China is Getting Better, Despite Economic Backlashes
Though China has been a brutal place for global start-ups, IE Singapore believes it could well be a promising location for ambitious Singapore firms.
The organization believes that a more strategic approach is important. Also, companies should still be optimistic despite the fact that plenty of companies have failed in China. Such tribulations are not perpetual.
China has a huge market and a vibrant tech ecosystem but companies may need some convincing as competition is white-hot and failure rates are high.
Many companies, including major players like Google, Amazon, Uber and Facebook have bowed out, while other global companies have struggled to navigate the different business culture and adapt their solutions to meet the market’s needs.
Lim Ai Leng, IE Singapore’s divisional director for East China, said there is a place for Singapore tech start-ups in China.
“Instead of trying to conquer it, Singapore companies should look to be connected to China’s vibrant ecosystem and to carve out a niche,” she noted.
She noted that four cities, Beijing, Shanghai, Suzhou, and Shenzhen are more mature and progressive in their tech ecosystems. In addition, each city has its particular strengths and opportunities.
Singapore’s familiarity and connections with Southeast Asia, as well as its strengths in the English language and intellectual property, are value propositions. This is due to many Chinese enterprises and start-ups which are globalizing.
“Beijing has the third-largest ecosystem in the world; Shanghai is a cosmopolitan city, which makes it easy for international investors to navigate.
“Suzhou makes a conducive and familiar environment for Singapore start-ups due to the presence of the NUS (Suzhou) Research Institute (NUSRI), and Shenzhen is strong in hardware innovation,” she said.
Chope, the Singapore-based restaurant-booking platform, ventured into China via Shanghai.
According to its chief executive Arrif Ziaudeen, there’s a very strong growth in middle-and upper-class spending. This applies especially in the food and beverage sector. Meanwhile, the demographics of the Shanghai market align to its market-entry strategy of establishing a presence with high-quality restaurants.
A Singapore-founded new media tech firm, MXR International also chose Suzhou as its entry point.
Its managing director Gerald Cai said Suzhou this was a natural choice. It is a focal point of the Singapore-China government partnership and has provided strong ecosystem support through various agencies.
Deep Understanding of Local Market Needs
Lim stated Singapore firms must build a deep understanding of local market needs and habits. After this, identify a strong and unique value proposition that the market requires.
She said this was especially so for consumer-centric products, as Chinese start-ups will know the local market best.
“Rather than aim to build a “perfect” product, firms should try and test their products quickly to first build the market. After doing so, they can improve them along the way,” she said.
She added that in China, speed-to-market is critical and product development is quick for two main reasons. These are: consumer’s speed in adopting new services is high and Chinese companies adapt quickly to their products.