Huobi Cloud Aims for 80 More Exchange Partners in Bid for Revenue Growth

Singapore-based exchange conglomerate Huobi Group has a unique growth strategy for emerging markets: partner with local entities and then split the profits 50/50.

Revealed exclusively to CoinDesk, the South African exchange HIZA will launch in May and join a cohort of 150 platforms under the Huobi Cloud umbrella, according to Huobi Group's senior business director David Chen.

"We will help them get their trading volume up and we'll expand our business when the market is more mature," Chen said, adding that up to 80 like-minded partnerships are currently in the pipeline.

Recent expansion isn't unique to Huobi, however.

Global exchange giants like Binance are opening independent subsidiaries in emerging markets like Uganda, or investing in local exchanges the way Bittrex did with the South African exchange VALR. Similar to Bittrex, Huobi Group offers partners like HIZA access to its global order books for prime liquidity.

Interestingly, the partnership approach allows Huobi to minimize the regulatory risks of working in under-developed markets - where banking relationships require local knowledge and repercussions for unintentional missteps remain uncertain.

"They [HIZA] own their customer data, it's not Huobi that owns it, otherwise it would be Huobi's responsibility," Chen said.

That's why, Uwakwe said, his exchange is taking a multi-pronged approach with both peer-to-peer and over-the-counter services.

"Huobi will be helping us with all the technical aspects, especially security."

This could turn out to be a lucrative play for Huobi Group, as a national survey by HootSuite in January 2019 found that 11 percent of South African mobile users own some cryptocurrency.