Allen Zhang wanted to make audio products that were wireless, stylish, and could outperform the best option Apple put on the market — at a cheaper price. So, he founded his company crazybaby to do exactly that, and employed China’s finest engineers to create some of the most sophisticated earbuds available. But there was one major problem: as a Chinese company, crazybaby needed a way to break into the US market.
Like a growing number of Chinese entrepreneurs, Allen decided to use crowdfunding to gain exposure to American consumers and build buzz for his products. He launched four different audio products on Indiegogo, raising a total of over $4.7 million. “On the Indiegogo platform, there are lots of early adopters looking for cool new gadgets they can’t find anywhere else,” said Zhang. “They became our first customers, and helped us create a base of support in the US.”
It’s a strategy more and more Chinese companies are using to get into western markets, and it’s working. “Crowdfunding offers a unique way for Chinese innovators to reach US consumers — a market that used to be nearly impossible for overseas brands to crack,” said Natasha Raja, Vice President of Marketing at Indiegogo. “Innovation seekers who back emerging ideas via crowdfunding understand that products are in development. As a result, they provide overseas brands with valuable product feedback — information that used to be impossible for overseas brands to obtain from American markets. Chinese companies have raised a total of over $100 million on Indiegogo in the last 2 years, and that number continues to grow.”
Crowdfunding eliminates barriers to entry
Traditionally, companies in China have struggled to find footing in the US. Chinese entrepreneurs have often lacked the strategic partnerships and firsthand experience to overcome barriers to entry. Crowdfunding is changing all of that.
Crowdfunding has become much more than a way to raise funds. In recent years, companies around the world have used platforms like Indiegogo to build brand awareness, generate consumer feedback, and get market validation – all of which are particularly important for a foreign company in a US market.
But, crowdfunding isn’t just a strategy for launching never-before-seen products. Well-established Chinese companies are using crowdfunding to take popular innovations onto the global stage.
Take the tech startup XGIMI, for example. The darling of the Chengdu Tianfu Software Park had a local following for their pico projectors long before they turned to crowdfunding. They shipped over 300,000 units and dominated over 50 percent of China’s market share by the time they launched their Indiegogo campaign in 2016.
For XGIMI, crowdfunding had nothing to do with getting funding and everything to do with building an American audience. Their H1 projector brought in more than 10 times its goal, and the company raised a new round of VC funding soon after. “We have sold over $1.4 million on Indiegogo and used this success to launch in other retail channels after [the campaign],” said Ivy Wu, Marketing Lead at XGIMI.
Crowdfunding is particularly suited for reaching high-tech audiences
Indiegogo’s backer audience is full of trendsetters and influencers looking for the latest innovations and cutting-edge products. By appealing to these tech enthusiasts, Chinese companies can harness a lot of exposure via social media shares and word of mouth.
Besides these benefits, backers are also more forgiving than retail customers, and expect their state-of-the-art purchase to have some features still in development. This gives Chinese companies a chance to perfect their products and get feedback from American consumers, which has been very difficult to get in the past.
That level of feedback and market validation was exactly what GPD HK was after when they chose to crowdfund their handheld computers. They wanted to prove that American audiences wanted a powerful handheld laptop and gaming device they could transport without fuss. So, they launched two products on Indiegogo: the GPD Pocket and the GPD WIN 2, raising a combined $5 million to bring the products to market. As a result, crowdfunding has become the team’s main strategy for putting out new tech. “Indiegogo is our go-to global launch channel for our new products,” explained Junzheng Wang, GPD’s CEO.
Indiegogo China: A Fast Track to the Global Market
Crowdfunding provides a low-risk opportunity for Chinese companies to launch and test the popularity of new products in America. While innovators looking to break into the global marketplace are quickly realizing the unique benefits of crowdfunding, this strategy is not without its challenges.
Whether it’s navigating an entirely new market with vastly different expectations or making new regional strategic partnerships, Indiegogo knows building a brand on a global level isn’t easy and understands that Chinese companies rely on agency support to succeed. That’s why the Indiegogo China Global Fast Track program is committed to helping China-based companies debut new products through crowdfunding.
“Indiegogo provides the tools and expertise needed for faster global innovation and growth, while allowing entrepreneurs to focus on what they do best — creating new innovative products,” said Natasha Raja, Vice President of Marketing at Indiegogo. “The China Global Fast Track program has already launched hundreds of successful campaigns, including 22 campaigns that have raised over $1M each. This year, we’re excited to build on the success of the program, connecting western audiences with Chinese entrepreneurs and bringing incredible products to consumers around the globe.”
Source: bing.com
