Case Study: Aconex in Greater China

About Aconex

Aconex provides a solution to managing the vast volume of information generated on construction and engineering projects. Through using Aconex, organisations save time, reduce costs and control risk on their projects.

Aconex is a web-based information management system that helps replace the use of paper documents by storing all project information – including drawings, documents, and correspondence – online in one central site. This allows people working on a project to instantly view, distribute and archive their information electronically from any location and at any time.

The result of using Aconex is: saved time through quick and easy information access; reduced costs such as couriers, printing and stationery; and reduced exposure to risks such as information loss, disputes and litigation.

Global uptake of Aconex has at least doubled every year for the past five years and Aconex is now the world’s largest provider of online collaboration solutions to the construction and engineering industries. The company has 24 offices worldwide that service projects with a combined value of more than $100 billion. Aconex has been listed by Deloitte as one of Asia’s fastest growing technology companies for the past three consecutive years and was named ‘Emerging Exporter of the Year’ in the 2006 Australian Export Awards.

Why China?

In 2004, Aconex had a strong market leadership position in Australasia and had established its first two international operations – in the UK and Dubai. From this platform, Aconex began assessing opportunities to establish a presence in Asia.

When assessing new markets to enter, Aconex looked at construction market size, forecasted construction growth, and the level of competition. As the Aconex system is web-based, we also considered rates of broadband internet penetration, internet infrastructure and willingness to adopt new technologies.

China was a high performer in these categories. It has one of the world’s fastest growing construction markets and is forecast to become the world’s largest market by 2012. Particularly appealing was the opportunity to establish a strong position early, so that we were strategically well positioned to grow in line with the market.

Launching in China

Our strategy was to establish Aconex in Hong Kong in 2004 and then expand into mainland China in 2005. We chose to initially base ourselves in Hong Kong as it is a thriving market in itself and drives many construction projects in South and South East China.

Before opening for business, we made sure we were well prepared. With the help of organizations such as Austrade and AustCham, we compiled a large volume of information from market reports, industry associations and trade organizations in order to understand the market and the key players.

Because of this research, before we engaged our first Business Development Manager in Hong Kong, we knew the exact companies and personnel we wanted to target so, almost immediately, we were able to present and sell our solution.

Outcomes

To date, our strategy for entering China has worked well and the Greater China team has secured some of the company’s largest deals. The $2.6 billion Venetian Macau casino development, signed in 2004, has already stored more than five million documents and pieces of correspondence on our system. Aconex has also facilitated the Mandarin Oriental Hong Kong renovations and is working with a number of other casino and hospitality developments in Macau and the $1.2 billion Ocean Park theme park redevelopment in Hong Kong. From this base, we have opened offices in Shanghai and Beijing, from which we are servicing local companies and international organizations operating in China.

In line with the other international markets we have entered, our client base in China has primarily grown through targeted selling and referrals from our existing network. We have also undertaken media campaigns and have spoken at industry events to increase awareness of the solution we provide.

Our Greater China team currently consists of a Regional Manager for Asia, a Country Manager for China, a business development team, customer training and support teams, marketing and administration.

Opportunities & Plans for Future

Aconex plans to drive further growth in China by expanding existing operations and entering new cities. The aim is to establish a network of sustainable offices that can service the whole of Greater China.

As previously mentioned, there is a significant opportunity for Aconex to expand in line with China’s vast, fast-growing construction sector. The adoption rate of online collaboration solutions, such as Aconex, on construction projects in China is still less than 10%, compared to around 25% in Australasia and 50% in the UK and the USA. Therefore we see enormous potential for Aconex to first educate the market and then become the long-term leading provider as China’s uptake increases. Due to the size of China’s construction industry, this represents a considerable opportunity that we are now well positioned to take.

Challenges

1. Regulations and Business Licensing. Being a new business concept in China can mean you are in un-chartered waters. Research is the key to understanding how you present your scope to government agencies.
2. Hiring the right people. There are literally thousands of candidates who will apply for roles with your company- Finding the right ones that can work independently and fit your company culture is important.
3. Understand your market. Don’t be fooled by the size of the market- It is competitive in every sense, and in the case of new concepts or products you have that huge market to penetrate and educate.
4. In the west Time is Money- In China Money is Money. Some of your most fundamental business beliefs may need some fine tuning- understanding which ones for your product and market need adjustment is the key.
5. Listen. Listen to everyone all the time and THEN trust your instincts – common sense more often than not prevails but you must have the whole picture to make an informed decision.

Lessons Learned

1. Follow your clients. If they move to China, then move with them. This ensures you have a client before even landing, providing immediate cash-flow and referrals.
2. Identify and hire the right local people as soon as possible. We found that this is important in the eyes of clients and deepened our market knowledge.
3. Be prepared. A wide range of market information and assistance is available. Using these sources before arriving in China can save time and money.
4. Be persistent. Don’t expect to seal a deal after one meeting. Pace yourself for at least 4-5 meetings with each prospect.
5. Be humble. A professional, down-to-earth, can-do attitude can go a long way.