Nowadays, in the path to growth for Chinese Internet companies, there must be an unsolvable multiple-choice question: acquisition by giants, venture capital, and death. Going to Southeast Asia is not only to explore business opportunities but also to search for new ways to solve problems.
ADVANCE.AI has undoubtedly been a star team over the past few years at the intersection of Chinese outbound Southeast Asia and Internet finance start-ups. The favour of many top funds and VCs at home and abroad, such as Gaorong Capital, Pavilion Capital, GSR Ventures, Vision Plus Capital, Lingxiu Capital, eGarden Ventures, Zhen Fund, Chongying Capital, and the dazzling work history and knowledge background of the founding team, have made ADVANCE.AI a key target for government and enterprise users in Southeast Asia.
ADVANCE.AI provides core services such as credit assessment, anti-fraud, risk control and digital identity verification for financial institutions, telecom operators, Internet companies and other enterprise-level clients in Southeast Asia. Through "AI + Big Data" and other technical means, helping clients in the Pan Asia-Pacific region to realize the intelligent transformation of traditional business.
In the interview with Leiphone, Dong Shou, Co-founder and COO of ADVANCE.AI, said: "Southeast Asia is still our main battlefield, but we are also optimistic about the Chinese enterprise services market for a long term and have to start doing something about it."
Dong Shou's response is not empty talk. As early as March 2019, ADVANCE.AI launched the "Lingchuang A Card" for the Chinese market, which directly targets US company BREX, "You can understand as it is a 'corporate virtual credit card'. "
The current plight of the cloud-based Chinese enterprise service market can be delineated by one word: payment. Although this topic seems like a cliché, there is a new strategy for this newly successful overseas start-up company.
The allure of the Chinese corporate services market is much too great.
The pivot for leveraging B-side business
ADVANCE A Card is mainly targeted at small, medium and micro enterprises in China, providing them with one-stop financial solutions such as payment, expense control and reimbursement in the form of mobile business cards.
"There are already many business models for personal credit investigation in China, so we provide credit services for small, medium and micro enterprises, and can further provide benefits and book tickets for employees."
In fact, corporate credit cards are not new, most banks will also offer credit cards to businesses, but the process is cumbersome, and the cycle is long. The use of corporate credit cards will improve the effectiveness of corporate operations such as payments and expense control while addressing employee advances to balance the conflict between employee care and corporate control requirements.
"No advances, flash card opening, quick review, on-the-go", these are several features of the ADVANCE A Card.
ADVANCE A Card will start with start-up projects from well-known domestic investment institutions. However, of course, there will be assessment criteria for serving such customers: such as the scale of financing and the investors behind it, "The amount of corporate loans issued will not be very high, about ¥ 100,000."
It is reported that the project has served hundreds of corporate clients in China.
"The pain point of banks is that they do not know how to conduct credit evaluations of start-ups through digital means. It is also difficult for banks to do business with the public, and if the end-user of this credit card is a company executive, there is the potential for bank cross-acquisition."
ADVANCE.AI leverages its rich experience for overseas financial institutions to provide SME financial services based on scenario-based card transaction data, enterprise-level big data and intelligent risk control with "Online Card" as the breakthrough point in China.
It is probably the real reason why the Lingchuang A Card has been so successful.
It is further conjectured that the Lingchuang A Card may only be a pivot for leveraging the domestic B-side business, for banking credit and other businesses, how to obtain the real demand information of the user side is the key point.
Advances and challenges of the Chinese experience
Enterprise procurement, either the procurement of office supplies, gifts, welfare and other goods or the agreement of hotels, travelling team construction, health insurance, employee loans and other services procurement, have been completed change to online service via the internet giants such as JD, Tmall and Ctrip. Many SaaS start-ups and traditional software enterprises also show the interesting in this sector.
For now, however, ADVANCE A Card has chosen to cut into the track in a way that is more in line with its own advantages and barriers.
Dong Shou said that in Singapore, there are not too many companies doing corporate credit cards; this is a regional business.
With this success in mind, it is not unreasonable for Lingchuang A Card to attempt to go overseas and make Singapore it is the first stop.
However, mature model experiences can provide lessons learned, but not all successful experiences can be replicated.
Previously, the gradual tightening of regulations in the domestic Internet finance industry and the slowdown in market growth prompted many Internet giants and start-ups to look for new opportunities in the Southeast Asian market.
These regions will remain incremental markets for some time to come, taking Indonesia as an example, Dong Shou believes that there are three factors: First, Indonesia's demographic dividend and consumption potential are large; Second, Indonesia's mobile smartphone coverage rate is less than 50%, which is an incremental market rather than a stock market; Third, the Indonesian government itself also encourages financial inclusion very much.
In his view, the biggest competitive advantage of ADVANCE.AI lies in localized operations, "We can provide customized services, not just a generic solution."
The opportunity and scope for AI as fundamental productivity in Southeast Asia are enormous, but at the same time, the Chinese companies going overseas are facing increasingly strict supervision and intricate competitive environment.
To this end, ADVANCE.AI is also intent on expanding its user market horizontally, and the types of clients are no longer limited to financial institutions, but also Internet companies, which have expanded their business from Singapore to countries such as the Philippines, Indonesia, Vietnam and India, "India will be our next focus."
It is noteworthy that the multiple business lines and multiple regional factors make ADVANCE.AI form its own set of personalized hiring system. Currently, the company has nearly 400 personnel in its R&D and AI team. Algorithmic talents, who are mainly from China and Singapore, are accounting for nearly 18% of the total personnel. The non-technical functional departments, such as operation, commerce, customer service and government relations personnel, more come from the local area of Southeast Asia.
Fight to support
Back in China, ADVANCE.AI may also take a different "To B" path from other AI start-ups -- Fight to support.
"Overseas users may be more willing to pay than domestic ones due to cultural factors, which is a relatively healthy business model in the eyes of investors." By contrast, the domestic enterprise services market is large but equally competitive, and revenue remains an issue.
"Your revenue may not always come from China, for example, you need overseas revenue to feed domestic costs, and only then, for a start-up, you are not in a hurry to make a profit, but more patient to polish your product."
According to the data, Dong Shou said that the overall revenue this year will be 100 million RMB, and the revenue from software + services is expected to exceed 60% next year.
As RPA+AI has become a new business format, ADVANCE.AI also stated that it would cooperate with RPA companies at home and abroad to try to implement related technologies. "RPA is an ecosystem, and we will approach it from the business layer rather than building an underlying technology ecosystem, such as applying RPA components to a financial scenario to create an automated process."
This naturally does not rule out that ADVANCE.AI will choose to cooperate with companies on the Chinese RPA track. Now that there is already a boom of RPA+AI in China, can Southeast Asia be a good landing scenario to take advantage of this momentum?
"Not all regions are ready to roll out RPA systems, but I think there is still an opportunity in Southeast Asia, it is a niche market, and there are not too many competitors looking at it." Dong Shou gave a positive answer.
What Leiphone can be sure of is that China has become an "experimental field" for entrepreneurs to innovate models in the future as they advance to the Southeast Asian market. RPA+AI will be a major technology selling point of ADVANCE.AI, which is clearly more worthwhile than just in the Chinese market. In such a market, it's clear that there are opportunities to participate in whatever way you can.
So, looking back, how should the story of China's "B2B" market to be told?