Find here the China paradigm episode 51. Learn more about Simon Vericel’s story and how to develop a beneficial PR strategy in China for businesses. You will find all the details and additional links below.
Full transcript below:
Matthieu David: Hello everyone. I am Matthieu David, the founder of Daxue Consulting, and this China marketing podcast, China Paradigm. Today, I am with Simon Vericel. You are the founder of Influence Matters, and you have been in China for 17 years since 2002.
Simon Vericel: I arrived in Shanghai in 2002, and I have been in Beijing since 2004.
Matthieu David: You founded Influence Matters in 2015, but you started many other initiatives in the PR industry and advertising industry in Beijing. You focus on tech PR, more specifically, B2B tech in China. That’s one thing I’d like to define more precisely with you, in terms of content. What is and what is not a PR strategy in China? You are activating some campaigns on social media and also very active offline in events, which is also a PR strategy in China. But social media for me is not clear whether it’s PR strategy in China or online digital marketing in China. I’d like to understand better what services you provide to your clients like Origins Technology, Air Visual, Fyber, Day Day Up, some mobile marketing and service app, some consumer tech, some blockchain companies like Pascal, Crypto Kitties, enterprise software like Terark and even automotive industries. You are very tech-oriented.
What is the size and story of your company?
Simon Vericel: More precisely, we provide PR strategy in China for B2B tech in China. Most of our clients are start-ups, SMEs, and scale-ups. All of them are foreign companies that we help in China. PR strategy in China differs from other types of communication because use third parties for communication. We provide PR strategy in China, which means we start with the communication strategy in China for our clients. They usually have a global communication strategy or none at all. We are going to define their communication strategy in China. Once we have a communication strategy in China, we are going to define their messages and stories for China. We put together the content that can be press releases, articles, interview material, and social media material. We are going to disseminate that content on various channels, primarily the traditional media in China, which is very much online, and social media. We also support our clients in events and help them put together.
We use third parties like social media influencers who have followers aligned with our clients and events. We do not communicate directly with the customers of our clients. We go through one of these third parties. That is the difference between marketing and PR strategy in China. Marketing and advertising are direct communications with customers. For example, if you work with social media campaigns for our clients, because our clients are smaller, most of the time, they don’t do big campaigns on social media, so we have to help them build their presence on Chinese social media. We register for them, set up their WeChat Official Account, Weibo and Taobao account, usually on the main platforms, not secondary platforms like Douyin. We build their presence and the first layer of the communication strategy in China through their followers on these platforms. Once we have a bit of follower, we work with influencers who are going to promote their social media campaigns to gain more followers in their target industry. We only do B2B tech in China, not B2C, which means we don’t work with game launchers, for example, or consumer tech like product launcher. But we work with industrial companies in China. We work with blockchain, who are service providers in blockchain through other industries like E-commerce industry. We work with the gaming industry, like game developers or problematic advertising platforms. Games outsourcing companies could also be our clients because their targets are e-game developers. Same for the industry where we are working on semi-conductor or the industry of small manufacturing tools, where the target industry is going to be the tech industry for any industry for semi-conductor or manufacturing industry for smart manufacturing use.
Matthieu David: Could you tell us more about your size now?
Simon Vericel: We just celebrated four years last month. In the past four years, we grew to 16 people. We just opened an office in Shanghai last month. We have 4 people in Shanghai and 12 in Beijing right now. We have really ambitious growth plans because we are looking at 35-40 people by the end of 2020. We want to double the size of the team of the company every year.
Matthieu David: From the point of view as an entrepreneur in China, isn’t it difficult to grow the size of the team based on the fact that most of the PR strategy in China is on a project base, not a retainer base like every month getting some services?
Simon Vericel: Most of our business in on a retainer base. We work on six months to one year, sometimes more, on the retainer programs for our clients. We currently have 10 active clients, 9 of which are retainers, so we just have one project, a three-month project that should turn into retainer after that. We build on the retainer base and make bonus money on projects.
Matthieu David: If I am a company in the B2B tech in China, I want to advertise in China or build my PR strategy in China, how would you approach my topic? What questions would you ask me? What should I bring to you to start working with you and get a bit of visibility in China?
Simon Vericel: We have a business-goal-centric PR strategy in China, which is a bit different from a lot of other companies here. Because we work mostly with smaller companies, we are connected with their business goals. We spend a lot of time understanding and dissecting how different the business goals of our clients are going to be in China. There might be a lot of different goals, depending on the size of the company. Some might come to China for the first time and are looking for an investor or partner to help them open the Chinese market. Some are at a further stage and looking for their second release with a need to recruit. A lot of our clients are developing their businesses in China. We spend a lot of time really understanding what they are trying to achieve as a business in China, so we can connect our communication strategy in China, messages, channels and the people who we are going to talk to for them, based on their business goals.
Matthieu David: Could you tell us more about a couple of cases that you have worked on to illustrate the event, digital marketing in China and so on and how they are articulating?
Simon Vericel: I’ll give you one clear example that we’re working on right now. It’s for a startup that just celebrates its first anniversary now, a software bug detection tool. It is very B2B tech in China. They are built by four founders that are extremely experienced in compilers, a kind of software development tools. They built a new way to detect bugs in the development phase of the software. Their clients in China are any companies that develop software, such as our company, banks, government offices, game developers, or software developers. They will launch their product a bit later this year. Right now, they are starting to build their awareness in the B2B tech in China. They are trying to reach those companies and their CTOs, people who are in charge of the development of software to let them know about this new product and the company. We just spent the first-month engagement with them, a six-month engagement, for now, building more of the fundamentals of their communication strategy in China. First, we put together the company introduction, the product introduction, the biography of the founders, all the materials that we need for the first layer of their communication strategy in China. We build that into a press kit, the material that we are going to send to the press whenever we need to work with them. At the same time, we also build their social media channel like WeChat that will launch next week. By the end of this week, we even built their Baidu Baike, a very important platform, especially for software companies. We also built a communication calendar for the next couple of months so that we know when we are going to do use PR strategy in China, either an announcement like a press release or press event to connect our client with the key media, or developing some case study articles for them to publish and placing in the specialized press that they are targeting. For example, there is press specialized in software, food, banking in China. We also built a calendar of events over the next six months to include any event that would be interesting for them to attend, either as an exhibitor or a sponsor, because it can support their lead generation in these events.
We will support it over the next five months, in developing content and running media relations to get some awareness in the specialized press. Running a social media account can help the company draw a solid base of potential customers that will follow its social media accounts and get them to the right events with the right PR strategy in China at these events, so it’s lead generation efforts will be easier when it goes there.
Matthieu David: In this case, you build its presence in China for it to be seen and reachable like the WeChat account, a website or at least an account where it can rank on Baidu through Baidu Baike, which is equivalent of Wikipedia in China but made by Baidu and very well ranked.
Simon Vericel: We have a network of partners for things that are not directly related to PR strategy in China and support our clients when they need. We have an SEO partner if a client needs a website in Chinese or to localize their website. If they need video content or graphic design, we have partners doing that. As an agency providing PR strategy in China, we work on the messages and written content, which includes press releases, articles, content that is written, and anything that is designed by working with a partner.
Matthieu David: Why did you decide to focus on the B2B tech in China? It’s a bit contrast for me because there are so much press and hype in consumer tech on CES like Xiaomi, Oppo and so on and China is really good at this. There are plenty of companies in consumer tech.
Simon Vericel: First, I am a geek, and that’s the main reason why I am more interested in B2B tech in China. I have always been passionate about innovation, innovators, and technology in general, and the innovators are mostly in B2B tech in China. The innovators, who invent chips, chip design or applications, don’t necessarily think of consumer applications when they are developing, because consumer applications come much later. If you look at the new phone like OnePlus, a very good Chinese brand, all the technology in that phone was invented five, six, ten years ago. The technology invented today is going to be on mobile phones in five, six, ten years from now. That’s the main reason why I got into B2B tech in China because I am a geek.
Consumer Electronics Show is very big in the US, but imagine that CES in China only takes 3-4 halls of the Shanghai Exhibition Center that counts 17 halls altogether. Every March, there is Semicon China, the biggest semi-conductor show in Asia. This year, it took all the 17 halls, plus 10 temporary halls built in the middle. The largest show for the B2B tech in China is about ten times bigger than the largest consumer electronics show in China. Consumer electronics are not that interesting, because they are already finished products, the innovation of which happened a long time ago. We are working for some clients, who are inventing the way the factories are going to work or applying artificial intelligence to e-commerce or marketing. One of our clients, a communication agency, is doing digital marketing in China for companies, but it uses data and artificial intelligence, which are all technology. We are working for them and helping their clients understand why digital marketing in China should focus on technology before an actual campaign. To me, it’s a lot more interesting to work on what’s inside, what makes B2B tech in China work rather than the finished products.
Going back to semi-conductor, one of the good examples I’d like to say is that China consumes about 90% or 70% of the semiconductors made all around the world, but it only builds 10%. It means that 90% of those semiconductors in China are imported from other markets like Korea, Japan, the US, and Europe. Our position as a PR agency focused on B2B tech in China is just what we should be, because there is a huge market in China for B2B tech in China. And there is a lot less competition than in B2C communication strategy in China.
Matthieu David: Could you name a few events for B2B tech in China?
Simon Vericel: In B2B tech in China, the events are very specialized. There is a bunch of events where you have to be. If you are a semiconductor, an industrial application, a manufacturing company or a robotics company, there is a Semicon China in mid-March every year. There is a show about wind energy every year in October in Beijing for all the companies that are in wind power, from turbines to cables to wind power to connectors. There are a couple of shows that focus on locomotive technology like Auto Shanghai. I was there this year for a client. There is a whole section of the show for B2B tech in China about cables, seats, etc. One of our clients that makes industrial connectors for the robotics manufacturing industry, wind, and railway industry goes to a show every month specialized in the industries that it focuses on.
Matthieu David: Would you mind mentioning some verticals that foreign companies can have a huge untapped market in China like factories?
Simon Vericel: Most verticals will be in semiconductors in China that will be interesting for foreign companies because a lot of future technology is happening in China. Take mobility as an example; whether it is electric vehicles or rail technology, China is still inventing the fastest trains right now. These trains need a lot of chips. Then we are going to have mobile communications and mobile phones that still use a lot of foreign technology.
We have one client, a French semiconductor company that covers 100% of mobile phones all around the world. Nobody knows the name of the company, but it does the base of the semiconductor material on 20 or 30 chips in your phone. With 5G in China, this is going to grow to 50 or 60 chips. It has actually calculated the millimeter area needed for 5G. Semiconductor is definitely an area that will has a lot of opportunities for foreign companies, in chips or the type of technology for 5G, because China is going to be one of the first launch markets to roll out the nationwide network for 5G, which means it’s going to be the first market to develop applications for 5G. These applications for 5G will connect everything with the Internet. They will need a lot of chips, technology, and algorithms to develop artificial intelligence or machine learning applications very fast. China is going to lead the world in the development of any applications built on 5G in the next 10 years.
Mathieu David: I know you are very involved in China France relations through La French Tech, an association promoting French technology all over the world. You have chapters in Beijing, Shanghai, New York, Silicon Valley, and all around the world. Could you tell us more specifically about what you do with La French Tech in China and what you see from the China France relations?
Simon Vericel: I founded the French Tech Beijing almost four years ago. The chapter in Shanghai is a little bit older than the Beijing one, and as you mentioned, there are chapters all around the world. Our goal is to promote French innovation globally and create a community of French entrepreneurs in China with local entrepreneurs in B2B tech in China. We have already created a community of about 400 people in Beijing, a bit bigger in Shanghai. We work with the French government a lot at the same time because we are supported and sometimes funded by it to create a connection between France and other markets like China. In the past couple of years, we worked very hard to create connections in various technologies, but last year and this year mostly in artificial intelligence, because there are big similarities in the expertise. We need artificial intelligence and more generally, what we call a deep tech, which is everything based on an algorithm in between China and French.
Chinese universities output some very good software engineers, who are good at designing new algorithms for artificial intelligence. The French university system is also very good at that. We have some of the best software engineers in the engineering schools around the world. The head of artificial intelligence in big American and European companies are French like the Head of AI at Facebook, Spotify, etc. They are all French. They have teams out of France, and a lot of them are also Chinese. We are trying to create some connections between innovators in China and France. Hopefully, some sparkles are going to happen, and we will have some projects and cooperation, at the government level, individual level, and company level between these two countries. Both countries benefit from each other’s expertise to build China France relations and ties. It has been rather successful so far because we understand each other pretty well. We are also in a position in the past two years that let Europe as a whole be interested in China. China’s trade war with the U.S. that blocks a lot of American companies from having an open door in China let France and Europe have a much more open door here. There are a lot of opportunities for French companies to leverage the Chinese market through our core technologies. We, as French Tech, identify where these opportunities are and put people together.
Mathieu David: French Tech is more about giving visibility to French technology and labializing some companies, more than being an organization with business and so on, right?
Simon Vericel: La French Tech is a community more than an organization, were on the accounts of the French government, the President or Vice President has to oversee La French Tech. We are recognized recently as one of the communities in the world, but not as an association or a proper governmental organization. We are just a group of people who love innovation and technology, and France and China at the same time. We are creating China France relations. Our main goal is to be completely disinterested in any profit. We do it really for the love of France and hoping France to stand out because it has the tools, technology, and skills to stand out. It’s just very bad at communicating its strengths. The government realizes that and gives the keys to a community of entrepreneurs in China to actually do that, which was a very clever thing to do, because we are working 120% on our companies already, another 50% on our families and another 20% on La French Tech, because we are promoting China France relations in technology. If you put it in a very broad way, that’s what we do.
Mathieu David: Would you mind talking a bit more about a topic that has been in a bit hype over the last years, Chinese companies going global? I know you worked specifically on this segment in a company called Hill+Knowlton Strategies China.
Simon Vericel: It was actually my first company. I started there after I graduated in 2005. My first job there was working for the 2008 Beijing Olympics. It was the agency that does communication strategy in China and around the world and international media relations for the 2008 Beijing Olympics. During that, we worked for some of the sponsors of the Beijing Olympics, many of which were Chinese companies, including Haier and Tsingtao Beer. Right before the Olympics started, some of the Chinese sponsors asked us to support them in doing international communications for them. I left the Beijing Olympics team and started building the China Going Global team. The China Going Global team was exactly what the name says. It was helping Chinese companies as the first ones starting to go overseas build the brand and markets outside of China. Our first big client was Haier at one point. Because we were working for Tsingtao Beer at the same time, I was in Tsingtao every two weeks, the city that became the headquarters of both Haier and Tsingtao Beer. We helped them build their international communications system, their communication strategies in China, messages and also train the executives in international communications and media relations, because they had to understand how to respond when there was an issue with a product, such as a washing machine of Haier breaks up in the U.S. For example, our team of 130 people supported Haier in 17 countries around the world, including New Zealand, India, Pakistan, France, Germany, Italy, Spain, Canada, U.S., and a couple of countries in South America. We had one monthly global call with all of them. No one understood anything, because you had 17 different English accents on the call. Once you went from New Zealand to a Pakistani accent, everybody was lost. But it was a fun thing, and we did that for a couple of years because we were working for Haier, which was one of the most high-profile companies going global. We started working for a couple of others like Hanvon Technology, a Beijing based e-readers, and facial recognition company. We worked for Bank of China and China mobile. We built a team of around 10 people in Beijing specialized in helping Chinese companies going global. We had centers of expertise pretty much all around the world with people specialized in helping Chinese companies in their own market, whether it was Europe or the US. It was an interesting trend at the time. Actually, not a lot of these companies were very successful, because these companies didn’t really see the international market as important for them. China is still so big. They still have a massive growth in China that 95% of their resources were in China. They were going global mostly because other companies were doing it, and they wanted to do it like them. Haier never really managed to build a huge brand. They were actually more famous outside of China 10 years ago than they are now.
Mathieu David: Which Chinese companies do you analyze as successful overseas?
Simon Vericel: Lenovo is probably one of the most successful cases overseas and one of the rare ones, but it did that through the acquisition of IBM and integrating IBM’s global network. It basically acquired the international position. Haier tried to do the same thing, but it didn’t succeed. It acquired GE Home Appliance Division 10 years ago I think, but it’s not something that we necessarily remember, whereas you remember Lenovo. Interestingly, Lenovo is doing well overseas. It does have some issues as a company image in a couple of markets around the world, but it has been super successful in building products that the rest of the world wants like mobile phones. There are also other Chinese companies that have been successful overseas. Right now, there is ByteDance with TikTok, the international version of Toutiao, which is massively successful outside of China. They managed to build a product that is new outside of China and built on the success in China, which doesn’t necessarily work outside. That is so different and good for them. We’ll see more, but we’re not going to see a huge amount of Chinese companies being successful outside of China so soon, because they still have a massive market.
Mathieu David: Thank you very much, Simon. Congratulations on everything you achieved and thanks for your time.
Simon Vericel: It’s been a pleasure and fun. I look forward to listening to myself and seeing comments on this. If anybody wants to ask me any questions, I’ll put some contact details next to your video somewhere, a link to my LinkedIn or something. I’ll be happy to connect with anyone who wants to know more.
Mathieu David: Thanks to everyone for listening. Bye.
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