China paradigm

[Podcast] China paradigm transcript #1 : How to switch from an agency to SaaS model with Thomas Graziani

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In this episode of China paradigm, Matthieu David interviews Thomas Graziani, founder of WalkTheChat. The podcast explores how he switched from an agency model to a SaaS product model in China, how to build a business in China, and what the product WalkTheChat can bring to e-commerce businesses to get access to the Chinese market through WeChat. WalkTheChat has been featured in many blogs, publishers and has been recognized as a top player in the WeChat ecosystem by many international firms based in China.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.


Transcription:

Matthieu David: Hi everyone. I’m interviewing today Thomas Graziani, founder of WalkTheChat, and I am happy to interview you, in this first episode of Daxue Consulting Chinese business podcast. I’ve known Thomas for some time. He has been a long time friend of mine; we met for the first time five years ago in Beijing. He was still working at a very large company, was not large yet. He was at the very beginning of WalkTheChat. I followed his entrepreneurial story and one of the things I’m very interested in knowing more is how he switched from an agency to a SAAS (software as a service) system, to a SAAS model in China. Which is what he had been doing although I think the last two years. And more about how he came up with this idea Walk The Chat which I think is the first idea he had, the first business he started, and I’d like to close this. Welcome, Thomas thanks for being with us.

Thomas Graziani: Hi Matthieu. Nice to be here.

Matthieu David: How was it, the intro?

Thomas Graziani: Pretty good, Very transparent. I like it.

Matthieu David: Okay thanks, so yes I know you, I think we met on June 14, 13. When did you think about WalkTheChat?

Thomas Graziani: Around three years ago but I think we know each other before that. I tried to start an art photography gallery in January in Beijing and that’s when I first met you. I was recommended talking to you to discuss pricing in China for my products and that was the first introduction from our friendship.

Matthieu David: Ok, I don’t remember. Ok all the things that are going on, and you have been to a very different company like Walk The Chat. Could you tell us what is Walk The Chat right now?

Thomas Graziani: Yes, today we are basically an e-commerce platform which enables merchants outside China to sell inside China via WeChat. So, it’s like a Chinese WeChat version for Shopify. You can create your store, and then your Chinese customers buy in China with a completely-China WeChat friendly interface, and you receive the money in your bank account in the US.

Matthieu David: I see. So to sum up, you are providing the kind of plug-in solution for Shopify shops for any platform?

Thomas Graziani: And it plugs into other e-commerce platforms. So, you can work by itself without any third party but let’s say you have a shop. If you want to run all your orders all using the inventory to Shopify then you can just use a platform to provide a storefront and maybe some kind of specific CRM and targeting ad campaign capabilities, but you manage your actual orders on Shopify. So, as you are really healthy two options, you can really do every single platform. You can just use it for the front-end commercial side and use your magneto Shopify store.

Matthieu David: Okay, so if one person who is listening to us and has a Shopify shop, he can take your plugin and immediately be visible on the Chinese market. Does it mean that it would get traffic immediately? It will have to bring traffic maybe, but that’s not which is actually the purpose, which is to connect like I guess a bit like Lengow in Europe. Do you know about it?

Thomas Graziani: Yeah I do, kind of similar and with differences. I believe I’m not an expert of what they do, but they enable to basically have a centralized way of listing your colours in different E-commerce platforms in China. What we do maybe is a bit more specific to each other. It’s also more customized for WeChat. But to answer your earlier question, yes you’re right. Once our merchants set up on WeChat, they don’t get instant traffic, so we don’t make the promise of merchants that just by listing on a platform will get sales. When they use our platform basically it’s just like if you created your Shopify store and then you need to drive traffic to it.

So, we do have clients who get sales very fast, but it’s because they already have an interest in their products in China. And then with the launch on widgets, some of the customers find it more convenient and start buying. So, we do notice there are some cases of time to launch and without any special promotion. Because they had some kind of existing presence in China they were already selling on other marketplaces when they started launching on Wechat and which items are provided to collect to be cheaper because it was their own channels that even have to pay the fees to all these platforms then kind started buying to it directly. But that’s as a minority of the cases or clients which they have to earn campaigns so that we can get it.

Matthieu David: Ok, ok I understand. So can you tell us about WalkTheChat now besides of the company, number of people working or number of clients, anything you can disclose to give a sense of this science and momentum that you’re having now for the SAAS business model in Chinaaudience?

Thomas Graziani: So, today we work with about 100 paying customers, so the way we work is basically mostly recurring revenue. So, clients pay every month to be able to use our platform and then the fee is about between 200 and 1000 USD for that reserve software. But some of our clients they are more than that, so you are asking earlier if we were handling the part about traffic. The answer is sometimes. So for some or all of our clients, we provide this kind of half basic e-commerce layer where we charge between as I said 200 and 1000 USD. This is how basically works a SaaS product model. And then on top of that, we have some sold services which can include customer service, marketing content. But we don’t do that with all our clients we actually do that with a small percentage of all clients, with whom we really want to do the washing the full stack approach so that we really understand how to market to China and we stay connected to the market. I put some of our clients, also agencies then, we’re selling the platform to their clients, in that case, they would handle everything. So, yes as I was saying about a hundred clients, wh can bring between two hundred to ten thousand USD or above of revenue depending on the size and on the services that they purchase from us.

Matthieu David: Ok, among the clients you are getting now, what’s a typical client, what do they sell? Like I guess it is an only physical product? Or services like travelling?

Thomas Graziani: It can only be physical products because we’re doing 12 audit payments with WeChat and we have to basically make sure the platform is not being used to funnel money out of China. So, you know the floor seems to be clean when a transaction takes place it must be associated with a Chinese customer ID, and with a shipping number so that then the Chinese government’s if they want, can track and make sure that we’re not using the platform to take revenue out of China. Because converting from local Chinese currency to USD is actually a very regulated thing. So, we have to operate in this framework which is set by WeChat. And to answer your previous question, a typical client very often will be either in fashion like cosmetics FMV industry. Usually, we’re talking about client well not super famous things within the niche.

So, very often like mid and niche fashion brands which are maybe famous in New York might have some do it in New York or Italy in the local market. But they are not LVMH level, and they want to get started in China so not selling here yet and they want to get visibility. Very often our clients would already have some kind of disability in China. Maybe some borders already identified the brand start talking about the brand because they don’t have the official channel yet to sell. So, that’s when we come into play, and we help them set up this official channel to cause border. And they don’t want to have like fruit flies like beat teams in China at this stage, they just want to basically be able to sell to this market, and that’s why we help.

Matthieu David: So, when do you think a company should contact you? When do you think company stuff so breaking WalkTheChat before you say mid-sized when you are reaching the mid-size? Do you have any metrics?

Thomas Graziani: Yes usually there should be like somewhere above 20 million USD of sales in the home market. Because getting into China is not necessarily cheap, we don’t want to promise in any way to our clients. We don’t tell them ‘Well you’re gonna spend like a few hundred bucks on the platform and then you would get sales.’ We try to be transparent about the fact that there is very often marketing expense to get started in China. So, very often it would be at least dozens of thousands of US dollars spent on paying some key opinion leaders so that they start promoting the brand. So, we have some good cases of companies spending less and sass, or recently we had a fashion brand which feels like a thousand US dollars of investment in checking and meters got about just below sixty thousand US dollars of sales for a company which is basically just getting started in the Chinese market.

So, we are getting good results sometimes with low investment, but is not first still an investment and very often we would advise having at least an envelope of fifty thousand US dollars to put in this marketing. So, we’re talking about brands which are already established in the local market and who can spend a bit on the acquisition to get that initial momentum. Because otherwise, we don’t want clients who just basically present a list of products and they don’t get any sales. We try to discourage this. Of course, there are some cases where clients could get to some results without some big investments.

As we said if they have existing visibility in the Chinese market or in some other ways to get customers. So, it’s all about acquisition right. If you have a store in the US in France where you have a lot of Chinese tourists who will come to your store, then you could actually tell them ‘okay scan this QR code’ because as you know, QR Codes in China are essential for offline to the online acquisition. And then tell them ‘okay know that you follow this QR Code you can keep buying the product when you go to China’.

So, you can have other ways if you already have some kind of audience. If you already have offline traffic from Chinese customers, then you can actually manage to do this without having to pay too much on acquisition, but it needs to be a solution to the acquisition problem. And it can be buying the traffic, or it can be offline to online.

Matthieu David: I understand. So if I summarize for the audience to make sure everyone understand: you’re providing a solution which can be the software itself you plug, you put your product on your platform, or the plug-in which is getting the products from Shopify, and making it possible to displace them on specific pages on WeChat where the Chinese clients can buy easily because that’s the way they buy China. Is it correct?

Thomas Graziani: Yes and basically as you said for the Chinese customers, it’s a completely local experience. Very familiar user experience: local logging message, local payments messages, local sharing messages. And then the money, of course, is upon purchase is committed to finding currencies. So, the Chinese customer is paying in local currency, and the merchant gets the money in a currency they used to sell. So, it’s a very seamless experience on both sides.

Matthieu David: I think on both side there is no hard work to change currency, to display the product on your platform, it’s seamless. It’s just translation you can provide the way or they do on their own but your focus is to offer a SaaS system in China which is helping to put the products on the platform which is easy to use by Chinese. And this you charge 200 to 500 dollars a month.

Thomas Graziani: Yeah I mean it’s 200 to 500 for this part of the offer he’s gonna move to two thousand to one thousand within like also as we are now we are going to classic Software a a service system evolution, or we’re increasing the pricing as a collect to get more features. So, some of the new premium features we’re going to add which includes CRM and some advanced targeting capabilities we’re gonna move create a one thousand US dollars’ plan. And I guess next year we also have two yearly pricing instead of monthly pricing. Today most of our customers are on monthly pricing. Some of them like the platform and then because they know they gonna keep using, it converts to yearly. But soon we’re gonna make everything to pay for a year because that’s a good way to get front cash for us. And as we get more comfortable with our solution we can see more success cases, we are more comfortable with clients paying for the service.

Matthieu David: So, we talked about it before the interview. You are not charging for the transaction, right? Don’t you take a commission on the transaction?

 

Thomas Graziani: Not really. So the transaction parts: it’s like the end customer usually would pay first like a middleman amount of Tencent official owner of Tencent in each country. To be more accurate: my merchant sign up they don’t sign up directly with Tencent. They sign up with a middleman of Tencent,  he aggregates all the merchants for WeChat. Because WeChat does not want to create accounts for every single merchant. So, they have some partners in each country. So, when the transaction happens, the customer pays via WeChat payment the money goes to Wechat, Wechat sends it to the payment partner, and then the payment partner we send it to the merchants. So, the total Commission is gonna be around 2.5 percent and usually is percent which is taken by WeChat more or less. In 1.5 percent by the payment partner so some of these payment partners have agreements with us and they will give us a very small fraction of a percentage.

But, we don’t really take it on top of that we take it from the fraction they get by the payment partner basically. Like if you recommend a client to someone and then the client will pay the normal price, but you will get an affiliate Commission where we get an affiliate Commission from some other payment partners.

Matthieu David: I understand so WeChat system, WeChat pay, is partnering with a middleman, do you have some names of middleman you can unveil to the audience of this China marketing podcast? 

Thomas Graziani: Ni Hao Pay, ‘Ni hao’ like hello, Royal Pay so this is a partner for us in Europe, is a partner from Australia but we integrate to like a dozen different providers today. Even more than that because we keep integrating when we have a client using a provider, using new terms you’ll be providing new terms we will just add them to a platform. And now, so that keeps expanding over time.

Matthieu David: Okay, so 2.5% percent is what Wechat pay?

Thomas Graziani: In total, that was a merchant has to pay in total, taking into account all the stakeholders both in traffic and the middlemen. And easily sign up with Wechat pay directly we should possibility then we still pay all the same percentage because basically Wechat Pay is giving a discount to these middlemen and then they get the difference. So, for merchants, it makes more sense to use this middleman because they actually provide better API and Wechat Payments nd that’s much easier to speak with and much more reactive if there is a question if there isn’t an issue that the customers want to discuss. So, we don’t really recommend going directly with WeChat. Although it’s just a possibility, we also have this integration of course, but in practice, we find more problems.

Matthieu David: Ok, ok basically 2.5% is very little, I mean, compared to, if I remember, Pay Pal and Stripe are about 5%, 4% to 5% when it’s cross-border.

Thomas Graziani: For cross-border payment transaction it’s very reasonable. We never had any merchants being bothered by the 2.5% definitely. I mean for the merchants the biggest question is on marketing and how to get returns right. So, that’s the real expense of the merchant, the whole set up of our platform is quite fast, I mean it’s quite smooth, the costs are not outrageous. The real cost comes when you have to start paying influencers to drive traffic. So, that’s where we have to maybe do a bit more calling, to explain to our clients how to do this and as we get more and more success, it’s getting easier because we can point to other customers who manage to do it. And it’s getting easier over time.

Matthieu David: You talked about what you imagine as a success story for one of the clients spending 8 thousand dollars, so they sold around 60 thousand US dollars.

Thomas Graziani: Yes, I think it is just below sixty thousand US dollars.

Matthieu David: Okay eight thousand spendings, 60,000 as revenues. So if I do the math, I’m around I guess twelve percent. Twelve.

Thomas Graziani: This is what you can expect for like successful campaigns, I would say like between five to seven times your investment. Of course, it varies. It’s social so there is a lot of uncertainty, and also this cost goes down over time because when you do your first campaign, you completely rely on the meters. So you don’t have your own asset, you don’t have your own traffic right because when we have our clients, we first time help them to set up this WeChat official account which is like a Facebook page right for WeChat, they’re going to be able to send notifications. And this account will be linked to the shop. So it’s like a Facebook page linked to a Shopify store. When you get started you don’t have any following so you have to pay for each view and for each sale and as you expand and as you keep doing campaigns, when you run a campaign you don’t take people directly to the store you ask people to follow your account, so you are accumulating followers on this account, this asset and your cost of sale gets down over time and becomes more predictable.

So as a beginning you are gonna has a bit more to spend, to acquire sales and also you’re gonna have much more variability because people don’t know you and some other influencers are gonna be a great fit, and then as time goes by and you can get more visibility on ourselves. You’re gonna get on WeChat and run your weekly, or monthly campaigns on your account and you will get some sales coming which is a bit more predictable a bit more return.

Matthieu David: Okay so these 8000 dollars include your fees?

Thomas Graziani: No, only marketing. This is without including some initial investment through maybe a bit of design and also office, but i think for this store that’s a few hundred USD per month right, so our fees are not really changing the equation of the ROI. I mean we look at our ROI as a campaign level, because once you have a good ROI campaign, you can reproduce it and scale it and hopefully our fees with because our flat, gets more and more as a part of this.

Matthieu David: I’m trying to understand so that the audience can have something in mind and project some business idea into the Chinese market. So 50,000 USD with no fame initially, the product is unknown. So two questions how much does it cost, total, I mean to spend with your fees and so on, and so the question behind this is how long did it take? Because if it took a year that means they had to spend for one every month for one year to give you something – some payments. So could you give us an understanding of this?

Thomas Graziani: For this campaign that you’re talking about, if I think the campaign happened like a month or so after the client launched his store. So usually it takes a bit more time in total but usually we have like the 1000USD fee to just create a WeChat account so when our clients start working with us sometimes they just pay this 1000 USD, and they don’t pay any recurrent fees because we need two-three months to get the approval from WeChat.  So we started working with them a few months back, with just paying this one-time fee, to create the account and then we designed it and then after this campaign happened like about two months after launch so it’s quite fast.

It took four or five months after first contact and maybe a couple of months one or two months after they actually launched the store including all the steps and they didn’t have to pay big amounts in the initial step for the first three months. I think we are just focusing on creating the accounts, so we were basically waiting for approval from WeChat and then the next two months, we’re more focused on really preparing the store, running the first campaigns and getting results, so it is quite fast.

Matthieu David: So it was 8000 USD, in marketing money. And your fees is like ten to a twelve?

Thomas Graziani: Just a bit less than that I think. It was like 3000 USD design, one thousand with the account creation. Maybe like a 1000USD of fees for a couple of months for content but the content was not really what increased the sales, the content is more flattering on the long term, so I think it was actually spent on design, creation, icon creation and campaign in total was around 15-20 thousand USD but I think that’s a lucky case in the sense that as I said I would recommend trying to have an envelope of over 50,000 USD to get started so that they can some returns.

Managing to do it without a total envelope of 15,000 USD, is rather unusual. This client was willing to spend more, it’s just the return came quickly, but I think you need to be ready to invest a bit in seeing returns if you spend like two thousand USD of online campaigns and you lose. I mean this is quite likely the first or second campaign some of the markets be big hits right away because when you find time to find the right influencers, and it takes a bit of luck too because it’s social media.

Matthieu David:  Basically you are on a ROI which is between 25 to 30 percent, which is actually when we compared to like Google AdWords or Facebook AdWords, it is pretty good because I remember the e-commerce conversion is about one to two percent in the West and if you have the click on AdWords together with one euro, you may have to pay up 250 to a 100 euros before you can sell.

Thomas Graziani: I mean you can get really good results via Wechat, and that makes the platform attractive. You can get results fast, of course, it suggests that the product is good. It’s not the kind of product results you can get with any product, and the product must have some kind of fit with the Chinese market and have potential in China. So that’s why I was saying with some kind of fashion, cosmetics items some FMD products, we get really good results there is there is an element of with a local market and if your product is good and if wink investigate to find the right influencer for your brand then the results can be extremely positive and extremely fast which is I think the impressive part, because entering the Chinese market for most brands can sometimes take years.

If you go to the traditional way and you go like setting up a branch in China, a company in China, you know as well as I do that a lot of foreign companies might take a year just to get their legal structure created before even talking about creating sales and being profitable. So the idea is that you would start on a phone call and that four or five months later, you will be profitable on your Chinese market strategy. It’s quite exciting and without such an insane expense. Once again as I said we don’t want to make people believe they can do that with just a few hundred bucks but for large SME’s investing like twenty, thirty, fifty thousand US dollars in initial campaigns or more if they want of course is not such a crazy expense.

Now, of course, they can elaborate on this, we can suggest WeChat, once they get their ad they can start looking for distributors and other things. But WeChat will always be part of the strategy.

Matthieu David: How do you identify the Kols in China? How do you identify them and how do you work with them? I mean work for money or?

Thomas Graziani: Very often we find them through personal contacts or using the network we are starting to build, and that’s what I’m saying we are mostly focused on like this element of like of fashion, cosmetics and FMV because that’s when we start to know bit more KOLs and being a bit more used to doing this kind of promotions. If we are in other areas where we don’t have anybody in our networks, then we might recommend other companies which are doing KOLs full-time. You know you have a company like Parklu which are just KOL’s companies. Their job is just to source KOLs. So if they want a specific influencer, we don’t have in our networks for specific products we might just introduce these companies. We don’t want to be like influencer management companies, we’re really focusing on the e-commerce layer, we have a Saas product model.

We just believe that it’s important for us to get a first-hand approach experience of everything that happens for our clients. So we are now building a small network of very high quality KOLs on some areas like cosmetics, fashion and FMV where we get a lot of clients and then when a client’s reach out to us we just try to see what is the best between what our client is offering and  what is your customer personnel of the client and what are these different KOLs in terms of gender and age and location, different size of cities in China.

So we can find a good match in the general tone out of the Influenster as opposed to the general messaging of the brand. So it’s kind of a manual process, and we can meet well because we keep it small scale. As I said we don’t work with all of our clients on th kind of campaigns, a lot of our clients might go to other agencies, and we do it when we believe we can really get good results because we have in house the capability to do his town campaigns. And we don’t try to do that for our clients, some of our client’s most specific needs and we just recommend some.

Matthieu David: Yeah, I understand basically it will help them to get good use of your software. Like because they could do it themselves, but they may not know how to do it because they are far away so in order to be successful on digital platforms you may help them doing marketing, but that’s not your core business.

Thomas Graziani: I mean a lot of clients need help, and it can come from us. Also it can come from other agencies. We have some clients in China savvies but it’s a very small percentage of our clients who know a lot about China. So for a small number, we help them. And for a large number, we introduce them to agencies which are helping them to do this more like PR/a promotion part of- the launch. So no matter what we make sure that our clients have the right kind of support. The question is, do they have it to start with? Do we provide it? Or how do we introduce them to people and provide that for them?

Matthieu David: Okay what do you think about I think Galeries Lafayette is using now QR code in Paris because that’s very close to your idea right to help local businesses being able to connect with Chinese, tourists or Chinese clients and getting sales from that platform. What do you think about it?

Thomas Graziani: What you’re describing for Galeries Lafayette, they simply providing the payments right. So payment inside Galeries Lafayette. What we are looking into is now we are trying to partner with this kind of providers who helped to provide offline payments in Europe in particular — and providing them with e-commerce on top of that. So today you go Galeries Lafayette, you purchase, but you don’t necessarily keep buying when you go out. What we provide and what we are starting to partner with the offline payment provider, is providing this kind of offline e-commerce which is adding to that. So basically you’re going to this tour in Europe in France, in Germany in the UK where you’re paying with Wechat payments. And as you’re paying like you’re invited to follow the account and then once you go back to China you can keep buying products on the platform.

So it’s a step further I think from what’s happening today, all of the merchants in Europe are now still at the stage of simply setting offline payment. What we’re providing, through our Saas product model in China, is to stay in touch with the customer and that’s something we look into right now. Once again I think that’s something which first place prospective, we are simply like in the discussion which these offline paying providers are trying to find ways to collaborate. It’s not we’re all traffic most of our traffic comes today our lines as I said are mostly brought through influencers. What we discussed  the beginning of the conversation when we said what matters at the end of the day is traffic, one way to get it is by influencers and Kols. That’s what we do today. Another way to do it is to get it from offline traffic which is what you’re describing with Galeries Fayette, and that’s also something we’ll look into.

Matthieu David: Okay I see. So you have this boot system where you are building a SaaS product model in China, and you are also providing other services. That’s eboot, and I feel that’s coming back from your origins, you create Walk The Chat as an agency. Could you tell us more about how it began? How you evolved it? I saw a lot of agencies who fail and a few of them being able to do it, which did very well actually like UpAnny, I think came out from kind of agency at the beginning. So could you tell us more about how you did the conversion?

Thomas Graziani: Well we’re just very frugal, as an agency. So this was a tough choice back in the days, now it is getting a bit easier to live with this because we see some really growth on the software side and we’re seeing success stories and getting momentum. But basically I chose to not take so many agency projects and to keep the agency small because I was afraid, I mean I didn’t look like the agency worked so much, we still do a bit of it we have a few agency clients. But like that’s a good client, like we just started a small project with Cisco which we renewed because we helped Cisco give you some Wechat processes and they are a quite smart, quite sophisticated client.

So they’re easy to work with. So we sealed in a bit of it but I didn’t want to do that long term, and I didn’t want to be dependent on this to run the business. I didn’t want to out because having clients as an agency’s bravery, can be very crushing because basically you’re kind of the slave of the client. When you’re running a software as a service system business in China we are today, of course, we have to be good for the clients we have to provide good service, but at the end of the day, there’s like now about hundred clients.

We don’t really depend on each client, and we keep growing, and the weight of each client gets smaller and smaller, and we give them some peace of mind, and it makes it much easier to run than running a business where you’re up in five or ten active clients. And then if you use one, it’s like a very big blow for your moral and for your company finance. So yes I just decided not to get into that and to kind of stay very low key until we found a model which works which stumbled into a year and a half ago. And which is gaining more momentum today but it was mostly restraint. There was not a lot of genius moves we just tried some things.

Matthieu David: So I told before I know you for some time and always felt that it could have been painful to do it and to refuse clients with maybe nice budgets as an agency. I know the focus on the product because one of the thing I find really amazing among the expat community in China: You are the one who about Wechat, WeChat gets a lot of press coverage lot of shares, a lot of likes and so on. So for you getting quite big on agency should have been possible but it was not part of your path, you saw it. And that’s very rare to see an entrepreneur to commit to one product and get rid of all the other business you could get which could make money.

Thomas Graziani: Yeah there are some different difficult calls like we turn down some products, rejecting Morgan, with Boss also work with them but then we refused to quote on some bigger projects. So it was not easy, but in the end today that was what it helps me because I’m a bit weird, I don’t really have a very philosophical approach to life. It’s not really about money, I don’t care too much about money. I care about doing these things the way I want them to be done. And if it makes less money, it makes less money.

I mean if it is getting money to do the wrong thing just not brain interesting. So that’s easier for me to turn on these projects although they were bringing money but they weren’t they were not what I wanted to do so. And I still sometimes do today to refuse to quote for things which are quite large, but I’m not a too good to fit for what we do interesting.

Matthieu David: Yes an agency is a never-ending fight, and you always have new products with different requirements.

Thomas Graziani: No I am always on this never-ending fight but so just in these days the fight I won’t certify it was one of building a Saas in China. So it’s also a never-ending fight you’re fighting against potential bugs or putting on the architecture of your business to bring stability, in putting out transparency, inputting features but one personal standpoint that fighting is finding more and more satisfying.

Matthieu David: I understand. How did you begin? I know that you have beginning in very different fields. I mean picture, photography and how did Walk The Chat begin, you are not a developer, obviously not Chinese, you are not in e-commerce. And how did it begin and how did you decide to create an agency focusing on WeChat. What was the start?

Thomas Graziani: A long story. So my background is in engineering but not in programming as you mentioned. I’ve been training mathematics from engineering in France and business in the UK. Then I went for a short time in measurement consulting which I didn’t quite like. So I quickly left to go to China. Where I worked for a French automation company for three years before starting Walk The Chat, this is like a personal side as you said it’s nothing neither with e-commerce, no is programming. As I was at Schneider I get interested in entrepreneurship started a few companies. One is a fashion business, one in the photography business and the fashion company, when I started it I started using WeChat as a marketing tool to promote it because back in the days Wechat was just getting started.

And then I realized a lot of companies didn’t know how to use WeChat, and I started to give services to companies, but it is expected that was building. As you mentioned, I started blogging about it that was the first person to write about Wechat in English. Now we have quite a very active blog which gets a lot of traffic which we have been maintaining for the last 3 years. It’s changed since I started Walk The Chat.

And that’s how it started, and briefly, I realized Wechat was making much more money. So I gave up the photography project and started focusing on WeChat, and then we were just taking some agency projects it’s not really finding out past just looking for what we wanted to do and for the last year and a half we have been focusing on this e-commerce product and it has been much more satisfying because we have great results, month over month, of course, it’s pretty nice to see that we are really building something.

Matthieu David: Okay I see. So you build WeChat initially because people were asking you to do the same as you having yourself for the initial business that you stopped and after you build a blog, we talked about it. And you did a lot of common marketing, and I have talked about it before about how to build common marketing. What is the situation now about your system process if I go and see in web and checking a website, you get I guess love from such google and a bit of social media, but that’s very little actually.

Thomas Graziani: Aas you mentioned we also you know about this because you’re the one who first told me to go into SEO about three years ago and who also supported me and supported us. At the beginning some of your teammates at Daxue Consulting were really helpful back in the days it was Thibaud who helped and but if you taught us how to do SEO. So SEO is a big thing for us we are if you write any Wechat keywords if you type Wechat shop, so I think we are number one and two or number one two three on the first page of Google.

Anyway, on all these keywords, we are really crushing it usually is only WeChat which is good for us for the vast majority of these keywords and most of the time we are number one. And sometimes our field refers to first places for which are advertising, which has killed many years of auditions. So this really helps definitely we getting more client referrals, it’s bringing great qualified traffic. I have liked I think 30 views per month on my profile, talk answer for WeChat. And people who ask questions like how it like latest on WeChat are very qualified and didn’t convert to our website some very qualified traffic.

And we are realizing now also all the forums about Shopify, people discussing how to create a store from Wechat to the Shopify website, Wechat friendly, China-friendly people. We will drive some answers, and that would drive some qualified traffic. These foreign channels are quite efficient driving very qualified lead, and this lead converts very high.

Matthieu David: I see. Another question for our China marketing podcast: What do you think about Quora because I feel that people ask a lot of very pretty naive questions, it’s working?

Thomas Graziani: If you are just browsing the most answered questions on Quora, of course, it would be a lot of things about American politics, updating stuff which is not really relevant to business. But as you said it’s very well referenced on Google. So most of the time if you have a question about Wechat you would find our website, and then you would find a core answer, and the answer would be my answer right. So at the end of the day when people look for information on Google being whatever reasons in on Quora. And make sure that people find it where is it and also Quora is very often seen as a trustworthy source of information because you get an opinion from different people about the questions you’re asking.

So being there is really a good way to provide expertise and very often we don’t directly promote the business, but we provide very good expertise, and then people go on our website and ask themselves questions about which items and then they convert to some of our lead magnets.

Then we also have very good lead magnets on the website, so once you go on the website we have magnets which are working from you. One is about entering the Chinese market, and one is posting about WeChat marketing. So people will sign up to that and then they would receive five emails.

First one about Wechat account, one about shops, third about traffic, fourth about content and fifth about case studies which basically would tell them everything about how to market on WeChat. And because what we do is so complex, having this content is very important because it enables us first to convert some of this traffic to email collection. And also it enables us to kind of start educating these customers so that when they get to us another zero level of knowledge, they got maybe 5 or 10%. And they are going to be all the way to experts but at least we are speaking from common, and they already know that they have to create an account. There are all different types of accounts, and they know maybe different ways you can drive traffic. So that’s that we helped.

Matthieu David: I understand. So how does it work, people could like email as they receive some training?

Thomas Graziani: They send their email, and it submits to a help platform which then sends their email. It’s quite simple. Especially you can see also the engagement of users, the difference between having an eBook and an email post is if you send people an e-book people you have no idea. You just know if they open the email and that’s it. But if you send an email, then you can see people actually open Gmail every day which  two things in sizes that can see which things were clicked. So you can really have some very serious metrics of engagement and I know I’m converting this into Facebook messenger reports, which is even more visibility and engagement of users.

This is very new we started doing that a few days ago, but I just put 30 buck’s investment on promoting this messenger course and generated 150 conversations on Messenger. So very interesting.  So this is retargeting. There are people who were visiting our website, and then I retarget them with ads and tell them what they want to learn about Wechat marketing. It’s not all of them working in big companies but that’s the beauty of Messenger. As they get inside the course, I can ask questions like you’re registered in, which country they visit and then I can find a way to basically use it and avoid the ones which can’t invest and focus on the ones which are actually very qualified.

So this is a new experiment I started three days ago, and I’ve actually done that myself. Because I really enjoy discovering new ways to engage people with messaging. This is a personal experiment. We are not scared at all, and just discovering how it was a good way to provide th kind of courses for messaging.

Matthieu David: I’m seeing that you get a lot of traffic from the US. Is it correct?

Thomas Graziani: This might also be some people using VPN in China. So like this all of this traffic might be Chinese traffic like our main draw graph is US, Canada, Europe, Germany, UK, Holland, Italy, and Australia, New Zealand. This could be the main domains. I think it’s always difficult because the US always tends to be over-represented because of the role of the VPN. If you look at the way to evolve on Google is like really Wechat payment, Wechat store, Wechat advertising.

Matthieu David: Still concerning marketing in China, I feel that we are now trying a lot of ways to get new clients but at the end of the day, what’s retraining the most of the client is called marketing stealing.

Thomas Graziani: As I said we haven’t been very good to leverage other channels that’s also why content marketing it’s so strong for us. Now I haven’t been very good at leveraging offline traffic. I mean like conferences and business trips and basically going out to meet clients, we should. Because I’m not this type of person, I’m a very extreme introvert.

So next year we’re gonna start doing more of this. Indeed I’m gonna go into like the entire European tour to get a bunch of talks in France, in the UK, in the Netherlands. So we can start leveraging a bit of this capability and I think online marketing is still quite strong, when it comes to online conversions especially for all kind of like niche B2B business in China is hard to just run a Facebook campaign and do very well, except as I mentioned retargeting then you have qualified audience. But if you’re starting from scratch finding high people intend to start selling their products in China, it’s not very easy.

Matthieu David: I understand. Thanks, Thomas Graziani, thanks for the time. How did you like it?

Thomas Graziani: It was good, good questions, a good interview for Walk The Chat.

Matthieu David: Okay good. Thank you very much, Thomas Graziani, for explaining to us how you built your Saas model in China and thank you all for listening to this China business podcast.

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