The tech founder’s guide to cracking China: 8 product gaps to fix before you go into China

In this series, I will try to share a list of product/tech gaps that tech companies need to address when approaching China as a market. The lessons are partly based on my own dumbass moments. I’ve tried to share them in a way that’s useful to western techies who know very little about the tech landscape of China.

Being a techy who decided to take his company to China, I was eager to quickly master the product/tech landscape in the country. China, of course, had different plans for me: it forced me to learn 10 cultural lessons for every product lesson along the way. Which explains why 99% of the books and blogs about China will only touch on cultural gaps such as “face”, guanxi (relationships) and handling broken communications with pretty much everyone around you.

You need to go a long long way to succeed as a foreign technology company in China. 70% of your struggles will be completely unrelated to your technology (ask Uber). But if you’re an existing tech company that wants to go to China, or an executive at one, it’s worthwhile looking at the tech related 30% first. For one thing: there is a good chance that your product wouldn’t work if you tried to use it from China right now. Here’s a small list of common product gaps in China, some of them non-trivial. Make sure you close them in advance. It’s no fun trying to fix these when you’re already trying to do business in China.

0. embrace Simplified Chinese

AKA localization for dummies. Pretty straightforward. Your first Chinese staff should be able to read and speak English (more on that when I discuss hiring). But make no assumption about the actual users of your software, whether it’s B2B or B2C. In fact, do make the following assumption: nobody will be able to read English. Not even the amount of English that allows them to find the “switch language” link. We make software for financial institutions, perhaps the most world-facing sector in China, and we still get non stop requests to translate our software for B2B users who can’t use it in English. Action items:

  1. Get good quality translation management software and use a translation service (I recommend HK based OneSky and heard good things about Transifex)
  2. Make sure your app starts with a full Simplified Chinese interface (Traditional Chinese is the written language only in HK and Taiwan. No need to add it for China).

Fun fact: Simplified Chinese is a character set that introduces easier ways to draw thousands of characters (words) compared with traditional Chinese. It was introduced to China by Mao Zedong only in the 1950’s and 60’s, and it had one purpose: to increase literacy rate. Today it’s the de-facto standard of written Chinese. So it’s essentially one of the most ambitious and successful “top down” operations in the history of human language!

1. get your head around Operating systems and platforms (mobile, web and desktop)

To the Western techy, the platform landscape in China is plain jungle. China doesn’t care if you like the dominance of IE6 or the invisibility of Google Play Store- and you have no choice but to play along. Check out my previous post for the full picture across web, mobile and desktop platforms: Localizing for China: the mobile-web-desktop platform Landscape (or: welcome to the jungle)

2. solve Connectivity and hosting issues

China has a shaky internet infrastructure, especially outside tier 1 & 2 cities, and the Great Firewall of China adds a variable (usually heavy) tax on the internet traffic. Jitter and occasional disconnections happen quite a lot. The final picture will make your CTO grow a couple of white hairs. I have no doubt that within a couple of years the Chinese internet will leapfrog towards (and beyond) what’s known to the rest of the world, but this optimistic thought won’t help you when setting foot in China today. Action items:

  1. Test for connection quality at least from 10 tier 1 and tier 2 cities (we found the local 17CE or the international CatchPoint useful). The less heavy your content is (think video) and the less connection sensitive (think finance), the better off you are.
  2. Disappointed with the test results and unwilling to relocate servers to Asia? Consider acceleration services such as Aryaka. Most of them have cooperations with local Chinese CDN’s such as ChinaNetCloud or ChinaCache. Paying extra dollars for the joint product will help you serve Chinese users from local POP’s (points of presence) all across China. The results are impressive, but price is a major consideration in this setup.
  3. Disappointed with the test results and willing to relocate your servers? Well, if you’re only starting in the China market, there aren’t many reasons to host websites inside China itself (which requires an ICP license anyway). HK is considered the next best option, and the result is perceived as excellent by all companies I’ve spoken to (even in the financial space). Singapore and Tokyo are also popular.

3. do Payments right

If you accept online payments, make sure your PSP can accept China UnionPay (CUP) cards. With little challenge from Visa and Mastercard, CUP is the network behind 80% of the cards and 72% of the card transaction volume in the country. Recent studies have found that China UnionPay has a shocking 100% brand recognition among Chinese living in China. Other payment methods (AliPay, TenPay) are nice to have. I’ll discuss them in future posts. For now take note: doing online business in China is not possible without China UnionPay, so make sure your current PSP can accept it or partner with a new PSP for China.

chinese internet users

4. forget about google

Make this your first Chinese lesson: Google is blocked. This will affect you right away if you use Google CDN (common use: loading JQuery). Our users in China suffered from dead slow startup time for our web platforms until we removed all references to Google. I heard from another tech company that all critical call to action buttons (think “buy now” button) disappeared in China because their CSS files were hosted on Google CDN’s. Nice! Action items:

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The tech founder’s guide to cracking China: 8 product gaps to fix before you go into China