Mindset comes as the biggest challenge to the globalization of U.S. internet enterprises

作者: 唐杰 分类: 阅读笔记 发布时间: 2018-09-21 11:05

Today there is an opinion from Chinese internet that U.S. internet enterprises are facing a new challenge to their globalization – the change in mindset. The opinion, novel and thought-provoking, is voiced by the well-known Chinese product manager Jie Tang, author of the book Becoming an excellent PM and currently serving iHerb Inc (China). Now let’s learn something more about this opinion.

Previously we hold the misunderstanding that U.S. internet giants were inherently globalization-oriented in R&D and market expansion. We took it granted that undoubtedly excellent products could spread their influence worldwide. Although currently Google and Facebook are still dominant players in the world’s internet industry (except a handful of countries), we have to admit that, if we take a closer look at some rankings and market behaviors, U.S. internet enterprises are not all-powerful anymore. It is no longer easy for them to occupy a leading position in any market.

  • 1, As the birthplace of internet, USA enjoys big first-mover advantages. By the time internet has been well-developed in the USA, other countries and regions were still at the starting stage in internet technology, where professional talents and funds were short. It is impossible for them to compete against U.S. internet giants.
  • 2, The shortage of internet research and development talents is common with most countries and regions. This is particularly true with some technology-oriented internet products like search engine, large-scale social networking services and communication software, as well as large and complex e-commerce platforms. The lack of local talents makes it impossible to meet large quantities of local demands. Without other options to make, they have to turn to the products by U.S. internet giants. For them, such products do not come as the most appropriate.
  • 3, As small market potential and size are typical of many countries and regions, they are often overlooked by internet giants who have to make a balance between R&D costs and returns.

As argued above, the underlying causes for U.S. internet giants’ dominance across the world do not lie in the fact that their products are the best for most countries; rather, it lies in the fact that there are no other alternative products for those countries.

However, things are changing in recent years.

  • 1, For the USA, the first-mover advantage in mobile internet seems not to be so dominant. For example, China falls relatively a little behind of the USA in mobile internet. However, China has done a better job than the USA in popularity and technological contents of lots of Apps.
  • 2, With the development of internet R&D technologies, lots of internet technologies have been open, narrowing the R&D gaps with the USA. Moreover, small regions and markets are characterized by less R&D complexity than the USA and China.
  • 3, Once competition in large markets is getting tense and fierce, accordingly research and development will meet larger difficulty than in small markets. Under this circumstance, small markets will reward developers with bigger success rate and more returns than large markets.

For instance, the largest e-commerce market share in Singapore, does not go to Amazon/eBay or Lazada; rather, it goes to the local platform Qoo10; in Southeast Asia, the most popular car-hailing apps is not Uber but GrabTaxi; in Vietnam, Zalo is the most popular among instant messaging users; Line is the most popular instant messaging tool in Japan; in the Middle East, Careem ranks as the most popular car-hailing platform and MumzWorld plays a dominant role in maternal and infant e-business; in Africa, the largest e-commerce platform goes to Kilimall.

With misunderstanding to globalization, U.S. enterprises and practitioners hold the belief that their products come as universal solutions throughout the world. Guided by such philosophies, they deploy their global business based on attention-attracting strategies and believe they can win the market once user attention has been attracted. However, such is not the case in China. China, however, is capable of independent research and development and has other alternative solutions to its own problems.

Many U.S. enterprises are sophomoric to the Chinese market. The past ten years have seen leap-forward development on internet in China. There is no denying that China has led the world in internet technologies related to daily life, of which, however, the USA hasn’t been aware. Such examples include WeChat payment, Alipay and so on. Unlike in the Western world, they do not rely on credit card any longer.

In China, people have access to plenty of internet-based Apps related to their daily life. With just a smartphone, more than 95% of life affairs can be solved at the efficiency beyond imagination of the Americans.

Once an internet firm has developed a global business vision, it has to segment existing customers and discover potentially new ones. Any attempts to supply such new customers with products of completely the same fucntions will nearly end up with failure. It will be rather difficult for business development if there are no differentiated services intended for new market users. It’s unlikely for the internet firm to gain the upper hand over local competitors.

Welcome to reprint or quote, opinion author Jie Tang ( Becoming an excellent PM Book Author )

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