Abhay Singhal is co-founder and chief revenue officer at InMobi
Like any other company, InMobi had two options to enter China. First -- enter into a joint venture with either a large or a small Chinese company. Second -- choose to enter the country as an independent local company. And we consciously opted for the latter. Most companies
fall prey to the strategy of entering into a JV with a local company. They assume that they will be able to ride the wave with their local counterpart and do some heavy-lifting as soon as they enter the market. What they seem to miss is that they lose precious time in formulating the terms of a JV and that the partnership might or might not work at all. And this whole process ends up costing them a lot of time.
When we entered China solo, we always had an eye on the bigger picture as we were in this for the long haul. We did lose five to six months but it was a much smaller investment that we chose to make for reaping larger benefits in the future. So my strong recommendation to any business that wants to enter China is to certainly go solo if their business permits.
The Chinese have a strong cultural and ethical heritage, which takes precedence over everything. Their first language is Mandarin and the business and social world revolves around it. They have their own closed, yet rich ecosystem, which makes it extremely difficult for any outsider to penetrate. The Chinese are indifferent to the likes of Whatsapp, Facebook, Google, and other household names. They have local substitutes for these giants and are widely adopted. So as soon as you set your foot in the country, with no access to any of these apps, you are virtually handicapped.
So when in China, do not even attempt to send people from outside of China to build your business. To be able to make your mark, first localise the mindset, then the technology. Understand the culture -- the Chinese are assiduous, proud, and hierarchical too. Subtle nuances like these can only be mastered by local people. Hence work in China, as a Chinese company, not as an Indian company in China. Do not make them adapt to your local processes. Deploy a local MD with a good pedigree, who can bring the best of both worlds - cultural and ethical heritage with a good business acumen and command on English. Once done, trust them with their decisions, as they have a far better understanding of the people, market and mobile phone adoption. We followed the mantra of "think global, act local" and since the last one year, InMobi has seen a four-fold growth in China, making it our fastest growing market so far!
The future of mobile-first
China is a mobile-first country at a significant scale. They have more mobile users using virtual wallets than we have smartphone users. According to China's Ministry of Industry and Information Technology (MIIT), nearly 95% of the population uses mobile devices. About 65%(roughly 380 million) of these have smartphones. This can be compared with India, which has 160 million smartphone users today and expects the number to reach 369 million only by 2018. We're significantly behind the dragon but have a huge potential.
According to the China Internet Network Information Centre, nearly 40% of Chinese Internet users pay for things with their mobiles. Whereas in India, we're still new to wallet payments. It is an opportunity for us to make the most of these statistics and data in China. They give us a good peek into the future of mobile for emerging markets as China's impact on payments, chat, transportation to everything else, is exemplary.
It is absolutely certain that not just one, but tens of business ideas that are getting funded or incorporated for Indian audiences have precedence in China. Half of which may have already failed. That is yet again a significant learning for any new entrepreneur in this space.
Sadly, with India's fascination with the West we've missed out on learning from a country with the same demographical profile, sociological problems, and illiteracy rate as us. If we want to realise our superpower status, it is imperative for us to cut-off the noise of fascination. We need to learn from our neighbour that is leading the way in mobile industry. The demographic dividend is in our favour to rule mobile in the coming years. Question is, how much are we ready to capitalise?