Amazon Cloud Technology Li Xiaomang: Interpreting the trend of 82% of unicorn companies planning to go to sea within two years

"The mainstream of the first wave of enterprises going to sea is 'digital going to sea'. Social, gaming, short videos, these newly emerging digital enterprises to expand overseas, to capture the dividends of the global digital economy. The second wave, on the other hand, is mainly 'going to sea digitally'. Overseas enterprises in traditional industries actively use digital technology to carry out all-round digital transformation and innovation of overseas business, realize product upgrading and brand upgrading overseas, and enhance global competitiveness. On April 25, Li Xiaomang, general manager of Amazon Cloud Technology's Commercial Market Division in China, said when talking about the overseas business.

Previously, a report by the China Council for the Promotion of International Trade Research Institute in March showed that the flow and stock of China's outward direct investment ranked among the top three in the world for four consecutive years. The report also shows that nearly 80% of Chinese enterprises will maintain and expand their intention to invest abroad, optimistic about the prospects of overseas investment.

Analyzing the overseas travel of Chinese companies in the past decade or so, Li Xiaomang shared six major trends observed by Amazon Cloud Technology.

The first trend is about the layout scope of overseas enterprises. According to the research report of Zhongqiao Consulting, more than 60% of the enterprises have more than three continents in the layout of the sea, and the way to go to sea has expanded from the traditional Europe and the United States to South America, the Middle East, Africa and other regions. Southeast Asia, Europe and North America still occupy the preferred destination for Chinese enterprises to go to sea, while emerging regions such as South America, Africa and the Middle East are becoming the "new blue ocean" for Chinese companies to go to sea.

"Southeast Asia is the easiest region for Chinese companies to set foot in the sea, and it is also the first stop for many Chinese companies to go to sea digitally. Because Southeast Asia has a huge population base and cultural habits are similar to China, many Chinese companies have innovative technologies and innovative business models in Southeast Asia, and it is easier to enjoy the demographic dividend in Southeast Asia, such as games, financial technology and other enterprises. Li Xiaomang added.

Trend two, Chinese enterprises going to sea are experiencing the road of upgrading from labor-intensive and capital-intensive product exports to technology-driven, innovative thinking and brand-led, realizing the transformation from quantity to quality. Li Xiaomang concluded, that is, "from the export of 'Chinese cost' and 'Chinese scale' to the world, to the export of 'Chinese technology', 'Chinese brand' and 'Chinese experience' to the world." “

The third trend is about a particular area – the automobile. In the past, the global automotive industry has always been the world of European, American or Japanese and Korean car companies, and Chinese car companies are not only difficult to exert their strength overseas, but also face very large competition at home. But with the wave of electrification sweeping around the world, Chinese brands are using the concept of new energy vehicles to open up a new track and achieve cornering overtaking.

According to data released by the China Association of Automobile Manufacturers, the export of new energy vehicles in mainland China will increase by 305% year-on-year in 2021. China's new energy vehicles play an increasingly important role in reshaping the global automotive industry pattern.

Trend four, the field of enterprise services has become a new hot spot for going global. From general enterprise-level services such as enterprise resource planning, customer relationship management, collaborative office, and human resources, to specific services required by vertical industries, to IT applications such as IT operation and maintenance management, databases, and big data analysis, the enterprise service field is becoming a new hot spot for going overseas. Even some overseas enterprises that originally faced the C-end have also developed their own experience in serving C-end customers into new services on the B-side of the service, and expanded their business to the B-end.

"Some of their overseas paths are to serve Chinese enterprises in China, go to sea with customers, and even create services specifically for the needs of overseas enterprises, such as marketing services for cross-border e-commerce." Others are directly aimed at overseas companies, serving foreign and global companies. Li Xiaomang said further.

Li Xiaomang also shared an observation that the C-end enterprises that were originally facing the C-end in the overseas enterprises have achieved great success and accumulated a lot of experience after years of overseas operation. On the basis of these experiences, we will begin to refine and summarize our own experience in the To C terminal, transform the experience into new business opportunities, and expand the business to the field of enterprise services.

The fifth trend concerns SMEs. Li Xiaomang shared a set of data that among the enterprises that have gone to sea, large enterprises account for 63% and small and medium-sized enterprises account for 37%; among enterprises that plan to go to sea, large enterprises account for 35%, and small and medium-sized enterprises account for 65%.

Li Xiaomang analyzed the changes behind it, "In the digital economy environment, the innovation ability of enterprises in the field of digitalization and intelligence is a more critical factor in whether they can succeed in the world, and the impact of enterprise scale is secondary." Our stereotypes of so-called 'multinational corporations', such as the need for a very large scale, strong financial resources, a long history, also need to be upgraded. From 'big' to 'small', small and medium-sized enterprises began to emerge in the sea, we can see that in the digital economy environment, the cloud plays a very important role, it allows small and medium-sized enterprises and large enterprises in the same starting line in technological innovation and application, small and medium-sized enterprises with a relatively low cost to use these advanced technologies to reduce the threshold of going to sea. ”

The last trend is that startups debut to aim to go to sea. From gaming, developer services, and SaaS to hardware/mobile phones, e-commerce, and more, more and more startups are born global. According to the 2021 Accenture China Unicorn Study, 45% of unicorn companies believe that overseas expansion is crucial, of which 82% plan to expand overseas within 24 months.

"The first share of mobile marketing" Huiliang Technology chose cloud native at the beginning of its establishment in 2013, and Xi Yuan, vice president of Huiliang Technology, told the surging news (www.thepaper.cn) in response to why it was so chosen, "The Huiliang business has experienced a period of rapid growth, with the average daily advertising request volume surging from 18 billion in 2017 to about 50 billion in 2018, and continued to grow to 60 billion in 2019, up to 100 billion times. At the same time, we operate overseas, and to achieve low response latency services, it is impossible for us to build our own data centers in each country. Amazon Cloud Technology's global services can help us dynamically match resources and business scale while the scale of our business is growing rapidly. ”

If Chinese enterprises want to go global, how can they successfully go global? Li Xiaomang's answer is: global thinking and local operation.

What is Global Thinking? Li Xiaomang believes that first of all, we must have the ability to efficiently allocate resources in the world, but also to be able to actively carry out local operations, and the recognition and understanding of the region is the foundation of the success of Chinese enterprises overseas. In entering a new cultural environment, it is necessary to understand the local system, laws, and customs, and on the basis of legal compliance, we must continue to provide innovation around local customers.

"The cloud is an important means to help enterprises achieve global thinking and localized operations, whether it is to establish a global business platform or a data platform, to have a global perspective and operation, to better achieve security compliance and technological innovation in various regions, the cloud has played a very important role, cloud computing as the technical base of the digital economy, has become a key technical bridge for Chinese enterprises to go to sea to achieve global business layout and innovation." Li Xiaoman concluded.