My #RISE speech: 3 key elements helped us seized the opportunity of going global
August 6, 2015|CEO Talks
I was glad to be in Hong Kong at the RISE Conference to share the story of Cheetah Mobile. That was my first time making an English speech without scripts–I was nervous. That was difficult even after a whole night of preparation. I hope I did alright.
Just 5 years ago, I founded Cheetah Mobile. At that time Cheetah Mobile was a very small company focused on the PCs and anti-virus software. The same year, I took my first U.S. trip. On University Ave of Palo Alto, just next to Stanford University, I thought to myself: why do U.S. companies have more innovations than Chinese companies?
Dreams are the biggest difference. The phrase, “Think big, think different” was the biggest motivation that changed our mindset.
Why can’t Chinese companies become global companies? Even though we’re a small company, even though we’re not good enough, we can have such a good dream, such a big dream.
Cheetah Mobile then adjusted our strategy expanding from the Chinese market to the global market and shifted our product focus from PC to the mobile.
Now by monthly downloads, Cheetah Mobile is the #2 publisher on Google Play only behind Facebook–even surpassing Google. Our monthly active users today from mobile is over 500 million and 70% of our users come from outside of China.
Just 2 years ago, our monthly active users were 40 million, so we’ve achieved 10x growth since then. Cheetah Mobile’s speed of growing surpassed WhatsApp and WeChat in the first two years. We are the biggest utility and security developer all over the world on the mobile side. These all happened in 3 years, how did these happen?
The most important thing is: in mobile world we can integrate many previous local markets into a unified global one.
We had a great opportunity to go global, but how do you seize this opportunity? That’s a huge opportunity for any company in any country. Three years ago, I saw that opportunity, so we decided to put all our resources into it. We have 3 key elements that helped us seized the opportunity of going global:
#1 Mobile makes the world flatter than before.
Google Play, iOS App Store, and even Xiaomi’s Mi AppStore all shape the local market into a unique global marketplace.
Prior to the mobile age, it was necessary to localize first and then globalize. But, with mobile you can put globalization first.
Before the mobile age if you wanted to go global you had to travel to a country, rent an office, hire people and then sign a contract with partners. But in the mobile age, with just clicking a button, you can let your app reach potentially billions of users in the world. You don’t even need to send anyone outside of your country.
Now in Google Play, we have 4 apps in the top 30. Clean Master, CM Security, Battery Doctor, and Photo Grid. All of these apps have huge user bases in US and Europe.
Before we opened our offices in U.S. and Europe, we already had 50 million monthly active users in the U.S. and Europe –acquired via word of mouth and online promotion.
Because Cheetah Mobile has focused on the global market, we have a huge user base all over the world. Then we started to build our local offices and acquire some companies all over the world. We just acquired a French company that specialized in mobile advertisement platform, MobPartner, for a price of $50 million. Now we have offices in 10 countries all over the world.
Because of the mobile age, you can get global users through online distribution. When you build your local office, you can cooperate with a local partner very easily because you already have tens of millions of users in their country.
When we opened our U.S. office, we already established a good relationship with Facebook and Google. Cheetah Mobile is the biggest partner with Facebook Audience Network. Facebook mentioned Cheetah Mobile in its Q1 financial report. And we are the biggest publisher in Google Play. So now we have many good relationships with companies in the SF Bay Area.
We don’t have an office in India yet, but we’ve already signed a contract with Micromax. We’ve already signed contracts with over 70 manufacturers and carriers all over the world such as Xiaomi, Huawei, HTC, ASUS, Micromax. Samsung’s Galaxy S6 flagship phone integrated Cheetah Mobile’s SDK. In the mobile age you can go from top to bottom, you can acquire a huge user base, then have your local partnerships. Nothing likes it was before.
Two weeks ago, Musical.ly was No.1 free app in the U.S. App Store all with organic growth. Musical.ly is like Instagram for music videos. The startup is a small team based in Shanghai with only 10 people. As a China-based company, in just six months, it grew very fast. MyIdol, too, is a Chinese startup that went viral internationally. Neko Atsume–a Japanese app, without any English versions–also went viral in the U.S. market.
With these examples here, I want to say that in the mobile age even if you’re a very small company, no matter where you’re based at, you can compete with big corporations all over the world. Cheetah Mobile wants to be a bridge for Chinese companies to all over the world.
#2 Chinese companies are leading the industry alongside our American counterparts
Among the 10 biggest internet companies: 4 come from China, 6 from the U.S. If we look at all the Internet companies that are over $5 billion valuation, it’s 50/50 Chinese and U.S. companies. Unfortunately, Cheetah Mobile’s valuation is $4 billion, so we’re not on the chart — but I’m working hard on that.
It’s no longer the case that Chinese companies are following the U.S. companies. It’s the age that Chinese companies and U.S. companies together are leading the Internet world.
Uber and Didi-Kuaidi are fighting in China. Uber raised $1 billion using only in China market, but Didi-Kuaidi responded with more than $2 billion fundings. Uber built a local entity just for China, but from my personal opinion, I don’t think Uber in China has a chance to beat Didi. Didi’s valuation will rise very soon, maybe someday it will surpass Uber’s, and if Didi wants to go global, Uber could be in trouble. A rough competition can be foreseen.
People wanted to say that Chinese companies lead the Internet because the Chinese market is so huge and the firewall prevents U.S. companies from entering the market. However, Chinese mobile companies have created some very unique innovations, thanks to many years of fierce local competition.
When Cheetah Mobile entered the global market, I realized the competition in the U.S. market, compared to China market, is relatively comfortable. In China, the market is competitive.
To shine out, we pay close attention to user experience. People ask me why Clean Master can acquire millions users all over the world. I traveled to the U.S. more than 3 times very early on to understand what users there were thinking when we were developing the app.
We paid close attention to our Google Play user reviews too. We have 24 million user reviews in Google Play. Our rating score is 4.7, better than many popular apps. To achieve that, we have a team of 30+ people in Beijing that can speak over 20 languages.
If Clean Master got rated 1-star, that user would receive contact from us very soon. If you rate Clean Master in Japanese, we will reply in Japanese. We have 20 languages we can reply to users and correct and update the app for the user if they don’t think we are good.
#3 Free is the best tool to acquire users
The free-to-use model is a Chinese model, but I believe users all over the world want free as a universal price. When we started the company, I believed free was the best tool to acquire users.
Many people questioned, “How can you make money if your products are free?” To your surprise, our mobile revenue increased 5 times last year, and overseas revenue counts for half of our total mobile revenue.
Facebook and Google make money from free service, so can Cheetah Mobile. Our strategy is to build a huge user base, then use big data technology, to build our own mobile advertisement platform. Our goal is to become one of the top three mobile advertising platforms worldwide.
So this is the story of Cheetah Mobile. I think I’m so lucky, because I seized the opportunity in the mobile age, and I hope all of you can do this too.
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