Almost all big technology companies have failed in China. Not an unknown Indian company: InMobi

Today, there are few global Internet companies that have managed to prosper in China. The Google search engine and other products from the American giant were no longer available in this Asian market more than a decade ago. amidst controversies over content censorship. Something similar happened with platforms like FacebookX (Twitter) and Amazon. However, InMobi has managed to make its way where many others have failed.

It is an Indian company that operates at both ends of the advertising ecosystem. Advertising agencies and brands turn to it to help their ads reach mobile device users. Developers, for their part, monetize their applications and games by facilitating the integration of ads managed by InMobiwhich also collects data to refine its products.

How to conquer the second largest mobile advertising market in the world

Founded in 2007 in Bangalore, from the beginning it aimed to go beyond its country of origin because a large part of Indians still used basic mobile devices. The main markets of its business niche were in United States and China, scenario that hasn’t changed much since then. So he decided to bet first on the North American country and then for the Asian.

After obtaining millions of dollars of financing backed by SoftBankInMobi decided to directly enter the world’s second largest advertising market in 2012. The Indian company not only aimed to offer advertising services for local clients, but also to become a bridge for US clients looking to have a presence in China.

The company picked it up in a study published a year later of its arrival on the market. understand the Chinese cultural characteristics and the specific reasons driving user behavior was key to the business. InMobi grew steadily over the years until reaching the profitability of its global business in 2017. By the time it reached that milestone, its revenue in China had grown 15 times over the previous three years.

InMobi quickly became the largest independent mobile advertising platform in the world. In 2017, this firm’s advertising network reached between 80% and 90% of Chinese smartphones. The service offering allowed clients to place advertising in more than 37,000 applications, reaching some of the most famous in the country.

According to Jessie YangCEO of InMobi China, many foreign players failed in the Chinese market because They did not act quickly enough to adapt. On the contrary, his company outlined a plan according to the needs of the Asian market and did not hesitate to be completely flexible to adjust it along the way. One of the phrases that usually accompanies their press releases is “Think from the user’s point of view”.

InMobi’s success in China has given rise to numerous analyzes of the keys to its achievement. Some of them rescue very interesting elements. For example, the company was able to understand the Chinese market. To achieve this, he hired local staff, including Jessie Yang, who had worked at a reputable consulting firm.

He also carefully studied the Chinese market, identifying trends and trying to stay one step ahead. At first he took advantage of his presence in other countries such as the United States to work alongside Chinese giants like Tencentthe creators of WeChatto get clients in international markets.

Last but not least, he cultivated local partners. China has very strict rules for foreign companies that want to operate within its borders. But tell it to Blizzard and its tense relationship with NetEase. InMobi worked to have good synergy with local firms such as FuguMobile. Once its reputation was established, InMobi began working with large American companies such as Microsoft.

Why other foreign companies have failed in China

After learning about InMobi’s achievement in China, the question arises why other foreign companies They have not had the same fortune. Some of the reasons have been made evident in the previous paragraphs, but let’s delve a little deeper into this aspect taking into account the very interesting analysis which former Silicon Valley Bank CEO Ken Wilcox did a while back.

Launching into the Chinese market without a local partner is practically a leap into the void. No matter how big the corporation is that dares such a feat, the most common thing is to choose to set up a joint venture. And it is precisely here where the first great challenge appears. Companies usually have different final objectives, which ends up generating conflicts and, in many cases, failure.

Another great challenge is the cultural barrier, and especially the concept of “guanxi”. This system, based on building personal relationships through trust and mutual obligations, is key in Chinese business. For foreign companies that do not master this dynamic, moving in this field is complicated, especially when some practices may seem directly inappropriate from a Western prism.

The Chinese regulatory environment is often another problem, and one of the main reasons why foreign companies need local partners. It depends on the type of business, but companies typically need a variety of licenses to operate, plus they must submit regular reports to regulators, which adds an additional operational burden.

Finally, companies must coexist with the constant presence of Chinese Communist Partywhich has considerable control of the businesses carried out in the country. Wilcox explains that Western companies are not usually used to this type of dynamic.

Images | InMobi | David Veksler | Alejandro Luengo | HaziiDozen

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