There have been so many road kills on the digital highway to China: practically all foreign companies entering the Chinese market have failed miserably. Abang.com, the Chinese subsidiary of About.com the successful network of network of expert ‘guides’, seems to be an exception and is doing quite well. What is their secret, how have they managed to survive and even do well in the Chinese market? These are subjects that moderator David Wolf, CEO Wolf Group, was curious to find out as Matt Roberts, CEO Abang.com China, shared the CHINICT stage with him.
From the ground up
According to Matt one of the most important things in China is to know what you know and know what you don’t know. When About.com decided to enter the Chinese market back in January 2007, they started out by digging deep to learn what is going on. Based on this initial orientation stage it was decided that Abang.com had to be launched from the ground up. ‘It was not so much about launching the about model in China, we were more free’ Matt explains. This is quite special as most of the companies that entered China (and failed) just planted their existing model and assumed that some localization would do.
As Abang was started from scratch Matt argues that you can’t rightfully call it a foreign company entering China. He wonders what is a foreign company? Baidu has received investment from foreign companies. So is Baidu a real Chinese company? Basically it does not come down to who your investors or even employees are. That’s actually irrelevant. More relevant here is the flexibility of your company. It is essential to be able to cope with the fast changing environment in China. ‘That is one of the major reasons why many foreign companies in China with a lot of baggage are failing.’
After it was decided that the Chinese About.com would start from scratch, 2 focus areas were determined:
- Content: as content in China often has no high value and investment behind it is lacking most of the times
- Metrics: a lot of advertisers were (and still are) frustrated by the metrics available. To quote Thomas Crampton ‘Abang will offer advertisers reliable third party statistics to measure an ad campaign’s effectiveness.’
According to Matt About.com gave it’s Chinese subsidiary plenty of room to get started. Naturally Abang had the luxury of many resources and financial backing (read: time) to figure out how to be successful in China. ‘We started without the bells and whistles we have in the US, but we are soon building new stuff specifically developed for the Chinese market.’