Cheetah leaps to the top of tool table
Updated: 2015-07-20 08:26
By Fan Feifei and Hu Yuanyuan(HK Edition)
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Cheetah Mobile CEO Fu Sheng says the overseas success of his New York-listed smartphone app software firm could inspire other mainland enterprises. Fan Feifei and Hu Yuanyuan report from Beijing.
Fu Sheng, CEO of Cheetah Mobile, believes the New York-listed Internet software company's success in exploring overseas markets could serve as an inspiration for emerging Chinese mainland enterprises.
"The era for China to enter the international market has already arrived," Fu told China Daily.
"It is possible for mainland enterprises to become global companies because mobile Internet has allowed the split regional market to combine into a global market."
Fu said the mainland Internet model has its own advantages globally, and the stage is set for mainland-made mobile apps.
Fu, 37, worked for five years at software group Qihoo 360 Technology as general manager, leading the development of the 360 web security products that became the cornerstone of Qihoo 360. He also served as vice president of Matrix Partners China, joining the company in 2008, before founding in 2009 Conew Network Technology (Beijing), an image processing software firm where he held the posts of chairman and CEO.
Then in November 2010, Fu founded Cheetah, which grew to become the largest mobile tool developer and second-largest Internet security provider on the mainland.
Cheetah came about as a spin-off after a merger between Kingsoft Internet Security Software and Conew Network. Initially called Kingsoft Network, the spin-off company was renamed as Cheetah Mobile in 2014. Fu led the successful listing of Cheetah on the New York Stock Exchange in May last year.
First-quarter results showed a surge in mobile and overseas revenue for Cheetah. Mobile income reached 370 million yuan ($59.6 million), soaring 584 percent on-year and accounting for 55 percent of total revenue. It also marked the first time that the company's mobile business, driven by mobile advertising services, contributed more income than that from desktops.
Overseas income totaled 260 million yuan, accounting for 38 percent of total revenue and 70 percent of mobile business income.
"Our mobile monetization, especially in overseas markets, has already become our main source of revenue and a key growth engine for us," said Fu, noting that overseas income growth has been exponential, considering it was zero in May last year.
Not only that, Fu expects overseas income to soon account for more than half of total revenue.
Cheetah's first-quarter financial statement also states that its mobile products have been downloaded more than 1.34 billion times worldwide, with about 443 million monthly active users, 71 percent of them from Europe, the US and other overseas markets.
Its mission critical applications, including Clean Master, CM Security, Battery Doctor and Duba Antivirus, make the Internet and mobile experience speedier, simpler, and safer for users, the company claims.
"One of our biggest advantages compared with US enterprises is that we could hire about 1,000 engineers within a year, but it is very difficult to do that in Silicon Valley, only Google and Facebook have that kind of charisma. Moreover, our free-of-charge mode is really attracting users," Fu said.
Traveling light
Competition in the domestic IT industry is much fiercer than overseas, and this provides a good opportunity for overseas expansion by mainland enterprises, Fu noted.
"When we set out to go overseas, we looked at each app in the Google Play Tools category. Interestingly, I found the No 1 app on the image ranking list was developed by programmers in Hangzhou, Zhejiang province. This means you don't need to possess a strong overseas background - as long as users feel your product is good, you can still acquire a large number of users."
Mainland Internet giants such as Baidu, Alibaba and Tencent, however, are heavily dependent on the domestic market.
The key to the overseas success of Cheetah Mobile lies in its being an asset-light firm that requires no offices overseas. This mode can be copied by other companies, Fu said, suggesting that successors view globalization from new standpoints, looking for avenues often neglected by others.
Xue Yongfeng, a senior analyst at Beijing-based research and consultancy firm Analysys International, told China Daily that the success of Cheetah Mobile comes from being in the right place at the right time. "When the company planned to explore the overseas market, its major competitors were focused on the domestic market, so the competition in the overseas market was not intense. Moreover, tools apps are popular among overseas users."
However, new Internet startups venturing overseas may encounter more difficulties, as their competitors may have already gained most of the market share, Xue said. "A new field for Internet startups to explore could be mobile gaming, which could attract large numbers of players overseas," he suggested.
Fu, meanwhile, is dreaming big. "We aim to become a big data company from a previous tools provider, making use of big data and precision marketing to realize the redistribution of global data traffic," he said.
In March, the company acquired the entire equity interest in MobPartner, a global mobile advertising company, to build one of the world's leading mobile advertising platforms. The following month, it announced the signing of a commercial agreement with Nanigans, a Boston-based startup and provider of social and mobile advertising software, and a pioneer in advertising automation software.
Stare down challenges
However, pioneering is hardly ever plain sailing. The biggest challenge for Fu has been the merger between Kingsoft Internet Security Software and Conew Network.
"I never managed a company with more than 100 staff before, but the new company had 400 to 500 employees. Moreover, at the time Kingsoft antivirus software had just claimed it would be free of charge forever, so the competitors massively attacked us."
Fu also remembers how, a day before Cheetah was to be listed on the NYSE, stocks of US-listed mainland companies dropped by 7 percent: "An entrepreneur should face obstacles instead of avoiding them. You should think you still have the ability to make things better and try to solve problems yourself, never shuffling off responsibility."
Fu said the future layout of Cheetah's overseas market would concentrate on developing countries, such as the BRICS nations - Brazil, Russia, India, China and South Africa. "The European and US markets are mature, so rapid growth is not easy to realize. But the development potential in these developing countries is huge."
Although Cheetah's core advantage is overseas, it continues to explore the domestic market.
Fu revealed that their free apps could be preloaded into smartphones from Xiaomi, Huawei, HTC and Asus, and the biggest advantage in the domestic market is that they participate in the industrial chain and remain committed to working with industry partners, instead of treating competitors as enemies.
Apart from its utility apps, Cheetah unveiled last year a smart air filter, known as Baomi, for home use, marking the company's first foray into hardware. But Cheetah will not fully enter the hardware domain, Fu said. "Smart home devices mark the first step in our effort to unite hardware and software. What we could do is to make the hardware smarter."
Contact the writers at fanfeifei@chinadaily.com.cn
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Rivalry in the domestic industry is much fiercer than overseas, notes Cheetah Mobile CEO Fu Sheng (left). He says the future layout of Cheetah's overseas market would concentrate on developing countries, such as the BRICS nations of Brazil, Russia, India, China and South Africa. |
(HK Edition 07/20/2015 page8)