in China Goes Global, Globalization

For all kinds of companies going global – Chinese, European, North American – the process is a complicated coordination of numerous components: developing strategy, sustaining R&D, facilitating project design, localizing materials. It takes time and a cohesive vision to bring everything together, and in the process, things can easily fall through the cracks. Sometimes companies are ready to go global even before their products can do so.

So what does a global product look like?

Global products satisfy worldwide expectations and preferences. Simply selling well in China doesn’t qualify a product as global; global products are successful – albeit with slight modifications – in multiple markets. To meet such a broad panoply of aesthetic tastes, cultural contexts, and consumer needs, global products often require an intensive amount of upfront product design and market research.

While not the most highbrow of products, the Kentucky Fried Chicken (KFC) franchise is a good example of a global product. KFC can be considered an “originator,” as it produces original products (fried chicken) adaptable enough to be modified and launched successfully in a wide range of markets.

Chinese companies are looking to become “originators” as well, with their products modified and distributed worldwide for international– not just Chinese – consumption. WeChat, Tencent’s wildly popular social media mobile app, is a story of how a Chinese company tried to go global before they had a globally-ready product.

It has enjoyed an incredible level of usage in Asia, with nearly 500 million users within China alone as of 2015. With such extensive market share in China, Tencent began to look abroad for expansion. In 2013, Tencent announced it would begin a formal effort to expand WeChat in North America. Around the same time, it even recruited soccer superstar Lionel Messi to feature in an international marketing campaign in places like Argentina, Turkey, and Malaysia.

These do-it-all apps are well-suited for the Asian market, which has an incredibly developed mobile infrastructure as compared to, say, the United States. Moreover, Asian consumers have relied increasingly on their mobile devices. North American and European consumers still overwhelmingly use a combination of multiple devices like laptops and mobile phones to take care of their daily social media and e-commerce needs. At the end of the day, WeChat’s extra financial and communication functions made it an overwhelming tangle of features to international users.

Despite a well-funded and star-studded marketing campaign, Tencent still could not manage to convince consumers in North America and Europe to use WeChat. Without a globally mature product, no amount of advertising—even a $200 million marketing push—could make WeChat succeed. After a year of less-than-optimal results, Tencent quietly halted its international marketing campaign.

The case of WeChat teaches us that domestic success does not necessarily translate into global success. WeChat is a very sophisticated app for a Chinese market because it integrates so well with e-commerce and mobile technology. Yet copy and pasting this kind of sophistication into radically different consumer markets can only bring marginally successful results. What gives WeChat an edge in Chinese markets can make it confusing and difficult to translate to international users. WeChat has yet to be an originator that can create successful versions of itself globally.

Tencent’s story teaches us that true global innovation and success is all about people. Technology and research are certainly important components of global strategy, but ultimately, being able to improve people’s lives will be the biggest predictor for a product’s success.

If you’re interested in learning more about CSOFT’s globalization and localization solutions, visit our Twitter, Facebook, or LinkedIn pages or you can visit our webpage!
[dqr_code size="120" bgcolor="#fff"]

Comments are closed.