Exclusive Interview With Twitter's Alan Lan: How To Do Business In A Country Where Your App Is Blocked

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In a country where its app cannot be opened, Twitter has found where to dig for gold.

"Although Twitter has zero monthly active users in China, the market outside the 'Great Firewall' is vast, and Chinese businesses can promote their brands to the entire world," Alan Lan, Regional Director of Twitter Greater China, told TMTPOST. This is Twitter's biggest and most crucial business in China – overseas advertisements for Chinese companies.

Advertising is a very old yet lucrative business. According to its financial report for Q2 2019, Twitter earned revenue of US$841 million in Q2, representing a YoY increase of 18% from US$787 million. Among that, US$727 million was from ad revenue, a YoY jump of 21% up from US$601 million; thus Twitter's ad business contributed to over 80% of its total earnings.

Despite their isolation, overseas internet giants have never given up exploring the Chinese market. At the Global Mobile Internet Conference (GMIC), which took place at the end of July, overseas internet companies including Twitter, Google and Facebook were present to explain their smart marketing strategies, all hoping to build connections with Chinese companies that are going abroad.

They seized this window of opportunity amidst a new wave of Chinese companies going global, which is also a unique survival strategy in the Chinese market for overseas internet companies such as Twitter.

From 'bringing in' to 'going out', a pivot for prizing up the multi-million-dollar overseas market

As the very first Twitter employee in China, Alan Lan witnessed how the company kicked off here from scratch. Back in 2016, Twitter China's business was still focused on the inbound tourism market. Based on search histories of overseas users, Twitter pushed targeted ads of travel items, including travel agencies, in order to attract foreigners to visit China and spend here.

Today, Twitter still needs to tell a good China story to its overseas audience, though now it is more about 'going out' than 'bringing in'.

Speaking on this transformation to TMTPOST, Alan Lan summarized it as a kind of spillover effect. In his view, the Chinese economy has been growing at an extremely rapid pace for the past 40 years, and in doing so has completed the key process of going from zero to one, or none to some. To keep doubling in size would be difficult and may require moving down to third-, fourth- or fifth-tier cities for marketing. Many Chinese brands have thus now focused their gaze abroad.

Currently, Japan is Twitter's second biggest user market after the US. Published data shows that Twitter Japan has over 45 million monthly active users, with ad revenue in Japan in Q4 2018 amounting to US$138 million.

But Alan Lan thinks that for companies that are going abroad, "the entire world is their targetable market. In this business alone, China has the potential to achieve a scale even larger than that of Japan." And it will be a market in the sphere of several hundred million dollars.

In fact, international business has grown to account for over half of Twitter’s total revenue. At the Q1 2019 financial report conference call, Twitter remarked that, though revenue growth in the US reached 15% in Q1, international business will grow even faster than the domestic sector in the future.

To meet the ever-increasing demands of the Chinese market, Twitter has not only expanded its business team in China, but also established a special new-customer team for serving tier-two region customers.

Twitter Greater China's business team is based in Singapore, but its sales team operates out of Hong Kong given the ease of meeting customers in person there. Within last year alone, Twitter's global inter-departmental team for supporting its China business has undergone three expansions, including support departments such as sales, brand strategy and R&D.

Alan Lan, Regional Director of Twitter Greater China

In its sixth year of business in China, Twitter has bypassed a rough period of reclamation to now enter an era of meticulous cultivation. Whilst previously it could only serve tier-one customers, with an upgraded staff Twitter has now spare energy to serve its tier-two customers, and expand out of Beijing, Shanghai and Guangzhou into second- and third-tier cities.

The overseas markets chosen by Chinese companies for advertising mostly comprise emerging markets of Southeast Asia, the Middle East and India. Benefits of the Belt and Road Initiative, spillover effects from domestic productivity, driving forces of capital investment, attractive demographic dividends in emerging markets… All these factors have combined to effect this wave of Chinese companies going global.

Although demands are high in these emerging markets, Alan Lan believes that it all depends on whether those within China are willing to invest long term – whether they are looking to build an ecological chain that lasts, or to simply quickly obtain user data in the short term. "Markets in Europe, America and Japan carry more weight, but to beat the ads from local businesses there is also harder. If you want 50 million users quick, the fastest way is to go to the Middle East, India and Southeast Asia."

But the problem with emerging markets is poor monetization. "A product may have tens of millions of users in India and make a round of financing, but it doesn’t actually bring in profits upfront. If you want to cultivate it long term, you must understand the needs of local customers."

Alan Lan thinks it is very important to break the stereotypes held by foreigners towards Chinese brands. Before using Chinese e-commerce apps, foreign customers generally view Chinese e-merchants as unreliable, but their trial experience would fly in the face of their assumptions – they are met with not only fast deliveries, but also free shipping and easy returns.

With livestreaming as its lifeblood, how does news master Twitter tell its stories?

The six years from 2014 to now mark a period in which Chinese companies transitioned from 'tool exports' to 'content exports'; it is during this time also that Twitter managed to rise from the ashes and find its way despite the pessimistic cries that Twitter was dead.

The challenges facing Twitter come from both outside of the company and within.

Google and Facebook had a big headstart on Twitter In the overseas marketing of Chinese companies and have already built giant ad sales networks in China. In terms of monthly active users, Twitter's 300,000 still stands short in comparison to Facebook's 2.3 billion and Google's 1 billion.

According to published data, in 2018 Facebook earned a total of US$5 billion from Chinese ad agencies making up about 10% of its total sales. On the other hand, 'The Information' once quoted an anonymous insider who said that in 2018, Google's revenue in Greater China (including both the mainland as well as Hong Kong, Macau and Taiwan) increased by over 60%, surpassing US$3 billion.

An anonymous source specialized in overseas smart marketing told TMTPOST that, judging from the volume, Google and Facebook run the largest overseas ad businesses. However, while Google concentrated on the search and Facebook focuses on social networking, Twitter emphasizes livestreaming and a sense of presence: there is a different tone to all of the three channels.

News media, real-time and a sense of presence distinguish Twitter's product from the other platforms. Ever since 2016 – when Twitter changed its category from 'social networking' to 'new media' to avoid competition from Facebook on the social networking front, followed by the launch of its livestreaming strategy – Twitter's financial reports have gradually improved. From being labeled 'doomed' after going public in 2014, Twitter achieved its first positive balance in Q4 2017 and has exceeded market expectations time and time again.

Through interaction modes including livestreams and videos, Twitter wishes to develop its real-time and news media features. Back in 2017, Twitter secured broadcasting and livestreaming rights of well-known sports events such as the NBA, NFL and MLB, while also reaching collaborations with news channels including Bloomberg and Buzzfeed.

In accordance with its real-time feature, Twitter's ad strategy is to develop "close relations to events." For example, during the FIFA World Cup, Twitter pushed a hashtag #Football, while tweets discussing the World Cup gained 115 billion accumulated impressions. Moreover, during Super Bowl 2019 (NFL) Twitter launched a series of hot-topic discussions during the course of the game.

"A leading video clip-based social media platform from China collaborated with Twitter, had a round of marketing during the Super Bowl and successfully seized the time when user attention was the most focused across the entire country of America," Alan Lan said. "This is what we mean by knowing the trending local demands before throwing in the ads."

Livestreaming of sports events is undoubtedly the most popular topic on Twitter. Alan Lan revealed to TMTPOST that he Is already bustling around for the 2020 Tokyo Olympics. "Tokyo is geographically very close to China, so it's a particularly good opportunity for Chinese brands who want to take advantage of the Olympics."

Twitter wants to be the first stop for news headlines and to have users voice their discussions on its platform of public opinion. Therefore, Twitter also has a knack for livestreaming product launch events, and many Chinese tech companies have livestreamed their launch events on its platform.

Take OnePlus as an example: previously, Chinese manufacturers would usually select either Shenzhen or Barcelona to launch their products. However, considering time differences and the event being a global launch, Twitter suggested that OnePlus livestream in both London and New York time zones on the same day. In the end, the two livestream events each attracted 7 million views, totaling 14 million.

OnePlus livestreaming its launch event on Twitter.

"Twitter is both real-time and news-worthy, and users hold an explorative attitude while on it." Alan Lan spoke to TMTPOST of a user test they conducted: "According to the neuron tests, users demonstrated a better memory of information obtained on the Twitter platform."

Under this new wave of Chinese companies going abroad, Twitter's role and scope has grown beyond just a distribution platform; it also wants to be a consultant that provides one-step services for its clients. Through analysis of over 500 million daily tweets on its platform, Twitter is able to infer new opportunities in different markets and send them back to its Chinese clients.

As the middleman, Twitter must integrate the client's USP (unique selling point) with the current hottest topics among users in order to come up with creative marketing ideas.

Alan Lan showed TMTPOST an example of a Chinese brand Bluetooth earphone. AirPods are the bestselling Bluetooth earphones globally, making up over 60% of the total market. By analysing the relevant data, Twitter found that every day there are over 7,000 tweets mentioning "losing one AirPod," demonstrating the level of users' frustration. In contrast, one of the features of the Chinese brand’s product is a magnet that keeps the earphones stuck. Thus they came up with this pitch: "How many AirPods have you bought and lost? Over US$100 each is quite a sum. Consider this inexpensive alternative from China that's both Apple-compatible and loss-proof." Such creative marketing hit right on the user's pain point and set itself apart from any crude shouts of "big sales."

To further strengthen its dominant position in livestreaming, Twitter recently announced the establishment of its ArtHouse department, which integrates viral contents from all over the world and provides one-stop services for digital content production and brand livestreaming.

"We offer transparent pricing and cross-platform services. Even if a Chinese advertiser wants to find an internet celebrity on Facebook or YouTube through Twitter, it can be done. The final marketing product can be launched on other overseas social networks and even domestic platforms like Little Red Book and Weibo," said Alan Lan.

Chinese companies going abroad have puffed up the prospects of overseas marketing, but growth in revenue of platforms like Google and Facebook are not to be sneezed at. With a bigger plate comes keener competition.

Through its own self-revolution and service optimization, Twitter has hastened in its moves to mine gold in the Chinese market. But Alan Lan believes it is still a long road ahead, and both he and Twitter are choosing to take the long-term view.

"Popularity and reputation are still on the way. Building a brand's value and developing customer loyalty are both processes that take time."

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This article was edited by the TMTPOST team. Please note source and hyperlink when reproduce.

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