#AskGGV: What made you go to China, and what made you come back to Silicon Valley?

Hans Tung
Managing Partner, GGV Capital
hans tung
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When I went to China, what spurred me was knowing that China was about to undergo some changes. This was as early as 2003. I liked how the political regime handled their transition, and how they handled the SARS crisis as well. So, I felt that China would be politically stable – at least for the next 10 years – creating a stable environment for start-ups to perform better.

On my business trips to China, it became increasingly obvious that the rise of the Internet and technology would be a great way to build national businesses. In an offline world, it’s difficult to expand from city to city. With the Internet, it could generate traffic on a national basis relatively quickly. The one thing I wasn’t sure was a way to monetize all that traffic. But of course, the advent of Alibaba, Jack Ma and Alipay, made all this business possible. You could pay for eCommerce items or virtual items with Alipay. So all this gave me the confidence that China would be very different between 2005 to 2015.

That’s how I decided to spend my next 10 years in China, to grow with the Chinese Internet space. That turned out well.technology would be a great way to build national businesses. In an offline world, it’s difficult to expand from city to city. With the Internet, it could generate traffic on a national basis relatively quickly. The one thing I wasn’t sure was a way to monetize all that traffic. But of course, Alibaba and Jack Ma, and Alipay, made all this business possible. You could pay for ecommerce items or virtual items with Alipay. So all this gave me the confidence that China would be very different between 2005 to 2015. That’s how I decided to spend my next 10 years in China, to grow with the Chinese Internet space. That turned out well.

By 2012 to 2013, Chinese smartphone penetration was increasingly rapidly. At some point in time, I believed that everyone in China would own a smartphone and hence reach a saturation point. Yet, you must understand that the Chinese business models are extremely useful for other markets. In 2011 and 2012, I witnessed Alibaba and Tencent begin to make investments and try to grow their businesses beyond China. I was helping Xiaomi try to recruit Hugo Barra (Xiaomi’s Vice President of International from 2013 to 2017). So it became quite interesting to me, to see the similarities between the Chinese market and markets in India too. Obviously, when you look at Xiaomi now, it has managed to internationalize itself very well between 2013 to 2017. When I witnessed Chinese companies and brands successfully grow abroad, I started thinking about the next 10 years of my life.

I started thinking about globalization and going global. This would be my focus from 2015 to 2025. This would be the era where more Chinese companies will go beyond China, and more local start-ups can learn from China’s model as well. I knew that if my experience in China could be applied to other markets, then I could add more value to the ecosystem. The seed of 出海 ‘chuhai’ or ‘going global’ was planted in my mind as early from 2012. I was fortunate then, to be given an opportunity with GGV Capital to do just that.

This answer first appeared on an Ask Me Anything session (AMA) with Hans Tung. Do you have a burning question of your own? Submit yours here.

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