Expat graduates gravitate toward Shanghai startups

The city has enacted forward-looking policies designed to help young foreigners open their own businesses in China's financial center

In February, two months after registering a startup that helps Chinese mobile game companies reach out to foreign markets, Joyce Tang, from Singapore, and her team of six expats launched their first promotion in France and Germany.

The product, Trojan Troops, a role-playing game, was more popular than they had expected.

"We define a game as successful if it attracts about 40 percent of people who played it the previous day. The game had a 'return rate' of 37 percent in both markets," says Tang, who founded Big Bread Gaming in Shanghai in December.

In June 2015, the municipal government unveiled policies to allow and encourage startups in the city as it looks to achieve its ambition of becoming a global technological innovation hub by 2030.

Foreign graduates of universities on the Chinese mainland can apply for a two-year residence permit by presenting a graduation certificate and a business plan, or proof of their startup. Tang, 35, was among the first group of hopefuls to take advantage of the new situation.

Zhang Xiaosong, director of the city's Foreign Affairs Office, says the new policies are part of a wider plan.

"Shanghai is becoming increasingly attractive to international students, because it is striving to place itself in the world's top echelon of economic, financial, trade, shipping, and research centers," Zhang says. "We have also announced an ambitious development plan through 2040, aiming to lift people's lives, work and education to new highs."

A growing trend

Yang Jianrong, director of the Council for the Promotion of International Trade Shanghai, believes a growing number of foreigners, including young graduates, will start their careers or open businesses in the east coast port city.

"The trend will continue, especially as Shanghai continues to unveil measures to grant expats easier access and a faster application process when they apply for permanent residence permits. We want to attract talented people from across the globe to join in," he says.

There are no official statistics about the number of businesses started by foreigners in the city, but there are already 564 in Yangpu district, the municipality's demonstration zone for mass entrepreneurship and innovation.

The latest figures from the National Bureau of Statistics show that 215,000 expats from 167 countries and regions are now working in Shanghai, the largest foreign population in any Chinese city.

After graduating from Fudan University in 2011, Tang joined a local company that specializes in the development of mobile games. A short time later, she took a job with a South Korean mobile games company to introduce its products to the Chinese market.

Mobile games have developed rapidly in China in recent years, so when some small developers create suitable products, they are eager to reach foreign markets.

With her experience of releasing and marketing foreign games in the Chinese market, Tang came up with the idea of promoting local games overseas. She then set up a team of six expats - including people from Spain, Germany, Turkey, Russia and Italy - who were already working in the industry.

"Localization of the language is an important factor. Our team members are native speakers, so they can translate the expressions in the games into the most colloquial and up-to-date terms in their own languages," she says.

Their first step was to help game developers find products that catered to individual markets.

"For example, games with cutesy characters with large heads are usually unpopular with Westerners," Tang says, stressing that tastes vary from country to country. "Russians like fierce war games, while the British prefer strategy games in which they can ponder the next move quietly on their own."

Tang believes her agency is probably the only one currently promoting local mobile games in non-English-speaking countries, and she hopes the number of team members will rise to 20 by the end of the year.

Trial and error

Young, foreign entrepreneurs have very different ideas from their Chinese peers, according to Wang Jiaonan, a manager with Venture Valley at Shanghai's Tongji University. Venture Valley provides free office space, company registration and support funding for business-minded students and alumni within three years of graduation.

"They are open to pursuing a trial-and-error approach when starting businesses, while their Chinese counterparts are more cautious and usually only start their businesses when a product is mature, in the hope it will prove popular immediately after entering the market," she says, adding that five of the 300 projects in "the valley" are run by foreign students and graduates.

"Moreover, they focus more on social issues. Usually their business idea derives from a social problem they have spotted," she says.

Koh Kok Yong is the perfect example of that. The Singaporean, who spent eight years at Fudan University studying international relations at the undergraduate and graduate levels, is determined to help reduce the more than 20,000 metric tons of garbage generated in Shanghai every day.

"I have decided to settle down here, so I hope my project will not only help me, but also Shanghai and its people, now and in future generations," he says.

Recycling

In 2014, Koh started Shanghai Xutao Greentech, a company specializing in recycling secondhand clothes. The business has placed more than 3,000 green, iron boxes in residential neighborhoods throughout the city, and it collects about 300 metric tons of secondhand clothes every month, he says.

The clothes are used in three ways: Those in good condition are washed and then donated to impoverished parts of inland China; some are sold to other countries; and the remainder are sold to qualified local plants that recycle the material as carpets, vehicle interiors and curtains for greenhouses.

Koh says the policies to encourage entrepreneurship have been helpful. Last year, his company received 200,000 yuan ($29,000; 26,570 euros; ￡22,450) in support funding from the district science and technology commission, which allowed the old collection boxes to be upgraded to electronic units.

Users download an app on their smartphone, and when they put unwanted clothing in a box, they earn reward points that can be exchanged for articles for daily use.

Koh now plans to expand operations. "Later this year, we will start recycling plastic and glass bottles as well as pop-top cans," he said. "We hope to reach out to more cities soon."

A growing number of foreign graduates are now making use of cultural heritage to start businesses, such as setting up apps that allow people to find language partners and establishing agencies to advise Chinese about the immigration policies of their home countries.

Alliot Aymeric, a French national who is in the second year of a master's degree at the University of Shanghai for Science and Technology, plans to develop a smartphone app that will share French culture both on and offline.

"Since I arrived in this land of opportunity, the Chinese people have been very nice to me. I want to return the favor by sharing French culture with them," the 25-year-old says.