NQ Mobile: it pays to be less Chinese

NQ Mobile: it pays to be less Chinese

Sep 12, 2013 3:00am by Peter Vanham

“How many Chinese brands can you name?”, a Chinese host asked at the beginning of the WEF session on ‘Rebranding China’. His American interviewee, Richard Edelman, knew only three: Huawei, Air China, and Lenovo. But this isn’t Edelman’s problem. The limited awareness about Chinese brands is mostly due to the faulty branding strategy by Chinese companies going abroad themselves. What then, can they do about it?Beyondbrics consulted a man that knows the answer by experience: Henry Yu Lin. The co-CEO of NQ Mobile, a Chinese global player in security software, did not only rebrand himself in the West, learning English and taking on the name Henry. But he made a name for his company and its products abroad as well.

In 8 years, NQ Mobile grew from a Chinese start up founded by family members and friends, to a global tech company with almost $200m in sales (doubling every two or three years), a ‘developed markets’ headquarters in Dallas, Texas, and a market cap of over $1bn on the NYSE.

Along the way, NQ distanced itself ever more from its Chinese roots. It hired foreign employees in its overseas branches, appointed a non-Chinese co-CEO, and communicates as neither a Chinese nor American company on its English website.

That strategy resonated well with its international clientele. As a matter of fact, Lin says, HQ comes across as so natural in America that “some of our American consumers even think we are American.”

These are Lin’s key messages for other Chinese companies trying to build a brand name abroad.

1. Hire (only) local people in your overseas markets
Do this early on after your overseas market entry. Don’t bring in people from the Chinese headquarters, as they likely won’t have the feeling for, connections in, nor the knowledge of the foreign market. Omar Khan, NQ mobile’s US chief is of Indian descent, but he spent his whole youth and adult life living, studying and working in the US.

2. Make your local staff as important as possible
Don’t shy away from giving local offices much power in your company hierarchy. Omar Khan is co-CEO of the company, and the US is the company’s second headquarters, responsible for most of the developed markets. Several other board members are American, and were brought in by Khan. An advantage of giving your local manager an important role, Lin says.

3. Overinvest in getting local market knowledge and act accordingly
Thinking before acting has led NQ Mobile to choose the right partners in its overseas markets: leading telecom providers like Verizon in the US and America Movil in Latin America. Taking less time or knowing the market less well might well have led to different partners and lower sales.

4. Create a local brand that feels as local as possible
Americans or Europeans don’t like clumsily written sentences on your website, Chinese handbooks, or customer reps based in China. As you go to a store, call customer support, or visit the NQ website, you will always as if you’re dealing with an American company – the website even mentions it is “Made in Dallas, Texas”.

For NQ mobile at least, this strategy has worked. Almost half of its sales now come from overseas and much of the initial seed money was provided by American investors like Sequioa and Mayfield.