Hi, this is Wayne again with a topic “The challenges Chinese gadget creators face”.
I think there’s definitely that existential threat of would my chinese identity or chinese branding hurt my business, maybe 99.9 of the users on take talk. They don’t know that it was a chinese company before the administration brought it up. People are not willing to wear their chinese-ness on their sleeves. They also like to you know, bring in a random white guy to join the group photos just to make themselves look more legit.
The u.s market is massive and an important one for brands to break into chinese companies are no exception, but for creators who want to make it big in the u.s they have to overcome their own risks and challenges. Customers and government regulators scrutinize their data and privacy practices for one, and they have to refine their products. Design for a market they don’t live in maybe most challenging of all, though, is overcoming the stigma of being chinese publicizing, where they’re from is often a tough risky decision for founders to make and one that could have wide reaching repercussions.
A lot of these great companies with great products don’t usually talk a lot about the fact that they are designed and made in china. My name is liu. I am the general manager of global strategy indiegogo. So what i do and what my team does is we help chinese entrepreneurs successfully launch crowdfunding campaigns on the platform.
We first started looking into china as a growing market four years ago. Really, at the time we were seeing so much innovation coming from the country, but what was challenging is that you know language barrier. Cultural barrier was quite significant. Although these companies have interesting products to offer potential backers, they still feel like they have to obscure, where they’re from the team section is a huge part of storytelling in a crowdfunding campaign. But that part is often the emphasize for campaigns coming from china a lot of times when they do have their team photos they like to grayscale it to kind of de-emphasize.
Their skin tone founders will anglicize their names. None of these tips and tricks are actually validated or a b tested on their page, and i think a lot of it is that passed down knowledge of what they think. This is how they should approach the american market by ways of you know the burden of representation. If people see a copycat product that is made in china, then they will draw the connection of because it is a chinese product. Then it is a counterfeit.
If you look at the successful brands coming out of europe and u.s they’re, usually quite true to their identity, my name is jerry yen, i’m the general partner of highway club hcvc jerry’s, an investor who works at hardware club, a venture capital firm that invests in early Hardware startups, he says european and american companies, usually don’t de-emphasize their origin and instead use the same messaging internationally as they do in their domestic market. They’Re selling a specific western image. Chinese companies, on the other hand, feel like they have to change their messaging, which is kind of an unfair situation for a lot of chinese brands that are now successful in domestic market. But then they’re trying to piggyback into a american market which is one of the most likely market, because the story that works domestically most of the time. Those stories are not attractive enough for american consumers.
We talk about tick tock. It didn’t pretend to be an american company. It’S just basically push our service that people like that people just find it neutral and and started to use it if they put the chinese later in the logo.
If they say this is you know creating china, you can make a very strong argument that people will be more doubtful when they use the app. Even if users didn’t realize tic tac was a chinese company. The us government knew and deemed it a security risk. Now to president trump’s threat to ban tick-tock the widely popular but chinese-owned, video sharing app out of fear that the link to china poses a security risk.
Over the summer, the trump administration announced that it would ban tick-tock from the u.s market unless it found an american buyer. The administration argued tick. Tock’S ties to the chinese government and its security practices were risk to american consumers. At the same time, the trump administration also wanted to ban wechat the most popular chat app in china over the same concerns.
These are just the most recent actions against chinese companies. The gay dating app grinder sold to an american firm after the us government expressed national security concerns and huawei and zte two other chinese companies are now locked out of us government contracts. Some of these concerns are real and verified, meaning the chinese government could potentially access user, sensitive data or censor their speech.
So when chinese companies enter the us market, they have to be transparent about how they treat customers data. Many creators find ways to work around the chinese government or at least prove their security. When zoom was scrutinized earlier this year, it doubled down on privacy and collaborated with facebook’s former security chief alex damos, another smaller creator, jenkin shaw says she and her team rent servers from amazon to preserve data before backers started to back the project.
We got that questions. A lot related to data storage: where did you store your data or how are you going to protect our privacy? Jenkin? Is the co-founder of wooc labs, a smart home device company that launched its first product wooc, a smart doorbell on indiegogo in 2019.? The doorbell system is designed for people who live in apartments or move around frequently it collects some personal data, given that has a live feed of who’s entering and exiting people’s homes and employs facial recognition. Software, its customers, of course, have concerns about how their data is stored. We do a few the pressure to answer these questions, for example, for europe we specific telling people that your data is covered by gdpr and then we combine that laws when we are building the software or using the cloud for u.s market, for instance, we are using Aws, we will be really transparent to backers about these facts that we really respect and protect their privacy following their local loss. But even these considerations might not be enough to satisfy the american market or regulators concerns. We are seeing a lot of these high-profile.
Very successful companies from china are getting bad pr were getting directly targeted by the u.s government. You really never know these days what kind of policies? What kind of tariffs will be coming through right? It really is random. It comes at any time at the stroke of midnight, the u.s hit china with tariffs on 34 billion dollars worth of goods. China’S great firewall hinders creators in other ways too, namely restricting their access to popular social networks. The chinese internet, unfortunately, is silo very much siloed from the rest of the world. Chinese people didn’t grow up using google facebook instagram. So when chinese entrepreneurs are trying to enter the american market, really they’re learning everything from xero, even if let’s say they are quite established in china and they’ve got, you know a million followers on weibull right, which is a chinese twitter. You know another 100k on wechat. It doesn’t really mean anything for the rest of the world because it’s not facebook and twitter. So, even if these chinese companies manage to overcome these challenges, they still have to consider the basics. Designing a product that appeals to a new market, a product that does well in china might not succeed in the us. You have to change the design for sure.
If you have something that works for china, especially if it works very well, you can be sure that it’s probably not going to be working well in different cultures, a campaigner that we worked with. They created the world’s lightest e-bike. That is also very affordable right. You know when they launched their campaign. Actually it didn’t do as well that as they expected for a few reasons. First of all, you know that foldability wasn’t actually that much of an attractive feature for the american consumers, whereas for asian countries living spaces and much smaller. So that feature was actually highly desirable. You know a year later they came back with the second version of their e-bike, and the product positioning is actually durability.
You can do it in different terrains and it’s good for camping. That campaign did so much better, but for all the struggles they might face, chinese companies do have one major advantage. Ironically, the biggest challenge was actually the biggest advantage they have. If we talk about physical good, obviously, today allows things are made in china.
Hardware is always a challenge, but when it comes to campaigners from china, it’s less of a challenge right. Instead of trying to figure out on the internet, who will be a good factory to manufacture your product? A lot of the creators that we work with, they can really just walk across the street right and sign a contract with the manufacturer and then get their product made. So in that sense it is a significant advantage. The stigma against chinese companies is real honestly, even trying to find a creator to talk about these struggles was difficult because of how sensitive a topic this is, but hopefully, over time, chinese creators will find ways to address their us customers concerns and bring their products abroad.
For jerry and lou, the key for these companies is to be true about who they are. Don’T try to pretend to be some sin or someone you’re, not if you’re, not american brains, you’re, not the story with dji, where they didn’t pretend to be american or european companies. It’S just a company that has the best product and you keep building best product better product on top of that and eventually win almost the entire market. Just by doing that, we do observe some very successful brands or companies that are started by chinese founders are doing really great, such as oneplus or zoom.
So i think that’s something that we look up to and we do think that those are examples or models telling us that chinese identity won’t be something that stops you from building a very successful company or a product that people love. You know be proud of. Your country origin right because at the end of the day, it is really about the product being awesome. When your audience, you know, buy the product, use the product and then like it, that’s that’s all it matters.
It doesn’t matter. If it’s labeled made in china, all they care about is that this is a great product. Hey y’all, thanks for watching this episode is part of our new season of in the making. So if you haven’t yet make sure you check out episode, one which is about the challenges that gadget startups face when trying to sell their products on live tv, as always subscribe to the verge okay, see you later bye. .