Ronen Priewer, Hello Markets’ regional manager, discusses his perspective on binary options’ potential in the Chinese market, and the logistics involved in the trade. He shares some of his experiences, after Hello Markets was recently awarded the Best Binary Options Platform provider at the China Forex Expo in Shanghai.
1. Why do you think binary options trading are especially appealing to Chinese clients?
I believe that binary options trading co-exists extremely well with the character of Chinese traders. The simplicity of the trades, speed of action and overall ease-of-use are all perfectly acceptable to both experienced Chinese traders and new clients wishing to explore their skills. Online investments are very common in China and with the continuously expanding Chinese economy and wealth, the online investment community is rapidly expanding.
2. Who are the brokers (brands) you are working within the Chinese market? Are they local ones or rather international brands based elsewhere?
We focus on local companies with experience in the online arena. Most of them have existing call centres, familiar with customer support and all the necessary actions to support online trading. Our target is to smoothly integrate our platform with their existing form of business nature. A very big part of the online business in China relies on the IB’s (Introducing Brokers), local business people who have the capability to attract a crowd of trading customers into an existing platform. IBs have a very big influence over the online market in China, while in the West most business is conducted between the broker and the consumer. The focus on local companies familiar with the market structure with IB networks becomes an absolute must.
3. What localization efforts should a company undergo in order to succeed in China? What cultural factors should be taken into account?
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There are two localization efforts which require professional and a well-planned approach. The first one is the technological issue. Cloud-based online platforms require fast and smooth access with zero latency. Given the Chinese “firewall” for companies operating from international hosted servers, you have to find the correct partners and technology to overcome the issue. Most of the existing trading platforms in various financial segments operating in China today have a plugin software which reduces the dependability of trades on internet speed, while Binary Options technology providers are basing their method on a cloud-based solution. The challenge is there both in terms of technology and Consumer Trading Behaviour as well as experience. The second challenge is the non-regulated environment which currently exists in China. How do you hire people and manage an office in China without risking yourself and your employees? Just walking into the market without any carefully planned approach can yield good results at the beginning with extremely high potential for future massive failure. The Chinese market is extremely big and attractive, It will be there tomorrow and the following years, so it is in one’s best interest to carefully plan each step of the way in advance.
4. What are the main challenges that technology providers and brands are facing in the Chinese markets?
“Industry reputation” will be a key factor determining the overall success of the industry in the Chinese market. We have to remember that even the more mature brother of our industry – Forex – is still undergoing difficulties being accepted by the Chinese government so Binary Options companies need to be patient. Both technology providers and brokers hold their future in their own hands. If they act in full transparency with traders, eliminate complaints of manipulated trade actions and manage to keep the complaints to an absolute minimum, I have no doubt that they will prevail. Sooner or later, the Chinese government will have to decide whether Binary Options brokers belong to the gaming or the financial sector. If the industry will develop the necessary scientific tools for traders to take calculated actions based on analysis and statistics, it will succeed. One of Hello Markets’ main responsibility as tech providers is to make sure traders receive all the financial tools to make calculated trading decisions. We are diverting a lot of resources into R&D for such tools.
5. What are the company’s future plans within the Chinese market?
As part of the company strategy, which also resulted in the change from “Hello Binary” into “Hello Markets,” we see our future role as a financial platform which offers its brokers a diverse portfolio of investment methods. Offering binary options is a perfect strategy to attract new investors into the platform, but the secret of success lies in one’s ability to obtain a long-lasting business relationship with each and every trader. The lifespan of an average trader today in Binary Options is roughly three to four months. It creates a situation where after a very long and expensive effort of acquiring client capital, he is away forever from the platform in a very short span of time. We want our customers to stay with us for a few years, not just a few months! Part of the success of the traditional banking industry throughout the years is found in their ability to maintain very long business relationships with each of their clients. If the online trading platforms wish to overtake bigger and bigger shares of investments, they must adopt this business philosophy. That’s exactly where Hello Markets is heading towards in the global markets in general and in the Chinese market in particular.