In 2023, these overseas tracks will become popular

In 2022, going overseas will become the unswerving choice of more and more Chinese enterprises. People who go to sea in China come overseas in unison, looking for a new growth curve and life cycle.

In the social field, according to the statistics released by Apptopia, TikTok, a subsidiary of ByteDance, topped the list of global application downloads in 2022 with 672 million downloads, while Huanju Group's Bigo Live, Newborn City Technology's MICO, Yale Technology's Yalla, Kunlun Wanwei's StarMaker, Laixi Technology's livU, Tomorrow's Wormhole's YoYo and other audio and video social products have also gradually become the main force in the globalization of Chinese social products on their respective tracks.

Xiaguang Think Tank "2022 Audio and Video Social Networking Overseas Market Research Report"

In the cross-border field, according to customs statistics, China's cross-border e-commerce import and export will reach 2.11 trillion yuan in 2022, an increase of 9.8%. Among them, the hidden unicorn SHEIN from China will become the most downloaded shopping application in the world in 2022, with 229 million installations; During this time, Temu has been installed 10.8 million times in the United States; in December, Ali officially launched Miravia, an e-commerce platform focusing on localized operations in the European market, in Spain, and currently has a clear national expansion plan.

In the game market, gamma data shows that in the first half of 2022, the actual sales revenue of China's self-developed games in the overseas market was 8.989 billion US dollars (about 63.6 billion yuan), a year-on-year increase of 6.16%; the revenue of overseas markets is close to half of the domestic game market. share. Among them, "Yuan Shen" developed by Mihayou will have an overseas revenue of more than 1 billion US dollars in 2022, and the total number of overseas App Store and Google Play downloads is estimated to exceed 40 million times.

Going out to sea is the general trend, but we must also be aware that there are occasional storms at sea: competition intensifies, the global economy continues to decline, the international situation is turbulent, and compliance requirements escalate...Under the baptism of waves, the only way to remain rational , Intensive cultivation, in order to allow enterprises to maintain lasting vitality.

In 2023, standing at a new starting point, "going to sea" is destined to open a new page. On January 17, Xiaguang Club invited guests such as Wang Chao, partner of Eggplant Technology, Hua Qianli, CSO of Yalla Group, Xu Ruicheng, chief North American representative of Grand View Capital, and Yang Fan, director of audio entertainment products of Shengwang, to review their observations in the past year And the industry changes experienced, review the corporate strategy and style of play that can stand the test, summarize the past, and look to the future.

In 2022, what are the new changes in going to sea?
According to Wang Chao, a partner of Eggplant Technology, “going overseas” has become an industry in which all people participate, which is caused by China’s unstoppable economic development trend. But he reminded all those who go to sea to notice that "going to sea" is no longer an unrestrained and barbaric growth track, and compliance has become the most critical part of whether a company can take root and grow locally.

According to the statistics of the United Nations Trade and Development Organization (UNCTAD), as of February 21, 2022, about 80% of the countries in the world (a total of 194 countries) have completed data security and privacy legislation, or have proposed draft laws. In the wave of compliance globalization, overseas companies must not only build a reasonable and complete data security and privacy compliance management system, but also track changes in overseas regulatory dynamics in a timely manner, and strengthen in-depth research and judgment on foreign regulations. The adaptability and tolerance of an enterprise's international compliance determine its vitality.

Founded in 2015, Xu Ruicheng, chief representative of Daguan Capital North America, an early fund of All-in going overseas, also shared the new changes he observed in going overseas. Since 2018, he has clearly felt that the field of investment in China's overseas projects has begun to surge. "The whole world has begun to pay attention to the excellent projects created by Chinese founders, and they all pay attention to the Chinese market."

In addition, one of the changes he felt was that China's sea-going industry and ecology are becoming more and more abundant. "From the mobile Internet going overseas to cross-border e-commerce, and then to the global enterprise services provided by Shengwang, everyone has come overseas to try the possibility of the future. This state is gaining momentum, and I think in 2023 there will be more people going to sea to stand on the world stage."

Hua Qianli, CSO of Yalla Group, who has been deeply involved in the Middle East and North Africa market, told Xiaguang News Agency that in 2022, he intuitively feels that the Middle East and North Africa will become a hot spot for companies going overseas. On the one hand, this is because the domestic market is becoming more and more crowded and the market growth is slowing down; on the other hand, because there are many countries in the world's top 30 in terms of per capita GDP in the Middle East, there are huge market development potential and entrepreneurial opportunities.

He also emphasized that companies going overseas to the Middle East must respect local cultural customs and religious habits, which is reflected not only at the business level of the company, but also at the level of organizational structure. "For example, during Ramadan, local employees are not allowed to eat or drink during the day after sunrise and before sunset. We must understand and respect these religious customs."

The success of Yalla Group in the Middle East is also inseparable from its localized development strategy. Yang Tao, the founder of Yalla, once served as the general manager of ZTE Abu Dhabi Branch. He has worked and lived in the Middle East for nearly 7 years, and has a thorough understanding of the customs and customs of the Middle East. The core team of the Yalla Group has also been actively introducing senior executives from the Arab world. In addition to the core management personnel from the Arab region, there are also many members who have worked in world-renowned communication manufacturers. management, forming the foundation of Yalla Group's localization capabilities. Yang Tao mentioned in the interview that they will even study the thumb size of users in the Middle East and design the most suitable button area for local users.

Yalla

Yang Fan, head of audio entertainment products at SoundNet, observed some new opportunities brought about by the rapid changes in the technology industry in 2022.

"For example, ChatGPT, which became popular on the Internet at the end of last year, is an intelligent chat robot. We quickly found that some customers have made breakthroughs in this direction. Traditional group chat or random matching is relatively mature, and the service companies used It’s nothing more than Shengwang or other companies, and everyone’s level is similar, so we still need to find breakthroughs in various gameplay levels. Social networking is an instinctive demand of human beings, and we can see that the technology industry is indeed making continuous progress every year Yes, these gameplay innovations also force us to update our concepts and products.”

Return to rationality when going out to sea
When "going to sea" becomes a compulsory course for Internet companies, and when players from all walks of life enter the deep water area one after another, under the fierce competition game, only long-termists who return to rationality can develop steadily and vigorously.

"The so-called return to rationality is to standardize business and respect humanities." Yalla Group CSO Hua Qianli concluded. He said that in the Middle East and North Africa, people are keen on social gatherings and chats. Community members gather together, sit around to discuss local events and issues, exchange news, receive guests, and the space for socializing and entertaining is called majlis. In 2015, UNESCO inscribed the social activity called "majlis" on its list of Intangible Cultural Heritage. And Yalla has transferred the popular offline social activities in this region to online.

"This is the fundamental reason why the voice social field is relatively different in the Middle East and North Africa, especially the Arab region and other places." Hua Qianli said.

The elders are teaching the children about social etiquette and the tradition of majlis. Source: Official website of UNESCO

In Hua Qianli's view, what Yalla Group is doing is to return social networking to its essence, which is a huge local demand.

"To start with local needs, we still have to take a long-term approach. If you want to make quick money, or even meet some gray or other needs that simply satisfy desires, you may be able to make a wave of quick money in the short term, but in the long run It must be more difficult. Whether it is China in 2005 or Southeast Asia in 2015, companies that eventually become a relative monopoly in the entire Internet industry must take the path of long-termists. On the one hand, we must exercise restraint, on the other hand, we must have A long-term perspective and a mindset of really serving the user.”

In 2022, multiple factors such as repeated epidemics, geopolitical conflicts, and U.S. interest rate hikes will be added to the down cycle of the Internet, causing the Internet industry to start a "cost reduction and efficiency increase" model. "Cost reduction and efficiency increase" has a different view.

"If everyone rushes to reduce costs and increase efficiency regardless of their actual situation, I think it is irrational." Wang Chao said that in his opinion, the real rationality is to clarify what exactly your products are solving for users. Demand, how much commercialization space can the solved demand bring to the enterprise, and how to keep its own ROI (return on investment).

As a leading company going overseas, the number of cumulative installed users of various APP products under SHAREit Group worldwide is nearly 2.4 billion

And how to keep the ROI that the company set for itself at the beginning of the business? Wang Chao emphasized two points: The first point is to repeatedly review the earliest positioning. "It's very easy for the team to step on the watermelon rind when it's doing it. It doesn't matter where it slips, and it also has a nice vocabulary called 'responsive to user needs'. In fact, you step on a piece of watermelon rind and you don't know where you slip. gone."

The second point is to constantly question the deviation of your own execution. Wang Chao said, "For example, the e-commerce season is in the third quarter recently, and everyone will always have external reasons to say that the CPM has risen. Let's put the CPA indicator first, and let's control it in other fields first, and see if it can be achieved." It is impossible to find out the time difference, and this kind of time difference is the deviation of execution.”

"The reason why we didn't keep the ROI when we went to review later was because we didn't stick to these two things. Either the initial positioning went wrong and we stepped on a piece of watermelon rind; The height is 5 centimeters, and the result is very different. So I think if you want to talk about the rationality of going out to sea, I think it is the greatest rationality to keep your own ROI and our insistence on a sustainable development model.” Wang Chao summed it up.

From the perspective of capital, Xu Ruicheng, chief representative of Grand View Capital North America, explained what he perceives as "rationality" and "reducing costs and increasing efficiency". Regarding the invested companies, Xu Ruicheng first suggested that everyone maintain a healthy cash flow, "We finally found that the companies that have developed better in the overseas circle have realized their cash at a very early stage. This may be different from your past perceptions. Something is different."

The second point, he emphasized that the era of attracting investment by telling stories in the past is gone forever. "There are only two places in the world that can raise funds based on the size of the story: Beijing, Shanghai, Guangzhou, Shenzhen and Hangzhou in China and Silicon Valley in the United States. But when the big market environment is no longer booming, and big companies in Silicon Valley are also laying off employees, everyone suddenly discovered that It is no longer possible to rely on storytelling to attract investment, and entrepreneurs will find that investors who originally invested after listening to stories have become more conservative than traditional investors.”

The third point, Xu Ruicheng said, in the face of the complexity and changeability of different global markets, Sun Zhengyi's time machine theory has gradually lost its magic power, and it is becoming more and more difficult to achieve the expected goal of reducing dimensionality by simply copying domestic Internet experience. Investors Those who really look at are entrepreneurs with core innovation capabilities. He summed up the relatively successful investment cases over the years, which are basically concentrated on three tracks: one is the entertainment and content fields in the mobile Internet; the other is global consumption, including cross-border e-commerce and its upstream and downstream industrial chains; the third is SaaS (Software Operations Services).

In 2023, which tracks can be expected in the future?
Today, when more and more Chinese companies are resolutely choosing to go out to explore new overseas territories, in 2023, what new opportunities are worth grasping for overseas companies?

Wang Chao, partner of Eggplant Technology, shared the four tracks he observed.

The first track is the new traffic position, such as the new brand, new consumption method and new To C products brought by TikTok. He suggested that new players going overseas can pay attention to this field.

The second track is the Middle East, a sea-going area centered on China's traditional advantages. On December 9, 2022, the first China-Arab Summit will be held in Saudi Arabia. This is a major event in improving the quality and growth of China-Arab (Arab) relations, and it is a milestone in the history of China-Arab relations. Wang Chao expects to take advantage of this wind, and the Middle East will continue to maintain a high-speed growth trend this year.

The third track is around new consumption models. The traditional business model is that companies make tools and then push traffic to Google. This is the simplest, crudest, and most primitive logic. This business logic is worth expanding. Wang Chao suggested that overseas companies can explore how to create new things based on existing things and create a new consumption model.

The fourth track is a new interactive method represented by ChatGPT and OpenAI. Wang Chao emphasized that every generational change in the way of interaction will bring about new changes. For example, revolutionary products and companies such as WeChat and INS have been born from the PC terminal to the mobile terminal. The next intergenerational interaction method is ready to emerge, and he predicts that it will bring new business opportunities.

When it comes to the overseas track with potential in 2023, Hua Qianli, CSO of Yalla Group, gave a very practical suggestion: "I will take the more developed emerging markets, such as China, Southeast Asia, and even India, which have already been produced by Internet giants. In the market, relatively large companies have examined all the businesses that have been done in history, and compared their remaining businesses to see which businesses have died and which businesses are still retained. Those that remain If the business is doing well in emerging markets like China, Southeast Asia, India, or even South America and Eastern Europe, and the Middle East and North Africa region is still in its infancy, this industry can even be done all in, because it has the commonality of success. The development of the Internet market to this stage must be produced by this industry. Generally speaking, if other emerging markets have not done it, it may be relatively difficult to do it in the Middle East and North Africa, so don’t put all your eggs in one basket and hope that you can create miracles.”

Yang Fan, head of audio entertainment products of Shengwang, shared two areas he is more optimistic about: one is overseas live broadcast e-commerce, "The live broadcast e-commerce in Southeast Asia, Europe and the United States is basically at the domestic level three years ago, and the entire industry chain has to be restructured. There are many opportunities in the process.” Another field is To B’s SaaS and PaaS. “The To C industry is already very mature and red ocean, whether it is domestic or overseas, so To C companies will pay more attention to it.” In terms of reducing costs and increasing efficiency, more attention is paid to how to improve the efficiency of internal browsing and collaboration, and to intensively cultivate some professional fields. In this way, there are great opportunities for To B enterprises, such as the digital transformation of banks and educational institutions. , the country is already very mature, and the experience in this field can be transplanted abroad.”