Though large, the China market is not known to be easy for foreign firms to enter. How does crowdfunding site Pozible plan to make a successful expansion?
Mention China, and many businesspeople based there will start waxing lyrical about the need for guanxi (connections), its convoluted government approval process, and special privileges given to local firms. Regardless of whether these tales are true or not, they do not seem to have dented the enthusiasm of foreign companies to expand and capture a portion of a 1.6 billion-strong market.
The crowdfunding space is no exception. Where Kickstarter and Indiegogo dominate the market in the rest of the world, local sites such as Dreamore and Demohour rule the roost behind the Great Firewall. That said, it hasn’t stopped global crowdfunding firms such as Pozible from making a crack at the China market.
Here, in an exclusive interview with e27, Co-founder and Director Rick Chen talks about Pozible’s strategy to conquer the China market.
What are the main motivations behind Pozible’s expansion to China?
China is a massive market; there is a lot of potential and there’s a big crowd. Secondly, I’m Chinese, and so China is a home market for me. I have always wanted to take Pozible back home, so to speak.
How will Pozible differentiate itself from current Chinese crowdfunding platforms like Demohour or Dreamore?
To start with, it is very hard for Western crowdfunding platforms to operate in China, creating a closed environment for local firms. Likewise, Chinese crowdfunding platforms are ill-equipped to venture outside China to get attention from an international support base.
What Pozible aims to do is bring our international audience together with the Chinese public, to facilitate the flow of project ideas in and out of the Chinese border. For instance, a Chinese project on Demohour will be able to reach out to only Chinese citizens, but with Pozible it can receive both, Chinese as well as global support.
How do you plan to overcome the challenge of regulations in China?
There isn’t much regulation with regards to crowdfunding in China, and platforms can operate relatively smoothly through pre-sales of products and services. We don’t anticipate many structural challenges there.
What is the strategy to market for China?
We have a local office in Shanghai to help facilitate the actual projects here, and it is within our interests to expand our China representation through local staff, as well as more engaging ways through local activities, presentations and workshops to educate people about the opportunity of crowdfunding on a global stage, as well as what Pozible has to offer in terms of resources in order to help them get there.
Basically, we act as a bridge between East and West, taking Chinese companies out of China and at the same time bringing global crowdfunded companies into China. Through this, we aim to merge the two user bases, creating a larger common market for Chinese and global firms alike.
Will Pozible be partnering local crowdfunding companies in its push to China?
We don’t have much in the way of a partnership strategy with other crowdfunding firms. In fact, since we already have a team of our own there, we would most likely be operating our China branch by ourselves.