While Baidu, WeChat and Alibaba — China’s substitutes for Google, Facebook (plus WhatsApp) and Amazon — are pretty well known, only few are aware that the country has its own version of Microsoft Office, known as Kingsoft Office.
A subsidiary of the 30-year-old Chinese giant Kingsoft Group, Kingsoft Office is backed by Xiaomi’s founder and current chairman, Lei Jun.
Over the last few years, Kingsoft Office — which offers products such as WPS Office and Kingsoft PowerWord for Windows, Linux, Android, and iOS — has been slowly establishing its presence in the Indian market, which has been a stronghold of Microsoft.
The Chinese office suite services provider entered India in early 2012 and claims to have garnered around 19 million monthly active users (MAUs) here across all platforms.
Kingsoft Office is now aiming for a second innings in the Indian market with the impending launch of WPS 2020. This year, in March, the company set up an office in Bengaluru with a ten-member team to focus on localisation and operations.
“We haven’t spent a cent to get new users so far,” said Danny Chen, head of overseas communication at Kingsoft. “Majority of our users are in China. Now we are actively focusing on the rest of the world, especially in India, where we have seen sustainable organic growth.”
“Although we have a lot of users in India, our brand awareness is a bit limited. Ahead of the global launch of WPS 2020, we are actively getting the message out,” Chen said.
The company’s offerings have reached 18.9 million users in India through its partner ecosystem of smartphones and laptop manufacturers such as Xiaomi, Huawei, Oppo, Vivo, Asus and TCL.
“We have a very close relationship with these companies,” Chen said.
According to a research firm Counterpoint, Chinese smartphone companies captured 66% of the Indian smartphone market in the first quarter of 2019.
Now that Xiaomi has become the market leader in India, Kingsoft plans to ride the growth wave of Chinese smartphone manufacturers. The company expects over 80 million smartphone shipments this year from its Chinese vendor partners, and WPS Office will come pre-installed in these devices.
According to a 2018 Microsoft survey, 91% of personal PCs in India are loaded with pirated softwares. Kingsoft Office sees India’s piracy problem as an opportunity.
“We want to let people know that there is an alternative out there to Microsoft that you can get for free, so you do not have to use pirated version,” said Chen.
Kingsoft Office currently offer WPS for free. However, it has a premium version for professionals who would be required to pay to get more templates, fonts or cloud storage services. The company has an enterprise version as well which it has been pushing in India.
“Our product combines the offline feel of Microsoft Office and the online collaborative feel of a Google Docs,” he said. “We are competitive on the pricing for emerging markets, compared to Office365.”
Established in 1988, Kingsoft Group has four companies under its umbrella — Kingsoft Office, Kingsoft Cloud, Seasun Entertainment and Cheetah Mobile.
Apart from Kingsoft Office, only Cheetah Mobile has ventured into India so far. The mobile tech and security app provider had made a name for itself in India back in 2014, but since the Android security market has saturated, the NYSE-listed company shifted its focus to AI and robotics in China.
The other two subsidiaries — gaming firm Seasun Entertainment and cloud services provider Kingsoft Cloud — haven’t explored the Indian market yet, although they “consider India a strong potential market”.
Kingsoft Group went public on the Hong Kong Stock Exchange in 2007, and all its four companies are now run independently with Lei Jun at the helm of affairs.
Jun had worked for 17 years at Kingsoft before he left the group in 2010 to set up Xiaomi. A year later, Jun went back to Kingsoft as the chairman. Now the group has about 10,000 engineers, of which about a fifth work for Kingsoft Office.
Kingsoft Office is also preparing for a listing on the newly-launched Shanghai Stock Exchange. The company has nearly 310 million MAUs globally. It also counts 69 Chinese Fortune Global 500 companies and government bodies in more than 30 provinces as its customers.
“As Kingsoft office starts to become more independent of the group, we are hoping to put out more products and brands,” Chen said.
The India challenge
With Huawei facing scrutiny from India over security concerns for the commercial 5G rollout and ByteDance mired in regulatory issues over unlawful content on its short video app Tik Tok, Kingsoft is being cautious about positioning itself in the Indian market.
“For the India market, all our servers are located in India. We really separate our business for security and privacy reasons,” said Chen.
“Users do not care about the origin of companies, they only care about how easy the service is to use, they only care about user experience,” he adds. “And that has been the thought process behind companies like Xiaomi, Oppo, Vivo and Huawei. They are really focussed on their functionalities and product features. So we also want to show our value in the market.”
About 25% of the 80 million MAUs that WPS Office has outside of mainland China are from India.
“India is one of the most important markets in the world with significant potential due to its rapid development, especially in high-tech and mobile,” said Vincent Bian, WPS, country manager for India. “Since India is the largest strategic market for WPS' international business, we are investing more and more resources in the country.”
“Compared with China and other ASEAN markets, India has a unique market ecosystem, such as diversified regional cultures, languages, even user behaviours,” he adds. “Therefore, WPS considers localisation the most significant strategy for its business in India. Compared to our experience in the Chinese market, we believe it is more important to bring more localised products and services to Indian users.”
The WPS Office mobile version currently supports Hindi. Kingsoft Office said it would bring in more local languages if and when it starts working with the government. So far it doesn’t have any tie-ups with public clients in India.
With WPS 2020, the company plans to bring AI-infused features such as smart writing, smart polishing for automatic formatting of presentations, and machine translation “so that people can just focus on content”.
Success in the public sector
Despite its legacy, Microsoft remains a much larger and formidable competitor globally. Interestingly, it has a decent presence in China as well. Microsoft entered China in 1992 and hosts one of its largest and most comprehensive R&D base outside of the United States in the country.
While Kingsoft Office dominates state-owned enterprises, banks and government in China with over 80% market share in each of these categories, it only has a 40% market share in the consumer segment, thanks to Microsoft. Chen expects that figure to touch the halfway mark in the next few years.
“We are home grown in China, so it allowed us to build those relationships early on with the government and enterprises,” said Chen.
“We took advantage of the mobile internet starting from 2007 and released our mobile version a year earlier than Microsoft. User behaviour in China has changed a lot with the mobile version becoming popular with the younger generation,” said Chen.
“We focus on the mobile version more than Microsoft. It has several applications with a lot of features. But users need only 20% of these features. We are trying to make that 20% more usable.”
Chen said they don’t expect to recreate their success in China anywhere else, “but we can definitely apply some of those strategies in other markets. For example, if we do move into government space in India, we would be focusing on security, specific formatting and back-end support.”
While Kingsoft Office has been expanding its international business since 2011 — when WPS released a mobile version for Android — the company’s global ambitions is now limited to the Southeast Asia with local teams in India, Indonesia, Vietnam and Thailand. It is, however, looking to set up a new team in Russia.
“Most countries are dominated by Microsoft. Its huge presence in the office space is hard to ignore,” Chen said. “China is unique because there is a home grown alternative to office. We are trying to bring some of that expertise to the outside world, so that people have alternative to Microsoft.”