In the past two years, we have observed numerous new trends and opportunities rapidly emerging and growing at an astonishing pace. Particularly as we entered 2023, these popular tracks have been speeding ahead globally, entering an era of rapid expansion. Faced with trends such as short films, AI+ games, pan-entertainment, social live streaming, and other equally popular trends, how should Chinese companies venturing overseas seize the initiative and navigate the challenges? 

On September 13th, Set Sail Abroad, in collaboration with Airwallex Cloud and Alibaba Cloud, held the "Future Trends: Emerging City Overseas Summit - Hangzhou Edition" offline exchange event. Focusing on emerging trends in gaming, pan-entertainment, AIGC, and more, the event aimed to assist Chinese companies in overcoming challenges and setting sail overseas.

For this event, Set Sail Abroad has specially invited speakers including Zhang Long, Director of Strategic Investment at Zhandong Technology; Lynn Liu, Senior Business Manager & Cross-border Payment Expert at Airwallex Cloud; Dan, Co-founder of Xiaowu Technology; Guo Xiao, Senior Solutions Architect for Overseas Expansion at Alibaba Cloud; and Iris, Marketing Manager at Hailepan Technology. They will share their experiences in overseas expansion in the gaming and pan-entertainment sectors.

PART 1

"AI Applications in the Gaming Industry, Disrupting Industry Dynamics"

Speaker: Zhang Long, Director of Strategic Investment at Zhandong Technology

One of the hottest topics in the first half of this year has been AI. Focusing on the gaming industry, what role does AI play in games, and how can it disrupt industry dynamics?

Firstly, AI has significantly improved the efficiency of the gaming industry. For example, in terms of AIGC (Artificial Intelligence-Generated Content), what used to take a month to create a finely detailed illustration can now be done in as little as an hour through the training of large AI models. This greatly reduces the costs associated with original artists and image production. Additionally, AI can assist in tasks such as video animation frames, motion rendering, orthographic views, icons, and more.

Secondly, AI can play a supportive role in advertising, distribution, and script planning. For example, it can intelligently generate plotlines or scripts, assist in product selection, aid in game mechanics, and generate code for quality checks, and support advertising optimization.

Looking at the future prospects of AI in gaming, compared to traditional games, AI-driven game production is expected to have lower production costs, better gameplay experiences, and superior data performance. Many games today are limited by productivity constraints, which can result in high production costs or excessive labor costs, preventing creative individuals from completing development work. In the future, AI may enable creative individuals to easily create and produce games.

Additionally, in terms of autonomous optimization and monetization models, AI-driven games may break away from fixed monetization models, such as pure ad-based monetization or hybrid monetization, and embedded payment structures.

Here are a few examples: Firstly, AI is used in "find the difference" games where it generates a scene and randomly replaces some elements. Even with the same scene, AI can create countless possibilities, significantly increasing enjoyment and replayability while reducing development costs. With the assistance of AI, many teams can complete a basic version of a game in approximately three days, and even achieve a faster release schedule.

Another example is word-filling games where AI instantly generates idioms and stories. After players form words, the AI explains the idiom's origin, significantly improving player retention and enhancing the overall game's replay value.

In the game production and development process, including marketing and distribution, AI will participate in various aspects of the production chain:

AI will assist in selecting gameplay and top subcategories within the platform's games. In other words, AI can be involved in the early stages of game project selection and content curation.

Leveraging AI's high efficiency, it will help produce products with higher playability, richer content, and better user retention and monetization data.

AI will determine targeting, delivery methods, ad placements, and audience profiles based on AI-driven advertising models.

AI will intelligently screen and batch-produce online advertising elements, further expanding ad distribution and increasing revenue and profits.

PART 2

"One-Stop Payment Solutions Empowering Advanced Expansion into Multiple Scenarios"

Lynn Liu, Senior Business Manager & Cross-Border Payment Expert at Airwallex

First, let's take an overview of the overall global payment landscape. Data shows that in the Asia-Pacific region, electronic wallets are the primary payment method, accounting for 46% of the market share, while card payments make up 30%. Payment preferences vary in different countries and regions, with credit card usage in the Asia-Pacific region not as widespread as in Europe and the United States, leading to a higher adoption of local payment tools.

Taking the Indonesian market as an example, card payments are the primary payment method, accounting for about 34%, and bank transfers are also a mainstream payment method, especially for transactions involving certain offline scenarios in the local context. In addition, e-commerce in Indonesia has seen rapid growth, with electronic wallets accounting for approximately 17%. However, the credit card penetration rate in Indonesia is not very high, indicating that the consumer base with strong purchasing power prefers alternative payment methods.

Next, let's discuss profit scenarios for going global, which mainly include in-app purchases, advertising monetization, data monetization, and IP monetization. Corresponding to these profit points, various payment channels are available to help businesses with monetization, including platform payments, third-party payments, and card organization acquiring.

When it comes to payment scenarios, ensuring that user payments or subscription fees can be received into the company's accounts is crucial for international businesses. This may involve foreign exchange and remittance issues. Challenges may include the need to open overseas bank accounts, individual remittance limits, and potential exchange rate losses. Managing multiple products, projects, and bank accounts can also be cumbersome for business personnel.

To address these payment pain points, Airwallex, a global payment and financial platform, offers an end-to-end payment solution. Airwallex holds over 50 financial licenses worldwide, covering major countries and regions such as Mainland China, Hong Kong, the UK, multiple US states, and Australia. With international acquiring capabilities and direct connections to major card organizations, Airwallex provides superior settlement cycles and reduces payment costs for premium merchants.

Through Airwallex's global business accounts, businesses can seamlessly connect functions such as collection, foreign exchange, global payments, RMB settlement, and Airwallex Pay. This enhances the fund flow and operational efficiency of international businesses. It also assists online entertainment platforms with a large number of content creators and KOLs in revenue sharing. Additionally, Airwallex offers financial management, expense control, and embedded financial solutions based on customer needs.

PART.3

"Current State of the Short Video Market for Overseas Expansion"

Dan, Co-Founder of XW Technology

Short video services primarily involve the transformation of domestic novels, web content, and similar materials into videos. These videos are monetized through methods such as pay-to-unlock chapters or monthly subscriptions, which distinguish them from short video platforms like TikTok. While this short video model is well-established in domestic platforms, its success overseas remains an area for exploration.

Currently, the key overseas platforms that garner attention from expansion-focused companies are Facebook, YouTube, and TikTok. TikTok boasts over 1 billion monthly active users, while Instagram, a part of Facebook, has nearly 3 billion monthly active users combined.

Among these platforms, YouTube, being a pure video platform, has seen positive feedback when Little Five Technology conducted experiments with segmented videos on it. YouTube itself has a demand for short video content. Facebook, as a social platform, covers a wide range of interest groups and has strong video monetization capabilities, making it an essential platform for Chinese companies expanding overseas. TikTok, on the other hand, performs well in terms of conversion effects in areas such as advertising, content management, and user acquisition.

The monetization methods on these platforms are relatively similar. Taking YouTube as an example, there are primarily three ways: first, revenue sharing from video ads, which is the main source of income. Once users upload videos that meet the platform's standards, it automatically matches ads for them; second, channel memberships, where users pay to unlock content; and third, transactional revenue, such as fan donations or brand collaborations.

Compared to domestic platforms, overseas platforms have had over a decade of experience in monetization operations, which come with characteristics like high stability and fairness. Although the acceptance of Chinese content by overseas users is still growing, high-quality content is rapidly gaining recognition and popularity among Southeast Asian users.

Currently, the Chinese-speaking audience in overseas markets numbers around 60-70 million, with over 2 billion video users, making it a diverse and extensive audience group. Public domain traffic also provides a fair and transparent monetization opportunity for short dramas. In terms of content preferences, the Western audience tends to favor fantasy themes, while Southeast Asia leans towards historical martial arts and workplace romance content.

Expanding short dramas into the overseas market presents certain opportunities as a new monetization channel. However, it is essential to consider different cultural backgrounds and platform rules:

Different language and cultural backgrounds require localized adaptations of content.

Different platforms have varying rules and regulations, necessitating research and compliance.

Operational challenges like the risk of account suspension and payment settlement issues need to be addressed.

Since 2015, Little Five Technology has been involved in the overseas video platform marketing service market, focusing on promoting and monetizing individual creative content on platforms like YouTube and Facebook. On platforms like YouTube, companies can generate significant CPM revenue through video ad monetization. Little Five Technology has developed over the years and is now an official partner MCN agency for YouTube and Facebook in the Greater China region, receiving official certification and support from these platforms. Over the past eight years, Little Five Technology has accumulated extensive experience in overseas video marketing.

With years of experience, Little Five Technology can assist content creators in promoting and operating on overseas platforms, enabling more efficient monetization. They also offer localization services such as video translation and subtitles to help Chinese short drama content reach a global audience.

PART 4

"In the Digital Age, Cloud Computing Facilitates the Globalization of the Pan-Entertainment Industry"

Presented by Guo Xiao, Senior Solutions Architect for International Expansion at Alibaba Cloud

Let's begin by providing a brief analysis of the market landscape for Chinese companies expanding internationally in recent years. Currently, Southeast Asian countries remain popular target regions. Specifically, Singapore is often chosen as the first international expansion destination due to its relatively well-established infrastructure. Indonesia, on the other hand, boasts a large population and high internet penetration, making it a hotspot for industries like e-commerce, social media, and gaming. Thailand, the Philippines, Malaysia, and other countries in the region are also experiencing steady growth in terms of user bases and are worth keeping an eye on.

Furthermore, the Middle East region is also rapidly emerging, with Gulf countries actively embracing emerging technologies such as gaming and the metaverse. This presents new opportunities for Chinese gaming and entertainment companies. Additionally, the Japanese and South Korean markets have a strong foundation in industries like gaming and esports. Therefore, Southeast Asia, the Middle East, Japan, and South Korea can be considered key focus areas for the global expansion of the entertainment industry.

For clients at different stages of international expansion, cloud computing services have different focuses. During the initial trial period, the emphasis is on data security and compliance, which requires cloud providers to offer comprehensive solution consultation. In the localization and deepening phase, rapid product iteration and deployment support are crucial, and cloud computing can provide agile deployment capabilities. For mature clients, global operations and cost optimization become priorities, and cloud computing can offer resource allocation and governance functions.

In the face of rapidly changing overseas markets, Alibaba Cloud believes that global expansion in the entertainment industry may face four major challenges: security and compliance, local integration, innovation challenges, and cost control. Cloud computing services need to provide support in multiple dimensions: firstly, cloud computing can build solutions that comply with local security and compliance requirements to ensure user privacy and data security; secondly, leveraging local ecosystem partners to seamlessly integrate into the local market is crucial for business success; and finally, cloud computing can help clients effectively control the costs of their cloud-based businesses through elastic resource allocation, automation, and other methods.

To address these challenges, Alibaba Cloud offers systematic cloud computing solutions for clients in the entertainment industry. Alibaba Cloud provides cloud computing infrastructure covering major global regions for flexible deployments. Technologies such as SD-WAN are utilized for network optimization to achieve ultra-low latency in audio and video transmission. Support for elastic scaling through containerization and serverless solutions accommodates fluctuating business needs. Big data analytics tools are employed to enhance user operation efficiency, and a multi-layered security protection system is established. Additionally, Alibaba Cloud relies on local teams and ecosystem partners in various countries to comprehensively support the international expansion needs of its clients.

From gaming to entertainment, cross-border e-commerce, and fintech, various industries rely on existing PaaS capabilities such as game acceleration, game operation, content distribution, content security auditing, and CTA. Alibaba Cloud leverages these capabilities to ensure user operations, quality assurance, data analysis, and user growth.

Lastly, Alibaba Cloud emphasizes the importance of deploying overseas business in compliance with regulations. When storing data in countries like Singapore, Thailand, the Philippines, or Malaysia, it's essential to ensure local compliance, establish privacy domains, store data locally, and perform desensitization before analyzing data in the target country. This approach has been developed through Alibaba Group's extensive experience with businesses like AliExpress and Cainiao.

PART 5

"Localized Strategies: How to Acquire Millions of Users for Social Products?"

Presented by Iris, Head of Marketing at HaiLePan

Discussing the current state of going global in the entertainment industry can be summarized with three "roll" words: increasing competition, rising user acquisition costs, and constant market evolution. Particularly in some Middle Eastern countries and regions, several companies have become active, actively seizing this important overseas market. In addition to this, traditional gaming companies are also shifting their focus overseas, diversifying their product offerings from mobile games to emerging fields such as live streaming and voice services. Undoubtedly, this presents greater challenges for overseas deployment and operations.

In this context, it's crucial for overseas enterprises to emphasize the effect of user scale. Only with a substantial user base can a complete social network be formed, unlocking the full potential of the product. Sustained growth is reliant on user retention, and in most cases, user retention rates in the Middle East are below 20%, with the majority hovering around 17%, which is relatively low. The core of user retention lies in the scale and quality of content creators (such as live streamers). By building a robust team of content creators and fostering high-quality communities, user engagement can be effectively increased, ensuring long-term operational success.

Tailoring your approach to different markets is essential, focusing on user segmentation and localization while understanding the cultural backgrounds and user demographics of various countries and regions. For example, in some Middle Eastern countries, young users may have specific preferences for certain types of live streamers. Therefore, companies can identify high-quality content creators that resonate with their target audience or create interactive features tailored to their preferences. This will significantly enhance the product's user engagement and stickiness.

For newly launched products, enterprises should not initially aim for revenue generation. When introducing a new product with limited content creators and user base, expecting immediate revenue is unrealistic. Instead, the primary focus should be on accumulating various operational data, laying a solid foundation for future product optimization. For instance, in the case of live streaming apps with a daily active user base exceeding 20,000, the revenue recovery cycle should ideally range from 3 to 6 months, depending on revenue-sharing arrangements with content creators.

This requires enterprises to strengthen data tracking and analysis during the initial ad campaign. For instance, using interactive events as tracking points and defining them as learning objectives for advertisements. With a sufficient amount of uploaded data, platforms like Google can identify the target audience for your business. If an interactive event costs twice as much as another event, yet it results in half the number of installations but provides a 1.5 times higher retention rate, then it may be worth considering using that event as the learning objective for your advertisements.

Finally, the three critical elements of advertising, operations, and product development need to work closely together. Only through effective communication and collaboration can a synergistic effect be achieved, allowing for the swift resolution of challenges and ongoing product experience enhancements. This is crucial for improving overall competitiveness.