Tencent has built a profitable video game business by dominating China, the world’s largest online games market. Now, it is looking to export some of its Chinese games to the U.S. and other overseas markets.
ON A random trip to China last year, when Jessica Wilson found herself being asked whether she would like to part in a reality television show for start-ups — she didn’t hesitate.
“I did not even think twice about it,” the founder of shopping app Stashd, told news.com.au about her decision to apply for the show The Next Unicorn.
“I could see how the market was moving … (and) I always thought Stashd would work really well in China.”
Ms Wilson, who is based in Sydney, was featured on the list of Forbes’ 30under30 entrepreneurs last year. Her Stashd app is already available in 136 countries around the world and offers about 500,000 products. Now it’s ready to take the next step into one of the most lucrative markets in the world.
Ms Wilson’s involvement in The Next Unicorn, which is similar to Australia’s Shark Tank, gave her invaluable advice and exposure in China, with the show airing to 150 million people.
On the back of her success, she launched a Chinese version of her app this year and this week announced a partnership with mega-company Tencent.
While not many people in Australia will have heard of Tencent, it is one of the biggest internet companies in the world and in China it rivals Alibaba for supremacy.
Ms Wilson said she thought the relationship could be game-changing for Stashd because of the reach and localisation the Chinese company could provide.
“It’s incredibly exciting,” Ms Wilson said. “With the rise of the middle class in China, they want access to western brands and we can see the potential.”
The Asian market is bigger than the European and US markets combined and Ms Wilson said she always thought Stashd, an app that functions like a virtual mall, would do really well in China.
“Trends are huge over there and if you can tap into the right generation, which I think are the millennials in China, they are just so fascinated with western fashion,” she said.
Buying online is viewed with suspicion though, because there’s concern among Chinese they are not buying genuine articles on local sites like Taobao.
“So if you can be that genuine portal to access western fashion … I think that outcome is huge, it’s ridiculous, it’s just fitting into that niche,” Ms Wilson said.
Ms Wilson, who announced the strategic shareholding with Tencent Lei during an appearance on Monday at the Sydney China Business Forum, said it was already adding value to her company.
“We’re raising a seven figure (funding) round and it looks like we’re close to closing that, with that value add of Tencent,” she said. “So it definitely increases the value of the company but we can’t speak too much around the dollar side.”
Tencent runs the biggest app store in China with 700 million users, which is more than double the population of the US. It also owns WeChat, the largest social media platform in China.
As many others have found, Ms Wilson said the biggest challenge to doing business in China had been localising her app as the system over there was completely different.
“We had a time when we launched the app and we didn’t get many downloads at all, we realised what we were offering was not what the Chinese were expecting,” she said.
While those in western countries are familiar with logging in to apps using Facebook or email, in China there was no Facebook and not many people used email.
“We had to completely scrap that,” Ms Wilson said. Instead they tweaked the app to start using QQ and Weibo as login processes.
Another issue was the many app stores available.
“We’ve got Google Play and the App Store and that’s pretty much it. Over there there’s like 13 app stores, each of them have a different process to launch, let alone feature,” Ms Wilson said.
“It’s literally like a completely different world.”
As part of the partnership, Tencent Lei will be taking a 10 per cent stake in Stashd’s Chinese business. It will provide Stashd with expertise through its innovation centre.
“They’re giving us access to their marketing teams, giving us an office in Shenzhen or Shanghai, wherever we chose to locate ourselves,” Ms Wilson said.
“They’re giving us preferred positioning in their app store, which has 700 million users and access to WeChat Pay, which is their payments option.
“They’re helping us recruit a CEO so it’s very holistic in helping us.”
Ms Wilson said she knew she wanted to partner with a local company after launching the Chinese version of her app shortly after her appearance on The Next Unicorn.
Stashd was in the top 10 new apps on Tencent despite the teething problems and Ms Wilson realised she should probably take it more seriously.
“I’m sure we could have plodded along and tried to do it ourselves but with where I wanted the business to go, I knew I needed someone who could add that sense of localisation, resources and exposure,” she said.
“I thought if we are going to take this seriously we’ve got to align with one of the big players.”
Ms Wilson said she thought a lot of people almost overthink the process of doing business in China.
“I’m just the type of person that says, ‘let’s just go and see … get the balls rolling’, then you learn and you figure things out.
“I do that with a lot of guidance as well. I do have an advisory board and mentors who have done business in China before.
“I think people spend a lot of time almost getting caught up in their head around how hard everything is, rather going out there, finding the right people to come with you to the meetings, figuring out the right questions to ask (and) getting the relationship going.
“China is very much personal relationship driven and that’s kind of how I like to do business anyway so it worked out well.”