Cheetah races ahead in overseas markets
Chinese Internet security company listed on NYSE enjoys surge in mobile revenues, Fan Feifei and Hu Yuanyuan report.
Fu Sheng, CEO of Cheetah Mobile, a NYSE-listed Internet company, said the company’s success in exploring the overseas market could be emulated in short order by emerging Chinese enterprises.
“The era for China to enter the international market has already arrived,” Fu told China Daily. “It is possible for Chinese enterprises to become global companies because mobile Internet has allowed the split regional market to combine into a global market.”
Fu said the Chinese Internet model has its own advantages in the world, and the stage has been set for Chinese-made mobile apps.
Born in 1978, Fu worked for five years at Qihoo 360 Technology as general manager of the software group, leading the development of the 360 safeguard products that became the cornerstone of Qihoo 360. In addition, he served as vicepresident of Matrix Partners China, joining the company in 2008, and founded Conew Image, where he served as the chairman and CEO, in 2009.
Fu founded Cheetah, the largest mobile tool developer and secondlargest Internet security provider in China, in November 2010, as a merger between two companies — Kingsoft Security and Conew Image. Fu led the successful listing of the company on the New York Stock Exchange in May last year.
The company’s first quarter financial statement showed that its mobile and overseas revenue surged. The mobile income has reached 370 million yuan ($60.2 million), soaring 584 percent yearon-year and taking up 55 percent of the total revenue, which was also the first time that the company’s mobile business, driven by mobile advertising services, contributed more income compared with that from desktops.
The overseas income totaled 260 million yuan, accounting for 38 percent of its total revenue and 70 percent of the mobile income.
“Our mobile monetization, especially in overseas markets, has already become our main source of revenue and a key growth engine for us,” said Fu, explaining that overseas income had grown rapidly considering it was zero in May last year.
Fu estimated the overseas income will soon account for more than half of the total revenue.
Cheetah said its mobile products have been downloaded more than 1.34 billion times worldwide, with about 443 million monthly active users. Seventy-one percent of monthly active users are from Europe, the United States and other overseas markets, according to its first quarter financial statement.
Its mission critical applications, including Clean Master, CM Security, Battery Doctor and Duba Antivirus, make the Internet and mobile experience speedier, simpler, and safer for users, the company said.
“One of our biggest advantages compared with American enterprises is that we could hire about 1,000 engineers within a year, but it is very difficult to do that in Silicon Valley, only Google and Facebook have that kind of charisma. Moreover, our free-of-charge mode is really attracting users.”
Fu pointed out the
competition of the domestic IT industry is much fiercer than overseas, which also provides a good opportunity for Chinese enterprises’ overseas expansion.
“When we set out to go overseas, we saw each app on the category of Google Play tools. Interestingly, I found the No 1 app on the imageranking list is developed by several programmers in Hangzhou, Zhejiang province. This means you don’t need to possess a strong overseas background, as long as users feel your product is good, then you can still acquire large amount of users,” Fu said.
However, Chinese Internet giants such as Baidu, Alibaba and Tencent heavily depend on the domestic market.
The success of Cheetah Mobile in overseas markets lies in its assetlight firm, requiring no offices overseas. It is not a separate case and its mode can be copied by other companies, Fu said, suggesting the successors should view the globalization with a differentiated thought, looking for a point which is often neglected by others.
Xue Yongfeng, a senior analyst at Analysys International, told China Daily that the success of Cheetah Mobile comes from being in the right place at the right time. “When the company plans to explore the overseas market, its major competitors focus on the domestic market, so the competition at the overseas market is not intense. Moreover, the tools application is popular among overseas users.”
However, when the new Internet startups plan to go overseas, they might come across more difficulties, as their competitors have already gained most of the market share, Xue said, adding: “A new field the Internet startups may be involved in is the mobile game, which could attract huge amounts of game players overseas.”
“We aim to be a big data company from the previous tool provider, making use of big data and precision marketing to realize the redistribution of global data traffic,” Fu said.
In March, the company acquired the entire equity interest in MobPartner, a global mobile advertising company, to build one of the world’s leading mobile advertising platforms. It also signed a commercial agreement with Nanigans, a provider of social and mobile advertising software and pioneer in advertising automation software.
However, pioneering in an enterprise is naturally never plain sailing. The biggest challenge Fu has come across is the merger between the two companies, Kingsoft Security and Conew Image, in 2010.
“I have never managed a company with more than 100 staff members before, but the new company has 400 to 500 employees. Moreover, at that time Kingsoft antivirus software just claimed it would be free of charge forever, so the competitors massively attacked us.”
Fu also remembered one day before the company was to be listed on NYSE, stocks of Chinese companies listed in the US dropped by 7 percent, while he almost couldn’t enter into the US as his visa had expired.
“The entrepreneur should face obstacles instead of avoiding them. You should think you still have the ability to make things better and make efforts to solve problems by yourself, never shuffling responsibility onto others.”
Fu indicated the future layout of the company’s overseas market would concentrate on developing countries, such as the BRICS — Brazil, Russia, India, China and South Africa. “The European and American markets are mature, so the rapid growth is not easy to realize. But the development potential in these developing countries is huge.”
Although Cheetah’s core advantage is overseas, it continues to explore the domestic market. Fu introduced that their free apps could be pre-loaded into the smartphones of Xiaomi, Huawei, HTC and Asus, and the biggest advantages at the domestic market is that they participate in the industrial chain and remain committed to work with industry partners, instead of treating their competitors as enemies.
Apart from its utility apps, Fu unveiled last year a smart air filter, known as Baomi, for home use, marking the company’s first foray into hardware.
Fu said the company will not fully enter the hardware domain. “Smart home devices mark the first step in our effort to unite hardware and software. What we could do is to make the hardware smarter.”
Fu has a number of hobbies, such as climbing, diving, skiing and running. Although he is busy with entrepreneurship, he still spares time to be with his 7-yearold daughter.
“I have taken my daughter to Disneyland five times. We have traveled to Hong Kong, Japan, Maldives, and many cities in China. We even skied in France and the US,” he said, adding he had a conference in Hawaii this month and took his daughter along.
But during Fu’s first years of startup, he also had a hard time achieving the balance between his work and the family.
“My daughter refused to let me hug her when she was one year old as it was the first time I had seen her since her birth,” said Fu.
For Lei Jun, CEO of Xiaomi, China’s hottest smartphone company, who once worked with Fu at Kingsoft, Fu is a determined, persistent and competent person.
According to Lei, he has met many competent people, but Fu is the only one who has real determination, perseverance and real entrepreneurship. Contact the writers through email@example.com