I Can Tell You Why Tencent Chose Italy to Win Over Europe
GHIZZONI, BOCCONI ALUMNUS AND EUROPEAN HEAD OF TENCENT, THE CHINESE COMPANY BEHIND WECHAT, EXPLAINS HIS COMPANY'S EXPANSION STRATEGYWhen, in 2014, Andrea Ghizzoni, a Bocconi graduate, was invited to develop the European business of Tencent, the Chinese telecommunications giant, he became the company's first employee on the Continent, and one of the very few European managers heading Chinese technology multinationals. Today the landscape has changed, and Ghizzoni may feel less alone: "Yes, indeed sometimes, maybe at the airport or at some conference, I happen to run into a colleague that works for a Chinese company in Europe. It never happened before," Ghizzoni laughs. At 38, he is Tencent's European director: "What I notice, however, is that Chinese companies in Europe and Italy do not network together. Perhaps this is because there is not much in common between those companies that are in Italy to sell Chinese goods to Italians and those, like Tencent, that are in Italy to bring Made in Italy goods to Chinese consumers."
➜ When Tencent landed in Italy, many believed that the objective was to export WeChat. But this has not happened..
From the perspective of the Italian consumer we have not grown, but today it is clear to everyone that this was not our purpose. We are not interested in persuading Italians to leave WhatsApp or other messaging services. Being new, different, and Chinese does not help in Europe, and consumer habits in the use of social apps are difficult to eradicate. But we target Italian companies to bring their business to our platforms. In this sense, we are very happy with our growth.
➜ What do you offer Italian businesses?
In our meetings with Italian companies we alwalys emphasize our huge user base, but also the technology of our ecosystem. In China, WeChat is winning because it has become synonymous with access to the Internet; it is the portal that gives access to a range of services that in addition to chat offers social media, digital newsstands, game stores, apps, telephony, multimedia, payment services.. Tencent's long-term strategy is to implant in Europe too all of this ecosystem, as, for their part, Facebook and Google are also doing..
➜ Why did you start your European expansion from Italy?
Italy has many assets: tourism, manufacturing vocation, the Made in Italy brand, many locations of world renown. It is a small market but full of strong brands, and with such concentration our business could grow faster. This is why it was chosen as the bridgehead for Europe, and Milan was selected as the seat of our European hub. Currently in our new headquarters of Porta Vittoria we are about twenty people; two work in a London office, and we are planning for expansion into France or Benelux. Within a year, we will double the size of our European staff.
➜ What are the difficulties of dealing with Italian firms?
The peculiarity of Italy is that there are many small and medium-sized companies that are still in the hands of founding entrepreneurs, who also manage important brands according to their own philosophy, but lack business organization, especially on the export front. In most cases, as they become aware of the difficulties of accessing foreign markets, these companies decide to rely on a local distributor in the region, accepting less profit and losing control over part of their production. With WeChat, instead, the reins of the whole process always remain in the hands of the original brand.
➜ Is it difficult to find people with the right skills to work in a Chinese company?
It is hard to find people who speak Chinese well, yes. Also because it is difficult to find good teachers, that is, Chinese people who speak perfect Mandarin here in Italy. Adding to this the fact that that the number of Italian young people having international proclivities is low, one realizes how complicated it is to give flesh to the idea of creating an Italian hub for all of Europe. The most encouraging aspect, however, is that the world of startups has a strong appeal on Italian young graduates, even the ones with most advanced training, who would once have gone straight to knock on the doors of consultancies. Today working in this industry is supremely cool!
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What Our Country Can Give You
by Lorenzo Martini
Translated by Alex Foti
