SenseTime Global IPO: Strategic Reaction to American Attack

Hong Kong-headquartered SenseTime Group Inc. (SenseTime) was founded in 2014 to commercialize artificial intelligence (AI) and was a global leader in deep-learning AI, with applications in Smart Business (facial recognition), Smart City (property damage and theft detection), Smart Life (interacting with the Internet of Things to improve consumer experience), and Smart Auto (autonomous driving). December 10, 2021, was supposed to be the date for setting the offer price for SenseTime shares in the company’s global initial public offering. Instead, it was the date that Xu Li, co-founder and chief executive officer of SenseTime, learned from Hong Kong Clearings and Exchange Ltd. that American President Joe Biden was about to designate SenseTime a Communist Chinese Military Company—an action that prevented American investors from legally investing in SenseTime, derailing the initial public offering. How should SenseTime alter its marketing, research and development, and listing strategies in the light of the American government’s actions? How would the increased tension affect the geographic, technological, and customer aspects of SenseTime’s efforts to drive business growth?

This case is suitable for senior undergraduate- and graduate-level courses on marketing, marketing research, entrepreneurship, international business, and international finance. Students should have taken an introductory marketing management course and be familiar with segmentation, targeting, and positioning. This case is about the marketing and international expansion of a rapidly growing high-technology company seeking to tap global capital markets. It examines how a company could consider wealth, size, degree of digitalization, and financial and political factors in forming expansion plans by using secondary data. After working through the case and assignment questions, students will be able to do the following:<br><br><ul><li>Explain the importance of applying technology to create useful services with value for customers.</li><li>Describe the AI industry and its key technologies.</li><li>Identify alternative strategies for a company’s geographical expansion.</li><li>Analyze needs for equity capital and outline the reasons for implementing a global offering.</li><li>Describe the interplay between defending intellectual property (IP) and marketing a high-technology product.</li><li>Visualize political risk in the US-China technology conflict.</li></ul>

• artificial intelligence
• smart business
• facial recognition
• smart city
• smart life
• autonomous driving