The US market is not a piece of iron.
Editor’s note: This article from the micro-channel public number “ Deep sound” (ID: deep-echo), author Ma Xiaojun.
This article core points
▪Although the US market is huge, its status as a global vane still attracts Chinese Internet practitioners.
▪ The US market is not a monolithic piece. The performance of Chinese products in recent years has even made the industry giants look.
There are some subtle changes in the US market that may bring new opportunities.
In the 1950s, a large amount of gold was discovered in California, and a wave of gold rushing in the west. Nearly 300,000 people rushed to California from the United States and around the world, allowing San Francisco to quickly develop from a small village. The town also made California officially a state in the United States.
After a century and a half, the United States—especially Silicon Valley, also in California, remains the home of global entrepreneurs. The entrepreneurial story of Silicon Valley’s technology giants became famous overnight, making it a holy place for countless Internet entrepreneurs.
But for Chinese entrepreneurs who want to make a Nuggets in the US, the US market is probably the place where people love and hate.
On the one hand, the high mobile Internet penetration rate and good user spending habits determine that this is a high net worth market; on the other hand, the US market is already a giant, the world’s largest More than half of Internet companies are in the United States. Around the giants of Facebook, Google, Amazon, Microsoft, etc.Your Majesty, it is not easy for Chinese Internet companies to find their place in the United States.
However, compared with the passive learning of the Chinese market in the past few years, more and more Chinese-style innovations have gained the first place in the global market, and the model innovation of “Copy From China” is also Proved in global competition. So, is it a good time for Chinese entrepreneurs to launch an impact on the United States?
The Dragon’s Land of Nuggets
When it comes to the US market, the first thing that makes Chinese entrepreneurs feel pressure is that the US technology giants have a high degree of control over the market.
This example is not hard to find: Facebook’s WhatsApp, Facebook Messenger, Instagram three communication / social tools, the total number of users is about 2.7 billion, more than one third of the global population; and Google is Holds the products of nine billion users including Android, Gmail, YouTube, Google Maps, and more.
Even the US regulatory authorities have expressed concern about the leading position of the US head Internet company in the market. In July this year, the US Department of Justice launched an antitrust investigation against US technology giants. Including Facebook, Google, Amazon, Apple and other technology giants.
But despite the entanglement of the US market giants, the total population of 327 million, the total GDP of $20.5 trillion, and the role and voice of the US market in the global wind vane The US market is still a battlefield that Chinese entrepreneurs cannot ignore when they go out to sea.
At the same time,The United States does have the world’s leading mobile Internet market base. The Pew Center data of the well-known American research organization shows that the penetration rate of American smartphones in adults has reached 81%. At the same time, Americans have a higher use of other mobile information tools: adults who own their own tablets and have their own e-readers are close to half.
In addition, adult users in the United States are increasingly dependent on the mobile Internet. The Pew Center has researched that about one-fifth of American adult users are only accessing the Internet via smartphones, which is already pure mobile Internet users. 20% of adult users in the United States.
On the good foundation of the US mobile Internet market itself, Attracting global entrepreneurs is the strong ability of American users to pay. Data released by Sensor Tower earlier this year showed that the average amount spent by US iPhone users on the iPhone reached $79 in 2018. This level of payment has opened up a lot of emerging markets such as Southeast Asia, India and Latin America.
In addition to the foundation of the user market, The active US venture capital industry has always been the key to the vibrancy of this market.
As the origin of modern venture capital,The US VC industry is highly mature and provides sufficient ammunition for the development of US technology companies. Leverever, Larry Page and Sergey Brin in the garage, or Mark Zuckerberg in 2005, from the establishment of the team to the improvement of the initial corporate management system. In the early stage of the venture, he got the double blessing of his early investors in terms of funds and resources.
From the latest report of KPMG, The US venture capital market is still strong today. In terms of total investment, the growth in the past four quarters was significant. In 2019, the total amount of funds raised by Q2 was reached 31.5 billion US dollars. Moreover, the vertical fields involved in venture capital this year are also quite diverse, and VCs can be seen in many fields such as logistics, takeaway, aviation and consumer goods.
In recent years, the IPO boom of American startups has also promoted a virtuous circle of the industry. In the first half of 2019, a number of strong startups have successfully listed IPOs and have performed well in the secondary market. Beyond Meat, Zoom, Pinterest and other companies, after the listing in the first half of this year, have performed very well in the market, with a peak increase of nearly 100%. They have also been recognized by investors in the secondary market.
Brian Hughes, co-head of the KPMG Enterprise and Emerging Giants Network, also said that as long asThe market remains stable and there are no major macro-volatility. In the second half of the year, we will be able to see more VC-backed startups listing through IPOs.
In this environment, Chinese capital is also very active in the United States. IT Orange data shows that the United States has become the most concerned region in the distribution of Chinese capital overseas investment events in 2018, with more than half of the investment events taking place in the United States. Especially in areas such as medical health that have patent rights and technical barriers, they are favored by Chinese capital.
This situation is also extremely high with the US market The talent density is inseparable. In the latest 2020 World University QS rankings, there are 157 universities in the United States, ranking first. The top university academic ability and high talent density have also attracted Chinese companies. Many Chinese companies have set up their own R&D teams in the United States or recruited talents in the United States. For example, companies such as Tencent, Ali, Baidu, and Didi have set up research centers in the United States to recruit local talents.
A good user market base and a strong support for innovative venture capital industry have made the US market a market full of opportunities for everyone, and it has made the competition even more fierce.
The US market is not a piece of iron
Such a fertile market fertile soil naturally attracts a large number of Internet companies from all over the world.
A trend that deserves attention is that Chinese Internet companies have begun to reverse the past pure pursuit in the United States:The successful experience of the Chinese market is now beginning to work in the US market. Even began to attract the attention of American technology giants.
Shaping the overseas version of Tik Tok’s success in the US market in recent years has attracted the attention of companies such as Facebook and Google. Sensor Tower data shows that in September this year, TikTok has occupied the top three in the US Apple App Store; in June this year, Vibrato and overseas version of TikTok achieved a record high of $10.8 million in global purchases in the Apple and Android app stores. The cumulative purchase exceeded the $100 million mark.
The side of the couch, let others sleep. Overseas giants have begun to deal with the rapid growth of Tik Tok in the United States. According to the Wall Street Journal reported on the 5th, Google has been studying the acquisition of video production startup Firework to counter the growing influence of TikTok.
As a social giant, Facebook naturally does not sit idly by the development of Tik Tok. US technology media The Verge reported that Facebook CEO Mark Zuckerberg mentioned the phenomenon of Tik Tok in the internal meeting in July this year, and said that he will use his short video product Lasso to take the lead in preempting Tik Tok in Mexico. The market has not yet entered, in response to the global acquisition of Tik Tok.
Another Chinese entrepreneur who has captured a lot in the US market is a mobile game.
The United States is one of the most important positions in the global gaming market. According to Newzoo, a third-party data agency, This year, the US will once again become the world’s largest revenue-generating game market after 2015, and the overall market size will reach 36.9 billion US dollars.
At the moment we can see that Chinese manufacturers are quite active in the huge mobile game market in the United States. Vertical media game grapes have been counted, 2018 domestic manufacturers have more than 80 products have entered the North American free list, top 100 list of best-selling list, the first echelon product annual income of nearly 1.5 billion yuan, the head products in the light game can also There is a monthly flow of $3 million. William Tseng, senior business manager of AppAnnie Greater China Games, also said in an open class that Chinese publishers’ revenue in the first half of the year in the United States increased by 52% compared to the first half of 17 years – in the US In a stock market, it is commendable.
The influence of Chinese mobile games on the North American market continues this year. According to data released by SensorTower earlier, the total revenue of Top 100 in the US mobile game market in Q19 in 2019 reached $2.43 billion in the App Store and Google Play, an increase of 27% over the same period last year. At the same time, the Q1 and Q2 Chinese mobile game revenues entering the Top 100 increased by more than 100% year-on-year, and the total revenue in the United States has reached 670 million US dollars.
President of the League of Legends Ghost Crab also said in an interview with the media at the Tencent UP conference last year: “When doing mobile games, North America may chase China to run.”
In addition to the pan-entertainment areas such as short videos and games, in the field of mobile phone hardware, the attention of Chinese companies to the average US user is increasing.
Lan Weilun, Managing Director of Twitter Greater China, said in an interview that “Shenzhen” said that China’s technological capabilities have received more and more attention from overseas audiences and continue to break through Twitter. Number of people. This year, MWC, OPPO used Twitter’s live broadcast, short video and other interactive forms to accumulate more than 9 million video views, which was the highest pageview in history. After half a year, this number was broken by one plus: one plus seven in the United Kingdom, the United States, the conference accumulated more than 14 million video views.
It can be seen that Chinese technology companies have gradually opened up some mouths in the US market and gradually gained the attention of competitors and users in the local market.
New opportunities in the US market flash
For ambitious Chinese entrepreneurs, the changes in the US market itself will also bring some new opportunities.
One of the important trends is The focus of US entrepreneurial innovation is beginning to shift to more areas outside the Bay Area. GGV Jiyuan Capital Management Partner Tong Shihao once said that as more and more engineers choose to live in a city near their alma mater after graduation, Silicon Valley’s absolute monopoly on technology talent is changing. In the past three years, GGV has invested in 11 companies in New York.
When talents such as engineers and product managers begin to flow to other regions, combining regional advantages with cities such as New York, Los Angeles, and Seattle will also drive new local entrepreneurial trends. For example, New York’s advantages in media, finance, healthcare, trade and manufacturing, combined with the advantages of technical talent, have spawned a large number of head-oriented vertical platforms and e-commerce brands.
This change in the regional entrepreneurial environment brought about by the changes in the flow of talents can also be used by Chinese entrepreneurs who need to form a localization team to enter the US market.
Another noteworthy opportunity comes from outside the US. According to Pew’s research data, there are actually digital divides in different regions in the United States. Currently, 15% of adults in remote areas say they have never been online. This figure is less than 10% in urban and suburban areas.
“Deep Ring” was introduced in an article earlier this year,US “outside the ring” There are also certain consumer market opportunities: as a height In urbanized countries, the population of the United States is mainly concentrated in the urban agglomerations on both sides of the strait; and the remote area (Rural), which accounts for 97% of the country’s land area, has a population of only 60 million, and this part of the population There is a characteristic that the overall income is low and the median age is obviously high.
Although the demographic characteristics are similar to those of the domestic five-ring population we usually recognize, due to populationThe total amount is small, the density is low, and the degree of digitization is limited. It lacks the digital dividend of the overall mobile Internet in China in recent years. The US five rings have not yet produced an explosive Internet product like a lot of fun and interesting headlines. The development of targeted offline retail industry: Target, Dollar General and other retail brands targeting this group of people, not only the rapid expansion of the market, and even the stock price recorded a substantial increase.
At the same time, because the living habits of this group are different from those of urban people, there is actually a gap in the market for mobile Internet products that meet their needs. There are already US startups that have seen such opportunities. Wish, the US low-cost e-commerce platform with China as the main source of goods, has won many e-commerce new users in the “US Five Rings” market.
But we should also note that the US-based platform is actually lacking the social dividends that it has when it comes to explosive growth. Wish was disclosed by the media in 2015. The annual advertising fee on Facebook is as high as 100 million US dollars. The huge advertising fee paid to the giants allows the US startups operating in the US outside the “five rings” to develop. Heavy steps.
However, in addition to the competitive pressure of local giants on the entrepreneurial company, Chinese companies have to consider the local laws and regulations when they enter the United States. At the beginning of last year, the US Foreign Investment Committee (CFIUS) once terminated the $1.2 billion acquisition of American mobile payment company MoneyGram on the grounds of “national security”. The advancement of the mobile payment market has had an impact. The pressure from the regulatory level has made Chinese technology companies have to be more careful in the process of development in the United States.
After a century and a half ago, California’s gold rush, only a few people finally got a huge amount of wealth, and most people returned without success. Today, the Chinese entrepreneurs in the Nuggets US market are also prepared to make a return. However, compared with the gold rush, when luck is greater than the strength of the year, the Internet market with strength and determination today is more likely to prove the reward of heaven.
References:-
Venture Pulse Q2 2019 : US, KPMG
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“2018 Capital Going to the Sea: Going to the US to Invest in Biopharmaceuticals, Going to India to Copy the Chinese Model”, IT Orange, Wu Bai
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Google Weighs Acquisition of Rival to Video App TikTok, WSJ, Georgia Wells & Rob Copeland
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“Chinese mobile games lead the North American market, over 80 products in 2018 into the Top 100”, game grapes, Andrew
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“The 2019 mobile game went out to the sea [US article]: In the first half of the year, the gold was over 4.8 billion yuan. Lilith and other sudden rises, the mobile games.
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“GGV Tong Shihao: Why do we invest 11 startups in New York? 》
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“The United States also has “outside the five rings””, deep sound, Ma Xiaojun
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