Cate Cadell, Author at TechNode

Calling All Tech Writers & Editors: Technode Is Hiring In Beijing, Shanghai

Cate Cadell — Fri, 23 Sep 2016 00:39:01 +0000

Technode, the most influential multilingual China-focussed tech blog, is looking for English language reporters and copy editors to join our Beijing and Shanghai offices. We are also seeking a managing editor, who will oversee day to day operations at the blog. If you have a passion for the China tech scene and experience in a media environment, check out the three roles below:

Position: Technology Reporter (Beijing or Shanghai)

The Role:

We are seeking motivated self-starters with a history in journalism and a passion for China’s burgeoning tech sector. Fluency in Mandarin is a major advantage. Reporters are expected to research and report breaking news as well as features alongside a dynamic team of bilingual reporters. There will be opportunities to participate in multimedia projects including podcast and video content.

The successful candidate will also assist the team in organizing local tech events as well as the two annual TechCrunch events in Shanghai and Beijing. This includes moderating panels and covering the events. Applicants should have knowledge of China’s tech sector as well as an understanding of the underlying influences affecting China’s tech industry today, including of policy and economics.

Requirements:

• English working proficiency

• Some Mandarin skills required, fluency highly preferred

• Experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

Position: Managing Editor, English (Beijing or Shanghai)

The Role:

Technode is looking for an experienced hand to oversee day-to-day operations of their English side blog. This involves some editing as well as working with journalists to decide on content and style. The Managing Editor will also oversee partnerships with industry representatives and other media organizations. This role also requires someone who can arrange small-scale events and be a liaison between Technode and other organizations within the Chinese tech ecosystem, meaning working proficiency Mandarin is highly preferred.

The successful candidate will be highly motivated and have extensive experience in online media, as well as a drive to grow the Technode brand and engage heavily with the Chinese tech scene. The Managing Editor will have extensive duties during the two annual TechCrunch events in Shanghai and Beijing. This includes moderating panels and coordinating coverage.

Applicants should have knowledge of China’s tech sector as well as an understanding of the underlying influences affecting China’s tech industry today, including of policy and economics.

Requirements:

• Fluency in English

• Some Mandarin skills required, fluency highly preferred

• Extensive experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

Position: Copy Editor (Beijing or Shanghai)

The Role:

We are looking for fluent English speakers with some experience in the newsroom who can help us polish our blog. Fluency in English is essential, as well as a solid understanding of fundamental grammar and style requirements. Copy editors are expected to cooperate with journalists and other editors to drive the blog’s content and style. There will also be opportunities to write for the blog, as well as participate in multimedia projects including podcast and video content.

Requirements:

• Fluency in English

• Mandarin skills preferred but not necessary

• Experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

About Technode English:

Technode is a Chinese tech media company that oversees both English and Chinese technology publications. Technode is also the official partner of TechCrunch in China, and manages TechCrunch.cn as well as TechCrunch events in China. Our coverage focusses strongly on grassroots technology and startups as well as corporate coverage and analysis of China’s technology ecosystem.

Please send a cover letter and resume to catecadell@technode.com. Applications will be accepted until September 30th, though early applicants will have an advantage.

Calling All Tech Writers & Editors: Technode Is Hiring In Beijing, Shanghai

Cate Cadell — Tue, 13 Sep 2016 01:12:46 +0000

Position: Technology Reporter (Beijing or Shanghai)

The Role:

Requirements:

• English working proficiency

• Some Mandarin skills required, fluency highly preferred

• Experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

Position: Managing Editor, English (Beijing or Shanghai)

The Role:

Applicants should have knowledge of China’s tech sector as well as an understanding of the underlying influences affecting China’s tech industry today, including of policy and economics.

Requirements:

• Fluency in English

• Some Mandarin skills required, fluency highly preferred

• Extensive experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

Position: Copy Editor (Beijing or Shanghai)

The Role:

Requirements:

• Fluency in English

• Mandarin skills preferred but not necessary

• Experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

About Technode English:

Please send a cover letter and resume to catecadell@technode.com. Applications will be accepted until September 30th, though early applicants will have an advantage.

VC Firm Founded By Ex-Google China Head Raises $674M In New Funds

Cate Cadell — Tue, 13 Sep 2016 00:30:37 +0000

Sinovation Ventures, the firm founded by ex-Google Inc. China head Kai-Fu Lee, has raised a 4.5 billion yuan ($674 million USD) for two separate currency funds that will target AI, enterprise software and entertainment content startups in China and the U.S.

It comes has the country is experiencing what has been dubbed a capital ‘winter’, spurring firms to shore up cash reserves and seek out more risk-averse investments.

Previously known as Innovation Works, Sinovation Ventures oversees around 300 startups, with a special focus on the Chinese market. Founder Kai-Fu Lee previously served as Google’s China head, as well as holding an executive role at Microsoft Corp.

The two new funds include their second RMB fund ($375 million USD) and their third U.S. dollar fund ($300 million USD), bringing the total amount on the firms portfolio to approximately $1.2 billion USD.

Seven-year-old Sinovation Ventures counts popular Chinese apps Wandoujia and Meitu among its investments. Meitu is currently preparing for a Honk Kong IPO.

Chinese VCs have raised record low funding amounts since the economic slump in mid-2015, however emerging trends in AI, big data and entertainment content have firms cautiously optimistic, while enthusiasm for high cost alternatives such as on-demand apps has mellowed.

Samsung’s China Manufacturer Will Replace 4 Million Recalled Batteries: Report

Cate Cadell — Mon, 12 Sep 2016 03:45:56 +0000

Samsung Galaxy Note 7 users were warned by the U.S. Consumer Safety Commission on Friday to not operate the phones, adding to a list of grievances for Samsung, which saw $11.7 billion USD wiped from their market capitalization since a recall was announced.

The company initiated the voluntary move on September 2nd when a small number of the devices reportedly exploded into flames due to a fault in their lithium ion batteries.

Prior to the U.S. regulatory warning, international airlines and airline authorities jumped to ban use of the phones in flights, as well as banning them in cargo holds.

There is one potential beneficiary of the multi-billion dollar USD snafu however; Samsung’s China-side battery manufacturer ATL.

Chinese models of the phone were not recalled, due to differences between those manufactured outside China (for markets including South Korea and the U.S.), and those inside China, manufactured by ATL.

According to reports from local Korean outlets citing industry sources, ATL is expected to take over manufacturing for the millions of batteries that are being reclaimed by Samsung as part of the voluntary recall.

This puts ATL in the precarious position of being the only battery supplier for a premium phone by the world’s largest smartphone brand. Samsung has previously indicated that it will seek to launch a third manufacturing partner or operation.

Unlike Apple, which relies on a large chain of suppliers, Samsung has a series of wholly-owned manufacturers, making ATL a minority supplier. According to Yonhap News Agency, Samsung sourced 70 percent of the batteries for the Galaxy Note 7 though their own subsidiary, and 30 percent through China’s ATL.

Samsung has reportedly submitted an order to ATL for four million replacement batteries for the Samsung Galaxy Note 7.

While the surprise upswing in orders will yield positive returns for the Chinese manufacturer, a future slump in Samsung sales due to fallout from the recall could take a bite out of their business.

The recall could also push Samsung to more quickly find a third alternative manufacturing partner for phone batteries, potentially cutting into ATL’s bottom line.

Samsung’s market share has been slipping gradually in China over the past two years, as cheaper local Android alternatives flood the market. The company released strong profit figures in their July earnings, with healthy gains in their chip business.

They also pulled the release of the Galaxy Note 7 forward by almost two months in a ploy to launch it before the Apple iPhone 7. Investors responded to positively at the time, though it’s a move that’s since been called into question due to the recall.

Audi Inks MOU With Alibaba, Tencent, Baidu For Connected Cars

Cate Cadell — Mon, 12 Sep 2016 00:55:46 +0000

Audi, the luxury car brand by Volkswagen, has signed an MOU with China’s three largest tech names, Alibaba, Tencent and Baidu, as they seek to expand their China-based connected car research.

The agreement, inked on Sunday in Shanghai, involved the three tech giants along with Audi parent company FAW-Volkswagen, and lays out plans for future cooperation on connected car technology.

“China has become an important lead market for digital technologies. Baidu, Alibaba and Tencent are strong innovators,” said Joachim Wedler, President of Audi China in a release.

Audi’s China operation, Audi China, is a wholly-owned subsidiary of Audi AG, has an R&D operation that focusses on connected cars, new energy driving, digital services and piloted driving, according to the company. It’s their biggest research facility outside of Germany.

Audi says they are already working with Alibaba on mapping technologies, including real time traffic data and high-resolution 3D Maps.

The automaker plans on integrating Tencent’s WeChat MyCar services, an auto-focussed feature based off the highly popular social messaging service WeChat, that will adapt location and music sharing services for cars.

Audi also committed to a 2017 launch of Baidu’s ‘CarLife’ in its latest models, an in-vehicle digital platform designed for using Baidu applications.

None of the parties have disclosed financial details of the cooperation, or specific details on how the tech giants’ competing services, such as mapping technology, would be mediated in future partnership activities with Audi.

The deal is significant because it marks the first open collaborative partnership between an automaker and China’s dueling tech tycoons. While many traditional car companies are hedging their bets across internet companies, none have made overt attempts to simultaneously integrate cross-platform technology from multiple Chinese tech companies of this size.

The ‘Chinese SpaceX’ Will Test Space Balloon Flights With Animals This Year

Cate Cadell — Wed, 07 Sep 2016 02:01:26 +0000

Kuang-Chi Science Limited, a Shenzhen-based tech company, has drawn comparisons in Chinese media to Elon Musk’s SpaceX for its ambitious projects, ranging from exoskeleton power suits to spacecraft.

While the company, founded in 2010, has yet to hold a flame to the achievements of SpaceX, they are attacking innovation with the hold-your-breath-optimisim that has become typical of China’s new tech companies.

Their latest bet? A near space tourism project that will involve sending paid customers almost 79,000 ft. (24km) above the earth’s service in a balloon aircraft dubbed the ‘Traveler Beta II.’

Traveler II Beta’s main subsystems have been completed and are in the final stage of assembly and testing, according to the company. (PRNewsFoto/Kuang-Chi Group)

The company has already committed to a manned flight of the aircraft within the next two years, though in an announcement made on Tuesday, they revealed test flights involving animals would be run much sooner – this year.

In a release, KuangChi Science Limited said the aircraft is “in the final stage of assembly and cabin tests are expected to be completed by the end of 2016 with flight tests beginning in 2017,” suggesting the animal passengers will be involved in cabin tests.

The aircraft has already completed a successful, unmanned flight 21km above the earth’s surface over New Zealand, according to the company. This is within the zone classified as ‘near space’, which is a region 20-100km above the earth’s surface that is subject to highly variable atmospheric conditions.

KuangChi Science Limited, which is the Hong Kong-listed subsidiary of parent company Kuang-Chi, doesn’t appear to be suffering from too many budgeting constraints in their R&D. The company unveiled a $1.5 billion USD plan to build a space travel theme park in the city of Hangzhou (Alibaba’s home town), which will feature simulations of their proposed tourist aircraft.

Technology-themed amusement parks are popular play in China when it comes to introducing consumers to cutting edge technology. Last month internet company LeEco announced plans for a autonomous driving ‘experience’ park as part of a $3 billion USD production plant.

Currently, most of KuangChi Science Limited’s revenue comes from their initial commercialization project, a space platform called ‘Cloud’, which manages data collection, analysis, internet access and other communication services, according to the company.

Title Image: A concept image of KuangChi Science Limited’s near space tourist balloon.

Taiwan VR Real Estate Company iStaging Seals $5M To Fuel International Expansion

Cate Cadell — Wed, 07 Sep 2016 00:50:25 +0000

Taiwan-based virtual and augmented reality company iStaging has sealed a $5 million USD pre-A funding round led by WI Harper with participation from Taya Venture Capital, one of a consortium of venture capital firms working with the Taiwan National Development Fund.

The company is a promising addition to a number of startups that cater to real estate agents and furniture makers by using virtual reality to let prospective buyers spatially experience living spaces remotely.

Releasing their debut app in January, iStaging is certainly not the first company to pioneer the use of VR in real estate, thought their position in Taiwan gives them access to a growing number of Chinese citizens seeking to invest in foreign real estate.

iStaging will leverage the latest funding round to fuel an expansion into western markets, building on operations in France and the U.S.

“Real estate agents have everything they need to capture, create, and allow their clients to visualize hundreds of properties virtually before selecting the ones to visit in person,” said Kevin Basset, iStaging’s Head of Marketing, on the capabilities of iStaging’s technology.

“It’s something we’re excited to promote in the U.S., Europe and China.”

Chinese investors have spent $300 billion on property in the U.S. market alone, according to a report from Rosen Consulting Group and the Asia Society released in May. Virtual and augmented reality services like iStaging could play a large role in streamlining future international property sales, allowing buyers to view and furnish properties remotely.

Other startups tapping the Chinese VR real estate market include Hong Kong-based VResidence, which oversees a number of virtual reality services, including a platform specifically for ‘second hand’ apartments in China.

Alibaba Did Some Serious Deal Making With The G20 In Their Home Town

Cate Cadell — Tue, 06 Sep 2016 07:11:03 +0000

Hangzhou, the site of this year’s G20 Summit, is famed for its lakes and historic buildings, but more recently it’s known as the hometown of Chinese e-commerce titan Alibaba.

The internet giant took advantage of the summit’s location to hold a series of high-level meetings, inking both deals and friendships in the process. Here’s some of the items that were on Alibaba’s schedule during the G20 summit:

1. Alibaba Partners With The UN Targeting Green Finance

Alibaba and Jack Ma have linked themselves to a handful of progressive causes over the past year as a part of the company’s drive to increase brand reputation as precursor to their global expansion. Causes championed by Ma and Alibaba include environment, education, anti-counterfeit measures and now green finance.

Yesterday, Alibaba’s finance affiliate, Ant Financial Services Group, sealed an MOU with the United Nations Environment Program (UNEP) to promote green finance and environmental protection initiatives. It’s part of a wider initiative by the UNEP to leverage partnerships with fintech companies to promote better environmental practices.

2. Alibaba Signs Cooperation Agreement With Canadian Government

Canada’s Prime Minister, Justin Trudeau, took a trip to the Alibaba headquarters during his time in Hangzhou, where he met with Jack Ma to discuss how to use e-commerce to stimulate trade between China and Canada.

The occasion also marked the official launch of the ‘Canada Pavilion’ on Tmall, Alibaba’s China-focussed international shopping portal. Canada joins a myriad of other countries who have already opened pavilions on the site, that allow shoppers to buy from foreign brands directly, instead of through grey market resales on Taobao.

Mr. Ma and Prime Minister Trudeau also agreed to work closely on initiatives to bring more Chinese tourists to Canada, including facilitating the use of Alipay and AliTrip in Canada.

“Today, I am pleased we are formalizing our efforts to have Alibaba serve as the gateway to China for Canadian businesses of all sizes,” said Mr. Ma in reaction to the agreement.

3. Australia Signs Agreement With Alibaba To Boost Trade

Canada wasn’t the only commonwealth country with a Jack Ma visit on the schedule. Australia Prime Minister Malcom Turnball visited the tech titan on his final stop before leaving China.

Australia’s Trade and Investment Commission, Austrade, signed an agreement with Alibaba to strengthen their trade relationship and to promote Australian products in China, a large part of Prime Minister Turnball’s focus during the G20 summit.

In a speech during the event, he said that Alibaba “enables the smallest businesses, the mom-and-dad businesses, in the regional part of Australia to have access to the biggest part of the world.”

An ‘Australian Pavilion’ was opened on Alibaba’s Tmall platform last year, encouraging China’s appetite for Australian wine, beef and dairy among other products.

4. WTO Director General Roberto Azevedo Visits Alibaba To Promote Digital Trade

The World Trade Organization (WTO) has been running a heavy campaign in Silicon Valley, urging tech stalwarts such as Facebook, eBay, Google and Paypal to plump up international digital trade.

WTO Director General Roberto Azevedo took the opportunity to do the same with China’s biggest e-commerce company when he visited Hangzhou this week for the G20 summit, meeting with Jack Ma.

5. Italian PM Swills Wine With Jack Ma In Hopes Of Boosting Sales In China

China’s appetite for wine poses a huge opportunity for Italy, the home of some of the world’s best-known wines. Italian Prime Minister Matteo Renzi joined Jack Ma on stage at Alibaba headquarters to share an Italian wine.

Currently Italian wine accounts for six percent of all wine on Alibaba’s e-commerce platforms, according to the company, though they are hoping to improve cooperation and bring that number up to an ambitious fifty percent.

The meeting reaffirmed an earlier commitment made by Mr. Ma in April, when he joined Prime Minister Renzi in a panel in Verona to discuss Italy’s wine trade.

6. Indonesia Asks Jack Ma To Become An Economic Advisor

While Canada, Australia and Italy had their agendas firmly pegged to trade during their respective Alibaba visits, Indonesia had other ideas in mind, namely a job offer for Alibaba Chairman Jack Ma.

Indonesia’s Minister Rudiantara, who was traveling as part of President Joko Widodo’s delegation, invited Mr. Ma to join a ‘steering committee’ comprised of ten economic advisors. Minister Rudiantara said the committee is part of a larger push to make “Indonesia’s positioning in the international marketplace more prominent.”

Mr. Ma hasn’t yet accepted or declined the offer.

Baidu And Nvidia Are Teaming Up On Autonomous Cars

Cate Cadell — Mon, 05 Sep 2016 05:46:35 +0000

Baidu is hoping to take its autonomous car project to the next level through a partnership with high performance chip maker Nvidia.

Baidu CEO Robin Li and Nvidia CEO Jen-Hsun Huang spoke together on stage at a Baidu event in Beijing last week. According to a blog post by NVIDIA, Baidu will contribute their cloud platform and mapping technology while NVIDIA will offer their self-driving computing platform and HD mapping solutions.

The partnership also renews the Chinese search engine’s competitive edge against local internet firm LeEco, which has been working on a similar cloud-based ecosystem for autonomous cars.

“We’re going to bring together the technical capabilities and the expertise in AI and the scale of two world-class AI companies to build the self-driving car architecture from end-to-end,” said NVIDIA in the blog post.

Together, the pair are hoping to develop autonomous parking and ‘level three’ autonomous vehicle control, which is the last level before fully autonomous (there are five levels all together).

Baidu has been rapidly expanding their testing grounds for autonomous cars both locally and abroad. The tech giant plans to establish ten local testing locations in China by the end of the year (current locations include Beijing, Wuzhen and Wuhu cities). Baidu recently received the go ahead from motor vehicle authorities in the U.S. to test vehicles alongside Google’s autonomous cars in California.

It’s not the first time Baidu and Nvidia have joined forces. According to Nvidia, the chip company has contributed components for other projects undertaken by Baidu’s artificial intelligence research unit, which is headed by Andrew Ng and based in the U.S.

Baidu recently joined automaker Ford to invest $150 million USD in detection technology for autonomous cars by Velodyne LiDAR Inc., as they continue to leverage partnerships in their goal to sell fully autonomous cars by 2018.

China’s $285B Social Security Funds Will Soon Be Using Blockchain Tech

Cate Cadell — Mon, 05 Sep 2016 01:42:21 +0000

While the whole world has been using the blockchain technology for some time now, even if sectors such as retail which is using blockchain retail, China’s National Council for Social Security Funds is adopting blockchain tech for the first time to keep down transaction costs.

“Blockchain technology will be used in the social security system because of its valuable applications in the investment and management of social security funds,” Wang Zhongmin, vice chairman of the council told state newspaper China Daily.

The National Council for Social Security Funds managed around 1.9 trillion yuan ($285 billion USD) as of the end of 2015.

It comes just days after one of China’s biggest state banks, China Merchants Bank, revealed they were working with finance innovation firm R3 to build the ledger-style technology used for large-scale blockchain operations. The bank has plans to work with 60 international financial organizations to build out the system as part of a global consortium.

China has had a terse relationship with blockchain technologies in the past, though they are warming up to the idea of officially sanctioned blockchain solutions. In 2013 the central government released an official statement banning banks and payment companies from dealing in Bitcoin, the most well known blockchain currency. Bitcoin mining for personal gain has continued to flourish in China however, fueling innovation in related technologies.

Early this year the government revealed they were investigating digital currencies, opening up the possibility for a state-backed cryptocurrency, and giving the green flag to government finance groups to explore the possibilities. It appears the National Council for Social Security is the first significant government-backed institution to take advantage of the technology.

Didi Uber Deal Under Investigation By Chinese Antitrust Regulators

Cate Cadell — Sun, 04 Sep 2016 04:32:49 +0000

It’s one of the biggest tech deals in China’s history, and now it’s being investigated by the country’s antitrust authorities.

China’s commence ministry has launched an investigation into Didi Chuxing’s milestone acquisition of Uber, because the Chinese ride-hailing company failed to declare the transaction.

The recent deal bring’s Didi’s total value to approximately $36 billion USD, however they failed to declare the deal to antitrust authorities because their revenue is below the threshold required for a review, the Wall Street Journal first reported.

It highlights the challenging regulatory space that tech companies occupy. Like Uber, Didi has been engaged in an aggressive campaign to increase their market share by massively subsidizing ride prices, so much so that neither company has turned a profit.

The tactic proved successful for Didi which eventually outpaced Uber to win the market through the acquisition. The resulting company’s high valuation and low revenue pose a complex question for regulators.

It’s not the first time the ride-hailing model has attracted regulatory attention in China. Until July, ride hailing was not officially legal in the country, creating uncertainty for companies like Uber and Didi who were attracting billions from investors, including state-backed institutions.

The latest antitrust review could potentially set a precedent for assessing companies in the fast-growing on-demand sector in China, including AirBNB-style startups and food delivery startups (of which there are many).

While the Didi-Uber deal is still expected to go through, the structure of the resulting company will be scrutinized by China’s Ministry Commerce. The ministry’s antitrust unit has already held two meetings with Didi officials, according to a ministry spokesperson.

Lyft Looks To Didi, Apple, G.M. For An Exit Lane

Cate Cadell — Sun, 21 Aug 2016 05:57:05 +0000

When Uber and Didi Chuxing orchestrated their market-shifting alliance last month, it put Lyft in a very tough position.

The U.S.-based ride-hailing service that aligned themselves strongly with Didi both financially and strategically, now has to come to terms with the fact that their largest ally is now in cohorts with their largest competitor, Uber.

It’s a trying time for the U.S.’s second-biggest ride-hailing company, and Lyft is now trying to do what one might expect: shop around for a buyer.

According to sources who spoke to the New York Times, Lyft has approached Didi Chuxing in hopes of selling the company, as well as high-profile Didi investor Apple. The company has also been in discussions with General Motors, Google, Amazon and even Uber itself, the same people said.

The acquisition of Uber’s China operations by Didi Chuxing effectively flipped the ride-hailing market upside down overnight. Before, the competitive pressure point lay between Uber and Didi, along with their network of loosely affiliated strategic partners, including Lyft, India’s Ola Cabs and Singapore’s Grab.

In the wake of Uber and Didi’s armistice, the weight of competition has shifted to the market between Uber’s global operations and the number of independent hailing services that now find themselves on the periphery of the empire, including Lyft.

It’s still not clear what the future of Lyft and Didi’s relationship will look like. With Uber and Didi retaining separate apps in the China market for now, Lyft still acts as Didi’s trans-pacific partner, with Didi users able to hail Lyft cars in the U.S. through the Chinese app and vice versa.

Prospects for the U.S. company are tightening. Lyft has neither the stashed funds or investor prospects to even consider taking on the Uber-Didi alliance, meaning their easiest bet is to broker a sale with one of their own strategic investors, which includes G.M. and Didi.

Lyft is reportedly working with Silicon Valley-based banking firm Qatalyst Partners to manage the sale, and as of January is valued at $5.5 billion USD.

Tencent Doubles Down On Workplace Tech With Teambition Investment

Cate Cadell — Sun, 21 Aug 2016 05:55:56 +0000

Tencent made a huge bet on the enterprise market with the launch of WeChat enterprise this year, hoping to tap the large number of businesses already using the hugely-popular message platform for work.

According to the company’s latest earnings report, WeChat enterprise has over 20 million registered users, and they’re now doubling down on productivity tools with a new investment in workflow startup, Teambition.

Shanghai-based Teambition sealed an undisclosed amount of funding from the tech giant as part of a B+ funding round, following a 12 million USD series B in September last year.

Both companies have remained tight-lipped on the investment, though in an interview with Technode in May last year Teambition CEO Junyuan Qi said the company had already begun working with paying customers abroad in Australia and Japan.

He also pitched the company as a local replacement for several western a SaaS services including Trello and Dropbox. “Since China doesn’t have those products, we decided poise ourselves as a one-stop-shop for providing all of them,” said Mr. Qi.

Tencent has been aggressively investing in startups that could potentially be integrated into the WeChat ecosystem, including productivity, entertainment and payments services. Lat week they also invested in fitness app KEEP, which has synergies with Tencent’s own WeChat-enabled fitness tracking services.

Teambition’s previous investors include Gobi Partners, IDG, Northern Light Venture Capital and Vangoo Capital Partners.

Nokia Is Bringing Their OZO 360 Camera To China – With A $15K Price Cut

Cate Cadell — Sun, 21 Aug 2016 05:55:37 +0000

The OZO 360 degree camera from Nokia is arguably the best in its class, but for the world’s most enthusiastic VR market, China, it’s been out of reach, selling only in Europe in the U.S. – until now.

Nokia is planning to sell the device through a partnership with Chinese internet LeEco, and it’s getting a new price to match its new market.

The company has slashed the camera’s price tag by a quarter globally, bringing the cost of the camera down to $45,000 USD just six months after it launched in Europe and the U.S. for $60,000 USD.

OZO, which claims to be the world’s first “professional” VR camera, is a teardrop-shaped device that holds eight 2K cameras, capturing spherical video and surround sound for immersive VR experiences.

Nokia will partner with LeVR, the VR division of LeEco, to distribute the camera. LeEco, often dubbed the ‘Netflix of China’, has diversified heavily in the past two years, investing in everything from entertainment to autonomous cars. The company took their first public steps into the VR market in December with the launch of their first headset, the LeVR Cool 1. Currently the headset is only compatible with LeEco phones.

For Nokia, tapping the Chinese market is an important step. The country’s enthusiasm for VR has surpassed other markets, with top internet companies and device manufacturers scrambling to give consumers their first VR experience. It’s an enthusiasm that’s matched on the consumer side too, as low-cost smartphone-enabled headsets flood the market, and VR immersion experiences, such as gaming arcades, gather steam in mainland China.

It’s a country that remains incredibly price sensitive however, which could factor into Nokia’s decision to slash the price of the OZO by 25 percent. According to Nokia, the price cut and LeVR partnership in the Chinese market will “increase the availability of OZO and make the camera available to a broader range of professional content producers.”

Tencent Overtook Alibaba This Week To Become Asia’s Most Valuable Tech Company

Cate Cadell — Sun, 21 Aug 2016 05:49:33 +0000

As of Thursday, Tencent’s market cap exceeded $246 billion USD, overtaking Alibaba’s market cap of $242 billion USD.

The switch reflected strong gains made by the social and gaming giant over the past quarter, driven by a handful of new investments including Clash of Clans game developer Supercell. It also points to a poignant truth about China’s consumer culture, and where the power lies – Tencent owns the country’s most valuable marketing tool, a social networking site with over 800 million users.

To be sure, Tencent’s triumph over Alibaba is not a definitive one. The two company’s stock prices faltered together in late 2015, and steadily resurged in unison during the first half of 2016. In September last year Alibaba’s stock dipped heavily enough to cede the title of Asia’s largest tech company to Tencent briefly, before retaking the lead.

The reasons for both Ali and Tencent’s upswing in 2016 are intertwined. Alibaba has managed to contradict expectations that the country’s retail market would suffer amid flatlining global growth, while Tencent has managed to channel the same sources of disposable wealth through their social platform with obvious benefits.

While the two companies have toed and froed, it’s important to note that Tencent’s market cap has outweighed Alibaba’s modestly but consistently in 2016, a role that was reversed in 2015.

Baidu Sues Tencent, Sohu For Defamation Over ‘Toxic’ Food Allegations

Cate Cadell — Sun, 21 Aug 2016 05:48:22 +0000

As the war between China’s many food delivery startups continues to wage, even the slightest PR snafu can cause a serious setback, which is why China’s largest search engine is now suing Tencent and Sohu.

Baidu has submitted a defamation lawsuit against the two companies in reaction to a series of articles that claim Baidu’s food delivery unit, Baidu Waimai, sourced deliveries from unhygienic restaurants.

The two internet companies aided in publishing a combined 16 articles that Baidu has taken issue with.

The search company says a public account called ‘CEO来信’ on Tencent’s WeChat platform accused restaurants using Baidu Waimai of serving “toxic” meals and washing their vegetables in toilets. A public account called ‘互联资讯’ on Sohu’s platform published articles claiming Waimai restaurants were using expired foods.

In a public notice posted on the website of Beijing’s Haidian District Court, Baidu says the claims are “seriously inaccurate” and have tarnished the company’s image.

Baidu is seeking damages and court fees amounting to 500,000 yuan (over $75,136 USD), as well as a written public apology for the articles. They are also asking that the public accounts behind the articles be suspended, and the social accounts attached to the reports be handed over to Baidu.

Chinese Airlines Will Soon Let You Use Wi-Fi On Your Phone

Cate Cadell — Mon, 15 Aug 2016 01:23:10 +0000

Before taking off in China, airline passengers are treated to a lengthy country-specific legal warning stating that using mobile phones (among other offenses) could lead to detainment under the country’s laws. That might soon change however, as regulators seek to amend laws that prohibit the use of mobile phones on airlines, paving the way for in-flight Wi-Fi.

The rules banning mobile phones on fights will be relaxed by the end of the year or by early 2017, according to the director of the air transportation division at the Civil Aviation Administration of China, Zhu Tao, who spoke to Bloomberg.

Global laws regarding personal electronic devices (PEDs) on planes were significantly relaxed beginning in 2013, when the U.S. FAA removed restrictions for airlines who could prove devices were safe during all flight phases. The EU soon followed and airlines all over the world, including Asia, have since begun providing in-flight Wi-Fi and internet-enabled shopping experiences.

Some 50 Chinese airlines will soon join the fold. While mobile phones and other devices equipped with radio signals are currently banned on flights, other electronic devices, including tablets, are already permitted during certain flight phases.

The country’s airlines have been prepping for the shift for over a year. In June last year three major airlines, China Eastern Airlines, China Southern Airlines and Air China were approved for in-flight Wi-Fi services, launching limited use for approved devices. The legalization of mobile phones on these flights will pave the way for these airlines to offer a more comprehensive range of e-commerce services and other internet services.

China has the world’s most mobile internet population, with over 650 million people accessing internet using mobile devices as of the mid-2016. It’s also a market with a strong commerce sector. Market leaders Alibaba and JD.com have confounded analysts with continued growth, despite a flattening economy. Additionally, Chinese tourists are some world’s most cashed-up travelers, spending $215 billion USD abroad last year – all factors that combine to make in-flight internet services a potentially very profitable business for China’s airlines.

In June last year China Eastern Airlines, which is based out of Shanghai, began the process of installing Wi-Fi services in some 70 airplanes, a process that could continue up until 2017, the company said at the time.

Alibaba Beats Expectations With 59% Growth

Cate Cadell — Fri, 12 Aug 2016 01:32:33 +0000

Alibaba has reported a 59 percent surge in revenue during their first quarter fiscal earnings, posting the biggest increase since the e-commerce titan listed in 2014.

The company recorded 32.2 billion yuan ($4.8 billion USD) in revenue, outstripping estimates of around $4.5 billion.

Mobile monetization rates also surpassed desktop for the first time ever, with mobile GMV accounting for 75% of Alibaba’s total GMV, up 119 percent over last year. While the change is in line with the shifting ratios of desktop to mobile in China, it also poses a huge challenge for the company, which needs to take into account the smaller ad spaces for mobile devices.

Alibaba’s cloud unit, Alibaba Cloud, also saw healthy growth, taking in 1.2 billion yuan ($187 million USD), up 156 percent from the same period last year. This week Alibaba unveiled plans to target overseas companies with their cloud services, they also sealed a strategic partnership with Taiwanese electronics company HTC to cooperate on VR-related cloud services.

The positive growth figures are a win for the company, which is currently facing an SEC probe into their accounting practices. The company’s stock stumbled briefly in May when the investigation was revealed, which is looking into how the giant reports data from their annual ‘Singles Day’ sales event, often used by the company as an indicator of retail health.

NextVR Lands $80M To Tackle Asia

Cate Cadell — Wed, 10 Aug 2016 03:14:19 +0000

NextVR, the leading producer of live VR broadcast solutions, has sealed an $80 million USD B series led by a slew of Chinese investors, as they seek to market their VR broadcasts to Asian viewers.

New investors include China Assets Holdings Ltd., CITIC Guoan Information Industry Co., CMC Holdings Ltd., Netease Inc., Founder H Fund Co. and VMS Investment Group Ltd.

Softbank Corp., the Japanese investment powerhouse and early Alibaba-backer, has also joined the latest round. The $20 million USD investment from CITIC was revealed last month and is part of the current round.

In an interview with the Wall Street Journal, NextVR’s Executive Chairman Brad Allen said that China’s enthusiasm for VR currently surpasses the U.S., and that Chinese consumers view the technology as the next major computing platform.

“Having the support of Asia’s biggest players provides us with significant resources for creating and distributing both local and international content in China, Korea, and Japan,” said Mr. Allen in a release.

NextVR works with a range of broadcast partners to produce VR experiences of live events. Their previous projects include the Kentucky Derby, The U.S. Open, and the Daytona 500, as well as sealing a five year contract with Fox Sports for coverage of various other events. The company also streams NBA games, a franchise that attracts more regular viewers in China than the U.S.

All investors in the U.S.-based VR company’s A round also joined for the B series, including Formation Group, Comcast Ventures and Time Warner Investments. The latest injection brings their total funding to $116 million USD.

Alibaba’s Cloud Unit Partners With HTC To Accelerate VR Ventures

Cate Cadell — Wed, 10 Aug 2016 01:34:50 +0000

Alibaba has been trying to propel China’s love affair with online shopping into virtual reality, and now they’re enlisted one of Asia’s top VR hardware makers to help them do it.

HTC, the Taiwan-based device maker, announced a strategic partnership with Alibaba’s cloud division, Alibaba Cloud, yesterday. Under the partnership, the companies will work on building a VR cloud ecosystem.

“The companies will focus on developing breakthrough innovative solutions to tackle bandwidth allocation, data transmission and data processing needs in areas such as VR video production and VR broadcasting,” said HTC in a statement.

HTC has been working in partnership with Valve to develop room-scale virtual reality products, which include hand-held devices and motion-sensor tracking.

Alibaba debuted their latest foray into virtual reality e-commerce recently at the offline shopping event Taobao Maker Festival. During a trial run of their ‘Buy+ ” program, users perused items in 72 shops using VR headsets stationed at the event. Both HTC Vive and Samsung Gear headsets were used during the event.

Alibaba also has a vested interest in sealing VR partnerships for their entertainment business. Alibaba Pictures, the company’s entertainment unit, has been aggressively expanding into new film and cinema projects, while Youku Tudou, the online video streaming service fully acquired by Alibaba earlier this year, has also revealed plans to produce 360-degree content.

The company launched their own in-house VR research lab in March. At the time, they claimed to have already completed 3D modeling for “hundreds” of products in cooperation with Youku Tudou, Alibaba Pictures and Alibaba Music.

Customers at Alibaba’s Taobao Maker Festival last week testing out the Buy+ program using Samsung Gear VR.

Update: This story was updated to reflect the fact that Alibaba used both HTC Vive and Samsung Gear headsets during the Taobao Maker Festival.

Correction (8/10/2016 23:14): This story was updated to correct a mistake. Alibaba’s cloud computing division is called Alibaba Cloud, not Aliyun.

Chinese Companies Are Competing To Stage The Most Dancing Robots

Cate Cadell — Tue, 09 Aug 2016 01:49:33 +0000

China is investing a lot of capital into robotics, and one side effect is a flood of companies working on bipedal entertainment robots. It’s now impossible to walk through a tech show in Beijing without seeing a handful of the two-legged bots krumping and somersaulting their way into the hearts of consumers.

It’s also spawned a trend of mass robot performances, where the the gadgets are programmed to take part in flash mob-style dance routines. While small scale performances have been held at expos and marketing events for some time, the mass performances went viral when CCTV staged a break dance featuring 540 bipedal robots during their Spring Festival Gala, a hugely popular annual event televised countrywide during Chinese New Years.

The event was not only visually spectacular, but also gave the company behind the robots, UBTECH Robotics Corp., a serious marketing bump. The robots taking part were the ‘Apha 1S’ models, a programable bipedal robot designed purely for entertainment purposes. To cap off the event in a truly tech-tacular fashion, drones dumped glitter over the bots during the performance’s finale.

The dance put UBTECH Robotics Corp. in the Guinness Book of World Records for the ‘most robots dancing simultaneously,’ but it was a record the would only hold for four months.

Last week, Qingdao-based robotic company Ever Win Company Ltd. bested the record by almost doubling the number of dancing robots to 1,007. During the annual Qingdao Beer Festival in Shandong the company staged the performance using their ‘QRC-2’ model bipedal robots, which stand at 43.8cm tall.

To clinch the record, the bots had to dance simultaneously for a full minute. A handful of the dancers sadly toppled over or didn’t perform, but a majority completed the total routine, allowing the company to take the title.

Despite a lull in China’s tech funding environment, robotics companies continue to produce bots for a variety of purposes, including entertainment. While the market for bipedal entertainment robots seems rather slim, a handful of other robotic devices designed for early education purposes are attracting much more attention from consumers. Chinese companies are also rapidly buying foreign manufacturing assets that feature robotics.

Video may require a VPN for mainland China viewers.

Guinness World Records adjudicator Angela Wu holds a robot in Qingdao

Qualcomm Has Sealed Licensing Deals With Smartphone Underdogs Oppo & Vivo

Cate Cadell — Tue, 09 Aug 2016 00:22:43 +0000

Qualcomm has sealed a licensing deal with China’s third biggest smartphone vendor, Vivo, as the chip giant smoothes over a rough few years in the Chinese market with steady gains.

Vivo is licensed to use Qualcomm’s technology in their 3G and 4G phones, the chipmaker said on Monday.

It comes just a week after Qualcomm sealed a similar deal with OPPO, which is also owned by Vivo’s parent company BKK Electronics.

The two brands have accelerated through China’s smartphone rankings in 2016, entering the top five local smartphone vendors and surpassing cult favorite Xiaomi. Along with OnePlus, which is also marketed by BKK Electronics, they now make up over 30 percent of phones shipped to the Chinese market.

According to research firm IDC, Vivo and Oppo’s market share grew 124 percent and 153 percent respectively in the year ending in March 2016, while Apple and Samsung’s share dropped in the same period.

Both vendors have a strong presence outside of China’s largest cities, which gives them leverage against premium vendors who market to China’s rapidly saturating first-tier markets.

The deal also marks a new milestone of progress for Qualcomm, which is steadily regaining momentum in the Chinese market following years of uncertainty. The U.S. chipmaker surprised analysts with an unexpected bump revenue bump in last month’s earnings, driven by Chinese chip demand.

Qualcomm makes over half of their total revenue from their chip licensing business, though they have struggled to ink deals with China’s largest smartphone vendors in the past. The company was subject to a year-long anti-trust investigation which ended in Qualcomm forking out a $975 million USD fine in early 2015.

They also payed out a $7.5 million USD fine in March this year after an investigation by the U.S. securities and exchange commission released a report that accused the company of bribing Chinese officials with gifts and employment offers.

With their regulatory issues settled and renewed progress on Chinese licensing deals, the company is hoping for a much brighter future in the world’s largest smartphone market.

During last month’s earnings call Qualcomm CEO Steve Mollenkopf said they were optimistic about further deals, and were in active discussion with remaining OEMS.

Australia’s Biggest Startup Hub Is Launching A China Office: Q&A With CEO Murray Hurps

Cate Cadell — Mon, 08 Aug 2016 09:09:22 +0000

Australia is in the midst of a renewed innovation drive, with a handful of heavyweight startups beginning to crop up, but according to Murray Hurps, CEO of the country’s largest startup hub Fishburners, Australia’s startups still aren’t very good at talking about themselves overseas.

Fishburners CEO Murray Hurps

“Australians are terrible at talking about what we do, we’re very humble,” says Mr. Hurps. “But we’ve got a great environment [for startups].”

It’s something he hopes to solve with the launch of a new startup hub in Shanghai later this month. The nonprofit wants to bridge the knowledge gap between Australian startups and the Chinese market, starting with a 50-seat coworking space.

Fishburners founder Peter Davidson moved to China three years ago, and will help launch the Shanghai office. Since the organization’s launch five years ago, they have worked with over 620 Australian startups, including taxi app goCatch and online crowdsourcing platform DesignCrowd.

We caught up with Fishburners CEO Murray Hurps to learn a bit more about the Australian startup scene and what Fishburners is hoping to do in China:

What’s changed about Australia’s startup scene since Fishburners was founded five years ago?

5 years ago there were some things happening in Sydney but they certainly weren’t working together and aggregating together in the way you see now. If you put a large number of people with large opportunities in a space together then the natural incentive is for them to collaborate and realize those opportunities.

Do you directly fund startups?

For Fishburners to do what it does, we have to not do a lot of things. To be an environment where [startups] are exposed to a maximum number of opportunities, we don’t want to be providing those opportunities ourselves. We don’t want to run accelerators and compete with other accelerators. We’d rather welcome all of those people doing good things in a non-preferential way. The maximum surface area for luck is what we want to provide.

Why did you choose Shanghai for your first base?

There’s a lot going on in China, and because of the size you end up with specialization accross cities. Shanghai is obviously not the right location for a lot of startups, but as a first step this was the location we selected because it offered the highest potential to a broad number of startups. We also have partners within that ecosystem as well and that has been a helpful thing. Startups going to Shanghai [with Fishburners] may not end up staying in Shanghai, but they can be part of the Fishburners community then figure out what they need to and go to work in the right location for them.

The Shanghai office of Fishburners will launch later this month

Which entrepreneurs will be taking advantage of the new space in Shanghai?

Stay tuned for that announcement. We’ve had a few go over as part of The Next Unicorn TV show. I don’t want to send companies overseas. I’d very much like for Australian startups to have something to offer those markets and have access to those markets, and also provide a really convenient opportunity for anyone who would like to work with the largest community in Australia.

What challenges do Australian startups face entering the Chinese market?

I think it’s understanding the opportunities. The strong areas in Australia at the moment – in term of number of startups addressing them, are big data, IoT, health, education and fintech. They make up 10-12% of startups in Fishburners, but also outside Fishburners [in Australia] according to Startup Muster, which is the biggest survey of startups in Australia. You look at those projects and a lot of them are so applicable to China. For example a smart city initiative in China could benefit from a whole host of technologies developed here and vice versa. Communicating the challenges of China is the biggest problem in allowing them to be solved by people around the world, not just Australia.

Also Australians are terrible at talking about what we do, we’re very humble and there’s a tall poppy syndrome in Australia where anyone who is successful doesn’t want to boast about it. But we’ve got a great environment, we have a huge amount of capital for investment, we’ve got a stable business environment, we’ve got a wonderful education system, we’ve got access to markets nearby that are enormous, we’ve got entrepreneurial tolerance and increasing enthusiasm. Combine all those pieces and you have a great place to incorporate, as well as address a whole bunch of markets that are nearby

Following Uber’s recent China exit, there’s a lot of discussion about what it takes to be a truly successful startup in the Chinese market. What do you think is that crucial element foreign startups need to succeed here?

[Uber] is a fantastic example. It illustrates the need for a local partner. To find someone with experience in that particular market with a reputation that is locally trustworthy and can help open doors for you is easily the most important thing a startup can have entering the market.

Are Australian startups attracting Chinese VC money at the moment?

We’ve run a lot of events where we have tried to connect people and we’re doing more of those to expose people to opportunities without pushing them in any sort of direction. In terms of Chinese investment, we haven’t seem much currently.We’ve had a lot of people come down [to Australia] and say ‘we’d like to pursue something’, but it hasn’t happened, and I think opportunities have been missed as a result. I think making it easier to understand what is happening in Australia is what is really needed to make that happen. Startups still have to get on the plane, go over there and show why it’s worth their attention.

Where do you see the Fishburners and your Chinese operations in five years?

There’s a lot we have to understand that we don’t understand yet. Starting with 50 desks and expanding over time is a great way to start. By 2020 we want to allow over 1000 highly-scalable Australian startups to be created in Fishburner spaces. You couldn’t do that if they are just addressing Australian markets. At some point they have to get on a plane, go over and understand opportunities outside our nice little country here, and this is part of that puzzle piece. Hopefully we can allow Chinese customers and investors to benefit from our startups as well.

Sure, The Straddling Bus Is Not Feasible – But Does It Really Matter?

Cate Cadell — Sun, 07 Aug 2016 23:03:22 +0000

Images of the ‘straddling bus’ from China went viral this week, and it’s not hard to see why – it’s a Willy Wonka-style solution to the country’s monumental traffic issues. Unfortunately it’s about as real as Wonka too.

State-backed-media have come out to poke holes in the project in a no-holds-barred attack that discredits everything from the bus’ design to the engineer’s primary school education.

According to the People’s Daily, authorities in Qinghuangdao city had no idea the public bus test was being conducted, and the trial was recorded as an “internal test.” State-backed Global Times added to the project’s PR woes with an editorial smearing the project’s investor, and heralding it the next major P2P investment scam.

It’s clear the bus is not a road-ready solution, but who honestly thought it was?

The concept by TEB Technology was designed to bypass urban vehicles by traveling above them like an enormous, runaway section of tunnel with 1200 people aboard. The max height of any car driving under the bus is 2.1 meters, which would pose issues for the cardboard-stacked trucks and bedazzled stretch hummers periodically found on Chinese roads.

The August 2 test ran at a low speed in a straight line for just 300 meters, hardly enough to test the viability of the project. It’s clear that initial prototype wasn’t built to quell doubts about turning vehicles, obscured stop signs, and damage caused by road weight, but can any investor in this project really say they were duped when every second Weibo onlooker can point out engineering flaws? (Is that an apartment block-style air conditioning unit in the inner left wheel?)

The straddling bus was first pitched at an expo in 2010, when it drew novel interest but no material investment. Six years later it reappeared, virtually unchanged – at a tech expo in Beijing this May. It attracted worldwide media coverage and inventor Song Youzhou launched a plan to reveal the bus before the end of the year.

And sure, the straddling bus is not feasible, but it really doesn’t matter. It highlights what is both ridiculous and incredible about China’s culture of innovation: if you want to dream up a magic sky bus and manufacture it from the workbench to public test in three months, that can be arranged.

A short look through China’s vehicular history reveals a number of outlandish concepts, from the Chery @Ant centipede-like connecting car trains revealed at the 2012 Beijing Auto Show to eHang’s actually-possible flying taxi drone, proving that amid China’s innovation fever, you can apparently still afford to build first, design later.

“We haven’t done anything wrong at all,” maintained Song Youzhou in an interview with Sixth Tone. “The latest tests show that the bus design is entirely possible.”

Title Image: A miniature mockup of the straddling bus presented by TEB Technology at the 2016 Beijing Hi-Tech Expo in May.

Xiaomi Has Revealed Their VR Headset

Cate Cadell — Sun, 07 Aug 2016 10:10:59 +0000

China is obsessed with VR, and Xiaomi is not about to be left behind.

The hardware giant revealed their first VR product on Thursday: a smartphone-enabled headset called Mi VR. True to Xiaomi style, the gadget is ridiculously cheap at 1 yuan a piece (about $0.20), but before you go scrounging through your spare change jar, it’s unfortunately only open to some several thousand pre-registered beta testers who were savvy enough to sign up last week.

It’s an exciting (and predictable) step from the device maker, which is rapidly diversifying their product line away from the smartphones amid sluggish sales.

Smartphone VR headsets are a fairly straight forward venture, with many existing brands and knock-offs already available on the market at penny-pinching prices. Xiaomi’s Mi VR offers a handful of nifty features that could put them ahead of other products if their final retail price is enticing enough.

While we weren’t lucky enough to get our hands on one of the beta sets, Xiaomi says the Mi VR features a lycra coating for comfort, which addresses an issue that consumers have identified with cardboard and hard plastic models. It also uses a zipper to hold in the smartphone, instead of velcro or a snap latch. The company says they will also release the headset in several bold prints and colors.

So do you need a Xiaomi phone to use it? It appears not. The headset can be used with any phone between 4.7 and 5.7 inches, a Xiaomi representative confirmed to Technode. This means that the device will be compatible with a range of devices, including iPhones.

The company previously announced they would be partnering with Google’s Daydream VR platform, though Daydream-supported devices will come at a later date.

Samsung’s Gear VR, which is widely considered to be the leader in mobile VR experiences, is only compatible with Samsung phones. Xiaomi has stamped down entry barriers – primarily price, to build out their ecosystem.

It will be interesting to see whether Xiaomi releases the headsets in a bundling deal similar to Samsung. The Korean smartphone giant sharply discounted their headsets when bought alongside a flagship phone, incentivizing buyers to join the Samsung ecosystem.

A Xiaomi representative told Technode that “The focus for now is to have [the] Mi VR app be an open VR platform allowing partners to join us, so we can create a more extensive library.”

Online Education Firm VIPKID Secures $100M From Yunfeng, Sequoia Capital

Cate Cadell — Thu, 04 Aug 2016 08:31:11 +0000

Education platform VIPKID has announced $100 million USD in series C funding from existing investor Sequoia Capital and new investor Yunfeng Capital, the VC firm co-founded by Alibaba founder Jack Ma.

It comes at a time when China’s education online education market is attracting healthy inflows of capital despite an increasingly risk-averse VC market.

VIPKID is a platform that offers one-on-one language instruction for the Chinese market, targeting children between the ages of five and twelve. The company says they will funnel the new capital into curriculum and product development, content, customer service and improving teaching standards.

“The rapid spread of broadband in China has made it possible to bring one-to-one English and broader curriculum learning directly to families throughout the country at an affordable price level,” said VIPKID CEO Cindy Mi in a statement.

China’s elementary and high school education system puts intense pressure on parents to intervene in early learning. Acceptance to universities hinges on success in the final school exam, or ‘Gaokao’, which attracts masses of media attention annually due to the extreme pressure it places on students and their families.

It’s the same high-pressure culture that has caused extracurricular learning services – both online and offline, to thrive. One of the country’s largest online education firms, China Online Education Group (also known as 51talk) listed on the NYSE last month with positive initial gains.

VIPKID claims to currently have over 3,000 North American teachers on their platform and say they are currently growing at a rate of 1000 percent year-over-year. The company launched an “entirely new” curriculum alongside the new investment, and is now available on iOS as well as Android.

It’s by far the largest round ever secured by the firm, and brings their total funding amount to $125 million USD. Previous investors include Innovation Works, Matrix Partners, and Northern Light Venture Capital. A spokesperson for VIPKID confirmed to Technode that there will be further investors announced within this round.

LeEco Reveals Netflix Partnership

Cate Cadell — Wed, 03 Aug 2016 01:02:19 +0000

Netflix has been lingering on China’s doorstep for a long time, unable to navigate the minefield of local content regulation laws, but that could be about to change.

LeEco, one of China’s largest internet firms, hinted on Tuesday they are planning “very significant cooperation” with the company, to be announced this year. Liu Hong, co-founder and vice chairman of LeEco revealed the partnership at an event in Beijing.

LeEco has set a September deadline for a U.S. event after a two month delay, where they are expected to outline their strategy for North America. The Chinese company recently purchased a site in Santa Clara for their U.S. headquarters.

The news of the Netflix cooperation comes a week after LeEco announced the $2 billion USD purchase of U.S. consumer electronics company, Vizio. LeEco says the company’s “steady install base of users” was one of the factors driving the purchase, something Netflix can also offer.

Despite being frequently dubbed the Netflix of China, LeEco is a much more complex company (and would probably reject the comparison). LeEco has expanded heavily outside their core streaming service into smartphones, smart TVs and even connected cars.

China’s tough regulatory environment has deterred Netflix from a direct entry, even as they expand heavily into other Asian countries. In September the U.S. entertainment company announced a wide scale Asia launch, which included South Korea, Singapore, Hong Kong and Taiwan, following an earlier launch in Japan. One of the issues facing Netflix is that TV shows in China are required to release entire seasons to Chinese censors prior to their air date. Shows deemed inappropriately sexual or in contradiction with the government ideals are either edited or banned.

A partnership with LeEco could give Netflix the channel into the country they’ve been looking for. Netflix was rumored to be in cooperation Alibaba in the past, but the Chinese e-commerce giant has since launched their own subscription streaming service, Tmall Box Office (TBO).

U.S. companies have been under increasing pressure to seal high-level partnerships to enter the Chinese market, rather than attempting a solo expansion. Uber, which set a new benchmark for U.S. companies seeking to localize in China, finally threw in the towel and sold their entire China operation to Chinese competitor Didi Chuxing.

The War Is Over – Didi Is Buying Uber’s China Operations

Cate Cadell — Mon, 01 Aug 2016 05:30:45 +0000

Didi Chuxing, the leading ride-hailing service in China, has reached a deal to acquire Uber’s China operations in a merger that could be worth up to $35 billion USD.

Didi will take over Uber’s China business, while the U.S. company will become Didi’s largest shareholder. The news comes days after Chinese regulators announced the upcoming legalization of ride-hailing services in the country.

According to sources who spoke to Bloomberg, investors in Uber China, which includes search giant Baidu, will take a 20 percent stake in the newly merged entity, and Didi will make a $1 billion USD investment in Uber Global at a $68 billion USD valuation to kick off the partnership. Uber will maintain management of their app in China for the time being.

[Update: Didi confirmed the acquisition in a statement, noting that Uber Global will take a 5.89 percent stake in the newly merged entity with a preferred equity interest worth 17.7 percent economic interest in Didi. Chinese shareholders, including Baidu, will receive a 2.3 percent stake in Didi.

Uber founder Travis Kalanick will join the board of Didi while Didi founder Cheng Wei will join the board of Uber.]

The deal marks the end of a grueling rivalry between the two services, which saw both companies shell out billions in marketing and subsidies. Uber also set a new benchmark for U.S. tech companies with their China entry, opening an entity financially distinct from their parent company, Uber Global.

The landmark consolidation brings together a host of the country’s top investors, with Baidu now joining Alibaba and Tencent, who oversaw investments in Kuaidi Dache and Didi Dache respectively before the two ride services merged in early 2015.

State-backed Chinese insurance giant China Life had already invested in both companies, investing $200 million in Uber in 2015 before injecting $600 million in Didi last month, raising suspicion that the ride sharing companies were in merger discussions.

According to an internal blog post by Uber CEO Travis Kalanick on the subject of the deal, “Uber and Didi Chuxing are investing billions of dollars in China and both companies have yet to turn a profit there. Getting to profitability is the only way to build a sustainable business.”

Didi Chuxing, Uber Are Now Legal In China

Cate Cadell — Sat, 30 Jul 2016 23:52:34 +0000

For those living in China, using ride-hailing apps Didi Chuxing and Uber has become a part of daily life. Which is why it might surprise some to hear they were illegal until a few days ago.

The services finally left the legal grey zone on Thursday, when a group of regulators announced new laws which will make ride-hailing legal under as of November 1st.

Until now, the services could’ve been shut down without notice, despite a fielding billions of dollars in investment, some from the Chinese government’s sovereign investment fund itself. While a blanket ban would’ve been unlikely, the government did use the legal distinction to periodically arrest drivers and stop the companies speaking at industry events.

The legalization comes with some draw backs for the companies. When the law comes into effect later this year drivers will have to have a recent car, three years’ driving experience, no criminal record and a license from a local taxi-regulator. It’s a comparatively soft set of regulations compared to earlier proposals, but it still raises the entry barrier for new drivers.

Both Uber and Didi Chuxing have poured billions into their China expansion efforts. Didi Chuxing sealed a $1 billion USD investment from U.S. tech giant Apple in May, following several large rounds from state and private investors. Uber’s China operation has committed over $1 billion USD a year to the market, engaging in an aggressive subsidies war with Didi.

Xiaomi Unveils A MacBook Air – No, Sorry, It’s A Mi Notebook Air

Cate Cadell — Thu, 28 Jul 2016 02:28:00 +0000

Xiaomi has revealed their first laptop. Like the mobile handsets that rocketed the brand to cult status, it’s cheap, simple and looks a hell of a lot like an Apple.

The Mi Notebook Air (yes – Air), makes no secret of which consumers they are looking to target, those with not enough coin to buy a MacBook Air. The laptop comes in two sizes, 13.3-inch and 12.5-inch with a Windows OS and a very familiar metal shell with full-HD display.

All credit to Xiaomi, the company has capitalized on Apple’s brand-power in China to make budget products for the local Chinese market that generally exceed expectations in terms of performance, and there’s no law against that.

The use of Windows is also a smart choice for the company. In Beijing’s western districts there’s a number of merchants who specialize in replacing Apple operating systems for Chinese consumers who prefer a Windows experience with the status of an Apple device.

The laptop will retail for 3599 yuan (about $540 USD), for the smaller model and 4,999 ($750 USD). Like its Apple counterpart, the Mi Notebook Air features a full-sized keyboard with backlit keys. It comes in silver as well as gold, which has also proved a popular color option for the MacBook Air in China.

The Mi Notebook Air will go on sale in China on August 2, and like other Xiaomi products will likely sell through periodic flash sales. For those outside China, it’s not worth holding your breath. Xiaomi has only released a handful of products to western markets, and they are usually the ones that pose no issues in terms of patent suits and marketing costs.

Here are some of the more detailed Mi Notebook Air specs released by Xiaomi:

Size: 306.9 mm x 210.9 mm x 14.8 mm (13.3-inch)

Weight: 1.28kg

Price: $750 USD ($540 for smaller model)

Processor: Intel Core i5 Processor (Intel Core M3 for smaller model)

RAM: 8GB DDR4 (4GB for smaller model)

Drive: 256GB PCIe SSD (128GB for smaller model)

USB: 2 USB slots plus type-C USB charging

LeEco Acquires Vizio For $2B Amid U.S. Expansion

Cate Cadell — Thu, 28 Jul 2016 01:34:44 +0000

China’s LeEco has agreed to acquire U.S. consumer electronics company, Vizio, for $2 billion USD, the Chinese company said on Tuesday. It comes as the Chinese internet company is seeking to expand its product line and ecosystem into the U.S.

According to a release from LeEco, Vizio offers a “steady install base of users and a brand that is both popular and successfully distributed throughout major North American retail channels.

Under the deal LeEco will operate Vizio as a subsidiary, taking responsibility for the U.S. company’s hardware business as well as their smart TV ecosystem. LeEco will own 49 percent of Vizio’s data business, Inscape, with the remaining 51 percent held by Vizio founder William Wang.

It follows much speculation that lead up to the deal, which began negotiations after Vizio abandoned plans for an IPO last year amid shaky stock market conditions.

Vizio founder and CEO William Wang admitted that he had “mixed feelings” about letting go of the 14-year-old company. Vizio, which has previously boasted a majority American staff, has built a brand on their homegrown image.

LeEco CEO Jia Yueting has been a staunch critic of traditional manufacturers and tech companies, including Apple, whose individual app ecosystem he has dubbed “outdated.”

LeEco has planned a product launch in the U.S. in September, which is expected to be their mobile handsets. The launch was delayed by two months.

Alibaba Pictures Launches $300M Investment Fund Amid Sluggish Box Office Figures

Cate Cadell — Tue, 26 Jul 2016 00:21:41 +0000

Alibaba Pictures, the Alibaba-backed entertainment firm, announced the launch of a $300 million USD investment fund on Monday, aimed at building assets across the television and film production chain.

The Hainan Pictures Entertainment Industry Investment Fund will be managed by China-based Wuhu Gopher Asset Management, a division of Noah Holdings Ltd.

In 2013 Gopher Asset Management participated in a similar 1 billion yuan ($150 million USD) fund on behalf of Bona Film Group, together with Alibaba stakeholder Sequoia Capital.

Bona, which held a 30 percent stake in the aforementioned fund, has since delisted, with Alibaba taking on an approximate 9 percent stake in the film company.

According to a filing made to the Hong Kong Stock Exchange on Monday, Alibaba Pictures’ latest fund will “invest in companies along the value chain of the movie and TV entertainment industry.”

Alibaba Pictures have been investing aggressively in building out assets across the film and television production line. The firm recently purchased a stake in cinema management company Guangdong Dadi Cinema Construction, marking their first foray into physical cinemas. The entertainment giant also recently announced they are currently working on 17 film titles and two television programs.

The fund’s public launch comes just days after Alibaba Pictures warned of increased losses due to the unexpected cost of marketing their newly rebranded ticketing platform, Tao Piao Piao. Corresponding with a significant downturn in China’s box office sales, Alibaba Pictures expects to post up to $58 million USD in losses.

Huawei Says They Can Hang On To Growth As Operating Margins Shrink

Cate Cadell — Mon, 25 Jul 2016 22:58:36 +0000

Huawei, the world’s third largest smartphone brand, posted a 40 percent increase in first quarter sales revenue when they reported their earnings on Monday. The company says they expect to maintain their current growth trajectory throughout the year.

Huawei recorded $245.5 billion yuan ($37 billion USD) in revenue during the first six months of 2016, claiming they have managed to beat the sluggish market with upgraded smartphones and strong network gear sales.

Despite hearty growth figures, Huawei’s operating margin dipped to 12 percent from 18 percent the same time last year. The privately held company diversified their smartphone stock heavily in late 2015 and early 2016, pushing into the premium space occupied by Apple and Samsung.

A saturated Chinese market, particularly in first-tier cities, has slowed smartphone sales and put local vendors under pressure. Huawei has managed to come out on top of competing local brands, including Xiaomi, by aggressively marketing their high-end models abroad while maintaining a significant share of the local budget smartphone market.

In line with previous rhetoric, Huawei CEO Richard Yu said the company’s ultimate aim is to displace market leaders Apple and Samsung to become the world’s largest smartphone vendor. The company will release the results of individual business groups on Tuesday.

Flowing on from an aggressive local campaign, Huawei has been exerting its influence more openly abroad. In recent months the company has engaged in a tit-for-tat legal battle with Samsung over patent infringements. In May, Huawei brought a patent suit against the Korean vendor in both U.S. and Chinese courts. Samsung has since responded with a similar suit in China.

Alibaba’s Movie Ticketing Platform Is Costing Much More Than They Thought

Cate Cadell — Sun, 24 Jul 2016 08:30:48 +0000

Alibaba Pictures, the Alibaba-backed entertainment firm, has warned investors that the unit foresees greater losses than expected, and their ticketing unit is to blame.

Tao Piao Piao, which until recently was called Taobao Dianying, has overshot its marketing budget amid unexpectedly sluggish box office sales in China.

According to a filing made to the Hong Kong stock exchange on Friday, the firm now expects net losses in the six months ending in June to be up to 450 million yuan (around $60 million USD).

“Such expenses were mainly incurred from attracting movie-goers to [use] Tao Piao Piao’s online ticketing platform,” said the filing. The ticketing subsidiary recently raised a 1.7 billion yuan A series, bring its valuation to over $2 billion USD.

Even without a stagnating box office, Tao Piao Piao’s marketing push would undoubtedly be very expensive in line with other heavily subsidized on-demand services in China. The subsidiary also underwent a costly restructuring and rebranding following their latest funding round.

Unfortunately for the Alibaba-backed firm, China’s appetite for blockbusters took a sharp dive toward the middle of the year after starting off with a bang.

Chinese ticket sales saw a unexpected 49 percent boom in 2015, which continued into the first quarter of 2016 before contracting heavily to leave second quarter figures almost 21 percent lower than the same period last year.

Losses aside, Tao Piao Piao still makes up a crucial link in Alibaba’s rapidly expanding entertainment empire. The platform drives consumers to Ali’s other offerings, primarily Taobao, through movie merchandise, as well as employing Alibaba’s own payment system, Alipay.

The service also forms a crucial support for any physical cinema presence Alibaba Pictures has in the future. The company recently purchased a 4.8 percent stake in nationwide cinema chain Guangdong Dadi Cinema Construction, which owns 313 cinemas over 150 cities.

Taobao Has An Image Problem, Which Is Why They Are Tapping Millenials

Cate Cadell — Sun, 24 Jul 2016 01:39:25 +0000

Taobao, the leading Chinese online marketplace backed by Alibaba, has attracted some serious flames over the products on their platform. The site’s penchant for grey market goods has ignited global rows over the company’s responsibility for everything from fake handbags to counterfeits drugs.

Following a very public rejection from the world’s largest nonprofit anti-counterfeit organization, and a slap on the wrist from the U.S. Trade Representative in December, Alibaba has being running an all-out anti-counterfeiting campaign, and their latest weapon is millennials.

This week the company held a Taobao ‘Maker Festival’, inviting 72 millennial merchants with a focus on self-made brands. Alibaba is hoping to “shift the site’s reputation as a consumer-to-consumer sales channel to a lifestyle destination,” according to the company’s blog.

It suggests Taobao is attempting to directly attract the kind of merchant their platform categorically repelled in the past: those seeking to make money out of original items.

For that to happen, the country’s young consumers and merchants will have to first overcome the price sensitivity that has fueled Taobao’s growth – along with its fake goods problem.

According to the company, 70 percent of the platform’s 369 million monthly active users are in their 20s and 30s, with a majority accessing the site on their mobile. Alibaba and Taobao are banking on these young buyers to shell out a little extra for original brands.

The products hosted at the Taobao Maker Festival event included 3D-printed jewelry, a foldable guitar and even a bamboo bicycle, which has already become a well-known standard among the trendier Beijing crowd.

“It’s about exploring something through making it rather than buying it,” said David Wang, creator of Bamboo Bicycles Beijing in Alibaba’s blog.

While it’s undeniable that China’s growing middle class is birthing a movement of more conscientious shoppers, it remains to be seen whether a budget marketplace stalwart like Taobao is nimble enough to change course.

Image Credit: Alizila

Apple Is Finally Opening A Flagship Store In Taiwan

Cate Cadell — Sun, 24 Jul 2016 00:29:12 +0000

Taiwanese manufacturer Foxconn is synonymous with the Apple as a primary assembler of their products. Which is why it’s somewhat surprising that the country doesn’t host a flagship Apple store – until now.

Apple’s Taiwanese job site posted a series of listings on Friday, including customer support, sales and leadership positions for an upcoming Apple store.

It follows the company’s listing of a 30-year bond on the Taipei Exchange last month, which raised $1.38 billion USD.

While Asia’s appetite for Apple products has given the company a major boost over the past five years, the region has hosted relatively few flagship stores.

Japan was the first country to open a series of stores, followed by China in 2008, the same year as the Beijing Olympics. Before Taiwan, the most recent territory to gain a store was Macau, where the first Apple store opened its doors on June 25th.

Apple saw their first ever decline in iPhone sales in Q2 2016, as they struggle to come to grips with an increasingly stagnant smartphone market.

The company faced a 26 percent decline in smartphone sales for Greater China, which includes Taiwan and Hong Kong. Apple claims that the drop was largely attributable to poor sales in Hong Kong, where many Chinese mainlanders purchase their devices.

Huawei Sued Samsung. Now Samsung is Fighting Back.

Cate Cadell — Sat, 23 Jul 2016 12:52:23 +0000

The spat between Samsung and Huawei has officially come full circle.

Samsung has sued the Chinese smartphone maker for patent infringements in Beijing’s Intellectual Property Court, just two months after Huawei brought a similar patent suit against Samsung in both the U.S. and China.

The scuffle is significant in that it marks the first high-level legal dispute originating from a Chinese company against Samsung, and the Korean company is refusing to be caught off guard.

It also highlights the growing confidence of Chinese companies wishing to assert their intellectual property rights. Several top U.S. companies have encountered patent issues in the last year, including Apple, who recently lost a ruling (also in Beijing IP Court) against a virtually bankrupt smartphone vendor that claimed to own patents used in the iPhone 6.

Samsung is seeking damages from Huawei to the tune of $161 million yuan for infringements. The Korean company claims Huawei’s high-end smartphone offering, the Mate8, and their Honor brand smartphones overlap with Samsung’s patents.

In the May suit, Huawei claimed Samsung infringed on 4G technologies, operating systems and user interfaces. They did not set a dollar amount for damages, but said their dispute extends beyond China and the U.S. into the global context.

Amid slowing smartphone sales worldwide, Huawei has emerged as the second strongest Android offering after Samsung, sharing a position in the top three with Apple.

As financial pressures gradually squeeze out less competitive players, patents are one of the primary weapons of defense being employed by smartphone vendors. Xiaomi, who have struggled to recapture their early momentum in the Chinese market, recently purchased some 1500 patents from Microsoft for voice communications, multimedia and cloud services.

The Last VCR Maker In Japan Has Called It Quits

Cate Cadell — Sat, 23 Jul 2016 12:13:35 +0000

Nostalgics and hipsters alike are weeping today – the last ever Japanese VCR, made in China, will roll off the line at the end of this month.

Funhai Electric began making the machines seven years after the launch of the format in the 1970’s, according to Japanese media. They are now shutting down production this month due to a lack of demand and difficulty finding necessary parts.

As a world leader in TV and entertainment equipment, Japan’s total abandonment of the format is both saddening and well overdue. When Funhai Electric was selling a peak 15 million machines a year it’s unlikely they foresaw internet TV. Though it’s a credit to the format that it survived to see DVDs also dribble into obscurity.

Funhai says they sold just 750,000 units last year. In recent times they have been producing the machines in China for Sanyo.

Last year Sony announced they were halting production of Betamax, the counterpart to VHS. Both formats require a VCR player such as the one made by Funhai Electric.

So what options does a nostalgic VCR-seeker still have?

Magnavox, a subsidiary of the Philips brand for which Funhai makes products, is one of the brands of VCR player still available for bulk order on Alibaba.com at around $10 USD a piece. You could also pick up an aptly-named fake brand version called ‘Bestamax’, which is also still on sale in China.

China’s Mobile Chip Demand Boosts Qualcomm Earnings

Cate Cadell — Thu, 21 Jul 2016 00:55:34 +0000

China hasn’t always been an easy market for Qualcomm, but a bump in Chinese chip demand has given the U.S. chipmaker something to smile about.

Shares in the company jumped 7 percent in after hours trading following the release of their Q3 earnings on Wednesday, which showed unexpected gains, boosted by Chinese chip demand.

The company posted a 3.6 percent Non-GAAP revenue hike to $6.04 billion USD. Analysts had predicted a year-on-year decline from $5.8 billion to $5.58 billion.

Qualcomm CEO Steve Mollenkopf credited the rise to progress in the company’s licensing business, which makes up over 50 percent of their total revenue. During the earnings call he also noted that demand for lower-tier chip sets in China has risen unexpectedly.

The results are a relief for Qualcomm, which has suffered globally due to slowing smartphone sales. It’s also the first revenue rise in five quarters for the company.

Qualcomm has run into issues inking licensing deals in China in the past. In 2015 the company forked out $975 million USD in fines following a year long anti-trust investigation by the Chinese government. They then struggled to seal high-level licensing deals with Chinese smartphone vendors throughout the year, cutting into their bottom line.

Qualcomm asserted their licensing claims in China last month when they revealed they are suing Alibaba-backed smartphone company Meizu over patent infringements.

Mr Mollenkopf noted during the latest earning’s call that they were more optimistic about further deals, and are currently in negotiations with the remaining OEMs.

The company also reiterated their commitment to 5G technology, expecting to make significant moves in the sector between 2018-2019. Regulatory conditions have recently begun to ease in the lead up to global 5G rollouts, as countries work on opening spectrum allocations.

Alibaba, Amazon, Snapdeal Named In Indian Illegal Wildlife Trade List

Cate Cadell — Thu, 21 Jul 2016 00:02:08 +0000

Asia has an illegal wildlife trading problem, and some of the world’s largest e-commerce platforms are at the center of it.

The Indian government has released a list of 106 websites that are currently being used to trade wild animals and their body parts. It’s a comprehensive record, that covers all the top names in e-commerce, including Alibaba, Amazon, Snapdeal, eBay and even YouTube.

The list was made as part of a monitoring effort by India’s central government, who scan the sites to crackdown on illegal trading and other cybercrime.

While companies, including Alibaba and Amazon, have made overt commitments to removing accounts and cracking down on trading networks within their own systems, e-commerce sites continue to act as a tool for traders in everything from drugs to ivory.

The number of advertisements for illegal wildlife products on Chinese sites dropped sharply in 2013, as social media sites boomed: Traffic.org

Several Chinese tech companies, including Alibaba, Sina and Tencent, have signed zero-tolerance policies toward illegal wildlife trading since the Chinese government stepped up their monitoring efforts in 2012.

According to a report by advocacy group Traffic, illegal wildlife advertisements discovered on Chinese sites dropped sharply from a peak of almost 60,000 in 2012 to under 10,000 in late 2014. However the report also notes that social media platforms could now be taking a lump of the trades that were once found on e-commerce sites. WeChat, the country’s most popular social media tool, is commonly used to facilitate private sales.

Here’s a full list of the sites named by the Indian government:

Websites Named by Indian Wildlife Crime Control Bureau

quikr.com

Gumtree.com

ClickIndia.in

Olx.in

eBay.com

Adsglobe.com

pets.oodle.com

Sell.com

Click.in

Classifiedads.com

Indialist.com

Locanto.in

globalFreeClassifiedAds.com

Adpost.com

Alibaba.com

Webindia123.com

inetgiant.com

yakaz.com

pennysaverusa.com

daype.com

Adeex.com

Whereincity.com

Aliexpress.com

ocala4sale.com

claz.org

Meramaal.com

Indiagrid.com

salespider.com

domesticsale.com

Adsmantra.com

epage.com

recycler.com

classifiedclan.com

hoobly.com

freeadlists.com

adpost.com

trade.indiamart.com

usfreeads.com

usnetads.com

theturtlesource.com

parrotshandraised.com.au

backwaterreptiles.com

youtube.com

reptilesncritters.com

myaquariumclub.com

citybase.in

ricepuller.com

Amazon.com

buytigers.com

softbillsforsale.com

bolee.com

shopping.rediff.com

vastustore.com

eindiabusiness.com

netexpress.co.in

whereincity.com

BeatyourPrice.com

taxidermiemporium.com

Boostime.in

Bizmartindia.com

Worldslist.com

Postaroo.com

Freeadvertisingexchange.com

freeadscity.com

Rajb2b.com

bavun.in

wantedwants.com

Dragg.in

buysellcommunity.com

Bharatpatal

Highlandclassifieds

Ozfreeonline.com

Kugli.com

Marketplace.sfgate.com

Ablewise.com

classifiedsforfree.com

craigslist.org

domesticsale.com

freeadlists.com

geebo.com

hot-ads.com

jihoy.com

kaango.com

nareshgroup.com

loot.com

pennysaverusa.com

Snakesvenom.com

Paintbrushes.com

ashbrush.com

startortoiseuk.co.uk

tortoisesupply.com

turtlesale.com

snakesatsunset.com

market.kingsnake.com

petsmart.com

petsolutions.com

reptilecity.com

undergroundreptiles.com

firstchoicereptiles.com

faunaclassifieds.com

cornsnake.net

havocscope.com

hookbillsforsale.com

tantraveda.org

clickbd.com

snapdeal.com

Huawei Links Up With GE To Boost Productivity Tech

Cate Cadell — Wed, 20 Jul 2016 22:42:50 +0000

General Electric Co. has announced a partnership with Chinese telecoms equipment and smartphone maker Huawei to work on productivity boosting equipment and machines.

It’s part of the U.S. giant’s ambitious ‘industrial revolution’ plans, which aim to boost efficiency by integrating end-to-end intelligence an analytics with traditional machinery and robotics.

The partnership was revealed on Wednesday at an event in Shanghai, where they also announced the launch of an $11 million USD co-working space, designed to incubate startups in fields corresponding to the company’s vision.

GE forecasts $500 million USD in savings this year as part of their productivity push. The company is hoping to expand their software portfolio, according to a recent earnings call, predicting $15 billion USD in software-related revenue by 2020.

In October 2015 Huawei announced a $1 billion USD investment fund aimed at boosting innovation in both software and devices. The company also opened a developer-focussed platform named eSDK in the hope of improving efficiency.

The latest pairing between GE and Huawei could see the Chinese company adopt GE’s operating system, Predix, which is already used by a handful of state-backed companies and projects. GE will also have access to Huawei’s extensive product portfolio.

Chinese Ride-Hailing Service Accuses WeChat Of Foul Play

Cate Cadell — Sat, 16 Jul 2016 02:25:16 +0000

Baidu-backed ride-hailing service Yidao has lashed out at Tencent’s messaging service WeChat for blocking the ride service on their platform.

Founder of Yidao, Hang Zhou, penned an open letter to Tencent CEO Pony Ma on his public Weibo account this week accusing the social media platform of periodically blocking users from accessing the Yidao site through the social platform for competitive reasons.

Yidao competes directly with Tencent-backed Didi Chuxing, the country’s most popular ride-hailing service.

Users were unable to access the Yidao app from WeChat from July 13th. Following Mr. Zhou’s open letter, the ban was briefly lifted before being reinforced on July 14th. The ban appears to have been lifted again at the time of writing.

“I just do not understand why WeChat blocked the application,” he said, “Moreover, Uber and Shenzhou [UCAR] type apps have also been blocked, Didi is the only exception.”

Yidao recently introduced a feature that allows users to compare the cost of an Yidao ride with other rides.

Tencent released a public statement within hours of Mr. Zhou’s open letter saying that Yidao had been blocked by the site for asking users to share promotional material in return for cash rewards.

The scuffle highlights the fierce competition between China’s current top ride-hailing apps, which have been fighting a two-year long war of attrition fueled by subsidies and aggressive marketing campaigns.

In December WeChat blocked Uber on the platform, citing ‘malicious’ marketing tactics. The social platform has a range of rules that apply to businesses who wish to use the platform to market brands. Companies must have over 100,000 followers before they are able to advertise, and must also submit a relevant license.

WeChat claims Uber failed to submit the license, Uber fired back saying that they had the appropriate regulatory approvals but had never been asked to submit them. Baidu is a prominent investor in both Uber and Yidao.

Being blocked on WeChat is a serious blow for any company in China. The app, which boasts over 750 million total users with over 90% coverage in tier-one cities, has become a major marketing and communication tool for companies in China. The app not only supports public accounts, but a highly popular payment service, WeChat Pay.

Tencent Just Became The Top Dog In China’s Online Music Market

Cate Cadell — Thu, 14 Jul 2016 09:42:07 +0000

Tencent has upped their stake in China’s leading music streaming company, China Music Corp., giving them the controlling stake in a company worth approximately $2.7 billion USD.

China Music Corp. (CMC) oversees two of the country’s most popular streaming services, Kugou and Kuwo, which merged resources with Tencent’s QQ music following the internet giant’s initial investment.

According to sources who spoke to the Wall Street Journal, Tencent’s stake has risen to 60 percent from 16 percent. CMC will operate as a subsidiary of QQ Music, and the combined business will be valued at approximately $6 billion USD. Chinese media reports suggest the transaction was a cash purchase.

Prior to the deal, CMC had been planning an IPO in the range of $300-600 million USD, though those plans have been halted.

China has recently stepped up the regulatory requirements for online music streaming platforms, forcing the services to comply with royalty laws and crack down on piracy. The move has caused rapid consolidation in the market, favoring the companies with deeper pockets.

Tencent’s latest acquisition puts them at the helm of what is now undoubtedly the largest music streaming empire in the country. Not only do the services under the partnership boast a large combined user base, they are also well distributed. Kugou and Kuwo have a significant audience in China’s underserved third and fourth-tier cities, giving Tencent access to an up-and-coming demographic of untapped users.

Alibaba and Baidu, Tencent’s two largest contemporaries in the Chinese market, have also worked on consolidating their respective music assets over the past year. In December, Baidu announced a merger between Baidu Music and traditional music company Taihe Entertainment Group. Last year Alibaba made a series of investments under their newly-created Alibaba Music Group.

Xiaomi Launches Electric Mosquito Repellent Device

Cate Cadell — Thu, 14 Jul 2016 08:47:10 +0000

Last month, Xiaomi CEO Lei Jun set out an ambitious three-year roadmap for the company which involved transforming the company into a variety store of “about 40 kinds of electronic products.”

It appears the internet giant has come one product closer to that goal with the release of a USB electric mosquito repellent device.

The gadget is part of Xiaomi’s ‘Mijia’ (MiHome) range, which also includes water filters, air filters and a rice cooker. MiJia products are mostly unified under a single app, though unlike other devices in the range, the mosquito repellent device doesn’t appear to be an actual Iot device, rather it is just a USB-enabled accessory.

The round unit, which measures 4.6 centimeters across and retails for 29 yuan (about $4USD), heats a small chemical-infused pad that in turn emits a repellent vapor. While the method is not popular in many Western countries, a variety of electrical mat or vapor mosquito repellent devices are available in Asia, and are a common sight in Chinese hotels.

The company says the gadget can last over 28 hours on their largest power bank, and can be used with any conventional USB power source.

Xiaomi, which rocketed to cult status with their budget smartphones, runs an innovation program that essentially incubates external hardware projects that are then released under the Mi brand.

Popular recent examples include the upcoming Xiaomi drones, a smart bike, a GoPro-like action camera and their scooter range, which was the result of the company’s acquisition of Segway parent, Ninebot. Unlike these devices, the mosquito repellent accessory is a fairly straight-forward offering, and is not likely to exit the Chinese market any time soon.

IDG Capital Partners, Breyer Capital Launch $1B China Startup Fund

Cate Cadell — Thu, 14 Jul 2016 07:33:20 +0000

China’s investment environment might have chilled in the past six months, but that hasn’t stopped IDG Capital Partners and Breyer Capital from teaming up to raise one of the largest VC funds in the country.

The $1 billion USD IDG Capital Fund III will target growth stage startups in technology, healthcare, media and energy, according to a joint announcement. The fund is seeking to invest in local startups as well as startups entering the Chinese market.

“China continues to represent tremendous long-term investment opportunities,” said veteran investor and Breyer Capital founder Jim Breyer. “Particularly in companies applying machine-learning and artificial intelligence to revolutionize a multitude of industries.”

IDG, which entered China in 1993, is an early investor in some of China’s biggest internet companies, including Tencent, Baidu, Xiaomi and Sohu. Breyer Capital is a well known Silicon Valley-based firm that counts Facebook among its early investments.

“I have invested in China with the IDG team for over a decade and have been continually impressed by the caliber, creativity and drive of Chinese entrepreneurs,” said Mr. Breyer in the joint release.

Mr. Breyer’s old firm, Accel Partners, has previously partnered with IDG, though the latest fund is their biggest collaboration to date.

IDG Capital Fund III will focus on more mature startups, paralleling the current risk averse trends in China’s investment ecosystem. While funds for early-stage companies have contracted, the country’s later-stage startups have continued to attract multi-billion USD rounds at engorged valuations.

Tencent-Backed Electric Car Startup Sets 2020 Production Deadline

Cate Cadell — Wed, 13 Jul 2016 09:08:54 +0000

Tencent-backed Future Mobility Co. has officially joined the club of Chinese auto concepts with a production deadline of 2020.

The auto startup, which is also counts Foxconn and Chinese car dealer Harmony New Energy as investors, plans to sell highly automated, electric cars globally within the next four-and-a-half years, the Wall Street Journal reported on Tuesday.

As a country of early adopters with an appetite for luxury vehicles, China has produced a number of electric, autonomous and connected car concepts, all hoping to reach production at an accelerated rate.

Baidu, China’s largest search engine, has committed to a 2018 release date for their autonomous concept, with a 2020 deadline for production and distribution. Likewise, LeEco, in partnership with Faraday Future, has set a similar 2020 deadline for their electric vehicle, claiming to have shortened the development stage by two years.

Future Mobility Co., which is just four months old, will close a funding round “soon,” according to CEO Carsten Breitfeld. He told the Wall Street Journal that the company is seeking to compete with major luxury car dealers Audi, Mercedes and BMW, which make up the lion’s share of China’s luxury vehicle market.

Mr. Breitfeld formerly worked on the development team for BMW’s i8 plug-in sports car.

Future Mobility Co. isn’t Tencent’s only bet in the autos industry. The social and gaming giant also invested in NextEV Inc., which has also attracted funding from Sequoia Capital and Joy Capital.

China’s PC Shipments Sink As U.S. Vendors Receive Bump

Cate Cadell — Tue, 12 Jul 2016 08:16:39 +0000

U.S.-based PC vendors HP Inc. and Dell recorded a pleasant bump in sales this quarter, as North American PC shipments increased for the first time since 2014, according to a report released by Gartner on Monday.

Unfortunately Chinese PC giant Lenovo had less to celebrate, recording a 2.2 percent decline in shipments over the past year. The company managed to maintain their position as the top vendor globally, with a market share over 20 percent, but sluggish sales in the Asia Pacific region stopped the company from achieving positive growth.

The preliminary results showed that total PC sales declined by 6.4 percent in China, and 6.3 percent in the Asia Pacific. “Business confidence is weak in China, and this affects consumer buying patterns,” said the report.

Globally sales dipped by 5.2 percent, with North American vendors pulling ahead of their Asian counterparts. “All regions except North America experienced a PC shipment decline,” said Mikako Kitagawa, a principal analyst at Gartner.

“One of the ongoing problems in the PC market has been the price hike in selected regions due to the weakening local currency against the U.S. dollar.”

IDC, who also released preliminary data on PC shipments on Monday, predicted a milder global decline in sales, at 4.5 percent.

“The PC market continues to struggle as we wait for replacements to accelerate, along with some return of spending from phones, tablets, and other IT,” noted Worldwide PC Trackers & Forecasting VP Loren Loverde in the report.

Chinese Ad Malware Infects 10M Android Phones

Cate Cadell — Sat, 09 Jul 2016 10:29:51 +0000

When it comes to wide-scale malware attacks, China’s consumers are rarely out of the firing line.

Up to 10 million Android devices have been infected with a malware that amasses fake clicks for adverts, according to a report by security firm Check Point. Most of the devices are in China, with large numbers also detected in India, the Philippines and Indonesia.

The malware, dubbed ‘HummingBad’ by Check Point, originated from a group of Chinese cyber criminals that work alongside ad firm Yingmob. The security firm first discovered instances of the malware in February 2016. According to their data cases have spiked in the past month.

Check Point estimates that the group behind the malware are raking in up to $300,000 USD per month in fraudulent ad revenue. “[Proving] cyber criminals can easily become financially self-sufficient.”

HummingBad is a type of malware that can hide undetected within an operating system, allowing the creators to remotely control a device. The group has used the malware to install fake versions of apps, or click on ads to make them seem more popular.

Lookout, a separate security firm which first discovered the same malware in November and has labelled it “Shedun,” says the malware can masquerade as popular apps suck as Facebook and Twitter. In a blog post they attribute the recent 600% rise in cases to “the authors building new functionality or distributing the malware in new ways.”

They also note that a the malware is not removed with a factory reset, and can defeat uninstall attempts.

Huawei Files Complaint Against T-Mobile Amid Widening Patent Campaign

Cate Cadell — Fri, 08 Jul 2016 02:15:20 +0000

Huawei has extended the scope of their patent-backed battle, now targeting U.S. telecommunications company T-Mobile. It comes as the Chinese smartphone vendor recently filed a second filing against Korean electronics maker Samsung over a patent dispute.

Huawei filed a complaint against T-Mobile on Tuesday to the U.S. District Court for the Eastern District of Texas, claiming the later company had infringed on a wireless network patent held by the Chinese company.

A handful of Chinese smartphone makers, including Huawei, Lenovo and ZTE have been rapidly acquiring and developing pools of patents in an attempt to challenge leading global companies as the Chinese vendors seek to expand.

In May, Huawei began legal action against Samsung int he U.S., claiming the Korean company had violated 11 patents pertaining to mobile technology. Yesterday it was revealed that Huawei filed a second patent suit against Samsung to a court in Shenzhen, where the Chinese company is based.

Huawei has been aggressively building out their high-end mobile business, looking to take a bigger bite out of the U.S. and European markets as local Chinese demand stagnates. The company has amassed over 50,000 patents as of the start of 2016.

Alibaba Has Launched A $22K Connected Car

Cate Cadell — Thu, 07 Jul 2016 08:30:35 +0000

Alibaba has officially launched their first connected car in collaboration with Chinese automaker SAIC. It’s the fruit of a two-year long relationship backed by a joint investment of $160 million USD.

The RX5, a sport utility vehicle, is now available for pre-order through Tmall at 148,800 yuan ($22,000 USD), with the earliest models expected to ship in August, according to a blog post by the internet giant.

The car’s system is built on Alibaba’s on YunOS operating system, which has already been rolled out on other connected devices including smartphones and tablets.

Alibaba joins a slew of Chinese connected car projects that are seeking to dominate the realm of connected cars. Tencent, the social and gaming giant behind WeChat, released their own custom vehicle OS in September 2015, while LeEco released their auto operating system in January 2015. Like the aforementioned operating systems, Alibaba plans to open the platform to third-party developers.

“We believe in the future that 80 percent of the car’s functionality won’t be related to transportation,” said Alibaba CEO Jack Ma at a launch event in Hangzhou.

His comments echo LeEco CEO Jia Yueting who recently said he considers the car a “smart mobile device on four wheels.” Similarly, Baidu CEO Robin Li forecasted an “aggressive” spend on autos as “the next major computing platform,” during the company’s last earnings call.

According to Alibaba, the operating system will serve as a platform to connect the company’s existing e-commerce infrastructure, including Alipay. The car will also feature “360-degree detachable cameras for recording trips—and selfies.”

Alibaba Acquires Major Chinese App Store Wandoujia

Cate Cadell — Tue, 05 Jul 2016 11:52:47 +0000

E-commerce giant Alibaba has agreed to acquire one of China’s largest app stores, Wandoujia, according to a social media post made by the app store’s founder on Tuesday.

“We officially announce that [Wandoujia] and Alibaba Group signed a formal merger agreement. The Wandoujia distribution business will be integrated into the mobile business group of Alibaba.” said Wang Junyu, founder and CEO of Wandoujia.

Wandoujia shares some core early investors with Alibaba, including Softbank and Goldman Sachs. Prior to the deal with Alibaba, Softbank was the biggest shareholder in the app store, whose name literally means “Snap Pea.”

Wandoujia the seventh largest app store in China, according to a ranking released in 2015 by Chinese games and marketing research company Newzoo. While the store held only about 6% of the market at the time of the ranking, it represents the largest app store in China not affiliated with a major mobile brand or tech industry giant.

“Wandoujia’s distribution business will continue to remain independent in the future, and become the strongest Android application distribution business under the Alibaba Group brand name,” said Mr Wang.

Technode reached out to Alibaba to confirm the details of the deal but did not receive a response at the time of publishing. We will update with any further information.

According to an Alibaba statement cited by state media outlet China Daily, the deal is worth around $200 million USD. If the number is accurate, it’s a significant devaluation for the app store, which was valued at $1 billion USD during their previous round of funding led by Softbank in 2014.

With Google Play still banned in China, the country has a fragmented market of app stores, including major players backed by Tencent, Baidu, Xiaomi, Huawei and Qihoo 360.

Technode has reached out to Alibaba but they have not responded at the time of publishing, we will update with any further information.

Image Credit: Wandoujia

Australian Fintech Startup Airwallex Lands $3M Led By Gobi Partners

Cate Cadell — Tue, 05 Jul 2016 08:58:19 +0000

Australian-Hong Kong fintech startup, Airwallex, has landed a $3 million USD Pre-A funding round led by Gobi Partners, a Chinese investment fund manager that oversees Alibaba’s Hong Kong innovation fund, among other projects.

The round was also joined by Gravity VC, Huashan Capital One and Billy Tam, who is the CEO of Chinese payment company PAYECO, Airwallex announced on Tuesday.

The peer-to-peer startup, which is currently still in beta mode, says they are able to mitigate bank margins and currency inflation risks by allowing businesses to issue and invoices in their preferred currency at a mid-market rate using the company’s algorithmic engine.

“Previously it was only big banks and financial institutions that had access to foreign exchange deals at the interbank rate,” said Airwallex co-founder and CEO Jack Zhang, who previously worked at Australian Banks ANZ and NAB in foreign exchange services.

“But we’ve built a direct connection that gives any business or individual access to this exclusive mid-market rate with an algorithmic risk management engine in real time.”

According to Mr. Zhang, the service is designed to disrupt the payment providers including Paypal and Western Union. Honk Kong has fast become a hub for fintech startups, however the market is much more regulated and saturated on the Chinese mainland, where companies like PayPal have largely exited.

A spokesperson for Airwallex confirmed to Technode that the investment is not part of the Gobi-managed Alibaba fund based in Hong Kong. Gobi Partners was founded in Shanghai, but has since expanded heavily into Southeast Asia with bases in Singapore and Kuala Lumpur.

Image: Jack Zhang, CEO and co-founder of AirWallex

Baidu To Test Driverless Cars On Tourists In China’s ‘Venice’

Cate Cadell — Tue, 05 Jul 2016 05:50:26 +0000

Just two months after Baidu announced the launch of a autonomous driving zone in China’s Anhui province, the search giant is now planning to test their cars on tourists in one of the country’s most popular travel destinations, according to state media.

Baidu is reportedly developing a deal with Wuzhen tourism Co., a travel agency in Wuzhen, which is famed for its quaint historic houses built atop a network of canals. The popular tourist destination is sometimes dubbed the ‘Venice of China.’

Wang Jin, the head of Baidu’s autonomous driving division, told Xinhua News that they are currently working with the local tourist agency to develop possible routes, as well as settling details including costs and the number of vehicles. The plan has not yet been finalized and a launch date has not been set, according to he report.

Baidu unveiled the autonomous car at the World Internet Conference in Wuzhen last year, before completing a series of tests on the outskirts of Beijing. In March the company announced they would soon begin testing the vehicles in the U.S., where they have a dedicated AI research base.

Wuzhen is approximately 100 kilometers southwest of Shanghai in Zhejiang province, which neighbors Anhui province, where Baidu announced an official testing ground for the autonomous cars in Wuhu city earlier this year. Baidu has said previously that they intend to launch a total of ten testing locations in China throughout 2016.

The company has said publicly that they intend to have their cars on the road within the next five years, in a challenge to U.S. tech giant Google, which is currently testing autonomous models on public roads.

Technode reached out to Baidu to confirm the details of the project and we will update with any further information.

It’s Now Illegal To Cite Social Media As A News Source In China

Cate Cadell — Tue, 05 Jul 2016 01:53:20 +0000

China is renewing their crusade on internet rumors, officially banning online sites from citing social media as a news source.

The Cyberspace Administration of China (CAC) released a statement late on Sunday stating that it is “forbidden” to use social media as a source for online news without direct approval from the government.

“All websites should bear the key responsibility to further streamline the course of reporting and publishing of news,” the statement said, “and set up a sound internal monitoring mechanism among all mobile news portals Weibo or WeChat [China’s top two social media sites].”

It’s not the first time the CAC has sought to crack down on the dissemination of “rumors” through social media. The latest degree renews the regulator’s authority and signals a potential crackdown.

China’s Tightening Grip On Internet Content

The announcement comes just days after China appointed a new head of the CAC, which is the country’s top cyberspace regulatory body. Outgoing head Lu Wei will be replaced by deputy Xu Lin, who previously served as the head of Shanghai’s propaganda department.

China has long exercised tough restrictions over internet content, which includes bans on popular western media sites such as Facebook, Youtube and Twitter. A handful of the country’s internet regulatory bodies recently banded together in an effort to purge the country’s internet of content considered unsavory or illegal by the government. As a result, almost a dozen of the country’s top file-sharing services were eliminated, including those backed by heavyweights Alibaba, Baidu, Tencent and Huawei.

China has also tightened the reigns on foreign content in the country. In April regulators banned Apple’s newly-launched iBooks and iTunes Movies services. In the same month a partnership between Alibaba and Disney to stream content was similarly halted by regulators.

Is Xiaomi Pivoting Away From Smartphones?

Cate Cadell — Tue, 28 Jun 2016 22:31:07 +0000

Xiaomi CEO Lei Jun wanted to make one thing clear when he spoke at the Summer Davos event in Tianjin on Monday: “Xiaomi was never meant to be just a smartphone vendor.”

The company, which rocketed to fame through mega-sales of budget smartphones, is now stepping back from its revenue-driving product, amid a stagnating smartphone market and increased competition form other local vendors, including Huawei.

Xiaomi has long maintained that they are selling an ‘ecosystem’ rather than hardware. On Monday Lei Jun hinted at what the future Xiaomi could look like, and it’s not a smartphone vendor.

“We are aiming to offer consumers a wide range of products at affordable prices,” he said. “We need about 40 kinds of electronic products to attract consumers to our online shopping platform and offline retail stores.”

It represents a major pivot in Xiaomi’s strategy. Not only did Lei Jun downplay the future of the company’s smartphone business, he also committed to a definitive offline strategy, something the company is famed for avoiding. During Xiaomi’s meteoric rise between 2012 and 2014, they became well-known for their frenzied online flash sales, which would sell out almost immediately.

The company also utilized multiple rounds of ‘crowdfunding’ as a promotional tool, boosting their online strategy. At the time Lei Jun himself was dubbed the ‘Monkey King’, humorously known for making his monkey subjects act crazy during mass sale events.

Two years later the smartphone market in first tier cities has slumped, and players such as Vivo and Oppo, who have a strong offline presence in China’s untapped smaller cities, are beginning to pull ahead.

In the vision Lei Jun laid out on Monday, Xiaomi will roll out around 1000 experience stores in the next three to four years. He likened the future Xiaomi to Muji, a popular minimalist Japanese variety store selling everything from stationery and kitchenware to clothing. The variety store analogy suggests that the Xiaomi of 2020 could very well marginalize the role of the smartphone. Xiaomi is working with around 50 companies currently, about 30 of which are still in stealth mode.

Lei Jun also noted that he “knew clearly that it would take 15 years for Xiaomi to go public, because the company’s business model is too complicated,” suggesting that the company is making room for some serious changes before planning a listing. Xiaomi was founded in 2010, which means we could be waiting another nine years for an IPO.

Uber China Wants To Make Bank On Your First 90 Seconds In The Car

Cate Cadell — Tue, 28 Jun 2016 21:53:59 +0000

When hailing a ride, Uber users in China keep the app open for an average of 90 seconds once they get in the car, according to the company.

A minute and a half doesn’t seem like much, but in the word of mobile content it’s very valuable. Which is why Uber is hoping to make serious bank on that minute and a half.

In May, the company first announced their UberLIFE initiative for China, which involves a curated mesh of content including recommended cultural, sporting and dining options based on collected travel data.

Uber China VP and General Manager of Central China reiterated that commitment at TechCrunch Shanghai on Monday, which was co-hosted by Technode, saying that the company wants to be a service “understand the lives” of their users, not just their riding habits.

It’s just one of the latest initiatives the company is trialling as part of an aggressive attempt to maintain customers while attempting to lower subsidies. However while the company has launched several new ride-related services in China, UberLIFE represents their first foray into a much more risky area: content. As U.S. tech companies Apple, Google and Linkedin know all too well, even the most innocent content curation can attract the ire of the Chinese government.

Uber is backed by Baidu in China, the country’s leading search engine, but even they have come under fire from the government recently over content issues. Regulators recently released a ruling requiring Baidu to clearly identify ads on their platforms.

For now, Uber’s goal is to just keep users in their app during that first 90 seconds, and possibly longer. The company implied the recommendations within the app would be driven by data collected on where consumers were going when using the app, though the potential for advertising is very obvious.

It’s worth noting that in taxi services in Beijing, riders can read a similar, physical lifestyle and events magazine that is often offered in the backseat pocket of taxis. Popular examples include 慢步, which is like a localized in-flight magazine for Beijing, so UberLIFE could be picking up on an existing behavior in some cities.

‘China’s AirBNB’ Tujia Acquires Rival Mayi

Cate Cadell — Fri, 24 Jun 2016 11:04:48 +0000

Tujia.com, which is often dubbed the AirBNB of China, has completed a total acquisition of younger rival Mayi.com, announced Tujia on Thursday.

Neither company has released details on how much the deal was worth, or how Mayi will be restructured under Tujia.

One interesting side-effect of the deal is that 58.com, the country’s biggest classifieds platform, will now own a partial stake in Tujia. 58.com previously held a controlling stake in Mayi.com.

58.com has gone on an investment rampage since their 2013 IPO. The company invested 1.7 billion USD in 14 companies within 18 months of their listing, including a $412 million USD stake in leading autos platform Ganji.com and the $267 million USD acquisition of major real estate listing platform Anjuke.

Tencent owns a 25 percent stake in 58.com. Tujia also counts Ctrip, one of China’s leading travel platforms, among their core investors, as well as Homeaway.com, the U.S. vacation rental platform.

It’s the latest in a continuing spate of consolidations among Chinese tech startups, particularly in the on-demand and O2O sectors. Sluggish economic growth and a more risk-averse investment environment has seen companies come under pressure to consolidate their position in the market.

Unlike the country’s ride-hailing sector, which has largely devolved into a battle between Uber and Didi Chuxing, China still has a number of competitive players in the short-term rental market, meaning that further consolidations could be on the horizon.

Tesla Eyes Shanghai For $9 Billion Production Hub

Cate Cadell — Tue, 21 Jun 2016 10:58:31 +0000

Shanghai could be the production hub for a $9 billion USD Tesla hub, according to sources who spoke to Bloomberg.

A company owned by the Shanghai government, Jinqiao Group, has reportedly signed a non-binding memorandum of understanding with the U.S.-based electric vehicle maker, said the source.

The deal would involve an investment of 30 billion yuan ($4.5 billion USD) from both Tesla and Jinqiao, totaling $9 billion USD. A majority of Jinqiao’s investment would be in securing the land for the facility, according to the report.

Jinqiao’s listed entity, Shanghai Jinqiao Processing Zone Development Co., saw their stock jump almost 10 percent following the news, before trading was suspended.

Tesla released their Model X for distribution in China just last week. The country hasn’t been an easy market for Tesla, though it’s expected to be the largest global market for connected, autonomous and electric vehicles. Several home-grown competitors have inched into the space, including NextEV and internet company LeEco, which is backing Faraday Future.

Bloomberg’s source claims that several cities are vying to partner with Tesla on the project, including Suzhou in Jinagsu province and Hefei in Anhui province. Recently Baidu announced that they would be testing their autonomous vehicles in Anhui province, due to the varied landscapes and favorable government conditions.

Beijing Rules To Ban iPhones In Patent Spat

Cate Cadell — Mon, 20 Jun 2016 00:47:45 +0000

Apple’s meteoric success in the Chinese market has hinged on a golden rule for foreign tech firms: stick to hardware, stay away from content, and you should be fine.

That premise broke down at the end of last week, when Beijing’s Intellectual Property Office revealed a ruling against Apple in a patent case brought by little-known Chinese smartphone vendor Shenzhen Baili. The Chinese company claims the iPhone 6 and 6s infringed on a patent held for their 100C phone.

The gravity of the order is enormous, as it could potentially halt sales of the iPhone 6 and 6s in Beijing. Apple says that they have appealed to a higher court, and the phones remain on sale across China. The case was settled late last month, though the decision was only revealed at the end of last week.

It’s the latest storm cloud in an increasingly complex relationship between the U.S tech company and Chinese authorities. Beijing has recently being coaxing foreign tech firms to extend their strategic cooperation in China, singling Apple out by name on multiple occasions. Apple CEO Tim Cook has made a series of symbolic and strategic moves to charm the country’s regulators, including numerous visits to the capital.

Apple’s Path To The Chinese Consumer Is Becoming More Complex

It’s been a tumultuous six months for Apple in China. In May, a drop in sales on the mainland contributed to the company’s first revenue decline in 13 years, as China’s purse strings tightened amid market saturation. In April the U.S company received a very public blow, when their iBooks and iTunes movie services were banned under a sweeping crackdown on foreign content by the Chinese government.

Last month the U.S. smartphone vendor laid deep roots in the market with a $1 billion USD strategic investment in Chinese Uber competitor, Didi Chuxing. The investment saw Apple join a club of investors which includes several top Chinese tech companies as well as a handful of state-backed investors, including sovereign wealth fund China investment Corporation.

According to the Wall Street Journal, the company behind Apple’s latest patent dispute, Shenzhen Baili, appears to be affiliated with better-known brand Digione, which counts Baidu as their largest investor. Baidu is also Uber’s biggest strategic partner in the Chinese market.

The latest patent roadblock shows that Apple’s passage in the Chinese market continues to be perilous, despite their deepening commitment.

Chinese Firms Are Taking Advantage Of Stronger Intellectual Property Laws

Interestingly it’s not Apple’s first brush with the law this year. In May, Beijing’s Municipal High People’s Court ruled against the U.S. smartphone maker in a bizarre case of trademark infringement. A Chinese leather goods maker called Xintong Tiandi successfully defended their claim to the ‘iPhone’ name, which they had trademarked in 2010. Apple said they would continue to pursue legal action against the company, which currently sells leather wallets and phone cases imprinted with the iPhone trademark.

It’s one in a series of cases highlighting the newfound confidence of Chinese companies, who are increasingly expressing their intellectual property rights. In May Chinese smartphone vendor Huawei filed a series of high-level patent suits against Samsung, marking their first patent dispute against the South Korean electronics maker.

Didi Chuxing Announces $7.3B Round, Here’s Who Invested In Them

Cate Cadell — Thu, 16 Jun 2016 03:41:55 +0000

Following a series of high-profile investments, Didi Chuxing, the company behind China’s top ride-hailing app, has announced the closure of their $7.3 billion USD round.

Earlier this week Didi announced a $600 million USD investment from state-backed insurance company China Life, which followed a $1 billion USD investment from Apple in May. We now have a more comprehensive overview of investors in the round, with some of the top names listed below:

Apple
China Life
Ant Financial
Tencent
Alibaba
China Merchant’s Bank
Softbank

With the exception of Apple and China Life, which is also an Uber-backer, the final list of high-profile investors doesn’t reveal any surprises as they are previous investors. Alibaba and Tencent were investors in Kuaidi and Didi respectively before they merged to make Didi Chuxing. Interestingly, this is the first investment in the ride-hailing firm by Alibaba’s finance arm Ant Financial.

The $7.3 billion USD injection is made up of $4.5 billion USD equity investment, with the remaining $2.8 billion made up of strategic financial arrangements from the round’s two significant state-backed investors. China Life committed to a long-term debt investment of 2 billion yuan (about $300 million USD), while China Merchant’s Bank agreed to become the lead arranger for a syndicated loan worth $2.5 billion USD.

The round values Didi at approximately 25 billion USD, and the company claims to have $10.5 billion USD in disposable funds now in their arsenal. This is a significant tool for the company which continues to run an extensive subsidies program in their battle against Uber in China.

Didi founder Cheng Wei said in a statement this morning that he was “inspired” by the support form the new investors. The company says they will use the proceeds of the round to upgrade their big data operations, improving user experience and exploring new business lines.

Didi Chuxing Lands $600M From China Life – An Uber Investor

Cate Cadell — Mon, 13 Jun 2016 02:31:50 +0000

Chinese insurance giant China Life Investment Holding Co. has officially joined the ranks of investors behind the country’s largest ride-hailing app and Uber’s biggest global competitor, Didi Chuxing.

The Chinese startup confirmed on Monday that they have received a $600 million USD strategic investment from the life insurer, which includes a $300 million USD equity investment and a further $305 million USD long-term debt investment.

The latest investment also brings to light an interesting twist: China Life has previously invested in Uber. In April 2015 we reported that China Life had invested about $200 million USD in the U.S. ride-hailing app.

The competition between Uber and Didi Chuxing has reached a feverish pitch on the mainland as both companies have publicly disputed each other’s market share data, as well throwing barbs over the ongoing subsidies war driving their local expansion.

It’s not the first time a investor has backed the China-ride-hailing-horse both ways. China-based investment firms Hillhouse Capital and Tiger Global Management have both invested capital in the two competing ride-hailing companies, though the scale of China Life’s dual commitment is unprecedented.

China Life’s investment is part of the same round that Apple participated in when they recently committing $1 billion USD to the ride-hailing app. The closure of the current round would value Didi Chuxing at over $25 billion USD.

China Life is now joins a list of common investors that reads like a who’s who of influential China tech investors. Didi has attracted significant investments from the country’s biggest tech firms, including Alibaba and Tencent, as well as the venture capital arm of fellow insurer Ping An.

China Life also adds to the number of state-backed investors who now have a stake in the ride-hailing company. Chinese sovereign wealth fund China Investment Corporation invested in Didi as part of a $2 billion USD round in August 2015. State-owned China Merchant’s Bank is also a backer of Didi.

This Is What China’s First Operational Drone Deliveries Look Like

Cate Cadell — Sun, 12 Jun 2016 23:03:55 +0000

Chinese e-commerce company JD.com has revealed the country’s first operational pilot program for drone deliveries, as tech firms compete to reach the country’s untapped rural consumers.

A JD spokesperson confirmed with Technode that the company is using at least two types of UAVs to deliver packages between designated distribution centers in rural areas outside of Suqian in northeast China.

The drones are capable of autonomously loading and unloading packages, and a single flight route manages up to 200 packages a day. The company uses one type of drone for longer-distance deliveries and another to carry heavier packages over short distances.

Current deliveries are up to 15kg each, says the company, which is significant given Amazon’s drone delivery trials are aimed at parcels less than five pounds (2.3kg). JD says the deliveries run over maximum distance of 20km and a top speed of 54km per hour, meaning the longest possible flight undertaken by the service is still under 20 minutes.

The company claims the service halves delivery fees to less than 0.5 RMB (7.5 US cents) per parcel. Currently the drones fly exclusively between depots before being distributed to “village promoters”, who then manage the final package deliveries.

“We have no intention of delivering directly to people’s houses,” the spokesperson told Technode. “For rural areas a lot of the time roads and things are not very good, or it’s too far and it’s just not efficient to send a truck.”

For now the service will be restricted to Jiangsu province. The company cites regulatory restrictions as the main hurdle in expanding the unmanned deliveries to other areas in China, and currently do not have a timeline to launch the service in other locations.

Lowering Logistics Costs To Tap Into China’s Rural Consumers

Drone deliveries are still very much a novel idea in urban China. The country’s overpopulated cities and localized bans on unmanned aerial vehicles make it unlikely that door-to-door drone delivery will be normalized in cities any time soon.

China’s rural areas are a very different story. Vast areas of the country are underserved by traditional infrastructure, leaving consumers cut off from the lighting-quick e-commerce services that buyers in urban centres have become accustomed to.

E-commerce companies, like JD.com and Alibaba, currently work through a series of distribution depots, which can sometimes even act as e-commerce community centers, equipped with tools for customers to both buy and pick up deliveries.

Amid sluggish economic growth, China’s tech firms have renewed efforts to tap the country’s rural consumers, which primarily involves cutting logistics costs. JD revealed their plans to launch drone flights earlier this year. Last month the company also sealed a partnership with robotics company Siasun Robot and Automation Co. Ltd. to build smart robotics systems for their warehouses, including autonomous vehicles.

Alibaba, which operates the country’s most popular e-commerce site, Taobao, has also invested heavily in building out their logistics network. In March this year Alibaba’s logistics affiliate, Cainiao, reportedly raised funds in the vicinity of $1.5 billion USD at a valuation of around $7.7 billion USD.

The same month Alibaba also revealed an ambitious partnership with the China Communist Youth league, a state-sanctioned youth group, to train a million school-leavers in the fundamentals of e-commerce with a view to boost business in China’s rural and regional areas.

Image Credit: Xinhua.com

Alibaba’s Finance Arm Invests $35M In Data Firm

Cate Cadell — Sun, 12 Jun 2016 02:46:22 +0000

Alibaba’s finance arm, Ant Financial, has further expanded their fintech empire with a new investment in Chinese finance data provider Shanghai Suntime Information Technology (朝阳永续).

According to a source who spoke to Reuters news agency, the Alibaba affiliate invested $35 million USD for one fifth of the data company. The injection makes Ant Financial the second largest stakeholder in the company, behind company chairman Liao Bing.

Shanghai Suntime provides a range of finance-related services, including a high-level wealth management platform for tracking the performance of hedge funds and other large asset groups. The company is also performs data analysis and earnings forecast services for listed companies.

Ant Financial, which oversees a range of finance and insurance services, including China’s most popular online payment service Alipay, raised $4.5 billion USD in April to fuel additional investments. The company is currently valued at around $60 billion USD.

Last week Alibaba CEO Jack Ma said he foresees a Hong Kong listing for Ant Financial, unlike Alibaba which listed on the New York Stock Exchange in late 2014.

Baidu Leads $300 Million Investment In Auto Website Bitauto

Cate Cadell — Tue, 07 Jun 2016 02:59:07 +0000

Baidu has led a $300 million USD investment in one of China’s biggest auto trading and marketing platforms, BitAuto, revealed the search giant on Monday. It’s the latest company to join Baidu’s growing auto investment portfolio.

Baidu is joined by several previous investors in BitAuto, including internet services giant Tencent and e-commerce company JD.com. The three companies each purchased $50 million USD worth of newly issued shares from BitAuto at $20.23 each. BitAuto listed on the NYSE in November 2010.

The new round of funding comes as China’s burgeoning tech autos market undergoes a fresh round of new strategic partnerships between ride-hailing services, online service platforms, and autonomous and electric car projects.

Baidu, which is also a strategic investor in Uber, has been building up their deep learning and AI capabilities to support their autonomous vehicle project, tipped to be revealed in 2018. Tencent is a major investor in Uber’s top China rival, Didi Chuxing, which recently secured a $1 billion USD investment from Apple as part of a larger strategic fundraising effort.

Bitauto is also an investor in ride-hailing services. The company lead a $20 million USD B series in Didi chuxing competitor Dida Pinche, which in May 2015 raised a further $100 million USD from China Renaissance Capital Investment, TBP Capital and IDG Capital Partners among others.

Bitauto CFO Andy Zhang reportedly met with Uber CEO Travis Kalanick in March last year to discuss a possible partnership between Dida Pinche and Uber. While there has been no evidence that the two have since worked together, the Baidu’s strategic investment now puts them in the same investment family.

Bitauto, which predominantly serves as a trading platform for new and used vehicles, says they have already begun leveraging Tencent and JD.com’s respective strengths in social media, big data and e-commerce.

“Through our new partnership with Baidu, we expect to leverage its leadership in mobile and desktop online search, big data and transaction services platforms for additional strategic advantages,” said William Li, CEO and Chairman of Bitauto in a statement.

Didi And Uber Can’t Agree On Who Owns What In China’s Fierce Ride-Hailing Market

Cate Cadell — Sat, 04 Jun 2016 03:30:05 +0000

Digging up the correct figures on China’s ride-hailing market can be a challenge for onlookers, though it’s apparently also a struggle for the companies themselves.

According to Liu Zhen, the Senior Vice President of Strategy at Uber’s China division, the U.S.-founded company will overtake Didi Chuxing to become China’s top provider of private-car ride hailing services within 12 months.

“Last year we were only operating in eight cities with only a 1 percent market share,” she said at a Wall Street Journal conference on Friday, noting that the company has since accelerated to take over a third of the market.

True to the fierce competition in China’s ride-hailing market, Uber’s statistics are at sharp odds with how much of the market Didi Chuxing believes they own.

Just two days earlier, President of Didi Chuxing, Jean Liu, casually announced that Didi owns almost 90 percent of the country’s private-car ride-hailing market. “They’re [Uber] actually in the industries we are in which is the private car service, where we have [an] 87 percent market share,” said Liu in a conversation with Recode’s Kara Swisher and Walt Mossberg.

Didi Chuxing originally found dominance in securing the ride-hailing market for taxis, a market it now claims to own “almost 100 percent.” Taxi services aside, the two companies compete directly in virtually every other aspect.

The confusing myriad services run by both companies in China has further muddied the distinction between which company owns what in a landscape of varied ride-hailing options. Both companies operate carpooling services alongside private car and black car services. However each company is also working on a handful of initiatives, from Didi’s foray into bus services to Uber’s latest route-oriented carpooling service.

It’s also important to note that drivers in China are not necessarily loyal to neither service, using whichever option is most busy or profitable on the day. One Didi driver told Technode that while she earned more using Uber’s service per ride, she found herself often driving Didi passengers because they were more frequent, swapping between the two apps.

The two companies also disagree on another factor that lies at the heart of a successful China campaign: their relative abilities to phase out subsidies. Both companies have relied heavily on subsidized services to expand rapidly on the mainland, and the race is now on to see which service can successfully transition into a more sustainable model.

On Friday Ms. Liu noted that UberChina will break even in China “soon”, spending 80 percent less per trip it did a year ago. In March this year Uber CEO Travis Kalanick noted that UberChina will break even within two years, and that they are spending roughly a billion USD per year in the market. Didi Chuxing claims to be profitable in 200 of the 400 cities they currently operate in, noting that less mature markets receive higher subsidies than some of the company’s more mature markets.

Both companies continue to fundraise at a breakneck speed, funneling funds into subsidies as well as technology. Recently Uber’s global operation received a $3.5 billion USD boost from a Saudi Arabia’s Public Investment fund, some of which would be spent on UberChina’s operations Liu Zhen confirmed on Friday. Last month Didi Chuxing sealed a 1 billion USD investment from U.S. tech giant Apple as part of a larger fundraising effort.

SoftBank’s Alibaba Stock Sale Tops $10 Billion

Cate Cadell — Sat, 04 Jun 2016 01:15:25 +0000

SoftBank, Alibaba’s top shareholder, said on Friday they will sell a further $1.1 billion USD worth of Alibaba shares, following an announcement on Wednesday that they would be selling upward of $7.9 billion worth of the e-commerce company’s stock.

The latest transaction brings the total value of the divested shares to $10 billion, which revises the value of the Wednesday sale to $8.9 billion.

It marks SoftBank’s first-ever sale of Alibaba stock since the company began investing in the e-commerce site back in 2000. SoftBank’s Masayoshi Son is a well known evangelist of the Alibaba cause, investing an initial $20 million 16 years ago, followed by a $60 million injection, for a stake that was valued at well over $40 billion at the time of Alibaba’s IPO.

The Japanese company says the reason for the sale is because of strong demand for Alibaba stock.

Alibaba’s shares debuted on the NYSE in 2014 at just over $93 apiece but took a beating during the Chinese stock slump beginning in mid-2015, sending their shares below $60 each. The company’s stock has rallied somewhat since February on new investments and stable sales growth, now sitting at just over $76.

Singapore sovereign wealth fund GIC and Temasek have confirmed the purchase of some of SoftBank’s divested Alibaba stock since Wednesday. Temasek is an existing investor in Alibaba.

The e-commerce company itself purchased 2 billion USD of the available stock at $74 each, which follows a $500 million buyback in February led by Alibaba Chairman Jack Ma and Vice Chairman Joe Tsai.

China Is VERY Cranky About Microsoft’s Forced Win10 Update

Cate Cadell — Sun, 29 May 2016 01:24:48 +0000

Just over a year ago Windows users in China found out that they would be getting a free upgrade to Windows 10, whether the current version they were using was pirated or not.

It was a bold play by Microsoft for the Chinese consumer market, but they may have undone a fair bit of that goodwill, as netizens on the mainland are now lashing out against forced upgrades.

Like their U.S. counterparts, Chinese users have been subject to ‘surprise’ reboots by the system, which spontaneously upgrades without giving users the option to opt out.

According to state media outlet Xinhua, netizens on microblogging site Weibo have mentioned the forced reboot issues or reposted stories on it over 1.2 million times.

Xinhua cites a source working for a Beijing PR firm who lost out a 3 million yuan deal when the update spontaneously started during the drafting of a business plan. Other commenters on Weibo claim they lost valuable design work and illustrations when their systems spontaneously rebooted.

“Microsoft is such a rogue, my computer was just rendering images and suddenly upgraded to Windows 10!… So irresponsible, how can I replace such valuable documents?….”

“Lousy Windows, I fear I lost most of the stuff on my computer when it automatically upgraded”

That old sl*t Microsoft just forced me to upgrade to Win10!!! Just Now!!! I totally did not agree!!

While a quick scan on Weibo shows a lot of venom toward the upgrade, it’s worth noting that Chinese netizens are known for their social media vitriol, and the stories by Xinhua have not been verified.

Windows, still the most wide-spread PC operating system in China, has struggled to monetize their consumer-facing systems due to rampant piracy. By offering the free upgrade, the company hopes to bring customers back into the official Windows fold.

The free upgrades will end on July 26, meaning those who manage to avoid the surprise reboots will have to pay for the new system after that date. Due to backlash both at home and abroad, Windows has since posted instructions on how to reinstall older versions of the operating system.

Secretive Alibaba-Backed Magic Leap Is Suing Its Staff… And Making Robots

Cate Cadell — Sat, 28 May 2016 23:33:31 +0000

In a rare glimpse into the secretive Alibaba-Google-backed augmented reality startup, Magic Leap, the company has filed a lawsuit against two former employees, claiming they worked on proprietary robotics technology while building a similar project outside the company for over a year.

The company claims that Gary Bradski, a senior vice president at the company “was aware of and involved in projects and plans that involved deep-learning techniques for robotics.” Bradski and another Magic Leap employee, Adrian Kaehler, allegedly began working on a new company while still employed at Magic Leap.

Magic Leap has attracted its fair share of attention, in part because of its secrecy, and also because it has so far attracted over a billion USD in investment from the likes of Alibaba and Google, valuing the company at around 4.5 billion USD.

So what do we know about them?

Up until now we already knew the company is working on a VR-style headset and imaging technology that allows users to overlay high-quality 3D imagery onto real life scenes. According to the company’s eccentric CEO, Rony Abovitz (who once dressed as an astronaut to deliver a TED talk), the technology “replicates” the field of light human experience in regular sight.

Following the lawsuit it’s clear the technology could have much more diverse applications: “Magic Leap’s Proprietary Technologies are not limited to its head-mounted virtual retinal display”, the lawsuit noted, “and extend to many different applications and devices, including, but not limited to, robotics.”

Before founding Magic Leap, Abovitz built a company specializing in medical robots called Mako, which went on to sell for $1.65 billion USD in 2013. Magic Leap is developing an optical chip using silicon photonics to bridge the gap between regular and virtual sight – it’s not difficult to see how the company’s technology could encroach on the field of robotics.

Dell Reveals Chinese Cloud Partner To Win Over Local Market

Cate Cadell — Thu, 26 May 2016 23:49:58 +0000

Dell has joined a growing number of foreign tech firms looking to extend their presence in the Chinese market through local cloud services.

The U.S. company announced the launch of a new Dell-backed cloud services company called Guizhou YottaCloud Technologies on Thursday at a big data summit in Guizhou attended by CEO Michael Dell.

Dell will offer technical and financial support to the company, which will act a vehicle to sell Dell’s cloud services to small and medium-sized businesses. The company declined to release any financial details of the arrangement.

While tensions between foreign tech firms and the Chinese government have been simmering over IP issues, hardware and cloud infrastructure are relatively uncontroversial, attracting more rigorous foreign investment.

This week Microsoft announced the launch of their second China accelerator in Shanghai, focussing on cloud computing, AI and big data. Amazon’s AWS cloud services branch launched a similar accelerator two years ago. Local tech firms are also pouring money into the hotly-contested industry. In May this year Lenovo launched a $500 million USD fund for startups in AI and cloud industries.

Dell’s latest investment is part of a strategy dubbed ‘In China, For China’ by CEO Michael Dell. In September last year the company pledged to spend $125 billion on expanding their China operations, including “closely integrat[ing] Dell China strategies with national policies.”

Huawei, Foxconn To Launch New Factory In Southwest China

Cate Cadell — Mon, 23 May 2016 01:16:00 +0000

Taiwanese manufacturer Foxconn is building a new factory in southwestern China for Huawei, according to sources who spoke to the Nikkei Asian review.

It comes as wages in eastern China and Taiwan are rising, while Huawei is seeking to lower costs for their local smartphone offerings.

According to the sources, the factory will be built in Guizhou, which is also within the home-province of Huawei CEO Ren Zhengfei.

Huawei has performed relatively well against other counterparts weathering China’s slowing smartphone market. While competitors, including Xiaomi, and looking at significant sales cuts, Huawei has managed to run a successful dual strategy of high-end international smartphones alongside budget local handsets.

In 2016 China’s smartphone market is favoring vendors with existing infrastructure in the country’s smaller cities and regional centers, where there is still a pool of untapped smartphone consumers.

Local competitors Oppo and Vivo, also clients of Foxconn, recently replaced Lenovo and Xiaomi to enter the top five local vendors with their strong third and fourth-tier city presence.

By opening a factory in southwestern China, Huawei will be able to push down manufacturing costs, keeping the prices of their budget handset offerings low.

Foxconn has been operating in Chinese provinces with lower labour costs for several years, including existing operations in Guizhou. The company has developed a network of data centers in the province dating back to 2014.

Microsoft’s Minecraft Builds Its Way Into China With Netease

Cate Cadell — Mon, 23 May 2016 00:21:05 +0000

Fans of Minecraft on the mainland have received some good news: the globally famous sandbox game is coming to China.

Gaming firm Mojang and their parent company Microsoft have announced a partnership with Chinese internet company Netease to launch a China-ready version of the PC and mobile versions of Minecraft, according to an announcement from Microsoft.

Minecraft already has a huge following in the mainland, though like many foreign gaming offerings, a lack of language support, community and payments options makes playing the game inconvenient for regular consumers.

The five-year deal with NetEase will include releasing a version of the game “tailored for the Chinese market,” which could potentially involve local payment options and Chinese-language support.

Minecraft has over 100 million users globally, gaining a huge following due to its highly-customizable nature which appeals to young children and adults alike. The game requires a one-time purchase, and can be played offline.

Minecraft creator Mojang was founded in 2011 and purchased by Microsoft in 2014 for $2.5 billion. None of the companies involved have given any indication as to when the Chinese version will launch.

The Acquisition Behind Alibaba’s Drug Safety Program Broke The Rules: HK Regulators

Cate Cadell — Thu, 19 May 2016 04:47:41 +0000

A Hong Kong regulator has pointed the finger at Alibaba for breaching acquisition rules when it purchased a healthcare company two years ago, saying the Chinese e-commerce company bought the firm on “favorable terms” due to a connection with the company’s executives.

Alibaba purchased CITIC 21 CN in 2014 for $170 million USD, which has since been restructured under Alibaba Health Information Technology Ltd.

According to a ruling from the the Takeovers and Mergers Panel of the Hong Kong Securities And Futures Commission posted on Wednesday, Alibaba also purchased another medical technology firm at the time, Hebei Huiyan Medical Technology Co., which was owned by the brother of CITIC 21 CN’s vice chairman.

The regulator has accused Alibaba of purchasing the second company under favorable conditions, meaning the same deal was not made available to other shareholders.

“[The deal] constituted a special deal with favourable conditions which were not extended to all shareholders and was a clear breach of the Takeovers Code,” said the result published by the Takeovers and Mergers Panel of the Hong Kong Securities And Futures Commission.

The acquisition of CITIC 21 CN left many onlookers scratching their heads back in 2014, when the company was operating at a significant loss. One of the primary benefits of the deal for Alibaba was CITIC 21 CN’s large pharmaceutical data base.

In July 2014 Alibaba announced they had integrated the company’s data to their own e-commerce platform, forming the backbone of their “Drug Safety Program”, which was launched to clean their e-commerce platforms of fake drugs.

Last month when the initial ruling was announced Alibaba said that they would contest the outcome.

Alibaba transferred their pharmacy business into Alibaba Health in April last year, consolidating their two biggest health investments. The health arm now oversees the sale of pharmacy products as well as other data-driven healthcare projects.

Technode Is Looking For Reporters: Job Description

Cate Cadell — Wed, 18 May 2016 09:08:14 +0000

Position: Technology Reporter

Technode, the most influential multilingual China-focussed tech blog, is looking for English language reporters to join their Beijing office.

The Role:

Requirements:

• Fluency in English

• Mandarin language skills are highly preferred

• Experience working in a newsroom or online media

• Video, podcast and graphics skills are an advantage

• A developed understanding of China’s tech sector and major players

About Technode English:

Please send a cover letter and resume to catecadell@technode.com

Alibaba’s Jack Ma Drops Speaking Commitment Over Counterfeit Row

Cate Cadell — Wed, 18 May 2016 08:38:47 +0000

Alibaba chairman Jack Ma has cancelled a speech he was scheduled to make at an event held by a global anti-counterfeiting body after the group suspended the Chinese company’s membership.

Ma was set to make the speech at the International Anti-Counterfeiting Coalition (IACC) conference in Washington, but dropped the commitment on Tuesday amid a backlash from brands and an independent investigation into the group’s management.

“We believe the IACC’s suspension of the general membership category is a step in the wrong direction and regrettable,” said an Alibaba spokesperson in an online blog.

“Given the IACC’s desire for additional time to reflect upon the viability of its general membership category, Alibaba feels it best that Jack Ma postpone his appearance,” she said.

Alibaba joined the group, which is primarily made up of brands, under a new type of ‘intermediary’ membership category.

Members including Gucci, Michael Kors and Tiffany & Co. reacted to the move by withdrawing their memberships in protest, claiming that Alibaba has not done enough to protect brands from counterfeit within China. Michael Kors legal counsel Lee Sporn even accused the IACC of giving “cover to our most dangerous and damaging adversary.”

The IACC suspended Alibaba’s membership amid the brand backlash, as well as concerns over a conflict of interest concerning the group’s chairman, who reportedly owns shares in Alibaba and maintained a close relationship with an Alibaba executive.

“Unfortunately, those who pressured the IACC on this decision prefer a confrontational approach,” said the Alibaba spokesperson. “Pitting brands against Alibaba and other industry participants in the hopes of prolonged litigation.”

In lieu of Jack Ma’s Washington speech, Alibaba president Michael Evans will address IACC at an event in Orlando on the 19th of May, said the company.

Didi Chuxing Could IPO As Soon As 2017

Cate Cadell — Mon, 16 May 2016 05:01:41 +0000

Fresh off the back of a $1 billion USD injection from Apple, Didi Chuxing is now considering a 2017 IPO, according to sources who spoke to Bloomberg.

The Chinese ride-hailing giant is eying a New York listing as soon as next year in a bid to outpace Uber, their top global competitor, said the source. Didi is in the process of sealing a $3 billion USD round which could value the company at around $26 billion USD.

Didi Chuxing “does’t have any such plan or schedule,” according to a statement from the company today referring to the IPO rumors.

An IPO could add significantly to the company’s war chest as they seek to expand globally in markets already dominated by Uber. The company’s new involvement with Apple could also fast-track the company’s U.S. entry, which previously relied on a strategic partnership with Lyft.

The potential IPO could also be the biggest China tech listing in the U.S. since one of Didi’s core backers, Alibaba, listed on the NASDAQ for $25 billion USD in late 2014. Since 2014, enthusiasm for U.S. listing among Chinese tech companies has dwindled, with several high-profile Chinese companies choosing to de-list in favor of local markets, including Qihoo 360 and Momo.

According to Bloomberg’s sources, the timing of Didi’s IPO could ultimately still depend on how their battle with Uber plays out. Uber CEO Travis Kalanick has said publicly in the past that the U.S. ride-hailing company will hold off plans for an IPO as long as possible.

Alibaba’s Movie Ticketing Business Is Now Worth Over $2 Billion

Cate Cadell — Mon, 16 May 2016 01:46:44 +0000

TaoBao Dianying, the ticketing subsidiary of Alibaba Pictures, has raised a 1.7 billion yuan ($260 million USD) A series, valuing the company at over 13.7 billion yuan ($2.09 billion USD).

According to a filing made by Hong Kong-listed Alibaba Pictures on Sunday, the CDH Investments led the round, followed by Alibaba finance affiliate Ant Financial and Chinese web portal Sina.com.

[Update: As of May 16 TaoBao Dianying has been renamed Taobao Piaopiao, and has partnered with one of China’s largest ticketing platforms, Damai.cn, according to Alibaba.]

Alibaba has been shoring up resources across the entire film production and distribution chain, capitalizing on China’s growing appetite for blockbuster movies. Last week Alibaba Pictures announced their first ever investment in physical cinemas, purchasing a 4.76 percent stake in Dadi Cinemas for 1 billion yuan ($150 million USD).

In June last year Alibaba Pictures sold $1.57 billion USD in shares to fund their expansion into new media projects.

Ticketing service Taobao Dianying is an off-shoot of Alibaba’s other on-demand services, and one of the company’s core strengths in sealing international distribution deals with U.S. production houses. Alibaba previously marketed Paramount’s Mission: Impossible – Rogue Nation through Taobao Dianying, a relationship that will extend to the Teenage Mutant Ninja Turtles and Star Trek franchises in the future.

According to Alibaba Pictures, most investors participating in Taobao Dianying’s latest round “possess not only investment capital but also industry and strategic resources which are highly valued by the Group.” Other participants in the round include Chinese film houses BONA Film, Hehe Pictures and Huace Media.

Alibaba Suspended From Top Global Anti-Counterfeit Body Following Brand Backlash

Cate Cadell — Sun, 15 May 2016 02:22:56 +0000

Alibaba has been suspended from the world’s largest nonprofit anti-counterfeit organization after a conflict of interest was discovered involving the group’s president, as well as several complaints from brands who also had memberships with the group.

Alibaba joined the International AntiCounterfeiting Coalition (IACC) last month under a new category which permits ‘intermediaries’ to join the group.

Several luxury brands, including Gucci, Michael Kors and high-end jeweler Tiffany & Co., have since withdrawn their membership in protest, claiming that Alibaba has not done enough to rid their e-commerce platforms of counterfeit products.

On Friday an Associated Press investigation revealed that President Bob Barchiesi owned shares in Alibaba, and had close ties to an executive at the Chinese company. According to the IACC board, Alibaba’s membership has now been suspended pending an investigation into the group’s “corporate governance procedures.”

The anti-counterfeit group says that while Mr. Barchiesi did disclose his conflicts, they were not communicated to the board. IACC says they are now hiring an independent investigative body to examine the issue.

In the meantime, Alibaba, along with two other companies that joined under the new membership category, Wish.com and TheRealReal, have been suspended indefinitely.

Alibaba has made aggressive strides toward ridding their platforms of counterfeit products, as they seek to attract more international brands to their platforms, including members of IACC. In a partnership dating back to 2013 Alibaba has worked with IACC to remove over 5,000 sellers as part of a wide-scale anti-counterfeiting push.

Among other measures the e-commerce giant also introduced an English-language complaints channel on their TaoBao Protect anti-fakes feedback system, as well as hiring an ex-Apple investigator to head up the company’s new anti counterfeiting push.

Despite the new measures, Alibaba still struggles to meet international standards on anti-counterfeiting. In December last year the company narrowly avoided being included on an annual blacklist by the U.S. Trade Representative (USTR) which identifies companies who do not meet international anti-counterfeit regulations. The USTR said they were “increasingly concerned” about the status of Alibaba’s enforcement programs.

Apple Invests $1 Billion In Didi Chuxing Strategic Partnership

Cate Cadell — Fri, 13 May 2016 03:39:31 +0000

Didi Chuxing, China’s biggest ride-hailing app and Uber’s top global competitor, has confirmed today a $1 billion USD investment from Apple.

The funding is part of a larger $2 billion USD investment round that the Chinese ride-hailing service is hoping to close soon, potentially valuing the company at around $25 billion USD.

Didi Chuxing, formerly known as Didi Kuaidi, has been expanding aggressively both locally and abroad in a services war with Uber. Didi currently dominates China’s ride-hailing market, and has partnered with complimentary services in other countries as part of a global strategy, including Ola Cabs in India, GrabTaxi in Singapore and Lyft in the U.S. Didi counts Chinese tech giants Alibaba and Tencent among their core strategic investors.

“The endorsement from Apple is an enormous encouragement and inspiration for our four-year-old company,” said Didi founder and CEO Cheng Wei in a statement.

“DiDi exemplifies the innovation taking place in the iOS developer community in China,” said Apple CEO Tim Cook. “We look forward to supporting them as they grow.” Tim Cook was in China last week for meetings with the Chinese government.

Neither company have divulged what the strategic partnership could potentially involve, though the pairing invites Apple into a coveted ecosystem of well-connected mainland investors. Aside from Alibaba and Tencent, the Chinese government is also an investor in Didi Chuxing via their sovereign wealth fund, China Investment Corp. Apple has maintains a relatively positive relationship with the government, though they experienced several upsets recently including a ban on Apple’s content services: iTunes Movies and iBooks.

A strategic partnership with Apple could help Didi realize their global expansion goals. Didi recently launched a dual service through their Lyft partnership, meaning Didi users traveling in the U.S. can use the local Chinese app and payments systems while Lyft users can use the U.S. app in China.

Though Didi maintains a strong lead over Uber in the Chinese market, servicing over 400 cities, they are still a long way off from competing with Uber globally.

Didi Chuxing were not available for comment at the time of publishing.

One Of China’s Biggest Music Streaming Companies Plans U.S. IPO

Cate Cadell — Thu, 12 May 2016 01:54:02 +0000

Tencent-affiliated China Music Corp. (CMC), the company behind online music services Kugou and Kuwo, is planning a U.S. listing, possibly before the end of the year.

According to sources who spoke to the Wall Street Journal, the company has hired Goldman Sachs Group and Morgan Stanley for the IPO which could range between $300-600 million USD.

In January this year Kugou and Kuwo inked a syndication deal with with QQ Music, the leading music streaming service from Tencent. Under the deal the two CMC companies gained the rights to over one billion songs exclusively distributed by QQ Music within China.

Competition between China’s largest musics streaming services has intensified in the last year. Nudged on by government regulations, the industry’s major players have cracked down on piracy on their own platforms, leading to a spate of legal battles between top players. In late 2014 Tencent sued rival Netease over alleged infringements, leading Netease to immediately countersue for similar reasons. Last year Kugou was sued by both Alibaba and Netease, before dutifully countersuing both companies.

Kugou and Kuwo hold one of the largest stakes in the Chinese online streaming industry, due mostly to their impressive presence in the country’s underserved third and fourth-tier cities.

The Chinese market has historically struggled to monetize online music. An increase in proprietary restrictions and a growing number of consumers with disposable income could transform the industry however, and leading services are racing to stake their claim in the industry early.

Alibaba consolidated a collection of their own music investments last year under Alibaba Music Group, including music streaming services Xiami and Tiantian. In December last year Baidu announced the merger of Baidu Music with traditional music company Taihe Entertainment Group.

Alibaba Now Controls Investments Across The Entire Film Production Chain

Cate Cadell — Wed, 11 May 2016 10:26:24 +0000

Alibaba has made a major purchase in cinemas, marking an important milestone as the Chinese tech giant now controls investments across the entire film industry production chain.

The company’s entertainment arm, Alibaba Pictures, bought 1 billion yuan ($154 million USD) worth of convertible bonds issued by Guangdong Dadi Cinema Construction, who own 313 cinemas over 150 cities in China.

According to a filing with the Hong Kong stock exchange submitted on Monday evening, Alibaba will take on a 4.76 percent equity stake in the cinema company.

It’s Alibaba’s first foray into physical cinemas following spate of investments in entertainment content and distribution.

“Cinemas will play an integral part in Alibaba Pictures’ operations as the company aims to build an integrated entertainment platform,” said Alibaba Pictures CEO Zhang Qiang.

China’s growing middle class has fueled several box office records in the past eighteen months. In February this year Kung Fu Panda 3 netted $57 million USD during the movie’s opening weekend, becoming China’s biggest-ever animated film launch. Last weekend Captain America: Civil War sold $96.1 million in tickets over its first three days in theaters, besting the U.S. market by over $16 billion USD.

Alibaba has previously partnered with Hollywood production companies, including Paramount Pictures and Lionsgate to distribute and market U.S. blockbusters, such as Mission: Impossible – Rogue Nation. The Chinese tech company monetizes on the lucrative deals by selling merchandise through their e-commerce channels as well as ticketing services in their own on-demand platforms.

Alibaba’s first purchase in physical cinemas means the company could soon be overseeing the entire film production process, from investment to production, marketing, ticketing and cinema sales.

Regulators Rein In Baidu’s Medical Ads Following Student’s Death

Cate Cadell — Tue, 10 May 2016 02:47:20 +0000

Chinese regulators have clamped down on medical ads on China’s leading search platform, Baidu, following the death of a 21-year-old cancer patient who undertook experimental therapy from a hospital advertised on Baidu’s platform.

The new restrictions require Baidu to add visual markers on advertisements as well as “warnings” on paid content. The search engine is also now required to limit advertisements to less than 30 percent of displayed results.

The company’s stock has fallen just under 3 percent since the announcement on Monday afternoon.

Baidu has since publicly accepted the ruling from the Cyberspace Administration of China, saying they will make the recommended adjustments by the end of the month. They will also remove support for companies that haven’t gained the appropriate regulatory approval to advertise.

Baidu’s online medical advertisements make up over 20% of the company’s total ad revenue, meaning the new restrictions could affect a significant chunk of the company’s revenue.

The issue came to a head at the beginning of the month when a post by 21-year-old university student Wei Zixi was widely circulated across Chinese social media sites and forums. The student, who passed away on the 12th of April, claimed he trusted an experimental treatment at a military-run hospital promoted on Baidu, which he later discovered had been discontinued in the U.S. due to a minimal success rate.

In a separate investigation regulators found that the hospital had been using unauthorized medical treatments, according to state media.

Lenovo Launches $500M Start-Up Fund Aimed At Robotics, AI & Cloud Computing

Cate Cadell — Thu, 05 May 2016 04:56:25 +0000

Lenovo Group Ltd., China’s original computer giant and the world’s largest PC maker, announced the launch of a $500 million USD startup fund, as the company seeks to diversify their business amid stagnating smartphone and PC sales.

The fund, which will be managed internally by Lenovo Group, will search out investments in the artificial intelligence, robotics and cloud computing industries, the company’s vice president He Zhiqiang said at an event in Beijing on Wednesday.

Lenovo joins a handful of Chinese smartphone vendors looking to diversify outside of hardware in an attempt to chase profitability in a flat market. Both Lenovo and Xiaomi dropped from the top five smartphone vendors as of Q1 2016, according to a recent study from IDC.

Xiaomi has taken on a similar strategy, investing in up to 50 companies, up to 20 of which remain in stealth mode, with no current public exposure.

Lenovo has already invested $100 million USD in 30 companies according to their website. Current investments are mobile focussed, including smart home devices and games. The new investment appears to seek out more complex back-end technologies, that could potentially help the company diversify their core business.

A majority of Lenovo’s revenue is still generated from their personal computer business, though the company has acknowledged the rapidly slowing growth in the sector. In August 2015 they cut five percent of their non-manufacturing workforce as part of a $650 million USD cost cutting program.

The company recorded losses in late 2015 for the first time in more than six years, though returned to profitability according to their Q3 earnings reported this February.

Uber Deals Blow To Didi’s Global Alliance, Extends Alipay Partnership Worldwide

Cate Cadell — Tue, 03 May 2016 23:40:37 +0000

Uber has announced a global expansion of their partnership with Alipay, the dominant Chinese online payment service, allowing mainland users to use their native payments internationally. Previously Chinese users would have to link their account to a dual currency credit card.

Its a major move for Uber, who have been running a multi-billion dollar campaign to boost their services in China. They can now potentially monetize on the 120 million outbound trips made by Chinese tourists every year, a larger population than some of the countries that Uber operates in.

It’s also created a significant new foothold for Uber in their effort to outpace Chinese ride-hailing giant Didi Chuxing.

Through mutual investors and direct investment, Didi has created a formidable network of international ride-hailing partners, including U.S.-based Lyft, Singapore’s Grab Taxi and India’s Ola Cabs. Didi has already begun leveraging this network to capture the market of traveling consumers. This year they announced that Lyft drivers could be hailed in the U.S. through Didi Chuxing’s Chinese app, while Didi drivers can be hailed in China by Lyft users.

By expanding Alipay to the 400+ global cities and 68 countries that Uber is currently working in, they have essentially matched the potential payment advantage offered by Didi’s global network.

Through the partnership with Alipay Uber has also forged a strategic partnership with PayTM, a leading Indian payments company that is backed by Alipay’s parent company Ant Financial.

“Alipay’s collaboration with Uber reflects a step forward of Ant Financial’s global strategy,” said Ant Financial President Eric Jing, “and the collaboration also extends to the Alipay’s strategic global partners like Paytm in India.”

Alipay’s parent company, Ant Financial, recently raised a $4.5 billion USD funding round, setting a global record for the largest-ever single funding event for a privately owned tech company. Alibaba is the largest shareholder in Ant Financial, which spun off from Alibaba in 2014.

Interestingly, Alibaba is also a major shareholder in Didi Chuxing, which goes to show that when it comes to extending their international payment network, Ant Financial has no qualms crossing the lines of loyalty laid out by their biggest shareholder.

Student’s Death Prompts Investigation Into Baidu’s Medical Ads

Cate Cadell — Mon, 02 May 2016 22:30:07 +0000

Chinese search engine company Baidu Inc. is being investigated by the country’s internet regulatory body after the death of a 21-year-old college student triggered outrage online over poorly-vetted medical ads on Baidu’s platform.

The NASDAQ-listed company saw their stock prices plummet by over seven percent after the Cyberspace Administration of China announced they are assembling a team to probe the company’s practices.

Wei Zexi, a Shaanxi-based computer science major, died on April 12th after the treatment he was receiving for a rare soft tissue cancer failed. Prior to his death Mr. Wei had lashed out at Baidu for promoting the hospital he used among top search results without vetting the information, calling the company “evil”.

According to his post on Zhihu, a Chinese equivalent of Quora (link in Chinese), Mr. Wei and his family chose the Second Hospital of the Beijing Armed Police Corps because it was promoted highly in Baidu’s search results. Their doctor of choice had appeared on state media broadcaster CCTV several times, he said.

Mr. Wei claims the doctor offered him a treatment endorsed by Stanford with an 80-90% effectiveness rate. The family paid more than 200,000 RMB ($30,889 USD) for the treatment over several months which he says they later discovered had been discontinued in the U.S. due to low rates of effectiveness.

The search giant took to Weibo on Monday afternoon to express condolences to the family and assure their followers that they are looking into the internal management issues at the hospital.

“We have actively submitted a notice to the [hospital] headquarters responsible. We hope the relevant departments prioritize the investigation to confirm any misconduct at the Second Hospital of the Beijing Armed Police Corps,” said the company. “We fully support the family of Zexi through legal channels.”

This isn’t the first time that Baidu has come under fire for their medical advertisements. In January this year it was revealed that Baidu had sold the management rights to a popular online message board on hemophilia to a private hospital in Shaanxi province. In March 2015 the company’s stock dropped 4 percent when a private hospital union, representing 80 percent of the country’s private hospitals, boycotted Baidu over misleading medical information.

[Gallery] LeEco’s New LeSEE Electric Car Concept

Cate Cadell — Sun, 01 May 2016 02:42:27 +0000

LeEco CEO Jia Yueting took aim at traditional car manufacturers and U.S. tech companies, claiming they were “outdated.”

The company is currently seeking to condense five years of car development into three to release an Aston Martin electric supercar by 2018.

In the meantime LeEco launched the ‘LeSEE’ electric car concept last week. The company aims to eventually sell vehicles that cost less than Tesla, generating revenue primarily through LeEco’s connected car ecosystem.

China’s Internet Giants Back A Smartphone On Four Wheels

Cate Cadell — Sun, 01 May 2016 00:53:16 +0000

Baidu earned a neat three percent bump in stock prices on Thursday after they recorder higher-than-expected revenues. One project that they’ll be spending the cash on is their driverless car unit, a research and development effort spanning between the U.S. and China.

“We believe that the automobile is the next major computing platform,” said CEO Robin Li during a call with analysts, forecasting an “aggressive” spend on the project.

Mr Li’s comments come just a few days after LeEco CEO Jia Yueting said that he considers the car “a smart mobile device on four wheels.”

Like Baidu, LeEco has invested heavily in their auto projects, which involve electric and self driving concepts as well as their connected car ecosystem.

The two also share another interesting feature: deadlines. LeEco has committed to releasing their Aston Martin electric sports car by 2018, while their strategic partner Faraday Future aims to have autonomous electric vehicles on sale by 2020.

Similarly, Baidu has set a 2018 release date for their autonomous concept, and a 2020 production deadline.

Shoot First, Monetize Later: The Battle To Own The Smartphone On Wheels

The ‘shoot-first, monetize later’ model has become a feature of Baidu’s expansion beyond their core search business.

The company is also embroiled in an cash-burning war over the O2O space with competitors Alibaba and Tencent. The search giant doubled down on investment in the area, including a $3 billion USD commitment to their group-buying site Nuomi. The company is now applying the same tactics to their autonomous driving unit.

“We are aggressively beefing up research and development in this area both here in China and our U.S. R&D center in Silicon Valley,” said CEO Robin Li in a post-earnings conference call. “We will worry about the business model later on.”

LeEco CEO Jia Yueting has also brushed off concerns about his company’s potential to make good on their massive valuation, as they continue to welcome new funding.

Mr. Jia claims LeEco’s electric cars will retail for less than Tesla rivals, but will profit from the connected ecosystem, drawing close parallels with smartphones. He has even gone as far as to suggest that the cars themselves could ultimately be free.

LeEco and Baidu join a raft of other Chinese entrants looking to capitalize on cars as a computing platform, similar to smartphones. Tencent-backed Next EV is planning to release an electric vehicle concept that is half the price of a Tesla by 2017.

Tazer Bots, Drones & Crime Predictions: China’s Sci-Fi Police Revolution

Cate Cadell — Sat, 30 Apr 2016 15:11:51 +0000

Eight years ago the world was momentarily entertained by images of armed Chinese ‘Segway’ divisions performing what was said to be an anti-terrorist drill in Shandong province during the run-up to the Beijing Olympics.

The crew was panned by critics worldwide, who pointed out that the recoil from discharging a weapon on the knock-off Segways would probably send them flying backwards, not to mention the obvious issue of pursuing a criminal capable of climbing stairs.

While the show of force wasn’t as intimidating as probably intended, it did make one thing very clear: China’s crime-stoppers are not afraid to look a little silly in the pursuit of hi-tech policing.

Fast-forward eight years and a lot has changed, including the sale of Segway’s parent company to Chinese smartphone giant Xiaomi, which in 2008 wouldn’t exist for another two years. However China continues to straddle the line between science and sci-fi when it comes to policing, and they apparently still have no qualms road-testing a few lemons.

The World’s Most Cuddly Tazer-Firing Police Bot

Last week the National University of Defense Technology (NUDT) and a Hunan robotics company jointly revealed what has been dubbed China’s ‘RoboCop’, a mobile robot security guard capable of firing an electric charge. The AnBot (meaning Safety Bot in Chinese), was displayed at the Chongqing Hi-Tech Fair, and stands 1.49-meters tall and weighs 78kg.

The ‘AnBot’ robot security guard can alert police when it hears the word ‘help’.

The fact that it’s a robot and a cop is where he RoboCop comparison ends. It’s much more like a cutesy low-budget Disney character with a few sinister features.

The robot’s creators claim it can patrol at a speed of 1km and hour for up to eight hours, and is capable of charging itself. The AnBot is designed to supplement police in crowded areas prone to riots and terrorist attacks, including airports, subways and train stations. It can also detect biochemical residue.

Perhaps its most adorable feature is the fact that it can recognize the word ‘help’, and will automatically alert a police officer when it hears it.

Both Chinese and international netizens have jumped to point out a few major flaws with the AnBot. There are the regular concerns associated with releasing a tazer-firing robot into a crowded subway, as well as issues with cost and effectiveness. AnBot also runs into the same issues as the Segway warriors in that it is crippled by stairways.

The AnBot a novel solution to a serious problem. China has been grappling with internal terrorism issues that the government blames on separatists from the country’s far west. In 2014 a group of knife-wielding attackers killed at least 30 people and wounded over 130 in a Kunming train station terror attack.

Predicting Future Crimes With Big Data

It’s the country’s terrorism issues that have inspired another tech initiative that borders on sci-fi: using big data to catch criminals before they strike.

Chinese state-run defense company, China Electronics Technology Group, is developing software that can gather information on civilians’ hobbies, activities, jobs, relationships and consumption behavior to map out potential terror attacks and crime incidents before they happen.

The AT-100 UAV by Shenzhen Art-Tech, a specialized anti-terror drone used by Chinese police.

The project, which has attracted obvious parallels with the 2002 movie Minority Report, could theoretically have future access to information from across China’s biggest tech companies, which routinely comply with official requests for information.

China’s police have also been early adopters of some more conventional security technology, including drones. Guangdong province claims to run daily drone reconnaissance missions to sniff out remote drug dens, while the country’s homegrown ‘anti-terrorist’ drones are being deployed across China.

Image Credit: Technode 2016

Apple’s Greater China Sales Fall By Over A Quarter

Cate Cadell — Wed, 27 Apr 2016 06:21:49 +0000

In an October 2015 earnings call Apple Inc. CEO Tim Cook said that if he turned off his television and shut off the web he “wouldn’t know there were any economic issues at all in China.”

Today, Mr. Cook wouldn’t be able to avoid knowing the effects of Asia’s market and monetary issues if he lived in a bomb shelter.

Just six months after the company reported their Greater China revenue had doubled year-over-year to $12.5 billion USD, Apple is facing their first ever decline in iPhone sales, and a 26 percent drop in Greater China sales.

Cook pointed to Hong Kong as the source of the company’s wavering China sales, saying that the strength of the Hong Kong dollar, which is pegged to the US dollar, had deterred tourists from buying at their usual rate.

Excluding Hong Kong and Taiwan, sales in mainland China dropped 11 percent, and 7 percent on a constant currency basis, said Mr. Cook.

Smartphone saturation has plagued local and international vendors in China. The astronomical success of the iPhone 6 in early 2015 also set a high bar for the company to meet in 2016, according to the company, which predicted the lower sales. The iPhone 6S wasn’t met with the same enthusiasm as the original 6 globally, Mr. Cook conceded, saying that “if we’d had the same rate on 6S as 6, it would be time for a huge party.”

Despite the gloomy outlook hanging over China’s saturated market, Mr. Cook said he remains “optimistic” about the potential of China to remain a stable growth market for the company.

Total global sales of iPhones dipped from 61.2 million in the same quarter last year to 51.2 million. The company’s shares dipped 8 percent in the wake of the latest earnings report, despite an effort to appease investors through a boost in share buybacks.

LeEco CEO Jia Yueting Takes Aim At “Outdated” Car Manufacturers, US Tech Giants

Cate Cadell — Mon, 25 Apr 2016 05:29:36 +0000

LeEco’s auto projects are extremely ambitious. The company hopes to squeeze five years of vehicle development into three to release their electric Aston Martin super car by 2018, at the same time they are racing to release their own consumer vehicles with a view to surpass Tesla.

They are goals that CEO Jia Yueting isn’t afraid to rub in the face of his competitors.

In an interview with CNBC, Jia Yueting said traditional car companies, like BMW and Mercedes Benz, “cannot fundamentally change themselves” to meet the requirements of the modern auto industry.

He also singled out Apple, calling their ecosystem of individual apps “outdated”, and pointed to the company’s faltering sales in China.

“Having separate apps just means great obstacles in the user experience. We hope to break down these obstacles,” said Mr. Jia.

LeEco, formerly known as LeTV, is often compared to Netflix in western media, though the company has expanded heavily into other internet-enabled verticals, including electric and connected cars. Mr Jia said that LeEco’s current model is the “ultimate combination of Tesla, Uber, Apple, Amazon and Netflix.”

Mr Jia’s comparison did not stretch to involve Google, who are leading US developments in autonomous driving technology. Last month the CTO of Autolink, LeEco’s auto ecosystem project, told Technode that the company is “working closely” with Google, and have been invited to trial their technology.

When asked about LeEco’s hearty appetite for funding in the pursuit of their auto projects, Mr. Jia said he was confident that their autos ecosystem would reap dividends for those “visionary” enough to invest in it. He also said that the capabilities of LeEco cars would exceed Tesla rivals, but would remain a cheaper alternative, monetizing through the resources gathered from their internet ecosystem.

Mr Jia’s comments follow last week’s public unveiling of the LeEco LeSEE, their highly-anticipated electric sedan. The company said the car was built with autonomous technology in mind. The company’s other flagship project, an electric supercar being developed with Aston Martin, is slated for release in 2018. LeEco is working closely with Faraday Future, the secretive electric vehicle company in which Mr. Jia is a personal investor.

Jack Ma Wants A Piece Of New Zealand, Literally.

Cate Cadell — Tue, 19 Apr 2016 03:30:57 +0000

With appetite for fine wine and dairy products booming on Alibaba’s import-focussed Tmall platform, it’s not surprising that chairman Jack Ma has his eyes on New Zealand. Though the e-commerce billionaire’s love for the country is apparently not just just commercially driven.

During a Q&A session yesterday with the New Zealand Prime Minister, John Key, Ma hinted that he was potentially interested in buying land in the southern island, calling it the “dream land.”

While Ma is by no means a typical internet billionaire, he is known or his high-end property purchases, including a (rumored) $193 million USD Hong Kong property, which is said to be the second most expensive property worldwide proportional to its size.

At the event in Beijing Ma said he had many friends who had bought properties in New Zealand, but said his biggest constraint was that he didn’t have time to peruse the listings.

“I just don’t have time to go there seeing the property myself. I see so many friends buy great properties,” said the entrepreneur worth an estimated $50 billion USD.

During the event Ma and Keys signed a deal that will allow New Zealand businesses improved access to the company’s China-focussed e-retail platforms. According to New Zealand Trade Minister Todd Clay, the deal will involve promoting home-grown products that have a proven track record on Alibaba platforms.

New Zealand’s rich wine-growing regions and highly-developed agriculture pose an attractive proposition to e-commerce platforms seeking to tap the diverse appetites of China’s growing middle class. Alibaba’s Tmall already imports a variety of high-quality New Zealand produce, including fresh seafood.

Image Credit: Ne Zealand.com

Tencent Wants To Add Another $2 Billion USD To Their Arsenal

Cate Cadell — Sat, 16 Apr 2016 04:07:50 +0000

China’s internet giants are gearing up for some serious spending. Tencent, the gaming and social network giant behind WeChat, is now in talks with five banks to raise a $2 billion USD syndicated loan, according to sources who spoke to the Wall Street Journal.

News of the financing comes five months after the company secured a $1.5 billion dollar loan, and just one month after fellow internet powerhouse Alibaba announced a $3 billion USD syndicated bank loan.

Tencent and Alibaba have continued their expansion both locally and abroad with a spate of large investments in hotly contested sectors including ride-sharing, entertainment, finance and on-demand services.

Both companies are said to be participating in an imminent $1.5 billion USD funding round for market-leading ride-hailing app Didi Chuxing (formerly Didi Kuaidi). Tencent backed a $3.3 billion USD investment in on-demand services firm Meituan-Dianping last year, while Alibaba has since sold their stake in Meituan-Dianping to back their own on-demand empire.

This week Alibaba and their financial affiliate, Ant Financial, revealed a deal to invest $1.25 billion USD in food delivery app Ele.me, which will share resources with Alibaba’s other big bet in the industry, on-demand firm Koubei.

Tencent’s new loan could also be targeted at another core market rivalry: finance. Tencent is the largest shareholder in WeBank, the online banking affiliate that competes directly with Alibaba’s Ant Financial. Both companies have make aggressive strides into payments, personal banking and data-backed credit systems, working on both personal and enterprise financing.

Five banks will underwrite the loan which is expected to close by next month (the same banking partners as the previous $1.5 billion USD round), Bank of China, ANZ, HSBC, Citigroup and Mizuho Financial Group.

Twitter Appoints New China Head, Seeking To Boost Enterprise Business

Cate Cadell — Fri, 15 Apr 2016 07:16:55 +0000

Twitter has appointed a new head of Chinese operations, as the number of Chinese companies using the medium to market overseas continues to rise.

Kathy Chen will take over from Peter Greenberger, heading up the Hong Kong headquarters, which oversees China. Chen previously worked with Microsoft and Cisco before joining Twitter. CEO Jack Dorsey tweeted his congratulations to Chen earlier today:

A big welcome to Twitter, @KathyChen2016! She joins us as our MD for China!
— Jack (@jack) April 15, 2016

The San Francisco-based social media network remains blocked on within mainland China, though tools like Twitter have become an important medium for Chinese companies seeking to reach out to foreign markets.

In an interview with the South China Morning Post, Twitter VP for Asia-Pacific, Shaliesh Rao, noted that the company had seen a 340 percent growth in the number of Chinese advertisers, (though the article didn’t mention the timeframe for that growth).

While China’s government is not willing to allow the company access to the mainland, they have no qualms working with Twitter outside the country. In a panel hosted by Technode in December, Twitter’s head of Online Sales, Alan Lan, said that the company’s biggest client was in fact Xinhua News, the official state media outlet of the Chinese Government. Many other state media outlets also use Twitter to advertise globally, including state broadcaster CCTV.

As Twitter’s presence has evolved in the region, they still shy away from the fanfare employed by other blocked tech companies including Google and Facebook. Jack Dorsey has done no public engagements in China, unlike Facebook CEO Mark Zuckerberg who has become a well known public figure in the country through multiple tours and partnerships.

The government has given no indication that western social media outlets, including Twitter and Facebook, will be permitted in China anytime soon. It’s likely the China operations overseen by new head Kathy Chen will include building out the company’s back end data analytics services for enterprise clients seeking new audiences overseas.

Kathy Chen’s posted a welcome video and message earlier today:

Thank you for your support as we connect Greater China to the world! A video by @kathychen2016 , MD of @TwitterGCN pic.twitter.com/aX9GzZe2sc
— Twitter GCN (@TwitterGCN) April 15, 2016

Alibaba, Ant Financial Bet $1.25 Billion On Food Delivery Startup Ele.me

Cate Cadell — Wed, 13 Apr 2016 21:24:10 +0000

After much speculation it’s been confirmed that Alibaba and their financial affiliate, Ant Financial, will together invest $1.25 billion USD in Chinese on-demand food delivery app Ele.me.

Alibaba will pitch in $900 million USD while Ant Financial will add an extra $350 million to the round. The deal also includes a new partnership between Alibaba’s own on demand services platform, Koubei, and Ele.me.

The duo now represents Alibaba’s biggest bet in the on-demand market. Alongside the $1.25 billion injection into Ele.me, the Chinese internet giant also pledged 3 billion yuan to growing out Koubei. Ant Financial also committed the same amount to the project.

Alibaba have not revealed further details on the deal, including how much their stake in the food delivery service would be. Last year Chinese financial magazine Caixin reported that the deal being discussed was for a 27.7% stake.

The news comes just months after Alibaba sealed a deal to sell their stake in competing on-demand service Meituan-Dianping, which also happens to be backed by Tencent. The other large competitor in the market is Nuomi, the on-demand platform that search giant Baidu has pledged $3 billion USD to improve.

The Ali-Ele.me partnership ties up a lot of loose ends in the highly-contested on demand market. During the Meituan-Dianping merger last year, and their subsequent $3.3 billion USD funding round (which rocketed the company’s valuation to over $18 billion USD), there was much speculation over which camp Alibaba would choose and whether they would maintain their stake in Meituan-Dianping.

It’s now clear that China’s deep pocketed tech giants intend on spending heavily through another subsidy-fueled war of attrition in the on-demand space.

Here’s Six Billion Reasons Why China’s Tech Funding Isn’t Slowing Down

Cate Cadell — Mon, 11 Apr 2016 07:18:29 +0000

While some onlookers believe a capital winter could be just the medicine China’s young tech community needs, established startups are seeking more capital than ever. From real estate to fintech and on-demand services, no one appears to be shying away from a heavy cash burn-rate in 2016.

Here are three multi-billion dollar deals that have come to light over the past week, worth a combined $6 billion, which show just how fearless China’s VC environment is in 2016.

1. Alibaba’s Finance Arm Ant Financial Is Seeking At Least $3.5 billion USD

Ant Financial, the Alibaba-backed finance giant behind Alipay, is looking to raise a round of at least 20 billion yuan ($3.5 billion USD), bringing the company’s total valuation to around $60 billion USD. Ant Financial’s 2015/2016 investment portfolio is incredibly diverse, and includes everything from Indian payment platform, PayTM, to the China’s Postal Savings Bank. The company raised $1.9 billion USD in their first round last year. The latest round could be the foundation for a highly-anticipated IPO.

2. Real Estate Company Homelink Looks To Raise $1 billion USD

Homelink Real Estate Brokerage Co., a Beijing-based property broker founded in 2001, is seeking to raise around $1 billion USD with interest from internet giants Tencent and Baidu, valuing the company at near 40 billion yuan ($6.2 billion USD). While demand for new property has dwindled over the the past 18 months, internet companies are still clamoring to take a bite of the market. Online companies in the industry including Soufun and Fangdd have surged ahead with new funding in the past six months as the country eases restrictions on home ownership.

3. Didi Kuaidi Raises Funding Target To $1.5 billion USD

China’s leading ride-hailing service Didi Kuaidi could see their valuation top $20 billion USD if the company is able to settle their $1.5 billion USD funding target. The company has been locked in an aggressive spending war with Uber, which currently values their China arm at near $7 billion USD. Uber currently claims to hold an estimated 30 percent share of private car services in China, versus Didi Kuaidi’s claim of 86 percent. The actual metrics vary depending on which aspects of the business you measure. The latest injection of funding into the Alibaba-Tencent-backed Chinese service shows that the cash-burning on-demand wars of 2015 are well and truly set to continue into 2016.

SCMP Drops Paywall Following Alibaba Buyout, Putting Profitability On The Back Burner

Cate Cadell — Thu, 07 Apr 2016 08:21:08 +0000

China’s tech giants are not afraid to burn cash in pursuit of a greater market share, and Alibaba’s newly acquired media asset, Hong Kong-based flagship newspaper South China Morning Post (SCMP), has dropped their paywall to do just that.

While newspapers across the world are looking to business model innovation and paywalls to boost revenue, the SCMP officially threw out their subscriber system in a bid to boost readership and ad revenue.

“Our focus now should not be on finding the right media business model,” said Alibaba chairman Jack Ma in a SCMP article yesterday. “Our priority should be on how we should change to better adapt to the reading habits of our readers.”

“With the paywall removal, it paves the way for the SCMP to grow its readership globally,” said SCMP editor in chief Tammy Tan.

The strategy parallels current trends of expansion across technology companies in China. Lowering entry barriers in hopes of securing a large market share is a tactic Alibaba has employed across their own e-commerce platforms, as well as their affiliated products. The company has been a primary player in China’s on-demand wars, funding massive subsidies for startups and services with a high cash-burn rate.

It’s a strategy that was conceived and born in China for a reason. Massive market saturation and a highly-mobile population bred the need for revenue burning tactics. It’s the same market that saw Xiaomi rocket to one of the world’s most valuable startups by providing a low-cost, market friendly entry point for China’s growing mobile population.

However Ma’s strategic focus on expanding their consumer base over profitability is an unproved theory in the world of print media. “Free services do not mean cheap services,” said Ma in reference to the paywall removal. “Rather, offering free but quality services is how we can succeed and sustain our growth,” he said, drawing parallels with the growth of TaoBao, the company’s flagship consumer e-commerce platform.

One of the primary benefits of expanding the readership of the SCMP by lowering the paywall would be increasing their advertising reach, which could in turn drive more consumers to their e-commerce platforms. Alibaba has expanded heavily into entertainment and other IP content on the same premise, driving traffic through the SCMP and other peripheral assets could help attract a higher-end clientele to the company’s increasingly global platforms.

SCMP’s total group revenue, which also includes a handful of other publications, was $160 million USD in 2015, which in a drop in the ocean compared to Alibaba’s other revenue streams which generated over $12.3 billion USD in 2015. The company will be hoping to convert any lost paywall revenue into ad revenue or sales revenue on their e-commerce platforms.

Alibaba’s purchase of SCMP has some parallels with the purchase of the Washington Post by Amazon founder Jeff Bezos, however it’s worth noting that Bezos focussed heavily on business model innovation for the US newspaper, with restructuring programs and digital-only features including their own news reader application. Alibaba and Ma have remained tight-lipped on any further possible changes to the SCMP.

ZTE Overhauls Top Management In Attempt To Lift US Trade Ban

Cate Cadell — Wed, 06 Apr 2016 04:35:32 +0000

ZTE has overhauled several top management positions, effective immediately, as they seek to mend bad blood with the US Department of Commerce over Iran trade sanction violations.

Former CTO Zhao Xianming will take over as CEO, a position previously held by Shi Lirong, who took up the post in 2010. Mr Zhao will also replace founder Hou Weigui as the company’s chairman. Two executive vice chairmen, Qiu Weizhao and Tian Wenguo, will also step down after failing to be reelected among seven new roles. Former CEO Shi Lirong will remain on the board though he will no longer involved in ZTE management.

ZTE, which sells telecommunications equipment as well as smartphones, was blacklisted but the US Commerce Department last month after documents from 2011 showed company was forward selling US-made components to Iran through at least one shelf company.

The US has strict rules against providing technology which could potentially aid in the development of an Iranian nuclear program. While some sanctions have recently been lifted, US companies are still banned from selling certain software and hardware to Iran or to companies, like ZTE, that then plan to reexport to Iran.

ZTE was blacklisted by the US Department of Commerce following the investigation, meaning they were cut off from U.S. suppliers. ZTE sources a number of components from US companies, including the Qualcomm chips within their handsets. The company has since been granted temporary approval to continue working with U.S. companies, though they remain blacklisted. According to sources who spoke with the Wall Street Journal, the management overhaul was one of the requirements for the temporary license.

In a statement on the reshuffle, new CEO Zhao Xianming said that “at this juncture, we must take time to rethink. We will be taking extra measures to ensure that legal compliance and anti-corruption processes eliminate any possibility of non-compliance.”

He also noted that the company would be taking steps to eradicate “top-down culture” within the company, pointing to bureaucracy as one of the weak factors in the organization. “We will put practical measures in place to rebuild our operational philosophy and turn the challenges into opportunities,” said Mr Zhao.

Uber Launches New Project, To ‘Win’ China By Cutting Costs In A Spending War

Cate Cadell — Tue, 05 Apr 2016 05:10:03 +0000

Uber’s largest global city by volume may seem surprisingly obscure. Chengdu, a central Chinese metropolis straddling the border between first and second-tier status, has the most active Uber population by sheer numbers, and it’s produced a testing hotbed for the company’s global services. Chengdu was the world’s first city to test Uber Commute,the service designed to curb peak hour traffic. It was also the first city outside of the US to trial Uber Pool, the carpooling feature that now spans several countries.

Chengdu isn’t just a big city for Uber, it’s also at the heart of the Chinese subsidy war. The country’s tech giants have initiated a spending spree, injecting huge amounts of cash into a subsidization program they hope will help them claim an early market share in an increasingly competitive market. Uber’s primary rival Didi Chuxing (formerly Didi Kuaidi) is no stranger to this cash burn. The company has raised upwards of $3 billion USD in the past 6 months to fuel their campaign, slashing costs for users.

Uber China, which has a comparatively small pool of funding, is now looking for ways to slash costs on subsidies, and Chengdu, one of the country’s biggest test markets, could hold the key to helping them do that. Last month Uber CEO Travis admitted that Uber China is losing $1 billion USD a year, but that they re aiming to achieve profitability within two years.

“We’re in the middle of a subsidy war and this is not a secret here,” said Tiger Fang, Uber General Manager based in Chengdu. “If we get more people into lesser cars we can lower the price for everybody, we can using technology to lower the price not money that we burn to help lower the price and that’s how we win China.”

According to Mr. Fang, Chengdu is a hotbed for the innovations he hopes will save Uber from being swallowed up in a subsidies war. “ I certainly think that Chengdu has done a great job as a [test] market, we have the volume and we have really smart people and a market of customers that want to try new things.”

World-First Pilot Program

This week the company is once again rolling out a world-first pilot program in Chengdu, essentially combining the Uber Pool and Uber Commute programs. The new service marks a significant behavioral shift in what Uber is asking of their users in China. Drivers will be able to pick up passengers during their peak hour commute, much like Uber commute, but the service encourages multiple pick ups, similar Uber Pool.

Tiger says the main issue with rolling out the service was figuring out how to reduce the “inconvenience factor” barring drivers from signing up, which is why the service is built on central arteries and roads, rather than random user-selected routes. Passengers will have to walk to a busy street to meet their driver, mimicking a small scale public bus service. “You’re inconveniencing yourself a little bit so more drivers can join this program,” Mr. Fang told Technode.

The new service is at the heart of what Uber is trying to achieve: a wide scale cost-cutting program that can help them remain competitive in the face of mega-sized competitors like Didi Kuaidi. “We’re spending a lot of money here [as part of the subsidies war], we’re spending a billion dollars a year, so this initiative is part of that savings program.”

“More butts into less cars, and it will be better for the whole city, if this is successful we will push this out to other main roads and to other main cities,” said Mr. Fang.

Uber, like Didi, also has the luxury of targeting a problem that the Chinese government is also desperate to fix: traffic congestion. In Chengdu, the city requires drivers to take their cars completely off the road for one out of every seven days. It mirrors policies across China, including peak event days in Beijing when drivers are required to stay off the road on alternating days depending on whether their numberplate ends in an odd or even number. In Chengdu, Uber offers one free ride a week to drivers who have offered a ride to another passenger at least once during the week, in an attempt to spur more drivers into the program.

The company is also working with the Chengdu government to share data. “I want to be able to show the government some data,” says Mr. Fang, referencing the latest pilot program, “like this is how many people are using this [service], and we think the average speed on this road improved by [this much].”

The latest program will be tested out of Chengdu for an unspecified time, though they are hoping to expand it across China and potentially spur the creation of specialized lanes across China. “If this is really successful then we should make pool lanes in all of the major highways, in all of the major arteries in China, we don’t have that right now,” says Mr. Fang.

Meet The Winners Of The 2016 ChinaBang Awards For Innovation In China Tech

Cate Cadell — Tue, 05 Apr 2016 02:59:41 +0000

TechNode thanks everyone who participated in our ChinaBang Awards 2016 awards ceremony in the evening of March 31 in Chengdu Xindu District.

The ChinaBang Awards were launched in 2011 with the intention of discovering and rewarding innovation in China’s technology community. Over the last four years, we have witnessed so much of that innovation, watching the birth of Chinese companies that now define the technology landscape. In the past, we have awarded prizes to companies including Didi Kuaidi, Ele.me and WeChat in their more fledgling days, and we hope that this year’s recipients will go on to similar successes.

ChinaBang Awards 2016 was held over two days in the Xindu District and featured 14 core awards. We also hosted the Asia Hardware Battle, where 15 hardware companies from India, Israel, South Korea, Honk Kong, Japan, and China came together in front of a panel of 13 judges to pitch some of the most innovative projects in the region.

Here are the winners of this year’s ChinaBang Awards:

Most Technologically Innovative Product of 2016

HTC VIVE
Noitem (诺亦腾)
uSens (凌感)
Small Zhi Robot (小智机器人)
HiScene (亮风台)

Best Software Design 2016

Faceu
MIX
Worktile
Mozik

Best Hardware Design 2016

Innomake (云造科技)
totwoo
Ninebot
Royole (柔宇科技)
Sleepace

Best Creative Marketing Company in 2016

IQIYI
Uber
Peng You Yin Xiang (朋友印象)
The Makers (创客星球)
Miao Pai (秒拍)

Best Educational Products and Services Of 2016

Ying Yu Liu Li Shuo (英语流利说)
Ji Suan Ke (计蒜客)
Qing Ta Jiao (请他教)
Pingo Space (平行国)
Mofunshow (英语魔方秀)

Best Business Award 2016

Lin Qu (邻趣) (Linqu)
Pin Hao Huo (拼好货) (Pin Hao Huo)
Che Mao (车猫) (Che Mao)
TouchPal (触宝科技) (Chu Bao Keji)
JiaE (加意新品) (Jiayi Xinpin)

Best Cross-Border Expansion 2016 (Outward)

APUS
NewBornTown (赤子城)
musical.ly
CamCard (名片全能王)
Kika Tech

Best Startups Founded by Expats 2016

Seed
Seeder
Nihao app
Seedlink
Robin8

Best Financing Platforms 2016

Oasis Plan (绿洲计划)
Inno Angel (英诺天使)
GSR Ventures (金沙江创业投资)
Ameba Capital (阿米巴资本)
Cherubic Ventures (心元资本)

Public’s Choice Award

Peng You Yin Xiang (朋友印象)
Totwoo
Ying Yu Liu Li Shuo (英语流利说)
Shi Ji (柿集)
Nihao App
uSens (凌感)
MICO
E Kuai Bao (易快报)
Meng Meng Da Tian Tuan (萌萌哒天团)

Annual Founder of the Year

Li Zhifei, Chumenwenwen (出门问问, 李志飞)
Zhang Xuhao, Ele.me (饿了么, 张旭豪)

Annual Youth Founder of the Year

Wang Yi, Ying Yu Liu Li Shuo (英语流利说王翌)

Female Founder of the Year

Xie Xu aka Qing Shui, In (In 谢旭, 网名清水)

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We’re Shortening Development By Two Years: LeAutoLink CTO On LeEco, Aston Martin Super Car [Q&A]

Cate Cadell — Mon, 28 Mar 2016 07:23:17 +0000

Speculation over the LeEco-backed Aston Martin electric super car has been building since the two companies announced in January their intention to release the vehicle by 2018.

While the US has led the development of connected, autonomous and electric vehicles, China is playing a hasty catchup game, backed by the country’s cashed-up tech giants.

According to Rao Hong, the CTO of LeAutoLink, part of LeEco’s Super Electric Ecosystem (SEE) Plan, development on the super car has been shortened from a five-year project to a three year project, with an indirect partnership from electric vehicle startup Faraday Future.

Technode sat down with LeAutoLink CTO Rao Hong to discuss what’s next for the LeEco car project from the software side:

What’s the current progress on the Le Super Car?

The typical car development cycle is about 4-5 years, and are trying to shorten the development cycle, our estimation is about 3 years. We are going to have some announcements next month at the Beijing auto show but that’s still [the] very early stage of the prototyping.

What are the different roles being played by Aston Martin and Faraday Future?

Aston Martin is a traditional car manufacturer and Faraday Future is a new startup company building electric cars, so its fits our overall strategy. Our partnership with Aston Martin is to bring in the internet of vehicle technology, autonomous drive technology as well as electrical power systems and transmission systems.

[Faraday] are new, they have leadership coming from Tesla so they know how to build electric cars. We are helping with the internet of vehicle aspect and we also work with them on autonomous driving . This is the beauty of [the partnerships]. We can look at it from the traditional car industry, and from the internet technology perspective.

You do R&D in the US while LeEco and Faraday are China-funded. How difficult is it working cross-culturally on such a complex project?

Internally there is still a lot of fighting from cultural and background perspectives. We have people from the car industry saying we should go one way and the internet people saying another way, but it’s part of the challenge, a challenge comes up and then we can work on something new. The process is challenging but it helps us understand different cultures and backgrounds. The good thing is we all have the same goal: we want to change the car.

We have people locally in the US, and we try to let them manage themselves, we are just here to facilitate their activities…It’s their area of expertise, so they go ahead, we just ask what they need. When it comes to the internet and autonomous driving, both sides have to collaborate. There will be a lot of arguing and fighting [Laughs].

How do you see Chinese electric vehicles, autonomous cars and connected cars against US prototypes being built by companies like Alphabet [Google]?

We work closely with Google, they’ve invited us to see their demo system. The industry is at the dawn of change, [in regards to] people, the car industry and the IT industry. It’s a big industry compared with some other LeEco industries.

We have a strong presence in China… Google apparently they are leading in autonomous driving, they have very good maps in the US, but not that good in China, they have some government issues. Our goal is to deploy cars globally. China is the biggest market for the car. We believe we have the advantage. China and the US are the two biggest markets. They are together probably one third of the global car market.

Will China be able to play catch up?

China is picking up, we believe that in the near future we will be a lot better than we are today. China has always played a catchup role, but when it comes to electric cars the advantage the traditional car companies have is not that big, electric cars in China are already leading in some ways…we are also in a good position when it comes to telecommunications.

LeAutoLink already collaborates with Aston Martin, BYD and Faraday Future, what sort of partnerships are you looking to forge in the future?

A lot. [We are] talking with a quite a few companies, our goal is not just to be in connected cars, we want to build the internet of cars ecosystem. So we are talking with pretty much everybody. We are still very young as a startup company, trying to figure out how and when to collaborate.

Image Credit: Technode

India’s Top E-Commerce Execs Squabble Over Alibaba Entry

Cate Cadell — Mon, 28 Mar 2016 01:07:59 +0000

As tensions between e-commerce companies reach a feverish pitch in India, two of the county’s biggest executives took to Twitter on Friday evening in a public spat over a possible Alibaba entry.

Sachin Bansal, the executive chairman of India’s biggest e-commerce platform Flipkart, tweeted: “Alibaba deciding to start operations directly shows how badly their Indian investments have done so far.”

The comment was aimed at companies including Flipkart rival Snapdeal, which was backed by Alibaba in a $500 million USD funding round last year. The two Indian companies are engaged in a fierce battle fueled by subsidies, much like China’s on-demand market, though on a smaller scale.

Snapdeal founder Kunal Bahl served a biting retort to Mr. Bansal’s comment, saying “Didn’t Morgan Stanley just flush five billion worth market cap in Flipkart down the toilet. Focus on your business, not commentary.” Last month Flipkart’s shares were devalued 27% by Morgan Stanley’s managed mutual fund on the back of significant year-over-year losses.

The scuffle demonstrates the heightened level of competition in the Indian e-commerce sector, which has led several companies to seek revenue in less-crowded South Asian markets.

Despite the squeeze, India’s e-commerce potential is still largely untapped, and Alibaba has made no secret of the fact they are looking for entry points. Last year the Chinese company’s financial arm, Ant Financial, invested $500 million USD in a 40 percent stake in One97 Communications, the parent company behind leading online payment app PayTM.

Alibaba’s own payment service, Alipay, was one of the big contributors to the company’s growth, funneling consumers to Ali-backed e-commerce platforms. An increased commitment to PayTM signals a similar strategy in India.

Earlier this month a former Alibaba executive, Bhushan Patil, joined PayTM as a vice president. Mr. Patil’s focus will be on expanding PayTM’s e-commerce business and cross-border operations, similar to his role working on Alibaba.com.

Currently Alibaba’s influence in the Indian market remains indirect, though it’s enough to rile up the country’s leading e-commerce executives. An Alibaba entry would almost certainly spur further consolidation in the market.

Alibaba-Backed YTO Express Plans $2.7B Listing As Delivery Companies Clamber For Capital

Cate Cadell — Wed, 23 Mar 2016 08:19:12 +0000

In China’s biggest cities you can get everything from Australian steaks to obscure art delivered within 24 hours due to the country’s highly developed e-commerce logistics infrastructure. The express delivery market has become feverishly competitive, leading companies to seek new funding for major expansions into China’s untapped cities and villages.

Alibaba-backed YTO Express will be merging with the Shanghai-listed clothes company Dalian Dayang Trands Co. Ltd., in a deal worth 17.5 billion yuan ($2.7 billion USD), according to an exchange filing by the clothes company on Tuesday.

Dayang Trands will convert their assets to YTO Express, meaning shareholders of the delivery company will own Dayang Trands through the backdoor listing.

The merger, which is still subject to regulatory approval, saves YTO Express the hassle of applying for an independent listing, which under Chinese regulations can take some time. The urgency of the deal signals their thirst for new capital, as companies vie for any remaining blindspots in China’s logistics market.

E-commerce powerhouses like Alibaba and JD.com have been investing strongly in expanding their services to rural areas and supplementing existing services in third and fourth-tier cities.

Several of YTO Express’s competitors have also showed their intention to list, sparking a flurry of similar activity among competitors. In December, Shentong Express (STO) performed a similar backdoor takeover of a listed company on the Shenzhen stock exchange. In February one of the country’s biggest express delivery companies SF Express revealed they were in talks with advisors on an imminent listing. ZTO Express is also expected to pursue a $1 billion USD Hong Kong listing this year.

Meanwhile, Alibaba’s in-house logistics company Cainiao, which counts YTO Express, STO Express, ZTO Express and SF Express among it investors, confirmed their first ever financing round this month at a valuation of about $7.7 billion yuan.

Alibaba Breaks 3 Trillion RMB In Sales, But It’s Not All Smooth Sailing

Cate Cadell — Tue, 22 Mar 2016 08:39:10 +0000

Alibaba said at an event on Monday that they have reached 3 trillion yuan in transaction value, but the company is gearing up for a bumpy ride, as growth slowed from previous years.

The company is hoping to reach 6 trillion yuan in gross merchandise value (GMV) per year by 2020, said CEO Daniel Zhang. However doubling the company’s GMV could prove tough in the economically challenging environment of modern China.

Alibaba’s yearly growth in GMV was 23%, down from 46% recorded in 2015. The figure, which represents the complete value of all goods traded on Alibaba platforms, is an indicator of consumer confidence, as well as Alibaba’s overall economic health.

While its expected that a platform the size of Alibaba will see lower growth as it enters maturity, there’s little doubt that market saturation and economic turmoil contributed to the company’s milder retail expansion.

2015 also saw smartphone sales in China reach a saturation point, leading to a sharp downturn in growth for mobile vendors. Sales on Alibaba’s platforms are very much tied to the expansion of mobile internet in China.

Alibaba executives have been open about the challenges facing the company’s growth in 2016. During Alibaba’s 2015 Singles Day sales event Chairman and Alibaba founder Jack Ma noted that 2016 would be a challenging year for the company.

“Growth is meaningless unless it is sustainable,” said Alibaba executive vice chairman Joe Tsai in a blog post on Monday. “Thus, we have turned our focus to quality growth and broadening domestic consumption.”

Alibaba’s focus on domestic consumption in 2016 involves reaching out to China’s untapped small cities and rural populations. In Mr. Tsai’s blog post he noted that the company had reached 12,000 of the the country’s 600,000 villages, with an aim to expand strongly. Alibaba also recently reached a partnership with the China Communist Youth League, deploying a million teenagers in rural areas to start e-commerce businesses.

The 3 trillion milestone is triple the GMV of 2012, meaning that if the company is aiming for 6 trillion by 2020 the company’s commerce platforms will see a much milder growth rate in the coming years.

Australian-Founded Chinese Real Estate Portal Juwai Seeks IPO

Cate Cadell — Mon, 21 Mar 2016 08:28:59 +0000

Juwai.com, the international real estate portal based in Shanghai and Tokyo, will aim for an Australian listing within a year according to comments made by the company’s newly-minted CEO in Tokyo on Friday.

Charles Pittar said the company would be seeking new funds from institutional investors and strategic partners to fuel the upcoming IPO, which they expect to be completed by early 2017 at the latest.

The company is also close to announcing a new partnership in the Japanese market.

Juwai, which literally means “living abroad” is an online portal connecting Chinese buyers with foreign real estate brokers. The platform was founded in 2011 by Australian duo Andrew Taylor and Simon Henry. Australia is one of the markets seeing a massive influx of real estate investment from China over the past few years.

According to Mr. Pittar, who was the COO of Asia for Macquarie Bank before joining Juwai, the company’s clients usually look for properties between $500,000 USD and $1.5 million, which is in the lower end for high-prices metropolises like Sydney, Tokyo, Hong Kong and New York.

The company claims to work with approximately 80,000 real estate brokers and agents and sources customers from 315 cities across China, with over 2.4 million property listings across 58 countries.

They now hope to use the freshly generated funding to attract new talent for their global operations.

Chinese outbound real estate investment has grown to $30 billion USD a year, according to a research done by Hong Kong-based real estate consultancy Knight Frank. Despite consistent growth, 2016 could see some disruption given recent economic turmoil and increased government scrutiny over capital outflow.

[Update] US Temporarily Relieves Sanctions On ZTE Over Iran Sales

Cate Cadell — Mon, 21 Mar 2016 06:43:00 +0000

After a nerve-wracking two weeks for one of China’s biggest telecommunications companies, ZTE, it appears sanctions laid against them by the US will be temporarily lifted, easing diplomatic and commercial tensions between the world’s two biggest superpowers.

A senior official at the US Department of Commerce said on Sunday that the sanctions would be temporarily lifted this week, allowing ZTE to once again source components from the US.

The sanctions were put in place earlier this month following a statement by the US Department of Commerce which claimed the Chinese company had violated trade restrictions on Iran by re-exporting US made components to the black-listed country. The blacklist is designed to clamp down on companies that could potentially aid in the development of an Iranian nuclear program.

The restrictions barred ZTE from purchasing US components without going through a complex licensing process that would most likely be denied. The company uses several types of US technology, including Qualcomm chipsets in their smartphones.

ZTE lashed out at the restrictions while the Chinese Ministry of Commerce also expressed “resolute opposition” to the “severe” effects of the move. ZTE has suspended trading for two weeks now, and have pushed back the date for their end-of-year final report, as they reassess targets under the new conditions.

The relaxation of licensing restrictions is expected to be temporary, though it is a positive sign of progress in such a diplomatically sensitive case. More information will be released on the loosened sanctions later this week.

Technode reached out to ZTE to confirm the reports and we will update with any further details.

Related: Could Sanctions Harm ZTE’s US Smartphone Ambitions?

Alibaba Is Employing A Million Teenagers To Sell Rural E-Commerce

Cate Cadell — Thu, 17 Mar 2016 01:18:31 +0000

Alibaba has sealed an agreement with the China Communist Youth League, a government-sanctioned youth group, to train one million teenagers in running online businesses, according to state media outlet Xinhua News.

Alibaba’s finance arm, Ant Financial, has committed 1 billion yuan ($153 million USD) to fund the program, which will be tested in China’s southwest Guizhou province.

The project falls very squarely within the Chinese government’s ‘Internet Plus’ plan, a strategic commitment to disrupting traditional industries with internet-enabled technology, in an attempt to boost growth in the services sector.

According to statistics released by Xinhua, there are currently 780 specialized “stations” in rural areas which allow citizens without resources to buy and sell good using e-commerce platforms. Through a 10 billion yuan investment the government hopes to increase that number to over 100,000 by 2019.

China’s e-commerce giants have been seeking inroads to the country’s vast, untapped rural market for some time. Alibaba hosts their own specialized agricultural mall channel on e-commerce platform Taobao, where farmers can purchase everything from seeds to fertilizer and even tractors. They have also leveraged their cloud and data capabilities to offer data-driven planting guides.

JD.com, the Tencent-backed primary competitor to Alibaba, rolled out their own agricultural products store in August 2015. JD has also committed to developing wide-scale drone delivery in rural areas.

Xiaomi Is Expanding Their Smart Transport Empire With Bicycles

Cate Cadell — Tue, 15 Mar 2016 09:19:03 +0000

After tackling Segway-style smart transport last year, Xiaomi Inc. now has plans to expand further into smart bikes.

The company will release a new Xiaomi-brand smart bike in the coming months, according to sources who spoke to the Wall Street Journal. At the same time Xiaomi-backed smart bicycle company IRiding will also release a ‘smart’ bike called the ‘QiCycle’ this week, the same source revealed.

A Xiaomi spokesperson declined to confirm details about either upcoming project.

The IRiding project is aimed at the high-end consumer market, a departure from Xiaomi’s quality-on-a-budget marketing strength. The bicycle will retail for $3000 US, and will be assembled in Taiwan, the manufacturing centre for brand-name bicycles. The IRiding project will not carry the Xiaomi brand.

IRiding isn’t the only bicycle startup being groomed as part of Xiaomi’s investment machine. In October last year Xiaomi invested in an A Series for Hangzhou-based smart bike maker Yunmake. By December the partnership had unveiled their first smart electric bike, the YunBike C1, which featured a Xiaomi-like minimalist design. The model has a 180W gearbox can reach up to 25km/hour, according to the company.

“This new hybrid vehicle is intended to modify the concept of the electric bicycle,” said Xiaomi at the time.

It’s not clear which acquisition Xiaomi would potentially draw on for the release of their next smart bike model, though it is likely to be a design that is in keeping with the company’s budget-friendly branding philosophy.

In April 2015 Xiaomi-backed Ninebot acquired Segway, the brand synonymous with the two-wheeled personal transportation device. Xiaomi has since leveraged the design relationship to release the wallet-friendly Xiaomi Ninebot Mini, a $315 USD stripped-back Segway-style device with leg controls instead of a handle.

The smart bike, scooter and transportation device market in China is booming alongside other core hardware technologies including drones and VR headsets. A mass of startups have entered the space, however powerhouses like Xiaomi have driven down costs with high-level acquisitions supported by mass manufacturing.

Image Credit: The Xiaomi YunBike C1, released last December.

Huayi Brothers Taps Hollywood Veterans To Launch Animation Unit

Cate Cadell — Tue, 15 Mar 2016 07:44:39 +0000

Animated films in China are breaking the box office and Tencent-Alibaba-backed film studio Huayi Brothers Media Corp. is taking a bite of the action.

The Chinese company said on Monday that they will launch their own animation untit, headed by Hollywood veteran Joe Aguilar as chief executive. Mr Aguilar was formerly a producer at DreamWorks Animation as well as Twentieth Century Fox.

In a statement to the Shenzhen stock exchange Huayi Brothers also announced that Markus Manninen will be the art director for the new company. Mr. Manninen worked on visual effects for the Kungfu Panda 3 movie, which grossed a record $146 million, the highest amount for any animated film in China.

The new unit is the latest in a series of links growing between the US film industry and China’s tech giants. Alibaba and Tencent have embarked on aggressive, individual spending sprees for IP content, as demand for entertainment continues to create a vacuum for local platforms. Just last week Tencent led a 500 million RMB ($76 million USD) funding round for boutique film studio Linmon Pictures, following a series of other deals including Disney partnerships covering ESPN and Star Wars. The Chinese tech giant also launched their own film production unit in September 2015.

Alibaba has expanded into all aspects of the film industry, from production to distribution, ramping up investment since the launch of Alibaba Pictures in early 2015. The company acquired the total remaining stake in Youku Tudou late last year, forming the cornerstone of their online subscription business. In 2015 the company forged strong links with Hollywood, including distribution deals with Disney and Paramount Pictures.

Huayi Brothers, which also counts Chinese finance institutions CITIC and Ping An among their core investors, has been laying the infrastructure in early 2016 for a cross-border expansion. In December the company revealed an investment in a Hong Kong shell company alongside Tencent Holdings and Jack Ma-backed Yunfeng Capital. The new entity will oversee the production of 10 live-action films and 3 animated films in cooperation with unnamed US production houses. Huayi Brothers also signed an 18-movie deal with Robert Simonds’ STX Entertainment last April.

Xiaomi Is Putting Their Faith In An Internet-Enabled India

Cate Cadell — Mon, 14 Mar 2016 02:38:25 +0000

Battered by slowing sales back home, Xiaomi is banking on a boom in Indian e-commerce to drive new growth in the coming years.

Xiaomi president Bin Lin told the Wall Street Journal that he believed growth prospects in India were better than in China, and that he hopes to see the number of online smartphone sales in India rise from 30 percent to 50 percent in a few years.

India’s smartphone market is still primarily supported by brick-and-mortar offline sales, though a burgeoning crowd of online retailers and payment platforms are setting the stage for growth in online sales. Platforms including Flipkart, Amazon and Snapdeal have introduced a new wave of pricing wars to the Indian smartphone market, buoyed by maturing online payment services, including Alibaba-backed PayTM.

In 2015 there were approximately 100 million smartphones sold in India according to IDC, under a quarter of the number sold in China.

Xiaomi’s brand is synonymous with online sales in China. The company is particularly known for their frenzied flash sales, earning CEO Lei Jun the title ‘monkey king’ among Chinese netizens, who playfully criticize him for toying with consumers by making them clamor for new releases.

Online sales have helped Xiaomi keep the cost of their devices low in China, a selling point they’ll seek to replicate in the India market. The company has also localized some manufacturing, recently launching their first ‘made-in India’ smartphone, the $150 USD Redmi Note 3.

Other Chinese smartphone vendors have also taken a dual approach to the market, opening online and offline sales channels rather than betting solely on the e-commerce market. In December Huawei, Xiaomi’s top competitor at home, began offline sales through a partnership with local marketplace Zopper. The same month president of Chinese smartphone brand Gionee said that the company’s survival in India hinged on having a functional offline strategy.

Image Credit: Paul Prescott / Shutterstock.com

Chinese Oil Company CNPC Joins Forces With Alibaba To Stave Off Gas Price Woes

Cate Cadell — Fri, 11 Mar 2016 07:51:09 +0000

As oil prices continue to slump in 2016, China’s state-owned oil giants are sponging up revenue wherever they can find it, including the country’s internet-enabled tech giants.

Alibaba has sealed a deal with state-owned oil giant China National Petroleum Corp. (CNPC), to cooperate on a range of internet-enabled projects including mobile services, payments and cloud services. Alibaba will leverage CNPC’s network of 20,000 fuel stations within China to add another valuable industry channel to their payment service.

CNPC chairman Wang Yilin and Alibaba chairman Jack Ma came together for a joint signing ceremony on Thursday to launch the partnership.

The synergy between CNPC, whose listed arm is PetroChina, and Alibaba is supported by the Chinese government’s ‘Internet+’ strategy, which promotes the hi-tech disruption of traditional industries including oil and gas, agriculture, banking, healthcare and manufacturing.

It is the latest extension of an existing relationship. In August 2015 the oil giant opened a pilot store on Alibaba’s Tmall e-commerce platform, selling discount petrol cards as well as on-demand information about peak fuel pricing periods and traffic conditions.

China’s Oil Giants Go Hi-Tech To Fight Low Oil Prices

China’s oil companies are seeking to boost revenue to offset low oil prices, making them hot territory for tech companies seeking a new vertical. In a statement released on Thursday on CNPC’s website the oil company says they will seek to “enhance the vitality, power and core competitiveness of CNPC in responding effectively to the challenges of low oil prices.”

Alibaba’s core e-commerce businesses, much like Chinese oil prices, have been wrestling with the barriers of a saturated and market experiencing slowing growth. Despite this, e-retail spending has remained relatively stable and Alibaba has continued to forge ahead with a spate of mergers and acquisitions. CNPC will be seeking to tap into the vitality of China’s consumer-facing technology market.

Alibaba isn’t the only tech giant finding synergy with China’s state-owned oil giants. In August 2015 Tencent joined forces with China Petroleum & Chemical Corp, whose listed arm is Sinopec, to foster a similar marketing and mobile services relationship.

Sinopec also worked with Alibaba previously in a non-consumer-facing capacity. Alibaba assisted the oil company in building a cloud-based system for data analytics, improving efficiency throughout the company’s production chain.

It’s not clear at this point whether modernizing China’s lumbering state-owned oil giants will foster the same competition between internet giants as other industries such as entertainment, online banking and on-demand services. However Alibaba is likely to have an edge over Tencent given the former’s dominance in cloud computing. According to the government outline on the ‘Internet +’ strategy, “cloud computing and big data” are priority technologies in the push to modernize traditional industry.

WeWork Seals $430 Million To Feed Asia Expansion

Cate Cadell — Fri, 11 Mar 2016 04:58:27 +0000

WeWork Cos., the world’s most valuable co-working space startup, has just sealed a $430 million USD pay packet to fuel their expansion across Asia’s fastest growing innovation hubs.

The investment was led by Chinese investors, and will help the US-based company open centers in several countries including China, South Korea and Japan. The latest funding values the company at $16 billion USD, up from the $10 billion USD following their last round in June 2015.

The financing was led by Beijing-based Hony Capital and parent company Legend holdings. According to filings submitted by the company on Tuesday, the company has allocated up to $780 million USD worth of shares for possible sale as part of the latest financing round.

“The quality of [WeWork’s] execution and fit for the Chinese culture is unparalleled,” said Hony Capital CEO John Zhao. “Our investment in WeWork is both strategic and obvious.”

Appetite for modern working spaces has accelerated over the past year in China. Both public and private projects have cropped up to fill the need for sophisticated offices, catering to China’s burgeoning startup ecosystem. In Beijing, the government has subsidized spaces in some of the most highly sought after areas in the city, attempting to centralize the city’s creative spaces.

WeWork has about 50,000 members worldwide according to a blog post released on Wednesday by company founder Adam Neumann.

“We started WeWork to support small businesses and entrepreneurs, but our intention since the beginning has always been more holistic,” said Mr Neumann.

Image Credit: WeWork

Update (3/13/16 16:18): This post has been updated to correct a typo. WeWork received $430 million USD, not $430 billion USD, in funding.

Alibaba Seals $3 Billion+ Loan To Fuel Expansion

Cate Cadell — Thu, 10 Mar 2016 11:44:13 +0000

Battles in China’s 2016 tech market are won by capital, and Alibaba is gearing up to fight.

The Chinese tech behemoth announced the settlement of a $3 billion USD five-year loan to add fuel to their expansion both locally and abroad. According to an SEC regulatory filing on Wednesday the syndicated loan could even increase according to the company’s demands.

The company has ramped up investments across several major verticals in the beginning of 2016, including online banking, intellectual property, media and entertainment.

Alibaba, along with other local tech giants, have pumped up expenditure as competition stiffens in the maturing Chinese tech sector. The number of cross-border mergers and acquisitions continues to rise through record levels, as Chinese companies seek to build out their businesses globally.

The loan suggests Alibaba will continue to depend heavily on mergers and acquisitions for the foreseeable future. It also points to the limitations of a saturated Chinese market, as acquisitions save the company from the costly localization process when expanding abroad.

The $3 billion USD+ loan will be spread between eight lead arrangers, according to the filing.

Could Sanctions Harm ZTE’s US Smartphone Ambitions?

Cate Cadell — Wed, 09 Mar 2016 09:08:45 +0000

Nothing riles the often fragile relationship between China and the US like a heated spat over sanctioned technology, and the latest clash over ZTE’s Iranian reexports is attracting fire from all sides.

ZTE, which makes smartphones and telecommunications equipment, allegedly breached US sanctions by selling US-made goods to Iran, according to a statement released on Monday by the US Department of Commerce.

Since then, Chinese officials have leapt to the aid of the local telecommunications equipment maker and smartphone vendor. A statement from the Chinese Ministry of Commerce website expressed their “resolute opposition” to the move, noting that the new license requirements would “severely” affect the operations of ZTE.

Diplomatic gymnastics aside, the sanctions have the potential to threaten a movement at the heart of ZTE’s current mobile operations: a two-year long push to put handsets in the hands of American consumers.

A Break In ZTE’s Supply Chain

While the latest restrictions won’t stop ZTE from shipping handsets to the US, they have a significant impact on the technology used in them. ZTE has made no secret of the fact that their latest high-end handsets are designed in the US, for the US.

Last year saw a handful of energetic Chinese smartphone sellers throwing off ‘made-in-China’ stereotypes by releasing high-end smartphones. At the beginning of 2015 ZTE initiated a brand overhaul and began selling handsets to the US. Previously the company had sold handsets in the US under white label agreements, meaning the ZTE phones were branded under other names, mostly carriers.

ZTE’s Axon was their enthusiastic high-end debut, defined by a significant upgrade in component quality. The phone was designed and tested in the US with the help of foreign teams, including Blackberry. The company branched out to sponsor five NBA teams among a series of decadent marketing commitments designed to push the new brand in the US market. In November, Senior Director of Strategic Marketing at ZTE, Andrew Elliot, told Technode that the company had tested every stage of the phone’s development, including the name, with 5768 American consumers.

And it worked. The company’s market share in the US almost doubled to 8.2 percent in 18 months. In a symbolic display, the Axon was even released in the US before China.

But as the company faces a lockout from US technology companies, they are also facing a lockout from the current, and potential, high-end components that helped them build their US flagship brand.

One of the major US tech companies that will be affected by the latest US ruling is Qualcomm. Qualcomm provides the MSM8994 Snapdragon 810 chip used in ZTE’s Axon. Under the new restrictions Qualcomm would be required to apply for a license to sell to ZTE, which would likely be turned down.

ZTE’s Relationship With US Consumers

The latest case with ZTE brings to mind the riff between Huawei and the US government. Huawei’s telecommunications business was blacklisted in the US over spying allegations. While the two cases are markedly different, it’s worth noting that Huawei’s handset business has made healthy gains in the US market despite the previous damage done to their brand. Like ZTE, Huawei has managed to encroach on Samsung and Apple’s high-end domain, notwithstanding a slowing smartphone market.

While consumer sentiment may not be harmed by ZTE’s latest sanctions, a dip in quality components could. The latest restrictions will also likely drive ZTE to search out new suppliers, further promoting the Chinese government push to localize and control core technologies.

The US sanctions against Iran, many of which were recently relaxed, are designed to halt the development of Iranian nuclear programs by locking them out of trades involving US technology.

According to the US Department of Commerce ZTE “planned and organized a scheme to establish, control, and use a series of ‘detached’ (i.e., shell) companies to illicitly reexport controlled items to Iran in violation of U.S. export control laws.” ZTE has a registered company in Iran, and was allegedly utilizing shell companies to export goods that include US technology from China to Iran.

ZTE has suspended trading this week in reaction to the news. The company has not responded to a request for comment at the time of publishing but released a statement noting they are “working expeditiously towards resolution of this issue.”

China’s Apple Stores Now Stock Air Quality Monitors As Pollution Surges

Cate Cadell — Fri, 04 Mar 2016 08:43:33 +0000

Beijing has once again been shrouded in smog this week, with pollution levels reaching hazardous levels over the past two days. It’s perhaps unsurprising then that the country’s Apple stores have decided to stock a piece of hardware primed for urban China: air quality monitors.

As of Wednesday, the Origins Laser Egg hit the shelves in 29 Apple stores across China, and will be available online from the 24th. The 499 yuan (about $76 USD ) air monitor allow users in congested cities to measure air pollution and take protective measures.

The Origins Laser Egg hit Apple shelves in China this Wednesday

China’s air pollution problem came to the forefront in December when the government’s public health warning system hit red alert for the first time since the system began in 2013, encouraging workers to stay home and offices to provide protective masks.

When Origins co-founder Liam Bates decided to start building air quality monitors two years ago there was no color code warning and only a handful of high-priced air purifiers on the market.

He had been visiting China since he was in high school in 2004, but it wasn’t until his girlfriend’s childhood asthma was reignited on a visit in Beijing that he realized how serious the pollution problem was.

“We went to a park in Beijing and we climbed to the top of a hill. We couldn’t see because it was so polluted. She was having a super hard time breathing.”

Liam Bates, co-founder of Origin, started the company after his girlfriend’s childhood asthma returned in Beijing.

Looking for a solution, he set out to buy an air purifier. “At the time I said, If I am going to spend this much money I want to know how it works…I thought, this is silly. This shouldn’t cost so much, and I don’t even know how if it works.” He called his partner Ken Ying and started work on the company the next day.

“We had no money and we knew nothing about air purifiers at the time” he says.

Two years later Origins now sells both air purifiers and air quality monitors. According to Liam, the monitors, which are popular among expats, caught the attention of China’s Apple operations when staff started to bring them to work. “It’s one of those thing you buy for your home but you invariably end up taking it to your office,” he says.

The Laser Egg features a small fan that pushes air past a laser, the laser refracts off minute particles in the air and uses an algorithm to calculate the air’s AQI, an index measuring air pollution. Origin’s accompanying app Breathing Space by Origins allows users to track the Egg’s readings and compare them to outdoor measurements.

Apple themselves have taken on strong environmental commitments in China. The company recently pledged to construct a 200 megawatt solar project across China’s north, east and southern regions. They will also partner with suppliers to build a further 2 gigawatts worth of clean energy projects in the coming years, hoping to avoid a total of 20 million metric tons of greenhouse gas, roughly equivalent to removing 4 million vehicles from the road for one year.

Alibaba’s Finance Arm Looks To Invest In Caixin

Cate Cadell — Thu, 03 Mar 2016 13:00:34 +0000

Just over two months ago Alibaba agreed to acquire Hong Kong’s flagship English language daily, the South China Morning Post, and now it appears the media spending spree isn’t over.

In a statement on Wednesday, Caixin Media Company Ltd., the well-known publisher of Chinese finance magazine Caixin, revealed they were in talks with new investors. Sources cited by the Wall Street Journal say the talks are indeed with Alibaba’s financial arm, Ant Financial.

Caixin’s statement notes that the potential partner will not “violate Caixin’s editorial independence,” and that no concrete terms have yet been laid out.

Caixin’s flagship magazine is one of the most influential names in Chinese finance, business and politics coverage. The publication has a strong data and analytics background, and maintains indices covering a wide range of Chinese industry.

The synergies between Alibaba and Caixin are numerous. The tech powerhouse has been leading an aggressive expansion into media, entertainment and content. In late 2015 they bought out the remaining stake in video streaming site Youku. In December Alibaba forked out $266 million USD to acquire the South China Morning Post.

Alibaba has also joined forces with Tencent to produce original film content, as well as growing out Alibaba pictures, their film production and marketing arm founded in early 2015.

Alibaba has also been extending into financial management services, which could see strategic benefits from a partnership with Caixin Media. Caixin didn’t state how much they are seeking to raise in the upcoming round, or any other financial terms specific to the deal.

Qualcomm Settles Fine For Repeatedly Bribing Chinese Officials

Cate Cadell — Wed, 02 Mar 2016 05:15:12 +0000

Qualcomm Inc. will be hoping to bury another piece of unfortunate history between the company and Chinese authorities, paying out a $7.5 million USD fine in response to allegations that they bribed Chinese officials with gifts and offers of employment, they said in a release on Tuesday.

According to a statement released by the US Securities and Exchange Commission (SEC), Qualcomm violated anti-bribery provisions by hiring relatives of Chinese officials in charge of the country’s telecommunications markets.

The SEC says that Qualcomm also “provided gifts, travel, and entertainment to try to influence officials at government-owned telecom companies in China.” The reports shows that Qualcomm referred internally to relatives of Chinese officials as “must place” or “special” hires for full time jobs and internships, describing the positions as “quite important from a customer relationship perspective.”

“For more than a decade, Qualcomm went to extraordinary lengths to gain a business advantage with foreign officials deciding between Qualcomm’s technology and its competitors,” said Michele Wein Layne, Director of the SEC’s Los Angeles Regional Office.

Among other listed offenses, Qualcomm also provided a $75,000 USD research grant on behalf on an official’s son, and a company executive provided a $70,000 USD loan to the son of a Chinese official to purchase a home.

Qualcomm has agreed to pay the $7.5 million USD civil penalty to close the matter, as well as committing to tighten internal controls, including monitoring the network of political and familial relationships of new staff.

“Qualcomm is pleased to have put this matter behind us. We remain committed to ethical conduct and compliance with all laws and regulations, and will continue to be vigilant about FCPA compliance,” said Don Rosenberg, Executive Vice President and General Counsel of Qualcomm. The company’s statement also says the alleged offenses all occurred prior to 2012.

It’s not the first time Qualcomm has come under fire as as they strive to maintain dominance in the geopolitically fierce battlefield of Chinese telecommunication contracts. In early 2015, the San Diego-based company paid out a $975 million USD fine following a year-long investigation by Chinese antitrust authorities, who claim the company violated the country’s antimonopoly laws.

The case shed doubt over Qualcomm’s ability to settle contracts with China’s largest handset vendors, causing their stock to stumble 38 percent percent in 2015. The company, which makes approximately 60 percent of their revenue from licensing fees, recently settled on licensing fees with Lenovo in February, following a deal with Xiaomi in December.

Chinese Mobile Ad Tech Giant Mobvista Buys US-Based NativeX For 25 Million

Cate Cadell — Wed, 02 Mar 2016 04:04:02 +0000

Mobvista, Asia’s largest mobile ad network, has agreed to acquire US-based NativeX for 160 million yuan (24.5 million USD), the companies said on Tuesday.

“Acquiring NativeX is another key step in realizing our global ad-tech vision to develop a multi-dimensional global ecosystem of mobile traffic,” said Mobvista CEO Wei Duan. The company claims to receive 10 billion daily impressions across 240 countries.

Minnesota-based NativeX was founded in 2000 by twin brothers Robert and Ryan Weber, and produces advertising for mobile games and apps. The company claims to have over a billion users across 178 countries, with 12 consecutive years of profitability. NativeX, now a subsidiary of Mobvista, will grow their team as part of the acquisition, maintaining their current leadership structure. CEO Rob Weber will also become a Vice President at Mobvista.

A Mobvista spokesperson told Technode that globalization is a top priority for the company in 2016. The Guangzhou-based company follows in the footsteps of several large Chinese tech powerhouses looking to expand globally in 2016. As the local market saturates amid a slowing economy and China’s tech companies begin to mature, finding new markets has become a priority for big names as well as smaller players looking to expand early and stave off competition.

Mobvista, founded in March 2013, secured their 12 million USD A series led by NetEase, followed by a 200 million yuan series B from Shanghai Media Group, Golden Eagle Broadcasting System, Haitong Securities and China Securities in mid-2015. Mobvista listed on the National Equities Exchange and Quotations (NEEQ), China’s over-the-counter equities exchange, in November 2015. At the time the company said the move was designed to fund their global expansion.

DJI Just Released The World’s Most Idiot-Proof Consumer Drone

Cate Cadell — Wed, 02 Mar 2016 03:20:16 +0000

Drone-flying has been an elusive hobby for those with little faith in their flying ability.

The idea of fishing a thousand-dollar-plus flying machine out of trees and gutters is enough to turn the most hardy beginners off drones, but DJI’s newly released Phantom 4 could change that.

The $1400 USD addition to the DJI line is the most expensive Phantom model yet, but it comes with a serious upgrade: it can autonomously avoid obstacles.

The drone features five cameras, two forward facing, two on the underside along with the 4K central camera. Together the images are compiled in the DJI’s software to produce a 3D model of the surrounding environment, allowing the drone to maneuver around obstacles.

The DJI Phantom 4 represents a new milestone in the era of consumer drones.

While autonomous obstacle avoidance technology has already been a beta feature of specialized professional drones and limited concept releases, the DJI Phantom 4 represents the first ever consumer-ready iteration of such software, bringing complex maneuvers and filming techniques within reach of the beginner drone pilot.

The drone is capable of avoiding buildings, trees, other drones, aircraft and even humans. Test footage of the drones show it making graceful arcs around buildings, crowds and pine trees. The autonomous feature allows amateur flyers to take ambitiously close footage without risking damage to the $1400 USD vehicle, bringing down a major barrier for new entrants.

“With the Phantom 4, we are entering an era where even beginners can fly with confidence,” said DJI CEO Frank Wang. The feature can also be disabled for more experienced pilots.

Autonomous object avoidance isn’t the only beginner-friendly feature added to the latest Phantom: ‘TapFly’ allows the drone users to set a maximum distance and simply tap the screen to reorientate the drone, meaning that users no longer have to tackle the dual stick controller to get a smooth video capture.

The drone also added ‘ActiveTrack’ , a feature that can 3D map a moving object or person and automatically adjust to keep it (or them) in frame. The follow mode allows the drone to track at just 4-5 feet from the subject.

The Phantom 4 also features a larger battery, with over 28 minutes of fly time as well as an updated 4K camera with wide angle lens and 12-megapixel still shots.

DJI will be teaming up with Apple to sell the latest drone. DJI CEO Frank Wang is a self-professed fan of Apple and Steve Jobs, incorporating the brands minimalistic design into the DJI models long before the partnership.

The new pairing will boost the brand into the offline space. DJI opened their first flagship store in Shenzhen last November, though an overwhelming majority of the company’s sales are still online.

Note: You may need a VPN to watch this video within China

1-In-5 Of 2016’s New Tech Billionaires Are Chinese Women

Cate Cadell — Sun, 28 Feb 2016 23:30:10 +0000

2015 was a tough year for billionaires who made their mint in metals and mining, but a much better year to be filthy rich in tech, according to the annual Hurun Rich List report, which ranks the world’s most wealthy people.

Interestingly, 23 percent of new tech billionaires added to the 2016 list are Chinese women. In fact, the nine new additions make up 100 percent of new global female tech billionaires.

Despite a 7 percent drop in their currency, China’s billionaires have become much richer and much more numerous in the past year. The technology, media and telecommunications (TMT) industry made up half of the main source of wealth for billionaires as of February 2016, whereas metal and mining billionaires saw their wealth drop.

The new female Chinese tech billionaires include Li Qiong, who is a partner with her husband in Beijing Kulun Tech, which recently bought a majority of US gay dating app Grindr, and then entered a bid for Norwegian-based mobile browser Opera. Other women among the nine new tech billionaires hail from companies including Rapoo, VenusTech, Qtone Education and United Electronics.

So Why Are 2016’s New Female Tech Billionaires Exclusively Chinese?

It’s at least partially related to an overall rise in Chinese billionaires. No other country added to the rich list at anywhere near the rate of China, with the combined wealth of their billionaires roughly equaling the GDP of Australia.

The country saw 90 new billionaires in the past year, taking their total to 568. Conversely, the US lost two billionaires, falling below China with just 535. Countries dependent on resources also fell in the rankings, including Russia, Canada and Australia who dropped 13, four and two billionaires respectively.

Aside from a general rise in Chinese billionaires, China also leads the world in new young billionaires (under 40), which could explain why more female tech names are finding their way onto the list. Women accounted for around 16 percent of the total Chinese people listed, while in the under-40 age category that number went up to 21 percent of the total. The country also accounts for 75 percent of the world’s ‘self-made’ female billionaires, according to the report.

Together, China and US made up half of the total list. Chinese billionaires grew 80% since 2013 and Beijing is the billionaire capital for the first year ever, adding 32 to make an even 100 billionaires, beating out New York’s 95.

Baidu Records Steady Growth In Q4, Still Bullish On O2O Expansion

Cate Cadell — Fri, 26 Feb 2016 05:39:51 +0000

Baidu’s stock rose about 11 percent in after hours trading following the company’s fourth quarter results, which showed better than expected revenue growth despite a slowing economy.

The company’s total revenue for the fourth quarter was 18.7 billion yuan ($2.9 billion USD), beating analyst expectations. Mobile revenue represented 53 percent of the company’s total revenue for the fourth quarter of 2015, up from 42 percent in the same period last year.

Baidu’s mobile advertising revenue drove growth, as the company’s mobile search capabilities continued to give them an edge. The company’s online marketing revenue grew 32 percent in 2015, breaking a million online marketing customers.

Despite the Baidu’s strong finish to 2015, the company is still under pressure to produce results from heavy investments in the on-demand sector. Baidu has “doubled down” on their O2O services in an attempt to gain a foothold against competing platforms from Tencent and Alibaba. In June 2015 Baidu committed to spend $3.2 billion USD on services platform Nuomi, which competes directly with newly-merged rivals Meituan Dianping, currently backed by both Alibaba and Tencent.

Baidu executives have been publicly bullish on the company’s ability to turn massive investments and acquisitions into market-leading assets. “Even as China’s overall growth slows, services and domestic consumption are growing. Services and domestic consumption-related verticals are supported by the government’s Internet+ initiative and hold tremendous potential,” said CEO Robin Li in a release detailing Baidu’s fourth quarter earnings.

The company’s shares are currently sitting at $175 USD, roughly 85% percent of their total worth this time last year.

Didi Kuaidi Plans $1 Billion In Fresh Funding

Cate Cadell — Thu, 25 Feb 2016 11:10:57 +0000

Didi Kuaidi, China’s most popular ride-hailing app and Uber’s top global rival, is seeking to close a further $1 billion USD in funding, valuing the company at more than $20 billion USD.

The round, initially reported by the Wall Street Journal who cited unnamed sources, has not yet been finalized and no potential investors were disclosed, though they did note that the round is oversubscribed.

The latest addition to Didi’s coffers will give them more leverage in their war against Uber as well as smaller Chinese ride-hailing services. Didi Kuaidi is the dominant player in the Chinese market, and also a strong competitor in the private car hailing market. The company currently claims to be working in more than 400 cities.

The latest discussions come just four months after the company raised $3 billion USD in September. Uber’s China arm ‘UberChina’ raised $1.2 billion at a valuation of over $8 billion to fuel their expansion in the same period.

The latest potential injection highlights continued investor confidence in China’s runaway on-demand unicorns, despite a slowing economy and an increasingly wary local VC climate. Chinese competitors have struggled to compete in the increasingly consolidated space. In October two of the country’s most popular ‘chauffeur’ apps eDaijia and UCAR entered a strategic partnership to share resources.

Didi Kuaidi has also been eying international markets through strategic connections to US-based Lyft, India’s Ola Cabs and Singapore’s Grab Taxi. Lyft recently revealed that users of the Lyft app will be able to use it to hail Didi cars in China and vice versa within a matter of months.

1955 Capital Seals $200 Million Fund Targeting Sustainability In China

Cate Cadell — Thu, 25 Feb 2016 00:38:47 +0000

1955 Capital, a freshly-minted VC founded by former Khosla Ventures partner Andrew Chung, has closed a $200 million USD fund aimed at helping developing countries, and the first country on the fund’s roadmap is China.

The fund will draw on innovations from America and Europe to solve a diverse set of challenges, including China’s air pollution, food contamination, manufacturing sustainability and the healthcare issues associated with an aging population.

“We believe that China, India, and other developing countries face fundamental challenges that put the future of their societies at risk and place severe pressure on governments and business leaders for solutions,” said Mr. Chung in a release on Wednesday. “We founded 1955 Capital because we believe disruptive technology is critical to solving these issues.”

1955 Capital takes its name from the year that several tech titans were born, including Bill Gates, Steve Jobs, Eric Schmidt and Vinod Khosla.

China has seen an upsurge in sustainable investment from tech titans over the past year. Following the December 2015 Paris climate change talks, Alibaba Chairman Jack Ma and Sequoia Capital Partner Neil Shen joined US billionaires including Mark Zuckerberg and Bill Gates to create a coalition aimed at developing zero carbon energy. During his speech at the talks Mr. Ma also discussed a similar coalition of investors within China working on sustainable goals.

In October 2015 Apple announced construction plans for several high-power solar energy facilities in China aimed at eventually offsetting 20 million metric tons of greenhouse gas annually, roughly equivalent to removing 4 million vehicles from the road for one year.

Despite a drop in China’s overall manufacturing, driven by a slowing economy, the country still suffers from the environmental pains of an emerging manufacturing hub, including unsustainable work practices, low wages and high carbon emissions. A study released in August 2015 revealed that outdoor air pollution contributes to an estimated 1.6 million deaths every year in China.

During his time at Khosla Partners, Mr. Chung invested in LanzaTech, a US company working in China that specializes in converting exhaust from steel mills into less harmful gasses. Mr. Chung said the investment was one of the inspirations for his new fund, noting that supporting American innovation with Chinese capital was one of the primary goals of the project.

Mr. Chung and 1955 Capital have not confirmed who contributed to their $200 million USD fund, though they did note that the fund intends to expand beyond China, potentially targeting India, South East Asia and Africa.

Momo Stock Surges 20% As Alibaba Vice Chairman Joins Board

Cate Cadell — Wed, 24 Feb 2016 10:34:08 +0000

Momo Inc., one of China’s most popular social networks, saw its stock leap almost 20 percent following an announcement that Alibaba Holdings Group Ltd. vice chairman Joseph Tsai has joined the company’s board.

Momo received a privatization bid in June 2015, just six months after their NASDAQ listing in December 2014. Tsai’s involvement suggests that Alibaba could have a hand in the bid, which is currently led by Momo CEO Tang Yan, with participation from Matrix Partners China and Sequoia Capital.

Momo’s stock rose to $12 on Tuesday, it’s highest peak since May 2015. The company’s stock tumbled 40% in the second half of the year as progress on privatization stalled alongside general volatility in the Asian markets.

Momo joins a number of Chinese tech companies looking to re-list in China. At the time of the initial privatization bid in June, Momo was the thirteenth company to plan a delisting from the US markets in 2015. Just a week earlier Chinese internet giant Qihoo 360 had also revealed privatization plans.

Momo initially began as a location-based social app for strangers, and has since extended into a wider networking platform. The company made a muted attempt to enter the US market with the release of a localized app called ‘Blupe’ in late December 2014, a month after their IPO.

The app failed to gain significant traction and the company has since refocussed efforts on the Chinese market. In September Momo launched ‘XianChang’ — meaning “on the spot”, a live concert broadcasting platform. The product targets China’s high demand for online streaming content, a vertical in which Alibaba has also been aggressively expanding.

Momo also has crossover with Alibaba in the digital gifts business and ‘lucky money’ drives. Acquiring the privatized social network could potentially help Alibaba extend into areas dominated by Tencent’s highly-popular WeChat and QQ social ecosystems.

Huawei Will Overtake Apple, Samsung In 5 Years: CEO Richard Yu

Cate Cadell — Mon, 22 Feb 2016 04:46:21 +0000

A turbulent economy and saturated market can make smartphone shipments hard to predict, but apparently not for Huawei chief executive Richard Yu.

Mr. Yu expects Huawei to overtake the world’s biggest smartphone sellers for the number one spot by 2020.

“Our competitors have strong brands, but we have much better products,” Mr. Yu told journalists at this week’s Mobile World Congress in Barcelona.

“Before, we were getting share from smaller players, but with time, we will get market share from Apple and Samsung,” he said.

Huawei is currently ranked number three globally behind Samsung and Apple, though they are now the largest vendor in China after recently overtaking Samsung. Huawei held 7.3% of the global market in 2015, meaning they will have to almost triple their market share to become the global leader by 2020.

Huawei’s success hinges on successfully marketing their brand outside of China and emerging markets. Like fellow Chinese telecommunications equipment maker ZTE, Huawei has previously shipped a large number of handsets in western countries through ‘white label’ agreements, meaning their hardware is sold under different brands, primarily carriers. This means that while Huawei sells a lot of handsets, their brand awareness is low relative to their market share.

In September 2015 Huawei made an aggressive brand-driven play for the high-end market, releasing the first Mate S at €600-€700, with several features that compete directly with the iPhone 6. The company also strengthened links to their western audience in 2015, releasing a Nexus device with Google and hiring a former Apple design executive to improve their smartphone interface.

The realignment paid off, with Huawei accelerating to more than 100 million shipments in 2015 while competitors in the Chinese market, including Samsung, Xiaomi and Lenovo, struggled to meet sales goals.

Mr Yu. also praised Apple CEO Tim Cook at the event for his tough stance on data privacy in light of the latest riff with the FBI, however he didn’t go as far as to comment on Huawei’s official stance. Huawei was previously blacklisted from selling telecommunications equipment in the US following spying allegations.

Ex-Mozilla President Wants To Challenge Android In IoT: Li Gong Q&A

Cate Cadell — Mon, 22 Feb 2016 03:14:12 +0000

Building an OS to compete with the likes of iOS and Android is no easy task, but it’s exactly what former Mozilla president Li Gong is hoping to do with his HTML5-based OS, H5OS.

Now CEO of Hong Kong-based Acadine, Mr. Gong believes the market is ripe for a new entrant, and he plans on striking where he feels the major players have fallen short: the fast-growing internet of things (IoT) market.

“The logical place to start for us is where they are weak or they are not meeting the customer’s requirements,” Mr. Gong told Technode, referring to the thousands of new IoT innovations cropping up in China.

Acadine released the first build of their OS last week, seven months after they received $100 million USD in funding led by Chinese state-backed Tsinghua Unigroup. The company has now teamed up with Linaro, Alcatel, Thundersoft and Qualcomm to get their OS into products this year.

Mr. Gong believes the battery efficiency and low memory requirements of the HTML5-based OS makes it the “logical minimum system.” The company is now looking outside of China for their next round of investment.

Technode sat down with Acadine founder and CEO Li Gong to discuss the release H5OS and why he believes the market needs an HTML5 OS. (Edited Excerpts)

Why do you think the market needs H5OS?

If you look at the big picture tech, especially in systems in software, it tends to go in cycles: ten, fifteen, twenty years. Something new comes along that’s small, spiffy and very nice, and then as it becomes popular lots of things get added to it because it has to support lots of things. Before you know it you are locked into the era that has just gone by and you can no longer adapt and change your self to meet what it coming next. That’s typically what happens.

We were saying this ten years ago, twenty years ago — that we were trying to connect stuff, but right now it’s really happening. We’re at the transition point of big change in terms the product, the devices that are becoming smart and you look at the traditional offerings none of them really fit what is happening now. That is the 10,000 foot view.

On the ground, especially here in China literally hundreds of companies or thousands of companies are trying to make something smart, however building an OS in house requires a large investment of time and money. These companies also want to focus on innovations for their own products, and they want an OS that works on these products. H5OS is the logical minimum system. Everything needs the web, everything needs to be connected – but apart from that you don’t really need anything more as a basic operating system.

What do you believe are the shortcomings of competing operating systems?

The problem is that a those systems are not designed for such small diverse set of devices. They’re defined for almost a single form factor, even the dimensions may change a bit from 4 inches to 5-6, but they are more or less designed for one category of devices.

And it’s not only a technology question, it’s a business question. I’ve worked with big companies and I understood clearly that even though everyone there understands dynamic dilemmas, when you are you faced with resource allocation choices they inevitably go down one path, because that’s their cash cow. When they have a successful product in the segment, they can see predictable returns if they put more resources into it.

These products are not adapting to anybody’s needs. If you talk to device makers almost none of them have any production or support from the [traditional] OS makers. They don’t talk to them, don’t listen to them and if you talk to a few [companies] who are big enough to have the engagement with them, you find out that their advice or input is not heard or taken in and their requirements are not matched.

Are you seeking to replace the market share of major players or supplement it?

The logical place to start for us is where they are weak or they are not meeting the customer’s requirements. There is also a strong set of people that want something that strategically allows them to allow them to innovate later, which H5OS does.

Your biggest funding round to date is from Chinese state-backed Tsinghua Unigroup. Operating systems are a technology the Chinese government is seeking to localize, how are you dealing with these geopolitical issues?

We are keenly aware the geopolitical complications that may come up, we are trying our best to avoid that and stay out of it. Even though we have investment from this particular group, they do not controlling anything. They are an investor, they’re not involved in our operations, and part of the reason for that is that we are open to funding from almost anybody

Operating systems cannot really succeed if they say that this is a US OS or this is the Chinese OS, because everyone ships product everywhere and you need to have global appeal for an OS to work. You can then localize for the specialized industry segment or customer.

H5OS is an international OS, and we are looking for funding to diversify our investor base.

What are you planning for your next round of funding?

Probably in the US or some other market. We also don’t want to be dominated by another big player in any one country

Who are the partners you are working with to get your software into products this year?

We are definitely not working in a vacuum. We are mostly working with device makers who ship the OS. It is also critically important for major chipset makers to support us. Because this is not like an open platform where you can just run their stuff on their chips, because if you want to fully utilize all the optimizations and innovations Qualcomm has done you can’t just buy their chip off the open market and run your program over the top, you have to be supported by Qualcomm. So aside from device makers we are also very close with chipset makers.

Qualcomm Seals Long-Awaited Patent Deal With Lenovo

Cate Cadell — Fri, 19 Feb 2016 02:48:39 +0000

Qualcomm has finally inked a licensing deal with Lenovo, the US chipmaker announced on Thursday, ending a 12-month period marred by delayed royalty payments from China’s biggest smartphone vendors following a damaging rift with the country’s government.

The deal covers Lenovo chips as well as Motorola, which was acquired by the Chinese hardware giant in late 2014. The fresh patent agreement grants Lenovo a royalty-bearing license to develop, manufacture and sell 3G and 4G devices built with Qualcomm technology.

Lenovo is the last of China’s five big smartphone makers to reach a deal with Qualcomm, whose stock price tumbled over 38 percent in 2015 amid troubles settling patent agreements with the cornerstone clients. Qualcomm’s stock price jumped almost two percent in after hours trading following the latest announcement.

Qualcomm’s patent fees account for some 60 percent of their total revenue, while Chinese business accounts for roughly half of the company’s total revenue.

Qualcomm came under fire from the Chinese government in November 2013, when they reportedly breached the country’s antitrust laws. Qualcomm was forced to pay a $975 million USD fine in February 2015, along with new conditions requiring Qualcomm to adjust royalty rates in future Chinese deals. Vendors capitalized on the legal spat to hold out on paying licensing fees. Notably Xiaomi waited until December 2015 to seal a patent deal with the US chipmaker.

Lenovo’s delay has also been linked to poor sales performance within their mobile division. The company has struggled to turn a profit on their handsets since the costly acquisition of Motorola coincided with a global slowdown in mobile sales.

LeEco, Aston Martin To Release Electric Vehicle By 2018

Cate Cadell — Thu, 18 Feb 2016 03:17:45 +0000

LeEco, formerly known as LeTV, will push out an Aston Martin electric vehicle by 2018, reiterating their existing partnership through a new MOU, the company said on Wednesday.

LeEco joins a handful of Chinese tech companies taking on US counterparts to release hi-tech electric and autonomous autos before 2020. According to LeEco, the latest MOU will possibly also cover the development of LeEco and Faraday Future-brand electric vehicles.

The partnership will initially oversee the production of the Aston Martin RapidE, the German brand’s first electric car. The vehicle will be based on an existing Aston Martin sedan design, with the aim of taking it fully electric. The car will be manufactured in Gaydon, England, according to the release.

“We have been encouraged by the project speed and technical depth shown by LeTV [LeEco] in the development of the RapidE concept towards full production,” said Aston Martin CEO Andy Palmer, “Bringing the RapidE to market by 2018 is an important milestone for both companies.”

LeEco and Aston Martin have worked together in the past on developing connected car systems. Last month the duo released an Aston Martin Rapide S with a fully integrated LeEco Internet of the Vehicle (IOV) system.

LeEco founder and CEO Jia Yueting is a primary investor in Faraday Future, the eccentric Chinese EV startup behind the Zero1 supercar. The integration of LeEco’s IOV and powertrain technologies with Aston Martin’s vehicle technology and Faraday Future’s EV platform could prove a formidable partnership in the race for global dominance in electric vehicles.

China’s tech giants, including LeEco, have been vying to enter the autos space as their US counterparts make a series of important breakthroughs. Baidu, China’s largest search engine, revealed their first fully-autonomous car had completed test runs on the outskirts of Beijing this December.

Apple Pay Will Launch In China Tomorrow

Cate Cadell — Wed, 17 Feb 2016 09:09:19 +0000

It’s the eve of a new battle for Apple in the Chinese market, with the first launch of Apple Pay set for tomorrow.

The service has the backing of 19 major and regional banks as well as a core partnership with Union Pay, the biggest central payment network in China. Apple Pay will be available for Industrial and Commercial Bank of China Ltd. (ICBC) customers this Thursday, said the bank in a public social media post.

“You no longer need to rummage around your wallet or waste time looking for the right card,” says Apple’s China-facing website. Though it’s been a long time since China’s digitally-enabled middle class did much wallet rummaging, with a highly-consolidated market of existing mobile payment systems.

Alibaba’s Alipay and Tencent’s WeChat Wallet have expanded aggressively with the backing of their respective e-retail and social empires. Currently the two payment systems cover all aspects of the digital retail market, including the country’s booming offline-to-online services sectors such as ticketing, ride-hailing and food delivery.

China marks Apple’s third official Apple Pay market following the US and Canada. While the service is technically available in other markets including Hong Kong, Singapore and Australia, local banks have shied away from strategic deals with Apple meaning that users must still use an American Express card.

Apple may face an uphill battle against China’s local payment giants, but they are holding steady in smartphone sales, which could boost their position as a payment provider.

Baidu Receives Offer For iQiyi Stake Led By CEO Robin Li — IPO In Sight?

Cate Cadell — Sat, 13 Feb 2016 01:51:40 +0000

Baidu Inc., China’s largest search engine, said Friday that they had received a non-binding acquisition bid for their $2.8 billion USD bid video streaming business iQiyi led by Baidu Chairman and CEO Robin Yanhong Li and iQiyi CEO Yu Gong.

The executives offered to acquire Baidu’s entire 80.5 percent stake in the company, formerly known as Qiyi, fueling speculation that the company is being ripened for IPO.

In May 2014 CEO Yu Gong told Bloomberg that the company planned to IPO within the next three years, giving them a loose deadline of mid-2017. The latest centralization of ownership within the Baidu family could be the first sign that the process is underway.

“The buyers expect that Qiyi will remain a strategic partner of Baidu after the consummation of the transaction and enter into business cooperation agreements with Baidu,” said Baidu in a release on Friday.

Over the past year Baidu has invested heavily in original content as they seek to outrun their main competitor Youku Tudou — the Alibaba-back streaming site. Both Alibaba and Tencent have expanded aggressively into media and entertainment, seeking to serve the growing demand for local content.

“iQiyi now plans to invest 50% of its resources in creating more self-produced content to compliment the acquired licensed content, such as films from Lions Gate.” said Baidu CEO Robin Li during their Q3 earnings call in October 2015.

Baidu said their board has formed a special committee of three independent directors to evaluate the transaction along with legal counsel.

Amazon Takes On Alibaba For $1 Trillion Global Delivery Market

Cate Cadell — Thu, 11 Feb 2016 01:24:42 +0000

Amazon.com Inc. is making an aggressive expansion into global logistics, pitting their cross-border e-commerce business against Alibaba Group Holding Ltd. in a bid to drive down shipping costs from the world’s biggest manufacturing nations, reports show.

The U.S. company’s roadmap includes building cargo and customs management services from China and India to core markets including Japan, Europe and the United States, according to internal Amazon documents reviewed by Bloomberg dating back to 2013.

It’s a bold plan which pits them directly against Alibaba, who have been spending aggressively to expand their homegrown logistics brand as well as their global logistics network. The cross-border e-commerce market is expected to become a $1 trillion USD industry by 2020.

The project, dubbed ‘Dragon Boat’, would also pose new competition to Amazon’s local shipping counterparts, FedEx and UPS. “Sellers will no longer book with DHL, UPS or Fedex but will book directly with Amazon,” said the 2013 report secured by Bloomberg. “The ease and transparency of this disintermediation will be revolutionary and sellers will flock to FBA given the competitive pricing.”

Amazon’s shipping costs have been rising sharply in the past year, causing concern from investors. Their latest earnings report shows a 37 percent jump in shipping costs year over year.

In a regulatory report cited by Reuters, Amazon registered a Chinese freight forwarding subsidiary, Beijing Century Joyo Courier Service, with China’s transport authorities in 2015, along with a complimentary application to the U.S. Federal Maritime Commission from their China subsidiary in November. Amazon also filed with the Shanghai Shipping Exchange to serve as a shipping broker for a dozen trade routes, including China to Europe and China to the U.S.

Qihoo 360, Kulun Enter $1.2B Buyout Bid For Opera

Cate Cadell — Thu, 11 Feb 2016 00:23:15 +0000

Norwegian-based Opera Software ASA, maker of the world’s fourth-biggest mobile browser, has received a $1.2 billion USD buy-out offer from a Chinese consortium including search and antivirus giant Qihoo 360 Technology Co. and game company Beijing Kulun Tech Co., according to a statement by Opera on Wednesday.

The consortium is offering to acquire the entirety of Opera shares at 71 Norwegian Kroner each ($8.33 USD), a 46% premium on their last trading price. Opera suspended trading on Friday amid speculation of the takeover and resumed on Wednesday, closing up 33% at the end of the day.

Opera still trails behind Alphabet’s Chrome, Alibaba-backed UC Web and Apple’s Safari in the global mobile browser market, with a share of roughly 10 percent. Opera’s management has been open since last year about the potential of the company’s sale.

In the face of stiff competition Opera has focussed on data compression to target their mobile browser to emerging markets where bandwidth is limited. The company’s interest in China, the world’s biggest mobile market, extends this existing strategy. China has a large untapped mobile market as well as an extensive pool of low-budget smartphone consumers.

“Facebook and Google have their ecosystems and now we have one too, in a part of the world that is growing incredibly fast and where we will become very strong,” Opera Chairman Sverre Munck told Reuters in an interview on Wednesday.

The acquisition has various benefits for both Qihoo 360 and Kulun. Qihoo has been seeking to extend their mobile search business, which is currently ranked second behind Baidu. Qihoo’s mobile search business has lagged in recent quarters, paralleling a general leveling in mobile search among their competitors. The acquisition of Opera could boost their position as well as supplementing their existing user base to cross-sell Qihoo-backed products, including their antivirus software, to Opera users.

Kulun, which has previously specialized in game development, recently extended further into the mobile market by purchasing 60 percent of US-based gay dating app, Grindr, for approximately $93 million USD.

The Chinese consortium behind Opera’s purchase also includes Golden Brick Silk Road (Shenzhen) Equity Investment Fund and their Yonglian Investment affiliate.

This Chinese Nuclear Fusion Machine Just Made A Major Breakthrough

Cate Cadell — Wed, 10 Feb 2016 09:24:27 +0000

Chinese scientists claim to have made a major breakthrough in the development of sustainable fusion energy. The research group at the Experimental Advanced Superconducting Tokamak (EAST) say they’ve heated plasma gas to over 50 million degrees celsius, almost three times the temperature of the sun’s core, for 102 seconds.

Just last week German scientists managed to heat hydrogen gas to 80 million degrees for a quarter of a second. The implications of the Chinese and German breakthroughs are massive. Sustained hydrogen plasma could potentially replace the need for nuclear fission and fossil fuels, creating a clean energy source powered by the same process that powers the sun.

The complicated process involves superheating hydrogen gas within a circular reactor while holding it away from the walls with high-powered magnets to create a plasma gas capable of emitting extreme heat energy.

According to EAST, the latest breakthrough is just a stepping stone to a greater goal. “EAST’s official scientific goal is to achieve a 100 million degree plasma for 1000 seconds,” the research unit said in a statement on their website. “But we still have to face many challenges in science and technology before we can achieve this scientific objective”

The EAST Tokamak reactor is located at the Institute of Physical Science in Hefei, about 400 kilometers west of Shanghai.

Credit: The Institute Of Plasma Physics Chinese Academy Of Sciences

540 Robots Celebrate Chinese New Year With A Syncronized Dance

Cate Cadell — Wed, 10 Feb 2016 02:06:42 +0000

In a show reminiscent of the 2008 Beijing Olympics drumming spectacle, state broadcaster CCTV aired a dance routine by 540 synchronized robots accompanied by 29 neon drones on Sunday.

The annual Chinese New Year Gala, which attracts some 700 million viewers every year, is an epic live variety show showcasing Chinese culture with a healthy dose of 爱国 (patriotism).

China has invested heavily in kickstarting an innovation economy amid turbulence caused by a slowing economy, and nothing showcases a newfound commitment to hi-tech like half a thousand dancing mechanical men.

The bi-pedal performers must have undergone some serious training because not a single one seemed to break unison during the performance:

Please note you may need a VPN to view this video from within the mainland.

Xiaomi Phones Went On Sale In The US This Week – For One Day

Cate Cadell — Fri, 05 Feb 2016 00:15:49 +0000

Xiaomi fans in the US were pleasantly surprised by announcements this week that Mi phones would be immediately available via US-based virtual carrier US mobile on Monday. The phones were on sale for less than 24 hours however, before being removed from the store.

US Mobile, backed by T-Mobile, advertised that they were the first legitimate US distributors of the Xiaomi phones, a claim that was later debunked by the Chinese company itself.

“Xiaomi only offers a small selection of accessories for sale in the U.S. through Mi.com,” said Xiaomi in a statement. “There are no plans to sell smartphones through any authorized distributors in the U.S.

“US Mobile is not authorized to sell Xiaomi products in the U.S.”

In an email to CNBC, US Mobile CEO Ahmed Khattack said they decided “it would be best to get the phone rigorously certified by carriers before it’s allowed back on our marketplace,” hinting that the US Mobile store could potentially hold the Mi products in the future, despite Xiaomi’s claims.

US Mobile is a third party virtual network operator that leases telecommunication services from T-Mobile, selling budget pre-paid packages to customers. The company claimed to have an authorized distribution relationship with Xiaomi, as well as fellow Chinese smartphone vendor Meizu.

Xiaomi has not released a phone or connected device compatible with the U.S. market, meaning imported devices would suffer defects. Xiaomi phones would not be able to use U.S. 4G services, and several apps within the customized Xiaomi app store would not be functional.

Xiaomi has expanded heavily outside of China in the past year, though they have stuck to high-growth developing markets, including Brazil and India. Xiaomi sales were initially halted in India due to an infringement case led by Ericsson, which eventually forced Xiaomi to ship 100 thousand handsets back to Hong Kong. The company has since regained lost ground, setting up manufacturing bases in both India and Brazil.

While Xiaomi has opened a limited U.S./Europe-facing store, it features only non-connected hardware, including headphones, battery packs and the Mi fit band. Company staff, including CEO Lei Jun, have previously downplayed the possibility of an imminent U.S.-entry, and the latest scuffle with US Mobile suggests it may still be a way off.

Secretive AR Company Magic Leap Raises $800M Led By Alibaba

Cate Cadell — Wed, 03 Feb 2016 23:25:21 +0000

Secretive augmented reality (AR) company Magic Leap has sealed almost $800 million USD from high-profile investors including Alibaba, Google and Warner Bros to produce their AR headset. The latest investment values the company at $4.5 billion USD. Alibaba’s executive vice-chairman, Joe Tsai, will also join the company’s board.

Magic Leap’s technology is as fantastical as it is secretive. The company has offered only glimpses of the beta headset, which appears to show highly-sophisticated 3D graphics interacting with offline spaces. A video released last year showed a robot hiding under a desk and a very detailed depiction of the solar system in the same office space.

The latest funding follows a $542 million USD investment in 2014 which valued the company at $1.2 billion USD. Other investors in the recent round include Morgan Stanley, JPMorgan Chase and Qualcomm Ventures.

“Here at Magic Leap we are creating a new world where digital and physical realities seamlessly blend together to enable amazing new experiences,” said Magic Leap Founder, President and CEO Rony Abovitz.

It’s not clear what Alibaba’s interest in the startup is, though the technology could theoretically be applied in several of the Chinese giant’s most prominent sectors, including entertainment and e-commerce. “We are excited to welcome Alibaba as a strategic partner to help introduce Magic Leap’s breakthrough products to the over 400 million people on Alibaba’s platforms,” said Mr. Abovitz.

Magic Leap’s commercial product currently has no sale date in sight, though in an interview with the Financial Times Mr. Abovitz said the devices would be shipping “soon” following a series of test runs and modifications to the accompanying software, cloud services and applications.

Tencent Joins Forces With ESPN To Tap March Madness In China

Cate Cadell — Wed, 03 Feb 2016 23:20:56 +0000

Tencent Holding Ltd. has inked a multiyear deal with ESPN, a division of Walt Disney Co., to air live sporting matches and Chinese-language commentary.

QQ Sports, Tencent’s flagship sports portal, will launch an ESPN sports section, initially focussing on NBA and international soccer, according to a statement from ESPN.

ESPN will provide exclusive Mandarin-language commentary for every game in the 2016 NBA playoffs, as well as a weekly “opinion and debate program” for Tencent users. The deal also covers the NCAA ‘March Madness’ Basketball Championship along with the X Games.

“Our relationship with Tencent marks an exciting new era for ESPN’s global business,” said Russell Wolff, Executive Vice President of ESPN International.

ESPN has also committed to providing Chinese-language media content covering NBA and international soccer, as well as permitting QQ to syndicate translated versions of other ESPN media content.

China’s tech giants, among which Tencent is the biggest, have been rapidly buying up media content in a mad dash to lock down sections of the online entertainment subscription market. Alibaba recently bought out the remaining shares in Beijing-based streaming company Youku Tudou, as well as several other media assets including the controversial acquisition of Hong Kong newspaper South China Morning Post.

Passages of investment have blurred between Tencent and Alibaba amidst the vacuum of available media content. Disney’s ESPN favored Tencent’s strong existing sports audience, though Disney recently launched an exclusive over-the-top content streaming service with Alibaba, who have excelled in media marketing. Recently Tencent also joined forces with Yunfeng Capital, backed by Alibaba Chairman Jack Ma, to buy out a shell company with the aim of producing media content.

ESPN says that they intend to extend the partnership with Tencent into other sports in the future.

Google-Backed Mobvoi Launches Chinese Android Wear App Store

Cate Cadell — Wed, 27 Jan 2016 07:05:53 +0000

Mobvoi, Google’s first direct investment in the Chinese market since they were blocked in 2010, has launched an Android Wear app store which will serve as a proxy for Google smartwatch apps in China.

Mobvoi launched the store at a developer conference on Monday. Mobvoi co-founder and chief executive Li Zhifei said the store will be pre-installed on all platforms for Android wearables and will feature alongside other partners on the official Android website.

Google’s Play store is currently still blocked in China, though the company is set to launch a version modified for the Chinese market in 2016, according to reports.

Founded by former Google employees in 2012, Beijing-based Mobvoi developed mandarin speech recognition search tool, Chumen Wenwen, as well as their own smartwatch OS, originally designed to replace blocked Google services. The company has also partnered with Lenovo on their Moto 360 smartwatches in China.

“They are a smart user-focused team that exemplify everything that exciting about the ecosystem here,” said David Singleton, VP of Google Android Wear at the event on Monday. “I am also overwhelmed by the pace of innovation in China,” he said, echoing Uber CEO Travis Kalanick who said China could soon surpass the U.S. in innovation at an event in Beijing this month.

Mobvoi also announced that differences between Android Wear and Android Wear China SDKs will be eliminated, paving the way for foreign apps to enter China. “Today, Google is going to announce that the Android Wear China SDK will be the same as the global one,” said Mr. Li. “The second step will be introducing the overseas apps into China. Synchronizing the SDKs solved part of the problem and we will do some promotion to encourage the ecosystem.”

Google led Mobvoi’s latest round of funding in October 2015, raising an amount in the tens of millions. The company’s total funding amount to date is $75 million.

Image Credit: Technode.com

Oppo Defies Saturated Market With 50 Million Sales In 2015

Cate Cadell — Wed, 27 Jan 2016 05:44:58 +0000

Chinese smartphone maker Oppo shipped 50 million smartphones in 2015, exceeding expectations with 67 percent year over year growth. It’s part of a wider reshuffle in China’s smartphone market that saw Xiaomi fall from grace and Huawei take top spot as the country’s largest vendor by shipments.

Xiaomi sold just over 70 million, falling well short of their 80 million low-end goal. Huawei broke 100 million with a diversified strategy targeting high-end users with the Mate S. Oppo’s global market share now stands at 3.8% as of the beginning of 2016, compared to Huawei’s 8.4%, Xiaomi’s 5.6% and LG’s 5.3%, according to a report released this month by market research firm TrendForce.

Oppo’s sales projected them into the top ten global smartphone brands, ranking eighth despite an increasingly saturated Chinese market. The company has followed other vendors into neighboring Asian markets including Vietnam, where they claim to be the second largest vendor in offline sales.

Oppo has also invested heavily in an India expansion, entering into an agreement with Foxconn to manufacture phones in India, as well as a marketing partnership with the International Cricket Council (ICC). In a release on Tuesday the company said they plan on 60 percent growth in non-Chinese markets, buoyed by “a planned sales increase of 300 percent by the end of the year” in India.

Samsung’s grip on global sales slipped in 2015, falling to 24.8% from 27.8% in 2014, leaving breathing room for smaller Chinese Android OEMs looking to crack the market. Lenovo’s share also slid sharply from 7.9% to 5.4% in 2015 following their acquisition of Motorolla.

Oppo claims their success on the Chinese mainland was due in part to the marketing of their fast-charge feature.

Why This Google Ventures-Backed Cybersecurity Startup Thinks China Is ‘Critical’

Cate Cadell — Tue, 26 Jan 2016 13:54:54 +0000

As a flurry of internet-enabled innovations begin taking advantage of the disposable wealth among China’s growing middle class, cybersecurity concerns continue to loom over the country.

The government steadfastly claims that China is the biggest victim of global cyber attacks, while outside the political realm internet giants face the challenge of protecting their ever-expanding consumer-facing empires.

U.S.-based Shape Security Inc., who specialize in ‘botwall’ cybersecurity technology, announced a $25 million USD series D this month, aimed at fueling their expansion in China. The series was led by Baseline Ventures and followed by Beijing-based Northern Light Venture Capital, bringing the company’s total funding to $91 million.

They join existing investors Kleiner Perkins Caufield & Byers, Norwest Venture Partners, GV Capital (formerly known as Google Ventures) and Tomorrow Ventures, backed by Alphabet chairman Eric Schmidt.

According to Sumit Agarwal, co-founder and VP of strategy at Shape Security as well as a formal Google executive, the Chinese market is vital. “We view expansion into China as critical for our long term success,” said Mr. Agarwal in an email to Technode. “Specifically for visibility into cybercriminal attacks on international B2C companies.”

Mr. Agarwal also pointed to potential vulnerabilities arising from rapid development in China’s internet industry. “We see massive opportunity in China because it is home to tech giants that are on track to surpass, and in some cases already have surpassed, their US counterparts,” said Mr. Agarwal.

“Especially in the area of e-commerce, these companies are facing the same security challenges posed by cyber criminals, competitors, and nation-states.”

Shape Security’s product targets ‘bots’ which search out website vulnerabilities through automated scans. The company’s tool, which can be completely deployed via the cloud, constantly modify parts of the source code to throw off the automated scans.

“Google and Facebook have invested hundreds of millions of dollars to create and operate sophisticated custom defenses for their applications,” the company says on their website, noting that they aim to provide “a level of protection previously unattainable for most organizations.”

According to Mr. Agarwal, Chinese companies are keen to get their hands on the technology. “We actually had Chinese customers approach us as we’re seeing their ambitions and huge amounts of capital take them to Silicon Valley.”

Shape Security is currently in the process of seeking a local partner in China, and will be announcing these plans later in 2016.

More Than Half Of China Is Now Online, And They’re Mostly Mobile

Cate Cadell — Tue, 26 Jan 2016 05:25:06 +0000

China has kicked off 2016 with a serious milestone – more than half their 1.37 billion population is now connected to the internet, according to a report released by state-backed China Internet Network Information Center (CNNIC).

As of January first 2016, 688 million Chinese people had access to the internet, accounting for 50.3% of the population. The report also revealed that over 90% of the country’s web users access the internet through their smartphone.

China has seen an explosion in mobile-enabled services in the past three years, spurred on by massive capital injections from the country’s internet giants including Alibaba, Tencent and Baidu. Mobile services have extended across retail, banking, education, travel and lifestyle in urban centers, capitalizing on the logistics problems posed by China’s overpopulated cities.

New brand-leaders have also emerged in China’s low-cost Android smartphone sector, including Xiaomi, who experienced a meteoric rise in sales before the market slowed in 2015.

According to CNNIC, mobile payments rose 64.5% in 2015, buoyed by Alibaba’s Alipay and the release of Tencent’s Wechat Pay. Travel bookings leapt 56% as market leaders Ctrip and Qunar joined forces. Mobile shopping rose 43.9% over the same figures in 2014.

While almost half of the country’s population is yet to be connected, growth levels in the smartphone sector are unlikely to reach previous heights. China’s smartphone shipments have now dropped below 10%, according to a report from market research company IDC in December 2014, caused by saturation in the Chinese market. The report notes that China is slowly shifting to a replacement market, meaning the pool of first-time buyers is shrinking.

According to CNNIC it’s China’s youth market that continue to drive growth, with those under the age of 19 accounting for 46% of total growth in 2015.

Qualcomm Forms $280 Million Joint Venture With Chinese Province

Cate Cadell — Wed, 20 Jan 2016 05:55:41 +0000

Qualcomm has formed a joint venture with Guangzhou province, touted as China’s upcoming hub for big data and cloud computing, in an attempt to extend their server chip business in the country. The venture will be worth 1.85 billion yuan (approximately $280 million USD).

The new semi-conductor company, Guizhou Huaxintong Semi-Conductor Technology Co. Ltd., will be 55% owned by Guizhou’s provincial government, while Qualcomm will hold the remaining 45%, they revealed at an event in Beijing on Sunday.

Qualcomm will also establish an investment firm in Guizhou, targeting further investments in China.

Intel currently holds a monopoly on the server chip sector in China, though they recently credited lackluster first quarter projections to caution in the Chinese market. While Qualcomm’s market share in server chips is comparably tiny, the new state-backed joint venture offers a potential fast-track to seizing some of Intel’s local business.

The new venture is also strategic in terms of Qualcomm’s relationship with the Chinese government. “The strategic cooperation with Guizhou represents a significant increase in our collaboration in China” said Derek Aberle, President of Qualcomm in a release.

“We are not only providing investment capital, but we also are licensing our server technology to the joint venture and assisting with R&D process and implementation expertise; this underscores our commitment as a strategic partner in China.”

Qualcomm scuffled with the government in the past over the country’s strict antitrust laws. Last February the company agreed to pay a $975 million USD fine, the largest in China’s corporate history, following a 14-month investigation.

Qualcomm continued to struggle with delayed patent payments into late 2015, but has started 2016 on a better note in Asia, sealing deals with Audi and Samsung, as well as launching a Singapore-based joint venture with Japan’s TDK Corp. to manufacture components for radio-frequency technology including robotics and drones.

Meituan-Dianping Raises Record $3.3 Billion To Fuel Market Grab

Cate Cadell — Wed, 20 Jan 2016 01:10:24 +0000

Meituan-Dianping, the top provider of on-demand services in China, has sealed a record-breaking $3.3 billion USD funding round, valuing the company at more than $18 billion USD. The funds will be used to consolidate their market share as competing powerhouses Alibaba and Baidu seek to boost their own services.

Investors in the latest round include Chinese tech giant Tencent Holdings Ltd., VC firm DST Global and Singapore state investment firm Temasek Holdings Pte Ltd, said the company on Tuesday.

The investment marks the biggest single private fundraising round ever snagged by a VC-backed startup. Last year China’s leading ride-hailing service Didi Kuaidi raised $3 billion USD, spurring speculation that a bubble was forming in the country’s booming offline-to-online sector.

Meituan and Dianping merged in October last year ending a savage industry rivalry propped up my massive subsidies from both companies. Meituan’s shareholders took on approximately 60 percent of the company following the match-up.

Meituan Dianping’s first major fundraising event since the merger also highlights the complex investment relationship between tech giants Alibaba Group Holding Ltd. and Tencent, both of whom held a stake in the newly joined company.

In November last year the Wall Street Journal cited unnamed sources who said that Tencent was planning to invest $1 billion in the new company’s latest round. At the same time, Alibaba – an early investor in Meituan, sought to sell their $1 billion USD stake and refocus efforts on their own on-demand service platform, Koubei.

Meanwhile Chinese search engine giant Baidu has also doubled down on their own on demand service, Nuomi. Last year Baidu committed to spending $3.2 billion on the service over three years. Both Nuomi and Meituan-Dianping are now scrambling for market share, spending heavily on subsidies to become the dominant platform in an increasingly competitive market.

JD Finance Seals $1 Billion In Fresh Funding

Cate Cadell — Tue, 19 Jan 2016 03:05:57 +0000

China’s e-commerce powerhouses have spent the holiday season locking down some serious funding for their finance arms.

JD.com announced a 6.65 billion yuan (about $1 billion USD) funding injection into their finance subsidiary, JD Finance, on Saturday. The latest round values the entity at 46.65 billion yuan ($7 billion USD), according to a release from the company.

The funding was led by top investors Sequoia Capital, China Harvest Investments and China Taiping Insurance, according to JD.

“With our top risk management technology and the additional expertise from our investors and partners, we look forward to significantly expanding JD Finance’s service offerings and market reach,” said JD CEO Richard Liu in a statement.

It follows an announcement earlier this month from Alibaba’s finance arm Ant Financial, who revealed they had officially begun a second round of funding. Ant Financial operates Alipay, the hugely popular payment service boasting over 400 million users.

China’s e-commerce players have been amassing scores of consumer-facing finance products in the past 18 months, and new funding between the country’s two top rivals, Alibaba and JD.com, signals the trend will continue in 2016.

Tencent, the social and gaming giant behind WeChat, is also rumored to be seeking fresh funds north of $1 billion USD for their online-banking arm WeBank. Tencent is also a backer of JD.com.

JD.com noted in the release that they would maintain majority ownership of JD Finance in the wake the latest funding round.

Chinese Billionaire Buys Majority Of World’s Largest Gay Networking App Grindr

Cate Cadell — Tue, 12 Jan 2016 07:59:34 +0000

The world’s biggest gay social-networking app, U.S.-based Grindr, has sold a majority stake to Chinese game developer Beijing Kulun Tech Co., chaired by newly-minted billionaire Zhou Yahui.

The sale will give Beijing Kulun a 60 percent stake in the business for $93 million USD in cash, the company said. Beijing Kulun, which listed in 2015, saw a 10 percent stock boost following the announcement. Mr. Zhou became a billionaire following the company’s listing, and is now valued at approximately $1.7 billion USD.

Grindr CEO Joel Simkhai said in a blog post that the partnership is a “huge vote of confidence in our vision to connect gay men to even more of the world around them,” hinting at Grindr’s potential to take on the gay networking market in China.

Currently that market is dominated by apps serving the gay male market, just like Grindr, though the number of apps for lesbian users are also on the rise. China’s biggest gay app (and Grindr’s biggest potential competitor) is BlueD, founded in 2000 by ex-police officer Geng Le. BlueD’s arch-rival Zank has also grown quickly in the past two years, followed by Jackd, G-Show and Waitta.

China’s gay networking market also features a series of odd services targeted directly at the local market. Queers, an app designed to help young people arrange sham marriages between gay and lesbian people, saw massive growth in the past year. GeeYuu, an app focussed on gay gaming communities is now in the top five most popular apps targeted at the gay market in China.

Chinese Drone Exports Soar On The Backs Of Brand Leaders DJI, Ehang

Cate Cadell — Mon, 11 Jan 2016 01:11:31 +0000

According to customs data released by state media outlet Xinhua, drone exports from Shenzhen – China’s hardware hub, amounted to $2.7 billion yuan ($412 million USD) between January and November 2015, an increase of 9.2 times over the same period in 2014.

Global commercial drone investment boomed in 2015, with a majority aimed at Chinese companies, including Shenzhen-based DJI, who wrapped up $75 million USD in May at valuation upwards of $8 billion USD.

Commercial drone makers have become the positive archetype of modern consumer hardware for China. Makers, such as DJI, have embraced global marketing strategies to eschew the copycat reputation often attached to Chinese brands. DJI is now the undisputed global brand leader in commercial drones.

Other notable Chinese drone brands that found funding 2015 include Yuneec, who secured $60 million from Intel in August. The company’s flagship Typhoon Q500 sought to compete with top names this year using 4k cameras and movement-tracking features.

Shenzhen-based EHang also locked down new funding in August, raising $42 million USD led by GP Capital. EHang wowed audiences at last week’s CES held in Vegas by unveiling an autonomous passenger drone capable of carrying a single passenger of up to 130kg. The vehicle has currently performed over 100 test flights, according to the company.

While investment in Chinese drone companies continues to grow, niggling regulatory concerns have overshadowed the industry. In August the government sought to cap exports of high-tech products linked to national security, including drones that can fly for over an hour or have advanced wind stabilization technology. Most commercial drones have a shorter flight time meaning they are currently unaffected by the regulations. The new rules do put limits on developing extended capabilities however.

This Chinese Fashion E-Commerce Giant Just Swallowed Its Top Competitor

Cate Cadell — Sun, 10 Jan 2016 18:31:22 +0000

2015 was a big year for consolidation in China’s tech scene, and the latest deal between two of the country’s biggest fashion e-commerce platforms shows that mergers still haven’t gone out of style.

Mogujie.com, the $1.7 billion USD social shopping startup, will take control of rival Meilishuo.com through a stock swap, according to unnamed sources who spoke to the Wall Street Journal.

Tencent Holdings Ltd., who previously invested in Meilishuo, will remain a strategic investor following the takeover.

Hangzhou-based Mogujie, founded in 2011 by a former Alibaba engineer, began as is an image sharing site similar to Pinterest or Tumblr. The company later expanded into fashion e-commerce, collecting commission on the platform’s merchants.

The company raised a $200 million USD round in November led by Ping An Ventures, the VC arm of Chinese insurance giant Ping An Insurance Co. Other notable investors in Mogujie’s previous rounds include Hillhouse Capital, Banyan Capital, Bertelsmann Asia and IDG Capital Partners.

The deal is the latest in a long line of mergers and acquisitions in China tech, fueled by increasingly cautious sentiment among investors. Startups within the county’s ecosystem have spent heavily to square off market share, though turmoil in Asian stock markets and increasing competition has led to a number of record breaking mergers within the sector.

In October group buying giants Meituan and Dianping merged to form an entity worth over $15 billion USD. 2015 also saw massive mergers between classified sites 58.com and Ganji, as well as ride-hailing services Didi Dache and Kuaidi Didi.

Prior to the takeover from Mogujie, Meilishuo had reportedly been seeking to raise a new round worth several hundred million USD, but had been unsuccessful before the merger.

EHang Teases An Autonomous Passenger Drone

Cate Cadell — Sat, 09 Jan 2016 14:05:10 +0000

EHang has revealed an electric autonomous areal vehicle at CES this week, the first of its kind. The EHang 184 drone can carry a single person, weighing up to 130kg, to a designated destination.

The eight-rotor vehicle doesn’t allow the passenger to control the vehicle, which brings to mind several safety concerns. Similar to the package delivery drones currently being prototyped by Amazon, the EHang 184 is set to an established location for an autonomous flight, rather that being controlled by the passenger.

The company claims that the drone has already completed over 100 test flights. They also note that a control centre monitors each flight around the clock with the ability to intervene in an emergency situation.

While it may not be commercially ready from a safety perspective, the company has added several other consumer friendly features, including a trunk for luggage and outward folding doors. The drone’s propeller arms can also fold upward for tight storage.

The drone can travel at up to 100km an hour and can fly for 23 minutes, according to the company, and the battery takes two hours to recharge. No release date has currently been set.

Chinese ‘Hoverboard’ Startup Raided By US State Marshals At CES

Cate Cadell — Fri, 08 Jan 2016 23:13:32 +0000

China is working hard to throw off a reputation for copycat hardware, but a public showdown between U.S. authorities and a Chinese company at CES this week didn’t help.

U.S. Federal Marshals reportedly raided the booth of a Chinese electric skateboard startup at the Consumer Electronics Show (CES) in Las Vegas on Thursday, seizing a number of the one-wheeled products.

The infringement complaint comes from Future Motion, makers of the Onewheel scooter, which bears a striking resemblance to the confiscated product made by Changzhou First International Trade Co. The American company filed a complaint in Vegas followed by a court hearing over the phone that permitted the raid and restraining order.

In an interview with Bloomberg Business Onewheel Inventor Kyle Doerksen said that the company was aware that the Chinese company would be exhibiting the product before the show. “We engaged our IP lawyers because we heard there were going to be knock offs of the Onewheel product appearing at CES,” said Mr. Doerksen.

“So we went through the formal US legal process to get a temporary restraining order against one of these companies thats trying to sell a knock off product to the States for the first time.”

While China’s IP protection environment has seen some improvement in recent years, the country still struggles with counterfeits and knock offs, compromising the country’s reputation abroad. Companies like Xiaomi have injected some legitimacy into the practice of making better quality hardware for lower prices, though startups within the country are still struggling to remain competitive within the low-cost ecosystem.

Nonetheless, electric scooters, skateboards and hoverboards have gained a lot of traction among young Chinese startups who are taking advantage of the country’s close proximity to manufacturing.

Last April China-based Ninebot, backed by Xiaomi, acquired Segway, the U.S. company that popularized self-balancing electric scooters. Xiaomi and Ninebot have since released a modified ‘handleless’ scooter backed by the Segway technology.

The scooter at the centre of Thurday’s raid uses similar sensors to keep the board balanced around a central wheel. The Chinese company told the BBC that they didn’t believe they had broken the law, and that they had kept the technology private to avoid copycats from other Chinese technology companies.

Image Credit: Onewheel

Netflix Didn’t Launch In China, But They’re Still Working There

Cate Cadell — Fri, 08 Jan 2016 20:13:09 +0000

This week U.S. streaming service Netflix surprised everyone by launching in almost every country with the notable exception of China.

Viewers in 190 new countries can now now enjoy the subscription streaming services. Last September the company announced that China’s regional neighbors Singapore, Hong Kong Taiwan and South Korea would launch in early 2016 following Japan, sparking discussions over the potential of a China entry.

The mainland market continues to elude Netflix due to tight restrictions on foreign content. Currently government censorship regulations stipulate that no show can be aired until the entire season is public. Shows must meet censor approval and can be knocked back for anything deemed overly violent, sexual or offensive to the Communist Party.

So What Does Netflix Do In China?

Netflix may not have launched their subscription streaming service in China this week, but the company is well and truly working in the Chinese market.

“We continue to explore our options in China and are hopeful we will be available there soon,” a Netflix press representative told Technode. “We are always keen to find partnerships and to maintain good relationships with authorities.”

The same representative told Technode that Netflix has been granted approval to hold the world premiere for Crouching Tiger, Hidden Dragon: Sword of Destiny in Beijing in February.

This week at CES 2016 CEO Reed Hastings told press that the company is seeking inroads to the country and communicating with the local government on possible entry points. In an interview with the BBC on Tuesday Mr. Hastings said Netflix would follow the lead of Apple and Disney, who have both expanded successfully into the Chinese market.

While the mass adoption of the iPhone in China is an attractive archetype for expansion, Netflix’s entry would likely be more similar to Disney’s. As a content provider Disney has made a slew of high-level partnerships to aid their entry, including a recent collaboration with internet giant Alibaba to launch a Mickey Mouse-shaped streaming device.

Netflix has remained tight-lipped on potential partners. The company was reportedly in talks with Alibaba in the past, but the Chinese giant has since launched their own subscription streaming service TBO, short for ‘Tmall Box Office’. The service costs 39 RMB per month ($6.08 USD) or 365 RMB per year ($57 USD). Netflix has also collaborated with Sohu in the past, selling them the rights for the highly-popular House of Cards series.

However Netflix finds their way to Chinese consumers, it’s clear their entry won’t mimic any of the other 130 new countries announced in this week’s announcement.

Huawei Celebrates The New Year By Boosting Sales Expectations

Cate Cadell — Thu, 31 Dec 2015 20:09:58 +0000

While many Chinese smartphone vendors are looking to 2016 for a reprieve from dwindling smartphone demand, Huawei Technologies Co. is ringing in the New Year with some better news.

The company said on Thursday that their 2015 revenue is expected to rise 35.5% over the previous year, significantly higher than a prediction release earlier this year of 20%.

The Shenzhen-based company has seen stronger smartphone sales in the second half of 2015, beating out Xiaomi to become the No. 1 player in China’s smartphone market. Huawei now expects to reach 390 billion yuan ($60 billion USD) in sales for the year, according to acting Chief Executive, Guo Ping.

China’s smartphone market has slowed across-the-board in 2015, causing several vendors to downplay expectations, including Xiaomi who likely missed their low-end sales target of 80 million handsets this year.

This year Huawei made several strategic moves to combat ebbing demand. The company released their most expensive flagship yet, the Huawei Mate S, in an attempt to edge into Apple’s territory. The Mate S, which received praise form critics, has several features that compete directly with the latest iPhone technology, including Force Touch.

2015 saw less first-time smartphone buyers in China, as sales attention turned to consumers looking to upgrade or replace older models. Huawei managed to cater to the country’s low-income smartphone consumers as well as tapping into the disposable income of China’s rising middle class.

Guo Ping also noted that Huawei would “allow room for failure” as they seek to continue their growth streak in 2016. According to figures released by IDC earlier this year, the company’s worldwide shipments grew 61% in the third quarter, exceeding the global average of just 6.8%.

Qualcomm Rallies With Further China Deals

Cate Cadell — Tue, 29 Dec 2015 21:47:47 +0000

Qualcomm Inc. has squared away another set of licensing agreements in China, sealing 3G and 4G patent deals with Beijing Tianyu Communication Equipment Co. and appliance-maker Haier Group.

The deals are a boost for Qualcomm in China, who have recently struggled to collect licensing fees in the country causing their stock to stumble in 2015. Qualcomm shares are currently sitting at $50.88 USD. Earlier this month they dipped to $46.83, their lowest point since August 2011.

The latest deals grant the two Chinese companies royalty-bearing patent licenses to make and sell CDMA2000, 3GWCDMA and 4G LTE units to the Chinese market. No financial details were disclosed.

Earlier this month Qualcomm inked a long-awaited deal with Xiaomi, one of the country’s biggest smartphone makers, easing investor pressure with a 5 percent increase in stock prices.

The company, which makes over half their revenue from licensing fees, previously signed deals with China’s Huawei Technologies Co. and ZTE Corp. among approximately 60 others, though they are yet to reach an agreement with Lenovo Group Ltd. Slowing smartphone sales have contributed to the squeeze, causing some companies to hold out on payments or roll them over to 2016.

The San Diego-based company also ran into trouble with the Chinese antitrust authorities, who forced Qualcomm to pay a $975 million USD fine in February following a year long investigation regarding a violation of anti-monopoly laws. The settlement also included a rectification plan which affects the way the company conducts business in China. Qualcomm’s latest deals have been settled under this plan.

Recently Qualcomm has been under pressure to consider splitting their chipmaker business from the licensing operations, though earlier this month they reiterated a commitment to keeping the different units together. Last year the company’s chip business generated $3.8 billion USD, its royalty business $6.6 billion USD.

Anticorruption Agency Detains China Telecom Chairman

Cate Cadell — Sun, 27 Dec 2015 21:23:26 +0000

The chairman of China Telecom Corp. has been detained over “severe disciplinary violations”, according to a short statement posted Sunday by the Central Commission for Discipline Inspection (CCDI).

Chang Xiaobing became the chairman of China’s third largest mobile operator in August. He had previously served as chairman of the second largest operator, China Unicom, according to the CCDI.

Mr Chang, 58, is the latest in a series of senior figures that have been targeted as part of President Xi Jinping’s crackdown on corruption within the Communist Party and state owned enterprises.

On Sunday evening a filing to the Hong Kong stock exchange noted that there would be no changes to the day-to-day operations of China Telecom, and that more information would be released as the situation develops.

Neither the company or CCDI have released further information on Mr. Chang’s detainment. An annual meeting scheduled for China Telecom executives today has been postponed, according to an internal notice cited by Caijing magazine.

It follows the corruption related arrest of the former chairman of China National Petroleum Corp, Jiang Jiemin, in October. The anticorruption campaign has been a central feature of Xi Jinping’s three-year tenure.

LeTV Edges Into Virtual Reality With ‘LeVR’

Cate Cadell — Sat, 26 Dec 2015 21:23:14 +0000

LeTV has taken their first steps into the VR market, releasing a smartphone headset priced at 149 yuan ($23 USD). The LeVR Cool 1 goes on sale by December 29, capping off a year of hardware releases including the LeTV smart TVs and a high-end range of smartphones.

LeTV, founded in 2004 as a video streaming service, are looking to leverage their content resources to sell their VR brand. The company plans to integrate their video-on-demand service with upcoming LeVR products.

Currently the headset is only compatible with LeTV handsets, the LeTV One and One Pro. The headset will also be exclusive to LeTV’s e-commerce platform LeMall.

“Few companies will fully handle VR business as selling the product requires premium hardware design, powerful cloud computing support and fruitful content,” said Ablikim Ablimit, vice-president of strategy management at LeTV in an interview with state media outlet Xinhua.

LeTV has perviously released plans to use VR technology in live-streaming sports events and concerts.

LeTV joins a number of Chinese companies vying to edge their way into the virtual reality space. Notable names include ANTVR, the Beijing-based company who launched off the back of a $260,000 USD Kickstarter campaign, releasing new goggles and cameras in late 2014.

ANTVR is among a number of companies working with LeTV to develop their technology. LeTV also says they have signed deals with LingVR and 3Glasses, two of the better-known local Chinese brands.

Investor interest in VR has skyrocketed in China since Facebook’s $2 billion USD acquisition of Oculus VR. Last month Chinese VR company GDI announced they would list on the NEEQ, China’s third national equity exchange, also known as Xin Sanban. In September US-based Jaunt VR received investment from China Media Capital (CMC) alongside Walt Disney, as they begin a push to enter the Chinese market.

Alibaba To Take Controlling Stake In Ele.me: Report

Cate Cadell — Sat, 26 Dec 2015 17:41:11 +0000

Alibaba is set to invest $1.25 billion USD into China’s most heavily funded online food delivery service, Ele.me, according to a report from local business weekly, Caixin, on Friday

Alibaba will become the company’s biggest shareholder, taking on a 27.7 percent stake, according to unnamed sources cited by the report.

The potential deal would cap off a year of high-stakes investment in the on-demand industry for Alibaba. It’s also the latest merger of interests between Alibaba and long-time rival Tencent. The gaming and social giant contributed to a $350 million USD injection into Ele.me, announced this August.

Ele.me is one of China’s most highly-touted unicorns, reaching an estimated valuation of over $3 billion USD following their August funding round.

The company received a major boost in May 2014 when leading on-demand service Dianping invested $80 million USD into the company, sharing merchant data and ordering services. Dianping has since merged with Meituan, forming another investment alliance between Alibaba and Tencent.

It’s not the only Ali-Tencent coalition that Ele.me has been strategically linked with. In November Ele.me CEO Zhang Xuhao confirmed to Chinese press that they had agreed on a “strategic program” with leading ride-hailing service Didi Kuaidi to roll out an Uber Eats-style service. Tencent-backed Didi and Ali-backed Kuaidi merged in early 2015, ending one of the country’s biggest on-demand rivalries.

Alibaba Hires Ex-Apple Investigator To Stamp Out Fakes

Cate Cadell — Tue, 22 Dec 2015 02:52:51 +0000

Alibaba has appointed a former Apple investigator to head up their anti-counterfeit operation, as the company ramps up efforts to pull fakes from their popular platforms.

Mathew Bassiur, who is leaving his role as Deputy Chief Security Officer at Pfizer, will become Alibaba’s Head of Global Intellectual Property enforcement as of January.

Prior to his time at Pfizer Mr. Bassiur was a senior director at Apple for two years, serving as a counsel for intellectual property rights enforcement. He also spent time teaching IP law at Renmin University in Beijing.

“Matthew’s appointment is the latest step in Alibaba Group’s comprehensive and industry-leading efforts to fight counterfeits,” said Alibaba Chairman Jack Ma in a statement. “We will continue to be relentless.”

This month Alibaba avoided being named on the U.S. Trade Representative (USTR) blacklist for counterfeit goods, though the government body did note that they were “increasingly concerned” about the ongoing status of Alibaba’s enforcement programs.

Alibaba.com has been off the list since 2011, while the company’s retail-focussed Taobao.com platform was removed in 2012.

[Update] Qihoo 360 Finalizes $9.3B Privatization Deal

Cate Cadell — Sun, 20 Dec 2015 00:41:23 +0000

Qihoo 360 Technology Co., has finalized a privatization deal worth $9.3 billion USD, adding to the growing number of U.S.-listed Chinese companies that have exited the U.S. stock exchanges hoping for better valuations back home.

Over 30 Chinese companies have made plans or executed privatizations from the U.S. in 2015, despite a slowing economy back home. The Qihoo offer represents a 17% premium to the value of the share in June, when the buyout was originally proposed.

At that time Qihoo, which has been listed in the U.S. since 2011, received a the offer from a group of investors led by the company’s Chairman and CEO Zhou Hongyi. Mr. Zhou said Qihoo was undervalued, and that the privatization bid would be an opportunity to reassess the company’s worth.

Qihoo shares, listed on the New York Stock Exchange, were trading at $73.03 at the close of trade on Friday, almost $4.00 below the offer for $77 per American Depository Share.

The consortium leading the privatization bid includes Sequoia Capital China, Ping An Insurance, Citic Guoan, Golden Brick Road Capital, New China Capital, Taikang Life Insurance, Sunshine Insurance, Huatai Ruilian and Huasheng Capital. Qihoo expects to complete the deal in the first half of 2016.

Alibaba Warned Over Fake Goods, Narrowly Avoids U.S. Counterfeit Blacklist

Cate Cadell — Fri, 18 Dec 2015 09:14:32 +0000

Alibaba’s year-long effort to endear themselves to the global community has yielded a major benefit: they have been left off an annual blacklist of e-commerce platforms targeted by the U.S. Trade Representative (USTR) for the sale of counterfeit goods.

The company, which has undergone a self-proclaimed ‘year of globalization’, has spent the last 12 months striking deals globally to bring more branded merchandise to China’s growing consumer class.

Despite their exclusion from this year’s blacklist, the USTR noted in a statement on Thursday that they were “increasingly concerned” about the status of Alibaba’s enforcement programs, and that the platform must do more to crack down on the sale of fake goods.

Alibaba.com has been off the blacklist since 2011, while Alibaba’s most popular consumer platform, Taobao.com, was removed in 2012. The USTR statement also said that “Alibaba Group’s enforcement program is too slow, difficult to use, and lacks transparency.”

In August, the company added an English language version of its counterfeit reporting service, TaoProtect, attempting to endear themselves to the global brand community. They have also invested in anti-counterfeit technology in 2015, including a strategic partnership with Israeli-backed QR technology company Visualead, which specializes in advanced QR technology.

China’s government has also ramped up efforts to remove fake goods from China’s e-commerce platforms. This November China’s State Administration for Industry and Commerce (SAIC) vowed to increase the number of random counterfeit checks on popular platforms including Taobao, Tmall and Alibaba.com.

Prior to the company’s record-breaking 2014 IPO, the Chinese government released a white paper accusing Alibaba of a lax attitude to removing fakes from their platform. Chairman Jack Ma has since publicly stated that for every counterfeit product sold the company stands to lose five customers, dismissing criticism that Alibaba benefits from the trade of fake goods.

Apple Pay China Will Go Live In Early 2016 With UnionPay

Cate Cadell — Fri, 18 Dec 2015 04:08:26 +0000

Following months of speculation Apple Inc. has finally confirmed that Apple Pay will come to China in early 2016 through a partnership with UnionPay. Apple has long been seeking to tap the payments market, which is currently dominated by wallet systems from Alibaba and Tencent.

“China is an extremely important market for Apple and with China UnionPay and support from 15 of China’s leading banks, users will soon have a convenient, private and secure payment experience,” said Eddy Cue, senior vice president of Internet Software and Services at Apple in a public post.

The company said the service would be available “as soon as early 2016” pending “tests and certification required by Chinese regulators.”

The announcement comes as UnionPay inked another mobile payments deal this week with Powa Technologies, a London-based venture-backed mobile commerce company. UnionPay will take a 51% share of the strategic partnership, which will initially focus on transactions within the online-to-offline (O2O) market.

Powa’s technology is based on specialized QR codes, unlike the Apple Pay system which uses NFC antenna technology and a dedicated chip within the device to conduct point-of-sale purchases without keeping bank data on Apple servers.

Apple’s relationship with UnionPay could see the rollout expedited. The company will be hoping to launch the service before Chinese New Year in February, when retail spending peaks around the holiday.

Microsoft Reveals Joint Venture Plans With Chinese State-Owned Tech Company

Cate Cadell — Fri, 18 Dec 2015 03:11:15 +0000

Microsoft Corp. has revealed details of a joint venture with state-owned China Electronics Technology Group Corp. (CETC) to streamline the release of a localized version of Windows 10 for China.

The venture, dubbed C&M Information Technologies, will serve “government agencies, as well as state owned enterprises in key infrastructure fields such as energy, telecommunications, and transportation” said Yusuf Mehdi, Head of Marketing at Microsoft in a public blog post.

Microsoft has forged several partnerships in China this year as U.S. tech firms are coming under increased pressure to localize elements of their technology. In September the company revealed a number of partnerships with state-owned and private companies including CETC and Chinese search giant Baidu.

According to Microsoft the version of Windows licensed under the joint venture will be able to gather feedback from users, run independent customer service, and feature Chinese government capabilities, including a locally selected antivirus.

China has been working to develop localized software for many of its core state-owned assets. In late 2014 they released guidelines for banks to migrate from foreign to local technology by 2020. The regulations were suspended in April. China has been working on several state-linked open source operating systems to potentially replace foreign operating systems.

Other U.S. companies have also made concessions in China to boost their market share and improve government relations. In October IBM revealed they would allow officials from China’s Ministry of Industry and Information Technology to review some of their source code in a controlled environment.

Cisco joined forces with Chinese computer company Inspur Group to boost their local presence. Dell announced $125 million USD in local R&D in September while Intel revealed they had invested $67 million in eight companies during the same month.

Microsoft says the latest joint venture is still subject to regulatory approval. They also noted that they will maintain core ownership of the Windows 10 technology, and will seek to maintain privacy standards while “recognizing that public sector solutions may differ from technology offered to private sector enterprises,” said Mr. Mehdi.

Alibaba And Disney Launch Mickey Mouse-Shaped Streaming Device

Cate Cadell — Wed, 16 Dec 2015 04:12:31 +0000

Alibaba Group Holding Ltd. and Walt Disney Co. have joined forced to launch an ‘over-the-top’ content system designed to funnel the Disney brand to Chinese consumers.

The two companies entered a multi-year content licensing agreement to launch the product called ‘DisneyLife’ which is now available on Alibaba’s e-commerce platform Taobao, shipping from December 28. The device is shaped like Mickey Mouse and retails for 799 yuan ($125 USD).

Content on the device will include Disney and Pixar films, cartoons and games, bundled in an initial one-year agreement. Buyers will also be able to use the system to buy merchandise an plan trips to the Disneyland theme parks in Hong Kong and Shanghai, leveraging Alibaba’s existing strengths in ticketing and e-commerce. Consumers will also be able to use the system to tap other Alibaba products and services, according to a joint release from both companies.

“DisneyLife directly connects us to China’s digital population and provides millions of kids and families the ability to explore and engage with Disney,” said Luke Kang, Managing Director at Walt Disney.

Alibaba has been rapidly investing in content and subscription services throughout 2015, which has seen them put aside their fierce historic rivalry with Tencent to mutually invest in more than one content deal. Yesterday Alibaba and Tencent announced they would be joining a series of other investors in a $1 billion USD buyout of NASDAQ-listed Chinese film company Bona Film Group. Tencent also struck a deal with Disney in September, winning the exclusive online licensing rights to stream the first six Star Wars movies online.

The latest deal with Alibaba makes China the second country outside the U.S. to experience Disney’s over-the-top streaming service, with the U.K. being the first. The DisneyLife device is advertised in several colors, though currently on Taobao it is only available in black.

Jack Ma, Tencent Join Forces To Make Movies

Cate Cadell — Mon, 14 Dec 2015 10:46:05 +0000

It’s not often that Alibaba CEO Jack Ma teams up with market-rival Tencent, but if anything can bring the two together as of late it’s a mutual investment in the entertainment industry.

Tencent Holding Ltd., Yunfeng Capital and Huayi Brothers Media Corp. have joined forces to buy a controlling stake in a Hong Kong shell company that previously traded as a retirement-home developer, the companies revealed on Thursday.

Mr. Ma owns a 40% stake in Yunfeng Capital, while both Alibaba and Tencent are investors in Huayi. The new company, called China Jiuhao Health Industry Corp., will use the shares to form a media content business.

The company will kick off operations with three animated features and 10 live-action films. The new content will be produced in partnership with currently unnamed U.S. production houses. Alibaba has previously teamed up with Paramount pictures to bring U.S films to mainland China. Huayi announced in March that it was investing in a slate of at least 18 films with Robert Simonds’ STX Entertainment.

Mr. Ma and Alibaba have been aggressively expanding a media empire throughout 2015, which now includes Alibaba Pictures Group and the total acquisition of streaming service Youku Tudou’s remaining shares. Just last week the company also announced they would be acquiring the media business of South China Morning Post Group.

The latest alliance between Tencent and Alibaba camps indicates that the two companies are able to put aside their tense market rivalry foster joint projects into 2016. The Chinese ride-hailing market was rocked in February 2015 when the two companies combined their services to create Didi-Kuaidi, which holds a strong market monopoly. Tencent and Alibaba have also shared investment in the $15 billion USD Dianping-Meituan merger.

Alibaba Confirms SCMP Takeover, Attempts To Quell Editorial Concerns

Cate Cadell — Sat, 12 Dec 2015 02:45:19 +0000

Alibaba’s expanding media and entertainment empire marked another milestone on Friday, with official confirmation that they have entered an agreement to purchase the media assets of SCMP Group.

The deal includes one of Hong Kong’s most influential English daily newspapers. The South China Morning post has a history of covering political and cultural topics forbidden by censored mainland outlets.

Alibaba has been steadily amassing assets in the content and entertainment industry. The SCMP marks the first editorially independent foreign publication to be added to the company’s growing portfolio.

Alibaba’s alignment with the Chinese government has sparked concern from media observers over the editorial independence of the newspaper. The SCMP has historically given intense scrutiny to China’s political and human rights situation, but has softened in recent years.

“Some have suggested that ownership by Alibaba will compromise the SCMP’s editorial independence,” said Alibaba’s Executive Vice Chairman Joseph C. Tsai said in a letter to SCMP readers. “This criticism reflects a bias of its own, as if to say newspaper owners must espouse certain views, while those that hold opposing views are ‘unfit,’” he said.

“We think the world needs a plurality of views when it comes to China coverage. China’s rise as an economic power and its importance to world stability is too important for there to be a singular thesis.”

As part of the acquisition Alibaba says it will overhaul several features of the media business. The company plans to remove the newspaper’s paywall, which is currently a feature on mobile and desktop editions. Alibaba claims the strategy will allow them to “grow the readership globally.” The company gave no indication of how they would drive alternative revenue.

The purchase of the South China Morning Post marks Alibaba’s entry into the public political arena. The newspaper occupies a position on influence in Hong Kong and South East Asia where Alibaba has been seeking to extend its business interests.

In an interview with the New York Times, Mr. Tsai noted that “[Alibaba] is so rooted in China, and touches so many aspects of the Chinese economy, that when people don’t really understand China and have the wrong perception of China, they also have a lot of misconceptions about Alibaba.”

In March 2014, Alibaba bought a controlling stake in ChinaVision Media Group, an entertainment and media company also listed in Hong Kong, before rebranding the entire acquisition under Alibaba Pictures Group. ChinaVision Media Group co-manages the distribution of one of Beijing’s largest local newspapers, the Beijing Times.

The acquisition covers several other media assets including the Hong Kong editions of Esquire, Elle, Cosmopolitan, The PEAK and Harper’s Bazaar.

Baidu’s Autonomous Car Hits Beijing Roadways

Cate Cadell — Thu, 10 Dec 2015 04:41:00 +0000

A 30-kilometer route along Beijing’s northern outskirts has become the testing ground for China’s first fully autonomous car.

Chinese search giant Baidu revealed today that they have completed a series of driving tests in the city, as the company seeks to launch an individual business unit dedicated to developing China’s first commercially-available autonomous cars.

In June, Baidu revealed they would would partner with BMW in a bid to release the concept car by the end of 2015.

The modified BMW 3 series completed comprehensive tests on the 30-kilometer route from Baidu’s headquarters in the northwest Beijing, continuing through the outskirts of the city. According to the company the car was able to make u-turns, change lanes, overtake other vehicles and merge on and off highway ramps.

Until now the autonomous driving project has been run by Baidu’s Institute of Deep Learning. The company will soon launch the Autonomous Driving Business Unit, headed by senior vice president Wang Jing.

“Fully autonomous driving under mixed road conditions is universally challenging,” said Mr. Wang. “With complexity further heightened by Beijing’s road conditions and unpredictable driver behavior.”

In an interview with the Wall Street Journal Mr. Wang also revealed that Baidu will launch a shuttle service made up of autonomous vans or cars that would be available for shared public use in designated urban areas. The company has not yet set time frame for when the vehicles will be commercially available.

Baidu’s ‘AutoBrain’ highly automated driving (HAD) technology has been under development since 2013, and has the ability to “record 3D road data to within a few centimeters of accuracy of vehicle positioning.” The company expects a majority of China’s roadways to be mapped with the technology by 2025.

Google’s autonomous driving project, founded in 2009, is now in advanced development stages. The company is currently employing their deep-learning technology to mimic more advanced human-like maneuvers including cutting corners and crossing double lines.

This September Chinese vehicle manufacturer Yutong Bus Co. revealed a prototype self-driving bus. The company claimed the bus completed a 33-kilometer test drive including lane changes, 26 traffic signals and a passing maneuver.

Baidu’s contemporary tech giants have taken different routes, choosing to invest instead in electric and smart car technology. In March Alibaba revealed a $160 million USD fund to develop internet-enabled cars with China’s largest automaker SAIC Group.

Tencent joined forces with Shanghai-based electric car maker Next EV to build an electric supercar with an expected release date in 2016. LeTV revealed a partnership with Aston Martin this year, and has committed to releasing their first electric sports car in April 2016.

Baidu’s concept car traveling on the outskirts of Beijing

The Baidu BMW concept car in Beijing

Yahoo Abandons Plans To Spinoff $31B Alibaba Stake

Cate Cadell — Wed, 09 Dec 2015 02:07:13 +0000

Yahoo has thrown out plans to spinoff their share in Alibaba, worth about $31 billion USD.

Shares in the California-based company have jumped over 2.7 percent in after-hours trading following the announcement.

It’s the climax to an 11-month debate over whether Yahoo would be able to separate their core business from the Alibaba stake without incurring a massive tax bill. Yahoo’s core business has an estimated worth of less than $2 billion USD, with the rest of the company’s value tied up in Alibaba as well as Yahoo Japan Corp. and some cash holdings.

The U.S. company will now consider selling its core business as an alternative to the spinoff, including their search and display advertising services. Yahoo declined to comment on the latest developments.

In February CEO Marissa Mayer was adamant that the spinoff would not incur a tax under current U.S. regulations. Authorities have since refused to give guidance on whether the spinoff would be taxed. In September Yahoo disclosed in a filing that the IRS had decided to not grant approval for a tax-free spinoff, though at the time the company stated they would continue to pursue the move.

Last month activist investor Starboard Value threatened Yahoo with a proxy fight if they refused to drop the spinoff plans. At the time Starboard’s CEO Jeff Smith penned a strongly-worded letter stating that Starboard will “look to make significant changes to the board if you continue to make decisions that destroy shareholder value.”

While Starboard originally supported the move, they have since urged the company to sell of their core business in view of tax concerns. The Alibaba stock within the potential spinoff company would likely trade at less than other U.S.-listed Alibaba stock given the risks of heavy taxation.

Yahoo’s core business business has suffered over the past few years, as Ms. Mayer struggles to stem the company’s falling revenue. Yahoo’s stock price has dipped by 32% this year.

Update (9/12/15) 11:23: We updated this post to reflect the fact that Yahoo declined to comment.

Yahoo Co-Founder Jerry Yang Joins Didi Chuxing’s Board

Cate Cadell — Tue, 08 Dec 2015 13:50:26 +0000

Didi Chuxing, the $16 billion USD ride-hailing service dominating China, has appointed Yahoo Inc co-founder Jerry Yang to its board, strengthening a network of existing investment relationships between Didi Chuxing, Alibaba Group Holdings Ltd, SoftBank Group Corp and Yahoo.

Both Alibaba and Yahoo received early investment from SoftBank. Alibaba then backed Kuaidi, which merged with Didi in early 2015 (later rebranded under Didi Chuxing). Mr. Yang is also an investor in Alibaba, and sits on the e-commerce company’s board alongside Jack Ma and SoftBank CEO Masayoshi Son.

Didi isn’t the only ride-hailing operation seeking to consolidate management across foreign investment partners in China. In September search giant Baidu appointed Uber CFO Brent Callinicos to their board. Baidu is a core investor in Uber’s China-side service.

Softbank is also an investor in India’s Ola Cabs and Singapore’s GrabTaxi, two of the companies within the consolidated network of ride-hailing companies that now also includes Canada’s Lyft.

Didi has aggressively sought to increase their market share in 2015. Earlier this week the company’s other core investor, Tencent, oversaw a ban on private Uber accounts within their highly-popular messaging service WeChat.

Mr. Yang is taking the seat as Yahoo is seeking to spin off their $30 billion USD stake in Alibaba.

China Now Exports Nearly 45% Of Asia’s High-Tech Goods

Cate Cadell — Tue, 08 Dec 2015 13:45:23 +0000

China’s share of Asia’s exports of high-tech goods has risen to 43.7 percent in 2014 from 9.4 percent in 2000, according to the 2015 Asian Economic Integration Report released by Asian Development Bank on Tuesday.

Since 2000 China’s share in high-tech goods including consumer electronics, telecommunications equipment, medical and aircraft technology increased over 4.6 times.

At the same time Japan’s market share shrunk from 25.5 percent in 2000 to 7.7 percent in 2014, making China the biggest high-tech producer in Asia.

It’s a positive sign for China given their recent government-led innovation drive. China still imports a high number of high-tech products for manufacturing, including chip technology, though an increasing number of companies are vying to make more core high-tech goods on the mainland.

Several Chinese brands in the high-tech space have seen global success in the past two years, including drone maker DJI and smartphone makers OnePlus and Xiaomi.

The Chinese government has committed several lump sums to promoting innovation in the past year, including a 40 billion yuan ($6.5 billion USD) government-backed venture capital fund established in January 2015 to support private sector innovation.

Uber Banned From China’s Most Popular Social Platform Over ‘Violations’

Cate Cadell — Mon, 07 Dec 2015 06:20:21 +0000

Uber is learning a tough lesson about what happens when you go head-to-head with China’s tech giants on their own turf.

Tencent, the tech company that oversees the China’s most popular chat app WeChat, has has blocked all Uber accounts on its social platform, affecting the service across more than a dozen cities.

Tencent-backed Didi Dache is the country’s biggest ride-hailing service and Uber’s largest competitor in the Chinese market.

According to Tencent CEO Ma Huateng [Pony Ma], the recent ban was due to marketing violations by a series of companies, though some were punished more harshly given the severity of the violations, he says.

China Business Network (CBN) CEO Zhou Jiangong confirmed to Technode that Mr. Ma made the comments on a social media post within their personal network.

Mr. Ma explained that public accounts of a certain size have the ability to “incite”, and that Chinese national regulations require businesses of a certain size to hold an Internet Content Provider license (ICP).

“The platform treats everyone equally,” said Mr. Ma, “Didi also violated the rules,” he noted, saying that in the past Didi had also been subject to restrictions.

As of Monday Uber is the only ride-hailing service that has been formally banned from the WeChat platform.

It’s the latest blow in an escalating war for market supremacy between California-based Uber and their Chinese equivalent Didi, backed by the country’s two biggest tech companies Alibaba and Tencent.

China’s largest internal ride-sharing war came to an end with the merger of Alibaba’s Kuaidi Dache with Tencent’s Didi Dache in February 2015. The landmark merger was the beginning of a global ride-hailing empire that includes Singapore’s GrabTaxi, India’s Ola and Canada’s Lyft. The coalition now poses a formidable front against Uber’s expansion, especially in Asia where the U.S. company has been seeking to expand.

Uber’s accounts were previously blocked on WeChat from mid-March. At the time local media reported that the the issues were due to policy violations, and later technical glitches.

According to Mr. Ma the latest bans are part of a platform-wide cleanup effort to remove accounts that are marketing their products by malicious means.

The loss of their public WeChat accounts is a big blow for the China-side operations of Uber. WeChat is a significant consumer outreach platform for businesses on the mainland, with over 10 million public accounts.

Global Smartphone Growth Drops Below 10% As Chinese Market Saturates

Cate Cadell — Fri, 04 Dec 2015 07:38:34 +0000

The global smartphone growth percentage will drop below double-digits for the first ever full year in 2015, according to market research company International Data Corporation (IDC).

IDC predicts that smartphone shipments will grow just 9.8% globally in 2015 to a total of 14.3 billion units, with no upturn in sight.

The Chinese market has been a significant driver in smartphone growth in the past few years. As China’s untapped millions became mobile, both internet companies and the vendors themselves experienced an intense growth period, which saw companies like Xiaomi and Alipay become household names on the mainland.

The market has since saturated. According to IDC China is now a “replacement” market, meaning that the core group of consumers who previously drove smartphone adoption are already mobile.

“The main driver has been and will continue to be the success of low-cost smartphones in emerging markets,” said IDC program director Ryan Reith. “This, in turn, will depend on capturing value-oriented first-time smartphone buyers as well as replacement buyers.”

Following the meteoric rise of Xiaomi and Apple within China, two distinct smartphones sales patterns have emerged dominant: the first are the vendors who sell low-end products on a mass scale for a drastically reduced price, including Xiaomi’s Mi series.

The second are those who are tapping the disposable wealth of China’s growing middle class by offering high-end phones, including Apple’s iPhone and Huawei’s Mate S.

Low-cost smartphones will continue to motivate growth, according to the report. They will also continue to drive replacements. The sub-$100 phones deteriorate quicker, which could bring the average replacement cycle to less than two years, according to IDC.

The Android market share is expected to rise a percentage point in 2015, despite the best efforts of alternate platforms including Linux-based Cyanogen and Xiaomi’s own MIUI.

Qualcomm Breathes Breath Of Fresh Air Following Xiaomi Licensing Deal

Cate Cadell — Thu, 03 Dec 2015 05:34:25 +0000

Qualcomm Incorporated stock has leapt over 5 percent, the biggest single-day increase in four years, following news that they have settled new 3G and 4G license patent agreements with Xiaomi.

It’s a relief for the California-based chipmaker, which has seen its stock decline heavily in 2015 over licensing issues and slowing market demand.

“We are pleased to reach this new agreement with Xiaomi,” said Derek Aberle, President of Qualcomm in a release on Wednesday. “Qualcomm is committed to the success of its partners in China as they continue to grow their businesses.”

Qualcomm’s inability to collect licensing fees from Chinese smartphone vendors in particular has cut into the company’s bottom line. Licensing fees for mobile technology make up approximately 60 percent of the company’s total revenue.

To date, Qualcomm’s total decline in 2015 now sits at approximately 30 percent. A tough smartphone market has also contributed to the company’s slide, as top suppliers Apple and Samsung increasingly rely on in-house components.

Qualcomm accepted a $975 million USD fine in February from China’s National Development and Reform commission following an inquiry into antitrust violations. The process caused the company’s licensing negotiations in China to stall, though they have since been strongly pursuing vendors.

They are still yet to close licensing discussions with Lenovo. The Chinese smartphone maker is struggling to bring their smartphone business back to profitability after acquiring Motorola. Lenovo could potentially roll the payments over to 2016.

Neither Xiaomi nor Qualcomm have revealed specific details of the latest licensing agreement.

Baidu Music To Merge With Taihe As Baidu Continues To Open Assets To Investment

Cate Cadell — Thu, 03 Dec 2015 04:33:25 +0000

Baidu Inc. has announced today that Baidu Music will merge with Chinese music company Taihe Entertainment Group, creating a new company. It’s the latest asset Baidu has spun off for investment as they focus funds on expanding their online marketing and transaction ecosystem, including Nuomi and Baidu Wallet.

“The new company will combine Taihe’s upstream strengths—its extensive intellectual property, and its artists and repertoire (A&R) resources—with Baidu Music’s powerful downstream digital platform and distribution capabilities,” said Baidu in a release.

Taihe has been consolidating an increasing amount of local and international content. The merger could give them greater leverage to deal independently of other music streaming services including those backed by Tencent and Alibaba.

The new company will be part of Baidu’s wider “aircraft carrier program,” which has opened series of Baidu assets up to investment with the goal of developing out their ecosystem under the guidance of Baidu. Other assets under the program include Baidu Takeaway [Baidu Waimai], Zuoyebang, and 91 Desktop, a desktop theme app.

“We’re very open to whatever works best to give these companies the highest chance of success, that brings in the best strategic partners, that structure them optimally to incentivize their management,” company spokesperson Kaiser Kuo told Technode on Thursday.

“Baidu Music is the latest but likely not the last.”

Baidu has recently concentrated core funds to expand services in the highly-competitive online to offline (O2O) sector. The company invested $3 billion into group buying site Nuomi, as they push to gain an early market share against. In October, Meituan and Dianping merged to form the market’s biggest on-demand services provider, competing directly with Nuomi. The companies are now locked in a battle for market share, re-routing funds to heavily subsidize the services.

“Baidu’s resolve and commitment to winning the O2O market remains unshaken,” said Baidu CEO Robin Li during an October earnings call.

“A small sliver, less than 5% of the local high-frequency transaction services market, namely restaurants and local entertainment is online today. Baidu can win in this market,” he said.

Baidu has declined to comment on the terms of the deal between Baidu Music and Taihe, though they say the tech giant will contribute “search technology, big data, and massive online infrastructure” to compliment Taihe’s licensing strengths.

Update 2:30pm 3/12: This article has been updated to reflect comments from Baidu.

Chinese Automaker Geely To Enter Hotly Contested Ride-Hailing Market

Cate Cadell — Wed, 02 Dec 2015 15:26:16 +0000

Chinese auto manufacturer Geely Holding Group is planning to enter the ride-hailing market with an ambitious upmarket rental service called ‘Caocao’.

The service will compete with both Uber and Didi Kuaidi, who have expanded extensively into the more pricey black car domain. Caocao will focus on rentals and ride-hailing, with a selection of add-on services.

In an interview with Reuters. Geely spokesperson Victor Yang said “we can provide driver, we can provide a translator, we can provide a body guard,” alluding to some of the potential add-on services.

Geely has officially established the subsidiary responsible for the new service. News of the Caocao was first reported by state media outlet Xinhua, though no information on the project’s funding was disclosed.

Competition in China’s ride hailing market has stiffened in 2012, with a series of coalitions forming. The year kicked off with a merger between Tencent-backed Didi and Alibaba’s Kuaidi, which went on to settle a $3 billion USD funding round over the summer.

Uber has consolidated its place in the market through a strategic partnership with Baidu. The U.S. based company confirmed a 1.2 billion USD funding round in September.

Geely is seeking to differentiate Caocao by catering to a high-end market. Other ride-hailing services have also attempted to avoid sharing turf with Didi Kuaidi and Uber. eDaijia, a designated driver app that provides chauffeur services, recently cut 20% of their staff in order to stay competitive as Didi launched a similar service.

eDaijia also entered a strategic partnership with similar chauffeur service UCAR, consolidating resources in the face of rising competition.

Technode reached out to Geely for comment on Wednesday evening and will update with any new information.

Samsung Reshuffles Management To Reboot Smartphone Sales

Cate Cadell — Wed, 02 Dec 2015 14:24:01 +0000

Samsung is reshuffling their top management as they attempt to breathe new life into their stumbling smartphone business.

The company revealed on Tuesday that co-CEO and mobile chief J.K. Shin will be replaced by D.J. Koh, Samsung’s former head of mobile research and development.

At the same time B.K. Yoon, head of consumer electronics, will step back from the home appliances division, taking a more general strategic role.

The reappointments are an indicator of the Korean company’s changing priorities. While Samsung’s semiconductor business has remained stable, smartphone sales have taken a two-year backslide.

The company’s latest earnings revealed that the smartphone division made up just 32% of overall earnings, a five-year low.

While Mr. Shin was credited for growing the smartphone brand during his early tenure, Samsung misread demand for the popular Galaxy S6 Edge devices, contributing to poor results in what should have been their most profitable quarter of the year.

Samsung, which works on a rotating CEO system, regularly reshuffles their management at the end of the calendar year.

Image Credit: Ivan Garcia / Shutterstock.com

Lenovo Partners With Razer To Conquer The Last Growing PC Market: Gaming

Cate Cadell — Tue, 01 Dec 2015 13:14:20 +0000

Lenovo has joined forces with Razer, a world leader in gaming devices, to launch high-performance desktop hardware, the only PC sector still seeing significant growth in 2015.

Lenovo will leverage Razer’s concentrated gaming community to boost sales of high-performance PCs, as the company seeks to improve profitability following their $714 million USD net loss last quarter.

The co-branded device will launch in 2016, according to Razer, and will feature the game company’s trademark lighting effects. “Razer matches Lenovo’s scale and broad appeal with a high-touch dedication to the gaming community,” Razer said in a release.

“Additionally, both companies are looking to jointly double down efforts to fast track the development of new technologies, including gaming experience enhancements. ”

While PC sales are shrinking globally, gaming hardware has experienced a resurgence, prompting the world’s leading PC vendors to increasingly target gaming communities.

China has a particularly healthy appetite for gaming PCs. Currently PCs are the top gaming device by revenue in China, with an expected revenue of $16.8 billion USD in 2015, far outweighing mobile and console gaming.

Lenovo is now fighting their way back to net profitability due to the costs of integrating recent acquisitions Motorola and the IMB x86 server business. While Lenovo’s PC business has remained profitable in itself, its growth is slowing according to second-quarter financial results.

The company is not known for their gaming computers, though it has bullishly cut into the market over the past two years. This September Lenovo released their Y-series laptops and desktops, designed for the company’s growing cult fanbase of gamers.

Lenovo isn’t the only company that has turned to high-performance PCs for salvation in a slowing market. Acer and Asus have also made strong commitments to gaming hardware. Graphics specialist Nvidia also saw earnings surge as of this November due to market demand for gaming graphics processing units (CPU), now making up 58% of the company’s total revenue.

Lenovo’s stock price has rallied somewhat in the past three months after shedding almost 30% over poor market share figures.

This Cloning Centre Wants to Produce Up To 1M Cattle A Year Starting In 2016

Cate Cadell — Fri, 27 Nov 2015 09:14:51 +0000

What costs $500 million USD and can churn out up to 1 million cattle embryos a year? A new livestock cloning facility in north China is hoping to do just that, starting production in the first half of 2016, according to one of the companies involved.

The project is a joint venture between Boyalife Group, Peking University, the Tianjin International Joint Academy of Biomedicine and Korea-based biotech foundation Sooam.

Along with cattle, the plant also plans to produce sniffer dogs, pet dogs and racehorses. While cloning projects have been undertaken by Chinese scientists since the early 2000s, there is yet to be a commercial enterprise for cloned livestock.

Boyalife says in a release that they have cloned three Tibetan mastiff puppies as part of their first joint venture with Sooam in September 2014. However increasing output to 1 million head of cattle per year seems somewhat unrealistic in the near future.

The company says it will start with 100,000 cattle per year, scaling up to the 1 million mark in an unspecified time range.

Chairman of Boyalife says that “Chinese farmers are struggling to produce enough beef cattle to meet market demand.”

China’s demand for beef is indeed rising, with live exports expected to double to 200,000 in 2016. China is expected to consume 7.4 million tonnes of beef in 2016, with the country expected to produce approximately 90% of that amount according to the USDA Foreign Agriculture Service.

Recently Australia signed a hotly debated deal to allow 1 million head of annual live exports to China beginning in 2016. Interestingly, it’s exactly the same amount Boyalife and Sooam are hoping to ‘manufacture’ in their single cloning facility.

Boyalife says the project will also include a research labratory, gene bank and museum.

Currently beef consumption sits at just 15% that of pork due to prohibitive pricing. As China’s middle class expands, the demand for reasonably priced beef could bolster cloning projects. However China is still in the process of opening itself up to new markets for beef imports, including Brazil.

This year the European Parliament voted in favor of a ban on similar commercial cloning techniques citing animal welfare issues.

Apple Pay Wants To Launch In China By February

Cate Cadell — Thu, 26 Nov 2015 13:47:53 +0000

Apple is looking to enter the highly competitive electronic-payments market in China by February 2016, according to several reports.

Technode reported in September that Apple registered a local entity called Apple Technical Service Shanghai Ltd (苹果技术服务 [上海] 有限公司) which would oversee the development of Apple Pay in China.

At the time the entity listed Gary Joseph Wipfler as legal representative. Wipfler currently serves as vice president and corporate treasurer for Apple. The established company reportedly registered capital worth $13.4 million USD.

According to sources who spoke to the Wall Street Journal, Apple has already forged relationships with China’s four major banks, as well as possibly Union Pay, the current market leader in credit and debit payments.

Earlier in the year Apple’s Tim Cook told state media outlet Xinhua that he was “bullish” on introducing Apple Pay to China. The country already hosts a series of local payment options, most notably Alipay, the payment brand of Alibaba’s finance unit Ant Financial.

Like Apple Pay, Alipay has excelled as a mobile payment method, allowing users to spend at a host of brick and mortar stores using queues from QR codes that interact with Alipay’s wallet system, linked to bank accounts and debit cards. Apple Pay uses a near field communication antenna embedded within the iPhone 6 itself to communicate with specialized terminals.

Apple Pay’s experience will be vastly different in China than in their home market. Penetration rates for credit cards remain low in China, while debit card-linked digital wallet systems have excelled in the absence of other methods. The Apple Pay system favors users of multiple cards.

Alipay dominates the payment market across online platforms, O2O apps and brick and mortar stores. A much larger percentage of China’s consumers also still use Android phones, which could constrict Apple Pay and related hardware to first tier cities.

Image Credit: Bloomua / Shutterstock.com

Baidu Teams Up With Allianz To Enter China’s Booming Online Insurance Market

Cate Cadell — Wed, 25 Nov 2015 12:06:22 +0000

Baidu has teamed up with Allianz, the European financial services company, in a bid to launch an online insurance service in China. The joint venture will also include Hillhouse capital, according to a report by the Financial Times.

Online insurance in China is growing rapidly. Statistics from the Insurance Association of China show that in the first half of 2015 revenues from Chinese insurance premiums sold online reached 82 billion RMB, a 206% increase on the same period in 2014.

Currently these sales account for just under 5% of the total industry, though a report from Ping An Securities released in April suggests that number could exceed 30% by 2019.

At present Allianz has a very limited presence in China, though a partnership with Baidu signals their intention to expand in Asia.

Last week Baidu revealed a partnership with China CITIC Bank to launch ‘Baixin Bank’, the company’s own online bank, following in the footsteps of fellow China tech giants Alibaba and Tencent.

The three companies, often dubbed ‘BAT’, have extended heavily into the finance sector in recent years. All three now have representation in P2P lending, online wallets, online banking, crowdfunding and now online insurance.

In 2013 Tencent and Alibaba formed their own online insurance seller in partnership with Ping An Insurance Group Co, with Alibaba currently holding the largest stake worth 16 percent. The venture, called Zhong An Online Property Insurance, raised 5.78 billion RMB in its first ever funding round this June (just over $930 million USD at the time).

Alibaba, which manages all finance services under their official finance arm Ant Financial, also revealed plans to invest 1.2 billion RMB ($188 million USD) for a 60% stake in Cathay Insurance Co., the China-based unit of Taiwan’s Cathay Financial Holdings Co. Alibaba also launched eBaoTech this year, the world’s first internet insurance cloud platform, according to the company.

The latest joint venture between Allianz and Baidu will target small-to-medium sized businesses as well as individual consumers.

The Pepsi Phone Is Here, But It May Not Reach Its Crowdfunding Goal

Cate Cadell — Wed, 25 Nov 2015 10:57:47 +0000

Last month we detailed the upcoming Pepsi smartphone, a mid-range smartphone model that would share the beverage brand for a China-only release.

The device launched on JD’s crowdfunding site JD Finance this month and has been live for a week, attracting significant media attention. However with only eight days left it’s yet to reach half of its 3 million RMB ($470,000 USD) goal.

Pepsi has chosen to partner with Koobee, a lesser-known Chinese smartphone vendor, to push the phone valued at approximately $250 USD (the price of the Koobee H7, which features virtually identical specs).

Those who got in early paid less than $78 USD for the a version of the limited edition phone, while early bird-options are still available for approximately $110 USD. After that users will have to pay $156 USD for the phone, or just over $200 USD for a combo including the phone and a selfie stick.

The phone itself features a 5.5-inch 1080p display with 16GB of internal storage, 2GB of RAM and a fingerprint sensor located on the back of the device. Design-wise, there are hints of the Huawei Mate S that come to mind, though it’s definitely participating in a lower price range.

Limited release branded smartphones are not unusual in the Chinese market. This year ZTE launched an NBA version of their Axon Mini exclusively to the Chinese market, drawing on the popularity of the NBA franchise in China to boost the sales of their latest flagship.

Image Credit: Pepsi Phone

Jack Ma In Discussions To Buy South China Morning Post

Cate Cadell — Wed, 25 Nov 2015 03:41:55 +0000

Jack Ma is in talks to buy a controlling stake the South China Morning Post, extending their entertainment and media empire into unchartered waters.

No financial details have been released on the deal, though it’s understood that discussions have been ongoing for several months with the current majority stakeholder, Kerry Media, which is owned by Malaysian tycoon Robert Kuok.

It is also not yet clear whether the potential buyer is Alibaba or Jack Ma himself.

In an interview earlier this month with Bloomberg, Ma explained possible synergies between the tech giant and traditional media.

“We need media to help our small, medium sized companies to promote,” he said. “And by the way our advertisement dollars [are] huge,” he went on to say, noting that small businesses could contribute heavily to media outlets.

He also said that Alibaba’s massive data resources could help media to report in a more “accurate way”.

The deal marks the first Alibaba-affiliated investment in news media outside of China. The company paid $200 million for a 30% stake in China Business News in June this year, which has both TV and newspaper businesses under parent company Shanghai Media Group.

The latest deal is reminiscent of the 2013 Washington Post sale to Amazon founder Jeff Bezos.

For Ma and Alibaba, the South China Morning Post holds strategic potential. The newspaper is widely circulated throughout South Asia where Ma is looking to extend his business interests, it also reports heavily on China-side business and economic developments.

Alibaba has been expanding aggressively into the content and entertainment industry over the past two years.

Alibaba has also made a trove of investments and partnerships in non-media entertainment content, including the recent acquisition of all remaining shares in video streaming company Youku Tudou.

Earlier this year Jack Ma clashed with the South China Morning Post over what he claimed was a misquote in an article. The paper quoted Ma as saying that the Chinese government reaction to the 1989 Tiananmen Square riots was the “most correct decision” at the time.

Ma claimed in a later statement that the quote was referring to his management of Alibaba, and was taken out of context by the South China Morning Post reporter causing a “terrible misunderstanding.”

Alibaba’s connection with the Chinese government will also be an intense discussion point should the company reach a deal to purchase the newspaper.

Out of necessity, Alibaba has maintained a good relationship with the the Chinese government on many fronts. However it’s a relationship that could be tested should Ma pursue the sale. The South China Morning Post is vocal on many issues that Chinese state media does not report in the interest of China’s ruling party.

Alibaba Seeks To Shed Stake In Meituan-Dianping

Cate Cadell — Mon, 23 Nov 2015 15:48:55 +0000

Just six weeks after Meituan and Dianping merged to form the largest on-demand services provider in China, Alibaba is seeking to sell their stake in the new company, worth approximately 7 percent, according to sources who spoke to the Wall Street Journal.

The stake is worth some $1 billion USD, the same amount that Tencent is reportedly preparing to invest in the new entity. Alibaba owned a stake in Meituan prior to the merger while Tencent held a stake in Dianping.

The newly formed company oversees a range of on-demand services including movie ticketing, restaurant booking and other services linking brick and mortar businesses to consumers via the mobile platform.

The match-up ended one of the biggest remaining industry rivalries between tech giants Alibaba and Tencent. At the same time it raised speculation that Alibaba and Tencent would potentially integrate their respective O2O food delivery services Koubei.com and Ele.me into the new platform, which also features some food delivery services.

It now appears that Alibaba will redirect resources to bolster Koubei.com, maintaining competition with Ele.me which is currently the country’s third-most funded startup in China, reaching an estimated valuation of $3 billion USD as of August 2015.

The new Meituan-Dianping entity is now in the process of raising fresh funds to fuel an expansion. The two companies had been engaged a financially exhaustive war of subsidies as they vied for early market share, an expense that would theoretically fall considerably once they ceased to compete.

Baidu injected $3 billion USD into their competing group-buying service Nuomi to remain competitive in the space.

Alibaba’s stock has fallen slightly since the beginning of the month but remains steady around the $0.78 cent mark since the close of their annual Single’s Day shopping event on the 11th of November.

Google Play Store Will Come To China In 2016: Reports

Cate Cadell — Sat, 21 Nov 2015 00:03:58 +0000

This September Google-watchers were buoyed by reports that the play Store may be entering China this fall. However according to sources cited by Reuters, the launch of a China-side Play Store has a much looser timeline: 2016.

Google has regulatory hurdles to overcome before they are allowed to pre-install the official version of their app store on any devices, though they have been working on a China-friendly version of their app store for over a year now.

In a highly cited report from The Information this September, sources said that the company could be releasing the store as soon as fall 2015, and that Google had already entered into local partnerships to launch an extensively planned app store. It appears the process has been slower than anticipated.

According to the latest report from Reuters, the new store will be unconnected to overseas stores, and the company intends to comply with state regulations on filtering sensitive content.

Early this month Alphabet’s Executive Chairman Eric Schmidt said at TechCrunch Beijing that he was traveling to China for government and private meetings. Google is looking to integrate the Chinese Play Store with China’s native payment methods, Alipay and Wechat Payment, meaning those partnerships also need to be forged along with device partnerships.

While the move is significant in terms of re-exposing their brand in China, the state has made no concessions in the latest deal. This mean’s that an entry for Google’s central search business remains an incredibly difficult task for the company.

Google Search was evicted from China in 2010 over censorship concerns in a very public conflict between the state and the company. Some services remained active, though they have been progressively snuffed out behind firewall, including Gmail, which was blocked in late 2014.

This year the company has made a concerted effort to re-enter the market, with several executives speaking out on the mater including Chief executive Sergey Brin, Alphabet Executive Chairman Eric Schmidt and Alphabet CEO Larry Page.

Since the restructure that saw Google become a unit of parent company Alphabet, it has been made clear that each unit of the new Alphabet company is free to pursue their own international expansion plans.

Last month Google made their first direct investment in a Chinese startup, contributing an undisclosed amount to Android AI smart-wear company Mobvoi. Google also partnered with their first Chinese smartphone vendor to launch the Huawei Nexus 6 in October, fueling rumors that Huawei may be Google’s initial device partner for the launch of the Play Store.

Kamcord Launches Live Mobile Streaming In Japan, Korea

Cate Cadell — Fri, 20 Nov 2015 05:51:37 +0000

Tencent-backed Kamcord has launched its capture and stream service in Japan and Korea today, as they continue their push into the East Asian markets.

Last year the company raised a $15 million USD B round to fuel their Asia expansion, opening offices in Tokyo and Seoul. Investors include Japanese game company Gungho and Wargaming along with Tencent. Kamcord has since worked on developing local partnerships to integrate their latest live streaming function.

Kamcord, which graduated from Y-combinator in 2012, began as software that could record gameplay using an integrated SDK. As of this year it has evolved into a live streaming service for gaming, entering the same territory as Twitch to cater to some of the biggest names in live gaming.

The company first launched an Android record-and-play version in late 2013, before revealing an Android version of the live streaming function in June. Android remains dominant in the Asian markets that Kamcord is attempting to tap into.

Kamcord launched their streaming service in the U.S. this summer, in July this year they claimed to have around 1 million registered users and approximately 5 million videos.

Asia has an extensive appetite for play-and-share as well as live streaming services in the game sector. There are several players that compete with Kamcord is at least one aspect, including YY, Douyou, Duopai and Aipai.

Korea’s fast internet speeds and Japan’s developed gaming industries made them viable targets for Kamcord’s early entry in Asia. Further markets have not yet been decided by the company, though their funding partnership with Tencent paves the path for a highly-anticipated China entry.

Alibaba Injects $430M Into Taiwan, Hong Kong Entrepreneurial Funds

Cate Cadell — Thu, 19 Nov 2015 15:00:37 +0000

Alibaba announced the launch of two entrepreneurial funds in Taiwan and Hong Kong today, tapping into the burgeoning startup communities on China’s fringe.

The Taiwan fund is worth NT$10 billion ($306 million USD), while the Hong Kong fund is valued at HK$1 billion ($130 million USD).

Investments will be in line with Alibaba’s existing ecosystem including e-commerce, logistics, mobile, cloud computing and finance, according to a release from Alibaba.

“We are passionate about fostering entrepreneurial spirit and hope the resources provided by the Fund will help unleash potential for innovation and entrepreneurship,” said Joseph Tsai, executive vice chairman of Alibaba Group.

Alibaba will employ independent fund management firms to initiate the program. Gobi Partners, a 10-year-old VC firm with offices across Asia, was the sole partner announced today, though further firms will be revealed.

Alibaba has been rapidly investing in early stage startups to fuel growth as they fight to remain agile despite their size. In an interview with Barack Obama this week, Alibaba executive chairman Jack Ma said that “innovation is always outside” of large companies.

The e-commerce giant says the investments will not be specific to companies of any particular size, though it’s worth noting that Gobi Partners has previously specialized in early stage investments.

The new funds will be a not-for-profit initiative according to Alibaba. Cindy Chow, the former senior director of international finance at Alibaba will serve as the executive director of the Hong Kong fund, while Andrew Lee, former chief financial officer of EnTie Bank, will serve as executive director of the Taiwan Fund.

DJI Disables Drones Near Wildfires, Prisons With New Software

Cate Cadell — Wed, 18 Nov 2015 04:42:45 +0000

Shenzhen-based drone maker DJI has announced an update to the ‘geofencing’ feature within their mapping service, meaning users will now be warned when they are flying into restricted zones including wildfires and prisons.

Over the past year there have been several reports of fire-fighting helicopters that have been grounded due to unsafe conditions caused by amateur drone hobbyists flying near fire sites. Many Fire Watch Guard Services also have reported to have had found drones lurking around the region. Drone companies have since been under pressure to introduce software that can disable drones without imposing over-reaching restrictions.

DJI’s new software will disable drones from flying by default in restricted zones, though users with a DJI account verified with a phone number and credit card will be able to unlock the drone regardless of the zoning. Under the new system, DJI will be able to assist authorities to track unauthorized users that have unlocked their drone within a restricted zone.

DJI says the new software will provide “accountability”, but that the company itself will not collect personal data for commercial purposes.

“We believe this major upgrade to our geofencing system will do even more to help operators understand their local flight environment, and to make smart, educated decisions about when and where to fly their drones,” says Brendan Schulman, DJI’s Vice President of Policy and Legal Affairs.

The software is a compromise between complete airspace freedom for drones and controversial blanket deactivation technologies that prevent firefighting staff, airline personnel and other authorized users from operating the drones in restricted spaces.

Currently DJI has a “No Fly Zone” system, enacted in 2013, that puts restrictions on drones flying close to certain areas including military bases and airports. The new system will be enacted in Europe and North America with other countries to follow.

China’s Tinder Promises To Improve Shoddy Encryption After Massive Flaws Exposed

Cate Cadell — Wed, 18 Nov 2015 01:02:30 +0000

Tantan, a close replica of Tinder, has vowed to improve its encryption after it was revealed the site had little to no protection against moderately competent hackers.

CEO and co-founder Yu Wang admitted in an email response that the lack of protection protocols was a “bad idea” and that they are seeking to fix the problems as soon as possible. The vulnerabilities were exposed in a report last Friday by Hong Kong-based entrepreneur Larry Salibra, who founded his own crowdsourced site-testing service.

Mr. Salibra claimed the site was “endangering young women and men by failing to use encryption”, drawing a comparison to the recent Ashley Madison hack which exposed thousands of personal data points.

Tantan’s CEO reached out to Mr. Salibra directly via email to respond to the allegations, saying that the company is now “working on releasing a version that fixes these two issues within the week,” though he claimed that the comparison with Ashley Madison’s breach was not accurate.

Among the vulnerabilities the report showed that sensitive data including personal telephone numbers and passwords were left unencrypted by Tantan. Other information including gender, sexual orientation, interests and hobbies were also left exposed through various means.

By viewing Tantan’s exposed console log though Apple’s developer kit Xcode, potential hackers are able to see a host of information about the app which is typically “turned off” in other apps to increase performance and protect sensitive information.

The report also revealed that Tantan had been using a list of ‘rude words’ to chide users who used certain phrases, such as colloquialisms for “let’s meet for sex” and “send nudes.”

China has a booming market of apps designed to facilitate romantic encounters, some with better reputations than others. Tantan is one of a handful of services that has an interface almost identical to Tinder. The latest breach reignites concerns surrounding the security of the many social apps flooding China-focussed app stores.

The country has seen a spate of high-level hacks and malware threats over the past year. In September a handful of the country’s most popular apps, including Didi, WeChat and NetEase Music, were infected with malware due to a tainted version of Apple’s developer kit.

Tantan’s most recent funding round was in February this year, when they raised $5 million USD led by Bertelsmann Asia Investments.

China Vows To Increase Quality Checks For Counterfeit Goods Online

Cate Cadell — Tue, 17 Nov 2015 23:55:05 +0000

A Chinese regulatory body has vowed to increase random quality checks for online goods in an attempt to stamp out the counterfeit issues that have continued to taint China’s e-commerce industry.

China’s State Administration for Industry and Commerce (SAIC) is the same regulatory body that released a damning white paper this January on Alibaba’s lax attitude to counterfeit products on their e-commerce platforms. Alibaba’s rival JD. com has also been called out for their oversight in tackling counterfeit products by the same body.

According to SAIC, the companies that fail to meet their ongoing standards will be forced to halt sales. The issue of counterfeit goods has been damaging for China’s e-commerce platforms as many look to expand overseas. At the same time the government has increased scrutiny over the past year, hoping to undo some of the negative stereotypes attached to China’s online trade.

As the parent of China’s biggest e-commerce platform, Alibaba has ramped up investments in counterfeit technology, including advanced QR code technology that will allow products to be scanned for authenticity on delivery. They also launched an English language complaints service for companies and individuals to report counterfeit products.

Alibaba has become increasingly conscious of the problem in 2015, which Jack Ma dubbed Alibaba’s “year of globalization.” With an influx of new partnerships inviting foreign brands onto the platform, Ma has spoken out several times vowing to crack down on the sale of fake goods.

According to SAIC’s most recent statement, companies that host counterfeit goods are responsible for their monitoring and removal. Those that fail to comply with be subject to penalties from their local regulators.

Image Credit: Ian Law / Shutterstock.com

Baidu Teams Up With Citic Bank To Launch Online Bank: Reports

Cate Cadell — Tue, 17 Nov 2015 23:20:07 +0000

Baidu will partner with China Citic Bank, one China’s largest and most internationally oriented banks, to launch an online bank according to local media reports.

Baidu has said it will make a formal announcement on Wednesday, while Citic Bank suspended trading on Monday pending an investment announcement.

Both Alibaba and Tencent have expanded considerably into the online banking space since they were granted their respective banking licenses in March 2014.

Tencent launched China’s first online bank in January, capitalizing on the under-serviced small and micro-loans markets, they followed up with a WeBank app this August.

Alibaba’s financial arm followed up with their own bank in June, also targeting small lenders. Both companies have developed consumer credit rating services preceding the launch of their online banks.

Baidu has been seeking to enter the space for well over a year. In March 2014 CEO Robin Li said that “Baidu is now applying for multiple banking licenses, including payment, but because we’re still in the process of applying it’s not convenient to reveal too much.”

In March of the same year Mr. Li called for greater regulation in China’s expanding online finance industry. In April the company omitted 800 P2P lending sites from results on Baidu’s search engine, citing poor regulation in the industry,

While Baidu has considerable experience in marketing finance products, they are behind the curve when it comes to internet banking services. Alibaba launched money-market fund Yu’er Bao in June 2013, which offers interest rates much higher than traditional banks. Despite a rocky year with high-end management changes, Tencent’s WeBank has leveraged their highly-popular social networking platforms WeChat and QQ to expand their banking service.

Competing with Alibaba’s early traction in finance and Tencent’s social integration will be a challenging task for Baidu’s new bank. It’s not immediately clear when the new bank will launch, though it’s worth noting that it took between 10 and 15 months for Tencent and Alibaba to launch their respective online banks following their initial license approval. Baidu’s stock was down 1.89% at $196.83 USD by the end of trading on Tuesday.

China’s Top Supercomputers May Soon Outnumber U.S. Systems

Cate Cadell — Tue, 17 Nov 2015 15:00:33 +0000

China already has the world’s best supercomputer and now they may soon have the most.

According to a reputable list of the most powerful supercomputers released this week, China now has 109 out of the top 500 systems. The number of Chinese supercomputers on the list tripled since the last tally six months ago.

China’s Tianhe-2 is still considered the most powerful supercomputer in the world, according to the same list, while China’s share as a manufacturer of high-powered computer systems also rose in 2015.

The U.S. has 200 supercomputers on the list, more than any other country. However their number has declined to the lowest since the list’s initial compilation back in 1993.

Chinese companies are continuing to invest in the high-powered machines to tackle the increasing computational demands of the growing local technology sector. They have also improved their marketing, with more machines running the required tests to be included in international rankings.

Despite China’s growing appetite for high-powered machines continues to rise, the latest ranking shows a continued slowdown in the overall development of supercomputer systems. “This low level of turnover among the top supercomputers reflects a slowing trend that began in 2008,” noted a release accompanying the list.

While China still holds the top spot for the most powerful supercomputer, it’s the country’s only representation in the top 10. The U.S. holds five of the world’s top ten supercomputers, while Germany, Saudi Arabia, Switzerland and Japan each hold one.

Drone Pioneer DJI Banks On Local Consumers With First Flagship Store

Cate Cadell — Tue, 17 Nov 2015 00:11:15 +0000

DJI, the world’s largest commercial drone maker, is ready to bank on China’s mainstream consumers, opening their first flagship store in Shenzhen where the company was founded in 2006.

The new store will open in a Shenzhen shopping centre before the end of the year, with an approximate floorspace of 800 square meters.

DJI will use the store to market to buyers who haven’t had experience with drones before, signaling their faith in a mainstream local market. However the company continues to primarily sells their drones online, with most revenue coming from overseas.

DJI’s drones and accessories featured during Alibaba’s 14.6 billion USD Single’s Day sales for a cut price this month, while partnerships with local content providers including Ali-backed Youku Tudou have helped the company grow their brand name locally after whirlwind global sales.

DJI is the brand leader in China though dozens of new players are flooding the market. DJI set themselves apart early with high-end technology and global marketing. CEO Frank Wang is a self-confessed fan of Steve Jobs and Apple’s brand development, which is evident in DJI’s products and marketing.

The DJI store will feature its most popular drones including the high-end Inspire 1 and the more consumer friendly Phantom 2 and 3 series. The company is currently working to expand their range through a partnership with Hasselblad photography. DJI bought a minority stake in the Swedish-based company which specializes in consumer cameras earlier this month.

DJI has expanded rapidly, with minimal funding outside their own cash flow compared to other Chinese drone makers. In May, they pocketed $75 million from Silicon Valley-based Accel Partners, concluding at a valuation of approximately $8 billion USD with no IPO in sight.

Image Credit: DJI

Didi, Uber Competitor eDaijia Cuts 20% Of Staff As O2O War Takes Its Toll

Cate Cadell — Mon, 16 Nov 2015 01:56:51 +0000

Chinese designated driver app eDaijia is cutting one fifth of their staff in an attempt to stay competitive, as market giants Didi and Uber expand aggressively.

According to multiple Chinese media outlets who cite an internal letter from the company’s CEO, Yang Jiajun, the company will be laying off approximately 20% of their staff to curb spending in the face of rising competition.

The source claims that eDaijia’s personnel have quadrupled since the beginning of 2015 as part of an all-out attempt to compete with market leaders. However the CEO now feels that their numbers are “bloated”, and that the company will have to streamline personnel in order to stay competitive.

2015 has seen China’s ride-hailing market become increasingly focussed on core players Didid Kuaidi and Uber China. Both companies secured multi-billion USD funding rounds over the summer in an attempt to grab an early market share in China. eDaijia’s latest funding round totaled $100 million USD in May, with an estimated market cap of around $800 million USD.

When eDaijia launched in 2011 they differentiated from large competitors by marketing themselves as a chauffeur service. Didi has since encroached on the space, by launching their own designated driver service this July called ‘Didi Chauffer’. At the time of the launch Didi claimed they would have the service running in more than 100 cities by the end of 2015.

UCAR and eDaijia enter a strategic partnership in October to cut costs

In October this year eDaijia joined forces with UCAR, also known as Shenzhen Zuche, in a strategic partnership that allows them to share resources including chauffeur teams, databases and marketing costs. The recent round of layoffs has sparked debate as to whether the two companies are planning a complete merger.

According to the internal letter cited in media reports, eDaijia is working on comprehensive compensation for the redundant employees, most of whom are in the technology business development portions of the business.

China’s O2O and on-demand services have seen increasing rounds of consolidation in 2015, beginning with the merger of ride-hailing giants Didi Dache and Kuaidi Dache. The country’s largest tech names Baidu, Alibaba and Tencent have expanded aggressively into the area, heavily subsidizing their services as each hopes to dominate capital-rich sectors. For companies like eDaijia, having minimal cash reserves could spell disaster in a market that favors early acquisition tactics.

Image Credit: Miro Vrlik Photography / Shutterstock.com / eDaijia

‘Don’t Buy This’: Senior Google Engineer Condemns OnePlus Type-C Adapters

Cate Cadell — Mon, 16 Nov 2015 01:03:38 +0000

Benson Leung, a Senior Google Engineer, has said that Type-C adapter cables from Chinese manufacturer OnePlus are harmful to fast charging smartphones, warning users not to use them with the recent Nexus and Google devices.

“Oneplus needs to get the message that their accessories are out of spec…” he said in a public post.

“Don’t buy this #USB #TypeC adapter for your Chromebook Pixel or Nexus 6P/5X phone. It uses the wrong identifier resistor.”

“The Oneplus A-C cable is not compliant either. I don’t recommend anyone with a Nexus use it.”

The cables from Chinese smartphone vendor OnePlus retail for approximately $7 USD. Mr. Leung notes that they are currently safe for OnePlus users because the phones do not support fast charging. However he warns that users should not keep the cord anyway in case they update their device.

“[The OnePlus cord] uses a 3A identifier resistor instead of the ‘Default USB Power’ one,” he says, which can harm the charger as well as the USB ports and PC.

Mr. Leung began a solitary campaign against the adapters recently through a series of damning Amazon reviews, saying he was “fed up” with the non-compliant accessories.

“None of the ones presently available are spec compliant, but several vendors have been in touch with me to repair their broken cables and adapters,” he says.

Mr. Leung worked on both of Google’s recent Pixel devices that feature the Type-C connection.

Image Credit: One Plus

China’s Ride-Hailing Giant Didi To Roll Out ‘UberEATS’-Style Program With Ele.me

Cate Cadell — Fri, 13 Nov 2015 07:58:31 +0000

One of the most highly anticipated partnerships between Chinese O2O services could see a full rollout before the year’s end, with Didi Dache and Ele.me reportedly settling on partnership plans this week.

Ele.me CEO Zhang Xuhao confirmed to Chinese press that the two companies had reached an agreement on a “strategic program” between the two companies, though no financial details have yet been released.

Ele.me is China’s leading O2O food delivery service. Founded in 2009, the Shanghai-based company employs a wide network of two-wheel delivery drivers in partnership with restaurants all over China to provide on-demand food delivery through their namesake app ‘Ele.me’, Which in Chinese translates to ‘Hungry?’. Didi is the country’s largest ride-hailing service and is valued at over $16 billion USD.

In September Zhu Xiaohu, Director at GSR Ventures, the company that backed Ele.me’s A series, confirmed that the companies were pursuing a strategic relationship, but that they had yet to enter formal financial discussions. At the time Didi noted that the partnership in discussion would not involve any direct investment.

The latest plans involve a program that utilizes both two-wheeled and four-wheeled distribution systems for food delivery. The same source said that a trial has begun in Beijing, which will extend to a fully-fledged service before the end of December.

A partnership between Ele.me and Tencent has long been rumored, considering both companies exist within Tencent’s strategic investment ecosystem. Both companies are well-and-truly equipped with enough capital to pilot the cooperative project, Ele.me closed a $630 million USD funding round in August, on top of a $350 million USD E round in January led by Tencent. Didi nabbed a whopping $3 billion USD investment over the summer, fueling their fight for market share against Uber and a handful of other ride-hailing companies.

The program resembles ‘UberEATs’, the food delivery service run by Uber. Uber has also been expanding aggressively in China since establishing an independent China operation to take on Didi. However despite offering periodic promotional food services, they are yet to launch an UberEATS style service on the mainland.

Challenging Months Ahead: Jack Ma Following Record $14.3B in Singles’ Day Sales

Cate Cadell — Thu, 12 Nov 2015 13:16:15 +0000

Today Beijing’s streets today were littered with delivery vehicles as millions of packages were making their way to happy consumers following yesterday’s Singles’ Day sales.

But despite 14.3 million USD in sales flowing through Alibaba’s payment service Alipay yesterday, and a whopping 467 million delivery orders passing through the Ali-backed Cainiao logistics system, all was not happy on the trading floor in New York.

Alibaba’s stock recovered in recent months from an all time low of $57.39 in September, but took a downward turn this week as Alibaba’s founder Jack Ma said that the next five to ten months with be tough for China, with certain economic factors continue to take their toll on the market.

Alibaba reported better than expected earnings last month, with a 32% jump in revenue. The company’s positive financial outlook and record-breaking Singles’ Day sales have given onlookers reason to believe that China’s consumer spend is immune to the economic pressures currently affecting other industries. But Mr. Ma believes that retail is still suffering, citing the continued effects of Xi Jinping’s anti-corruption campaign.

While this year’s sale day managed to smash records, Alibaba’s year-over-year profits are a better measure of the health of domestic consumption. With hype around the Singles’ Day sales growing yearly, some have pointed out that Singles’ Day creates a vacuum, negatively affecting sales directly before and after the event.

Following yesterday’s final tally, Mr Ma. was optimistic, saying that despite a “bumpy time” ahead, China’s economy and domestic consumption would see improvement over the next decade and a half.

Tencent Rides Out Economy Woes With Growth In Mobile Games And Ads

Cate Cadell — Wed, 11 Nov 2015 14:23:15 +0000

Tencent has posted a record 32% profit gain in the third quarter bolstered by mobile games and advertising revenue, as the company puts aside last quarter’s concerns of a shrinking mobile game market and a slowing economy.

The company’s net profit rose to 7.45 billion yuan in the three months preceding September, while total revenue jumped 34% to 26.59 billion yuan ($4.17 billion USD). The company’s social networks business, which includes WeChat and QQ services, grew 32% year over year, while advertising revenue jumped 102% to 4,938 million yuan.

Tencent’s report cited an increase in digital content subscription services as one of the reasons behind the growth of their social networks. The company has been aggressively extending into subscription services as market rival Alibaba makes similar investments.

Tencent inked a deal with Metro-Goldwyn-Mayer Studios earlier this month to distribute the entire James Bond franchise, as well as a separate deal with Paramount Pictures to release upcoming films. In September they sealed a deal making Tencent the exclusive online platform for all six of the first Star Wars films.

One of the most surprising elements of Tencent’s Q3 report was the 60% revenue growth in mobile games after second quarter revenue growth of just 11%. They release some big-name games in the third quarter, as well as implementing a “new smartphone game strategy,” according to the company.

Going forward, Tencent will focus on building out player communities around their social platforms as well as building content and pushing new games to keep smartphone game engagement high. Tencent has been making a series of new PC and mobile game investments over the past three months, including and A series investment in Palo Alto-based Artillery games last month.

The company has also been building its cash reserves through a series of loans including a $1.5 billion USD syndicated loan. The loans have been reportedly earmarked for acquisitions and investments, spurring discussion as to what Tencent’s fourth quarter portfolio might include.

According to sources who spoke to the Wall Street Journal, approximately $1 billion USD of that capital is earmarked for an investment in the the on-demand giant created by the Meituan-Dianping partnership.

Why ZTE Is Now Sponsoring Five NBA Teams

Cate Cadell — Tue, 10 Nov 2015 06:08:25 +0000

On New Year’s Eve 2014, Chinese telecoms equipment and smartphone supplier ZTE began a new phase in their growth.

The company launched their new brand identity at the first game of the Golden State Warrior’s season, effectively ending their time in the U.S. market as purely a white label manufacturer for U.S. carriers and setting out to sell devices under the ZTE brand.

Ten months later, the ZTE-backed Warriors were NBA champions and the Chinese company would have almost doubled their US market share in the preceding 18 months to 8.2%.

While the company couldn’t have guessed who would be NBA champions, they did know that they were tapping into a marketing goldmine. The NBA final broke viewer records in America this year with a peak of just under 29 million viewers during the game, but it’s a fraction of those watching the same games in China.

“There are more people watching that game [in China] than there are people in the US, period. 100 million Chinese people are putting their eyeballs on the Houston Rockets games,” says Andrew Elliot, Senior Director of Strategic Marketing at ZTE. Currently the Chinese Basketball Association (CBA) estimates that more than 300 million young Chinese people play basketball.

Following this year’s championships, ZTE signed two further teams to their roster: this year’s runners up, the Cleveland Cavaliers, and the Chicago Bulls, which brings the total number of ZTE-sponsored teams to five.

The Chinese company partnered with the Houston Rockets in 2013 before adding the New York Knicks and Cleveland State Warriors to their roster in October 2014.

According to Mr. Elliot, the success of the brand awareness campaign in the U.S. has been the biggest driver for signing more teams. “We measured the brand awareness and it went up pretty significantly form less than 1% [in 2013] to more than 16% [in 2014],” he said. That number has now risen to 34%, according to ZTE’s own research.

Rebooting the ZTE Brand

Despite now being the U.S.’s fourth largest smartphone supplier, many consumers wouldn’t have known the company’s brand before the start of the year. previously ZTE was a white label carrier, meaning they would manufacture devices under other brands primarily carriers.

“We’ve gone from having no products with our logo on them to all of our products with our logo on them,” said Mr. Elliot.

Now the company is trying to take back some of that low-cost device market with their own branded devices, while simultaneously releasing a high-end offering, the Axon, for $450 USD. They later released the Axon to China as a second-wave market, as well as the subsequent Axon mini which features an ‘NBA edition’ for Chinese consumers.

While the company may be making significant gains in brand awareness, their quarterly revenue, as of September 2015, only rose from $354 million to $369 million. Despite nearly doubling their sales in the 14 months preceding Q2 2015, the company itself had seen only a four percent rise in total revenue, meaning they are yet to capitalize on their growing share in the U.S..

One aspect of the company’s business that continues to rise is their marketing budget. “When I first got here from year one to year two our budgets doubled,” said Mr. Elliot. “Year two to year three for support of the Axon it doubled on top of that too.”

Chinese Smartphones Aim For The Top-End

ZTE isn’t the only Chinese smartphone manufacturer looking to increase brand awareness in the U.S. market. Huawei, who recently dethroned Xiaomi as the top Chinese smartphone vendor on the mainland, has partnered with Google to release the Nexus 6 in July, which was followed by the Nexus 6P at the end of October. It’s the first partnership between Google and a Chinese smartphone vendor, and marks the Chinese company’s changing brand direction.

They followed up the launch of the Nexus 6 with their own Mate S, a high end offering priced to compete in the same range as Samsung and iPhone flagships. It launched with several high-end features including Force Touch, which Apple would launch in the same week.

Huawei’s relationship with the US market has been a tumultuous one. They were banned from bidding on US government contracts contracts over espionage concerns, though Chief Executive Guo Ping has said multiple times in 2015 that the ban is “not important’ for the company’s growth.” Huawei has still been permitted to sell its consumer devices, but like ZTE has been largely relegated to white label manufacturing until recently.

While Hong Kong-listed ZTE may currently hold a much larger stake of the U.S. market than Huawei, they’ve had less luck at home in China. Currently they are the 8th most popular brand locally by market share. Their stock has also dipped this year amidst a slowing local economy, falling from a high in May of $28.80US down to $14.97 US in July, recovering slightly to $19.13US today.

Following the latest additions to their NBA roster, ZTE will be hoping to carry some of the magic over from the Golden State Warrior’s win to boost brand awareness both in the U.S. and at home. The NBA will host several pre-season promotional trips to China for the franchise’s teams.

As CEO of ZTE Mobile Devices Adam Zeng said in an investor conference earlier this year, “Lebron maintains his leader position among his competitors. This shows us that despite the ups and downs of the industry we can maintain a sustainable development, just like Lebron.”

Video: Alphabet Executive Chairman Eric Schmidt At TechCrunch Beijing 2015

Cate Cadell — Mon, 09 Nov 2015 15:18:21 +0000

This past week we had the pleasure of welcoming Eric Schmidt, the Executive Chairman of Google’s parent company, Alphabet, to join us onstage at TechCrunch Beijing, co-hosted by Technode.

VP Of Didi Strategy Stephen Zhu At TechCrunch Beijing 2015 [Full Video]

Cate Cadell — Fri, 06 Nov 2015 09:53:42 +0000

This past week we had the pleasure of welcoming Stephen Zhu, the VP of Strategy and Head of Taxi Services at Didi to join us onstage at TechCrunch Beijing, cohosted by Technode. The article summarizing his talk can be found here.

VP Of Didi Strategy Stephen Zhu: Chinese Cities Are A Bigger Challenge Than U.S. Cities

Cate Cadell — Fri, 06 Nov 2015 09:11:13 +0000

As Didi and Uber go head to head to conquer the Chinese market, Stephen Zhu, VP of Strategy and Head of Taxi Services at Didi has said it’s a much harder task to master China’s cities than comparable markets like San Francisco.

“Of course it’s more difficult, because Beijing has 20 million people. When you compare the difficulty level it’s like comparing calculus with algebra”, said Mr. Zhu onstage at TechCrunch Beijing on Tuesday, an event co-hosted by Technode.

“The traffic system is more complicated here,” he continued, saying that matching the thousands of passengers with cars within Beijing’s convoluted traffic network was an ongoing challenge, with the company processing over 50 terabytes of data each day.

Referring to markets like San Francisco, where their largest foreign rival Uber is based, Didi has been “dealing with countless other problems every day compared to companies who’ve only been solving algebra problems,” said Mr. Zhu.

According to the company, Didi facilitates approximately 7 million rides a day in China, with private cars accounting for about 4 million rides, taxis 2 million and other services including hitch and carpooling making up the remaining 1 million.

Didi has been expanding aggressively out of their core taxi-hailing business, which now only accounts for 28.5% of their total rides, according to the company’s own estimates. They launched their private car service 14 months ago, which has gone head to head with Uber’s expanding China operations.

Mr. Zhu also commented on the company’s expanding investment portfolio, noting that they were already emerging their local counterparts to cross promote rides through the corresponding apps.

“For example, [when] all the passengers who use didi in China go to South East Asia, where we work with Grab Taxi, when they turn on Didi… they can hail a car through the network,” said Zhu. Didi recently revealed that the same cross-platform service would be available for Lyft users by early next year.

Mr Zhu. also said that the company would be spending an increasing amount of money on innovation investment. Currently they are only legally registered for certain services in Shanghai, including their ‘Hitch’ service, which is similar to Uber’s original ride-sharing model.

This past week we had the pleasure of welcoming Stephen Zhu, the VP of Strategy and Head of Taxi Services at Didi to join us onstage at TechCrunch Beijing, cohosted by Technode. You can view the full video here.

Evernote COO On Strategy & China: It’s Easy To Get Spread Thin When You’re A Growing Company

Cate Cadell — Fri, 06 Nov 2015 06:11:32 +0000

Evernote has taken a dramatic shift in 2015, restructuring under new CEO Chris O’Neill and cutting 13% of their staff along with several global offices. But according to Evernote’s COO, Linda Kozlowski, the changes have been a necessary reassessment.

“It’s created a lot of change but also an opportunity to step back and rethink,” said Ms Kozlowski on stage at TechCrunch Beijing this Tuesday. “It’s easy to get spread very thin when you’re a growing company.”

While it’s been a tough year for Evernote, they’ve seen success through changes to their paid model, particularly in China. As of April Evernote rolled out a mid-tier pricing range, as well as restructuring the regional prices of their trademark premium product. They’ve since seen quadrupled the number of paid consumers in China, according to Ms Kozlowski.

“Our research showed that many people needed something that was more than our free product but not quite to our premium product,” she said. Evernote currently has approximately 15 million users in China, and is seeking partners in the market to support their growth.

Evernote launched a China version of their product, called Yinxiang Biji in China in 2012, something many foreign companies have sought to do including Linkedin, which launched a localized app earlier this year

“There tends to be an issue with companies from Silicon Valley coming over and saying ‘oh we can do it exactly the way we’ve done it in the U.S.’, which is completely not true,” said Ms Kozlowski on stage. “You need to think about what is right for China instead of trying to impose what’s right in the U.S. on China.”

She also warned against “shiny object syndrome”, whereby companies are tempted to expand into several verticals too quickly. Evernote recently shut down several of their secondary services including Evernote Food and Evernote Hello.

This past week we had the pleasure of welcoming Linda Kozlowski, the COO of Evernote to join us onstage at TechCrunch Beijing, cohosted by Technode, to answer some questions about Evernote’s new direction in 2015 and growth in the Chinese market. The Full Video can be found here.

Evernote COO Linda Kozlowski at TechCrunch Beijing 2015 [Full Video]

Cate Cadell — Fri, 06 Nov 2015 06:08:59 +0000

DJI Buys Minority Stake In Hasselblad

Cate Cadell — Thu, 05 Nov 2015 15:34:49 +0000

DJI, the Shenzhen-based Chinese drone company, has announced it will take a minority stake in high-end camera technology brand Hasselblad.

“We are honored to be partnering with DJI, the clear technology and market leader in its segment,” said Perry Oosting, Hasselblad’s CEO. Neither company has released the financial details of the deal.

“Hasselblad and DJI share a passion to provide creative people with cutting-edge, inventive technology to help them take visual storytelling to the next level,” said Frank Wang, DJI’s Founder and CEO. “With this partnership, we combine our strengths to further push the borders of what’s possible in imaging technology.”

DJI has been expanding rapidly into a series of drone and photography related projects. Recently the company revealed it had been working with Canonical on a powerful computer called the Manifold, especially designed for the DJI Onboard SDK. The computer equips drones with powerful data, image and mapping abilities.

Earlier this week the company unveiled a concept video detailing ideas for their upcoming drones including obstacle avoidance, free-flight object tracking and multi-angle shooting. While the ‘Phantom X’ is still a concept, it appears the company is seeking out the right partners to make the promised technology happen.

Hasselblad’s camera technology is high end, playing into DJI’s brand ambitions. “DJI and Hasselblad are equally enthusiastic about creativity and excellence, and we are looking forward to sharing technical expertise and paving the way for future innovations,” said the Swedish-based company’s CEO.

According to the joint release, the companies will continue to develop delineated brands. Hasselblad’s 75-year-long history includes supplying cameras for the Apollo missions and moon landing, however more recently they have focussed on more traditional cameras.

Images taken by Hasselblad’s cameras during the moon landing

JD.com, Alibaba Clash Over Single’s Day Promotions

Cate Cadell — Thu, 05 Nov 2015 09:19:27 +0000

With just one week left before this year’s November 11th Single’s Day mega-sale event, China’s top two e-commerce platforms are already at each other’s throats.

JD.com has filed a complaint with China’s State Administration for Industry and Commerce (SAIC) claiming that Alibaba is attempting to bar merchants from participating on competing platforms during the upcoming sales, according JD.com’s official Weibo account.

While Alibaba was the original driver behind Single’s Day, it’s become a nationwide one-day-sale across most of China’s e-commerce platforms including JD.com. It’s also the country’s single biggest shopping event of the year, with Alibaba alone pulling in $9 billion USD worth of sales on the 11th of November 2014.

According to JD.com the SAIC has officially received their request, meaning they will take the matter further. Regulations from the same government body state that no e-commerce platform is able to stop merchants from participating on multiple platforms.

Both Alibaba and JD.com are running extensive promotional events leading up to the sale day. According to JD.com, Alibaba is forcing a handful of merchants to participate in Ali-exclusive promotions, though it’s not clear whether Alibaba is actually prohibiting merchants from participating in sales on JD.com and other e-commerce platforms.

While barring merchants from cross platform activity is prohibited by the state, platforms have employed various tactics in the past to ensure exclusivity. Tencent and Alibaba have leveraged WeChat shopfronts and Alipay respectively to make if difficult for micro-merchants to operate on multiple platforms, though these methods are ineffective for barring large merchants.

While Alibaba has returned better than expected growth in its Q3 earnings, some believe that the Single’s Day sale will be a better measure of how China’s consumer spending power has been affected by the economic slowdown this year.

Image Credit: Taobao.com sales day promotion

Tencent Looks To Invest $1 Billion In Meituan-Dianping

Cate Cadell — Wed, 04 Nov 2015 04:30:43 +0000

Less than a month after two of China’s largest on-demand services companies Meituan and Dianping came together in a landmark merger, Tencent Holdings Ltd. is seeking to invest $1 billion USD in the newly combined entity, according to sources who spoke to the Wall Street Journal.

The latest round could be up to $3 billion USD, which would bring the total value of the Meituan-Dianping joint venture to $20 billion USD.

The potential investment will up the stakes in an already capital drenched market of O2O providers. In June this year Baidu revealed they would be investing $3 billion USD in Nuomi, a service that competes in the same market as Meituan and Dianping.

China’s O2O companies, particularly those backed by Baidu, Alibaba and Tencent (BAT) have been spending aggressively in 2015 to lock down an early market share by subsidizing their services and offering promotions.

It’s not yet clear who else will participate in Meituan-Dianping’s latest multi-billion USD round led by Tencent, or whether Alibaba, who have a stake in Meituan, will take part.

Earlier September year, taxi-hailing company Didi-Kuiadi, a merger also backed by both Alibaba and Tencent, saw an additional $3 billion USD funding round including $740 billion USD from China’s sovereign wealth fund China Investment Corp. (CIC) as well as Ping An Ventures and Capital International Private Equity Funds.

As China’s O2O platforms continue to confidently pump billions into squaring off market share, it remains to be seen whether into these companies can live up to their valuations.

Aside form the Dianping-Meituan and Didi-Kuaidi mergers, 2015 has seen partnerships develop between Baidu (Qunar) and Ctrip, Alibaba and Youku and 58.com and Ganji.com.

The marriage between Dianping and Meituan ended the largest market rivalry between on-demand services, meaning further funding rounds could focus less on out-performing rivals through subsidies and more on other strategic moves in the market.

Video: The Week In Chinese Tech: Ctrip-Baidu, Alibaba Earnings, Alphabet Rumblings

Cate Cadell — Mon, 02 Nov 2015 07:02:24 +0000

Please Note: If you are viewing from within China you may need a VPN to see some of our video content.

Just in case you missed it, this is what has happened over the last week in Chinese tech. Subscribe by email or Wechat, or follow us @technodechina for regular updates.

Huawei Has Hired An Ex-Apple Executive To Improve Their Interface

Cate Cadell — Fri, 30 Oct 2015 04:37:17 +0000

Fresh of the back of their blockbuster third-quarter results, Huawei is wasting no time establishing itself as a market contender in the high-end smartphone space.

According to a statement on the company’s public Weibo account, Huawei has hired a former Apple design executive to lead the interface design of Huawei’s smart devices. Abigail Brody served almost 10 years as a Creative Director at Apple where she consulted on the interface for the first iPhone as well as Mac Os X among other projects.

Huawei is making bold moves in the high-end smartphone arena, escalating their brand to the third largest vendor in China this quarter and beating out local superstar Xiaomi to become the top local vendor in the country.

Huawei’s third quarter results revealed a 63% year-on-year jump in sales to 27.4 million handsets, comparing to a 22% jump from Apple and a disappointing 6.1% from Samsung.

The company has now set their sights on the international competition, including Apple’s iPhone, which holds the second largest share of the Chinese market behind Samsung.

This September Huawei released their Mate S, a 5.5-inch high-end offering ambitiously priced in the same bracket as the iPhone 6. The price isn’t the only competing feature. Huawei launched the Mate S with Force Touch, a feature similar to Apple’s which was released just one week later.

While the Mate S is made up of solid hardware specs, its interface received mixed reviews. The company revealed that it is in the process of establishing an R&D centre in Silicon Valley, hoping to improve UI design.

A handful of Chinese vendors have made a play for the high-end market recently, as overall smartphone sales slump and companies seek to increase their brand power overseas. Xiaomi’s top-tier flagships (still priced well below other premium offerings) performed relatively poorly compared to their budget offerings, the later of which drove their growth this year.

ZTE, who compete with Huawei in the telecoms and white label device sectors, have also made a strong bid for the top-tier market in 2015 with the release of their Axon series. The company has aggressively marketing their phones in the U.S. following a rebranding in the late 2014.

Image Source: Ivan Garcia / Shutterstock.com

Alphabet Chairman Eric Schmidt Joins Techcrunch Beijing To Talk Google And China

Cate Cadell — Wed, 28 Oct 2015 02:02:38 +0000

With the Techcrunch conference just around the corner, we are excited to confirm that Alphabet (Google) Executive Chairman Eric Schmidt will be joining us for a fireside chat on November 2nd.

Google has had a limited presence on the mainland in the past, but the company is set to enter a new phase in its relationship with the China. As foreign tech companies find new avenues to do do business in China’s diversifying tech ecosystem, Google is also looking to leverage its resources as a content and innovation powerhouse to interact with the Chinese tech community and consumers.

About Eric Schmidt

Since joining Google in 2001, Eric Schmidt has helped grow the company from a Silicon Valley startup to a global leader in technology. As executive chairman of Alphabet, he is responsible for the external matters of all of the holding company’s businesses, including Google, Inc., advising their CEOs and leadership on business and policy issues.

Prior to joining Google, Eric held leadership roles at Novell and Sun Microsystems, Inc. He holds a bachelor’s degree in electrical engineering from Princeton University as well as a master’s degree and Ph.D. in computer science from the University of California, Berkeley. He is a member of the U.S. President’s Council of Advisors on Science and Technology.

He is the co-author of The New Digital Age and How Google Works, and serves on the boards of the Economist Group, the Mayo Clinic, and the Broad Institute. He’s a Gulfstream pilot, and his philanthropic efforts through The Schmidt Family Foundation focus on climate change, including support of ocean and marine life studies at sea, as well as education, specifically cutting edge research and technology in the natural sciences and engineering.

Google in China

2015 has seen a new wave of activity from Google in China. The company has been maintaining a fringe presence for several years since they were banned from the country over censorship issues in 2010. They have since been working to actively participate in the community through other avenues than their traditional search engine services.

Reports earlier this year sparked conversation that Google may be preparing a China-friendly version of their Google Play app store to release before the year is out. Last Week they also revealed their first direct investment in a Chinese startup since their 2010 exit, putting an undisclosed sum into Android voice search software Mobvoi. Mobvoi will also join us at Techcrunch next week to discuss what makes them a company worthy of Google’s attention.

We are incredibly excited to hear what Mr. Schmidt has to say about Google’s new moves in the China market as well as how their general strategy is evolving to fit the market.

TechCrunch Beijing runs from November 2nd-3rd at Wukesong Hi-Park in Beijing. If you haven’t already secured your tickets to the show, the good news is you can still have time to grab a ticket. You can also keep your eyes on our our event page for updates to the agenda and scheduled speakers.

Ctrip, Qunar End China’s Biggest Online Travel Rivalry With Multi-Billion Dollar Partnership

Cate Cadell — Mon, 26 Oct 2015 13:31:53 +0000

The spate of consolidations between Chinese tech companies continues as yet another industry rivalry is settled in a multi-billion dollar partnership.

Ctrip.com International Ltd. and Baidu-backed Qunar Cayman Islands Ltd. have announced a matchup today that will have a valued worth of approximately $15.6 billion USD.

Unlike other recent match-ups in the market, Qunar and Ctrip’s partnership involves a share swap rather than a straight acquisition or a merger. Baidu will take on 25% of Ctrip, while Ctrip will take approximately 45% of Qunar.

Ctrip CEO James Liang will join Qunar’s board of directors along with COO Jane Sun. Baidu CEO Robin Li and Tony Yip, head of Baidu investments, will join Ctrip’s board in return.

Ctrip is worth roughly double Qunar at $10.6 billion USD. The larger company attempted a complete buyout of Qunar just under six months ago, but the deal was rejected.

According to Bloomberg data, the latest partnership bring the total value of Chinese internet deals to $62.5 billion USD over the past year. Major deals include the $6 billion USD merger between Alibaba’s Kuaidi Dache and Tencent’s Didi Dache and the $15 billion USD matchup between Dianping and Meituan.

Baidu has been aggressively investing in its O2O services in 2015, a strategy that has seen it cut deeply into net profits. Like other internet giants they have been heavily subsidizing several of their services, including group-buying site Nuomi and Qunar, in an attempt to grab market share early. It’s a strategy that is seeming more and more logical as tech giants strive to monopolize the market through multi-billion dollar partnerships.

Buying into such a large cut of the online travel industry is a long awaited win for Baidu, who have found themselves on the outskirts of an increasingly close relationship between contemporaries Tencent and Alibaba.

Baidu’s Nuomi competes directly with the newly merged Meituan-Dianping duo, a partnership between stakes held by Alibaba and Tencent. At the same time the Baidu-backed Uber China arm is in fierce competition with the Ali-Tencent ride-hailing giant Didi Chuxing (Didi Kuaidi).

Both Tencent and Alibaba have made their respective investments in online travel, though the latest matchup between Ctrip and Qunar easily makes up the largest single online travel service in the market.

Video: The Week In Chinese Tech: Ali-Youku, IBM, Google-Mobvoi & 500 Stormtroopers

Cate Cadell — Mon, 26 Oct 2015 03:45:44 +0000

Please Note: If you are viewing from within China you may need a VPN to see some of our video content.

Just in case you missed it, this is what has happened over the last week in Chinese tech. Subscribe by email or Wechat, or follow us @technodechina for regular updates.

This week: Alibaba acquires Youku, IBM shares its source code with the Chinese government, Google funds its first startup in China since the 2010 exile, Huawei de-thrones Xiaomi and 500 stormtroopers march on the Great Wall of China.

Alibaba To Invest In Secretive Google-Backed AR Company Magic Leap

Cate Cadell — Sun, 25 Oct 2015 22:48:20 +0000

Magic Leap, the Florida-based augmented reality company that landed half-a-billion USD in funding from Google last year, is now reportedly in talks with Alibaba to seal its next round of funding.

Sources who spoke to Recode say that the Chinese tech giant is expected to lead the company’s next round with a $200 million USD investment. According to the South Florida Business Journal, multiple sources say the company’s total round will be around the $1 billion mark.

Magic Leap has attracted a lot of attention for its secretive product development and eccentric CEO. While the company has yet to release a working prototype, they’ve attracted the attention — and dollars, of some of the world’s biggest tech and entertainment names.

Besides Google, previous investors include Qualcomm, Legendary Entertainment, Avatar founder Richard Taylor and Lord of the Rings special effects company Weta Workshop

Their product employs ‘Light-Field Technology’-enabled goggles that supposedly allow you to overlay real-life scenes with highly advanced 3D graphics.

At last week’s WSJ Live conference CEO Rony Abovitz (who once dressed up as an astronaut to deliver a TED Talk) told the audience that Magic Leap provides “cinematic reality” as opposed to traditional augmented or virtual reality concepts. He said that the technology “replicates” the light field that humans experience in regular sight.

Mr. Abovitz, who worked on medical technology before joining Magic Leap, said that traditional forms of virtual reality don’t conform to the way the brain is designed to interact with the eye, an issue he says Magic Leap resolves using photonic light fields and visual wave fronts.

Magic Leap’s secrecy over the product has attracted a lot of hype, enough apparently to catch the attention of Alibaba.

The Chinese tech company has been expanding rapidly into entertainment following the establishment of Alibaba technologies earlier this year. They’ve reached into a wide array of tech-related investments including internet TV, e-retail-backed film promotion and, most recently, a complete acquisition of Youku Tudou, one of the country’s largest online streaming services.

Alibaba appears to be following the lead of other global tech giants looking to cash in on the next generation of AR and VR tech. Google has invested in multiple AR projects, including Google Glass, while Facebook bought VR startup Occulus for $2 billion USD last year. Chinese companies are also showing interest in the developing AR and VR playing field, earlier this year China Media Capital (CMC) followed Walt Disney in a $65 million USD funding round for VR startup, Jaunt.

Here’s look at the Magic Leap demo they released during the WSJ Live conference, showing an animated android hiding under a desk and a 3D representation of the solar system floating in an office space:

Mark Zuckerberg Praises Chinese Tech Companies In Lengthy Mandarin Speech

Cate Cadell — Sun, 25 Oct 2015 21:29:24 +0000

Almost exactly a year ago, Facebook founder Mark Zuckerberg sent the internet into a frenzy when he did a Q&A in Chinese at a Tsinghua University event. The performance drew mixed reviews at the time: some praising the then 30-year-old CEO for his persistence, others picking apart his shaky pronunciation and so-so grammar.

A year later he has returned to the same event with a 22-minute Chinese speech, which he claims is his “first real speech in any language sharing how I started thinking about Facebook’s mission.” The lengthy talk was littered with Chinese idioms and even some well-timed jokes, showing off the progress his Chinese has made in the past year.

Dressed down in what appears to be the same grey t-shirt he wore to the event last year, Mr. Zuckerberg told the crowd his motivation for starting Facebook was “to connect people”, a mission statement he believes he shares with Chinese tech companies Alibaba and Xiaomi.

“I want to connect people… and when I look at Chinese companies like Alibaba and Xiaomi, I see the same story,” he said.

He goes on to praise Jack Ma in particular, citing one of the Chinese business man’s most popular Alibaba anecdotes. “Jack Ma has a great quote,” said Mr. Zuckerberg on stage, “Compared with 15 years ago, we are big. Compared with 15 years from now, we are still a baby.”

While he didn’t directly discuss any plans for Facebook’s entry to China (where the social media site is still banned behind the Great Firewall), he did emphasize the importance of international expansion for the future of Facebook, reiterating that the site was not just a U.S. product.

Preceding his Q&A session last year, Mr. Zuckerberg was named to Tsinghua’s School of Economics and Management’s advisory board, a position he continues to hold. In the past he has praised Tsinghua for its role as an innovation driver in China’s tech scene.

His impressive progress drew some praise on Chinese social media sites, though the young CEO has had a few important Chinese language engagements in the past year to practice.

In September Zuckerberg had some significant face time with Chinese President Xi Jinping when the leader was visiting the U.S.. At the time Mr. Zuckerberg requested a nickname from Mr. Xi for his unborn daughter, though Mr. Xi politely declined, saying it was too much pressure.

While Facebook continues to be banned in China, the company has been targeting Chinese companies who are looking to court audiences abroad.

Apple Steps Up Green Energy Program In China By Targeting Supply Partners

Cate Cadell — Fri, 23 Oct 2015 02:18:18 +0000

Apple has announced two new sustainability projects in China this Wednesday, hoping to begin offsetting the carbon footprint of their entire supply chain.

The company has already completed the construction of a 40 megawatt solar project in Sichuan, which the company claims produces more than the total electricity of their China offices and retail operations.

The newly announced projects include the construction of a 200 megawatt solar projects across China’s north, east and southern regions. The will also partner with suppliers to build a further 2 gigawatts worth of clean energy projects in the coming years, hoping to avoid a total of 20 million metric tons of greenhouse gas, roughly equivalent to removing 4 million vehicles from the road for one year.

It comes at a time when China itself is stepping up its commitment to clean energy. The country is the world’s largest polluter, but has taken an active role in setting climate goals ahead of the 2015 UN Climate Change Conference in Paris starting this November. This September they rolled out plans for their own emissions trading scheme, capping emissions and allowing the trade of carbon credits.

“Climate change is one of the great challenges of our time, and the time for action is now,” said Apple CEO tim Cook in a statement on their latest projects.

Among the company’s partners involved in the project is Taiwan-based iPhone manufacturer Foxconn, who will build a 400 megawatt solar project in China’s Henan province with a deadline of 2018, looking to make the final production process carbon neutral.

“We are excited to embark on this initiative with Apple. Our companies share a vision for driving sustainability and I hope that this renewable energy project will serve as a catalyst for continued efforts,” said Foxconn CEO Terry Gou. Foxconn recently revealed plans to spend $5 billion USD to build new manufacturing operations in India.

Apple’s U.S. operations are already carbon neutral, as are their office and retail operations in China, though offsetting the the carbon emissions of their entire supply chain – a large part of which is in China – is a much more complicated process. Like many global tech hardware brands, Apple struggles to control the entire supply chain. In December last year a BBC documentary claimed that Apple had failed to adequately protect factory workers, while in 2013 Apple themselves had discovered 106 cases of child labor in their supply chain through an internal audit.

Despite the challenges of monitoring a complex supply chain throughout several developing countries, Apple is committed to offsetting more than just their own carbon footprint. “These projects go beyond Apple’s operations in China to help our suppliers adopt clean renewable energy,” said Lisa Jackson, Apple’s vice president of Environment, Policy and Social Initiatives.

Apple expects they will meet their goal of removing 20 million metric tonnes of carbon in China by 2020.

Image Credit: pio3 / Shutterstock.com

Tencent Invests In U.S. Game Company Artillery

Cate Cadell — Thu, 22 Oct 2015 21:59:17 +0000

Tencent, who have stakes in some of the the world’s biggest mobile and online games, are proving that they still have their finger on the pulse when it comes to early-stage investment in game companies

The Chinese game and social giant has led the A series in Palo Alto-based PC game startup, Artillery. The investment round, which was for an undisclosed amount, will help to bring the company’s first game Atlas to market. The free-to-play game has similarities with other real time strategy games in Tencent’s investment portfolio including World of Warcraft.

Other investors participating in Artillery’s A series include First Round Capital, Lowercase Capital, Signia Ventures, General Catalyst, Charlie Cleever and Crunchfund.

“We’ve grown to 22 employees and plan to expand our testing at the end of this year,” said Ankur Pansari, Artillery’s CEO, in a statement.”We’ve learned a lot from [Tencent] already and their feedback has been invaluable.”

Tencent has a diverse number of game company investments across mobile and desktop including Riot Games, maker of the highly popular League of Legends game, Activision Blizzard, maker of World Of Warcraft and call of Duty, and Epic Games, the company behind Unreal Engine.

The company has increasingly focussed on the mobile gaming market in China. Recently they invested $126 million for a 14.6% stake in San Francisco-based Glu Mobile Inc., paving the way for the U.S. company to introduce its apps to China.

Despite their continued vigor in the gaming field, Tencent’s growth in online gaming dropped sharply from 28% in Q1 to 17% Q2 2015, while growth in smartphone-game revenue shrunk to 11% from 82%. Saturation in the gaming market has led Tencent to seek out alternative revenue drivers, including advertising which now accounts for approximately 17% of Tencent’s total revenue, rising from 10% in 2014.

Google Invests In Chinese Android Voice Search Software Company Mobvoi

Cate Cadell — Thu, 22 Oct 2015 20:50:47 +0000

Google has made its first direct investment in China since their 2010 exile, putting up an undisclosed amount into existing partner Mobvoi, an AI company building Chinese voice search functionality for Android devices on the mainland.

Google’s investment is in the tens of millions, and is a contribution to Mobvoi’s C series, bringing the company’s total investment to $75 million USD.

The Chinese company, which is founded by former Google employees, found a niche in its early days as a replacement for the banned Google services. The company is still relatively small, but is known for its voice search software as well as its own smartwatch OS and device called Ticwear.

Mobvoi was founded in 2012 by former Google research scientists, Li Zhifei, now CEO, and Mike Lei, who is the company’s CTO. They sealed a partnership with Google in March this year, also partnering with Lenovo’s Moto 360 to promote their voice search software this September. Their software is integrated with several of China’s most popular apps including WeChat, Dianping, Didi Chuxing and Weibo.

Currently Mobvoi’s voice search software, Chumenwenwen, has been integrated into the LG G Watch R along with the Moto 360. The company’s early investors include SIG, Sequoia Capital and Zhenfund.

For Google, the investment is the latest indication that they are serious about re-entering the market. Google services have been largely banned in China since 2010 due to a conflict with the Chinese government over several issues including censorship. The U.S. tech giant stepped up their efforts this year, with reports claiming that they are preparing a China-friendly version of the Play Store to be released on the mainland this year.

Huawei Hits 100M Shipment Goal As Samsung Is Set To Record First Ever Decline

Cate Cadell — Fri, 16 Oct 2015 01:43:34 +0000

2015 has been a tough year for smartphone vendors in China, with an economic slowdown taking its toll of country-wide sales. However some vendors have been more successful than others.

Huawei reached one of its major milestones this quarter, shipping 100 million units in 2015, becoming the first Chinese vendor to do so, according to research firm TrendForce. Given the current climate for phone sales in China, meeting goals is a quite an achievement. Some of the biggest contenders in the industry have been forced to lower expectations.

Samsung held tight to their top spot in global smartphone rankings, accounting for 25% of total shipments in Q3. However their global shipments are expected to decline a percentage point in 2015 to 324 million units, while rival Apple will see a 16% boost, shipping 223.7 million.

While Huawei’s expected shipments for 2015 are less than half of Apple’s, the company is speeding up where others are struggling, with TrendForce estimating a growth rate of more than 40% over 2014.

That said, China’s smartphone market has not been particularly kind to any of the big smartphone vendors, and it is expected to stay that way until at least mid 2016.

Several Chinese vendors have attempted to stave off market saturation woes by introducing high-end models at a premium price in an attempt to edge into Apple and Samsung’s territory. Xiaomi attempted to crack the premium market with its Mi Note series, positioned as a slightly less pricey alternative to the foreign brands.

However 2015 revealed that Chinese consumers are willing to pay more for the premium names rather than take a price cut for something with less brand appeal. Xiaomi is still set to achieve a 14.6% shipment growth this year due to steady sales in their budget models, however they will fall short of their 100 million yearly target.

Huawei also made an attempt to crack the high-end market, aggressively targeting features in other name brand devices. The Mate S series, which was released just before the iPhone 6s, is Huawei’s most expensive flagship yet, retailing within the iPhone’s price range. They also unveiled a Force Touch feature similar to Apple’s 3D Touch, along with Knuckle Sense technology and fast charging.

While Huawei may have had more success in pushing their high-end smartphone offering, their market share in China did fall almost 1% to 17.9% in Q3 while Xiaomi gained close to 1.5% to reach 14%.

Total third-quarter global smartphone shipments were up 9.1%, reaching 332 million.

China To Connect 50,000 Villages With $22B Investment

Cate Cadell — Thu, 15 Oct 2015 23:31:34 +0000

China’s breakneck development has allowed a sophisticated e-commerce sector develop alongside a large rural population that is still plagued by poverty. It’s a disparity that has led to a unique relationship between agriculture and e-commerce, with $16 billion USD in agricultural goods traded online annually.

Now China’s government is hoping to boost the digital sector in rural and remote China by investing 140 billion yuan ($22 billion USD approx.) in extending the broadband network to 98% of the country by 2020.

The ambitious plan was laid out by China’s state council on Wednesday, and involves around 50,000 villages in rural and remote China. The memo details how 30 million households will gain improved internet access as part of the five-year project.

The plan is part of a wider commitment by China’s government to bring 70 million residents out of poverty by 2020, but it also coincides with the policy commitments of ‘Internet Plus‘, the strategy aimed at bringing China’s traditional industries — including agriculture, online.

Several of China’s largest tech companies have extended into the rural e-commerce space. JD.com one of the country’s largest e-retail platforms, has launched a dedicated service for the trade of agricultural products. Alibaba also opened an agricultural e-commerce service on its Taobao platform that also features data-driven guidelines for certain farming practices.

The parent company of Lenovo, Legend Holdings, also invested heavily in Yunnongchang, which means ‘Cloud Farm’, a service that sells agricultural products online, which also has service centers across over 200 cities.

The $22 billion USD investment plan laid out by the government will also seek to improve logistics in the affected areas, attracting investment to some of the country’s poorest areas.

Alibaba And The Chinese Economy Are Like Conjoined Twins: Jack Ma On Counterfeit Goods

Cate Cadell — Wed, 14 Oct 2015 05:42:22 +0000

It’s no secret Alibaba has made significant moves to clean up its global image since their 2014 IPO, but commander-in-chief Jack Ma has now said that removing counterfeit products is a matter that inextricably links Alibaba and the Chinese economy.

In an interview with state media outlet Xinhua, Ma said that while the effect of having counterfeits on the Alibaba marketplaces was limited, the company suffered from forgeries due to their dependence on the health of the Chinese economy.

Ma went as far as to claim that for every counterfeit product Alibaba sells, they stand to lose five customers, dismissing comments that they have benefitted from the wide network of black market items within its stores.

Alibaba has attracted criticism from both the Chinese and U.S. governments in the past for falling short in efforts to curb counterfeits being sold on its e-retail platforms, primarily Taobao. The Chinese government released a white paper at the start of the year accusing the tech giant of failing to take action to eradicate fakes prior to their record-breaking 2014 IPO. U.S. agencies, including the U.S. Trade Representative, have been critical of the sites’s counterfeit policy for years.

The Chinese e-commerce giant has recently made a series of moves to throw off the counterfeit stereotype and endear its platform to international audiences as they increasingly invite foreign products into their ecosystem.

This August Alibaba added an English option to its IP protection system TaoProtect, allowing English speakers to report instances of counterfeit. They have also made a handful of investments in technology aimed at curbing counterfeit, including Israeli-based QR tech company Visualead, who create ‘dotless’ QR codes for packaging.

In his latest interview Ma said the consumer complaint rate for products on their platform currently sits at just over 0.01%, though he did not specify the scope of the platforms included. He noted that if China continues to be pigeonholed as a market for making quick money then Alibaba has no future.

Ma also noted that big data was playing a big role in identifying and shutting down counterfeit operators.

Combatting counterfeit isn’t the only measure the company has taken to improve its image since its IPO. In June they also joined western internet giants Google, Amazon and Walmart in banning products that feature the confederate flag, citing guidelines that prohibit “materials that are ethnically or racially offensive.”

Alibaba’s stock has taken a beating over the past few months as market instability has unbalanced several large tech companies. However their share price has bounced back slightly this month after falling below $0.60 USD to reach an all time low in September.

Pepsi Will Add Another Phone To China’s Saturated Market

Cate Cadell — Wed, 14 Oct 2015 03:13:49 +0000

It’s a sign of China’s hardware prowess that that not even a saturated market can deter PepsiCo from making an Android smartphone.

Before you get too excited, the U.S. beverage company will not be entering the manufacturing game for good. Currently they are just seeking out hardware partners for China-only promotional phone in line with other accessories they are releasing.

The phone will be dubbed the ‘Pepsi P1’, and will not be competing against high-end rivals in the China market specs-wise. It’s expected to retail at around 1300 RMB ($200 USD approx.) which puts it in the price category of several popular phones from Xiaomi, Meizu, Lenovo, Huawei and OnePlus, among others.

It will will feature a 5.5 -inch screen with 16GB of storage and a 1.7GHz processor.

Pepsi has joined hardware makers in the past to develop co-branded products, but the Pepsi P1 marks the first smartphone project. Last year, the U.S. beverage maker teamed up with B&O Play to develop headphones.

Cheap manufacturing and an abundance of viable hardware partners makes China an ideal market for launching a promotional phone, if not the only market. China-side brands including ZTE and Huawei have specialized in selling hardware to be used under alternate brands, including U.S. and other international carriers.

Branded phones have historically performed poorly in western markets, though a China-only project has better prospects. Consumption of low-end smartphones is higher and Chinese consumers replace their mobile devices every 18 months according to recent statistics.

Despite this, China’s smartphone market has slowed considerably this year, and large brands have felt the effects of a saturated market. Considering the Pepsi P1 will share a price bracket with several competitive options, the company may run into barriers in such a crowded market.

Image Credit: Mahathir Mohd Yasin/ Shutterstock.com

iQiyi Inks Deal With ‘Hunger Games’ Studio Lions Gate

Cate Cadell — Mon, 12 Oct 2015 00:00:04 +0000

In the latest entertainment matchup between Hollywood and Chinese tech companies, Baidu-owned internet video service iQiyi has inked a deal with California-based Lions Gate Entertainment Corp., the production company behind The Hunger Games.

Neither iQiyi or Lions Gate have released financial details of the deal, though according to a statement from the companies it will give Lions Gate access to a platform of 500 million users for upcoming titles including the latest Hunger Games installment, Divergent, and action thriller Deepwater Horizon.

The deal is by no means Lions Gate’s China debut. The company has also partnered with tech giant Alibaba’s entertainment department, partnering in October 2014 to license its content for streaming in China.

China Develops An Apetite For Streaming Hollywood

China’s video streaming market has seen rapid growth over the past five years, and major streaming services, including iQiyi, have launched subscription services for both local and foreign films. While China is known for its large online black market of pirated films and music, cheap licensed services and higher levels of disposable income have boosted the number of viewers watching subscription services.

Last month Youku Tudou, one of the country’s largest media streaming services, announced a licensing deal with Paramount Pictures, adding over 100 movie titles to their subscription service including Forrest Gump, Star Trek and Mission: Impossible. They had previously partnered with Netflix to distribute the House of Cards series, which was highly popular in China.

China’s largest internet giants are also scrambling to create Hollywood partnerships, as entertainment becomes a high-grossing investment for companies who can leverage their platforms for movie-ticketing services and merchandise retail. In September Tencent, the company behind China’s largest social app WeChat, signed a deal with Walt Disney to become the exclusive online distributor of the first six Star Wars films. They also entered a licensing agreement with HBO in November 2014 stream a number of popular series including Game of Thrones.

Both Tencent and Alibaba have launched respective film production houses in China this year, with the later also partnering with Paramount Pictures to distribute and franchise Hollywood blockbuster Mission Impossible: Rogue Nation, in theaters. Alibaba also rolled out its own subscription-based streaming service in September, Tmall Box Office, which costs 39 RMB ($6 USD approx.) per month.

While the appetite for Hollywood films and U.S. TV series is strong in China, U.S.-based streaming services have struggled to enter the market. Last month Netflix announced it would launch in four major Asian markets including South Korea, Singapore, Hong Kong and Taiwan, following an earlier launch in Japan. They have avoided the Chinese market however as regulatory concerns and stiff competition make it a complex candidate for expansion.

For now, licensing deals appear to be the easiest route for production companies looking to get their content direct to Chinese consumers. The latest deal between iQiyi and Lions Gate will also include the rights to stream some third-party films that are under a distribution contract with Lions Gate.

Image Credit: Tinseltown / Shutterstock.com

Apple Disables News App In China To Keep A Good Thing Going

Cate Cadell — Sun, 11 Oct 2015 23:00:03 +0000

Apple may have a better relationship with the Chinese government than some of its contemporaries, but it appears they are not taking any chances.

The U.S. -based company has evidently disabled their news app in China, hoping to circumvent he censorship discussion all together.

Users who attempt to access the app on the mainland without the aid of a VPN (virtual private network) will now see the error message “Can’t refresh now. News isn’t supported in your current region.”

Apple launched the news app in June, which is currently only available for users who have registered in the U.S. and some test markets in Britain and Australia. However those who had already loaded the app on their device have been able to use it globally without interference, with China now the only exception.

The app, a reader that compiles a customized news feed based on the readers’ preferences, features major western news outlets that are restricted or banned in China behind the Great Firewall. While some companies, including Linkedin, have agreed to allow selective censorship of their content, it appears Apple will avoid the debate entirely by making the service completely unavailable to Chinese users.

Apple Avoiding Controversy In China

Unlike some of its U.S. tech contemporaries, including Google and Facebook, Apple has maintained a relatively positive relationship with China’s regulatory authorities, due in large part to the fact that it is not a content creator at heart.

However despite being their second-largest market, China is still frequently left out of batch-one releases for major Apple software. Late last month, Apple finally launched Apple Music on the Chinese mainland, almost exactly three months after its global launch. The company also opened iTunes Movies and iBooks on the same day.

It’s unclear whether Apple received a request to remove the feature in China, or if they were making a preemptive move to avoid potential backlash. Many content producers, including media outlets, game makers and social platforms, provide ‘lite’ versions of their products in order to appease government censors. Google has reportedly been working on a modified Play Store for the Chinese market, while Linkedin has attracted controversy in the past for censoring posts on its Chinese language platform as well as their localized app.

China already has complex laws requiring foreign tech companies to host servers within the country if they intend to create locally available content. Considering Apple News is not a core product, especially in the Chinese market where it has not yet been officially launched, it’s likely the company will not attract the ire of either consumers or government by attempting to make the news app available in any form.

Image Credit: skyme / Shutterstock.com

Where Does The Dianping Meituan Merger Leave Baidu?

Cate Cadell — Fri, 09 Oct 2015 08:42:20 +0000

This week’s Meituan-Dianping merger may mean the end of another Alibaba-Tencent rivalry, but Baidu is feeling the pressure with stock falling just over 8% since the announcement on Wednesday.

The new Ali-Tencent-backed company will form a formidable force in the O2O market, competing directly with Baidu’s biggest platform investment, Nuomi. Before the latest merger, Nuomi had a 13.6% market share, trailing Tencent-backed Dianping who accounted for almost 30%.

This year has seen Baidu become an aggressive O2O investor, shoveling funds into their affiliated platforms, including $3.2 billion USD in Nuomi, hoping to lock down consumers before the market saturates.

Subsidizing platforms to attract users is a consistent tactic across many of the large O2O providers in China. It’s a cost Dianping and Meituan could potentially stem with their latest merger.

“We have to invest aggressively to make sure we will be successful,” said Baidu CFO Xi Linzhe following lower-than-expected Q2 earnings in July. The company reported a quarterly earnings growth of just 3.3%, though it was their ‘double down’ on O2O investment that has cut into profits.

Baidu management hasn’t been shy when it comes to their O2O commitment. “It’s kind of difficult for a typical U.S. public market investor to really understand why Baidu is losing so much money on those unproven businesses,” said CEO Robin Li in an interview with Bloomberg last month, noting that the Chinese tech giant’s future would be in services, not search.

In the wake of the Dianping-Meituan merger, Baidu’s urgency makes a surprising amount of sense. China’s O2O market is attracting record-breaking investments from the public and private sectors as well as international investors. The country is cashing in on a growing population of mobile-enabled users willing to pay for services in China’s overcrowded megacities.

So what does the Meituan Dianping merger mean for Baidu? In the cutthroat game of attrition playing out among China’s O2O providers there is now one less competitor, and a new behemoth. While Dianping and Meituan have distinct differences, there’s certainly elements of their business which will see a significant boost as they pool resources.

Tencent is notoriously petty when it comes to using their messaging app, WeChat, for business outside of the Tencent family. In the past they’ve been unaccommodating of advertisements from Ali-backed Taobao as well as other e-retail platforms. At the same time, Alibaba has been restrictive with their payment system, Alipay, on non-Ali platforms.

Unfortunately for Baidu, the match-up of Alibaba-backed and Tencent-backed platform giants is becoming a trend. The Meituan-Dianping merger is the market’s biggest since the merger of Alibaba and Tencent’s respective ride-hailing apps Kuiadi and Didi, in February this year.

Baidu has also staked its claim to the ride-hailing market, making a substantial strategic and financial investment in Uber. However the Ali-Tencent coalition has recently extended its investment power to India’s Ola and Singapore’s GrabTaxi, forming a formidable competitor within the Asian region.

It’s a challenge that Baidu is looking to overcome through renewed direction and management. The company has opened up some of its wholly-owned companies to outside investment, while pumping up investment in core projects. They’ve also recently added former Uber CFO Brent Callinicos to their board, along with Yang Yuanqing, Chairman of Lenovo.

At this point, it’s hard to predict what the future of China’s tech powerhouses, colloquially known as the collective ‘BAT’ (Baidu, Alibaba, Tencent) could look like. Though following the latest series of mergers, the possibilities include B versus AT .

The U.S. Mobile Market Will Look A Lot More Like China: Android Founder

Cate Cadell — Thu, 08 Oct 2015 11:36:25 +0000

As the country’s most popular mobile OS, Android has almost as many faces in China as there are smartphones. And it’s something that hasn’t gone beyond the notice of Android founder Andy Rubin.

According to Rubin, the biggest transformation in the mobile market over the past ten years will see the U.S. market take queues from China.

In a Recode conference in California yesterday Rubin said the shift from carriers to manufacturers as the primary distributors of phones is the biggest change of the decade, one that will see the U.S. market looking a lot more similar to China.

Rubin, who left Android in 2013 to work on other projects, including some with Google, discussed how major phone manufacturers, including Apple, were usurping carriers by offering their own upgrade plans, a feature that China’s upstart mobile market has excelled at.

“That’s the biggest change in the last 10 years in mobile,” said Rubin. “It makes the U.S. look a lot more like China.”

The wild west of China’s early smartphone manufacturing sector made manufacturer-to-consumer phone sales a lot more attractive than other markets. The dual sim movement has gained mass momentum in the Chinese market, with an overwhelming number of Chinese flagships hosting the extra slots as part of their bare-minimum feature set.

Major foreign brandnames including Samsung, Nokia and Sony have shied away from dual sim capabilities until quite recently due to pressure from from telecoms companies. However Shanzhai (counterfeit), Chinese phones have been capitalizing on cheap manufacturing to bypass the same concerns for years, a trend that has been seamlessly picked up by China’s legitimate smartphone brands.

And selling phones direct to consumers isn’t the limit for Chinese smartphone makers. Late last month we wrote about the launch of Xiaomi’s mobile contracts, offering their own carrier service that piggy-backs of the infrastructure of multiple telecoms companies. The Chinese smartphone super-startup is now selling sim card plans starting at $10 US equivalent per month. The concept allows Xiaomi to bundle their phones together with their own carrier-branded sim, completely usurping the consumer-to-telecom relationship.

Xiaomi, like many Chinese smartphones, runs a highly modified – and sometimes unrecognizable – version of Andy Rubin’s Android software, though Rubin himself is surprisingly upbeat about the “fragmentation” of his most popular software contribution, saying he prefers the term ‘consumer choice’.

Image Credit: Bloomua / Shutterstock.com

Samsung’s LoopPay Targeted By Chinese Hackers

Cate Cadell — Thu, 08 Oct 2015 06:28:57 +0000

The system behind Samsung-Pay, LoopPay, has been the victim of an attack from sophisticated Chinese hackers that have affiliations with the state, according to The New York Times.

The hacker group, known as Codoso Group, successfully breached LoopPay’s corporate network, including their email and file servers, but failed to enter the portion of the network that deals with payments. The attackers were after the company’s magnetic secure transmission (MST) technology, but according to a statement from Samsung, the breach did not affect Samsung pay itself.

Loop Pay’s system, similar to Apple and Google services, enables Samsung users to pay for items using their smartphone. The MST system that the hackers were after allows the service to operate similar to physical cards with a magnetic stripe, making LoopPay compatible with older point-of-sale technology.

Samsung acquired the Burlington-based LoopPay for $250 million USD in February, just months after the attack was discovered in August 2014. It’s thought the breach could have began as early as March. LoopPay’s new parent company has been quick to shake off concerns that the hack would reveal private data.

“We’re confident that Samsung Pay is safe and secure. Each transaction uses a digital token to replace a card number. The encrypted token combined with certificate information can only be used once to make a payment,” said Samsung in a statement.

According to the New York Times, the Chinese hacker group known as Codoso Group, who have been implicated in a series of state-affiliated attacks, are well known for leaving and maintaining hidden backdoors in infiltrated networks, suggesting that LoopPay may not be out of the woods yet.

The company has hired two independent forensics teams to handle the breach, who continue to work on the case. The company and parent Samsung seem unfazed by the attempted hack, forging ahead with the U.S. launch of Samsung Pay just over a month after the breach was discovered.

New Virus Targets Porn Users As China Grapples With iOS Malware

Cate Cadell — Mon, 05 Oct 2015 09:10:58 +0000

The iPhone may be a crowd pleaser in China, but it’s fast running into trouble with the country’s love of black market apps. A third major iOS malware threat has been reported in just six weeks.

Cybersecurity firm Palo Alto Networks identified the latest malware called ‘YiSpecter’, which has the ability to remove and download apps, add full screen advertisements to apps, retrieve user data and change browser settings and bookmarks.

According to Palo Alto Networks the virus has primarily affected Chinese and Taiwanese users who have used a modified version of the QVOD media player, a well known service in China for streaming pirated videos and porn. The virus attacks and abuses private APIs, allowing it to implement control over various functionalities within the iOS system.

Kuaibo, the company that developed QVOD, was investigated by police in April 2014 and subsequently shut down. The attackers who released YiSpecter claimed their app, dubbed QVOD “private” or “version 5.0” was a genuine alternative of the retired QVOD. Mirror applications are common in China’s app stores, mostly hacks of paid apps and restricted apps.

Surprisingly, the malware apparently affects both jailbroken and non-jailbroken phones. While attacks both globally and in China have tended to favor jailbroken devices, there has been an increasing number malignant wares that have been indiscriminate.

The virus has been operational since at least November 2014, but has only just been picked up. It’s the latest in a string of malware targeted at iOS users, particularly in China. The country has a well developed culture of piracy and black market app stores due in part to their geopolitical isolation from other consumer markets.

While a majority of China’s smartphone users run Android, the app store market is fragmented and prone to attacks. Despite having an operational iOS store, users continue to source restricted and free-version apps elsewhere.

Two weeks ago up to 40 apps including Didi Kuaidi, WeChat and Net Ease Music revealed they had been targeted by a wide-scale malware threat called XcodeGhost, which also originated in China. The breach was made when developers used unauthorized versions of the iOS developer toolkit’s Xcode, forcing Apple to remove affected apps from their store.

At the beginning of September, malware dubbed “KeyRaider” stole over 225,000 iOS account login credentials in a wide-scale breach that mostly targeted Chinese users. At the time some users reported that their devices had been effectively held for ransom by malignant agents.

Image Credit: Lewis Tse Pui Lung / Shutterstock.com

Jack Ma & Zeng Fanzhi Smash Estimates With $5.4M Painting Sale

Cate Cadell — Mon, 05 Oct 2015 04:58:36 +0000

Jack Ma’s stock may have taken a beating over the past year, but it appears he has a promising second income to keep him afloat.

A painting by the Alibaba Chairman and Chinese artist Zeng Fanzhi went for $42.2 million HK ($5.4 million USD) on Sunday at Sotherby’s auction in Hong Kong. According to Sotherby’s, the sale was 21 times more than the price predicted by the auction house.

The $5.4 million USD, paid by Chinese entrepreneur Qian Fenglei, will be donated to the Paradise International Foundation, an environmental non-profit patronized by multiple Chinese philanthropists. Ma toured Sotherby’s before the sale, and said it was “an honor” to have his work sold for charity, according to Bloomberg.

The round oil painting depicts a pastel blue and green planet earth and is titled ‘Paradise’. The image is slightly distorted by horizontal lines, as if viewed through a fuzzy television screen, though it’s not clear whether it was intentional. Ma and Zeng reportedly used palette knives to create the texture of the painting. The picture shows East Asia, including China, Korea, Japan and Russia. The bottom half is obscured what looks like blue waves.

Zeng Fanzhi is a highly acclaimed artist in China, he previously set the record for living Asian artists at Sotherby’s with his painting “The Last Supper”, which sold for $23.3 million USD in 2013. Ma, who has said he has no plans to pursue art, previously sold an ink painting on his Taobao platform.

The painting’s unexpected popularity isn’t the only good news Jack Ma has had in the past few days, Alibaba’s share price has rallied slightly since the start of the month. The company’s stock has taken a hit as volatile markets wrought havoc in China this year.

Image Credit: Sotherby’s

Huawei Joins Forces With Google & ZTE Cries Copycat

Cate Cadell — Mon, 05 Oct 2015 04:05:47 +0000

Those of us on holiday in China this week may have missed the launch of the latest Nexus devices from Google on Thursday, and the subsequent Weibo trends that ensued.

Among the new Nexus range was a first-time entrant Huawei. Google’s newest flagship phablet, the Huawei Nexus 6P, is the first collaboration project between Huawei and Google within the Nexus range.

The matchup with Google is a win for Huawei who are looking to shake of their rocky start in the U.S. market and expand their smart device brand. However the marketing director for ZTE, a fellow Chinese telecoms company looking to do exactly the same thing, was less positive about the Google-Huawei device.

Liu Qian Hao used the social media platform to point out to Huawei CEO Yu Chengdong that the Nexus 6P looks a bit too similar to the ZTE Grand S. The comment attracted a lot of attention, sparking responses from both Huawei and ZTE fans.

Admittedly the external design has some similarities, though it’s a bit of a stretch to compare the actual meat of the phones to each other. The Nexus 6P appears to be sleek and well thought out (we are yet to try out the UI), with an all-metal design that is thinner than its predecessor. It has a 5.7-inch display, making it slightly smaller than previous phablets, and of course comes with Android’s 6.0 Marshmallow.

It’s powered by a 64-bit Qualcomm Snapdragon 810 8-core processor and features Type-C USB charging. The Nexus 6P will also include Goggle’s ‘Sensor Hub’, their recent processor upgrade which is designed to more efficiently monitor the phone’s sensors while sleeping.

While the screen is a tad smaller, it actually covers 74% of the device, more than the Nexus 6, which Google claims they added because it was more “immersive.” The model also includes the ‘Nexus Imprint’ fingerprint sensor positioned on the back of the phone.

The camera portion of the phone looks similar to the ZTE Grand S, but as far as we can tell, that’s really the extent of the potential overlap, and it’s certainly not the closest copy we’ve seen between Chinese smartphones.

Management teams in Chinese tech companies are not shy when it comes to openly criticizing competing products on social media, though the vitriol is often directed at easier targets, like Apple. In April this year LeTV CEO Jia Yueting took to Weibo to compare Apple to the Hitler, before posting a relatively high-budget remake of Apple’s iconic 1984 ad to playfully smear the U.S. company.

Huawei has not returned fire at this point, either on social media or elsewhere. The Chinese company has been banned from operating its core telecoms operations in the U.S. since 2012. At the time the company was accused of using their equipment to spy on behalf of the Chinese government, an allegation Huawei denies.

While Huawei has been unable to overcome its impasse with U.S. Congress, they have been able to sell their consumer smartphones. It may sound like a minor concession prize, but having a U.S. market, however small, is something many Chinese smartphone makers, including Xiaomi and LeTV, haven’t yet been able to achieve.

ZTE is also pushing hard to expand its presence in the U.S. The Chinese company is seeking to sell more phones under the ZTE brand, rather than rebranding devices under carrier brands. They’ve teamed up with Blackberry and U.S. design teams to launch their most recent flagship phone, the 5.5-inch Axon.

Student Micro-Loan Startup Fenqile In Investment Talks With Tencent

Cate Cadell — Fri, 02 Oct 2015 01:05:49 +0000

Fenqile, one of China’s leading student micro-loan startups, is in talks with Tencent hoping to seal their next round of investment, according to sources who spoke to the Wall Street Journal. The latest round could potentially value the young company at the $1 billion USD mark.

The site offers loans to college students who are then able to pay them back over monthly installments. Its one of a handful of up and coming micro-loan startups, including Qufenqi, who received $200 million USD in funding led by Alibaba Group’s Ant Financial.

While no details have yet been released, it’s possible Fenqile had been in Tencent’s sights for some time. The student loan company was founded by a former Tencent employee and received an undisclosed strategic investment from JD.com, the popular e-commerce platform in which Tencent owns a stake.

The potential investment form Tencent sets the stage for yet another Alibaba-Tencent showdown as both companies race to extend into all things financial. Qufenqi’s partnership with Alibaba’s Ant Financial involved the integration of Alipay as well as their Sesame credit-scoring service. Fenqile’s partnership with Tencent would allow them to access the similar Tencent versions of these same services.

Alibaba and Tencent have also pushed to take their financial expertise abroad. This week Alibaba announced a $500 million USD investment in leading Indian wallet app PayTM while Tencent revealed on Thursday that it will be joining South Korean Chat app Kaokao’s bid for an online license.

According to the government, China has about 1,200 universities and a further 1,300 vocational colleges. Enrollment rates have surged since the early 2000s when the government launched an enrollment expansion plan, with over 76 percent of those who take the final high school exam enrolling in college. The market of young spenders has been targeted by a range of O2O products including financial services, part-time job platforms and food delivery apps.

Other companies attempting to edge their way into the student micro-loan sector include Renren Fenqi, a service launched by China’s Facebook clone Renren, as well as Ufenqi, Aliwey and Aixuedai.

Aside from JD.com, Fenqile’s former investors include DST Global, metric Partners China, China Renaissance and Bertelsmann Asia Investments.

Korean Messaging App Kakao Partners With Tencent & eBay To Launch Online Bank

Cate Cadell — Thu, 01 Oct 2015 23:05:16 +0000

Kakao, the owner of South Korea’s largest mobile messaging app, has confirmed that both Tencent and eBay will join their bid for a coveted online banking license. The license is expected to be released by the government later this year.

Tencent and eBay will each take a stake in the new bank of no more than four percent should the license be granted, according to a spokesperson, though Kakao has declined to comment further on the details of the deal.

Kakao has already released a wallet service linked to their app called BankWalletKakao. They partnered with Korea Financial Telecommunications and Clearings Institute as well as 16 other banking institutions to launch the service which can link to bank cards.

For Tencent it marks their first foreign foray into online banking, as they invest strongly in expanding their own banking service at home. Early this year they launched WeBank after they received approval for their own online banking license last year. They have since expanded aggressively into online loans and e-retail.

Tencent’s primary competitor, Alibaba, opened their own internet bank in June, building off their personal wealth fund Yu’e’bao. They have also leveraged their expertise in online finance overseas, this week announcing a $500 million USD investment in India’s largest mobile wallet company PayTM. PayTM was one of 11 Indian services recently granted a conditional online banking license.

Unlike India and China, who have both offered 10 or more online banking licenses, the South Korean government is expected to hand out only one or two this year. Kakao will have to bid against at least two other contenders, though their partnership with Tencent and eBay may sweeten the deal.

eBay’s bid will mark their first move into the finance sector since splitting with Paypal earlier this year.

Tsinghua Puts Up $3.8B for 15 Percent Stake In Western Digital

Cate Cadell — Thu, 01 Oct 2015 10:37:05 +0000

The flop of Tsinghua’s $23 billion USD bid for memory chip maker Micron clearly hasn’t dulled their appetite for U.S. hardware makers.

Unisplendour Corp., a branch of Tsinghua Unigroup group, has inked a deal with U.S.-based hard drive company Western Digital, agreeing to hand over $3.8 billion in return for a 15% percent stake, reports Bloomberg.

The purchase is still currently pending approval, though it would mean the Chinese company could be the largest shareholder of Western Digital. They will also have the option to appoint a board member to the U.S. company.

It’s the latest in a series of high-tech purchases from state-backed apparatuses as China seeks to build its own technology ecosystem.

Last week Microsoft announced its Chinese cloud computing partner 21Vianet Group had entered a joint venture with Tsinghua to market cloud services to state-owned enterprises.

The same arm of Tsingua paid out $2.3 billion USD in may this year for a 51% stake in Hewlett-Packard’s chia data business, giving them a controlling stake. They also forged a partnership with Intel, who have taken a 20% stake in Tsinghua and are now chip developing technology together.

Tsinghua Ungroup will purchase the 15% stake in Western Digital by buying newly issued shares at a price of $92.50 each. The U.S. company’s stock jumped 15% following the news, marking their biggest hike in almost three years.

Baidu Adds Former Uber CFO & Lenovo Chairman To Board

Cate Cadell — Wed, 30 Sep 2015 05:55:56 +0000

During their last public earnings call in July, Baidu CFO Xinzhe Li said the company would have to “basically double down” on investment in O2O if they were to stay competitive in the market.

They’ve certainly made a financial commitment, slashing into their last quarter earnings with multiple billions US invested in O2O platforms including group buying site Nuomi. It now seems they are making a management commitment too.

The Chinese search giant has appointed former Uber CFO, Brent Callinicos, to its board of directors. Callinicos will join Yang Yuanqing, Chairman of Lenovo as the two newest board members of Baidu, while former Sony Chairman Nobuyuki Idei and Netdragon Websoft Chairman Liu Deijian will vacate their seats on the board.

As Chairman of Lenovo, the world’s biggest PC maker, Yang Yuanqing will be a valuable asset, despite the fact that Lenovo has also stumbled in recent times, slashing 10% percent of their white collar workforce. Baidu will be looking to leverage both Yang and Callinicos’ fresh perspective on business to help them diversify in an increasingly mobile market.

It’s a time of challenge and transition within Baidu, which is seeing a drop off in traditional search traffic, forcing the company to search other revenue streams. Currently, the company still earns most of its revenue from search, while the penetration rates of their O2O services are still lingering in the “low singe digits”, according to Xinzhe Li this July.

“Because of the early-stage nature, we have to invest aggressively to make sure we will be successful,” she said at the time. ““Eventually, we will be able to take a cut… whether that’s three years or five years, it’s really hard to tell at this point.”

Despite last-quarter growth slumping to 3.3%, Baidu has made no attempt to pump the breaks on spending. The company was confirmed as a participant in Uber China’s $1.2 billion USD funding round. It’s a project that has pitted them against the other two primary Chinese internet giants, Alibaba and Tencent, both of whom are backers of Didi Kuaidi, the country’s most popular ride-hailing app.

Baidu has also led funding in the $40 million USD B series of health O2O startup Quyi, as well as a $100 million USD B series of O2O laundry startup Edaixi. All capping off its $3 billion USD investment in group buying site Nuomi.

The aggressive O2O investment has seen the company’s stock stumble however, and the company is trying to claw back revenue by opening up a handful of companies for investment, including 91 Desktop and Baidu Takeaway.

Thailand Looks To Build A Firewall Similar To China’s

Cate Cadell — Wed, 30 Sep 2015 03:29:26 +0000

The Thai government is considering a firewall similar to China’s, reducing the number of internet gateways from ten to just one, according to a cabinet document. Over 80,000 people have since signed a petition to protest the move on group action site Change.org.

The statement, which came from Thailand’s cabinet, emerged last week and contains an order directed at the country’s Ministry of Information, Communication and Technology to begin work on creating the single gateway.

Currently, most of the ten internet gateways are managed by non-government companies, each capable of setting and removing controls. A unified gateway controlled by the government would allow the state to surveil traffic and block access to certain sites, similar to the way China blocks sites including Google, Facebook and Twitter.

Users are able to skirt the firewall using VPNs, but even these services are subject to Direct Denial of Service (DDoS) attacks. At the start of this year, China launched several attacks on VPNs operating in the country, taking out several of the top services temporarily.

It comes at a politically tense time in the Asian region regarding cybersecurity and censorship.

Yesterday, just days after the US and China shook hands on an agreement to reduce cyberattacks, a former commander of one of China’s top military hacking units said that developing markets should have the right to control the internet through surveillance and other measures to stop the spread of “blood” and “hatred”, comparing the situation in Asia to the Arab Spring.

Thailand has blocked websites before, targeting social media sites in times of political turmoil. It’s a crime in Thailand to criticize the country’s ruling monarchy, and online activity can be punished by law. In the past the government has ordered multiple ISP providers to make the restrictions, the unified gateway could simplify the process.

The statement from the Thai cabinet did not give a definitive timeline on the project, and Technode was unable to verify whether the order is definitive or suggestive.

Image Credit: 1000 Words / Shutterstock.com

Alibaba Adds Over $500M To PayTM’s Wallet As Indian E-Commerce Expands

Cate Cadell — Wed, 30 Sep 2015 02:04:21 +0000

Alibaba has injected over $500 million USD in the parent company of Indian e-commerce company PayTM, One97, reflecting its commitment to India’s fast-growing e-commerce sector.

The latest funding is the second installment in One97 from the company’s ecosystem, with $200 million USD laid out for a 25% stake in February by the Alibaba’s financial affiliate, Ant Financial.

According to sources who spoke to the Financial Times, they originally planned to invest a second installment of $375 million USD to take a further 20% stake, but upped the figure to over $500 million to reflect the company’s higher valuation.

It’s not clear why Alibaba agreed to multiple installments, thought it could have to do with tentative developments in the Indian e-commerce market.

Last month, PayTM was granted conditional approval from the Indian government to set up an online payment bank along with 10 other companies. The license allows PayTM to extend its services by setting up debit card products along with online banking and online transfer services. It’s possible the license could have sweetened the deal for Alibaba or at the very least affected PayTM’s valuation.

India’s domestic e-retail and e-commerce market is experiencing rapid expansion right now. Several local companies including Flipkart and Snapdeal have made headway in the industry. Flipkart recently reporting a $15 billion USD valuation, while U.S. contender Amazon is also looking to edge into the market.

PayTM is currently the country’s largest online wallet provider, with over 100 million users, according to the company.

Image Credit: 360b / Shutterstock.com

Qualcomm Invests $150M In India’s Growing Mobile Population

Cate Cadell — Tue, 29 Sep 2015 11:13:45 +0000

Qualcomm, the U.S. semiconductor giant, has announced a $150 million USD investment in a range of Indian startups, focussing on mobile.

As far as their Asia involvement, Qualcomm has favored involvement with Chinese startups in the past, including a $40 million USD investment in four startups at the end of last year. But India’s emerging industry is attracting more attention, offering up as a less complex geopolitical market.

It’s also still an early-stage market for mobile adoption, a critical time for app-based platform startups. “India is at the cusp of a technology revolution and mobile technologies will lay the foundation for Digital India,” said Dr. Paul E. Jacobs, chairman of Qualcomm.

The recipients of Qualcomm’s latest funding injection range across multiple stages, with some early-stage participants and some established startups. Companies include Yourstory, a media platform for entrepreneurs and MyMapIndia, a mobile-based mapping service. Portea Medical, an in-home healthcare app will also receive funding, at a time when healthcare apps in India are attracting the big dollars from local and foreign funds.

Qualcomm began investing in India in 2007, according to the company, bringing the asset of mobile specialization to their startups. India’s startup scene is hotting up as platforms spring up to take advantage of the fast-growing mobile population. The number of mobile users in the country is set to double to over 300 million by 2017 according to a report form KPMG and the Internet and Mobile Association of India.

While retail and services are still primarily brick and mortar, digital is catching up fast. Recently e-commerce player Flipkart is now valued at $15 billion USD following a series of high-profile investments, while ride-hailing app Ola is looking to seal a $500 million USD series, with current participants including Chinese giant Didi Kuaidi.

Qualcomm made the announcement as India’s Prime Minister Narendra Modi is visiting the U.S., with an itinerary that included a Q&A with Facebook CEO Mark Zuckerberg. Modi has been a strong advocate of digital development in India. Among his tech-friendly policies is the ‘Make in India’ program, which makes it easier for foreign tech companies to start up manufacturing closer to the growing number of Indian digital consumers.

Image Credit: Katherine Welles / Shutterstock.com

China, EU Join Forces To Roll Out 5G By 2020

Cate Cadell — Tue, 29 Sep 2015 10:01:04 +0000

The European Commission announced a strategic agreement on Monday to cooperate with China on the development of 5G networks.

The deal comes as China is ramping up its 5G and pre-5G efforts to roll out consumer-ready networks by 2020. The high-speed 5G connection is also a vital element in China’s booming Internet of Thing market, as well as a key component in their Smart Cities initiatives.

The European Commission has recently signed similar agreements with Asian market leaders in 5G technology, Japan and South Korea. Both countries, along with China, have made commitments to roll out networks within the next five years.

The deal could mean that the European Commission will have access to the research conducted by China and vice versa. The two countries may also be able to access funding from partnered research associations. China and Europe will work together on standardizing of 5G rollout, including the promotion of a unified spectrum.

“By 2020 there will be more than 30 times as much mobile internet traffic as there was in 2010.” said the European Commission in a statement. “5G won’t just be faster, it will also be the backbone of our digital future.”

The agreement was signed during a trade and economic dialogue held in Beijing this week. It follows several EU partnerships from Chinese telecommunications companies. In July Huawei announced their involvement with the European 5G Public Private Partnership (PPP), one of the associations that could be sharing funds with Chinese researchers under the new agreement.

East Asian countries have made strong commitments to 5G development. South Korea, the regional leader in 5G research, has committed to rolling out networks by the 2018 Winter Olympics, While Japan made a similar commitment for the 2020 Summer Olympics. Chinese providers Huawei and ZTE have both committed to a 2020 deadline, already testing their services.

Currently, a lack of funding and allocated spectrum as well as security concerns are the biggest barriers to 5G development globally. The latest partnership could help China and the EU promote a global standard spectrum while pooling funding and research data.

Microsoft Reveals List of Partnerships With Chinese State And Private Sector

Cate Cadell — Thu, 24 Sep 2015 20:36:16 +0000

Microsoft has joined forces with a handful of local partners in an attempt to hang onto its market share in an increasingly protectionist Chinese tech economy. The partnerships feature several politically connected companies, as well as a state owned Chinese military technology consortium.

Microsoft’s partnership with state-backed China Electronics Technology Group Corp. could lead to the deployment of a ‘localized’ version of Windows 10, which is their primary project together.

China’s government has invested heavily in several homegrown operating systems in an attempt to remove foreign technology from banks and government institutions. They have worked on at least four different China-optimised, Linux-based operating systems, including Ubuntu Kylin, which is reportedly used on 40 percent of Dell computers in China.

The latest partnership with Microsoft could mean the government is open to keeping foreign operating systems within their most important state infrastructure, so long as they are modified. Earlier this year the government put out a notice to banks requiring them to remove components of foreign technology from the banking system by 2020, the plan was later put on the back-burner.

Microsoft has also revealed this week that they have struck a partnership with Baidu, meaning the Chinese search engine will feature as the primary search engine on Microsoft’s Edge browser in China. In return, Baidu will make is simpler for users to upgrade to Microsoft’s new software.

Microsoft’s China cloud partner 21Vianet Group has also organised a joint venture with state-backed chip-maker Tsinghua Unigroup, which will hep the company sell cloud services to state-owned enterprises.

The handful of high-profile partnerships are the latest in a line of China commitments put forward by U.S. tech companies seeking to hold on to an increasingly local market. With the complex geopolitical conditions and restrictions, partnerships are a way for foreign tech companies to stay vital in a market that has openly threatened to rid its main industries of foreign tech.

This week Cisco announced a partnership with local computer company Inspur Group, hoping to gain back some of the market lost in the wake of their implication in the 2013 NSA revelations. Other U.S. tech giants have also made multi-million, or multi-billion, dollar commitments to China over the past 8 weeks.

The commitments also come as Xi Jinping met with U.S. and Chinese tech leaders in Seattle this week, committing to reducing security risks.

@CateCadell
Image Credit: Peteri / Shutterstock.com

Cisco Looks To Boost China Operations With A Local Partner

Cate Cadell — Thu, 24 Sep 2015 02:33:57 +0000

Cisco has joined forces with a Chinese computer company, Inspur Group, in an attempt to bolster their presence in China as foreign tech companies feel the sting of an increasingly competitive local market.

The company announced a $10 billion USD pledge aimed at deepening their presence in the country this summer, though they’ve struggled to keep their position in the market since Snowden’s 2013 NSA revelations implicated their equipment in spying and surveillance operations. According to research firm Dell’Oro Group, cited in the Wall Street Journal, Cisco’s revenue has dropped approximately 30% since 2012.

The partnership with Inspur could potentially help them take back some of their previous market without trust issues looming over their head. China has made open moves to remove foreign technology from some of its most important industries, including banking.

Cisco isn’t the only company looking to endear itself to a volatile, and sometimes hostile, market. Dell recently announced a $125 billion USD investment in Chinese R&D operations, to be spent over the coming 5 years. Last week Intel revealed a $67 million USD investment in a series of 8 technology companies, focussing on hardware and cloud-based systems.

At the same time, Xi Jinping attended a meeting in Seattle this week with a number of high profile tech leaders including Apple CEO Tim Cook and Microsoft CEO Sataya Nadella. It shows a clear drive from both the government and U.S. tech companies to strengthen relationships, despite the troubled relationship between China and foreign tech.

While the solo entry of any foreign tech firm is a complex process, partnering with a Chinese partner has helped a handful of foreign companies make inroads. This week U.S. speed and cyber security services company Cloudflare announced they had partnered with Baidu, aiming to expand to over 50 server stations in the coming year, something they would have been unable to do without support from the Chinese search giant.

Cisco could be hoping to harness some of the same magic with their latest local partnership, though it could take time to build back trust in the Chinese market following the Snowden allegations.

Things have been looking a little less grim for the U.S. company on the mainland recently, equipment orders had declined %20 in their third quarter, a number that dropped to just %3 in the quarter ending in July, apparently their best quarterly performance in the two years since 2013.

@CateCadell
Image Credit: Ken Wolter / Shutterstock.com

Xiaomi Could Now Be Your Next Mobile Carrier

Cate Cadell — Tue, 22 Sep 2015 21:28:33 +0000

Diversifications seems to be the buzz word down at the Xiaomi office these days, with the Chinese smartphone giant looking into almost any potential revenue stream to stave off woes over a slowing smartphone market.

Their latest venture? Becoming a mobile operator.

Right off the back of the Mi 4c launch, the company has released $10 USD per month mobile contracts. The will offer a prepaid model charging 0.10 yuan ($0.02 USD) per minute voice with one megabyte of data or a 59 yuan ($10.0 USD) package which features three gigabytes of data. The service will be available from September 23.

Xiaomi will rent capacity from existing carriers China Unicom and China Telecom, meaning that we can expect the service speed to be similar. The cards can be used in multiple brands of phone, though it’s possible they will bundle them with Xiaomi phones, making the entire experience cheaper.

It’s an interesting move in the Chinese market given that restrictions on owning multiple sim cards are tightening. In many areas of the mainland users are required to hand in identification and are barred from registering multiple cards.

If Xiaomi bundles its phones with cards this could potentially hinder users from buying a second non-Xiaomi card. With their low-cost handsets, they can target the hundreds of millions of Chinese people in rural areas who are still non-mobile.

Despite this, many people in China still have two sim cards, and dual sim slots are a consistent feature across the flagship versions of Chinese smartphones, including the recently released Mi 4c, which debuts at just over $200 USD.

Xiaomi is very much a Chinese internet company of its time, looking to follow the industry giants Alibaba, Tencent and Baidu by diversifying into a wide range of products and services.

They have released a slew of products including TVs, air purifiers, headphones and fit bands. This month they invested in brokerage startup Tiger Brokers, and they have also reportedly been working on releasing a laptop by 2016.

@CateCadell

Cloudflare Lands $110 Million To Push China Expansion

Cate Cadell — Tue, 22 Sep 2015 20:56:42 +0000

A $110 million USD funding round from the world’s biggest venture partners is a hard piece of news to stay tight lipped on, but that’s exactly what Cloudflare have done.

The company has landed $110 million USD in funding led by Fidelity with participation from some of the biggest names in China and U.S. tech: Google Capital, Baidu, Microsoft and Qualcomm Ventures. It brings the company’s total funding to over $180 million at an approximate valuation of $1.05 billion.

Cloudflare, which offers content delivery and security, apparently shook hands on the latest round of funding at the end of last year but chose to only just disclose it. In the past week they have announced a partnership with Chinese search giant Baidu to expand its services in China.

“With this partnership, CloudFlare has become the only unified network that can provide performance and security to the entire world’s Internet population,” said CEO Matthew Prince at the time.

Cloudflare first announced its intentions to offer a local China version of its web security software in November last year, but according to Prince the deal with Baidu was a four year process. The company is now looking to extend its presence in China from 17 data centers to 50 in the next year.

This latest round of funding has invited Cloudflare into one of the best possible combinations of partner investors. Microsoft’s enterprise unit will be at Cloudflare’s fingertips, helping it to shift its product to large companies. Qualcomm’s chip tech is an obvious advantage while Baidu is a strong partner to help them navigate their China expansion.

Cloudflare’s security technology has a lot of applications in China, where internet speed can be slow for a variety of reasons and direct-denial-of-service (DDoS) security attacks are frequent. Cloudflare operates under a relatively unique system with their partner Baidu called a ‘virtual joint venture’, meaning they are able to effectively scale the Great Firewall without officially operating in the country from a legal perspective.

Cloudflare now works in over 30 countries and processes about 5 percent of the internet’s traffic according to the company.

Walt Disney, CMC Invest In VR Company Jaunt As They Plan China Expansion

Cate Cadell — Tue, 22 Sep 2015 09:45:47 +0000

Virtual reality startup Jaunt has sealed $65 million USD in funding from Walt Disney along with China Media Capital (CMC) and Evolution Media Partners.

The investment marks the largest ever single investment in a virtual reality startup, signaling Hollywood’s increasing interest in VR. The participation of China funds points to the mainland’s growing influence in international entertainment and film.

They’ll join former funding partners Google Ventures, Redpoint Ventures, Highland Capital, Sky, and SV Angel. This brings the company’s total funding to over $100 million USD.

Recently Jaunt and ABC, which is owned by Disney, worked together to produce a feature on Syria, where viewers were able to see 360-degree scenes in war-torn Damascus, Syria.

The VR company will use the latest round of funding to extend their brand internationally. This strongly indicates why the company chose to include China partners in the round.

“[China is a] tremendously huge market” for VR, says Jaunt CEO Jens Christensen.

China is already working to build its own VR market. Last year Baofeng, a Chinese video service launched a $16 USD VR headset called ‘Magic Glasses’ [our translation] which the company claims have comparable quality to IMAX.

Just three month later in December 2014, Chinese VR headset Maker ANTVR launched a range of products, hoping to challenge Occulus VR. The products include smartphone-compatible VR goggles and a camera. ANTVR launched off the back of a $260,000 USD Kickstarter campaign.

@CateCadell

Xi Jinping Courts US Tech, But Google Will Stay Home

Cate Cadell — Mon, 21 Sep 2015 22:14:27 +0000

Xi Jinping has made it clear this week that he will be seeking out allies in U.S. tech companies, meeting with CEOs and executives from top-name companies including Microsoft and Apple this week as part of his first state visit.

But there will be one notable absence among the U.S. tech titans: Sundar Pichai, CEO of Google, will not be invited, according to sources who spoke to the Wall Street Journal.

The meeting in Seattle, which marks the first stop on Xi Jinping’s tour, has highly political undertones. The Chinese government is currently under threat of possible sanctions from the U.S. for a series of high-profile hacking allegations.

The meeting could be a call for support from Xi Jinping, looking for the western tech companies’ backing, or it could be a show of dominance, as many of the invited tech companies are looking to make China their biggest market.

Either way, Google’s absence is conspicuous, but not a huge surprise. The company has been progressively banned from China since 2010, when the tensions with the Chinese government came to a head over censorship restrictions and data-sharing requirements. The American search engine was ousted behind the firewall, followed by a series of other Google services including Gmail which was banned just last year.

However here has been a small silver lining to Google’s China raincloud recently. The company is reportedly plotting a return to the mainland, hoping to launch a modified version of the Android Play Store in China this fall. It’s a government-friendly option, but it could be the company’s only route into the market for the foreseeable future.

It’s not clear whether Google and Sundar Pichai’s ‘un-invite’ from Xi Jinping and his delegation is due to their rocky past relationship, though it suggests there are still barriers between the two, and that despite their improving situation, they are far from having a public friendship.

It’s also not clear at this point whether Mark Zuckerberg or any other Facebook executive has been invited to attend, though it is somewhat more likely despite being under a similar ban in China. The social media site has been targeting Chinese companies attempting to expand outward, and many of China’s state media organizations have a large budget for advertising on western social media.

Malware Targets iOS Versions Of China’s Big-Name Apps: Didi, WeChat, NetEase

Cate Cadell — Sun, 20 Sep 2015 20:51:45 +0000

A handful of China’s most popular apps have been infected by malware aimed at iOS devices, including Kuaidi Didi, WeChat and NetEase Music.

The breaches were made when developers used an unauthorized version of the Apple developer tool kit, a relatively common practice in China. According to U.S. cybersecurity firm PaloAlto Networks, the flaw affected over three dozen apps.

There has been an increasing number of iOS viruses and breaches targeting Chinese users recently. The problem highlights the country’s continued love affair with black market app stores and plagiarized software.

The breach apparently affected several functions within the apps, but did not reveal personal data or compromise payment information. The malware could gather information about the device, prompt fake alerts with the intention of stealing Apple iCloud passwords, and read information from a user’s clipboard.

An handful of high-profile companies came out with statements over the weekend noting that there had been a breach but that upgraded versions of the app would fix the issues.

According to WeChat, the country’s largest social media network, “a preliminary investigation into the flaw has revealed that there has been no theft and leakage of users’ information or money, but the WeChat team will continue to closely monitor the situation.”

Earlier this month a separate malware attack dubbed ‘KeyRaider’ stole over 225,000 iOS logins, targeting flaws in jailbroken phones.

“The purpose of this attack was to make it possible for users of two iOS jailbreak tweaks to download applications from the official App Store and make in-app purchases without actually paying,” said Palo Alto at the time.

As the biggest market of Apple’s iPhone, China’s susceptibility to jailbreaking and black market app stores makes it an increasingly vulnerable market for malware. Last year malware originating in China, ‘Wirelurker’, reportedly affected over 450 app downloaded over 365,000. The breach affected non-jailbroken iOS phones fro the first time signaling that “bad actors are getting more sophisticated,” according to Palo Alto.

@CateCadell

Top Chinese Real Estate Platform Soufun Announces Up To $700M Funding Amid Slowdown

Cate Cadell — Sun, 20 Sep 2015 20:11:58 +0000

China’s top real estate platform Soufun announced on Thursday it will seal between $400 and $700 million in funding from a group of investors including IDG Capital and Carlyle Group, as well as CEO Vincent Mo.

The company’s stock price has suffered recently, like many similar real estate platforms, as China’s real estate market continues to slow along with other areas in the economy.

The message from CEO Vincent Mo is similar to a handful of other big platforms and tech companies who are looking to stave off slowdown by entering tier-three cities and expanding their existing share into a monopoly.

He said the company would use the funds to “expand aggressively to more cities and rapidly increase its market share in existing cities.”

The housing market in China, while nowhere near as profitable as it was in the midst of the real estate boom, has some reasons to be hopeful recently. Housing restrictions on people buying second homes have been loosened, opening up the potential for buyers to begin less risky property investments. Government stimulus has also helped the market gain back a little of its vitality.

Soufun will likely be looking to expand its overall market to maintain growth. The company’s stock lost 47% of their value in the pat three months as market turmoil continues to wreak havoc on China’s A-shares.

The online real estate market is has slowed, but seems to still see some investment. Last week Fangdd, a popular Chinese real estate platform startup, announced a $223 million USD series C funding. In March 58.com merged with Anjuke, a Chinese property site, as the companies planned to create a separate group manage their property investments.

@CateCadell

Apple Pay Has Silently Entered China

Cate Cadell and Wang Boyuan — Thu, 17 Sep 2015 23:46:02 +0000

Apple Pay, the mobile payment service launched alongside the iPhone 6 last has finally made headway in China.

Jian Danian, the Vice Chairman of Shanghai Pilot Free Trade Zone said at an event that Apple Pay as “a new business mode” has already been launched within the Shanghai Special Economic Zone, beginning some operations in June, according to The Paper.

Apple has registered an entity company named “苹果技术服务（上海）有限公司” (Apple Technical Service Shanghai Ltd.) to primarily run the Apple Pay service in China, as well as a series of integration services.

It has listed its legal representative is Gary Joseph Wipfler, who serves as Vice President and Corporate Treasurer of Apple Inc. The entity reportedly has a registered capital of $13.4 million USD.

In May this year Apple’s Tim Cook told Chinese state media Xinhua that the company intended to roll out their Apple payments system on the mainland, and that they were in discussions with Alibaba as well as a series of Chinese banks.

“We very much want to get Apple Pay in China,” Cook said to Xinhua at the time. “I’m very bullish on Apple Pay in China.”

Apple has not revealed how the current Apple Pay system works, or how it will interact with popular payment systems in China including Alibaba’s Alipay.

Intel Reveals A $67M Investment In 8 Chinese Tech Companies Ahead Of Xi Jinping’s U.S. Visit

Cate Cadell — Thu, 17 Sep 2015 23:31:32 +0000

Intel has reiterated its commitment to China’s tech ecosystem, revealing they have injected $67 million USD into eight startups across China, including Ninebot, the company that acquired Segway earlier this year.

The company announced the full list of startups in a statement released on Thursday. Other focus areas for the investment include OpenStack solutions, smart device hardware and IoT hardware.

Intel has made a series of investments in Chinese startups since opening China-side operations. This August they announced a $60 million USD investment in Chinese aviation and drone company Yuneec, following investments in other global drone makers. In January 2014 they pumped an undisclosed sum into Chinese crowdfunding site Demoday, which focusses on hardware development. Back in 2013 they also partnered with Baidu to launch free app testing centers in China with the intention of speeding up the development process for startups.

The announcement comes ahead of Xi Jinping’s first state visit to the U.S., as American tech companies reiterate their commitment to China. Last week PC hardware giant Dell showed support for its China-side operations by reiterating its commitment to spend $125 billion USD in China R&D over the next five years.

At the same time, a handful of U.S. tech leaders have reportedly agreed to attend a conference organized by Beijing in Seattle on the 23rd of September. Attendees will include Apple CEO Tim Cook as well as representatives from Google, Uber and Facebook. All of whom have a vested interest in maintaining a positive relationship with the Chinese government.

The Chinese market has posed a serious challenge to Intel, with local chip makers bursting into popularity over the span of five years. According to Bloomberg, two of China’s largest tablet chip manufacturers Rocket Electronics and Allwinner Technology have snared close to a third of the chip market in the last half decade.

@CateCadell

Chinese Electric Super Car Looking To Seal $1B To Take On Tesla

Cate Cadell — Thu, 17 Sep 2015 10:06:22 +0000

NextEV, one of China’s most promising electric car innovators, has already raised half of the $1 billion it is seeking to take on U.S. rival Tesla. It comes as a handful of Chinese companies are investing heavily into the electric vehicle industry.

The Shanghai-based company’s latest round has been joined by Sequoia Capital and Joy Capital, with Chinese media reporting that they have raised $500 million USD so far. NextEV already has offices in Silicon Valley, as well as Munich and London.

NextEV isn’t the only Chinese effort that has made moves to expand its operations globally either. Last week Chinese state-owned automaker BAIC Motor Corp, announced an R&D centre in Silicon Valley. They also revealed that they have taken on a majority stake of California-based electric car maker Atieva, and will begin developing electric cars.

LeTV, a Chinese video streaming company that has since diversified into smartphones, also announced that they are working on an electric vehicle with an R&D centre in Silicon Valley, which will be released in the first half of 2016.

Despite their international outlook on R&D, it’s likely the Chinese companies will look to gain early traction in their home market, rather than starting up overseas. Despite their global presence, all three of the aforementioned electric vehicle projects strongly favor Chinese investors.

NextEV is looking to release their first project, an electric supercar, by 2016. It’s tipped to have over 1000 horsepower and have the ability to accelerate from 0 to 100km/h (62 mph) in less than 3 seconds.

To learn more about the project check out Four Hi-Tech Car Concepts From Chinese Internet Companies You’ll See Within A Year

@CateCadell

Lyft Gets A $100M Stamp of Approval From China’s Largest Ride-Hailing Startup

Cate Cadell — Thu, 17 Sep 2015 09:40:02 +0000

Lyft, the San Francisco-based ride-hailing company with a pink mustache, has announced a partnership with China’s largest player in the industry, Didi Kuaidi. It comes at a time when Didi’s presence in the market is intensifying, and mutual rival Uber attempts to gain traction.

Didi Kuaidi has confirmed that it contributed $100 million USD to Lyft’s latest $530 million USD round in May. The North American startup is now valued at 2.5 Billion USD.

It’s a very advantageous partnership for Lyft, who have now entered the biggest ride-hailing funding family in Asia. Didi Kuaidi recently landed a $3 billion USD funding round from a variety of high-profile investors. They also have received funding in the past from China’s sovereign wealth fund, CIC, which is widely seen as a tick of approval from the Chinese government.

For Lyft, being a Didi Kuaidi-approved company could help them avoid some of the legal issues that Uber has faced during the establishment of their China-side operations.

Didi Kuaidi also shares investors with Singapore-based Grab Taxi and India’s Ola Cabs. The Chinese giant is reportedly in talks with both of the later companies about possible future partnerships, but have kept tight-lipped on any details.

In a conference held in New York on Wednesday, Didi confirmed that Lyft and Didi Kuaidi users would be able to use each others’ services in their contrasting markets, meaning that Lyft users will be able to seamlessly hail Didi Kuaidi services in China and vice versa. It is possible that Didi Kuaidi has a similar model in mind for Ola and Grabtaxi.

@CateCadell

Two Of China’s Biggest O2O Startups Ele.me, Didi Kuaidi In Partnership Discussions

Cate Cadell — Wed, 16 Sep 2015 06:43:59 +0000

Few names in China’s booming offline to online (O2O) industry pull as much weight as food delivery service Ele.me and ride-hailing giant Kuaidi Didi, and they are now discussing a possible partnership, according to local media.

Didi Kuaidi is no stranger to mergers and partnerships. The company began in 2015 when Alibaba-backed Kuaidi joined forces with Tencent-backed Didi to end a ride-hailing war and together take control of over 90% of the ride-hailing market in China, posing a formidable challenge to other entrants.

Zhu Xiaohu, Director of GSR Ventures, the company that backed Ele.me’s A series, confirmed to Chinese press that the companies were pursuing a strategic relationship, but had yet to enter formal financial discussions. Didi has confirmed that any partnership would not involve direct investment. Both startups are often singled out as super stars in China’s burgeoning O2O sector, together pinning down the largest funding rounds in their respective sectors.

Ele.me, the country’s biggest meal delivery startup, shares a common investor family with Didi Kuaidi. They raised a $350 million USD series E funding led by Tencent and Sequoia Capital in January of this year. They then pulled in a further $630 million USD F round led by CITIC capital and supermarket chain Hualian, followed by previous investors Tencent, Sequoia and JD.com. Last year their order volume reached 110 million RMB ($17.3 million USD), servicing 250 cities across China.

Didi Kuaidi just sealed $3 billion USD in funding, marking the biggest round in China startup history. The ride-hailing app continues to expand rapidly across a myriad of O2O sectors in the hope of maintaining their dominance in the face of incoming competitors including Uber, who just closed a $1.2 billion USD funding from Chinese backers.

A potential partnership would allow the two startups to leverage each other’s distribution networks across China. The two could possibly found a service similar to UberEats, utilizing drivers to also deliver food. However Ele.me’s fleet of food delivery vehicles are primarily motorbikes, which have a special advantage in China’s cities where traffic jams are frequent.

Whether the match-up goes ahead or not, the discussions are indicative of the maturing worth of China’s O2O sector. On Monday Robin Li, CEO of Chinese search engine giant Baidu claimed the future of China’s internet industry will focus on services rather than traditional internet industries. “We are actually transforming the company from connecting people with information to connecting people with services,” said Li.

@CateCadell

Tencent To Pump $1.57 Billion USD Into International Cloud Computing Effort

Cate Cadell — Wed, 16 Sep 2015 04:15:30 +0000

Tencent has revealed it will invest 10 billion yuan ($1.57 billion USD ) over the next five years to boost a multi-national cloud computing operation across North America, Hong Kong and China.

The online social and gaming giant is looking to boost its presence in the cloud computing field as other internet giants, Alibaba and Baidu, are also expanding. Tencent entered a MOU with IBM in November last year to extend their presence in corporate cloud computing.

Alibaba’s cloud computing department, Aliyun, has also agressively expanded its operation outside of China. In March, they launched their first U.S.-based data centre in Silicon Valley. Last month they launched a strategic centre in Singapore, at the time Ethan Yu, VP of Aliyun told CNBC that the company is looking to make the Singapore centre the biggest outside of China.

In December last year, one of China’s oldest software companies, Kingsoft, announced a $1 billion USD investment in also extending their cloud services over the next five years.

The expansion into overseas markets by some of China’s biggest players signals their readiness to take on world leaders Microsoft Azure and Amazon AWS in cloud computing. Both foreign companies have already established a presence in China, with Microsoft launching a new entity, Microsoft Asia-Pacific Technology Company Ltd., to take over management of local cloud operations.

Smaller companies are also gaining momentum in China, putting pressure on the internet giants in their own market. Qiniu, a cloud service provider established by former Kingsoft researchers sealed an undisclosed investment from a series of prominent investors last month, while UCloud, founded by ex-Tencent executives, landed a $100 million USD C series led by Legend Capital in April.

While Tencent’s recent cloud service expansion has focussed on the more profitable commercial sector, they have also made steps into the consumer cloud space. In January this year they launched a highly modified version of their original ‘Micro Cloud’ (Weiyun) personal cloud storage platform. The company has since integrated the service into their existing social platform and other QQ operations.

@CateCadell

Youku Tudou Signs Deal With Paramount To Bring 100 + Movies To China

Cate Cadell — Wed, 16 Sep 2015 02:37:44 +0000

Youku Tudou, one of China’s leading online media companies announced on Tuesday that they would be partnering with Paramount Pictures to add over 100 movie titles to their subscription streaming service, including Star Trek, Mission: Impossible and Forrest Gump.

It’s the latest in an increasing number of deals sealed between Chinese internet powerhouses and American production companies. Last week Tencent sealed a deal with Walt Disney to become the exclusive online distributor of the six existing Star Wars movies in China.

Tecncent also signed a deal with HBO in November 2014 to stream popular series including Game of Thrones. Sohu, one of Youku Tudou’s largest competitor in the online streaming space, inked a deal with Netflix in 2014 to distribute the highly popular House of Cards series in China.

“The consumer-driven demand for premium online services in China is growing rapidly,” said Youku Tudou Chairman and CEO Victor Koo.

The newest additions from Paramount will bring Youku’s online movie library to over 4,000 domestic and foreign titles, according to the company.

Paramount has had a relatively diverse number of partnerships in China over the past three years. In 2011 they partnered with a leading Chinese game company, Kabam, to distribute a free, browser-based multiplayer game based on The Godfather.

In June this year, internet behemoth Alibaba revealed an undisclosed investment in the latest Mission:Impossible movie, Rogue Nation. The partnership with Paramount included distribution rights as well as Alibaba-exclusive merchandise, ticketing and promotion through their multiple e-commerce and payment platforms.

@CateCadell

India’s Ola Pulls In $500 Million As Asia’s Ride-Hailing Spending Spree Continues

Cate Cadell — Tue, 15 Sep 2015 15:46:56 +0000

Ola Cabs, the Indian ride-sharing app that shares a major investor with Alibaba, has sealed $225 million USD of a planned $500 million investment round in what has been the most generous season on record for Asian ride-hailing apps.

The latest round of funding brings Ola’s valuation to approximately $5 billion USD, and is currently led by New York-based Falcon Edge Capital. Early this year they had pulled in $400 million led by Russian billionaire Yuri Milner’s fund, DST global. Before that Ola had sealed $210 million from SoftBank, the Japanese company that owns over 35% of Alibaba.

It caps off a truly spectacular eight weeks of funding among Asian ride-hailing apps. Last month Singapore-based Grab Taxi raised $400 million USD with the help of sovereign wealth fund, China Investment Corporation (CIC). The same fund had previously supported Chinese star ride-hailing app Didi Kuaidi, who just days ago confirmed a whopping $3 billion USD in funding.

Ola, Didi Kuaidi and Grab Taxi all share a mesh of similar investors, presenting a strong front in the increasingly competitive market. Despite this, Uber has kept its spot in the ring so far, announcing $1.2 billion USD in fresh funding from previous backer Baidu.

Uber has committed to multi-billion dollar localization efforts across China and India over the next year, though they have met with a series of setbacks so far, the largest of which is strong local competition. Ola currently claims to be operational in five times as many cities as Uber within India, while Didi Kuaidi currently holds over 90% of China’s ride-hailing market.

@CateCadell

Alibaba’s Finance Arm Invests $188 Million In The Insurance Game

Cate Cadell — Tue, 15 Sep 2015 14:51:52 +0000

Despite stock price woes it’s full steam ahead for Alibaba’s finance arm, Zhejiang Ant Financial, who revealed plans to invest 1.2 billion yuan ($188 million USD) into the China insurance arm of Taiwan-based Cathay Financial Holdings on Monday.

It’s very much a strategical asset for Ant Financial, who will hold a 60% stake following the deal, according to a statement from the Taiwanese company. The partnership will allow Ant Financial to extend it’s online insurance services and avoid applying for extra licensing.

The internet insurance sector has grown in leaps and bounds, transforming the industry in China. Sales of online insurance neared $13 billion USD in the first six months of 2015, according to the Insurance Association of China, on par with the total amount for 2014.

Fast growing sectors include motor insurance, which accounts for over 56% of the total online insurance spend. Automotive insurance is interestingly one of the main focuses of Cathay Financial, Ant Financial’s new market partner.

The development of e-commerce platforms including Alibaba’s Taobao and JD.com also have driven online insurance numbers.

Ant Financial introduced a platform last month, called Ant Fortune, that lets users select from hundreds of fund products from over 80 local financial institutions.

The company teamed up with Tencent and Chinese insurance company Ping An in November 2013 to launch an online insurance company called Zhong An.

@CateCadell

40% Of Dell Computers Are Running Linux In China As Open Source Movement Gains Momentum

Cate Cadell — Tue, 15 Sep 2015 03:54:31 +0000

Despite a notable shortage of Linux developers in China, it appears the movement is gaining steam among Dell users.

According to a report by Hong Kong-based South China Morning Post, 40% of all Dell computers in China now run on Ubuntu Kylin, a version of Linux being modified in China. It comes at a time when Microsoft attempts to woo Chinese users with free upgrades to Windows 10, even if the software is pirated.

While the number of open source users using Dell’s hardware is high, it’s worth noting that Lenovo, the country’s biggest PC hardware provider, inked a partnership with Microsoft last year to distribute Windows 10, meaning that the proportion of Linux-based operating systems on Lenovo hardware could be much lower than 40%.

Nevertheless, Dell’s footprint is certainly a significant indicator of growth in the open source software sector. Just last week the company announced they would invest $125 billion USD in China over the next five years. It’s part two of a total $250 billion USD commitment that they made back in 2010. Public records show they took in around $5 billion USD in China revenue annually before the company went private in 2013.

China has a checkered relationship with its operating systems. Windows Vista was a hugely popular OS in the country, however its use has been declining for several reasons, including piracy.

The growth of Apple’s market share, primarily on the consumer side, has weakened Window’s grip on the market. That said, a confusing trend has also emerged in China where Apple users replace the iOS operating system on their Apple hardware for Windows, hoping to nab the Apple status symbol without working on the new OS.

On the business side, the government has begun a push to convert large companies and state-owned operations away from the foreign operating systems. Earlier this year Beijing issued a policy guideline requesting state owned banks to phase out foreign technology by 2020.

The ban was later put on hold in April, though the race to develop a China-friendly open source OS still continues. Currently the government is working on up to four different Linux-based projects, with Ubuntu Kylin gaining the most momentum.

@CateCadell

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Tencent Brings Star Wars Online In China

Cate Cadell — Mon, 14 Sep 2015 15:41:46 +0000

As Tencent continues their breakneck expansion into entertainment, it seems they have found the droids they are looking for.

The internet giant has officially signed a deal to become the exclusive online distributor of the first six Star Wars films, inking a deal with their new owner, Walt Disney. It comes as fans are now eagerly counting down the final days before the highly-anticipated seventh installment; Star Wars: The Force Awakens.

Just three days ago Tencent launched Penguin Pictures, a new movie production unit aiming to produce 10-15 movies per year. Tencent pictures, a similar venture, was established last year. Alibaba established their own film and entertainment arm early this year following the $800 million USD acquisition of Hong-Kong based ChinaVision.

A handful of Chinese internet companies are now vying to hold down paying consumers in the growing video streaming space. Partnerships with popular series are hard fought. Tencent forged an agreement with HBO in November 2014, making them the exclusive distributor of hit shows including Game of Thrones as well as other series. Last year Netflix signed a limited licensing agreement with Sohu to distribute the highly popular House Of Cards.

China has a large market for pirated content that continues to thrive despite government efforts to curb it. Foreign producers have fought back by seeking licensing deals to have more control over their series, and not just financially. Pirated series in China are often subject to sub-par translation or dubbing by netizen volunteers.

Star Wars fans in China will now be able to watch the entirety of the first six Star Wars films for an added premium of 2.50 yuan. Next month, subscribers will be able to watch the films for free while non-members will have to pay double, 5 yuan, to watch each film. A number of streaming services are pushing the same deal for popular series, hoping to boost subscribers.

@CateCadell

State-Owned Automaker BAIC Invests In Silicon Valley’s Atieva As China Rides The Electric Vehicle Wave

Cate Cadell — Fri, 11 Sep 2015 07:06:52 +0000

It has been a popular year for Chinese companies announcing plans to develop electric vehicles, and the spree has continues.

Chinese state-owned automaker BAIC Motor Corp, announced an R&D centre in Silicon Valley yesterday. They also revealed that they have taken on a majority stake of California-based electric car maker Atieva, and will begin developing electric cars, and later, self-driving cars.

Atieva was co-founded in 2007 by former Tesla executive Bernard Tse. The company is based in Silicon Valley’s Menlo Park. BAIC’s new research and development operations will be run at a separate centre that is currently employing 20 staff.

BAIC is planning to up its production to 200,000 electric cars by 2020, hoping to export 30% of them outside China.

Earlier this week we reported on four high tech car concepts from Chinese internet companies that we can expect to see within a year. Among them was the Tencent-backed NextEV electric supercar and the LeTV Aston Martin electric sports car.

Both NextEV and the LeTV electric car teams have research teams also based in Silicon Valley. LeTV said this year that it would be releasing its first concept car in April 2016 at the Shanghai Auto Show, while NextEV, who announced their Tencent investment just last week, remain tight lipped on a release date, but have committed to a 2016 concept launch.

The electric vehicle market in China is attracting a lot of attention from high profile tech and auto investors, with the Chinese-backed electric vehicle concepts looking to challenge Tesla both globally and in China.

It’s been a rough year for Tesla’s China-side team, with reports claiming that the U.S. company had laid off 30% of its staff on the mainland in reaction to slowing sales.

Last month the company urged the U.S. government to put pressure on China during Xi Jinping’s upcoming visit, hoping to lift restriction of foreign automakers.

Currently Tesla is not able to manufacture in China without establishing a Chinese joint venture. The Chinese government has been openly supportive of developments in the electric vehicle field, but has not budged on laws restricting foreign companies.

@CateCadell

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Apple China Pays Back $71 Million In Back Taxes Following Audit

Cate Cadell — Fri, 11 Sep 2015 05:12:12 +0000

Tim Cook may have been singing the praises of their China division on stage this week, but its been revealed that Apple China underpaid on their taxes by 452 million yuan ($71 million USD ) dues to reporting errors during their 2013 operations.

According to a report from the Chinese Ministry of Finance on Wednesday, which was released yesterday through state media outlet Xinhua, Apple had already rectified the mistake and was required to pay a further 65 million yuan in late fees ($10.1 million USD).

Apple had apparently underestimated their revenue by 8.79 billion yuan, as well as overstating its profits by 5.4 billion yuan.

This week Apple CEO Tim Cook noted that sales on the iPhone had increased by 75% in China over the past year, making it the biggest market for their flagship. The iPhone 6S is set for release in China on the 25th of September as part of the second wave of releases.

As foreign tech companies gain increasing momentum in the Chinese market the government is stepping up its scrutiny of taxable foreign operations.

In November last year, they claimed $140 million USD in back taxes from US technology group Microsoft. While they had again employed state media newspaper Xinhua to make the announcement, they redacted the name Microsoft, instead opting to call the company ‘M.’ Microsoft then contradicted the report, claiming the amount was a “bilateral advanced pricing agreement”, and not due to any tax violation on the U.S. company’s part.

Apple has instead confirmed the misreported values, as well as confirming they have paid the back taxes reported by the 2013 audit.

@CateCadell

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Dell To Invest $125 Billion in China’s “Unlimited Potential”

Cate Cadell — Fri, 11 Sep 2015 04:15:40 +0000

As local PC makers including Lenovo grapple to raise revenue, U.S.-based Dell is making an all-out commitment to China, pledging to invest $125 billion USD over the next five years, citing the “unlimited potential” of the world’s second largest economy.

“The internet is the new engine of China’s future economic growth,” said Dell CEO Michael Dell in a statement.

The statement hinted that Dell’s investment would be very much focused on localizing the PC giant, as well as streamlining company goals with those of the current government.

“Dell will embrace the principle of ‘In China, For China’, and closely integrate Dell China strategies with national policies.”

In 2010, Dell had previously announced a planned spend of $250 billion in China over 10 years. If the newest pledge is part of the original amount promised in 2010, then Dell has spent roughly half of the original pledge, and is expecting to spend the same again before 2020.

Before their privatization in 2013, Dell had seen annual China sales the range of $5 billion USD annually.

China is currently in the midst of a giant policy push to bring up its tech sectors, boost infrastructure and increase innovation among existing tech companies and institutions. Earlier this year they announced the ‘Internet Plus’ policy, aiming to invest hundreds of millions in taking traditional industries online.

At the same time, China’s sovereign wealth funds have been increasingly generous to new innovations and startups in the tech sector. Last month it was revealed sovereign wealth fund China Investment Corporation (CIC) had participated in the $2 billion USD funding round of Didi-Kuaidi, the country’s biggest ride-sharing app.

While the attitudes of policy makers are certainly in favor of tech right now, Dell may have to deal with some of the country’s more protectionist policies. China has made it clear that the operations of foreign-run tech companies are subject to scrutiny from the government.

Earlier this year the government briefly announced a policy that would phase out foreign technology, including operating systems and computing hardware, in Chinese banks. They later put the policy on hold, though the move put pressure on the marriage between Chinese banks and the foreign tech companies that use them.

Dell currently ranks third in global PC shipments behind Lenovo and HP. China-based Lenovo has felt the sting of China’s sluggish economy recently, slashing 10% of their white collar workforce, accounting for 5% of the entire company, in an effort to save $1.3 billion USD annually.

@CateCadell

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The iPhone 6S May Already Be On Sale In China, For An Insane Price

Cate Cadell — Thu, 10 Sep 2015 02:38:16 +0000

The iPhone 6S is scheduled for launch on the 25th of September in China, a second wave release. However reports show that smugglers have already begun taking orders for the coveted phone, charging up to $3,300 USD for the device. The South China Morning Post reported that hawkers had already taken the phone to the mainland amid a frenzy of iPhone mania.

Despite a global slowdown in smartphone sales, the new iPhone 6S are attracting a lot of attention, with local tech blogs, news sites and social media packed with commentary on the new model following its initial release.

Yesterday Apple CEO Tim Cook said on stage that the iPhone’s market had grown 75% year over year. During an earnings call in July, the company revealed that revenue had jumped 112% in China, reaching $13.2 billion USD, up from $6.2 billion USD the preceding year.

Despite the company’s positive outlook, they are unlikely to come out of this year’s economic slowdown unscathed. Tim Cook’s 75% iPhone growth figure is down from 87% reported in the company’s Q3 earnings this June.

A drop in Chinese retail consumption has seen a handful of China’s biggest tech companies and smartphone makers lose significant revenue through sales and marketing. Yesterday Alibaba cut revenue predictions as stocks fell to another all time low, while Lenovo cut 10% of its white collar workforce to offset losses.

Chinese smartphone makers including China’s top seller Xiaomi have also been forced to cut sales estimates, extending into emerging markets to offset market saturation back home in China. Taiwan-based HTC was ejected from the Taiwan Top 50 Index this month on the back of poor earnings driven by the global market slowdown.

Apple is now the third largest smartphone vendor in China by revenue behind Xiaomi and Huawei, falling from second earlier this year. Like Apple, Samsumg has seen its market share stumble to fourth as lower-cost options strengthen their foothold.

CEO Tim Cook told CNBC last month that volatility in the Chinese stock market was not a major concern for the company. The company is looking to China, their biggest market for iPhones, for good news this month, hoping the iPhone 6S will help them boost the sales throughout the end of 2015.

@CateCadell

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China Plans Forum With Jack Ma, Tim Cook Ahead Of Xi Jinping Visit

Cate Cadell — Thu, 10 Sep 2015 01:20:00 +0000

Amid tensions over hacking allegations ahead of Xi Jinping’s first state visit to the U.S., Beijing is now reportedly organizing a tech conference in Seattle on September 23rd to show off its tech prowess.

According to the New York Times, who cited unnamed sources, some of the biggest names in Chinese and American tech are expected to attend, including Alibaba’s Jack ma, Apple’s Tim Cook and Robin Li from Baidu. Representatives from Uber, Google, IBM and Facebook have also been invited to the forum which is co-hosted by Microsoft.

The meeting will be headed by China’s ‘Internet Czar’, Lu Wei, who is responsible for deciding the extent of restrictions on foreign tech companies. It is worth noting that a number of the invited companies are currently struggling to have such restrictions lifted.

It was revealed this week that Google, whose services have been progressively blocked in China since 2010, is seeking to introduce a ‘China-friendly’ version of their Play Store in China this fall, marking progress with censors.

Uber has also come close to clashing with the Chinese government over banned ride-sharing models, while Facebook remains blocked in the country, despite efforts to target cross-border businesses. Apple will also be keen to maintain a health relationship with Chinese regulators, with CEO Tim Cook praising China sales.

Following a series of recent data hacks, tension over tech remains high between China and the U.S. ahead of Xi’s visit this month. The possibility of sanctions are hanging over the Chinese leader’s head after data was stolen from the U.S. Office of Personal Management this year, including the personal records of over 20 million American workers. The Chinese ambassador has already publicly warned against sanctions ahead of Xi’s visit.

While it’s not clear whether the high-profile tech event is a means of retaliating against possible sanctions, it certainly highlights possible tension points between the U.S. government and U.S. tech giants. Tech will likely become a major bargaining chip in China’s soft-power arsenal, with billions of dollars at stake for U.S. businesses who do not comply with Chinese demands and restrictions.

@CateCadell

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Netflix Reveals Asia Expansion Plans As Competition In China Stiffens

Cate Cadell — Wed, 09 Sep 2015 14:55:01 +0000

Netflix has announced it will be entering four new Asian markets in early 2016, including South Korea, Singapore, Hong Kong and Taiwan. The company launched its Asia presence in Japan this month.

The U.S.-based subscription streaming service has effectively traced a line through China’s eastern and southern neighbors, though plans to enter the mainland itself are still frustratingly vague. The company has hinted that is will be seeking partners, but has made no concrete statement. One reason for their hesitation could be the intense competition posed by new entrants in the industry.

Earlier this month, Chinese e-commerce giant Alibaba rolled out its own subscription-based streaming service, TBO, short for ‘Tmall Box Office’. The service costs 39 RMB per month ($6.08 USD) or 365 RMB per year ($57 USD).

While TBO is still in its infancy as a beta product, it has the right parent company to succeed. Alibaba has made a series of high profile film and entertainment partnerships this year. In early July they struck a deal with Chinese film company DMG and Hunan TV to package the first ever bundle subscription service in China, integrating the service with their Tmall platform.

TBO could also see benefits from some of the partnerships established under Alibaba Pictures, the official media and entertainment arm of Alibaba group, established early this year. Recently the entertainment group led an undisclosed investment in Paramount Pictures’ ‘Mission Impossible: Rogue Nation’.

Despite their global strength, Netflix lacks the industry roots of Alibaba in China. Netflix sold the rights to air their hit series House of Cards to the streaming arm of internet portal Sohu this year, though they have remained tight lipped on a possible entry partner for the company itself.

Other entertainment streaming services, including Spotify and Apple music, have also skirted China, aiming for its less-complex Asian neighbors.

@CateCadell

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Alibaba Shares Stumble As Sales Estimates Are Cut

Cate Cadell — Wed, 09 Sep 2015 12:52:41 +0000

There’s still ten days until the anniversary of Alibaba’s record breaking $25 billion USD NYSE IPO, but the honeymoon is well and truly over.

The e-commerce giant is now grappling with a slowing Chinese economy. Shares slumped again today to an all time low of $60.45 USD following the announcement that second-quarter sales would fall below expectations.

The company now expects their gross merchandise volume to fall in the “mid-single digits lower” range. Currently their shares are sitting at 89% of their original IPO price, falling from a peak of over 175% in November.

“[Alibaba is] observing some negative impact to the magnitude of spending,” said the head of Alibaba’s investor relations, Jane Penner at a conference in New York on Tuesday. Penner claimed that overall engagement had remained high on the company’s e-commerce platforms, but that elements including average order values has dropped.

The stock tumble comes just days after chairman Jack Ma and Vice Chairman Joseph Tsai sought to borrow $2 billion USD from a series of American Banks, using Alibaba stock as collateral. It’s expected the money will be reinvested through the family office fund Blue Pool Capital Ltd., established by Tsai earlier this year. Ma and Tsai own approximately 7.1% and 3.1% of Alibaba Group stock respectively. Their year-long lockup period ends on September 21, though they have both committed to keeping their shares at this point.

Alibaba isn’t the only company suffering from a slowdown in Chinese retail. Baidu, another of the country’s top three internet companies, saw their stock tumble in July following lower than expected earnings. The company said the revenue dip was due to large investments in the O2O sector. CFO Xinzhe li said at the time that increased competition meant they would have to “double down” on investment in order to stake a market share.

A series of tech companies across a range of industries have been experiencing sales setbacks this year, signaling that retail is not immune to China’s greater economic slowdown. Last month one of China’s most entrenched global tech brands, Lenovo, cut 10% of their white collar work force, hoping to trim $1.3 billion USD from the company’s annual spend. Internet company Sina saw an 8% drop in advertising as local brands reigned in their marketing spend, while smartphone giant Xiaomi is also looking to miss its goal sales volume in 2015.

@CateCadell

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Plans To Spin Off Yahoo’s 15.4% Alibaba Stake Set Back

Cate Cadell — Tue, 08 Sep 2015 23:35:17 +0000

On January 27th this year an announcement that Yahoo would be spinning off their Alibaba shares into a new company called ‘Spinco’ sent their stock price soaring almost 8% in after hours trading.

Today, it’s grim news for investors.

Yahoo disclosed in a filing that it has dropped its request to spin off the shares on September 2nd, when the IRS had decided to not grant them approval for the tax free spin off.

Despite the bad news, the filing noted that Yahoo would continue to seek ways to spin off the shares.

Yahoo has been fielding shareholder pressure to pass on the profits of its multi-billion USD stake in Alibaba Group, previous sales of Alibaba stock had attracted tax bills of close to 40%, which could potentially shear billions from their 15.4% stake in the Chinese e-commerce giant.

To offset the tax, the company had intended to spin off the shares into a separate company, Spinco, which would be a tax free transaction for Yahoo and its investors. They would then divide the shares of the new company among shareholders. Yahoo had intended to contribute a small operational division, in an attempt to show the company would not just represent a bundle of shares.

Yahoo did not make clear in the filing how they would continue to pursue the spinoff, though it’s clear that Yahoo’s current proposed plan has not been cleared. “The IRS notified Yahoo’s counsel that it had determined, in the exercise of its discretion, not to grant the requested ruling,” said Yahoo General Counsel Ron Bell in a filing from Yahoo on Tuesday.

Since the announcement, Yahoo’s stock has fallen 3.3% in after hours trading. It’s bad news for Yahoo CEO Marissa Mayaer, who has been working hard to produce growth after a rough 3-year tenure so far.

Correction: It was noted earlier in this story that the value of the Yahoo stake in Alibaba was $39 billion USD. This was the value of the sock at the time Yahoo originally announced a spin off, though it is no longer worth this amount.

@CateCadell

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Hong Kong O2O Van Service ‘Lalamove’ Seals $10 Million To Expand In China

Cate Cadell — Tue, 08 Sep 2015 14:32:58 +0000

With the car-hailing wars reaching a fever pitch on China’s mainland, it’s hard to believe there’s any room left for new competitors in O2O transport. But that’s not the attitude of one Hong Kong-based startup.

Lalamove has just sealed a $10 million USD bridge round to continue its expansion in China. While the relative newcomer currently only operates in 4 cities, they want to use their latest injection to move into a further 12 cities, looking to tap 50 total by 2016.

Founded in 2013, the company has a team of drivers that can be ordered on demand through the company’s app. Like Uber, anyone can sign up to be a van driver, and its operations mimic features of its ride-hailing competitors.

Lalamove, also known as EasyVan, began with a focus on Hong Kong and Southeast Asia, though they settled a $10 million A series in January, led by Chinese investors, which could have facilitated their move to the mainland. The company has opted to separate China-side operations under different management for the time being.

In a previous interview with Tech In Asia, board member Blake Larson noted that China operations be specifically headed by the company’s CEO and Co-founder Shing Chow.

In their home market of Hong Kong, Lalamove is in direct competition with GoGoVan, another O2O van logistics startup founded in 2013. Like Lalamove the have aggressively extended outside of Hong Kong. Just this month they revealed they would be conducting an official launch in Korea.

GoGoVan also landed a $10 million USD investment from a Chinese investor last year, social networking site Renren. Though they have not made strong moves toward the Chinese market itself. In January, Uber also launched a van logistics service called Uber Cargo in Hong Kong.

@CateCadell

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Uber Confirms $1.2 Billion in Funding, As Didi Reportedly Closing $3 Billion

Cate Cadell — Tue, 08 Sep 2015 04:17:17 +0000

Uber has confirmed a $1.2 billion USD funding boost from previous backer Chinese search engine giant Baidu. It comes as Didi Kuaidi, their primary competitor in the market, is reportedly about to close a round of around $3 billion from its own investors.

It’s now become an all out war for market share as investors show they are not afraid to subsidize services in order to take a bigger piece of the Chinese ride-share pie.

Uber CEO Travis Kalanick told Chinese tech media site Sina.com that the financing round is still not finished, and that finding a suitable partner in the Chinese market was more important than the funding itself.

Bloomberg reported on the same day that Didi Kuaidi’s latest injection from had increased the company’s valuation to $16.5 billion. While the full number of investors have not been disclosed, current investors in this round include SoftBank, China Investment Corporation, Alibaba Group, Tencent and Ping An Insurance.

Didi Kuaidi’s $3 billion investment surprised onlookers, surpassing the expected values. The company had revealed in July that they were planning $2 billion in funding, with President Jean Liu saying at the time that the company would only look to raise an extra “few hundred million dollars”.

Recent figures show Uber’s valuation is potentially $8 billion as of the latest round, though that amount could fluctuate depending on who the San Francisco-based company chooses to round out its series.

Uber has made agressive moves to localise in 2015 with their ‘Uber China’ arm, hoping to make it their biggest market globally. Earlier this year Kalanick said the company would be investing $1 billion in the Chinese market before the end of the year, and the company has been on the hunt for funding since, though given their large cash reserves it’s likely the $1 billion is not being sourced fom new investment. CEO Travis Kalanick is in Beijing this week to speak at the Baidu annual corporate conference.

The new funding injection has only upped the stakes for the two highly-valued startups, who are vying to establish market share in China. Didi Kuaidi now reportedly has a 95% share of the ride-hailing market, though it’s important to note that they operate in the taxi-hailing vertical, unlike Uber. When comparing Uber’s numbers with Didi Kuaidi’s non-taxi services the share is much more even.

@CateCadell

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Four Hi-Tech Car Concepts From Chinese Internet Companies You’ll See Within A Year

Cate Cadell — Mon, 07 Sep 2015 05:00:33 +0000

It’s the year of four wheels for China’s internet giants, and the country’s tech companies are racing to get their concepts ready by 2016. Cars in the connected, remote and electric fields are under development right now with a focus on high-profile foreign partnerships.

Hi-tech cars have been the domain of western progressive tech companies in the past, including Tesla, Apple and Google, but with R&D at an all time high among China’s tech companies, many are taking the opportunity to extend past traditional fields.

The government has also become a backer of hi-tech car solutions recently, amending rules to allow non-automotive companies to invest in car projects. Here are some of the latest hi-tech car concepts to come out of China’s internet powerhouses.

1. Tencent Partners With NextEV To Build Electric Super Car

Concept: Electric Super Car

Release Date: 2016

What can produce over 1,000 horsepower and accelerate 0 to 100 kilometers (62 miles) in less than 3 seconds? Tencent’s latest partnership with Shanghai-based electric car maker NextEV.

While it’s not Tencent’s first foray into the car industry, their latest partnership with NextEV is snagging a lot of attention. NextEV is a company working on electric cars, and is considered on of the prime competitors to Tesla in the region. Tencent and Uber-backer Hillhouse Capital put up and undisclosed amount to take NextEV global, according to a NextEV spokesperson.

The first model that will be launched under the partnership will be an electric supercar. While it’s not exactly a consumer-ready concept, it aims to show its muscle in the industry by outperforming combustion engines in the same class. A spokesperson told Reuters that the car would produce over 1,000 horsepower and have the ability to accelerate to 100 kilometers within 3 seconds, making it competitive in its range.

NextEV’s deep-pocketed investors helped secure former Ford Motors Executive Martin leach to head the effort, which is expected to see a first release in 2016.

In March this year, Tencent had partnered with Foxconn and top Chinese luxury auto dealer China Harmony Auto Holding to begin exploring the electric car industry.

2. Baidu’s BMW Autonomous Car

Concept: Semi-Autonomous Car

Release Date: Late 2015

Chinese search engine giant Baidu inked a partnership with BMW to release an autonomous car, potentially before the end of 2015. The two companies revealed they were working on the project together in April 2014, but had kept things under wraps until the announcement this June that the car would see daylight before the end of the year.

Frequently compared to Google, Baidu lived up to its name, looking to beat the U.S. search giant to market with its autonomous car. Unlike Google’s effort however, the Baidu car will not be fully autonomous according to reports, instead it is going to employ a driver assisted system.

3. LeTV’s Aston Martin Electric Car Concept

Concept: Electric Sports Car

Release Date: April 2016

While they don’t exactly rub shoulders with Baidu, Alibaba or Tencent, LeTV is a budding internet giant in its own right. The company, which began as an internet video streaming service, has since extended its reach into smartphones, releasing a series of controversial ads to challenge Apple in the Chinese market.

They are now expanding into electric Sports Cars too, joining forces to create a concept car with the James Bond of British Car Brands; Aston Martin. The company released a series of concept drawings at this year’s Shanghai Auto Show, depicting a very sleek concept with many of the Aston Martin design features. Aston Martin and LeTV have been reportedly working together on the electric car at an R&D centre set up in Silicon Valley.

In January, LeTV released a custom OS for electric and connected cars, which is expected to feature in the upcoming design. They are expected to release the car at the same show in April 2016.

4. Alibaba’s Internet Connected Cars

Concept: Connected Cars

Release Date: 2016

In March this year Chinese tech giant Alibaba revealed that it had made a $160 million USD investment in partnership with China’s largest automaker group SAIC group to create a fund aimed at developing internet-enabled cars. Unlike others in the field, Alibaba and SAIC have remained tight lipped on their upcoming projects, giving almost nothing away since the initial announcement.

According to an announcement on SAIC’s website, we can expect to see the first project released in 2016. Besides funding, Alibaba is expected to contribute the cloud computing technology, digital entertainment, maps and financial data.

@CateCadell

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Jack Ma, Joseph Tsai Borrow $2 Billion USD Against Alibaba Shares

Cate Cadell — Mon, 07 Sep 2015 01:13:43 +0000

Jack Ma, Chairman of Alibaba Group and Vice Chairman Joseph Tsai are looking to borrow $2 billion using Alibaba shares as collateral, according to a report released by Bloomberg on Friday.

The loan, which could be announced as soon as this month, could potentially be used to fund Blue Pool Capital Ltd., the family office created by Joseph Tsai designed to reinvest the wealth created by Alibaba’s $25 billion USD IPO last year.

Ma is now reportedly worth $27 billion USD while Tsai has an expected wealth of $7 billion, owning approximately 7.6% and 3.1% of Alibaba stock respectively.

Banks working on the potential loan include Credit Suisse, Goldman Sachs and Morgan Stanley. A lockup period placed on the shares owned by Ma and Tsai will expire on the on the 21st of this month, though neither has indicated they will sell off stock, which could potentially cause unease among investors. Lending against the stock is a means of avoiding this while expressing confidence in the potential of the company.

The loan will be a margin loan, meaning that if the value of Alibaba stock lowers considerably, Ma and Tsai will be required to hand over cash to match the value of the loss. They will also have the option to sell stock to pack back the loan.

Alibaba has had a tough couple of weeks amid economic turmoil on China’s stock markets. The giant’s stock price dipped below their IPO price of $68.00 USD, losing just over 45% from their highest trading point November. The company has since continued its downward slide, now resting at just under $64.00 USD per share.

@CateCadell

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HTC Ejected From Taiwan 50 Index As Smartphone Slowdown Hits Home

Cate Cadell — Sun, 06 Sep 2015 22:15:58 +0000

It’s been a tough season for smartphone makers aimed at the China market and that’s something HTC can attest to.

The Taiwan-based smartphone maker will be removed from the Taiwan Stock Exchange’s Top 50 Index, now shifting into the Taiwan Mid-Cap 100 Index. The company’s stock has dropped over two-thirds in the past year as smartphone sales in the region experience a uniform slowdown.

It’s the latest in a series of worrying signals for HTC, which has seen its global market share dwindle in recent years, Once the world’s biggest smartphone maker by volume, they now hold under 2% of the market, dropping out of the top 10.

The indexes, which rank companies according to their market cap, were recently reassessed, and will be reshuffled as of September 21st. HTC’s position on the Top 50 Index will be replaced by fabric producer Eclat Textile.

Last month HTC revealed that it would be cutting approximately 15% of its workforce and hoping to reign in operating expenses by over a third. While all smartphone makers have felt the pinch of a sluggish market, HTC’s outlook has become particularly grim as the market continues to saturate.

Following poor Q2 results this August, the company revealed that it expects to remain unprofitable in the third quarter of 2015. In an attempt to cut off dying limbs, they have decided to axe low-end models, a market now dominated by newer players including market-leader Xiaomi.

According to the report, HTC will be focussing on its premium market, hoping to differentiate itself. However the high end market is also experiencing saturation. Following the lead from Apple, Samsung, OnePlus, Lenovo and Huawei, Chinese smartphone maker Meizu also revealed plans last week to enter the premium market.

According to a report from IDC, smartphone shipments to China are expected to rise just 1% from last year. At the same time, global growth is expected to dip from 27.5% last year to a more modest 10.4% in 2015. Slowing sales have put pressure on smartphone makers that both originate from and target China. Many local players, including market-leader Xiaomi, have opted for a rapid expansion into emerging markets such as India and Brazil to offset the slowdown at home.

HTC would be hoping to shake off their stock market blues with the release of the mid-range Desire 728 phablet in China this week, featuring dual sim slots and a 64-bit MediaTek 728 chipset.

@CateCadell

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Google’s Play Store Could Be Coming To China This Fall

Cate Cadell — Sun, 06 Sep 2015 20:48:36 +0000

Google Inc. is reportedly planning a China re-entry for its Google Play Store, with unnamed sources claiming the service could be up and running by fall on the mainland.

The U.S. tech giant has apparently been working on a China-friendly version of the Play Store for over a year, compiling a selection of apps and features that are approved by the Chinese government.

Google has been at odds with the Chinese government since 2010, when the company was barred form the country over email security issues and the censorship of search results. In the past five years the China tech market, including its majority Android smartphone sector, has seen booming growth, making it harder to ignore for U.S. tech giants.

The play store will reportedly make its debut as a pre-installed option on Google-licensed Android smartphones in the Chinese market, though it is not yet clear which phones. Currently a number of the country’s biggest smartphone brands, including Xiaomi and OnePlus, run Android modified operating systems, making it the most popular mobile OS in the country.

Despite their global brand recognition, entering the Chinese market could prove tough for the play Store, even if they get the green light from the government. Unlike other countries where the Apple iTunes store and the Google Play store form a market monopoly, China has seen dozens of black market Android app stores gain popularity due to the absence of official options. Many of these stores offer the apps and services that a giant like Google will likely have to cut if they are to remain on good terms with the government.

The possible launch of the Play Store is a confusingly progressive step forward in the U.S. company’s relationship with the Chinese government, which appeared to be deteriorating further recently. In December of last year, Gmail was blocked in China, marking the last big Google service to be taken down by the firewall. In the absence of Google services, China has seen a slew of services pop up to fill the gap from a series of companies, including documents, mail, maps and other similar features.

In the past, Google management have been openly critical of the Chinese government, including co-founder Sergey Brin. However like other western tech giants that have been barred from the country such as Facebook and Twitter, Google has made efforts to tap into sectors of the Chinese market that remain available to them.

The development of the Android Play Store in China – while far from settling Google’s wider disputes in China – is a positive step in their journey to monetize in the world’s biggest mobile market.

@CateCadell

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‘KeyRaider’ Malware Steals Record 225K iOS Logins, Holds iPhones For “Ransom”

Cate Cadell — Thu, 03 Sep 2015 02:50:53 +0000

A malware family dubbed ‘KeyRaider’ has stolen over 225,000 iOS account login credentials, mostly from Chinese jailbroken iPhones, according to a report released this week from Palo Alto Networks.

The breach is the biggest so far in the history of iOS devices, and has affected users in 18 countries total. According to the report, up to 20,000 users are taking advantage of the tweaks that use stolen data to download and pay for items from the iTunes App store.

“Some victims have reported that their stolen Apple accounts show abnormal app purchasing history and others state that their phones have been held for ransom”

The malware was originally discovered by a student from China’s Yangzhou University along with a member from tech group WeipTech which is affiliated with well-known Chinese Apple fan site Weiphone. The report identified a user of Weiphone’s Cydia Repositories, a service for jailbroken devices, who they believe to be the author of the malware.

Weiphone has cooperated in the past with Palo Alto in identifying Wirelurker, another of the largest attacks to hit iOS devices, again mostly in China. The country is susceptible to malware because the inability to access software on official platforms makes jailbreaking an attractive option for users.

Wirelurker was the first malware of its kind to infect iOS devices that were not jailbroken. At the time Palo Alto Network noted that it was a sign “bad actors are getting more sophisticated.” Wirelurker infected 450 apps on a black market app store and was downloaded over 365,000 times, potentially affecting a similar number of users as KeyRaider.

Palo Alto Network has posted details on how affected iOS users should handle the the KeyRaider malware once it has been identified.

@CateCadell

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Xiaomi Could Be Releasing A 15-Inch Notebook By 2016

Cate Cadell — Thu, 03 Sep 2015 01:43:48 +0000

After rocketing to the top of China’s smartphone game, Xiaomi is reportedly taking on a new challenge: notebooks.

According to a report from Bloomberg the smartphone vendor is in talks with Samsung to source the memory chips and displays for a device that could be released as soon as 2016, putting them in direct competition with Apple and Lenovo.

A separate source quoted in DigiTimes says “Xiaomi is planning to use the same strategy as the one for smartphones and will release notebooks with high price performance ratio.”

The same source believes the notebook will run Linux on a 15-inch screen and retail considerably lower than the comparable Macbook Air at 2,999RMB ($471 USD). Other potential partners in the project include Inventec and Apple manufacturer Foxconn.

As of this year Xiaomi has shot ahead of competitors in the Chinese market with the promise of a high quality product with a low-end price. They are known for their slick user interface and creative custom OS, though it remains to be seen whether the company is capable of transferring that concentrated success into such a saturated new market.

PC sales have faltered in 2015, slipping almost 9% according to IDC. But the move into laptops could be an attempt to diversify in the face of poor smartphone sales. According to a Gartner report released in August this year smartphone sales reached a record slowdown, recording the poorest growth numbers since 2013.

While Xiaomi still managed to come out on top, their main market competitor in the smartphone sector, Apple, slipped to third place behind Huawei despite and increase in sales, signaling a tough market. Lenovo, who would be Xiaomi’s biggest competitor in the Chinese notebook market, has the fourth largest market share in terms of smartphones.

Xiaomi has extended into a range of other product lines outside its smartphone business, but none have been as technically challenging as notebooks. Their product line includes air purifiers, battery packs, headphones, tablets, fit bands and other tech accessories.

@CateCadell

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Huawei Reveals Their Answer To The iPhone 6 With Force Touch

Cate Cadell — Thu, 03 Sep 2015 00:21:35 +0000

Huawei has unveiled the follow-up to last year’s Ascend Mate 7 with a whole host of interesting upgrades.

The Mate S has stuck to the high end price range with the phone retailing for between €600-€700 depending on memory and case selection. It’s the most expensive phone ever released by Huawei, with the previous model retailing for €499-599. It appears they have the confidence to bring the new flagship even closer to iPhone 6’s domain.

And the price isn’t the only thing Huawei is competing with the iPhone on. The Mate S appears to have beaten Apple to the punch by introducing a Force Touch feature. Apple was anticipated to reveal the same feature this week for their upcoming iPhone.

The company kept the Ascend Mate 7’s fingerprint sensor but eschewed the 6-inch screen, taking it back down to 5.5-inches. They have stuck to the 13-megapixel main camera but have upgraded the front camera to 8-megapixels from 5 last year.

Other interesting upgrades were made to their Knuckle Sense technology, which allows users to open the camera by drawing a C with their knuckle and the internet by drawing an I.

Customers looking to upgrade to the Mate S from the Ascend Mate 7 will be happy to learn that Huawei has finally boarded the fast-charge wagon (which they really have no excuse for overlooking in this price range). Users can now see a significant drop in charge time from the 3.5 hours required for the last model.

Other features from the new Mate S include a 1080p screen, 7.2mm thickness, a Kirin chipset and a curved metal design. It has dual sim slots which will allow it to support up to 13 LTE frequencies across the world.

The phone will be available in China as well as Japan, South Africa and European markets by the end of September, open for pre-orders on the 15th, but customers in the U.S. will not get to see the latest flagship as Huawei has no plans to release it there. They will likely be staying out of iPhone’s price territory in the U.S. where the market is much more saturated. Currently they don’t even break the top 20 vendors in the U.S., and make up less than 1% of total sales.

Huawei recently plucked off Apple to become the second biggest smartphone vendor in China by market share behind Xiaomi, according to a report from Canalys. It now holds a 15.7% share of the Chinese market, and is expected to sell almost 110 million smartphones globally this year.

@CateCadell

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Chinese Smartphone Makers Race To Go Offline In India

Cate Cadell — Wed, 02 Sep 2015 01:58:01 +0000

As the Chinese smartphone market continues to suffer from saturation and a slowdown in sales, local smartphone companies are increasingly turning their efforts to other markets for a revenue boost.

India has been the target of rapid localization from virtually every Chinese smartphone company that has the capital to do so, including Xiaomi, Huawei, LeTV, ZTE, Meizu, Lenovo, Gionee and OnePlus.

While many have kicked off their India presence with sell-out online sales, they are now racing each other down a decidedly low tech avenue, offline retail. The reason? 90% of retail in India is still offline, while approximately 75% of mobile device sales are still conducted in brick-and-mortar stores.

Following the launch of their MX5 flagship in India, Meizu revealed yesterday that they would be ramping up the number of offline service centers from 28 to 40 over 20 cities in India. “For the next few months, after-sales service will be the key focus for Meizu,” sais Li Nan, VP of Marketing at Meizu in a release. The company is currently in talks with iPhone maker Foxconn to begin manufacturing in Chennai.

Xiaomi, who has been locked in a virtual shoving match with Lenovo to be the top Chinese smartphone retailer in India, signed a deal three weeks ago with Redington to launch a pilot offline retail project over 10-15 cities by October. The Head of Xiaomi’s India operations, Manu Jain, noted that they expect offline sales to account for up to 33% of total India sales by the end of the year. Xiaomi is hoping to sign with at least one other Indian retail partner in the near future.

Lenovo’ strength in India could be traced back to its early adoption off the offline model. According to Sudhin Mathur, Director of Lenovo’s Smartphone Division for India, their offline sales currently make up 80% of total sales. The same can’t be said for Motorola however, which was recently acquired by Lenovo. They currently sell their mobile devices through Flipkart, the Indian e-retail giant who partnered with Xiaomi for their market entry. However Motorola released a plan in the last month to follow its parent company’s example with a push into the offline sector, likely leveraging Lenovo’s existing network of vendors.

Huawei also made strong moves into the offline market this year, offering its Huawei Honor flagship to selected brick and mortar stores for the first time in early June. The company joined forces with Sangeetha Mobile for the initial launch, though they are expected to extend the number of retail partners alongside their Chinese counterparts, targeting a 10% share of offline mobile device sales in India.

A handful of newer Chinese brands, including Xiaomi and Meizu, have made a verbal commitment to making India their biggest market outside of China. Currently, the top four Chinese players Lenovo, Xiaomi, Huawei and Gionee account for 12% of the total mobile market in India, double the amount of the preceding year. Companies have focussed strongly on low-cost 4G phones around the $150 USD bracket, and are hoping to stay in that price range throughout their move offline, targeting India’s large unbanked population.

Samsung still leads the Indian smartphone market, claiming last month that its market share had extended over 40% for the first time. Indian vendors Micromax and Intex also still outweigh the other companies by sale volume, though competition is expected to stiffen as Chinese sellers move offline.

@CateCadell

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Alibaba’s Tmall Brings Napa Valley Wine to China

Cate Cadell — Tue, 01 Sep 2015 23:04:40 +0000

Alibaba’s Tmall has welcomed a host of international brands onto its platform over the past months from Timberlands to Levi’s, and they are now targeting one of the country’s fastest growing vices: fine wine.

The Chinese internet giant revealed a partnership yesterday with Constellation Brands yesterday, the parent company of Robert Mondavi wines. The agreement will see a a handful of Mondavi wines sold on the Tmall Global platform, including a pinot noir and a cabernet sauvignon.

China’s appetite for fine wine has exploded in the last decade and a half, with consumption up almost 50% since 2000. The market took a hit in 2014 following Xi Jinping’s government austerity program, which aimed to crack down on corruption and frivolous spending by government officials. The policy had wide scale effect on restaurants, wine distributors and other consumables.

Those selling wines in China now pin their hopes on an increasingly wine savvy growing middle class, who have an appetite for travel and an appreciation of foreign wine. Alibaba’s move is a no-brainer, as Chinese tourists to the Mondavi winery now make up almost a third of their visitors. Famously, retired Chinese NBA player Yao Ming bought grapes from Napa Valley to launch his own wine label in 2011, which raised the profile of the American wine region back in China where he enjoys a star status.

Chinese people have been early adopters when it comes to buying their alcohol online. A recent report on the country’s group buying sites showed that food and beverage sales amounted to 60% of total sales at 48.3 billion RMB ($7.76 billion USD).

There have also been a number of successful entrants in China’s O2O wine, beer and spirits delivery market. In July this year liquor e-retailer Jiuxian raised $80 million USD from a series of sate owned banks. The same company runs a specialized wine division called Jiukuaidao [Alcohol Coming] which partners with around 100 wine enterprises.

Alibaba’s partnership with Robert Mondavi wines also marks the opening of a new specialized mall, “Tmall Vineyard Direct,” where it s expected that more high profile foreign wines will soon be added. The deal will hopefully boost the profile of American wines in China, exports of which have dwindled in the past year. Though they have a long way to go, with French wines accounting for over a third of imported wines as China’s favorite foreign producer.

@CateCadell

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Chinese Oil Companies Come Online With Internet Plus Policy

Cate Cadell — Thu, 27 Aug 2015 02:32:22 +0000

China’s Internet Plus government initiative has ignited a steady state-led push to bring some of the country’s most traditional industries online. Banking, healthcare and agriculture have all seen their fair share of digital modernization over the past few months.

We can now some of China’s biggest state-run assets to that list – oil companies.

Yesterday PetroChina, one of the country’s biggest oil producers and a former grout packers supplier, made a novel move into the world of e-commerce by opening a store on Alibaba’s Tmall. It features a selection of discounted petrol cards, ranging from 100-400RMB a piece, approximately $15.60-$62.40 USD.

The store also offers information on peak fuel pricing periods and traffic conditions. Currently the products only cater to residents in the central Chinese province of Henan, with the cards valid across a total of 550 petrol stations.

The launch comes a month after the oil giant revealed a strategic partnership with Tencent, which will offer support in payments, big data and O2O services. Rival oil giant Sinopec inked a similar deal with Tencent a year ago. They also opened an independent website to sell similar fuel cards in early 2014.

The Internet plus strategy focusses on integrating big data and cloud computing into traditional industries. This has given rise to a series of marriages between government and private technology companies, potentially sharing some of the country’s most valuable data assets between the private and public sector.

According to the government outline of the strategy, it aims to join the priority technologies of “mobile internet, cloud computing and big data,” with “manufacturing, energy, agriculture and other areas of innovation.”

Sinopec joined forces with Alibaba’s cloud computing arm in April to build a cloud-based system for data analytics covering the entire petrochemical production chain, according to Sinopec. It’s not yet clear whether PetroChina will follow suit and extend their relationship with Alibaba beyond the Tmall store, though Alibaba’s cloud unit Aliyun is arguably the strongest Chinese provider in the field.

While China’s oil companies are famously opaque when it comes to sharing data, the move may be unavoidable as the global oil and gas industry becomes increasingly data driven. According to a report from Accenture and Microsoft Corp. released in April this year, 89% of industry professionals surveyed felt that the new analytics technologies would increase value, while 80% planned to invest equal or more amounts in improving digital integration.

@CateCadell

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Chinese Short Term Rental Market Soars As AirBNB Rushes to Localize

Cate Cadell — Wed, 26 Aug 2015 09:24:14 +0000

China might not be a great place for a search engine or a social media site to localize, but if you are in the O2O business, things are looking up.

Last week AirBNB sought a CEO for its China operations, the company also announced partnerships with China Broadband Capital and VC giant Sequoia Capital China, who will likely assist them in finding the right candidate. According to AirBNB, their customer base in China has risen 700 percent over the past year, making it their fastest growing market of outbound travelers.

But the growth in China’s short term rental market isn’t unique to AirBNB.

The short term rental market in China has seen an unprecedented boost as the country’s middle class works up an appetite for travel abroad. Statistics from China’s biggest search engine, Baidu, shows that the Chinese term for short term apartment rental ‘短租公寓’ barely existed as a search topic just one year ago. Over the last year, searches related to the short term rental market have skyrocketed.

Search engine traffic has spiked in the last year for the Chinese phrase meaning ‘short term apartment rental’ [Baidu].

Santiago Mateos, the Director of International Business Development at Chinese search engine marketing service Netconcepts, says that AirBNB has seen more search demand growth, and may have the upper hand over companies that stay attached to the local market as the industry thrives.

“Mayi and Xiaozhu [two of AirBNB’s prime competitors], have not registered the same level of search demand growth despite online and offline advertising campaigns, and numbers are lower in absolute terms,” says Mateos. “They also do not list any overseas based inventory and it remains to be seen whether Chinese travelers will show the same level of interest in P2P apartment rentals in the domestic market compared to overseas travel.”

AirBNB has a handful of competitors in the Chinese market, including Xiaozhu, Mayi , Muniao and Tujia, the later of which run a series of other rental services on top of short term rentals. While the local players have a head start in the local market, AirBNB has clear strengths in overseas markets, which explains their strong focus on outbound travelers.

Tujia has positioned itself as the competitive high-end local service, with value add services such as post rental cleaning and laundry. The company reached a valuation of $1 billion USD following a $300 million USD investment this month. In an interview with the Wall Street Journal Tujia CEO Melissa Yang said “we started managing our properties ourselves, so we can ensure a high quality of service.” She also noted that Tujia strongly outweighed local competitors in funding, saying it was a vital factor in the success of Tujia. The company still has a weak outbound service compared to AirBNB however, focussing primarily on the Asian region including Southeast Asia.

A comparison of AirBNB’s low end competitors by mobile and desktop search engine popularity

In July this year, Xiaozhu, which is often referred to as an AirBNB clone, sealed a $60 million USD funding round from four private equity firms. The company also has a strong domestic focus, with offices across 20 Chinese cities and 30,000 listed rental homes.

While most Chinese competitors have a local effort that easily outweighs AirBNB’s 10-person-strong China management team, it’s likely the US company will continue to be a strong competitor for outbound travelers.

Like Linkedin, AirBNB will be expected to hand over data to the Chinese government including user information and possibly booking data. It’s an uncomfortable feature of entering the Chinese market that all foreign tech companies face. Google refused to make the allowances and has remained blocked in China, while Linkedin made concessions to share data, drawing criticism but ultimately allowing them to operate in China.

Barriers to entry are certainly less than the potential benefits for AirBNB. The market for short term rental companies in China is set to double, with a potential value of $1.69 billion USD, according to Chinese internet consultancy iResearch.

@CateCadell

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Smartisan Launches A Rainbow Of Phones Ahead Of T2 Flagship

Cate Cadell — Wed, 26 Aug 2015 03:38:37 +0000

Smartisan, one of China’s smaller players in the smartphone arena, has released their latest smartphone, Jiangguo, which means ‘nut’. The multi-colored device will precede the T2 flagship, set for release later this year.

The 5.5-inch Android phone is the company’s first release since their T1 in May last year. Smartisan itself is now over two years old but unlike other competitors in the market has taken its time releasing flagships. It will be interesting to see what the company, headed by teacher-turned-CEO Luo Yonghao, has come up with over the past 18 months.

The T1 was a fairly solid smartphone with a relatively unique Android OS which has performed well with critics. It was priced above its market contemporaries Meizu and Xiaomi. Smartisan has not opted for the higher price bracket with the Jiangguo, with the newest release retailing at 899 yuan, which is about $140 USD.

There were rumors that the phone would be released in the US, but like most Chinese smartphone brands, a U.S. market entry is fraught with challenges, which makes an initial exit to emerging markets like India or Brazil more palatable.

The Jiangguo features a 1080p display with an octa-core Snapdragon 615 chipset. There’s 2GB of ram along with 32GB in internal storage, 2,900mAh battery and dual sim slots.

Perhaps its most recognizable physical feature is its vibrant cases, there are seven available covers in a range of colors. Smartisan could be targeting a younger crowd with the pastel rainbow or options, along with a lenient long-term payment plan.

Like a handful of other Chinese smartphones on the market, including the recently released OnePlus 2, cover changes can be mimicked in the home UI.

Smartisan has gone from a novel joke to a solid prospect in Chinese phones since its launch. Its attractive OS has been praised among its price range. At the time of the launch of the T1 last year, the company allied with San Francisco-based Ammunition group to plug the phone’s design, giving it a credibility boost.

Consumers in China will be able to buy the phone as of September 1, though patient supporters of Smartisan may wait until later in the year to get their hands on the T2 flagship.

@CateCadell

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CITIC To Invest $100M In Uber, UberChina Reaches $7B Valuation

Cate Cadell — Mon, 24 Aug 2015 00:21:00 +0000

China’s state-run CITIC bank is planning an investment of $100 million USD between UberGlobal and UberChina, a source from CITIC bank has told Technode. The same source noted that the current valuation for Uber’s China operations is $7 billion USD.

CITIC-CP Asset Management, the branch of CITIC currently planning the injection, will split the investment between UberChina (20%) and UberGlobal (80%).

The proposed investment plan also gives UberChina an IPO deadline, stating that if Uber does not IPO its China subsidiary by 2020, the investment would be returned at 8% compounded interest in either UberGlobal shares or cash.

Just last week, a leaked document attained by Reuters suggested that the parent company could go public much sooner, within 18-24 months.

The latest investment from the second-tier, state-owned Chinese bank shows the willingness of state backers to invest in ride-sharing tech. Earlier this month, Chinese sovereign wealth fund China Investment Corporation injected an unknown investment into Uber’s largest China competitor Kuaidi Didi. The same fund revealed a $400 million USD investment in Singapore’s GrabTaxi, a ride hailing app that shares an investor with Alibaba.

Last week Beijing municipal government also launched their own government-funded taxi hailing app, attempting to elbow their way into the growing market.

Uber has been a stubborn supporter of its own China expansion,putting $1.1 billion USD behind the effort for 2015. They have also been seeking $1 billion USD in funding solely from Chinese parters. Chinese internet company Baidu also made a 9-digit USD Uber investment in December last year.

@CateCadell

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Alibaba-Backed Paytm Granted Banking License In India

Cate Cadell — Fri, 21 Aug 2015 05:53:52 +0000

Paytm, a leading Indian mobile payment platform that is backed by Alibaba’s Ant Financial, is one of 11 Indian payment banks that has been granted “in-principle” approval to set up payment banks.

The newly minted payment banks will go through an 18 month provisional period before they can receive a full license, according to the Reserve Bank of India. The new banks will have the ability to provide debit card services, online banking and online transfers. The newly approved licenses are tipped to stimulate e-commerce in India, where credit card penetration is still comparatively low.

Alibaba’s banking affiliate Ant Financial owns a 40% stake in Paytm, which like Alipay is a payment wallet system aimed at facilitating ecommerce. Paytm currently holds around 60% of the mobile wallet market share in India, with over 20 million users. While the transaction rate is still relatively low (compared to Alipay’s 300 million users and 80 million daily transactions) it’s hoped the partnership will help Paytm extend their lead in the underserved Indian online payments arena.

Alibaba and its affiliates have taken a strong interest in India’s burgeoning e-commerce sector. Earlier this week, they led a $500 million USD investment in Snapdeal, which has some similarities with Alibaba’s core retail business. Also involved in the round was Taiwan’s Foxconn and Japan’s Softbank.

Snapdeal is one of three dominant e-commerce platforms, along with Flipkart and Amazon, which are vying for top spot in an increasingly competitive market. The introduction of the new banking licenses is expected to revitalize the payment ecosystem, which will hopefully see a range of new players develop in the coming years.

In the meantime, many of the large retail sectors remain primarily offline, including the smartphone market, which has become a focus for Chinese companies of late. This week Lenovo-backed Motorola announced that it would be extending into brick and mortar stores in an attempt to tap into the 75% (approx.) of consumers that buy smartphones offline. Smartphone giant Xiaomi made a similar commitment earlier this month.

The Reserve Bank of India is looking to give out further licenses pending the success of the current round. Given the initial 11 were selected from a group of 42 applicants, it appears there are many companies who have faith in the growth of the payment banking sector in India.

@CateCadell

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Aston Martin, LeTV Finally Reveal Electric Car Concept

Cate Cadell — Thu, 20 Aug 2015 21:17:33 +0000

If you were wondering what LeTV and Aston Martin might have been working on since they announced their partnership in April, wonder no more.

The Chinese video streaming company, often dubbed the Netflix of China, has released a series of concept images for their upcoming electric car, and it’s looking very sleek.

The iconic British car brand announced its partnership with LeTV at the Shanghai Auto Show this year, and for those eager to see the final product, they’ll have to wait until the same show next year. LeTV has set a timeline to release the car in April 2016.

The two companies have only been publicly linked for four months, but according to Chinese media reports they have been working together for a year now on the latest design. LeTV has already debuted a concept UI that can link smart devices and cars.

The Chinese company set up an R&D centre in Silicon Valley, with a specific team dedicated to developing their electric car. While they may have been working on the design for much longer, LeTV began seeking a license to manufacture them in December 2014.

Connected and electric cars have been a hot investment among Chinese internet companies over the past 18 months. Baidu, China’s answer to Google, confirmed it would be launching its first driverless car in the second half of 2015. Tencent inked a deal this year with luxury car dealer China Harmony Auto and iPhone manufacturer Foxconn to reportedly manufacture electric cars with smart technology. not to be outdone, Alibaba has also joined forces with China’s largest automaker SAIC Motor to establish a $160 million USD und aimed at developing connected cars.

San francisco-based Tesla is also currently working in China, though sales have been steady. According to the China Automotive Technology and Research Centre, the company has an approximate 80% share of imported plug-in hybrid or electric cars, selling 2,147 in the first 6 months of 2015.

Just for comparison, here’s the 2016 Aston Martin DB9 GT.

@CateCadell

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LeTV to Make Electric Vehicles

Image Credit: LeTV

Beijing Municipal Govt Backs Uber, Didi Kuaidi Competitor

Cate Cadell — Thu, 20 Aug 2015 08:23:23 +0000

A taxi-hailing app backed by the Beijing Municipal Government has gone live this week, attempting to break into a market hotly contested by Uber and Kuaidi Didi. The app, Feidi, has an will draw its users from an existing city taxi hotline Beijing Qihua, also known as 96106, which the company claims has over 1.9 million regular users.

The relationship between the government, taxi companies and ride-hailing apps has fluctuated as private companies continue to expand in the market. Beijing has reiterated a total ban on for-profit civilian drivers since the start of the year. In July, Shanghai authorities introduced harsh new fines for any un-licensed civilians caught using the ride sharing apps.

Feidi Che claims that their starting user base was at 15,000, though most of these drivers are not likely be exclusive users. Taxi drivers in Beijing often use a coupling of different taxi apps to boost their profits. The app supports Wechat transfer, Alipay and cash payments, and unlike the hotline itself, a 5RMB hailing charge does not apply to the app.

Unlike Uber’s China services or premium cars, Beijing’s Feidi Che will focus exclusively on facilitating rides between users and existing city taxi drivers, Kuaidi Didi’s market entry service. Most private companies have since expanded beyond taxis to enter the private car and carpooling arenas. The establishment of Feidi could be an attempt from the Beijing municipal government to calm tensions with traditional taxi drivers.

Taxi drivers have been under pressure with the influx of new services, as well as existing restrictions on small enterprise in the industry. In April this year several dozen disgruntled taxi drivers ingested pesticide in central Beijing, protesting government laws that force drivers to lease taxis from government companies instead of owning their own.

The government has kept up communication ties with the various foreign and local companies, in an attempt to moderate the industry, though it appears that the Alibaba-Tencent-backed coalition Didi Kuaidi may have an upperhand in government dealings. At the start of this month Chinese sovereign wealth fund China Investment Corporation committed to investing in the company, which uses conventional taxi-hailing services as well as black car and carpooling services. The investment is an important asset for Didi Kuaidi when it comes to navigating restrictions.

@CateCadell

Related Articles:

GrabTaxi Raises $400M With Help From Didi Kuaidi Backer

Didi-Kuaidi Confirms Record $2B USD Funding, And They’re Not Done Yet

Didi-Kuaidi Launch Carpooling App To Challenge People’s Uber

Image Credit: Shutterstock

Samsung Wants You To Enjoy The ‘Aristocratic Life’ With… A Flip Phone

Cate Cadell — Tue, 18 Aug 2015 03:28:27 +0000

“Enjoy the luxury lifestyle, break into the aristocratic life,” is the mantra Samsung is using to sell its latest flagship, and nothing screams blue-blood quite like a flip phone.

No, it’s not 2003, but Samsung did release a clamshell smart-flip-phone called the Samsung G9198 on Friday, complete with a 3.9-inch dual screen 768p touch display, powered by Snapdragon 808.

While it may seem like a strange move in China, a market defined by incredibly cheap smartphones, Samsung isn’t the only player who seems to think there’s potential in a high-end clamshell. Just two weeks ago LG released a single-screen flip phone, the LG ‘Gentle’ with a physical keypad along with a touch sensitive display. It’s powered by Android 5.1 Lollipop and retails for over $170 USD.

The Samsung G9198 – while not exactly “aristocratic” – packs a punch for its size, and is definitely a significant upgrade on the previous model G9098. It comes with 2 GB of RAM, 1.8GHz hexa-core processor, 16 GB internal storage capacity and dual cameras (16-megapixel f/1.9 forward facing and a 5-megapixel f/1.9 selfie camera) with LED flash. It also has a heart rate monitor and supports dual-SIM along with a microSD card slot.

But if you’re looking to tap into “the luxury lifestyle” from outside of China, you’ll be disappointed. For now, the G9198 appears to only be on sale in the Chinese store. Since it seems to be a Middle Kingdom exclusive, it won’t support Google services, and from the images available it appears to be run on a modified Android system.

It’s not unusual to see the occasional flip phone on the streets of China, though with Xiaomi and Apple fighting for domination of the 20-35 age range, it’s likely these clamshells are targeted at the older generations. Samsung hasn’t yet released a price point for the G9198 flagship.

@catecadell

Image Credit: Samsung China

iDreamSky Shells Out $10M For Silicon Valley Game Startup Rumble

Cate Cadell — Tue, 18 Aug 2015 00:39:39 +0000

iDreamSky, the company known for localizing popular western apps including Fruit Ninja and Temple Run, has paid $10 million USD for a majority stake in Silicon Valley-based game startup Rumble, according to the Chinese company. It’s the most significant foreign investment they’ve made since announcing plans to privatize their Nasdaq-listed company.

The partnership will allow iDreamSky to publish Rumble’s highly popular KingsRoad game on the mainland. Rumble focusses on higher quality mobile games, but has struggled to compete with big names in the market including Clash of the Clans, which already has a significant following in China.

iDreamSky has had a series of hit-and-miss game localization attempts, but has tapped into a vein of high profile apps to drive their growth. Earlier this year they announced they would be modifying the highly rated Temple Run 2 game with an added Bruce Lee character exclusively for Chinese audiences.

While online and mobile gaming is a rapid growth industry in China, the market is seeing some saturation and even large players are reporting lower revenues. Industry giant Tencent revealed that game growth had significantly slowed in their Q2 results this year, dropping from 28% to 17% in the preceding three months.

iDreamSky is one of many Chinese tech companies looking to privatize and re-list locally, as confidence in Chinese tech stocks continues to grow despite volatility in the past six months. After listing in August last year, the company announced just ten months later that they would be considering a privatization proposal led by CEO Michael Xiangyu Chen. Other Chinese companies with gaming who have considered privatization include Qihoo 360, Renren, Snda Games and Perfect Sky.

According to their most recent earnings report the company has 118 million monthly active users and saw a 113.6% jump in revenue growth since last year. Their share price dipped to $7.00 USD in April, less than half their original listing value, but has since rallied to a healthier $12.50 USD per share.

@catecadell

Image Credit: Rumble [KingsRoad]

GrabTaxi Raises $400M With Help From Didi Kuaidi Backer

Cate Cadell — Mon, 17 Aug 2015 21:30:56 +0000

Leading Southeast Asian Taxi app, GrabTaxi, has pulled in $400 million USD in fresh funding from investors including sovereign wealth fund China Investment Corporation (CIC), who reportedly contributed an undisclosed amount to Chinese counterpart Didi-Kuaidi earlier this month.

It’s not the first time that Didi Kuaidi and GrabTaxi have shared in the same investment family. At the end of last year SoftBank became GrabTaxi’s (then) largest investor, with a $250 million USD investment. SoftBank owns a 36.7% stake in Alibaba which in turn oversees half of the Didi Kuaidi partnership. The latest investment from CIC pulls the two companies under the same investment umbrella once again as they face off rivals including San Francisco-based Uber.

At the time, GrabTaxi CEO Anthony Tan told Technode that GrabTaxi had no ambition to enter the Chinese ecosystem for now, though he noted that success in the car app business hinged on a good relationship with the government.

“Governments in Asia can decide overnight whether to crush you or not,” Tan told Technode in December. “It’s like that in China, and its like that in South East Asia. Governments have a disproportionate amount of power over business.”

GrabTaxi has received funding directly from the Singaporean government in the past, and has successfully partnered with local authorities, giving them a regional edge over competitors. This includes partnerships with police that have allowed them access to their driver’s police records, according to Tan.

The company currently covers a handful of Southeast Asian markets with drivers in Singapore, Malaysia, Thailand, the Philippines, Indonesia and Vietnam. Aside from CIC and SoftBank, GrabTaxi also received funding from Tiger Global Management and Vertex Venture Holding. The company recently opened a new R&D office in Singapore focussed on data analysis, hoping to improve taxi density at peak times as well as coming up with more suitable localized payments options.

The taxi-app market has shifted swiftly over the past six months from a battleground between former rivals Kuidi and Didi to a tense face-off between the Didi Kuaidi coalition and foreign entrant Uber. Other players are also gaining strength as all parties fight to dominate the less-competitive third and fourth tier markets.

CIC is one of China’s four sovereign wealth funds, and is valued at $740 billion USD. This year they launched an overseas foreign direct investment branch, CIC Capital, this year which is aiming to profit from investments in China’a ‘One Belt, One Road’ Asian development strategy. CIC is one of the contributors behind the $40 billion USD Silk Road infrastructure fund, according to state media.

@catecadell

Image Credit: Shutterstock

A Bleak Market Sees Lenovo Slash 10% Of Their White Collar Workforce

Cate Cadell — Fri, 14 Aug 2015 06:36:09 +0000

Chinese tech giant Lenovo is slashing over 3000 jobs in what CEO Yuanqing Yang calls a “tough market environment,” said the company on Thursday. Their Q1 earnings report showed a 51% drop in net income since the same time last year.

The company will cut one out of every 10 white collar jobs, totaling 5% of the company’s staff, in hopes of yielding $1.3 billion USD in savings annually. Lenovo shares fell by over 8% on Thursday following the release of the results showing a $300 million USD loss in its mobile division.

Lenovo acquired Motorola from Google last year, but the company has failed to thrive under its new management, with handset sales dropping by almost a third. Results from their PC division were similarly disappointing, declining by 7% over the last year.

Lenovo is taking a series of steps to combat market challenges, says the company, including a $600 million USD investment to consolidate the management structure between the Lenovo and Motorola smartphone divisions.

HTC, a competitor to Lenovo’s smartphone business, is also making major cuts following poor earnings. The company revealed that it would be seeking to cut operating expenses by 35% following $250 million USD after-tax loss.

It’s been a tough period for Chinese smartphone makers as demand has slowed in the first half of the year. Even market leaders Apple and Xiaomi have missed their estimates in the increasingly competitive landscape. Chinese players are now making a strong play to enter less-crowded emerging markets including India and Brazil.

Lenovo mentioned that currency fluctuations in Latin America had also taken a toll on their revenue, but that their efforts to extend globally had been generally supportive of the overall business.

Last quarter, we faced perhaps the toughest market environment in recent years…” said Yuanqing Yang, CEO and Chairman of Lenovo. “To build long term, sustainable growth, we must take proactive and decisive actions in every part of the business.”

@CateCadell

Image Credit: Shutterstock

Xiaomi Teams Up With Foxconn To Make Phones In India

Cate Cadell — Tue, 11 Aug 2015 02:36:07 +0000

Xiaomi launched its first phone entirely assembled in India yesterday, the Redmi 2 Prime. The company has paired up with manufacturer Foxconn, who recently announced a $5 billion USD investment in new manufacturing facilities in western India. The phones were assembled in a current Foxconn factory, and retail at just over $100 USD, (6,999 INR).

Xiaomi recently regained their top spot as the number one smartphone company in China by shipments last quarter, with an estimated market share of 15%, beating out Huawei and Apple. The company posted lower-than-expected revenue figures last month, apparently affected by a general slowdown in Chinese smartphone sales, though they have managed to maintain steady growth, surpassing 20 billion downloads through their customized Android app store last week.

The Chinese smartphone maker has made strong moves in the Indian market, already amassing a loyal following. In an interview with Bloomberg Business last year, Vice President Hugo Barra said “It is the biggest market for us beyond China, it will someday be as big as China.” CEO Lei Jun echoed this sentiment days after the India launch of the Mi 4, saying he is “fairly confident” Xiaomi will be the number one smartphone seller within three to five years.

India’s ‘Make in India’ program initiated by Prime Minister Modi has made it more attractive for tech companies looking to start assembly in India as labour costs in China rise, though it is unlikely to draw core manufacturing away from the mainland for years to come. Huawei has also invested heavily in assembly and R&D in India after receiving its manufacturing license earlier this year.

Xiaomi had a rocky start in India when it was hit with a lawsuit from Swedish Telecoms giant Ericsson. The Chinese company forced to return a shipment of 100,000 Redmi Note 3G handsets back to their port of origin in Hong Kong, and was banned from selling any device featuring the contentious Mediatek processor.

Like other Chinese smartphone makers, Xiaomi has kept a firm focus on developing markets. They marked a milestone this July when they launched in Brazil, selling phones outside of Asia for the first time. They wasted no time launching their own assembly plants in the county, which has high import taxes on electronics.

Xiaomi has yet to sell their flagship phones in Europe of America, though they launched a store for the western markets in May, featuring MI brand items including headphones, power banks and a fit band.

@catecadell

Image Credit: Xiaomi

Alibaba Invites English Speakers to Complain About Fake Goods

Cate Cadell — Mon, 10 Aug 2015 06:00:01 +0000

Alibaba has added an English complaints option to it’s IP protection system TaoProtect, which will allow foreign companies to report counterfeit goods on their Tmall and Taobao platforms. It’s one of many recent changes that the e-retail giant has put in place to facilitate their global brand expansion – and avoid lawsuits.

Kering, the owner of luxury brands including Yves Saint Laurent and Gucci, filed their second lawsuit against the Chinese internet company in May this year, claiming that they had “facilitated” the sale of fake goods. Alibaba has since invested in anti-counterfeit technology as well as reducing the maximum response time for responses to two days.

Alibaba is presenting an increasingly global face, with a slew of new brand partnerships aimed at bringing foreign products to the Chinese market. Last week, they announced an exclusive partnership with 20 apparel brands including Zara and Timberland. The new products will be sold on Tmall, which has become Alibaba’s default platform for foreign products.

Besides investment in anti-counterfeiting, Alibaba has made other symbolic moves to improve their global image. In June the company joined Google, Amazon and Ebay in banning images of the confederate flag on their platform. Alibaba recently reinforced their global push by hiring ex-Goldman Sachs banker Michael Evans to head their overseas expansion.

In Jul they added an additional 11 countries to their Tmall Global platform, including Australia, the U.S. and Britain. Each county can build a curated “pavilion,” showcasing anything from fresh food to fashion. At the same time, Alibaba entered partnerships with 26 embassies to improve marketing and promotion operations on their group-buying platform Juhuasuan.

Alibaba is not the only retailer rushing to fulfill local appetite for foreign brands. The country’s second largest e-retailer by sales, JD.com, launched a U.S. Mall last month that will feature everything from Converse to Taylor Swift’s clothing line. JD is still some way behind Alibaba however, as they only launched their ‘JD Worldwide’ platform in April. They also partnered with Russia’s biggest online retailer, Ulmart, with an eye extend their global reach north.

Internet company NetEase also began trials for their cross-border commerce store in January this year, while Chinese logistics company SF Express launched their own platform, SF Haitao [our translation] just two days later.

The government has also expressed support for China’s burgeoning cross-border commerce trade. In June this year they released new policy guidelines that include more advantageous taxation policies with the aim of increasing domestic consumption.

At the same time, the government put pressure on Alibaba when it issued a paper earlier this year alleging that the internet company had knowingly allowed the sale of counterfeit goods.

@CateCadell

Image Source: Shutterstock

China Liquor E-Retailer Jiuxian Raises 300M RMB To Tap Wine Market

Cate Cadell — Fri, 31 Jul 2015 06:03:37 +0000

Jiuxian, owner of Beijing-based alcohol delivery service Jiuxian.com, has secured a 300 million RMB ($80 million USD) in equity investment from a series of state owned banks, adding to the number of fast-growing companies in the liquor e-commerce market.

The latest round brings the company’s total investment over six rounds to 930 million RMB ($151 million USD).

China became the world’s biggest wine consumer in 2013, with close to 2 billion bottles sold a year. It also has a thriving domestic liquor trade, particularly in the Chinese spirit ‘baijiu’.

Jiuxian oversees a handful of B2C and O2O businesses including Jiukuaidao [Alcohol Coming], an O2O delivery service which has 100 wine enterprises and 30,000 terminal shops according to the company. It also operates wine B2B e-commerce site Zhongniang.com.

The company has been planning an IPO for over a year now, and the latest investment may be what they need to make the next step. In September 2014 founder Hao Hongfeng hinted at the IPO, saying that the process would possibly be expedited if they were to list in the US. At the same time, competitors Zhongjiu and Yesmywine are gaining momentum with recent funding.

In a 2013 interview with state media outlet Global Post Hongfeng noted that Chinese alcohol was taking up less than 1% of total alcohol sales at the time, and that he was aiming for “a 10 billion yuan [turnover] in 2015.”

According to a 2015 Neilson report released this year online alcohol sales still make up a marginal amount of the total industry but are rising fast.

Consumer behavior may also shift soon, perhaps away from wide-scale platforms. “Respondents say they may begin favoring websites operated by manufacturers for their wine and Baijiu purchases in the next couple of years, while specialty online stores will remain the most preferred avenue for purchasing imported spirits and beer.”

Baidu Opens Companies To Investment As Stocks Stumble

Cate Cadell — Fri, 31 Jul 2015 02:00:47 +0000

Baidu has opened up over a dozen of their current projects to direct investment, hoping to boost development as they attempt to stay competitive in China’s O2O arena. The companies open for investment include recent spinoffs 91 Desktop and Baidu Takeaway, a food delivery service.

Baidu saw a sharp drop in their stock at the start of this week following their Q2 earnings report. Revenue fell below expectations due to the company’s aggressive O2O investment.

“Because of the early-stage nature, we have to invest aggressively to make sure we will be successful,” said CFO Xinzhe Li during an earnings call.

Li noted that strong competition from non-public companies including Meituan and Dianping meant that Baidu had no choice but to invest aggressively over the next three to five years.

The latest program from Baidu, dubbed the “aircraft carrier program,” will open series of Baidu assets up to investment with the goal of developing out their ecosystem under the guidance of Baidu.

Baidu takeaway [Baidu Waimai] is a an O2O service with logistics operations covering predominantly food. They hope to extend their coverage to pharmacies, flowers, supermarkets and other consumer products. They are also the testing company for Baidu delivery drones, with the latest trial taking place in June. 91 Desktop [91 Zhuozi] is a desktop theme app.

Baidu recently invested 20 billion RMB ($3.2 billion USD) in Nuomi, one of the largest O2O services in the country and a fully-owned Baidu entity.

Baidu Invests Aggressively To Stay In The O2O Game

Cate Cadell — Wed, 29 Jul 2015 09:22:04 +0000

Baidu stock has had a rough couple of days. Following their lower-than-expected earnings the company has suffered numerous downgrades from sell-side analysts as their stock dropped 6% in late trading on Monday. The company’s second quarter earnings grew 3.3%, but aggressive investment in offline services saw them cut into their profits.

CFO Xinzhe Li confirmed that spending, general and administration expenses were forecast to rise to between 80% and 90% YoY – up from initial predictions of 50%. Such expenses include marketing and promotion for their spate of recent O2O investments.

Li pointed to market conditions where non-public companies were creating fierce competition, leading Baidu to “basically double down” on investment in O2O in order to secure themselves within the market. Currently O2O penetration is still lingering at “low single digits” in terms of percentage.

“Because of the early-stage nature, we have to invest aggressively to make sure we will be successful,” she said. “Eventually, we will be able to take a cut, a sizable cut from that.”

She noted that a return on the heavy early-stage investment would take time to eventuate. “Whether that’s three years or five years, it’s really hard to tell at this point.”

Baidu announced a $3 billion USD investment in group-buying site Nuomi at the end of last month, evidence of their all-in approach to O2O. They made an aggressive move into several verticals outside their core search engine operations including food-delivery, ticketing and entertainment. They also put a sizable investment into San Francisco-based ride-hailing service Uber, which has been seeing steady growth in China after a rocky start.

While Li named Meituan and Dinning as prime competitors during the latest earnings call, Baidu’s competitive field spreads far beyond non-public companies, with the same O2O services enjoying rapid investment from internet giants Tencent and Alibaba. Food delivery and car-hailing as well as ticketing services have seen strong investment from all three BAT giants.

Baidu’s core search business boasted comparatively stable revenue, with a 38% jump from last year’s Q2 revenue and a predicted 34% rise in Q3, just shy of predictions. Ad revenue is currently driving growth in their search business, which they hope will help boost their O2O service penetration out of the single digits.

@CateCadell

Image Credit: Shutterstock

China’s Music Streaming War: The Era Of Being Squished By Giants Is Not Over

Cate Cadell — Tue, 28 Jul 2015 12:25:52 +0000

It was probably only a matter of time until Alibaba folded its two music streaming investments, Xiami and Tiantian, into something shiny and new under the Ali brand.

This month, they quietly put the acquired brands under Alibaba Music Group, headed by celebrity music executive Gao Xiaosong and backed by a partnership with BMG as well as Chinese labels Rock Records and HIM Records. The switch comes just as the Chinese government laid out a country-wide ban on unlicensed, free music which – with some proactive enforcement – has the potential to completely alter the music streaming landscape in China.

The edict requires companies to rid their platforms of unlicensed music by this Thursday, and have comprehensive paid-model plans ready within three months. While it’s a mere road bump for internet giants like Ali and Tencent who have already concreted some licensing partnerships, it’s a thumping great wall for smaller players who don’t have the capital to play with the giants.

Alibaba’s two brands together represent just under 18% of the music streaming market, which gives them the uumph to outperform arch-rival Tencent’s QQ Music, if only by around 1%. Both brands still trail behind the market leader Kugou, which found a whopping 35% of the market by tapping into tier two and three cities.

As foreign services Apple Music and Spotify steer clear of the market for various reasons the unification of Ali music is setting the stage for the next in a series of entertaining – if not exhausting – feuds between our favorite internet giants. Like the taxi-app saga that eventually led to an Ali-Tencent coalition under Didi-Kuaidi, we could be gearing up for a music streaming war in China.

This time however, the stage could look very different. In the case of Kuaidi-Didi, it was a battle for dominance that would compromise traditional taxis. This time, they could be compromising something much closer to the heart of average Chinese consumers; the ability to pirate virtually anything.

It’s still unclear whether the services fortified by licensed, paid models will quash the country’s appetite for free music, but the companies themselves seem to believe there will be a substantial future in paid streaming for China.

“The sale of music, film and television content will become a major revenue driver in China in coming years,” said Alibaba in a release.

Alibaba recently cemented their spot in another important entertainment vertical; film and television. Last year, they acquired close to a 60% stake in Hong Kong-listed ChinaVision Media Group, then earlier this year they consolidated the purchase under the brand of Alibaba Pictures Group. They’ve since set down roots in a dizzying number of sub-verticals. Last month, the new group announced an investment of an undisclosed amount in Paramount Picture’s Mission Impossible: Rogue Nation, they also announced a partnership with DMG and Hunan TV early this month to establish China’s first entertainment bundling service.

It’s long been the prerogative of Chinese internet giants to put down feelers in as many verticals as possible, and its seems there’s no limit to how thin the can spread their empires, with music streaming and connected cars hot on the agenda. And while a fresh generation of entrepreneurs claim the landscape is changing, it appears the stage is set for at least a few more years of industry domination by China’s internet giants.

@catecadell

China Drops 15-Year ‘Mental Health’ Ban On Game Consoles

Cate Cadell — Mon, 27 Jul 2015 09:19:53 +0000

For a decade and a half, the Chinese government thought console games would rot your brains.

But gamers on the Mainland have been given a reprieve this week; companies including Microsoft, Sony and Nintendo will finally be allowed to make and sell their consoles anywhere in China.

The foreign consoles were banned in 2000, with the government citing the ‘mental wellbeing of China’s youth’ as a primary factor. In the years since, they have continued to release systematic edicts banning various games and gaming communities by targeting distributors and companies. Often, the games have been lumped together with porn bans, earmarked as too depraved for China’s youth.

It’s a narrative that has been reinforced by coverage of rehabilitation ‘bootcamps’, which treat extreme cases of extreme internet and gaming addiction in China. Internet addiction is classed as a clinical disorder in the county, and hundreds of centers run military-style camps that aim to quash out addictive digital behavior.

Since January, the future has been looking a little brighter for the foreign console giants though. The government partially lifted the ban, negotiating an agreement which would allow the companies to make and sell their consoles within the 11-square mile radius of the Shanghai Free Trade Zone. It posed a logistical problem for the foreign giants, who had to make sure their operations fell within the permitted areas.

The new manufacturing and distribution guidelines also include an important restrictive glitch; games on the mainland will still be subject to censorship, meaning that while the consoles will be able to begin building their ecosystem, it’s possible the games will be at least partially localized.

Even so, it’s still a big win in the eyes on console makers. Confusion over details and timelines didn’t stop Nintendo’s shares from jumping to a two-and-a-half-year high following the initial announcement in January, as excitement grew over the massive untapped potential of the Chinese console market.

During the 15-year ban, there were still avenues for gamers to get their hands on coveted foreign consoles. Grey markets shops and online stores have provided an outlet for those desperate to buy the latest machines. The underground halls of Zhongguancun’s electronics market in west Beijing are a good bet for finding a console, just like Huqiangbei in Shenzhen. Online stores have also peddled the banned boxes, but like other unsanctioned foreign goods, the markup is high, and after-sale service is nonexistent.

It’s also important to note that owning a console has not been illegal, nor has the possession of unsanctioned games, just their distribution. But while consumers were able to hold on to their products, the government succeeded in shutting off something just as important in modern console gaming; network ecosystems. The last decade has seen the explosion of global communities built around console gaming, and the ban has left Chinese players locked outside, unaccommodated in various aspects of the console experience.

One of the resulting problems is much more troublesome to the Chinese government than the unrealized possibility of mentally unhinged youth. Restrictions have fueled a mass of free and pirated games in the market for PC and mobile, adding to China’s IP woes as they try to paint a more friendly face on their growing entrepreneurial ecosystem.

Despite optimism from console companies, the total removal of the ban is unlikely to have a floodgate effect, at least at first. Like other banned foreign products, console giants Wii, Playstation and X-Box lack a wide-scale cultural following in China. Local players are also looking to leverage their reputation to wedge themselves into the market.

Huawei unveiled their Android-based Tron console just as the laws were being eased late last year. Chinese internet giant Alibaba also injected $10 million USD into US Kickstarter-favorite, Ouya, earlier this year, fueling questions around a China entry.

Whether it’s the large foreign console companies or new players back home, there’s industry consensus that China has huge potential for growth in console gaming. Sales of mobile and console gaming this year are expected to stretch to over $22 billion USD in China, a 23% increase year-over-year with an estimated 446.3 million gamers within China.

@catecadell

Image Credit: Shutterstock

Xiaomi Releases Latest 4K Smart TV: It’s Thin, It’s Cheap.

Cate Cadell — Thu, 16 Jul 2015 09:24:06 +0000

After much speculation that Xiaomi would be prematurely releasing the Mi 5 today, they have instead launched the latest in their smart TV series. The 48-inch Mi TV 2s has a 9.9 millimeter aluminum frame and features a 4K image.

In tune with the rest of their range, the newest addition is very competitively priced, at 2,999 RMB (roughly $485 USD). It also will be sold in a wide range of colors including silver, pink, blue and green, as well as gold – in keeping with Chinese tastes of late.

Xiaomi featured a comparison between market leading 4K TVs at their launch event today, calling out Sony, Sharp and Samsung in a side-by-side show down. Interestingly, they have also focussed on redesigning multiple hardware features since their last part TV offering, including the modification of their power plug which is now smaller than a matchbox.

The sound system in the Mi TV 2s is supported by Dolby and there is 2GB RAM and 8GB internal storage on the Android-based system. The latest TV launched in partnership with some of China’s most popular content creators and licensors including Youku, PPTV and BestTV.

Slowing mobile sales in China have recently hampered Xiaomi, who after a meteoric growth period are now facing the possibility that they will not reach their 2015 sales goals. The company smashed through their 2014 goal of 60 million handsets following their $45 billion USD valuation earlier in the year.

While slowing smart phone sales across the board in China points to an overpopulated market, Xiaomi has extended their efforts to go abroad, launching a succession of new products in promising markets including India and Brazil.

Like the rest of Xiaomi’s connected products, including its predecessor the Mi TV 2, the Mi TV 2s will not be available in western markets for now.

Image Credit: Xiaomi

Photo Highlights From Mobile World Congress Shanghai 2015

Cate Cadell — Thu, 16 Jul 2015 08:19:20 +0000

This year’s MWC Shanghai was chock full of the interesting innovations and insights we’ve come to expect from the MWC conferences. Over three exhibition halls and three conference stages we heard about some of the biggest emerging trends in mobile across China, Asia and the Globe. Just in case you missed out, here are some highlights from the conference and exhibition floor;

Conference-goers check out a MakerBot 3D printer on the exhibition floor.

Swiss-based MyXKronoz displays a series of smart wearables.

China-based Hydrowarriors gets wet showcasing their nano-coating technology designed to waterproof your tech.

Hanna Lee, the Director for Business Development in China from chat app ‘Line’ talks about business model innovation.

Gamers battle it out on the ESL stage infant of an audience.

Passers-by check out the range from Alibaba’s smart home brand.

Siemens shows off their own smart kitchen.

Viewers gather for the China Mobile App challenge hosted by Applied Innovation.

A brave volunteer tries out a virtual reality snowboarding experience on the exhibition floor.

Huawei demos a robotic arm that can translate touch movements from and iPad into a work of art.

Huawei displays a mini smart home model on the exhibition floor, as well as a tiny, smart worksite.

Qualcomm staff play with some of their robotic toys for interested onlookers.

CEO of Nokia, Rajeev Suri, discusses the opportunities and challenges of 5G on the main stage.

Startup SoundBrenner Pulse introduces a wearable for musicians that features a metronome function.

China-based startup Grush gets hygienic with a smart toothbrush designed to get kids to brush their teeth through an interactive tablet display.

China-based Xishua displays their RFID/NFC reader, designed for Chinese payment services.

Kriyate from New Delhi demos an app that draws on braille design to allow visually impaired users to type on smartphones and listen back to the copy.

Thinfilm reveals their newly released ‘Smart Wine Bottle’ which features a printable electronic tab aimed to curb counterfeit wines.

China-based Bai Cells displays their flying 4G, complete with base station, designed for use during natural disasters and in remote areas.

Conference-goers try out headsets at a GSMA-sponsored VR station.

Huawei runs a friendly mini-golf competition using clubs with a smart attachment that give you the stats on your swing.

All images taken at Mobile World Congress Shanghai, 2015.

Mobile In Asia Is Driving Innovation, More Than The West Realizes: MWC Shanghai

Cate Cadell — Thu, 16 Jul 2015 04:09:52 +0000

Mobile innovation in Asia is developing fast; faster than the western world realizes according to the Director General of GSMA, Anne Bouverot, who opened the Mobile World Congress in Shanghai yesterday.

“There are 1.8 billion uniques subscribers in the Asia region, and it’s growing faster than other regions… Asia is driving innovation, more than people in the U.S. and Europe understand.” Bouverot pointed to examples including the rapid expansion of 4G networks and the number of regional leaders in LTE technology.

“Growth is coming from China. Deployment of 4G in China is faster than Europe and faster than the US,” she added, also noting that “in terms of production of handsets, 90% of the models of handsets were produced in Asia.”

South Korea was singled out for their fast adaption to 5G, and both South Korea and Japan as frontrunners in the innovation of LTE technologies, with an adoption rate faster than both the U.S. and Europe. Bouverot also added that leaders in the mobile industry still have a lot to do in Asia, with penetration still well below the global average.

Other speakers at the event pointed to a mobile-first tendency in Asian countries with both developed and emerging markets in the region skipping desktop connectivity in favor of mobile.

Telenor CEO, Jon Fredrik Baksaas, case-studied the launch of Telenor SIM cards last year in Myanmar, where total connectivity sits at a regional low and mobile continues to outweigh desktop by a considerable margin. “The very first day in Yangon we had 521,000 new [mobile] connections,” he said. “Its quite the logistical adventure.”

While the market is willing, innovation and development in the region still requires considerable guidance, according to Bouverot. “In the Asia Pacific only a third of people have access to mobile… There is a lot to do, and a lot for us to do as leaders.”

Image Credit: Shutterstock

Government Resources, Innovation & Security The Biggest Challenges To 5G Development: Huawei, Nokia CEO

Cate Cadell — Thu, 16 Jul 2015 02:47:02 +0000

A lack of government allocated spectrum resources and cross industry collaboration are some of the biggest challenges facing the development of 5G technologies within the next five years, according to the Deputy Chairman and Rotating CEO of Huawei, Ken Hu.

“The 5G future is bright, but there are a lot of challenges and therefore we need to make revolutionary innovations,” said Hu during a keynote at today’s Mobile World Congress in Shanghai. “We need cross-industry innovation… and we need to call on governments and regulators to allocate more spectrum resources.”

Earlier this week Huawei announced in a press release the launch of their involvement in the European 5G Public Private Partnership (5G-PPP) Project. Huawei is working on a handful of other 5G projects across Europe, the UK and in Asia. On the same day, Huawei sealed an MOU with the Maltese government to launch an R&D centre with the aim of testing 5G technology in Malta.

Nokia CEO & President Rajeev Suri, who spoke at the same event, also shared concerns about the development of the industry including security for 5G and IoT connected technologies. “I don’t think we as an industry are focussed on security as much as we should be,” said Suri. “Standardization issues, privacy and security, network security will be a big part of the challenge.”

Asian countries are among the leaders in implementing 5G technology. South Korea has committed to providing 5G services as soon as 2018 during the Winter Olympics, while Japan has made a similar commitment for the 2020 Summer Olympics. Initiatives from China have also signposted 2020 as the earliest date for 5G services, while providers including Huawei and ZTE aim to launch tests in the coming years.

While tests and initial services may be ready within the next five years, there is an industry consensus that wide-scale 5G services will take closer to a decade to develop. Currently, the industry focus is still on 4G technology, with China being the fastest growing market for 4G services.

Images: Huawei rotating CEO Ken Hu (Top) and Nokia CEO Rajeev Suri.

ZTE Releases First U.S.-Designed Flagship Phone With Input From Blackberry

Cate Cadell — Wed, 15 Jul 2015 05:13:08 +0000

Chinese telecommunications company ZTE has today released its first flagship mobile device designed for the U.S. market. The 5.5 inch ‘Axon’ is the latest product released by ZTE in an effort to push their brand abroad and specifically in the U.S. The company worked together with a Blackberry designteam to localize the project.

The Chinese company is attempting to tap into a higher end consumer pool, with the unlocked model retailing at $449.98. As the fourth-largest handset provider in terms of total shipments, ZTE is hoping to knock out LG to become the third-largest by 2020, following Apple and Samsung.

“The U.S. is the most important market for us right now,” said Adam Zeng CEO of ZTE Mobile Devices during a ZTE analyst conference on Monday.

“Consumers enjoy a higher standard in the U.S. than in China,” he added at a press conference earlier today, noting that the Axon is now the most expensive Chinese-branded handset available in the U.S. market.

The phone is compatible with AT&T as well as T-Mobile networks and features a high quality audio chipset and dual rear cameras that are capable of capturing 4K video.

Despite being designed for the U.S. market, the phone will also be released in China next week on the 21st. Zeng also revealed that the Axon would hit stores in Europe within the quarter.

ZTE officially launched an R&D team in Canada late 2014, and also have and R&D presence in California as well as other hubs in the U.S. The Blackberry design team introduced several elements including hardware, with antenna technologies being one of the major contributions from the Blackberry team according to ZTE.

While ZTE has been selling its mobile hardware under carrier brand names through white label agreements since the early 2000’s, they only began selling ZTE branded products in late 2009, and have since made a strong move to expand in the US. Over the past year they have extended their partnership with the NBA to now sponsor 3 teams, while they rebranded earlier this year for a more “youthful” look.

Zeng also noted that they would leverage their launch in the US to expand their presence in the other 13 core mobile markets they operate in. He also hopes the higher-end U.S. presence will boost their brand back home, claiming that “Chinese consumers are becoming more and more choosy, they are not just looking at the price, they are looking at the quality.”

Image: CEO of ZTE Mobile Devices Adam Zeng speaking to press this morning/ ZTE Axon

Didi-Kuaidi Confirms Record $2B USD Funding, And They’re Not Done Yet

Cate Cadell — Wed, 08 Jul 2015 04:13:46 +0000

Didi-Kuaidi, China’s largest taxi-hailing ride service, has announced a record breaking $2 billion USD in funding lead by Capital International Private Equity Fund and Ping An Ventures. Fittingly, the record outstrips the $1.2 billion D and E series funding records of Uber, Didi’s fastest growing foreign competitor in China.

Didi-Kuadi is now estimated at a value of $15 billion USD. Didi President Jean Liu has already indicated in an interview that the round will be open over the coming month, hoping to raise several hundred million more.

According to the company, this brings the company’s cash reserves to $3.5 billion. Earlier this week, Chinese media reported that the Didi-Kuaidi partnership would soon begin o explore the American market with a series of R&D centers, however the company refused to comment on the matter.

The announcement comes as Uber is looking to raise new funds for its China operation. The San Francisco-based ride-sharing app indicated in a statement to investors last month that China would be the focus of their expansion over the coming year, with a plan to invest over $1 billion USD in developing its operations.

Despite their comparatively large cash reserves, Didi and Kuaidi have been slower to monetize than Uber. As a mere taxi hailing service, the Chinese company did not see the early profits of the Uber model, and have only relatively recently begun premium and carpooling services to boost potential revenue and stave off competition.

Uber has been growing steadily in China, despite legal issues meaning their namesake Uber X ride-sharing service has been banned for now. The currently operate black taxi services and a not-for-profit carpooling service.

Image Credit: Shutterstock

Xiaomi Leaves Asia For The First Time With Brazil Launch

Cate Cadell — Thu, 02 Jul 2015 00:29:42 +0000

Chinese smartphone giant Xiaomi has clocked an all time first; selling its phones outside of Asia. The company officially opened its Xiaomi Brazil store on Tuesday, tapping one of the hottest mobile markets globally.

Xiaomi will be selling their Redmi 2, a model which has performed well in both China and surrounding markets. The company has already revealed that they will manufacture the phones in Brazil, which will also be their first manufacturing operation outside of China.

This could be due to the high import taxes on electronics in Brazil. Other foreign imports, including Apple products, sell in Brazil for up to double their home market RRP once taxes are added. For other Asian countries, Xiaomi has so far managed manufacturing in China, shipping out of ports in Hong Kong.

Earlier this year they were forced to take back a shipment of phones that were the centre of a copyright infringement suit with Ericsson. The case almost saw the Chinese company banned in India. Xiaomi was forced to exclude one of its processors in further sales, and is now relying on an alternate design that does not come under the Ericsson suit. After a short block on sales, the company was given permission by India’s High Court to continue selling the infringement-free products on the condition that the offending hardware be returned to China in its entirety.

Their trials in the Asian market will likely inform a smoother entry into Latin America, where global vice president Hugo Barra revealed that they will be taking a vasty different strategy in terms of logistics and distribution.

In an interview with CNBC’s ‘Squawk Alley’ he said that the “direct-selling model makes a huge difference considering how expensive the margins are if you sell through normal retail, which is typically how smartphones are traditionally sold in Brazil.“

“Brazil is, for us, a stepping stone into the rest of Latin America. We’re running Latin America from Brazil and, of course, we’re very focused, so we’re concentrating on Brazil before we go any further,” he said.

While they are yet to release plans to sell their smartphones in western markets, Xiaomi performed a soft entry this year with the launch of a US and European focussed store, which sells non-connected items such as branded headphones, battery packs and their fit band wearable. Other Chinese smartphone makers including LeTV have performed similar ‘soft launches,’ but for most, the headaches of the western market outweigh the benefits, while developing countries such as India and Brazil present easier targets.

Image Credit: Xiaomi

Alibaba, DMG Reveal Details Of China’s First Entertainment Bundling Deal

Cate Cadell — Wed, 01 Jul 2015 23:50:08 +0000

Alibaba Group now has another string in an impressive bow of media investments.

The e-retail giant struck a deal yesterday with Chinese film company DMG and Hunan TV to create a bundle subscription service that encompasses cable and mobile internet as well as gaming, filming and TV. It’s the first ever bundling deal of this sort available on the mainland.

While they have not released a timeframe, Alibaba revealed they will be integrating the service with the TMall e-commerce platform. They also note that the service will go through a pilot period in Hunan before being released China-wide.

The announcement comes a week after they revealed a sizable investment in Paramount’s Mission Impossible: Rogue Nation, the Chinese company’s first investment in a foreign film. Like the latest bundle deal with DMG and Hunan TV, Alibaba will leverage their TMall platform to sell tickets to the upcoming film as well as merchandise.

Alibaba Pictures, the official media arm of Alibaba group managing the recent entertainment expansion, was created in early 2014 when they acquired a controlling interest in Honk Kong-listed movie production company ChinaVision Media Group. Between January and April the company’s share price almost doubled.

A large part of this rise was a 37% leap made in April following the announcement that they would be injecting a substantial amount into the arm’s online ticketing service and investment platform. However it has since shrunk back from a high of $4.20 HKD to $3.01 HKD as of today.

The entertainment arm now has a slew of investments ranging from an 8.08% stake in Youku’s movie production company Huaiyi, to a partnership with Lionsgate, under which they have launched subscription streaming services in China for Hollywood blockbusters including Twilight and The Hunger Games.

The most recent partnership with DMG and Hunan TV will service an initial 6 million cable TV subscribers in Hunan, according to a filing made on the Shenzhen stock exchange where Hunan TV and DMG are listed.

Image credit: Shutterstock.com

No Tunes For The Mainland: China Left Out Of Apple Music

Cate Cadell — Wed, 01 Jul 2015 12:43:21 +0000

Apple has released iOS 8.4 with ‘Apple Music’, spurring global excitement over the new service. But one market won’t be celebrating, and it happens to be the second biggest consumer of Apple products: China.

People in 100 countries and territories were able to download the update last night, but China did not make the list despite early reports that they would. Meanwhile, both Hong Kong and Taiwan have made the cut for the first release.

The company didn’t explicitly reveal why the Middle Kingdom was not included, but it’s likely to do with the competitive nature of China’s existing streaming ecosystem. Dominant players Tencent and Baidu already feature strong streaming services, as well as many other smaller players.

The market is also notoriously for its piracy culture, making the monetization of music, film and tv challenging. It’s for these reasons that Apple Music competitors such as Spotify have stuck to surrounding markets including Hong Kong, Singapore and Malaysia.

Likewise, in 2012 Google shut down its China-exclusive music service after 3 years, citing poor performance in a company blog. “The influence of this product turned out to be lower than we expected, and as a result we decided to transfer our resources to other products instead,” said the company.

Aside from market competition, streaming services in Asia also have the tough job of adapting to regional music tastes where local players perform better. While Apple Music will not be a feature in the latest update for China users, it will likely seek out a solution to the issue in the future given the market potential of the country’s growing middle class. Early this year, iPhone sales outstripped local and international competitors to become the most popular smartphone in urban China.

Image Credit: Shutterstock.com

How To Sell Tea To China: A Lesson In Tech Entrepreneurialism

Cate Cadell — Mon, 29 Jun 2015 23:59:00 +0000

When the recession hit, Kaushal Dugar was a self-proclaimed ‘excel monkey’ working in a financial modeling job out of Singapore. He was very far from his roots; a multi-generational Indian tea merchant family.

“I’ve grown up with tea. My whole experience growing up was visiting tea gardens. I actually thought the people who worked there were magicians, because they have this ability to turn a leaf from a plant to something so amazingly tasteful when it’s produced in the right way.”

Kaushal had been overseas for years when the recession began to take its toll in Asia. But as the financial world was unravelling, his thoughts turned to entrepreneurialism, and how to revolutionize a centuries-old industry in a flailing economy.

“Even though tea is a 200 year old industry [in India], nothing has changed since the days of the British. Which kind of gave me an ‘aha’ moment,” he says.

“If nothing has changed then clearly this industry is ripe for disruption.”

Jumping forward six years,Kaushal is now the CEO of the world’s biggest online tea company. Teabox.com sells tea directly from the source to consumers in 75 countries, and Kaushal has a goal: to be the first billion dollar tea company. He’s now eying China, a market that is inextricably linked to tea consumption and already comfortably produces over 30% of the world’s tea.

It’s a radical shift from the ancestral model his father and grandfather followed, but according to Kaushal, cracking the tea market in China, and globally, is all about tech.

“Interestingly, we run less like a tea company, and more like a tech company that happens to be in the business of selling tea direct from source,” he says.

“Shipping to 75 countries is definitely very terrifying, it’s not easy because tea is a food product, but the way we’ve managed to do this is by not running it in an orthodox way, but really using technology as much as we can.”

Teabox.com has the most computer engineers of any tea company globally, and it is a big point of pride for Kaushal. “We have products managers, a VP of Engineering, software developers, we have quality assurance technicians and we have SEO guys,” he says. Teabox.com even has a dedicated developer team based out of Bangalore, one of the region’s biggest tech hubs.

While the staffing sounds complex, their goals are simple; recommend the right tea, and get it to the consumer as fast as possible. Much of their operation is about shaving days off delivery. “Reducing ten days to four days to maybe three days or so. That’s what we are doing with our technology team,” says Kaushal.

“Say if the tea is produced on Monday, it is in our climate controlled warehouse later that day or Tuesday morning. It goes through quality control and is vacuumed packed ready to ship at the earliest the very next day.”

The developer team’s other primary focus is predictive algorithms, which focus on recommending the right teas to the right consumers. It’s at this point that the combination of tech and traditional industry knowledge combine to push margins says Kaushal.

“Predictive algorithms help us figure out what teas are selling where. So for example in India you might like a black Darjeeling from this season, but someone else might like a Darjeeling black tea from the summer season.”

“Why you like those teas is very interesting, there are certain qualities about the taste on your palate that makes you like that tea. So figuring out what is liked by consumers is what we do, then working back to figure out which teas to sell.”

While the marriage of tech with two centuries of tea farming has been a relatively smooth process so far for Teabox.com, China poses an unprecedented challenge. Not only is the Chinese market firmly entwined with its own tea culture, it also has a relatively isolated e-retail ecosystem, making it a difficult market to crack for foreign enterprise.

Companies also have to migrate their advertising approach away from foreign social media platforms and search engines to adapt to the local market. And while shipping fresh produce to tier one cities in less than a week may be possible, it’s harder to guarantee outside of the major centers.

Despite the challenges, Kaushal believes it’s impossible to ignore China. Partly for the same reasons that Apple’s iPhone and luxury brands are flooding the market; China’s growing middle class.

“Just like the way people are happy to pay exorbitant amounts of money for a bottle of wine, people buy tea in China. Last year we sold a tea for about $3500 USD a kilogram.”

“And China, being one of the largest economies, has a huge growing disposable income. They have aspirational needs, they travel a lot. [Teabox.com] fits for those consumers who are looking to trade up or who are looking to splurge, who are willing to pay for a good lifestyle and are willing to pay for a good quality branded product.”

Their platform is currently enabled by Alipay, one of the leading payments providers, but according to the company there are many more to consider. They have a 100 person dedicated website for China, and they claim customers are growing 100 percent month over month.

“We are providing access for Chinese customers to the best tea available in India, and to customers anywhere in the world,” says Kaushal. “Technology really is the enabler allowing us to do all of that.”

Chinese Companies Smear Western Tech On Weibo: Uber, Apple

Cate Cadell — Mon, 29 Jun 2015 22:06:35 +0000

Uber is beginning to gain traction in China. A leaked memo from the company’s COO revealed last month that the Middle Kingdom will be Uber’s focus market over the coming years. After years of toe-dipping, it seems that the ride-share giant may finally have an inroad in the world’s largest economy.

So how does a competing local company with a medium-to-small market share attempt to nip Uber in the bud? Last week, one of China’s homegrown services released a particularly aggressive ad campaign to do just that.

Car service company Shenzhou gathered together ten high-profile celebrities and released a series of posters on their Weibo page with the slogan ‘Beat U: I’m Afraid Of The Black Car.’

The ads have a distinct PSA feel, and warn against illegal car services, calling on women to avoid the services for their own safety. Uber’s for-profit civilian ride-sharing model is banned nationwide in China, but they have adapted with low cost black car services and not-for-profit ride-sharing, both of which fall in a legal loophole.

The company apparently underestimated China’s netizens however, and in the past few days the company has received a digital lashing for scaremongering, while the celebrities have been attacked for being “money grubbing.” There was even a series of mock ads using the same template with the slogan ‘Beat Shenzhou.’

All in all, it was a swing and a miss for Shenzhou on the front of self-righteousness, but they did manage to occupy a viral corner of the Chinese web for a few days, which can’t hurt in a market as competitive as China.

And it’s not the first time this year that a Chinese company has shelled out major dollars to fund a smear campaign against a western company. In April, one of the country’s largest video streaming companies released a parody of Apple’s iconic 1984 ad as part of a promotion for its new smartphone, the ‘Le Superphone.’

LeTV’s high-budget parody of Apple’s iconic 1984 went viral just as the company hosted a US launch.

LeTV CEO Jia Yueting was criticized for posting a Hitler cartoon with an Apple sash on Weibo in April

Unlike Shenzhou’s PR blunder, the high-budget LeTV parody was a bit more tongue and cheek, pointing out the iPhone’s growing cult-following in China. Unfortunately, the company’s CEO also released an image on Weibo of a Hitler cartoon with a red Apple arm sash in the same week, which attracted widespread criticism.

Blunders aside, both the Shenzhou and LeTV campaigns point to the growing number of Chinese companies that are looking to push back against new western counterparts entering the market. For over a decade, Chinese censorship and rampant IP theft has kept Western companies wary, but as the market begins to modernize foreign players are finding new footholds.

However, while Uber and Apple have managed to make headway, it still remains a tough market to localize in. Linkedin, another successful entrant, is still ironing out issues on the mainland, despite entering several years ago. Last week, it released a China-exclusive app, Red Rabbit, it’s first dual-brand strategy in a foreign market. Banned services like Twitter, Facebook and Google are attempting back door acquisition by targeting companies who are trying to promote globally.

Both Shenzhou and LeTV’s campaigns also point out that there is a lot of maturing to do in China’s advertising market. Netizens are becoming increasingly critical of the scaremongering that is commonplace among some company strategies. Last week, Chinese internet giant Qihoo 360 was dragged through the mud by online consumers when they released a ‘pregnancy safe’ router. The company later acknowledged that they “were not scientists” and were unaware that WiFi routers are not harmful to unborn babies.

Image Credit: Shenzhou/LeTV/Weibo

Alibaba Joins Global Retail Leaders In Banning Confederate Flag

Cate Cadell — Wed, 24 Jun 2015 21:36:57 +0000

Alibaba has followed western internet giants Google, Amazon, Wal-mart, Sears and eBay by pulling products that feature the confederate flag from their retail platforms. The move follows the debate flaring in the US over the use of the flag following last week’s shooting at a black church in South Carolina which saw nine people killed.

While a most of Alibaba’s retail platforms are focussed on Chinese consumers, they also feature products made for distribution overseas.

“Alibaba Group prohibits listings of materials that are ethnically or racially offensive across its platforms. As such, we will be removing listings for flags, clothing and other memorabilia that display the Confederate flag imagery,” spokeswoman Rachel Chan told Reuters in an email.

While Alibaba platforms have historically been a hotbed for unapproved products, including fakes and forgeries, the company has become increasingly conscientious about the content of its retail platforms, especially since its US listing.

Part of the reason may be because of its renewed focus on attracting foreign brands and retailers onto its Ali-branded payment system Alipay. At the end of last year it launched a foreign direct purchase system allowing Chinese consumers to buy directly from some of America’s largest department stores including Nieman Marcus, Macy’s, Bloomingdales and Sak’s Fifth Avenue.

At the same time, it has made several new foreign investments across many verticals including retail, logistics and entertainment. This week Alibaba group announced they first investment in a foreign film, the next in the series of Paramount’s Mission Impossible series.

Alibaba also made modifications to its platform recently in the wake of a lawsuit put forward by luxury retail brand Kering, which oversees many high-end brands including Yves Saint Laurent. Its the second complaint from Kering over counterfeit products. Days after the allegations, Alibaba revealed an investment in Visualead, an Israeli company making dotless visual codes to combat counterfeit products.

Banning the confederate flag image is the latest evidence of Alibaba’s commitment to building a global strategic brand position.

Image credit: Alibaba

Linkedin Introduces Youth-Focussed App For China

Cate Cadell — Wed, 24 Jun 2015 20:56:58 +0000

Linkedin has released a professional networking app specifically aimed at China’s growing youth working class. According to the CEO, ‘Red Rabbit’ is designed to be an “interesting, young and fresh” adaption of the existing Linkedin network.

The dual brand strategy is apparently the first in Linkedin’s global operations and features a game-like UI which will be available across mobile and desktop platforms.

China’s advanced outlook on mobility and its growing IP sector has seen post-80’s and 90’s gen workers become a focus in many industries including technology and business.

Linkedin is unique among western tech companies in that it plays by the Chinese government’s expression laws, the same policies that saw Google, Youtube and Facebook ousted to the other side of the firewall. While the move drew widespread criticism worldwide, Linkedin has seen China become its fastest growing market as they tap into the booming industry of personal connections.

At the time, a Linkedin spokesperson was quoted as saying at the time that “we recognized when we launched that we would need to adhere to the requirements of the Chinese government in order to operate in China. So the decision to proceed in China was one that we weighed heavily.”

Linkedin’s model also made it a more attractive adapter than other western networking sites. Facebook, Youtube and Google have successful existing counterparts, however the nature of professional networking means that only a foreign networking site could offer access to connection from abroad. While there are many local counterparts, none have managed significant adaption rates outside of the Chinese community.

While suspect data use has foreigners wary about Linkedin’s operations in China, CEO Shen Bo Yang says data collection will continue to be an important part of the local strategy. “LinkedIn China team will continue its in-depth study of Chinese people’s social needs in the workplace as well as communication habits, characteristics of mobile use.”

The new app will allow existing Chinese linked users to import their contacts.

Image Credit: Red Rabbit (Linkedin)

Qihoo 360 CEO Zhou Hongyi Proposes $9B USD Privatisation Bid

Cate Cadell — Wed, 17 Jun 2015 23:50:43 +0000

Chinese internet company Qihoo 360 Technology Co. has received a buyout offer of $9 billion USD from a group that includes the company’s Chairman and CEO Zhou Hongyi, they revealed yesterday.

The company’s board of directors will form a separate committee to assess the deal, which proposes a buyout of $77 USD per American depositary share. The company’s shares have jumped 12.9% to $74.10 USD in New York after hours trading.

China’s fertile stock market has begun to beckon several U.S.-listed companies back to the mainland. According to data firm Dealogic, 11 Chinese companies listed in the U.S. have announced plans to delist, including giants such as Ctrip.com and waning social network Ren Ren. The announcement from Qihoo now brings that number to 12.

Stock indexes across China are uniformly up, with several over 50%, including the Shenzhen market which is fast becoming a hotbed for new and existing technology companies.

According to an internal email cited on Chinese media, Qihoo CEO Zhou Hongyi believes the company’s $8 billion USD capitalisation undervalues the company’s market potential. He is now hoping that privatisation will allow them to reassess the company’s position.

VC firm Sequoia Capital is among the consortium including Hongyi that plans to privatise the company. CITIC Securities and China Renaissance are also involved.

At the same time China’s State Council said it is looking into ways to facilitate movement between local tech companies and Chinese stock markets this Tuesday. They have also committed several billion in state money to boosting local innovation at national and city levels. This includes subsidies and free office spaces for tech companies in upcoming innovation hubs such as Shenzhen and Suzhou.

Image Credit: Qihoo 360

Cisco Will Work With Chinese Government To Invest $10B USD In Coming Years

Cate Cadell — Wed, 17 Jun 2015 22:20:59 +0000

US tech firm Cisco is planning to invest more than $10 billion USD in China-focussed partnerships and investment over the coming years. The company made the announcement this Wednesday as Chief Executive John Chambers visited Chinese Vice Premier Wang Yang. Chambers’ soon-to-be replacement Chuck Robbins also travelled to China as part of the trip.

The company has made it clear they will be working closely with the government following their political goodwill visit. They said in their statement that they will strive to support local innovation, one of the Chinese government’s recent policy hooks in technology.

Cisco also revealed they have signed a memorandum of understanding with China’s National Development and Reform Commission, aiming to also expand R&D, employment and equity investment.

CEO John Chambers recently said that “the rules of the road” have to be set for governments in relation to surveillance operations. Last year it was alleged by journalist Glen Greenwald that the NSA had targeted “load stations” to implant beacons and servers for surveillance activity.

at the time Chambers said in an open letter to Barack Obama that “we ship out products from locations inside, as well as outside the United states, and if these allegations are true, these actions will undermine confidence in our industry and the ability of technology companies to deliver products globally.”

Since the NSA revelations in 2013, the business ecosystem for technology giants in China has become prickly. Cisco’s sales in China fell almost 20% in the quarter ending this April compared to their earnings a year earlier. In 2013, the company saw a similar 18% quarterly earnings drop, at the time Chambers pointed to the “impact in China” of the NSA revelations as a key factor in the dip during an earnings call.

At the same time, China has been leaning toward increasingly protectionist tech policies at home. They recently made a push to convert their banking system to local technology suppliers by 2020, but later put the plan on hold amid fears it would cause weaknesses in the industry.

Earlier this month the company flattened out its management in China by getting rid of several executives. the company’s China-side reshuffle comes as company leadership is shifting globally. Cisco’s CEO John Chambers is expected to step down and hand the reins over to replacement Chuck Robbins in the next month.

Image Credit: Cisco CEO John Chambers, Shutterstock.

US Consul General Reiterates The Importance Of Legal Transparency In China Tech: TC Shanghai

Cate Cadell — Mon, 08 Jun 2015 03:34:40 +0000

The Consul General of the United States in Shanghai, Hanscom Smith, has emphasized the importance of openness and legal transparency in developing local innovation during his keynote at TechCrunch Shanghai. He made the comments in response to questions about the legal ecosystem for tech in China.

He also noted that the strong IP protection laws were paramount to supporting innovation, as well as legal predictability, saying that such laws are vital for creating innovation hubs.

“The US is a leader in IP law, and if you have a strong IP foundation… then you’re gong to help the infrastructure that supports innovation,” said Smith. “Openness to foreign investment, transparency, predictability and rule of law are important foundations.”

He also pointed to Silicon Valley’s embrace of risk as an important factor in the development of their innovation culture. “In America there is much less stigma to risk, failure is an accepted part of the process. In Silicon Valley, having failures is a badge of pride.”

Smith also mentioned there had been a mass of visa requests for the new 10-year China-US visas, which were introduced late last year. “We’ve seen an explosion in visa demands, about 1.8 million in Shanghai alone.” The visas were introduced to make travel easier for cross-border business ventures across all industries.

The US has been adding an increasing number of incentives aimed at promoting the China-US tech trade relationship. They have also introduced programs aimed at attracting American students to study in China, which Smith also mentioned during his talk.

Despite being periodically compared to Silicon Valley, China’s tech hubs still suffer from a perceived lack of innovative drive as well as poor IP protection.

Image Source: TechCrunch Shanghai 2015

India High Court Permits Xiaomi To Send 100K Handsets Home Following Ericsson-Led Infringement Suit

Cate Cadell — Tue, 02 Jun 2015 13:25:24 +0000

Xiaomi has been given permission to bring 100,000 Redmi Note 3G handsets back to Honk Kong from India in the wake of an infringement dispute with Swedish telecoms giant Ericsson. The New Delhi High Court handed down the decision today, over five months after the phones were banned in India.

The handsets have been stuck in limbo since Ericsson lodged a case on December 8th of last year claiming that Xiaomi had violated hardware infringement laws. Ericsson has agreed to the latest decision, which requires Xiaomi to keep a strict inventory of the phones as they make arrangements for them to be returned to Hong Kong.

While Xiaomi has managed to launch other handsets in India since the initial ban, the Redmi Note 3G Handsets have been gathering dust in a holding facility owned by e-commerce retail platform Flipkart, who are the designated retail partner for the Redmi Note 3G in India, as well as other Xiaomi products.

Xiaomi’s Mediatek processor is the hardware component at the heart of Ericsson’s infringement claim. The Chinese handset maker has been forbidden to retail its Mediatek-powered handsets since December 2014, along with any manufacturing, advertisement and import procedures related to the allegedly infringed technology.

The Delhi High Court partially lifted a total ban on Xiaomi products just eight days after the complaint was brought forward by Ericsson. Under a ‘pro tem’ order Xiaomi has since been able to launch products that do not contain the Mediatek processor.

The Xiaomi Mi 4i, which is the Chinese hardware giant’s 5-inch HD model, was launched at a premiere event in New Delhi on the 23rd of April, attended by Xiaomi founder Lei Jun and VP of Xiaomi Global Hugo Barra. The latest model runs on a Octa-Core Snapdragon processor, which is permitted under the pro tem agreement with the New Delhi High Court. The phone, which is priced at $385 US, reportedly sold out within 15 seconds after over 300,000 customers had pre-registered for its launch.

According to CEO Lei Jun, India is currently the most important market in the company’s expansion plan. In an interview with the Economic Times just days after the India launch of the Mi 4, he claimed to be “fairly confident” that Xiaomi will be the number one smartphone maker in India within three to five years.

Two days ago Xiaomi also launched its 16,000mAh and 5,000mAh power banks, another of its popular market-entry products. The company recently opened a US & EU online store, which sells Xiaomi’s fitness tracker and headphones along with the power banks. The company has not yet revealed concrete plans to extend its smartphones and tablets into western markets.

Image Source: Xiaomi

What Does It Take To Be An ‘Expat-preneur’ in China? Let’s Just Ask Them

Cate Cadell — Tue, 26 May 2015 11:51:31 +0000

This is the first post in our series: Say Hello To China’s Expat-preneurs, where we will talk to a mix of foreign founders who have tackled China’s growing tech space and won. Stay tuned over the coming three weeks as we talk to foreign founders from Beijing to Shenzhen about what it takes to thrive in China. You can follow our updates at @technodechina, or check back here for new stories in the series.

Moving to China is a daunting project for anyone, but moving to China to grow a business from seed to superpower is a whole new level of terrifying. So why do foreigners leave home, learn one of the world’s most mind-bending languages, and brave the smog and paperwork of China’s entrepreneur scene?

Over the next three weeks, Technode will be asking a spread of successful foreign entrepreneurs exactly that.

The term ‘Expat-preneur’, coined by Yvonne McNulty, has become a loose moniker for those people crazy (or brilliant) enough to pack their bags and look for a new base of operations abroad. Connectivity has changed the way we think about our borders, and an increasing number of entrepreneurs are heading to China, seeking to disrupt virtually every step of tech production as we know it. Gone are the days when we scratched out designs in our own backyard, sent them off into the unknown abyss of China’s manufacturing hubs, and forgot about it until the finished product arrived on our doorstop in a box full of foam pellets.

From localizing innovation to shortening distribution channels, China-side tech is becoming an increasingly attractive business option for foreigners, especially in hardware. Innovators are making the decision to head to the mainland to either increase supply-chain efficiency, or to edge into the Chinese consumer market itself.

The process is far from simple. As many optimistic go-getters soon learn, it’s a mean myth that you can log onto Alibaba and within 30-days be shipping a polished, world-class tech product across the globe (but by all means, take that as a challenge). And even for those who’ve taken the time to set down roots, breaking through the expat barrier and understanding a business ecosystem as complex and well-established as China’s is challenging.

While a handful of the country’s cities have been offered the title of ‘China’s Silicon Valley,’ it’s a poor categorization for a market that is unlikely to ever mimic America’s tech trends. According to Cyril Ebersweiler, founder of Shenzhen-San Francisco accelerator HAXLR8R, recognizing China’s unique offering is key for those looking to head east.

“You can’t replicate the Silicon Valley and it was a mistake trying to do so in the past few years,” Cyril told Technode. “Instead we should all focus on creating new kinds of ecosystems. In Shenzhen we are working toward making the city a place where starting hardware startups is easier and more flexible.”

China’s tech scene is in many ways an ecosystem of contrasts. It’s a market that has largely bypassed desktop computing, meaning that in 2015 there is a significant chunk of China’s population who experience exclusively mobile internet. Despite a sluggish start for local innovation, e-commerce functionality has arguably surpassed America in a big way. And while Xiaomi is taking the market by storm with incredibly affordable smartphones, the iPhone is taking a near-equal share with a completely contradictory model.

If China’s unpredictable appetite isn’t already sufficiently challenging for foreign founders, the tech landscape is also changing incredibly quickly. Remember a time when you’d never heard of Xiaomi and Weibo was the lone-wolf of China social media? Probably, because it was barely 24 months ago.

The pace of China’s tech industry is one reason why foreigners set up camp locally, it’s virtually impossible to stay ahead of any market if you’re not immersed. Conversely, it’s easy to shy away for exactly the same reason. Tenacious competition and copycats have a history of scaring early-stage startups offshore. It’s a phenomenon that many groups, including the Chinese government and their budget, are now working hard to reconcile.

Incentives including free office space, economic subsidies, international incubators and special trade zones have been popping up in China like neon arrows pointing toward a casino floor. And though the barriers are still significant, it’s becoming less of a gamble bring business China-side.

In that spirit, we at Technode have scraped together a selection of our favorite foreign founders for a series of interviews looking at what it’s like to set up shop as an expat-preneur in China’s tech scene. You can check back here to see the stories unfold, or follow us @technodechina.

Feel free to reach out @catecadell for feedback or to suggest a great China expat-preneur story. You can also follow our contributing reporters @evayooare and @emmalee12345 for updates.

In our next post, Eva Yoo will kick off our series with the Top Three Musts For Foreign Founders In China, as decided by our expat-preneurs.

Image: Shutterstock.com

Xiaomi Opens US, Europe Stores: Product Reviews From China Netizens

Cate Cadell — Tue, 19 May 2015 02:08:31 +0000

Xiaomi has just launched its beta US/Europe store, and appears to have already sold out. The store offered four of its most popular products in a push toward the western market. It’s is a soft entry for the company which hopes to add its phones and tablets to the same store once patent issues are resolved.

Despite their impressive rise to prominence, Xiaomi’s global expansion has come up against some significant setbacks. Late last year the Chinese giant was banned from selling its smartphones in India after Swedish-based Ericsson entered a patent infringement suit against their smartphones. Xiaomi has since successfully launched their phones and accessories in India, and is now the fifth-biggest smartphone vendor in the country.

Xiaomi co-founder Lin Bin has previously said that while intellectual property issues were one factor in their global strategy, it was not their biggest concern.

He also noted that Xiaomi is an internet company, and that it would continue to expand into areas outside of smartphones. Last week the company revealed that it had launched a money-market fund, Huoqibao, extending further into financial services.

Mi Products You Can Find in the US, Europe Store

The store launched with four of the company’s most sturdy products, including the Mi semi-open Headphones, their Mi Band activity and sleep tracker, and two sizes of portable Mi Power Banks (5000mAh and 10400mAh).

While Xiaomi’s branding periodically comes under fire for being too similar to Apple, their products have been met with generally positive reviews at home. They are quickly growing a reputation for offering premium versions of China’s cheap market favorites, including everything from air purifiers to Smart TVs.

Xiaomi seems to be taking a lean approach to its market exit strategy, only offering its smallest consumer gadgets to the west at this point. So here’s the rundown from the Chinese internet on the Xiaomi products you can pick up in the US and Europe as of today.

Mi Headphones

While Xiaomi’s headphones will be retailing in the foreign market for a meek $79.99 USD, back home they’re seen as a more premium offering at 500 yuan.

In numerous reviews, Chinese netizens even mention that the headphones are almost uncomfortably heavy given that they are made from more sturdy materials than their market competitors.

Reviewers also noted that the earphones struggled with low frequency sounds which is to be expected in such a cheap headphone. Despite this, it has been compared in quality to the Sennheiser HD 25-SP II, which retails for just under twice the price of the Mi Headphone.

Interestingly, a recurring theme in Chinese reviews of the Mi Headphones is the fact that their lower-premium pricing has sparked a new interest in sound quality for headphones coming out of China, meaning that buyers at home could become increasing more discerning. As one popular tech reviewer writes on Baidu-affiliated news site Hexun.com:

“I can’t really say it at this point, but I think Mi Headphone sales will certainly do well. It has definitely made more people interested in good sound quality for the entire headset industry, this is a good thing, kids”

Mi Power Bank

As for Xiaomi’s Power Banks, the reception in the Chinese market has been overwhelmingly positive, despite the availability of many low-cost options on China’s various e-commerce platforms. They’ve performed well enough that we are already seeing some copies on the streets, even though that the have an equivalent retail value of just $10-14 USD.

The big flaw that reviewers point out is the fact that Xiaomi’s push into high-capacity power banks – with the recent release of their 10400mAH model – has given rise to a frustrating design flaw; they take a long time to charge themselves. According to user reviews, the average time to charge Xiaomi’s biggest pack, the 10400mAh, is between 6-7 hours.

On the positive side, the Xiaomi offerings are generally seen as a much safer option than other banks available when it comes to accidentally frying your devices. As part of their brand-expansion effort, Xiaomi has noted in their english store how many times the banks can fully charge various Xiaomi phones, despite the fact that the phones are not yet available.

Mi Band

The Mi Band features all of the expected features from health-tracker wearables today. Bluetooth capabilities, call alerts, sleep tracking and fitness tracking. The device itself is pleasantly minimal and the app is slick and easy to use.

This year netizens were surprised that Xiaomi, which is built on Android, had chosen to go for a dual iOS/Android approach to the Mi Band app. Though considering they are expanding overseas ahead of their smartphone counterparts, the Mi Band definitely benefits form its dual capabilities. Not to mention the fact that the iPhone is going head to head with Xiaomi in their home market.

After trying the band itself, I’d say it’s comparable in most functions to the first generation fitness trackers from the west. Chinese reviewers note that the data requirements when connected with bluetooth put a strain on most smartphones, and that constantly running the GPS capabilities has a toll on the battery life of even the best smartphones, much like existing trackers. While a comparison we ran between the Mi Band and a leading foreign brand showed an 800 step discrepancy, the consensus is that the price makes up for all flaws in the eyes of the consumer at just $14.99 USD.

As Xiaomi’s global expansion continues, it’s likely they will release more consumer goods in the US and Europe before they take the leap with their smartphones and tablets. On top of potential patent woes, the US is becoming a more marginal market for Chinese smartphone makers, who are seeing an increased uptake in South East Asian consumers as well as India.

In a recent interview with the BBC, Huawei chief executive Guo Ping said that their ban in the US market was “not very important.” As the world’s largest telecommunications equipment firm, Huawei and ZTE were blocked from the US market in 2013 over security concerns.

Image source: http://www.mi.com/en/index.html

Alibaba Teams Up with Visualead To Combat Counterfeit With ‘New Standard’ Of Visual Codes

Cate Cadell — Mon, 18 May 2015 09:00:34 +0000

Alibaba has teamed up with Israeli-based QR technology company Visualead to release a “new standard” of dotless visual codes for packaging, aiming to crack down on counterfeit products, said Visualead today.

The announcement comes three days after luxury goods company Kering Group submitted its second lawsuit against Alibaba, claiming that the e-commerce giant was not doing enough to stop the sale of counterfeit products on its platform. Visualead currently works with Kering subsidiary Yves Saint Laurent in China, as well as YSL licence-partner L’Oreal.

Visualead-partner brands including L’Oreal and Ferrero Rocher are already being sold in China with the new codes on their packaging as part of Alibaba’s new Blue Star platform, which focuses on product engagement and anti-counterfeiting.

“Each product carries a uniques dotless code, and when consumers see this code they will get immediate feedback on whether the product was fake,” Oded Israeli, VP of Marketing at Visualead, told Technode.

“They are much more visual appealing, they have about 90% of their surface as a graphic or image. More importantly is that they are more secure, so that these codes can not be forged.”

The codes will eventually be used across several of Alibaba’s platforms, targeting O2O services with secure scanner technology that is already integrated into the Taobao platform. Alibaba will also allow brands to incentivize users who scan the codes, offering discounts, memberships and reward programs.

The new partnership is one of several projects Alibaba is working on in a bid to stop counterfeit products being sold on its various platforms. In a scathing Chinese government report released earlier this year, Alibaba was criticized for being too passive in the fight against grey-market goods, as well as bribery and other illegal activity on its platforms.

Alibaba denied the recent claims by Kering, saying that it is working hard to tackle the problem, and that “unfortunately, Kering Group has chosen the path of wasteful litigation instead of the path of constructive co-operation.”

Kering filed a similar suit against Alibaba in July last year, but later withdrew it, saying that they would be working together with Alibaba in the future to address the issue.

Visualead partnered with Alibaba earlier this year with an investment of between 5-10 million USD, following a successful 1.6 million USD A series led by Kaedan Capital and Entrée Capital. The company entered the Chinese market 18 months ago after their win at the 2013 Beijing Global Mobile Internet Conference (GMIC) competition.

“We are very fortunate to have Alibaba on our side to really push the standard of dotless visual codes in China and later globally,” said Oded. “Tencent and Wechat were the main content driving QR codes in China, Alibaba should be the main force that pushes the dotless codes.”

Their new technology surpasses previous QR and visual QR technology, making the codes almost indistinguishable from regular images or graphics. The adoption of QR codes has been exceptionally high in China due to their use on social messaging platforms as well as other in-app e-commerce services.

Image Credit: Israeli-based Visualead following their win at GMIC Beijing 2013.

Alibaba Takes On 9.2% Stake of U.S. Retailer Zulily As The Flash Sale Model Slumps Globally

Cate Cadell — Tue, 12 May 2015 03:00:38 +0000

In the past 10 days, e-retailer Zulily’s share price took a rollercoaster ride from a 16% dip following last week’s Q1 report, to an 18% surge in the wake of a $56 million dollar investment from Alibaba Group.

While similar flash sale sites in China including VIPshop are experiencing steady gains, the model has proved to be less viable overseas, where companies have experienced rapid, unsustainable growth followed by a drop in revenue.

In Zulily’s recent earnings report it was revealed that the company’s growth has decelerating after revenue fell below the predicted analysis consensus of 314 million USD. The slow down was attributed to first-time customers failing to return to the site, despite active customers growing to 5 million in the same period.

Whether Alibaba has plans to integrate Zulily’s operations into the Chinese market is unclear, however the flash sale e-retail model has been shown to perform better in China that western countries due to their proximity to local manufacturing.

China’s Advantage in the Flash Sale Market

The e-retail site is one of the last western flash sale giants after the flash sale model spiked in popularity around 2012 before slumping just two years later. Despite a 1 billion USD valuation, flash sale site Fab sold for a disappointing 15 million, while there are rumblings that eBay affiliate Rue La La may be sold to Gilt Group, one of the few remaining big names in western flash sales.

Xiaoher, market newcomer and Chinese counterpart to Zulily, gained momentum locally last year after completing a 10 million USD A series a funding. In an interview with Technode at the time, CEO Michelle Meng said that the site’s popularity was due to the fact that they did not have to expand into in-house production because their proximity to manufacturers gave them a strategic advantage.

China’s largest online apparel discounter VIPshop hit a 52-week high in April this year as Chinese internet stocks rallied, and the company saw its stock rise strongly throughout 2014 following a 75% equity acquisition of cosmetics retailer Lefeng.com. Their mobile-driven model and short distribution chain has seen them become the market leader in China.

Alibaba’s Move Into Apparel E-retail Abroad

At the end of last year Alibaba made moves into the foreign fashion and consumer retail market by offering a ‘foreign direct purchase’ ePass service through Alipay for some of America’s largest department stores and fashion brands including Neiman Marcus, Macy’s, Bloomingdales and Sak’s Fifth Avenue. The company had previously opened similar partnerships with Ann Taylor and Aeropostale, making it easier for Chinese consumers to shop foreign without using intermediaries.

In February last year, two wholly owned American subsidiaries of Alibaba, Vendio and Auctiva, joined forces to launch a boutique fashion, jewelry and tech brand called 11 Main. The Alibaba expansion into foreign retail also includes investments in U.S. sports retailers Fanatics, e-commerce platform ShopRunner and a 15 million USD investment in luxury e-retailer 1stdibs.

Despite a hiring freeze and a new CEO, Alibaba appears to be moving ahead with a series of investments across multiple industries. At the time of the hiring freeze, Chairman Jack Ma revealed that he would be consolidating the business into seven segments, e-commerce, Ant Financial, Cainiao logistics, big data and cloud computing, advertising, trade and other internet services.

Image source: Zulily.com & Vipshop’s, Eric Shen, Co-Founder and CEO rings the opening bell at the New York Stock Exchange (Photo by Ben Hider/NYSE Euronext).

You Can’t Afford To Ignore The Chinese Market: Smaato CEO Ragnar Kruse On Ad Tech

Cate Cadell — Thu, 07 May 2015 16:00:19 +0000

There are approximately 500 million smartphone users in China. Last year those users downloaded close to 185 billion apps, which is about seven times more per user than in the US. Smartphone penetration is currently at 2.3 billion users globally, with China representing approximately 22% and climbing fast.

It’s no secret that putting ads in apps for China is a big business. Earlier this year internet giant Alibaba announced it had bought a majority stake in the country’s largest independent digital ad platform, AdChina, pairing it with marketing unit Alimama and their cloud computing sector Aliyun. At the same time other local players like Avazu Mobile and Mobvista are looking to consolidate in China as well as abroad.

But how do foreign ad exchange platforms go about entering a market which is already seeing huge local growth? The secret may lie in targeting the country’s huge companies, not their consumers.

While the internal market might be getting tougher, CEO of German-founded Smaato, Ragnar Kruse, believes it’s a good time to be working with Chinese brands that are expanding outward. As one of the world’s leading real-time bidding and supply side platforms (SSP) for mobile advertising, Smaato has recently turned its sights to companies exiting China who struggle to break into surrounding markets.

“We have already been doing business with big brands who want to go outside the country,” Ragnar told Technode. “When you rely on advertising for monetization, you need to figure out how to get those ads into your apps. Selling directly to an advertiser doesn’t exactly work, since [Chinese publishers] don’t have those partnerships abroad.”

Smaato already works with several Chinese companies including Chinese mobile internet company Cheetah Mobile. They’ve also begun working with around 20 demand-side platforms (DSPs) and ad networks within the country.

Cross-border mobile advertising is becoming easier with the growth of the programmatic ad buying, which allows software to automate the buying and selling process of mobile ads on a large scale. Ragnar believes this could also help app developers and publishers overcome barriers in their home markets.

“The nice thing about this whole app ecosystem is that it has become a massive global market… in Europe you always find a certain resentment against some things, and the consumers are a bit picky. But because it’s a global market you can easily find a different market where there are customers. So naturally many companies are moving into China.”

Smaato has an existing Asia presence in Singapore and Jakarta, along with operations in San francisco and New York. The 10-year-old company launched a new platform in January, merging together several services to create a single dynamic demand service that is designed to increase efficiency and give publishers more control. The company claims to have 5000 users already using their new platform, including a series of Chinese companies that are in the process of trialling it.

The company hasn’t given indication on who they may be partnering with for their official entry into China, though according to Ragnar they hope to open a local base within the next few months. “We will now make an effort to set up shop here in China. We already have hundreds of apps we are working with here in China and helping them monetize outside of the country.”

Image Source: Shutterstock

Alibaba Welcomes New CEO, Reports 45% Revenue Growth

Cate Cadell — Thu, 07 May 2015 14:08:26 +0000

Alibaba has just ushered in its second CEO since Jack Ma stepped down exactly two years ago. Former Chief Operating Officer Daniel Zheng will take over from Jonathan Lu, who will remain on the board of directors of Alibaba Group as Vice Chairman according to a statement from the company.

At the same time, the company announced a 45% year-over-year revenue rise in its March quarter earnings report, exceeding expectations. Like other Chinese internet giants, mobile was a strong point, with a 352% increase in mobile driven e-commerce retail revenue compared to the same period in 2014.

The announcement comes barely a week after Jack Ma announced to staff that Alibaba would be freezing new hires for the rest of the year because the company was growing “too quickly.” Whether the CEO reassignment has anything to do with Ma’s efficiency woes is unclear. However, onlookers were quick to jump to conclusions last week, assuming the freeze would precede a poor earnings report.

New CEO Daniel Zheng came on board as Chief Financial Officer of the Taobao Marketplace in 2007, and was later promoted to CEO of the Marketplace and Tmall services.

Ma did not give a reason for the shift in high-level management, but noted that former CEO Jonathan Lu would be taking on a sudo-training role. While Ma has been vocal in the past about promoting younger leadership, Daniel Zheng is just two years younger than his 45-year-old predecessor.

“Daniel is a proven international business leader and innovator with a strong track record of delivering results,” said Jack Ma. “I look forward to [former CEO Jonathan Lu’s] continued contribution as a key leader in helping Alibaba Group train and develop the next generation of leaders.”

In 2013 when Ma handed his role to Lu, he noted that “the internet is a place for young people, this year, most of the leaders at Alibaba born in the 1960’s will exit management roles to lead… we believe they know what’s ahead better than we do.”

The company has recently invested in a spate of new projects, including civil projects, banking & credit, hospitals, transport, consumer tech and offline to offline (O2O) services. Like other internet giants in the Chinese market, the company has been quick to diversify into virtually every investment vertical in the market.

While the strategy has proved successful so far for a range of Chinese tech titans, the rapid expansion has obviously put a strain on the company’s operations. Ma and Zheng will be looking to consolidate Alibaba’s core sectors in the coming quarter.

DJI Quadcopters And A New Breed Of Dominant Chinese Brands

Cate Cadell — Mon, 04 May 2015 02:26:12 +0000

China sets out the be the best at a lot of things. In tech, it’s been a hit and miss process.

From chip technology to operating systems, the country can’t move fast enough in its bid to bring innovation home and send their products global. It’s been a rough ride though. Both the hardware and software industries have been pigeonholed as copycats of their foreign counterparts. On top of that, the country’s internet giants have put their foot down in virtually every tech vertical available, suffocating areas of the ecosystem for new players.

For drone company DJI however, they’ve achieved the one thing that most China tech can only dream of at this point. They are the quality leader in their field, not just for China, but the world.

Last week at Global Mobile Internet Conference (GMIC) in China, we saw the newly released Phantom 3 and Inspire 1 quadcopter models up close. By far one of the most popular exhibits on the exhibition floor, the drone demos attracted a sizable crowd of onlookers.

CEO Frank Wang is a self-confessed fan of Steve Job’s leadership, saying in the past that he styles his ‘aggressive’ management strategy on the late icon’s reputation. In an interview with the WSJ last year, he noted that “Chinese companies now are getting better; before, they lagged behind… more Chinese companies will go global and their image will gradually change.”

Image could well be another Jobs-inspired feature of DJI, with the latest DJI drones taking on an eerily similar minimalist white in their branding approach. In fact, the entire company seems distinctly foreign compared to its local counterparts, which could explain the company’s global success.

Despite their growth overseas, DJI is still yet to match the market share stats back home, but it’s high on the Shenzhen-based company’s agenda. This Wednesday, they formally launched a marketing and publishing partnership with Chinese streaming service Youku Tudou.

“This new partnership with DJI fits perfectly into Youku Tudou’s rapid advancement of its multi-screen media and entertainment ecosystem,” said Jerry Li, Youku Tudou’s Senior VP. Li also mentioned that part of their strategy would involve “building communities” using the new platform. The hope is that the partnership will give DJI a home-base in video publishing and marketing, with a view to engage consumers in its own territory.

As their quad copters continue to top reviews word wide, DJI form an interesting case study as global leaders in their field. The country continues to pour literal billions into kickstarting local innovation, and it’s likely we’ll see more of this new breed of globally-dominant Chinese technology companies.

Images: Onlookers at the Global Mobile Internet Conference (GWIC) held last week in Beijing. DJI showcased the Inspire 1 professional quadcopter and its high-end consumer drone the Phantom 3.

Group photo from the DJI/Youku Tudou partnership launch last Wednesday.

Mobile Search Engine Traffic Will Surpass PC in 2015: Sogou

Cate Cadell — Tue, 28 Apr 2015 00:23:16 +0000

2015 is the year that Chinese search engine Sogou expects mobile search traffic to finally outstrip PC.

At the close of this quarter’s earnings report, Sogou CEO Xiaochuan Wang claimed the company’s partnership with Tencent’s WeChat had seen their aggregate search traffic rise over 60%, while mobile traffic jumped 130%.

“It’s expected that mobile search traffic will surpass PC traffic at some point of 2015,” said Wang. “Our in-depth cooperation with Tencent, in particular with Weixin, has brought unique capabilities to our mobile search and further enhanced our competitiveness.”

In February this year Chinese search giant and market front-runner, Baidu, reported that their 47.5% rise in quarterly revenue was mobile driven, with mobile revenue up 36% in Q3.

China’s second largest search engine, Qihoo-backed ‘Haosou’ rebranded earlier this year [from 360] to launch a in independent search brand that is better equipped for China’s mobile market. like Baidu and Sogou, the company’s third quarter earnings showed that mobile was the key force behind their expansion, with a 59.9% growth-spurt since the same period the preceding year.

China is a country that has adopted mobile like no other, largely bypassing trends in desktop computing in favor for an increasingly large pool of local and international smartphone offerings.

In 2012, mobile gamers outstripped PC players in China. In July last year, the China Internet Network Information Centre (CNNIC) reported that 527 million people, or 83% of the country’s internet users, were accessing the internet via mobile. This bypassed the 81% that used desktops, meaning that there is a growing number of people in China who experience a totally mobile computing and internet experience.

A torrent of options in highly functional smartphones offer many Chinese people a cheap alternative to desktop computing. At the same time, an industry focus on developing mobile platforms for gaming, shopping, finance and social has seen the development of a rich, unparalleled mobile ecosystem in China.

Aside form their gains in mobile search, Sohu’s strong areas in their Q4 report were gaming and video media. Despite reaching profitability year over year, their quarterly report showed static and negative growth quarter over quarter. Over all areas of the business, they showed a 5% QOQ loss in total revenues with a 25% YOY gain.

Image Source: Shutterstock.com

Alibaba Affiliate’s ‘Future Hospitals’ Can Access Chinese Medical Data

Cate Cadell — Fri, 24 Apr 2015 03:45:20 +0000

The Alipay ‘Future Hospital’ program marked a milestone this week by opening in its 20th province, Shaanxi, according to parent company Ant Financial. The program is now in use at a total of 63 hospitals, and the company claims up to 5 million individual patients currently use the service.

The program was launched in May last year, and aims to act as a liaison between consumers and hospitals on a wide scale. Patients can link their Alipay account to the hospital’s service, allowing them to register online, pick up medical reports and of course pay using their Alipay wallet.

Chinese hospitals are notoriously inefficient when it comes to queues and wait times, especially in a second or third tier city like Xi’an where the latest partner hospital, Xi’an Jiaotong University Hospital, is based. According to the company, the future hospital program is designed to combat efficiency issues that plague the hospitals. Currently the program is only in place where hospitals are able to fund it themselves.

Ant Financial and other Alibaba affiliates have extended into a diverse range of public consumer services over the past 18 months. In September last year, the payment arm was granted approval from Chinese authorities to establish a privately owned bank. Earlier this month Alibaba also announced a partnership with one of China’s most prestigious Universities, Peking University, to launch open online courses.

While Alibaba (as well as competing private tech giants) seem to be patching up holes in public services with positive e-commerce solutions, it does raise concerns about private data collection in China, where public services have been relatively slow to digitize their databases.

The ‘Future Hospital’ program goals include the ability to “check medical reports online, and see relevant treatment information.” This could represent one of the first cross-hospital consolidated patient databases in many Chinese provinces. The private ownership of the database in concerning considering that there are still high levels of discrimination against disabled and mentally ill people in China.

Despite this, Chinese hospital services are in dire need of digital services to curb issues in efficiency. Currently, controlled medications require a national ID or a passport, though many of these records are not digitized.

The Future Hospitals program is running in most of China’s largest cities, including Beijing, Shanghai, Guangzhou and Zhejiang. Next month the program will celebrate its anniversary, however there has not yet been feedback on the program from the hospitals, other than the adoption rate. The move to Xi’an marks the program’s planned expansion into China’s north west region.

In other Alibaba health news, Alibaba Group announced last week that it has agreed to transfer the operations of Tmall online pharmacy business to Alibaba Health Information Technology.

Image Source: Shutterstock.com

How Advertising Constraints Sent The Condom Digital in China: Durex

Cate Cadell — Wed, 22 Apr 2015 09:38:18 +0000

Durex is partnering with Beijing-based incubator TechHive this Friday to launch one of the most left field startup challenges we’ve come across in China so far; sexual wellbeing. The challenge is an open invite to any startup that fits the theme, and will be held over an intensive 54 hour weekend.

The incubator is the latest in a diverse series of brand outreach activities by UK-based Durex. In the past year parent company Reckitt Benckiser Group (RBG) has worked with content partners in China to produce over 3000 pieces of individual content, but according to their Beijing office virtually none of that is direct advertising.

So what do Weibo-supported, love toy hitchhikers, personalized condom boxes and sex-themed startups have in common? They are all part of Durex’s embrace of the digital community in a bid to share their brand with a country that prohibits ‘obscene’ advertising.

“For Durex, this is the one market where we can’t really advertise,” Aditya Sehgal, Regional Director for North Asia at Reckitt Benckiser, told Technode. “Our hands are tied, we are constrained in ways that we are not constrained in other markets. We’ve had to be creative.”

China is the fastest growing consumer of Durex products, and their biggest online market. While the company’s online global sales are currently just upward of 20%, Aditya believes the future of Durex in China is more than 50% online.

Durex allows Chinese customers to personalize their own condom packaging before shipping. Source: Durex, Weibo

Low Market Adoption of Condoms

Despite being the company’s biggest market, the current penetration rate of their condom products in China [pun intended] is one of the lowest of all Durex markets.

China is the world leader in modern birth control methods, due in part to their one child policy, however condoms still only have approximately a 10% adoption rate countrywide.

Giving Away The Durex Brand

According to Durex the untapped market has made China the perfect place for innovation, especially digital.

“China is really one of our pioneering markets,” says Aditya, “That’s because China is very much an outlier market in terms of innovation in e-commerce, digital and social. In my view, even ahead of the US.”

“I don’t think we are as focussed on the product benefits in China as in other places. We are more focussed on the broad idea of the brand.” According to Aditya, Durex China acts more like a curator of their brand’s image, rather than the owner.

The company first launched sex toys online in China, making it the worldwide debut marketplace for Durex toys. By way of promotion, the company gave a winning couple a bag of sex toys in liu of money and had them hitchhike from Beijing to Shanghai then Shangrila bartering toys to make their way. The couple were permitted to receive help from their official Weibo following, according to the company the promotion made over 1 billion impressions.

During the November 2014 China-wide ‘Singles Day’ sales event, the company was the biggest selling sex toy brand in the country, with China-exclusive products ranging from 99RMB($) to 2000RMB(USD).

Legal Grey Area

While constraints on advertising have eased recently, the law is murky in terms of how products in Durex’s category can be advertised.

“For example, there is a law that says that we can advertise to people the dangers of HIV. But there’s another law that says you should not advertise anything that has the potential to be seen as obscene.” says Aditya. “Now depending on who looks at it, you can choose to pick one law or the other law.”

“The good news is we don’t really need the TV advertising in China anymore, because we [marketers] have really gone beyond that. So considering that, and the fact that we were so constrained, has actually helped us to open up other routes.”

According to Durex, their latest brand collaboration with TechHive will focus widely on promoting sexual wellbeing and improving the sex lives of Chinese people. Durex China and Techhive say their event will be open to a wide range of applicants, including those relating to sex from a social, education and health perspective.

Image Source: Shutterstock

Apple Is ‘Tyranny’: A Close Look at LeTV’s Anti-Apple Campaign [PICTURES]

Cate Cadell — Fri, 17 Apr 2015 03:21:25 +0000

Nothing says ‘look at me’ quite like a Chinese tech brand appropriating a Hitler cartoon to take a shot at the world’s biggest technology company.

If you live in a Chinese city, watch Chinese video streams or peruse the local social media, chances are you’re familiar with LeTV’s anti-Apple campaign. From Nazi satire to a high budget parody of Apple’s iconic ‘1984’ ad, LeTV is making it clear that they know who their biggest rival in the local smartphone market is – and that they’re willing to take it on.

This week, LeTV launched three new premium ‘Le Superphone’ models which appear to be the world’s first USB type-C enabled smartphones. The event was simultaneously webcast in Beijing, San Francisco and Los Angeles, highlighting what the company calls its ‘BLS’ (Beijing, Los Angeles, San Francisco) strategy.

On CEO Jia Yueting’s personal Weibo account, he attacked Apple for lacking innovation and stifling developer communities with their closed OS, taking the same approach as Android’s fierce supporters.

Chinese Smartphones Breaking Into Foreign Markets

If you’re a foreigner looking at Chinese smartphone makers, you may not recognise a good number of them. The quality and diversity of Chinese phones has grown substantially over the past five years, with local brands trying hard to shake off the low cost, low quality image that comes with being a Chinese smartphone in the west.

As the Chinese middle class grows, the market for the cheap-and-nasty tech is shrinking. Premium products are gaining traction, and high-end brands – both local and foreign – enjoy a cult following. This Chinese New Year, iPhones sales outstripped competitors in urban China for the first time ever, according to a report form Kantar Worldpanel released this month. Over the same period, local brands released a spate of ‘premium’ 5.5 and 6 inch alternatives, hoping to dip into the same pool of the increasingly wealthy Chinese urban population.

Despite the general surge in quality, however, Chinese smartphone brands are still struggle to expand to the west. Even if they can manage to avoid the Huawei nightmare of publicly vetted for security issues, they still face a wall of consumers who see little benefit to buying a Chinese smartphone. Especially one that eventually intends to price itself into the premium range.

Which puts LeTV’s oddly obsessive campaign into perspective. For a company that doesn’t even intend to launch its new phones in the U.S. until late 2015, they’ve sure managed to put their name next to Apple’s in a lot of headlines. Playing the role of the active challenger – no matter how ludicrous – has bought LeTV a ticket to the fight, at least in the arena of possible Chinese contenders.

The LeTV ‘1984’ Parody

Despite several flaws in its logic, the parody is surprisingly on-point. It opens with a crowd of chalky, white-faced worshipers in hazmat suits mimicking the original 1984 Apple ad – except they’re idolising a green Apple on a pedestal.

A man in a red shirt runs from a hallway behind the dark room, fighting off heavily armoured S.W.A.T-style special forces police. He breaks through the crowd and takes a bite out of the apple. The walls slowly slide open to reveal blinding sunlight. The final shot shows a gnawed apple core.

While the Hitler gag drew criticism at home and abroad for obvious reasons, the ‘1984’ parody is playfully geeky – even if it’s a bit self-indulgent of the part of LeTV. But we’ll let you be the judge – on the left is Apple’s ‘1984’, on the right, LeTV’s parody:

To view both ads on LeTV’s video streaming service, click here.

While the concept is cheeky, the unfortunate eyebrow-raiser of the parody is the fact that the Le Superphone looks a bit too much like the Apple iPhone 6 to be making jabs about innovation. Even the billboard marketing here in China shares Apple’s distinctive minimalistic vibe. Giving LeTV the benefit of the doubt, here’s to hoping the innovation is in their hardware-software combo.

Image sources: Sina Weibo, Apple ‘1984’ & LeTV

Beijing’s 5th International Film Festival Goes Digital

Cate Cadell — Thu, 16 Apr 2015 02:42:02 +0000

Like many of China’s consumers, Beijing’s 5th International Film Festival (BJIFF) will be very digital. Local video sites and social networks are vying for coverage of the event, as well as leveraging their partnerships to premiere original content.

Several of the events, including the opening ceremony, will be live-streamed on the BJIFF website, as well as on Tencent Video, Youku Tudou, Sohu and iQiyi. The BJIFF will also post live updates on social platforms Weibo and WeChat.

Increasing numbers of Chinese people of all ages are bypassing the living room TV in favour of online web series. The appetite for digital films is no different, as can be seen in the online focus of the forthcoming festival.

Local content producers like Sohu and Youku Tudou’s Heyi Pictures are ramping up their original content offerings. According to a spokesperson from Youku Tudou, the company will be premiering nine online movies this year, with the option of theatrical releases depending on their web popularity.

Sohu is also capitalizing on the momentum of online video, adapting their most popular comedy web series Diors Man (with over 2.3 billion cumulative views) for a silver screen release this July.

During the festival, Youku Tudou’s film division Heyi Pictures will be premiering feature film Ever Since We Love, as well as exhibiting eight micro-movies. The company revealed a large investment in the micro-movie ecosystem earlier this year and will host a forum on April 21st as part of the festival, to discuss this developing industry.

“The festival serves as an excellent opportunity to bring Heyi Pictures on the stage where international and domestic film industries get together to network and cooperate.” said Allen Zhu, head of Heyi Pictures.

Image Source: BJIFF

Editing by Mike Cormack (@bucketoftongues)

DJI & Youku Tudou Announce Partnership At Phantom 3 Launch Event

Cate Cadell — Thu, 09 Apr 2015 03:46:49 +0000

Chinese video service Youku Tudou has announced a partnership with Shenzhen-based drone company DJI, making Youku the exclusive China platform for uploading DJI videos.

The partnership was announced during a series of live webcast events in New York, London and Munich on Wednesday evening, along with unveiling new DJI products including the long awaited Phantom 3 quadcopter.

“Youku Tudou is thrilled to partner with DJI to give users a platform to share and showcase their creativity,” Director of Youku Communications Jay Chen told Technode.

DJI quadcopters are one of the most widely used consumer drones in the world. The Phantom 3 is an improvement on their previous crowdpleaser Phantom 2 Vision +. The Phantom 3 Professional model will go for US$1259 and features a 4k camera, addressing complaints that the Phantom 2 lacked resolution.

DJI also released an ‘Advanced’ Phantom 3 model alongside the Professional, which features a
1080p camera (the same as the Phantom 2 Vision+), which retails for US$999.

The new models will feature LightBridge streaming – previously an optional extra – which will enable (near) live streaming to a device on the ground, which means the quadcopters now all have out-of-sight flying applications.

Both Phantom 3 models will feature upgraded flight stabilization systems, reconfigured GPS and more advanced motors. The company has dubbed the new model “the most revolutionary consumer quadcopter in history.”

Youku Tudou is tight-lipped on what their partnership will entail, though they did note that there would be further partnership collaboration in the future. DJI already has a channel on Youku, though this is the first official partnership between the two companies. The drone company already has a similar partnership with YouTube.

Images: Youku (Wednesday’s release event)/DJI (gold version of DJI’s new Phantom 3 Quadcopter)

VPN Providers Catch A Break As China Deploys DDoS Attacks

Cate Cadell — Tue, 07 Apr 2015 09:16:35 +0000

A renewed zest for enforcing China’s Great Firewall has seen a series of sophisticated and large scale direct denial of service (DDoS) attacks in the country over the last month, including a six-day attack on GitHub, as well as the Chinese mirror site for the New York Times and GitHub repository GreatFire.org.

The attacks, while severe, appear to have taken the heat off leading VPN providers, who were directly attacked in this January. At the time, popular providers including Golden Frog and Astrill recorded deep packet inspection (DPI) of internet traffic to identify VPN protocols, as well as attacks blocking the IP address ranges of several VPN servers.

The attacks appear to have dropped off during the newest DDoS offensive however, with VPN providers claiming that no further attacks of the same degree have taken place since.

“In recent weeks, China appears to have moved on to alternative censorship tactics,” said Sunday Yokubaitis, President of Golden Frog. The company claims their VPN service, VyprVPN, hasn’t experienced additional attacks or outages since.

The shift in strategy from DPI surveillance and IP restriction to DDoS attacks marks a sharp change in course for the Great Firewall. Last week, China’s Foreign Ministry spokesperson Hua Chunying did not deny government involvement in the attack, but suggested that speculation was being unfairly directed at China.

“It is quite odd that every time a website in the US or any other country is under attack, there will be speculation that Chinese hackers are behind it,” Hua said.

GitHub claims its defences are currently holding strong and that its projects are fully operational following the six-day attack that ended on March 31st.

Image Source: Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

Samsung Denies Paying Groups To Attend Galaxy S6 Shanghai Launch Event

Cate Cadell — Tue, 07 Apr 2015 09:13:29 +0000

Samsung has denied that up to half of the attendees at the launch of its Galaxy S6 and Galaxy S6 edge were paid to be there. The company released a statement yesterday denying that anyone was financially compensated for attending the Shanghai gathering last week.

“[Samsung] investigated a media report on April 3 which claimed people were temporarily hired and paid to attend the Galaxy S6 launching event in Shanghai, China and later found that the story was totally groundless and bogus,” a statement on the company’s website said.

The accusations were originally made by a Chinese language publication, The Paper, which claimed that up to half of the 1,100 attendees had been “recruited” to attend the event for 30 yuan (US$3.20) per hour. The Paper also said that a recruiter had targeted “fans” who were under the age of 30 and could pass for students.

The story was reported across several Chinese language media sites as well as in China-based English language publications.

In their strongly-worded statement, Samsung says it is “seriously considering whether to request the media outlet take further action” in issuing a correction.

Several instances of ‘crowd-hiring’ have been reported in China in the past for a range of different events. Popular chat apps such as WeChat are used to post recruitment ads, though there has been no solid evidence that this was the case at the Samsung launch event.

Image Source: March Marcho / Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

iPhone 6 Thrives In Chinese New Year Smartphone Splurge

Cate Cadell — Tue, 07 Apr 2015 08:43:34 +0000

The 2015 Chinese New Year period lived up to its frenzied reputation with several local and international companies setting market records. The booming local smartphone industry received a tidy bump during the holiday, but the clear winner was Apple’s iPhone 6.

iOS now has a 27.6% share of the urban market in China, setting a company record. Momentum for Apple products continues to skyrocket, with the iPhone 6 taking the top spot in urban sales from Xiaomi’s RedMI Note. Third place went to the iPhone 6 plus, which sold well in a country with a strong appetite for larger phones and phablets.

“China Mobile subscribers accounted for 59% of the 27.6% volume share recorded by iOS in this latest period”, said Carolina Milanesi, Chief of Research at Kantar Worldpanel ComTech. The iOS market share has dipped slightly over the past year in the US, from 39.2% to 38.8%.

Lenovo re-launched Motorola Mobility with a selection of new smartphones released during the New Year, while Chinese giant Xiaomi launched several products during the holiday spending period, such as a special edition of the Xiaomi Redmi 4G as well as a China Mobile version of the same budget favourite. Huawei also launched the Honour 6 plus just before the festival, featuring a larger body in line with the season’s 6-inch screen trend.

Samsung has also entered the ring with its Galaxy S6 and Galaxy S6 edge earlier this month. The company chose to separate the release of their highly publicised 6-inch smartphone from the Apple offering by several months.

While urban sales continue to rise, the iPhone is still struggling to crack markets across regional China, with cheaper alternatives from local companies more popular. According to findings by Kantar Worldpanel, the iPhone 6 was also the bestseller in Britain, France, Germany, Italy and Japan over the same period.

Image Source: Lewis Tse Pui Lung / Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

Yahoo Abandons China Outpost

Cate Cadell — Tue, 24 Mar 2015 01:32:25 +0000

Yahoo has laid off between 200 and 300 staff as it shut down its research and development (R&D) office in Beijing. The office was the last Yahoo outpost in China.

Yahoo! CEO Marissa Mayer’s recent consolidation efforts have seen the company make significant cutbacks to its operations since October 2014, with a focus on reining in its global spread.

The cuts have seen downsizing in other regional centers including India. Up to 400 staff were cut from the Bangalore office in October 2014, approximately three percent of the company’s total workforce.

At the same time Yahoo! has been pulling talent from its global bases back to Sunnyvale California, in a move that is largely symbolic of Mayer’s strategic reshuffling. The company is aiming to shave a half billion dollars from staffing costs.

So what exactly does Yahoo’s future with China look like? Non-existent at this point. In January this year, the company announced that it would be spinning of its (then) US$39 billion, 15.4% stake in Chinese retail giant Alibaba. The resulting company, Spinco, allowed the tax-free distribution of the entire block of Yahoo’s 384 million shares in Alibaba to Yahoo! shareholders.

It seems the future of Yahoo! operations is in a consolidated US effort for now, with reports claiming that Chinese and Indian R&D staff would be transferred to the Sunnyvale headquarters.

As it exits China, Yahoo! is still hanging onto its 8 billion USD share in Yahoo! Japan, despite a further push from activist investor Starboard Value LP to spin off their remaining 36% stake earlier this month.

Image Credit: Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

China Says No Google, But Developers Say Yes

Cate Cadell — Thu, 19 Mar 2015 01:37:18 +0000

Virtually all of their products are blocked by China’s Great Firewall. But Google still attracts a sizable number of volunteer developers, willing to take the company’s cause to the mainland.

Dozens of Google Developer Groups (GDGs) have developed throughout the country, sharing information on Google products and technical advice. Unaffiliated GDGs are a feature in many nations, but China’s relationship with Google makes their work particularly difficult.

Last month, Google congratulated developer group GDG Nanyang for its assistance in launching the new Google developers channel on YouTube (which is also blocked) in Mandarin.

According to organizer Cheng Lu, Nanyang is one of many groups spread to over the country volunteering for Google projects.

“The main translation work was actually done by enthusiastic volunteer developers all over the country, Nanyang GDG was just the initiator of this project,” says Cheng.

“We use Google sites and Google Docs to collaborate, as well as Github. The practise of Google Developers is to usually publish relevant English videos, and we will translate them into Chinese.”

Developer tools Github & Google Sites are blocked in China, along with Google services including Gmail, Google Docs and the Google Play store.

With regards to the Great Firewall, Lu Cheng believes the less said the better. “Surmounting the Wall is a necessary skill for any developer. In this country I can only express respect, so I have nothing to say.”

Some of the most active Google developer groups hail from surprisingly isolated areas. Lanzhou, a relatively small city with just 3.5 million citizens in the central north of China holds the current title for most Google Developer Group events in the past six months, meeting 21 times. Urumqi, the capital of Xinjiang Uyghur Autonomous Region, came third with 17 events.

Last month, Google Senior VP Sundar Pichai claimed that Google does not think of China as a “black hole,” saying they are content to play the role of an “enabling platform” for now.

Other Google products have been making headway in the country despite the company’s poor standing with the government. Google Chrome is estimated to have around half the browser market. In the wake of Internet Explorer’s slow death, they are expected to take an even larger chunk of the pie.

Google’s Android OS is also dominant, with over 70% market share, though the gap is closing with Apple’s iOS tipped to have over taken Android in urban areas.

Image: Chukcha / Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

China Slams Door On Private Ride-Sharing Apps

Cate Cadell — Fri, 09 Jan 2015 05:06:13 +0000

Beijing has launched a crackdown on private drivers using cab-hailing apps, citing safety concerns. The ban is aimed at private citizens taking advantage of increasingly popular taxi hailing apps, including Alibaba-backed Kuaidi Dache and Tencent’s Didi Dache. While the apps are still available for licensed drivers, the announcement has effectively snuffed out private ride-sharing in China.

Authorities will be on the lookout for private drivers using the apps from this month, according to a statement on the Transport Ministry’s website on Tuesday. The statement confirmed that private luxury and “limousine” services would not be affected by the ban, describing them as an “innovative models.”

The services remain legal for licensed drivers and taxi companies, who have previously expressed widespread discontent at the off-market use of the apps by private drivers. It is possible this week’s statement – the first official announcement regarding their legal position – is a reaction to growing pressure from China’s taxi firms.

The ban affects several apps, but does not explicitly ban any specific service, such as Uber, which does not currently offer for-profit private hailing services in China. The company recently launched a pilot service titled ‘People’s Uber’ in Beijing, as an experimental not-for-profit private service.

It’s unclear whether the pilot will be affected by the crackdown, considering the law only regulates for-profit drivers. However it’s now almost certain the experimental service won’t evolve into a profit-driven model, given the announcement.

The leading taxi-hailing apps Kuadi Dache and Didi Dache will be the most strongly affected, though considering their widespread use among licensed taxi companies, the ban is to significantly affect their bottom line. Both companies claim their apps are in use in over 300 cities across China.

Currently, neither service has monetized the hailing portion of their app. Unike Uber, they act purely as a liaison between drivers and passengers, with no portion of the passenger fares going to the apps. Their ease-of-use has however made them susceptible to use by off-market ‘black’ taxis.

The ban has already been affirmed in several other cities including Shanghai, Nanjing and Shengyang. According to a follow-up statement this Thursday, twelve private drivers were detained in December in Shanghai for using the app. Coastal city Qingdao also revealed this week that it will be launching a crackdown on unlicensed drivers, though no city so far has suggested a blanket ban of the apps themselves.

Image Source: Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

Motorola Takes Second Plunge Into Chinese Market

Cate Cadell — Wed, 07 Jan 2015 13:55:51 +0000

Motorola will be re-entering an increasingly competitive Chinese smartphone market next month when it releases the new Moto X, and Moto G. The announcement comes three months after Lenovo announced they had completed a US$2.9 billion purchase of Motorola’s mobility from Google.

The smartphone maker has timed its release with the Chinese Spring Festival, according to a blog post made by the company on Monday. Lenovo pushed forward with the anticipated release despite CEO Yang Yuanqing calling the Chinese market “saturated” earlier this year, claiming the company would have to find “new growth areas” to stay competitive.

Chinese smartphone makers saw intense growth in 2014. Last week, Xiaomi CEO Lei Jun claimed that the company had sold 61.12 million smartphones, making a 227% increase over the previous year’s sales. At the same time, Huawei shipments rose 40% from 2013, with 34.27 million sets sold in the first 6 months of 2014.

Motorola also announced they would be releasing a Moto X ‘Pro’ model, which according to its specifications, appears to be similar in specs to the Nexus 6, with a 6-inch QHD display. They did not release any base price points and it’s still unclear whether they will adopt special pricing in China. Currently, the Moto X 2nd generation is still retailing upwards of US$500, while the Moto G is more affordable, just under US$200. Meanwhile Xiaomi’s competing models begin at around US$100.

Lenovo itself previewed the P90 this week, which will compete with the Motorola products when it is also released in February. Lenovo CEO Yang has made it clear in the past that both brands will be maintained, and he will continue to “make [Motorola] stronger.” Lenovo released the teaser for hands-on P90 display at the 2015 Consumer Electronics Show (CES) held in Vegas this week. The P90 has similar dimensions to the Nexus 6, with a 5.5 inch display, and will be released alongside a headphone jack flash device designed specifically for selfies. Unlike the Motorola products Lenovo’s P90 will not be released in the US.

Image Source: Motorola.com

China Leading Augmented Reality Consumption in 2015?

Cate Cadell — Fri, 02 Jan 2015 04:15:42 +0000

You could certainly say that 2014 was the year of the Chinese tech company, but 2015 is shaping up to be even bigger.

The country’s largest tech brands exploded in a way that only China and its 1.3 billion consumers can manage. From Alibaba’s record-breaking IPO to the meteoric rise of smartphone maker (and world’s largest startup) Xiaomi, Chinese tech companies are proving that China has vast potential for ridiculously concentrated growth.

Augmented reality is one sector that’s come out of the shadows over the past year. Internationally, the AR market – for everything from wearables to retail – has been escalating since 2013, with experimental products and startups surfacing.

So will China’s huge appetite for tech see AR expanding as quickly as smartphones and e-retail? According to Sonny Xin, head of China operations for AR company Metaio, the answer is yes. He estimates that AR products will be commonplace in daily life as soon as 2017.

Metaio entered the Chinese market in 2013, and is now working across animation, print media and heavy industry. According to the German-based company, they have over 150 international AR patents, making them the largest such holder in the world.

“In 2014 we saw a fast-growing demand for Metaio-patented technologies such as CAD edge based tracking, 3D environment tracking, and thermal touch algorithms in the Chinese market.”

Mr. Xin believes that the fiercest competition on the Chinese mainland is between AR content producers rather than between the hardware manufacturers. These includes creative agencies, media companies and middle tech companies that are “constantly” pushing AR content into the market.

2014 also saw a rapid boost in AR hardware manufacturing in China. Nearly all major chipset manufacturers are planning to support AR technology in 2015, says Mr. Xin.

The last year saw a steady growth of AR products in China. From character translation apps like Pleco and Waygo, to the public unveiling of Google glass competitor Baidu Eye in September, AR is slowly creeping into the day-to-day lives of Chinese people.

At the end of 2014, Beijing-based ANTVR also released a slew of virtual reality (VR) products, including a headset that will compete directly with San Francisco-based Oculus VR, which was recently acquired for US$2 billion by Facebook.

Growth in innovation in China, along with the new prosperity of its tech scene, means that China has the potential to lead the development of market-entry products such as AR, instead of playing catch-up as it has done in the past.

However, rudimentary industrial standards could prove an issue in a country often criticized for poor labour practices and protective pricing. According to Mr. Xin, this is the major drawback of the Chinese ecosystem.

“There is no pricing standards for AR projects and no labour standards for AR development in the Chinese market.

“Many AR startups have to develop their own standards to adopt in the new market.”

Image source: Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

Alibaba’s International Sales Up 1000% During “Year of Globalisation”

Cate Cadell — Fri, 02 Jan 2015 04:09:35 +0000

Chinese e-retail giant Alibaba has released figures claiming its overseas shopping division, Tmall International, saw a ten-fold sales increase between February and November 2014, dubbing it “the year of globalisation”. The division has reportedly attracted 5,500 overseas brands since its February launch, according to a statement made on Monday.

The company also revealed that it has agreements with five of China’s biggest cities in pilot programs aiming to improve trade. No further details on the agreements made with Shanghai, Guangzhou, Hangzhou, Zhengzhou and Ningbo were released, though Alibaba did note the programs were designed to to expand e-retail.

Tmall is currently working with suppliers across 25 countries and regions, as well as postal systems in Singapore and Australia. The company claims there are more than 100 international brands awaiting approval on the Tmall platform.

Thirty Tmall stores on the international division reportedly earned over 10 million yuan (US$1.6million) by November, with a further 30 high-end brands tipped to enter the market by the Spring Festival shopping season in mid-February.

Alibaba said the Tmall International Service levels the playing field for Chinese consumers, who until recently had incurred high charges when buying foreign products.

“Following the emergence of Tmall International, Chinese consumers need not pay extra fees to enjoy the same quality of goods enjoyed overseas.”

Alibaba also pointed out that Tmall had facilitated the expansion of Costco, America’s second biggest retailer, claiming that their international division had saved Costco “several years” of market-entry expenses. It also revealed that Costco would be dramatically increasing both the number and quantity of products in 2015.

Alibaba has been an aggressive international force in 2014, holding the world’s largest ever IPO in September 2014. The company went on to record over US$9.3 billion in sales over 24 hours during the Chinese ‘Singles Day’ event in November. Alibaba’s profit-share affiliate, Ant Financial Services Group, also oversaw the foreign expansion of Alibaba’s payment system Alipay this year.

Image Source: Shutterstock.com

Editing by Mike Cormack (@bucketoftongues)

China Consumer Giant Alibaba Unveils Credit Service ‘Just Spend’

Cate Cadell — Tue, 30 Dec 2014 14:21:50 +0000

Shoppers on Alibaba’s Tmall and Taobao can now take out month-to-month loans of up to RMB30,000 (roughly US$4800). The new payment option is called Huabei, or ‘Just Spend’, and was released by Ant Financial Services Group, the Alibaba affiliate that oversees Alipay.

According to Ant Financial, over one million vendors are using the credit system. It is currently in a testing phase and a formal release has not yet been announced. The service allows consumers to pay off debts up to a month after delivery with a minimum purchase of RMB1,000 yuan (roughly US$160). Consumers will be expected to pay of the loans by the 10th day of the month following delivery.

In September, Ant Financial also announced that it aims to create a marketplace of 1 trillion yuan (roughly US$1.6 billion) over the coming 2 years, a number which will factor in the new Just Spend credit function.

Alibaba founder Jack Ma and a partner own a controlling stake in Ant Finance Services Group, who in-turn will finance the Just Spend function. While the two companies are formally separate, Ant Financial shares a 37.5% profit stake with Alibaba. Ant Financial also currently runs a micro-credit subsidiary called Ant Micro. Earlier this year it launched micro-loan platform Zhaocaibao, which is a marketplace for financial institutes to list finance products.

Competing retailer JD.com launched a credit option in February, offering up to 15,000 yuan (roughly US$2400) on a similar 30-day repayment plan. Tech giant Sina Weibo also launched a credit service called Xinyongbao this time last year, however it is still confined to minor purchases. Alibaba’s new Just Spend currently offers the largest credit advance of the major online consumer marketplaces in China.

Credit services have been historically under-utilised in China, making up just a fraction of the national GDP. However the past 5 years has seen a growth in household debt, as younger Chinese consumers are increasingly willing to take on new financing options.

The announcement also comes at a time when Alipay is expanding its consumer reach overseas. In November Ant Financial revealed that it will now offer direct purchase options for American vendors including department stores Neiman Marcus, Macy’s, Bloomingdales and Sak’s Fifth Avenue.

Image Source: Shutterstock.com

The new ‘Just Spend’ credit function allows Alipay users to borrow up to US$4800 a month.

Momo Marks U.S. Expansion With Blupe App Launch

Cate Cadell — Tue, 23 Dec 2014 06:04:05 +0000

Barely a month after filing for IPO in the U.S., Chinese social service Momo has backed the launch of English-language app Blupe, marking the company’s expansion into the U.S.

It follows the announcement earlier this year that they would close their English language service in July, raising suspicion that there was a stand-alone app in development.

The Blupe interface is based on user-created interest groups that allow strangers to join communities and interact via a chat interface.

Blupe is quick to note that it is a wholly San Francisco-based company, with only “origins and support” from Momo. Their U.S. office has both Chinese and American employees and is led by the Momo US team with CEO Sic Zhang.

Parent company Momo is frequently referred to in China as a ‘flirting app’ and has been compared to Tinder in the U.S. The company came under fire in April this year when it was linked to prostitution as part of China’s state-led crackdown on illicit content. It has since taken a notable shift toward an interest-based community model, which may explain the strong focus on interests in the Blupe release.

Blupe is also trying to distance itself from these imputations, claiming that the interface will focus on more than just personal appearance and basic information. “This differs quite a bit from Momo’s original model of complete, open communication,” says product marketing manager Kayla Cunningham.

“Our focus is on what you love. Many vaguely similar apps revolve around appearance or the bare minimum list of who a person is.

“Blupe is flipping the switch within the U.S. market, and turning the spotlight back on what people really want to connect on, their true interests.”

Blupe is still in the early release stage and is not currently releasing statistics or plans for future monetization. Currently it is only available on iOS, though a version will be released on the Google Play Store soon.

This year, parent Momo followed a list of Chinese tech heavyweights – including Alibaba, Weibo and JD.com – into the American market when it went public on the NASDAQ earlier this month. Momo has over 180.3 million monthly active users as of September 2014.

Image Source: Blupe

Editing by Mike Cormack (@bucketoftongues)

Blacklane Car Service To Launch In Chinese On Baidu-Backed Qunar

Cate Cadell — Sun, 21 Dec 2014 12:51:45 +0000

German chauffeur service Blacklane will be integrated with Chinese travel site Qunar in mid January, allowing travellers to access the service in Mandarin. The partnership comes as Baidu makes a large strategic investment in US car-hailing giant Uber, as well as an investment in local Chinese car service YongChe this August.

Despite their close proximity in the market, Blacklane CEO Jens Wohltorf insists that Uber, YongChe and Blacklane have specific strengths, and will not be directly competitive.

“We have a pretty well differentiated product to Uber,” Mr. Wohltorf told Technode, “I’m not very concerned about this, we can learn a lot from Uber and I’m sure they can learn a lot from us.”

Unlike Uber’s on-demand model, Blacklane services are ordered at least an hour in advance. The prices are predetermined and are not subject to price hikes. This may make Blacklane’s market entry more fluid compared to Uber, who have received condemnation for its surge pricing as well as issues with non-professional drivers.

“We do not offer on-demand services or cabs,” say’s Mr. Wohltorf, “down to an hour [before] you can book Blacklane. But typically – like when you fly or arrange a hotel – you do it a few days in advance. This is when you can add a Blacklane to your travel schedule.”

Blacklane has been in the Asia for over a year now, but like other foreign players it has struggled to enter the Chinese market without the support of a local platform like Qunar. Last month, Blacklane also picked up a “mid-seven digit” investment from Japanese investor Recruit Holdings, securing its position in Japan.

According to Mr. Wohltorf, Blacklane’s focus is ease-of-use for business and leisure travellers, and users will “typically order a Blacklane for airport transfers or your hotel transfers.”

The Berlin-based company will also face competition in the form of other car rental services, even if they manage to avoid competing with on-demand giants Uber, Kuaidi DaChe and Didi. This time last year China travel giant Ctrip led a US$100 million funding round for local rental service eHi, following their Goldman Sachs-backed C series. eHi went public at the end of last month, with Hertz-backed player China Auto Rental (CAR) also listing this quarter in Honk Kong.

According to Mr. Wohltorf, Blacklane’s advantage will be in attracting both in-bound and outbound travellers. “We started with 30 cities in the app and they are about to launch our other 150 cities [globally]. It’s our vision to be the global provider of professional drivers and quality cars… to attract more Asian travellers but also more non-Asian travellers travelling to Asia.”

Blacklane’s largest Asian markets are currently Hong Kong and Singapore, though the service is also active in Thailand, Macau, Australia and Japan, as well as cities in Europe and the Americas. Since entering the Asia, they have recorded a preference for the company’s high-end services. They have also launched a region-specific economy option in an attempt to stay competitive the Asian market.

Car services have proved to be a popular investment for Chinese and foreign companies in 2014, with China’s three biggest tech companies, Alibaba, Tencent and Baidu, boasting new investments in local and international car service apps.

Baidu Joins China Cab-Hailing Market With Uber Purchase

Cate Cadell — Fri, 19 Dec 2014 10:43:35 +0000

China’s top three internet companies are competing by proxy through their stakes in the domestic car services market following Baidu’s undisclosed investment in Uber earlier this week. Internet giants Alibaba and Tencent are already backing taxi-apps Kuaidi Dache and Didi Dache respectively.

Users of Chinese taxi-apps are expected to number 45 million by 2015, and local internet giants are vying to establish dominance in the fast growing market through a range of car-hailing models.

Unlike Uber, Kuadi and Didi both started with taxi-booking apps. Despite comprising the majority of the market, both are yet to monetize their massive user bases. Kuadi has taken the first step, however, launching the premium service ‘Kuadi ONE’ in July this year, competing directly with Uber’s Black Car services.

Uber also launched its ‘People’s Uber’ pilot project in Beijing this August, mimicking Uber’s controversial ride-sharing services abroad, except that it is non-profit in accordance with Chinese laws.

Neither Uber nor Baidu have announced the size of the investment, though the strategic value for Uber is high as they struggle to iron out issues in their global business. The Baidu partnership may also help them improve their regulatory compliance in China, which has been weak in comparison to Didi Dache and Kuaidi Dache.

As a latecomer in the Chinese market, Uber will also be looking to leverage the partnership for expansion potential. The San Francisco company has only been available in China for under two years and is used in just nine cities, while competitors Kuaidi Dache and Didi Dache both boast active users in over 300 Chinese cities.

Thus far, Uber’s app distribution channels have been comparatively weak, as Google Play is blocked in China. Baidu has multiple app distribution channels including 91 Wireless, which it purchased in July last year for US$1.9billion from NetDragon. Uber will also be able to leverage Baidu’s mapping software, with Google Maps also prohibited in China.

Despite obvious market entry challenges, Uber CEO Travis Kalanick is optimistic about the company’s ability to expand in China. “You have to do things differently in order to succeed here in China,” said Kalanick at a public appearance in Beijing this week.

On top of their investment with Uber, Baidu is also the primary backer of Chinese online travel company Qunar, which recently partnered up with German car service company Blacklane. Blacklane offers pre-booked driver services, and is currently taking strategic advantage of the Qunar platform to expand into China. Despite possible market crossover with the ‘Uber X’ premium service, Blacklane CEO Jens Wohltorf told Technode that the two companies would not be competing in the same market.

Last week, Technode also reported that Alibaba’s primary investor, Softbank, had backed Singapore-based GrabTaxi, completing an investment portfolio of Taxi apps that included South East Asia, India and China.

Tencent’s Didi Dache just closed a US$700 million series D funding round led by Singapore-based Temasek Holding, while Uber itself sealed a US$1.2 billion funding round that will be used to “make substantial investments, particularly in the Asia Pacific region,” according to CEO Travis Kalanick.

Image Source: Uber

Editing by Mike Cormack (@bucketoftongues)

Oculus VR Technology Makes Your Hands The Controllers

Cate Cadell — Fri, 12 Dec 2014 09:57:00 +0000

Virtual reality company Oculus VR has purchased hand tracking technology company Nimble VR, bringing Oculus Rift a step closer to consumers.

The skeletal hand tracker will be mounted on the existing Oculus VR goggles, according to Nimble’s Kickstarter campaign. With Nimble’s depth-sensing infrared 3D cameras, users will be able to use hand movements to direct the virtual reality experience. The purchase is a significant addition for Oculus, which would have had to rely on physical controllers in the absence of hand tracking technology.

Nimble VR had already gained significant market traction prior to their acquisition. This August they were selected as a finalist in the 2014 TechCrunch Beijing Startup Competition, where they showcased their motion sensor technology. Leading up to their sale, they had more than doubled their original US$62,000 goal during their Kickstarter campaign, which was cancelled in the past 24 hours.

Oculus has not yet detailed how the Nimble VR technology will be integrated with their current goggles. So far they have said the Nimble VR technology has “the potential to be part of a great VR experience.”

However the acquisition does mean that it’s unlikely Nimble VR will continue to work on any projects other than its skeletal tracking software. Oculus stated that Nimble VR will be “winding down their existing projects to focus on VR full-time at Oculus.”

At the same time, Oculus revealed they have purchased 3D digital modelling company 13th Lab. They say the addition of 13th Lab’s real-time 3D models will “enable all sorts of new applications and experiences in VR, like visiting a one-to-one 3D model of the pyramids in Egypt, or the Roman Colosseum.”

They also announced that motion capture expert Chris Bregler would be joining Oculus full-time as a research leader. Bregler is a NYU computer science professor who has notably worked as a visual tracking specialist in the film industry, including The Lone Ranger and Star Trek Into Darkness movies.

The acquisitions are expected to get the Oculus product on the market more quickly. The complete VR goggle technology is not yet available to consumers, but Oculus have released a development kit priced at US$350.

Editing by Mike Cormack (@bucketoftongues)

Kamcord Cements Move To Asia With US$15 Million Gungho Led B Series

Cate Cadell — Fri, 12 Dec 2014 04:16:03 +0000

Photo Credit: Kamcord.com

Game recording app Kamcord has sealed US$15 million of B series funding, led by Japanese mobile game giant Gungho. China’s Tencent also participated in the round, having invested in earlier rounds. Also contributing to the round was game company Wargaming, which claims to have over 100 million active users.

Kamcord allows users to record and share video of gameplay through an embedded software development kit (SDK). It’s become increasingly popular in Asian markets as well as the U.S. where the brand was founded.

The funding has cemented San Francisco-based Kamcord’s move into the Asian market. In 2012 they launched as an iOS-only application with US$2.5 million in seed funding. They tested their first Android version in September last year.

According to the company, the development of the Android version has been the primary driver in its Asian expansion, along with the backing of regional tech giants Tencent and Gungho. Kamcord has also recently set up offices in Japan, which they say has been a “major factor” in their growth.

In May, Technode reported that Kamcord had begun supporting Asian social platforms WeChat and Line, allowing users to share video through them. Mobile gaming is one of the biggest, and most profitable, technology sectors in China, and has experienced exponential growth since 2013.

Despite this healthy backing, Kamcord will still have to compete with popular local platforms. Earlier this year, Chinese video social network YY re-launched gameplay video sharing app Duopai, following the success of gameplay videos on its PC-based site. Unlike Kamcord, Duopai does not require users to install an SDK. YY claims it generated RMB31.1 million (US$5 million) from gameplay streaming (on its PC-based site) by the end of Q2 in 2014.

Other investors in Kamcord’s B series also include TransLink Capital, M&Y Growth Partners, Merus Capital, and XG Ventures. Co-founder Aditya Rathnam informed Technode that at the time of Twitch’s acquisition, Kamcord had 1.3 million content uploaders per month, with over 25 million videos shared.

Editing by Mike Cormack (@bucketoftongues)

Uber’s Asian Competitors Consolidate Under SoftBank

Cate Cadell — Wed, 10 Dec 2014 09:56:59 +0000

As Uber comes under fire both at home and abroad, Alibaba’s largest investor SoftBank has spent US$250 million in the taxi-app GrabTaxi, adding the South-East Asian front runner to a portfolio which already includes both China and India’s strongest taxi-app competitors.

The deal makes SoftBank the biggest investor in GrabTaxi, which now spans six countries in Southeast Asia including Singapore, Malaysia, Vietnam, Thailand, Indonesia and the Philippines. They now claim to have 500,000 active users from 2.5 million downloads, while CEO and cofounder Anthony Tan told Technode his goal is to have a “few hundred million people use the app each day”.

SoftBank holds a 36.7% stake in Alibaba Group, making them its largest investor. In turn, Alibaba has backed one of China’s taxi-app front-runners, Kuaidi Dache, which boasts over 150 million users in 350 cities.

Earlier this year SoftBank invested US$210 million on New Delhi-based OlaCabs, Uber’s primary rival in India. OlaCabs continues to operate in India, according to a report from the Hindustan Times, despite being included in a blanket ban on taxi-apps following an alleged sexual assault by an Uber driver last week.

Softbank’s Taxi App Family

Softbank’s investment family now includes three competing taxi-apps covering an Asian market of over 3.2 billion people. Despite their recent US$1.2 billion investment round, this poses a formidable challenge to Uber’s globalisation plans.

GrabTaxi’s Anthony Tan says that loyalty was a big factor in their deal with SoftBank, which was led by CEO Masayoshi Son. Fourteen years ago Mr. Son invested US$2 million in Jack Ma’s fledgling Alibaba, a stake now worth over $40 billion.

“You want guys like that because you want to win,” said Mr. Tan in an interview with Technode. “He [Son] is very clear in what he wants, and he’s very clear in who he wants.”

Masayoshi Son has previously expressed his intention of building a high-tech ecosystem to rival Silicon Valley. SoftBank is currently an investor in over 1300 companies world wide, including their US$22 billion investment in U.S. wireless carrier Sprint.

The company’s investment in multiple Asian taxi-app companies reflects the gradual consolidation of the market over the past two years. This is particularly true in China, where a previously large group of local competitors have now thinned to two brands, Alibaba’s Kuaidi Dache, and the Tencent-backed Didi Dache.

“In China, there were about 30 [taxi apps], and now there are two,” says Mr. Tan. “That happened in just two years here. I think the world will move that way.”

Collecting Local Taxi-Apps vs. Uber’s Globalisation Model

Uber has faced considerable roadblocks in their globalisation. Along with troubles back home and an official ban in New Delhi, Uber has experienced a backlash in the Netherlands, Germany, Spain, Thailand and Toronto.

In a blog post this week, CEO Travis Kalanick said that the company has experienced “growing pains,” but that their recent US$1.2 billion funding round will be used to “make substantial investments, particularly in the Asia Pacific region.”

One of the primary differences between Uber’s market entry strategy and local starters such as GrabTaxi and Kuaidi is their relationship with the relevant local governments. According to GrabTaxi’s CEO Anthony Tan, the company not only works with local authorities in several countries for access to police records, they have also accepted funding directly from the Singapore government.

“Governments in Asia can decide overnight whether to crush you or not. It’s like that in China, and its like that in South East Asia. Governments have a disproportionate amount of power over business.”

Mr. Tan admits that the credibility of drivers will continue to be an issue, and that GrabTaxi is still consistently banning drivers from its fleet. But he says the cooperation with authorities has allowed them to get a head start over other competitors on important issues, including background checks.

“Our drivers are banned every day, whoever even flirts with a passenger is banned,” says Mr. Tan, who claims their work with the authorities has prevented previous sex offenders from applying as drivers.

Like GrabTaxi, Kuaidi has also carved out a competitive advantage by working closely with government regulators in China. India’s OlaCabs is an outlier in Softbank’s taxi-app investment family in this aspect. This week they were swept up in Uber’s India ban on taxi apps. Even though both companies appear to still be operating, their future is murky considering the blowback against taxi-apps is gaining international momentum.

“All Out War” for Asian Taxi-App Services

Despite issues with volatile Asian governments, Uber has still led a largely successful expansion 250 international cities and over 1000 employees based overseas. Given the speed of their expansion over the past two years and their recent funding boost, they continue to be the dominant force globally.

“They [Uber] are clear and we’re clear that it’s going to be an all out war,” says Mr. Tan, “but I think this dichotomy is often overplayed. For us it’s very clear, we need to stay humble and stay true to why we started.”

The Singapore-based startup is planning on channelling SoftBank’s US$250 million investment into new high-end talent. Mr. Tan travelled to China this week with the aim of sourcing new high-tech staff and meeting with Chinese mentors, including Qunar and B series investment leaders GGV Capital.

Editing by Mike Cormack (@bucketoftongues)

Baidu Invests $3 Million In Israeli Startup Pixellot

Cate Cadell — Mon, 08 Dec 2014 09:48:02 +0000

Baidu has backed its first Israeli startup, investing US$3 million in video technology company Pixellot, according to a report by Reuters. The Tel Aviv-based video technology company will use the money to develop its unmanned cameras and technology for large outdoor events. The move reflects a sharp rise in Chinese companies investing in Israel over the past two years.

Earlier this year Baidu made its first move into the Israeli investment scene, funding capital firm Carmel Ventures, as Technode reported in October. The firm announced it had raised US$194 million from multiple strategic investors in Asia, including Baidu, Ping An Insurance, and Qihoo 360.

In August this year, Chinese computer manufacturer Lenovo Group Ltd. invested US$10 million in the Israeli- focused arm of Canaan Partners, while last November the venture arm of Chinese insurance giant Ping An created a US$100 million fund aimed at Israeli and U.S. startup partnerships.

According to the director of Baidu’s Corporate Development, Peter Fang, Pixellot’s “ground-breaking” technology will be a huge value-add for Chinese internet users. While neither company has gone into specifics on their new agreement, Feng said on Sunday that it will “revolutionise video content production”.

Chairman and co-founder of Pixellot, Miky Tamir, says the investment signals the start of their international focus, enabling them to “grow globally, and bring [Pixellot] into the Chinese market.” As Chinese demand for streaming content continues to grow rapidly, acquisition of low-cost broadcast video technology is a clear motivator for Baidu in the investment.

Pixellot technology is designed to make recording and broadcasting large events easier and more cost effective. According to the company, their products includes specialised cameras and spatial relay and workflow technology that makes it possible to record large-scale outdoor events with minimal personnel, or even from a remote location.

Since Baidu’s 2005 IPO, their share price has reached highs of US$250. The company has since expanded into multiple new industries and markets. In September, Baidu invested US$10 million in Finnish mapping software maker IndoorAtlas. In 2013, the search giant moved into Indonesia, where it is now on the lookout for high-tech investment following the success of its market entry apps, according to the Wall Street Journal.

Editing by Mike Cormack (@bucketoftongues)

Beijing Moves Free Wi-Fi Forward Despite Surveillance Concerns

Cate Cadell — Thu, 04 Dec 2014 15:52:53 +0000

Beijing is rolling out free internet on 12,000 city buses this week, according to state media. It’s the next step forward in a three-year “wireless city” plan that originally saw ten district hot spots open up around the city at the end of 2011.

State-owned telcos China Mobile, China Telecom and China Unicom will lead the rollout, which has inevitably been met with security concerns given China’s poor network surveillance record. Despite the risks, the move will likely take the sting out a recent announcement that public transport prices will rise by up to 100% from December 28.

Supermarkets, subways and other public spaces will also be targeted in the next month as the municipal government plans to provide some 90,000 access points. It’s part of a pilot scheme that will be tested over three years. Authorities haven’t as yet indicated what will happen to the networks after that time, or whether they will remain free.

Since China lifted a ban on Wi-Fi enabled devices in 2009, there has been a strong push for public Wi-Fi services. Last week, passengers on the Guangzhou to Hong Kong train line trialed the first free Wi-Fi project on the country’s high-speed trains. Air China also moved to add free Wi-Fi on its flights in mid 2013, which was upgraded in 2014 and to our knowledge remains free.

While unencrypted networks are notorious for security vulnerabilities, it’s unlikely to phase Beijing netizens who have become accustomed to the heightened network controls. Users will be expected to enter their phone number in return for a code to join the new networks labelled “16 Wi-Fi” on buses and “My Beijing” in other public spaces.

The requirement makes it easy for authorities to identify users on the public network by linking phone numbers to activity logs. It’s a common feature of existing public Wi-Fi spaces in Beijing, including Starbucks and other coffee shops, and is unlikely to deter users.

The demand for free public Wi-Fi in Beijing is obvious for anyone who has taken public transport there. It’s a common sight to see entire train carriages during rush hour lit up with live streaming content and graphic-rich gaming.

It remains to be seen whether the new bus networks can support the data-heavy gaming and video content that have become ubiquitous in China over the past few years. According to state media, the connection is enough to support up to 40 passengers streaming video on a 4G connection. However the speed of the initial “My Beijing” hotspot rollout in 2011 was criticized on social media for falling well below its expected rates.

Editing by Mike Cormack (@bucketoftongues)

Why Flash Sale Sites Might Work in China, and Not the U.S.

Cate Cadell — Tue, 25 Nov 2014 08:29:53 +0000

After a record US$9 billion of sales on Singles Day, the world’s biggest 24-hour e-retail extravaganza, the market in China for flash sales appears stronger than ever. However the one-day feeding frenzy may not the best indicator of health when it comes to the flash sale site model.

Flash sale sites that run year-round as opposed to one day-sales are frequently criticised for the questionable sustainability of their model. Most U.S. flash sale giants have seen steady losses over the last two years. However new entrants to the China market are optimistic, claiming that the simplified experience and access to merchandise makes flash sale sites an ideal model in China’s developing consumer market.

Vipshop, China’s largest online apparel discounter, has seen its stock rise strongly in 2014. The relatively new company has seen sharp growth through a primarily mobile-driven model of discount flash sales. In February this year the B2C retailer also acquired a 75% equity stake Chinese cosmetics retailer Lefeng.com.

Xiaoher is another flash sale newcomer that has managed to gain momentum recently, completing its US$10 million Series A funding with the help of venture capitalists Lightspeed China Partners (LCP) this month. Xiaoher is the Chinese version of niche site Zulily, which targets mothers and children with discounted products.

According to Xiaoher CEO Michelle Meng, the flash sale model is successful in China because it functions more like a catalogue, simplifying the online e-retail experience. She claims that users across over 3000 Chinese cities were checking the site for new deals going live every day at 7am, as opposed to coming to the site for a specific product.

“Traditional e-commerce sites require shoppers to choose from a series of complicated options. Most of the Chinese women who shop with us are from the middle of the country where these functions are unfamiliar.”

According to Meng, Xiaoher shoppers preferred the simplicity of browsing pre-selected deals, rather than seeking out products. “It’s almost like a subscription, but many women from China’s interior don’t have email, so this is a simple alternative.”

Xiaoher and other Chinese flash sale sites also have another distinct advantage over their US counterparts, in that inventory is much closer to home. Volatility in the U.S. flash sale market is directly related to merchandise availability. Sites rely on sourcing off-season, or otherwise discounted, bulk merchandise that can be acquired according to consumer demand and then sold at a substantially cheaper price. However there are very few flash sale companies that can source enough merchandise without taking the next step into manufacturing their own.

Meng, who claims Xiaoher stocks over 2000 brands, believes the flash sale model can survive in China without in-house production.

“We continue to reach out and find more [brands]. They are very willing to cooperate with Xiaoher, because traditional sales channels are too expensive, while Xiaoher is free and brings them lots of sales,” says Meng.

The flash site model emerged in the U.S. just before the financial crash of 2008, as entrepreneurs took advantage of the heavily discounted merchandise that retailers were attempting to offload as the economy declined. Companies like Gilt saw a revenue increase in the area of 250% during the years immediately following the crash.

However market conditions have since stabilised, putting more pressure on sellers to find inventory. Gilt may end up being the last of its previously swollen competitor pool in the U.S., following news last July that main competitor and eBay affiliate, Rue La La may be sold to Gilt Groupe at a US$400 million valuation.

The thirst for e-retail deals in China certainly isn’t dwindling. However it was reported that an estimated 50% drop in sales preceded the Singles Day event this year, showing that Chinese consumers are not necessarily as impulsive as flash sale merchants may like.

For sites like Xiaoher, the consumer preference for simplicity and a seemingly endless supply of cheap inventory appears to be giving the flash site model a second life in China – at least for time being.

Editing by Mike Cormack (@bucketoftongues)

U.S. Department Stores Open Doors to Alipay

Cate Cadell — Fri, 21 Nov 2014 12:16:30 +0000

Chinese buyers can now shop directly online from the biggest department stores in the U.S., as Alipay’s ‘foreign direct purchase’ ePass service goes live for the holiday season. Participating stores including Neiman Marcus, Macy’s, Bloomingdales and Sak’s Fifth Avenue will join Ann Taylor and Aeropostale as the first major overseas brands to sign on with Alipay. The stores will now be open to any shopper who has an account with Chinese marketplace giant Taobao.

Shopping for overseas products has been historically difficult for Chinese consumers, who face barriers using credit cards online. In contrast, Alipay has had massive adoption rates, with over 800 million accounts accounting for almost 80% of online transactions within China.

“We hope to reconstruct the experience of shopping abroad,“ said Peng Yijie, Vice President of Ant Financial’s international business division. Peng believes that the move to connect directly with U.S. department stores will help fix a ‘disjointed’ system that often requires Chinese consumers to use a middleman agency when buying from abroad.

Despite the swelling number of middle class consumers in China, foreign retailers have previously found it difficult to enter the market. Earlier this year, Neiman Marcus revealed that it had sold its 44% stake in Chinese e-retailer Glamour Sales, which it had acquired just two years earlier in 2012 with the view to launching their e-commerce presence in China.

The new direct additions to Alipay follow a rise in overseas purchasing options for Chinese consumers. This October, Amazon announced the launch of its China direct shipping service, while Alibaba’s own Taobao and Tmall continue to increase their overseas stock.

With Alibaba recording US$9.3 billion (about RMB57.6 billion) of sales during the 24-hour ‘singles day’ event this month, the benefits of connecting with Chinese consumers are becoming increasingly apparent for foreign retailers.

Editing by Mike Cormack (@bucketoftongues)

Safety the Biggest Concern for China Plastic Surgery Apps: Developers

Cate Cadell — Thu, 20 Nov 2014 12:17:40 +0000

China is seeing a rise in social, review-based cosmetic surgery apps. Unlike the previous wave of simulator options, these apps provide a colourful feedback platform complete with live consultation, pricing and photographs. The new products aim to remove the final hurdle between consumers and hospitals in China: the expansive knowledge gap.

In contrast with their regional neighbour South Korea, cosmetic surgery in China is still widely perceived as a fringe indulgence. Sensationalist reports of collapsed facial surgeries often circle on Sina Weibo, and cosmetic app developers themselves have admitted the industry is hazardous. However they believe the only thing standing between consumers and safe surgery is a lack of reliable information.

Notable new player, app Zhen Youmei (“Very Beautiful”), made its market entry in January this year. Founder Jiang Zhi is a serial entrepreneur who started out in the advertising industry. In 2008 he co-founded China’s biggest demand-side platform advertising network, Pin You Hudong. Three years later, he established Daye Shengde, a messaging marketing operator. In late 2013, Jiang Zhi made the move to health and cosmetics, and by early 2014, both iOS and Android versions of Zhen Youmei were on the market.

“The potential and market for plastic surgery is huge, but currently the Chinese market has too many dangers to the consumer, including facial disfigurement and financial swindling. This has lead to a lot of criticism of the industry” says Jiang Zhi.

A close look at Zhen Youmei gives good insights into Zhi’s solution. First and foremost, it’s an information app. It doesn’t take user photos and spew out retouched images like its market predecessors. Zhen Youmei is targeted more at removing the emotional and social ‘first-contact’ barriers between consumers and hospitals; delivering procedure details, consultations and prices.

The app features a sugary-pink UI with 14 options including eye widening, nose fixes, lip and teeth modifications as well as liposuction. Each goes into complex detail covering applicable patients, results, costs, advantages and possible risks.

What’s remarkable about this cosmetic sidekick – or concerning, depending where you stand – is the social element. Not only do users have an option to connect with hospitals and submit anonymous questions, they also can take advantage of a ‘diary’ function, where they describe their experience and share photos. It parallels a format that has already been successfully applied in fitness apps, with particular similarities between ‘before and after’ photograph functions.

A friendly interface and frank procedure details aside, the social element is Zhi’s greatest asset in the drive to normalise plastic surgery in China. He said that the app will always exclude hospital and doctor information from the diary function, but admitted that it would be impossible to entirely moderate sham advertisements.

Market rival Zheng Na’r also sells itself on safety and ease of use. That app was released in June this year, along with a notably more benign fashion app that shares the same bubblegum-pink UI. Like Zhen Youmei, developers say that patient safety is the app’s primary concern. According to their own description on the iTunes store, they only work with hospitals that have complete legal certification, with the aim of ending false solicitation by unregistered clinics.

Their description also claims they are connected to over 2,000 hospitals country wide, and to more than 6,000 physicians. Zheng Nar boasts a slightly broader option set, including hymen reconstruction at US$512 (around RMB3000), which received a low satisfaction rating of just 33%, while dental crowns received a glowing 100% appraisal.

Like Zhen Youmei, Zheng Nar is well aware of their core selling point: “You only have to lift a finger to get started.”

Editing by Mike Cormack (@bucketoftongues)