Entering the Chinese Market as a Blockchain Startup
This was originally a guest post on China Crypto News.
Globalization is a powerful and seemingly irreversible force that has greatly improved the overall standard of living around the world. Technology is one of the primary drivers of globalization, and blockchain technology is one of the most talked about new technologies of the last decade. Blockchain promises to make networks of businesses and individuals more interconnected and efficient. Cryptocurrencies, the digital currencies often associated with blockchains, are instantly global and can cross borders easily, unlike traditional currencies. However, borders still have tremendous power and doing business in any given country presents its own technical, legal, and cultural challenges. Understanding the nuances of the culture and target market we are dealing with takes time and sensitivity. To accomplish Origin Protocol’s goal of creating a platform for truly peer-to-peer marketplace and sharing economy applications that are accessible to everyone, we must take special care.
For the past several decades, strategists have asked businesses this important question: “What is your China strategy?” Although for some the answer to that question is to avoid or ignore China, we decided to place a special importance on business operations and community development in the Chinese speaking world. With China having by far the largest internet population of any country, a thriving technology industry that is home to the largest fintech company in the world, and tremendous national and public interest in blockchain, ignoring China was not an option for us. China has seen an explosion for sharing economy companies and mobile payments have been the norm there a decade. Tencent’s QQ Coin was one of the first widely adopted virtual or digital currencies anywhere, predating bitcoin by 7 years, and of course, it was the subject of mass speculation and trading for a time. Development of blockchain technology is even written into the Chinese government’s five year plan. In many ways, Silicon Valley must actually play catch up to China. Community development plays a huge role with blockchain startups due to the innovative incentive structures they offer. Every user of our platform is also a potential stakeholder of our token. We simply could not build a product and ship it to the Chinese market as an afterthought. We needed to build a thriving community in China before we launched our product and token. China’s largely homogenous population that follows trends closely and is extremely comfortable with mobile payments sets an ideal staging ground for token-incentivized growth.
At a high level, we decided that we needed strategies localized to Greater China. It wasn’t enough to apply the same marketing and community strategies we used elsewhere. This meant that instead of translating articles word for word into Chinese and posting it on platforms like Medium and Twitter, we adapted our written content for a Chinese audience. We changed the style, areas of emphasis, and posted to platforms like WeChat and Weibo. Our articles written for a Chinese audience were shorter, punchier, more visual, and emphasized the educational and professional accomplishments of our team more than our articles written for an American audience. Part of this decision was informed by data telling us China was a mobile-first country. The graphics we designed for China were customized for local tastes and format. We created long vertical banner images with QR codes optimized for mobile viewing, and used a bolder, busier aesthetic than the more minimalist, subdued style we used in the West. When speaking to Chinese audiences in person, we focused on certain value propositions we thought were most relevant. There was less of a focus on censorship resistance or regulatory defenses and more of a focus on financial incentives and the social benefits of decentralization. Although we never implemented any airdrops or red envelope giveaways, we recognized their special place in community building in China.
The concept of “face” and respect are important Chinese cultural values. With that in mind, we made sure to send our founders to China several times to interact with our community, investors, and partners face-to-face. We held meetups and gave presentations in Beijing, Shanghai, Hangzhou, Hong Kong, Singapore, Taipei, Macau, and Shenzhen. It was important to Origin and its co-founder Matthew Liu, a proud Chinese-American, that he give presentations in Mandarin and build a strong personal network in Greater China. We also hired employees who live in Greater China and tapped our extensive network of investors and advisors with expertise in the region for best practices and advice.
It would have been much easier for us to just hire a translator and utilize channels we were familiar with. It was not easy to deal with the restrictions imposed by many Chinese platforms or the regulatory environment in general. For example, our Telegram group has tens of thousands of people in it, but on WeChat, each group chat can only have 500 people and joining becomes difficult after 100 people per group. Telegram, like Facebook, Google, Instagram, Twitter, Medium, etc. are totally banned in China. Registering business or even personal accounts on many Chinese platforms requires either a Chinese ID, bank card, or phone number. Business and software engineering practices are also very different. Open source software development is much less common in China than in the US and business practices are both more formal and less formal simultaneously. WeChat is preferred over email, business dress is very casual, but social hierarchy and respect are important. In the US, paying for press coverage is not the norm and considered unethical.
Around the same time we launched our China initiative, we also launched in South Korea. There were many common goals such as building a strong community and forging new partnerships with blockchain companies, but the way we implemented them was quite different. Besides the obvious cultural differences, almost the entire crypto community in Korea is located within one city, Seoul. In the Chinese speaking world, there are many cities with large crypto communities. The overall sharing economy and fintech/mobile payments space is much more developed in Greater China than it is in Korea, though Korea leads China in most technology penetration and per capita wealth metrics. Despite its reputation for heavy-handed governance, China can be quite friendly to business innovation whereas Korea has been restrictive in some areas. Korean platforms like KakaoTalk and Naver are far easier to use and come with less restrictions than WeChat or Weibo. Traditional channels that we utilized in the US were not banned as they are in China.
Although we are still at the beginning of our journey in China, we can say that it has been an extremely rewarding one so far and we have learned many lessons that apply broadly. We must be able to look outside of ourselves to succeed in foreign environments. Innovation looks different with a different culture and different sets of constraints. Flexibility, thoughtfulness, and respect are requirements to succeed in China and will help us in all aspects of business and life.
Learn more about Origin:
- Buy and sell on our DApp: dapp.originprotocol.com
- Web: originprotocol.com
- WeChat: originprotocol
- Weibo: weibo.com/originprotocol
- Telegram: t.me/originprotocol
- Discord: originprotocol.com/discord
- Reddit: reddit.com/r/originprotocol
- Facebook: facebook.com/originprotocol
- Instagram: instagram.com/originprotocol
- Twitter: twitter.com/originprotocol
- YouTube: youtube.com/c/originprotocol
- Events: originprotocol.eventbrite.com
- Email: firstname.lastname@example.org