Aussie entrepreneur Andrew Collins warns of tough times in China

Andrew Collins spent 17 years doing business in China, but is not sure budding Australian founders will persevere as long as he did given rising trade tensions.

Andrew Collins last week clinched a $65m deal to sell his sports digital agency Mailman to Endeavour China.

One of Australia’s most successful entrepreneurs in China has declared aspiring Australian business people could struggle to break into the market there given rising trade tensions and changing attitudes.

Andrew Collins, 41, last week clinched a $65m deal to sell his sports digital agency Mailman to Endeavour China, the local arm of the New York-listed sports and media agency Endeavour owns properties such as the Ultimate Fighting Championship (UFC) and counts Elon Musk as a board member.

Collins arrived in Shanghai in 2007, and paid $175,000 to acquire the business licence of a print marketing agency then distributing promotional postcards in restaurants, bars and other retail outlets.

He transformed Mailman into a digital agency working in China for some of the biggest sports in the world, including soccer’s world governing body FIFA and European clubs, plus the large US leagues such as the National Basketball League (NBA), National Football League (NFL) and National Hockey League (NHL).

Collins helped the big sports crack the Chinese market, and even acted as the promoter for NHL matches there, but says he has noticed a change in attitude towards Australian entrepreneurs in recent years.

“When I arrived, Australians were respected and considered great people to do business with. We were regarded as honest and bold, so opportunities were plentiful, particularly for those willing to stay the distance and build a business,” he told The Australian.

“But in the last few years it has become increasingly obvious that Australians have been losing ground to the French, Germans and Americans. Fewer Australians are willing to move to China and invest the 10 years or more that it takes to build a business there, and are probably less inclined to do so now given the recent political and trade tensions.”

Collins first agreed to sell to Endeavour last year, but the deal was delayed by Covid. He has since moved to Singapore and will continue to work for the group.

But he fears Australian entrepreneurs will shun the opportunity to move to China and follow in his footsteps given the political tensions between the two countries.

And while he acknowledges that founders are increasingly choosing to build global businesses from Australia, or choose to move closer to Silicon Valley in the US, he says they are ultimately missing out on striking it big in China.

“No question it is a massive economy and customer base. The value of a successful business in China is worth more than the same business done in Australia.

“The valuation modelling is different, there’s more funds, more money and if you develop a good business you’re more attractive. The size of the opportunity is directly related to the valuation.

“If you’re in Australia you’ve got a limited opportunity. That was the logic I started with when I went to China.”

Collins grew up in Wodonga, Victoria, and followed his ambition to become an entrepreneur after studying at Swinburne University in Melbourne. He was invited to Shanghai and Singapore after winning a university award, meeting with 50 other budding entrepreneurs around the world.

He says the trip gave him his first exposure to international peers and made him realise he could compete with others, feeling “comfortable, invigorated, challenged and inspired” by being in China as the nation grew quickly.

Collins figured if he was going to spend 70 hours a week building a company in Australia, he may as well do it in China instead.

“China had an infinitely larger market with a much higher growth rate in all the categories I wanted to look at: sports, technology, digital and media. So that was it. It was really dumb logic I guess.”

His first client was the AFL, which was seeking the chance to grow Australian rules football into China. From there, his biggest break was striking deals with FIFA to help their international sponsors promote World Cups, and later the big US sports.

“We underwrote the NHL games in 2018. That one was an existing client we were doing marketing for, they didn’t have the best experience with their previous promoter. Tickets were up 300 per cent that year we did it. It was a success.”

By then, Collins had already raised $20m from local investors to grow the business, making acquisitions in Europe and then later expanding across the Asia-Pacific. Then Endeavour came knocking.

Collins wants to keep being an entrepreneur, and thinks he is the only Australian to sell a business in China for more than $25m. But he is not sure if any similar deals will happen in the near future.

“If you’re in technology, science, anything related to engineering, construction, aged care, child care, health products, there‘s so many great opportunities. There’s a lot of local founders that would be thrilled to partner with Aussie entrepreneurs.

“I think ultimately you’re missing out on multiples of 10x the value of your company and your efforts for the same amount of time elsewhere if you don’t try China. if you’ve got the willingness to dedicate your time to the market it will pay off.”