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Online Networking 101

Asian American companies build strategic alliances on the Web

Johnston C. Chen, president and CEO of Internet Corporation, a company which aims to be the leading portal and online payment gateway in e-commerce throughout Asia. Photo courtesy of Internet Corporation.

By Ron Chepesiuk

By developing a global platform for business transactions, BeXcom (formerly known as BeX.com) is working hard to become one of the world’s leading e-commerce service providers. The company, however, realizes that it can’t reach its goal alone. So in March, BeXcom entered into an agreement with Bolero.net, a leading network for international electronic trade communities. BeXcom believes that Bolero.net’s infrastructure will substantially benefit its network of electronic marketplaces. The two companies plan to work together to provide a seamless environment that will allow businesses to conduct secure online transactions from front-end order processing and management to back-end trade document exchange.

“Strategic alliances have really accelerated our efforts to expand through Asia, and they are helping us to build the foundation we need for a strong business,” said Dan Clark, Vice President for Marketing at the San Diego-based company.

BeXcom is not alone. Across the Web, Asian and Asian Americans companies are partnering and forging strategic alliances with each other and other companies to grow and prosper. Consider these developments: Last June, Sunnyvale, Calif.-based SINA.com, a leading Internet media services company for Chinese communities worldwide and Taipei-based Aurora Group, Taiwan’s largest telecommunications retail company, announced a partnership to develop an e-commerce platform for Chinese Web audiences worldwide. “This new partnership combines the predominant market presence of the Aurora Group with SINA.com’s extensive e-commerce experience,” said Ben Tsiang, SINA.com’s general manager.

In January of this year, Click2Asia, a leading global online community for Asian Americans, and CarOrder.com, the Internet’s first and largest auto dealer, established a partnership that will sponsor free car-giveaways to Click2Asia’s members throughout 2000. “CarOrder.com doesn’t have any experience in the Asian and Asian American markets, and they are interested in them because of their highly attractive demographics,” revealed Chin Yao, Chief Corporate Relations Officer for the Los Angeles-based Click2Asia.

Since its beginning in 1993, Internet Corporation, which has offices in Guangzhou City, China, and Fremont, Calif., has had one objective: to become the leading portal and online payment gateway for e-commerce and financial transactions in China and eventually Asia. “We realized we can’t do business by ourselves in China, so early on we began establishing partnerships with banks, technology leaders, telecommunications companies and other businesses,” said Johnston C. Chen, CEO and president of Internet Corporation.

Internet Corporation, for example, is linking its portal to the China Merchant Bank portal, which will create Internet payment gateway services to millions of banks and stock brokerage account holders throughout China. Internet Corporation will receive revenues for transactions processed through the payment gateway, as well as from advertising and Web hosting services. As these dynamic strategic alliances show, the partners’ objectives vary and may include a desire to move new markets, increase operational efficiency, build up complimentary resources, and speed up product development. Strategic partnerships have been around for a long time, but their development has accelerated with the growth of e-commerce.

Without these alliances, it is difficult for a business to extend its reach, what with e-companies here today and gone tomorrow. There is much uncertainty in conducting business in cyberspace. The Internet, moreover, is huge and fragmented and much of what happens in cyberspace is done for a purpose. “Often the only way e-commerce can survive is by building strong online strategic alliances,” said Hollis Thomases, President of Bell Aire, Maryland-based Web.Advantage Inc., an Internet marketing and public relations agency.

Atasuko Watanabe, an executive with Admerasia, added, “Today, strategic alliances have to be at the core of the e-business strategy of every Asian American company. That’s the only way to get ahead in the dynamic new medium of the Internet.” Admerasia is a New York City-based advertising and marketing company focusing on the Asian American community.

CyberAsia, the company serving as Admerasia’s interactive arm, practices what Watanabe preaches. It has formed an alliance with NetResource, an Asian company that’s involved in Web production and has access to Web developers and producers in Asia. CyberAsia will manage many of NetResource’s accounts. “The strategic alliance will greatly increase our resources by giving us access to the talent pool in Asia,” Watanabe said.

The giant companies like BeXcom, Click2Asia and SINA.com have grabbed the headlines with their partnerships, but analysts say alliances are definitely a game that smaller Asian American businesses can play. And according to Watanabe, “it’s actually easier for the smaller Asian American business to establish strategic alliances because they can make quick decisions and get things done faster.”

David Liu, Chief Operating Officer of the San Francisco-based YesAsia.com, agrees. His company is partnering with SINA.com, but the relationship took several long months to negotiate. “The bigger the company, the bigger the bureaucracy,” Liu said. “In dealing with a big company, it usually takes longer to get to the right person who can make the deal.”

But once forged, strategic alliances offer a host of benefits. Helping to save on marketing costs and extending a company’s reach are only the most obvious advantages. “Before looking for strategic partners, Asian American businesses need to assess their strengths and weaknesses, minimize the threats and exploit the opportunities,” advised Reid Carr, Chief Operating Officer and Acting Director at the Hollywood, California-based PBJ, a full-service interactive development agency. “I know doing this is an established business practice in any sector [in the brick and mortar world], but it’s something online businesses tend to forget and something partnerships can enhance.”

That’s what InnHanse Corporation did before signing agreements with three of its most important strategic partners: Lucent, Sun Microsystems, and Cable and Wireless. “We know our core competencies are technology and hospitality, but we need to move our services,” said Himesh Patel, the Indian American CEO of InnHanse, a leading e-business in the hospitality industry. “That’s why we’ve aligned ourselves with those companies. They can help us extend our reach while teaching us a few things along the way.”

After looking at its strengths and weaknesses, Click2Asia entered into an agreement last April with IntraACTIVE.com Inc., a leading Web-based community software company based in Washington, D.C. The partnership will allow Click2Asia to provide IntraACTIVE.com’s Bantu Messenger instant messaging services (IM) and chat sites to its growing Asian and Asian American communities. Bantu Messenger will allow Click2Asia users to consolidate all IM accounts into one system and to interact online with over 75 million other people via several IM networks, including Yahoo, ICQ and MSN messenger.

“We’ve found Bantu Messenger to be the perfect instant messaging solution to break down the barriers separating the Internet’s leading instant messaging service providers for our members, who tend to have multiple IM accounts across multiple networks,” said Joseph Cheon, CEO of Click2Asia.

The interaction of two strategic partners often sparks creativity, which leads to new ideas and ways of helping customers. “Businesses that get involved in strategic alliances often find that, in talking with each other about their relationships, they generate new business opportunities,” Janal said.

Strategic partnerships can also help businesses that are competing in markets that are already saturated. “If a strong brand is already established, it’s difficult to oust them from that position without heavy monetary backing,” Carr said. “It’s smarter for a company to establish an amicable relationship with those companies.”

Last May, SINA.com joined with CarsDirect.com, a leading automotive e-tailer, to create what SINA.com claims will be an entirely new way of purchasing and leasing car buying services online for the Chinese American population. CarsDirect.com provides Chinese-language customer support. The launch coincided with SINA.com’s launch of its auto center, which allows customers to buy with Chinese-language instructions virtually any car in the U.S. When the partnership was announced, Bob Brisco, CEO of CarsDirect.com said, “by partnering with SINA.com, CarsDirect.com can effectively reach the Chinese Internet user in the U.S. and begin delivering our benefits to that population.”

In forming alliances, Asian American e-businesses are savvy enough not to forget the opportunities in the world of brick-and-mortar world commerce. Click2Asia, for example, has partnered with YOLK, an Asian American pop culture magazine. “YOLK provides us with content and promotes us through their off-line channels,” Yao explained. “In return, we give the magazine exposure on our Web site.”

Click2Asia has also partnered with several Asian American organizations, including the non-profit Korean American Coalition and the National Association of Asian American Professionals. “When these organizations have major events in the community, they approach us because they know we can reach so many people quickly,” Yao revealed. “Our Web site has a million visitors per month, so an announcement on our [site] will give an organization great publicity. In return, we get exposure in the brick-and-mortar world.”

Many of BeXcom’s partners are traditional companies, Clark revealed. Examples include Compuware in Australia and Taiji Computer Corporation in China, which falls under the umbrella of the Chinese Government’s Ministry of Information Industry. “A partnership with us gives a brick-and-mortar company a great opportunity to move [more easily] into e-commerce, while opening up new markets for us,” Clark said.

Just this month, BeXcom announced the formation of a strategic alliance with two Chinese organizations under the Taiji Computer Corporation umbrella: Taiji-HuaNeng and Taiji-ZongTi. Taiji-HuaNeng is a joint venture between Taiji Computer Corporation and the HuaNeng Group, a private electrical utility; Taiji-ZongTi is a joint venture between Taiji Computer Corporation and ARCHIE (Architecture Research Center Information Engineering), a research center commissioned by the Chinese Ministry of Information Industry. The alliances are expected to accelerate the development of a national standard for B2B e-commerce software in China.

“The key to global leadership in e-commerce is to understand local requirements and to develop the systems and processes necessary to meet these ends,” Voon Fee Yong, BeXcom’s chairman and CEO said in a press release. “This requires teaming with the best partners in the countries and regions in which we operate. Our partners are leaders in their respective industries, and they will help deliver a critical mass and bring this joint venture to market more quickly.”

But establishing strategic alliances in China—or any Asian country, for that matter—is not easy. “It can be a complicated process,” Clark conceded. “The government is often involved and this means dealing with bureaucracy. Politics and business are often intertwined, too.” An e-commerce company doing business in China must usually deal with the huge China Telecom, which controls 70 percent of the local ISPs. “That can be quite tedious,” Chen revealed. “You have to wait in line and fill endless forms. It takes time—lots of it.”

Any Asian American company wanting to establish strategic alliances in Asia needs to have executives on board who have lived in and understand the local cultures, Liu advised. “Our company is part American and part Asian, so selling a business proposition in Asia is not difficult for us,” he said. “We click with the Chinese business community because our executives speak Asian languages, and this makes it easier to sell the fine points of a strategic alliance.” Internet Technology has several senior managers who were born in China, speak Mandarin and understand the distinct cultural body language and nuances. As Chen explained, “a Chinese businessman can say to you, ‘Yes, we can work together,’ but what he really means is, ‘No thank you.’”

Chen also stressed that establishing a relationship is the most important consideration in doing business in China. “A relationship can take years to cultivate and just being Asian American doesn’t give you any advantage,” he said.

No matter how inviting the possibility of a strategic alliance, whether it’s forged in the U.S. or in Asia, it is important to check out the prospect carefully. “We get calls from companies all the time wanting to partner with us, but we never agree to a meeting or to anything else until we do our homework,” Liu said. “We visit their Web site and ask them for a copy of their business plan. The last thing we need is to get involved [with a] company that has a bad reputation.”