Cultural differences a hurdle for Chinese tech firms in Southeast Asia, India

2 min read
Left to right: Elliot Zaagman, TechNode contributor; Wendy Min, director of Ctrip International Affairs; Bella Tu, investment director of Gobi Partners; Dev Lewis, research associate of Digital Asia Hub. (Image credit: TechNode)

As growth in domestic internet users slows and economic momentum decelerates, China’s technology companies are looking to emerging markets for new opportunities. Chinese tech startups and giants alike are shifting competition to Southeast Asia and India hoping to replicate their home turf successes.

The appeal of the two regions is obvious: they boast large populations and internet user penetration is rapidly growing.

Silicon Valley has already made significant inroads; tech titans including Facebook, Google, and Amazon have already cultivated strong followings for their respective social, search, and e-commerce services. Chinese tech giants such as Alibaba, Tencent, and Bytedance, as well as thousands of startups, are also shifting their sights to the region for growth.

The most critical problem for Chinese companies to expand to overseas markets is how to acclimatize, according to panelists speaking on Thursday at the Emerge by TechNode conference in Shanghai. Southeast Asia consists of 11 countries with different languages and culture, while India is a multi-ethnic country with 22 official languages.

Wendy Min, director of Ctrip International Affairs; Bella Tu, investment director of Gobi Partners; Dev Lewis, research associate of Digital Asia Hub; and Elliott Zaagman, a TechNode contributor discussed strategies for Chinese companies expanding to Southeast Asia and India at the event on Thursday.

“The Indian market is very diversified, unlike the Chinese market which is unified with only one [official] language,” Lewis said to the conference attendees. He added that there were at least five markets divided by different languages in India, including English and Hindi, which are two of the biggest, as well as another four regional languages.

“So it makes it a lot more difficult in terms of the building of products—sometimes we have to use five different teams to build the same products,” said Lewis.

The most knotty problem for Chinese startups that want to expand to overseas markets is how to hire local employees, said Tu of Gobi Partners. It’s common in China for tech companies to require employees to work overtime, spurring the now infamous 996 work schedule, but such work demands are unacceptable in most Southeast Asian countries, she added.

“The best way is to make sure that you find very good local partners so that you can understand local culture and understand how to hire local people,” said Tu.

The 10 markets that make up the Association of Southeast Asian Nations (ASEAN) are home to more than 660 million people. Active internet users in Southeast Asia will reach 480 million by 2020, according to a report by Google and Temasek, a Singaporean state-owned holding company.

India, a country of more than 1.3 billion people, will have 666 million internet users by 2023, up from 525 million in 2018, according to market and consumer data provider Statista.