Global co-operation is on the upswing when most needed
Globalization as a socioeconomic phenomenon originated in the 19th century when the capital moved freely across the world and goods crossed national borders with the assistance of cheap transport.
Today, while US economists have a bleak view of the future of globalization, in no small measure thanks to Donald Trump who has threatened to withdraw from major trade deals and political affairs jeopardizing international relationships, the Chinese giant Toutiao, in contrast, has announced that “globalization” would be its new goal.
In addition to its efforts to promote a multi-polar world, the “3W” model - what, when, and how - could be the company’s secret weapon to take the great leap into a globalized future.
(1) What - focusing on globalization, targeting international customers
“What” is of primary importance in achieving Toutiao’s globalization goal.
In its early stages of development, the Beijing-based news and information platform powered by artificial intelligence technology had already highlighted globalization as one of its main goals and took its first step in the international market in 2015 - the 3rd year after the company was founded.
It now has successfully branched out into a large number of global businesses covering North America, Japan, India, Brazil, Southeast Asia, and other regions.
Zhang Yiming, the founder and CEO of Toutiao, said that he and his team were convinced that the global market would be more profitable than the domestic market for well-prepared participants who seek business opportunities regarding market resources and labour forces.
“Although the Chinese domestic market provides an appealing platform for start-ups, in terms of long-term development, adapting to new changes, focusing on international competition and utilizing global resources is the right path”, he said.
“We believe that Chinese corporations, like the American companies, should be characterized as ‘born to be global’.”
He said “as an Internet-based company, we had little confidence to be the pioneer when launching our first globalization project in 2015. However, Chinese corporations in electronics manufacturing, mechanical engineering, and information and communication technology (ICT), such as Huawei with successful experiences in the global world of trade, encouraged our exploration.”
“Our goal is to win over 50% international customers in the next three years.”
(2) When - recognizing and seizing business opportunities
A rising tide of worldwide tech enthusiasm, fueled by development in computer science like cloud computing and mobile Internet, is the fundamental platform for start-ups. Therefore, “when” underlines spotting and unlocking business opportunities.
A few years ago, China’s largest e-commerce business was ruled over by BAT, referring to the three Chinese IT giants - Baidu, Alibaba, and Tencent, but now the triad, TMD consisting of Toutiao, Meituan, and Didi has emerged with industries as varied as media outlets, restaurants, groceries, public transportation and recreation. The three new giants have grown to be worth more than USD100 billion collectively.
Zhang Yiming said “in comparing BAT with TMD, the common ground lies in creating customer-oriented business models and emphasis on talented employees. However, we possess several other features that distinguish Toutiao from its rivals.”
First of all, Toutiao was founded at an apt time – in 2012, when the Internet penetration rate in China was comparatively high. Thus, a large population was able to get accustomed to the company’s products and services in a short time period.
Additionally, post the financial bubble, Internet companies were relatively competitive in terms of recruitment, indicating that it was easier for Toutiao to attract young professionals and fundraise for business at that time.
Furthermore, apart from Toutiao, other Chinese enterprises such as Meituan and Didi also became rising forces in globalization designed to capture international markets.
Finally, Toutiao dared to “break out of the comfort zone”, branching into the new business without the fear of loss. “You must try something new.” Zhang Yiming said, “as you see, corporations established in 2012 have been seen to expand faster than others.”
“Any development relies on improving vertically and horizontally. Vertical promotion includes providing users more professional services, digging into valuable topics and information, and performing global value chain analysis, while horizontal improvement can be achieved by extending business scope, adding new dimensions, and globalization.”
Zhang Yiming said, “I expect a boost in our tech company that moves the services to To-Business (‘to B’) after building the To-Customer (‘to C’) infrastructure. We previously focused on ‘to C’ services based on the database, cloud computing, and payment system, but the more challenging one is the ‘to B’ which requires high-level technology in ICT.”
(3) How - keeping young and open-minded
The secret behind Toutiao being recognized as one of the country’s most successful brands with a large amount of support from the youth, most of whom were born after the 1990s, is to keep the company “young”, in other words,“think young, live young, and be young”.
According to Zhang Yiming, the culture and soul of Toutiao is that every day should be valued in much the same way as Amazon’s “Always Day 1”.
"Our thought process is a break from tradition,” he said. ”Rather than thinking that the youth is immature or naive, we like to keep up with the changing habits and trends beloved to young people. Like the prevailing Tik Tok app – we require all employees to use Tik Tok. It’s a way to keep our pulse on the youth because the best results come from an open mind and a sophisticated method to thoroughly understand customers.”
“For corporations like us, three points are of significance in the future: (1) self-awareness and development in management, culture, and organization, (2) to globalize, (3) keeping an open mind and contributing to society,” Zhang Yiming said.