Chinese hardware makers turn to crowdfunding as they look to go global – TechCrunch

China’s tech giants have had a tough time in western markets in recent years. Huawei and DJI are facing trade restrictions, while TikTok and WeChat are threatened with banning their apps in the US. Overall, Chinese companies with an overseas presence are increasingly concerned about mounting geopolitical tensions.

At an event organized by the California crowdfunding platform Indiegogo for Chinese consumer goods manufacturers in Shenzhen, companies of the sizes ranging from portable power startups to 53-year-old home appliances listened carefully as Indiegogo’s Chinese executives shed light on how to woo western consumers.

“The first phase is to let the world hear us. We did that, ”Li Yongqin, general manager of Indiegogo China, admonished a room of entrepreneurs. “Next, we’ll bravely ride the tide and take on the challenge of finding the brands that are loved by users around the world.”

For Midea, crowdfunding provides a very straightforward way to understand consumers, said Chen Zhenrui, who oversees the group’s overseas e-commerce initiative. Platforms like Indiegogo and Kickstarter offer individuals and organizations the ability to raise capital from large numbers of people to fund a project. In most cases, backers receive perks or rewards from the project they fund.

Midea raised $ 1.5 million A new air conditioner was launched on Indiegogo last year, an almost negligible amount compared to 2019’s annual sales of 280 billion yuan ($ 42 billion). However, the support from Indiegogo’s 3,600 supporters was more of a proof of concept.

Within a few weeks, Midea learned that a compact air conditioner that sits securely on the windowsill, blocks out noise and saves energy, could attract many American consumers. Like other established Chinese home appliance manufacturers, Midea has been exporting for several decades.

But “in the past, a large part of our foreign business was in the traditional B2B export area. I think we are still a long way from being a world class brand, ”said Chen.

When Midea first launched on Indiegogo, a user left comments on their campaign page describing the project as a scam: How could a Fortune Global 500 company be on Indiegogo?

“We got to know each other through communication rounds. This user gave us a big boost, ”Chen recalled, adding that Midea used a dozen suggestions from Indiegogo supporters to improve their product.

Li Yongqin, general manager of Indiegogo China, admonished a space of entrepreneurs to develop brands that are loved by global users. Photo: TechCrunch

More and more traditional manufacturers from China are giving crowdfunding a chance. Padmate, based in the southern coastal city of Xiamen, built a new earphone brand called Pamu as a white label manufacturer of sound systems from the start.

Edison Shen, a director at Padmate, said traditional exports are getting harder as old-school traders come under pressure from new retail channels like e-commerce. By creating their own brands and reaching out to consumers directly, factories could also improve profit margins. Padmate went on Indiegogo and raised in 2018 over $ 6.6 million in one of his wireless headphones campaigns.

Most of the projects on Indiegogo will go beyond that 9 million supporters Crowdfunding site on mainstream platforms, listing on Amazon, and advertising on Google and Facebook. Although the core services of these American big tech companies are not available in China, they have all built some sort of operational presence in China, regardless of whether they are stationary employees in the country like Amazon or whether they work through local ad retailers like Facebook.

Indiegogo itself opened its China office in Shenzhen five years ago and has since raised over $ 300 million in China-based projects through its platform, according to Lu Li, general manager for Indiegogo’s global strategy. China is the company’s fastest growing market today, accounting for over 40% of the campaigns that raised over $ 1 million in 2020.

Kickstarter, a rival to Indiegogo, also saw an increase in projects from China reaching you Record of $ 60.5 million The Brooklyn-based company recently started looking for one contractor in Shenzhen or the neighboring city of Hong Kong to explore the Chinese market.

“In recent years, more and more Chinese companies have got the hang of crowdfunding and using their brand globally, in other words ‘blockbuster’ campaigns [from China] are also on the rise, ”remarked Li.