Laying ground for China's big data transformation
How one entrepreneur got into database field and set himself up for role in Beijing's effort to turn booming metropolises into 'smart cities'
When the Obama administration announced its US$200 million Big Data Research and Development Initiative just over a year ago, it opened up myriad business possibilities for American businessmen. The "big data" idea centres on developing and enhancing of tools needed to access, organise and make new discoveries by combing through vast amounts of digital information. In China, Heilongjiang native Leon Liu Yang foresaw such possibilities years ago. He is already working hard towards capitalising on them. Liu, 34, talks about how his company, Lecast, is tapping into the promising data market while facilitating a national push to build so-called Smart Cities, essentially China's take on the big data dream.
What does Lecast do?
We provide solutions for clients' marketing campaigns, work on membership management, and help companies implement their plans. For example: a high-end car brand wants to invite potential buyers for a test drive of a new model. We help them find interested people and reach out to them by sending an e-mail, invitation, and so on. These types of activities allow us to learn more about end-consumers. We attach labels - for example, "car owner", "wine fan", or "villa owner" - to basic database information, creating more than just a string of telephone numbers or e-mail addresses.
What made you start a database company?
I migrated to Beijing in 2002 after graduating from Heilongjiang University. All I was thinking about at the time was how to make a living. My parents are farmers in Nehe, Qiqihar . People in my village were quite isolated, knowing little about the outside world. And there is no tradition of migration, unlike in coastal cities where villagers help each other branch out to try their luck. I was totally on my own.
I first worked for a company that sent promotional letters for new books, on behalf of publishers, to book stores around the nation. In order to save time and money, the company owner came up with the idea of e-mailing the letters instead. E-mail was not as widely used at the time. My boss's innovative idea surprised me and opened up a big world before me.
After that, I tried various types of jobs; it didn't matter how trivial. I took jobs at advertising companies - sending marketing materials, invitation letters and birthday cards to their clients. I buried myself in the work and did not bother to think about my future until 2007.
A friend of mine said my perseverance was a key trait for a successful entrepreneur, and he suggested that I move to Shanghai, saying the city was more suitable for start-up companies. Though it's hard for a small company to satisfy the big demands from state-owned enterprises in Beijing, my friend said it was easier to meet demands from smaller companies in Shanghai, where the economy is more market-oriented. I set up a predecessor to Lecast in Shanghai in 2007.
Private information is not well protected by mainland laws. How do you convince clients that your data was acquired legitimately?
Some of the data is membership information about our clients that we are authorised to use, and some of it is bought from internet companies. Since Lecast was established, we have been accumulating data. The development of e-commerce, internet search engines, online profiles and microblogging provides enormous information about consumers and their spending habits. We collect, store, analyse and categorise the information to help improve our clients' marketing initiatives.
What kind of opportunities do you see in China's 'Smart Cities' push?
With millions of people flooding into cities, municipal management will be put to the test. Earlier this year, the Ministry of Housing released a list of 90 cities that will be turned into Smart Cities in the next three to five years. There is no strict definition of Smart Cities, but it is widely understood that such a city is built on information technology that operates scientifically, based on data. For example, electricity is allocated according to consumption data provided by local factories. And people's social security cards should contain basic information about them that can be read in hospitals, parks, libraries and other public venues, presenting data in a uniform format that is readable in all computer systems, which are linked with each other.
Data is essential in all these examples. That's why we are constructing an internet data centre in the Wujian Economic Development Zone, located in Suzhou , Jiangsu . The centre will be a data-storage facility for our company, a call centre, and a place where digital data, pictures, audio and video images are treated and applied to serve local governments, companies and residents. When China announced the Smart City drive [in January], it excited me, because we can improve people's lives by using data and technology.
How are you going to finance the internet data centre?
Money is not a problem. We are backed by private equity funds. Bitong Capital invested 100 million yuan in our company last year. Apart from private equity funds, our company has sufficient cash flow, with sales revenue more than doubling to over 120 million yuan last year.
Liu spoke to Jane Cai