The following is a guest contributed post by Todd Miller, VP Global Sales at Cheetah Mobile.
Much has been made about the decline of importance of the U.S. in terms of global economic leadership. Forbes recently pointed out that the U.S. economic output currently represents 22% of global GDP — that’s down to from 40% in 1960. Despite that eye opening stat, it’s still impossible to be successful globally without a strong presence in the U.S market. Because economic clout isn’t just about numbers.
Still want to talk stats?
When it comes to proof of the importance of being in this market, you just have to look at the number of international companies spending billions in acquisitions and partnerships to get a toehold in North America.
According to economic research firm Rhodium Group, Chinese companies alone will invest up to $30 billion this year, double what was spent in 2015. Chinese acquisitions of U.S. assets and businesses hit a record $8 billion for the first eight months of the year alone. Compare that to the previous record of $8.9 billion set in 2007, according to data from Dealogic. And that was for the full year.
From Movies to Oil and Gas to Apps
This year we’ve seen truly blockbuster deals starting with Dalian Wanda’s $2.6 billion acquisition of AMC Entertainment, the U.S. movie theatre chain, and Sinopec’s $2.4 billion investment in a number of oil and gas developments from Devon Energy. And of course there’s the ever popular tech sector. App marketing company AppLovin has agreed to a friendly takeover by a Chinese private equity firm for $1.42 billion.
Far from ebbing as an economic powerhouse, although India and China have seen explosive economic growth in the last decade, in other metrics the tide of U.S. influence continues to rise.
Still A Leader
After all, U.S. corporations still represent 128 of the most influential institutions in the world according to the Fortune 500 list. While the global marketplace has become more diverse, the U.S. is still a leader in innovation. It leads in R&D spending which predictably results in a constant stream of new products and services. Often that next big thing that the rest of the world is copying sprouts from the American spirit of invention. And who’s gonna buy that breakthrough time-saving device? Let’s not forget that the U.S. is still ranked number one in global consumer spending.
What about the art and science of persuasion? The U.S. is a global leader in industry sectors that tend to spend a lot on influencing choice: public relations, marketing, including technology, retail, and financial sectors.
Most industries rely on positive consumer sentiment for their products and services to some extent. Brand management plays a key role in building and maintaining a company’s reputation. It’s natural that an agency’s market footprint is disproportionately higher in the U.S. than elsewhere. And the U.S leads in using new tools, such as social media marketing, and continues to set the trends.
Cheetah Next Steps
It was during a trip to Silicon Valley that Cheetah’s founders made two important decisions: to pivot from a PC-based strategy to mobile and to target the U.S. for its expansion plans. Cheetah leapt even further into the European and U.S. market with the acquisition of MobPartner in 2015 for $58 million. Cheetah Mobile now has 623 million users all around the world, but for reasons set out above — the U.S. is key to it running a truly global operation. And the company has deepened its investment in Silicon Valley with the recent opening of its new U.S. headquarters in Palo Alto, CA. Cheetah Mobile’s dual-headquarter strategy – Beijing and Silicon Valley – straddles the two central hubs for the mobile Internet, enabling it to leverage opportunities across both countries.
For now the bulk of its workforce remains in China, but establishing a name and presence in the U.S. will mean a global advantage. After all, 80 percent of the company’s user base comes from outside of China, which makes it unique among Chinese tech companies.
Yes, there have been some growing pains, as the company integrates the infrastructure of acquired parties and builds out its own regional sales teams. That’s been the challenge for my first 100 days with the company.
But now Cheetah is poised to have a focused and streamlined offer for U.S. agencies and advertisers. And that’s access to big data insights from more than 600 million monthly active users, harnessed to target a global market place, whatever the vertical.
Finally, much has been made of the ascendency of the Chinese economy. As Forbes pointed out recently, the global influence of the U.S. was captured by the old adage that “when America sneezes, the world catches a cold.” Today, those symptoms now appear when China does the same. But when Chinese companies want to become truly global players, they come here.