Making it in China

Casual Connect TLV 2016 @ironSource

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OUTIN OUT

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The Silk Road

China InThe Challenge + The Opportunity

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The Challenges

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A Parallel Universe The Challenge

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Localization is a b***hThe Challenge

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Too many sandboxesThe Challenge

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Tencent21%

Baidu16%

360 Mobile17%

Xiaomi14%

4%4%4%

Huawei11%

5%

4%

200Total Android app stores in China

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Tencent21%

Baidu16%

360 Mobile17%

Xiaomi14%

4%4%4%

Huawei11%

5%

4%Google Play4%

Cautionary Tales

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eBay vs. AlibabaCase Study

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Marketing

Spent hundreds of millions on advertising on the internet.

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HR

German manager and American CTO to lead China operation

HR

100% Locally staffed

Marketing

Spent on TV to target SMBs who were less internet-savvy

Product

Stuck to its ‘global platform’ with listing charges & complex auction model

Product

Free for use, simple interface, focused on selling vs. auctioning

Primary User Acquisition Channel

Internet (90M users at the time)

Primary User Acquisition Channel

Mobile (300M Cellphones)

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Any China-In strategy must be completely localized, including adjusting

the product itself

Moral of the Story

Uber vs. Didi Chuxing Case Study

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Jan ‘13 Apr. ‘13 Aug ‘13 Feb ‘14 Sep ‘14 Dec ‘14 Feb ‘15 Jul‘15 Sep ‘15 Feb ‘16 May ‘16

Didi and Kuaidi fight each other for market share, showering subsidies + incentives on drivers

Uber soft launches in Shanghai

Uber takes a scouting trip to china, planning to invest big in the market.

Uber’s formal launch in China: introducing luxury car services in Shanghai, Guangzhou and Shenzhen

Uber expands offering to include a cut-price service, People’s Uber

Didi and Kuaidi Merge

1% Market Share

Uber has 3% Fraudulent rides a day

$1B Investment from Baidu

$3B Round

$1B Investment from Apple

Uber report over a $1B loss in Chinese market

Aug ‘16

Sells for 20% in Didi

Invests $1B in Uber

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K.O!

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Massive capital ≠ guaranteed success

Thinking outside of the box(if you can’t beat ‘em - join ‘em)

Moral of the Story

The Golden Opportunity

563MSmartphone users in 2016

~28%Of the global smartphone market

$27.5BMobile Ad spend in 2016

30%Global mobile ad spend in 2016

1stIn the world for iOS Revenue as of Q3 2016

1st In the world for global gaming revenue

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China OutThe Challenge + The Opportunity

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"We must absolutely globalize...We will organize a global team and adopt global thinking to manage the business, and achieve the goal of 'global buy and global sell'." - Daniel Zhang, Alibaba CEO

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The China Out Opportunity

Helping Chinese companies get “out” of China enables:

Working with giants

A mutual relationship - both supply and demand

Long-term growth @ironSource

What does it take?

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True global reachThe Ingredients

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‘China-Grade’ Scale The Ingredients

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Bridging East and West The Ingredients

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Our journey in China@ironSource

APR. 2014OPENED FIRST CHINA OFFICE

30+EMPLOYEES IN CHINA

20%OF OVERALL COMPANY REVENUE

STRATEGIC INVESTORS

ironSource in China

Top 3MOBILE USER ACQUISITION PARTNER FOR BAIDU

Top 1PC DISTRIBUTION PARTNERFOR BAIDU

Israel & China

The China-Israel Love Affair

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Local first; Global first

Why it works

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Mutual cultural respect and similarities

Why it works

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Geographical advantage: bridging East and West

Why it works

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The right chinese partners can help

A long runway of time and money

China in or out - choose wisely

We don’t really know - be humble

The Checklist

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Thank you!Omer Kaplan | CMO & Co-founder | ironSource

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