Posted on August 13, 2019 by staff

Why online entrepreneurs should look to China


For what’s coming next in tech, the UK tends to look towards the US – but in future it could be China that blazes that trail in innovation.

With a population of almost 1.4 billion and one of the most advanced technology ecosystems in the world, Grant Long has seen first-hand how a business can take off there.

The American entrepreneur grew up in Silicon Valley and, as head of product at Swyft Media in New York, was among the pioneers in helping brands penetrate the fast-growing world of mobile messaging.

Speaking to BusinessCloud from San Francisco, he said: “On the one hand, we went out and acquired all these brand licences, such as Disney and DreamWorks.

“On the other, we would go out and negotiate partnerships with the big messaging apps around the world, such as KakaoTalk in Korea, WeChat in China, Line in Japan and Viber in Israel.

“We did some things with Facebook Messenger and Blackberry Messenger. All these messaging apps were growing in importance globally as people switched over to them to communicate with their friends and family.

“People were spending a significant amount of their time in these messaging environments [so] we introduced a new business model, which was more like paid native advertising in the form of shareable content like emoji and stickers. And business really took off for us.”

Swyft worked with the likes of Sony, Universal Music, Ford and even the Pope during his tour of the Americas. “That was a fundamental moment for us where we didn’t entirely pivot, but we basically introduced this new dominant revenue stream for us – it became our main focus,” said Long, who turns 30 in September.

When Monotype, the largest font company in the world, swooped for Swyft, Long found himself “getting deep into the real opportunity we were pursuing”.

“My conclusion was that we were just the tip of the iceberg – that this private social environment is really the killer app, the core experience of our mobile devices,” he said.

Rather than collaborating or competing with similar companies such as Giphy, he looked to the worldwide opportunity afforded by his contacts in the East. A chance encounter with his future business partners cemented China as the destination for his new venture Dongtu.

The micro-content network has been integrated into 3,000 of the largest apps in China, enabling one billion mobile users to communicate using animated GIFs and stickers. Its brand and content partners now have the ability to promote deep links and custom QR codes within the content it provides to the likes of WeChat, Alibaba, Tencent and Baidu.

The scale of its addressable market is mind-boggling but just as impressive is the sheer number of its GIFs viewed per day: three billion at the time of writing.

“I moved from New York to China in 2016 and spent 100 per cent of my time there for almost two years,” said Long. “The business has grown a lot. We’ve definitely gotten to the point now where we can provide a lot of value for foreign partners and brands such as big international content providers, sports businesses and entertainment companies.”

Super-rich Paris St Germain became the first European football club to follow the big American sports franchises in launching on Dongtu and reaching an almost limitless market for content and merchandise. “If there’s a company that is already adopting these types of new media units [such as GIFs and stickers], and has an interest in growing their presence in the China market, we want to be a resource and valuable partner for them,” said Long.

“In sports in particular, when these guys are trying to grow their brands, there’s only so much growth that they can do within their home territory. They look over at China and see a country that has very great access to the internet and spending power, but don’t have their own top-tier professional sports leagues.”

China’s most successful sporting export was basketball legend Yao Ming, who spent nine years with the Houston Rockets and entered the NBA Hall of Fame. He is now president of the Chinese Basketball Association. “Because of basketball, we know that the Chinese are into these Western sports teams and athletes,” continued Long. “They’re thinking ‘maybe this is a much better place for us to spend our effort… we’re talking about selling jerseys to a new 500 million-person fan base’.”

The population is also incredibly engaged with tech. “China is a super-active mobile market: I saw a statistic recently that Chinese teenagers spend something like seven and a half hours a day on their phones, which is kind of wild,” says Long. “When you’re on the subway there, almost everyone’s staring at their phone screens doing something.

“A lot of it may be WeChat. But there are many other verticalised apps for things like dating, watching videos or chatting about anime – and almost all of them have some kind of social or communication functionality. It’s almost a minimum requirement these days to have this social layer keeping people engaged within the app. And we plug directly into that experience in China.”

The direction of travel taken by technology is changing, says Long. “We’re going to be seeing a lot more ideas and innovation like this coming out of the China market which we adapt for the Western world. In the past it was more in the other direction, with people adapting Western internet businesses for the China market.”