Sramana Mitra: So, Baidu controls all the search traffic in China and this traffic gets routed largely to servers hosted in China. So websites have to be hosted in China to be ranked for the Chinese consumers. That’s the reason why you have to have a strategy for China to do e-commerce. Is that the point?
Jacob Cooke: That’s correct. There are two main concerns. One is, we need to be inside the country to get a proper listing at Baidu. Number two, is your site may not be open-able and is not enough to go through the firewall, the user experience can be sub-par and not optimal in terms of converting the user.
Sramana Mitra: The thing that I want to clarify is being hosted in China the only issue or are there other criteria for being ranked in China? Obviously, there has to be content in Chinese that have to be in tune with Chinese keywords.
Jacob Cooke: There are some steps in CRM systems such as Salesforce, which has been adopted all over the world, that actually violate consumer protection laws in China. Consumer data, especially phone numbers and email addresses, is not allowed to be put in the cloud. Salesforce’s databases are on the cloud. We have another CRM system that we’ve just developed that prevents consumer data from being accessed outside the country. It can still eventually go to Salesforce but it has to follow a certain rule and be sanitized a certain way. You can just leave little bits of data like IP addresses outside of Salesforce and keep them on a separate database inside China. That’s where the complexities arise because we have a lot of these companies that have multiple touch points. We need to be able to distribute those leads as they come in very quickly. If those connections to Salesforce weren’t being made, they don’t get the leads for the day.
Sramana Mitra: I see. Now that we have a little bit of that explanation, let’s go back to your use case and walk us through it.
Jacob Cooke: Let’s do an e-commerce use case. I think your audience has heard of the Alibaba IPO. Unlike the west where the majority of e-commerce platforms are standalone and people get great control over the brands, we have platforms out here that are part of the Alibaba group that we need to use because that’s where a lot of the e-commerce traffic goes. The climate overall in China is accelerating quicker than the United States. There’re a couple of reasons for that. One thing that China did very well before it opened up the e-commerce revolution was solidify the banking system. We have a very safe and secure system for online payment here. We probably oversaw probably close to 800,000 transactions so far this year. Out of those, none of the stores have ever complained of fraud. The system is really infallible.
In the west we have problems with credit card theft. We’re still having those problems with Target losing information. Everybody out here has their bank account numbers, but they have an additional level of security, which is the dynamic PIN. They change numbers every 30 seconds. Even if somebody is on the Internet and does grab that information, the information is validated just a few seconds later. What that allowed was for consumers to trust buying online.