How to crack crowdfunding in China
Philip Ellison 12 September, 2013 at 01:09
A new, socially conscious crowdfunding platform is set to launch in China in early December. It’s called FundingDream, and it closely adheres to the tried and tested model of crowdfunding leader Kickstarter, in that campaigns are only funded if they reach their targets.
FundingDream exists to help businesses, organisations and projects that have a focus on social good, which founder Joshua Johnson believes helps it to stand out from other Chinese platforms like DreamMore and Demo Hour. And unlike these two, FundingDream welcomes projects from outside of China (it is actually registered in the United States).
We’ve previously covered the cultural roadblocks facing the new generation of ambitious entrepreneurs in China, and Johnson’s brainchild aims to alleviate some of these obstacles by helping start-ups make connections. “1.4 million is an open and untapped market,” says Johnson, “[which] we’re hoping to dominate because of our partnerships.” This refers to the partnership between FundingDream and Chinese shopping site Jiekuwang. The retailer is giving FundingDream access to its substantial client contact database, which they will use to “jumpstart” their own user base.
However, Chinese-born blogger Andy Shuai Liu told Mashable that establishing credibility may be a huge issue that FundingDream faces: “In a relatively low trust society where people are concerned about scams online, many well-intending prospective benefactors would be seeking assurance that the cause and the project are legit before deciding to donate.”
This fear of online scams means that, while crowdfunding is increasingly popular among China’s younger generations, the average value of donations tends to be much lower than in the West. Another potential barrier to FundingDream’s success is government interference, which is rife in start-ups in Asian countries, with founders and developers being held personally accountable for the content posted by users.
There is also the widely held view in China that the act of giving money away is frivolous and inappropriate, considering the country’s huge income inequality – although Johnson maintains that “people donating is becoming more common and less controversial.”