As China blocks the majority of functions on WeChat and Skype, FinanceFeeds looks at how to ensure continued contact between Chinese IBs, customers and how to future-proof your business in China. Chinese operations and WeChat will be needed from now on. We can also help your company do so via the official Chinese channels
Today, FinanceFeeds China discovered that as a result of a meeting by the Chinese Communist Party, popular cross-platform messaging applications Skype and WhatsApp are now no longer accessible in their full form from within the Chinese mainland.
FinanceFeeds has been continually monitoring and conducting research on the extent of the restrictive measures taken by the government with regard to the monitoring and accessibility of full functionality provided by Skype and Whatsapp, both very widely used applications for business, and mainstays of conducting conversations between technology vendors, brokerages, IBs and service providers in the FX industry globally.
Until recently, Skype messenger and WhatsApp messenger were available, however the voice aspects of these applications had been blocked in most of mainland China, especially within second tier development towns, the reason being that the government could monitor written text far more accurately than it could monitor voice conversations that did not take place in Chinese, conducted by foreign visitors, or between Chinese offices of western firms and their global head offices outside China.
As of today’s Communist Party meeting, WhatsApp and Skype will be substantially restricted across the majority of mainland China, largely as a result of concerns by the Chinese government over transmission of data outside China and accessibility of foreign data by Chinese citizens and companies, however it is also possible that this was done in order to boost overseas use of Chinese cross-platform messenger WeChat.
There is no information on whether this restriction is temporary, and if it will be relaxed soon, or never, as the government does not provide this type of information to anyone at all.
WeChat is more than just a messaging service. In China, email (QQ) is relatively rarely used, and WeChat dominates the domestic and corporate world, as it has multiple functions that are designed to power businesses, from marketing to customer bases, to distributing customer interactions and as a tool by which many businesses receive and send vital information to their suppliers.
WeChat is available in restricted form to overseas users, and clearly the Chinese government, which has successfully managed to achieve a mobile usage penetration of 900 million people – which is pretty much every literate adult in China – wishes to ensure that its policy of monitoring every aspect of life remotely via the mobile internet, whilst stimulating domestic business.
Recently, FinanceFeeds addressed over 300 senior Chinese FX executives in Guangzhou, southern China, accompanied by WeChat management, in order to look closely at the importance of using fully integrated Chinese media when working within China.
For brokerages with a Chinese foothold, Chinese media is the only methodology and will future proof the entire business, as is having a fully fledged Chinese company, operated by Chinese executives and with either partial Chinese ownership, or full Chinese ownership and operated as a joint venture with its Western originator.
“We are speaking today about the new ways that media in China will have to be used in order to attract and maintain a sustainable client base as well as organically grow any business, and from my research, the only method now is to concentrate on media campaigns that are based in China, originate from Chinese entities – meaning Chinese hosted and partially owned subsidiaries of Western brokerages or technology firms, and not to make any media campaigns that focus on China, from outside China” – Andrew Saks-McLeod, CEO, FinanceFeeds
“The reason for this is that nowadays, with large introducing brokers in regional towns and cities that are highly astute and operate offices with in some cases over 100 staff and perform every possible activity that a retail brokerage itself would perform including portfolio management via MAM accounts with in house money managers, full payment and withdrawal services, back office and customer relations departments and a customer-facing sales team, the Chinese retail trader is today more empowered than ever, yet totally focused on the relationships with large IBs” said Andrew Saks-McLeod to the audience, which consisted of over 250 executives from mainland China, all representing Chinese and international FX companies.
There is no point at all in purchasing football sponsorship, or using media and communications channeels remotely from outside China, as not only has this been severely restricted by Baidu’s advertising clampdown on OTC derivatives firms from abroad (and many other industry sectors), but the high costs and difficulties in knowing where to position such media will be further thwarted by the inability for the increasingly small number of clients that would click on such an advertisement rather than deal directly with their existing firm to send their funds overseas.
China’s very media orientated modus operandi in this sector is a very important consideration and thus can only be future proofed by ensuring that WeChat is used as a business tool, and to gain a corporate account with WeChat, a Chinese company will need to be registered and operated by Chinese responsible operators.
As of last month, it is no longer possible to obtain a Beian internet license for a .cn domain as a private individual, despite the licences only ever having been issued to Chinese individuals.
Now, a Chinese company is required, with Chinese management team responsible for internet site licensing and WeChat commercial pages.
Thus, in today’s world, the only means of using the media correctly is to do as companies that have already taken the steps of founding joint ventures or have opened Chinese offices.
These companies are hosted locally and have become vast household names across mainland China, and are free to be able to use local and national Chinese media channels to attract and maintain a relevant audience without restriction on conversion via advertising or transfer of capital to trading accounts.
This, in itself is another indicator that having presence in China in terms of full operational capacity is the only way ahead.
FinanceFeeds can offer full services with regard to helping your company navigate China and gain a greater client base. We are the only international B2B electronic trading resource in the world with that ability and with full Chinese presence.
For more information, please contact firstname.lastname@example.org