Getting into the China market is crucial if you want to be a truly global company, says Max Cumming, business development lead of geolocation app what3words. Here’s how his company is going about it
what3words is a simple but innovative solution to a common problem. Founder Chris Sheldrick used to work in the music industry, and became intimately acquainted with the flaws of using street addresses to navigate to unfamiliar locations. For instance, they cannot tell you where a specific entrance is at a huge music venue, and sometimes one postcode covers an immense area.
He attempted to use GPS coordinates, which offer a much more precise location. Unfortunately, a minor error in a lengthy list of digits can have a huge effect on where you end up, as Sheldrick discovered one day when a band arrived an hour north of Rome, when they were supposed to be performing at a location an hour south of the city.
The what3words solution was to divide the globe into a grid of three-metre squares. Each square is assigned a set of three unique words (Nelson’s Column in Trafalgar Square, for instance, can be found at ///beans.again.voting). The technology is available to consumers as an app, available via the Android or iOS app stores, which supports 45 languages including Chinese.
An ever-growing number of businesses are also integrating the system to improve efficiencies or to drive a smoother customer experience. From travel guides to emergency services, what3words is a precise and user-friendly way of defining a location, whether you’re organising a delivery to a safe space or lost in the Gobi Desert.
The company launched in 2013, and began to start looking at the Asian market in 2018. “One of the reasons for this is frankly that it’s one of the biggest markets in the world, and it is moving at an undeniably fast pace,” what3words’ business development lead Max Cumming tells us. “Our ultimate ambition as a company is to become a global standard for communicating location. You can’t become a global standard in anything if you don’t involve one of the largest countries and economies in the world.”
The key to what3words’ success in the Chinese market is an understanding of the significant differences between the UK and China and how those differences can impact their operations. The market can be a minefield for the unwary – intellectual property, for instance, is famously hard to protect in China. Although regulation has improved in recent years, it remains up to businesses to look out for their interests. Check out the UK government’s website for more information about how best to prepare for these risks.
For what3words, preparing carefully for expansion and taking advice from contacts and experts was vital. “You have to learn about the Chinese market from a legal standpoint, but also from a product standpoint,” says Cumming. what3words employed 100 professional linguists to make sure its product was optimised for China. “We effectively localised every aspect of our product and our branding to make sure that it felt more appropriate for the Chinese market,” says Cumming. At the same time, it was important to remember that China is not a monolith, but home to 1.4 billion people spread across a huge nation.
I met with this company at 11am on a Monday morning [regarding integration with what3words], says Cumming. “By 3pm, I had a message telling me that the integration with our API was done. The next morning it was on the app store
Contacts and advisors are vital for confronting this diversity – as well as for navigating China’s complex legal and regulatory systems. In some cases, Chinese restrictions require foreign businesses to work with a local partner, and it’s paramount that organisations do their homework to ensure that potential partners are trustworthy, reliable and compliant with China’s labyrinthine regulations. Cumming emphasises the value of working with Chinese speakers. “It’s really, really important to be able to communicate with people in their own language and on their own terms.” British organisations like the China-Britain Business Council (CBBC) and Department for International Trade (DIT) give what3words ongoing advice on working in the country, as well as introductions to other businesses experienced in operating in the region, who can in turn recommend contacts of their own on the ground in China.
Cumming advises being “very, very open to feedback” from Chinese contacts. “What I found from working with people in China is that people are very open and honest, and will give you fantastic nuggets for how to further localise your product or your marketing materials. As a British company, you should be open to understanding that China is a very different country and people operate in different ways. Soaking up as much as you can from people on the ground is very valuable and beneficial to your growth and to your understanding of the market.” Developing an understanding of China is key when it comes to operating successfully and avoiding any pitfalls. The UK government also has resources to help get started with due diligence.
Speed and change
UK businesses might be shocked by the speed at which things can move in China. what3words staff working in the country were certainly taken aback – but quickly saw the advantages. “I met with this company at 11am on a Monday morning [regarding integration with what3words], and then I left them at 12pm,” says Cumming. “By 3pm, I had a message telling me that the integration with our API was done. The next morning it was on the app store.” Whereas timelines for large, Western companies are usually defined in terms of years, in China they are frequently defined in months.
But while that speed is seductive, it’s important that businesses do not allow due diligence to slip. A quick turnaround might be profitable in the short term, but a failure to address the legal, regulatory and ethical issues can impose serious long-term costs on a business, not only in terms of fines and lawsuits, but also reputational damage should any failings in due diligence come to light in the media.
Despite the challenges, Cumming anticipates that China will continue to grow in importance, not just for what3words but the global market as a whole. And this won’t just be a case of foreign organisations expanding into China. “I’m seeing a lot of Chinese companies that are now looking to expand into other countries,” he says, highlighting how automotive companies like Great Wall Motors and electric vehicle startup Aiways are setting their sights on markets from India and Russia to Germany and Corsica.
“I think there’s this mutual understanding that the UK is looking out at China, and China is looking into Europe, so there’s going to be a merging point. If I had my crystal ball, I would say that we’re going to be more closely tied to one another in the future.” As these ties grow closer and closer, a strong understanding of how to navigate the complexities of China’s market will only increase in importance.
what3words partners in the region include Mercedes-Benz, whose vehicles can navigate to a what3words address, CK Maps which is helping Chinese tourists navigate abroad, Sherpa’s who are delivering food hotter and faster thanks to more accurate addresses, and Time Out China.
This article was published in partnership with china.theweek.co.uk, techUK and CBBC.org. Visit the digital and tech China hub to learn more.