400 Million Users Strong: UCWeb CEO Shares Turning Points of the Company

400 Million Users Strong: UCWeb CEO Shares Turning Points of the Company

May 28, 2013

by Willis Wee

With more than 400 million users of its UC Browser, China’s UCWeb is probably one of most popular mobile browser makers in the world. UCWeb CEO Yu Yongfu tells us that that the company’s first product started as a BlackBerry Messenger type of service called UCMail. Unfortunately, it didn’t take off. But the team was quick to realize that people weren’t using UCMail. Rather, they wanted an application that could help them browse the web. So in 2004, UCMail rebranded to UCWeb, which stands for “U Can Web”, to being a full-fledged mobile browser. In 2006, with a team of 12, Yu Yongfu reorganized UCWeb and took over as the founder and CEO role. Today, under Yongfu, UCWeb has grown into a 1,500 employees company with 400 million users globally. Prior to UCWeb, Yongfu was a venture capitalist for six years focusing on the mobile internet sector. But he saw a lot of potential in the young company, so he chose to switch to the other side of the table to become an entrepreneur.

Turning points

There are a couple of turning points for the company. Yongfu says that in July 2007, UCWeb sold its B2Bdepartment that does mobile browser customization and other technical consulting for telcos. Minus the B2B department, it has helped the company to focus its energy solely on end-consumers. Though the B2B department was the only channel that generates revenue for the company, he believes in focusing just on its consumer-facing product, UC Browser for Android, iOS, Windows Phone, BlackBerry, Symbian, and JAVA-based phones. Yongfu told me (translation ours):

From a revenue generating company, all of the sudden, we don’t generate any more revenue.

At the end of 2008, Yongfu also placed a big bet on Android as he believes that Android will be the key winner in China and many parts of the world. Today, UCWeb’s mobile browser has over 150 million Android users monthly. Another turning point is when UCWeb started to expand internationally at the end of 2009. He sees it as a pivotal and bold decision to push the company outside of China. He tells me (translation ours):

Back then, there wasn’t any Chinese company that had successfully gone international and UC was still a startup at that time.

Today, UCWeb can pat its chest and declare that it has over 100 million users who are outside of China, which is quite a rare feat for a Chinese tech company. In 2011, UC set up its first international office in India. In October 2012, its US office was established.

Yu Yongfu says that UCWeb employs “airborne tactics” when it comes to expanding to other markets. That means, its business development managers will travel to another country often but will not have an office. The key is to push the product into the market and keep localizing and improving based on data and feedback the team receives. Today, he says that UCWeb is growing rapidly in India, Vietnam, Indonesia, Russia, and the US. His aim is to hit one billion users with 50 percent of them outside of China.

Not heading for IPO soon

The company has recently announced that it plans to invest over $480 million over the next three years on expansion, growing its own ecosystem, monetization, and technology. UCWeb generates revenue from advertising and games where the margin could be as high as 85 percent from advertising and 50 percent from games. He also reveals that revenue has doubled in the last three years and the company is profitable.

When asked about UCWeb’s IPO plan, Yongfu says he prefers to go IPO later rather than earlier as he believes that the mobile internet boom has just only started and he doesn’t wish to be pressured by investors to deliver quarterly financial figures. He is also determined to keep UCWeb independent despite ongoing rumors spreading around Chinese tech circles that the company could soon be acquired. Though, he says, he is open to talk to strategic investors who are interested to invest and partner with UCWeb.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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