November 12, 2013

Understanding China - Its Role in Global Business

In addition to making a presentation to Seattle University's Global Business Club on October 31, 2013, I was invited by David Reid, Ph.D., Professor of Global Business Strategy at Seattle University's Albers School of Business and Economics, to speak in a class he teaches entitled "Understanding China - Its Role in Global Business" on November 4, 2013. In his course syllabus, Dr. Reid explains that "this course is geared to students who want to learn about the reality of China as a business opportunity as well as a threat, together with China's state of market development." This post will highlight a few points from my presentation and subsequent discussion with the students.

The focus of my presentation was to present the role China plays in the strategy of my company, ROI3, Inc. While my colleagues and I see opportunities to develop digitally-animated apps and content for smartphones and tablet computers worldwide, China serves as our initial market. As indicated in my post, "ROI3, Inc. - Tools for Empowerment," China had over 300 million 3G subscribers as of May 2013, according to a Tech in Asia article. China will see smartphone shipments exceed 460 million units by 2017 and is expected to have 440 million 4G users by 2017. By 2020, China will be the largest market of smartphone users utilizing the latest mobile broadband technology.

I addressed the many challenges my colleagues and I face in the world's second largest economy. One challenge is the fragmented revenue channels for app developers. While the business-to-consumer (B2C) market offers significant revenue growth, there are multiple B2C channels including AppChina, Baidu App Store, Google Play, HiMarket, Taobao App Market, and Tencent's App Store just to name a few. Furthermore, in-app advertising serves as an integral component of our B2C monetization strategy. (Masanari Arai, founder and CEO of Kii Corporation, a Tokyo, Japan based company that promotes itself as "the only mobile backend-as-a-service (MBaaS) provider that helps developers turn their apps into full-fledged, global businesses," wrote an insightful blog post on November 9, 2013 for VentureBeat explaining China’s mobile app ecosystem.)

In addition to the B2C opportunities, I explained ROI3's business-to-business (B2B) revenue model that resides in enterprise customization and direct licensing. We also see opportunities to monetize our apps via mobile network operators or equipment manufacturers as a value-added service for original equipment manufacturers.

When talking about the specific components of ROI3's apps, I highlighted the following five features: (1) security, (2) simple, user intuitive user interface, (3) engaging graphics through digital animation, (4) social interaction among users, and (5) reward system (gamificiation). While other apps in the China marketplace may provide similar content in the area of English language learning or health, my colleagues and I feel our competitive advantage lies in the technology of the app's back-end infrastructure and front-end user interface, thereby creating an engaging and unique experience for our subscribers.

I wish to express my sincerest appreciation to Dr. Reid for providing me with the opportunity to speak and to the students for their well-constructed questions and critical feedback.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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