It isn’t easy being a parent in today’s hi-tech world. With smartphones and tablets in households, kids have more and more excuses to spend their afternoons staring at a screen.

“Times are changing,” says Neo Hsiung, the CEO of Neobear, an early education startup based in Shanghai. “It’s not possible to prevent your child from playing with an iPad.”

“But AR technology can let [your child] experience multimedia entertainment without having them stare at a screen for a long period of time,” he says. “If you want to play with AR, you have to interact with physical objects.”

Neobear believes it can create engaging educational experiences without turning kids into couch potatoes by using augmented reality.

Last month, the company launched the AR Globe, its latest AR product, which lets children interact with animated objects on a physical globe via an app. By clicking and moving around a smartphone or tablet, kids can learn about animals that they find roaming around the globe or pull apart different layers of the Earth. The idea is to leverage AR to create more interesting educational experiences for kids without requiring them to sit still and stare at a screen, says Mr. Hsiung.

“Our first reaction was that the traditional globe is just about seeing different countries,” says Mr. Hsiung. “But with a virtual globe overlaid on it, we can do a lot of things. We can throw a lot of little animals on the it, […]  you can cut open the globe like a watermelon, […]  you’ll see boats on the ocean, sailing back and forth.”

Neobear began developing AR products in 2012, one of the few education companies leveraging AR technology at the time. Creating AR products for children comes with its own host of unique challenges, such as designing hardware that’s appropriate for children. For children ages 2 to 6 or Neobear’s target age group, tablets can be too heavy. It’s also easy for children to accidentally block the camera which is needed for AR functions.

To remedy that issue, Neobear developed the “Magnifier NEO”, a magnifying glass-shaped device that lets kids discover animations overlaying the real world. The company also plans to launch a hardware platform for small to medium hardware developers in October or November, according to Mr. Hsiung.

“For the past few years, educating users has been a very exhausting task,” says Mr. Hsiung. Thanks to Pokemon Go, however, explaining what augmented reality is to parents has become a lot easier, he says.

The success and popularity of Pokemon Go has thrust augmented reality into the limelight, even in China where the app is currently unavailable. AR is not a new technology by any means but so far it’s mainly been applied in non-consumer contexts, such as logistics and manufacturing. However, as the technology matures and becomes less expensive, that might change – something tech giants like Microsoft are betting on.

According to AR/VR and mobile games consulting firm Digi-Capital, the augmented reality market value is estimated to reach $90 billion USD by 2020.

Image credit: Neobear

Conversations around virtual reality are quickly centering around one of the biggest bottlenecks in the industry’s development: high-quality content.

The two-day Global AR/VR China Summit, which kicked off on Wednesday, featured speakers from different corners of the industry, from virtual reality analytics company Touch Virtual to Neobear, an early education startup developing augmented reality products. The hype around VR hardware seems to have petered off with most presentations focused on building exciting and useful VR content in marketing, education, travel, and social applications.

“We have to choose PC-based VR [over mobile-based VR] because our client’s expectations for high quality content,” said Yuan Yuan, the CEO of AR/VR software company Ugion, on a panel discussing the current and future adoption of VR and AR technology.

“The most important thing is there’s no killer-app,” he said. ” There’s no killer app to attract users to the headset.”

At the moment, VR content still leaves a lot to be desired. While a multitude of VR headset and hardware startups have sprung up in China, the same cannot be said about quality VR content and software. Still, as this year’s conference shows, there’s plenty of interest and potential in the area – it’s only a matter of time before VR content hits its stride.

Here are some highlights from Global AR/VR China Summit 2016:

Multiple users can interact with and import 3D models into MiddleVR‘s virtual meeting space software aimed at designers and architects. These two guys are measuring a CAD model.

Plex VR creates custom 360 degree content for shops, museums, and real estate developers.

Conference attendees lined up to try Microsoft’s HoloLens AR headset.

Scott Lai, the marketing and sales director of Realmax, explains the company’s AR training software.

Behavioral research firm Noldus is jumping on the VR bandwagon with eye tracking and VR interaction analytics.

A conference attendee tries Nvidia’s Funhouse app where users can play a range of carnival games, like whack-a-mole and arrow shooting.

In China, key opinion leaders or KOLs are often seen as a silver bullet for brands that want to successfully advertise or run marketing campaigns on Chinese social media platforms, such as WeChat. However, many brands have no idea how to leverage KOLs properly.

“[The brand] kind of forced me to use the press release as social content,” said a KOL in a survey conducted by ParkLU, a platform that connects KOLs and brands. “No matter how I explained [it], they were just being stubborn.”

On Thursday, during CHat Shanghai, a conference on WeChat and global messaging trends, Kim Leitzes, the founder and CEO of ParkLU, offered insight into the lives and minds of Chinese KOLs in a talk called “Confessions of a KOL.”

Through one-on-one interviews with different KOLs, Ms. Leitzes identified do’s and don’ts when collaborating with KOLs, like sticking too closely to advertising KPIs or worse, encouraging KOLs to buy followers.

“The brands that succeed at [leveraging KOLs] take a long term view,” Ms. Leitzes told TechNode. “They are looking for long term partners and the KOLs that continue to build credibility as opposed to those [that] become too commercial.”

In China, KOLs refer to a wide variety of internet celebrities, including bloggers and livestreaming hosts. There are also different tiers of KOLs, from Papi Jiang, who has more than 18 million followers on Weibo, to budding fashion KOL “Pomegranate Granny Report” (石榴婆报告, our translation), who has 57,000. A number of companies and agencies, such as ParkLU and Robin8, are dedicated to helping brands find the right KOLs for their marketing campaigns.

For brands that want to use KOLs to boost brand awareness or market products, understanding KOL dynamics is essential. Here are 3 points from ParkLU’s talk on KOLs that we think you should know about:

1. KOLs need space for creativity.

A huge turnoff for KOLs – especially top tier ones – is a controlling client. For example, in some cases, companies will send press releases and photos to KOLs and expect them to post them directly on their social media channels.

“Why would you engage a KOL to copy paste your press release?” said Ms. Leitzes during her talk. “There are certain KOLs who do want to copy paste. […] and you should run for the hills.”

Some companies see KOLs as a traditional advertising channel, such as a banner space on a website, says Ms. Leitzes. However, KOLs are valuable not only because of their visibility and access to social media channels, but their unique personality. In particular, KOLs can have a very niche, but powerful following. This differentiates them from traditional celebrities, such as movie stars and pop singers, who might appeal across a number of different verticals and demographics simply because they’re famous, not because of the content they post.

It’s that authenticity and quirkiness that give KOLs an edge over traditional advertising. By stripping KOLs of their voice and style, brands lose many of the benefits of hiring a KOL in the first place.

2. An effective KOL strategy leverages the halo effect.

On social media, brands need to create the impression that something is a social norm, says Ms. Leitzes. “Three, four people are talking about it [or] maybe no one is talking about it,” she says. “That’s what you need to do with KOLs. […] You need to create your own echo chamber.”

To do that, companies need to hire multiple KOLs for one vertical per campaign. Isolating KOLs across different verticals or hiring just a few can drastically limit the success of a campaign. In addition, KOL campaigns are even more powerful if companies have the budget to hire several top-tier KOLs as they typically influence other KOLs that are lower on the totem pole.

“If you don’t have a lot of brand equity and trust, why would a mid-level or mid-tier KOL vouch for you?” Ms. Leitzes told TechNode. “If they see a top-tier KOL […] validate your brand, give it social proof, give it the cachet, the rest are much more comfortable doing it.”

3. Develop long term relationships with KOLs – don’t obsess over short-term KPIs.

At the end of the day, using KOLs to market products or promote brand awareness is content marketing. That means consistency is key.

“The people who really benefit from KOLs do it every month,” says Ms. Leitzes. They’re always managing that mix – the tried and true and the new ones.”

It also means that calculating the value of a KOL from engagement KPIs alone, such as clicks and pageviews, is not a good way to assess their influence. In particular, analytics on different Chinese social media platforms, namely WeChat, are disparate. Until detailed analytics from different platforms can be pooled together and analyzed in aggregate, tracking the effectiveness of KOL campaigns will remain a challenge, says Ms. Leitzes. In addition, depending on the industry, there can be a significant lag between marketing campaigns and their ultimate effect.

“It’s much better now,” says Ms. Leitzes. “But it used to take thirty days from the point where someone first saw a product they liked on an overseas e-commerce site, and then they had to do all this research [and] go on this enormous sixteen point journey, researching on Baidu, on social, on Taobao, before they finally made a purchase.”

“So if I’m looking at sales conversion, do I just look at seven days?” she says. “Not if you’re doing cross border.”

It can be easy for companies, especially digital agencies, to obsess over short-term engagement KPIs, such as clicks and shares. However, it’s important to remember that KOLs are people, says Ms. Leitzes. In the long run, companies will reap much more by focusing on cultivating brand advocates rather than short campaigns with the right numbers.

Image credit: Instagram/anny_styleontop

This article is part of Technode’s coverage of CHat Shanghai, where TechNode was a media partner.

Chinese tech giant Tencent is making good on its word to boost its advertising business and offer advertisers more refined targeting tools.

On Wednesday, Tencent and AppsFlyer, a mobile marketing analytics and attribution platform, jointly announced a strategic partnership that would let app marketers outside of China access real-time analytics to Tencent Social Ads for the first time ever.

“In today’s increasingly competitive landscape, app marketers need deep insights about the performance of their install campaigns more than ever,” said Canny Lau, Product Manager at Tencent Social Ads, in a press release.

“The insights our advertisers will get from AppsFlyer are invaluable in helping them maximize the return on their app install ad spend.”

Tencent Social Ads lets advertisers run campaigns on some of the company’s largest social platforms, including messaging apps WeChat and QQ, which have about 800 million and 899 million monthly active users, respectively. AppsFlyer’s service will let advertisers around the world track key campaign metrics on Tencent Social Ads, including clicks, activations, in-app purchases, sessions, and average revenue per user.

Tencent Social Ads advertisers will also be able to leverage AppsFlyer analytics, such as cohort analysis and full funnel reporting, to analyze the performance of app install campaigns.

“The app economy is quickly becoming a global economy, and this partnership with Tencent Social Ads, one of the biggest and most important distribution platforms in the world, opens up myriad possibilities for app marketers and developers looking to grow in China, while enabling us to expand our footprint in Asia and globally as well,” said Elad Masiach, VP Partner Development at AppsFlyer.

According to Tencent’s second quarter financial report, only 18% of Tencent’s revenue comes from advertising. However, the Chinese tech giant is moving quickly to capture more market share in the advertising industry. Revenue from advertising increased 73% year over year during the first quarter of 2016 with approximately 80% generated through Tencent’s mobile platforms.

Last January, Tencent started displaying ads in users’ Moments, the timeline feature of WeChat. Since then, the tech company has made more ad formats available to advertisers, including video.

In August 2015, Tencent opened WeChat Moments ads to all advertisers, expanding on big name brands, such as Coca Cola and Mercedes-Benz.

Giving people the ability to control objects with their voice has typically been the domain of big tech companies: Amazon Echo, Google Home, Apple’s Siri. Shenzhen-based hardware company Seeed Studio wants to change that.

“You can take a plant and make it something you can talk to,” says Xiaobo Ye, the product manager of ReSpeaker. “Now, raising a plant will be like raising a dog or cat. It can tell me if it’s thirsty or, ‘I’m okay, I don’t need to drink water.’”

On Tuesday, Seeed Studio launched ReSpeaker on Kickstarter. About the size of a hockey puck, ReSpeaker is a hardware module that can make objects respond to voice commands and queries. Depending on what the user wants to control – an air conditioner, a stereo, a coffee machine – ReSpeaker can be connected via USB or wired in directly. Once connected, the hardware module can be programmed to carry out different actions, like making coffee or scheduling a meeting room.

By connecting ReSpeaker to WiFi, users can also access ReSpeaker’s web application and pick various ready-made applications, such as a music streaming app. Developers can also write their own custom plugins. Various hardware add-ons are available too, like a far-field voice capture mic array that helps ReSpeaker hear users as far as ten meters away.

One of the goals of ReSpeaker is to lower the barrier of voice recognition technology so that startups and hobbyists alike can turn any object – not just connected or ‘smart’ ones –  into interactive devices. Through partnerships with third party companies, Seeed Studio has added various voice recognition software to ReSpeaker, such as Microsoft Cognitive Service, Amazon Alexa Voice Service, Google Speech API, Wit.ai and Houndify.

“If you’re Xiaomi, you can connect it all to an app,” says Mr. Ye, referring to Xiaomi’s wide range of smart home products. “But if you’re a startup , it’s really hard for you to do that.”

“You have to create your own app and your cost is actually about the same as Xiaomi’s, but your product offering is not as rich,” he says.  “It doesn’t address as many use cases and thus can’t attract as many users.”

Since consumer-facing IoT took off a few years ago, large Chinese tech companies like JD and Xiaomi have been rushing to build their own smart home hubs and IoT ecosystems in order to build one platform to rule them all. It’s not a race that small companies and startups can win, but in a market estimated to reach $1.7 trillion USD in 2020, there’s plenty of room for niche products and other services that entrepreneurs can tap into.

“Going forward, there will be more […] long tail companies that make products for specific contexts,” says Mr. Ye. “We hope that by selling these products to small companies, we can let them slowly grow into big companies.

ReSpeaker is not the first product to offer developers open source voice-control capabilities. Two years ago, two Princeton students created Jasper, an open source Siri-like platform. Instead of having custom hardware modules, however, Jasper runs through a Raspberry Pi.

On Kickstarter, ReSpeaker has surpassed its $40,000 USD campaign, which is more about promoting Seeed Studio’s project than generating profit, says Mr. Ye. The company is starting with the overseas market first as ReSpeaker is only available in English for now. Going forward, Seeed Studio plans to add more plugins to its web application and work towards creating a platform where developers can share and leverage each other’s code.

Image credit: Seeed Studio, Shutterstock

A lot of glory goes to the companies in China’s e-commerce and O2O market, but behind every food order and Taobao purchase is a delivery person, hustling the last mile in a complex system of logistics.

China’s retail e-commerce and O2O food delivery market is the the largest in the world. According to research provider eMarketer, sales from China’s retail e-commerce industry will hit $899 billion USD by the end of this year. Last November during Singles Day, the largest shopping day of the year in China, Alibaba’s logistics arms Cainiao claimed it processed more than 300 million delivery orders. Needless to say, there’s a lot of money resting on the shoulders of China’s “little brothers” (小哥) – a popular nickname for deliverymen in China.

In meeting the demand of millions of consumers, China’s delivery system has developed quirks and innovations of its own. Here are four that we think you should know about:

1. Forget PO boxes – just send your packages to a convenience store

One of the annoying things about packages is having to be around when the deliveryman arrives. In China, many people choose to receive packages at work instead of at home, since most offices have someone in charge of receiving packages.

It’s handy, but the downsides are lack of privacy, as well as not being able to receive packages after work hours. To get around the problem, e-commerce sites like Taobao and Tmall let you select convenience stores as a package drop off locations instead.

2. Scooters = shortcuts

Time is money. That’s especially true in the world of food and package delivery. In China, that often translates to creative scooter routes and reckless driving. Sidewalks, one-way streets, narrow alleys – everything’s fair game when you’re trying to deliver as many food orders as you can.

For example, here are some maps drawn by a “little brother” in Beijing, complete with labels for highly congested roads and shortcuts through hutongs, Beijing’s labyrinth-like neighborhoods.

3. No address? No problem.

The majority of China’s population does not reside in tier-one cities like Beijing and Shanghai. According to the World Bank, 44% of China’s population was considered rural in 2015.

But less infrastructure doesn’t mean packages can’t be delivered. Instead of having to list out a specific address, package recipients can add a description of where they live.

For example, this man describes his address as: “Across the bank at 480 Renmin Road in the housing complex for civil servants of the Ministry of Reserves.” There’s also a phone number and name so the deliveryman can hand off the package once he arrives.

4. Feeling impatient? Track deliverymen in real-time and send them push notifications to hurry up.

Finally, if you’re really hungry, instead of helplessly waiting for the deliveryman to arrive, you can scrutinize their movements on O2O apps like Meituan. These apps lets you track deliverymen in real-time and push them to drive faster by sending them alerts through the app. You can also call or text them directly.

Image credit: MuchMania/Shutterstock, Wyol.com.cn

Qihoo 360, a Chinese tech company best known for its anti-malware software, is turning over a new leaf in product development.

Following the lead of other Chinese tech giants, Qihoo 360 launched its own AI research institute and is looking at developing smart driving applications.

“We have a very clear and long term target,” Shuicheng Yan, the Chief Scientist at Qihoo 360’s AI research institute, told TechNode. “Definitely it’s for smart driving. […] From product’s perspective, I consider smart driving as a major focus on the whole research institute.”

Leveraging Dr. Yan’s academic background in computer vision and deep learning, Qihoo 360’s AI research institute will primarily focus on image and facial recognition. While strengthening Qihoo 360’s existing IoT portfolio is the institute’s priority, Dr. Yan’s team is also looking at using AI to improve driver safety.

Qihoo 360 will start at the “zero level” of autonomous driving, he says, with advanced driver assistance systems (ADAS), including a rear-view mirror that helps people drive more safely. The company also plans to develop products that monitor driver behavior and assess the environment around the vehicle.

The company is also taking advantage of their own strengths in security.”If you have various connections within the car [or] if you want to connect [your entertainment system] to the internet, definitely you will have the security threatened,” says Dr. Yan.

Qihoo 360 plans to develop security software reminiscent of the company’s “Safety Bodyguard” [our translation] anti-malware mobile app. However, whether or not Qihoo 360 will go as far as to develop their own fleet of autonomous cars, similar to that of Baidu or Google, is still under discussion. The company also plans to conduct their own research on voice and speech recognition, but under a separate research organization, says Dr. Yan.

Pivoting To IoT

Qihoo 360’s smart driving plans are part of the company’s overall goal to focus on connected devices. At the Second World Internet Conference last December, Zhou Hongyi, chairman and CEO of Qihoo 360, dubbed IoT the best business opportunity in the next five years. In many ways, the company’s AI research institute will be an extension of its IoT product development unit.

“We mainly support the two major lines of products of the company,” says Dr. Yan. “One is smart devices, IoT. Another line is the livestream[ing].”

Dr. Yan’s team is improving the facial recognition features of Qihoo 360’s smart home security camera, “Small Water Droplet” (小水滴, our translation). For Qihoo 360’s livestreaming platform, Huajiao (花椒), the research institute will enhance face tracking features, such as beauty and face swapping filters. At the moment, fundamental research is not a priority, says Dr. Yan.

IoT and AI could generate new revenue streams for Qihoo 360, whose main source of revenue comes from advertising on platforms like 360 Search and 360 Mobile Assistant, Qihoo 360’s mobile app store. Last year, online advertising services accounted for 67.1% of the company’s total revenue. In contrast, revenue from smart hardware and IoT devices was about 3% of Qihoo 360’s 2015 revenue, 88% of which was cost.

Qihoo 360 will also face steep competition from more established players. Other domestic tech giants, such as Alibaba and Baidu, started investing in AI years ago, either through partnerships, such as Alibaba’s partnership with facial recognition company Face++, or their own proprietary research labs, such as Baidu’s Institute of Deep Learning.

As the new kid on the block, Qihoo 360 will not only have to boost AI capabilities of existing products to survive, but develop cutting edge applications of its own.

Disclaimer: Although Qihoo 360 provided no editorial control over this post, the company covered the travel expenses involved in interviewing Dr. Shuicheng Yan.

“[My dad’s] clients are mostly electronics companies that sell long-term consumer products,” says Mr. Lin. “I am mostly working with makers.”

The 28-year old is the COO of Vast Elecsource, a manufacturing company that caters to hardware startups and hobbyists, a demographic commonly referred to as ‘makers’. It’s separate from his father’s business but leverages the same factory, which can produce small batches of products ranging from hundreds of units to thousands. Compare that with manufacturing giants like Foxconn and Flextronics, whose facilities are designed to output hundreds of thousands of units per day.

“You have to understand that big factories are highly efficient,” says Mr. Lin. “Their machines are automatic. At every step, you have to adjust the settings.”

“This gives small factories like us an opportunity,” he says.

Small factories like Vast Elecsource play an important role in Shenzhen’s multi-tier manufacturing ecosystem, which includes mammoth facilities with on-site dormitories as well as tiny prototyping workshops. It’s the difference between boutique and wholesale.

In just a few days, a large factory can pump out millions of units of the same design. Smaller factories, on the other hand, are more flexible and can offer clients custom solutions and tolerate smaller batch quantities. This makes them a good fit for startups, an increasingly relevant source of revenue as manufacturing costs rise.

“Big factories are moving to Huizhou [and] Dongguan,” says Mr. Lin, referring to two neighboring cities in the Guangdong province. “It’s too expensive to operate in Shenzhen nowadays.”

Over the past decade, Shenzhen has gradually shifted away from manufacturing as real estate prices and labor costs increase. According to the National Bureau of Statistics, yearly wages for Chinese workers in the manufacturing sector rose 66% from about $4,650 USD in 2010 to about $7,727 USD in 2014. Many large manufacturers, such as TCL Corporation and Foxconn, have started investing in facilities in Vietnam and India, respectively.

Vast Elecsource isn’t planning to move. Despite rising costs, the factory is sticking close to its clients, most of which are located in Shenzhen. Other small-scale manufacturers are also staying in the city, as one of their key competitive advantages is being able to meet regularly with clients and engage in face-to-face discussions on product design.

“We didn’t move to Dongguan because our clients aren’t really there,” says Jian Yu, a business development manager at 1942 Tech (壹玖肆贰科技, our translation),  a small printed circuit board assembly company in Bao An, a western district of Shenzhen.

“Because most of our clients do R&D, […] they don’t necessarily understand manufacturing,” he says. “They want our suggestions.”

Like Vast Elecsource, 1942 Tech also works with hardware startups. Currently, the company manufactures five thousand units or less per client, says Mr. Yu. In some cases, the factory will even produce as few as one or two prototypes for a single customer. At a larger facility, an order that small would cost a fortune.

“[Big factories] don’t really pay attention to you that much,” says Benjamin Joffe, a general partner at HAX, a hardware accelerator in Shenzhen. “You need to find factories where you can actually talk to the owner to make sure you have their attention.”

Regular factory visits are crucial for startups that are creating unique, non-standard products, says Mr. Joffe. For example, one of HAX’s startups is Revols, which sells custom-fit earphones molded to the shape of your ear. Another is Kniterate, which is developing a “3D printer for knitwear.” Products like that require close collaboration with factories and frequent visits.

“You need to test it with your own hands,” says Mr. Joffe.

The demand for smaller, more accessible factories is prevalent enough that more and more factory-startup matchmaking services are emerging, like those offered by Seeed Studio and Higgs Hub. Finding the right manufacturing partners can be difficult for hardware startups, especially those targeting the global market. The language barrier between international startups and local manufacturers can be a challenge, as well as finding manufacturers with an international mindset.

“A lot of factories probably want to go fast and skip everything,” says Simon Zhang, the head of hardware R&D at Brinc, a hardware accelerator based in Hong Kong. “And it’s true, they’re fast. But there’s a sacrifice; the quality. If you want to go to the global market, you cannot sacrifice your quality.”

However, that might change as younger generations inherit or co-run their parents’ factories, like Mr. Lin. According to Mr. Zhang, some of Brinc’s factory partners are run by factory owners in their late-20’s or early 30’s.

“It’s heritage, so they have owner capabilities,” says Mr. Zhang. “[They’re] very open minded, very Western facing, so that’s also very important. […] It’s all about mentality.”

Still, some factories face more practical barriers to working with hardware startups. Often, when visiting factories for Brinc startups, Mr. Zhang finds older facilities with outdated machinery that can’t produce the latest, compact designs of IoT hardware. 

These factories could get squeezed out as larger facilities become increasingly automated, cutting the need for and cost of human labor. In May, for example, Foxconn claimed it replaced 60,00 workers with robots at a factory in Kunshan. For big manufacturers, investing in ‘dark factories’ where robots churn out products night and day makes sense for large orders that take days to complete.

Nevertheless, by working with more startups, smaller factories are doubling down on what they do best – delivering small batches for a diverse product portfolio. In particular, they can tap into the long tail market of IoT, where sensors and connected devices are often designed to fit very specific contexts and needs.

According to research firm IDC, worldwide IoT spending is projected to reach $1.7 trillion USD in 2020, an enormous market with almost a third of it attributed to sensors and devices. Bespoke hardware products, such as smart insoles or headphones tailored to your hearing, might never hit the mainstream market, but enough of them could form a viable business for small factories in Shenzhen.

Image credit: 1942 Tech

As tech giants like Baidu and Google refine the technology to make fully autonomous cars feasible, one important barrier still stands between research and mass production: affordability.

On Tuesday, Baidu and Ford announced a $150 million USD joint investment in Velodyne LiDAR, Inc., a Silicon Valley-based company that develops laser-based LiDAR (Light Imaging, Detection, and Ranging) sensors, which are used for mapping, localization, object identification, and collision avoidance. According to Velodyne, the latest round of funding will go towards cost-reduction and scaling the company’s technology.

“This investment will accelerate the cost reduction and scaling of Velodyne’s industry-leading LiDAR sensors, making them widely accessible and enabling mass deployment of fully autonomous vehicles,” stated David Hall, founder and CEO, Velodyne LiDAR, in a press release.

In LiDAR technology, lasers bounce light waves off nearby objects to measure their distance from sensors. It’s faster than radar, which uses radio waves. As a result, LiDAR sensors can collect more data and produce more detailed 3D maps of the sensor’s surroundings. In the context of autonomous cars, LiDAR sensors help cars ‘see’ the road.

Currently, Velodyne’s latest generation of sensor, the Velodyne Puck, costs about $8,000 USD. That’s cheap compared to older generations of Velodyne sensors, which cost more than $80,000 USD. In developing the Velodyne Puck, the company scaled down the number of lasers per sensor from 64 to 16, significantly lowering its cost. Still, the company’s sensors will have to become even cheaper in order to scale to the mass consumer market.

“Baidu is developing autonomous vehicles with the intention to increase passenger safety and reduce traffic congestion and pollution in China,” stated Jing Wang, Senior Vice President and General Manager of Autonomous Driving Unit of Baidu, in a press release.

“Our investment will accelerate our efforts in autonomous driving with what, in our view, are the best LiDAR sensors available today and advance Velodyne’s development of increasingly sophisticated LiDAR sensors,” he stated.

Baidu’s investment in Velodyne marks another milestone in the tech giant’s ambitions for its autonomous driving unit. Two months ago, Jing Wang announced Baidu’s plan to mass produce autonomous cars and have them on the road within the next five years. The Chinese tech giant also launched an autonomous car driving zone in the Anhui province earlier this year and signed an agreement with the Wuzhen Tourism Bureau in July to let tourists book Baidu self-driving cars.

Baidu is also expanding its R&D resources for its autonomous car technology. In April, the company announced the formation of a 100-person R&D team based in the Silicon Valley.

Image credit: Shutterstock

Having received a joint investment of over $1 million USD, Papi Jiang is considered one of China’s most successful internet celebrities, or ‘wang hong’. Globally, she still has a long way to go.

Outside of China, internet celebrities like Swedish Youtube star ‘PewDiePie’ are making as much as $12 million USD in one year.

“How is it that Youtubers in the [West] can be both influential and make a profit?” says Ivy Wong, the CEO of VS Media, a multi-channel network (MCN) for video content producers in Hong Kong, Taiwan, and mainland China.

“The most important thing is that they have a lot of MCNs […] between brands and internet celebrities to help them create better content and monetize it.”

On Tuesday, VS Media and Discovery Communications, the company behind the Discovery Channel, jointly announced a strategic partnership, which includes an undisclosed amount of funding from Discovery Communications and a new 26 million RMB (about $3.9 million USD) fund for VS Media’s media entrepreneurs. VS Media will leverage the new partnership to bring Chinese internet celebrities overseas and foreign stars into China.

“We want to make China’s internet celebrity economy more professional, more standard, and more international,” says Ms. Wong. “We actually have a lot of internet celebrities with great content but don’t know how to improve their video quality.”

“By giving them more resources and money, they can change their content from UGC [user generated content] to PGC [professional generated content] to IP [intellectual property],” she says.

VS Media calls itself the “voice of young Chinese.” According to Ms. Wong, the average video content creator on VS Media is in their 20’s, though the platform has creators as young as four years old. Video clips are short, just a few minutes long, and are distributed to other content platforms such as Meipai, a Chinese video editing app.

In addition to marketing and distribution services, VS Media also provides film equipment, training, and production support. The company is also working on several IP projects, including a virtual reality travel series, a feature on eSports in China, and a show about Chinese millennial fashion.

“Around the world there are young Chinese people, so we’ve never thought about changing our content to fit Western tastes,” says Ms. Wong. The main barrier to globalizing Chinese video content is access to international platforms like Youtube, not the actual content itself, she says.

It’s not clear whether or not Chinese internet celebrities can appeal to non-Chinese audiences, but that might not even matter. The Chinese diaspora was estimated to be about 50 million people in 2010, according to a report by investment firm Greater Pacific Capital. It’s a sizable market that Chinese internet celebrities could tap into in addition to the domestic market. Besides VS Media, Vice also features wang hong. However, for the most part, Chinese internet celebrities will hire local agents or work with local companies to find and seal deals with brands inside China.

According to VS Media, the platform currently has over 500 video content creators. Founded in 2013, the Hong Kong-based company set up its first office in mainland China last summer and received an undisclosed amount of funding from China Media Capital in June.

Correction (8/4/2016 15:48): This post was updated to correct a mistake about Papi Jiang’s valuation.

With over 750 million monthly active users, WeChat is indispensable for any company that’s serious about growing its presence in China. However, while WeChat official accounts are relatively cheap marketing tools, they have one major weakness: Tencent likes to keep a lot of data to itself.

“WeChat is a private platform,” says Alexis Bonhomme, the co-founder of CuriosityChina, a digital marketing and tech company based in Beijing. “It’s very difficult for digital professional marketers [and] PR person to understand […] what works well on the WeChat platform.”

On Monday, CuriosityChina launched CURIO EYE, an application that lets users compare official accounts across WeChat’s platform and analyze high performing posts and keywords. Users can add official accounts to their CURIO EYE “monitor” to track individual data points, such as the account’s average page views per post. Industry-wide data is also available. According to Mr. Bonhomme, CURIO EYE includes the top 1,000 accounts for cosmetics, e-commerce, food and beverage (F&B), fashion, media, and other industries.

“You need to follow the account first and to follow the account […] you need to find it,” says Mr. Bonhomme, explaining the manual process of monitoring official accounts. “And sometimes it’s a pain […] to find the account because you don’t know what kind of WeChat ID it is [and] you don’t know the name.”

By automatically pulling data from official accounts, CURIO EYE can aggregate, compare, and analyze public data from different WeChat accounts. Top posts for different accounts, industry verticals, and keywords are calculated using the number of likes and page views of posts, as well as their conversion rate.

For example, on CURIO EYE, Gucci, Dior, and Louis Vuitton are listed as the top three luxury fashion accounts on WeChat, in terms of number of followers. In the past thirty days, Louis Vuitton’s article about its City Steamer handbag garnered the most attention out of all luxury fashion posts: 29,945 page views and 111 likes.

“When you are out of mainland China, […] you know WeChat is super important, you know you need to be there, […] but you don’t know what works,” says Mr. Bonhomme. “You don’t know how to look for the account, you don’t know what kind of content works the best.”

CURIO EYE is not a unique solution, but it’s one that international companies, especially those that are based outside of mainland China, might not want to invest in on their own. Though WeChat does provide an API and technical documentation, it’s only available in Chinese. Likewise, similar tools like DataStory (数说故事), Robin8’s KOL search engine, and New Rank (新榜服务), are only offered in Chinese.

Though the majority of Tencent’s revenue still comes from value-added services, such as virtual weapons in its gaming business, the tech company is trying to expand its online advertising business. According to Tencent’s Q1 2016 earnings report, online advertising made up 15% of the company’s overall revenue, up 9% from the same period three years ago. Last year, Tencent started displaying ads in WeChat users’ Moments newsfeed and has refined targeting tools for WeChat marketers.

Given that 94% of WeChat users log in at least once a day and about half use it for more than an hour everyday, it’s no surprise that marketing agencies have risen to meet the WeChat needs of both international and domestic brands (link in Chinese). In addition to CuriosityChina, other agencies with WeChat marketing and consulting services include WalktheChat and China Channel.

Numbers are tricky things in Chinese. If you’re not careful, you might unintentionally invoke death and misfortune, all because you used the number four (sì), a homophone for the word “death” (sĭ).

The Chinese language is rich in homophones, which makes it easy to turn numbers into proxies for words and phrases, like 88 (bābā) or ‘bye-bye.’ That explains why 666 (liùliùliù) refers to the Chinese word for smooth or skilled (溜, liù) instead of the devil.

From League of Legends To Livestreaming

According to Baidu, Chinese League of Legends gamers were the first use the number 6 to express awe and respect for good gameplay. At first, this took place in League of Legends’ chat feed, but now it’s not uncommon to see 666 on livestreaming platforms, which overlay text from chat feeds onto the screen.

With thousands of viewers in one livestreaming ‘room’, throwing a bunch of 6’s across the screen can be a way to applaud in a virtual setting:

Also, in China, there are special hand gestures for numbers 1 to 10. The hand gesture for number 10, for example, is a closed fist. To physically express 666, Chinese people will sometimes shake their hand while it’s in the 6 position, where your pinky and thumb are out, like this guy:

‘Lost In Translation’ is a weekly column that covers netizen-speak from China’s Interwebs. China’s internet slang is a fast-moving linguistic phenomenon and staying fresh has never been harder. Here, you’ll find new words or phrases every week with a breakdown of what they mean, how they’re used, and how they came to be.

Image credit: Shutterstock

Amid a saturating PC market, Intel is sticking to one of its largest and most loyal user bases: hardcore PC gamers in China.

Intel joined Acer Inc. on Thursday to jointly launch the latter’s latest high-performance gaming laptop, the Predator GX-791. The souped up Predator is equipped with Intel’s i7 processor, a NVIDIA GTX 980 graphics card, and an improved cooling system that lets gamers pump their CPU up to 4.0GHZ.

“The users [of this laptop] are top level gamers,” says Haibo Pan, Senior Business Manager at Acer. “These people are definitely looking for the best overclocking experience.”

Partnering with Acer on the Predator GX-791 is Intel’s latest move to attract hardcore PC gamers in China, as well as worldwide. While general PC sales are slowing, China’s PC gaming market is still robust. According to market research firm Newzoo, revenue from China’s PC and MMO (massively multiplayer online game) market makes up almost half the country’s total games revenue, which is estimated to hit $24.4 billion USD in 2016.

“This is our market,” says Jingxiang He, the General Manager of Intel Asia Pacific R&D, referring to China’s gaming market. “We have a dedicated team in China that works with our partners to create a gaming ecosystem that fits China and has Chinese characteristics.”

Despite a solid user base, mobile gaming has been eating into China’s PC gaming market. According to big data and analytics firm Data Eye, mobile gaming revenue jumped from 5% of China’s gaming market in 2012 to 36% in 2015. Even with the rise of eSports in China, where gamers participate in live tournaments such as the League of Legends World Championships, Intel will have to move beyond hardcore PC gamers to maintain growth in China.

The company has not had an easy year. In April, Intel cut 12,000 jobs and reported slower revenue growth from its data centers. It also cancelled its Broxton and SoFIA SoC (System-on-a-Chip) plans, which were supposed to propel Intel into the smartphone chip market currently dominated by Qualcomm.

The company still managed to pull in $13.5 billion USD in revenue during the second quarter of this year. Intel has also branching out into other areas, such as game consoles. During CES Asia in May, Intel, Tencent, and Haier jointly launched the Tencent Games Platform (TGP) Box, a console that runs Windows 10. Intel also has plans to unveil its own VR-specific products at the end of the year, according to Kit Ho Chee, the director of platform management and operations at Intel.

Image credit: Intel

Update (7/29/2016 11:07): This post was updated to correct an error. The total revenue for China’s games market in 2016 is estimated to be worth $24.4 billion USD not $24.9 billion USD.

At a mere $492 USD*, Apple is offering its latest iPhone at a much more palatable price for its fans in mainland China than previous iterations. Nevertheless, the term “kidney machine” (肾机, our translation) is still used to refer to Apple’s smartphones.

A Kidney For An iPhone

Four years ago, a 17-year-old boy from Anhui province sold one of his kidneys in order to buy an iPhone. Through Tencent’s QQ messaging app, he connected with several black market kidney agents who found a buyer for his kidney and made arrangements for the surgery. After the operation was over, the 17-year-old received 22,000 RMB for his kidney (link in Chinese). Subsequently, his health began to deteriorate.

Thus, the term “kidney machine” was born. It’s worth noting that at the time, iPhones weren’t exclusive just because they were insanely expensive. Even if you had the money – in those days, an iPhone ran for about 10,000 RMB or almost 1,500 USD – you might not be able to buy one due to a limited stock of iPhones in mainland China. Hardcore Apple fans from China, as well as enterprising Apple resellers, would sometimes travel all the way to New York City to line up for an iPhone (or several).

Though iPhones are much easier to get a hold of nowadays, the term “kidney machine” has stuck. Even with the rise of higher end Chinese phones, such as Huawei’s Mate series, iPhones are still the most expensive smartphone in China. For now, the “kidney machine” label belongs to Apple.

‘Lost In Translation’ is a weekly column that covers netizen-speak from China’s Interwebs. China’s internet slang is a fast-moving linguistic phenomenon and staying fresh has never been harder. Here, you’ll find new words or phrases every week with a breakdown of what they mean, how they’re used, and how they came to be.

*This price refers to the 16 GB iPhone 5SE. The 64GB version is sold for about $612 USD in mainland China.

China is a powerhouse when it comes to Bitcoin trading. According to a report published by Goldman Sachs last March, about 80% of Bitcoin transactions are driven by the Chinese yuan. However, awareness around Ether, another cryptocurrency, is much lower.

“Bitcoin was a great experiment in monetary policy,” says Andrew Keys, the Head of Global Business Development at Consensus Systems (ConsenSys), a venture production studio for blockchain-based applications and tools.

“What it proved was that I can send you a Bitcoin without a bank,” he says. “Ethereum […] can do peer-to-peer agreements.”

Ether is the cryptocurrency used on Ethereum, a blockchain-based software platform that came five years after Bitcoin. While Bitcoin was designed primarily for peer-to-peer monetary transactions, such as payments, Ethereum was invented to fit a much broader context. Any software application can be uploaded onto Ethereum’s decentralized platform: housing rental, equity distribution, voting, and more. The Ethereum Foundation calls it a “programmable blockchain.”

Put another way, Ethereum is a way for software programs, or what are known as ‘contracts’ on Ethereum,  to execute the way they were programmed to without interference. That means that two parties can agree on and be held to a digital contract without lawyers, the police, or any kind of intermediary. Trying to change the contract or take it down would be almost impossible, as contracts on Ethereum are stored on a distributed network of servers – the Ethereum blockchain.

ConsenSys wants to bring Ethereum to China’s tech and finance giants, such as Tencent, Ping An, Ant Financial, and Alibaba.

“Every single one [of them] is open to a proof of concept, where we give them a private instance of the Ethereum blockchain,” says Mr. Keys.

For Chinese companies and financial institutions, such as banks and insurance companies, the lure of Ethereum lies in its potential to cut costs. But Ethereum’s blockchain could be useful in other contexts as well. ConsenSys is working on about thirty different decentralized applications – or ‘dApps’ – for Ethereum’s blockchain. They range from event management to online poker, to a smart music contract dApp that musician Imogen Heap used last October to release one of her singles.

“Over the next month, we’re going to do webinars and demonstrations with the CTO and technical teams of all those companies I just mentioned,” says Mr. Keys.  “We kind of show them the art of the possible, then from that they say, ‘Okay, we have a pain point here and a pain point there – can we apply the technology to ameliorate those pain points?’”

“When we come back [in September], we’re going to further elaborate on how we work together,” he says. That could include joint ventures or something simpler, where ConsenSys educates its partners on Ethereum and gives them the infrastructure to build their own Apps, he says.

The meetings are still in early stages, but ConsenSys is serious about putting down roots in the Chinese market. Founded in 2014, the company has moved quickly through its partnership with Microsoft and its Azure cloud computing platform to discuss and seal deals with other companies.

In China, the buzz around blockchain technology is starting to pique interests among tech companies and financial institutions. In June, a group of more than thirty technology and financial firms, including Ping An Bank and Tencent, created a consortium dedicated to blockchain applications. A month before that, a non-profit called ChinaLedger Alliance launched with the aim of promoting blockchain technology in China. The non-profit is led by Wanxiang Blockchain Labs, a Shanghai-based non-profit by Chinese auto conglomerate Wanxiang Group.

Image credit: Ethereum Foundation

2016 has not been a good year for China’s peer-to-peer lending industry. The year began with the collapse of Ezubao (e租宝), a P2P lending site that swindled 50 billion RMB (about $7.5 billion USD) from almost a million investors. Since then, the scandals haven’t stopped.

Part of it has to do with how fast China’s P2P lending landscape has developed over the past few years. According to data provider Wangdaizhijia, between 2012 and 2014, the number of P2P lending platforms in China jumped from 200 to 1,575. Today, there are more than 4,000.

In a country where the majority of citizens have never borrowed money from a bank, it’s not surprising that companies have jumped in to fill the gap for consumers and small businesses who need loans. Last December, regulators put out a draft of policies for P2P lending companies, such as prohibiting platforms from directly handling or managing funds (link in Chinese).

Founded in 2012, Dianrong.com (点融网) is one of the earlier players in China’s P2P lending industry, in addition to Renrendai (人人贷) and Yirendai (宜人贷). The company was started by Kevin Guo and Soul Htite, the former CTO and co-founder of Lending Club, a P2P lending company in the U.S that went public in 2014. According to Dianrong.com, the platform has processed over 13.5 billion RMB in loans since launching.

TechNode sat down with Kevin Guo to discuss the current state and future of China’s tumultuous P2P lending industry.

1. How have scandals like Ezubao affected P2P lending companies in China?

Honestly, in the long run, this is good for startups, especially companies that follow the standards. Now there’s 4,000 to 5,000 [Chinese regulators] have made a lot of restrictions. They’re not allowing us to do advertisements anymore. But I think at their core, they’re still trying to encourage this industry.

2. What impact has the Ezubao scandal had on the latest draft of P2P lending regulations in China?

Under normal circumstances, [a new draft of policies] would have been released this year, but Ezubao disrupted the whole process and changed everything. […] From what I’ve heard, there will probably be a deep review of the draft in the first quarter of next year. Some of the rules will probably see some big changes.

3. In an industry with thousands of competitors, what kind of room is there for business development?

I think there’s still a lot of room for development in this industry. […] There are all kinds of opportunities that can be dug out of different verticals. P2P lending is just one small piece. […]Blockchain, robo-advisors, data mining, machine learning, online insurance – there’s a lot of room for imagination.

Image credit: Shutterstock

Correction (7/21/2016 10:56): This story has been updated to correct the statistic about Dianrong.com’s total loans. 

Correction (7/21/2016 12:38): This story has been updated to correct Kevin Guo’s title from co-founder to founder and Co-CEO. 

One of the magical things about Chinese is the linguistic density of its script. In just a few characters, you can describe a complex concept, evoke an ancient proverb, or allude to a historical event.

‘Straight man cancer’ (直男癌, our translation) is a good example of this. There is no equivalent in English. You could try to summarize it as ‘male chauvinism’ but straight man cancer is much more than that. If you’ve been diagnosed with straight man cancer, it not only means that you’re sexist, but that you’re stubbornly sexist. You get defensive easily. You don’t like being challenged on your views and, like cancer, something drastic needs to happen – kind of like chemotherapy – for your views to change.

It’s a great word for pointing out all kinds of sexist behavior, from slut shaming to sneering remarks on female political leaders (link in Chinese). As one netizen said, “The person who made up the term ‘straight man cancer’ has made a great contribution to society.”

Is Straight Man Cancer Contagious?

Unfortunately, unlike actual cancer, ‘straight man cancer’ is contagious and can be passed from person to person, such as parents to their children. Straight man cancer doesn’t discriminate either – women can get it too, as can non-heterosexual men.

China’s IT industry is particularly rife with straight man cancer. Earlier this month, for example, Liu Chao, the head of user experience at Baidu, was fired after making blatantly sexist and offensive comments at the IXDC International Experience Design Conference in Beijing.

Just this Tuesday, the Hong Kong Information Technology Joint Council tried to throw an IT beauty pageant to ‘celebrate’ accomplished women in tech, before organizers realized how insulting and sexist the event was.

‘Lost In Translation’ is a weekly column that covers netizen-speak from China’s Interwebs. China’s internet slang is a fast-moving linguistic phenomenon and staying fresh has never been harder. Here, you’ll find new words or phrases every week with a breakdown of what they mean, how they’re used, and how they came to be.

Image credit: Shutterstock

The next time you hear a native Chinese speaker call themselves a ‘homeboy’ in English, don’t assume that they’re trying to be cool.

“Homeboy is Chinglish for zhainan,” explains Zoe Zhou, the COO of Seed, a language education startup based in Shanghai. In Chinese, zhainan, which literally translates to ‘home man’, refers to males who don’t leave the house and avoid social contact – quite different from the comparable English expression.

“One of the biggest challenges [for our users] is speaking English,” she says. “It’s hard to practice at school, […] and they don’t know if what they’re saying is right or wrong.”

National exams in China, such as the gaokao college-entrance exam, test students on their English language abilities, but most of the emphasis is placed on reading and writing, not speaking. For example, an exam might require students to recognize hundreds of English vocabulary words, but not test them on their ability to carry on a conversation.

For students who want to study abroad or professionals who work in foreign companies, oral English proficiency is a must. In China, a multitude of companies have risen to cater to this demand, such as 51Talk, which offers one-on-one phone calls with Filipino teachers, as well as apps like Liulishuo (流利说) and Youdao ‘Spoken English Master’ (有道口语大师, our translation).

Daka (打卡), Seed’s latest app, isn’t about fixing pronunciation, nor does it offer users a set of lessons or training material. The app gives users one exercise per day, consisting of three questions. Each exercise is centered around a provocative prompt or topic. The point is to get users talking about topics that they normally discuss with their friends, says Ms. Zhou.

“Young Chinese people have their own unique perspective on a lot of topics,” says Ms. Zhou. “We hope that by helping them practice [speaking English], we can help them express themselves.”

“[Self-expression] is missing in a lot of traditional Chinese education and training,” she says. “A lot of exams are about facts, like what date is National Day? But they won’t ask […] what are your thoughts? Do you think they did the right thing or the wrong thing?”

In addition to inciting users to talk, Daka’s prompts are also designed to push users to think critically and defend their own opinions. For example, an exercise might start off by asking users what they think about the Yulin Dog Meat Festival, says Ms. Zhou. The next question will then follow up on the first one, and ask users how eating dogs is different from eating fish, which is a widely accepted practice despite the fact that fish can also be pets.

Daka, which launched a few weeks ago, is meant to be paired with Seed’s previous app, which curates English content for users. The company hopes that users will be able to pick up new words and phrases from their first app and apply them in Daka, which means “to clock in” in Chinese.

Daka will have to battle the user attrition typically associated with smartphone app usage, especially as a language learning app that wants its users to practice regularly. According to a study by analytics firm Localytics, 23% of users abandon an app after just one use. Seed is hoping to encourage its users to “clock in” everyday with a credit system, where users are rewarded for starting the daily exercise, as well as completing it. In the future, these credits can be redeemed for teacher feedback on audio responses.

Human teachers are typically one of the biggest costs in any language learning company, and it’s not clear whether or not Daka’s credit system will be enough to cover those expenses. However, the company is focusing on growing their user base at the moment, not generating profit, says Ms. Zhou.

Image credit: Seed

If you use China’s most popular social chat app, WeChat, you might have seen a lot of strange references to ‘chicken soup’:

Clearly, ‘chicken soup’ is not chicken soul in Chinese netizen vernacular. So what are people really talking about?

Chicken Soup For The Soul

In 1993, a book series called Chicken Soup for the Soul  launched in the U.S. The books were about making people feel good and were filled with heart-warming and cheesy motivational essays. Over the years, hundreds of them were sold. There were different variations of Chicken Soup books too, like Chicken Soup for the Woman Golfer’s Soul or Chicken Soup for the Soul: Parenthood.

Thus, Chinese netizens turned ‘chicken soup’ into a catchall term for gooey, feel-good essays that might belong in a Chicken Soup for the Soul book, like “Ten Things Jack Ma Taught Me” or “He’s Rich But Not Happy – Why?”

Like the original Chicken Soup for the Soul stories, the emotional power of ‘chicken soup’ essays should not be underestimated. In a report released last October by Tencent, post-60’s WeChat users were identified as big fans of ‘chicken soup’ essays.

‘Lost In Translation’ is a weekly column that covers netizen-speak from China’s Interwebs. China’s internet slang is a fast-moving linguistic phenomenon and staying fresh has never been harder. Here, you’ll find new words or phrases every week with a breakdown of what they mean, how they’re used, and how they came to be.

China’s counterfeit culture has earned the country the reputation of being a place where execution trumps innovation and no design is sacred.

That doesn’t mean that China’s intellectual property (IP) industry is a total free-for-all. In fact, the country’s State Administration for Industry and Commerce (SAIC) has started cracking down on counterfeit goods, particularly those found on e-commerce sites such as JD.com and Taobao. Last year, the SAIC ran a campaign from July to November to purge counterfeit goods from online platforms, holding platform operators responsible.

It’s an important direction for China’s e-commerce giants to move towards, especially as more Chinese companies eye overseas markets, which are less tolerant of fake goods and copyright infringements. An increasing number of Chinese companies are also looking at IP monetization opportunities in film, gaming, and other content. In addition, more and more Chinese companies are leveraging patents to take down and challenge global competitors, such as Apple and Samsung.

Protecting IP rights (IPR) is a good business for companies like The Intellectual Property Group, which works with IP owners, such as international brands, and ISPs (Internet Service Providers) to resolve IPR violations that happen online. Most of the work is technical, and the company is even investing in its own SaaS platform to standardize and automate more of the IP takedown and mediation process. However, The Intellectual Property Group will also visit factories and physically track down violators. In China’s developing IP industry, offline negotiations are sometimes unavoidable.

TechNode sat down with Dean Arnold, the co-founder and director of The Intellectual Property Group, to glean insights on the challenges and dynamics of China’s IP industry.

1. What is one of the major pain points of the IP industry?

The fact that there are 600,000 web hosts in the world, [and] 1,500 domain name registrars. We estimate there’s […] more than 1,800 [General Merchandise Value] platforms globally.

This industry doesn’t have standard behaviors or [a] platform. […] You have to reach out to every one of them individually. You have to track them individually. They all have different policies and formatting requests. Most of them have none. Most of them have no IP policies or procedures in place. For a lot of them you’re lucky if you can even find their ID and email address to contact them.

2. How is The Intellectual Property Group able to physically track down IPR violators in China?

The guanxi and the relationships. I used to think that was so cliche but time and time again, I’ve seen it. It makes a big difference.

Even though […] there’s a lot of fraud in this industry, and even though […] part of our appeal is we’re an international company and we share the same ideals, […] even when you’re acting with all the best intentions, […] you still can’t achieve legitimate results […] without being able to call someone and have contacts, or police being cooperative. It’s about relationships.

[Also], we have a team. It’s a seriously hard-nosed job. The guy that runs that department for us [was] an ex-police[men] for nine years.

3. Taobao gets a lot of flack for counterfeit goods, but what about WeChat stores (微商) on WeChat?

Anyone can sell whatever they want on WeChat. […] It’s literally as easy as getting on, buying a SIM card anonymously, creating an account on a phone, and getting to know people, getting involved in groups.

You can’t really hack that process – it’s a bit of a slow uptake – but then you can list photos everyday in your moments, and […] you’re reaching people regularly. You’re completely anonymous and you can take a payment right there, or you can move to another platform like Weibo.

Let’s say you find a potential supplier you want to work with on Taobao. You ask for their WeChat, they give you their WeChat, [and] you deal with them directly. You can’t trace them back. There’s no cooperation [from ISPs] to trace them back to an actual person. [It] would have to be a pretty grievous, something really concerning safety like pharmaceuticals or something sensitive, and then you could probably expect the cooperation of the ISPs then but for [everything] else, no chance.

4. Why is now a good time to build a platform to help protect IPR?

There’s going to be be billions more people coming online and they’re going to come from developing countries. They’re less sophisticated consumers when they get online, and they don’t have money. When they get online they’re going to buy fakes, they’re going to steal content. It’s as simple as that.

In the new economy, e-commerce is going to surpass physical retail. […] If you can stop people from trading online, they can’t reach new business. And as a global economy, they definitely can’t reach international. If they’re only reaching local communities through physical outlets, they’re not serious players and they’re not a big headache for the IP owners.

5. What’s something you’ve learned from working in this industry?

Here’s the big secret in the business: Chinese buyers are not stupid. They’re extremely smart. They’re extremely skeptical. Their whole life they’ve been dealing with fakes […] and they’re very, very savvy. Everyone knows that you don’t go to Taobao to buy a […] genuine luxury handbag. If you’re going there to buy luxury handbag, you probably want a fake one.

I think in foreign countries, people get duped into buying counterfeits a lot more. […] They’re kind of protected from that [..] over there. For example, […] perhaps they […] come across a Chinese website. They don’t even know it’s from China, but they just think, ‘hey this is like $100 cheaper.’

I think that Westerners not being exposed to fakes and fraud as much as Chinese [are] just so much more easily duped into buying stuff.

Image credit: Shutterstock

If you’ve ever wanted to filter romantic prospects by genetic compatibility, China is the place to be.

“Ask any unmarried, single person when they’re young what [their] standards are [for a boyfriend or girlfriend],” says Wei Zhao (赵伟), the founder of 360°Gene (360°基因, our translation), a consumer genetic testing startup based in Beijing.

“They’re actually very confused,” she says. “They’re not sure. We want to help them solve problems on a genetic level, like those inherent qualities or things about [someone’s] personality that can’t be expressed in a survey.”

360°Gene’s matchmaking application of its genetic testing technology might sound bizarre, but it’s one of many genetic tests in China targeted at the mass consumer market. The country’s direct-to-consumer genetic testing startups assess a dizzying array of traits, from your risk of developing acne to the strength of your short-term memory, and even the likelihood that your child will start smoking as a teenager.

However, clinical applications, such as prenatal and cancer-related tests, are mostly absent. It’s partly because lifestyle applications, such as weight loss, are easier to market to consumers, but also because of the country’s regulations – or lack thereof. Though concrete laws around clinical applications of genetic testing exist, everything outside of that is fair game.

“At the moment, [the China Food And Drug Administration] doesn’t have clear guidelines […] on how to report, how to supervise consumer genetic tests,” says Gang Chen (陈钢), the CTO of WeGene, a Shenzhen-based consumer genetic testing startup. “I think they’re still in the stages of planning and preparation.”

“The good thing is that you can do pretty much whatever you want – there’s not a lot of limitations,” he says. “But on the flip side, […] if there are rules, you can follow these rules to create products or services. Even if the outcome is bad, at least you were following the rules.”

Shoot First, Aim Later

The field of genetics is not new to China. The Beijing Genomics Institute (BGI), founded in 1999, was one of the key sequencing facilities for the Human Genome Project, which mapped out three billion base pairs of human DNA. Since then, BGI has continued to make headlines, sequencing other flora and fauna such as rice, silkworms, and pandas. China has also conducted some of the most advanced genetic research in the world. In 2015, Chinese researchers were the first to edit genes in a human embryo.

However, the country’s technological advancements are outpacing their laws, especially in non-clinical applications. For example, Chinese companies that want to sell genetic tests directly to consumers do not need a special business license to do so and can sell genetic testing kits without verification or approval from the CFDA. In March 2014, the Chinese government implemented a blanket ban on genetic sequencing in medical applications. A few months later, the ban was lifted.

“In China, laws are always relaxed in the beginning in order to let industries develop,” says Ms. Zhao. “After a period of time, once some issues come up, [the government] tightens them. Then they relax them again. […] It’s a continuous process of opening and closing.”

“It doesn’t matter whether you’re looking at the internet industry or the third party payment industry,” she says. “This is just China’s market environment.”

The legal gray area around genetic testing hasn’t stopped the country’s startups. They’re aggressive when it comes to locking down market share, and price-gouging is common. In the U.S, 23andMe, one of the first companies to make genetic tests widely available, sells DNA kits for $149 USD. That’s cheap compared to their competitors, some of which offer more comprehensive tests for around $1000 USD. In China, prices for genetic tests can be as low as 299 RMB or about $49 USD.

“Do I want to sell something to make 9,000 RMB, or do I want to create something that lets as many people as possible know their genetic information?” says Mr. Chen. “In this ecosystem, we want to expand the services. If […] I’m considering the more long-term value of the data, then I should lower the barrier of getting the data in the first place.”

WeGene uses chip-based testing, which is cheaper and faster than other types of genetic tests since they sequence just a few SNPs (single-nucleotide polymorphisms) or hotspots on a gene, as opposed to a panel of genes or an entire genome. The company is also positioning itself as a tech rather than a genetics or healthcare company. It’s even developed an API for its database, hoping to become the data layer between companies that want to create genetics-related applications and consumers.

360°Gene is pursuing a data-driven strategy as well, but instead of offering faster and cheaper tests, they are sequencing entire genomes. Though the company doesn’t need or use all the data for the reports it generates, by holding the keys to their users’ genetic data, 360°Gene can continue to offer users value-added services in the future, such as genome-specific fitness programs.

“It doesn’t matter if you’re sick or not, I can save all your genetic data,” says Ms. Zhao. “That way, when you are sick and […] really need it, I can tell you immediately. This is what really offers value to consumers.”

It’s a smart strategy, but one that gives companies, not consumers, control over their own data. In an unregulated environment where most consumers do not have a basic understanding of genetics, this could mean that users are giving up more than they realize.

Ethical Boundaries

Educating consumers is a huge challenge in the consumer genetic testing industry. In other consumer-facing industries, like O2O food delivery or mobile payments, the metrics for quality are straightforward: the food was hot, my money was quickly transferred. But in genetic testing, what counts as high-quality or appropriate testing is much more technical and detailed.

For example, a chip-based test for SNPs associated with breast cancer will not cover all genetic mutations linked to the disease. That means that if your test comes back negative, it doesn’t mean your risk for breast cancer has been properly gauged. Even if your test results do come back positive, it doesn’t mean that you’re going to have breast cancer. However, for some diseases, a chip-based test for SNPs can cover the majority of associated genetic mutations – it just depends.

“It might be that one company does the exact same test, and it just is more expensive and takes longer, and it might be that the company is doing a more complete test, which is why it’s taking longer,” says Dr. Sheila Dobin, a geneticist with a PhD in cytogenetics and medical genetics at Baylor Scott & White Memorial Hospital.

“That’s why […] it’s a good idea to get a genetic counselor [to] look at your family history and say, ‘This is the best test for you at this time,’” she told TechNode.

Most genetic testing startups in China do not offer their users consultation services from genetic specialists. Instead, most settle for a FAQ page or provide a hotline staffed with customer service agents to help users navigate their genetic test reports. It’s not just easier to scale that way – China’s National Health and Family Planning Commission (previously the Ministry of Health) does not offer formal training programs for genetic specialists.

Also, while genetic testing startups will lament the lack of awareness and knowledge among consumers, many continue to produce oversimplified and sometimes misleading marketing material and genetic reports in order to attract more users. For example, some companies market tests for “talent” genes such as athleticism and positive personality traits.

“If […] a child is branded for carrying, say, a ‘gene for ‘puppy love’, ‘prone to violence’, or ‘prone to depression’, it might have a deep psychological impact on the child, and could result in social stigma and genetic discrimination,” wrote authors Suli Sui and Margaret Sleeboom-Faulkner in “Commercial Genetic Testing and its Governance in Chinese Society”, a research paper published in 2015 (paywall).

“Similarly, if a child is regarded as a ‘genius’ on the basis of a genetic test, the high expectations of parents and society regarding gifted children might also put a heavy burden on the child, especially if the child fails to meet the expectations.”

For companies that do offer clinical applications, such as tests for diseases like breast cancer and gout, the ethical quandaries are even more serious. Not only could it result in a consumer taking unnecessary or harmful medical action – especially in the absence of professional genetic counseling – it could put doctors in an ethical bind.

“The big issue here […] is, what if a patient goes directly to a company and gets tested and brings you the test results to interpret?” says Dr. Dobin. “You as a doctor have not ordered that test – do you have to then interpret something you did not order for that patient?”

“Now you have these results you don’t know how to interpret,” she says. “What obligations do you have?”

In many ways, China’s consumer genetic testing industry is simply following the path that most emerging industries take – develop fast and don’t look back. That might work well for some industries, but in an industry like genetic testing, the ethical implications are much more troubling. For now, as China’s consumer genetic testing industry continues to develop without regulation, it’s up to companies to respect and protect their user’s data, navigate the ethics of genetic testing, and offer consumers reliable and accurate tests.

Correction (7/8/2016 15:48): This post has been updated to correct the spelling of Gang Chen’s Chinese name.

Headlines on artificial intelligence typically belong to globally renowned tech giants, such as Google, Facebook, and Apple. Asia’s AI and machine learning startups, on the other hand, rarely make it onto the world stage.

“I want a world-competitive AI company coming from Asia,” says Tak Lo, the Managing Director of Zeroth, a funding program for early-stage AI and machine learning startups in Asia. “[Part] of that is taking Asian startups and being able to support them from a global network of entrepreneurs.”

Zeroth, which launched on July 1st, is a three month funding program that offers mentorship and $20,000 USD in capital to early-stage startups. The team is still working out its application process but plans to launch its first batch this winter. Though Zeroth will accept startups from any AI vertical – “Surprise me,” says Mr.Lo – the program is stricter in its focus on Asia. Relevant startups outside of the region are welcome to apply, but for the most part, Zeroth’s emphasis is on Asia.

Part of that is personal. “[I wanted] to kickstart the Hong Kong tech community,” says Mr. Lo, who is a Hong Kong native. “Hong Kong is a blank space because it’s so behind [in tech], [but] by being a blank space you can draw whatever you want on the whiteboard.”

“I’m very, very serious [about] trying to bring everything that I’ve learned to Asia,” he adds.

Mr. Lo, who was previously Director of Techstars, a global startup accelerator, is also eyeing the city’s angel investors. Currently, Zeroth is still raising funds from investors in the U.S, the U.K, and Hong Kong.

In China, tech giants such as Baidu and Alibaba are seen as the leaders of artificial intelligence and machine learning. Baidu, for example, has its own artificial intelligence research lab, which is headed by renowned machine learning expert Andrew Ng, previously an associate professor at Stanford University. Ant Financial, the financial arm of Alibaba, is partnering with Beijing-based startup Face++ to incorporate facial recognition technology into its mobile payment system, Alipay.

However, Zeroth is betting on Asia’s local startups. The program hasn’t explored any partnerships with Asian tech giants, though it’s open to them. For now, Zeroth’s main focus is on recruiting companies and mentoring them. Tech expertise is also a top priority, which is unsurprising given Zeroth’s focus on AI and machine learning. The program has filled its team roster with seasoned AI tech entrepreneurs, such as Jaan Tallinn, the co-founder of Skype. Even Zeroth’s name is tech-related – “zeroth” refers to zero-based numbering, which is used in computer programming.

Other startup programs, such as TechCode, a Beijing-based startup incubator, are also digging into a growing AI and machine learning industry. According to estimates by Bank of America Merrill Lynch, the global market for robotics and artificial intelligence systems is expected to be worth around $153 billion USD by 2020.

Image credit: Shutterstock

In China, human vs. machine face-offs are just as much about entertainment as they are about technology. On Thursday, Ant Financial, the financial affiliate of Alibaba Group, held a facial recognition contest between T.V celebrity Wang Yuheng and “Mark” (蚂可), the facial recognition AI for Alipay, Ant Financial’s mobile payment system.

Over the course of three half hour rounds, Mark and Mr. Wang identified livestreaming celebrities at the event from hundreds of photographs. Both human and AI guessed correctly for the first two rounds, which involved 150 and 300 photographs, respectively. However, in the third round, when Mark and Mr. Wang were asked to identify the childhood photographs of two livestreaming hosts, and Mark lost.

“We wanted to see how the recognition abilities of super humans like [Wang Yuheng] compared to those of a machine,” Dr. Chen Jidong, the Senior Data Expert at Ant Financial, told TechNode.

“We want to absorb and incorporate their special recognition abilities into our algorithm so that our AI can more safely and conveniently service users,” he says.

Mr. Wang is known for his appearance on the Chinese talent show, “The Brain” (最强大脑), which pits geniuses from different countries against each other. To win, participants complete various challenges, such as identifying which glass a judge drank out of given 520 glasses of water – the challenge that earned Mr. Wang the nickname “Water Brother” (水哥, our translation).

“I believe that Mark has learned a lot in interacting with Water Brother, but it has a long way to go when compared to humans,” said Dr. Chen after Mark lost in the final round. “This event isn’t really a [battle]. We’re just hoping that more people will understand this technology.”

The contest is largely a publicity stunt, similar to the one by Alibaba in April. Using information like social media content and song popularity, the Alibaba’s AI accurately predicted the finalists and winner of Chinese reality singing show I’m A Singer. Mark’s algorithm was developed by Face++, one of Ant Financial’s partners. The Beijing-based startup specializes in face recognition technology and also powers Alipay’s “smile to pay” service.

Alipay’s facial recognition feature has been around for about a year, but is still being perfected, says Dr. Chen. As a finance-related application, Ant Financial has “very strict” requirements when it comes to its false acceptance rate (FAR), or identifying the wrong person. The technology also has to mesh well with the Alipay app and deliver a smooth user experience for all kinds of users. The point is to someday make passwords obsolete, says Dr. Chen.

“We hope that users will try [our facial verification feature] under different light settings, different angles…even while wearing makeup to see if it will pass,” says Dr. Chen. Improving Mark’s performance under challenging environments is one of Ant Financial’s ongoing initiatives. In the case of the childhood photographs, many were shot in dim lighting, contributing to Mark’s errors.

In addition to photo quality, data security is one of the key challenges for financial applications of biometric technology. Simply using one biometric method – a face scan – to verify someone’s identity is not ideal, says Dr. Chen. In the future, Ant Financial plans to incorporate other biometric methods as well, such as behavioral patterns and the user’s social network.

In addition to Ant Financial, other Chinese companies, such as Ping An, are also looking at using biometric identification. In April, Ping An launched its face recognition loan technology, which cuts down the loan application process to six minutes and can differentiate between twins, according to the company.

Image credit: Ant Financial

In Asia, China has a reputation as a more equitable country when it comes to gender and management positions. Globally, China has a slightly higher percentage of women in senior roles, an average of 25% versus 22%, according to the Grant Thornton International Business Report in 2015.

However, in the tech industry, chauvinist views – namely that women are less capable of understanding technology than men – exist among both sexes.

“As a woman investor, we are very sensitive. We tend to be very sharp. In terms of tech background, it’s not my strength. That’s why I have my male investors help me,” says Xiaoting Zhang, the CEO and Managing Partner of Ming Capital, highlighting the prevalence of gender stereotypes in China’s tech industry.

At the “China’s Female Investors” panel at TechCrunch Shanghai on Tuesday, three female investors from Ming Capital, Autobot Capital Partners, and ZhenFund discussed the funding landscape in China, and of course, gender.

According to a report released in April by TechCrunch, only 7% of partners at the top 100 venture firms are women, where ‘top’ is defined by longevity, recent investment activity, rounds led, and funding amount. In China, it’s not clear what percentage of venture firm partners are female, but it’s fair to assume that it’s similarly low.

“As a female, we are a minority, especially in internet investment,” says Minman Gu, the Principle of ZhenFund. “I think that we should not…label ourselves as a woman investors. The moment you label yourself, you say no to some possibilities.”

Panelists discussed both disadvantages and advantages of being a female investor in China’s startup ecosystem. For example, according to Ms. Gu, female investors have the advantage of identifying blind spots and opportunities that their male colleagues might miss. She also believes that as a female investor, she has a keener intuition for certain products, such as Dayima (大姨妈), an app that tracks menstrual cycles and provides content related to women’s health and fitness.

In addition, how entrepreneurs handle their family life and family relationships is something that she will pay attention to but her male colleagues might ignore, says Lan Zheng, a Managing Partner at Autobot Capital Partners.

“There’s so many roles and responsibilities [for women],” says Ms. Zhang. “For example, one of our project owners is a startup entrepreneur. She just gave birth to a baby half a year ago. I admire her so much – she’s kind of my idol.”

In China, women are under a lot of pressure to get married and have children before their thirties. There’s the social stigma of becoming a ‘leftover woman’, or an unmarried woman in her late twenties and above. However, that trend is changing, especially in urban centers like Beijing and Shanghai, where more women are choosing to pursue their own careers. As Chinese society becomes more progressive, hopefully its investment culture will diversify as well, allowing for more open-minded views about female investors, especially female investors in tech.

“I’m very good at physics and mathematics. I’m very proud to be a tech-minded or science-minded person,” says Ms. Zheng. “I want to overcome the stereotype that women can only be good at cultural things and can never conquer tech.”

Blockchain, the technology behind Bitcoin’s public ledger, is one of the hottest topics in fintech, and one of the technology’s biggest fans are banks.

“You see these banks that really get excited about blockchain and fintech,” says Zennon Kapron, the founder of Kapronasia, a research and consulting firm that focuses on Asia’s financial industry.

“At some point over the next year, banks are going to wake up and realize that blockchain is a great, sexy technology for a problem that doesn’t exist,” he says.

At TechCrunch Shanghai on Monday, Mr. Kapron and Bobby Lee, the founder of BTCC, one of China’s first bitcoin exchanges, discussed the future of Bitcoin and blockchain technology. According to a report by KPMG and CB Insights,  venture capital investments in Bitcoin and blockchain-related startups rose from $3 million in 2011 to $474 million in 2015. Though blockchain technology was originally developed for Bitcoin, the technology is applicable to other assets as well, from diamonds to stocks.

For banks, blockchain technology has the potential to speed up transaction times, minimize fraud, boost security and transparency, and slash costs. It’s also less risky than adopting a cryptocurrency and betting on the value of Bitcoin. However, so far, blockchain technology has not been widely adopted outside of Bitcoin.

“For there to be a good and suitable blockchain for companies, banks, [and] financial institutions to use, there has to be a very good blockchain that is immutable, global, open source, [and] public,” says Mr. Lee. “Today, there is only one such ledger – it’s called the Bitcoin blockchain.”

One of the core strengths of blockchain technology is the distributed and decentralized nature of its record-keeping. A blockchain is made up of a network of computers or “blocks”, each containing a copy of the whole ledger. Thus, safeguarding against unscrupulous attempts to rewrite or alter parts of the ledger depends on how large and distributed the blockchain is. For banks or startups that want to create smaller or private blockchains, many of the benefits of the technology could be lost.

“A lot of the things that blockchain was designed to solve, those aren’t benefits of these smaller, private blockchains,” says Mr. Kapron. “If you have five banks using one blockchain…how secure is that blockchain? How much do you trust those other players that are there?”

The enthusiasm behind blockchain technology from financial institutions is part of a rising interest in fintech in general, as banks grapple with disruptive fintech startups in mobile payments, P2P lending, and more. Many banks, such as Standard Chartered, have taken the approach of partnering or investing in fintech startups, many of which target financial institutions as their customers and clients, not necessarily their competitors.

However, financial regulations and policies will shape and can make-or-break the future of many fintech applications, such as Bitcoin. At the end of 2013, the Chinese government cracked down on Bitcoin, prohibiting banks and payment companies from dealing with the cryptocurrency. Still, the regulations left room for optimism as individuals were still allowed to sell and and buy Bitcoins. As regulations around blockchain continue to develop, how banks and startups will implement blockchain for their own purposes remains to be seen.

The ‘quantified self’ movement might still have a future, despite the tanking wearables market. Digitizing our health and monitoring our bodies could well be the future of healthcare.

“We can take all the DNA in our body and turn it into letters on a hard drive,” says Jimmy Lin, the Chief Scientific Officer for Oncology at Natera, a genetic testing company. “So that actually makes it a data problem. That’s really exciting.”

“It’s no longer that we [will] see a doctor once a year or only when we’re sick,” he says. “[There are] possibilities for us to have constant monitoring of our health, 24/7. That sort of rethinks how healthcare can be provided.”

On Wednesday at SparkLabs’ Demo Day in Seoul, Dr. Lin and Laurent De Vitton, the co-founder of  Apricot Forest (杏树林), a healthcare startup based in Beijing, highlighted opportunities and challenges for startups eyeing the healthcare industry, which is in many ways one of the final frontiers for consumer technology.

“I think the ecosystem is very, very young,” said Mr. Lin. “Even if you look at all the excitement of the Apple Watch, or ways that people can use a cellphone, it’s still not much more advanced than a pedometer.”

The smartphone has revolutionized a multitude of industries, especially consumer-facing verticals, such as virtual reality, e-commerce, and social media. Smartphone applications in the healthcare industry, however, are much more niche, like smartphone microscopy, which can help doctors without access to expensive medical devices detect diseases like skin cancer or malaria. In addition, despite the wealth of technological advances in healthcare – gene editing, robotic surgeons, in-body sensors – the experience of end users, or patients, still falls short compared to other consumer products.

“Individuals in the West, but also Asia, understand less and less why their shopping experience [has] been so revolutionized by the smartphone, why their entertainment life has been so deeply transformed, [but] why their health is barely impacted as far as their personal experience goes,” says Mr. De Vitton.

Improving user experiences in the healthcare industry is a huge opportunity for startups. In China, for example, overextended doctors juggle excruciating caseloads, sometimes seeing fifty patients a day, averaging to about less than five minutes per patient, says Mr. De Vitton. Lowering the rate of misdiagnosis and improving patient service can come from simple solutions, like Apricot Forest’s suite of apps, which digitizes patient case files and enables doctors to crowdsource solutions and diagnoses from other doctors.

Big data also opens a lot of doors for healthcare startups. From medical records to genomic data, the healthcare industry will need products and services to sift through and make sense of vast amounts of data.

“Until we’re able to derive value from big data, it’s just a bunch of data. That’s where a lot of opportunities exist for startups,” says Mr. Lin. “From taking the data that’s from your DNA to a file, to ultimately an action that a physician can then recommend you to do, all those steps are potential… companies, [and problems] that startups can be able to address.”

In China, where an alarming number of doctors are physically assaulted by their patients, disruption of the country’s healthcare system is badly needed. According to a report by the Chinese Medical Doctor Association in 2015, almost 60% of medical staff reported verbal abuse from patients and more than 13% said they had been assaulted.

The country’s healthcare system also suffers from a lack of trust, which is further entrenched by medical scandals, such as the 21-year old student who died in May after undergoing experimental treatment advertised on Baidu.

Image credit: Shutterstock

Following a series of leaked rumors, Chinese tech giant Tencent officially announced the purchase of a majority stake in Supercell, the Finnish gaming company behind the hit game Clash of Clans. The deal will buy a 84.3% stake in the company for $8.6 billion USD from Japanese firm SoftBank Group Corp.

The deal values Supercell at $10.2 billion USD, almost double its valuation a year ago. When SoftBank bought a 51% stake in 2013, the Finnish company was valued at a mere $1.53 billion USD.

“We have agreed with Tencent that Supercell will continue to be operationally independent, exactly as it was under SoftBank’s ownership,” wrote Ilkka Paananen, CEO of Supercell, in a post on the company’s blog.

“Our headquarters will stay in Helsinki and we will pay our taxes in Finland. All of this is very important for us,” Paananen added.

Tencent’s partnership will offer Supercell access to Tencent’s gaming platforms, such as QQ Games, as well as access to some of Tencent’s other game-related purchases, most notably Riot Games. In turn, the tech giant will grow its mobile gaming business. Gaming is a core part of Tencent’s revenue, making up more than half of the company’s overall revenue in Q1 2016. Tencent’s gaming business model is based off of various value-added services, including the purchase of digital weapons, as well as VIP memberships.

In China’s heavily monopolized mobile gaming industry, Tencent is one of the top players, in addition to iDreamSky and NetEase. As of April 2016, the tech giant occupied almost half of the top 20 titles for Android mobile games in China, with games like King of Glory, Crossfire, and We MOBA. In addition to mobile games, the tech giant will continue to diversify its gaming portfolio through its pan-entertainment strategy, which it announced during last year’s ChinaJoy tradeshow.

Image credit: Supercell

Despite all the brouhaha around internet celebrities and KOLs, it turns out that money is the top reason why Chinese users decide to livestream, not fame.

In a report released by Tencent on Monday, out of 4525 Chinese netizens surveyed, 43% of those who are willing to be livestream hosts would do so for the money. The second most popular response, at 34.6%, was livestreaming as a way to “kill time.” Survey respondents could pick more than one response in their answer, the other options being livestreaming for fun (32%), to share life experiences (22.2%), or to gain followers (17.9%).

The results illustrate one of the key differences between Chinese livestreaming platforms and their Western counterparts: digital gifts. In China, audience members can tip livestreaming hosts with digital gifts that are later converted into real money through the platform. On YY, one of China’s leading livestreaming platforms, for example, digital gifts range from 0.1 RMB – applause, a lollipop, fruit candy – to 1314 RMB, a luxurious cruise ship. Users who tip – especially those who tip generously – are usually thanked and acknowledged by the host during the show.

“For me, at periods of high traffic, I can earn hundreds of thousands [of RMB] each month,” a livestreaming host on Chinese social networking app Momo told TechNode.

The host, whose stage name is Hong Xiaoqiao (洪小乔), started livestreaming when she was 21 years old, dropping out of college to do it full-time. She runs her livestreaming show every night, a mix of singing and conversation. Each episode lasts at least three hours, she says. During the day, Hong Xiaoqiao will also livestream, albeit more casually, and chat with some of her more dedicated followers.

“I prepare ahead of time,” she says. “I’ll think about today’s conversation topic and get the background music ready. Half an hour ahead of the show, I do my makeup, get my clothes ready, and set up the background music.”

Of course, not all livestreaming hosts are as successful as Hong Xiaoqiao, but for those who can attract and keep loyal followers, livestreaming as a full-time job is a real possibility.

They don’t have to be wildly famous to gain traction as a livestreaming host either. According to Tencent’s report, audience members aren’t necessarily attracted to well-established wanghong or internet celebrities. Though about a third said that they liked watching internet celebrities livestream, another third said that they didn’t care who the livestreaming host was, as long as they were “good-looking.”

Tencent’s report, which studied Chinese Android app users for the month of May, also reaffirmed the gender inbalance of mobile livestreaming platforms. About two-thirds of livestream users are men, most of them either 19 years old and younger, or 21 to 29 years old, reported Tencent’s results.

Over the past few months, major livestreaming platforms, such as YY, Panda TV, and Douyu TV, have attracted the scrutiny of government regulators, who are cracking down on lewd content. In particular, female livestreaming hosts are facing new rules, such as Douyu TV’s point system, that punish hosts for wearing salacious outfits (link in Chinese). However, curbing sexual content will pose additional challenges to China’s content moderators, as hosts are often encouraged to dance sexually or change into more sexually appealing clothing by audience members, who then reward hosts for doing so with digital gifts.

Image credit: Douyu TV, YY.com

For end users, it’s easy to forget how much infrastructure is required to support the invisible magic that is cloud technology.

In reality, the cloud is made up of industrial-scale warehouses packed with backup generators, air conditioners, and data centers, where servers and other storage equipment are kept. In China, these data centers occupy a total of about 2.35 million square meters*, an area that is expected to expand to 3.27 million by 2019, according to DatacenterDynamics (DCD) Intelligence. On top of that, each data center requires electricity – a lot of it.

“In operational costs, electricity is the most expensive,” says Pan Dong from Guofu Guangqi (国富光启), a Shanghai-based PaaS and IaaS company. “Why are China’s telecom companies willing to go to Inner Mongolia and Guiyang? Because the electricity is cheaper.”

At DatacenterDynamics’ annual conference in Shanghai on Wednesday, experts from different tech companies, including Huawei, Telstra, and Intel, shared insights on the data center industry. Though U.S tech companies, such as Facebook and Google, have a head start when it comes to building and maintaining data centers, China’s tech giants are certainly catching up, especially when it comes to energy efficiency.

“Chinese colocation [providers] are good at energy efficiency,” says Dedric Lam, the CEO of DCD Group Asia Pacific. “In general, [they’re] better at energy efficiency than the average global colocation provider.”

Colocations are shared facilities for data centers that are managed by a service provider. In China, about 70% of colocations belong to telecommunications companies like China Telecom and China Unicom. Because China started building data centers after the U.S, their equipment is newer, says Mr. Lam. That’s partly why data centers in China are more energy efficient and have more optimal PUE (power usage efficiency) numbers than the global average.

“China is a maturing market – the age of our data centers is, in general, younger. They don’t have the problem of legacy infrastructure as much,” he says.

Chinese tech companies, such as Tencent and ZTE, are also investing heavily in green solutions, optimizing their PUE to levels close to or superior than those of Facebook. In 2011, Facebook launched its “Open Compute” server, a customized piece of hardware that the company claims is 38% more efficient to build and 24% less expensive to run than other servers on the market.

In May, both ZTE and Tencent partnered together to create what they claim is the world’s most energy-efficient data center, Tencent West Lab. The data center is made up of smaller data centers known as “T-blocks”, short for “Tencent blocks.”

“T-block changes the traditional data center into something standardized and modular, then we can stack those blocks in fields,” says Sean Zeng, a data center architect at Tencent. “It takes less time for construction and is very convenient for us to expand or scale it.”

Because T-blocks are smaller than traditional data centers, they can be pre-fabricated and transported to the data center site, saving time and operational costs. According to Mr. Zeng, T-blocks are very sensitive to location, as they are designed to leverage their surrounding environment to cut costs.

“Location is very important for T-blocks,” he says. “In central and western China, for example, there are some advantages in terms of climate.” In Inner Mongolia, for example, T-blocks need to be customized for the province’s freezing winters, and can take advantage of the region’s abundant sunshine and moderate humidity.

In addition to T-blocks, ZTE and Tencent’s Tencent West Lab makes use of solar power and indirect evaporative-free cooling technology, which is five times as energy efficient as traditional air-conditioning systems, according to ZTE. Other companies, such as IBM and Delta, are also investing in their own micro modular data centers as part of a global trend to cut costs and improve energy efficiency.

For China, improving the energy efficiency of its data centers will be imperative. At the moment, only about half of China’s massive population is online. As that other half gains access to the internet – or as existing users’ needs grow more demanding – China’s data centers will need to grow and expand sustainably.

According to China’s Ministry of Industry and Information Technology (MIIT), as of 2015, China had over 400,000 data centers. Though China’s colocation centers are relatively energy efficient, overall, China’s data centers are less green than the global average. The Chinese government has already started setting benchmarks for energy efficiency, and is working with tech companies to lower their energy consumption. In 2015, for example, MIIT and the National Energy Administration (NEA) released a plan to launch one hundred green data center pilot projects by 2017, with energy consumption rates at least 8% lower than the national average by 2017 (link in Chinese).

*This estimate refers to the ‘white space’ in data centers, a term that describes the amount of usable area in a data center.

Image credit: Shutterstock, Tencent Data Center

Chinese tech giant Tencent may soon add the company behind mobile gaming sensation Clash of Clans to their already massive portfolio.

The Wall Street Journal reported on Thursday that Tencent is in talks to purchase a majority stake in Supercell from SoftBank Group Corp, according to people familiar with the matter. The deal that would value the Finnish gaming company at $9 billion USD.

When SoftBank purchased a 51% stake in Supercell in 2013, the company was worth $1.53 billion USD. The sale would free up some significant capital for Softbank, which also recently divested around $10 billion worth of Alibaba shares which the Japanese firm acquired as an early investor in the e-commerce company.

Tencent is also in discussion with other investors, such as Hillhouse Capital Group, who may join the deal as co-investors, according to the same sources.

“We don’t comment on market rumors or speculation,” a spokesperson from Supercell told TechNode. SoftBank and Tencent did not respond to requests for comment.

Supercell’s Clash of Clans has enjoyed extraordinary success in the Chinese mobile gaming market, which is primarily dominated by local players. Other notable companies in China’s mobile gaming industries include Chinese internet company NetEase, as well as mobile game publisher iDreamSky, which sold $15 million USD worth of shares to Tencent in the process of their initial public offering last April.

The multi-billion dollar deal with SoftBank will be Tencent’s largest to date. Just last December, Tencent purchased a majority stake in U.S gaming company Riot Games, the maker of hit eSports game League of Legends. In 2013, the Chinese tech company purchased almost half the stock of gaming firm Epic Games, totaling $330 million USD.

Gaming is a core part of Tencent’s business, accounting for over half of the company’s overall revenue in Q1 of 2016. According to market research firm DataEye, mobile games made up 36.6% of China’s digital gaming industry in 2015, a number that is expected to increase as tech companies shift their attention from PC games to mobile.

Image credit: clashofclans.com

Update (6/17/2016 14:28): This post was updated to include a comment from Supercell. 

China’s mental health record is tarred by social stigma and a lack of resources. While public initiatives are now seeking to rectify the issue, the country’s active startup ecosystem is also competing to fill the gaps.

According to a study published in 2011, a staggering 91.8% of Chinese people with a mental health diagnosis never seek help. Part of that has to do with the shortage of trained mental health professionals in China, as well as the country’s psychiatrist-to-patient ratio, which is as low as 1.24 per 100,000 patients, compared to the global average of 4.15 per 100,000.

“The problem is huge,” says Jin Hsueh, the co-founder and CEO of KaJin Health, a Taiwanese startup that provides an online counseling service to people in Chinese-speaking communities. “There are [90] million [people with] depression in China, and very, very [few] that ever seek for help, talking to a doctor or therapist.”

China’s mental health problem isn’t just an issue of resources. Social stigma continues to deter patients from seeking help, and severe mental health cases, including schizophrenia and psychosis, are treated as family issues, sometimes with disastrous consequences.

“In China… there’s always a huge stigma when you go to a physical clinic to seek [mental health] help,” Mr. Hsueh told TechNode. “That’s why we’re doing this business, because it allows you to talk to a…therapist at home, without any[one] knowing.”

While evidence shows the government is taking steps to acknowledge the problem, private enterprise, including startups, are also beginning to shoulder some of the load. KaJin Health is an early-stage company targeting Chinese-speaking users, such as those in Taiwan and mainland China. Through the company’s official WeChat account and website, users can book appointments and chat with Chinese-speaking therapists.

The app also aims to rectify another glaring issue: mental health resources in China are heavily skewed towards the country’s urban centers.

“[Our local Taiwanese and Chinese users] don’t know much about therapy, but by [providing] online access to therapy, it kind of lowers the barrier a little bit,” says Mr. Hsueh. “You don’t have to visit a physical clinic so they would like to give it a try. Seventy percent of [our] customers…are first-time therapy users.”

Different Approaches To Therapy In Mainland China

According to Mr. Hsueh, China requires a special approach when it comes to mental health therapy, believing that cultural differences play a role in designing effective therapy.

“The type of therapies in Taiwan [are] usually more long term…[guiding] you through the downturns and the stress,” he says.

Customers in China prefer more “straightforward” answers, where therapists provide instant solutions and instructions on how to get over their stress, he says. “In China, we position [our product] more…like coaching rather than [therapy].”

Currently, KaJin Health is partnering with brick-and-mortar clinics in Taiwan, where they refer customers to a certified medical facility if needed. To avoid any legal headaches, the startup has wisely chosen to outsource drug prescriptions and medical procedures to partner clinics. However, KaJin Health is struggling to find local partners in China.

“We haven’t found any trusted local clinics to partner with,” says Mr. Hsueh. “It’s hard for us to [identify] if they are qualified or not.”

Over the past decade, policies around mental health in China have slowly improved. In 2004, the country created local brigades of community-focused mental health clinicians, an initiative dubbed the “686 Program” that was meant to ease the disparity between cities and the countryside.

In 2012, the Chinese government enacted its first mental health law, which defined basic guidelines around the diagnosis, treatment, and rehabilitation of mental disorders, and promoted psychological well-being. Still, China’s mental health services have a long way to go.

In addition to online counseling services, the company also runs offline and online mental health awareness campaigns. According to Mr. Hsueh, KaJin Health is also in talks with Chinese insurance companies to create a new type of coverage just for “psychology treatments,” in order to increase the accessibility of its services, which currently cost around 60 USD per hour.

Currently, KaJin Health has offices in both Taipei and Shanghai, and was part of local incubator program Chinaccelerator’s ninth batch of companies. Though roughly half of the KaJin Health’s users are Chinese-language users living overseas, the company has its eyes set on the local Chinese market, where the company believes there’s a greater need and more potential to grow its business.

Similar services have also begun to crop up on the mainland. “Simple Psychology” (简单心里网, our translation), is a Beijing-based startup that also offers online counseling services as well. China also has a number of non-profit organizations that raise awareness around mental health, such as CandleX, one of KaJin Health’s non-profit partners that focuses on depression.

Image credit: Shutterstock

Update (6/13/2016 16:21): This article was updated to include a corrected figure from KaJin Health. Mr. Hsueh meant 90 million, not 900 million, when talking about the number of people suffering from depression in China.

Whether it’s a MOOC or a live-streamed tutoring session, the bottleneck for most edutech startups is usually the same: teachers.

“Chat [is] this two-way medium. It’s really well-suited for education,” says David ‘DC’ Collier, the CEO of Rikai Labs, an English education startup based in Shanghai. “You’re chatting with a chatbot and…actually learning at the same time.”

Rikai Labs is using chatbots to boost the scalability of its English education platform. Instead of only interacting with either a computer or a human, like in a one-on-one video session, Rikai Labs implements something called  “Artificial Artificial Intelligence”, which blends the two.

For example, during any given lesson, Rikai Lab students will converse with both chatbots and human teachers, running through structured content as well as more open-ended role play. Lessons are conducted through WeChat’s chat interface.

“We don’t really regard the AI as necessarily replacing the teacher,” says Mr. Collier. “It’s more like a teacher’s assistant.”

The concept of “AAI” comes from Amazon’s Mechanical Turk, which outsources tasks that are difficult or unsuitable for computers to human beings. These tasks are known as “Human Intelligence Tasks” (HITs) and include things like labeling pictures and transcribing spoken audio files. For Rikai Labs, “Human Intelligence Tasks” include open conversations between students and teachers, who don’t need to be trained in order to talk to humans. Rikai Labs’ chatbots, which the company calls “teacherbots”, are responsible for simpler interactions, such as providing practice material and responding to student answers.

“[Chatbots are] taking out all of the drudgery,” says Mr. Collier. “Hopefully, [teachers] would be able to deal with twenty students at the same time.”

As Rikai Labs’ chatbots get smarter, the student-to-teacher ratio should increase, says Mr. Collier. The platform’s chatbots, like Rikai Labs’ students, learn from teacher corrections, which happen not only during human-to-human interactions, but also bot-to-human interactions as well. When Rikai Labs’ students are practicing with chatbots, for example, teachers can observe and jump in at any time to correct mistakes. As the amount of training material increases, Rikai Labs’ chatbots will become better and better at catching grammar mistakes and teaching students, says Mr. Collier.

China’s Chatbot Industry Is Still Early Stage

In China, chatbots are nowhere near as hyped up as they are in Western countries, where tech giants like Facebook, Google, Microsoft, and Amazon are actively investing in chatbot technology. For example, Google and Facebook are developing powerful natural language processing (NLP) tools, which are the backbone of chatbots – they’re what enable them to understand human speech and respond accordingly.

In May, Google open sourced SyntaxNet, the company’s NLP engine that can parse text and understand grammar. Facebook has its own natural language tool called DeepText, which helps chatbots mimic human speech by learning from Facebook content. China’s tech giants, on the otherhand, have been pretty quiet when it comes to chatbots, though related fields, such as artificial intelligence and natural language processing, are obviously areas of interest, especially for Baidu.

Besides Rikai Labs, there are a few other WeChat chatbot accounts. There’s Microsoft’s Xiaobing (小冰), a flirtatious female bot that users can chat or play games with (she challenged me to a Chinese idiom competition. I lost). Another chatbot WeChat account is Turing Robot (图灵机器人), whose conversational abilities appear to be less mature than those of Xiaobing.

Still, when it comes to more commercial or service-oriented WeChat accounts, chatbots are rarely implemented, says Mr. Collier.

“WeChat is just an amazingly underused platform,” he told TechNode. ” [In] Slack, everyday people are releasing cool new applications that really use the platform. [In] WeChat, people are just shoving marketing material on webpages.”

WeChat’s Developer API supports many functions that are useful for chatbots, such retrieving text-to-speech output, says Mr. Collier. However, most WeChat applications stick to HTML5 pages and rarely take advantage of WeChat’s built-in chatbot potential. In addition, though other chat platforms, such as Line and Facebook Messenger, have the ability to utilize chatbots, WeChat is the only one that can really monetize it as a business, due to its micropayments system WeChat Wallet.

Of course, chatbots still have a long way to go, especially when it comes to open-ended and less structured chat dialogue. “We’re trying to take a fairly curated approach…so it’s not just random chat,” says Mr. Collier. “Over time, we’ll have to see how scalable we’re able to [teach] people.”

“We’ll probably need a bot to watch the teacherbot or something like that, so we don’t get a Microsoft Tay kind of situation,” he adds.

The Shanghai-based startup will face stiff competition from all directions, as China’s English education market is highly lucrative and fiercely competitive. The industry includes large, traditional education companies, such as Education First and Wall Street English, as well as startups, such as Liulishuo (流利说) and 51talk.

Currently, Rikai Labs’ service is free – students can start lessons by following the company’s WeChat account – but doesn’t have that much content. According to Mr. Collier, the company plans to launch another version in two months, and will charge students 20 RMB (about $3 USD) per lesson in future versions.

Image credit: Shutterstock

From education to gaming, talent shows to dating, China is experiencing a love affair with live-streaming.

And now there’s a Chinese crowdfunding platform that will allow you to put your hard-earned dollars toward any livestreaming project, from language classes to low-level pyromania.

Beijing-based startup crowdfunding Qschou (轻松筹) announced on Wednesday the completion of a $20 million USD round of Series B+ funding, bringing its valuation up to an estimated $350 million USD. Their latest project? Crowdfunding livestreaming projects.

Livestreaming products vying for funding on Qschou’s platform include a live session of ‘drink mixing’, where the video host will apparently mix strange concoctions and drink them if they meet their goal funding, as well as another project entitled “I’m going to livestream while setting a soda can’s pull tab on fire to see if it explodes.”

A more rational example of how people are using Qschou’s third and latest mode of crowdfunding is teaching classes through the app. People who are interested in attending the class pay upfront by a certain date. If enough people have signed up by the time the project reaches its deadline, the teacher teaches the class.

Participating investors included IDG, DT Capital Partners, and Tencent.

“After this round of funding, Qschou will continue perfecting its product and improving its service,” Liang Yu, the CEO of Qschou, told TechNode. “In addition, we will also increase the strength of our marketing, and let more people know about how they can use the Qschou crowdfunding platform.”

According to Mr. Yu, the livestreaming feature is still undergoing internal testing. In the next version of the app, all users will be able to apply to submit livestreaming projects to Qschou’s platform.

If you’re used to U.S-based crowdfunding platforms, such as Indiegogo and Kickstarter, Qschou’s livestreaming feature sounds like a far cry from the typical crowdfunding model, where donors are seen as supporters of a project, not audience members.

However, in China’s crowdfunding landscape, it’s not uncommon to see the mechanics of crowdfunding – a timeline, rewards, and donations – applied in more commercial contexts. For example, crowdfunding platforms by e-commerce giants Taobao and JD run are used for flash sales, not crowdfunding.

Qschou’s platform also includes this mode of crowdfunding, where projects are more about selling products than raising money. Most projects are homemade or homegrown products, such as Dragon Well (龙井, longjing) green tea and dried jujubes from China’s Xinjiang province. The startup’s platform also supports a type of crowdfunding similar to Indiegogo and Kickstarter, where projects are unrealized dreams that need money in order to be achieved.

Founded in 2014, Qschou claims that it has featured over 600,000 projects on its platform, with almost 100 million users contributing as project supporters. The company joins number of other crowdfunding platforms in China, including Tencent’s own crowdunding site on its Open Platform, as well as Kaistart (开始众筹) and Zhongchou.com (众筹网).

China’s cutthroat education system is a breeding ground for Chinese K-12 education startups. The country’s exam-heavy system particularly gives rise to startups that focus on helping students improve their test scores.

Online education startup Yuanfudao (猿辅导), which targets China’s middle school and high school test takers, announced a $40 million USD boost from Chinese tech giant Tencent on Tuesday.

Last March, the Beijing-based startup raised a $60 million USD round of Series D funding from IDG, Matrix Partners, New Horizon Capital and CMC Capital Partners.

“Over the the past four years, with continuously improved adaptive learning algorithms, Yuanfudao has gained a massive amount of data in terms of our students’ practice behavior, which we have used to build online tutoring courses,” said Li Yong, Yuanfudao’s CEO, the company’s press release.

Currently, Yuanfudao has three products, but their online tutoring platform, also named Yuanfudao or “Ape Tutor” (our translation), will be the main beneficiary of the $40 million USD injection. As far as products go, Yuanfudao’s tutoring app is pretty straightforward – it connects students with tutors, who livestream through the app. Students can choose one-on-one tutoring services or join a group class. Some tutors teach a series of classes, typically on exam-specific material, while others teach one-off courses that are priced as low as 1 RMB ($0.15 USD) for a one hour lecture.

Yuanfudao’s product is aimed at easing China’s buke (补课) bottleneck, which affects middle school and high school students all over China. In China, buke refers to remedial classes that are taught outside of normal class hours. However, unlike remedial classes in other countries, buke is not just for students who have missed class or need to make up coursework. In China, buke classes are largely attended by students who want to improve their test scores.

Due to the competitive and do-or-die nature of China’s exam system – students can only attend schools that they test into – buke classes are a lucrative business. According to Yuanfudao, Chinese families spend an average of 3,820 CNY (about $580 USD) per year on their child’s buke classes, with some families spending as much as 80,000 RMB (about $12,149 USD) a year. By moving buke sessions online, Yuanfudao claims it can cut at least 70% of the cost and distribute buke tutors and services more fairly across different regions of China.

In addition to Yuanfudao’s tutoring platform, the company has two other products: Yuantiku (猿题库), an app that helps middle school and high school students cram for national exams by serving practice problems from an adaptive database, and Xiaoyuansouti (小猿搜题), an app that lets students  search for homework answers and one-on-one help by uploading pictures of homework problems.

Though the three apps operate independently at the moment, it’s not hard to imagine possible synergies between them. Already, Yuanfudao has a unified account system that recognizes users based on their phone number across its different apps. In China’s crowded education market, Yuanfudao’s product suite could give it the competitive edge it needs over similar products, like Xuebajun (学霸君), which is almost identical to Yuanfudao’s Xiaoyuansouti.

Yuanfudao joins a number of other education startups in Tencent’s investment portfolio, including Enjoy Learning, a private tutor marketplace, and ABC360, an English language learning startup based in Hangzhou. In addition to funding, Yuanfudao’s press release hinted that it would “cooperate with [Tencent] on a more strategic level.”

The company’s PR spokesperson did not respond to requests for more details.

Update (6/2/2016 9:45): This post was updated to include IDG as one of Yuanfudao’s previous investors.

As if Alibaba’s counterfeit woes weren’t enough, the Chinese tech giant’s e-commerce platforms Taobao and Tmall were hit with more bad news on Monday.

An investigative report by The Beijing News (link in Chinese), a Chinese media company, was published yesterday, revealing China’s illegal market of “empty package scalping” (空包刷单, our translation), whereby shop owners on Taobao and Tmall inflate their sales statistics though fake package deliveries by using “empty package” service websites and delivery services.

“I wasn’t even in China, I never bought anything from these stores,” said one source in the report, who had left China for two months.

In that period of time, she received more than one hundred fake packages filled with toilet paper, shredded paper, and other useless debris. Like other victims of “empty package scalping” schemes, her personal information, including her full name and address, had been leaked online to unscrupulous e-commerce shop owners.

In other “empty package scalping” schemes, shop owners will send packages with the words “Already inspected” (已验视, our translation) stamped on them, so abetting couriers at package delivery warehouses know they’re fake. That way, they can mark the package as “delivered” without having to send it to a final destination.

According to a source who spoke with The Beijing News, those in the package delivery industry are well aware of “empty package scalping”, which has been occurring since at least 2013.

Five package delivery companies were implicated in The Beijing News’ investigative report:  STO Express (申通快递), YT Express (圆通速递), ZTO Express (中通快递), Best Express (百世快递), and Yunda (韵达速递).

“The ’empty package scalping’ incident has shocked us,” stated STO Express in a public announcement. “As one of the largest courier companies in the industry, we cannot be excused for the inadequate management and poor supervision that has been revealed by the ‘scalping’ incident. To our customers and friends, we offer our sincere apologies.”

According to the company’s announcement, STO Express will adopt a “zero tolerance” attitude and work with law enforcement to conduct investigations and crack down on those involved in the empty package scalping schemes. In addition, STO Express claims they will improve their supervision and oversight systems, creating a “blacklist” for dishonest shop owners.

During the 2016 Development Of China’s Express Delivery Industry Conference (2016中国快递行业发展大会, our translation) on Sunday, the CTO of Cainiao, Alibaba’s logistics affiliate, said that it was working with both government officials and delivery companies to investigate the network of “package scalpers.” In addition, the company said it would continue to leverage big data not only to stop stores from plagiarizing goods, but empty package scalping as well.

However, Cainiao’s war against “empty packages” will be hard one to win. Shop owners on Taobao and Tmall rely on their total sales to promote their stores, attract customers and boost the visibility of their shop. In addition, their shop status is influenced by the number of deliveries they successfully complete, as well as user reviews. Both can be bought.

A spokesperson from Alibaba could not be reached in time for comment.

Image credit: Shutterstock

Despite efforts to clean up the country’s P2P lending space, another Chinese P2P lending site, Esudai (e速贷), was shut down on Wednesday amid embezzlement claims.

According to a statement by local police in Huizhou, Esudai is accused of illegally collecting deposits and “absorbing” hundreds of millions of RMB. Thirteen executives from Guangdong Huirong Investment Co., the company responsible for Esudai, have been detained.

“As Huizhou’s first and largest P2P platform, Esudai will cooperate with the compliance inspection and supervision departments, and work together to promote the healthy development of the industry,” stated Esudai on its website a week earlier when investigations began.

The company called the inspection “routine” and said that the company’s senior executives and select employees were working to help police with their investigation. “Once the investigations conclude, we’ll send out a formal explanation on what happened,” stated the company. “Please understand…and do not spread rumors.”

A spokesperson from Esudai could not be reached in time for comment today.

In China’s turbulent P2P lending landscape, Esudai’s case rings all too familiar. In January, twenty-one executives from P2P lending platform Ezubao (e租宝) were arrested for stealing 50 billion RMB (about $7.6 billion USD) from almost one million investors. Though Ezubao’s case is exceptional, legal cases involving P2P lending in China are a common occurrence. According to a work report released by China’s Supreme People’s Court in March, China’s court system processed a total of 1.42 million cases that had to do with P2P lending in 2015.

In December, the Chinese government published a lengthy document on managing and regulating online P2P platforms (link in Chinese). In particular, the government defined P2P lending platforms as providers of “information services”, responsible for providing accurate information to both lenders and borrowers, not managing or handling funds. Instead, the transaction of money would be done through third-party banks. P2P lending platforms not in accordance with the new policies would have 18 months to change.

However, Esudai’s case shows how government regulation of P2P lending in China is still inadequate. Even before the government announced its new policies on P2P lending in December, Esudai was partnering with Guangdong Nanyue Bank (广东南粤银行) to process transactions between borrowers and lenders on its platform. According to Esudai, partnering with the bank would “increase fund security” and ” prevent the platform from ‘running away’ [with investor money]”.

For the Chinese government, which is seeking to encourage innovation in its finance sector, preventing cases like Esudai and Ezubao is imperative. As Chinese officials continue to contend with the country’s fraud-ridden P2P lending sector, tightening regulations without smothering the nascent industry will be a fine balancing act.

Image credit: Shutterstock

China’s artificial intelligence industry received a huge boost of validation from the government on Wednesday, which announced its plans to create a “100 billion level” ($15 billion USD) artificial intelligence market by 2018.

According to state-owned media Xinhua News Agency, the government plans to roll out projects in smart home applications, smart cars, unmanned systems, wearables, and robotics over the next three years.

“According to the plan, China will improve the country’s economy and society, disrupt the core technologies of artificial intelligence, and increase our smart hardware supply capabilities,” stated the government in its announcement. “Over the next three years, the country will build a solid foundation for an innovative, active, collaborative, eco-friendly, and safe artificial intelligence industry.”

As per usual, the government’s announcement was vague. There were no details on how the government planned to achieve its ambitious goals, or what organizations will be involved. The announcement wasn’t explicit about its 2018 “100 billion levels” goal either.

To put that into perspective, according to consulting firm MarketsandMarkets, the world’s artificial intelligence market is predicted to be worth $5.05 billion USD by 2020. It’s worth noting that forecasts on the world’s artificial intelligence markets depend on how “artificial intelligence” is defined. In the Chinese government’s statement, artificial intelligence is defined as a “branch of computer science where machines have human-like intelligence” and includes robots, natural language processing, and image recognition.

Ever since AlphaGo and Lee Sodol faced off in five games of Go, awareness around artificial intelligence in China has risen sharply. But years before AI became trendy, China’s tech giants have been investing in AI technology, such as Chinese web services company Baidu. In 2014, Baidu recruited renowned artificial intelligence expert, Andrew Ng, as Chief Scientist and head of the company’s research initiative in the U.S., Baidu Research.

Mr. Ng is a professor at Stanford University and is well-known for his work on neural networks and deep learning. At Baidu, Mr. Ng’s research has focused on autonomous or self-driving cars, which the Chinese tech giant hopes to start selling in 2018.

This year, China’s startup world has seen a lot of capital pouring into AI, as well as big data and cloud computing, two industries closely tied to AI. Earlier this May, Lenovo launched a $500 million USD fund for startups in cloud computing, AI, and robotics. Just this week, Microsoft Ventures Accelerator announced its plans to launch an accelerator in Shanghai. Similar to its Beijing counterpart, the Shanghai accelerator will focus on projects around AI, deep learning, big data, and cloud computing.

For now, the government’s “100 billion” announcement is just talk. How the Chinese government plans to complement the country’s already burgeoning – and well-funded – artificial intelligence industry, remains to be seen.

Image credit: Shutterstock

Coffee shops are quickly becoming the go-to place for the world’s digital nomads. On any given workday, you can probably spot a few squatters with laptops at a cafe, buying coffee and snacks to justify the fact that they’ve been there for hours.

“Starbucks is the most [global] coworking space in the world,” says Andrew Collins, the CSO and co-founder of Loop, a startup based out of Shanghai and Singapore. “Our goal is to disrupt Starbucks, and get folks out of the cafes and into collaborating across the best coworking spaces.”

To do that, Loop wants to create a global network of coworking spaces, starting with Asia. For $30 USD a month, users can access Loop’s network of partner spaces and book meeting rooms and hot desks on a pay-as-you-go basis through the company’s app. Existing members of partner coworking spaces in Loop’s network will automatically become Loop members for free.

“We’re targeting the reporters, the freelancers, the solo entrepreneurs, anyone who’s not location-dependent,” says Mr. Collins.

The company doesn’t want to deal with the brick-and-mortar aspects of coworking. Instead, Loop will focus on fostering the movement of people – and their social capital – through existing spaces. Currently, Loop has more than a hundred partner spaces around the world, including CoCoon in Hong Kong, The Hive in Thailand, and Bitspace in the Philippines. In June, the company plans to launch a beta test with XNode and naked Hub in Shanghai and The Working Capitol in Singapore.

Loop’s business rides on a global trend of coworking, which was popularized by companies like WeWork, a U.S-based company that just raised $430 million USD in March to expand into Asia. In China, coworking spaces have grown exponentially from a few hundred spaces in 2008 to several thousands in 2014, according to the Wall Street Journal. Companies from other industries, such as real estate and hospitality, have also jumped on China’s coworking craze by building their own spaces, such as UR Work, a coworking space by Chinese real estate giant China Vanke.

“It’s not just about the coffee and the beautiful office,” says Mr. Collins. “It’s access to people. We want to make [users] feel part of a community.”

Some coworking spaces might be savvy when it comes to real estate and interior design, but clueless when it comes to fostering collaboration and building community, he says. He describes a friend’s experience at SOHO 3Q, where they had bad wifi and weren’t allowed to eat food in the space’s casual areas.”They were told to eat at their desk,” he says.

“Because of all this WeWork frenzy, a lot of people [are] naively jumping into the game, wishing they can make an easy fortune out of it,” says Wei Zhou, the CEO of XNode. “To a certain extent, in China, space has become a commodity.”

As a company without physical spaces of their own, Loop will have to provide other value-added things, says Mr. Zhou. So far, Loop is focusing on networking benefits, such as matching users through their personal profiles on the app. The company is also offering corporate perks to their nomadic user base, like discounts on GuavaPass and SoftLayer web hosting services.

Loop’s concept is not new. WeWork’s Commons membership, which precedes Loop, lets members work out of multiple WeWork locations, addressing similar pain points around traveling and networking. In Europe, there’s another platform called Seats2meet, which lets users book meeting rooms, work spaces, and event venues across the continent with the similar goal of encouraging collaboration and knowledge sharing. As one of the first players to break ground in Asia, Loop will have an advantage. Still, in a highly competitive market, Loop will have to work hard to pitch to both members and partner spaces.

Founded in 2015, Loop is funded with $100,000 USD of seed funding from Mailman Ventures, the investment arm of sports and digital tourism agency Mailman Group. In addition to coworking spaces, Loop is also courting companies with cool work spaces. According to Mr. Collins, Loop has already signed partnerships with companies like Omnicom Media Group and Gravity Media. In September, the company plans to roll out its app to all partner spaces in Asia.

Image credit: TOONG

Correction (5/26/2016 11:29): This post has been updated to correct a mistake. Loop offers members discounts with SoftLayer, not Amazon.

China’s artificial intelligence and cloud computing industry has been very busy this year.

Last week the industry saw another important round of funding, as CloudMinds (达闼科技), an AI and cloud computing startup, announced a $30 million USD round of seed funding, led by SoftBank International, the Tokyo-based telecommunications company that invested early in Alibaba.

Other participating investors included Taiwanese electronics manufacturer, Foxconn, and Walden International, an investment firm that funds early stage companies in the semiconductor sector, among other verticals.

“When early stage startups are choosing investors, they can’t just think about the money – they also have to consider their resources,” said Bill Huang (黄晓庆), the CEO of CloudMinds in an interview with Caixin (link in Chinese). “SoftBank, Foxconn, and Walden International are all strategic partners.”

All of CloudMinds investors will partner together on “operations resources, manufacturing, and semiconductor downstream resources,” according to the company’s press release last Tuesday.

These partnerships will be key to achieving CloudMinds’ ambitious plan to construct a global framework for cloud computing, a “new standard for information security” that CloudMinds calls the “Mobile-Intranet Cloud Service” (MCS). This service aims to provide enterprises with a secure cloud computing platform for XaaS (X as a Service) products, and includes services like image recognition, voice recognition, and big data analysis.

CloudMinds’ MCS will be built on top of a network called the “Skynet”, which is specifically designed for connected devices and robots. According to CloudMinds’ press release, Skynet is separate from the internet and uses blockchain technology for more secure and high speed service. The company plans to extend Skynet’s coverage to all continents except Antarctica within two years.

“With [our technology], users will….be able to access a hidden virtual space, similar to planes in stealth-mode,” said Mr. Huang in an interview with Caixin (link in Chinese). “Hackers will not be able to find you, they’ll have no way to attack you. This is the core of the next generation of mobile technology. It will be vital for finance, healthcare, government, and big corporations.”

In addition to CloudMinds, China’s artificial intelligence and cloud computing industry includes big, corporate players suck as Alibaba Cloud, the cloud computing arm of Alibaba. This year, Alibaba Cloud has closed partnerships all across Asia with companies like SoftBank, SAP, Accenture, and NVIDIA, the graphics processing unit (GPU) manufacturer. Other tech giants have taken the approach of investing in cloud computing and AI startups, such as Lenovo, which announced the launch of a $500 million USD fund for robotics, AI, and cloud computing startups earlier this month.

Founded in 2015, CloudMinds plans to seek another round of investment following this completion of seed funding. Future funds will go towards the development, production, and marketing of the first phase of MCS. The company is also developing a robotics product for the blind called Meta, which uses computer vision, machine learning, and language processing to provide users with information about their surroundings and interactions.

Image credit: CloudMinds 

Chinese O2O healthcare services startup, Ping An Health Cloud Co. Ltd., announced a hefty round of Series A funding on Friday.

The Ping An Insurance subsidiary raised $500 million USD, putting the company at a valuation of around $3 billion USD. The company did not disclose its investors, though it said that funds were sourced from “well-known overseas private equity funds and state-owned financial enterprises.”

“The development of China’s online healthcare industry is still in its early stages,” said Tao Wang, the Chairman of Ping An Health Cloud, in an article by NetEase Finance (link in Chinese). “This round of funding will help Ping An Doctor (平安好医生) open the era of ‘internet healthcare 2.0’.”

Ping An Doctor is Ping An Health Cloud’s mobile platform for healthcare-related services and products. Users can make doctor appointments through the app, pay for private online consulting, purchase medicine, find nearby pharmacies and hospitals, track how many steps they’ve taken, post pictures of their gym workouts, and more.

According to Ping An Insurance’s annual financial report for 2015, Ping An Doctor has partnered with 40,000 external doctors and has about 30 million users. The app is similar to that of its biggest competitor, Tencent-backed WeDoctor (formerly Guahao). Last September, WeDoctor announced a $394 million USD round of Series C funding, following a $100 million USD round of funding from Tencent in 2014.

Launched in June 2015, Ping An Doctor is just one piece of Ping An Insurance’s ‘internet finance’ ecosystem, which includes Ping An Haoche (Ping An Good Car, our translation), an automobile e-commerce services platform, and Ping An Haofang (Ping An Good House, our translation), a platform for crowdfunding, trading, renting, and obtaining loans for real estate property.

These internet finance businesses are a way to boost Ping An Insurance’s customer base and encourage customer migration across the company’s various businesses, such as insurance, banking, and asset management. Ping An Insurance also has a venture capital arm called Ping An Ventures, whose investments include Chinese e-commerce app Mogujie in 2015 and U.S biotech startup 20/20 GeneSystems in January.

A spokesperson from Ping An Health Cloud did not respond immediately for a comment.

Image credit: Shutterstock.

Chinese home appliance manufacturer Midea Group is betting big on high tech manufacturing.

On Wednesday, Midea made a whopping $5 billion USD bid for a more than 30% stake in German robotics company Kuka AG. Kuka specializes in industrial automation, where robots autonomously complete industrial tasks, such as welding, assembling components, and load-bearing.

Acquiring a more than 30% stake in Kuka means Midea will have to make an offer for all of Kuka’s outstanding shares. Midea’s bid is an all-cash proposal at €115.00 per share (about $130 USD) for all issued shares of Kuka. If the Chinese company’s bid is accepted, Kuka will remain independent and listed in Germany, according to Midea’s press release.

Though a potential acquisition of Kuka’s technology by a Chinese company worries regulators, Kuka investors celebrated Midea’s bid, sending shares upwards by around 25%.

Midea’s bid for Kuka comes in the context of rising labor costs and the company’s desire to move towards high tech manufacturing. According to a 2015 report by McKinsey, China’s working age population is expected to shrink by 16% by 2050, as the country is seeing increasing wage competition from its southern neighbors, such as Vietnam and Indonesia.

Investing in smart manufacturing will be long-term play for Midea, which currently has more than 100,000 employees worldwide. In addition, the company wants to develop smart home devices as part of an initiative called “Smart²”, launched in 2015.

“The investment fits perfectly into Midea’s”Smart²” strategy, which aims to upgrade our manufacturing competencies and develop smart home devices,” stated Paul Fang, the CEO and Chairman of Midea, the company’s press release.

Part of Midea’s Smart² strategy is about developing smart home devices using robotics technology. According to Midea, the company aims to increase its overall sales to over 25 billion euros (about 28 billion USD) over the next few years. The company hopes to make smart devices and service robotics a significant part of those sales.

Image credit: KUKA Aktiengesellschaft

Chinese mobile dating app Tantan has raised a $32 million USD series C funding from a group of investors, including LB Investment, Vision Capital (元璟资本), and DST Global. The latter is headed by Russian billionaire Yuri Milner, whose investment portfolio includes big name tech companies, including Didi Chuxing, Xiaomi, Facebook, Snapchat, and Twitter.

“After this round of funding, we plan to continue focusing on [user] pain points, improving daily usage, and consolidating our position in the social application industry,” a PR spokesperson from Tantan told TechNode.

According to Tony Park, a Partner at LB Investment, some of the app’s future features include offering users the option to ask their matches out to lunch or to go for a walk. This will make it easier for matches to start a conversation and prevent matches from never talking to each other, he says.

Tantan claims it has 2.5 million active users, about 80% of which are part of China’s post-90’s generation. According to Chinese media, the male-to-female ratio on Tantan’s app is 6:4.

Founded in 2014, the Chinese app is almost identical to Tinder, down to its UI which lets users swipe left and right for potential matches. In 2015, the Beijing-based company came under fire when multiple security risks in the app were revealed by Hong Kong-based entrepreneur, Larry Salibra. By reverse-engineering the Chinese app, Mr. Salibra discovered that sensitive user data, including passwords and telephone numbers, were not encrypted and vulnerable to hackers. In addition, Mr. Salibra found a list of censored sexual keywords in the app, such as “meet for sex?” and “nude photo.”

China’s online dating scene has grown rapidly over the past few years with multiple companies jumping into the industry, including Momo, a location-based social app that has recently zeroed in on livestreaming to boost user interactivity. Last year, online dating platforms Baihe Network Co. and Jiayuan.com joined forces when a subsidiary of Baihe acquired Jiayuan, a dating service designed for “busy students and young professionals.” The platform monetizes through a paid messaging system as well as user subscriptions, which include value-added services like virtual gifts and higher search rankings.

It’s unclear how Tantan plans to monetize its app, which is currently free and offers no in-app purchases. According to a PR spokesperson from Tantan, the company’s current focus is not on generating profit. “We’ll focus on that around the end of this year after we’ve hit 7 to 10 million daily active users,” he said. If Tantan continues to follow Tinder’s lead, we can probably expect a paid version of Tantan – ‘Tantan Plus’ – in the near future.

Previously, Tantan raised a 13 million USD round of Series B funding from DCM, KPCB, and GX Capital (光信资本), and LB Capital, all of which returned to fund Tantan’s latest round of funding. In January, 2015, Tantan raised a 5 million USD round of Series A funding.

Update (5/19/2016 12:39): This post was updated to include a comment from Tony Park, a Partner at LB Investment. His comment includes more specific information about Tantan’s planned app features.

Image credit: Tantan

China’s saturated smartphone market saw another victim on Tuesday, as Chinese media reported the extreme downsizing of domestic smartphone company IUNI, which cut around 60 percent of its staff. IUNI is a wholly owned subsidiary of fellow smartphone vendor Gionee Communications Equipment Co. Ltd.

“After this round of layoffs, the only employees left will be product development and marketing staff. IUNI has given up on the domestic market and its core business will now focus on the overseas market,” stated a IUNI employee in an interview with Tencent Tech (link in Chinese).

The Shenzhen-based company’s product line includes the 999 RMB (about $153 USD) N1 smartphone, another cheap-but-decent smartphone currently a dime a dozen in China’s smartphone market. In addition to the N1 and IUNI’s other budget phones, such as the U1 and U2, the company has also developed its own OS called the IUNI OS. Reminiscent of Xiaomi, the company has also branched out into other, somewhat baffling, product verticals, including water bottles, pillows, backpacks, and stationary.

Both IUNI and Gionee are feeling the squeeze of China’s saturating smartphone market, like many other budget android vendors. In March, Chinese smartphone company Dakele suspended its R&D and marketing operations, due to increasing competition in the market and “unexpected capital shortage”, according to the company’s founder, Ding Xuhong. In 2015, Xiaomi reported a dip in semi-annual sales figures for the first time since the Chinese smartphone company started disclosing them in 2013.

Like more established smartphone companies, such as Huawei and ZTE, IUNI is trying to shift its brand toward “tasteful” smartphone users, who are willing to shell out more money for premium smartphones. Last November,IUNI launched an English version of its website and announced its plans to expand overseas. However, forIUNI, the overseas market will be just as much of an uphill battle as the domestic market. Last month, Huawei launched the P9 and P9 Plus, two high-end handsets that are part of a long-term collaboration between Huawei and Leica Camera, a German optics company.

A spokesperson from IUNI could not be reached in time for comment.

Image credit: IUNI

The hype around 3D printing has created a lot believers in a ‘new industrial revolution’ where everyone can make their own products, from cars to action figures.

Though consumer-facing 3D printers can make some pretty cool stuff nowadays, CES Asia’s talks on 3D printing last Friday made it clear that the future of 3D printing technology belongs to companies.

“Last year, 3D printing was a very popular topic,” said Richard Lu, the Director of Autodesk Consumer and 3D Printing Group, at CES Asia 2016 last Friday. “In mainstream magazines, people talk about 3D printing – even Obama talked about 3D printing – [and] how 3D printing will come to every household in the future, like the desktop.”

“Do you think it’s realistic? Will [3D printing] be a necessity for every household? I don’t think so,” he said.

This year, industry experts at CES Asia focused on industrial 3D printing instead, touching on applications in B2B and B2C products such as customized medical devices and lighter airplanes. For example, using 3D metal printers, companies like Arcam have been able to create hip implants that look like titanium cups of foam, porous enough for tissue to grow into. Last December, Autodesk partnered with aircraft manufacturer Airbus, to design 3D printed airplane parts that would reduce the weight of Airbus’ airplanes and save fuel.

“Previously, [General Electric’s fuel injection nozzle] was assembled with eighteen components. Now it can be done in one step,” said Jane Yu, the Executive Director at Recycling Times Media, which covers the 3D printing industry. “The weight was reduced by 25% and the life cycle is the five times of the previous one.”

3D printing technology has been around for several decades, but its popularity in mainstream media only took off recently, coinciding with a larger, worldwide movement around “makers,” or everyday people who are empowered to create things on their own.

In 2012, Chris Anderson, the former editor-in-chief at Wired Magazine and author of Makers: The New Industrial Revolution, said that 3D printing would be “bigger than the Web.” For consumers, that might be an exaggeration, but for industry players, such as automobile and aircraft manufacturers, 3D printing has the enormous potential to reduce costs and offer customization at scale.

“Every person is different, every person’s feet is different, every person’s walk is different,” said Mr. Van de Perre.

By analyzing a person’s foot shape and the distribution of pressure across their feet while walking and running, RSPrint’s software makes design suggestions, which sports specialists can adapt manually if needed. Materialise has also worked with Phonak, a hearing aid company, to cut down its design process for customized hearing aids from “two days…to two minutes”, according to Mr. Van de Perre.

Autodesk, which is best known for its 3D modeling software, AutoCAD, has also focused on improving the design process for 3D printing and product designers. Specifically, the company is looking at ‘generative design,’ where cloud-based software can automatically create a product design based on user requirements.

“You just have to tell the computer what you want, what you want it to do, and you can also provide some parameters on limitations, [like] a certain weight, the strength of the materials,” said Mr. Lu.

He showed an example of a load-bearing engine block that was automatically designed using Autodesk Within, a set of generative design software solutions for engineers in automotive, aerospace, industrial equipment and medical implant industries.

“The structure is very elegant and the heat exchange efficiency is even better than traditional ones,” he said. “This is a feature of 3D design. It looks like very elegant, but with a traditional CNC or forging or casting, it is very difficult to make. But for 3D printing, it’s not difficult at all.”

However, in addition to touting the potential of 3D printing technology, both Mr. Lu and Mr. Van de Perre addressed the flaws and trade-offs of 3D printing, such as limitations on speed and printing quality. In particular, both speakers reacted against the ubiquity of consumer-facing 3D printers and the overall hype around 3D printing tehnology.

“You [need] to first figure out why you need to use 3D printing,” said Mr. Van de Perre. “For example, if you want to make a pen and sell millions of pens, it does not make any sense to use 3D printing.”

“I want to avoid [the situation] where people say, ‘3D printing is very cool, let’s buy a machine!…What shall I print?’,” he said.

Image credit: Arcam, Autodesk, Airbus.

WeChat public accounts, China’s most influential social media channel for enterprises, are overwhelmingly dominated by tech, a study by social marketing startup Robin8 has found.

Robin 8 released the results of the study at CES on Thursday, which crawled through over half a million WeChat public accounts across one month.

Each account was scored according to a number of factors including their average page views per post, their total number of post page views, and their total number of ‘likes’ on posts.

The results unanimously towards technology as  the hottest topic on WeChat’s public accounts. According to Robin8’s ‘influence’ calculation, the top five WeChat public accounts were:

1.  科技美学 (Technology Aesthetics, our translation)
2.  纵观互联网 (Overview of the Internet, our translation)
3. 小米公司 (Xiaomi)
4. 互联网观察 (Internet Watch, our translation)
5. 科技每日推送 (Daily Tech Recommendations, our translation)

All five had more than half a million page views in April, with Xiaomi’s public account gaining 228,601 page views for a single post. Not all of the public accounts on Robin8’s top 100 list were companies – quite a few are operated by individuals, such as Yinghuan Li, a chief correspondent and tech journalist for The Time Weekly (时代周报) who is considered a wang hong or internet celebrity. Some accounts were incredibly prolific in April, such as 电脑报 (Computer Report, our translation), which published 163 posts. Others, such as Xiaomi’s public account, had less than ten.

In addition to the top 100 list, Robin8 also shared other insights from its one-month study, such as popular keywords and brands. Again, technology had a strong presence as “mobile phones,” “design,” “products”, and “technology” were identified as popular keywords, and tech brands such as Apple, Huawei, Tencent, and Alibaba were especially of interest to large numbers of WeChat users.

“In the future, we’ll publish more data like this,” Duan Yong, the CTO of Robin8, told TechNode. “We plan to launch a [wang hong] search engine, so everyone can search for this kind of information themselves.”

According to Robin8’s CEO, Miranda Tan, the company’s “wang hong search engine” will launch next Friday. The search engine will leverage the company’s natural language processing (NLP) algorithms and big data analytics to pull and analyze data from social platforms, such as Weibo and WeChat public accounts.

The Power of the Masses: China’s Wang Hong Phenomenon

Robin8’s results were part of a larger discussion on KOLs (Key Opinion Leaders) and wang hong in China. Though Robin8’s study revealed the popularity of technology-related public accounts, Mr. Yong said that public accounts on any topic have the potential to be influential.

“In every vertical, you can find a wang hong. In their small circle, they have influence. You can find wang hong in VR, robotics, electric cars – anything,” said Mr. Yong during a panel discussion following his presentation. Robin8’s product helps companies find wang hong, using content from social platforms like WeChat, Weibo, and Douban.

“Anyone can be a wang hong, as long as they have a lot of reach, relevance, and influence,” said Arlene Ang, the CEO of OMD (Omnicom Media Group), a global communications agency that hosted Robin8’s presentation and the KOL panel discussion at CES Asia 2016. “It might be a cook, it might be a designer, it might be a teacher, as long as they have this relevance and influence.”

An increasing number of brands are seeing wang hong, from WeChat public accounts to live-streaming hosts, as a way to market their products, increase brand awareness, and produce interesting content with high conversion rates. Last month, one of China’s most well-known internet celebrities, online video comedian Papi Jiang, raised 22 million RMB (about $3.4 USD) in a bid from cosmetics startup Lily & Beauty during an ad auction.

Though Papi Jiang is exceptional, the diehard nature of wang hong fans is a unique characteristic of China’s internet celebrities. It’s that obsessive fandom that makes wang hong, even those with smaller or more niche fan bases, so valuable to brands. In addition, unlike companies, wang hong can come across as more genuine and sincere.

“I think [the] wang hong’s biggest selling point is they’re down-to-earth. That’s why a lot of consumers trust them,” said Ms. Ang. “They trust the content that is being put out by the wang hong.”

However, as one of the panelists noted, companies will need to be careful when dealing with wang hong. Unlike more traditional KOLs, such as actors and sports stars, wang hong are more independent and, in some ways, unpredictable.

“Part of the wang hong phenomenon…is about how they can help brands,” said David Li, the founder of Maker Collider, a platform that helps hardware makers bring their products to market. “But something you need to be aware of is, one day, if the wang hong and the company have a falling out, the wang hong can recreate one of the company’s products from scratch…perhaps making it even cheaper…and resell it on their own.”

Correction (5/13/2016 17:19): This post was updated to correct the spelling of Robin8’s CTO’s name.

Norwegian software company Opera launched an iOS app called ‘Opera VPN’ on Monday, a free and unlimited VPN (virtual private network) service that comes with other web browsing perks, such as ad-blocking and preventing ad-tracking cookies from sharing your data with advertisers and marketers.

However Chinese netizens will be disappointed to discover that the Norwegian-based company management have not made the service available in China.

“We are in good sync with our consortium partners,” says Peko Wan, Opera’s Head of PR and Communication, Asia, when asked about the possible conflicts between Opera VPN and Opera’s Chinese backers.

In February of this year, a consortium of Chinese companies, including Qihoo 360 and Kunlun Tech, entered a $1.2 billion USD bid to acquire Opera. Chinese internet company Qihoo 360 has a controversial record when it comes to user privacy, as it was accused of stealing confidential information from users in 2013, which the company denied. Thankfully, it looks like the Norwegian company is still independent when it comes to product development, especially since foreign VPNs are not supported by the Chinese government.

“They are supportive with the primary goal being providing good user experience to our users.”

“With the new Opera VPN app, we help people to break down the barriers of the web and enjoy the internet like it should be,”said Chris Houston, President of Surfeasy, Opera’s VPN division, in the company’s press release.

Opera VPN will remain unavailable in the Chinese market for the foreseeable future. Despite the regular crackdowns on VPNs by the Chinese government, a large number of VPN services both foreign and local, such as Astrill and VPNinja, cater to customers in China. Virtual private networks are a way to connect securely over the internet, which makes them handy for anyone who wants their web traffic encrypted, like privacy advocates and corporations.

VPNs can also mask a user’s location, since their IP address is replaced once they connect to a virtual private network. That means VPNs can be used to get around all kinds of content filters, from workplace bans on social media to the ‘Great Firewall’, China’s internet censorship apparatus.

So far, users of Opera’s new VPN app can choose to connect with servers in five different countries: the U.S., Canada, Germany, Singapore, and the Netherlands. The app has already been localized into a number of different languages, including English, Japanese, Arabic, and Spanish.

Qihoo 360 declined to comment on Opera’s new VPN feature.

Image credit: Opera

Correction (5/11/2016 21:26): This post was updated to correct the fact that Opera’s acquisition is still awaiting approval from shareholders and the U.S and Chinese government. 

Jean Liu, the president of ride-hailing startup Didi Chuxing, will represent China as an Olympic Torchbearer for the Rio Olympics 2016 Torch Relay, according to an announcement made by Coca Cola on Monday.

“A face of the young and modern China, [Jean Liu] will represent her country when carrying the flame along the Iguaçu route,” stated a press release from Didi Chuxing.

According to Didi Chuxing’s press release, Jean Liu was chosen through a popular vote organized by Coca Cola, one of the global partners for the Rio Olympics 2016 Torch Relay. The relay traces through all five regions of Brazil, totaling a distance of 20,000 kilometers by road and 10,000 miles by air.

Ms. Liu will join 12,000 other torchbearers for the 95-day relay, which concludes on August 5th during the opening ceremony. Specifically, Ms. Liu will participate in the Iguaçu route, named after Iguaçu Falls, a major tourist location in southern Brazil. Eight other Olympic Torchbearers will run the same route, including Lang Lang, a Chinese concert pianist, and Chinese actress Jiang Yiyan.

The relay, which began on May 3rd, features participants like Hanan Khaled Daqqah, a refugee from Syria, and Fabiana Claudino, a two-time Olympic volleyball champion. Even though Didi Chuxing is one of China’s largest ride-hailing startups – the company is valued at a staggering $20 billion USD – Jean Liu is a strange choice for the Olympic Torch Relay. It’s unclear how Coca Cola’s voting campaign was organized, or who the other choices were, but if anything, the result demonstrate China’s influence as a tech growing tech powerhouse – not to mention synergies with Brazil’s own thriving tech demand.

A spokeperson from Coca Cola could not be reached in time for comment.

Founded in 2012, Didi Chuxing competes with a number of ride-hailing startups in China, most notably Uber. In December 2015, Didi Chuxing signed partnerships with Lyft, Grab Taxi, and Ola Cabs to form an ‘anti-Uber’ alliance. Last month, Didi Chuxing launched a new version of its app with U.S roaming capabilities, leveraging Lyft’s driver network and expanding Didi’s service to the U.S. In May, Uber signed a global partnership with Alipay, enabling Alipay as an international payment option for Chinese users of the app.

Just a few weeks ago, Alibaba Group Holding Limited made headlines by sinking $1 billion USD into Southeast Asian e-commerce startup Lazada. Today, the Chinese tech giant made another round of investments via its Hong Kong Entrepreneurs Fund, continuing its expansion beyond mainland China.

Three Hong Kong startups will receive minority investments from Alibaba to help scale their businesses: Yeechoo, an online fashion rental startup, GoGoVan, an on-demand logistics company, and Shopline, an e-commerce platform for merchants.

“Alibaba is the world’s largest e-commerce company with expertise in payment, logistics and cloud services that are all core to e-commerce,” said Shopline CEO and cofounder Tony Wong in a post on Alibaba’s official blog, Alizila. “This will help us strengthen our market positioning in Hong Kong and Taiwan, and fuel the next stage of our growth.”

Alibaba announced the launch of its Hong Kong Entrepreneurs Fund last November, valued at HK$1 billion (about $129 million USD). The fund is dedicated to Hong Kong startups working in industries relevant to Alibaba’s various businesses: e-commerce, logistics, mobile, cloud computing and finance. Alibaba also launched its Taiwan Entrepreneurs Fund on the same day, valued at $10 billion NT (about $309 million USD).

Created in hopes of “unleash[ing] potential for innovation and entrepreneurship,” Alibaba will no doubt leverage these funds to usher more startups into the Alibaba ecosystem. As the tech giant’s appetite for markets outside of mainland China grows, making strategic investments across Asia will be crucial. Other Chinese tech giants, such as Tencent, have employed the same expansion strategy. In 2015, Tencent invested in multiple startups across various verticals, including healthcare, transportation, and education.

In addition to its Hong Kong Entrepreneurs Fund, Alibaba is also “working closely with local incubators and universities in Hong Kong,” according to the company’s statement. Alibaba plans to invest in further startups and is accepting applications to its Hong Kong Entrepreneurs Fund on a rolling basis.

In the final of the two parter episodes, we continue our conversation with Eva Xiao from Technode on the Tencent Group, specifically focusing on WeChat, the most popular messaging app in China. Eva dissected how WeChat is the platform for other popular online to offline (O2O) services and dived deep into the various monetisation models which the messaging app has built from WeChat pay to official account pages. We also discussed whether Wechat is cannibalizing QQ and how Tencent perceives disruption within their company. Last but not least, we examined Tencent’s investment strategy in gaming and their foray into new areas such as healthcare companies.

Download MP3 (21.5 MB) or Subscribe via RSS.

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

• Eva Xiao, Reporter at Technode.com
• If you have missed part 1 of our conversation, check out our earlier episode 109 with Eva Xiao on Tencent and QQ.
• WeChat [0:43]
  • Official data on WeChat from Tencent: 697M monthly active users by end of 2015 with YoY growth of 39%, and recently reaching 800M monthly active users in Q1 2016. [0:46]
  • What are the core revenue drivers for WeChat? [0:57]
    • WeChat Wallet: charging a transaction fee. [1:05]
    • Official Accounts (brand pages for content marketing) [2:00]
  • How does WeChat work for the consumer? [3:16]
    • WeChat is focused on the user and protects users’ privacy. [4:33]
      • Content is compartmentalized: You have to go to “games” to game and click on “official accounts” to read content from companies (companies can’t spam your moments with their posts)
      • WeChat bans companies from offering incentives for follows or shares
      • This includes following an account for a discount code or to get an answer from a quiz, asking users to share a message
      • Tencent bans companies from “exaggerated wording” as well, like ‘If you don’t share, you’re not a true Chinese’ (from WalktheChat blog)
      • Tencent bans rumors, dirty jokes (this is also related to the Chinese government, which disapproves of the spreading of rumors)
      • Tencent bans data collection unless the user consents to it (must be made explicit)
      • Tencent bans H5 games and quizzes
      • Penalties range from temporary blockage of a post to a permanent ban of the official account
    • Marketing and branding tools for companies, both small and large enterprises.
    • Consumers can purchase goods through official accounts, get access to wifi, rent a car
    • Lower barrier to entry than standalone app development
    • Customizable through HTML5 pages and WeChat’s developer API
    • At the same time, WeChat has rules to protect its users, ex: frequency of posts (4x/month or daily, depending on account type)
  • What are the convenient & accessible services? Online lifestyle play by Tencent. [6:23]
    • Paying bills
    • Topping up your phone
    • Ordering food, taxis
    • E-Coupons
• Launch of Enterprise WeChat (launched on 18 April) is meant to help reduce “WeChat fatigue” by offering users more tools to separate work and personal life. [8:16]
  • Is it similar to Slack in the US?
  • Ex: Users can block messages outside of working hours
• How does Wechat monetise from their platform for example, Didi Chuxing? [10:16]
  • Transaction fee through WeChat Wallet (.1 yuan, or .1 percent of the transaction if sum exceeds 1,000 RMB)
  • Official accounts and merchants are charged a %0.06 transaction fee (data from 9/2015)
  • WeChat Wallet has 200 million users and how far are they from Ant Financial aka Alipay? [11:22]
    • Ran very successful CNY marketing campaigns (ex: partnering with the Spring Festival Gala for its “Shake Shake” promotion), trying to take more of Alipay’s (Ant Financial, Alibaba) market share, which is currently around 70%
• Investment into other messaging apps: Tencent made a strategic investment in Kakao Talk, any thoughts on why they did that? [14:14]
• Tencent and Disruption [15:23]
  • Is Wechat cannibalising QQ? How does Tencent deal with disruption? [15:23]
  • William Bao Bean‘s view of Tencent as a single large incubator with many startups within.
  • QQ & WeChat are deliberately separate so the products develop independently
    • Comparable to the development of the XBox during Microsoft’s Bill Gates era (two teams developed a game console separately, final product used the OS of one and the outer design of the other)
  • Tencent used to be more hostile to startups (ex: copying features), but is now more collaborative and sees early-stage startups as potential partners or additions to the Tencent ecosystem.
    • It’s like crowdsourcing – a way to get a diverse collection of ideas without investing too much capital/resources
    • Lets its investments growth independently, supports the founder, but is not controlling (according to Martin Lau, also other anecdotal support)
• Tencent is active in venture capital investments and acquisitions. Can you talk about some of the interesting companies which they have invested? [19:23]
  • For example, Cyanogen and Lyft in US
  • Growing its ecosystem: WePiao, Didi Chuxing, Meituan-Dianping, Jing Dong (JD), Edaixi (laundry)
  • Overseas expansion: instead of having to deal with acclimating to local culture, hiring a local team, adjusting their product, part of Tencent’s strategy is investing in other companies. For example, it bought the remaining shares of Riot Games last December (before that, it owned 93% of the company’s shares), giving it full control over the huge gaming company responsible for League of Legends
    • In the case of Lyft, for example, Tencent can invest and leverage Lyft’s already established network and business in the US, instead of having to create its own ride-hailing product for North America
    • Snapchat, Kik, Kakao Talk
  • Interest in healthcare
    • Scanadu (mobile medical device company, US), Picooc (smart scales, China), WeDoctor (formerly Guahao, China), Medlinker (China)

The Chinese government might soon own a 1% stake in major tech companies such as Tencent Holdings Ltd., Baidu Inc., and NetEase Inc., according to anonymous sources who spoke to the Wall Street Journal.

The 1% stake is part of a proposal around content distribution and censorship, which is still being discussed internally. According to Bloomberg, the proposal gives government representatives board seats and stakes of at least 1 percent at major internet portals in exchange for news licenses. Under the proposal, these news licenses would be mandatory for all providers and distributors of “current affairs news,” which includes politics, economics, military, foreign affairs, and social issues.

Chinese tech companies, such as Tencent and Baidu, already comply with government regulations around content censorship, filtering out sensitive keywords, rumors, and what the government deems ‘gossip’. However, this new proposal is an aggressive reassertion of government oversight. If implemented, government officials would have even tighter control over online content, proactively blocking and monitoring content before it’s published.

Though the Cyberspace Administration of China (CAC) and the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) regulate online media in China, “illegal” articles occasionally slip through, albeit temporarily. In March, Beijing-based Caixin Media Company published an article on free speech, featuring Jiang Hong, a member of the Chinese People’s Political Consultative Conference. A few days later, the CAC ordered the removal of the article, according to Caixin.

This proposal is the latest in a series of tightening regulations around content by the Chinese government. April was particularly eventful, as iTunes Movies and iBooks were blocked in China and online video celebrity Papi Jiang, whose latest video ad auction raised 22 million RMB (about $3.4 million USD), apologized publicly on Weibo after several of her videos were removed due to her use of curse words. These incidents align closely with a speech recently delivered by Xi Jinping at a symposium on cybersecurity , in which the President of China called for a more “clean” and “righteous” cyberspace.

Image Credit: Michel Temer

For Chinese netizens who feel judged by their WeChat posts, or stigmatized for their bawdy sense of humor, there’s now an app called ‘Right Brainer’ (右脑人), a safe space for China’s self-identifed weirdos.

“This is a social product that brings lunatics and psychos together,” states Right Brainer’s website. “We help the unruly meet troublemakers, and let misfits find unconventional friends.”

Much of the “weirdness” of Right Brainer boils down to semi-risqué content – phallic memes, nipples, condom jokes – though there is some legitimately bizarre content on there, like a picture of hairy man wearing nothing but a pink, flowered apron. The app also features original creations by Right Brainer users, such as uploaded artwork and short comics.

The point is to share content that boosts your imagination or “opens your mind” (脑洞大开, which literally translates to ‘widen your brain hole’), says Wei Zheng, the CEO of Right Brainer. “I believe that everyone, under different circumstances and periods of time, has the potential to ‘open their minds’.”

To facilitate “brain opening,” the app pushes timed challenges to users, who can win strange, kitschy awards if they complete them on time. For example, responding to the prompt, “Describe a time when you successfully wooed a woman or man,” earns users a wooden sculpture of a tuxedo-ed duck. Users can also respond to “crazy sound” (疯声) prompts through voice recordings. Some “crazy sound” responses are more confessional, such as “Tell us about something that made you unhappy recently”, while others are more competitive, such as “Who can whistle the best?”

“Adding a speech bubble onto an image counts as a kind of creativity,” Mr. Zheng told Chinese media site Pencil News (link in Chinese). “There’s no standard to creativity, nor is there a high barrier to entry. Everyone is creative and can participate in the creative process.”

The Beijing-based startup is hoping to convert the “lunacy” and quirkiness of their users into creative solutions. Here, creativity doesn’t refer to graphic design, visual art, or anything categorical, but simply the ability to imagine. According to Mr. Zheng, Right Brainer will serve as a platform where users can crowdsource solutions to personal issues and requests.

“There won’t be any restrictions on what kind of requests are allowed [on Right Brainer], but we will not recommend requests that require offline or high-tech solutions,” says Mr. Zheng. Instead, requests might look similar to the prompts that Right Brainer users are already used to, like,”I can’t sleep. Can someone tell me a story?” or, “My girlfriend is a second-generation rich kid. How should I propose to her?”

Currently, Right Brainer only allows users to socialize and share, as the request feature is slated to launch on May 7th, according to Mr. Zheng. Right Brainer’s approach of building a community before monetizing user interactions is typical in China, where startups, such as ride-hailing company Didi Chuxing, often prioritize user acquisition over earning capital.

Last Friday, the company announced they have secured 6 million RMB (about $927,000 USD) in angel funding. Earlier in April, Right Brainer raised about 7 million RMB (about $1 million USD) through JD’s crowdfunding platform, and a 2 million RMB round of seed funding (about $309,000 USD) from Buttonwood Capital, Rice Bank, and Taihuoniao in 2015.

Image credit: Right Brainer

Eva Xiao from TechNode joined us for a two parter discussion on one of the BAT companies: Tencent. We dived deep into the holding company behind the two successful messaging apps in China: QQ & Wechat. In this first part of 2 episode arc, we discussed the vision, mission & corporate structure of Tencent, how the company built up their business structures and revenue streams, and the state of QQ, their desktop messaging app and its relevance to the Tencent’s portfolio today.

Download MP3 (19.3 MB) or Subscribe via RSS

Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.

TechNode does not endorse any commentary made in the program.

Notes:

• Eva Xiao, Reporter at Technode.com
  • How did she start in journalism? [1:00]
  • What brought Eva from US to China? [1:36]
  • What are her areas of coverage in Technode? [3:09]
• Tencent: Founded in 1998. Revenue in 2015: 102.9B RMB ~ 15.9B USD, EBITA: , Market cap: 1.4T HKD ~ US$200B compare to Facebook with US$340B. Listed in HK Stock Exchange with two significant owners: MIH Group under Naspers from South Africa  35.1% and Pony Ma 9.1%.  [3:28]
  • What is the vision and mission of Tencent? [4:08]
    • “using technology to enrich the lives of Internet users”
    • Connect and content – ‘online lifestyle’ strategy
      • Martin Lau: “At the heart of Tencent is actually a social company.”
    • Tencent is building an ecosystem of mobile services: payment, O2O, e-commerce, communication, entertainment (movies, gaming, digital content, VR), banking, social networking
  • Who are the key executives of Tencent? [5:30]
    • Founder: Pony Ma
    • Martin Lau, President of Tencent, also a Goldman Sachs alumnus.
      • Pony Ma is often described as reclusive and shy (as is Zhang Xiaolong). He’s done a good job of covering his own weaknesses with his ex-investment banking management staff.
      • In many ways, the public face and voice of Tencent to the outside world (interviews, videos)
    • James Mitchell, Senior Executive Vice President – Strategy.
    • David Wallerstein, CXO, based in Palo Alto, in charge of international expansion.
    • Allen Zhang Xiaolong, President of Weixin (WeChat) Group, created Foxmail, manages product and team for WeChat, QQ mail
    • Sy Lau, Senior Executive Vice President of Tencent and President of its Online Media Group, ~20 years of advertising experience, Malaysian-born
      • Won the Cannes Lions Media Person of the Year Award in 2015
  • What is the culture like in Tencent? Is it run more like a traditional chinese company or western company?  [9:18]
    • Mix of both. There are signs of more “Western”-style management from Zhihu, such as free meals, “afternoon tea” service, which is comparable to Silicon Valley companies. But career growth is rumored to be difficult, especially since departments are very separate and tasks/responsibilities are narrow. Compared to Alibaba, Tencent’s working culture is more corporate
  • What are the current businesses that is driving the business growth of Tencent? [11:29]
    • Social networking platforms: Wechat(includes WeChat Wallet), and QZone (SNS, blogging)
    • Online games: distribution for mobile and PC games, advertising for games, investments in gaming companies (Riot Games, Epic Games, etc.)
    • Media content: partnerships with Disney (Star Wars), HBO (Game of Thrones), Warner Music, NBA, Paramount, Sony music, ESPN (QQ Sports, live broadcasting), QQ.com news portal (advertising).
  • What are the core products and value added services of Tencent and the value added services that are driving their revenues? [13:30]
    • Value-Added Services (78% of Tencent’s revenue in 2015)
      • “Tencent is great at monetizing eyeballs,” says Jeff Walters, partner and managing director in the Boston Consulting Group’s Beijing office. “That’s their core competency. They are making tons of money by scraping together pennies, from tiny transactions.” (Fast Company profile of Tencent). **This is a big theme in Tencent’s business narrative. [14:04]
      • VIP membership [14:15]
        • QQ has its own currency system using Q点 (dian) , where one Q点 = .1 RMB, and Q币 (Q coin), where one Q币 = 1 RMB
        • 8 tier membership system where ascending to a higher level requires a certain amount of credits
          • Pyramid structure: VIP1 to VIP2 requires 600 credits, VIP2 to VIP3 requires 1800 credits, VIP3 to VIP4 requires 3600
            • Makes upper levels more exclusive, also guarantees that users do not move through levels too quickly
            • Depending on your VIP level, you earn a certain number of credits per everyday
              • Ex: VIP1 users can 5 credits a day, which means it takes 120 credits to ascend to VIP2 (which requires 600 credits)
              • If they pay for 1 year of membership (~120 RMB) using WeChat Wallet, they receive 15 credits a day, but if they pay by month through WeChat Wallet, they only receive 11 credits a day
        • Examples of benefits: size of your QQ mail inbox (3, 4, 5, 6, 7, 8G), the size of files you can download (10, 20…70G), how many people you can have in a chat group (500, 1000, 2000), special events (win special items for a game, discounts to Meituan-Dianping, which Tencent has a 20% stake in)
      • Freemium model: Small digital purchases add up [16:18]
        • QQ Games: buying extra lives, special weapons
        • QQ Show: buying digital clothing, backgrounds
        • QQ: benefits like ad-free, background music,
      • Advertising (17% of Tencent’s revenue in 2015) [17:13]
        • QQ.com (news site)
        • Tencent Video
        • QQ Games (pop-up ads)
        • QQ messaging platform (in-feed ads)
    • QQ 
      • Tencent’s first product as an instant messaging app on desktop and found the business model to monetize successfully against MSN, Yahoo! And Skype. What is the current relevance to Tencent’s business bottom line? [18:15]
        • Appeal to a younger audience
        • Used by some companies for internal/external communication (with colleagues, business partners)
        • Entertainment portal: links to QQ Games, Qzone, QQ Music, QQ Show, all of which drive revenue at Tencent
      • For QQ mobile, 642M smartphone monthly active users increase by 11% and QQ instant messaging 853.1M monthly active users. [19:25]
      • What are the value added services that are driving QQ’s growth? [19:47]
        • Covered above.
        • Mobile gaming (ex: special weapons can be bought, extra lives)
        • VIP subscriptions (personalized chat rooms, background music, ad-free, etc.)

This year’s Global Mobile Internet Conference (GMIC) in Beijing went well and beyond smartphones, covering everything from drones to smart home devices, facial recognition to virtual reality (something we expect to see at most, if not all, tech conferences in China this year).

Big data and artificial intelligence won the most limelight, underlining the fact that industry players across all kinds of verticals are increasingly seeing hardware, such as smartphones, smart watches, and drones, as just another channel to gather data.

“The reason I [created 3D Robotics] is not because I have any interest in drones,” said Chris Anderson, one of the speakers at GMIC and the CEO of 3D Robotics, a drone and UAV (unmanned aerial vehicle) company. “I have an interest in data. I have an interest in measuring the world.”

As usual, this year’s GMIC showcased a dizzying number of products, some good, some interesting, some questionable. Here are the highlights:

Hello there. Zero Zero Robotics’ Hover Camera uses facial recognition to follow and photograph people.

Virtual reality goggles? Nope – an eye massager!

Just another product in Xiaomi’s ever-expanding product portfolio. This “pen” can tell you how clean a cup of water is.

A strange hodgepodge of cosplayers advertising an online news site. Not sure how Gintoki, Sailor Moon, and Mario are related.

A conference attendee fights off bad guys in one of HTC Vive’s virtual reality demos.

Megvii Inc shows off their facial recognition technology.

The Turing OS lets developers create educational bots for kids.

California-based startup suitX demonstrates its Phoenix exoskeleton at a talk about bionics.

Baidu’s version of Google’s Street View car, plus one of many showgirls that were present at this year’s GMIC.

The President of China, Xi Jinping, sent out mixed messages on April 19th in a speech that was released on Monday. He called for a more “clean” and “righteous” cyberspace, while urging officials to engage with the public for online feedback, suggestions, and “well-meant criticism.”

“For well-meant criticism raised on the Internet, be it aimed at the overall work of the Party and the state, or at individual officials, be it gentle or harsh-sounding, we will not only welcome it, but also study it for future reference,” said Chinese state media outlet Xinhua, paraphrasing Xi’s speech in English.

Xi’s comments come amid heightened censorship that has affected players across the board, from tech companies to human rights advocates. In December 2015, renowned humans right lawyer Zhiqiang Pu was charged with eight years of prison for seven tweets on Chinese social media site Weibo. Last week, iTunes Movies and iBooks were blocked from China’s internet, following new guidelines on publishing content by the State Administration of Press, Publication, Radio, Film and Television (SAPPRFT) that were enacted on March 10th.

“China can not and will not shut its door to the world,” said Xi, contrary to the actions carried out on Apple’s two content platforms. “We welcome foreign internet enterprises as long as they abide by Chinese laws and regulations.”

As China continues to pursue its “Internet Plus” strategy, aiming to make homegrown entrepreneurs and information-based services the core of China’s economy, the Chinese government faces a difficult balancing act: the public sphere must remain sanitized and “clean”, yet creativity must be cultivated and allowed to grow. According to Xi Jinping’s speech, part of the solution lies in promoting collaboration between tech companies, as well as academic and research institutions.

“Unlike Microsoft, Intel, Google and Apple, Chinese internet enterprises do not cooperate well with each other on research, which is one of the reasons why there is a large gap between China and other countries,” said Xi.

Xi’s speech underscores his vision for China’s cyberspace as one where open data and access are privileges enjoyed by an elite few, such as select companies and government organizations. In contrast, the public is seen in a more paternalistic light, and must be guided away from “slanders, rumors, [and] crimes.”

“Internet users come from many places, each with their own experiences, and opinions. Therefore, it is too much to ask them to be right on every topic,” said Xi.

Government officials will need to be patient when dealing with the public, as netizens are susceptible to “fuzzy ideas” and “wrong perceptions,” he said. At the same time, public opinion is an important source of information that government officials can leverage.

Xi’s speech also reemphasized the importance of cybersecurity,  especially in the industries of finance, energy, transportation, and telecommunication. Increased internet access to more rural and impoverished areas was also mentioned in Xi’s speech, as was the concept of cyber-sovereignty, which Xi announced during the World Internet Conference in Wuzhen last December.

During China’s first ‘Space Day’ last Friday, the country’s National Space Administration (CNSA) announced its plans to launch a Mars mission probe in 2020, slating the probe’s ETA on the red planet for 2021, the 100-year anniversary of the Communist Party of China.

“We are working on a tight engineering timeline, hoping to launch our Mars probe in the window of 2020,” says Dazhe Xu, the director of the China National Space Administration. “This is a huge challenge, because at the moment, countries that have successfully launched a probe to Mars include the U.S and Russia.”

China’s space program has made rapid progress since they launched their first man-made satellite forty six years ago. Like their Western counterparts, China’s early interests in space were partly motivated by nationalism, where successful space missions asserted country’s technological and scientific prowess.

Nuclear warfare has also played a part, as certain types of ballistics missiles, such as those traveling across continents, need to travel through outer space in order to reach their target. In 2003, China’s space program made a major milestone when they sent their first Chinese astronaut into space, Liwei Yang.

The upcoming mission to Mars could be China’s next major space achievement.

“Such a big plan to achieve orbiting, landing and rover deploying in one mission will make a legend,” says Rongqiao Zhang, the chief designer of the Mars exploration mission. “Only by completing this Mars probe mission can China say it has embarked on the exploration of deep space in the true sense.”

A successful launch on Mars won’t be easy, acknowledges Mr. Zhang, as the success rate of Mars missions worldwide is about fifty-fifty. The probe will have to travel 483 million kilometers through space before reaching Mars, a long voyage that can fail for a number of reasons, from small trajectory errors to solar flares. Upon entering Mars’ atmosphere, the probe will also have to survive its descent onto Mars’ rough terrain and environment.

According to Mr. Zhang, the Mars mission’s launch date is meant to coincide with the favorable alignment of Earth and Mars, which is predicted to occur in 2020. China’s space program also plans to launch their own space station, the “Tiangong Space station”, that same year. Unlike other countries, such as Russia, Japan, Canada, and the U.S, China is barred from the International Space Station (ISS), due to a law passed by the U.S Congress in 2011 over security concerns.

As China’s tech scene continues to evolve at a rapid pace, Chinese universities struggle to prepare their students for the world outside of the classroom.

“We need to reduce the gap between the theories and concepts taught in class and the expectations and realities of the corporate world,” says Jianwei Jiang, the Vice Director of “the Office of MOOC” at Shanghai Jiao Tong University. “That’s why we have to take the knowledge and tools from the corporate world to prepare students for the future.”

Specifically, Shanghai Jiao Tong University wants MOOCs (Massive Open Online Courses) that are designed by tech companies. On Thursday, IBM and Shanghai Jiao Tong University announced that the university’s online platform for free MOOCs,  CNMOOC (好大学在线), now features courses from IBM’s ‘Big Data University‘. IBM is CNMOOC’s first corporate partner and has contributed 22 courses on big data analytics topics, such as Hadoop, Spark, and data analysis with ‘R’, an open source programming language.

“In the past, all we did was computer science. Now, we need to learn about software development, because the way of working is totally different,” says Mr. Jiang. “You have to make sure that [your code] is usable, that your users won’t break your application.”

IBM’s courses follow Big Data University’s ‘5-5-5’ template: five lessons with five five-minute long videos each. In addition to course content, IBM has also launched a Chinese version of their ‘Data Scientist Workbench‘ platform, where students can use open source tools, like Python and R, without downloading any software. So far, not all of IBM’s Big Data University courses have been localized and translated into Mandarin.

Completing an IBM course results in a digital certificate, which CNMOOC hopes will give students a leg up during the job application process. At the very least, like other courses on CNMOOC,  IBM’s classes will count as school credit at the 66 universities currently partnered with the platform. These incentives are meant to keep students engaged, as MOOCs are notorious for high rates of attrition. In particular, big data analytics can require more patience on the student’s part than other tech topics, like app development. Leon Katsnelson, the Director and CTO of IBM Analytics Emerging Technologies, calls it “80% janitorial services – cleaning the data – [and] 20% analysis.”

In fact, most of Big Data University’s students aren’t university students, says Mr. Katsnelson. They’re IT professionals that want to pivot their career towards big data, such as former database administrators (DBAs) or IT professionals in the service industry. According to Mr. Katsnelson, Big Data University’s course completion rate is 40%, a high percentage that speaks to the professionalism of IBM’s students, not their discipline.

“When a student comes to take a course, the enthusiasm lasts for about fifteen minutes because then it becomes hard,” says Mr. Katsnelson. “If your boss says, ‘Hey, this is a great idea’, it’s a little harder for your interest to wane.”

That’s why tying CNMOOC to local curricula is essential, explains Mr. Jiang. “MOOCs are helpful, but they can’t replace the traditional classroom,” he says. Instead, local universities will use CNMOOC to revamp and supplement existing courses by integrating offline and online materials. That way, students not only benefit from face-to-face instruction and guidance, but they’ll also be held accountable for online coursework.

Though U.S-based MOOCs, such as Coursera, edX, and Udacity, have taken off, their Chinese counterparts have been less successful. In the past few years, domestic companies have received their fair share of limelight, like Uniquedu, which raised 300 million RMB (about $46.3 million USD) in 2015. However, a large number of Chinese students still opt for foreign MOOCs, some of which are actively targeting the Chinese market. In 2015, Coursera added Alipay as a payment option to its website, and on Sunday, Udacity announced the launch of “Youdaxue” (优达学), its Chinese equivalent.

Still, Chinese MOOCs have a unique advantage over foreign companies when it comes to integrating online courses with local schools and their curricula.

“Teachers can’t force students to take classes on foreign MOOCs,” explains Mr. Jiang. “There can be educational content on there that conflicts with our [political] system.”

Launched in 2014, CNMOOC is Shanghai Jiao Tong University’s initiative to open educational resources from China’s top universities to students all over the country. Other Chinese universities have created their own MOOC platforms as well, such as Tsinghua University’s Xuetangx (学堂在线), which is powered by U.S-based edX’s open source platform.

China’s Ministry of Education has treated the country’s MOOC movement with both support and caution, as MOOCs are another form of content that require supervision and monitoring. In 2015, the Ministry of Education announced that it would set up an inspection system to prevent “harmful information” from being disseminated by domestic MOOCs.

Update (4/22/16 15:41): This post was updated to clarify Leon Katsnelson’s position at IBM. 

China’s ‘Internet Plus’ initiative for state-owned enterprises reached a new milestone on Monday with the launch of epec.com (易派客), a SC2B (supply chain to business) e-commerce platform by Alibaba Cloud and Sinopec, one of the major state-owned oil giants in China, for products in the petrochemicals sector.

Epec.com is very similar to Tmall, Alibaba’s B2C e-commerce platform, except that it specializes in mud pumps, sucker rods, and other oil and gas-related goods. In order to register for an epec.com account, users must verify that they belong to a company by entering information like the company’s tax and business license registration numbers.

“Public cloud services, such as Alibaba Cloud, greatly reduce the cost of investment, operation and maintenance,” stated Zhigang Wang, General Manager of epec.com, in Alibaba Cloud’s press release. “In the future, the architecture of this new cloud platform will enable us to quickly expand to do fuel oil, chemical products and CRM [customer relationship management] without duplication of efforts.”

In collaboration with Sinopec, Alibaba Cloud helped build the order center, user center, payment center, and goods center for epec.com. After piloting epec.com for a year before its launch, the oil giant claims that the platform has recorded a total transaction value of 13.7 billion RMB (about $2.1 billion USD).

“Epec.com is the result of the successful technology cooperation between Alibaba Cloud and Sinopec, showcasing ‘Internet Plus’ strategy in China,” stated Simon Hu, the President of Alibaba Cloud, in the company’s press release.

Chinese tech giants have embraced the Chinese government’s long-term goal to streamline government services through disruptive technology, such as cloud computing and big data. In 2015, Tencent also partnered with Sinopec, enabling Sinopec customers to pay for fuel through WeChat. In March, Alibaba announced a partnership with another state-owned oil company, China National Petroleum Corp. (CNPC), that encompassed a wide range of projects including internet payment and finance, cloud computing, logistics, and more.

In addition to the oil and gas industry, Chinese tech companies have jumped on other traditional industries, such as banking, healthcare, and agriculture. Last year, both Ant Financial, the financial affiliate of Alibaba, and Tencent launched their own private banks, MYBank and WeBank, respectively.

Image credit: Alibaba Cloud

China’s O2O space continues to see regular and generous funding rounds despite warnings of a capital winter. On Monday, Renren Kuaidi or ‘Everyone’s Express’ (our translation), a Sichuan-based crowdsourced delivery platform, announced the completion of a 50 million RMB (about $7.7 million USD) round of Series B funding.

Founded in 2011, Renren Kuaidi began as a crowdsourcing platform for delivering lifestyle products from local boutique stores, such as cake, coffee, or flowers. Anyone on Renren Kuaidi’s app can apply to be a courier and pick up nearby delivery orders via their transportation mode of choice: bike, scooter, motorcycle, car, metro, or on foot.

In the last two years, the app has expanded to encompass a wider variety of crowdsourced services, such as ‘Help Me Buy’, where couriers not only deliver products, but purchase them at a brick-and-mortar venues. In 2015, Renren Kuaidi added an even broader service called ‘Help Me’, which lets users put in requests for almost any service, including waiting in line, moving furniture, changing light bulbs, and more. Currently, the startup takes 20% from each completed order.

Renren Kuaidi’s funding news comes less than a week after the merge of JD Daojia, the O2O affiliate of Chinese e-commerce giant JD.com, and Dada Nexus Limited, a crowdsourcing logistics company, was announced. The new company will continue to focus on O2O delivery services to Chinese retailers, competing in the same space as Renren Kuaidi. The delivery space in China is full of players, from express delivery companies like SF Express to food delivery startups like Sherpa’s and Ele.me, which raised $1.25 billion last Thursday.

“To guarantee a high quality of service, we’d rather expand slowly,” stated Qin Xie, the CEO of Renren Kuaidi, in the company’s press release. “Only through high quality service will we become truly competitive.”

By specializing in premium goods, such as those sold at boutique stores, the company is hoping to differentiate itself from its competitors, without having to resort to the popular cash burning subsidies employed by other O2O startups, such as Didi Chuxing and Ele.me.

Renren Kuaidi’s new round of funding will be used to expand the company’s operations and hiring, according to the company’s press release. Renren Kuaidi currently operates in 27 cities around China and previously raised a 15 million RMB (about $2.3 USD) round of Series A funding led by Tencent.

Weibo, the Chinese equivalent of Twitter, was filled with sobbing emojis today as Chinese netizens paid tribute to Kobe Bryant’s last NBA game with mournful tweets and nostalgic messages.

Hashtags like “It’s not just a game” (不只是比赛) and “I was alive during the time of Kobe” (我活在科比的时代) have flooded Weibo’s newsfeed, and celebrities, such as Taiwanese pop star Jay Chou and Chinese actor Yifeng Li, are honoring Bryant’s 20-year career with throwback pictures of the time they hung out with the “Black Mamba.”

China’s obsession with the NBA spans decades, which many trace back to 2002 when 7-foot tall Chinese basketball player Yao Ming was drafted by the Houston Rockets. In 2007, over 200 million Chinese people tuned in to one of the most watched NBA games of all time, when Yao Ming faced off another Chinese basketball player, Yi Jianlian, in a match between the Houston Rockets and the Milwaukee Bucks. In comparison, an average of 15.5 million Americans are estimated to watch NBA Finals on T.V.

Though Yao Ming retired in 2011 due to injuries (fun fact: he’s now the celebrity front man for English education company VIPABC), China’s fever for the NBA grew. In 2012, the NBA claimed that its previous three seasons received 9 billion video views on their Chinese website, an increase of 180% from the year prior. Currently, the NBA has more than 30 million followers on its Weibo account.

The numbers behind the NBA’s following in China are so impressive that tech giants like Tencent and ZTE have invested in NBA partnerships to boost marketing. The latter is sponsoring five NBA teams, including the Chicago Bulls and Houston Rockets. In July 2015, Tencent and the NBA extended their five-year partnership, which brings live NBA games and other NBA programming and content to Tencent’s various content platforms, including Qzone, Tencent Video app, Tencent News app, and more.

It’s a sad day for Kobe Bryant fans in China, who call the basketball star by various nicknames, including “Old Kobe” (老科), “My Kobe” (我科), or even “snail shell” (蜗壳), which is a homonym of “My Kobe.” Though other NBA players, like Vince Carter and Tracy McGrady, are just as loved and worshiped by Chinese NBA fans, for many, Kobe Bryant’s departure from the professional basketball signals “the end of their youth.”

In China, big data is typically dominated by commerce-driven internet giants, however a new type of player is entering the field, and they’ve got a lot of coins to spend.

iCarbonX (碳云智能), a six-month old biotech startup that raised a 1 billion RMB (about $154 million USD) round of Series A funding, boosting the Shenzhen-based company to unicorn status with a valuation of $1 billion USD.

“We want to digitize everyone’s life data…to improve everyone’s quality of life,” said Jun Wang, the CEO of iCarbonX, in an interview with Chinese tech media NetEase Tech, which announced iCarbonX’s funding news on Monday (link in Chinese).

The company is building a big data-driven health platform, capable of processing a wide variety of health-related data, including genetic data and data from smart hardware devices. Using artificial intelligence, iCarbonX will recommend personalized health services and products, as well as forecast and predict health conditions.

According to the iCarbonX’s website, the company is partnering with research institutions, pharmaceutical factories, hospitals, insurance companies and health management companies around the world to gather and analyze data for its platform.

“After completing this round of funding, iCarbonX will develop the following four areas: cosmetics, nutrition, health, and medical treatment,”said Mr. Wang in an interview with Chinese medical media site 360zhyx.com (转化医学网).

According to the company, users interested in skincare could use iCarbonX’s offline system to conduct a skin test. Afterwards, iCarbonX’s platform would suggest a personalized solution, product, or O2O service.

The Chinese startup has a star-studded team, starting with Mr. Wang, who is the co-founder and a board member of the Beijing Genomics Institute, a well-known genome sequence center and one of the key sequencing centers for the 1000 Genomes Project, an international initiative to catalog human genetic variation.

Mr. Wang’s partners include Chun Wu, who has a Ph.D in genetics from Yale University, and Qiang Yang, a fellow of AAAI (Association for the Advancement of Artificial Intelligence) with a Ph.D in artificial intelligence.

The company’s Series A funding was led by Chinese tech giant Tencent, who have invested in a number of health-related startups, including mobile medical device startup Scanadu, smart scale company Picooc, and Guahao, an O2O platform for medical services. Artificial intelligence and big data have gained significant limelight in China following Lee Sodol’s defeat against AlphaGo, an AI developed by DeepMind, an artificial intelligence company acquired by Google in 2014.

A spokesperson from iCarbonX could not be reached in time for comment.

Image credit: iCarbonX

Chinese startup Qingtuanshe (青团社) announced the completion a 55 million RMB (about $8.5 million USD) round of series A funding on Monday, led by Zhubajie.com (猪八戒网), a website that connects freelancers in design, IT, marketing, and other “creative” disciplines to paid projects.

Qingtuanshe’s student-facing app connects university students with part-time jobs, such as shopkeeping at a hamburger joint, livestreaming on an app, and even “liking” a company’s social media posts (advertised on Qingtuanshe as “earn money by playing with your phone”). Students can browse and sign up for different job opportunities, which puts them in contact with the company. On the other side, companies can download Qingtuanshe’s free corporate app and post job opportunities and track applications.

According to co-founder Xinxuan Wang, students can fall prey to online scams on job search platforms. To mitigate that, Qingtuanshe has invested in corporate partnerships, including McDonald’s and Ikea. The company also has a team of employees that are in charge of verifying part-time jobs on the app.

However, Qingtuanshe’s student-facing services are only one piece of the startup’s business. The company makes money through its B2B services, aimed at companies struggling to hire temporary or part-time workers. These are offline services that are separate from Qingtuanshe’s apps, though they utilize student data from their app, as well as data from partners such as ride-hailing company Didi Chuxing and online finance platform SF Pay. According to the company’s press release, Qingtuanshe already has brick-and-mortar offices in 25 cities around China.

For many Chinese students, undergraduate university is the first time that they can seek out and work at a part-time job, due to the rigor and intensity of primary, secondary, and high school. There are a wealth of job search services in China, such as 51job and Lagou, but most of them cater to a wider audience, not only university students. In addition, Qingtuanshe has partnered up with Alipay so that its users’ part-time job experiences can eventually count towards their Sesame Credit, which is currently calculated through Alipay users’ bill-paying habits, purchasing behavior on Taobao, and other metrics.

Founded in 2013, Qingtuanshe received a 10 million RMB (about $1.5 million USD) round of Series Pre-A funding in 2015, as well as 1 million RMB (about $154,000 USD) in angel funding in 2014. The company plans to use its latest round of funding towards offline expansion to more cities and improve its job search services in more industry verticals.

Image credit: Shutterstock

On Tuesday, Alibaba Group Holding Limited announced that it acquired a controlling stake in Southeast Asian e-commerce platform, Lazada, for $1 billion USD.

The acquisition includes $500 million USD in Lazada shares, as well as purchased shares from other Lazada stakeholders, including Rocket Internet, Tesco, and Kinnevik. Following the transaction, Lazada’s valuation stands at $1.5 billion USD.

“With the investment in Lazada, Alibaba gains access to a platform with a large and growing consumer base outside China,” said Michael Evans, president of Alibaba.

Lazada’s e-commerce platform spans a number of important markets in Southeast Asia, including Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Despite the challenges posed by Southeast Asia’s cultural and linguistic diversity – not to mention its topology – the region’s half-billion residents make e-commerce a lucrative area with a lot of potential for growth. In addition to Lazada, other regional e-commerce startups include Tokopedia, Bukalapak, and Qoo10.

“Southeast Asia is an attractive mobile-driven consumer market that is highly fragmented and diverse with significant barriers to entry and a nascent modern retail sector that has large headroom for growth,” stated Max Bittner, the CEO of Lazada, in a press release. “The transaction will help us to accelerate our goal to provide the 560 million consumers in the region access to the broadest and most unique assortment of products.”

Alibaba’s billion dollar purchase shouldn’t be seen as simply a move into Southeast Asian e-commerce, though it’s certainly part of the tech giant’s ambitions. Just as Taobao paved the way for a range of other profitable products, such as Alipay under Ant Financial, the acquisition of Lazada may serve as a launchpad for other Alibaba products looking to enter Southeast Asia.

These are interesting times for Hong Kong’s nascent startup scene, as the city grapples with China’s slowing economy and struggles to define itself in an increasingly globalized world. As a small market home to 7 million people, Hong Kong will have to specialize and claim something as its own, in the same way that markets like Israel and Singapore have with tech R&D and fintech, respectively.

“If you just look at fintech, it’s having a vibrant ecosystem in Hong Kong,” said Gregory So Kam-Leung, the Secretary for Commerce and Economic Development, at fintech accelerator SuperCharger‘s demo day on Thursday. “We see…DBS, Accenture, and Nest, and of course TusPark, all coming to Hong Kong, really pointing the direction that we have something going really good right now.”

Along with IoT, government officials, as well as other players in Hong Kong’s startup scene, see fintech as a potential pillar for the city’s startup ecosystem. Hong Kong is one of the top financial centers of the world, and ex-bankers, such as David Rosa, one of the entrepreneurs in SuperCharger’s batch, have jumped into the fintech space, eager to apply their banking knowledge in a less rigid environment.

However, whether or not Hong Kong’s strength in traditional banking will translate over to fintech, remains to be seen.

“If you’re talking about fintech, it matters if you’re talking about fin or tech,” says Dong Shou, the CTO of Wecash, a Beijing-based startup in SuperCharger’s batch. “If you’re talking about fin, definitely. But if you’re talking about tech, I’m not so sure if Hong Kong can compete with mainland cities like Beijing.”

Hong Kong’s government is keen on promoting fintech and has even created a dedicated fintech team under Invest Hong Kong, a government organization aimed at “attract[ing] and retain[ing] foreign direct investment,” according to its website. In January, Hong Kong’s Chief Executive Leung Chun-ying announced a HK$2 billion ($257.8 million USD) “Innovation and Technology Venture Fund” for early-stage startups, and Cyberport, a state-owned “innovation and technology hub”, announced in February that it would dedicate three thousand square meters of its co-working area to fintech startups over the next five years.

At SuperCharger’s demo day on Thursday, the accelerator’s first batch of eight startups pitched their companies and products, from bitcoin exchange Gatecoin to cashless payments startup Eko. Founded in 2015, the Hong Kong-based accelerator is backed by three corporate sponsors: Standard Chartered Bank, Baidu, and TusPark Global Network.

Here are the eight SuperCharger startups that pitched on Thursday:

Neat

Neat is a digital banking solution aimed at millennials. Users can open a Neat bank account through Neat’s smartphone app, which uses facial recognition to authenticate the user on the frontend. The startup is working with an undisclosed regulatory partner to conduct KYC (Know Your Customer) checks offline, in the background.

The company also has Mint-like analytics, where users can track their spending habits and set limits and goals for themselves. The company also plans to monetize their users’ payment data by providing business intelligence to merchants. Neat’s product also comes with a bank card, a concession to the Hong Kong market where QR codes have not been well received.

Wecash

Wecash uses data analytics to generate credit scores and offer customized loans services.

“We are focusing on the long tail market. Our customers are usually young, like students, or blue collar workers, or farmers,” says Mr. Shou. “It is really hard to get loans from banks without a mortgage. From us, they get a micro loan up to 500 USD.”

By connecting to the user’s accounts on social media and e-commerce sites, such as Weibo and Taobao, Wecash can analyze the user’s social network and activity, and use information like the user’s university degree to generate a credit score. For users that are not active on social media, the startup analyzes their phone contacts and text messages instead.

Amareos

Amareos analyzes data from social media and news articles to provide market sentiments, such as “disgust” and “joy.” Currently, Amareos is only available in English, though the startup wants to localize it in Mandarin and Japanese, and is working with Baidu to access mainland China’s market. The startup also has plans to expand to the U.S, London, and Paris.

Gatecoin

Gatecoin is a trading platform Bitcoin, Ether, and DAO tokens for individuals and institutional investors around the world. The startup also offers cross-border money transfer solutions for banks and payment service providers.

Funding Societies

Funding Societies is an online P2P platform for SMEs and investors in Southeast Asia.

Eko

Eko‘s products enable customers in India to conduct payments on their mobile phones without installing software or an app. The company also provides customer payment services, merchant transactions, bill payment, and cash collection services.

Microcred

Founded in 2005, Microcred offers loans to Micro and SMEs. It’s currently operating in Africa and China.

Jade Payments

Jade Payments is a payments provider and program management company for events payment systems, prepaid card programs, and payment platforms.

Since its designation as a Special Economic Zone, Shenzhen has earned its reputation as the ‘Silicon Valley for hardware.’ Many hardware startups such as DJI choose to base their headquarters in Shenzhen, and hardware accelerators, such as Brinc and HAX, leverage the city to offer entrepreneurs a proximity to manufacturing that’s hard to find elsewhere.

However, jumping into hardware and getting hands-on with product manufacturing isn’t easy, especially as a foreigner in China. Navigating Chinese factories and negotiating with factory bosses can be a sink-or-swim experience for expat entrepreneurs, depending on their cultural fluency, language skills, and chutzpah.

We sat down with Liam Bates, the co-founder of Origins Technology, at ChinaBang Awards 2016 to discuss his experience in China as an expat running a hardware startup. Mr. Bates has lived in China on-and-off for a total of ten years, and used to film travel documentaries in China, an experience that surprisingly proved useful when he started Origins Technology without any previous experience in manufacturing hardware.

How did you start learning the basics about the manufacturing process in China?

We started meeting with people [at factories] and talking to them. At first we were like, ‘We’re two guys and we want to make some products’, and found out really fast that that just does not work.

We started BS-ing a lot – ‘Oh yeah, we’re a big company, we’re going into a new range of products.’ We told people we were in the organic food and health product space. We made some business cards. We didn’t have a company name – we just made something up. At the start, we’d be like, ‘Oh we actually have another colleague who’s in charge of manufacturing, but he’s 出差 (on a business trip) in the US. So we don’t know much about this – he’s the expert – so let’s just tell me what the process is.’

Of course, we made it sound much bigger than it was – new product line, we have a lot of existing companies, a lot of existing clients. We would just list off clients we didn’t have, just to get the foot in the door. In China, if you try to tell them your story, ‘Oh we’re small, but then we’ll be big’ – China doesn’t have many stories like that, why would anyone believe that?

What did you look for in the factories you were choosing from?

My other partner, Ken Ying, he has a background in manufacturing steel, which is very, very different. But it gave him enough of an idea, like how to talk to people in factories, how to bluff. The point is, he’d done enough business with large factories to know what to look out for, what kind of people are the kind we want to work with.

So an easy example is…when we were on our second product, the laser egg, [and we were] choosing a factory to do the steel molds for. I went to this big, Chinese factory, [which had] all the most up-to-date, modern technology in the world there. We showed the designs, and the guy was like, 没问题， 没问题， 可以做，可以做，没问题 (No problem, no problem. We can make it, we can make it, no problem).

We went to another one, a Hong Kong-run company, and the chief engineer, he looks at our design and says, “Oh, that’s going to be really hard to do well. This is not going to look good, this is probably not going to come out well. Your design is very hard to work with.”

Of course, the natural instinct is to go with the one with modern equipment that says like yeah, we can do this. But that would’ve been the wrong choice. The right choice was to go with the guys who had the older equipment and told us where all the problems were so we could fix them.

It’s very Chinese [to say] 没问题， 没问题， 没问题 (No problem, no problem, no problem)…and then you get [the product] finished and are like uh, that’s not what I wanted.

How did you negotiate prices at the factory?

It’s like if you’re talking to VCs, right? If you want to get money from Sequoia, you’re probably not going to go to Sequoia first. We would go to maybe three other people that we don’t want to work with first, work out how much it should cost. You need at least three numbers to get an idea of market. You have to know what you should pay and then you can start talking.

How has bootstrapping forced you to be resourceful as a hardware startup in China?

Our first product, for example, we basically used a whole lot of tricks to get around not needing tons of capital. For the outside mold, we didn’t create a mold from scratch. We went to all these factories and we found a product which we liked that looked good. Then we were like, okay, we’re going to order some massive quantity, we need some samples first.

Of course, the samples turned out to be the products we sold. But we were like, yeah, we like your product but we’d like to change the filter inside. So we changed the filter. [Then] we changed the fan. We changed every single piece other than the outside case, and even then we got it made in new colors. So it was basically a totally new product, except we saved the 1.5 million molding cost.

Image credit: Origins Technology

Update: A section in this article related to gift-giving in Chinese factories was removed for legal reasons

The past twelve months have not been great for China’s financial industry. The sharp plunge of China’s stock market, coupled with the $7.6 billion USD scandal by P2P lending platform Ezubao (e租宝), has chipped away at the zeal Chinese consumers once had for trading stocks and dabbling in online finance.

Still, Robinhood, a U.S fintech startup, believes that 2016 is the right year to enter China.

“China is a massive market where we know we can make a big impact,” Jack Randall, Robinhood’s Head of Communications, told TechNode. “There are many barriers to entry for Chinese citizens looking to access the US exchanges, and we are happy to lower them.”

On Monday, the company announced its plans to launch a Chinese version of Robinhood (罗宾侠) by Q2. Robinhood’s app lets users buy and sell U.S listed companies and ETFs (Exchange Traded Funds) without any fees, unlike its brick-and-mortar competitors, such as Scottrade and E*Trade. The company’s goal is to “democratize access to financial markets,” and has appealed to users not only through its zero-fees policy, but a minimalist and simple UI. In May 2015, the company raised a $50 million USD round of Series B funding and announced plans to expand into Australia, its first market outside of the U.S.

To prepare for its launch in China, Robinhood has started a ‘Pioneer Program’ so Chinese-American users of the app can invite friends and family in China to sign up for the waitlist.

“Our Chinese-American customers love Robinhood and we [want] to encourage them to share their love of Robinhood with their friends and family in China,” says Mr. Randall.

It’s unclear how effective Robinhood’s ‘Pioneer Program’ will be, as Chinese-Americans are significantly different from their Chinese counterparts and, in some cases, do not even identify with mainland China. Robinhood’s assumption that Chinese-Americans qualify as an entry point into the Chinese market suggests that the startup has not yet realized how challenging localizing their product for China will be.

Compared to Australia, entering China is a whole other game, and Robinhood will have to work hard to establish strong, local partnerships and adapt to China’s regulatory framework. The company has not yet disclosed any details regarding their strategy for the Chinese market, including information about local partners.

Founded in 2013, Robinhood is backed by a number of well-known investment entities, including Google Ventures, Andreessen Horowitz, and Index Ventures, and has raised a total of $66 million USD in funding.

Image credit: Robinhood

This year’s Asia Hardware Battle featured a smorgasbord of hardware products, making it clear just how broad the term hardware has become and how rapidly the field has expanded.

The hardware competition showcased a total of fifteen startups from all over Asia: India, China, South Korea, Israel, and Japan. Startups came from a diverse range of industries, tackling problems around urban farming, sleep quality, bad coffee, long distance relationships, healthcare, air pollution, personal fitness, and more.

Social enterprises made a strong presence at this year’s competition, such as Chakr, whose product converts harmful particulates from diesel emissions into ink. Health-related products were also popular, such as exii.Inc and MedEXO Robotics’ bionic arms, which help amputees and patients suffering from Parkinson’s, respectively. 

After a grueling session of fifteen back-to-back pitches, Asia Hardware Battle chose the following three startups as the winners:

Alesca Life

Related Post: Meet Alesca Life, The Urban Chinese Startup That Can Grow Your Lunch On Demand [Video]

exii Inc.

Meirenji (每人计)

See More: Meirenji.cn

This article is part of Technode’s coverage of ChinaBang, where Technode was the organizer of the event.

Image credit: Alesca Life, Live Braille, Rideon, Meirenji

There’s a Japanese word that roughly translates to “spiritual possession” or hyoui. In the case of Japanese startup Adawarp, ‘other things’ refers to teddy bears.

“We are creating a remote control teddy bear. [The user] sees what the bear sees,” said Tatsuki Adaniya, the founder of Adawarp, at the pitching session of Asia Hardware Battle. “So what kind of problem we are trying to solve? We are closing the distance between the people who need to be closer.”

Adawarp’s product, HugmeBear, is a teddy bear that can be controlled remotely over the internet through Adawarp’s VR app and an Xbox controller. By strapping on a VR headset and opening Adawarp’s app, you can see through the bear’s eyes and turn the bear’s head. Twiddling the controller’s joysticks makes the bear wave its arms and give hugs. It’s a little unsettling, especially when you realize that the bear’s eyes are actually two camera modules that are connected to an Arduino, packed inside the bear’s body.

“Before this teddy bear, I made a lot of VR games by myself,” says Mr. Adaniya, who is currently a junior at Chiba University. “But I noticed that…virtual reality games are lonely games. I want to use virtual reality to connect people. I think the bear is more emotional for them.”

According to Mr. Adaniya, communication tools like Skype, FaceTime, and other messaging or voice-call applications are insufficient for long distance relationships, both romantic and familial. They lack presence, which Mr. Adaniya believes can be achieved through an interactive object and virtual reality. HugmeBear’s design was informed by Mr. Adaniya’s own personal experience when he was studying abroad in San Francisco. At the time, his girlfriend was in Japan and ended up breaking up with him because of the distance.

HugmeBear can also be a way for shy individuals to express themselves, says Mr. Adaniya.”If we are a couple, and we do some fighting, and I want to say sorry but [am] too shy to say [it], using this, [I] can [speak my] mind more directly,” he says.

According to Mr. Adaniya, the teddy bear is just an outer shell, one that can be replaced with any kind of animal or doll. He plans to open source Adawarp’s “bear-OS”, which is the operating system powering HugmeBear’s remote-control capabilities.

“A lot of people think this is a teddy bear. This is not a teddy bear, it’s a robot,” says Mr. Adaniya. “Our core technology is peer-to-peer connection, same as Skype. Skype’s protocol is voice and video. We made [a] sensor data layer. So voice, video, and sensor layer protocol…that is our core technology.”

Adawarp’s first version of its HugmeBear product, which it refers to as “DK1”, launched today on Indiegogo. Mr. Adaniya acknowledges the limitations of this preliminary HugmeBear, which has limited movement and needs to be plugged into a computer. In the future, he plans to give the teddy bear more mobility and streamline user experience with gesture control instead of an Xbox controller.

This article is part of Technode’s coverage of ChinaBang, where Technode was the organizer of the event.

Image credit: Adawarp

Chinese netizens have a reputation for dodging Chinese censors through wordplay. Through clever homonyms and code words, such as “check the water meter” (抄水表), Chinese internet users are able to discuss police brutality, protests, corruption, and other sensitive topics without getting caught by Chinese censors, also known as the Great Firewall (GFW).

Of course, the Great Firewall isn’t just sensitive to political commentary – it blocks thousands of websites, including Google’s search engine, news articles, and social media sites like Facebook and Twitter. For many companies in China, circumventing the Great Firewall is necessary to stay productive. Virtual private networks (VPNs), which are offered by both foreign and domestic companies, are a popular way to get around the GFW.

However, for VPN providers that cater to customers in China, day-to-day business can involve dealing with crackdowns from the Chinese government, which employs a variety of tactics to take down VPN connections. That game of cat-and-mouse is a lot more difficult for Chinese VPN providers, as they can be physically shut down by law enforcement and government officials.

Perhaps it’s for that reason that a significant number of Chinese VPN providers choose more nuanced names than those of their Western counterparts, such as ExpressVPN, PureVPN, and HideMyAss. Quite a few draw their names from dynastic literature, alluding to idioms or stories that represent escape, secrecy, or going over a wall (翻墙), another code word for getting around the GFW.

Here are three Chinese VPN providers (all of which have been shut down already) and the stories behind their names:

1. Red Apricot (红杏)

“Red Apricot” is an allusion to a Song dynasty poem by Ye Shaoweng (叶绍翁) about a married woman that has an illicit affair with a lover. In the poem, a red apricot tree leans over a wall (红杏出墙) as a metaphor for adultery. For the Chinese VPN provider, “red apricot” symbolizes “leaning over” or getting around the Great Firewall.

2. A Winding Path (曲径)

This is a reference to a poem by Chang Jian (常建), which can be found in “Three Hundred Tang Poems”, an anthology of Tang dynasty poems compiled in the 18th century by Sun Zhu, a Qing dynasty scholar. One of the lines from the poem is “a winding path leads to a hidden spot” (曲径通幽), where the “winding path” represents the VPN connection that leads individuals outside of the Great Firewall.

3. West Wing (西厢)

“West Wing” refers to a Chinese drama from the Yuan dynasty called “The Story of the Western Wing” (西厢记). The drama describes the story of Zhang Sheng and Cui Yingying, who fall in love against their parents’ wishes. In the story, Zhang Sheng has to climb over a wall in order to meet with Cui Yingying in secret – another reference to circumventing the Great Firewall.

Virtual reality has taken center stage in China’s tech scene this year. Chinese tech giants like Alibaba and Tencent are all competing for a piece of the VR market, and VR startups are popping up everywhere, largely driven by the “wow” factor of VR technology: immersive content and sleek hardware.

“Everybody is talking about virtual reality…making a VR headset, making VR controls, [and] making it more advanced,” says Peter Choi, the Director of Palapple, an IT solutions startup based in Hong Kong. “The thing is, we have to put it into action and fit [virtual reality] into normal life.”

Like many startups, Palapple started developing its own VR products. Last December, the company created a project called VResidence (V视点), which covers a number of VR real estate products, including an online platform for ‘secondhand’ property. The platform lets real estate agents show VR tours of ‘secondhand’ apartments, a reasonable distinction in China where so many new or ‘firsthand’ apartments are built every year. Palapple isn’t the first company to create VR tours for the real estate industry, but Mr. Choi claims they are one of the few targeting the secondhand property market.

Using VR To Sell ‘Secondhand’ Apartments As Real Estate Growth Slows

“Secondhand buy and sell and rental is our focus market,” says Mr. Choi. “We don’t need to intervene a lot, we only need to send people to take a panorama picture for [real estate agents]. Then right away we transfer [it] to our server, do the 3D transformation, and within half an hour, it’s on [our platform].”

Palapple’s choice to focus on the secondhand property is a strategic one. It allows the company to invest a minimal amount of resources on technical development, while maximizing its ability to scale in China’s real estate market. Unlike ‘firsthand’ property, which requires VR rendering and modeling of unfinished buildings, creating VR tours of secondhand property can be done with panoramic photos.

“We don’t want to be too technical in this area,” says Mr. Choi. “What [real estate agents] really want is they have to make the customer make the decision fast.” For property that clients might potentially buy or rent, an offline visit is unavoidable, he says.

“You really need to go there and have a look, so why do everything on VR?” he says. “There’s no point. What we’re trying to do is balance everything and make it just right to fit into the industry.” By offering clients virtual tours, real estate agents can help clients quickly identify property that they’re interested in and close rental and sales agreements faster, says Mr. Choi.

It’s a bare bones approach towards virtual reality, where business development takes priority, not the “wow” factor of the technology, as we often see in China’s early-stage VR market.

In order to capture panoramic photos of secondhand property, Palapple works with third-party logistics companies. The startup provides the company with one week of training and a panoramic camera, such as a Ricoh THETA S. When a real estate agent sends in a request for one of their apartments, the logistics company goes in and snaps panoramic photos of the property. Once the agent makes a sale or closes a rental agreement, the startup receives 5% of the real estate agent’s commission, part of which goes to the logistics company.

“We need to involve [the logistics company] because we need to do the economy of scale, especially when we’re talking about the entire region of China,” says Mr. Choi. “In Hong Kong, we can hire people and…still achieve the margin because Hong Kong real estate is the highest in the world. But that’s not the case in China.”

Tapping Into The Mainland Real Estate Market

The Hong Kong based startup has ambitions to expand into China starting in May, and has already sealed partnerships with Chinese real estate developers such as Vanke (万科). In China, Palapple will have several competitors, such as 51wofang.com and Home Director (指挥家, our translation). However, both startups primarily focus on modeling firsthand property in VR, which has a higher production cost, according to Mr. Choi. Though Palapple also provides VR modeling services, it’s a minor part of the startup’s business, which depends on the high turnover rate of secondhand real estate.

“The major hurdle for firsthand developers is that the decision process is way too slow,” says Mr. Choi. “We’re a startup – we have to grow, right? We need to scale fast so we can’t wait for their decision.”

In China, real estate is a lucrative industry that has created quite a few billionaires, including Wang Jianlin and Hui Ka Yan. However, the firsthand real estate market has slowed in recent years due to oversupply. According to the National Bureau of Statistics of China (NBS), as of November 2015, 441 million square meters (around 4.7 billion square feet) of the gross floor area (GFA) of new homes is finished but unsold. Given the more consistent flow of students and young professionals seeking rental property, the market for secondhand apartments may be more stable.

In addition to Palapple’s platform, where users can select property to view through Palapple’s VR app, the company also has its own headset. The company plans to sell its headsets to real estate agencies, though the VR app is compatible with other headsets as well, according to Palapple. At the end of March, the company will officially launch their online platform for the Hong Kong market.

Image credit: Palapple

While the world watches China’s slowing economy with anxiety-filled anticipation, Chinese consumers are largely optimistic and willing to spend, according to a new report released last Friday by consulting firm McKinsey.

The report, which surveyed 10,000 people across 44 cities in China, found that more than half of Chinese consumers were confident that their income would increase significantly over the next 5 years, compared with 32% of Americans and 30% of U.K consumers.

Though certain regions, such as the northeastern belt from Henan to Heilongjiang, were less optimistic, overall, McKinsey’s report shows that Chinese consumers are increasingly willing to spend their disposable income on entertainment, travel, and lifestyle services such as spa treatments and massages.

In 2015, box office revenue jumped about 50%, reaching a record amount of 40 billion yuan (about $6.16 billion USD), a sign that Chinese consumers are also happy to pay for leisurely activities such as going to the movies.

Domestic consumption will become an important pillar of China’s “new normal” economy, as the Chinese government tries to shift China towards an annual GDP growth rate of 6.5 – 7% for the next five years, the lowest in a quarter-century. According to Premier Li’s annual work report, the Chinese government will also focus on growing “emerging areas of consumption such as information goods and services, smart homes, and personalized fashion,” and work to “usher in a new era of mass tourism.”

That isn’t to say that Chinese consumers are wholly unaware of their slowing economy. As they find more ways to spend their money, while staying mindful of the need to save and invest, Chinese consumers are becoming more selective about how they spend their money. Drawing from McKinsey’s report, here are 3 things about today’s Chinese consumers that you should know about:

1. Earning Brand Loyalty Is Harder

Brand-awareness is not a new trait in Chinese consumers. In fact, they’re notorious for traveling abroad for the express purpose of purchasing brand-name luxury goods. According to a report by Bain, mainland China’s luxury goods market was worth about 113 billion RMB (about $17.4 billion USD) in 2015. Chinese consumers are also more likely to believe that higher prices correspond to better quality, compared to consumers in the U.S and Japan.

Today’s Chinese consumers are still brand-conscious, but they’re getting pickier about the brands they choose to support. According to McKinsey’s report, a growing number of Chinese consumers are narrowing their focus to just a few brands, or even a single brand.

For example, in apparel, less than 30% of Chinese consumers said they were open to considering brands outside of their “consideration list” in 2015, down from about 40% in 2011. In industries such as food and beverages, consumer electronics, and personal care, a similar trend applies. Today, Chinese consumers are less open to trying new brands, and outreach via promotions may not be as effective.

2. Personal Health Matters For Chinese Buyers

Over the past decade, various food scandals have pushed food safety to the forefront of consumer awareness in China. In 2008, for example, melamine-tainted milk powder resulted in 300,000 sickened infants and 6 infant deaths.

Despite efforts from the Chinese government, including the creation of a China Food and Drug Administration (CFDA) in 2013, consumer confidence hasn’t recovered. According to McKinsey, about “72% of Chinese consumers…worry that the food they eat is harmful to their health, up from 60% in 2012.”

In the past, concerns around food quality made Chinese consumers more careful about what they ate and where they food came from. Today, that wariness has translated directly into purchasing behavior, as unhealthy food and beverages, such as carbonated soft drinks, chewing gum, and Western fast food, have taken a hit in market penetration. Instead, more Chinese consumers are opting to buy food and drinks that are perceived as healthy, such as fruit juice.

In addition, Chinese consumers are developing more specific requirements for food safety. According to McKinsey, “‘organic/green food’ has become one of the top criteria that Chinese consumers use to identify the safety of food, with 38% of consumers mentioning this attribute among their top three criteria.”

Finally, Chinese consumers are putting their money towards preventative healthcare products, such as regular health checkups, lifestyle apps, private medical insurance, and wearables, which have exploded in recent years as domestic tech companies, such as Xiaomi, have jumped on the wearables trend. Chinese consumers are also becoming sportier with an estimated 73% of Chinese urbanites involved in some kind of sports activities, compared to about 70% of American consumers.

3. Offline Shopping Is Entertainment

Online retail is a booming market in China, with tech giant Alibaba raking in 3 trillion yuan across its different platforms, including Taobao and Tmall, in 2015. That doesn’t mean that brick-and-mortar retail establishments, such as shopping malls, are falling out of favor with Chinese consumers, however. According to McKinsey’s report, two-thirds of Chinese consumers see offline shopping as one of the best ways to spend time with their family, an increase of 21% compared to 2012.

This means that shopping malls are becoming more popular, in comparison with department stores, since they combine dining, shopping, and entertainment in one venue. Traveling, another popular way to bond with family, also centers around shopping. According to McKinsey, more than 80% of Chinese travelers made overseas purchases in 2015 and almost 30% chose their travel destination based on shopping opportunities.

For Chinese consumers, it’s clear that shopping offline is not only about purchasing products. It’s a social experience, particularly for families, and one that can be mixed with other leisurely activities. In 2015, there were more than 70 million Chinese tourists who traveled abroad.

Image credit: Shutterstock

Countries across Asia are vying to boost their homegrown service economies, as a drop off in resources demand and a slowing Chinese economy are taking their toll. China has pumped over a billion into kickstarting their local innovation economy, while countries including Australia and India have launched their own costly campaigns.

“What I don’t think is good is when governments organize a very expensive [and] large one-time just to deliver a message,” said Martin Talvari, the CSO of startup conference organized SLUSH. “I think it was the Prime Minister [of Finland] who said, ‘Yup, we do a lot by not doing much.’ There’s a certain truth in there.”

Governments like the Chinese government have had a more heavy-handed approach. The Chinese government has offered generous support to both startups and investors in China, including the construction of high-tech parks, startup funds, tax benefits, and even “risk compensation” for venture capital firms. This year in Premier Li’s annual work report, “innovation-driven development” was reemphasized again and again as a priority for the Chinese government. However, China is not alone in its top-down push for tech and innovation. Almost every country in Asia has jumped on the bandwagon, each touting itself as a “startup hub.”

“Somehow every city has their own ranking system that puts them in first place,” Mr. Talvari told TechNode in an interview after the panel. “For example, I just came from Australia and learned that they spent $28 million AUD [about $21.3 million USD] for campaign advertising. They put all these advertisements on platforms just to show that Australia is all about ideas [and] about technology.

Mr. Talvari ran a panel at this year’s Asia Beat conference, where representatives from different cities, including Seoul, Fukuoka, Hong Kong, and Taipei, compared and discussed the merits and flaws of their respective ecosystems. The panel was inspired by Mr. Talvari’s side project, where 120 countries around the world, 80 of which he has visited, are ranked in Excel by a number of metrics including: internet speed, government access, opportunities, and more. For “startup hubs” around the world, attracting the best and brightest entrepreneurs will depend on not just hard capital, but healthcare, access to airports, relative cost of living, and even things like good coffee, according to Mr. Talvari.

“Once you are not depending anymore on the location – your business is online, everything you do is online –  you start caring a lot about lifestyle. We see [this] from [digital] nomadism, [which is] increasing in popularity. So it’s all about finding a balance,” he said.

In addition to organizing SLUSH events, Mr. Talvari has started a new project called Leaders, a marketplace for conference keynote speakers. He is partnering with Loïc Le Meur, the founder of LeWeb, a well-known tech conference in Europe. The two started Leaders a few months ago, according to Mr. Talvari, and have already raised an undisclosed amount of funding.

This article is part of Technode’s coverage of Asia Beat, where Technode was a media and organizational partner. 

Virtual reality is one of the hottest trends in the Chinese tech market, as proximity to manufacturing and abundant local capital have seen a splurge in VR investments. But according to Cai Wensheng, a well-known angel investor in China, 2016 may not be the year that virtual reality takes off.

“In 2000, during the dot-com bubble, everyone thought the internet could change everything. But when it all crashed, we found out it was all a lie,” said Mr. Cai, drawing a comparison to the recent hype around virtual reality during a panel event at this year’s Asia Beat conference in Xiamen.

Entrepreneurs can start entering the virtual reality industry, but should manage their expectations, he said. However, despite his caution toward virtual reality, Mr. Cai has invested in VR startups as he would rather “make the wrong investment, than miss an opportunity.”

Currently, one of the main issues with VR is the limited amount of time that users can experience it, says Li Feng, the founder of venture capital firm Freesfund, at the same event. “It can cause vertigo if used for a long period of time, especially totally immersive VR,” he said. “And time is a very important factor in a business model. If a cannot be used for a long period of time due to physical reasons, the full potential of VR will be hidden.”

“This year, many companies are still conceptual or just part of the [VR] bubble,” said Mr. Li, echoing the caution of Mr. Cai.

“There are trends that seem hot but there’s always the danger of being pulled in,” said Bernard Moon, a co-founder of SparkLabs Global Ventures, in an interview with TechNode at Asia Beat. A seasoned investor and serial entrepreneur, Mr. Moon is also cautious when it comes to following trends, though his team does track certain industries, such as fintech, IoT, cybersecurity, food tech, and e-commerce.

“I think a good example is – I don’t want to be blacklisted – but Kleiner [Perkins Caufield & Byers],” said Mr. Moon. “For awhile, Kleiner got pulled into the whole green tech thing. I think it’s the second wave of recent internet investments. So I think there is a danger of trying to overly focus too much on trends.”

For a seed-stage fund like SparkLabs Global Ventures, team dynamics are a more important metric when accessing their viability than trends or the “hotness” of their product.”What we’ve learned is regardless of how hot the deal is, you really need to know the team better [and] do the reference checks,” Mr. Moon told TechNode.

“There’s no exact metric on it, but I would say a third of startups fail because of team dynamics, founders fighting, or a founder had too big of an ego,” he said.

At Asia Beat, Mr. Moon advised entrepreneurs to be flexible on valuations, as “it’s not a time to be arrogant.” He believes winter is hitting the global startup ecosystem, with valuations decreasing and down rounds already occurring in Silicon Valley. For seed-stage startups, Mr. Moon recommends that entrepreneurs seek multiple investors in a seed round and to double down on metrics –  “the benchmarks of your industry” – in order to succeed in raising a Series A or B round.

This article is part of Technode’s coverage of Asia Beat, where Technode was a media and organizational partner. 

Update (3/21/16 16:56): This post was updated to clarify that TechNode interviewed Mr. Moon at Asia Beat, where he also gave a talk.

According to Todd Embley, the Program Director of Chinaccelerator, the failure rate for startups in China is 95% – a daunting number that’s even higher than the estimated failure rate for startups in general.

“People don’t even know how to start in Asia,” said Mr. Embley in a talk at Asia Beat, an annual startup competition for entrepreneurs and investors in Asia.

“They’re especially afraid of China, because so many companies have failed to come into China, none bigger than Google of course,” he said. “There is a fear of coming to China which puts [Chinaccelerator] in a very good position to be that soft landing, and to help them understand the local ecosystem.”

A growing number of organizations are springing up in China, aimed at offering that same soft landing for foreigners who want to start, scale, or boost their ventures in China. HAX, a hardware-focused accelerator in Shenzhen, draws entrepreneurs from all over the world to the heart of China’s hardware startup scene. There’s also HaxAsia, a hardware accelerator based in Beijing, as well as Microsoft Ventures Beijing, which launched in 2012. Countries have also set up their own resources to help their entrepreneurs survive in China’s tough market. For example, La French Tech, a global network of investors, entrepreneurs, and other players in France’s startup ecosystem, launched in Shanghai earlier this year.

However, expat entrepreneurs in China still suffer from challenges such as a language barrier, cultural differences, and what Mr. Embley calls the wrong “gut instinct”, in terms of intuiting typical consumer behavior in China. At AsiaBeat, we were lucky enough to catch Mr. Embley’s talk and sit down with him to chat about Chinaccelerator and the startup environment for foreigners in China.

1.  How has China’s startup landscape changed over the seven-plus years that you’ve been here?

The sheer amount of attention being given to this area of innovation is immense. It’s incredible. I always have this image of the startup ecosystem in Silicon Vally [as] driving forward with the government as the piano tied to their ass. But in China, it’s kind of the reverse. The government is extremely forward thinking, knows what needs to happen, and is willing to move mountains to make it happen. They’re flooding the market with capital and driving media. They’re driving co-working spaces, accelerators, incubators, and IT parks.

[They’re] really making a lot of noise around, ‘We need entrepreneurs , we need our young people creating innovation, this is where we go from manufacturing to leaders in innovation and tech where we need to be.’ So it’s been amazing to watch.

2. Is China’s startup ecosystem more receptive to foreign startups nowadays?

It is because there is more information. Five years ago, when we got into this, it was really hard because there was a lack of information. Even if you wanted to contact people, there wasn’t even a Yellow Pages,and you couldn’t find things on the internet. It was just really hard to find information, everything was really tightly kept.

Now enough startups have failed, enough people have come over, [and] enough attention has been brought to the ecosystem. That has all helped uncover some of the secrets to being successful in China. There’s money flowing back and forth in and out of China, overseas returns are coming over – it’s much much easier now. And it’s just getting better and better.

3. How has the Chinese government’s support affected the startup ecosystem? As an accelerator, have you seen any effects from government policies?

There’s both positive and negative effects of this in the [near] future. In our opinion, entrepreneurs need to make mistakes in order to learn. Now, if they’re over funded, their runway is a lot longer. They’ve got too much money. You’ve got to have your back against the wall, ship your product to the market, and constantly iterate on that product in order to make it better and find that perfect market fit.

If you have too much money, you kind of stayed buried in your office, building feature on feature on feature, and you’re not needing to drive revenue because you’ve got lots of money. Investors have less risk in investing, so they’re a little more free with their money – it’s not like a true market-economy is happening.

On the upside though, I think it’s great. I can’t read the China government’s mind but one of the sticking points is getting Chinese parents to let their children be entrepreneurs. When you can make good money, and you can show your parents a lot of evidence in the news and media of very successful people who have started companies à la Jack Ma or  Lei Jun, you can say, “Listen I’m going to go work for a startup,” and your parents aren’t going to freak out.

4. Can you elaborate on how Chinaccelerator was created to essentially mine data about China’s startup scene?

[The founders of Chinaccelerator] wanted to invest in China, [which is] a very dangerous place for foreigners especially, knowing how companies like Google have failed. So, they thought, “How can we intelligently invest? If we don’t have data, how can we make smart investments in a culture that we don’t really know? ”

That was where the idea of the accelerator came along. Let’s bring in some startups at very early stage, and then work with them for three months. That will give us our data, that will give us the knowledge of who they are, how they operate, what they’re doing, and whether we think they’ll be successful or not.

There’s just not a lot of data on early stage startups right now. Data comes from historical evidence of things that have happened. For new startups, we don’t really have a lot of historical data. Then of course we’re in a country like China where we’re ‘foreigners’ and we don’t have that gut instinct of what we’re deal with. We wanted to be early stage investors in technology in China – this was really the best way for us to do it.

5. An example of a foreign company that has adapted well to China’s market (from Mr. Embley’s talk):

My favorite is probably LinkedIn, because LinkedIn follows what we say is the ‘SEAL Team 6 approach’. The SEAL Team 6 is this: You have to get an amazing, elite team together. You give them all the training they need to be successful. You give them all the resources they need to be successful. Then you let them go in their environment and do what they need to do without remote controlling them from Silicon Valley, which is what kills most startups coming over here – most companies coming over here.

You need to be so fast, you need to work so hard in China if you want to be successful. And trying to remote control – that’s too slow. Having a decision maker not based in China who is not Chinese is a terrible idea. So LinkedIn created a completely autonomous product…here in China. LinkedIn.cn is an entirely brand new product that was built from the code up in China, hosted in China, built by Chinese for Chinese. Yes, it looks and acts and integrates seamlessly with LinkedIn.com but it is a completely independent product here. I think it’s done very well.

For those living in mainland China, the temporary but excruciatingly widespread blockage of VPN (virtual private network) services is the most tangible sign that something political is happening domestically.

The annual meeting of the National People’s Congress (NPC) has triggered a crackdown on VPN providers, which allow customers to bypass China’s internet censorship or the Great Firewall (GFW). Many organizations, including non-profits, startups, academics, and corporations, rely on VPN to access services and resources such as news articles, Google’s search engine, and social media. The meeting concluded yesterday, hopefully returning internet censorship in China to “normal” levels.

In many ways, the Great Firewall is associated more with slow internet and lowered productivity, not thwarted dissent. In countries where the internet is not as broadly censored as China’s, VPNs have a more niche audience who care about browsing privacy or need a secure connection to a remote network, such as a corporate intranet.

“Chinese users tend to focus on accessing censored websites, whereas our non-China users focus on enhancing their privacy,” said a spokesperson from a VPN service provider, who requested that the company remain anonymous.

“This doesn’t always have to be a trade-off, but it can be in some cases,” he said. “For example, there have been periods where the PPTP VPN protocol worked well in China and many of our China-based users did not hesitate to use it, despite well-known security flaws inherent to this VPN protocol.”

The popular appeal of VPNs in China speaks to the even more massive scale of the GFW, which has blocked 63,950 websites so far, according to GreatFire.org, a non-profit that collects data about the GFW. That’s why crackdowns on VPNs matter to so many people – without VPNs, many businesses in China, particularly those with a global focus, would see losses in productivity and revenue.

In the context of the recent crackdown, TechNode spoke with a few VPN providers that cater to customers in China, and learned more about how the GFW takes down VPN services in China. Here are five things that can stop or slow your VPN connection:

1. ISP (Internet Service Provider) Throttling

“Last year was absolutely hectic for getting the VPN to stay stable because [Chinese ISPs] pretty much slowed all the traffic to outside of China – you couldn’t get on any cloud internet sites. No one was getting any traffic,” says James Cox, a spokesperson for VPNinja, a Shanghai-based VPN provider that targets expats in China.

“Everyone assumes it’s the VPN but you can’t even get outside of the country in the first place,” he says. “Chinese New Year, every single year, it cuts. Actually, every public holiday, they limit the internet, slow it down. Inside of the country, [the internet connection] is amazing.”

ISP or bandwidth throttling is when internet service providers intentionally slow down internet services. State-owned Chinese ISPs, which have been known to aid government censorship, can employ ISP throttling to discourage users from accessing overseas websites. Last August, China Unicom was accused of deliberately slowing down connections to overseas websites so they could charge extra for premium services, an allegation they denied.

2. IP (internet protocol) Address Blocking

According to GreatFire.org, 8,056 IP addresses are currently blocked by the GFW. IP addresses refer to devices, such as servers, in a computer network. The GFW can block the IP addresses of VPN servers in order to take them down.

This can result in a temporary lapse in VPN connection. While the VPN provider is busy changing the IP address of the server, most users take this time to try other servers, which works if their IP addresses haven’t been targeted as well. According to Mr. Cox, it’s rumored that the Chinese government has people who sign up for VPN services with the purpose of retrieving server IP addresses to block.

“Something to be aware of: the ‘world’ has run out of IPv4 addresses,” said a spokesperson from a VPN service provider, who requested that the company remain anonymous. “As long as the Chinese Internet is predominantly an IPv4 network, replacing IP addresses will become increasingly expensive.”

According to Akamai’s Q3 2015 “State of the Internet” report,  the American Registry for Internet Numbers (ARIN) had to waitlist a request for an IPv4 address for the first time last July. The internet registry for Africa, AFRINIC, handed out almost 5 million IPv4 addresses in Q3 2015, or about 11% of its available pool. According to Akamai’s report, AFRINIC is the only regional internet registry with a substantial pool of IPv4 addresses remaining.

Like phone numbers, IPv4 addresses can be reused and resold. However, if the address has already been blocked by the GFW, it’s essentially useless to VPN providers who need to readdress targeted servers. Some VPN providers give  multiple IP addresses to a single server, which allows them to connect to clients when one or several other IP addresses have been blocked.

3. DNS Poisoning

DNS (Domain Name Server) poisoning or hijacking is when the GFW intercepts requests for a certain domain name, say “www.facebook.com”, and redirects you to an incorrect IP address. This means that instead of serving you the right webpage, the DNS sends you elsewhere.

Sometimes VPN providers will have their domain name “poisoned” by the GFW. Similar to IP address blocking, VPN circumvent DNS poisoning by getting a new domain name.

4. Deep Packet Inspection

The GFW can use deep packet inspection (DPI) to identify VPN protocols in its network and cut VPN connections. However, according to one VPN provider, modifying protocols to get around  is easy, while implementing DPI on a large scale is not, due to the volume of traffic.

“This is relatively easy to work around, simply by making small modifications to the protocol so that it goes unrecognized,” said a spokesperson from a VPN service provider, who requested that the company remain anonymous.

“They’re probably aware of this, as they haven’t used this technique to block the many other VPN protocols that exist,” he said. “It’s technically possible for them to improve these techniques, but extremely expensive to do so because of the amount of traffic involved.”

DPI can also be used to scan for more specific information like keywords. If someone is trying to search for something politically sensitive the GFW can block the connection.

5. Bandwidth Limitations

Similar to ISP throttling, bandwidth limitations can affect internet speed and thus VPN connections. The more people who are sharing the same network, the slower the internet connection. In China, internet connections have to filter through the GFW as well. The more people using the internet, the more data the firewall has to process.

“There is a way that you can make it better,” says Mr. Cox. “If you switch servers in the same country, it’s not going to do much. For example, if you have a slow connection in the US, if you try switching to South Korea or something like that.  You might go through a different section of the firewall that has different usage and you might get a faster connection.”

Bandwidth limitations can also apply to VPN connections, which slow down when users crowd on a single server. Using VPN at a less popular time of the day, such as early morning, may help.

Image credit: Shutterstock

Chinese gaming company Beijing Kunlun Technology Co. Ltd. announced on Wednesday a $3 million USD investment in Kunlun AI, a new company jointly established by Kunlun Tech’s Hong Kong subsidiary and a few undisclosed partners. Kunlun Tech will own a 15% stake in the new company.

Based in Palo Alto, California, Kunlun AI will develop big data and AI-driven corporate solutions in advertising, content recommendations, security, marketing, finance, and speech recognition, according to a press release. The company also claims to have pulled hires from well-known tech giants like Facebook, Dropbox, Pinterest, and Baidu.

“Our work in artificial intelligence is a long-term investment,” says Sophie Chen, a spokeperson from Kunlun Tech. “To put it into perspective, we’re investing in the future ten to twenty years from now. This is not something that will immediately yield profit. As you know, artificial intelligence is still in the basic stages of research and development.”

Kunlun Tech joins a growing number of Chinese companies, including Alibaba and Baidu, that are investing in the interconnected fields of big data, artificial intelligence, and cloud computing. In January, Alicloud launched its Big Data Platform and announced a strategic partnership with NVIDIA, an American company known for its graphic processing units (GPUs) and chip units. According to a press release from AliCloud, the company will work with NVIDIA to create China’s first GPU-based cloud HPC  (high performance computing) platform.

“It’s precisely because China’s biggest companies, like BAT, are doing this that we’re investing in AI,” says Ms. Chen. “That’s why we’re being proactive and taking a far-sighted view. If we enter this red ocean and only look three to five years ahead, we’re worried that we might lose to other internet companies.”

Besides moving forward in AI research and development, Kunlun Tech is also focusing on overseas expansion. In February, Kunlun Tech made a joint bid with Chinese search and antivirus company, Qihoo 360, to acquire Norwegian-based mobile browsing company Opera Software ASA. In January, Kunlun Tech also bought a 60% stake in Grindr, the world’s most popular gay social-networking app, and announced a $800,000 USD investment in an American robotics company, Woobo Inc..

Image credit: Shutterstock

Despite boasting a population of over 1.3 billion citizens, China’s young people have a surprisingly tough time meeting people. At least that’s what one startup thinks.

Hangzhou Ouch Technology Ltd.’s ‘Come Rent Me’* is a service that wants to monetize the spare time of China’s young people – by renting it to others. The company announced 5 million RMB (about $767,000 USD) in new funding from an undisclosed angel investor, according to an announcement on Monday.

Using Ouch Technology’s official Come Rent Me WeChat account, users rent themselves to strangers and vice versa. Fees are on an hourly basis and vary from 1 to 200 RMB per hour (about $0.15 to $30.70 USD). Rental activities include going to the movies, eating dinner, jogging, visiting ancient towns, and more.

“Nowadays, young people don’t want to go out,” says Yulong Fan (范宇龙), a co-founder of Come Rent Me.” Between going to and from work, most people either stay at home by themselves or play games. When people don’t leverage their free time, the opportunities to talk and meet with new people decreases.”

Like Momo, a Chinese social networking app, Come Rent Me wants to help young Chinese people meet each other. However, unlike Momo, Come Rent Me views these meetings as monetization opportunities that individuals can capitalize on.

“We’re not a community platform,” says Mr. Fan.  “We’re running an information service. No matter what you do, whether it’s meeting someone or completing a task, you have a cost.” Mr. Fan believes that Come Rent Me dates have a comparable value to ticket sales, citing the example of ‘cross-talkers’, which is a type of performance popular in northern China involving casual comedic banter.

“Isn’t [that] a type of consumption too?” he says. “For example, maybe some people want to meet Jack Ma, but they can’t. If Jack Ma was on our platform, people would have the opportunity to meet him. So the rental fee is the cost of opportunity.”

When a user on Come Rent Me wants to rent someone, they pay for the number of hours they want to rent before receiving a text message from the platform. The text includes the WeChat ID of the person they want to rent. After making contact through WeChat, the person renting out their time can reject their client (in which case the client gets a full refund), or they can arrange the meeting and pay the fee.

The company compares itself to Uber and Didi Chuxing, two ride-hailing apps that have become icons of China’s burgeoning on-demand economy. “When Didi and Uber started, they wanted to enable individuals to make money outside of their day jobs. But at that time, people thought private cars were unsafe,” says Mr. Fan.

“Now, Uber and Didi have transformed the free time of individuals, and have made private cars acceptable,” he says. Come Rent Me has the same goal but instead of driving cars, individuals will rent out their time. “Don’t [performers and cross-talkers] sell their time?,” says Mr. Fan. “Or consultants and lawyers? Why can’t individuals sell their time?”

Come Rent Me is very similar to a mobile app called Zuwo (租我) or “Rent Me”, which is also a C2C rental service with hourly fees and specified tasks. Both Zuwo and Come Rent Me operate in the context of Chinese dating culture, where Chinese people in their 20’s and 30’s are often pressured by family members to get married. Both platforms appeal to users in that age range, who may not have many opportunities to meet and get to know strangers.

However, both companies also have to grapple with Chinese regulations around sex. In China, prostitution and porn are illegal, and media is often censored for “inappropriate” content. Though Mr. Fan claims that Come Rent Me is very strict when it comes to who is renting and what they’re renting, preventing illicit activity from happening on the platform is almost impossible, as there is no way to control what happens after two users meet offline. Other Chinese companies have also straddled this fine line, such as Momo, which was accused of facilitating prostitution by Chinese officials in 2014.

Founded in July 2015, the Hangzhou-based company claims that it has 500,000 users on its Come Rent Me WeChat platform. About 10% or 50,000 – 60,000 of those users offer services while the rest are clients, according to Mr. Fan. The company plans to launch a mobile app in April and will use its newest round of funding on offline and online marketing, in addition to product development.

*杭州哎呦科技有限公司/来租我 Our English translation

Image credit: Shutterstock

Shanghai-based “boutique entertainment studio” Linmon Pictures (柠萌影业) announced a round of 500 million RMB (about $76 million USD) Series B Funding on Tuesday, according to Chinese startup and investor platform, ITJuzi. The round of investment was led by Hony Capital (弘毅投资) and followed by Tencent and Mango V Foundation.

“In the near future, using this new round of funding, we plan to not only expand the production of our TV shows, but also invest in film, variety shows, and other kinds of content,” said Xiao Su (苏晓), the CEO of Linmon Pictures, in an article by Sina Finance.

Founded in August 2014, Linmon Pictures is an independent creator, producer, and distributor of entertainment content. In 2015, Linmon Pictures received a 100 million RMB round of Series A funding from Tencent, after which it produced three TV dramas: Chronicle of Life (寂寞宫廷春欲晚), A Love for Separation (小别离), and The Good Man (our translation, 好先生).

Tencent’s backing of Linmon Pictures marks another move into the entertainment industry by a Chinese tech giant. Both Tencent and Alibaba have made efforts to control more of China’s entertainment and media industry in the past year. In November 2015, Alibaba acquired Chinese online video provider, which signed a partnership with Paramount Pictures last September, and owns Alibaba Pictures Group. Last year, Tencent signed a deal with Disney to be the exclusive online distributor of Star Wars: The Force Awakens.

A spokesperson from Linmon Pictures could not be reached in time for comment.

Image credit: Sina Entertainment

Update (3/11/16 15:40): This post was updated to correct the Chinese name of Linmon Pictures.

The National People’s Congress (NPC), China’s unicameral parliament, convened last Saturday to kick off its annual meeting which runs until March 16th. It’s a lot of pomp and circumstance, with the NPC widely dismissed as a “rubber stamp” parliamentary for the Chinese Communist Party.

Nevertheless, the meetings offer valuable insight into the Chinese government’s priorities and ambitions for the year, many of which shape the country’s business environment. This year’s gathering is especially important as delegates will draft and complete China’s 13th Five Year Plan.

Unsurprisingly, Premier Li Keqiang’s annual work report underlined the government’s continued commitment to  “innovation-driven development”, in the form of investment, tech and innovation hubs, and “platforms…for crowd innovation, crowd support, crowdsourcing, and crowdfunding.” Other buzzwords, like the sharing economy, internet-of-things, and big data, were also scattered throughout the report.

For entrepreneurs, this year’s NPC gathering can hint at other opportunities as well, besides the general support for entrepreneurship expected from the government. Using the Premier’s annual report, we’ve identified three areas that entrepreneurs can take advantage of:

1. Clean and Green Tech

The Chinese government’s commitment to environmental conservation and reducing pollution and emissions was reemphasized in Mr. Li’s annual work report. For example, the government plans to reduce “water consumption, energy consumption, and carbon dioxide emissions  by 23%, 15%, and 18% respectively” per unit of GDP over the next five years.

The report also sets reduction targets for air pollutants, such as sulfur dioxide and nitrogen oxide, and specifically mentioned secondhand cars and electric vehicles as markets the government is interested in supporting.

Already, China has made a number of serious commitments to environmental conservation. In 2014, China spent $4.3 billion USD on its smart grid market. During the Paris climate talks in 2015, the Chinese government committed to producing 150 to 200 gigawatts of solar energy by 2020.

Conserving energy and the environment will be a growing imperative for China as the environmental consequences of rapid urbanization and development take their toll. For entrepreneurs in the green tech sector, the next five years could be see even more support from the government, in terms of policies, funding, pilot projects, and more.

2. Digitization and Urbanization of China’s Rural Population

According to Mr. Li’s report, the Chinese government wants to connect more of the country’s rural population to the internet.

“Fiber-optic networks will be developed in a number of cities and 50,000 administrative villages will be linked up to fiber-optic networks, thus enabling more urban and rural residents to enjoy a more digital way of life,” stated Mr. Li in his report.

In addition, the government aims for 60% of China’s population to be urban residents by 2020, or about 780 million people. The government also plans to build and upgrade 200,000 kilometers of rural roads around China.

More rural residents online could hold a number of opportunities for entrepreneurs. Startups such as Emubao, which connects users to sheep farmers, are already targeting China’s rural population. As more rural residents connect to the internet and rural infrastructure improves, we expect more opportunities for startups in the O2O and e-commerce industry.

3. The Tourism Industry

This year, Chinese government will make a strong push to grow China’s tourism industry.

“We will ensure people are able to take their paid vacations, strengthen the development of tourist and transport facilities, scenic spots, and tourist sites, and recreational vehicles parks, and see that the tourist market operates in line with regulations,” stated Mr. Li. “With these efforts, we will usher in a new era of mass tourism.”

Currently, many of China’s travel agencies are or belong to tech giants, such as Alitrip and Qunar. However, opportunities for startups in tourism services, hospitality, and social media – such as sharing moments from trips – are plenty and we expect them to increase.

The push for tourism comes in the context of China’s slowing economy. The Chinese government will strive to maintain a GDP growth rate of 6.5% for the next five years, according to the Premier’s report. To move China’s economy to a more domestic-consumption-based model, the government is not only supporting tourism, but online shopping, personalized fashion, health services, cultural and sports services, and elderly care, according to Mr. Li’s report.

Image credit: Shutterstock

China’s coworking space industry has exploded over the past few years, matching the fast growth of the country’s startup ecosystem. According to the Wall Street Journal, there were 3,200 coworking space companies in 2014, compared to 400 in 2008.

Not all coworking spaces are connected with startups, however. China Vanke, a real estate company, launched UR Work in April 2015. Hotel development and management company naked Retreats opened their first coworking space naked Hub in Shanghai last November. As the coworking space market continues to saturate, companies will have to offer more than a polished, beautiful space to be unique.

Founded in 2010 by Bob Zheng, People Squared (P2) is one of the oldest coworking spaces in China. P2 has offices in Shanghai and Beijing and plans to expand to other cities such as Shenzhen. Before founding P2, Mr. Zheng founded another startup, liuxueok.com, a social platform for Chinese high schoolers with western universities. In addition to being P2’s CEO, Mr. Zheng is also a mentor at Chinaccelerator.

TechNode had a conversation with Mr. Zheng about his view on coworking spaces in China, specific challenges, and what P2 has planned for 2016.

1. How can a coworking space remain unique in China as more competitors move in?

I actually think that China doesn’t have enough coworking spaces. [For example], Shanghai has a very mixed and cosmopolitan culture. People who work have their own requirements for different working styles. Currently, a lot of coworking spaces are just for startups because the environment exists. But actually, coworking spaces don’t have to be just for internet companies. Every coworking space has a different audience.

For example, New York City has General Assembly. Their model is about teaching workshops to their clients. That’s their business model. A lot of coworking spaces [in China] are very limited or homogeneous.

2. What’s the biggest difference between coworking spaces in the US and coworking spaces in China?

In San Francisco, there was an owner of a night club who was very successful, but didn’t know what to do with the upper levels of the building. They rented it out to other offices. WeWork opened across from them, which brought them a very different option for making profit. Now, the basement is still a nightclub but the upper levels are a coworking space for artists. At the same time, there are internet companies who work inside as well.

There are more of these kinds of coworking spaces [in the U.S]. You can find more inspiration there. In China, there are still too many spaces that only serve one purpose. It’s a pity. We still haven’t given the [most creative] people the chance to interact in a community, know each other, and encourage new ideas.

3. How do you create a community that’s open to both foreign and local Chinese startups?

This is something that P2 decides. Our users in China are 80% to 90% Chinese. P2 had a lot of events like Startup Weekend, Startup Grind. We discovered that if you want to combine or merge the Chinese ecosystem with the foreigner circle, it’s always hard. For example, if you want to enter the internet industry, you have to either choose the Chinese community or the foreign community.

During some period of time, especially in 2013 – 2014, our spaces had a lot of foreigners. You know, foreign and Chinese communities don’t talk in China. It’s like you have two communities in one space. It’s a very strange thing. And it’s not clear where everyone stands.

We thought, well, we’re in China after all. If we want to make coworking spaces, we need to make spaces for Chinese people, let them realize their value in our spaces. Just how spaces select their people, people select their spaces. This is a very natural phenomenon.

At Techyizu events [an organization in Shanghai that organizes startup, design, and tech events], for example, you’ll see that there are a lot of Chinese people. Most of them are returning from abroad, or they want to practice their English, or they want to learn more about overseas and international culture. It’s very different from ITJuzi and 36kr events. Their purpose is very clear, they want to understand venture capitalists, etc.

4. In your opinion, can community be scaled, and if so, how?

You’re right. Scaling community is really hard. We’re very lucky at P2 because we grow with the community, we’re not just scaling [it]. Like you mentioned, the internet, this whole wave of “innovation” and “startup culture” – the scale has grown bigger and bigger.

To build a community, there are a few parts. It has to be open yet exclusive. In our spaces, we have a lot of rules. We’ve even pushed a few teams out of our spaces because startups are kind of a mentality. If you invite teams that only need physical space, they not only don’t help the community grow, they can hurt it.

Startups need to understand our space and why we need to have a community. You need to be selective. P2 has a long wait list. We even have a special team called “community” to choose the right teams.

5. You mentioned that P2 is launching a coworking space for artists this year. Can you tell me more about that?

This year, we’re opening a new space in Baoshan, Shanghai. This space will be used for musicians, photographers, and artists. It will be their working and living space.

The recording studio, etc. and office space will not be separated – it’ll be shared among all users. The dormitories will be open as well. They’ll be on Airbnb. Anyone can come in and enjoy this space. We’re calling it “Ocean 10.” We hope that ten artist groups will live there and lead the culture. They will develop the artistic atmosphere around the area.

This will make the space even more interesting. It will have a core group of artists, as well as “living water.” The space needs “living water,” a group of people who are attracted by the community, can interact with the artists, understand their products, their work.

Artists will also be able to invite their friends, as many of them will be from London, the U.S, etc. They can invite them over and live with them for a period of time. The nature of the space will still be exclusive [like other P2 spaces], but we wanted to add a more open part.

Image credit: People Squared

Hangzhou-based startup weLian (微链) announced a 28 million RMB (about $4.2 million USD) round of Series A and A+ funding on Thursday, led by Bojiang Capital (博将资本) and Rushan Venture Capital (如山资本). weLian is a platform that connects different players in China’s startup ecosystem, such as investors and entrepreneurs.

“weLian wants to optimize the entire startup industry,” stated Hua Cai, the founder of weLian, in a press release. “We hope that our product will integrate the whole ecosystem, and help users successfully develop and grow through our platform.”

weLian’s platform is essentially a social network for investors and entrepreneurs with special features catering to both user type’s needs. For example, entrepreneurs can create ‘projects’ on weLian, which they can submit directly to individual investors. weLian projects are startup profiles that include information about funding status, past milestones and announcements, industry, product, and more.

Entrepreneurs can also send their business plans directly to investors on weLian, who can contact them if their interest is piqued. Investor profiles on weLian not only display their investment firm, maximum amount of investment, and past investments, but also their “feedback rate”, which refers to business plans that the investor has responded to, whether that means reaching out to the entrepreneur or rejecting them.

Investor profiles also show how many weLian “projects” have been sent to the investor, as well as the percentage of users that the investor has contacted after receiving their pitch. According to weLian, the platform currently has about 1,000 investors from more than 300 investment firms, including Ping An Ventures, SIG China, and IDG Capital. The company also claims more than 3,000 business plans are sent through weLian every day.

In addition to investor and entrepreneur profiles, weLian also displays startup-related events throughout China.

“A lot of entrepreneurs will go to offline events to reach out to investors, but exchanging business cards doesn’t really help, adding their WeChat doesn’t lead to real exchanges either,” says Lynn Ting, a PR manager at weLian.

weLian is not the only company trying to connect China’s fragmented ecosystem. For example, Chinese platform ITJuzi also keeps a roster of startup-relevant events in China. It also manages a database of startups and investment firms, which includes many of the same data points as weLian “projects”  do.

This year, weLian plans to add features for “startup service” companies. “As startups become more popular, a lot of people will create companies that cater to and offer services to them, like tax services. They are also startups, but their clients are startups too,”says Ms. Ting. According to Ms. Ting, weLian’s mobile app will allow startup service companies to more effectively communicate and contact their clients by the end of the year.

Image credit: weLian

Shanghai-based startup O2 (氧气) has managed to achieve something that global lingerie brands like Victoria Secret have not: crowdsourcing lingerie ads from their users.

“[Our models are] from all over China,” says Daini Xu (徐黛妮), the CEO of O2. “Chongqing, Xi’an, Harbin, Tianjin, Changzhou. All different. This one is a reporter, a photographer, a student,” she says, pointing to three different photos.

All of O2’s models are users of O2’s app, which is an e-commerce platform for lingerie, sportswear, bathing suits, and other related products. There’s no money involved, only the promise of free lingerie and being featured on O2’s app. For every three sets of lingerie photographed, models receive one set for free. O2 calls its models “lingerie experience masters.”

“We wanted normal people, like office ladies and students,” says Ms. Xu. “Our [modeling] program is more about letting users experience [our lingerie], to let them wear something they’ve never worn before.”

According to Ms. Xu, O2 currently has about five hundred “lingerie experience masters,” an astonishing number that reflects not only the strength of O2’s brand, but the culture of China’s post 90’s generation. Often compared to millennials, China’s post 90’s generation are characterized by strong individuality and self-expression. They’re the product of a unique mix of phenomena, including the One Child Policy, rapid urbanization, and the internet. Unlike older generations, China’s post 90’s generation have strayed the furthest from traditional Chinese values, such as filial piety and modesty, and are often criticized as selfish, lazy, and promiscuous.

“They’re very self-confident,” says Ms. Xu. “Their self-acceptance comes from themselves. Many of them acknowledge: ‘Yes, I am beautiful.’”

O2 is depending on this new generation to power their brand, which aligns well with post 90’s culture. Each photo collection, which showcases one set of lingerie, centers around a unique setting or concept, like an apartment rooftop or a red, leather couch. Though professional modeling experience is not required, O2 sets a high bar. Aspiring “lingerie experience masters” have to submit a CV, a cover letter, and examples of their photography. Applicants have to prove that they understand O2’s brand and can produce high quality photos with a unique aesthetic. According to Ms. Xu, the company receives around five applications a day.

“Snapping a selfie of your chest – kind of like Taobao advertising – is definitely not okay,” says Ms. Xu. “You must have a [special] setting. I’m not requiring you to be artistic but you must have this.”

In many ways, O2’s brand is promoting a post 90’s attitude towards female sexuality. The company’s culture is built around the idea of independent women who embrace their own bodies. Through its platform, O2 guides users through playful discussions on sex, where hooking up is about having fun, not validation. O2 bras are also deliberately thin and padless, aimed at achieving a “natural” result instead of a bulging chest. Currently, all of the lingerie brands on O2 are foreign, as most traditional Chinese lingerie companies tend to focus on breast size, not design.

“They think that the symbol of female sexuality is having a large chest,” says Ms. Xu. “Most traditional Chinese bras will have a very thick pad that sits very high, as if it’s trying to take all the fat from your back and push it towards your chest.”

“Having grown up with this trend, most [Chinese] women do not feel confident when they see these thin [pieces of lingerie],” says Ms. Xu. That’s another reason why O2 prefers its users over freelance models. It’s not only cheaper, it’s also encouraging to other users.

O2 joins a growing number of Chinese companies that cater to younger consumers, whose purchase decisions are driven by “intangible, emotional factors” and “satisfying emotional needs,” according to a report by McKinsey. For Chinese consumers in the post 90’s generation, blatantly commercial marketing is not effective. The brand has to appeal to the consumer’s tastes, then make the sale. In 2015, post 90’s consumers made up 15.4% of China’s population are expected to reach 31.3% by 2050.

Pre 90’s Chinese consumers in middle to high income brackets are exhibiting similar purchasing habits, as they are increasingly “more conscious of brands, more demanding on quality, and more individualistic in expressing themselves through the products they consume,” according to a report by consulting firm Roland Berger. Chinese e-commerce platforms, such as Mogujie (蘑菇街) and Xiaohongshu (小红书), are tapping into this trend by emphasizing the social aspect of their platforms and offering users high quality, brand-heavy products.

Founded in 2014, O2 received a round of Series A funding in June 2015 led by venture capital firm SIG China. In 2016, the company plans to ramp up the community aspect of O2 by letting O2 models interact directly with and be “followed” by other users. O2 is also hoping to open offline pop-up stores in Chinese shopping malls so users can try on O2 products.

Image credit: O2

After several competitive rounds of pitching all over India, we’ve finally chosen the top three startups that will represent India in this year’s Asia Hardware Battle!

These startups will receive an all-expenses paid trip to Chengdu, where they will meet and compete with other phenomenal early-stage hardware startups from all over Asia. In order to win, they will have to present in front of a panel of judges that includes venture capitalists from Y Combinator, Plug and Play, LB Investment, Matrix Partners China, Cyber Agent, Softbank Corp, and others.

In total, fifteen startups competed in the India Startup Hunt finals. Here are the top three startups, along with their product pitches:

Chakr

Chakr’s product, Kaal-Ink, is a device that can absorb almost 81% of particulate matter emitted by diesel engine generators and industrial chimneys. Kaal-Ink is aimed at reducing the detrimental health effects of these emissions, which include bronchitis and premature death. After Kaal-Ink’s concentration of particulates reaches a certain value, the particulates can be separated from Kaal-Ink, renewing the device’s ability to absorb.

Live Braille

Live Braille’s product lets people look at up to 3,000 objects simultaneously in one second, according to the startup. Their product helps blind people navigate public transportation systems, travel alone, cross roads, commute to work, and be productive.

Velmenni

Jugnu is a smart LED bulb that can transfer data through visible light at speeds up to 1GBps. It uses a Li-Fi, which is a wireless communication system that uses light as a medium of transport instead of traditional radio frequencies. This technology can be a good complement to exciting RF technology (Wi-Fi, Bluetooth, NFC and other RF Systems).

Besides Chakr, Velmenni, and LiveBraille, here are the other twelve startups that competed in the India Startup Hunt finals:

1MoreThing

1MoreThing’s I2U2 app and robot chassis converts mobile devices into a moving, navigable, responsive, and video-enabled robot.

NexGear Tech. Pvt. Ltd.

NexGear is a hardware startup based out of Mumbai. Their first product is a wearable, smart adventure camera called Frodo.

BleeTech Innovation Pvt Ltd

Blee is a platform for deaf and hard of hearing individuals.

Dhamainnovations.com

Dhama Innovations Pvt. Ltd. is a startup that creates temperature-based wearable electronics.

Pert.me

Pert is a simple modular home automation system that can fit into any home without changing the existing wiring.

Smart MCT

Monitra Healthcare’s disease management platform helps physicians treat heart rhythm disorder patients by identifying rhythm abnormalities, monitoring cardiac activity before and after surgery, and assessing the effects of therapeutic drugs on cardiac activity.

Uber Diagnostics Private Limited

Uber Diagnostics provides early diagnosis of heart disease in rural and semi-urban areas.

Thinqbot Technologies Pvt Ltd

Thinqbot builds IoT products for smart homes, such as “IR Blaster,” which can turn a smartphone into a remote control for TVs, air conditioning units, and more.

Cardiac Labs

Caridac Lab’s MIRCaM stands for Mobile Intelligent Remote Cardiac Monitor. The MIRCaM comprehensive suite comprises of a Bodyworn unit, Patient’s Bedside Unit, MIRCaM Doctor’s Terminal and MIRCaM Doctor’s Mobile App.

3ding

3ding is a company that offers 3D printing services and sells affordable and easy-to-use 3D printers.

Wii Tronics

Wii Tronics integrates vehicle detection parking sensors with a mobile app to offer users information about parking availability.

Alcochange QS

Cyberliver delivers products and services that focus on preventing liver ailments from causing severe damage.

Update (3/1/2016 23:41): This post was updated to correct the list of judges that will be present at Asia Hardware Battle.

Update (3/2/2016 18:42 ): This post was updated to add product descriptions for the 12 startups that competed in the finals of the India Startup Hunt.

China UnionPay International and Visa Inc. signed a Memorandum of Understanding (MOU) in Shanghai today. The companies will collaborate on payment security, innovation, and financial inclusion, according to a release.

The Chinese government said last year that they would open up the market to foreign payment networks from June 2016. The latest MOU will allow Visa increased access to the market for bank card transactions.

“This is a unique collaboration between two leading industry players to address major challenges facing the payments industry,” said Visa’s CEO, Charlie Sharf. “We are excited to be working together on innovation as digital payments transform commerce, resulting in safer, faster and more convenient ways for consumers to pay.”

Mr. Sharf’s comment on “major challenges” may have been a reference to the growing number of  mobile payment systems in China. Last Thursday, Apple Pay joined China’s crowded mobile payment market in an agreement with UnionPay. The market also includes established players such as Alipay and WeChat Wallet. Samsung is planning to launch its own system, Samsung Pay, in China as well.

China’s central bank, the PBOC, also recently revealed they would be considering a bank-sanctioned digital currency, though they have ruled out blockchain in the past.

UnionPay has been working hard to modernize and digitize its services in the face of increasing competition. In 2013, UnionPay partnered with China Mobile to launch its mobile payment service QuickPass for NFC-enabled phones. In December 2015, the company announced separate partnerships with Apple Pay and Powa Technologies, a London-based mobile commerce company specializing in QR code technology.

According to consulting firm China Internet Watch, Alipay and TenPay accounted for 89.1% of the third-party mobile payment market in Q3 2015. Through partnerships, as well as aggressive third-party payment policies, UnionPay is hoping to own more of China’s crowded mobile payment market.

Chinese virtual reality startup KAT received $1M USD in a round of angel investment led by Unity Ventures, they announced on Monday. The startup’s flagship product, KAT WALK, is an omni-directional ‘treadmill’ that lets users physically explore worlds in virtual reality.

After strapping into a hanging harness, KAT WALK users can walk, run, wave their arms, and swivel around in place. Special shoe covers interact with KAT WALK’s concave base, mapping the user’s movement in virtual reality. The product can sense up to 35 centimeters of vertical movement, including jumping, through KAT WALK’s sensors and harness.

“Frictionless walking is awkward, like walking on ice. To make walking in VR feel more natural, KAT WALK uses special high-friction material and the constant force of rolling friction,” explains the company on their Kickstarter campaign page. “This makes you feel like you are walking on real ground instead of sliding walk.”

The product is meant to overcome one of the fundamental barriers to virtual reality gaming: space constraints. The company claims that KAT WALK lets users experience limitless exploration in virtual reality without tripping over their living room table. They also claim that KAT WALK reduces the motion sickness sometimes induced by virtual reality.

“Virtual reality is about sensory immersion,” says Chen Pang, the CEO of KAT. “An important criterion for excellent VR products is how immersive they are.”

“KAT is committed to creating a more complete and unlimited virtual reality experiences for users,” she says. “After the KAT WALK series, KAT will create other virtual reality products.”

KAT WALK primarily targets small businesses, such as internet cafes, which can house the product and offer gamers more active VR content, like first-person-shooter (FPS) games. Currently, the product is headset-agnostic and can support any kind of VR content, as along as it incorporates KAT’s software development kit (SDK), which will be released “soon”, according to a spokesperson from KAT.

Last August the company ran a successful crowdfunding campaign on Kickstarter, raising $149,278 USD. KAT is currently partnering with XIMMERSE, a Guangzhou-based research and development (R&D) company that focuses on mobile visual computing technology, as well as VR content companies Sureal Technology (超凡视幻), Mirage (幻视), and ZHJLAB (指挥家).

KAT CEO Chen Pang presents KAT WALK at TechCrunch Shanghai 2015, hosted by Technode.

Image credit: KAT

Update (2/23/2016 18:25): This post was updated to correct Chen Pang’s name. Previously, we published it as Pang Chen (surnames are first in Chinese). 

Shanghai-based startup the Squirrelz launched its new ‘materials’ platform today, which takes fabric waste from factories – defective and overstocked goods – and sells it online to designers, craft hobbyists, and eco-friendly brands all over the world.

“It’s that insane idea of throwing new stuff into the garbage that we want to bring to an end,” says Ryan J. King, the head of marketing and communications at the Squirrelz. “It’s brand new material – good to go, perfectly fine.”

The company is hoping to act as “the bridge between factories and creatives” by working with factories in China and relieving them of overstocked and defective goods. By selling their products to the Squirrelz, these factories save themselves the hassle and cost of moving their products to a landfill or processing it for recycling. The Squirrelz can then resell the material at a low cost.

“It’s a bit of guanxi but it’s pretty straightfoward,” says Mr. King, using a Chinese word that means “networking” or “connections.” “It’s not a difficult sell. You can guarantee if it’s a factory, they’ll have boxes of things they can’t get rid of.”

Currently, customers can purchase knit and woven fabrics by yard on the Squirrelz’s platform, as well as buttons. Both fabric and buttons – which the platform categorizes under “trimmings” – can be bought wholesale. The platform has also added the new concept of “inspiration packs,”  which are one-time products that are sold in smaller quantities. They include a few samples of fabric and accessories that designers can experiment with. It’s a clever way of reselling fabric that can’t be sold wholesale, such as leftover fabric from pieces that have already been cut to create other products.

“What we compete on is selection, range, and price,” says Mr. King. “Manufacturers of garments in North America [are] not as big as [they are] here. We’ve got a wider range and bigger selection of stuff.”

The materials platform is primarily targeting customers in the U.S, where there is a thriving sustainable fashion industry. Unlike companies like Overstock.com, the Squirrelz focuses on selling raw materials that designers and hobbyists can use and modify to create a more finished product.

Founded in 2013 by Bunny Yan, the Squirrelz began as a brick-and-mortar shop and evolved into an online marketplace for products with an “eco-friendly design and a positive social impact.” Now, that platform includes the wholesaling of eco-friendly material. The startup was part of Chinaccelerator’s 3-month program in 2015 and has raised $500,000 USD in seed funding.

In the future, the Squirrelz plans on adding more types of fabric and accessory material, such as hooks and eyes. The company will also add different kinds of “finished” clothing products, like blank T-shirts, that can be customized by designers.

Image credit: the Squirrelz

Update (2/22/16 19:15): This article has been updated to correct a factual error. The name of the startup is “the Squirrelz” not “Squirrelz.”

Update (2/22/16 19:16): This article has been updated to correct the units of fabric sold. 

Within the next few months, users of Didi Chuxing (滴滴出行) and Lyft will be able to summon rides in both the U.S and China without leaving their ride-hailing app of choice.

“In two to three months, you’ll be able to open Lyft in China and summon rides through Didi’s service network,” said John Zimmer, the CEO of San Francisco-based Lyft, in an interview with Chinese media on Wednesday. The same will hold true for Didi users, who will be able to summon Lyft cars through the Chinese app, confirmed a PR spokesman from Lyft.

This announcement follows the strategic partnership by ride-hailing companies Lyft, Ola, GrabTaxi, and Didi Chuxing made in December 2015. In a joint press release, the companies described a global alliance where users of each company can summon rides using the ride-hailing app from their home country.

“Through this global partnership, the companies will collaborate and leverage each other’s technology, local market knowledge and business resources,” stated the press release. “Each company will handle mapping, routing and payments through a secure API.”

Lyft’s partnership with Didi Chuxing will help the US company extend its services to Chinese users without becoming too entrenched in the fiercely competitive ride-hailing market in China. And just how people are using promo codes to get discount in the US from www.rideshare.us/lyft-promo-code-existing-users-guide/, very soon even in China, there will be similar sites which will cater to promote the app-based car hire service company by allowing people to access and use discount codes to get great deals. The market also includes foreign and domestic players, like Uber and Yidao Yongche (易到用车).

The goal of the partnership is to allow users to “seamlessly access local on-demand rides” when traveling in the U.S, Southeast Asia, India, and China.

Last May, Lyft also benefited from a $100 million USD investment from Didi Chuxing during a round of $530 million USD funding. The company has also received funding from General Motors, who invested $500 million USD in January. The partnership aims to develop a network of self-driving cars .

Image credit: Lyft

China has the most active gaming community in the world. Despite a 15 year ban on gaming consoles – and a generation of kids who grew up without an XBox, Playstation, or Nintendo 64 – China’s game industry raked in about $22 billion USD in revenue last year, more than any other country, according to market research firm Newzoo.

Drawing from a list of predictions by Niko, a market intelligence firm specializing in Asia’s gaming industry, we’ve compiled five predictions for China’s digital gaming industry that we think you should know about:

1. Growth in China’s Mobile Gaming Industry is Slowing

This year, China’s mobile gaming industry is expected to continue growing, but not as sharply as it has in the past. Smartphone sales, which add more paying gamers to the market, are slowing as the domestic smartphone market saturates. China’s overall digital gaming industry will be affected, as mobile gaming made up 36.6% of China’s digital gaming market in 2015.

In 2015, revenue from China’s mobile gaming industry surpassed that of the U.S, bringing in $6.8 billion USD of combined domestic and export revenue. The industry also enjoyed a year-on-year growth rate of 22.9% last year, according to a report by big data mining and analytics firm, DataEye. Revenue from China’s mobile gaming industry has increased steadily and rapidly over the past few years, growing from $2.3 billion in 2013 to $4.4 billion in 2014.

2. Virtual Reality Games Will Take Off In China

You’ve probably heard this a million times, but 2016 might finally be the year for virtual reality gaming to excel.

That’s because VR hardware and software are finally ready for it. In China, VR headsets and equipment are now widely available and accessible thanks to Chinese companies including ANTVR, LeVR, DeePoon, and Baofeng. This year, Facebook’s $2 billion VR darling, the Occulus Rift, will finally launch with shipments coming out on March 28th (pre-ordering has already started!).

VR content is also becoming more accessible. Foreign companies like Jaunt, Immersive Media, and NextVR are offering games, videos, and live-streaming in virtual reality. In 2015, Jaunt received $65 million USD from Walt Disney, China Media Capital (CMC), and Evolution Media Partners, a sign that the company might target the Chinese market soon. Cheap panoramic cameras like the Insta360 and platforms like Immersive Media’s im360 Server Platform have also helped to lower the barriers to entry for VR content production and publishing.

3. China’s E-Sports Ecosystem Will Expand

Niko says e-sports are defined as “professional or amateur tournaments and organized competitions involving specific game genres,” which the Chinese Game Publishers Committee specifies as Massive Online Battle Arena games, Action, Shooting, Casual, Poker and Trading Card Games.

According to Newzoo, more than 170 million people worldwide watched e-sports in 2014. In 2016, China’s e-sports ecosystem, dominated by tech giants including Tencent and NetEase, is expected to expand as more people in China become e-sports spectators.

China’s e-sports ecosystem has grown rapidly. Already, it encompasses a wide variety of industrial players, such as developers, publishers, e-sports clubs, organizers, e-sport platforms, and live broadcasting sites.

The e-sports industry is a lucrative one in China, with some e-sports commentators earning up to 10 million RMB (about $1.5 million USD) each year. In 2014, the World Cyber Arena (WCA) hosted an e-sports event in China where prize pool estimations varied between $95,000 USD and $1.1 million USD.

4. China’s Gaming Market Will Consolidate

China’s gaming market is incredibly crowded. In 2015 alone, the SAPPRFT (State Administration of Press, Publication, Radio, Film and Television) in China approved 750 games.

In 2016, consolidation in China’s gaming market is expected, especially among small to mid-sized gaming companies, while bigger companies like Tencent and NetEase continue to battle each other for the top 10 titles in mobile gaming.

Similarly, we expect more small and medium-sized gaming companies to dig into new market segments, like girl games, warfare strategy games, and animation or comic games, as they face increasing pressure from competitors and market preference for quality products.

5. Pan-Entertainment Will Drive IP Monetized Content

In 2016, Chinese gaming companies are expected to invest more in pan-entertainment strategies, which can provide opportunities for IP (intellectual property) monetization.

Pan-entertainment is cross-sector collaboration across different media such as books, movies, games, animation, and comics. For example, “Hua Qian Gu,” a popular Chinese T.V series, was jointly released with a mobile game of the same name in June 2015.

For tech giants like Tencent, who own stakes in animation, digital books, and film, pan-entertainment can be a way to leverage content across different platforms. The company announced its plans to create pan-entertainment businesses during the 2015 ChinaJoy tradeshow, and hired two famous Chinese authors, Nanpai Sanshu (南派三叔) and Liu Cixin (刘慈欣) last March as part of their strategy.

The shikumen (石库门) neighborhood where Lewei Huang grew up is barely recognizable from the digital replica he created half a year ago. Sections of the neighborhood have been reduced to rubble, as bulldozers grind their way through brick walls and 20th century shikumen structures – a fusion of Western and Chinese architecture unique to Shanghai.

“A lot of places that are rich in Chinese history haven’t been well documented,” says Mr. Huang, a junior at NYU Shanghai. “Instead, they’ve been gentrified or demolished.”

“This project is a kind of preservation,” he says. “A preservation of old memories.”

Mr. Huang’s “Cardboard Shikumen” project is a digital copy of his neighborhood, which was slated for demolition last year. The project was built using WebVR, an experimental API that developers can use to create virtual reality applications in a web browser. This means that “Cardboard Shikumen” can launch directly in Chrome and be viewed without a VR headset or any special equipment.

“[The project] is a technical prototype of a virtual reality presentation software that requires little technical expertise and budget to operate,” explains Mr. Huang. By lowering the cost of producing and consuming virtual reality content, more people can participate in the virtual reality platform, he says.

“Cardboard Shikumen” feels like Google Street View, except more immersive. To move around, viewers have to click on arrows located throughout the neighborhood. Each frame has a 360 degree view, which can be rotated by moving around the smartphone or clicking and dragging a mouse. The project captures quotidian scenes from his shikumen neighborhood: an old woman resting on a wooden stool, neighbors chatting, lines of laundry drying in the sun.

“VR, especially WebVR, is in the process of being developed,” says Mr. Huang. “There’s a lot of things that you have to do right from scratch. There’s no established process or series of steps that you can follow.”

In order to create the scenes inside of “Cardboard Shikumen,” Mr. Huang rigged his own 360 degree camera using six Xiaomi Yi cameras and a 3D printed case. He walked through his neighborhood and snapped photos of different locations using his custom-made contraption. Afterwards, he used Autopano to stitch the photographs into panoramas, which would serve as the content for “Cardboard Shikumen.”

It took Mr. Huang about two months to create the beta version of “Cardboard Shikumen,” which he worked on sporadically between May and July of 2015. Once the neighborhood has been completely demolished, he’ll make another recording of the same route. That way, viewers of “Cardboard Shikumen” can experience the before-and-after of shikumen demolition.

According to Shanghai’s City Archives, from 1949 to the late 1990’s, shikumen neighborhoods in the Xuhui district alone decreased from 2.68 to 0.25 million square meters. In Beijing, thousands of traditional hutong neighborhoods have been destroyed to make way for new real estate as well. Virtual reality and 3D modeling technology could be a way to save these cultural artifacts, similar to initiatives outside of China like Project Mosul, which launched last March in an effort to preserve the ancient relics destroyed by ISIS.

Still, virtual reality is an imperfect solution for preserving cultural heritage. “No matter how many pictures you take or how visually realistic your model is, you can’t replace the original,” says Mr. Huang.

“I feel that this project is only a way to ‘make up’ for these disappearing buildings,” he says. “To really preserve them, we need to preserve the originals, not just do these kinds of projects.”

From the main road where Mr. Huang’s shikumen neighborhood branches off, there’s no sign of demolition yet. A street vendor sells piles of fresh fish off a bright blue tarp on the sidewalk, while another vendor hawks cages of live pigeons. Old women crowd around storefronts and chatter loudly in rapid Shanghainese.

It’s standard Shanghai street fare, the kind of “daily life” Mr. Huang is trying to save with virtual reality.

Image credit: Lewei Huang

Update (5/2/2016 11:06): This article was updated to include a link to Mr. Huang’s “Cardboard Shikumen” project page and WebVR demo.

In just a few days, the most important holiday in China will begin its seven day festivities. Chinese New Year, or Spring Festival, is a holiday filled with a multitude of time-honored traditions, including lion dances, fireworks, red envelopes (both paper and digital), and gathering with family.

But on the internet, nothing is sacred. In true netizen fashion, Chinese internet users have squeezed endless amounts of puns, jokes, memes, and satire out of this ancient holiday.

In honor of Chinese New Year, here are some of our favorite Spring Festival-themed memes:

1. 猴腮雷 (Hou Sai Lei), the Mascot for the Spring Festival Gala

The Spring Festival Gala is a four-ish hour TV show that has rung in every Chinese New Year since 1983. Run by state-owned broadcaster CCTV (Chinese Central Television), the variety show includes stand-up comedy, singing, and other performances, and has also been criticized as a platform for political propaganda.

This year, the Spring Festival Gala has its own mascot, an unfortunate-looking monkey by the name of hou sai lei, which is the Cantonese pronunciation for “very impressive” or “intense”. The mascot was designed by Meilin Han, the renowned Chinese artist who was responsible for Fuwa, the Beijing Olympics mascot.

According to Baidu Baike, a web-based encyclopedia by search engine Baidu, Mr. Han’s original design was in the style of traditional Chinese ink wash painting and was generally well-received. However, the 3D rendering of hou sai lei has been critiqued as “terrifying” and “so ugly, I want to cry.”

In particular, the erroneous rendering of hou sai lei‘s cheek pouches, which is where the monkey can temporarily store food, was especially offensive. Since the 3D model lacks the ink wash painting style of the original design, hou sai lei’s cheek pouches resemble “tumors” instead of stuffed cheeks.

China’s netizens have skewered the new Spring Festival Gala mascot. Some have made jokes about the items stored in hou sai lei‘s cheek pouches, while others have made comparisons to Taiwan’s “even uglier” monkey mascot,  fu lu hou (福禄猴), which is deliberately shaped like a gourd:

One netizen photoshopped fu lu hou into different photographs in a post on Weibo, a Chinese social media platform similar to Twitter. At the end of the post, they concluded that hou sai lei wasn’t so bad after all.

Here’s fu lu hou in a scene from My Neighbor Totoro:

Fu lu hou and Steve Jobs:

Fu lu hou as a Teletubby:

And fu lu hou as a beautiful woman(美女):

2. 六小龄童, as Featured in Pepsi’s 2016 Spring Festival Commercial

Every Chinese New Year, Pepsi does a “Bring Happiness Home” (把乐带回家, our translation) campaign, where the Chinese word for “happiness” refers to Pepsi’s Chinese name.

This year, playing off the “year of the monkey” theme, Pepsi released a six minute TV ad about the actor Jinlai Zhang (章金莱), who goes by Liu Xiao Ling Tong (六小龄童). Mr. Zhang is famous for playing the Monkey King or Sun Wukong (孙悟空) character from the popular 1980’s T.V adaptation of Journey to the West, a famous Chinese novel from the Ming dynasty.

According to the commercial, which is voiced over by Mr. Zhang, four generations of the Zhang family have acted as the Monkey King. The opening shot shows Mr. Zhang’s older brother whirling a pole and sweating through training as he preps for the role. Through a series of touching cameos, it’s revealed that he dies prematurely from leukemia, leaving Mr. Zhang to inherit the Monkey King legacy instead.

The commercial ends with a shot of Mr. Zhang in a movie theater, surrounded by audience members who are saluting him with Pepsis and wishing him “100 things to be happy for” in 2016, which is a literal translation of Pepsi’s Chinese name.

Though cheesy, the commercial has received a lot of emotional responses from netizens, most of whom grew up watching the 1980’s TV series Journey to the West. A “Feature Liu Xiao Ling Tong at the Spring Festival Gala” hashtag (#六小龄童上春晚#, our translation) has even circulated Weibo, as many hope that Mr. Zhang will make an appearance at this year’s Spring Festival Gala.

For a video of Pepsi’s commercial, click here.

3. 耍猴 or “Putting on a Monkey Show”

We kind of cheated with this meme, since it’s not exactly Spring Festival themed. However, it involves monkeys and Xiaomi’s founder, Lei Jun, so we decided to throw it into our list.

Cynical Chinese netizens have accused Lei Jun of “putting on a monkey show,” in reference to Xiaomi’s flash sales, where thousands of phone sell out in seconds. For Xiaomi, the flash sales create a hype around new products and allows the company to avoid over-production. However, this means that users have to act quickly and aggressively in order to snag the latest Xiaomi product.

The “monkeys” in the “monkey show” refer to Xiaomi fans, who have to play along with Xiaomi’s flash sale antics in order to get their newest products. As Xiaomi’s founder, Lei Jun has been dubbed as the “Monkey King” or one who “puts on a monkey show” (耍猴). For example: “Lei Jun is putting on another monkey show!” (雷军又耍猴了!) is how some netizens react when Xiaomi announces a new flash sale.

In the spirit of Chinese New Year, some Weibo users are jokingly calling for Lei Jun’s appearance at the Spring Festival Gala, as “Monkey King”:

With a disappointing 70 million smartphones sold in 2015, it is not a fun year to be “Monkey King” Lei Jun.

Image credit: Shutterstock, Han Meilin Art Foundation, Weibo, Pepsi.

Alibaba’s finance arm, Ant Financial, tested their own red envelope marketing campaign on Monday, mimicking the red envelope campaign test by Tencent last week. On Chinese New Year’s Eve, the tech giant will offers its users up to 800 million RMB (about $122 million USD) in discounts and money through their online payment system, Alipay.

The “red envelope” is a feature shared across multiple Chinese online payment platforms, including WeChat and Alipay, that allows users to send and receive money. It’s also a way for online payment systems to acquire and engage users. For example, in 2015, Weibo reported a 46% increase in active participants after Chinese New Year, reaching 102 million people on New Year’s Eve.

In 2015, Alipay and WeChat battled fiercely through red envelope campaigns. It looks like this year will be no different. Alibaba will work with the Spring Festival Gala to launch its red envelope campaign in a partnership that is almost identical to the one Tencent had last year. In 2015, WeChat users could “shake” during certain moments of the Spring Festival Gala, an annual show on Chinese New Year’s Eve by state-run broadcaster CCTV (China Central Television). Lucky WeChat winners could win up to 500 million RMB (about $76 million USD) in money and e-coupons.

Instead of “shaking,” Alipay users will use the app’s new “Show Show” feature, which was launched on January 12th. From January 23rd until the gala, Alipay users will be able to find red envelopes, merchants, discounts, and Alipay “friends” nearby by clicking on the target-like icon for “Show Show.”

With the “Show Show” feature and the Spring Festival Gala partnership, Alibaba is looking more and more like a copycat of Tencent. Not that that will matter to users, who are probably more than happy to have more chances to win money from Chinese tech giants.

Update: This post was updated to reflect the red envelope campaign was managed by Alibaba’s financial affiliate, Ant Financial.

Image credit: Alibaba

Starting February 1st, the Shanghai government will compensate investment firms for losses incurred while investing in early stage and seed funded tech startups.

Called the “Provisional Measures on Managing Shanghai Angel Investor Risk Compensation” (our translation), the new policy promises up to 3 million RMB (around $456,000 USD) per unsuccessful investment, with a limit of 6 million RMB (around $916,000 USD) in “risk compensation” per investment firm per year. The amount of risk compensation allocated is calculated using the difference between the profit made from the startup’s exit and the amount of money invested in the startup.

It’s a hefty load of money to throw at venture capital firms, aimed vaguely at encouraging local startups, specifically those that bring “global impact” and “innovation” (the Chinese government is obsessed with the word ‘innovation’) to the tech industry. By mitigating the financial risk of investing in startups, the Shanghai government hopes to promote more “public businesses” and the “innovation of the people.”

“The [risk compensation] policy will have some impact but in the end it still comes down to startup’s culture and its ability to grow,” says Ken Xu, a Partner at Gobi Ventures, a venture capital fund for IT and digital media companies in China and Southeast Asia.

“Startups are characterized by their potential for explosive growth and the factors of uncertainty within them,” he says. “There’s no simple guide [to their success].”

The “risk compensation” policy reveals a lack of basic knowledge on how venture capital works. The financial consequences of a bad exit are a natural disincentive for reckless investment. In order to be successful, VCs must make smart and careful investments, through business acumen, experience, and yes, luck. By undercutting this dynamic with “risk compensation”, the new policy runs the risk of bloating Shanghai’s startup ecosystem with VC firms and startups that are dependent on government funding for financial success, not their own merit.

The Shanghai government is not the first provincial government in China to implement a “risk compensation” policy. In 2013, the Jiangsu government announced a “Provisional Measures for Guiding Angel Investment Funds” (our translation), which also offered “risk compensation” to investors who invested in early stage tech startups.

In addition to financial incentives, provincial governments have also implemented policies to improve their local talent pool for startups. For example, in September 2015, the Shanghai government announced a new policy that would make it easier for tech entrepreneurs in Shanghai to obtain the much coveted Shanghai hukou (户口) or permanent residence.

In any case, China’s netizens are not happy with the news of Shanghai’s “risk compensation” policy. Many are horrified that their tax money is being funneled en masse to investment firms. Some called the subsidy “brain-dead,” among other colorful terms. One netizen commented that “if Chinese people could vote, these kinds of governmental officials would never have been elected.”

On Tuesday afternoon around 4 p.m, blurry photos started appearing in WeChat “Moments,” or the newsfeed feature of the social media platform. Clicking on a blurry photo revealed a small piece of the original photograph and gave users an ultimatum: send the photo owner a “red envelope” (红包) filled with a random amount of money using WeChat’s online payment system and see the original photo, or refuse and the photo remains blurry.

The campaign was shut down about four hours later. According to Tencent’s tech news platform, yesterday’s photo campaign was just a test.

“Because our beta test met our expectations, we shut down the campaign. If you’re interested in playing the red envelope photo campaign again, we’ll have another one on Chinese New Year’s Eve,” stated Tencent, the tech giant that owns WeChat.

Digital “red envelopes”, sometimes known as “lucky money,” are a feature that allows users to send and receive money through online payment systems including WeChat and Alipay, Alibaba’s equivalent. Traditionally, red envelopes are used in China to send money as a gift, especially around Chinese New Year.

The use of “red envelopes” around Chinese New Year in marketing campaigns is not new. In 2015, Tencent launched a “red envelope” campaign during the Spring Festival Gala, a popular show broadcasted every year by CCTV (China Central Television) on Chinese New Year’s Eve. Lucky users who used WeChat’s Shake feature at certain moments during the show received “red envelopes” with random amounts of money or e-coupons. That same year, Alipay gave away 600 million RMB (around $91 million USD) worth of “lucky money” in cash and  e-coupons to its users.

The “red envelope” has been a point of contention between the two tech giants, who have both tried to block their users from using their competitors’ payment system. “Red envelope” marketing campaigns like the one launched by Tencent yesterday are away to funnel more users into their respective payment systems, as well as create a buzz.

“This campaign looks a little like the Japanese ‘lucky bag’. You pay money for something you don’t know,” says Alexis Bonhomme, referring to fukubukuro, a Japanese New Year custom. Mr. Bonhomme, who used to work for Groupon Tencent China, is a general manager at Curiosity China, a digital and tech company focusing on social CRM for international brands and agencies.

“You have 650 million active users on WeChat. Imagine that 80% of them use Wechat payment,” says Mr. Bonhomme. “It’s a key asset for Tencent, especially when it goes to fight Alipay.”

According to Tencent’s tech news site, the “red envelope” photo campaign launching on Chinese New Year’s Eve will be even more fun and interactive. The tech giant recommends that users upgrade to the latest version of WeChat so that they didn’t “miss out on several hundred million RMB.”

As Chinese New Year approaches, it will be interesting to see how other tech giants like Alibaba respond and launch their own campaigns. This year’s Chinese New Year “red envelope” wars have officially begun.

Image credit: WeChat, Shutterstock

Alex is a twenty-three year old woman from China who studies fashion marketing in London. She also does daigou on the side.

“I started [doing daigou] for friends and I only charged for shipping,” she says. “Then more and more people added me on WeChat and Weibo. If it’s a total stranger, why not make some money?”

Daigou is what is known as a gray market, or an unauthorized sales channel. In particular, it refers to Chinese shoppers who travel overseas to purchase goods so they can resell them illegally when they return to China. In some cases, like Alex’s, daigou agents ship their goods internationally and don’t return to China to make the sale.

The daigou market is a lucrative one, estimated to be worth 34 – 50 billion RMB in 2015, according to a report by Bain & Company. It’s one of many channels that Chinese consumers can access for Western luxury items, such as women’s wear, jewelry, and cosmetics, or other desirables like vitamins and food products. The daigou phenomenon has drawn both awe and criticism from countries like Hong Kong, Australia, and Japan, which are often targets of daigou agents, due to the sheer volume of purchases made by Chinese shoppers. In some cases, daigou agents have been known to temporarily empty a country’s supply of a certain product, like baby formula in Australia during Singles Day, a major online shopping holiday in China.

“It is an ecosystem created by Chinese people that is not defined by physical land,” says Jacqueline Lam, a co-founder of Mihaibao (觅海宝), a cross-border e-commerce platform targeting Chinese consumers. “It’s a market between Chinese people all over the world. It’s fascinating.”

Mihaibao wants to disrupt the existing daigou market by scaling and legalizing it. The platform connects Chinese consumers directly with high-end Western brands, such as Gucci and Giorgio Armani, while offering the lowest price globally for the product at the local currency automatically.

“Daigou cannot do that,” says Ms. Lam. “You cannot send a daigou traveling around the world, buying different products at the optimal price. So what we’re doing is we’re making money from efficiency in the system.”

In addition to price optimization, Mihaibao strips foreign VAT (value-added tax) off its prices, which allows the platform to add Chinese import taxes – legalizing the process – and still make a profit. Without paying Chinese taxes, Mihaibao cannot build a long-term, sustainable business and receive government support, says Ms. Lam.

Mihaibao also prides itself on its cultural understanding of Chinese consumers. Through its partnerships with Western companies, the startup hopes to help foreign brands cater to the tastes of Chinese consumers.

“They’re very smart shoppers,” says Ms. Lam. “They want much more information than Western shoppers and they care about different information.”

She cites a Giorgio Armani coat as an example. “They will care that it was made in Italy or France, but not made in Portugal,” she says. “Chinese customers now care where their original product is from. If something is Western but made in China, they might feel cheated.”

Also, because of issues of trust and authenticity of goods in China, product images need to be more detailed, says Ms. Lam. They have to show every angle of the product and convince Chinese consumers that it’s the product they want, she says.

There are many players in the daigou space, like other cross-border e-commerce sites and overseas websites including Tmall, JD, Shopbop, Net-A-Porter, and Kaola.com (网易考拉海购). However most make a compromise between authenticity and price. For example, consumers who shop on lower-end platforms like Alibaba’s Taobao run the risk of purchasing counterfeit goods.

There are offline channels for Western goods as well, such as domestic department stores and outlet malls, but an increasing number of Chinese consumers are opting for online options. According to a report released by Bain & Company, cross-border and overseas websites accounted for about 12% of all Chinese luxury goods spending. The daigou market, on the other hand, is declining because of crackdowns on daigou by Chinese customs officials, as well as other factors like global pricing by brands and governmental support of cross-border e-commerce in China.

As a startup that wants to legalize China’s gray market, it would seem natural for daigou agents like Alex to resent Mihaibao. But the company is employing daigou agents and leveraging their existing client bases in return for a commission on sales.

“[My] customers get parcels from the merchants, not from me personally, which is really good for building trust,” says Alex. In addition, by giving Mihaibao control over the supply side of daigou, she doesn’t have to spend time browsing through different stores and shipping packages.

In the future, Mihaibao plans on expanding to other verticals outside of fashion. Currently, the platform offers traditional luxury fashion brands, as well as more unique products from other high-end designers which appeal to younger generations of Chinese shoppers and Chinese people who have returned from working or studying abroad. In December 2015, the company received a round of $1.6M of seed funding from a list of high-profile investors including John Wu Jiong, Alibaba’s first CTO and Yahoo’s first Chief Architect.

Image credit: Mihaibao

Correction (1/27/2016) 17:30: This post has been updated to correct a factual error. Mihaibao received its round of seed funding in December 2015, not January 2016.

2015 was a tumultuous year for China’s multi-billion dollar luxury goods market. A plunging stock market, crackdowns on overseas luxury goods, and more high-profile arrests under Xi Jinping’s anti-corruption campaign are just a few factors that shook up China’s luxury market in 2015.

According to a new report by Bain & Company, some new trends in the Chinese and global luxury market have emerged. Here are five key takeaways:

1. China’s Luxury Market is Declining

Overall, purchases of luxury goods in mainland China decreased by about 2% to 113 billion RMB last year. In particular, men’s wear, watches, suitcases, and handbags have taken a drastic dive. For example, in 2014, luxury brand men’s wear decreased by 10% from 2013; by the end of 2015, the decrease is expected to be 12% from 2014.

The decline can be attributed to a number of different factors, including President Xi Jinping’s continued anti-corruption campaigns, which discourage lavish gift-giving (also known as bribes). Last April, former security chief Zhou Yongkang joined the growing number of Chinese government officials who have been arrested on charges of corruption.

In addition, last year’s stock market crash contributed to a slowdown in the luxury market, as well as increasing crackdowns on the daigou market by Chinese custom officials. Daigou refers to Chinese shoppers who purchase luxury items overseas and resell them illegally when they return to China. Between 2014 and 2015, the daigou market size for luxury goods decreased from about 55 – 75 billion RMB to about 34 to 50 billion RMB.

2. … But a Few Verticals Continue to See Steady Growth

Luxury brands in women’s wear, jewelry, cosmetics, perfume, and personal care items continued to see growth in 2015.

Since 2012, these verticals have seen steady growth. For example, luxury brand women’s wear has stayed at around a 10% CAGR (compound annual growth rate), and cosmetics, perfume, and personal care items have ranged around a 5 to 10% CAGR.

Top brands in these verticals include: Armani, Burberry, and Channel in women’s wear; Bvlgari, Cartier, and Chow Tai Fook in jewelry; and Chanel, Dior, and Estee Lauder in cosmetics.

3. Chinese Shoppers Aren’t Traveling to Hong Kong to Buy Luxury Goods

Instead, they’re opting for Japan, South Korea, and Europe. Japan was a particularly popular destination, as sales in luxury items is estimated to have increased by 251% since 2014. South Korea was second with an increase of 33%, followed by Europe with an increase of 31%.

In contrast, sales in Hong Kong and Macau decreased by about 25%.

The sharp increase in luxury items purchased by Chinese shoppers in Japan is attributed to a more open visa policy, which also explains the increasing number of Chinese tourists who visit Japan.

4. Cross Border E-Commerce is Taking Off

According to Bain’s report, cross-border and overseas websites are taking about 12% of all Chinese luxury goods spending.

Instead of buying luxury goods at department stores, shopping malls, or arranging a deal with a daigou merchant, Chinese shoppers are making purchases through websites like JD, Tmall, Net-A-Porter.com, ShopBop (acquired by Amazon in 2006), and Harrods.

Startups have also started catering to Chinese consumers through cross border e-commerce platforms, such as Kaola.com (网易考拉海购) and Mihaibao (觅海宝). To appeal to more price-sensitive Chinese consumers, startups like SECOO (寺库) and Share2 (只二) are selling secondhand luxury goods.

The Chinese government has also been helping to move luxury brand purchases online. For example, in January 2015, limits on cross-country online payments increased from $10,000 USD to $50,000 USD. The expansion of free trade zones in China also offers tax benefits to companies that conduct cross-border e-commerce.

5. Global Pricing by Luxury Brands to Boost Domestic Growth in 2016

Luxury brands like Chanel and Cartier have begun to price their items globally, shrinking profit margins for daigou merchants and reducing the price gap between Europe and Asia. Last March, Chanel was the first luxury brand to slash the prices of its handbags in China, before being joined by Cartier and Gucci, who also cut prices across their products.

In part a response to depreciating currencies such as the euro and RMB, global pricing by luxury brands will contribute to further downsizing of the daigou market and an increase in local consumption and domestic growth in 2016.

Correction (1/26/2016) 15:00: This post has been updated to correct a factual error. Mainland China’s luxury market declined to about 113 billion RMB, not by 113 billion RMB.

Uber is packing this year with charity campaigns aimed at winning over China’s white collar workers.

“In our more established cities, we plan on doing charity campaigns pretty much every month,” says Zhiyuan Meng, a marketing manager at Uber. Incorporating charity into its campaigns is partly an appeal to Uber’s existing user base, which is mostly white collar, says Mr. Meng. If a campaign is too commercial, it will be “challenged.”

In particular, the company will focus its campaigns on the app’s carpooling feature, or People’s Uber, which was launched last August in Beijing. Carpooling can be considered a kind of “charity” or non-profit activity, and campaigns around carpooling are more likely to be approved by Uber management, says Mr. Meng.

For example, Uber will launch a charity campaign around carpooling and books later this week in Hangzhou. The company is partnering with Seed, a Shanghai-based startup that encourages Chinese users to read and discover English content through its app. The campaign will incentivize Uber users to exchange books while they carpool by offering them a chance to win a book recommended by a celebrity, like Chinese actress Song Jia, as well as a signed bookmark, if they upload a photo of their book exchange to Weibo. At the end of the campaign, users can also donate secondhand books to the Shanghai United Foundation.

Seed was able to seal a co-marketing campaign with Uber because of the ridesharing aspect, says Zoe Zhou, the COO of Seed. “Uber wanted to focus more on ridesharing, which clicked with our proposal,” she says.

This isn’t Uber’s first charity campaign around books. In April 2015, the company put “moveable libraries” in Uber  cars in Shenzhen, Wuhan, Chongqing, and other cities for World Book Day, in partnership with reading app Green Tomato (our translation of 青番茄).

“We want to do this type of library project every year,” says Mr. Meng. “We want our cars to become ‘cultural spaces.’ ”

It’s a different tactic from the “money-burning” campaigns by Uber’s Chinese competitors, like Didi Chuxing (滴滴出行 ) and Yidao Yongche (易到用车). Last year, billions of dollars poured into the ride-hailing sector in China, as different companies used ride subsidies to try to dominate the market. In 2015, Uber faced a number of setbacks as it battled its domestic competitors, like having all of its Wechat accounts blocked by Tencent last December.

Leveraging more charitable or “cultural” marketing campaigns might be a way for Uber to differentiate itself in a crowded market while digging into China’s white collar and younger demographic. According to Mr. Meng, Uber’s users are typically between 18 and 40 years old. By targeting its marketing towards this younger group, Uber also hopes to gradually reach parents and grandparents via word of mouth.

2016 is set to be an ambitious one for Uber. Yesterday, the company announced its plans to expand to 15 new cities in the Sichuan province before Chinese New Year, which is part of a larger goal of reaching 100 cities in China by the end of 2016.

Here in Asia, we’re the first to see the sun rise. We’re the continent with the most people and some of the oldest civilizations in human history.

We’re also home to some of the most innovative hardware startups in the world. From “Startup Nation” Israel to high-tech Japan, Asia is a hotspot for exciting hardware, and it’s about time we had our own hardware competition.

At TechNode, we’re delighted to invite you to this year’s Asia Hardware Battle in Chengdu, where the top 15 hardware startups in Asia will present their products.

Most people know Silicon Valley as the heart of technological innovation, but what most don’t know is how more and more Valley tech giants are buying up technology from Asia. For example, in 2015, Apple acquired Israeli imaging company LinX and their 3D scanning technology, PrimeSense. The year before that, Google acquired an information security company called SlickLogin, also from the “Startup Nation.”

China is starting to see innovative hardware across all verticals: wearables, virtual reality, smart transportation, artificial intelligence, and more. And despite headlines of a winter in the Chinese economy, various tech industries in China are continuing to receive generous financing.

In the virtual reality industry, Noitom Ltd., a motion capture solution provider, and ANTVR, a VR hardware company, received $20 million USD and $300 million RMB in rounds of Series B funding, respectively.

China’s artificial intelligence industry got a nod from Google last October when the tech giant invested $75 million USD in Mobvoi, a speech recognition and natural language processing startup based in Beijing.

China’s UAV industry was especially well endowed with financing in 2015, as DJI, YUNEEC, and EHang all received millions of dollars in funding. Guangzhou-based startup Ehang also wowed everyone at this year’s CES in Las Vegas with their autonomous helicopter drone. Of course, investment money is just the start – what hardware startups do with it will determine their future.

If you’re an early stage, pre-Series A funded startup with an exciting product, we’d love to have you at this year’s Asia Hardware Battle. Not only will you meet hardware startups from all over Asia, you’ll also have the chance to meet investors from top-tier VC firms, like Sequoia Capital, Silicon Valley Bank, GGV Capital, and others.

Online applications are open until the end of February. We look forward to seeing you in Chengdu!

Asia Hardware Battle Timeline

1. Applications accepted: January 11th – End of February
2. Application screening period: March 1st – 5th
3. Finalist preparation period: March 6th – 30th
4. Final Presentation in Chengdu: March 31st

(Note: Due to visa processing, the timelines for Chinese startups and overseas startups are different)

Qualifications

1. Must be a hardware startup in Asia (see accepted regions below)
2. Must be early stage, pre-Series A funding
3. Must have released a prototype already

Regions

• Mainland China
• Japan
• South Korea
• Singapore
• India
• Israel
• Taiwan
• Hong Kong

What We’re Looking For

• Disruptive companies with innovative technology
• Companies that haven’t had a lot of media exposure yet

Rewards and Perks

• Tickets for our “VC Meetup” (50 top tier VC firms )
• A chance to attend 2016 ChinaBang Awards
• 15 Finalists have a chance to present on the main stage
• 15 Finalists will receive tickets to the 2016 ChinaBang Awards
• 15 Finalists will receive a roundtrip plane ticket to Chengdu and
  hotel lodging for 3 days
• 15 Finalists will receive feedback from a distinguished panel of judges
• Media coverage
• ….and more!

Click HERE to apply!

Chinese parents are notorious for enrolling their children in a multitude of co-curricular classes, and now the rise in innovation-driven tech investment has yielded yet another option: 创客课程 or ‘maker’ classes.

“We are committed to the principles of experiential learning and project-based learning,” states Join-In (卓因青少年创意工场), one of many ‘maker’ education companies in China. They have an extensive repertoire of workshops for children aged 3 to 18, from soldering a wristwatch to building a robotic car that can be controlled remotely through Bluetooth.

In maker education or ‘learning through making’, learning is supposed to happen as part of the student’s experience as they tackle hands-on projects on their own or with peers. Ideally, teachers take on the role of facilitators and guides. Their job is to lead students towards certain learning goals and revelations without giving away the answer.

China’s Burgeoning Maker Movement

The term ‘maker’ is a hot buzzword in China. Though it’s often used to describe hardware projects, ‘making’ can refer to any creative endeavor: painting, cooking, knitting, 3D printing, robotics, hydroponics.

China’s maker movement follows in the footsteps of similar movements in Europe and the U.S, where makerspaces, or communal spaces where makers can share tools, knowledge, and projects, started emerging in the early 2000’s.

In 2010, China’s first makerspace, Xinchejian (新车间), was founded in Shanghai by David Li, Min Lin Hsieh, and Ricky Ng-Adam. Since then, makerspaces have sprung up all over China, not only in first tier cities like Shanghai and Beijing, but Nanjing, Suzhou and Chengdu, among others.

In the December 2010 a TV show called 我爱发明 or “I Love to Invent” (our translation) launched. Each episode features inventions by different Chinese people, as well as real-time demos and analysis by the show’s host. In 2014, China’s Ministry of Education sponsored the first China – U.S Youth Maker Competition, with Intel, Tsinghua University, and the Chinese Service Center for Scholarly Exchange as organizers. Last January, Chinese Premier Li Keqiang made a high profile visit to Chaihuo Makerspace (柴火创客空间) in Shenzhen, and was named Chaihuo’s first new member of 2015.

“Makers have revealed the incredible entrepreneurship and creativity of the people,” commented Mr. Li. “This kind of vitality and creativity will be an inexhaustible engine for China’s future economic growth.”

The government’s avid support of China’s maker movement is not surprising. While many Chinese companies and institutions focus on the educational merits of maker culture, the Chinese government has primarily viewed it as a stimulus for entrepreneurship.

Homegrown innovation will become an imperative in the coming decades as China’s working-age population is expected to reduce by 16% by 2050, according to a report released last October by McKinsey. In the eyes of the Chinese government, China’s maker movement could drive – at least partially – the country’s radical shift from manufacturing to startups and innovation.

Disputes Around Maker Education

“Making for the sake of making, which is what most [maker education startups] are doing, shouldn’t mean more than playing with a special or different kind of toy,” says Rock Zou, the founder of Bigger Lab (必果科技), an educational startup aimed at high schoolers in China.

He’s referring to the plethora of maker classes that revolve around kits. For example, Shanghai-based robotics and open source hardware provider DFRobot sells over forty different kits of varying difficulty levels. For beginners, there’s the “4-Soldering Light Chaser Robot Kit” which only requires simple circuitry and soldering to assemble a robot that responds to ambient light. In more advanced kits students have leeway over their end product. Kits involving Arduino microcontrollers, for example, are more open-ended and enable students to build their own interactive hardware.

DFRobot sends its kits to schools all over China and trains teachers on how to run maker classes. According to Luna Zhang, a community manager at DFRobot, these training sessions are also meant to instill the “maker spirit” in teachers.

Mr. Zou concedes that kits offer some kind of educational value, but believes that they don’t challenge students enough intellectually. “You’re not pushing any boundaries,” he says. “It makes a difference whether you ask the question of why we make things, or what should we make.”

Bigger Lab’s classes focus on design thinking, user research, and rapid prototyping.

Last July, during their first round of workshops, Bigger Lab students stayed at a youth hostel in Shanghai and interviewed their tenants. The goal was to create a prototype that was designed to address one or more pain points of staying at the hostel. Over the course of the month, students learned various design thinking principles, as well as technical skills such as 3D printing and lasercutting, to help them with come up with a final product. At the end of the month, the students presented their projects at Xinchejian.

One group of students created a prototype of a machine that scanned tenant handprints and printed them onto postcards. “Our group decided to work on how to keep the memory of the hotel,” wrote one of the students in his blog. Another group created an interactive game that worked like human Tetris, but with anime characters in different poses instead. Inspired by their interviews at the hostel, the group wanted to help tenants get to know one another.

“They really [didn’t] like talking to humans, especially strangers,” Mr. Zou says. “But the problem is, if you don’t do it, you risk making useless stuff and wasting resources and time.”

Results, Results, Results

It can be difficult to persuade Chinese parents to buy into the principles of ‘learning through making’. After all, learning through making necessitates a kind of courage and resilience towards failure.

“I was more idealistic in the beginning,” laughs Ms. Han. “We wanted students to know that it’s okay to fail. In life, you’ll have to face failure eventually. But parents can’t accept that.”

Like Mr. Zou, Ms. Han disagrees with curricula designed around kits. In her previous job, Ms. Han marketed robot kits for Senfu Robotics Education Institute. That experience pushed her to create Join-In in 2015. “The end product doesn’t always represent the educational value,” she says. “What if you took away [the kit]? Would students still know how to build?”

However, Join-In has had to compromise to appease parents. Every class, which usually consists of four workshops, ends with tangible product. It’s the result of a kit that Join-In puts together, plus some customizations from the student for a margin for creativity.

“Chinese parents are really focused on results,” says Ms. Han. “At the end of workshops, parents will ask their children: ‘Were you able to finish? Did you put it all together?’”

Join-In has also started organizing robotics competitions to convince parents of their program’s value. These competitions appeal to parents because students can bring up their award during their xiao sheng chu (小升初) interviews, which are part of the national xiao sheng chu exam deciding what middle school students can attend. Multitudes of education companies have rushed to cater to this need to stand out.

For Bigger Lab, parental pressure is less potent as its target audience is Chinese high schoolers, specifically those with ambitions to study abroad. “In the college application process, [local] awards rarely mean anything,” explains Mr. Zou.

In 2016, both Join-In and Bigger Lab plan to expand their businesses and apply for investment funding. Specifically, Join-In will start by connecting schools in 2nd tier cities and build brick-and-mortar outreach centers to find more students. In addition to recruiting more teachers, Bigger Lab will build their own space that will be used as a classroom and workspace for students.

Image credit: Bigger Lab

Update (1/16/16) 13:05: We updated this post to add Join-In’s Chinese company name, 卓因青少年创意工场.

Another year, another chance to make good on some new resolutions… or any old ones you might’ve abandoned in 2015.

To the naysayers who believe that technology is making us lazier, here are five Chinese apps that will make you more active, healthy, and better traveled in 2016.

1. Get Fit With Keep

Keep is a great app for anyone who wants a fitness routine without thinking too much about it.

After picking a fitness goal – lose weight, tone, or gain muscle – and a difficulty level (described using Keep’s 4 point system), the app curates a regular workout schedule for you. The schedule gives you one fitness routine per day, except on rest days, which are also part of your workout schedule. Every fitness routine consists of a series of videos with a coach leading you through different exercises, repetitions, and even timed breaks.

You can also surf Keep’s massive library of fitness routines, sorted according to required equipment, targeted muscle areas, and difficulty level. You can click to add any item to your list of training modules, where you can also access the workout schedule recommended by Keep.

2. Eat Healthier With Benlai.com (本来生活)

Benlai.com (本来生活) is a grocery and kitchen supplies delivery platform, with an emphasis on healthy and high quality food. Based in Beijing, Benlai.com was founded in 2012 by Yu Huafeng as a reponse to rising concerns around food safety in China.

Through Benlai’s app, you can order produce, meat, rice, wine, and various kitchen supplies from plates to rice cookers. If you want to learn more about where the food is sourced or how it was tested for food safety, you can click “Drag for more information” under each product. After placing your order, you set an address for the delivery and can pay using your bank card, Wechat, or Alipay.

3. Travel More with Zouzhe Travel (走着旅行)

Zouzhe Travel, or “walking” travel, is a platform that connects individual tour guides and drivers to travelers. According to Zouzhe Travel’s website, the goal of the app is to make traveling simple by relieving users of the hassle of arranging transportation.

Zouzhe Travel also offers set tours, with itineraries for cities all over China and Asia, like Thailand, Nepal, and Japan. Tours can include anything from 1-on-1 guided scuba diving in southern Taiwan to an all-day tour of the Nanxun water town near Shanghai. Like its driving service, tours through Zouzhe Travel are personalized and private.

After picking a tour for a set date and time, you can let the guide know about any special requirements you have for the trip. Finally, payment is received through the app using Alipay or Wechat.

4. Quit Smoking With Jieyan Juntuan (戒烟军团) 

The Jieyan Juntuan app, which literally translates to the “Quit Smoking Legion”, helps you track your smoking habits and urges. Depending on how ambitious you are about quitting smoking, the app offers different plans. For those who want to go cold turkey, Jieyan Juntuan shows how long you’ve lasted without smoking. The app also shows you updated health improvements, like a “decreased chance of a heart attack”, according to the number of days that you’ve quit smoking.

Jieyan Juntuan lets you record when you’ve felt the urge to smoke, as well as when you’ve given in to those urges. Though the latter restarts your plan to quit smoking, the app will record and save the former over the course of your plan to completely quit smoking.

If you’re not ready to quit but want to reduce your smoking habits, the app will let you set daily cigarette limits, whether it’s by time, such as one cigarette every three hours, or by quantity of cigarettes per day.

5. Learn How To Cook With Xiachufang.com (下厨房)

Xiachufang.com is a recipe-sharing platform for all kinds of dishes and culinary skills, including how to cut a dragon fruit! You can save recipes from other users, post questions about them, as well as upload your own. By selecting different recipes for your “grocery basket,” Xiachufang will also give you a compiled list of all the ingredients you need to buy.

You can browse through Xiachufang recipes by name or category, like “vegetarian” or “breakfast dishes.” Each recipe is rated out of ten by users and shows the number of people who have reported having made the recipe before.

Chinese telecoms equipment and smartphone supplier ZTE will use 2016 to build brand loyalty and brand awareness by consolidating their smartphone portfolio and involving consumers in the product development process.

“We are shifting to a model where we are working directly with the consumer and trying to build the ZTE brand with the consumer,” says Waiman Lam, the Senior Director of Technology and Partnerships at ZTE Mobile Devices.

Specifically, ZTE will focus on cultivating the “ZTE Community,” where consumers can give feedback and have a direct impact on product, says Mr. Lam. As an example, he cites the release of the 64GB Axon Pro last November, which was a result of consumer feedback after the launch of ZTE’s 32GB version in August.

“We treat [consumers] like a partner these days, showing them our designs, trying to get their feedback, [and trying] to improve on the features that we think are important to them,” he says.

ZTE has chosen voice control as one of those features. In 2014, ZTE formed the Smart Voice Alliance, which includes companies like Nuance, Audience, NXP, and Sensory. According to a survey conducted by the Smart Voice Alliance and GfK China, 80% of Chinese smartphone users reported wanting voice control, and voice control was ranked just after brand, price, and quality as an “important influencing factor” when purchasing a smartphone.

System level voice control is a feature that will differentiate ZTE from its competitors, says Mr. Lam. Unlike other solutions such as Apple’s Siri, ZTE will develop localized voice control that doesn’t require network connection.

“For a lot of things that you shouldn’t have to go to the internet for, we want to embed inside the phone,” says Mr. Lam. For example, if users want to play music or open certain applications with their voice, they will be able to do so without being connected to the internet.

In addition to voice control, ZTE will also continue to improve its biometric features in 2016, such as the fingerprint sensor on the Chinese version of the Axon Pro. According to ABI Research’s Biometric Technologies and Applications Research Service, fingerprint sensors for smartphones are expected to reach 1 billion shipments by 2020.

“Unique features like voice control, biometric security – all of these are important to differentiate you as an OEM,” says Mr. Lam. “From the hardware perspective, everybody’s probably about in the same boat. What differentiates you as a vendor is your design, your unique features, your services,” he says. For example, ZTE will appeal to consumers through services like the Axon Passport, which includes a two-year warranty and free advanced exchange of devices.

ZTE will also continue to push its sports marketing strategy to consumers worldwide. ZTE is currently sponsoring 5 NBA teams, including the Chicago Bulls and the Cleveland Cavaliers, as well as athletes in other sports, like hockey, softball, and rugby.

Though ZTE ranks as number eight in the Chinese smartphone market, the company has done well in the U.S market, where the company has partnerships with carriers like T-Mobile and AT&T and a strong patent portfolio. According to World Intellectual Property Organization (WIPO), ZTE has ranked within the top three in filing international patents between 2010 and 2014.

However, as ZTE faces continued competition in its established markets, it will expand and focus on Japan, Indonesia, and India, as well as European markets like Germany and Spain, in the upcoming year. In addition, ZTE’s higher end Axon Series will see a “refresh”, according to Mr. Lam.

The company is also investing in smart watch technology. Last October, ZTE launched the Axon Watch, which runs Tencent’s smartwatch operating system TOS+, which it will showcase at this week’s Consumer Electronics Show (CES) in Las Vegas.

This holiday season Chinese smartphone manufacturer Smartisan Technology Co., Ltd. (锤子科技) launched its newest smartphone, the Smartisan T2. The T2 follows Smartisan’s first flagship model, the T1, after more than two years of development.

The T2’s exterior is a stripped down, minimalist design. The power button is integrated into the home button and the nano SIM tray is hidden behind volume key on the right side, leaving the phone largely buttonless. In addition to an all metal frame which Smartisan describes as “seamless”, the T2 is coated in 2.5D Gorilla Glass 3 to improve the phone’s durability and display.

While Smartisan has invested heavily in the T2’s look and feel, the company has settled for rather standard hardware. The T2 is equipped with a hexa-core Qualcomm Snapdragon 808 processor and a 2670 mAh battery, putting it behind devices like the Mi Note Pro and Meizu’s Pro 5. The T2 also comes with a maximum of 32GB of internal storage, which is half the storage that many of T2’s competitors offer. The T2 also comes with a 13 megapixel rear camera, a 5 megapixel front camera, and Smartisan’s OS 2.5.

Founded in 2012, Beijing-based Smartisan has struggled to compete in China’s crowded smartphone market, which includes companies like Xiaomi, Huawei, Meizu and OnePlus. When Smartisan launched the T1 in July 2014, only 122,000 phones were sold by December due to supply chain problems, according to Yonghao Luo, the company’s founder.

Nevertheless, Luo’s unconventional background as an English teacher and high school dropout, as well as his popularity – Luo has about thirteen million followers on Weibo – has helped to boost Smartisan’s public image. In 2014, Smartisan received $29 million USD in funding, about four months after a round of Series A funding in 2013.

The T2 is the third smartphone in Smartisan’s portfolio of smartphones, which includes the Smartisan T1 and the Smartisan U1 Jianguo. It is currently being sold for 2,499 RMB ($385 USD).

The guerilla mentality that drives product development and early stage growth in Israeli startups can be their downfall when scaling in China, according to one VC.

“They treat the business as a command or combat unit,” explains Amos Avner, a founding partner of Startup East, a Pan-Asian startup accelerator and microfund based in Israel. “It’s less about building a big company, a big structure. It’s very results driven.”

“It’s very, very good when you start a company, to work this way,” he says. “The disadvantage is [Israeli startups] don’t have enough patience. It can create frustration, it can lead to a pivot. In the worst case, it can close the company.”

The relationship between Israeli and Chinese startup communities has grown rapidly over the past two years. In 2011, two Israeli companies, PTL Group and Elan Industries, launched the China Industrial Incubator Initiative in Changzhou to help overseas SMEs establish and develop manufacturing capabilities in China.

Companies like Startup East and Upround Ventures, founded in 2013 and 2014 respectively, have risen to meet the needs of Israeli startups who are seeking  to connect with investors in Asia. Ping An Ventures, Alibaba, Baidu, and other Chinese investors have invested millions of dollars into Israeli startups, including Waze, which was acquired by Google for $1.15 billion in 2013.

“A lot of Israeli companies will think that if they build a good enough product, people will want it,”  says Benjamin Peng, the business director at Yafo Capital, a Shanghai-based investment firm and financial services company that focuses exclusively on American and Israeli technology and overseas M&A projects. He believes this is inhibiting their expansion in China.

During an event jointly organized by Startup East and Yafo Capital in Shanghai last Monday, seven startups from Israel presented their startups. Each company, from Internet-of-Things hardware startup Gemsense to medical imaging diagnostic startup Collage, had a clear pitch about the quality and technical innovation behind their product. After almost every presentation, a Chinese investor from the audience would ask, “What’s your business model?.”

“Some Israeli startups don’t even think about their business model,” says Mr. Peng.

He cites the example of Valtech Cardio, an Israeli startup that specializes in mitral and tricuspid valve repair and replacement. According to Mr. Peng, Valtech Cardio focused almost solely on product development for seven to eight years in Incentive, an Israeli technology incubator owned by Peregrine Ventures.

“Their team was almost all technical people,” he says. “There were hardly any employees dedicated to business development.”

In September, Valtech Cardio was bought by HeartWare International for almost a billion dollars. However, the success of Valtech Cardio’s acquisition might have more to do with HeartWare International’s existing base of consumers and familiarity with the industry, not Valtech Cardio’s business development, says Mr. Peng. In fact, before Valtech Cardio was bought by HeartWare International, their product, Valtech Cardioband, did not have CE marking approval, which is required for placing medical devices on the European Union market.

Most Chinese investors want to know about the startup’s business model, says Mr. Peng. Marketing and sales – both very local operations – are a key component of succeeding in China’s market.

In addition, Israeli startups who are not savvy about the cultural differences between Israel and China may find it difficult to form partnerships with Chinese investors.

“Israeli startups are more direct, more aggressive. The Chinese are more reserved,” says Mr. Peng. “Sometimes [a Chinese investor] will say something positive to give the other party face,” he says. “For example, they might say, ‘We look forward to working with you in the future.’ This can lead to feelings of disappointment on the other side.”

More Israeli startups are educating themselves about Chinese culture and the dynamics of the Chinese market. Researching the Chinese market, knowing the local players and competition, “makes a lot of difference,” says Mr. Avner. Before bringing the Israeli startups to China, Startup East gave them a few weeks of preparatory training on cultural nuances, how to pitch to Chinese venture capitalists, and more.

Both Chinese startups and Israeli startups have a lot to learn from each other, says Mr. Avner. “When I look at Asian companies, especially Japanese and Korean, some Chinese, they are more focused on the process,” he says, referring to the business development process. “They understand that it’s a long process and it takes time.”

In February, Shanghai-based company WinSun (盈创) made waves in global media by creating the world’s first 3D printed villa. According to WinSun, the villa was printed using a mix of “glass fiber, steel, cement hardening agents and recycled construction waste.”

The villa took just three hours to assemble, and the company believes that 3D printed buildings can reduce mining residuals and construction waste. In addition to recycled material, WinSun is exploring other eco-friendly printing materials like sand from northern China.

China’s multi-billion real estate industry is entering a new era of green building. Government policy is one factor helping to drive the green movement in China’s real estate industry. In the past decade, China has passed numerous policies to promote energy conservation and reduce air pollution, like the 2007 “Green Credit” policy, which requires banks to stop lending to companies that are on the MEP blacklist for environmental violations.

The government is also investing heavily in green technologies that impact the real estate industry like smart meters, which measure energy consumption and improve energy efficiency. Last February, China spent $4.3 billion USD on its smart grid market, with part of the investment going towards the installation of 60 million smart meters. On Tuesday, China announced at the Paris climate talks that it would commit to producing 150 to 200 gigawatts of solar energy by 2020.

“Chinese officials are adaptable,” says James Hu, a business manager at Glumac, a consulting firm that specializes in sustainable design and engineering. “They welcome innovative and creative ideas.”

In particular, government entities like the China Development Bank are “leading the way” in sustainability, he says. In 2014, the China Development Bank shelled out 1.4 trillion RMB ($216.8 billion USD) in loans for “green credit projects”, according to their 2014 Sustainability Report.

“It’s all about health,” says Johnny Browaeys, co-founder and executive chairman of Seeder, a Shanghai-based startup that provides building owners with green tech solutions and financing options.

“Developers will need to meet the requirements of the masses,” he says.

Green tech solutions can help developers address changing needs from tenants, who are gradually moving towards greener buildings. For example, adding air purification systems can give developers an edge in the real estate market, as air pollution in cities like Beijing continue to draw attention and alarm.

Businesses are also seeking greener offices to boost work productivity, says Daniel Shwartzer from CBRE, a real estate service company. Air pollution can make employees sick and some multinational companies require LEED-certified offices as a company standard, he says.

“More tenants want greener buildings,” says Amy Wang from Shui On Land, a property development company that partners with consulting firms like ARUP and AECOM to build LEED-certified buildings. “And building greener is a way to differentiate from competitors,” she says.

Green technologies like solar panels and smart meters are also encouraging Chinese real estate developers to go green since they lower the cost of energy and make buildings more energy efficient. For example, building owners can enter solar power purchase agreements (PPA) with investors to save money on electricity. The investor covers the cost of buying and installing solar panels in return for a guaranteed buyer of electricity – the building owner. According to Alex Shoer, a co-founder of Seeder, the returns for investors are 10 – 12 percent.

“Buildings are looking at how to optimize,” says Mr. Shoer. “It used to be buy, sell, but people are starting to see that [they] need to become more efficient with operations and lower operating costs. You can make just as much money by spending less as you can by making more.”

In the future, Seeder will explore more cutting edge technology, like using probiotics to clean and filter air, says Mr. Browaeys. Some buildings in China, like the Glumac headquarters in Shanghai, have already implemented composting toilets and rainwater collection, and are working towards net zero energy, water, and carbon certifications.

Tainiqi Zhu admits that the Chinese market might not be ready for second-hand clothing, but he’s willing to make a bet on its potential.

“In mainland China, there’s a problem of trust and communication,” says Mr. Zhu. “And even after you convince someone, you still have to negotiate the price. There’s a huge culture of bargaining.”

Mr. Zhu’s self-funded startup, Share2 (只二), is a platform where users can buy and sell second-hand clothing. Unlike C2C platforms, such as 58.com or Ganji.com, Share2 takes a more active role in processing seller items. The startup will clean and iron clothing, photograph them, estimate their value, and upload the product details onto their platform. If buyers have any issues with purchased clothing, Share2 serves as their point of contact.

China’s growing middle class shells out more than $55 billion USD for luxury products, according to Bain & Company China, but when it comes to non-luxury second-hand goods the market is lukewarm.

Cultural factors play a part. Unlike luxury goods, the savings on second-hand clothing are in the tens and hundreds of RMB, not thousands. For consumers who are part of China’s “bargaining culture”, second-hand clothing holds less appeal.

“Companies like Share2 need to cultivate the Chinese attitude [towards second-hand clothing],” says Mr. Zhu. “This will take time and money. We need to show that buying second-hand clothing isn’t shameful, it’s a very cool lifestyle.”

“It just takes time . The market is not mature enough,” says Bunny Yan, CEO of Squirrelz, a platform for upcycled, recycled, and other eco-friendly products. Ms. Yan says the market is growing, despite cultural barriers. “In the beginning, [our customers] were 80 percent foreigners, 20 percent Chinese, but now it’s 50-50.”

Most of Squirrelz’s customers in China are returning from abroad, highly-educated, or Western-influenced, she says. “We don’t really have the masses from China, the aunties, who have the habit of only going for price.”

Mr Zhu. says marketing second-hand goods specifically to Chinese consumers is the key. The platform is advertised as a money saving tool, that can help users “find cash in your closet”, a stark difference to western platforms touting cool, vintage clothing as their core selling point.

Instead of using the Chinese word for “second-hand”, Share2 opts for the term “old love.” Share2’s website is also deliberately simple, designed to look like the website of a clothing store, not a second-hand goods marketplace. Goods are also categorized by preferential brands, including H&M and Zara, and are only accepted in new or like-new condition.

Currently, the company is self-funded by Mr. Zhu and his team. After launching the mobile version of Share2 next week, the company will start seeking investment.

The number of sales platforms for second-hand goods in China is increasing steadily. In 2014, Secoo, a second-hand luxury goods platform in China, raised $100 million USD in Series D financing. Micro-shop platforms including those owned by Tencent and Alibaba have also provided new avenues for consumers to sell their second-hand goods.

Two of China’s largest matchmaking sites are tying the knot as the country’s tech mergers and acquisitions continue into 2016.

Jiayuan.com International Ltd. announced on Monday that they will be acquired by a subsidiary of competitor Baihe Network Co. in a deal that values the former company at around $250 million USD.

The matchup between Jiayuan and Baihe’s LoveWorld Inc. is expected to close in the first quarter of 2016, after which Jiayuan will be removed from the NASDAQ. Baihe will fund the deal through $23.4 million USD in cash, and private placement of shares or bank loans.

The matchup caps of a year of mergers and acquisitions between Chinese tech companies including giants Didi-Kuaidi, Meituan-Dianping and Ganji-58.com. Jiayuan also joins a host of Chinese tech companies that have made plans to de-list from the U.S. market in 2015. Baihe has previously indicated they intend to list locally.

Jiayuan.com was founded in 2003 by Haiyan Gong, who was completing a Masters degree in Journalism at Fudan University. According to their website, Gong recognized a need for an online dating service for “busy students and young professionals in a rapidly urbanizing China.”

Jiyuan.com reported an average of 5.5 million active user accounts and 1.5 million paying user accounts per month, according to their their 2015 Q2 financial results. Users on Jiayuan.com must pay 2 to 3 RMB ($0.31 to $0.47 USD) per message or pay for a periodic subscription in order to use the service. Other value-added services include virtual gifts, highter search rankings, priority rankings for sent messages and more.

Baihe, founded in 2005 by Mu Yan, raised $240 million USD in a round of Series D funding this past May. The dating site claims to have 90 million users in 80 different cities across China.

Linguang Wu, executive director of Jiayuan, will become co-executive of the new company following the closure of the deal. The new entity has not yet disclosed a name. Jiayuan’s stock jumped almost 6.5 percent following the announcement on Monday, and is currently trading at $7.33 USD.

Twenty-eight of the world’s wealthiest investors are pooling their money to solve climate change.

Bill Gates and Mark Zuckerberg launched the Breakthrough Energy Coalition on Monday, timed to coincide with the U.N Climate Control Conference in Paris. The initiative is dedicated to investing in early-stage companies that will move the world towards zero-carbon energy.

The coalition includes four Chinese partners, Alibaba Chairman Jack Ma, SOHO CEO Zhang Xin, SOHO Chairman Pan Shiyi and founding Managing Parter of Sequoia Capital, Neil Shen.

“The risk-reward balance for early-stage investing in potentially transformative energy systems is unlikely to meet the market tests of traditional angel or VC investors,” states the Breakthrough Energy Coalition on their website.

To overcome this barrier, the Breakthrough Energy Coalition will provide seed, angel, and Series A funding across five different sectors: electricity generation and storage, transportation, industrial use, agriculture, and energy system efficiency.

According to their website, the organization is looking for “outliers.” This includes companies that are developing innovative and new technologies or are enabling existing technologies to be dramatically more efficient, cheaper, and scalable.

Like Bill Gates, who announced at $1 billion USD investment in clean energy technology this past summer, Jack Ma has already made commitments towards environmental solutions.

In an interview with President Barack Obama during this year’s Asia Pacific Economic Cooperation (APEC) summit, Jack Ma said that he had been investing 0.3 of his company’s revenue in programs to encourage young people to solve environmental issues for the past six years.

Jack Ma is also the Chairman of the Board for the The Nature Conservancy’s China Program, which is dedicated to conserving and protecting different habitats in China.

So far, no amount of investment have been disclosed by the Breakthrough Energy Coalition. In addition, the process of how companies and organizations can start pitching to the coalition remains unknown.

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If you ask Alan Feld what Chinese investors should know before investing in Israeli startups, his answer is simple: a trusted, local partner.

“Investing is very much a local business,” he explains.

Feld is the cofounder and managing partner of Vintage Investment Partners, Israel’s only active fund of funds. They manage about $1 billion dollars in funds and discretionary accounts across Israel, the U.S, and Europe. These include secondary funds, or holdings in other private equity and venture capital investments, co-investments in late-stage companies, and a fund of funds.

But Vintage Investment Partners isn’t just about leveraging money. One of the company’s most valuable assets is its massive database. Their proprietary database includes more than 4,000 venture and private equity-backed companies in Israel, the U.S, and Europe, as well as more than 3,000 investors.

“We see about twenty companies a week,” says Feld. He and his team will drive around Israel, where companies are two hours away at most, and meet different entrepreneurs, companies, and investors. Feld also conducts similar meetings in Berlin, London, Stockholm, and other cities outside of Israel.

In doing so, Vintage Investment Partners not only does due diligence on its underlying companies, but also grows its enormous, cross-continental network. The investment firm can then use its database to connect investors, companies, and entrepreneurs to the right contacts for sourcing talent, business partnerships, and more. Offered as a free service, this strengthens and helps the firm expand its network even further.

For Chinese investors interested in Israeli startups, Vintage Investment Partners’ database could prove crucial. Israel is home to thousands of startups – the most startups per capita in the world – which can be challenging to navigate for any investor or firm without local or detailed knowledge about Israel’s startup ecosystem.

Not that that’s stopped Chinese investors. Famous Chinese investor Li Ka Shing and his Horizon Venture fund have invested in 29 Israeli startups and were early investors in Waze, a crowd-sourced navigation app that Google acquired for $1.15 billion in 2013. Alibaba, Baidu, Fosun, Renren, Tencent have also poured investments into Israel’s startup ecosystem, which boasted about $15 billion USD worth in exits last year and eighteen IPOs.

At the same time, Israeli startups are looking to scale into larger markets like China’s. MoovIt, an app that provides different services to public transportation commuters, such as trip planning, service alerts, and more, plans on launching in Hong Kong, Guangzhou, Shanghai, and Beijing. Last year, the social investing platform eToro secured an equity round from Ping An Ventures, a Chinese venture capital firm.

“I want Chinese investors to have a good experience in Israel,” says Feld. “And Israel could be a bit of a bridge. It could be a conduit between China and the U.S, and China and Europe.”

According to Feld, some trends to look out for in Israel’s technology world include cybersecurity, cloud technology, and computer vision startups, such as JustVisual and Cortica.

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“A rich family’s child has to choose one of three options,”says Fuye Wang managing partner at Geek House Capital. “Work in a large company, invest, or inherit the family business.”

Mr. Wang is an example of China’s ‘second generation rich’. His father, Zhongjun Wang, is the founder of Huayi Brothers, one of the largest private-sector film companies in China. Huayi Brothers is backed by Alibaba, Tencent, and CITIC, a state-owned investment company. 

Instead inheriting his father’s business, Mr. Wang decided to take the second option. “I’m too lazy and I know that I can not work hard, so I got into the investment field,” he jokes.

China’s second generation rich have a reputation for extravagance. But how do they see themselves as entrepreneurs?

“There are bad examples of [Chinese “second-generation rich”], but there are good examples, too,” says Lili Luo, founder of TriBeluga.

Ms. Luo is also a wealthy second generation entrepreneur. Her parents run a business that involves various residential and tourism property development projects.

“During my first presentation at my parent’s company, I said that we needed change and improvement,  just like President Obama in his speeches. Company executives were quite shocked by my idea,” she says.

The more senior executives of her parent’s company wouldn’t trust her, they thought she was just another second generation rich kid. However, Ms. Luo now recalls it as a valuable experience. “These challenges ultimately helped me grow. Being aware of misunderstandings and cultural differences help me better understand others.”

Ms. Luo started her own business last year. She is the founder of Tribeluga, a Chinese incubator that helps foreign startups expand to China by leveraging global networks. Based in Seoul, Tribeluga mainly focuses on three areas: environment, health care, and education. So far, the incubator has invested in two startups: VTouch, a remote touch interface solution provider, and N.thing, which makes internet connected smart pots. 

“Other countries still think of China as ‘made in China’. The future will be ‘make for China’,” Ms. Luo says. “China is a full 20% of the world’s population. Any decision, values, or views that we [China] hold will have significant implications for the world.” 

Xianming Zhang’s father Yue Zhang is the founder and CEO of Broad Group, which is currently building a 220-story building, the tallest in the world.

The tower or the ‘Sky City‘ will hold schools, a hospital, 17 helipads, and some 30,000 people, according to Mr. Zhang.

“My dad’s inspiration comes from his imagination and an attempt to build sky cities,” Mr. Zhang says.

Inspired by his father, Mr. Zhang founded a Spatial Research Lab called P8 in Changsha, China. P8 aims to change the horizontal structure of cities by creating vertical living spaces that connect people and communities more easily within the space.

“I wanted to create a vertical community based on the ‘Sky City’ concept. I believe that collaborative making, living, and working is the future,” says Mr. Zhang. The eight-story building is also committed to embracing entrepreneurs, makers, and students who want to explore the maker community in Changsha. 

Image Credit: TechNode

During this year’s record-breaking Single’s Day sales event, Xiaomi posted a project with a one-day limit on Taobao’s crowdfunding platform. The project goal was set to 10 million yuan, and backers who put up one thousand yuan would receive a new Xiaomi phone along with the chance to win a ticket to a Xiaomi press conference.

By midnight the project surpassed its goal by 3559%.

“Projects on Chinese crowdfunding sites aren’t really for crowdfunding,” explains Summer Su, a marketing executive at hardware startup Crazybaby. “They’re all about sales.”

Far from the entrepreneurial spirit fostered through homemade videos and on Kickstarter or Indiegogo, China’s crowdfunding sites are distinctly commercial. Campaigns on China’s biggest platforms are often run by established companies that use the platforms to drive product promotions and sales.

That’s why Chinese startups like Crazybaby only put their product on a Chinese crowdfunding site after running a successful campaign on an international crowdfunding site.

“We’re running a crowdfunding campaign [on Taobao] in order to launch Crazybaby into the domestic market,” says Su.

Crazybaby’s product, a levitating wireless speaker called Mars, has already earned 1277% of its original target, surpassing it by more than 200,000 RMB ($31,000 USD).

More than a thousand units of Mars have already been claimed by Taobao backers and there’s still a month left in the campaign. The startup raised more than $800,000 USD on Indiegogo in January this year, before spending the next seven months refining Mars and prepping it for mass production.

Czurtek, another hardware startup based in Shenzhen, also has a crowdfunding campaign on Indiegogo, as well as a domestic one on JD’s crowdfunding site. They’ve already earned $531, 497 USD on Indiegogo and another 2.5 million RMB ($391,000 USD) on JD.

“The differences between international and domestic crowdfunding platforms are a manifestation of cultural differences,” says Yaxing Liu, a PR representative of Czurtek.

“Chinese backers are more interested in price and deals, whereas backers on international crowdfunding platforms will be interested in the product itself.”

International backers are more likely to express their opinions and make suggestions, she explains. Startups can then perfect their product by incorporating some of the feedback from Indiegogo and Kickstarter users. Backers from international crowdfunding platforms are also more forgiving than their Chinese counterparts, which gives startups room to tweak their product.

“I would especially recommend international crowdfunding sites to hardware startups,” says Rex Chen, the founder of Stary, a Shanghai-based startup that ran a successful crowdfunding campaign on Kickstarter for its electric skateboard.

Releasing new versions of hardware is more time consuming than updating software. If a startup has to delay product shipment by two months because of hardware issues, Kickstarter users are willing to wait, says Chen.

Once the product is ready for production, the startup can then run a crowdfunding campaign in China, which serves as the product’s first release into the domestic market. Stary, having run a successful campaign on Kickstarter, plans on running a crowdfunding campaign in China as well.

Chinese crowdfunding sites are also a way for startups to sell a lot of units at a low price without affecting the long-term value of the product. “If you start selling your product on Taobao, it will always remain at a low price,” says Chen. The benefit of crowdfunding campaigns is that there’s an endpoint – it’s only a temporary deal.

However taking advantage of both international and Chinese crowdfunding platforms comes with its own challenges. Startups like Stary have to navigate cultural differences in order to succeed on both sites.

“Kickstarter loves stories,” Chen says. “Backers will read your story and if they like you as a person, they’ll back you.” That’s why some Chinese startups that succeed on domestic crowdfunding sites will fail on international platforms.

“In China, you market your product by telling users that it’s ‘cheap, excellent, good.’ One, two, three – worth your money.” That kind of messaging isn’t an effective way to move users on Kickstarter and Indiegogo.

Both foreign and Chinese startups also have to overcome logistical hurdles on international and Chinese crowdfunding platforms. Kickstarter, for example, only supports project creators from a limited list of countries, not including China. Project creators on Taobao must have a Taobao account, an Alipay account, and a Chinese national ID.

So far, only sales-focused Chinese crowdfunding platforms have thrived, like e-commerce tycoons JD and Taobao. Both platforms have reported approximately one billion RMB in contributions, as well as the participation of more than 300,000 backers.

However, as China’s middle class grows and online consumers start exploring other ways to engage, there might be hope for something more reminiscent of Kickstarter and Indiegogo. Artable is one example, a donation-based crowdfunding platform for products by artists and designers. Their mission is to “help individuals to be independent and creative with the public.”

Founded in 2013 by Zoe Zhang, the Shanghai-based startup is part of Chinaccelerator and has several thousand designers already on board. Whether or not they can succeed – enough to challenge the existing model of crowdfunding in China – remains to be seen.

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