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How LinkedIn China operates - exclusive interview

Interview with Josh Wu and Billy Huang

· miscellaneous

{{{Wina Huang}}}

In 2018, over eight million individuals graduated from universities in China. This figure is an understatement of the number of people who pour into the Chinese job market each year. In an era where demand for jobs is ever increasing, technology plays an important role in both preparing prospective candidates for the job hunting process as well as connecting them with the right people to launch and develop their careers. LinkedIn is a business and employment-oriented online platform that was founded in 2002 by Reid Hoffman and a few other co-founders. Today, LinkedIn has achieved significant global growth: it boasts over 560 million users, of which 44% are monthly active users and over 60 million are senior level influencers.

In 2014, LinkedIn made its debut in China, which at the time represented “an opportunity of some 140 million professionals”. Since then, the Company has grown its presence significantly and has additionally helped many individuals through its social impact initiatives such as its non-profit project BrightStart and #MakeWhatsNext, a program which inspires high school girls to pursue careers in STEM.

Fascinated with the company’s China operations, I had the unique opportunity to sit down with Josh Wu, Senior Director of LinkedIn APAC Finance, and Billy Huang, Head of Consumer Marketing and Communication at LinkedIn China. While Josh is based in Singapore and handles all financial affairs in the Asia Pacific region, Billy leads marketing as well as internal and external public relations at LinkedIn China. Here, I share their unique perspective on LinkedIn’s progress and the future of professional networking in China. Responses incorporate insights from both individuals.

Microsoft is one of the few major U.S. tech companies successfully operating in China. Given the company’s acquisition of LinkedIn, what are some advantages and disadvantages of LinkedIn’s operations in China? For example, what acquisition synergies have you seen materialize?

Microsoft is not only a mature organization with large operations, but it has also been in China for a long time, with substantial and solid operations here. After the acquisition, LinkedIn kept autonomy of day-to-day operations; however, we have established very good alignment with Microsoft from engineering, government relationship, and communications perspectives. On the marketing side, there have been some synergies as well. For example, if there is a big announcement, we will give our counterpart at Microsoft a heads-up to ensure our narratives are aligned.

What has the growth trajectory looked like along LinkedIn’s product lines in China? Which are being prioritized in China? Particularly, what does the LinkedIn Premium skew look like here?

China is a busy and buzzy market. First, we have to understand that LinkedIn’s business model is a mix of B2C and B2B. Because our B2C members form the foundation of our business, we need to make sure they get our value properly. LinkedIn’s mission is to connect the world’s professionals to make them more productive and successful. When the mission translates into how we can help Chinese professionals develop their own career journey, we strive to help people get connected with opportunities all over the world, stay informed with forward-looking insight, and advance their career path.

Developing in a region happens in phases, and having users realize our value comes first. This is challenging because our value is diversified; it is hard to pinpoint a single function that we serve, and everyone has his own way of realizing value on our platform. Because we are still working on having our members understand our core value, LinkedIn Premium is not a focus today.

It also important to understand how we define success in China. When we entered the market in 2014, we had around 4 million members. These members primarily had international profiles, and acceptance was very high. This group of individuals, who are similar to our American members, still dominates the makeup of our LinkedIn China presence. We think of success as addressing the bigger market beyond these users. This is a priority for us, and we understand we have many local competitors.

What are the key financials metrics that you track, and how do they differ in the U.S. versus in China? For example, how does value of member (VOM) compare?

In terms of VOM measurement, we are still in a development stage. Growing our member penetration and engagement is a priority. Our early members, who were generally international in profile, demonstrated good engagement. Right now our focus is on educating members so that they understand not only what each solution represents, but also what they can get out of our platform. LinkedIn is still in its infancy stage in China. We are a member-first company, so we prioritize our users understanding our message. The roadmap for our adaption in China is still being discussed, but we assure big breakthroughs are coming.

What are marketing norms for consumer apps in China? How do you approach high customer acquisition spend taking into account lower return per paying customer?

What we see in China is often in the short-term, companies will aggressively pursue marketing. Marketing is a frenzy, a “stunt” to get the customer in hopes that he or she can be governed. The issue is if there is no solid value, these acquired users will ultimately leave. As a result, we see many companies that can achieve over one billion dollar valuations, but they do not have intrinsic value. At LinkedIn, we do not aggressively acquire members like this. We know that we have to understand our users’ needs first to be able to tackle the pain points. Our value has already been received globally. Simply put, we are in China for China.

How do differences in formal and informal job seeking practices in China manifest in differences in product?

Each year, there are around eight million university graduates who are looking for jobs and many more students who are seeking work experience. Formal job positions do not cover these needs. Although top tier university graduates may not have too much trouble finding jobs, for many others, formal job seeking is not an option. We conducted a study and discovered students have three unmet needs.

1.Many companies now look for at least one to two years of experience. This makes finding good internships very important during university. It’s our long term plan to address this issue.

2.Many students do not feel ready when job hunting season begins. They do not have access to professional training, including interview and resume preparation and soft skills such as negotiating pay. Here, LinkedIn offers insights.

3.Study abroad students and China returnees (or “sea turtles”) are not as valuable to the job market as they used to be. How these people face China and adjust their expectations is challenging. We help manage talent that is both going out and coming back in.

To address these concerns, we provide both UGC (user generated content) and PGC (professionally generated content). Although PGC, such as tutorials, can be valuable, UGC is still the best approach we wish to pursue.

How do you ensure the quality of data in emerging markets? For example, in emerging markets like China and India, the quality of numerous products is lower. Profiles have fewer descriptions and lower quality or absence of photos – that is, less can be gleaned from the average profile compared to one in the United States.

It is interesting to first think about this question from the perspective of how a boss would react to seeing an employee browsing LinkedIn in China. Generally, people think of LinkedIn as a job portal in China, so an employee using LinkedIn during working hours would create a bad image. This perception provides insights on why we see incomplete Chinese LinkedIn profiles. The lower quality of data reflects a concern over privacy. People do not want others to think they are using a recruiting tool, and this priority informs their perception toward and use of the platform.

We see a similar data problem in other emerging markets like Japan, Indonesia, and the Philippines. For example, Indonesia and Malaysia had the best member engagement last year, allowing marketing solutions to grow significantly. We believe this trend stems largely from the English education that pervades these regions. People naturally improve their profiles because the content keeps them coming back. Because content is mostly in English, Chinese users (who are not primarily educated in English) do not get the same value as those living in other emerging markets. Given that PGC is costly and our preference toward members writing content, we face a notable hurdle in China.

LinkedIn has been in Asia for 10 years, and what we have seen is it takes some time to attract a large number of members. We simply cannot grow in one night. Thus, we rely on members to understand our value proposition and then spread that value to other users.

A lot of western tech companies, although they have international offices, will build their products in the headquarters. LinkedIn China is very different in this regard given its largest product team outside the U.S. is in China. How do you think about ROI for the regionally-based product team?

China and the United States are polarized in terms of user behavior. To do well in China, we need to adapt to local norms. We have to be agile. We work in a dynamic industry, and what we see is adapting to a global norm is not going to happen. Since we are still working on having our Chinese users realize our value, we do not look at our product from an immediate ROI (return on investment) perspective. We have to find a way to help them spend their time in a meaningful manner.

How is LinkedIn China’s relationship with the government? How do you partner with the government, and where do you find there are challenges?

The government is a key stakeholder for us. We are always looking for ways to help our stakeholders be successful. For example, as a big data company, we issue economic graphs reports and run analyses to help our clients and related government agencies understand talent flow in a region. We also recently conducted a study with Tsinghua’s School of Economics and Management (SEM) to understand how regional integration and digital transformation are being driven by the flow of human capital.

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