The decade from 1990 to 1999 marks an important part in China’s history. China’s “Open-door policy” from 1986 to 1990 brought a market economy and the private sector. Many of the post-90s generation (九零后, those born in the 90s)—having been born after much of the recent upheaval and a time when the country had long been accustomed to the one-child policy—have grown into open-minded and confident young adults.

“Post-90s grew up under a stable political environment and enjoyed the fast-growing economy of China. They have not experienced any major social change, unlike the previous post-70s and post-80s. Therefore, this generation is very confident,” Tony Park, the Managing Partner of LB Investment China told TechNode.

Post-90s kids are known to be tech-savvy, as they were the first generation to access the internet starting from childhood. The post-90s’ average age of first internet experience is 7.53 years and the daily usage time is 11.45 hours per person on average in 2014, according to Baidu. They account for 26% of China internet users in 2015 according to CITIC data.

They also became the main consumers of Alibaba’s e-commerce platform Taobao and Tmall; 86.8% post-90s shop online to reduce the cost of clothes and bags. A report from Tmall Global and CBNData show that young buyers (defined as those born after 1988) now account for nearly half of all consumption on Tmall Global.

Now the eldest of post-90s generation, people born in 1990 are 28 years and have already started their career; some have even started their own businesses. There are many successful post-90s founders: Dai Wei, founder and CEO of Ofo, the bike rental company that expanded to three continents. Nie Yunchen, founder and CEO of Heekcaa, a flavored tea company that quickly expanded to main cities in China. Li Jing, 25 years old, is Baidu’s youngest-ever vice president.

We interviewed three post-90s generation founders in Shanghai to see how they are disrupting the traditional market with their own fresh and creative ideas.

Challenging foreign brands in China

Jiang Jun, the founder of gamer glasses brand Zedot, used to play Tencent’s top-grossing game Honour of Kings ten hours every day, for two months whole months. He began to notice that his eyes were inflamed and irritated, but glasses that filter blue light helped to alleviate these symptoms. He found a lot of different brands that do this, but they were mainly from Germany, US, and Japan. He was surprised to find that the design of these glasses wasn’t very pleasing.

“How can those glasses make a good-looking guy like me to an ugly guy? I just couldn’t stand it. I thought I can make surely better design than that one,” Jiang Jun, CEO of Zedot told TechNode.

Jiang Jun hails from a family that has run a glasses business for 20 years, and he knew the industry very well. Jun, a Shanghainese, is from an affluent family and as a market planner at China’s leading media Diyi Caijing (第一财经), had a monthly salary of RMB 20,000 ($3,010). Jun’s six Shanghainese friends, who later joined him, also gave up their monthly salary of up to RMB 30,000 ($4,516) to join the company. Except for one, they are all post-90s.

“If you are Shanghainese, generally speaking, you have a house, you have a car, and your conditions are not so bad. You’re stable, but you don’t want to work for somebody, and you want some achievement,” Jun remarks.

Targeting the gaming market, the team aimed to develop gamer glasses that alleviate digital eyestrain. Yet, Jun wanted an all-new design and wanted a designer who had no knowledge of glasses to take part in the design.

Jiang Jun found a designer who won a Reddot design award to come up with Zedot’s design. Their glasses have a small space near the lens that holds water so gamers can keep their eyes moist during long sessions.

The market is big. There are nearly 560 million gamers in China and 36% of them spend money on games, according to Newzoo’s 2016 data.

To sell glasses for RMB 399, Jiang is collaborating with gaming platforms in two ways. First, he started a top-tier computer supply distributor Taidu, known for their futuristic computer equipment. Taidu is the exclusive distributor, allowing Jian to focus on product development. Second, he found marketing channels such as gaming and game live streaming companies to raise awareness of the glasses and their benefits.

“Right now it’s mostly international brands controlling the Chinese consumer market, and there are not many Chinese brand products,” Jun said. “I want to encourage more Chinese people to start their company in any sector, from the internet to food and beverage. Any traditional business needs post-90s generation’s new way of thinking.”

Jun also gave advice to those who are currently working in a company and getting ready to start their own business on the side, just like him.

“To be a good founder, you should be a good boss and co-worker in your current company, then you start your thing. If you are not doing a good job in your current company, and start your business, then there will be a lot of problems,” Jiang Jun says. “There is a Chinese saying ‘If you cannot organize your home, how can you go and think about the rest of the world (一屋不扫，何以扫天下)’. If your co-workers and boss all like you and respect you, then you can go start, because in that network, there is a lot of opportunities and they can support you.”

Challenging materialism over experience

Can you imagine Chinese tourists spending more than $10,000 overseas, just to have military training for three days?  This is serious business for a startup founded by 27-year old Prescilla Li.

“Chinese travelers are experiencing a shortage of travel destinations. Apart from polar expeditions, traveling overseas by car, and purchasing artworks in Europe, what can you imagine?” Prescilla Li, CEO and co-founder of The Global Extreme Players Club says.

Started in August in 2015, The Global Extreme Players Club is a travel startup specializing in extreme sports and military experience at sea, air, and land. Their customers are willing to pay $10,000 and above to spend on trips, ranging from 3 days to 3 months, to try out global military experience, hunting, extreme sports and flights to test their courage and try their limits.

She says that her customers range from post-90s to older, mostly coming with friends, sometimes with their family members. And these aren’t the types that boast on WeChat moments, preferring to share with their inner circle instead. They include investors and high-net-worth entrepreneurs from China. Now the most trending spot is Russia and Ukraine, and where their clients ride tanks, planes, and submarines.

“Chinese people do have kind of ideal thoughts and longing for military culture,” Prescilla notes. “We had a young entrepreneur client who could not face life after going through family’s misfortune. We took him on one of our trips and every day we see him changing until he had a major breakthrough. When we face the thorny situation, we are no longer pessimistic, and this inspires us.”

Born in Beijing, Prescilla Li was a normal travel tour guide, and she used to lead her guests to go golfing, fishing and sightseeing. As she kept doing the job for two years, she found that her customers had special needs more something more adventurous.

After traveling more than 20 countries and longtime contemplation of starting her business, Prescilla and her co-founder, who also loved extreme sports, decided to start the club.

“Our first destination was Mexico. When we set up new operations, we first conduct surveys with local people to ask what they think is the most valuable adventure they can do. Then we approach the local military. After signing a contract with the local military, they receive the first group,” she says.

The Chinese company signed a service agency partners with a French company and currently, French tourists are also using their resources to enjoy the same experience.

Challenging male dominance

The number of Chinese returning after getting their degree (海归, haigui, a play on the word for sea turtle) is increasing rapidly. According to Ministry of Education, there were 2.5 million Chinese students who had studied abroad coming back to China. 76.4% of haigui started their business in China from 2015.

After getting a double degree in mathematics and statistics from the University of Toronto, Angela Wang came back to China and co-founded Micro Capital, a cross-border venture capital platform investing and supporting the pioneering projects in big data and its verticals. With outstanding investment performance, including Wuxi Bing Jian Technology, they made 6x ROI.

“We made a huge financial return. But, helping entrepreneurs was not enough for me. I loved and admired entrepreneurs so much that I wanted to become one of them. So I decided to start a startup myself,” Angela Wang, CFO and founder of RiverPay told TechNode.

Passionate about numbers, she found a market in North American overseas merchants. With the number of Chinese tourists to the United States increasing every year, overseas merchants need to offer Chinese mobile payment options. A whopping 2.97 million Chinese tourists traveled to the US in 2016, spending a total of $33 billion, according to a report compiled by the National Travel and Tourism Office (NTTO).

“North America’s payment lags far behind that of the cashless society in China. Our target was a North American company that has Chinese as their main consumer base, who had pain points of providing Chinese mobile payment options,” Angela said.

“Being a VC is easy, you don’t have to try cold calls. The good companies come to you. Being a VC is not good for young people. You shouldn’t find comfort when you’re young, you should find discomfort,” Angela says. “Starting a company is a much harder job than doing VC, because it’s actually making a change and you are making things happen. It’s more challenging but more interesting.”

RiverPay slowly expanded to different cities in US and Canada and is currently cooperating with thousands of high-end merchants in North America, including Holt Renfrew, one of the largest luxury chain stores in the world, Harry Rosen, Canada’s top-end menswear, and hundreds of other well-known boutiques including Tiffany, Van Cleef & Arpels, Chloe, Balenciaga, Givenchy, Porsche, BMW, and UPS. The company is currently profitable by charging service fees to businesses that use their Alipay and WeChatPay payment solutions.

“We hire business development teams in more than 20 cities, including LA, New York 5th Avenue, Toronto, Vancouver, Saipan, Las Vegas and Hawaii,” Angela says.

The fintech company’s strength lies in their self-developed cash register integration technology that can quickly dock with dozens of mainstream business ERP system and is currently patent pending. To offer Chinese mobile payment options in the region, RiverPay follows compliance requirements from U.S. and Canada regulators, as well as the payment networks including Alipay and WeChatPay. They also formed their own big data industry chain, to provide precision marketing services to North American businesses.

“We hope that in the next five years, we will thoroughly subvert the payment industry in North America and transform the status quo of Chinese cross-border payments. In the past when we talk about technology, we used to say ‘Copy from USA’. Now we are doing ‘Copy from China’,” Angela added.

The female co-founder also wants to change the trend of male entrepreneurs dominating the fintech and investment business arena.

“We need more female CEO leadership in fintech and VC. It’s currently 80% male dominant. We need more woman. Male has the tendency to be logical, while female is more attentive to details. Female executives are more likely to pay attention to employee’s emotions, and put importance on human-oriented rather than working-oriented atmosphere,” she says.

Post-90s will be the driving force of China’s future

Brought up in a more affluent environment than their previous generations, post-90s come with new consumer’s view, seeking more value in product and service, such as better design, new experience, and convenience. They also had working experience in the traditional industry and wanted to shake up the status quo in their own lives and in the market.

The post-90s in China are expected to reach 31.3% by 2050 according to data from the United Nations, meaning that post-90s will be the driving force of China’s future development and consumption. Keep your eye on this generation, and get ready to be challenged by them, as they might be relevant for your future customer or your future employee or even your future boss.

The phrase “Sluggish sales of…(滞销)” and a picture of an unfortunate old man making poor sales (滞销大爷) of its local produce have gone viral. The Beijing Youth Daily claims that a handful of online marketplace merchants are abusing his dramatic face expression that arouse people’s empathy in an attempt to increase sales.

Recently, a statement about improper marketing of “sluggish sales of apple from Linyi county (临猗苹果滞销)” issued by the Linfen County government in Shanxi Province, says that several e-commerce companies have abused “sluggish sales of apple from Linyi county” and “unfortunate old man making poor sales.” According to the notice, this has caused a serious impact on the local brand image of the fruit industry, and the marketing content has exaggerated many facts.

In the WeChat public account and e-commerce platform, there are still merchants who use “sluggish sales of…” phrase as marketing methods to sell bamboo shoots, pineapples or any other local produce in order to create sympathy, based on traditional Chinese Confucian culture of younger people respecting older generation and looking after them. Many of the posters used by merchants have a pictures of the same old man, infringing portrait rights. This old man is also known as the name of “sluggish sale old man (滞销大爷)” online.

When the reporter of Beijing Youth Daily contacted the Yucheng County government, where merchants promote that there are sluggish sales of apples, government officials said that there are no cases of unsalable agricultural products this year.

“This is a marketing method and has an exaggerated marketing component,” Dasha River Town government officials stated. They also said that there were unsalable agricultural products last year, but at the moment they should already have completed inventory processing. Even if there are still apples left, they do not recommend buying them.

Luckin Coffee (瑞幸咖啡), a new coffee brand the “new retail professional coffeeshop operator”, has announced that it now opened in 13 cities, 400 stores, served 1.3 million customers with 5 million cups of coffee after 4 months of soft launch, TMT Post is reporting.

The CEO of Luckin Coffee, Qian Zhiya (钱治亚), is the former COO of UCAR (神州优车). The new coffee company has attracted RMB 1 billion ($156 million) in funding to spend on subsidies to attract new customers to compete against Starbucks.

“Why is there only 4 to 5 cups of coffee per capita consumption in mainland China compared to 750 in Europe, 400 in the United States, and 200 per capita coffee consumption in Japan and South Korea?” Qian said at the announcement. She attributed it to the two major pain points: high prices and inconvenience of purchasing a cup of coffee.

Hear more: China Tech Talk 46: Internet business models disrupt China’s coffee market: Luckin Coffee

From last December, Luckin Coffee has been poaching staffs from Starbucks, by attracting them with three times higher salary in the same position, according to Beijing Business Today. Luckin Coffee posted hundreds of job ad for part-time workers and baristas, followed by various types of technical personnel and functional operations personnel. The salary of some senior executives has reached RMB 15,000-22,000 ($2,352 ~ 3,450) per month; in terms of recruitment regions, the top recruiters are mostly first-tier cities such as Beijing, Shanghai, Tianjin, and Guangzhou. Apart from its physical stores, the coffee company delivers coffee to customers with the help of Didi, Meituan, and Shunfeng.

Starbucks is still the top player in China enjoying the ever growing coffee market. There are now more than 3,200 stores across 139 cities employing 40,000 people and serving more than 6 million customers every week. In order localize its digital strategy, the coffee giant has opened Starbucks Roastery last year with a matching AR game and introduced WeChat gift card mini program and new website solely for the Chinese market. 

Chinese police have used facial recognition to identify and capture two fugitives at two different Jacky Cheung (张学友) performances (in Chinese), one in Zhangzhou, Fujian Province in May and one in Nanchang, Jiangxi Province in April. Jacky Cheung is a Hong Kong celebrity, once called Hong Kong’s “God of Songs” and grouped with other celebrities such as Andy Lau and Aaron Kwok.

In both cases, the fugitives’ faces were caught during the security check and were later apprehended by local police. These two cases follow Chinese police using facial recognition technology to catch an escaped criminal who was traveling to Wuzhen, using Baidu-made face-recognition cameras installed across the town last October.

Read more: A year in constant review: China’s surveillance breakthroughs in 2017

China is now using facial recognition technology more and more in crowded areas such as concert halls, airports and even along the streets of tourist attractions. The Chinese government has been working on implementing a national system that could use surveillance cameras to identify any one of China’s 1.3 billion people within 3 seconds and with at least 88% accuracy since 2015.

Hundreds of unlocked ofo rental bicycles have been found buried under construction waste in Chengdu. The bikes were in miserable conditions with deformed tires, broken chains, and damaged seats, but were fairly new, produced as early as March this year. The incident was reported to Chengdu Wuhou Police and the police is investigating, Chinese media The Cover is reporting.

“In April, I used the back-end software to check the use of bicycles in the corresponding area as usual,” Chen Long, operations director of ofo in Chengdu, said. When he found that there was a particularly large number of bicycles in the same location, all in silent mode, meaning that vehicle has not been used for more than three days. The staff sent to the scene found that the bicycles were buried in various positions under construction waste and later noticed at least hundreds of bikes were buried there.

“If it is deliberately damaging rental bicycles, its behavior has been suspected of violating the criminal law,” Zhu Jieping, director of the Taiyi Law (Chengdu) Office said.

Rental bikes are subject to vandalism and bike theft, and case like this threatens bike rental company’s cost management. The unit price of each vehicle ranges from RMB 400-800 ($62~125) to a total of tens of thousands of RMB, according to Chen Long. This is not only the problem inside China, as both Mobike and ofo have been busy launching their service in more than 200 cities around the world spreading the idea of dockless bikes. Ofo’s expansion to Europe, however, was later followed by bike theft, and vandalism in some areas, with its most recent case in Milan, Italy.

TechNode just hosted ChinaBang Awards 2018 in Shanghai and invited the most promising tech startups and investors inside China. (Here’s the full list of award winners.) But how did these companies get to where they are now? We hit up with people from five Chinese companies who won the awards and asked what were their achievements and their competitive edge of winning the turf war.

Best Company of the Year: VIPKID

VIPKID is one of the new-born Chinese unicorns in 2017 in the education space, providing one-on-one online English class to children between the ages of five and twelve. The Beijing-based company hired 40,000 English teachers from North America taking the concept of geek economy and reportedly has 300,000 paying users in China. The teachers on the platform get a wage between $14-22 for a 25-minute class.

Many married women, mainly coming from the east and middle part of US joined the platform, and VIPKID team gave them empowerment and training. In September 2017, a VIPKID teacher lost her job at VIPKID and criticized the company online. VIPKID told TechNode that they hire teacher managers to communicate with its teachers and solve these problems. For example, they organized a VIPKID meeting and seminar in Utah to form a community around hundreds of teachers in the US.

“While teaching English to Chinese kids, these US moms get a better understanding of China. Later, they even have their children learning Chinese through VIPKID’s sister brand Lingo Bus, which has a similar model with Chinese teachers teaching Chinese to foreign kids. The users and teachers are interacting with each other,” a VIPKID insider told TechNode.

Established in 2013, VIPKID launched their product in 2015. Li Kaifu, founder and chief executive officer of Innovation Works and other VCs including Northern Light Venture Capital tried out the product with their child first and later invested in the product. Now the company hires 4,000 employees.

Best Entrepreneurial Service of the Year: 优客工场 UCOMMUNE

URWORK became China’s first co-working unicorn in January 2017, after raising an RMB 400 million ($58 million) Series B at a valuation of 7 billion RMB ($1.02 billion). Later they rebranded their name to UCOMMUNE.

“It’s mainly two things that make us competitive in the market. First, we have expanded to 37 first-tier and second-tier cities around the country, and that way, founders can move around these cities and work. Second, based on our wide network, we can connect companies with our network and provide more services,” Lu Yongfeng, Senior Director of UCOMMUNE told TechNode.

Transportation Service of the Year: 凹凸租车 Atzuche

P2P car lending platform Atzuche allows car owners to rent out their unused cars, and earn money on top of their platform.

“75% of our users rent a car for traveling and the rest of them use it for business use, or just to drive special cars. Brand cars like Subaru and Maserati on our platform are much more affordable than other companies,” Xue Zhaomin, the CMO of Atzuche told TechNode.

Established in May 2013 by Shanghai-born founders, the company expanded to 62 cities in China in five years. Atzuche kept on expanding and raised over RMB 95.5 million ($14.7 million) via JD’s private equity crowdfunding platform JD Dongjia in May 2016, while P2P car lending platforms in China saw its peak in 2015 and later many shut down their service in 2016.

“They later all failed because they invested too much money on marketing so the user experience was so bad. However, we put 70-80% of our resources on operations including car delivery, insurance, and user claims,” he said.

Best Enterprise Service of the Year: TalkingData

TalkingData provides data analysis about their business for Chinese companies like Tencent, Baidu, US companies like Google, Yahoo, and Zynga, and traditional companies like China UnionPay, China Merchants Bank, and CITIC.

“These days, many retail giants are using us. With the OMO (online merge offline) trend, they have to apply data science on the supply chain and store management while channeling their online solution to offline business,” Bao Zhongtie, senior analyst at TalkingData told TechNode. “I have a positive perspective on their growth. After the new retail integration, offline businesses are getting better.”

Most Innovative Company of the Year: 数坤科技 Shukun

Shukun Technology uses artificial intelligence technology to improve the diagnostic experience in hospitals. It combines expert intelligence and machine intelligence to increase the level and efficiency of medical service for both doctors and patients.

The founder and CEO, Anne Ma, was formerly at IBM with more than 10 years of research experience in AI technology improving healthcare. She later started Shukun with other founding team members who hail from IBM Waston, GE Health, and Alibaba. The Beijing-based team is in the process of developing AI Doctor and is building a business model on top of it. Their product CoronaryDoc is a first-in-class AI product that diagnoses heart disease and is going through clinical trials.

“By 2018, there were over 100 companies in medical AI sector in China. It’s making continuous significant progress in more and more disease diagnosis even though there are still challenges from government regulations. It is welcomed by first-line doctors because it improves efficiency and effectiveness of diagnosis,” Ma said.

Outbound Startup of the Year: 惠租车 Huizuche

Huizuche provides car rental service for online travel agencies on Ctrip and Didi’s international platform in the US and Europe as well as airport pickup service on the China Eastern airline app.

“The competitive advantage we have is that we allow users to compare the price, and provide cheaper services than other players. We see the trend of 20% of travelers going to other countries and they want to drive the car by themselves,” Huang Haoming, CEO and founder of Huizuche told TechNode.

“Our customers have different needs depending on the country they visit. Tourists visiting North America like to drive by themselves while those visiting Southeast Asia want to hire a local driver instead,” he said.

Huang says that most of Huizuche customers are visiting the US, followed by Germany where they also rent cars. Next is Thailand where users usually rent a car with a local driver accompanied by a Chinese translator. In Japan and South Korea, the company has a pool of Chinese drivers.

“When entering a new market, we first find global car rental companies like Hertz and establish a partnership, then we upgrade the product together. If a fleet of drivers is living in an overseas country, they can download the app and join the platform,” Huang remarked.

Currently, the Shanghai-based company is operating in 30 countries where it is only providing car rental service. However, they aim to go further into hotel and flight booking.

Chinese bike rental companies Mobike and ofo expanded to more than 30 countries last year. While attending the SeedStars Summit 2018 in Lausane, Switzerland, we asked people from 5 different countries what they think about Chinese bike rental startups’ expansion into their home countries.

Recent data from Cheetah shows that China’s active users of bike rental service increased six fold in 2017. In China, ofo ranked number 1, Mobike came second, dominating 90% of the Chinese market, and Hello Bike is in third place. Didi also just launched their rental bikes in Chengdu and Shenzhen.

Cheetah Mobile is optimistic about bike rental companies’ global expansion, predicting that the number of bike rental users in the world will increase to 306 million in 2019 and there will be 5 to 10 times more room for expansion in the overseas market in the next 2 years.

In Europe, many cities tried to roll out docked bike sharing, as “dockless bike-share companies” launched in Europe in 2017.

Last August, ofo said it planned to operate 6,000 shared bikes in Bangkok by the end of September. However, when we interviewed one investor from Thailand whether he had tried ofo in Bangkok, he said he has never seen ofo bikes in Bangkok.

“Bangkok doesn’t have bike lanes, so it’s not so safe for bicycles to pass. We mostly commute to work with cars, or maybe train,” he said.

Netherlands

Mobike officially announced its launch in Rotterdam, the country’s second-largest city, last November, after a successful trial period in the Netherlands. They couldn’t enter Amsterdam, the capital since the city decided in August to temporarily clear up all sharing bikes, as the bikes occupied the city’s scarce public space.

In January this year, Mobike and nine other dockless bike-share companies agreed to work together on API integration, excluding Ofo and oBike.

David Loriggiola

Everybody owns a bike in Amsterdam, even more than one. People would rather rent a car. So, the idea of renting bikes could work for tourists. I rented a car twice recently, and I think a car sharing model has a better market fit. I haven’t seen Mobikes in Amersterdam.

Germany

Mobike kicked off its operations in Berlin, Germany in November 2017, meeting its goal of expanding to 200 cities globally by the end of 2017. After other bike rental companies also launched in German cities, transport authorities in Munich and Frankfurt have limited the maximum number of bikes to be left at particular public locations, while Cologne has introduced designated parking zones for bikes.

Mobike’s arch rival Ofo is hiring people in Germany right now.

Julian Daum, editor at Business Punk

There’s a grey [Deezer] and a yellow [oBike] bike startup with bike stands, where you can put them. There’s a debate around these bike rental startups. Everybody’s hating them. Because they are standing around, thrown everywhere, but nobody’s picking them up. Berlin is a bike stealing hotspot. You cannot let it stand there for two minutes, so it makes sense to use bike rental startups. But I prefer racing bikes, especially from the 70s. Rental bikes are not very fast. Besides, everyone I know owns a bike. I don’t see any people driving around on rental bikes. But if there’s space in the local market, why not? Someone might be needing a bike or a car.

[Bike robbers] have specialized gear to break the locks, so some people use two locks with different lock systems since not many robbers carry gear to break two kinds. One of the reasons for robbing bikes is because there is a big second-hand bike market. They deconstruct the bike, put the parts together differently and resell. A lot of them go to Poland. In Germany, we use car-sharing companies. There are two moped–little electric scooter sharing companies–Emmy and Coup.

France

Paris has three bike rental players including, Singapore’s oBike, with about 1,800 grey-orange bikes, and two major Chinese firms: Ofo, with about 1,000 yellow bikes, and Mobike, with several thousand orange bikes.

Stefan Himmelstoss, head of scouting at tire company Continental

I have seen Mobike and ofo in Paris. The problem with it was the vandalism and it doesn’t make a good picture in the city. Expanding to Copenhagen and Netherlands would make more sense in general. Bike sharing models in Europe were adopted because of its traction gained in Asia.

BMW is running electric scooter business in Paris and Berlin has electronic scooters for inner city transport. So people there don’t need to own the transport.

Co-pace is the startup program of Continental. Our main purpose of launching co-pace is to help mature enough companies and to advance with them. In products, maybe we want the companies to generate more stream of revenues in various ways. Investment is only one part. Working together and understanding each other is much more important. Continental’s co-pace is looking for startups in mobility that is reducing the communication problem. We are looking for startups who are available in data analytics, has knowhow upfront and how that will work. For example, we can take away the cars and replace them with shuttles. This needs a mixture of intelligently and efficiently working transportation.

Italy

Italy was the second European city that Mobike expanded to, following the UK. The a fleet of orange bikes were launched in both Florence and Milan last July, followed by ofo’s yellow bikes. Mobike charges €0.30 cents for the first 30 minutes, then €0.50 for each additional 30-minute period. Ofo charges are lower — starting at €0.20 cents for the first half hour, €0.30 for the next and €5 for a full day pass.

Italy is also seeing bike theft and vandalism. The police in the Quarto Oggiaro district in Milan used Ofo bikes’ geolocation to find 20 bikes locked within a private residence.

Loris Lanzellotti, co-founder and CEO of BoostHeroes

BoostHeroes is a venture capital company with a portfolio of 55 companies with a sector-agnostic view. I invested in Hong Kong-based bike rental startup GoBee bike. GoBee bike was started by a French CEO in February 2017. GoBee bike expanded to Rome, Florence, Turin in Italy and Paris, Lille in France, since the founder of GoBee had major contacts in those cities. However, they encountered vandalism and theft, and the service didn’t work out. The rate of the bikes stolen or thrown away was higher than expected in their business plan. In February, they shut down the operation in Paris.

In some cities, they tested the model earlier than Mobike and ofo. GoBee bike didn’t launch in Milan as there were more ofo bikes.

Mobike and ofo are doing pretty well in Europe. Many are complaining about their service. I’m not sure if they’ve reached break-even point or not. Education of customers is necessary. You don’t want to be the first company to launch, because the bikes will be subject to vandalism and theft, and you don’t want to be the first one to make mistakes in the market.

Note: On April 13th, SCMP reported that ofo plans to take over the operations of Hong Kong-based GoBee Bike. 

Singapore

Singapore is one of the first countries that ofo and Mobike have expanded to, in early 2017. We previously reported that ofo and Mobike aren’t doing so well in Singapore due to its local player oBike.

Stanley Chia, co-founder and COO of Cialfo

I use Mobike in Singapore, and I like it. In Singapore, you can link your credit card to Mobike and pay. It’s helpful. But it’s more useful in China, because of the number and easy access to bikes. But in Singapore, there are much fewer bikes.

These bikes, however, make streets messy. In China, it’s acceptable to some extent. They are hiring people to tidy up the streets. In Singapore, the rules are much stricter. Users are expected to park the bikes in the parking zone. So it’s quite inconvenient because you can only pick up a bike from where it’s parked properly. From both perspectives, it’s less accessible, and not easy because there aren’t many bikes. On the other hand, it cost too much to keep it organized since we don’t have many parking places. So it’s hard to make it more organized in Singapore.

In Singapore, we normally use MRT and bus. Lazy people like me use a taxi. I reached certain income range to own a car, but it’s too expensive. So using taxi costs less for me. I use taxi-hailing apps like Grab taxi.

I think the idea of ofo and Mobike is not that innovative, there were such ideas before. Mobike and ofo could bring it to volume for the masses, and make wide use of it. Acceptance of such innovation in the community is impressive. So it’s more about the community who are open to change and innovation. When it comes to innovation, in a big city like Singapore there is an obvious difficulty of implementing it.

Huoshan (火山小视频), the short video platform backed by Toutiao, has temporarily shut down the city channel (同城频道) to clean up the vulgar content. It is still unclear how long the channel will be offline, Chinese media TechWeb is reporting. 

A week ago China’s media regulator, the State Administration of Radio and Television and China Central Television criticized two short videos apps, Huoshan Short Video (火山小视频) and Kuaishou (快手), for displaying vulgar content. These apps disappeared in Android stores the following day but remain accessible in the Apple App Store.

Huoshan said that the current main page video page has undergone a comprehensive clean up, and will strictly follow the requirements from the regulatory authorities to further improve the standard during the rectification period, and conduct comprehensive cleaning up of existing and past contents on the platform.

At the same time, the Huoshan has now created a “Hello! New Age (你好！新时代)” topic on the recommendation site, focusing on “positive energy content” such as Chinese students wearing school uniform and doing sports together. It also features authorized content and positive energy video channel on the top.

Huoshan said that in the future, it will comprehensively increase the auditing standards, increase the intensity of content review, and check any suspected content. If there are any violations, it will shut down its uploading function and take permanent measures, and will not tolerate it.

On April 4, the State Cyber Information Office interviewed Kuaishou and the relevant person in charge of the Jinri Toutiao’s Huoshan and made serious crackdown, ordering a full clean up of its content. On April 6, the Huoshan short video announced that it will implement various management requirements one by one, in-depth self-inspection and self-correction, and establish correct values internally and externally. On April 7, Huoshan closed all accounts (in Chinese) of underage users.

Huoshan is one of the top four short video platforms, along with Kuaishou, Douyin, and Watermelon and was among the Spring Festival’s top 5 apps based.

Pony Ma, chairman and founder of Tencent, said that the Tencent Blockchain (腾讯区块链, also called as TrustSQL) will be used in medical treatment so that prescription cannot be tampered with, Chinese media Tencent Technology is reporting. 

He also said that the internet behemoth has already partnered with Chinese city Liuzhou and Guangxi Province to enable the scheme at 2018 China “Internet +” digital economic summit held in Chongqing.

“Tencent has tested the first ‘out-of-hospital prescription circulation’ service to cities like Guangxi and Liuzhou based on the WeChat’s hospital reservation service and payment functions. They have prescribed prescriptions in hospitals, purchased drugs outside the hospital, and even sent medicines to their homes. They also connected planning committee, hospitals, and pharmaceutical companies. Here we are using blockchain technology so that prescription cannot be tampered with, and we are also considering to promote the application of this technology,” Ma said.

Read more: How Tencent’s medical ecosystem is shaping the future of China’s healthcare

At the summit, Tencent also officially launched “Tencent blockchain + supply chain financial solutions” to improve the financing dilemma of small and medium-sized enterprises and help upgrade local industries using blockchain technology and operational resources. The company said that it will increase investment in supply chain finance in 2018.

At present, the Tencent blockchain has been implemented in areas like supply chain finance, medical care, digital assets, logistics information, legal deposit protection, and finding missing child.

Tencent’s blockchain product TrustSQL passed the authorization of China Information Technology Institute and rolled out BaaS service (in Chinese) in November 2017. One month later Baidu followed Tencent’s step by launching its own BaaS blockchain open platform. Other Chinese companies started crypto pet bandwagon, including Baidu’s cryptodoggies, Netease‘s “Lucky Cat(招财猫)”, Xiaomi’s “Cryptorabbit (加密兔)”, and crypto alpacas (加密羊驼).

On the evening of April 12, there was a major revision to the WeChat public account backend. Content editors on the platform can optimize video, audio, photo publishing to improve their followers’ content reading efficiency, Chinese media Sohu is reporting. 

Currently, in the content management (素材管理) menu on the backend of WeChat public account, WeChat content editors can only add text content. With the revision, now when users click on “+” at the end of the list, they directly add five different formats of content: “graphics and text (图文消息)”. “video (视频消息),” “audio (音频消息),” “picture (图片消息),” or “reproduced (转载).”

“This is the first time that the official account platform (公众平台) has transformed message types. It has changed from native to H5 to facilitate interaction and better disseminate content. We want everybody to experience it first, and can give us feedback any time,” a Tencent spokesperson told TechNode.

The new version supports the insertion of video, audio, or graphic content independently. The titles of individual audio, video, and pictures must be consistent with the material and is limited to 140 words.

After the revision, followers on WeChat public account can better distinguish the video, audio or picture content, which could improve the user experience on content consumption.

It is worth noting that short video platforms such as Kuaishou, Douyin, and Weishi (微视) which have grown rapidly these years and video platforms such as iQiyi, Youku, and Tencent video are all supported for video publishing.

As “new retail” changes from jargon to oft-used phrase, Tencent has thrown their hat into the ring. However, they don’t plan on opening their own stores (the WeChat pop-up seems to have been exactly that). Rather they want to be the foundation to help the retail industry achieve two goals: the digital upgrade of stores and the optimization of user experience.

“Tencent does not do retail, not even any commerce, but is only the ground level (底层) and gives the opportunity to all partners,” Tencent CEO Pony Ma said (our translation) at a recent conference.

Since Tencent began to cooperate with many offline industries using WeChat as their payment option in 2014, the tech giant has continuously provided tools for retail enterprises through Tencent Cloud, social advertisements, and more recently mini programs to connect people and businesses.

“Wechat payment, whether in retail, catering or other formats, is gradually promoting and cooperating with the entire retail industry in China, including department stores, supermarkets, and convenience stores. There is no one format that does not support WeChat payment,” Bai Zhenjie, Operations Director of WeChat Pay said (our translation) in a press conference at Tencent’s smart unmanned retail industry conference held on March 30.

On top of these open platforms, including Tencent Cloud, social advertisements, and mini programs, Tencent’s smart retail solution is optimized through various tools, big data, and intelligent identification of users, to further help them improve efficiency and optimize user experience.

Tencent also says that in the first stage, the company will cooperate with industry leaders that are large in scale, digitally capable, and resourceful, especially in supermarkets, convenience stores, shopping malls, and chain stores to provide digital solutions. The internet giant also mentioned that some products would be built with retailers, such as databases that protect the data privacy of both parties.

In 2017, Tencent purchased a stake in Super Species, the new retail unit of one of China’s largest supermarket chain operators Yonghui Supermarkets. In January 2018, Tencent invested $604 million in Vipshop, the third largest e-commerce player in China. In the same month, Tencent invested an undisclosed sum in Carrefour supermarkets together with Yonghui Supermarkets. The Shenzhen-based company threw $1.5 billion into Dalian Wanda group, which owns commercial properties, malls, and hotels around China, acquiring 4.12% of the company.

WeChat’s data privacy and monetization

After the recent, Facebook data scandal, Tencent has been very active in assuring their 1 billion users of their privacy.

“Tencent is the first to be a social platform. User privacy is the company’s largest premise. The application is based on everything that does not infringe upon the privacy of users. From the earliest stage of the company’s development, we aimed to protect user privacy. There has been no disclosure of user privacy because it is the company’s decision,” Bai Zhenjie said.

However, Bai did mention that Tencent will work on data analysis based on big data they gathered for their retail partners.

“We will work on data without violating the privacy of users. The secondary use of data is also dependent on our collaboration with our partners. The function requirements and data applications in different industries are not the same. The WeChat platform is the platform for the entire industry, so the development of secondary applications will be based on the needs of the industry in data applications,” he said.

At present, all of the capabilities on the WeChat platform, including open data, are free of charge. Bai said that WeChat is considering whether or not to charge fees in the future.

Tencent’s unmanned store cooperation

At the event, Tencent showcased some retailers in unmanned convenience stores, or vending machines, including EasyGo, Miss Fresh, and CityBox. Three companies were using WeChat payment and mini program to operate their businesses.

EasyGo Convenience store asks customers to first scan the QR code to open the door. The assorted goods in the store all have embedded RFID chips. As a customer walks in, grabs an item, and leaves the store, the storefront scanner reads the RFID chip and sends the bill to the mini program in the customer’s WeChat app. The customer can pay via WeChat and then leave the store.

Tencent believes that integrating their solution with retailers will bring in customers’ data, giving them a massive pool of data.

“10 million Chinese consumer’s data will come out. Currently, it is still a very small amount, and there is a lot of room for growth,” Bai said.

Password before selection

Compared to other startups showcased there, CityBox is unique because it is about as close as you’re going to get in China to AmazonGo’s model: users don’t have to put in a password, they can just pick up the product and leave. Or rather, they need to put in their password before doing anything else.

When a customer opens the CityBox mini program, it asks you to first enter your WeChat payment password. Then, you confirm that you want to open the refrigerator. Customers can then open the door of the refrigerator, and when they pick up a bottle of water and shut the door, the mini program notifies them that a purchase was made.

“We talked to a lot of partners. The first requirement they mentioned was if they can allow customers to make purchase more quickly, without having to type in the WeChat Pay password. We will make the password-free capability into standard products. After the merchant applies for the opening of the password-free function, when the user enters the unmanned store, it will be easy and quick for them to purchase something and deduct it from their account,” Bai Zhenjie said.

The new retail battle is getting more interesting as time goes by. Alibaba and Tencent have different approaches. Alibaba is taking a top-down approach by cooperating with major players. On March 29, Alibaba’s new retail player Hema teamed up with 13 well-known real estate developers to accelerate new retail in China. It’s a massive boost for Hema, since renting such a vast space in a big city is a significant expense for the company. As consumers are visiting department stores less and less, having a frequently visited store is vital for these real estate developers.

Tencent’s WeChat, on the other hand, is taking a bottom-up approach. They are not doing any e-commerce business, and are only providing toolsets for the retailers that let them thrive in the WeChat ecosystem, keeping their expenses low. All the retailers using Tencent ecosystem were small scale: vending machines and unmanned shelves. Currently, 95% of e-commerce companies in China are all integrating mini programs.

Alibaba Cloud, the cloud computing arm of Alibaba Group, announced that it aims to build an IoT network with 10 billion connected devices within the next five years. The announcement was made at this year’s Cloud Computing Conference held in Shenzhen on 28 March 2018.

At the conference, Alibaba’s operating system AliOS also announced a major partnership with NXP Semiconductors N.V., the world’s largest supplier of automotive semiconductors to jointly install automotive infotainment solution in millions of vehicles in China by 2020.

Alibaba’s internet car is one of the main focus of its IoT initiative. AliOS joined hands with SAIC Motor, Dongfeng Peugeot-Citroën Automobile, and Ford Motor to develop internet automobiles. As of today, 500,000 AliOS-powered internet cars have been rolled out. Apart from connected cars, Alibaba Cloud’s IoT solutions have also covered the household, manufacturing, smart city, leveraging its cloud, artificial intelligence (AI) and computing,

Alibaba’s IoT initiative for household started in June last year with Alibaba Cloud Link, an open platform for smart living. For example, individual appliance manufacturers like Midea can link their own products to those of others through this Alibaba Cloud platform, and use Alibaba’s connectivity, device management, and data analytics solutions. On January 2018, Alibaba’s A.I. lab partnered with MediaTek, a Taiwan-based global semiconductor company for to provide a smarter home solution.

It’s been almost one year Alibaba Cloud established its Internet of Things (IoT) business unit. Since April 2017, it partnered with over 200 industry players on its IoT Connectivity Alliance (ICA) to create AliOS Things, an open-source operating system for IoTs with more than 14,000 developers involved. They will also develop edge computing using Alibaba Cloud’s advantages in security, storage, cloud computing and artificial intelligence.

Merchants are accusing food delivery startup Ele.me of forcing to deduct RMB 3 per order for promotion fee for a bid ranking, Tencent News is reporting. 

When food & beverage businesses and Ele.me cooperate, Ele.me deducts 6% of every single order. Adding the RMB 3 to original 6% deduction, it will become money-losing deals for businesses.

“After verification, the problem was about Alipay’s promotion. Our local market managers have put business owner online for the increase his personal performance without confirming the business owner’s decision. With this feedback, we have arranged people to communicate with the involved merchants to communicate and pay for the corresponding losses,” Ele.me’s spokesperson told TechNode.

According to DCCI’s 2017 food delivery startup report, Meituan Waimai was dominating the market with 53.9% market share, followed by Ele.me (29.8%) and Baidu Waimai (13.7%). Despite Ele.me’s merger with Baidu, Meituan still ranks the first in the food takeaway turf war.

According to media reports, the RMB 3 promotion fee is a “promotional bidding” activity for Ele.me. It is used to increase the rankings of merchants on the list of Ele.me app, thereby increasing user traffic and bringing more customers. Ordinary merchants’ rankings are based on several factors such as the merchant’s popularity and sales volume. After paying for the promotion fee, the merchant’s ranking will be higher and ensure more exposure.

“Deducting the promotion fee is against the ethics of the industry. The ultimate victim of the promotion fee is still the consumer. The merchant will also lose trust in the platform in such events. The reputation of the company will be damaged and will lose both customers and merchants,” Chen Liteng, an assistant analyst with the O2O Department of Life Services at the China Electronic Commerce Research Center said

Chinese short video platform such as Douyin and Kuaishou are being criticized for featuring video hosts who make and distribute counterfeit products on their videos, Tencent News is reporting.

Some video hosts on platforms such as Douyin, and Kuaishou are forming a black industrial chain: They openly demonstrate the process of homemade lipstick and foundation and then affix brand names, leaving their WeChat account details to receive money to send out goods. In addition to DIY brand-name cosmetics, when users search for keywords such as “luxury” and “prestige watches” on these platforms, they can find plenty of contents that show off fake luxury goods. Some suspected fake product videos even received these platform’s recommendations.

In recent years, the Advertising Law and relevant Internet laws have become increasingly stringent, forcing e-commerce platforms to abide by the rules. For example, a few days before November 11 in 2017—when Chinese shoppers make new records of year-on-year swelling shopping volume—the standing committee of the National People’s Congress introduced new provisions that ban false or misleading advertising about a product’s features, functions or quality, forbid falsifying sales data, user comments and awards.

Seeing how authorities are heavily regulating these e-commerce platforms, the sellers have transformed into “Weishang (微商, WeChat merchant)” and pushed social marketing for product sales. The cosmetics industry is one of the areas that Weishangs are quickly monetizing on their own branded cosmetics. Because of the huge traffic on these platforms, there was also a blind spot for supervision for entertainment and social platforms compared to e-commerce.

Under Advertising Law (广告法), the short video platforms should understand that its commercial nature is a user traffic, and should follow advertisement publishing rules. It is also expected that Bureau of Commerce and Industry will follow up with them in a timely manner.

Douyin stated that it will mark out those video creators advertising fake products based on its system identification, and manual auditing. They also said that they will stop recommending users suspected of counterfeiting or violating other rules on the platform.

Zhang Yiming—CEO of Bytedance an AI-powered content platform and parent to Toutiao—said that the company’s 2018 keyword is globalization at the sixth anniversary of Toutiao. In an interview with Tsinghua University professor and Dean, Zhang revealed their goal to achieve globalization and have more than half of its users from overseas in the next three years (in Chinese).

He believes that the most important thing for a company is to stay young, and this is more important than having a matured company. This is the reason why startups like Douyin (抖音), Wukong(悟空问答), Xigua Video (西瓜视频) started by post-80s can attract post-90s, post-00s or even post-10s, Zhang explains.

“We have to stay young and we should not be willing to take a negative and critical attitude toward new things. There must be some reasons behind bringing new things. We must experience, try, and observe its development,” Zhang Yiming said.

About internet giants BAT and rising giants TMD, Zhang said they have similarities and differences. Zhang said he learned a lot from BAT entrepreneurs. For example, he read a book about Tencent’s history and applied the lessons he learned from the book to Toutiao: Understanding the user experience, focusing on the user, creating value for the user and putting importance to talents. However, there are also unique things about TMD:

First, the entrepreneurial environment is better. Second, it is much easier to do investment, financing, and recruitment. Third, increasing talents are joining Toutiao. Fourth, expand to global earlier. Fifth, they dare to develop new business.

In January, Toutiao bought a 100% stake in Ulpay (合众支付), an online payment agency, and acquired its own online payment license, implying that the company might enter the mobile payment market.

With so many blockchain projects, how can you judge which ones are legitimate? On International Women’s Day, March 8, women in blockchain, including founders and investors, shared their views on the emerging technology at the Bund SOHO3Q in Shanghai. The “Women in Blockchain Forum” was hosted by China Business Events.

The “Women in Blockchain” panel was made up of QJ Wang, Founder and CEO of Queschain, Momo Zhang, Co-founder of DREP Foundation, Andrea Liu, co-founder at Genaro Network, and Ting Peng, Head of China PR at Shivom blockchain project.

How to judge a blockchain project

1. Meet the team

“Do they care about [blockchain], what’s their experience in the field? Secondly, what partnerships do they have? Finally, do the due diligence,” Head of China PR at Shivom, Ting Peng says.

Shivom’s blockchain project gathers genomic sequence data with a blockchain solution. Partnerships with labs and pharmaceutical companies allow donors to have their genome sequenced so that they can own it, share it within the ecosystem, sell it and also get insight about their own health from the system.

Andrea Liu, co-founder of Genaro Network advises entrepreneurs to find out all there is to know about the team: “Blockchain is an open concept. You can find the members on the internet and see what they are doing, look into it, talk to them, read the business report and all the information, and talk to the community.”

Started in January 2017, Genaro Network gives Blockchain developers a one-stop solution to decentralize their applications, deploy smart contracts and store data affordably. The Singapore-based foundation did a token offering in November and received about $14 million in support from its community.

2. Does the project actually solve a real problem?

According to Momo Zhang, co-founder at DREP (Decentralized Reputation System) foundation, blockchain projects that solve actual problems will survive, and profitable foundations will emerge.

“I have seen a lot of projects that have no clear business model or sustainable ecosystem. Instead, they just rely on selling tokens to get cashflow,” Momo said. “Some internet startups cannot make a profit and without feeding off funds either. How can they be sustainable merely with the application of cryptos?”

As for the DREP foundation, they connect reputation value on different internet platforms and achieve user pool sharing. The Singaporean company aims to quantify and monetize reputation value and use it for trading, making investments, and sharing data.

“For instance, if we cooperate with Twitter successfully, each user on Twitter can turn the contribution into wealth and unleash its value by each post or vote. For Twitter, they can encourage high-quality content contributors and reduce malicious user activities,” Momo explained.

Founder and CEO of Queschain, a blockchain-focused venture capital firm, QJ Wang shared two questions to help find a good blockchain company: Is it decentralized? Do the founders understand the technology?

3. Is it decentralized?

Essentially, since the blockchain is a decentralized and public digital ledger that is used to record transactions across many computers, QJ says one needs to ask if the blockchain project is open and decentralized, or is it controlled by the people running the platform.

“If you go to coinmarketcap.com and check the valuation of the cryptocurrency project, you see a lot of companies’ valuation among the top 50 don’t make sense, their token is just too expensive. A lot of tokens are from just a few addresses and you conclude from it, it’s from the team. It’s not traded, meaning they are not out there,” QJ points out. “A lot of companies are not really an open platform.”

QJ gave the example of bandwagon crypto pet games—Baidu’s Cryptodoggies (莱茨狗), Netease’s Lucky Cat (招财猫) and Xiaomi’s Cryptorabbit (加密兔).

“Do they have the transaction ID and specification that are recorded? Cryptokitties are designed by who people who are running the platform. It’s an interesting experiment from the early stage of blockchain but you cannot decide how [the pet will] look. This shows how a centralized asset can decide things,” QJ said.

4. Do the founders understand the technology?

One question that QJ asks is whether the founders have invested in any blockchain projects, or whether they even have blockchain wallets. She points out that many blockchain founders don’t have wallets, which she sees as a problem.

“One of the biggest reasons why people need a wallet before even considering to start a blockchain project is because they need to understand how early-stage and complicated the technology is,” she says. “I remember back in 2015, one wallet was updating every week. The wallet that a user downloaded won’t work unless you update and then sync with the all transactions. It takes hours [to sync] before you do even do one transaction.”

QJ herself was a serial entrepreneur in the blockchain industry. Starting out as the marketing lead in China for Blockchain.info in 2014, QJ was a co-founder of four blockchain companies before starting Queschain.

“At the same time, you would want people to work on this project to have wallets, not just a bitcoin wallet. Only understanding the bitcoin wallet will never evolve into the knowledge of a smart contract, which is where all projects are going. If they don’t even have such experience, and you’d be surprised how few of them actually have, I doubt they will survive.”

How would you inspire teenage girls to get interested in blockchain?

The ratio of Chinese female entrepreneurs is as low as 16%, according to one report by NetEase Cloud and IT Juzi. Blockchain is even more dominated by men than other tech industries, and Momo explains the two reasons why there are more men in the blockchain industry.

“First, the blockchain industry is in the early stage, just like the internet in the early 1990s. Most of the blockchain companies are startups, and females tend not to be as adventurous as men in becoming entrepreneurs. The early blockchain industry is largely started out by programmers and hackers, among whom there are few women,” Momo says.

However, she says that she sees more and more women in blockchain these days. Her company has more than six women in PR and marketing.

“In blockchain we have the concept of consensus. A simple analogy of consensus is that everyone in the network has an equal vote. So no matter whether you are a man or a woman, you will get that vote. And I hope more women join the blockchain industry just for that vote,” Andrea says.

“The blockchain industry is not just about tech. Blockchain requires a lot of talents to be in this field. You have to understand finance, tech, sociology and psychology, and those fields are not only for men. They are for everybody,” Ting says. “In the 21st century, it’s not about having one talent, it’s about having different talents, and passion to be successful in the area. We need to tell women that blockchain is for everybody. If you’re interested in it, why don’t you give it a try?”

Blockchain technology is in full swing. Baidu, Alibaba, and Tencent are all vigorously investing in blockchain technology and Chinese VCs are fishing for blockchain tech companies. What’s more, the Chinese government is also poised to educate Chinese people about this booming technology. However, that doesn’t mean that all blockchain projects are viable.

With a $500 million fund and another RMB fund with the same amount, CreditEase Fintech Investment Fund is investing in fintech companies, mostly participating in B and C rounds.

When CreditEase looks into a fintech startup, it starts with the startup’s geographic location, and whether the market offers multiple exit opportunities. CreditEase says they look for the product market fit and invests in the company after thorough due diligence. The startup should have deep expertise in the finance area and use technology to solve problems in this area. After the investment, the firm helps them grow.

We talked with Anju Patwardhan, Managing Director at CreditEase (宜信) China about CreditEase’s global fintech investment fund, their blockchain fund of funds, ICOs, and global fintech trends.

1. What do you think of recent developments in blockchain?

Investments in crypto currencies don’t align with our long term investment area. However, we like the underlying technology. It still has issues with it, such as scalability, private key storage and retrieval challenges, and regulatory approval.

The biggest challenge is scalability. If you look in to payment space, the global Visa/Mastercard networks can handle about 40,000 ~ 50,000 transactions per second. Ripple network can process 1,500 transactions per second. And blockchain can process about 1,000 transactions every eight minutes, or seven transactions per second. That’s it. You need to get massive scalability before this technology can be used in payment solutions, and there has to be a solution that solves for scale and high volume.

The second problem is the energy consumption. Even at the current volumes of about 1,000 transactions every eight minutes, it consumes more energy than it takes to run the entire Visa network. I was reading in New York Times that if the blockchain could be scaled to reach the transaction number of Visa, the energy requirement will be equivalent of 5,000 nuclear reactors, or the entire energy consumption in the world. And we are only talking about one payment network i.e. Visa, not even Mastercard or WeChat Pay. The technology is exciting, but people don’t realize it doesn’t scale for commercial applications today. We do see there are some applications we like about the blockchain and related technologies, and we are interested in investing the sector in the future if the valuation should be logical.

2. What do you think of China’s AI industry?

If you look at the status closely, in using machine learning, AI, and GPU (Graphic Processing Unit), four years ago the largest user was Yahoo, followed by Baidu and Alipay. And last year it was Tencent. In terms of using AI for big data processing, China is the leader right now.

In AI, we are seeing the use of machine learning for credit scoring and fraud detection. We are starting to see chatbots in conversational AI for fintech using Amazon Echo or using Apple Siri or other similar tools. Many US banks are starting to adopt that. Even in China, many are starting to adopt that. We made an investment in a Singaporean company Active.AI which adopts chatbot customer service and sales. They are now connecting to Whatsapp and WeChat and are already partnering with banks available in eight countries. Other companies use AI for fraud detection and credit scoring purpose.

3. How do you see the global fintech investment overall?

If you see fintech investment, it’s not declining. They are going up YoY. Until 2014, or even 2015, 75% of all fintech investments were happening in B2C payments and marketplace lending sector. There were very little investments happening in other financial services. What has changed in the last two years is that there is less investment going into those two areas and a lot more investment in wealth management, insurance tech, B2B payments, reg tech, capital markets and SME ecosystem. In our portfolio, only 30% is in lending and payments, and 70% is in other areas, including investments in companies such as NAV, Marqeta, Addepar, Ellevest, Trumid, Funding Circle, Upgrade, Fundbox, Fair, and others.

4. Have you seen any successful cases of blockchain technology adopted by financial institutions?

There are many financial institutions doing experiments with blockchain. However, as far as I know, there hasn’t been any really large application of blockchain technology in production because of scalability issues. There are several applications being built on Ethereum too in a private distributed system in areas such as smart contracts.

Other large application of cryptography I‘ve seen is in Estonia. They have put all their national health records into a similar technology. So they have connected consumer, pharmacy, hospital, and doctors. Consumers get to decide which data the doctor gets to see and what they cannot see. They call it blockchain but it is not linked to any currency. It’s a good way to think about it. Some other countries are also thinking of using advanced cryptography but without the crypto-currency link. There are about five to six countries which are exploring related technologies to launch a digital version of their fiat currency. Singapore did a pilot a few months ago.

As for ICOs, I think there are two parts. One is the use of underlying technology to streamline the process, which is good and another is to bypass the security regulations which is not good. Some countries banned ICOs, as it should be regulated. Regulators in countries like the US are going to issue guidance soon.

Chinese ride hailing company DiDi announced on March 19th that the company will raise $1.5 billion in funding using asset-backed securities (ABS), after getting approval from the Shanghai Stock Exchange. ABS is a financial security collateralized by a pool of assets such as loans, leases, credit card debt, royalties or receivables.

This enables DiDi to help partner leasing enterprises raise funds through securitizing their stock assets. Upon completion of the issuance, DiDi’s partner leasing companies will acquire new funding channels and help strengthen general transportation capacities.

Based on DiDi’s business verticals, the program is collateralized by the leasing claims by car leasing enterprises when leasing cars to drivers. DiDi acts as a proxy of the originators, responsible for the coordination of leasing companies, and issues bonds through bundling the underlying assets to the capital market.

The scale of the planned initial issuing is RMB 300 million. The raised funds will be used for new vehicle procurement by the leasing enterprises in order to expand the transportation capacity of DiDi’s platform.

Didi said that its program for an RMB 10 billion ($1.5 billion) shelf offering of a supply chain finance asset-backed security product received a no-objection letter from the Shanghai Stock Exchange (SSE).

DiDi currently has more than 21 million drivers, 450 million passengers, car leasing companies and automobile dealers, delivering more than 25 million rides on a daily basis.

“Using financial tools to serve the physical economy and incorporating modern finance into the industrial system are the general trend of the economic development,” said SSE in a statement, adding, “the issuing of the new transportation supply chain ABS is a key step by the SSE to urge the supply chain finance to serve the physical economy under the leadership of the China Securities Regulatory Commission.”

E-commerce giant Alibaba announced today that it will invest an additional $2 billion in Lazada Group to accelerate the growth plans of Southeast Asia’s largest e-commerce platform and deepen its integration into the Alibaba ecosystem.

This accumulates Alibaba’s total investment in Lazada to $4 billion. Alibaba acquired 51% stake in Lazada in April 2016 with an investment of $1 billion and further increased its stake to 83% with another $1 billion investment in June 2017.

Launched in 2012, Lazada helps more than 145,000 local and international sellers as well as 3,000 brands serving the 560 million consumers in the region through its marketplace platform, offering a wide range of products in categories ranging from consumer electronics to household goods, toys, fashion, sports equipment, and groceries.

Along with funding also came a shuffle in management. Lucy Peng, who currently serves as Lazada’s Chairman and is a co-founder of Alibaba, will assume the additional role of chief executive officer. Lazada founder Max Bittner, who had been its chief executive officer since 2012, will assume the role of senior advisor to Alibaba Group and assist in the transition and future international growth strategies.

“With a young population, high mobile penetration and just 3% of the region’s retail sales currently conducted online, we feel very confident to double down on Southeast Asia. Lazada is well-positioned for the next phase of development of Internet-enabled commerce in this region, and we are excited about the incredible opportunities for super- charged growth,” said Peng.

“Alibaba’s new commitment of capital and resources is good for Lazada and good for the Southeast Asia e-commerce market. I am excited about the future for Lazada and Lazadians and I look forward to continuing to contribute to the success of the business by helping Lucy and Alibaba’s management,” said Bittner.

It’s not only the e-commerce part that Alibaba is interested in the burgeoning region. The tech behemoth had made significant investments in the area over the years. Alibaba Cloud announced this month that it has opened its first data center in Indonesia. In January, Alibaba Cloud launched Malaysia City Brain to help its city traffic, trade and also to grow local startups.

Chinese taxi hailing company Didi’s bike rental service, Didi Bike (青桔单车, meaning green tangerine bike in Chinese), was suspended for one day for not obeying the local law, Chinese media Shenzhen News is reporting. 

Bike rental companies hugely spread out last year, filling the Chinese streets with rental bikes. In order to manage rental bicycles, Shenzhen City Transportation Committee has previously issued the “Implementation Plan for Shenzhen Internet Rental Bicycle Regulatory Management and Renovation Action Plan” (our translation, 深圳市互联网租赁自行车规范管理整治行动实施方案) clearly requiring that, from August 23, 2017, there should be no new shared bicycles put on the streets of Shenzhen.

However, in the early morning of March 17, the Shenzhen government claims Didi illegally placed Didi Bikes. Didi staff were notified by various departments and they were required to immediately remove its bikes. The launch sites included Futian, Baoan, Longhua and other districts, with the number of bikes reaching approximately 20,000 units. Didi’s own-branded bikes Didi Bikes are temporarily shelved, but riders can still rent ofo and Bluegogo bikes in Chengdu and Shenzhen using DiDi app.

“We are in constructive communication with Shenzhen authorities and hopeful of finding a way to serve the city with more convenient and eco-friendly mobility options,” a spokesperson from Didi told TechNode.

Didi Bike was formally launched in Chengdu on January 25 this year, replacing Bluegogo bikes. Didi’s own branded bikes were gradually launched in five cities in China including Chengdu, Dongguan, Foshan, Nanchang, and Hefei. They are second or third-tier cities that has room to grow since first-tier cities are dominated by Mobike and ofo bikes. On January 17, Didi announced that its bicycle rental platform will land in Beijing and Shenzhen, and said that its sponsored Bluegogo will be on the road again.

This is not the first time that Didi received a red card from Shenzhen’s transportation authorities. Previously, Didi launched and operated bicycle rental service in Shenzhen under the name of Bluegogo, and was suspended.

For many employees in the West, if you want to make a business purchase, you can either just use the corporate credit card or just bring in an invoice and file for reimbursement. However, those who work at company registered in China will have to go through the tedious and long process of printing out a fapiao (单位发票, corporate invoice).

Knowing the pain of making reimbursement, some Chinese companies have tackled reimbursement service. Current players include Hongju Technology(红橘科技) and Yikuaibao (易快报).

On March 6th, one-stop business trip and expense management SaaS platform Cloud Helios (汇联易) announced the receipt of RMB 50 million RMB series B financing from its previous investors SBCVC, Blue Lake Capital and Z Capital.

The Shanghai-based startup is a subsidiary of Hand China, an IT consulting firm. Started as a research and development project of Hand China in August 2016, the company landed RMB 30 million Series A in September which was jointly funded by Blue Lake Capital, SBCVC and Hand China. Hand China invested RMB 9 million, with a 51% controlling stake.

The app connects supervisor, finance departments, and staff (reimbursement initiator) to process reimbursement on employee’s business activities related to transportation, accommodation, meals. The app also helps on the enterprise cost budgeting, corporate expense control, employee reimbursement, invoice review, and financial system integration.

So how does it work? The employee can directly input the reimbursement on the mobile phone, then the form is delivered to the supervisor. After approval, the employee can enter the bill submission. Then the finance person can go through financial check-up session. For each payment made by an employee, an automatic reimbursement claim will be generated. The scary thing here is that the supervisor can control the overall reimbursement of employees, and check where the employee spent money on.

In 2017, the company currently has 119 new clients, including internet giants Didi, Ctrip, JD, and Meituan-Dazhong Dianping (aka Xinmeida). In the past 19 months, the company handled 300,000 reimbursement documents in total, of which the plane ticket amount exceeded RMB 200 million. Huilianyi, the core of the product, connects enterprise consumption with the internal and external reimbursement processes.

Based on an SaaS model, client companies can register their employees on the app by paying annual subscription fee of RMB 216 per account. Only when the company has registered its employees, one can register in an app. In other words, a user cannot register individually, and his/her company has to register them, then let their employees login. The company also provides other financial office automation systems and receives a service fee.

The service is customized to each company since all the companies have different spending patterns and use different services. For example, a client company might use Ctrip and Didi, while other client company doesn’t. So Cloud Helios sends a person to the client company to talk to their finance person to optimize product features and details to make a customized reimbursed SaaS product for the client company. The B2B company currently has 130 people, of which 50 people are dedicated to this customization. While it takes six months to complete this process for their competitors, CEO Zhang Changzheng said it takes 1-2 months on average.

“We want apply forefront technologies such as business intelligence forecasting, big data mining and AI to enterprise business trip and reimbursement scenarios,” Zhang remarked.

After Baidu’s financial blockchain lab released the blockchain pet Cryptodoggies (莱茨狗), Netease also launched a similar product “Lucky Cat (招财猫).” Now, Xiaomi seems to have to use the same form of blockchain layout. It is reported that Xiaomi’s blockchain product is called “Cryptorabbit (加密兔)” and is currently being tested, Chinese media iFeng is reporting. Xiaomi chose a rabbit since their mascot, “Mitu (米兔, meaning Rice Rabbit),” is a rabbit.

According to the “User Services Agreement,” Cryptorabbit is a digital pet service provided by Xiaomi based on the blockchain and feed on digital grain “rice grain (米粒)” in the game.

Crypto-collectibles show the potential of future gaming because, unlike traditional games, which focus on recreational entertainment, it is highly opportunistic and attracts players into the game. With blockchain technology, the platform guarantees that every pet is unique in the world, cannot be copied and cannot be destroyed.

Cryptokitties was the first digital game based on Ethereum blockchain technology launched by a Vancouver-based innovation studio and attracted a lot of attention from users and reached a valuation of tens of millions of dollars (in Chinese). Showing the huge market potential and profitability of digital pets, this grabbed the attention of Chinese startups started crypto pet bandwagon, including cryptodoggies and crypto alpacas (加密羊驼).

Those who join these crypto pet bandwagon should be cautious not to step the domestic policy red line, however. Netease launched “Lucky Cat(招财猫)”, taking its name from the figurine cat usually found at the entrance of shops. After a period of internal beta testing, it still hasn’t been released to the public.  Some analysts pointed out that this is maybe because Lucky Cat supports digital currency payment, touching the domestic policy red line.

170 million people use WeChat’s mini program every day, and WeChat is pushing efforts to upgrade mini program and mini game features to help businesses utilizing mini program actually monetize.

As users pull down their chat list, they can see recently used mini program and mini games. Recently, WeChat was found to be experimenting a new function, IThome is reporting.

A new feature on WeChat called “Nonstop Features (功能直达, our translation) ” is going through a beta test. When a user starts WeChat’s search function, if the keyword is related to a certain mini program, then the function will be displayed directly in the search.

“The WeChat ‘Nonstop Feature’ is going through experimentation. We have invited some developers who configure the relevant capabilities based on our guidelines. After the configuration is complete, when users search keywords in the ‘Discover Mini Program,’ they can directly reach the corresponding function. The capacity is currently not officially released,” WeChat told TechNode.

This is important for mini program developers and business owners who use mini program, because this creates a new search engine market for WeChat, and add importance to following WeChat’s mini  program guidelines. Just like how keyword search on Baidu made the company a search engine giant, with WeChat’s “Nonstop Feature (功能直达)”, WeChat will possess strong search results offering the mini program that specifically solves users’ problems.

In other words, WeChat can give you a direct recommendation inside the relevant mini program so that you can use it directly.

For example, if users search kuaidi (courier, 快递), they will get a list of functions like Track Packages, Call a courier, My past packages, and Address management which link to related WeChat mini programs.

Also, at the bottom of the search page, the mini programs that the users have used in the past as well as recommended ones are shown. If users search delicious food, a list of highly reputed restaurants is shown with their price range and rankings.

To celebrate National Tree Planting Day (植树节) on March 12, Ant Financial CEO Jing Xiandong said on March 11 that Ant Forest will invest RMB 500 million ($79 million) in ecological protection by the end of 2018, Chinese media TechWeb is reporting.

At present, there are more than 300 million Ant Forest users. If more than 300 million users continue their efforts for the next five years, Ant Forest says they will plant 500 million actual trees. This will be reforesting 6 million mu (90 hectares), or approximately equal to five times the land size of the New York City.

Launched in September 2017, Ant Forest is a feature in the Alipay app. Users can grow a virtual tree by doing environmentally friendly things such as walking, using public transportation, asking for electronic invoice rather than paper invoice, and recording their own carbon emissions. After the virtual tree is fully grown, Ant Financial matches the user with charity partners such as the China Green Foundation, Elion Foundation, SEE Conversation, and The Paradise International Foundation so that they can plant a real tree.

When users open Alipay app, they can click “Ant Forest” banner to access their virtual tree. At the bottom of the tree, there are a ranking of friends based on their saved carbon emission shown in kg.

By the end of 2017, Ant Forest had accumulated and maintained 13.14 million real trees and guarded 12111 mu or 181,665 hectares of protected land, which were located in Alashan, Ordos and Bayan Nur in Inner Mongolia, and Wuwei area in Gansu province.

Ant Forest users can access satellite imagery to see the changes made by the reforesting and the newly planted saplings forming a row of sloping lines.

According to the plan announced by the State Forestry Administration, China’s large-scale land-based greening efforts will strive to complete afforestation by 1.5 billion hectares in 2018. Ant Forest said that they will participate in planting 15 million hectares of forestry each year, which is equivalent to 1% of the domestic forest land.

Didi announced on March 7 they have signed a strategic cooperation agreement with BAIC Group to build new energy vehicles, which will be used to run a car rental business that Didi is preparing to launch in the first half of this year, according to the press release.

Didi will stack the car rental operator with intelligent car rental business management capabilities, drivers, fleet operations and management capabilities, and provide personnel training, financial solutions and other system operations programs.

At present, Didi’s “rent a car and drive for yourself  (自驾租车)” has entered the adjustment phase (Chinese source), and no car is available at the moment. The spokesperson from Didi said the new car rental service will be based on an hourly fee.

On February 7, Didi announced that the company has reached a cooperation to jointly build new energy sharing car service with 12 automakers including BAIC BJEV, BYD, Chang’an Automobile Group, Chery Automobile Group, Dongfeng Passenger Vehicle, First Auto Works, Geely Auto, Hawtai Motor, JAC Motors, KIA Motors, Renault-Nissan-Mitsubishi, and Zotye Auto.

Existing car rental platforms include Gofun, Card2go, Evcard, GreenGo, PandAuto, TOGO. This requires investing a lot of capital in the early stage, and managing high operating costs, thereby difficult to profit in a short-term. Didi has chosen a lighter model to operate the service; By diversifying the property rights, vehicles can come from car manufacturers, leasing companies and other partners.

Didi has not yet announced the details of hourly car rental fee. Recently, Shenzhou launched a car rental business with pricing of  0.19 RMB per minutes and  0.99 RMB per km. From Suzhou Bridge in Beijing to Sihui East, it is 23 km, about 40 minutes driving. To compare the price, the taxi price is RMB 69, GoFun Chery EQ price is about RMB 38.5 yuan, and Shenzhou’s price is RMB 27.4. To compete with pioneers in the car rental market, Didi would have to consider better price strategy for their car rental service, while keeping the operating cost low.

China Unicom announced that it has officially launched the “eSIM One Phone Number Dual Terminal  (eSIM一号双终端)”  (in Chinese) business in six Chinese cities including Shanghai, Tianjin, Guangzhou, Shenzhen, Zhengzhou and Changsha.

“eSIM One Phone Number Multi-Terminal (一号多终端)” means that one phone number can shared with the user’s smartphone and wearable devices, without the need for a physical SIM card. For example, using eSIM users can go out exercise without carrying an additional mobile phone; the data recorded by the watch can be synchronized to the phone in real time.

Apple Watch 3 was the first end-product to support the eSIM. Last year November, this caused connection failure problems as Chinese carriers were not ready, and one month later Apple decided that Apple Watch Series 3 customers are eligible for a refund in China. The problem was that the eSIM allows users to subscribe to any carrier they choose and thus loosening the government’s ability to tracking users. The previous two generations of Apple Watch must be connected to the iPhone via Bluetooth to receive calls. Now that China Unicom also launched eSIM, Apple Watch 3 users can independently access the mobile cellular network.

China Unicom is currently the only operator that launched eSIM business in China, and made its first eSIM wearable product after two years’ work. From this date until December 31, 2018, China Unicom users who initiate this service can pay a lower fee on secondary eSIM card, from the activation date to 12 months later.

A Weibo user named 美国往事1999 is claiming that one of Apple’s official tech support people illegally stole their personal information. The news is spreading across China’s internet where many are expressing concerns over data security. The user said that the case happened on February 28th, the first day that iCloud services in mainland China being transferred to cloud company in Guizhou, GBCD (Guizhou-Cloud Big Data Industry Development Co., Ltd) under Apple’s partnership with the company.

“On the first day Apple switched from iCloud to cloud company in Guizhou, Apple’s official tech support illegally stole my personal information and data and blackmailed me,” 美国往事1999 wrote and even added a phone recording (Baidu Cloud) of Apple’s Apple technical support consultant threatening the user.

Many are pointing out that 美国往事1999’s account the user’s account wasn’t secure: He didn’t turn on two-step authentication and he didn’t use Hotmail e-mail for many years while his iCloud e-mail was never used.

Here’s what we understand of the incident:

On February 28th at 15:55 pm, 美国往事1999 called the Apple customer service hotline to consult iCloud related issues, but was then transferred to the Apple technical adviser. 美国往事1999 says (our translation):

“At 21:56 that night, the technical support consultant called me from a Xi’an cell phone number. He said that he was the same person I talked to that afternoon. He said that he used his access to invade my iCloud, copy my personal information and data. He said he sent an email to my 163, Hotmail, and iCloud accounts that included his QQ. He said he will give me an hour and I did not add him on QQ, he said he will remove my personal information and data. And said that he will make it impossible for me to use my Apple devices again.”

美国往事1999 added the support consultant on QQ, but they refused to respond. 美国往事1999 then called back, but the person no longer took the initiative to mention anything and hung up the phone.

“Later, I checked the Internet access mail and found that Hotmail e-mail password has been modified … To be sure my Hotmail mailbox has also been invaded. After checking the mail, I saw the threatening letter he sent to me in Hotmail and iCloud’s mailbox,” 美国往事1999 wrote.

The blackmail from Apple’s technical adviser reads (our translation):

“You can guess who I am. You should be afraid. I’m going to share your account and data with the world. If you’d like to chat, add this QQ. I do not want you to login in China again haha.”

Five days later, the user called the Apple customer service many times, but they refused to give a response.

“Here, I hope that all Apple users can see this post and pay attention to and protect their own personal information security even though for this case, it didn’t matter how much attention I put into it. I also hope that China’s relevant state departments investigate Apple’s bad behavior and deal with it,” 美国往事1999wrote, and he called the police and filed the case. On March 6th, the user posted on his Weibo that Apple had fired the employee.

“Apple contacted me this morning saying the employee was fired but declined to give any details. They refused to disclose how much my personal information and data that employee stole, what he had done with it,” he said.

We have reached out to Apple to confirm the veracity of this account, but they have not yet responded. We will update as soon as we get a response.

For Chinese people, Spring Festival is all about seeing family and celebrating the new year, but it’s also the optimal time for using screens. Have you ever been on a train for 20+ hours? In China you’ll find, from little kids to 60-year-olds, everyone is using their smartphones. Surely, to kill time, content is king in China.

During the Spring Festival, from February 15th to 21st, the number of app users in three segments—mobile games, photo app, and mobile video app—increased significantly, according to QuestMobile’s “2018 Spring Festival Entertainment Insights Report,” Chinese media CSDN is reporting.

The report pointed out that Chinese people have both online and offline ways to enjoy Spring Festival. Online was mobile games and video; offline was watching movies.

Spring Festival’s top 5 apps based on the number of daily active users were:

1. Honour of Kings – 128 million
2. Douyin short video – 61 million
3. Huashan short video – 53 million
4. Toutiao – 97 million
5. Youku – 83 million

Top 20 apps that showed the biggest DAU increase during the Spring Festival included: Mini World that showed whopping 116% increase in DAU, Douyin short video (78%), Honour of Kings (76%), Faceu (69%), and Wuta Cam (64%).

Mobile games

Playing mobile games (手游) is one of the major leisure and entertainment activities of the Spring Festival. Apps encouraging social interaction saw amazing growth. During the Spring Festival, mobile games with social attributes such as the Tencent’s Honour of Kings—already boasting 200 million users—and Speed QQ (QQ飞车) saw some amazing increases in use. Games showed significant increase as Mini World that showed whopping 116% increase in DAU while Honour of Kings showed 78% increase in DAU.

Game live streaming market was less affected by the Spring Festival, and saw a small peak a week before New Year’s Eve.

Watching short videos

Number of users watching short videos during the Spring Festival also increased. Having to move long distances, and loving to share videos, Chinese people are increasingly watching short videos over live streaming.

China’s three major telecoms companies reduced data fees over the holiday, allowing short video apps to grow even further. Users watched and shared short videos of wishing “Happy New Year,” hongbao, and short videos from Spring Festival Gala. Popular short video apps saw user numbers peaking up around New Year’s Eve. Kuaishou (快手) users opened the app 161,929 times on February 16th, and Douyin (抖音) users opened the app 134,253 times on February 14th.

Another trend in was watching anime or reading manga on mobile phone. In the New Year ‘s Eve, both the total number and the app usage duration of mobile anime apps increased. After the New Year’s Eve, users of mobile anime app users dropped over a long period of time and then picked up rapidly to reach new highs.

Photo apps

During the Spring Festival, all the photo apps had their own photo contests, giving a small boost to the platforms on New Year’s Eve and Day. On February 19th,  Toutiao announced the acquisition of Faceu (Chinese). Faceu recorded the most DAU with 2,892 DAU at its peak, followed by Meitu Xiuxiu’s DAU of 2,622.

Watching movies

When not looking at a mobile phone screen, Chinese people filled the movie theaters during Spring Festival with movie ticket booking apps saw a significant increase. Six high-quality movies were released on this year’s Spring Festival, including “Red Sea Campaign (红海行动, our translation)” and popular children’s cartoon “Monster Hunt 2 (捉妖记 2)”. During the Spring Festival, the daily active users of Alibaba’s ticket-buying Taopiaopiao (淘票票)  and Meituan’s movie ticket unicorn Maoyan (猫眼) almost doubled.

According to a recent white paper released by Nielsen and Alipay, 65% of Chinese tourists sampled have used mobile payments while traveling overseas, compared with only 11% of non-Chinese tourists.

The white paper, “Outbound Chinese Tourism and Consumption Trend: 2017 Survey” found that 91% Chinese tourists said they were more likely to buy from a merchant if they supported Chinese mobile payment services.

The total number of Chinese traveling abroad has been increasing steadily over the past years, encouraged by increasing income and more favorable visa policies. A total of 131 million trips were made by Chinese tourists in 2017, a 7% increase from 2016, according to the China National Tourism Administration.

With the growing market, Alipay and WeChat Pay are battling it out for wallets at home and abroad. WeChat Pay has expanded to 25 countries around the world. Alipay used to hold over 80% of the transaction value across China, but in Q1 2017, Alipay’s market share dropped to 54 percent, while WeChat Pay claimed 40 percent.

“China has embraced mobile payments faster than any country and will continue to lead the global charge in this regard. Mobile payment is on the rise globally, and will continue to support greater connectivity and efficiency across the commercial ecosystem,” said Vishal Bali, Managing Director of Nielsen China.

Read more: The rise of China’s cashless society: Mobile payment trends in 2017

Here are 4 takeaways from the white paper:

1. 91% Chinese tourists want to use Chinese mobile payment brands overseas

According to the white paper, 83% of Chinese tourists polled said would ask whether local merchants support Chinese mobile payments. When asked about the reason for using Chinese mobile payments abroad “convenience and speed, and familiarity” (64%) came in first, followed by  “feeling proud of Chinese mobile payment brands” (48%), “favorable exchange rate” (43%) and “discounts or promotions” (36%).

63% of respondents said that they had used mobile payment while shopping, followed by dining (62%) and visits to tourist attractions (59%).

2. Chinese tourists spend more on shopping

Chinese spending abroad has been increasing steadily. In 2017, the average spending was $5,565 and is expected to reach $5715 in 2018, a 3% increase.

Of those polled, Chinese tourists spent an average $762 per person on their last trip outside China, compared to $486 for non-Chinese tourists. Duty-free shops were the most popular (62%), followed by department stores (47%) and supermarkets (47%).

The top three categories of spending were shopping (25%), accommodations (19%) and dining (16%). For Non-Chinese tourists, however, shopping came last (15%), with dining (18%) at #2, and accommodation (29%) at #1.

Read more: How Chinese mobile payments are quietly conquering the world

3.  Relative price after discount has a greater impact for Chinese tourists

When shopping, Chinese tourists paid the most attention to discounts offered (41%) and payment methods accepted (41%), followed by the price of the good or service (40%). For non-Chinese, opposite is true: 52% of non-Chinese tourists said total price (52%), total travel budget (43%) and product quality (35%) were key factors in making purchases.

4. The youth are leading in mobile payments overseas

During their most recent trip overseas, 65% of Chinese tourists used mobile payment, compared with only 11% of non-Chinese tourists.

The survey also found that younger used mobile payment more frequently: people born in the 90s used mobile payments for 33% of their purchases, while those born in the 70s used mobile payments for only 23% of their purchases. Credit cards were used for 37% and 49% of purchases respectively.

iQiyi (爱奇艺), the Chinese entertainment company famous for its video streaming service filed for an initial public offering in the US, our sister media TechNode China is reporting.

The news comes after rumors and speculation of iQiyi’s IPO since the end of last year.

Read more: Five most highly-anticipated Chinese tech IPOs for 2018

The Beijing-based company filed with an offering size of $1.5 billion. iQiyi is aiming for a public market valuation of as much as $10 billion, people familiar with the matter said. Just like how IFR reported in October 2017, iQiyi chose three banks—Goldman Sachs, Credit Suisse Group and Bank of America—to lead the IPO.

Here are iQiyi’s user numbers and revenue numbers from the filing.

• For the three months ended December 31, 2017, iQiyi had about 421.3 million monthly active users and about 126 million active daily mobile users.
• iQiyi’s total revenue in 2017 increased to approximately RMB 17.38 billion ($2.67 billion) and in 2017 subscription revenue was approximately RMB 6,536 billion ($1.046 billion). However, the company posted a net loss of US$574 million.

In the filing, iQiyi stated that “We have had a net loss since its inception and may continue to suffer losses in the future.”

Read more: Chinese video giants are becoming production powerhouses

The company is hugely dependent on high-quality original content on its video streaming service. For example, iQiyi bought the exclusive rights to stream Korean drama Descendants of the Sun in China in 2016, which later brought more than 1 billion views to iQiyi. In April, it became the only Chinese service that licenses content from Netflix.

Baidu owns 70% of iQiyi’s shares and iQiyi has been seeking an independent listing. In the filing iQiyi also mentioned that it signed the main business cooperation agreement with Baidu on January 19, 2018 in the areas of artificial intelligence technologies, smart devices / DuerOS, cloud computing services, online advertising, internet traffic, data, and content.

iQiyi officially launched on April 22, 2010 with its video streaming service. On November 3, 2012, Baidu acquired the shares held by Providence Equity Partners LLC, the second-largest shareholder of the iQiyi, to become its single largest shareholder. The company plans to offer Class A shares to the public, while Baidu will hold all of the company’s Class B shares, the filing shows.

688 million people used WeChat hongbao on February 15 (Chinese New Year’s Eve) with Chengdu, Chongqing, and Beijing with the fastest hands according to WeChat’s New Year’s Eve big data, our sister site TechNode Chinese is reporting. 15% more people used WeChat hongbao in 2018 compared to the year previous

In China’s new year, elders give the money to children hoping to pass on a year of good fortune and blessings, and the younger generation give the money to their elders as a blessing of longevity and a show of gratitude. In a country where 95% of its internet users mobile device to access the internet, more and more people send their red envelopes to their relatives and friends through WeChat, making into a game of who can open them the fastest.

The stroke of midnight rang in the Lunar New Year. At the same time, a shower of red envelopes filled mobile screens across every part of China. New Year’s Eve  (除夕 chuxi), the day before Spring Festival (春节 chunjie), is the peak time to grab red envelope  (红包 hongbao). It’s like saying farewell to chicken’s year, and greeting dog’s year. There are even tactics to grab hongbao depending on which phone you use. 

So here’s the New Year’s Eve data for 2018:

In all age groups, users from the post-80’s generation (those born in the 1980s) were the largest portion of the “Red Packet army,” comprising 32% of total users, sending or receiving Red Packets. Post-90’s, post-70’s followed the ranking, comprising 27%, 22%, respectively.

WeChat was even able to track the fastest single user and the most generous:

The report also tracked how users spent their time during the New Year’s Eve through their purchases.

With an attempt for Tencent to keep its first place in hongbao war, WeChat Pay also announced hongbao raffles throughout the 7-day Spring Festival holiday. Stay tuned to see who won the 2018 hongbao battle as the Spring Festival comes to a close.

Just as small startups are disrupting traditional companies, individual online celebrities are changing the advertising market. It’s not dominated by a big entertainment company who owns thousands of top stars, but an individual with a strong talent can also convince consumers to open their wallets.

Over the past few years, Key Opinion Leaders (KOL, 网红 wǎnghóng in Chinese) or online influencers, have successfully dominated Chinese social media platforms like Weibo, WeChat and live streaming apps. Overseas companies expanding to the Middle Kingdom are now using these KOLs to drive more traffic and raise brand awareness. According to the 2017 Wanghong Career Report  (in Chinese) released last month, 54% of the new university graduates polled want to become a KOL.

Overseas brands and companies rely on KOL marketing to enter China market because they are effective. According to Elijah Whaley, CMO of PARKLU, the average engagement results for KOL campaigns are six times higher than brand campaigns, and three times higher than brands’ own sales campaigns. KOLs are paid to create original content and then amplify that content on their own social media accounts.

PARKLU is a technology platform that provides social media tools for brands. After identifying brands’ needs, they suggest 15 or more KOLs to brands through their recommendation engine.

He shared with us three new trends in KOL marketing.

1. Short videos are becoming more important as a format for KOL marketing

PARKLU is a curated, closed platform. Only those who meet their standards can join PARKLU’s KOL pool. To be a KOL on PARKLU, minimum engagement followers of an influencer should be 50,000 followers for Weibo, and 5,000 reads per publication on WeChat.

“We prefer content creators who make original content,” said Whaley. “There’s still Meipai (美拍) and Yizhibo, live-streaming platforms, but Musical.ly and Douyin (抖音 aka Tik Tok in English) are up-coming apps for KOLs.”

In fact, short video platforms showed a dramatic increase last year thanks to younger user groups, while the time spent on live streaming stayed flat. In December 2017, Chinese users spent 6,149 million hours on short videos, while spending 881 million hours on live streaming.

2. KOLs are now building their own brands

“[B]rands don’t have an emotional connection with social media followers. They don’t have strong opinions or feelings. Brands are inhuman. It’s not a human to human interaction,” said Whaley.

For a longterm strategy, KOLs are building brands and are trying to monetize their followers now by selling their product on Weibo or other e-commerce sites. “KOLs are changing the fashion industry by creating brands. That’s also one way they monetize themselves” said Whaley.

An easy option for KOLs to help monetize is their beauty, and their fashion. Elijah and his girlfriend Melilim Fu, who happens to be a top makeup artist started a brand Melilim Fu and launched a makeup product Fayeyelash.

“Last December we broke even in the first couple days of sales. It’s about how you run your brand and connect with your fans,” said Melilim Fu.

Shanghai-based fashion KOLs AVA & NIKKI opened their Taobao clothes shop, selling their apparel on ANUZA on JD.com and Kuiben8. Some KOLs are making their own cosmetic brands, promoting those products on their WeChat Moments and selling those products through WeChat, either one-on-one or through group chat rooms. With the help of “Weishang”—a WeChat feature that allows users to sell goods and services to their contacts—a top KOL can make 600,000 RMB (~$86,000) a month through cosmetic sales. However, Chinese microblogging platform Weibo has been aware of too many commercial activities run by KOLs, and released its rules to regulate KOL advertising on their Weibo accounts.

KOLs also no longer stand solely in the beauty sector. As Chinese dominant smartphone users-post 80s generation and post 90s generation-age, get married and build family, and care more about lifestyle, and travel, key opinion leaders for some other sectors emerged, including parenting, fitness and health, pet, home decoration, lifestyle, and travel.

“As China’s income levels increase, they [consumers] care more about their bodies. Healtchare, fitness, and health KOLs will become more and more popular,” said Whaley.

3. KOLs are educators and entertainers, rather than static media

“One challenge is the lack of expertise and experience of those marketers who work at brands,” said Whaley.

Brands are used to marketing using stagnant media such as TV, newspaper, online search, and “traditional” social media. KOL and influencer marketing is a fairly new concept to them, and these marketers don’t necessarily possess the required skills.

“They think if they invest money into KOL marketing, all they need to do is crank the wheel and more money will come out the other side. This is not programmatic advertising. KOLs are first and foremost people,” he said.

In 2017, successful KOL campaigns had a lot of engagement from the brands themselves, working with KOLs that reflected the brands’ values. After Chinese fashion blogger Mr. Bags’ recent collaboration with Givenchy, he gave his followers access to buy his exclusive Valentine’s Day edition Givenchy “Mini Horizon” handbags. He reported that 80 handbags were sold out in 12 minutes. On top of that, Victoria’s Secret also invited fashion blogger gogoboi to their Victoria’s Secret Fashion Show. The KOL  wrote a detailed article about this year’s show, attracting more than 100,000 views. 

“Brands commonly have one objective and that’s to sell. But KOLs are not salespeople, they are educators and entertainers that have learned the best way to influence people is to offer value first via content and ask very little in return,” said Whaley. “If brands do not listen to the feedback from the KOLs they are working with, they increase their likelihood of failure. They should not say “do this”, but ask “what should we do”.”

Spring Festival is approaching and the annual hongbao war is on. Alibaba’s lifestyle app Koubei invested 100 million yuan on the “shout red envelopes” (in Chinese) game.

From 11:00 pm on the 13th to the first day of the New Year, users can login on the Koubei app, and search for “shout red envelopes (喊红包)” to enter the event page to participate. These red envelopes work like Siri, and users need to say certain things or make certain sounds to get a hongbao, like “You are my New Year’s wish (你就是我的新年愿望)” or bark like a dog (since its the Year of the Dog). Users can also say tongue twisters like “Egg mochi cake I also eat mochi cake eggs I Also eat (鸡蛋糍粑我也吃糍粑鸡蛋我也吃).” Koubei invested RMB 100 million ($15.7 million) on the “shout red envelopes” game.

Koubei’s competitor, Meituan Dianping also launched the “grab a red envelope for the Spring Festival” event a few days ago. If the user can gather a team of six, they can get red envelopes, the same is 100 million red envelopes limit. From February 9 to 21, the user can invite five friends to participate in this event, you can get a random amount of red envelope.

In the second half 2017, Chinese laptop maker Lenovo showed 20.2% market share, a year-on-year drop of 4.9%, while the market leader HP showed considerable growth, driving the overall performance of notebook shipments beyond previous expectation, market research firm TrendForce is reporting. 

For 2018, the market share of the top six brands is expected to rise to 89.1%, squeezing the room for other brands to develop. On the other hand, Xiaomi and Huawei recorded growth in Chinese market, but the results of their overseas deployment are not clear yet. Xiaomi’s laptop Mi Air was launched in July 2016, with a bold design, not revealing its logo on the laptop cover.

Two weeks ago, Chinese company Lenovo voluntarily recalled about 80,000 ThinkPad X1 Carbon 5th Generation laptops due to a potential fire hazard last week. Officials said about 78,000 ThinkPad X1 Carbon Laptops were included in the United States, as well as about 5,500 in Canada, according to Fox. These 12-inch touchpad computers feature detachable keyboards for tablet functionality and even come with Active Pen styluses.

Taiwanese multinational electronics company ASUS’s market share dropped to 9.5%, ranking the fifth. ASUS has adjusted its product strategy in recent years and shrink the production of models with low profits.

Acer continues to expand aggressively in the Chromebook market, and its notebook shipments growth in North American market raised its annual shipments by 0.6%. Its market share recorded 8%.

Apple and HP recorded double-digit growth in 2017. HP has demonstrated its ambition since the second quarter and recorded new highs of shipments in 2H17. With a market share of 24.3%, HP has retained first place in the shipment ranking.

The updated MacBook Pro in Q2 2018 helped Apple expand shipments by 18% for the whole year, the highest growth rate among all the notebook brands.

Spring Festival (春节 chunjie) is just 2 days away, and WeChat just announced the launch of “Spring Festival Shake (新春摇摇乐)” promotion.

The forthcoming “Spring Festival Shake (新春摇摇乐)” is an attempt for Tencent to keep its first place in hongbao war, and is the upgrade version of “Weekend Shake (周末摇摇乐)” which WeChat rolled out in January. Its activities will extend from previously a two day event to seven days, during the Spring Festival holidays.

From February 14 to 20, WeChat users can use WeChat to pay over RMB 2 ($0.3) at the offline sites where WeChat Pay is aligned with. Users have three chances a day to participate in lucky draws to win two kinds of red envelopes: free purchase (免单) or up to RMB 200 ($31.6) in red envelope (到店红包) that user can use in offline stores using WeChat pay.

During the “Spring Festival Shake” event launching on the 14th, WeChat will also hand out different daily digital blessing eggs (祝福彩蛋) to users. In Chinese tradition, eggs have a meaning of blessing. In China, it is common to hold at the baby’s first-year birthday a red egg and ginger party. When Chinese couple get married, they hide colored eggs around their bedding, and let children look for eggs.

There has been various speculation on what Alipay would do during the Chinese New Year’s day including a gold hongbao feature, last year’s augmented reality hongbao campaign, red envelopes and gifts to viewers during the CCTV Spring Festival Gala. However, Alipay’s operator Ant Financial told TechNode that they are not commenting on this at the moment. Last year’s hongbao war winner went to WeChat, who sent out 14.2 billion red envelopes on New Year’s Eve, up 75.7 percent in comparison with the same period in 2016.

Long-waited Amazon Go opened its door to the public in Seattle last week and there has been overall positive feedback. However, unmanned stores are definitely not a new concept for China’s tech-savvy consumers. Since May 2017, when Alibaba launched its first unmanned store with the focus word “new retail”, a flurry of Chinese tech companies has created their own versions of unmanned stores with Shanghai becoming an important base.

BIU (similar to 哔 bì, the sound a scanner makes), Suning’s second big data-driven unmanned store, opened its doors in Shanghai on November 6th, 2017, following the opening and trial of the first Nanjing-based store in August. Powered by facial recognition, the store held public events to both promote and test their systems.

“We tried some activities to see how well the camera recognizes people. We held a public event inviting different groups of people. The camera had to identify a lady with or without makeup, a person dressed normally and with a cosplay wig and makeup, and twin brothers and sisters. They tried it and the scanner could read them all,” William, who’s in charge of BIU’s store told TechNode.

Targeting Shanghai’s affluent and trendy consumers, BIU is one of the 4 new retail visiting spots in the region, along with 2017-opened Starbucks Roastery famous for its AR game, unmanned convenience store Bingobox, and Hema Supermarkets, which combines a supermarket, warehouse, and restaurant. Thirteen out of 20 Alibaba’s Hema stores are based in Shanghai.

Since last year, Suning has aggressively developed their unmanned store project. BIU has so far been piloted in 5 different cities across the mainland. While Suning 4-stories home appliance retailers are easily seen throughout the country, their Shanghai BIU location is their first unmanned store to rely on facial recognition.

Not enough integration

BIU is on the first floor of the 4-story Suning store in Wujiaochang (五角场), facing Fudan University, Shanghai’s top university. From the entrance, big wall posters and arrow stickers on the floor promotes its unmanned store. As I stood in front of BIU, a clerk managing the store next to BIU walked up. He helped me scan a QR code to download the Suning Finance (苏宁金融) app and register an account.

Although Alibaba is the second largest shareholder in Suning, the Suning app does not connect with Alipay. This is the hassle of Alibaba-backed startups, including Suning and Hema: Even though they’re backed by the e-commerce giant, they all have separate apps that you must download. The introduction, on the other hand, of mini programs into Tencent’s WeChat leaves out the need to download anything, reducing friction to a negligible degree. Alibaba’s arch-rival has managed to get 95% of Chinese e-commerce startups onboard.

In order to enter BIU, I had to link my face to my bank account registered in the Suning app. However, I was not able to link my account. The clerk told me that it’s because I’m a foreigner. Currently only foreigners holding China Construction bank(建设银行), Huaxia bank(华夏银行), and Ceb bank(光大银行) can register their bank account on Suning app to use facial recognition. He helped me get in by scanning his face and walked back to his shop.

Small, rotating inventory

The 120-square-meter BIU store was quite simple with five categories of products: Suning’s lion mascot products, sportswear, everyday items, and smart devices such as air purifier and phone chargers. As I wandered about the shop, a shopkeeper standing near the exit approached me to give an explanation.

“Inter Milan is invested by Suning and fans come here come here to buy the jerseys since it’s cheaper than buying online. The next most popular is the everyday items. With a discount, they are very cheap. We rotate the products every 2-3 months,” William, the shopkeeper, told me as he put his hands firmly inside a teddy bear handwarmer. Shanghai’s winter wind was slipping through the main entrance of Suning store bringing a chill into the BIU store.

Simple item tracking

Whereas Amazon Go tracks items as they are put into carts and back on shelves to calculate totals, BIU only identifies the items when the customer leaves the store.

When purchasing goods, just like Amazon Go, customers don’t have to queue for payment and can walk directly through the payment gateway. The system will automatically identify the user by facial recognition. I chose an RMB 13 eye patch, which was the most affordable product in the shop. Since I had failed to link my bank account to the Suning app, I asked William to pay for the product for me (I paid him back later through WeChat.)

As he walked towards the scanning area, the camera caught his face, found his account, confirmed the purchase with a beep (bì 哔!), and opened the exit gate. The whole process took only five seconds or less.

The two main technologies behind BIU are RFID—with chips attached to every product—and facial recognition. The RFID chip contains the product’s name, price, and unique identification number. The exit gate recognizes the item while the camera scans your face, find’s your account, and finishes the transaction. This is very different from Amazon Go where sophisticated computer vision and machine learning software that can see and identify every item in the store, without attaching a special chip to every product.

Facial recognition isn’t just for making purchases though. As William steps in front of a TV in a corner of the store, it recommends products to William based on past purchase and browsing history. Since the BIU store can only stock a limited number of products, the system allows customers to purchase, and have delivered to their home, items online where they can browse more options.

William says between 100 to 200 people visit the store each day, with approximately RMB 10,000 ($1,586) in sales per day. A diverse group of people from many different companies visit the store and ask about possible partnerships with Suning, hoping to introduce their own product in the store.

“Customers read the about BIU and come to see the store on account of our reputation. Or they come to buy the home appliance and drop in,” he says.

Tough verdict

It’s hard to decide if BIU is ultimately on the same level at Amazon Go. First, I haven’t tried Amazon Go myself. Second, they are completely different experiences focusing on different product categories. A better comparison would be Amazon Go vs Bingobox, a Chinese cashier-less convenience store. However, Bingobox is a 2013-born startup and is subject to its partnership with big retailers who provides products. In fact, two Bingobox stores in Shanghai were closed down last year as their partnership with Auchan and RT-Mart as the cooperation deal ended.

Competition in China

In the future, BIU plans to offer fast-moving consumer goods and at relatively low cost. In 2016, the retailer giant invested in online grocery delivery company Eight Days, who operates offline convenience stores on university campuses. This is different positioning, however, from Hema.

“We are not in conflict with Hema, because they focus on fresh food, while we will be focusing more on non-durable goods such as packaged foods, beverages, and toiletries,” William said. “Hema is not convenient because the user has to still queue to use self-cashier machine using facial recognition or Alipay. In BIU, it’s faster and easier because you can just walk away with the product.”

However, the challenge is consumers’ habits. William says, while young people understand this concept and model, consumers over 50 years old don’t.

In the future, BIU stores will vary depending on location. In residential areas, they will have more products for the home. In an office building, they will have a cafe and a store selling office products. BIU’s vision is to open 200 stores in China in two years. They have 4 more stores almost ready to open.

For example, for Suning’s third unmanned shop will be opening in Nanjing (in Chinese) targeting younger customers. When they walk into the store, a robot will welcome and guide them. A smart hanger will be analyzing the customer behavior of selecting the product, learn user preferences, and optimize the display of goods. For entertainment, there will be also an intelligent treadmill, XBOX somatosensory game machine, appearance testing machine, and an AR group photo machine in the store.

During the last six months of 2017, the Suning app added 389,000 new users, ranking 7th among 10 e-commerce apps in China coming one rank down from the previous year. It is unclear at this point how much its unmanned store initiatives will bring up company’s sales in 2018.

Editor’s note: This article was supported by Hujiang Education Technologies. We believe in transparency in our publishing and monetization model. Read more here.

Language learning used to be mostly massive open online courses (MOOC), and many startups have taken many different methods to improve user interaction language learning. Shanghai-based English learning platform Rikai Labs uses WeChat chatbot, 2010-born language learning social network italki uses Skype to allow its users to give language lessons to each other, and there are other solo app learning startups as can be seen from Busuu, Duolingo, and Memrise. Now a Chinese startup Hujiang is using AI to help you learn a new language and analyzes the interaction of students and a teacher on its live streaming platform CCtalk. For example, if the teacher joked in the class that created more engagement, the company analyzes data and provides that to the teacher.

Since live streaming started to take over the China market from early 2016, there has been a number of education platforms that have launched their own live streaming services for teachers to give lectures. These traditional education corporates like New Oriental, TAL (Tomorrow Advancing Life), live streaming platforms like YY, Douyu, and startups like Zuoyebang and Xiaoyuansouti.

At first glance, AI-powered CCtalk’s live class has little resemblance to a typical MOOC class— primarily one-way streaming without interaction using courseware or whiteboard.

When you first download the CCtalk app and register, the app asks you if you’re a student, white-collar worker, hot mom or cool dad (辣妈酷爸), or a free person (自由人). Such information is collected to provide tailored services to its users, such as the courses and news they might be interested in and to better understand users’ learning behaviors and habits.

Then you can tap keywords based on the language you want to learn and your interests, so I clicked on tags like “IT/ internet”, “French”, and “liberal arts and history.” Then you can access the main page, where you’ll see many different live classes you can attend.

Many live language courses are for English, Japanese and Korean, and users can attend the class they are interested in. These classes are at set times and there is a timetable with the title of the lesson and the time. Teachers on CCTalk often use powerpoint-like slideshows that contain the notes the teacher will use to teach the class. The teacher annotates on the presentation by typing, underlining and circling on it with a digital red pen.

I attended a Korean language live class given by a lady named Snow. On top of the courseware where she listed out dozens of words, she typed down a phrase using the word and was explaining each word with an example. (See the images below) Students typed down the questions to her, and she directly answered. Some users sent digital flowers to the teacher, which the teacher can cash in as a tip.

Teachers on CCtalk make money from the paid courses they teach, including live lectures, pre-recorded videos, micro classes (“微课” in Chinese) which lasts just a few minutes. The charge varies from courses to courses with a class fee ranging from RMB 9.9 ($1.5) to RMB 40,000 ($6,399). CCtalk puts it this way: Earn as you share knowledge (通过知识分享获得收入).

Once you tap on the second board on the app, you can see a timeline where students ask questions like “Do you have any book recommendation to learn Korean by yourself?”, “Can someone please translate this sentence for me?”, and other students or teacher’s answer. On the third page, you can choose to join the chatting group of Snow’s Korean course, which adds number to Snow’s number of followers.

While the CCtalk app looks rather simple and straightforward to use for language learners, the app is actually gathering big data from the teachers and students, to make the language learning much more efficient.

Using AI in language learning

“Typically when we talk about AI application in education, most of the apps focus on how to improve learning from learner’s perspective,” Dr. Lu Jian, a partner at Hujiang.com, and CEO at CCtalk told TechNode. “However, we are collecting data from both the student and the teacher. By mining the data, we learn from learner’s perspective, how to learn better, and from teacher’s perspective, how to teach better.”

CCtalk is a real-time interactive teaching platform that grew out of Hujiang’s (沪江) online teaching tools. In the course of doing online education business for over 10 years, Hujiang developed a suite of teaching tools called CCtalk, including audio-visual streaming, and digital whiteboard for independent teachers about a year ago, and later it became a platform business under it. Compared to CCtalk, Hujiang provides paid live or recorded online classes with B2C model: they develop the educational content and sell the classes to the students.

“Before AI, there was a field of study called adaptive learning (自适应学习), which tries to personalize the learning. It works by building a knowledge graph first, then it provides personalization based on well-designed evaluation tests,” Dr. Lu says.

‘Adaptive learning’ and ‘intelligent classes’ are mainly adopted on Hujiang Class (沪江网校). Adaptive learning is an educational method which uses computers as interactive teaching devices, and to personalize the teaching and mediated resources according to the unique needs of each learner. To adopt adaptive learning into Hujiang’s classes, a number of questions are given to students to evaluate how well he or she has learned.

“Dynamic knowledge points are supported by a test form and the student will be evaluated based on these knowledge points. Then we will create a personalized learning program in and different phases for different students. These are called intelligent classes (智能课程) or courses,” Dr. Lu Jian explains.

In this way, Hujiang has gathered big data on how much the students learn about the specific materials and uses the data in order to make learning tailored and personalized to students.

The AI application on the CCtalk platform is mainly for teachers to help teachers teach better. On the teaching part, CCtalk collects a variety of data on how the teacher holds the classes. CCtalk will record how many minutes the teacher spends for each page in the courseware, and send out these data and insights to the teachers.

“We cannot tell a teacher what to do, but a teacher has a review [of their current teaching method] in order to improve effectiveness and efficiency. Also, we have the data about the in-class interaction between the teacher and the students,” he says.

Many of their services are now based on big data and cloud technologies. For example, if the teacher joked in the class that created more engagement, say many students started typing “haha” instantaneously, the company analyzes data and provides that to the teacher. However, it seems that it will take more time for the company to actually figure out how AI can boost up the language learning and monetize it.

“We are not cashing on AI at the moment. Now many companies in education are exploring the potential of applying AI to education. We are at a stage trying out different AI applications. In a commercial point of view, we are yet to see how we can cash in on this,” Dr. Lu says.

Why attend live streaming classes

Dr. Lu said the live courses available on Hujiang platforms increased fivefold in 2015 in a speech at the 2016 Computing Conference in Hangzhou. He says there are several reasons for that. Firstly, students love interacting with teachers, and live streaming allows students and teachers to interact more.

“Rather than recorded online video classes, I think that live streaming resembles more traditional class in a sense that the students can have their questions answered. These live classes are attractive to students, and even students want to watch the video later. And many of them want to come to live classes,” Dr. Lu Jian says.

Secondly, live streaming for online class encourages more active interaction from the audience, which is a key difference between live streaming for an online class and live streaming for entertainment.

“The old way of live streaming for old entertainment, just like watching a movie, doesn’t require a lot of interaction. In that type of streaming, there is a longer delay. But in the live class, because students like to interact with a teacher, and the delay has to be short, typically under half second,” Dr. Lu added.

For many educators live streaming is still a tool, not a business model. There is speculation whether or not these live streaming classes can make money in an already saturated. However, the idea of live streaming class opens the door to narrow the gap between affluent families and those who live in rural areas with less financial freedom. In my personal observation, the classes on CCtalk seemed too technical for test preparation since the classes tend to focus on more on grammars and vocabularies than actual verbal interaction with the teacher. However, there were other paid classes than just languages on Hujiang, such as bride makeup, sketching, yoga class for pregnant women, and children’s ballet, which shows the decent establishment of Hujiang as a teaching tool for virtually any subject.

The number of Chinese unicorns—startups with more than a $1 billion valuation—are growing so fast that later we might have to change the term into “dragons” in the future. The country now has 55 unicorns becoming the second-richest country in unicorn companies, followed by India and the UK. This is partly due to the ever-growing activity of Chinese venture capital and tech giants in the sector.

Among 2017’s newly added 57 unicorns hail from US (56%), while 18 startups hail from China (32%), that is up from last years 43% for US, and 29% for China, according to US-based data analysis firm PitchBook’s 2017 Unicorn Report. CBInsights numbers China’s total unicorns as 55 companies while PitchBook numbers them as 57 companies, as they have different criteria to list unicorns.

We posted 4 takeaways from 34 new-born unicorns in China, and in this post, let’s first look at each of the new unicorns in turn and then compare them to those of 2016 as these unicorns give a good bird-view of trending startup sectors in China. Please note that 34 new-born unicorn list is from ITjuzi’s database, and unicorns on this post are from CB Insight’s complete unicorn list.

Firstly, let’s take a look at 2017’s top 10 new-born Chinese unicorns:

Jinri Toutiao (今日头条)

Jinri Toutiao, a personalized news aggregator app, is one of of TMD (Toutiao, Meituan-Dianping, Didi), expected to be the next tech giants following China’s BAT. Jinri Toutiao’s strong on AI, as its parent company Beijing-based ByteDance was most well-funded AI startup of 2017 with $3.1 billion in investments so far. Jinri Toutiao is recently moving towards adding fintech solutions to their media. Toutiao already laid out its own insurance and loan businesses with the company forming an insurance business team in early 2017 and bought a 100% stake in UIpay, an online payment agency this month.

United Imaging Healthcare (联影医疗)

Shanghai Yingying Medical Technology Co., Ltd. is a high-end medical equipment and medical information solutions provider for medical institutions. Headquartered in Shanghai Jiading, R & D center radiation around the world, the company provides imaging diagnostic equipment, radiotherapy equipment, service training, medical IT solutions, and high-end medical care.

NIO (蔚来汽车)

NIO (Previously NextEv) is a Chinese electric carmaker with over $2 billion in investments from the likes of Tencent, Baidu, IDG and more. Launched by the chairman of Chinese automobile portal Bitauto.com and the founder of Autohome.com  in 2014, NIO said they will provide cloud computing and data to connect their charging substations to a complete service system. Shanghai-based company will soon launch ES8, its first mass-production SUV model, which will be targeting the same customers of Tesla’s Model X. For production, NIO plans to focus on design and leave the manufacturing to partners such as JAC and Chang’an.

Maoyan Dianying (猫眼电影)

In 2012, group buying startup Meituan decided to develop a separate app for their movie ticket service called Maoyan (literally “cat eye” in English). The app quickly gained traction and became the largest player in the movie ticket selling sector in China in 2015, taking half of the market share. Other Chinese major online entertainment ticket sales platforms include Tencent’s Weipiao, Gewara, and Taobao.

Mobike (摩拜单车)

China’s bike rental company Mobike won Environment’s Champions of the Earth awards from the United Nations for its contribution to the advancement of low carbon public transport. Its 200 million users in over 200 cities have cycled 18.2 billion kilometers, the equivalent of 4.4 million tonnes of carbon dioxide or 1.24 million cars being taken off the road each year. The company is now rolling out its first ride-hailing service in Guizhou since December 2017 to challenge ofo and Didi’s tie-up.

ofo (ofo小黄车)

Mobike’s arch-rival Ofo company saw the highest increase in market penetration compared to the previous year reaching up to 1811% year on year growth, according to Jiguang’s data. In July, ofo announced its Series E of financing worth $700 million led by Alibaba and other investors including Didi, who added ofo’s bike rental service in its app in April. With funding, the Beijing-based company started its global expansion in 2017 bringing China’s bike rental concept to US, Australia, Europe and Asian countries.

e-Shang Redwood (易商红木集团)

ESR (e-Shang Redwood), a leading pan-Asia logistics real estate developer, was formed through the merger of e-Shang and Redwood in January 2016. It is backed by investors including APG, CPPIB, Goldman Sachs, Morgan Stanley, PGGM and Ping An and is managing over eight million square meters gross floor area of projects owned and under development across China, Japan, Singapore and South Korea, with capital and funds management offices in Hong Kong and Singapore.

Douyu TV (斗鱼TV)

Douyu TV, China’s live e-sports broadcasting vertical, claims it controls over 70% of the market after gathering 30 million daily active users and nearly 200 million monthly active users. Founded in 2013, the Wuhan-based company joined unicorn list as it finalized an RMB 1 billion ($150 million) in a Series D round led by CMB International last November.

VIPKID (VIPKID大米科技)

VIPKID is a platform that offers one-on-one language instruction for the Chinese market, targeting children between the ages of five and twelve. The online English teaching tool announced in August that it has raised $200 million in financing and joined the unicorn list. The latest gig-economy company VIPKID recruits about 30,000 teachers globally. In September 2017, a VIPKID teacher who had to cancel her class to settle down things after her own child’s death lost her job at VIPKID and posted the story online which went viral. This brought a lot of attention to company and triggered an online contractor-versus-employee debate.

SenseTime (商汤科技) 

Beijing-based startup SenseTime is best known for its face recognition technology, along with its close rival Face++. With a pool of 400 researchers, including 120 with Ph.D.s., SenseTime’s technology can simultaneously track more than 100 subjects while gauging their age, gender, and vehicles on the street. Chipmaker Qualcomm invested in SenseTime on November 2017 to collaborate on AI, which will see SenseTime’s proprietary algorithms deployed in smart devices and Honda agreed to work with SenseTime to develop artificial intelligence for autonomous driving.

Comparing them to 2016 unicorns

There were more e-commerce players in 2016, and more on-demand companies in 2017. In e-commerce, cross-border shopping platform Xiaohongshu hired a lot of writers and used catchy leads to market their products. Their 2015 campaign using muscular young foreign men (国外小鲜肉送快递) for delivery also made this company go viral. Shopping platform Pinduoduo (拼多多) leveraged WeChat social network and increased Gross Merchandise Volume (GMV) transaction from zero to 60 billion RMB ($8.9 billion USD) in 2016. It saw the highest increase in market penetration in 2017 compared to the previous year reaching up to 1000% year on year growth according to Jiguang’s data.

As you can see AI is buzzing sector in China for the past two years. It’s propelled by several structural advantages for AI development: huge datasets, a young army of talent, aggressive entrepreneurialism, and a strong and pragmatic government AI policy, according to Eurasia Group’s 2017 report. Seven Chinese companies made it to CB Insights’ AI 100 list, and it includes 2017’s unicorn Toutiao and SenseTime, and 2016’s unicorn UBTECH. In fact, five AI startups of the seven Chinese startups have achieved unicorn status, with four of them surpassing $1 billion in valuation just this year.

In China’s healthcare sector started to see the cusp of its boom, partially because of China’s health-care reform began in 2009, and income growth which encourages greater awareness of treatments. Shenzhen-based biotech company iCarbonX, building a big data-driven health platform, raised 1 billion RMB and became China’s first unicorn in the sector. Now Shanghai has two newly added healthcare sector unicorns, United Imaging (联影医疗) and Mingma Technology (明码科技).

Brokerage and leasing vertical is an area that has a high potential for growth. Proptech companies including Homelink or Lianjia.com, Fagdd.com, Tujia.com, and Aiwujiwu have already reached unicorn status. Lianjia is the company behind Ziroom, co-living startup winning the hearts of young professionals looking for one-year-based rent housings in first-tier and some second-tier cities.Mofang Gongyu is a startup providing apartment’s for young people to long-term rent rooms and socialize in common area.

In 2016, second-hand car trading companies that largely kicked off around 2015 started to consolidate the market leaving the main players in 2016 like Renrenche and Guazi, established by online classified site Ganji.com. Changes in consumer tastes are driving electric cars further into the mainstream such as electric vehicles like NIO, 2017 unicorn. As tech space started to see recruitment needs from big companies to SMEs, recruitment platform Liepin gathered a huge userbase and became a unicorn in 2016. Now 2017 unicorn VIPKID is hiring online teachers from all over the world.

Ant Financial Services Group today announced that Alipay is soon to be made available to most local businesses in the Swiss town of Davos, thanks to a partnership with SIX Payment Services, a pan-Europe payment service provider based in Switzerland. Restaurants, bars, supermarkets and hotels in Davos will be offering Alipay, all with merchant information available in Alipay’s in-app overseas traveller service platform.

Alipay, along with its arch-rival WeChat Pay, has aggressively expanded globally in recent years. Data from research institution iResearch shows that the value of China’s mobile payments market tripled to more than RMB 38.5 trillion ($5.6 trillion) in 2016 and is projected to reach RMB 55 trillion in 2017. Comparing the marketshare, Alipay accounted for over 80 per cent of transaction value just three years ago, however, it held a 54 per cent share of mobile transactions by value, while WeChat Pay claimed 40 per cent, in the first quarter of 2017.

With around 40 flights between the two countries every week, China has become the fourth largest source of tourists to Switzerland and the two nations experienced over 1.2 million two-way visits between China and Switzerland in 2017, up 12% year-on-year. Holiday is the peak season, as Alipay overseas transaction grew by eight times over National Holiday Golden Week in 2017.

“Alipay is committed to better connecting Chinese tourists abroad with local merchants. We help businesses to share customised service offerings that cater to the needs of Chinese tourists,” said Eric Jing, CEO of Ant Financial.

SIX Payment Services currently supports bank card transactions via Point of Sale (POS) systems at over 250 merchants in Davos. With the new agreement in place, these Swiss merchants will soon be able to serve Chinese tourists by offering e-payments in RMB via Alipay.

A Twitter post claims that an app on Chinese smartphone manufacturer OnePlus’s phones is identifying and uploading bank account numbers to a Chinese server, but the company has told TechNode that this is incorrect.

The @OnePlus #clipboard app contains a strange file called badword.txt 🤔

In these words, we can find: Chairman, Vice President, Deputy Director, Associate Professor, Deputy Heads, General, Private Message, shipping, Address, email, …https://t.co/ePQvD1citn pic.twitter.com/3dCh0joVkH

— Elliot Alderson (@fs0c131y) January 25, 2018

This is a good reminder…Please don’t copy paste your bank account number…TeddyMobile has a dedicated method to recognize a bank account…😡 pic.twitter.com/U21J2jrXcN

— Elliot Alderson (@fs0c131y) January 25, 2018

In the latest OxygenOS Beta update, an application named Clipboard comes preinstalled on OnePlus devices and has been accused of transmitting users personal data to a Chinese server owned by Teddy Mobile, a service in China which helps in identifying unknown caller identities. Teddy Mobile claims to have 200 million users and cooperates with other Chinese smartphone operators including Xiaomi, Coolpad, YunOs, Oppo, Vivo, Gionee, Meizu, and Lenovo.

“The statement that Clipboard has been sending user data to the server is incorrect. The code is completely inactive in the open beta of OxyOS and user data is not sent to any server without the user’s consent,” a OnePlus spokesperson told TechNode. “In the Chinese beta version of OxyOS, identifies these files, in order to filter out some of this data so that it won’t be uploaded. The local data in these folders with these fields will not be sent to any server.”

OnePlus is one of the few players who, as a Chinese smartphone maker, only on the international market.

The news comes two week’s after its chief executive Pete Lau telling The Telegraph that its revenues last year had doubled to more than $1.4 billion and that this had come with “healthy profits”.

Mr. Lau said the smartphone company plans to continue releasing two new phones a year. The next OnePlus phone will come out toward the end of the second quarter and would run on Qualcomm’s Snapdragon 845 processor, the mobile chip unveiled in December. The company saw its OnePlus 5T become its fastest- and best-selling product after its launch in November, according to Pei, the company’s co-founder.

The cloud computing arm of Alibaba Group, Alibaba Cloud, today announced the launch of its Malaysia City Brain initiative, the first of its kind to be adopted overseas. This will be done in a joint effort with the Malaysia Digital Economy Corporation (MDEC), the country’s digital economy development agency, and Dewan Bandaraya Kuala Lumpur (DBKL), the city council in the capital, at a ceremony in Kuala Lumpur.

In the recent years, Alibaba has piloted its cloud solution to solve traffic problems in its home city Hangzhou and in Guangzhou, the capital of Guangdong province in southern China. Last year, Dr. Wanli Min, data mining scientist of Alibaba Cloud told TechNode that its solution is applicable to any cities in other countries and is also aimed at helping cities in South East Asia and Europe. 

Malaysia is a country where 24.6% of its people are ethnic Chinese, who dominate business in the country, making it easier for a Chinese company to enter. To seize the e-commerce scene in the country, China’s top e-commerce firms Alibaba and JD.com were considering to invest in the Malaysian subsidiary of Korean online marketplace 11st last year October.

It’s not only on its city traffic that Alibaba is looking into. The tech giant has made its foray into Malaysia since last year, to help its trade and also to grow local startups. In 2017, Alibaba announced the partnership with the Malaysian Digital Economy Corporation (MDEC) in March to work jointly to enable Malaysian small and medium-sized enterprises to benefit from global trade.

In November, Alibaba Group announced that the first Electronic World Trade Platform, or eWTP hub outside of China, which offers Malaysian SMEs the infrastructure for doing commerce with services encompassing e-commerce, logistics, cloud computing, mobile payment and talent training and also forms part of the Digital Free Trade Zone (DFTZ) spearheaded by MDEC.

The City Brain will enable Malaysian urban planners and city officials to upgrade their city governance and decision-making to turn the city into an intelligent one. Developed on Alibaba Cloud’s cloud computing infrastructure, it is expected to support Malaysia’s digital transformation with cloud technology and artificial intelligence.

WeChat announced that their media platform will regulate user’s information dissemination behavior and those trying to conduct marketing activities by distorting China and CCP history, ThePaper is reporting [in Chinese].

The announcement comes one week after WeChat’s Open Class in Guangzhou, where WeChat promised to work on helping content public accounts to monetize their user base. With the announcement of now 580,000 WeChat mini programs, WeChat wants to make sure all their platform operators abide by the rule of “People’s Republic of China Cyber Security Law”, and publish only appropriate content.

WeChat announced that it will permanently remove any Official Account “distorting” the national history or the Party history.

Here’s the full text of the announcement (our translation):

Recently, WeChat public platform (微信公众平台) found that some public accounts and mini programs that were distorting the party history and national history and were conducting marketing activities. Such acts have violated the “People’s Republic of China Cyber ​​Security Law”, “Internet users’ public account management regulations”, “Instant Interim Provisions on the Development and Management of Public Information Services for Communications Tools “,” WeChat Public Platform Operation Specification “and” WeChat Mini Program Platform Operation Specification”, which were suspected of spreading fake marketing information, disturbing users, destroying user experience and disrupting the healthy ecosystem of the platform.

According to the requirements of the above laws, regulations and platform specifications, from the moment of announcement, public articles that still exist for such opportunistic marketing activities will be deleted and penalized for violating rules. If they continue to violate regulations or deliberately use various means of malicious confrontation after repeated punishments, we will take more heavy treatment until the permanent removal. We ask operators seriously treat inappropriate content, strengthen account management, and work together to maintain a sound network environment.

Examples of violations

1. Misleading titles

The title released on July 1st 2017 reads, “China, you are fooled!” The bottom red explanation reads “Fiercely click up there! You can subscribe to this account for free!” and “Right mind, right thought, right behavior and the most influential, positive energy-giving platform! Thank you for being part of us!”

This article on WeChat public account conducted marketing activities by spreading fake marketing information, and disturbing users and falsely using a title, therefore, violates the rules.

1. Fabricated distortion of historical information

The title of the article released on August 4th, 2017 reads, “Shangganling campaign! A secret concealed for the half-century”.  Shangganling Campaign was a protracted military engagement during the Korean War dating from Oct 14, 1952 to Nov 25, 1952, where the main combatants were two United Nations infantry divisions, with additional support from the United States Air Force, against elements of the 15th and 12th Corps of the People’s Republic of China. The notice reads: “Notice: click the upper account, then you can subscribe for free!” “After subscription, you can answer at the bottom with the number next to each article title, and read the content.”

This article on WeChat public account conducted marketing activities by distorting China’s history, therefore, violates the rules.

Secondhand trading unicorn Zhuanzhuan has responded to judicial investigations regarding their platform being used to buy and sell real and counterfeit invoices (发票). Recently, the court received a report from Zhuanzhuan (转转, meaning ‘pass on’ in Chinese) that, with a series of preventive measures added, the number of cases has dropped drastically, Chinese media Beijing Morning Newspaper is reporting.

Zhuanzhuan is the secondhand trading unit of Chinese Craigslist 58.com, used as a platform for buying and selling used phones, computers, as well as furniture, clothes, books, and vehicles.

Zhuanzhuan has known to be lack of vetting its listings. In 2017, one person with surname Zhou said that he sold his accumulated 543 Beijing special invoice for parking fees, at a price of RMB 200 on Zhuanzhuan app. After identification, above invoices are found to be real invoices. After the Haidian Court sentenced him to three months in prison for selling illegally the invoice, he was fined RMB 10,000.

In 2017, 26 out of 59 cases of the illegal sale of fake invoices that the Haidian Court saw originated from Zhuanzhuan.

58.com’s spinoff company Zhuanzhuan after receiving judicial advice said it has been reforming its platform. First of all, in the platform banned invoices and prescription drugs and other prohibited goods from the search function. It also added a quick entry for reporting of prohibited merchandise. After the rectification, the number of illegal sales of invoices handled by Haidian Courts involving transfer to the platform dropped drastically. At present, no new cases have been reported, the users cannot find any appropriate transaction information on the platform.

This is not the first time Zhuanzhuan has been told clean up its platform. Last September, the secondhand trading platform sealed a deal with Foxconn and other tech giants to work on vetting secondhand phones exchanged over the platform.

Caocao Zhuanche(曹操专车) an electric vehicle sharing company backed by Chinese automaker Geely, has completed a RMB 1 billion ($156 million) series A round from various investors, at a valuation of over RMB 10 billion ($1.6 billion), Sina Technology is reporting. Investors in the round were not disclosed. With the new funding, the company plans to expand in cities such as Shenzhen and Chongqing.

While Didi Chuxing still dominates China’s ride-sharing market after the acquisition of Uber’s China operations, there is still room for other players to grow. In last December, Didi Chuxing’s market penetration rate was 11.4%, followed by Yidao Yongche (0.9%) and Shenzhou Zhuanche (0.7%), according to Jiguang Data. Caocao Zhuanche, taking the 7th place in the list, showed an explosive growth rate 512.7% in December.

Three things seemed to have contributed to Caocao’s high valuation. Firstly, Caocao Zhuanche uses only electric vehicles from Chinese automotive manufacturing company Geely, who is also a strategic investor to the company. Unlike other ride-sharing companies, Caocao Zhuanche owns all the vehicles used in its service and trains their drivers and gives certificates to them. On top of taxi hailing services, the company also offers car rental services and private car hailing services which user can also have a tour guide option.

Launched in 2015, Hangzhou-based company claims that it now operates in 17 cities with over 12,000 drivers, and fills roughly 150,000 daily orders. It is named after Caocao(曹操), one of the central figures of the Three Kingdoms period.

Expanding to car-hailing business seems like a new movement for Chinese companies. Chinese O2O ecommerce company Meituan-Dianping set up its ride-sharing unit, and chauffeured car service provider Yidao Yongche also launched its taxi-hailing service. The two companies are currently having a subsidy war to attract more users to their services to win over Didi’s market dominance. Earlier this month, bike rental startup Mobike also expanded to car hailing service by partnering with Shouqi Limousine & Chauffer (首汽约车) to battle its arch rival having their bike rental service on Didi Chuxing.

The CareVoice (康语), focused on improving healthcare and the insurance experience for people in China, announced today it has raised over $2 million in early growth capital. The investment will be used to fuel its insurance business lines, accelerate technology development, consolidate its leadership in China’s major cities and expand to Southeast Asia. The company would not disclose their total valuation.

China’s health-care sector spending is projected to grow from $357 billion in 2011 to $1 trillion in 2020, according to McKinsey’s article.

The funding round has been co-led by two China- and US-based VCs, Haitao Capital and SOSV, and involved local Chinese and Southeast Asian healthcare investors.

“In just a couple of months, key players such as AXA, Ping’An, and Chubb became customers of The CareVoice, and the onboarding rate of newly-insured members has increased 10 times, reaching more than 50%,” said Geoffrey Handley, General Partner at Haitao Capital.

Currently, The CareVoice app lists hospitals, doctors in Shanghai, and medicines in China and their reviews from the patients, all in Chinese. While working at Sanofi for more than 10 years, CEO Sebastien Gaudin said he found that China’s healthcare market needs to build trust, and founded the company.

Established in June 2014, the startup went through Chinaccelerator’s batch 10 in 2016, coinciding with company’s shift towards health insurtech.

“It goes with the trend of privatization of healthcare. There has been huge investment to address consumers’ demand for better healthcare, and the percentage of private hospitals and clinics increased from 25% to 50%. These new medical facilities are embracing international standards, patient-centric care, and more transparency,” Gaudin told TechNode. “Private insurance companies and employers are supporting this trend too. This created opportunities for international startups like The CareVoice to get into health insurtech.”

The Carevoice includes a free open platform for the public to share their experience and get ratings and recommendations of medical providers. For individuals or employees covered by insurers who are clients of CareVoice, they get access to a VIP personalized access to the platform where their App experience reflects their insurance plan so that they can simply with more confidence find medical care, and use easily their insurance benefits.

Sebastien said the cost for an annual insurance ranges from RMB 7,000 to 20,000 to cover access to private medical services. CareVoice earns a percentage of that premium for its VIP membership SaaS services that is paid by insurers. While the company is not profitable yet, Sebastien said they expect positive net income this year.

In 2018, The CareVoice will focus its efforts on accelerating the development of its mobile platform and SaaS solutions for insurance incumbents, which enables them to undergo the critical digital transformation of health plans expected by mobile-savvy Chinese affluent consumers.

Yesterday Chinese media 36kr is reporting that Didi vetoed Alibaba’s funding to Chinese bike rental startup ofo. However, Didi’s spokesperson told TechNode that this is not true.

“We didn’t veto any such plan. We are partners with Alibaba in ofo,” Didi spokesperson told TechNode.

In July, ofo announced its Series E of financing worth $700 million led by Alibaba and other investors including Didi. According to 36kr, at the end of last year, ofo reportedly has reached an investment agreement with Alibaba to accept the $1 billion in financing. However, neither ofo nor Alibaba announced the details of the financing.

Speculations arose last week, with rumors that ofo investor Zhu Xiaohu (also known as Allen Zhu) from GSR Ventures has sold his shares in ofo to Alibaba for $3 billion.

On January 14, Jia Jinghua, an influencer on Baidu Baijiahao, said that during the new round of financing, many ofo shareholders had already agreed and signed the investment agreement. Only one shareholder was so unwilling to sign it. 36Kr has confirmed with many parties and the shareholders who are reluctant to sign was Didi, who launched its own bike rental platform this week.

An ofo insider said that part of Alibaba’s financing is being used to buy some of Didi’s shares in ofo.

Didi launched its own bike rental service in cooperation with Bluegogo, combining with its own manufactured rental bikes while owning about 30% of ofo.

January 9th was WeChat mini program system’s first birthday. Throughout its first year, some startups picked it up and developed their own mini programs. There is now an ecosystem of mini programs. The advantage the small, light programs have is that WeChat users don’t need to download anything, they just start the mini app from within WeChat, saving time and memory space on the phone.

At the WeChat Open Class PRO held in Guangzhou on January 15, WeChat announced that they now have 980 million monthly active users. But the big question is, as WeChat is now becoming a platform for companies to start their business based on the WeChat ecosystem, how effective are WeChat mini programs for user acquisition and monetization? How can content entrepreneurs running WeChat public accounts monetize their user base?

Let’s review WeChat mini programs’ key numbers from 2017.

• 170 million users are using mini program every day
• 30% of users are from first-tier cities. Second, third and fourth (and below) cities made up 50%
• There are 580,000 mini programs online
• There are more than 1 million mini program developers, business and individuals combined
• There are 2,300 third party companies

So how the 2,300 third party mini programs differ from the 580,000 mini programs online? WeChat public platform (微信开放平台) certifies third party platform (第三方平台) companies, so that they can help other businesses to register their mini program through them, and develop mini program for them. In the Mini program ecosystem map, 有赞、轻芒、SEE小电铺、知晓程序 are third party platform companies.

Hu Renjie, general manager of WeChat Open Platform introduced WeChat mini programs use cases in five sectors:

Retail

Hu gave three examples of retail stores using WeChat mini programs. Yonghui supermarket (永辉超市) has a mini program that consumer can scan QR code, shop, then pay directly and leave the store, so that consumers don’t have to stand in long queues, similar to BingoBox’s format. Meiyijia convenience store (美宜佳便利店) put discount coupons in the mini program. Family Mart’s gift card mini app takes advantage of WeChat’s social aspect and allows consumers to present gift cards to each other.

E-commerce

There are three models of WeChat mini programs, the first is “platform e-commerce”. According to Hu, 95% of e-commerce platform companies have created their own mini programs such as JD, Pinduoduo, and Mogujie.

“We also observe a phenomenon that many users spontaneously set up a WeChat group for sharing good products or a discounted products. Users are very accustomed to sharing their shopping experience in groups,” Hu says.

Second is “content e-commerce”. WeChat is home to a lot of original content and they are increasingly linked to e-commerce. The Rebecca (黎贝卡) WeChat public account has created a brand store mini program, and added 1 million users in about seven minutes. Hu did not share any sales figure of these mini programs, but mentioned that the WeChat team will keep on developing so those content companies can monetize through WeChat.

“We will do more to help these companies find new revenue models and earn money on top of their good quality content,” Hu remarked.

The third model Hu shared is the “brand e-commerce”. Mini programs can open up the membership system, to provide membership privileges, add points, purchase, share, send gift cards to achieve higher user retention.

Lifestyle

Currently, open the “mini program nearby (附近的小程序)” function, and you’ll see a list of local businesses including restaurants, beauty salons, coffee shops showing how far they are from the user with their address.

“The WeChat team has tried to create a low threshold for access to service via mini programs, allowing us to approach many potential users. Second, merchants can maximize the traffic to online services and make better transaction scenarios, and then have their customers linked to merchant’s public accounts. That way, they are using more channels to through which consumers can recognize them and make more touch points with the consumer, and expand the overall user base,” Hu said.

More than any other lifestyle services, Hu said bike rental and mobile charger rental programs are frequently used, as users find it easy to immediately use these mini programs.

Government services

Hu shared that the Intermediate People’s Court of Guangzhou has a mini program where they upload video of court trials and the Guangzhou Traffic Police has a mini program through which citizens pay fines.

“The government doesn’t need too much development capability and can provide very good services for citizens through mini program,” Hu says.

Mini games

WeChat released mini games (小游戏) on December 28 2017, and games are actually a sub-category of mini programs that will expand the content of mini program services. Developers can incorporate improved interactive and entertainment features to attract users.

“When we make our services, we consider how we can make WeChat users more accessible to each other, and to connect better. When they connect better, in fact, this is the traffic for WeChat,” Hu noted.

Conclusion

WeChat wants more businesses to join the bandwagon of WeChat mini programs. It’s totally up to businesses whether they stick to the WeChat ecosystem, or use other Chinese social platforms to “spread the eggs” and drive traffic. Still, considering Statista’s forecast that there will be 7.3 million apps in 2018, 580,000 mini programs looks like a better battleground to enter. If you still thing developing an app might be a safer option in the long term, keep in mind the fact there are hundreds of Chinese app stores due to the absence of Google in China, and upload your app to stores based on rankings such as the top 10 Chinese Android app stores. 

While Tencent’s WeChat has over 980 million monthly active users—mostly Chinese-speaking—around the world, the Chinese messaging app is still stranger to many other countries outside the Middle Kingdom. Tencent once surpassed Facebook in valuation. According to Chinaccelerator’s managing director William Bao Bean, Tencent’s WeChat achieves better monetization than Facebook.

Released in August 2013, WeChat Pay has expanded to 25 countries around the world, and among those countries, expansion to its neighboring countries—Japan and South Korea—was rather successful, according to Grace Yin, Director of WeChat Pay Cross-border Operation at Tencent at the press conference held at annual WeChat Open Class PRO in Guangzhou, China on January 15th.

She shared status quo of WeChat payment’s overseas expansion.

• Japan: In the past one year, the expansion to Japan was rather good, according to Grace, collaborating with many local players. WeChat aims to make a better product, upgrade quality, benchmark local companies for local merchants, and further their expansion in the retail and traffic sector.
• Taiwan: WeChat has Taiwanese bank partners. Taiwan’s  local stores are interested in WeChat payment and are active in adopting it.
• South Korea: WeChat expanded to South Korea earlier because the local merchants had a better understanding of WeChat. WeChat said they are not concerned with KakaoPay, a Korean payment service for local people because Wechat is targeting only Chinese people.

She said it is not difficult to penetrate countries where credit card payment is already widespread, such as Japan and South Korea. “We are going to target Chinese tourists in those countries, so introducing WeChat payment there is not so different from doing it in China,” she said.

In WeChat’s localization effort in overseas countries, when a user makes a payment, she made it clear that “We don’t have to have money transacted in overseas countries to come back to China.”

Are overseas users using WeChat mini app at this point?

We have our partners, working with these local merchants in overseas markets. They give suggestion to storeowners about WeChat payment and mini app, to ask their demand and help them establish these solutions. We are now figuring out how we can do it better and to help them better.”

As for WeChat payment in overseas countries, WeChat is only targeting Chinese tourists. When would WeChat consider covering international users?

It’s only Hong Kong that WeChat is helping local people to use WeChat payment service at this point.

WeChat is initially a social app. If they don’t have experience using WeChat, then we cannot ask them to establish WeChat payment for their local users. WeChat payment usage go along with WeChat, and we have to see the regulation of different countries.

WeChat Pay has spread out to 25 countries now, what are the difficulties?

Our first step to educate the local users. There are so many funny stories in our expansion and promotion efforts to other countries, because all the culture and regulation is different from country to countries.

In Japan, we wanted to add WP to a department store. Since Japan is meticulous about service, they asked “don’t you like personal service face-to-face, rather than mobile payment?” I could see that they want that personal interaction with customer.

In Thailand, local people don’t have experience in mobile payment. Firstly, they said, it’s ok to run mobile payment options. But as we started it, they said “There must be a risk, according to our law. We have to establish all the regulation around QR code and the mobile payment.”

Has WeChat considered providing payment option to other third parties such as Southeast Asian taxi companies like Ola and Grab?

On top of last year’s 20 countries, WeChat has expanded to five more countries. This year, Indonesia and Singapore asked to add WeChat payment. In the taxi partnerships, we are doing it now. We are welcome to accept any overseas third party services to add WeChat payment to their payment option.

Chinese conglomerate Shanda Group invested $5.6 million Series A in Malaysian startup NIDA on February 2017 in order to further tap into Southeast Asia regions, the next booming travel destination for Chinese tourists.

In fact, Southeast Asian countries remain top destinations for Chinese outbound tourists. Thailand, Singapore, Vietnam, Malaysia, Indonesia and the Philippines are among the 10 most popular destinations for outbound travelers during the National holiday according to the China Tourism Academy.

But why did the global privately-owned investment group Shanda (盛大集团) invest in the 3-year-old Malaysian company?

“The primary reason is that Shanda Group wants to establish a similar model to HomeInns in SEA,” Kaneswaran Avili, CEO of NIDA told TechNode.

HomeInn Hotels Co. (首旅如家) and Ctrip jointly established an economic hotel chain HomeInn (如家酒店, means “Home-like hotel”) in 2002. HomeInn’s first branch opened in Beijing, and has since furthered its expansion to more than 2300 hotels in and outside of China over the decade, and was listed as one of the top 50 hotel chain brands in 2016 in the HOTELS magazine. It seems that Shanda, seeing the SEA as the next market, is betting on NIDA to do the same.

Southeast Asia’s economy hotel room network NIDA secures over 4,000 hotel partners in Indonesia, Thailand, Malaysia, Philippines, with additional plans to launch in Singapore. As Shanda’s investment group is headquartered in Singapore, this might help NIDA’s expansion in the neighboring country.

“NIDA caught our attention as they have developed a business model that enables the Company to quickly build a highly scalable platform with a strong brand by effectively addressing the needs of travelers and local hotels in the fragmented, less digitalized yet large and rapidly growing economy hotel sector in Southeast Asia,” said Robert Chiu, President of Shanda Group said in the press release when NIDA received investment.

We asked Shanda to further comment on this investment and future expansion in the Southeast Asian market, but the company declined to comment.

Why Shanda invested in NIDA

There are handful of competitors in the booming Southeast Asian travel market including local players like Indonesian hotel and flight booking site Traveloka, hotel reservation company Agoda, Expedia, booking.com, Ctrip and international players like Trip Advisor, Hotel Quickly, hotel price comparison site Trivago.

Established in September 2015, NIDA is comparably a new player in the sector, but has found the niche in the accommodation market: economy hotels.

We visited one of the hotels integrated to NIDA, called Javelin boutique hotel in Kuala Lumpur, Malaysia. At a first glance, the hotel looked like just an ordinary hotel. At the time, Kaneswaran said soon this hotel will change its name to Hotel NIDA, and it actually did, as the picture above shows. Why would these boutique hotels give up their brands to join NIDA?

“They are not interesting brands. Brand does not add significance to these independently owned hotels,” he says. “Joining the network of a bigger brand brings significant benefit for them, in terms of technology, customer attraction and lower operation cost.”

NIDA automates the registration process so that hotels can gradually decrease the people in the front line. This makes the check-in and out process efficient so that customers can check in much earlier, and improves the financial account of hotels by reducing human labor. When a customer checks out, the company sends the alert the cleaning people so that the room can be sold much quickly to new customers.

“Normally customers have to check out by 12 p.m., and can check in after 2 p.m. We want to change that policy, because business people arrive at the airport with morning flight, arrive in the hotel early in the morning, and want to have early morning shower and go to meeting, but current hotel system doesn’t allow that,” Kaneswaran, a former director of AirAsia said. When AirAsia, Malaysia’s top-grossing budget airlines started with two domestic air craft in 2001, he implemented company’s various distribution channels in all markets. He sees the economic hotels going same for tourists.

“Travelers are spending more time and money outside, and spend little time and money in the hotel room. They spend lower than $40 per night,” Kaneswaran says.

NIDA is already tapping to Chinese customers. Thailand’s hotels that joined NIDA are integrated with Chinese provider of travel services Ctrip. “Chinese tourists’ demand for Thailand’s hotel rooms is much higher [than rest of SEA countries],” he explains.

Prior to Shanda’s investment, NIDA landed $4.2 million pre-Series A investment in April of 2016 from Japanese fund CyberAgent Ventures and Convergence Ventures.

According to Apple Inc., iCloud services in mainland China will be transferred to cloud company in Guizhou and will be responsible for the operation starting from February 28 this year, Chinese media People’s Daily is reporting. 

Guizhou-Cloud Big Data Industry Development Co., Ltd. (GCBD, 云上贵州公司) will be responsible for iCloud operations in mainland China and will have legal and financial relations with iCloud users in mainland China. The company was approved for operation by the People’s Government of Guizhou Province in November 2014, meaning that the company is sponsored by Guizhou Big Data Development Administration and supervised by the Board of Supervisors of Guizhou State-owned enterprises.

In July 2016, Apple set up its first data center in China in an effort to comply with country’s newly passed cybersecurity regulations. The data center project is part of the tech giant’s planned $1 billion investment in Guizhou province and is operated in partnership with GCBD.

“Chinese users like to use iCloud to securely store photos, videos, documents, and applications and stay in sync on all devices. We believe new partnerships will improve the Chinese iCloud user experience by reducing latency and improving reliability,” Lisa Jackson, Apple’s vice president for environment, policy and social affairs said.

While moving iCloud to China will improve the speed and reliability of Apple’s services, it raised data protection concerns since all data will be required to be reviewed and approved by Chinese regulators before transferring abroad.

In the meantime, Apple emphasized in its statement that “Apple has a strong data privacy and security mechanism and will not create a backdoor in any of our systems.” In addition, Apple also said that they will collaborate with Guizhou on the cloud and will only respond to legal requests for data. Apple also said that it can not unlock unlocked iPhone or iPad.

Within a seven-week period from January 10, users will receive this notice by e-mail and push notifications from Apple and iCloud’s system will make sure the users have received at least one notice, in order to complete the user’s service migration. As of February 28 this year, if the user has not received the notice, their accounts will not be moved to Guizhou’s cloud and will remain in the disabled state. During deactivation, data previously stored by the user in iCloud will also be stored in iCloud and will not be lost. If a user disables the iCloud service after February 28, Apple users will need to accept the new terms and conditions to ensure that your account is reactivated and moved to Guizhou’s cloud.

In the new terms and conditions of iCloud operated by GCBD, GCBD comes out four times. Basically, it tells you all the data you store with iCloud, including photos, videos, documents, and backups, will be transferred to GCBD.

Here are the 4 major additions to the TOS for Chinese users:

1. Welcome to iCloud operated by GCBD
   THIS LEGAL AGREEMENT BETWEEN YOU AND GUIZHOU ON THE CLOUD BIG DATA INDUSTRIAL DEVELOPMENT CO., LTD (“GCBD”) GOVERNS YOUR USE OF THE ICLOUD PRODUCT, SOFTWARE, SERVICES, AND WEBSITES (COLLECTIVELY REFERRED TO AS THE ‘SERVICE’).
2. Upon receipt of a copy of a death certificate your Account may be terminated and all Content within your Account deleted. Contact iCloud Support at Electronic Information Industry Park of Gui An New Area, Guizhou province, P.R. China for further assistance.
3. If while using the Service, you encounter Content you find inappropriate, or otherwise believe to be a violation of any copyrights, or of this Agreement, you may report it by contacting GCBD at Electronic Information Industry Park of Gui An New Area, Guizhou province, P.R. China.
4. To terminate your Account and delete your Apple ID, contact GCBD Support at Electronic Information Industry Park of Gui An New Area, Guizhou province, P.R. China.

Why Guizhou?

You might wonder, why is iCloud’s Chinese partner based in Guizhou, not other provinces in China? Located in Southwest China, Guizhou is one of the first provinces in China to have developed a big data industrial sector to lift its people out of poverty.

Leveraging the local government’s support, numerous tech giants also have chosen Guizhou province to place their servers. Prior to Apple, Apple’s smartphone rival Huawei established their data centers in Guizhou in August. More importantly, Apple’s main supplier in Asia, Foxconn also holds several tens of thousand servers in the region. As you can see from the map, Guiyang is geographically the belly button of Apple’s device manufacturing factories in China, surrounded by Chengdu, producing iPads, Shenzhen producing Macs, and Zhengzhou and Taiyuan, producing iPhones. In November, Apple has been accused of relying on students working illegal overtime to build the iPhone X, through Foxconn, which manufactures the devices in Zhengzhou.

A week after China’s leading O2O and e-commerce platform Meituan announced that “Meituan Dache (美团打车)” will be launching in Beijing on January 12, Municipal Commission of Transportation said “Meituan Dache” is not yet in accordance with the municipal law to apply for ride-hailing business, and has not obtained related business qualification yet, Chinese media Tencent News is reporting. 

According to the “Opinions from the General Office of the State Council on Deepening Reform and Promoting the Healthy Development of Taxi Industry” (our translation, 国务院办公厅关于深化改革推进出租汽车行业健康发展的指导意见), ride hailing business services should go through relevant permit procedures in the city. The municipal department in charge of transportation spoke to Meituan’s relevant person in charge and claimed that the company should operate the following service in accordance with laws and regulations in Beijing.

Meituan Dache’s official Weibo account has not responded to the matter yet. Meituan Dache Weibo account, established on July 2017, was used as a platform to push the subsidies to its over 11,000 followers.

This comes just two days before launch. Meituan, who was busy pushing subsidies to its users to battle Didi, would have to make sure their service abides by the rule. Didi has been dominating the taxi hailing market, since it acquired Uber’s China operations in August 2016.

With bigger ambition to find next revenue source, TMD (Toutiao, Meituan, and Didi Chuxing), the new BAT, are now crossing the boundary of their proprietary businesses. While O2O service Meituan is getting into taxi-hailing, ride-hailing company Didi is getting into bike rental service after Bluegogo tie-up, and AI-powered news aggregation app Jinri Toutiao is getting into payment service after acquiring online payment license.

A Beijing district court dismissed a lawsuit against Chinese bitcoin exchanges, stating “people have the right to freely participate in bitcoin trading at their own risk”, the Beijing Morning Post is reporting. This comes four months after China’s ban on initial coin offering (ICO).

The lawsuit was raised by Mr. Wang, who lost RMB 400,000 trading bitcoin. He sued bitcoin exchanges, including Huobi(火币), to get his money back, arguing, “According to Karl Marx’s The Two Factors of the Commodity: Use- Value and Value, the commodity should have the use-value and value, and the bitcoin has no value and use-value, and cannot be identified as a commodity . . . so bitcoin does not exist. Therefore the previous trades should be invalidated.”

Defendant Huobi disagreed with Mr. Wang’s claim, saying that Mr. Wang’s understanding of bitcoin was wrong and his trading on the platform was not invalid. The court ruled in favor of Huobi and other bitcoin exchanges citing there are no laws forbidding the investment and trading of bitcoin.

The Beijing Haidian District Court ruled that the plaintiff cannot provide evidence that the exchange was operating illegally, and thus the plaintiff should be responsible for his own trading behavior.

The court judgement also states that, according to China’s relevant laws and regulations, bitcoin is not issued by the monetary authorities, does not have legal and monetary attributes, thereby bitcoin is not a currency issued by government and “there are no laws that forbid the investment and trading of bitcoin” and “people have the right to freely participate in bitcoin tradings at their own risk” (our translation).

The judge warned that investors should be fully vigilant and must not blindly follow trends.

Not long ago, seven ministries and commissions promulgated the “Notice on Prevention of Investment-related Risk on Token Issuance” (link in Chinese; our translation, 关于防范代币发行融资风险的公告). In response, all major domestic bitcoin trading platforms, including one of China’s largest bitcoin exchange platform—BTC China—shut down bitcoin trading.

The district judge said, “These financial platforms generally advocate that what the seven ministries and commissions have halted is the transaction between cryptocurrencies, rather than between the virtual currency and the RMB transaction. So it’s not touching the red line.” Adding that at present, the legal attributes of wealth management products such as bitcoin funds have not been clearly defined yet.

A “unicorn” refers to those companies less than 10 years old and valued at $1 billion or more. There were 34 Chinese new unicorn companies in 2017 that match these conditions, according to a new report released by Chinese startup database IT Juzi (IT桔子).

In the first half of 2017, rental economy startups gained prominence with bike rentals, power bank rentals, and got pretty silly with umbrellas, basketballs, and even blowup dolls. In the second half of the year, new retail projects such as unmanned convenience stores and unmanned shelves began to emerge. AI, on the other hand, has become a consistent investment-attracting sector throughout 2017 with Chinese startups’ overall valuation 2-4 times higher than that of the United States.

It’s interesting to note that more than 60% of the companies have direct or indirect equity shares ownership from BAT (Baidu, Alibaba, Tencent). Tencent’s investment activity in the early-stage investment rounds (angel round and series A) reached 42%, exceeding that of most early-stage investment institutions.

Here are four takeaways from the report:

1. Cultural entertainment, business services, and vehicle sectors were top 3 industries

The new unicorns hail from 11 vertical industries. Among them, the cultural entertainment and business services industry both had seven companies.

The cultural entertainment industry ranks the same as the 2016 rankings, with the number of unicorn companies still in the top spot. Culture and entertainment industry covers short video, content business, as well as education: Kuaishou (快手), Yidian Zixun (一点资讯, meaning “a little information”), Kuaikan Manhua (快看漫画, meaning “quick comic”), Dragonfly FM (蜻蜓FM), Luoji Siwei (罗辑思维, meaning “logical thinking”), and Zhihu (知乎).

The ranking of business services industry has greatly increased compared with that of 2016, since most of the companies in AI belong to business services. Artificial intelligence has spawned a wave of companies such as Shang Tang Technology (商汤科技), Kuang Shi Technology (旷视科技), and Mobvoi (出门问问 in Chinese, meaning “going out to ask questions”).

In 2017, unicorn companies related to the concept of “rental economy” included bike rental service Mobike, and ofo, short-term house rental service Xiaozhu 小猪短租, and UrWork (优客工场).

2. 56% of unicorns are born in Beijing

2017 new born unicorns were still highly concentrated in five provinces, just like 2016. Beijing has 19 unicorn companies, accounting for the highest proportion of 56%, up from 42% in 2016. Beijing’s unicorn company were generally from “content industry” and “artificial intelligence” sector.

Among the five newcomer unicorns in Shanghai, two were in the medical and health field, namely United Imaging (联影医疗) and Mingma Technology (明码科技).

Among the four newcomers in Guangdong, three are in the financial sector, namely trading platform for Hong Kong stocks and US stocks Futu5 (富途证券), the comprehensive banking service providing platform TDW (团贷网) and Feidee (随手记), an internet finance management company.

Among the four newly-promoted unicorn companies in Zhejiang Province, two are located in the field of enterprise services, namely, DT Dream (数梦工场) and Hangzhou-based Tongdun Technology (同盾科技), an intelligent risk management service provider.

3. More than half of the company’s largest single financing in the $100-200 million range

Statistics show that $100-200 million of financing often leads to becoming a unicorn company, so the range of the largest single financing accounted for the highest proportion. In particular, some unicorn companies in 2017 have shown a very strong money-raising capacity, exemplified by Mobike and ofo under the “bicycle rental” concept.

Companies with a single financing amount of more than $200 million accounted for 38% of the total, and the largest single financing amount of more than $300 million also exceeded 20%.

From unicorn’s round of financing, the C round (11 companies, accounting for 32%) is the highest, followed by the D (8 companies, accounting for 23%). In addition, 15% of companies grew into unicorns in Series A. These companies were either from a large company splitting their business, such as 58Tongcheng’s Zhuanzhuan and NetEase spin-off company Netease Cloud Music; or was funded by a giant company or a state-owned company, such as Alibaba investment in Cambricon (寒武纪) and DT Dream (数梦工场), and Liangyu Medical (联影医疗) backed by a state-owned capital.

4. Unicorn can be born in 17 months if shortest, in 105 months if the longest

From the founding date of IT Orange’s 2017 Unicorn List, from the date of the establishment of these companies to the latest round of financing to help them enter the $ 1 billion, the fastest is the Cambricon (寒武纪). It took only 17 months to go through the angel round, Pre-A round and A round of three financing, valuation reached $1 billion.

In addition, two companies that entered the “Unicorn Club” within two years were Mobike and Zhuanzhuan. On the other hand, it took 105 months for Shanghai-based company Chubao (触宝科技) to grow into a unicorn.

The time spent for a startup to grow into a unicorn is mainly concentrated to 2-6 years, accounting for 76%. Startups that took a very short time to grow into unicorns were mostly riding on the main business trend or were spinoff companies of large companies.

When the blockchain era arrives, all transactions will be transparent and decentralized. China, a country with a centralized authority issued an ICO ban in September, seeing how crypto frenzy led $394 million to be contributed towards ICOs in the period from January to June 2017. However, it’s interesting to see how blockchain technology, a decentralized database, is actively making its moves in China, and has attracted international cryptocurrency gurus and blockchain startups to the country.

This year, we talked about the present, past and future of cryptocurrency and blockchain. We have observed some ridiculous ideas trying to raise funding using ICO, how US and Chinese multinational corporates are trying to tackle food safety using blockchain and learned about blockchain’s future at the blockchain side stage at TechCrunch Shanghai 2017. In short, Bitcoin is here to stay; Crypto is as much about ideology as it is about making money; We need to be patient. As we will continue to write about blockchain as stories unfold, we gathered up the most popular blockchain and bitcoin stories of 2017.

1. NEO—China’s Ethereum—is building a smart economy on blockchain

Dubbed the Ethereum of China, NEO has one of China’s most successful cryptocurrencies and is also China’s first open source blockchain. Much like Ethereum, NEO uses a general purpose blockchain and runs smart contracts on it.

NEO has been developing actual products based on the blockchain. The company is betting on what they call the “Smart Economy” which involves creating standards for digital assets, smart contracts, and blockchain-based digital identity systems.

2. Qtum says the trend is building a new business model on top of blockchain

In China, building a new business model based on blockchain has become a trend.

Qtum (pronounced Quantum) is now becoming a toolset and a platform for companies to build their business on top of blockchain. The Shanghai-based blockchain company has their own cryptocurrency called Qtum, which now ranks in the top 20 on CryptoCurrencies Market Capitalization index and provides a blockchain application platform to execute “smart contracts” with a proof-of-stake consensus mechanism.

3. Crypto startup Zeus Exchange uses Chinese tech to transform shares via blockchain

It will soon be possible to buy shares anonymously and securely anywhere in the world via cryptocurrency. And for smaller investors, shares of shares will be available, all for almost no transaction fees.

Russian startup Zeus Exchange, has registered in Singapore and become licensed in Cyprus to trade shares using the smart asset blockchain—the world’s first—developed by Singapore-based foundation, NEM. The not-for-profit foundation is developing its systems in China. The framework that Zeus Exchange will use could be particularly successful in China due to it allowing access to exchanges all around the world via Cyprus. Plus anonymously, and at small scale.

4. Blockchain is shaking up O2O in China and turning cryptocurrency into Pokémon Go

VeChain, a blockchain firm with offices in Shanghai, Singapore, and Paris, sees the technology as a “trust machine.” It assigns each item with a unique ID which is registered to VeChain’s blockchain allowing it to be authenticated and traced to its origin—an important task considering how many fake products there are on the Chinese market.

Beijing-based LoMoStar is building an O2O ecosystem by putting cryptocurrency in red envelopes, also known as “hongbao.” The company’s LoMoCoin (LMC) token can be exchanged for real value (either fiat money, bitcoin, or other cryptocurrencies) and it enables marketing and advertising in the LoMoStar ecosystem, according to its CEO, Xiong Lijian. It’s like the Pokémon Go app but with cryptocurrency gift cards.

5. Central bank says all ICOs illegal

The People’s Bank of China has said that initial coin offerings (ICOs) and any related fundraising activities are illegal. The regulator said in its notice that all activity must stop. The bank has conducted investigations into the practice and found it to disturb financial order.

To some, Shanghai-based startup incubator INNOSPACE+ seems like it’s taking a different path. While there are over 10 startup accelerators in Shanghai, it’s rare to see a startup incubator in the fast-paced city which actually spends money and puts in a great deal of effort to help promising startups to grow.

Taking a lonely path might have been difficult for new players, but now 7-year-old INNOSPACE+ has incubated nearly 400 startups, with a 75% 3-year survival rate. Having incubated and accelerated 10 startups with a valuation exceeding RMB 100 million ($15 million) within 12 months of inception, INNOSPACE+ Ventures’ 1st RMB 40 million ($6 million) Angels Fund recorded a book gain internal rate of return (IRR) of 42%. The Shanghai Tech Bureau has acknowledged them as the #1 ranking accelerator in the region.

“We get over 8,000 of applications a year, and we only pick out the ones that match our investment strategy,” Richard Tan, CEO of INNOSPACE+ told TechNode.

INNOSPACE+ Ventures’ investment is not constrained by a startup’s location and has, in fact, invested in projects outside its physical space including projects in Beijing and Shenzhen. All of their events, resources, and the selected startups are centered on their investment strategies and directions to harness the maximum synergies from all these activities.

“Our model is using the return on investment to cover the cost of running an incubator as well as providing an acceleration program,” Tan said. “Space is just a tool to observe and identify quality startups from the not so good ones, as well as for more effective portfolio management.”

“Unlike other co-working spaces, INNOSPACE+ has an incubation+investment model. This means that we would only set up presence in locations with a strong pipeline of investible projects as well as the need for localized portfolio management support,” Tan elaborated.

This means that all their resources and activities align with investment strategy. Together with their VC Alliance, consisting of the top VC players including Gobi Partners, PreAngel Fund, Innoangel and Atom Ventures, they have been referring projects to each other. And if there is a need, INNOSPACE+ could always request their Alliance members help provide portfolio management support in locations where it does not have a presence.

There are other Chinese startup accelerators in Shanghai, such as Cyzone, Feimalv, iStart, and Suhehui. When asked about other Chinese startup accelerators in Shanghai, Tan explained that iStart’s model is somewhat closer to INNOSPACE+. Cyzone’s main business is media while most others are co-working spaces.

Betting on emerging sectors

INNOSPACE+ Ventures’ 2nd Angels Fund of RMB 200 million ($30 million) is currently being set up, with a focus on three sectors: automotive, smart manufacturing and new retail.

The Shanghai-based incubator is working with BMW, which is trying to find innovative solutions for their cars, and is working closely with Siemens and 3M on developing smart manufacturing and new materials. Together with Acer, the world’s 4th largest PC maker, they set up an innovation lab in Hongqiao Tiandi focusing on IoT projects. Recently, the supply chain conglomerate Li & Feng Group (which dates back to 1906) set up incubator Explorium (利程坊) on Shanghai’s Hechuan Rd focusing on new-retail and new experience and is collaborating with INNOSPACE+. So why are these multinational corporates eager to partner with INNOSPACE+?

“We have amassed much knowledge and resources after years of experiences working with MNCs in these three sectors. We are confident that their 2nd Fund would continue to do well,” Richard Tan explained. “Multinational corporates have a strong need to look for innovation. They partner with us as we are able to help grow startups to a stage that is suitable for these MNCs to consider for technology sourcing.”

Overseas governments are also tapping into INNOSPACE+ to help accelerate their startups to grow in China and to find innovative solutions. Most recently, Malaysia’s Ministry of Trade and Industry brought 29 CEOs from big banks and insurance companies to INNOSPACE+ to source innovative projects and fintech solutions. The South Korean government also sent two batches of five startups to join the INNOSPACE+ Acceleration Program to help them expand into China. As for Hong Kong, Cyberport provided grants to Hong Kong startups that successfully entered the INNOSPACE+ Acceleration Program.

A one-stop service platform for startup gurus

When over 10 co-working space players are jostling to take the best spot in the center of Shanghai to lure young and trendy startup people, INNOSPACE+ decided to locate itself where young people dwell the most: the University area in Yangpu. More than 10 universities and engineering colleges such as Fudan University and Tongji University are located within 3 km of INNOSPACE+. As a pioneer in building up the startup ecosystem, other players like Tencent Incubator, and South Korea’s Hanwha Dreamplus are now located near Daxue Rd (literally meaning “University Road”).

In the lobby of INNOSPACE+, an animated video of a CEO spending a day here is screened for visitors; from work to meeting investors, exercising and finally going to bed after a hard day at work–startup staff can spend their entire day in INNOSPACE+ without having to take a step out of the building. INNOSPACE+ not only has incubator and accelerator, but also an entrepreneurs café, a hardware lab and accommodation, and even a gym. For those startup people who want to devote their time solely on work, and minimize their time on other things, INNOSPACE+ has got everything covered.

Chinese e-commerce behemoth JD officially released the “Paipai second-hand (拍拍二手)” brand, Chinese media 36kr is reporting. As the second-hand e-commerce market is growing bigger and seeing its arch-rival Alibaba’s second-hand e-commerce Xianyu is doing well in the sector, JD is making a move into the burgeoning but risky market.

Paipai has built-in automatic valuation system to help sellers set the price of second-hand goods. Then JD logistics will pick-up the product from the seller based in Beijing, Shanghai, Guangzhou and 125 other cities in China before 15:00 on the same day and go through the goods identification process.

Personal idle item trading market has enlarged these years, as transaction processes and product evaluation systems have become more mature and Chinese users’ consumption patterns have changed. According to Quest Mobile’s report, as of the end of 2017, the number of Chinese users trading second-hand products was close to 40 million. Zhuanzhuan (转转) and Xianyu accounted for more than 90% of the market.

Alibaba’s idle item trading platform, Xianyu has 19.61 million monthly active users, ranking first, followed by Zhuanzhuan who has 17.47 million monthly active users. Zhuanzhuan was launched by 58 Tongcheng, China’s version of Craigslist, in April this year, and received $200 million investment from Tencent.

Mobile phones are now the most popular product to sell and purchase on second-hand e-commerce platforms. Based on Zhuanzhuan’s data released in August, the total trading volume of the platform reached RMB 2.48 billion out of which the mobile phone business accounted for 31%. The mobile phone second-hand market is the largest business segment with its volume of transactions seeing a year-on-year increase of 316%. In the second quarter of this year, the mobile phone transaction volume reached RMB 2.1 million on the platform.

While the second-hand market looks attractive for e-commerce players, the business has its innate risks. As a longtime e-commerce player, JD has an advantage in the 3C market (computer, communication, and consumer electronics). However, entering the second-hand market means having to deal with counterfeit products and this would put JD’s identity as a direct-purchase e-commerce player under scrutiny.

Updated 26 December 2017: This article has been updated to correct the statement that WeChat’s mini apps use H5. The mini apps use a special framework designed by Tencent based on JavaScript. 

Christmas is here! If you’re in China surrounded by excited WeChat friends sending out greetings chances are that you might already be sporting a Santa Clause hat on your WeChat profile photo. Behind the Santa hat craze on WeChat lies the success of WeChat mini apps.

The Santa hats were initially surrounded by April Fool-like tricks and rumors. Users would ask WeChat friends with Santa hats on their profile pictures how they got them and were fooled by their friends to write “Please give me a Christmas hat @WeChat official” on their WeChat Moments, a function similar to Facebook’s wall. Soon enough everyone’s Moments were filled with Santa hat requests but those who joined the bandwagon quickly realized that nothing actually happened.

There are two ways that you can get your Santa hat. First, you can use the WeChat mini app Christmas Profile Photo (圣诞头像) to add Christmas hats to your WeChat profile picture. The second option is to use Tiantian P-Tu (天天P图), a picture editing mini app made by WeChat’s creator Tencent. To place a Santa hat on your picture use the “One key for a Christmas Hat” (一键圣诞帽) feature. Taintain P-Tu launched a promotional WeChat mini-app allowing people to add two kinds of Christmas hats. The mini app asks users to download the Tiantian P-Tu mobile app to try on other three kinds of hats.

The mini apps built with a special framework designed by Tencent that enable lightweight mobile-first webpages allowing users to design interactive campaigns. Judging from its name, the Christmas Profile Photo mini app was created especially for this occasion. Campaigns such as these can go viral as users share them on their WeChat Moments.

Born on January 9th, WeChat’s long-awaited mini apps initially received a rather lukewarm reception from users despite high expectations. But mini apps are gaining more traction. Companies and startups are making witty and easy to use mini apps such as these to spread their message and brand.

The three winners of K-Global Demo Day were VR eye-tracking startup Visual Camp, conversational AI startup MrS.ai and blockchain money remittance startup Moin. K-Global demo day is part of the South Korean government’s effort to foster interaction between South Korean startups and Chinese startups.

On the day itself, December 12, five Chinese startups and 10 Korean startups climbed on stage at Shanghai’s Jin Jiang Hotel to pitch to five judges including Strikingly CEO David Chen, partner at NIO Capital Junyi Zhang, Vice President of Sky9 Capital (云九资本), Fred Young and Professor and Adviser to International BU, III. C. Jimmy Shih. The event was hosted by K-ICT Born2Global Centre, a startup incubator operated by South Korea’s Ministry of Science and ICT (MSIT) and organized by Shanghai-based startup accelerator XNODE.

“There are two startups winning second place. Moin, the first one, is using an emerging technology that could disrupt the current system. Although China has a very strict law on financial matters, she is accepting new technology until proved otherwise. The next one, MrS.ai, uses a natural language technology specializing in Mandarin, that could better fit to the Chinese market,” Professor and Adviser to International BU, III. C. Jimmy Shih commented on each company as he announced the winners of the demo day. “The first place goes to VisualCamp whose technology will be a strike to most mobile commerce in the future.”

“There were also high tech companies like Moin that focus on blockchain tech and building channels to transfer money. The bitcoin price has exceeded $10,000, but is really hard to work on it in China. Korea is special market, and has the potential for its bitcoin market to be the largest in the world,” Vice President of Sky9 Capital, Fred Young commented. Sky9 Capital runs a US dollar fund in China focusing on early stage internet companies and innovative companies in consumer and technology sectors, and has offices in Beijing, Shanghai, Shenzhen and Silicon Valley.

“As for AI, it’s hard to handle Mandarin in AI, since it’s a much more complicated language. So MrS.ai has a very unique competitiveness and has the chance to win in the market. For Chinese startups, the AI market is large and a lot of companies and brands need AI services.”

Here is our overview of the top three companies.

VisualCamp

Eye tracking is crucial to both virtual (VR) and augmented reality (AR) technology-based verticals such as games, e-commerce, content, and social media. US eye tracking technology player Eye Tribe was acquired by Facebook, Eyefluence was acquired by Google in 2016, and SMI was acquired by Apple in 2017. South Korean startup VisualCamp is a VR eye-tracking technology provider and their technology is currently mounted on Samsung Electronics’ all-in-one-type Exynos VR HMD (head-mounted display). As VR HMD is moving from PC connected, mobile connected, then to all-in-on device, keeping low CPU occupation rate becomes important. On Exynos 8890, their technology  takes less than 4% of CPU occupation rate. Compared to their competitors in the same arena, their solution run on all three HMDs including desktop, mobile and all-in-one, and runs on five operating systems, including Android,  Windows, Linux, Linux Arm and Mac OS. Based on the eyeball and gaze data, the Seoul-based company also analyzes user intention.

MrS.ai

Conversational AI, such as Siri and Cortana are now becoming a trend for brands and companies. These companies believe that future service delivery should be interactive and personalized for consumers, and are actively searching for localized professional solutions that provide in-depth AI technology while truly understand quality services, to help them innovate next-gen service experience.

MrS.ai develops Conversational AI solution for the service industry, designing virtual AI agents for multinational corporates to deliver professional-level services via conversation in Chinese. The virtual agents it designs can handle complicated consumer requests in Chinese with in-depth personalization, using technologies like service-sector-specialized SLU, the dynamic representation of professional knowledge and multi-task management, etc., aiming to disrupt the current use of AI in services. Visa China will launch a new AI-based concierge service in China in January 2018, powered by MrS.ai. At the same time, this Chinese AI company, with a clear business need and tech focus on services, is now working with international airlines, prestige hotel groups, and luxury brands in hospitality and mobility, to provide conversation-based services.

Moin

Moin is using blockchain technology to help its users transfer money to overseas countries. Targeting expat workers and students studying abroad, their remittance solution optimizes the process to make it cheaper, and faster, lowering the traditional remittance time by 90%. Their iOS app and website also offer realtime remittance fee comparison with four big commercial banks. For security, Moin follows KYC and AML protocols, and their security will be endorsed by a license issued this month by the South Korean government. During the Q&A, the company confirmed that they are not doing ICO of tokens and are focusing on their service provision. Established in March 2016, the Seoul-based company has raised $2.5 million in funding.

Blockchain is sensitive issue around the world, with some governments wanting to keep the regulation under the radar. However, blockchain is legal in South Korea, and a handful of Korean startups waded into this booming sector this year.

Comments and advice to other startups at the demo day

“There were a lot excellent entrepreneurs from China and Korea with good global perspective. For example, we can see that the iSharingsoft app is useful for a family that has a child,” Vice President of Sky9 Capital, Fred Young commented.

iSharingsoft is a real-time locator service allowing family members and close friends to privately share their location and communicate with each other.

“They were amazing and their products are impacting daily life. iSharingsoft, LIMA and Monit are very interesting,” Junyi Zhang, partner at NIO Capital told TechNode.

LIMA allows brands and companies to advertise their products inside famous web-novels and webtoons utilizing machine learning technology, and Monit is a smart baby-monitoring service, sensing diaper changes and environmental conditions and provides mobile notifications to parents.

“Some of the startups need bigger investors and industry players to help them expand to China. For example, LIMA needs a content company or platform to expand in China. iSharingsoft has been downloaded 300,000 times, that’s not bad. But China is already dominated by WeChat and Baidu Map, and they will have a hard time expanding in China. They really need partners to help them.”

While Christmas has not been a part of traditional Chinese culture and is a working day in China, more and more Chinese tourists have been traveling to Finland’s northern province Lapland—“Santa Clause’s home”—to witness the Northern Lights, or Aurora Borealis. Polar tourism has become the new darling of China’s high-income population and has attracted a large number of Chinese tourists to the north and south poles.

Ctrip, one China’s largest travel sites, recently released China’s first annual “Chinese Polar Travel Report” shows that the number of Chinese tourists traveling to view the Northern Lights has increased 400% in 2017, compared with 2016. The strong market growth, on the one hand, is due to the Chinese travelers’ pursuit of exotic destinations, more challenging travel locations.

As more and more Chinese tourists visit European countries, Chinese mobile payment app Alipay’s coverage in the region is expanding. Finland’s biggest chain of department stores Stockmann agreed to install Alipay as one of its payment methods on this September preparing for Golden Week, a week-long national holiday in October. Payments made in European stores using the Alipay increased six-fold over in that period. 

Apart from the Polar tourism, there are more business interactions between China and Northern European countries, such as SLUSH, a Finland born international tech conference and more startups from Finland and Iceland starting in China, posing a strong background in games such as Shanghai-based AR, VR game maker Directive Games. Some startups scooped investment from Chinese investors or even got acquired by a Chinese company, such as Supercell whose majority stake was purchased by Tencent, Rightware, which was later acquired by China’s Thundersoft. 

Here are four takeaways from Ctrip’s data.

1. Shanghai people are the dominant Polar-goers

From Ctrip’s data, “the top ten Chinese cities that love polar city travel” were mostly first-tier cities or southern cities: Shanghai, Beijing, Guangzhou, Shenzhen, Nanjing, Hangzhou, Chengdu, Wuhan, Chongqing, and Changsha.

Finland, Norway, US Alaska, Canada and Iceland rank as the most popular northern lights destinations. According to Ctrip, the world’s six most popular Aurora destinations for Chinese tourists were: Rovaniemi in Finland, China’s Mohe in Heilongjiang province, Reykjavik in Iceland, Alaska in the United States, and Russia Murmansk and Canada Huangdao City.

2.  Elder people love the South Pole, while younger people love the North Pole

Ctrip travel data shows that the age of customers is polarized (get it?). The South Pole and Antarctica travel products were purchased mainly by people over the age of 46, accounting for 58%. Ctrip travel experts suggest that time-consuming consumers choose Antarctic + South America tour itinerary since it takes more than 30 hours to get to South America from China.

On the other hand, the North Pole and Arctic Aurora travel products were mainly purchased by young people born after the 1990s: 19 to 35-year-olds accounted for more than 50% of the customers.

3. China has become Antarctica’s second largest tourist source in the world in 2016

Data released by the International Association of Antarctica Tour Operators also reflects the strong growth of Chinese outbound tourism. According to the association, China has become Antarctica’s second largest tourist source in the world in 2016, accounting for 12% of some 46,000 total visitors, trailing the United States. Chinese travelers to Antarctica have increased 40 times from less than 100 visitors in 2008 to 3,944 in 2016.

4. Chinese tourists spend RMB 50,000 ($7,500) on average when traveling to polar regions

According to Ctrip’s tourism statistics, tourists who plan to travel to the polar regions for the Spring Festival 2017 and New Year’s Day spent more than RMB 50,000 on tourist products. In terms of consumption, Antarctic products have higher prices, with an average of RMB 100,000 to 200,000 with some direct-to-South Pole and Antarctic luxury cruise products priced at more than RMB 300,000.

Youku, the video hosting and streaming arm of the Alibaba Digital Media and Entertainment Group, today announced the signing of two significant licensing deals with NBCUniversal and Sony Pictures Television.

As a result of the deals, subscribers to the Youku service will be able to watch hundreds of films from NBCUniversal and Sony Pictures Television’s respective libraries for no additional fee. The films are also available to all Youku users via multiple Youku distribution channels, including its flagship online platform, SmartTV solutions, and set-top boxes.

The multi-year agreements with NBCUniversal and Sony Pictures Television will not only add to Youku’s already broad content offering, but they also reinforce the strength of the partnerships that Youku has with these studios.

Tencent video, iQiyi, and Youku were named as the top 3 video apps in China (Source in Chinese), according to QuestMobile’s data on 2017 2Q.

In China, where YouTube, Netflix, and Amazon have been unable to penetrate, there is certainly a content war between many video streaming players in China trying to work with these US players to stream their popular content in China. The leading online video and streaming service platforms in China are trying to partner with international studios that own content IPs that can bring in other sources of revenue. They are also busy doubling down on their original content.

Yang Weidong, President of Youku, Alibaba Digital Media and Entertainment Group said, “I am confident that expanding our relationships with more international studios will further enhance our platform’s penetration into the home entertainment business and push the online video and OTT (over the top) businesses to greater heights.”

The agreements will also enable Youku users to have faster access to the latest and upcoming movies from each of the two studios such as Sony’s Blade Runner 2049, which was recently released in the cinemas and was highly acclaimed in China, and Jumanji: Welcome to the Jungle.

NBCUniversal will provide Youku with a full lineup of blockbuster Hollywood movies, including the entire collection of films from hit franchises such as The Fast and the Furious, Despicable Me, The Mummy and more. Sony Pictures Television will provide award-winning movie series such as Resident Evil, The Smurfs, and The Spider-Man.

To offer its users the best film offerings, Youku has been aggressively signing deals with international studios since 2015. Youku has also partnered with Disney, Warner Bros., Paramount, FOX and other major Hollywood companies.

Youku claims that its content reaches 580 million devices such as mobile phones, PCs, and televisions with 1.18 billion daily video views, as well as a wide selection of acquired movies in its library.

The practice of drinking tea has a long history in China, having originated there during the Tang Dynasty. But in 2017, the practice of drinking coffee could be adding a new chapter to its history in China.

For those living in Shanghai, last week’s WeChat Moments were filled with Shanghai locals posting pictures and selfies in the new Starbucks Reserve Roastery, which opened its doors on December 6th. It’s world’s biggest Starbucks, but other than that, it offers many things and features that you aren’t able to taste, see or experience in an ordinary Starbucks in other Chinese cities.

Stereotypically, tech entrepreneurs love and appreciate good coffee. We even evaluated Shanghai-based co-working spaces based on their coffee environments. There are many things we’d like to talk about in terms of this branch’s new menu–wine, craft beers, chocolates, bakery products (pastry, pizza), freshly roasted coffee and so many items that go over RMB 50 or even RMB 150–not to mention the entire coffee roasting process, coffee library and coffee brewing process. But we’ll focus solely on how techie was Starbucks in Shanghai, the city burgeoning with New Retail sites and a top destination for VR arcades. 

Make sure you do these three things. Firstly, take your time. You need more than an hour to explore this Starbucks. Lining up in front of the Starbucks entrance itself takes more than 30 minutes. The security guards on the doors will allow only 15 people to enter at a time. Secondly, your budget should be more than RMB 5o, because a lot of the drinks are over RMB 50, and bakery items are over RMB 20. Thirdly, you need a fully-charged phone. You might have to play with your phone to wait 30 minutes to enter Starbucks, and playing Augmented Reality game consumes a lot of battery.

1. Starbuck’s AR game

Now you’re in. Firstly, you cannot miss the AR game in the new Starbucks. To enjoy the AR game:

1. Connect to Starbucks Roastery wifi

2. Download Taobao (Starbuck uses Taobao’s AR scanner)

3. Scan the QR code on the Starbucks Roastery guide

4. Be patient when loading

5. Start scanning coffee roasting machines and flasks in Starbucks!

The AR game involves scanning over a dozen coffee machines and coffee brewers in Starbucks. You can first see the map on the app, and select “AR scanner” at the top, then tap the image below to get a hint of exactly where you should go and scan the object or place.

After pointing the camera on the object, the loading process takes about 2~3 seconds. In my experience, some of them work well and are impressive, but it takes a lot of patience to scan it right and some of them just doesn’t work well. After scanning two coffee machines on the first floor, and frustrated to see the AR scanner failing to capture the third coffee flask, I asked the staff to scan it for me, but still no use.

After scanning, an interactive image of the copper cask being filled up with freshly roasted coffee appears, and the copper cask, placed in the middle of the new Starbucks is actually the easiest to scan. As I scanned the copper cask, I could see animated images showing how coffee beans are roasted, and when I tapped “More information,” I was led to another page explaining how the copper cask works in detail. Using the AR function to explore the coffee roasting process was quite impressive and educational.

2. Apply for an electric invoice

Other technology attempts in the new Starbucks include giving phone notifications when your coffee is ready, (if you have paid through either Alipay or WeChatPay) and offering options to apply for electric invoices (fapiao), a very useful function for those who work for China-based companies and want the company to reimburse your invoice. After paying for your drink, tap “Apply for electric invoice (申请电子发票)” at the bottom, and fill in your company name (invoice title, 发票抬头), tax code (税号), and your email address. The electric invoice will then be sent to your email, and you can browse them on your mobile too.

3. Don’t line up, just grab a member of staff to place an order

At West Nanjing Rd’s Starbucks, you don’t have to line up to place an order. You can simply collar a member of staff wandering around with a Windows Surface tablet. They will hand you the paper menu and you can place an order and pay using your mobile phone’s mobile payment options (WeChat Pay, Alipay) or swipe a card. If you want to pay by cash, then you need to go to the cashier to place an order. After placing the order, the app will tell you the name of the nearest spot to pick up your drink.

Considering Alibaba’s technology that it has developed, especially its cashier-less cafe showcased at the Taobao Maker festival, the new Starbucks could have explored even more new functions, such as Alipay’s facial recognition and the unmanned payment options that are currently used in some of its Hema stores (盒马鲜生). But Starbucks played it safe this time, only implementing AR experience at its first Roastery in China.

There was less focus on coffee technology. While Starbucks offers options to its customers to make coffee much stronger or lighter by adding more or fewer shots, this could have been done digitally. For example, you could imagine Starbucks coffee machines connecting directly to user’s Starbucks membership card apps, and records users’ coffee preferences.

The most populous city in China with 34.0 million people and the biggest city in the world by population, Shanghai is surely an optimal destination multinational companies and brands to set up pilot projects. 13 of the total 20 Hema stores, Alibaba’s new retail store concept, are operating in Shanghai, Alibaba’s Single’s day flagship stores were launched in Shanghai, and China’s first Disneyland opened here in 2016.

Starbuck Roastery Chinese address: 上海市南京西路789号 （近石门一路）
English address: 789 West Nanjing Rd (Near No.1 Shimen Rd) Shanghai. Take subway lines 2, 12, 13 and get off at West Nanjing Rd station exit 11 (only line 13 will allow you to get off at exit 11) and you’ll see Starbucks on your right.

We are seeing Asian startups expanding globally. This year, most notably Chinese bike rental companies Mobike and Ofo have expanded to Asian, North Americna and European markets. Chinese smartphone manufacturers Huawei and Xiaomi have been also successful in expanding to Southeast Asia and India. So what are the keys for Asian startups to go global?

At Startup Festival 2017 held in Seoul on November 30th, four panelists discussed the difficulties for global expansion and advice for Asian startups to expand their service globally. The panelists were Bryan Chang, Principal at Collaborative Fund, Judy Sindecuse, CEO & Managing Partner at Capital Innovators, Lu Gang, CEO at TechNode, and Michael Chow, General Partner at Radiant Venture Capital. The panel was moderated by Matt Shampine, General Manager at WeWork.

As a part of efforts to bring in global startups, VCs, and media to South Korea, the first Startup Festival 2017 was hosted by Ministry of SMEs and Startups, and organized by 500VOLT TWO and Brandcook in COEX, Seoul for three days.

These are the three things that we learned from the panel.

1. Localize your service

“Going global is happening right now. Startups should think about how to globalize using their technology, and business model. China is already a massive market, but China’s BAT (Baidu, Alibaba, Tencent) are making the most investment in the US and Southeast Asia. Mobile phone manufacturers are also going global aggressively,” said Dr. Lu Gang, CEO at TechNode.

Even though it’s mostly China’s unicorns that are making steps outside China’s border, Dr. Lu mentioned that startups from smaller countries have an opportunity for global expansion too.

“Israel doesn’t have a big market, but Israeli startups have shown good success cases. You should think about going global from the beginning and think about it every day,” he added.

About the advice to go global, Lu mentioned the importance of localization. Many foreign tech giant companies such as Google, Facebook failed to operate their service in the Chinese market, and even those foreign startups trying to take a piece of China’s booming O2O market such as Uber and Delivery Hero also had to change their direction. Uber’s China operations were purchased by Didi, while Berlin-based Delivery Hero had to exit China market amid hectic competition.

“Internet business is a reflection of the local culture. There are many failure cases of international companies trying to enter China market. They put a very strong marketing effort, but China’s ecosystem is totally different,” he remarked.

“To give ofo and Mobike as an example, it’s too early to say that they have succeeded in the global market. We cannot say they are a success story at this point, and startups should take care of their local market first,” he said.

2. Know your VC

As one of the strategies for global expansion, startups consider fundraising in the country they are expanding to, in a hope that the local investor will help them on the groundwork for local business operations. The panelists discussed the contrast venture capital environments in China, South Korea, and the US.

“Interacting with Korean VCs, the biggest difference of South Korean VCs and the outside is the focus on the profitability given lack of capital or relatively small amount of money available in Korean VCs. Most startups are pushed to profitability much faster than Silicon Valley startups and that changes the whole growth projection,” said Bryan Chang, Principal at Collaborative Fund. “All in all, I’ve seen more startups in Korean and Asia that have a focus on the growth side and sacrifice profitability with the capital coming out of Asian market. So, it’s good to balance both.”

Judy Sindecuse, CEO & Managing Partner at Capital Innovators, gave a broad explanation of how investors from different regions in the US have a different focus when investing in startups. Depending on your focus—whether you are a startup with a long-term vision to attract as many users as you can, or with a firm business model making money from the day one—startups should be aware who they are talking to. She also mentioned that a foreign company willing to fundraise in the US should have a US entity, otherwise US investors wouldn’t consider investing.

“If you’re an early stage startup, you should think about the region. We’re in the mid-west of US. Investors in east coast want to see profitability. Investors in Silicon Valley are trying to find the unicorn. Investors in the mid-west are trying to find B2B startups with practical ROI, and we are open to invest in smaller businesses. I think startups should break into these sectors, and learn about the differences between those markets,” said Judy.

3. Be aggressive in global expansion

Many foreign startups have expanded to China market, and South Korean startups are certainly one of them. E-commerce startups trying to take advantage of the boom of Korean dramas and K-pop in China, child education startups, technology-based hardware startups largely stepped into China. With political tensions beginning last year, the boom cooled down. On October 31, as China and Korean government reached an agreement to mend relations, the situation is getting better. However, given the overall political matters and economic relationships between two countries, Lu mentioned that the failure of China market expansion is the matter of being aggressive and competitive in the market.

Recently, China-based Legend Capital has invested in several Korean companies including cosmetics company Mediheal, Big Hit Entertainment, who owns and operates South Korean boy band BTS, a clouding company, and a film special effect company.

“We see more interaction and more and more communication between China and South Korea,” said Lu. “But we are not seeing many successful cases. Chinese startups are more aggressive to go global. Chinese look at Southeast Asia as a whole, but South Korea is too small a market and not that attractive for Chinese startups to expand to.”

“Korean startups are good at design and technology, but they are not that aggressive. They are afraid about Chinese startups are aggressive on copying the idea, and copyright issues in the Chinese market,” Lu pointed out. “Korean games were hugely successful in China. That’s an exception I think.”

There are less focus on designers and designing tool startups in China, but there are about 17 million designers in China and 28% of them are product designers, and it’s a huge market itself.

So when you see all those Chinese startups, have you ever wondered how those Chinese designers actually made that product? While Facebook, Google, and many others are inaccesible in China, designing products like Photoshop and Sketch are widely in use. Of course, there needs to be Chinese interpretation of these foreign designing tools, and that’s where Lanhu, a Beijing-based startup comes in.

“Lanhu (蓝湖) means Blue Lake in Chinese. By using our product, we wanted our users to relax,” the co-founder and product manager of Lanhu, Zhu Feng told TechNode.

Lanhu is an online product design team collaboration platform for UI designers, product managers, and engineers. The problem that they found in the working process was when designer and developers communicate and collaborate.

“We had inner need to collaborate between developers and designers, and we created the first version of Lanhu. Then other companies started using it, and slowly it went viral and started to spread out with word of mouth. It was December 2016 that we decided to wholly focus on Lanhu,” Zhu Feng said.

For example, when a developer sends a file and or an image to the designer, the designer has to accept it, download it, and there can be miscommunication about which one is the final version. Even using email and WeChat, the team has to download files on their computer. Lack of an efficient collaboration mechanism may lead to tremendous waste of resources at work, and Lanhu provides an interface where all members can access the file and edit it together, just like Google Docs. The way the tool works is similar to Western players like prototyping tool Invision and Zeplin, a collaboration app for UI designers and frontend developers.

“After designers finish editing an image, they have to process it. So after using Sketch and Photoshop to edit pictures, designers manually mark all that elements, and Lanhu helps them mark the elements automatically,” Feng noted.

The Beijing-based company officially launched China’s first professional product design collaboration platform “Lanhu” on November 1, 2017. Lanhu’s free version is B2C, and there’s business version, where the company gives more data security for businesses to keep their private resources and have privacy settings.

“Today, there are a large number of internet companies. In the fierce market competition, product iteration speed is the magic weapon for internet companies to stand out from the crowd,” Yanghui Ren, founder and CEO of Lanhu remarked. “Lanhu’s goal is to become the Microsoft’s Office of the internet age, to establish collaboration standard among individuals, departments, and companies.”

As of November 1, 2017, the collaboration tool startup iterates 52 product versions, modifying 641 requirements; has 230,000 registered users, of which 85% are designers, product managers accounting 6%, engineers accounting for 9%; and average daily usage time of 100 minutes.

“In the future, Lanhu will be carrying more scenarios for more roles to provide intelligent services to reduce duplication of roles between individuals, departments, and companies. By enhancing the docking efficiency, we’ll build a truly intelligent product design collaboration platform,” Zhu Feng said. “Lanhu aim to have 1 million users next year.”

Ford outlined the next phase of its China expansion strategy today, focusing on SUVs, electric and connected vehicles, a streamlined business structure and closer connections to Chinese customers. Jim Hackett, CEO of Ford Motor Co mentioned that the speed of decision making is much faster in China than the US, and said Peter Fleet, Group Vice President & President, Ford Asia Pacific and Jason Luo, Chairman and CEO, Ford China are now fully in charge of China market.

“The evidence is that [our] Chinese organization is run in China,” Hackett said at the press conference held in Shanghai.

“China is not only the largest car market in the world, it’s also at the heart of electric vehicle and SUV growth and the mobility movement,” said Bill Ford, Executive Chairman of Ford.

Here are six things that we learned about Ford’s plan to bring more smart vehicles into China by 2025.

1. All new cars will be internet-connected by 2019

By the end of 2019, 100 percent of new Ford and Lincoln-branded vehicles in China will be connected through either embedded modems or plug-in devices. Ford’s company leaders also said they are working on broader infrastructure opportunities to improve future mobility experiences. Ford’s investment in electrified vehicles is to date $4.5 billion.

2. Ford will introduce more than 50 new vehicles in China by 2025

Ford plans to offer more than 50 new Ford and Lincoln vehicles in China by 2025, and at least 15 new electrified vehicles from Ford and Lincoln. And the new Zotye-Ford joint venture will deliver a separate range of affordable all-electric under a new brand, pending regulatory approvals.

Ford said that they will contain structural cost in the region throughout 2018 to grow its China revenue by 50 percent by 2025 versus 2017.

3. Ford continues working with Baidu on autonomous vehicle development

Ford is one of the founding members of the Board of Baidu’s Project Apollo, building on the agreement signed earlier this year.

In 2014, Ford developed a China market-targeted SmartDeviceLink, an open-source voice commander, together with leading Chinese mapping service providers Baidu and AutoNavi. Last year August, Ford and Baidu jointly invested $150 million in Velodyne LiDAR, a company that makes sensors for autonomous cars’ mapping, localization, object identification, and collision avoidance.

The Apollo Open Platform accelerates the development, testing and deployment of autonomous vehicles. The TechNode team actually had a chance to try out their autonomous cars in this July, when Baidu released their autonomous driving ecosystem Apollo 1.0 with their 50 partners, including Ford.

Ford’s participation supports the company’s robotics and artificial intelligence research efforts and provides an opportunity to contribute to a platform that will be key to developing autonomous vehicles in China.

“We are responding to the rapid pace of change by delivering increased connectivity and working to improve and simplify mobility for everyone,” Hackett said. “This builds on our commitment to deliver smart vehicles for a smart world, helping people around the world move more safely, confidently and freely.”

4. Ford puts importance on SUVs in China

Starting in 2019, the company plans to locally assemble five more vehicles in China for Chinese customers including a Lincoln premium SUV and the company’s first global all-electric small SUV. The expanded product portfolio reflects an even stronger emphasis on SUVs. As Chinese families start to have two children after putting down one-child-policy last year, SUVs will be a more attractive option for Chinese consumers.

“From luxury Lincolns to Ford cars and SUVs, to an all-new electric vehicle brand, we will meet the growing desire and need in China for great new energy vehicles,” said Jason Luo, chairman and CEO of Ford China.

Ford said Lincoln, Ford’s luxury brand in China, will maintain its separate dealer network to offer its one-size-fits-one customer experience.

5. Ford is strengthening ties with its joint venture partners Changan and Jiangling in 2018

Ford is strengthening ties with its joint venture partners Changan and Jiangling in 2018, establishing one distribution services division responsible for the marketing, sales, and services associated with all Ford vehicles sold in China.

“Now is the time to deepen the partnerships we have with Changan and Jiangling Group and present one Ford brand in China,” Fleet said. “The new distribution services division will enable us to offer an enhanced experience for our customers and more closely connect with our dealers and the community.”

“All of the actions outlined today reflect an unprecedented commitment to focus on the needs of consumers in China through a more fit and streamlined Ford,” he added. “They are proof of our dedication to grow our business in China.”

6. Ford wants to cater to Chinese consumer’s taste

In 2019, the company will start producing five additional Ford and Lincoln models in China to further tailor vehicles to more closely meet the needs of Chinese customers.

“Some of our most advanced manufacturing and innovation facilities are here in China,” said Fleet. “Producing more vehicles for China locally allows us to improve the benefits for our customers, our partners, and our bottom line.”

Ford last month opened the Nanjing Test Center, which includes close to 80 different types of real road surface conditions, a three-kilometer test track and a sophisticated emissions testing facility, to speed development of new products, services, and technologies to meet the unique driving requirements of Chinese customers. Jason mentioned that there are 2,000 engineers working in Nanjing.

The company also launched Quick Lane, its customer service provider in Nanjing and Chongqing this month, offering routine vehicle maintenance and light repair services. Ford plans to open 100 new outlets next year.

A Chinese actress’s complaint about online travel company Ctrip’s bundled sales of additional products and services has caused heated debate online. On December 1, Shanghai Insurance Regulatory Bureau issued a total fine of RMB 400,000 to Ctrip Insurance Agency for the illegal activities in 2016, specified as “no disclosure of underwriting company, the main sales agent, not explicitly disclosing the product information and the provisions of the serial number”, Chinese media Daily Economic News is reporting.

After the investigation of Ctrip, Shanghai Insurance Regulatory Bureau revealed that there was illegal activity in the Ctrip network sales of insurance products in 2016: that is, in the sale of insurance products through the Ctrip process, did not specify the name of underwriting companies and sales agents name for the consumers.

In addition, in the insurance order confirmation link, the company did not disclose specifically a list of the links and filing numbers of the insurance products of all the cooperated insurance companies. That way, the consumers are not sure the insurance products they ordered cover which company’s clause and the corresponding record number.

TechNode has reached out Ctrip for comment and will update when we receive a response.

On Sep 10, “Ctrip bundling sales of hotel coupons” was thrown into a hot discussion online as Chinese singer and actress Han Xue, who is also an avid Ctrip user, posted a screen capture of the Ctrip on her Weibo account. She claimed that even though she did not choose “hotel coupon (酒店优惠券）”, the coupon was selected on the booking information and charged to her.

There is another consumer who also posted the complaint on Weibo account, claiming that Ctrip “concealed the important fact on the insurance contract” on April 11. The aviation accident insurance fee (航空意外费）specified on the purchasing page was RMB 20, which turned out to be RMB 30 on the booking information.

According to a survey conducted by a reporter in the Daily Economic News, the insurance companies that Ctrip previously had cooperated on insurance products with include aviation accident insurance, aviation compound insurance, aviation delay insurance, airline ticket refund insurance, domestic and overseas travel insurance, and account security insurance.

“In order to prevent risks, Ctrip previously chose a number of insurance companies to provide services at the same time, the specific underwriting companies in the insurance only given a clear range, the insurance policy ultimately falls to which insurance company is automatically matched through the system. According to the same price of insurance products, insurance coverage and coverage of all insurance companies are the same, the sum insured is also consistent,” a spokesperson at Ctrip said.

Huawei, Oppo, and Xiaomi came in the top 5, after Samsung and Apple, in the Southeast Asia region during Q3 2017, according to data from research firm Gartner. Among them, Xiaomi’s phone shipments grew nearly 80%, and the market share increased from 4% last year to 7% (in Chinese).

Huawei, Xiaomi, Oppo, and Vivo are the top four domestic smartphone makers in the third quarter in their home ground mainland China, and they started to get a grip of the Southeast Asian market in recent years. According to IDC data, Oppo accounted for the second-largest sales volume in 2016 with 13.2% market share, with shipments up 137.5% YoY. ASUS and Huawei each took third and fourth, with 5.9% and 5.1% respectively.

The latest figures from Strategy Analytics reported that in the third quarter of 2017, Oppo was the second largest market player in Southeast Asia with 17.2% market share, followed by the other Chinese mobile phone brand Vivo, taking 4.6% market share.

The report pointed out that global smartphone shipments in the third quarter to be able to achieve a 3% year-on-year growth, thanks to strong growth in Asia Pacific emerging markets and North American markets.

On the other hand, China’s smartphone market is shrinking. Comparing the third quarter figures for 2016 and 2017, smartphone sales in Greater China dropped from 32.3% to 27.9% in the global market, while the share of emerging markets in Asia Pacific rose from 19.1% to 21.3%.

Indonesia represents almost 40% of the economic output of Southeast Asia and is now rising as the next market for Chinese companies looking into Southeast Asia market for a number of advantages. In the “Startups in Indonesia” panel, Adrian Li, managing partner at Convergence ventures and Weihan Liew, CEO and founder of Mainspring Technology, concluded that Indonesia needs more talent. They said Chinese entrepreneurs and investosr should look into this booming market, with Adrian mentioning “China will be to Indonesia what US was to China.”

Convergence Ventures is one of the largest VCs in Indonesia with an early stage technology venture fund that has invested in 30 companies in Indonesia over the years.

Mainspring Technology is a mobile apps and games company based in Jakarta focusing on the Android platform in Indonesia. The company made an AI-driven news app that works like Jinri Toutiao in China and is actually backed by Jinri Toutiao.

Why should Chinese startups look to the Indonesian market?

Adrian: When you look at any market, you start with the fundamentals. Indonesia is a big country and naturally a large economy. Official census says that there are 260 million people in Indonesia. On top of that, you have the opportunity to have a market that is a follower market. In the same way that China was industrializing rapidly and the internet economy came along with US companies replicating and localizing their product to prove their business model in this market, there is a same opportunity in Indonesia. So from those fundamentals, Indonesia is an attractive market not only for Chinese companies but for entrepreneurs and investors from all over the world that are looking to invest in a high potential country.

Weihan, you’re from Malaysia. How did you decide to focus on the Indonesian market?

Weihan: I spent time in China many years ago, working at consulting firm BCG, where they assigned me to Jakarta in the late 90s. When I got back to Indonesia a few years ago, I saw a lot of opportunities. Just like how China was rising in the 2000s, Southeast Asia is rising now. There are less people doing business in Southeast Asia, compared to China. The market is very large and seeing its progress, it’s like you have a time machine. You can think about what you could possibly work on in Indonesia. That’s what motivated me to move to Jakarta.

There are now a lot of Chinese companies moving to Indonesia. Can you share some Chinese companies that are successful there?

Adrian: Chinese companies have been pretty successful in the market. Huawei is running one of the biggest digital and telecom infrastructure in Indonesia. A more mature product-based company is Cheetah Mobile—they have tens and millions of customers in Indonesia. More recently, we are seeing Chinese companies coming to Indonesia for a mixture of reasons. They move to Indonesia in conjunction with the Chinese market, or instead of the Chinese market.

Even though you have success in a market like China, and you have capital, it doesn’t take away the fact that you have to localize in Indonesia, like any other market. You have to localize and understand the people. Unless you can solve that part and build for this kind of opportunities, you won’t be successful.

Weihan: In general, hardware companies in China in tech were successful. Almost all the infrastructure in Indonesia is run by Huawei. Xiaomi went from being very small to 10 million users and has done very well within a year or two. On the other hand, within internet services, Alibaba is the most successful right now because of the strategy they took in terms of investment.

Chinese internet software and service players, in general, have been less able to penetrate the market. We used to ask, “Why can’t big US tech companies do well in China?” Now it’s “Why can’t Chinese companies do well in Southeast Asia?” I think one reason is that models that work in China require scale. In fact, each market in Southeast Asia is sub-scale. It’s not easy to build the model that works for a large scale in Southeast Asia. The other big thing is the people. People in SEA are different in how they treat their work and motivation.

What strategy should Chinese companies take to monetize?

Weihan: History doesn’t repeat itself. Looking at the size of the market, this is how I do things differently. For example, you can advertise because the pool is large. In Southeast Asia, it’s still a market highly driven by Google and Facebook in many aspects, so you should be able to maneuver around that. You don’t have to do the same as in China. The model can be different.

Which sectors are promising?

Adrian: The first time I went to a tech conference in Indonesia was in 2012 and they had a few hundred people. When I went to the same conference a month ago, there were 6,000 people. You can see how much the market has matured. Back in 2012, one of the companies I met was Traveloka, an online travel company. It’s now one of the most stable and strongest unicorns in Indonesia.

In the first wave, it was horizontal e-commerce like a marketplace platform. Now looking forward at other sectors that are gaining traction, we invested in vertical e-commerce like female fashion and furniture which can scale, build a sustainable business, and be acquired.

In media, TV still dominates this country. Prime Perkins reports that per capita hours spent on digital media is one of the biggest in Indonesia. There is a great advantage to build a model in the media space.

This year, in particular, there has been a lot of interest in fintech including payments, banking, and lending. Let’s talk about lending because that’s what Chinese companies are interested in. Only about 30% of people have a bank account in Indonesia. Even then, the largest bank in Indonesia, BCA (Bank Central Asia) is one of the largest market company in the whole of Southeast Asia. You can come up with a business model not seen in China to address this 70% of the population that doesn’t have a bank account.

We recently backed a company using agents which allow people to make a mobile ATM enabling those who don’t have an account bank to be banked. Only 3% of the population has a credit card in Indonesia. How do these people access credit when banks are not willing to lend money to those who don’t have credit scores? There can be an alternative credit scoring mechanism. In order to lend and enhance huge interests in the sector, hundreds of Chinese companies are coming to Indonesia. The financial sector is not heavily regulated now in Indonesia, while financial services are regulated in every country. Secondly, lending, in particular, is not a global business. It’s not like an app. People can find different ways to create an algorithm. It’s a local business—you have to be there and execute well.

What advice do you have for startups entering Indonesia?

Weihan: Patience to start with. It takes a while to make things happen. Also, you need local people to help you. How do you find the right people, and how to motivate them really matters.

Adrian: I would take a step back, and ask startups why they want to enter Indonesia. This is because a number of Chinese companies entering Indonesia don’t ask that question. Some have lost the market in China, and cannot make a business here, so they go to Indonesia. There are all these push factors such as regulation in China. Or even pull factors like other people going there or investors saying it’s a good market to go to.

You have to find the answer first, then go there. I have seen the country, met the people, and I really believe in 10 years, you can build a good company in this area. Then I believe you can build a big company. If you cannot understand that economic opportunity and expand there, you will burn out. You need to have that patience.

Tokopedia has been building a model for 10 years to be a dominant company in the county. Ten years is what it takes to build a good company. Be fully committed to this market. I would literally move there. You can’t have the advantage of being a cross-border team because technical talent is difficult to come by in Indonesia. I would even look out for a local co-founder. If you are serious about the market, offer a big equity to the co-founder and find the best local person in the market. Speak to local VCs and contact the government to be successful. Last but not least, really commit to the market.

VR winter is over. Long live AR. Both Kevin Leung, the director at HTC VICE X, and Atli Mar Sveinsson, co-founder and CEO of Directive Games, concluded that there needs to “killer apps” to open up the AR and VR markets.

In fact, virtual reality headset shipments are showing no signs of slowing, as the quarterly total exceeded 1 million units for the first time in Q3 2017 according to Canalys. Sony took the lead, followed by Oculus and HTC, Collectively, Sony, Oculus, and HTC made up 86% of the total market in Q3 2017.

The third market leader in VR headset shipments, HTC officially revealed on November the Vive Focus, its all-in-one VR headset, and VIVE WAVE, a VR open platform and toolset for easy mobile VR content development and high-performance device optimization for third-party partners.

Directives Games, a Shanghai-based company making VR and AR games, was invited to Apple’s iPhone X launch event, where Apple also released ARKit to facilitate AR experiences. Launch partners for Apple’s  ARKit apps include a new game from Directive Games called The Machines, a competitive AR multiplayer game.

Here are the highlights from their discussion at TechCrunch Shanghai 2017.

What is China’s position in the VR industry?

Sveinsson: I think the Chinese market is very important, not only because of sales, but the whole innovation, design, manufacturing, and the consumer market. When we release our products, of course, we will have some unique localizations for China. So when we talk about profits, when we talk about sales, China certainly is just as important as the rest of the world, or something more important in some respects, not least because of the size of China’s market.

When we talk about the market taking volume, China is completely leading. We also see so many VR HMD (head mounted display), but some products are not very good, but from this perspective, China is a great market that can help you to test your products.

Leung: I can not say that the technology of VR is more advanced in China than the Western world. However, we think that the user’s awareness of VR may be the highest in the world in China. We saw a lot of businesses, large enterprises, and they are trying to use VR technology for their business. What we can see now is that in China, VR is basically used in all the sectors, including design, cars, property, and real estate. Therefore, I think China is far beyond the Western market in this respect. Generally speaking, Chinese companies tend to be more open to adoption of new technology Every business wants to use VR to be ahead of their competitors.

What do you think the market will look like next year?

Sveinsson: AR is actually quite different, AR is just beginning, if we have some AR technology, but this is not complete until a few months ago, Apple released AR Kit in June. In my opinion, it may take AR to reach its peak in 2020, which does not mean that AR is growing every year, but I think this will be a spiral process.

Leung: In 2018, more products with better user experience will enter into the market.  And over the past 2 years, top notch developers like Directive Games have learned to leverage the immersive experience of VR / AR platform.  Instead of porting their console or smartphone content into this new platform.  In short, better contents on better products create even better experience for more use cases.

Sveinsson: What matters is: How do you really communicate with the user? This is what we’ve learned so far. For users, they hope to find something else different, and we hope AR and VR will give users a completely different experience.

Leung: We will start to have 5G coverage in China by 2019.  VR is only going to become more mainstream. So it’s not far away from us, maybe only a few years time.

Many people this year talk about artificial intelligence, and big data. How can AR and VR combine with artificial intelligence and big data?

Sveinsson: We want to put AR and VR together in the cloud. So I think we want this service to give different kinds of data from HMDs. Artificial intelligence can help us continue to develop. So you must consider how to project, and how to analyze. We hope we can sample these big data and collect a large amount of data.

Leung: In the short terms, AI enhance the accuracy of all types of trackings, including positional, eye, facial, hand and body.   In the longer term, AI can help generate scene on demand.  You tell your VR voice assistant that I want to be in Hawaii, and you will see yourself sitting in a sunny beach with biniki ladies playing volleyball, all generated automatically.  It will be like you’re living in lucid dream.

Sveinsson: There are a variety of different scenarios for VR. Say, I saw a pair of shoes in H&M which is black, I really like these shoes, or I like to watch a movie, you can explain some specific scenes, then the VR HMD will find the movie and show you. In fact, we can communicate with our cell phones and so on and get some real-time feedback. We really need AR and VR to develop into this way, we want this kind of VR HMD. Our company is not just building hardware, we are building software, and for some B2B platforms, like Wal-Mart or some other company, they all want to get into the scene as a user. The experience must start with some of the apps on your smartphone, then later it will quickly change our everything else

iResearch says that 2019 will be a turning point in the consumer content market where major content creators will begin to make money. So what kind of advice do you have for these startups to monetize?

Leung: I think I have to take into account the long-term results, I think 2C will be the most profitable areas but 2B is where the money is currently.   Despite the investment climate has been cooled down a bit in the last 3 quarters.  Many VR startups generate decent revenue through corporate clients.  There are many traditional industries approaching us each day and ask us how to leverage VR in their business.  And that’s one of the reasons for setting Vive X accelerator so that we bridge the industrial demands to the startups.

Sveinsson: We’re able to share a variety of experiences with Hollywood and other platforms, and we also think it is important that people may be very interested in our entire experience. IP is our whole strategy.

China’s medical & healthcare industry is like a fresh apple just ready to be eaten by startups and investors. Zhang Suyang, previously a well-known investor at IDG Ventures, China’s top venture capital, founded Volcanics Ventures (火山石资本) last year, to focus on the medical industry. At TechCrunch 2017 Shanghai, he said China’s medical & healthcare industry has two characteristics: information asymmetry and more demand than supply, making the sector ready to be tackled.

He also mentions that genetic testing can help China’s medical industry, with startups including consumer genetics testing company Prenetics, allowing people to take a preventative approach to healthcare.

Volcanic Ventures invests in the Series A and B mostly in the medical sector, AI, and cultural entertainment. The fresh born venture capital has invested in four medical startups, three AI startups, and one cultural entertainment startup since last year.

Their medical investments include:

• Gene+ (吉因加): invested RMB 200 million in series A round of Beijing-based Gene+
•  Origimed (至本医疗): invested $10 million in angel round of Shanghai-based Origimed
• Jianke (健客网): invested $50 million in Series A+ funding of a 10-year-old, Dongguan-based B2C medicine e-commerce platform Jianke
• Ruisunshengwu (锐讯生物): invested in a few million dollars in angel round of Suzhou-based Ruisunshengwu

Here are some highlights from this fireside chat (edited for length and readability).

China’s medical & healthcare industry

We are investing in the traditional medical & healthcare sector, which includes traditional equipment, traditional treatments, hospitals, and nursing homes. Medical treatment was based on evidence-based medicine, which is generally based on experience and diagnosis. However, for the past five years, with the development of genetic medicine and development of molecular medicine, it may break some of the evidence-based medicine streams. Its final diagnosis is a clinical diagnosis [as opposed to genetic] and clinical diagnosis may be wrong.

For example, suppose you have a respiratory infection, and you go to the doctor and get an examination, then it takes at least a week to get the result. Now, from a genomics point of view, if you get a diagnosis, you may know the result the next day. So the company that made the original evidence-based approach based on their newer technologies, is our interest. In the field of medical treatment, it is divided into two types: one is mainly based on the traditional way and the other is the new fields (genetic medicine, molecular medicine).

Our company is, relatively speaking, focusing on the latter one. Most of our investments made are those technology-driven companies that have played a part in the medical development over the last five years.

Two characteristics in the medical and health field in China

China’s mobile internet medicine has two characteristics. I feel that any internet or mobile internet company has met these two insurmountable problems in the medical field.

First is information asymmetry. When internet companies get into any one of the 2C areas, they are easily copied. But the medical industry is not like this at all. You buy a thing onsite, even if you buy a fake, you know you bought a fake. If a Louis Vuitton bag was sold at RMB 500, we must know that it is a fake. This is a strict information symmetry. But the medical industry is not the same, no one has so much medical knowledge to figure out if it’s real or fake.

Second is that supply is less than demand. A good doctor is a very scarce resource at the evidence-based medical stage.

Because of internet companies, and the rapid development in the last 15-20 years, there’s a tremendous amount of information out there, and this can improve the efficiency a lot. Although all the change happened with the development of the internet, as an independent third-party company, you still encounter the same difficulties in medical & healthcare sector as before. Unless the healthcare organization itself has done some internet + smart technology, the industry will still be the same.

Xiaomi CEO Lei Jun and Xiaomi will replicate China’s business model in India and announced that it will invest $ 1 billion to 100 Indian startups over the next five years, our sister media TechNode China is reporting.

“We are interested in any application that can increase the frequency of using smartphones, as long as they are mobile Internet accelerating the popularity of the India market. We only plan to take a minority stake in order to work closely with these companies,” Lei Jun, CEO of Xiaomi said.

Xiaomi hopes to replicate the company’s investment experience in China to India. In the past four years, Xiaomi and its Shunwei Capital (顺为资本) has invested $4 billion in 300 companies in China. Shunwei Capital was founded in 2011 by Lei Jun and Tuck Lye KOH, and has invested in mobile internet and IoT companies such as Xiaomi, self-balancing scooter Ninebot, 17zuoye, video streaming service provider iQiyi, Renrenche, 51Talk, Aiyibang, Misfit, and Xiaomi’s real-time video call provider Agora.io.

According to the latest smartphone data released by IDC, Xiaomi and South Korean manufacturer Samsung made up 9.2 million sets of mobile phone shipments with same 23.5% market share, becoming the two largest smartphone brands in India in the third quarter of 2017 ending September. According to the report, Xiaomi India recorded a growth rate of about 300% over the same period of last year, making it the fastest growing smart phone brand in the Indian market. This partly attribute’s to Xiaomi’s Redmi Note 4 sales propelling in India market.

Xiaomi already has invested in some Indian startups over the past years. In April 2016, Xiaomi led the $25 million investment in India’s online music and video provider Hungama Digital Media Entertainment, which is Xiaomi’s first investment in India. In October, India’s online installment for students platform KrazyBee has completed a $8 million Series A round led by Xiaomi Hesun for capital, E-city Ventures and RK Group, including equity financing and debt financing.

Xiaomi entered India market in July 2014. Currently, Xiaomi has two offices in India; Xiaomi’s headquarter is located in Bangalore, the startup city and has another office in Delhi, India’s capital. The total number of employees in Xiaomi’s operation in India is over 300 people, according to Xiaomi.

When reporters from Fawan secretly visited one courier center run by STO Express in the New World outlets located in Chongwenmen area, Beijing for the past two weeks, they found that the couriers were unwrapping the parcels to steal food and play with adult toys.

According to their observation, the courier center was unorganized, filled with parcels, and courier men were throwing the parcels which then hits the wall, and falls to the ground. When couriers unload parcels from the car, they will kick the courier boxes with their feet. In addition, the courier will open the damaged parcel, to steal food, and reportedly one courier opened the express delivery of adult toys to play with it in his hand, and then packed it back to the courier box and sealed it.

In response to this report, STO Express issued a statement on its official Weibo account on November 17th. STO Express said that the problems associated with parcels will be fully rectified, and the staffs will be punished and educated, and the person in charge of suspended from their duties to prevent similar acts.

This is bad news for Alibaba’s in-house logistics company Cainiao, who collaborates with STO Express on its express delivery service. For example, when we searched Cainiao and STO Express, we could see there are two Cainiao’s relay stations (菜鸟驿站) in Shanghai run by STO Express on Baidu map. Cainiao’s collaboration with STO Express is also shown in Cainiao relay station’s promotion video. 

Even before Cainiao confirmed their first ever Series A RMB 1 billion financing round on March 2016, STO Express has backed Cainiao as early as 2013, and the chairman of STO Express said that they invested in Cainiao to give face (给个面子). Chinese courier companies like YTO Express, STO Express, ZTO Express and SF Express invested RMB 50 million to take 1% share of Cainiao.

It’s also worth noting that YTO Express (圆通速递), STO Express, ZTO Express  (中通快递) are all from one family and called “三通一达 (meaning “Three “tongs” will get you through”). As they are tied with Alibaba’s Cainiao, they give a lot of logistics workload to these three courier players. The three courier brothers’ headquarter are all based in Shanghai’s Qingpu area. Alibaba and these “three Tong” courier companies have mutual investor ties, as  Alibaba also backed YTO Express.

After breaking another record with RMB 168.2 billion (more than $25.3 billion) in GMV achieved in 24 hours on Singles’ day, Alibaba is touting its foray into its new retail strategy as it announced today a strategic alliance with Auchan Retail S.A. and Ruentex Group that brings together their online and offline expertise to explore new retail opportunities in China’s food retail sector.

The alliance reflects Alibaba’s “New Retail” vision to leverage its internet-based approach and new technology while working closely with retailer partners to provide a seamless online and offline experience to consumers in China. Building on the strengths of the three partners, the alliance aims to introduce a new shopping experience to China’s 1.3 billion consumers.

With this collaboration, Alibaba is building ties with France, as Auchan Retail S.A or Groupe Auchan S.A. is a French international retail group with a presence in France and 15 countries. In contrast, Alibaba’s arch-rival has been mainly collaborating with US retailer Walmart, as the company acquired Yihaodian in June 2016.

As part of this strategic alliance, Alibaba Group will invest a total of HK$22.4 billion (approximately US$2.88 billion) to obtain an aggregate direct and indirect stake of 36.16% in Sun Art Retail Group Limited by acquiring shares from Ruentex. The transaction will give Auchan Retail, Alibaba Group and Ruentex approximately a 36.18%, 36.16%, and 4.67% economic interest in Sun Art, respectively.

Sun Art (高鑫零售有限公司), a leading multi-format offline food retailer in China, operates with a total gross floor area of approximately 12 million square meters in China, as of June 30, 2017. The Hong Kong-based company has been in China’s O2O scene since 2015. The e-commerce business platform of Sun Art’s retail arm Feiniu (飛牛網) officially commenced its O2O program in May 2015. In April 2015, Sun Art Retail acquired online grocery store Fieldschina (甫田網) and Xiaohehe (校呵呵), a mobile O2O platform targeting at university campuses in September 2015.

In China, Auchan Retail is the main shareholder of Sun Art Retail Group, and Sun Art currently operates 446 hypermarkets in 29 Chinese provinces under the “RT-Mart” (大润发) and “Auchan” (欧尚) banners.  In 1998, Sun Art opened first RT-Mart hypermarket complex in Zhabei district of Shanghai, followed by first Auchan hypermarket complex in Yangpu district of Shanghai. Recently, Auchan signed a contract with Hisense on a new unmanned store prototype called “Auchan Minute”.

Last year, an investigative report about China’s illegal market of “empty package scalping” (空包刷单) was released by The Beijing News (link in Chinese) which we also covered. It explained how shop owners on Taobao and Tmall inflate their sales statistics though fake package deliveries by using “empty package” service websites and delivery services. So how does Alibaba keep merchants from falsifying sales data?

Alibaba just recorded total GMV of RMB 168.2 billion (more than $25.3 billion) on this year’s Singles’ Day. There was speculation that GMV numbers would be a bit more rational for this year Singles’ day, as Anti-Unfair Competition Law came into effect.

Just days ahead of Single’s day, the standing committee of the National People’s Congress passed changes to the Anti-Unfair Competition Law introducing new provisions that ban false or misleading advertising about a product’s features, functions or quality, forbid falsifying sales data, user comments and awards, and prohibit “organizing fake transactions” that amount to false or misleading commercial publicity.

When we asked Alibaba, “How much of those orders are legitimate? Were there any empty boxes?”, Alibaba spokesperson said the ‘empty package scalping’ was reported in 2016, thereby the information is outdated.

“Alibaba has no tolerance for the practice of merchants organizing fake transactions, reviews, and ratings on our platforms. We continuously improve our algorithms to enhance our proactive detection capabilities and penalize merchants who manipulate transactions on our platform,” Alibaba spokesperson told TechNode in an exclusive email interview.

In terms of Anti-Unfair Competition Law, the spokesperson shared a statement posted on Weibo by Alibaba’s platform governance team (阿里平台治理部) on November 6th, 2017:

The Weibo reads:

[Alibaba response to the Anti-Unfair Competition Law: fully support with ten thousand “Likes”!]

“Organizing fake transactions, reviews and ratings” (刷单炒信) ruins the future of China’s economy. Alibaba will resolutely implement the national laws and regulations, and resolutely crack down on the acts of speculation in accordance with the law. At the same time, Alibaba is sparing no effort to promote the rule of law against the counterfeit products. We have been expecting to establish a extensive consensus on social issues like this, and we are even poised to cracking down on counterfeit goods just like “cracking down on drunk driving,” that are strictly forbidden by law. We must crack down on the source of counterfeit goods and so that those who make counterfeit goods and fake goods have no place to stand in the society.

Founder of Bluegogo, Li Gang authored an open letter on November 16th stating that the Bluegogo has reached a strategic cooperation with Chengdu-based Green Bike-Transit (拜客出行). Green Bike-Transit will be fully authorized to operate the Bluegogo.

About the unpaid salary to Bluegogo employees, Li Gang also said, “Owing to everyone’s salary, I will try my best to solve it as soon as possible.”

Li Gang is not only the co-founder of Bluegogo but also the founder of SpeedX (野兽骑行). After Li Gang’s first smart performance bike SpeedX received RMB 150 million series B funding in November 2016, Gang established bike rental startup Bluegogo.

TechNode interviewed with Li Gang last year May when he was fully focused on SpeedX’s development. After setting the record for the most highly-funded bike on Kickstarter’s crowdfunding website, Gang was the first one to mention ‘bike innovation’ from China and was optimistic about Chinese bike’s global expansion. There was zero coverage about ofo and Mobike at that time, and after few months, China indeed made noise with its bike rental companies going global. However, the bike innovation story for Li Gang himself now stops here, as he admits his mistakes in managing the troubled bike company.

“I never denied my mistake. My heart is full of suffering and I am in trouble for months,” Li Gang said in the letter.

From June, Bluegogo has gone through a handful of problems, where Li Gang puts in his letter as “it seemed as if the Bluegogo was cursed.” Both Bluegogo and SpeedX had deteriorating financial positions, and the orders have been delayed. At present, Bluegogo has reportedly defaulted property costs up to RMB 200 million and owes nearly RMB 200 million from more than 70 suppliers. Most Bluegogo and SpeedX employees have left the company.

Bluegogo ranked 6th among the top 10 bike rental startup list by Cheetah big data and belonged to iResearch’s second tier bike rental company along with Hellobike and Youon, as they come in with an average Monthly Active Users number of more than 100 million.

In January this year, Bluegogo completed a RMB 400 million Series A, valued at RMB 1 billion. But since then, financing information has not been announced. The company is about to complete Series B in March, but did not get any sum of money in the end.

As Green Bike-Transit takes over Bluegogo’s operations, China’s bike rental market is witnessing consolidations. Previously, Hellobike and Youon bike merged to survive in the China’s bike rental red ocean. Wukong bike (悟空单车) and 3Vbike have halted its operation, while Machi-cho bike (町町单车) failed to refund the deposit.

China’s fintech company Jianpu listed on NYSE on November 16th, with issuance code JT, our sister site TechNode China is reporting. Jianpu’s initial public offering price was $8 per ADS, lower than the previously identified range of $8.50 to $10.50 issue price.

Jianpu’s NYSE listing marks as the fourth Chinese internet finance company to go public in the United States in the second half of the year, following the steps of Chinese microlender Qudian, Hexindai, and PPDAI. Local media cast a shade on Qudian’s US IPO, because of Qudian’s sustainability. Student micro-loan was at its peak when Qudian grew, and the company claimed that now they suspended the service as the state has issued a  ban on online loans in November 2015.

Jianpu (简普科技), a wholly-owned subsidiary of Rong360, is registered in the Cayman Islands and Rong 360 is the Variable Interest Entity (VIE) of Jianpu. With its latest monthly active user base of 95.8 million, Jianpu has reached more than 2,500 financial institutions and has provided 170,000 financial products covering more than 350 cities nationwide.

On October 20, Rong360 filed an IPO application with the Securities and Exchange Commission (SEC) under the name of “Jianpu Technology” with the planned financing of up to $200 million.

“Establishing such an independent internet financial search service platform using the Internet search method, to quickly and efficiently match users and financial products, is very valuable, I’m very optimistic about this platform business, because it’s very scarce to see a company that brings this value,” said Mi Qun, founding partner at Lightspeed China Partners, one of the earliest investors of JianPu and its parent company Rong 360 remarked.

Established in 2011, Jianpu’s parent company Rong360 is a Chinese search and recommendation service for online financial products. The company has since completed four financing rounds, with its latest funding round being a $160 million Series D in 2015. By 2015, the company claimed that it includes some 170,000 financial products, of which over 70,000 are loans products. While Rong360 itself has a loan business, its listed company Jianpu does not provide loan service.

Jianpu said it will continue to focus on the independent open financial search and recommendation platform in the future, working on system integration and big data risk management to provide more in-depth solutions. In addition, the company mentioned that it will also broaden the coverage of financial products categories, such as insurance and wealth management products, so as to attract more users and increase user activity.

Rong360 (Jianpu) is backed by Lightspeed China Partners, a China-based venture capital fund focused on early investments in China’s Internet sector. A number of startups were backed by Lightspeed China Partners including, PPDAI, Junsheng Wanhe (merged with Qihoo 360), Dazhong Dianping, Tujia, Fangduoduo, Pinduoduo, Xingren Doctor, and eCheng.

Shenzhen-based UBTECH announced yesterday a $40 million Series C led by Tencent.

Established in March 2012, UBTECH focuses on the research and development of intelligent home robots, and has since launched the robot Alpha, and Alpha II which can be used as personal assistant or as an entertainer. Previously, their Alpha 1S model performed at 2016 CCTV’s Spring Festival Gala, during the Chinese New Years making the Guinness World Records of “most robots dancing simultaneously.” The company is mainly working on artificial intelligence and humanoid robot research and development, platform software development and product sales.

The current investment shows Tencent’s attempt to focus more on AI, as the internet giant is also heavily pushing its efforts and funds into the booming sector. According to forecasts by International Federation of Robotics (IFR), there will be 42 million new service robots added for personal and domestic use between 2016 and 2019. Many Chinese companies, including Rokid, Pudding, and Jett Companion Robot has introduced their home robots to the market, and UBTECH is one of them.

In 2016, the Shenzhen-based robotics technology company received a $ 100 million Series B round from CDH Investments. It is reported that after its Series B round of financing, UBTECH became robotic unicorn as its valuation has reached $1 billion, serving as the first case of its vertical to become a unicorn in China. 

UBTECH’s founder Zhou Jian was inspired by Honda’s ASIMO humanoid robots back in 2008, and start with the research and development of the humanoid robot’s core source servo. It was four years later that he incorporated UBTECH and gradually introduced consumer-grade humanoid robots, commercial humanoid robots, and Jimu robots, which includes programmable robotic kits for children.

Thailand may be an appealing top 2 travel destination for Chinese people, but now startups can consider expanding their business to this neighboring country as well. Chinese startups are eyeing Southeast Asia as the next market for their global expansion, and burgeoning Thailand is one of the markets to consider. To explore this booming market, TechNode has covered “Now In Vietnam” series, Indonesian market overview, and this time, we’ll look into Thai startup ecosystem.

Thailand market has seen remarkable growth over the past four years. In 2016, Thai startups raised funds of at least $86.02 million, including the three of the country’s biggest deals raised so far. It’s a global trend that we see more and more startups and fundings, and Thailand is no different. From 2012 to 2016, Thailand has gone from having less than 3 funded startups to over 75 funded.

Some of the rising Thai startups are:

• Builk.com is a very niche company in the construction industry, helping construction businesses manage their projects. The founder is a graduate in civil engineering and worked in construction for 10 years. He saw the real pain point of the industry and established the company. They have expanded to Malaysia, Laos, Philippines, and Indonesia.
• Ookbee is a digital entertainment platform that provides new opportunities for content creators in music, comics, ideas, and literature. Ookbee has pocketed $19 million from Tencent.
• Wongnai is the no.1 restaurant review site just like Yelp.
• Omise Payment is a payment management platform for businesses that raised $25 million on its ICO this year. Founded by Thai and Japanese co-founders, the startup raised $17.5 million in 2016 which is second highest funding amount last year.

There is also support for the startups from the Thai government driving this move. Under “Thailand 4.0” model, the Thai government is now planning to grant tax exemptions for startups similar to Singapore’s and adjusting ESOP (employee stock option plan) so that entrepreneurs can provide stock options to their employees. Currently, Thai startups are not able to provide stock options to new employees and Thai people prefer to work for big companies and other facilities that provide stock options. This regime is expected to attract more talents in startup sector.

TechNode interviewed Oranuch Lerdsuwankij, co-founder and CEO of TechSauce, Thailand’s leading startup media. She gave insights on how to enter Thailand market and a glimpse of the thriving Thailand startups. Here are six takeaways she gave us on the Thailand market.

1. Fintech sector is strong in Thailand: there are 14 startups backed last year

Fintech is one of the sectors we want to bring in new solutions. The key drivers are the banks and startups who disrupt the banking industry. There are four banks in Thailand, and they are now running accelerators, corporate VCs, and new subsidiary companies.

Those who make regulations are willing to listen from banks and startup community, and gather the feedback from them before starting or adjusting the policy. As an outcome, they started a fintech regulatory sandbox that enables fintech companies to experiment with innovative financial products or services in the production environment and approved standardized quick response (QR) code for electronic payment.

2. Alibaba and JD are investing heavily into fintech, e-commerce companies in Thailand creating strong competition among Thai startups

For big players from China, we’ll see more M&A and joint ventures in Thailand. Rather than competing with them, local Thai players will probably shift their focus to other niche sectors.

Alibaba’s financial affiliate Ant Financial is planning to acquire Ascend Money, subsidiary of CP group, the biggest company in Thailand that owns 711 and other telecom companies. Their partnership creates a big barrier to the newcomers. It’s good for Chinese tourists since they can use Alipay payment solution to pay for the merchandise in Thailand.

JD is in talks with Central Group to set up a $500 million e-commerce joint venture and expand to Thailand market. This is a great advantage for JD who has an online platform to strategically partner with the Central group who has both online and offline channels. Even before the partnership with JD, Central group already had one sharing knowledge platform that serves as a successful case study.

Chinese investment in Thailand creates more competition than collaboration. Southeast Asia’s e-commerce platform Lazada has received $2 billion from Alibaba and is controlled by them. If a Thai local player is strong enough, it’s  possible that they go through M&A or investment. But, it’s tough, so local companies should really focus on becoming the niche player.

3. Thailand is the top 2 destination for Chinese tourists, and Alipay and WeChat payment options are largely available

Alipay and WeChat payment options are largely available in Thailand. Central World, the largest shopping mall in Bangkok, big retail companies, and many merchants now provide support for Alipay. You can see many merchants in Chiang Mai, Phuket, and Pattaya also providing those payment options to Chinese tourists.

Tencent is also operating WeChat pay in Thailand. In Chiang Mai, the local merchants and SMEs now accept both Alipay and WeChat Pay to support Chinese tourists. They already acquired one of the largest Thai web portal Sanook Online, to operate music service JOOX, and other services on Sanook.com.

4. There are two types of Thai entrepreneurs

The first group has domain expertise, such as finance and construction. Some of the founders have studied abroad, worked with Google and Amazon, and come back to run their business. They are about 30 to 35 years old and have diverse experience in the industry. They are trying to use technology to solve a problem.

The second group is the new generation, who have just graduated from university and want to be young entrepreneurs and build their own companies. It is very important for the ecosystem to educate them in parallel.

Comparing the success cases, the first group can create more successful companies and promising startups, because a B2B focus is easier market than B2C.

Another factor is that big players have found they cannot do business alone. Five years ago, corporates stayed alone, but now there is more collaboration between startup and corporates. The first wave of these corporate VCs were telecom companies (2012-2015), the second wave was from banks (2016-2017), and the third wave is from manufacturing, energy, insurance and properties sectors (2017). So they set up accelerator programs, support startups, stay open for the partnership with startups.

5. Japanese companies and investors have had a big presence in Thailand, and now it’s Chinese players.

There are two generations of Japanese companies in Thailand. The first is from automotive industry such as Toyota, Honda. They set up the manufacturing company in province area 50 years ago, and they used Thailand as a hub for manufacturing.

In 2014 and 2015, the internet and infrastructure improved a lot, and we recorded high mobile phone penetration. We witnessed the second generation of Japanese companies setting up in Thailand. But we haven’t seen big movement from Japanese companies recently. Rakuten has stepped away from Thailand and the Southeast Asia market. They sold all their shares in Thailand’s largest e-commerce platform, so they do not have a presence here anymore. Last year, there were no big movements from Japanese internet-based companies, it’s because of the competition. However, Japanese VCs such as CyberAgent are still investing in Thailand.

In the last two years, we have seen big movement of Chinese companies like Alibaba, Tencent, making strategic movement in Thailand.

6. Tips for overseas startups when entering the Thailand market

Thailand’s mass market has high mobile penetration and internet penetration. Thai users are very tech-savvy, which makes it easier for SEA startups to target Thailand. Social media is big here, like Facebook and Line, so internet companies runs marketing campaigns on these platforms. That way, it’s not too hard for startups to reach out to these people.

The challenge is some services are not different from others if they cannot provide real value proposition, it’s easy to fail. For example, we have many dating apps. It’s not hard to acquire new users, but to gain loyalty customer, long-term customer, they need to differentiate themselves.

Overseas startups should understand the Thai culture. Thai customers are open to international services, but you should study Thai culture and behavior. Thai people are open to various cultures and have been influenced by Japanese, Korean, and Chinese culture. For example, we love Korean dramas, we are open to work with Japanese companies. We both celebrate Chinese new year, and Thai new year. In Thailand, English is not the main language, so content localization is very important.

For overseas startups wanting to start a company in Thailand, you have to get approval from Board of Investment. In terms of the government support and regulatory issues, it’s more flexible.

You should check the key players in the market, and think about who you should partner to accelerate the business and serve as a springboard for the company. For example, ofo has launched its bike rental service in Thailand. We see both ofo and Mobike launching in Thailand by partnering with institutes, universities and big enterprises.

So I advise them to find a country manager from Thailand who understands the behavior of Thai people. If you don’t want to test the market with so many partners, find a trustworthy local partner. If they don’t want to set up the company, you can allocate a representative as the partner, and their credibility is important. Once you want to work with them, you should find out the history about them, and get third opinion from local people in ecosystem.

The UK remains one of Chinese students’ top three destinations for studying abroad, with 58,810 Chinese undergraduates studying in Britain in 2014. However, even if Chinese students want to stay in the UK to get a job they will have difficulty applying for a visa. Russ Shaw, the founder of Global Tech Advocates and Tech London Advocates says that the UK is now trying to “brain gain” these Chinese students, by providing Tier 2 visas to them.

Currently, most Chinese students go back home after graduating university in the UK. After studying at the University of Surrey in the UK, April Lin, a Chinese student also came back to Shanghai to start her career.

“I considered working in the UK for a little bit. I don’t know how hard it is to get a working visa there, but I do know it can be difficult,” April says. “In my opinion, more Chinese student-friendly policies, such as visa policies or policies related to a student’s well-being, would make more Chinese students stay in the UK and start their career.”

Neo Wang, another Chinese student also came back to Shanghai after getting a Master’s in computer science at Oxford University in 2014.

“After graduation, Chinese students should immediately go back to their country. This makes it hard for students to find a job there. To apply for a job before graduation is really tough. Before graduation, students are busy preparing for the final year project, and it’s hard for them to send out CVs and applications to companies,” Neo Wang says. “Maybe if the visa application was easier, it would make Chinese students stay in the UK longer after graduation. Three years ago, the UK helped students trying to find job stay in the UK for 2 years, however, they changed the policy.”

Some Chinese students go on to start their business in the UK, but the situation is not straightforward for that either. While doing the undergraduate program at Liverpool, Neo Wang started an SNS service, Timeet, in 2013 with Chinese friends in the UK.

“We tried to fundraise for our company in the UK at that time, but it was very hard. We reached out to the UK government, but what the government offered to us was not very favorable,” he told TechNode

Neo Wang and his friends decided to come back to China to raise funding. They could easily raise funding in China, as a Chinese VC invested in his company.

Tech London Advocates, a private sector-led coalition of over 5,000 expert individuals from the tech sector, is working with the UK government to make it easier for Chinese students to stay in the UK for longer periods and start their business. This is one example of governments trying to keep Chinese talents, as they see many Chinese students want to become entrepreneurs after graduating university in the UK.

“I say, when you finish (your degree), don’t go back to China. We’d like you to stay. That will help us build the relationship between UK and China,” Russ Shaw, the founder of Global Tech Advocates and Tech London Advocates told TechNode. “Chinese students are going to go back to China to build their business because they know China. We have an opportunity to change that because there are so many Chinese students in the UK.”

Chinese students in the UK

“One of the things Tech London Advocates is working on with the British government is, how do we make it easier for people to receive Tier 2 visas,” the former Vice President of Skype, remarked, “so that it gets easier to set up businesses, and work in local companies.”

Tier 1 visas cover technician and entrepreneur visas for those who are setting up their business and looking to invest in the UK. So, it’s straightforward to get a Tier 1 visa.

“The issue that we are facing is how to make it easier for people like that to get a Tier 2 visa and to allow incubators, accelerators, and VC firms to sponsor Tier 2 visas. There are a lot of ministers I have spoken to who are very interested in that,” Russ says.

Three years ago, Russ introduced 10 startups to the Immigration Minister, so that founders from overseas, including Turkey, US, Europe, and China could tell him the challenges and issues they had to get the Tier 2 visa. The Immigration Minister heard directly from startups creating world-class businesses about how hard it is to get the visa here in the UK.

“The good news is that the government is listening. The opportunity is that, as the UK prepares to leave the EU and we won’t have freedom of movement without EU, we rethink the entire immigration system. We need to keep attracting skilled talent to the sector, and we need it to come from everywhere,” Russ says.

AI talents in the UK

In the country where Alan Turing first developed artificial intelligence, the UK has seen many bright talents in AI. LinkedIn is seeing a dramatic increase in job postings with good AI skills and data analytics in London. According to The Top Skills of 2016 on LinkedIn, United Kingdom has top skills in statistical analysis and data mining. Google’s acquisition of London-based DeepMind in 2014 served as an important catalyst to attract many startups to move to the UK. Now the AI brain power in the UK is drawing more Chinese companies, as they are interested in getting more AI scientists from the UK.

“Alibaba is investing AI in London. They’ve got 120 people in London. Alipay and the Alibaba Cloud division are very big in London. Chinese investors are coming to London to look at companies,” Russ says.

“Top universities in the UK really understand AI, and they have many AI genius. But there is a larger market in China a lot of companies need someone who understands AI. In the UK, they already have good AI people, but they have very small market compared to China. In China, the market is huge, but there are not enough people to do AI,” Neo Wang told TechNode.

Russ says there needs to be more collaboration between China and the UK. As part of their effort to create more alliances, the Tech Shanghai Advocates Launch Event was held in Shanghai hosted by the Global Tech Advocates and Cocoon Networks on October 26, 2017. This is the first event of Global Tech Advocates (GTA), a non-profit international elite organization founded in 2015, in China. With the official launch of the Tech Shanghai Advocates, the event announced the five technology working groups that will foster development: artificial intelligence, medical and biological, green technology, financial technology and big data.

“GTA is building a platform that can connect to the world. Technology-related industry advocates in different regions can create a unique and advanced international technology network. We are committed to building a global science and technology, entrepreneurship and investment ecosystem, to promote the exchange of ideas and cooperation between members, and continuously improve this ecological circle and sustainable development,” Russ said at the event.

New Retail is the trend in China right now. Before November 11st Singles’ day, a day when Chinese spends the most in a year, Chinese e-commerce titan Alibaba flexed its muscles on both online and offline channels. We will tell you four destinations in Shanghai that you can visit to get a glimpse of China’s fast changing retail stores.

Fresh food? Go to Hema

Address: 777 Wanrong Road, Daning Music Plaza, B1
Chinese address: 万荣路777号大宁音乐广场B1层

Alibaba’s pilot project for new retail, Hema integrates the online and offline shopping experience by combining three places: supermarket, warehouse, and dining place into one place. Hema store, that much looks like a mart and a food court, is the warehouse and fulfillment hub.

Three ways to use Hema:

• Online: Once a user places an order on the app, the staff picks up the goods in a bag that has a barcode. Within 3km radius, users can receive the goods as little as 30 minutes. It says the whole process takes only 9 minutes: 3 minutes for Hema’s staff to pick up goods based on user’s order, 3 minutes for the shopping bag to move from the store to the delivery warehouse, and 3 minutes for packaging the products.
• Offline – Online: Customers can browse the fresh products in the offline store, then scan the barcode of products to place an order, make cashless transactions, and receive home delivery.
• Offline: Customers can pick up the goods directly and purchase the products, either by using Hema app that asks you to link to Alipay, or directly pay by Alipay’s facial recognition technology. Alipay only allows those with Chinese ID cards to use facial recognition option.

All the products have a unique barcode that the users can scan and retrieve specific information as well as make purchases with Alipay.

Hema has lower price line than other stores because they have no middleman, just Alibaba. Alibaba finds the supplier and delivers goods directly to Hema, which keeps the prices low.

According to Alibaba, Hema is a startup incubated inside Alibaba for two years, and opened its first store in January 1st in Shanghai’s Jinqiao (金桥国际广场店). Its first store has an online to offline order ratio of 7 to 3, while some other shops have ratio almost close to 5 to 5. Hema customers tend to make return visits, with a monthly average of 4.5 purchases.

To purchase goods, users must first download the Hema app. Then Hema amasses users’ data to find out which vegetable is most sold, the duration of a user buying a specific product and which brand users like and derives insight for the supply chain. The data is then sent to suppliers, such as farmers, to let them manage their crop to match the demand and supply, and estimate how much they should supply.

Customers can enjoy the food in the store. For example, they can buy a fresh lobster at RMB 99, and ask an onsite chef to cook it in a french style cheese dish by choosing cooking option on the app. Then the chef will give you a buzz alarm, which will give alarm once the dish is prepared. The cooking process of a lobster takes about 75 minutes.

There are currently 20 Hema stores in China: 13 of them are in Shanghai, three in Beijing, and one each in Ningbo, Hangzhou, Guiyang, and Shenzhen.

Sportswear? Go to Suning unmanned store

Address: 1st floor, Suning store, No. 585 Handan Road

Chinese address: 邯郸路585号，苏宁易购一楼

Chinese electronics retailer Suning opened its second unmanned store equipped with full face recognition payment system in Shanghai on November 6th.

Located at Wujiaochang (五角场) in Shanghai, adjacent to Fudan University, the unmanned store displays four main categories of products, including sports IP products accounting for about 70% of all products on sale.

Before entering the store, users download 苏宁金融 (Suning Finance) app on their mobile phone in advance, go through face recognition, and link their bank card. After scanning their face, users can enter the unmanned store to start shopping.

Fashion Apparel? Go to smart clothes shop (Now closed)

Address: 4th floor, Northwest Tower, Jing’an Joy City (No. 166 Xizang North Road, get off at Shanghai subway line 12, 8 Qufu Road) – One visitor witnessed that the smart mirror is no longer used, and the staff said it was turned off after Singles’ day.

Chinese address: 西藏北路166号大悦城北座4楼

Hangzhou fashion brand Aline de Rose has used a number of connected devices in its smart store. All the connected devices were equipped by Hangzhou-based listed company Ontime, who makes smart mirror and RFID solution for retailers. The startup is an operating partner for Alibaba, and brand’s collaborating partner. Once customers scan the RFID of any item in the store to the smart mirror, all related product information, such as stock availability, model showcase, mix-and-match products as well as its reviews from the brand’s Tmall Flagship store will be instantly displayed. Customers can place orders by scanning the product’s QR code or purchase onsite by using Alipay or facial recognition.

Facial recognition technology is used in the store to collect information about number of customers at any given time, which allows merchants to adjust their staff and supply based on customer traffic and demographics. Ontime purchased UFace, a facial recognition technology provider that analyzes the age range and gender of the users. Under the agreement of the retailer, the startup gives the data to Alibaba.

Just a bottle of beer? Go to unmanned convenience store BingoBox (缤果盒子)

Address: Longkou Road (Get off at Shanghai subway line 12 Ninguo Road station, exit 3, go straight on Changyang Road until you hit Auchan mart, then go to the car parking space of Auchan mart, then you’ll see Bingobox.)

Chinese address: 龙口路 (It’s easier to find 缤果盒子 on Dazhong Dianping, then follow their directions.)

China’s answer to the Amazon Go unmanned store, BingoBox (缤果盒子) is an unmanned convenience store that can greet customers 24/7, and requires the customer to have a mobile phone to enter and purchase an item. When we tried one ourselves, we found the service had some flaws, such as invalid product tags and no paper receipts, causing customer frustration.

At BingoBox, customers choose their wares, then scan the products with a scanner like a cashier would. A screen displays the running total and the shopper can complete the payment using Alipay and WeChat Pay. BingoBox says its stores offer prices about 5% lower than those of other convenience store brands, and that they provide RMB 60 in discounts for new users.

At the beginning of 2017, they reportedly made progress in artificial intelligence to achieve accurate identification of more than 200 categories of goods.

On this year’s Singles’ day, Alibaba’s total GMV exceeded RMB 168.2 billion (more than $25.3 billion), and a whopping 812 million delivery orders were made, with 90% of the GMV coming from mobile. During the 24 hours, 1.48 billion payment transactions were processed, with a 41% YoY growth.

“On November 11, 167 merchants surpassed RMB 100 million in sales, 17 merchants surpassed RMB 500 million in sales, and 6 merchants surpassed RMB 1 billion in sales,” Daniel Zhang, CEO of Alibaba Group remarked.

While this year’s sale day smashed last year’s records, now the new goal for Alibaba is globalization. This year’s sales event showed clearly how Alibaba’s shopping festival is gradually converging China and the rest of the world. Alibaba reported that 225 countries and regions with completed transactions.

Here are some of the highlights:

• Top 5 countries selling cross-border to China by GMV were Japan, United States, Australia, Germany, and South Korea.
• Top 5 imported brands bought by Chinese consumers by GMV were Swisse, Aptamil (爱他美), Kao / Merries (花王／妙而舒), Moony and Bio Island.
• Top 5 countries/regions buying cross-border from China by GMV were Russia, Hong Kong, United States, Taiwan and Australia.
• Top 5 export product categories from China by GMV were mobile phones, wool coats, knitted sweaters, dresses, and sweaters.

Alibaba’s online finance arm, Ant Financial announced that Alipay processed around 256,000 payment transactions per second at its peak within the first 10 minutes of the shopping festival. This was made possible by Ant Financial’s proprietary finance-grade distributed relational database, OceanBase, which processed 42 million requests per second at its peak. The company also reported that a total of 1.48 billion transactions were processed by Alipay in the entire 24 hours and Alipay processed 100 million transactions in the first 7 minutes 23 seconds of the shopping festival.

A Shanghai-based company who owns the trademark of “Small Yellow Car (小黄车)” filed the lawsuit against ofo, the trademark owner of “ofo Small Yellow Car (ofo小黄车)”, for infringement of their registered trademark and asked for a compensation of RMB 3 million (about $452,000), Chinese media Beijing News is reporting.

As 车 (chē) can mean “car” or vehicle in Chinese, ofo simply referred to its bikes as “ofo sharing bicycles (ofo共享单车)” and “small yellow car (小黄车)”. And in the court, Ofo said that the company first used the trademark “small yellow car”.

Ofo claims that the plaintiff registered the trademark with malicious intent. Yesterday afternoon, Beijing’s Haidian Court heard the case in court. After four hours in court, both parties expressed their willingness to accept mediation.

On April 3rd, 2014, ofo’s co-founders registered the company as Small Yellow Bike (Beijing) Data Services Co., Ltd. (小黄车（北京）数据服务有限公司), whose business scope includes technology development, data processing, and bicycle rental. On August 6th, 2015, they registered the company as Beijing Baike Technology Co., Ltd (北京拜克洛克科技有限公司).

Ofo noted that they had launched its ofo bikes in the market and used “ofo” and “Small yellow car” before the plaintiff’s application for registration of “small yellow car” on July 29, 2015. Ofo also said that a lot of local media also reported ofo bikes stories and referred to ofo bikes as “small yellow car” or “ofo shared bike.”

“The plaintiff did not really use the trademark “Small Yellow Car” for a long time, but instead made a profit through litigation,” Ofo said during the court hearing. “The plaintiff, starting from October 30th in 2013, has also applied for registration of several other well-known trademarks, but the registrations so far are not in real commercial use.”

Trademark war can be frequently seen in China between China-based companies but also international brands and Chinese local companies. Last year, Apple has lost a trademark fight in China, and the Beijing court allowed a Chinese company to use the iPhone mark for its leather goods.

Chinese electronics retailer Suning opened its second unmanned store equipping full face recognition payment system in Shanghai on November 6th, Chinese media The Paper is reporting.

Unmanned stores are spreading all over China, and Shanghai is becoming an important base to test the market with Shanghai’s affluent and trendy consumers. In Shanghai, unmanned convenience store BingoBox opened this year to attract local people who are lazy to go to big marts, while unmanned noodle shop just closed due to its own problems.

Located at Wujiaochang (五角场) in Shanghai, adjacent to Fudan University, Suning’s unmanned shop covers area of about 100 square meters. When launching in Shanghai, Suning rebranded its store from the name “苏宁体育Biu (Suning sports)” used in Nanjing, to “苏宁易购Biu (Suning easy purchase)” The name change was mainly due to the richer product categories in Shanghai store, offering not only Suning’s Sport IP products, but also product categories from supermarket, and department stores, according to the person in charge of Suning.

The unmanned store displays four main categories of products, including sports IP products accounting for about 70%, in addition to Suning’s lion mascot Sugelaning IP products, and furniture.

From the shopping process point of view, compared to other brands of unmanned code scan into the store, Suning unmanned store equips a more simple face recognition to enter the store.

Before entering the store, users download 苏宁金融 (Suning Finance) app on their mobile phone in advance, go through face recognition and link their bank card. After scanning their face, users can enter the unmanned store to start shopping.

Unmanned store launch can be seen as Suning’s effort to attract tech-savvy Chinese customers to their offline stores. Last year, the retailer giant invested in online grocery delivery company Eight Days, who operates offline convenience stores on university campuses, to tap into university students. Backed by e-commerce beheboth Alibaba, Suning ranks 8th on China’s ecommerce apps annual ranking in 2016, according to Cheetah lab’s data.

Statistics from the Cheetah big data shows that ofo and Mobike still occupy the majority of the bicycle rental market in the third quarter of 2017, Chinese media Lanjing TMT is reporting. As the weather turns colder, bike-sharing apps may witness usage decline compared to the second or third quarter as many people do not ride bikes in the cold days. This might lead more bicycle companies to consider merging with other companies under “Unite to overcome difficulties (抱团取暖)” strategy just like the case of Hellobike and Youon bike merger.

Cheetah’s shows that ofo and Mobike’s weekly active penetration rate were 0.9419%, 0.8742%, repsectively, taking the first and second place. However, users open Mobike app more than ofo. Comparing the weekly app openings per capita, Mobike users opened the app 30.9 times, while ofo users opened the app 28.4 times.

While third place saw other bike rental players go back and forth, ofo and Mobike stayed firm in market dominance. The second place and the third place leaves a huge gap of weekly active penetration rate. Hellobike and Youon bike showed weekly active penetration rate of 0.0748%, and 0.0283%, listing the third, and fifth, respectively.

Now we can divide the bike rental players into three groups based on its average Monthly Active Users. According to iResearch’s mUserTracker monitoring data for the second quarter of 2017, first tier players are Mobike and ofo, with average Monthly Active Users number of over 30 million. The second tier lists more companies such as Hellobike, Youon, and Bluegogo come in with an average Monthly Active Users number of more than 100 million.

Winter comes to bike rental companies

The entire bicycle-rental industry showed a cooldown this year. Since the beginning of June this year, Wukong bike (悟空单车) and 3Vbike have halted its operation while Machi-cho bike (町町单车) also failed to refund the deposit.

Until next year’s spring, analysts say that bike rental companies will face a vicious cycle: venture capital will no longer back these bike rental companies, users will withdraw the deposit, the operation and maintenance costs will go up. In fact Bluegogo failed to give deposit refunds to its users and had to promise a new deadline.

Governments are also putting bars on dock-less bike rental companies. Since June 2017, Chinese cities including Beijing, Shanghai, Guangzhou, Shenzhen, and Nanjing have announced the policy that no more new bikes should be placed in the city. This means that new brands have no chance to enter these mainstream cities, which will allow current players to consolidate the competitive bike rental market.

India’s market has become another battlefield for China’s mobile phone manufacturers. The second largest market after China showed 36 million units of smartphone sales, a 7% increase YoY. Four of China’s companies are putting greater pressure on Samsung, according to an Indian smartphone market third-quarter report released by Yonhap news agency on Sunday.

The report shows that Samsung mobile phone is still veteran in India market taking the first place, with a third-quarter share of 26%. Chinese player Xiaomi ranked second with its share increasing to 25%. In the second quarter of this year, Samsung had a market share of 21.2%, while Xiaomi recorded only 15.6%.

Three other Chinese companies monopolized the other positions in the top five. Vivo had 10%, OPPO 9%, while Lenovo’s market share fell to 7%.

“As China’s market saturates, the fast-growing India market will become a much more important market for smartphone manufacturers next year,” the report said. The Indian market is growing fast in both consumption and retail sector, as India’s retail sector surpassed China with anticipated growth of $1.3 trillion by 2020.

Statistics show that the most popular smartphone prices between $100 to $150 in the Indian market. Chinese manufacturers have launched a large number of products within this price range, cultivating Indian fans.

Replicating the pattern in the Chinese market, Chinese mobile phone manufacturers in India have had great success, as they launched high quality Android mobile phones, which have the same configuration with that of iPhone, but with a much lower price tag.

The Red Mi Note, Red Mi 4, Red Mi 4A were the three most popular mobile phones from Xiaomi (in Korean) in India, and Samsung’s low-end mobile phone Galaxy J2 ranked fourth.

Huawei may have beat Apple in global mobile phone sales since June, becoming the world’s second-largest smartphone brand, next only to Samsung. However, Huawei failed to enter the top 5 in India.

Why do we attend so many business events and meet-ups? While the idea of a startup might be based on beginning a business online and hoping to see exponential growth by attracting millions of internet users to their product, we know that it’s human-to-human connections that actually make things happen and these are done offline. So why do we need to make connections, and how do we make meaningful connections? At Slush Shanghai 2017, held on October 13th, panelists from China and Hong Kong gathered to share their experience on connecting startup ecosystems.

The panelists were:

• Eric L. Schmidt, co-founder and CEO at EventBank, who hails from US and founded China Entrepreneurs in 2003, a network of more than 20,000 business professionals in China
• Carman Chan, managing partner at Click Ventures, who originates from Hong Kong and founded Click Ventures in 2015
• Tony Verb, co-founder and managing partner at GreaterBay Ventures & Advisors, was born in Hungary and is currently based in Hong Kong helping the integration of different cities in Guangdong province and innovative companies to succeed across Asia

Started in Finland in 2008,the  startup conference Slush attracted 3,000 attendees at Slush Shanghai 2017. Here’s an edited transcript of the panel on connecting startup ecosystems.

Why do we need to make connections? What’s the best outcome of such connections?

Eric: The first thing about connecting ecosystems is they need to grow the business and make revenue. In order to grow the business, rather than raising capital, finding new clients or working out how to get into new markets, they need new access to the market and having connections is most important to that.

Tony: Defining the term “ecosystem” is important. When you break it down and if we are a bit abstract, all human beings are separate ecosystems. What happens if two human beings connect in an open-minded and meaningful way? A baby is born. It might sound funny, but it’s an important analogy. When two companies meet, new solutions, new value, and money will be ultimately created between them. The same thing happens but on a higher level. If we are talking about startup ecosystems and cities, the same magic happens with the right people, right companies, right governments connecting in a dedicated and an open-minded way.

Carman, you have portfolio companies in US, China, Hong Kong, and South Korea. How do you connect these startups?

Carman: Portfolio companies need to expand to overseas markets and ecosystem connections are important for that. Startups need to expand to different cities within the first 1-3 years, and some startups get international clients from day one. But when they expand to a different city, they need to hire local employees and make a different team to solve the problem.

I connect the portfolio companies that have synergy together. I have a US portfolio company that does influential marketing in many countries except China. I have another influential network company in China in my portfolio, so I connected them to create international network. Another way, we have a company from Hong Kong that’s having difficulty hiring a local developer in Hong Kong, so they expanded to Taiwan to find the developer there. I had six portfolio companies who just expanded to Taiwan, so I connected them to share the information.

Eric, back in 2003, how did you connect Chinese and non-Chinese communties?

Eric: The challenge we saw early on was that the foreign community in China was not connected. In Beijing, there really wasn’t any ecosystem at all, until 2005 or 2006 when China saw a huge growth of people wanting to be an entrepreneur. Ten years ago, when we wanted to do an event in Shanghai, there really wasn’t any ecosystem, no incubator nor accelerator. There was nothing. But then, the investors were all traveling to Beijing weekly, and there was a push by the government to encourage the growth of the ecosystem to create more jobs for young people.

Tony, you have connected to governments in Nairobi and Bahrain. How do you do this?

Tony: As all governments are different in nature, you should connect to them in different ways. Let’s define the term “connection” first. It always happens between human beings. Every single good connection needs relevance and synergy between human beings. We need to create value for governments, local institutions, and citizens. Then, a government will be interested in a proposition, and then internalize the given value for their companies, and citizens—the society. To open a project or apply for government grants or any kind of support, you will need to build personal relationships with them. Only with a conversation can things start happening informally or formally between individuals, companies, and even governments.

Carman: We are also well connected to government, and we are approached by different countries, like South Korea, Taiwan, Canada, Israel, and France. A lot of startups expand globally within the very early stage, within the first 1-2 years. And the governments are in competition to find and attract the best talent and startups to their country. So they are trying to provide resources. They set up certain departments, and handle the work permits, and provide supporting grants for startups expanding to their countries. So you have to look for what kind of support they can provide you before you expand to overseas countries. Many years ago, only big companies could expand to other countries. Now startups can go to different countries and get support from the government.

Eric: Companies need to scale to succeed. So, unless they are in the US or in China, they can’t really approach $100 million in one single market. Let’s take a startup in Hong Kong or Singapore for example, they immediately have to cross borders to get to $100 million. One of the major challenges in Asia is that government to government interaction is not enough. China’s cybersecurity creates challenges for organizations going into China, and Chinese companies expanding to Asia. It’s doubling their costs. Same goes for Malaysian companies going to Indonesia. There are challenges because governments are not connecting the ecosystems, that are trying to align with those regulations. The governments actually create more challenges for these startups.

Tony: The government has such power and such a toolbox in their hands to help and block the ecosystems to connect properly. They have such a responsibility to be connected and connect.

What are the elements to make meaningful connections? Time, money?

Carman: Sincerity is important. Recently, I was interviewed by LinkedIn about how to get connected globally. This is a hot topic because its possible to go global now with very little resources. Everybody is much more internationally connected than ten years ago. There is competition for attention from your network. My suggestion is that you need to be sincere. This is the most important thing to win more attention from your network. Everybody makes more than 1,000 connections, and if you are not sincere, people won’t remember you.

Tony: My keyword is “trust”. No trust without sincerity. Trust comes with time. Trust comes from sincerity. It’s also the relevance. you need to be relevant in the relationship.

How would you advise a person who just arrived in China and wants to start a startup?

Eric: Going to any market, you have to first learn about the market. If you haven’t figured out the landscape, you can’t go to a new market. That homework should be done first and really evaluate the strategy. You need a partner, a reseller, and a market strategy. You cannot expect that the cashflow will be positive overnight so you need to be patient and invest for the long term. You have to know that if you’re moving from a smaller market to a bigger market, there are a lot of challenges.

Carman: I have more than 1,000 invitations in the queue all the time and a lot of people sending me a message. Usually, they do research before they contact me. They know who is active and who is doing what in the market. When they contact me they introduce who they are, what they have done, why they want to connect to me. Do the homework, before you connect, then connect with some people first. I’ve seen few people being successful just by doing that. One kid from the US created a first venture fund to invest in university students. In the first year, he connected with 100 universities in the US. In the second year, he connected investors and active people in Hong Kong. You always have a good idea, so do your homework. It’s about conversion rate. If you send out 100 messages, and you have 5 replies, it’s 5% conversion. It’s already a very good start.

Chinese consumers are becoming ever increasingly affluent. In 2015, 77 Chinese cities’ per capita GDP reached $10,000, and for top cities like Shenzhen, the per capita GDP was as high as $26,071. LB Investment, with their investment strategy as “TMT + Consumption Upgrade”, says it is more accurate to compare per capita GDP city by city, rather than country by country. When comparing city by city, some consumers in Chinese cities are ready to afford up-to-date lifestyles as those in advanced countries.

Among more than 500 foreign venture management firms in China, LB Investment ranks 36th on the list. LB Investment has $1 billion AUM (Assets Under Management) and LB Investment China manages about $150 million.

Not many know that LB Investment stems from LG Corp, owned by South Korea’s 4th largest conglomerate family, the Koo’s. Brian Koo (Bonchun Koo), the grandson of South Korean multinational corporate LG Corp founder Koo In-hwoi, founded LB Investment in 1996. LB Investment China was later established in Shanghai in 2007. Besides the legacy VC funds, LB Investment also manages Private Equity growth stage venture funds.

Some of the standout companies in LB Investment’s VC portfolios:

• 6.cn: one of the earliest live streaming platform in China.
• PPS: one of the leaders in video streaming service. It merged with iQiyi, ranking top 10 best exit investment in 2013 and later became a part of Baidu group.
• UUCUN (悠悠村): The largest 3rd-party app store for smartphones.
• Tantan (探探): The leading social app for young Chinese that ranked top 10 best portfolio companies firms in the internet sector.
• Pearl Abyss: The KOSDAQ listed company is the producer of the award-winning MMORPG Black Desert. Black Desert was awarded best Korean game in 2017.
• Big Hit Entertainment: Big Hit Entertainment owns and operates BTS, one of the top South Korean boy band.

TechNode interviewed Tony Park, the Managing Partner of LB Investment China as well as an early investor of Tantan and many deals in TMT + Consumption Upgrade sectors. The former executive of Alibaba also served as a acting CEO at leading game company The9 and founded a startup which he successfully exited later. During the interview, Tony explained his investment strategy and shared his viewpoints of the current market trends.

What are some of the areas in tech that your funds are focusing on right now?

We see a clear trend of personalization in consumer behavior, which is closely related to the emergence of a new generation of consumers.

This year, the oldest post-90s’ generation (born after 1990) are already 27 years old. They are at the earlier stage of their career and are just starting to get their own source of income now. They tend to purchase products and services based on their own lifestyle rather than social standard. This confidence is quite different from their elder generations, like post-80s and post-70s.

The reason behind that is: post-90s grew up under a stable political environment and enjoyed the fast-growing economy of China. They have not experienced any major social change, unlike the previous post-70s and post-80s. Therefore, this generation is very confident. This confidence will become the mainstream consumer mindset in China. This brings good opportunity for China local brands to emerge.

When we choose to invest in consumption, we communicate with post-90s a lot. During the communication, we found that:

• Post-90s have strong demand to purchase sportswear, fashion brands, and sneakers;
• They are willing to pay for non-diplomatic education;
• They are willing to invest in their hobbies to develop them up to a professional level;
• They are willing to spend money more than their income level on certain areas that previous generations didn’t, such as sports, fitness and losing weight.

Regarding technology, we are looking for companies with technology at the application level. When we invest, we try to find companies that leverage AI and big data to meet the demand for personalized consumption.

One company in our portfolio Wochu (我厨), for instance, based on its big data of consumer purchase behavior, providess RTC (ready-to-cook) food that fits the fast-paced lifestyle of young professionals. This RTC helps busy young professionals to prepare a meal within 5 to 10 minutes.

Another of our portfolio Yunmai provides smart hardware that tells digitalized body status and then provides a solution to help users develop a fitter and healthier lifestyle. Currently, more than 100,000 daily users measuring their weight and following online weight management course on their app to learn more about fitness.

What advice, if any, are you giving to startups in your portfolio in regards to conditions in China right now?

Many would say it is difficult to raise money compared to years back, dubbing the period as “capital winter” or “market downturn.” But I don’t agree with them. I believe for good companies it is the right time for them to scale up. During the last two years, we have seen many good companies raising large rounds with favorable conditions. The key for any company is to keep technological advantage and focus on bringing value to the customers.

As for investors, it is also a good timing to invest. Take LB Investment for instance, as we pursue mid-to-long term investment strategy, our decision making is less influenced by a temporary market downturn.

On the other hand, we cannot ignore the fact that China’s economic growth is slowing down, and the overall growth period has come to an end. From a macroeconomic perspective, we foresee this market cool down to affect startups for two to three years, but no longer than five years. During this period, there are still many chances to invest, and we will not hesitate to invest in good deals.

For startups already being affected by this capital winter, my suggestion is to keep focusing on bringing value rather than just thinking about the environment.

How competitive is the environment between VCs in China right now?

It is quite tough. China has more than 8,000 VCs, RMB funds and USD funds altogether. There are 2,000 USD VCs. Altogether, there is much more supply of VCs than before. All the startups want to get investment from good VCs and same goes for VCs. The competition among investors is so fierce, and sometimes we were not able to invest in deals we want. We frequently face these win or lose games.

That’s why we deliberately make investments and try to give so much help to startups. We help them raise the next round, help them grow their business network, and connect them to industrial expertise. When they need to adjust business direction, we also discuss the future strategy with them. In order to invest in the best deals, we try our best to stay competitive.

Can foreign startups compete in China? And if so, how?

The answer to the first question is yes. For overseas startups to survive in China, they should have technical innovation or differentiation point in their product. They should do R&D on site.

Take Korean games for instance: Korean games were strong in the home market. However, some of the game makers only relied on recruiting graphic designers in China, not paying effort on localized R&D and not considering Chinese gamer’s taste. Now Chinese game companies are developing their own top grossing games. The local game companies turned out to be more successful because they know their gamers better, thus making better games.

China is much more open than Korean and Japanese corporates when it comes to giving an opportunity to female and younger people. The annual income could double or triple depending on their work. Korean, Japanese, and many European companies cannot provide such a condition, and find it unnecessary to set up an R&D center in China. There is no dominant overseas corporate successfully operating in China, and the reality is much tougher for startups. Startup entrepreneurs should have such a mindset that they should move into China, and make an innovative product, otherwise, they cannot survive. The best is that the startup comes to China, and develop their product based on R&D, and try to work with the best Chinese talent.

Current tech trends in mind, what do you think will be the biggest winner within five years?

We’ll see the era of “AI+”, where big data and machine learning will become a very important part of business success. For example, the top news aggregation app Jinri Toutiao (今日头条) knows which type of news the reader likes, and curates the news for the users, letting them access the information they want. With cutting-edge technologies, they quickly grew large and exceeded other older model online media.

Hema Xiansheng (盒马鲜生), the new retail startup invested by Jack Ma, is also an “AI+” company. Users download the Hema app to order online and use it to make a purchase even in retail shops. It gathers all the data of the user’s purchasing pattern and will know which product this user likes to eat, how often they purchase it and will be able to prepare products for delivery or in the retail shop.

Tantan, the top social app, will also become an “AI+” company. When users swipe, it will analyze what fashion style, appearance, hobby, blood type the user like, and recommend other people accordingly.

How do you predict VC industry in China will change in the next ten years?

In the next 5 years, we’ll see VCs who specialize in one niche sector with strong industry expertise. VC in China started as a state-owned company with many employees. But nowadays we see top partners split from larger organizations and start their own business. In the future, we see this trend to keep on developing. We expect there will be many individuals who run their own VC fund that specialize in vertical sectors.

To compete in the new era, we need industry experts who can empathize with entrepreneurs, make quick judgments on projects, and have many resources. Compared to “generalists,” experts have a higher probability of investment success. LB, for that reason, chose industry expertise, and we made reasonable compensation structure. A mature investment landscape shall include big comprehensive funds and boutique funds that have professional investors with industry expertise.

Also, there will be more vertical funds of funds (FoFs). I have talked to industry expertise FoFs, and some of them were focusing on a certain type of VCs, for instance, internet VCs or consumer brands VCs.

Chinese tech giant Baidu announced signing strategic cooperation agreements with two of China’s leading automotive companies, BAIC Group and Xiamen King Long United Automotive Industry Co., Ltd. (“King Long”). Baidu and BAIC Group, one of the largest automakers in China, will mass-produce vehicles with Level 3 autonomous features around 2019 and fully autonomous Level 4 cars around 2021.

Baidu also signed a strategic partnership agreement with King Long, a leading Chinese commercial vehicle manufacturer. Together the two companies will put autonomous buses that run on designated areas into mass production and trial operation by the end of July 2018.

Two of these strategic partnerships is a pavement for Baidu’s open-source autonomous driving platform Apollo. The platform was announced in July where TechNode actually had a chance to test drive Apollo 1.0. This September, Baidu’s announced an RMB 10 billion fund for autonomous driving and the release of Apollo 1.5.

The combination of Baidu’s Apollo open platform and BAIC Group’s vehicle platform will enable the mass production of autonomous cars, with Baidu’s AI technology at the core. The cooperation covers connected cars and cloud services with the goal of creating an “AI+Automotive” ecosystem. Apollo technology, the conversational AI platform DuerOS, and image recognition technologies will be integrated into BAIC Group’s in-car systems to create a one-stop shop of connected car products.

In addition, the two companies will jointly explore opportunities to create a new cloud ecosystem, products in intelligent transportation and mobile travel, and other big data services. When it comes to using cloud AI, Baidu also partnered with Microsoft to use its cloud infrastructure services via Azure on last July.

It is anticipated that BAIC will be fully equipped with the Apollo car networking capabilities by the end of 2018, and in 2019, the number of BAIC vehicles equipped with Baidu’s connected car products is expected to exceed 1 million.

Baidu and King Long, China’s leading bus manufacturer, will work together to release autonomous driving buses that run in designated areas by the end of July 2018. These vehicles will be the first self-driving buses in China to be mass-produced and mark an acceleration of Baidu’s timeline for the mass production of autonomous vehicles. The partnership will combine Apollo’s autonomous driving solutions with King Long’s extensive vehicle fleet, pioneering work, and expertise in commercial vehicle designs for mass production. The two companies have already performed autonomous waypoint driving in enclosed venues using King Long buses deployed with Apollo’s 1.0 capabilities.

Tencent’s top-grossing game Honour of Kings has opened for pre-registration in North America with its rebranded overseas version, “Arena of Valor”, to be available on iOS, Android and Nintendo Switch, Chinese media  Sohu is reporting.

The first report of Tencent’s “free-to-play MOBA (Multiplayer Online Battle Arena)” game Honour of Kings landing in Europe and the United States game market traces back to this July. Foreign media said this move is a “curve strategy” for Tencent to attract overseas gaming fans.

Nintendo has announced that the “Honour of Kings” will be available on the Nintendo Switch platform in September, which brought a polarized reaction from game players and investors. Game players, especially Chinese players who tried out overseas version of Honour of Kings on Switch and either showed restrained or opposed attitude. There was even a game player who wrote a long article to explain why Tencent is not suitable for the Switch platform.

Related investment and the industry is generally favorable to this Tencent move. Citigroup said that it is too early to comment on whether the current “Arena of Valor” will be successful or not, and this will help “Honour of Kings” to expand its global gamers, especially in the United States and Japan. Citigroup also said that if the “Arena of Valor” in the Nintendo’s Switch platform is successful, it will help the success of “Honour of Kings” mobile version in the long term.

Currently, overseas version of “Honour of Kings” has landed in Southeast Asia, South Korea, UK and other regions, but the game is not as popular as it is in China. In the UK, “Arena of Valor: 5v5 Arena Game” is not even on the top 200 game chart. When it comes to the MOBA genre, most players in Europe and the United States still prefer playing  MOBA games on PC such as DotA2 and LoL, rather than playing it on mobile.

The game is seeing fluctuating rank in Southeast Asia and South Korea region, ranking inside top 100 game chart. Despite Tencent’s efforts to localize “Honour of Kings” to meet gamer’s taste in different regions, it seem to have little effect on the overall result.

In South Korea, “Honour of Kings” is named Pentastorm (펜타스톰) and launched through Kakao. The Chinese game ranked 15th among all iOS app games in South Korea based on the data gathered in this July by Daily Game (in Korean). In a country famous for e-sports matches, Arena of Valor International Championship: Asia 2017 (AIC Asia 2017) will be held on November 24th and 25th for semi-final and final match, gathering top game teams from South Korea, Taiwan, Vietnam and Indonesia.

WeChat subscription account is undergoing a major transformation, from a traditional folder method into a more intuitive feed stream format, making it more look like Jinri Toutiao’s format, Chinese media Hunwater Media is reporting.

After a WeChat user subscribes to an account, they can go directly to see the content (audio and video) with a more intuitive presentation. This could bring new content reshuffle and will have a greater impact on the user experience. Currently, WeChat has not given an official response to this news.

As early as May of this year, WeChat launched new features like “See (看一看)” and “search (搜一搜)”, making WeChat subscription accounts look more like Jinri Toutiao (今日头条). Users can tap on “See (看一看)” and choose from “What friends are reading” and “Hot topics,” leading some to believe WeChat was testing a feed stream style.

WeChat subscription account became a major platform for one-person-media (自媒体) who create their own public account and are encouraged to publish quality content to keep their users interested and share their content, while Jinri Toutiao, a company with “no editor” but “all engineers”, uses the latest machine learning technique to figure out what users are interested in and curate its content.

As these two companies established their reputation on their different strong points, they have reaped what they sowed. According to IImedia’s “2017 China’s New Media Industry Report“, WeChat public account has 63.4% absolute advantage in the one-person-media industry, followed by Weibo, which accounted for 19.3%.

While WeChat won the favor of one-person-media to stick to subscription account as their platform to publish content, Jinri Toutiao saw its over 100 million active users staying in their app reading their content as long as 76 minutes long in average as its CEO Zhang Yiming announced last November.

In June 2017, Jinri Toutiao reached 178 million users, the size of 7.71 million live users, and ranked 5th on the longest monthly usage time among all applications, according to QuestMobile’s 2017 Q2 Mobile Internet report.

WeChat’s feed stream trial cannot eventually make WeChat subscription account become truly a  feed stream. Because, after all, WeChat subscription account is a relatively closed content platform, which had also allowed Jinri Toutiao to grow.

China’s e-commerce giant Alibaba not only wants to be the best e-commerce player in the market, but also wants to deepen its technological prowess.

At Alibaba’s annual Computing Conference 2017 held in Hangzhou on October 11th, not only did the company unveil its plans to invest $15 billion over the next 3 years in its R&D, but they also showcased their technology developments to its visitors to give them a glimpse of the future in a way that they can easily understand their technology and actually try out the technology for themselves.

Alibaba’s technology developments in internet car, smart logistics, and smart mirror is powered by its partnered companies or the startups that Alibaba previously backed. On November 11th last year, China’s Single’s day, the e-commerce behemoth showed off its robotics, AI, AR, and VR developments.

Alibaba’s top competitor JD is also pushing its technology, as they officially debuted their first full-scale unmanned warehouse (in Chinese) in Shanghai on October 9th.  The entire warehouse doesn’t have a porter, sorting staff or packing staff, and is powered by solar panels on the roof, charging the power during the day and storing the power at night.

Alibaba’s internet car – Banma Network Technology

Alibaba’s internet car has a lot to do with Banma Network Technology, a joint venture between Alibaba Group and SAIC Motor Corp. Banma showcased “AliOS”, the newly-launched operating system offering OS solutions for mobile, industrial and IoT devices, with various functions such as purchasing items and parking their car. Currently, three Chinese car brands MG (名爵), Roewe (荣威), and MAXUS (上汽大通) are using Banma, and their more than 250,000 cars are running in China now. Alibaba announced last week the release of AliOS-enabled cars with Dongfeng Peugeot Citroen Automobile Company starting next year.

The core technology behind Banma is data converged computing based on AliOS. Banma’s navigation map uses GPS and ADAS (Advanced Driver Assistant System) which help users not to pay that much attention to driving. By aggregating the GPS data from users’ destinations, the car understands driver’s habits and consumption patterns and knows which shops and places they like to go, and its reaction will be customized to the driver: For example, if a user buys a movie ticket, then the car will ask if the driver wants to go to the theater, send out coupons when the driver is going to restaurant, and provide parking data that matches the user’s parking habit.

Banma’s man-machine interaction system is based on voice recognition.

“Siri is based on the phone, and users can just type the message in using their hands. When you are driving, your hands are on the handle, but you can perform a lot of things with your voice,” Zhang Li, senior visual designer at Banma told TechNode.

Virtual fitting room – Haomaiyi (好买衣)

To allow its customers to try on as many outfits as possible, without the hassle of putting on and taking off clothes, Alibaba has strategically partnered with Shanghai-based Haomaiyi (好买衣), a virtual fitting room startup. Customers can visit an offline shop and try on clothes by just tapping the clothes on the screen of smart mirror, and the 3D image on the mirror can demonstrate 90% of the customer try-on look. Now smart mirrors are used in two global fashion brands’ brick and mortar stores in China, and the same can be done online through their app Haoda (好搭) and dozens of merchants on Tmall. By aggregating user’s purchasing data, Haomaiyi aims to give AI-driven fashion recommendation to its customers in the future.

Smart coffee robot

Connecting data with Swedish-Swiss robotics ABB, Alibaba’s ET industrial brain intelligently analyzes the real-time data of robots and enhances their work efficiency. Firstly, it collects operational data of robots, building up a defect prediction model, and reduces downtime ratio. Secondly, it optimizes robot’s large-scale collaborative operation and improves the efficiency of a production line.

Smart logistics – Quicktron

In order to improve its efficiency of logistics, Alibaba invested in Quicktron, a Shanghai-based company that provides smart order picking system. Their artificial intelligence algorithm-based solution consists of mobile robots, mobile racks, as well as replenishment and picking stations to complete a task. The intelligent order fulfillment system incorporates shelf locating, product pickup, replenishing, returning and stock counting. Robots and systems are equipped with intelligent machine learning. When a robot receives an order, it selects the optimal route to the shelve that stores the goods, seamlessly adapt to the operation environment, and avoid obstacles. The system helps improve robot’s independent decision-making capability, inventory conversion rate, and client’s order optimization and warehouse optimization. The startup now works with Alibaba, JD, and vip.com.

VR – Kujiale (酷家乐)

One category of product that the customers are reluctant to make a prompt purchase online is furniture because they are just not sure about its size and how it will fit in their house. Alibaba’s partner and solution provider Kujiale (酷家乐) is an interior design VR company providing online 3D interior decoration rendering software. Using their solution, users can wear VR headsets to easily browse furniture in a virtual house and purchase them online. The Hangzhou-based startup owns proprietary ExaCloud rendering technology, which enables users to complete interior planning in 5 minutes by rendering as fast as within 10 seconds. Specializing in cloud-based distributed computing and computer graphics, the company claims that it improves retailer’s furniture sales by providing a unique onsite user experience.

Alibaba Group announced on October 11th the launch of an innovative global research program, Alibaba Academy for Discovery, Adventure, Momentum, and Outlook (or DAMO Academy), designed to increase technological collaboration worldwide. With the setup of the Academy, the company expects to invest more than $15 billion in research and development over the next three years.

The Academy is the first major global initiative of Alibaba to fulfill its commitment to serve 2 billion customers and create 100 million job opportunities in 20 years (in Chinese). Alibaba now has around 25,000 engineers and scientists on its staff.

The Academy will oversee the opening of seven research and development labs worldwide and seek to recruit 100 talented scientists and researchers from around the world to join the program. Alibaba Group’s Chief Technology Officer, Jeff Zhang will be the head of the Academy.

Under the plan, seven research labs will open in China (Beijing and Hangzhou), the United States (San Mateo and Bellevue), Russia (Moscow), Israel (Tel Aviv) and Singapore, focusing on both foundational and disruptive technology research including data intelligence, Internet of Things (IoT), fintech, quantum computing and human-machine interaction. Within those broad research areas, the labs will focus on topics such as machine learning, network security, visual computing, and Natural Language Processing (NLP). The Academy will also cooperate with the University of California, Berkeley through its RISE Lab on areas such as secured real-time computing.

“In the 20th century, a company could solve one or two problems and can be successful. In the 21st century, you need to solve greater problems to be successful. We are aware that we are a late mover in research, and we need to learn from IBM and Microsoft,” chairman of Alibaba Group, Jack Ma pointed out at the Alibaba Computing Conference 2017 held in Hangzhou. He shared his three hopes for Alibaba DAMO Academy.

Jack Ma stressed that the Academy will not only serve as Alibaba’s R&D arm but also become a self-sustainable company by monetizing its technology.

“Alibaba DAMO Academy will be self-supportive. We will invest $15 billion for the next three years as an initial money to recruit talents, but it should earn money on its own. We strongly believe that we will profit from the technology, not by the scale,” Jack Ma said.

Along with the announcement of Alibaba DAMO Academy, Alibaba Group’s Chief Technology Officer, Jeff Zhang stressed the importance of data for Alibaba Group.

“The difference between a traditional company and an internet company is that the latter makes decisions based on data, and they know if they should turn on a red light or green light for the project, and what will be the consequence of the changes,” Zhang remarked at the conference.

“We have an unwritten rule: In Alibaba’s meetings, we ask our team to bring the data, if you don’t have data, bring a case study, if you don’t have a case study, bring your viewpoint. Without data, case study or viewpoint, then the colleague does not need to present his proposal. The data comes first, and when you have data, you have power just like the CEO. This is very important part of Internet thinking.”

China’s early adopters who tried out Apple Watch Series 3 cellular connectivity with China Unicom are furious after connection failures and China Unicom’s passive reaction. The connection issue, however, seems to be China Unicom’s fault: they still have not gotten formal approval from China’s Ministry of Industry and Information Technology for “one phone number multi-device (一号多终端)” business, essential to support Apple Watch Series 3 cellular connectivity.

Tian purchased the Apple Watch Series 3 through Apple’s official website and China Unicom’s SIM card to pair with it. To his disappointment, after pairing China Unicom’s data service with Apple Watch, he couldn’t receive any calls.

“It’s been two weeks. I called China Unicom seven times, no use. I’ve also visited two China Unicom stores, got a new SIM card with same number, but still no use,” he told TechNode.

Apple announced in its official news room that customers will be able to order Apple Watch Series 3 (GPS + Cellular) beginning September 22 in China. At the beginning of the new Apple Watch Series 3 release, Apple said they would provide LTE cellular network via China Unicom in five areas in China, namely, Shanghai, Guangdong, Henan, Hunan and Tianjin on its official website.

Apple Watch’s network activation problem in China was first reported by Chinese media The Paper on September 23rd, saying a user that can not complete the real name authentication on Apple Watch 3. Only a week after Apple Watch Series 3 release, Apple’s official website has backtracked from its initial announcement and shows that China Unicom’s cellular network will be available later (今年稍后推出).

Apple Watch Series 3 users who purchased China Unicom SIM card failed to make phone calls using the watch and expressed their anger on Weibo.

“When I was buying the Apple Watch at Apple Store, it said Shanghai Unicom supports data service on the Apple Watch. Now that line is gone. So I’m definitely entitled to return the Apple Watch because it’s not working in the way Apple advertised it at the time point when I was placing the order. But the Watch is working fine, besides this issue, so I don’t want to return it,” Tian says. “If they haven’t tested it, they shouldn’t have advertised it.”

The reason behind the issue

Zhongguancun Online’s interview with a China Unicom’s staff (in Chinese) explains the issue. Apple Watch Series 3 uses eSIM independent cellular data, which required access to China Unicom’s “one phone number multi-device (一号多终端)”. However, China Unicom’s “one phone number multi-device” has only received “probationary” license, and did not pass the formal approval of the Ministry of Industry and Information Technology. China Unicom had no way to handle large-scale use of China’s Apple Watch Series 3 users, and had to immediately suspend the service.

Both Apple and China Unicom have not yet given the official explanation on the cause of the connection failure. China’s Apple Watch 3 users rage over China Unicom’s poor reaction to the people who suffered loss by purchasing China Unicom’s SIM cards.

“I’m just angry at China Unicom’s ignorance and incompetence in reacting and solving this simple issue. If China Unicom was not prepared for the service, they shouldn’t have offered it in the first place,” Tian said. “I don’t even want to use data service on Apple Watch 3 any more. So disappointed. I just want my SIM card back to normal service.”

On October 8th, bike rental startup ofo released “2017 National Day Holiday Travel Data Report.” According to the report, the capital of the Tibet Autonomous Region, Lhasa showed the highest increase of ofo usage during National Day, Chinese media Sohu is reporting.

Data show that ofo enjoyed a significant increase in cycling trips on October 1st, the National Day. After showing a slight slowdown on October 4th, the Mid-Autumn Festival day, the number of trips rose again on October 5th. During the holiday, the time of using bicycle rental service was smoothly spread out, without showing morning or evening peaks. The first batch of bike travel showed a 1-hour delay (compared to before the holiday) and daytime travel concentration was greater than usual.

The average number of bicycle rental services used by active users was increased by 15.4%, reducing the urban traffic jam in Chinese cities.

During the holidays, bicycle rental users were mainly young and male. Male users accounted for 57%, while female users accounted for 43%. The proportion of young user groups aged 18 to 25 and 25 to 30 accounting for 55% of all users.

In addition, the average bike riding speed reduced from the normal 2.12 m/s to 2.0 m/s, showing a 5.5% overall speed reduction; bike riding distance increased from 1.56 km to 1.69 km, an 83% increase. The report concluded that the rides were probably more recreational and less urgent than during non-holiday periods.

Bicycle rental users were mainly concentrated in the shopping district, scenic spots, and transportation hub. When it comes to bike travel purposes, leisure and entertainment in shopping area accounted for 40.1%, scenic travel accounted for more than 34.5%.

The top 10 shopping districts in China during the National Day included Beijing Wangfujing, Shanghai People’s Square, Chengdu Chunxi Road, Beijing Xidan, and Shanghai Huaihai Road.

The top 10 cities in National Day were: Beijing, Shanghai, Chengdu, Tianjin, Shenzhen, Guangzhou, Xi’an, Wuhan, Hangzhou, and Nanjing. The Top 10 attractions were: Hangzhou West Lake, Beijing Tiananmen Square, Shanghai Bund, Beijing the Forbidden City, Chengdu wide alley (宽窄巷子), Beijing Summer Palace, Nanjing Sun Yat-sen, Xiamen Gulangyu, Xi’an Big Wild Goose Pagoda, Shanghai Oriental Pearl Tower.

The top 10 cities that showed the highest increase in ofo usage on National Day were Lhasa, Suzhou, Yantai, Yangzhou, Datong, Zhuhai, Guilin, Xinzhou, Leshan, and Shantou. Among them, Lhasa rose the highest, reaching usage number of nearly 3.5 times a day.

ofo has been actively promoting its trips by giving out red packet (hongbao) rides and free rides. Due to these efforts, the average utilization rate of shared bicycles reportedly increased by 11.6%, preventing cumulative travel carbon emissions by more than 78,000 tons. Among them, Beijing was the top city with the most bicycle rental service usage.

Chinese people enjoyed eight days long holiday, from October 1st to 8th, as its National Day (国庆节) and Mid-Autumn Festival (中秋节) fall on the same week this year. WeChat issued a National Day big data report on October 8th, announcing that Hong Kong became the top destination for outbound Chinese tourists on National Day, our sister media TechNode China is reporting.

Not surprisingly, the largest number of Chinese outbound tourists were coming from first tier cities Shanghai, Beijing, Shenzhen, and Guangzhou. Second and third tier cities followed, including Hangzhou, Nanjing, and Chengdu. The fastest growing outbound travel city was Chongzuo City in Guangxi province, showing the outbound travel growth rate as high as 338%.

Most of the mainland’s outbound tourists chose the closer travel destinations like Southeast Asia, East Asia (South Korea and Japan), Hong Kong, Macao and Taiwan regions.

Here are the highlights of the report:

• Hong Kong was the top single destination for outbound tourists, followed by Macao, Bangkok, Phuket, Tokyo, Taiwan, Singapore, Bali, Seoul, and Osaka.
• Southeast Asia received the most Chinese tourists followed by East Asia (South Korea and Japan), Hong Kong, Macao and Taiwan regions, North America, and Europe.
• 52% of outbound tourists’ expenditure was made in duty-free shops. It’s interesting to note that expenditures made in duty-free shops and drug stores exceeded 60% of the total expenditure.

• The largest number of people departed the country on October 1st. More than 600,000 people departed the country, far higher than other smaller holidays.
• Post 90s generation visited Hong Kong, US, and Japan the most, while post 80s generation visited Hong Kong, Thailand, and Japan the most. Post 70s generation visited Hong Kong, US, and Macao the most.
• WeChat payment was used the most in Hong Kong, followed by Thailand, South Korea, Japan, Australia, and Taiwan.
• 6.3 billion Red packets (hongbao) were sent and received on Mid-Autumn festival.
• Most WeChat calls were made between post-60s generation and post-90s generation. The longest average phone call was 750 seconds when post-60s generation called 90s generation, followed by 610 seconds when post-90s generation called post-60s generation.

Editor’s note: This was produced in partnership with Start Alliance, a business network between the most vibrant startup hubs around the globe. Start Alliance supports startups to adapt business models to international requirements and accelerates corporate innovations. Partner cities are Berlin, New York, Paris, Tel Aviv, and Shanghai.

If you want to get a sense of what’s happening in Shanghai’s startup scene, you shouldn’t just go to co-working spaces. The most technology-driven spectacle is not the Oriental tower, it’s the booming VR arcades in Shanghai. Shanghai is home for more than 100 VR arcades. If you want to have fun in Shanghai, going to a VR arcade is a must.

So how do you visit VR arcades? Well, I’ve included the addresses of the ones I visited, but since we’re in the 21^st century, I’ll give you the secret to finding anything in China. Using this method you can find the nearest VR arcade and book a timeslot VR arcade experience.

You first download an app called Dazhong Dianping (大众点评),  the best guide to restaurants, theater and massage shops in Shanghai. You type in Xunixianshi (虚拟现实), which means Virtual Reality, and you will get about 100 results in Shanghai. Choose the VR arcade that sits closest to where you are or choose the one with the best feedback. Then call the shop to make a reservation. Since some arcades can be really popular, and the experiences are at least 30 minutes per person, it’s probably best to book ahead.

I went to the VR arcade closet to my house, Wow VR arcade, in a commercial area in New Life Plaza in front of Changshou Road metro station.

Who goes to VR arcade?

At 3 p.m., a 9-year-old boy drags his grandmother to the VR arcade. The boy screams with joy as he put on his VR helmet. The boy first plays a gun shooting game. He hides behind the wall, reloads his revolver, and boldly moves away from the wall to shoot the enemies. He looks like a 9-year-old gunfighter in a movie, with a futuristic helmet on. His grandmother tells me that he comes here every weekend to play this game.

“Doesn’t this look too violent for him?” I asked the grandmother. She looks at me suspiciously, and she says, at her age, she doesn’t understand all this stuff. Meanwhile, the boy asks the employee to change the game. He plays a spaceship game, where he glides around the skyscrapers, then after 10 minutes, he changes the game. This time, he rides on a giant swing, seeing the view of the mountains.

While he plays the VR, his grandmother watches him as she holds his backpack on her lap. After the boy takes off the VR headset, he seems very excited about the VR experience he had.

“It’s so fun!” he cries. I tried to talk to the boy, but his grandmother holds his hand and quickly walks away saying, “He has to go to the next lesson.”

At 4 p.m. three high school girls wearing school uniform came to VR arcade holding ice cream in their hands and carrying huge backpacks on their backs.

It’s their 6th visit to this VR arcade. When they enter the VR arcade, they ask the employee if there is a new game. The employee shows the 30 inch PC monitor on top of their heads to show them a new game just downloaded from Steam.

Then the girls put down their bags, and tell the employee the size of their head. One girl says 400, the other girl says 600.The employee takes two other straps, and adjust the size of the VR headset for them. Three girls are all wearing glasses, and they take off their glasses to wear the VR headset.

“It’s the new amazing device, which gives me a whole new experience,” Qihui Wang, 17-year-old girl in a WOW VR arcade told me. The other two girls tease her and her face becomes red.

“I saw virtual reality in the news. Our high school is really close from here, and nowadays many students already know about this place. We often come to this mall after school to buy food and beverage, and as we passed here we thought we should experience this,” Zhenhui Xu, another girl told me. They are all Shanghainese girls born in the year 2000.

“I think I can consider buying one of the VR helmets and leave it at home. I think it will be quite useful. It can be part of my daily life. I can draw things, go traveling to other faraway places, and experience different things. It will be very useful I think,” she adds.

One VR experience is about 30 minutes long, and each of the girls take turns to play Arizona Sunshine, a zombie shooting game. “When we were crazy about VR, we played like 2 hours, one time. I didn’t think it was too much!” Zhenhui says.

She shows me about 7 different games downloaded on her phone. “I play games a lot. Cell phone and the computer screen is just 2D, this is high-technology showing scenes from real life. Some of the games are frightening for me, but my friends love them. It’s something we cannot experience in the daily life.”

An employee at Wow VR arcade says that the most of their customers all live close by. Young people visit the arcade several times, bringing different friends all the time.

“It includes all the types of people. About 45% are young people, and about 45% are little children and 10% are old people. The youngest kids are about 4 or 5 years old who come here with their parents,” Ruo Ming, the employee at Wow VR told me. “Disabled people using wheelchair also come here to experience VR.”

A son of a disabled mother had experienced the VR arcade and had brought his mom and the whole family to experience the VR and to encourage his mom.

“One Paralympic player sitting on wheelchair also came to experience it. He said the VR experience gives him courage and confidence since he is left alone in the VR space,” Ming says.

VR arcade business is now red ocean

“It’s the trend of the market, and it’s an attractive business, commercially,” Ming says. “The good thing about VR is that it’s a private space, and you can transfer time and space easily.”

Started in October 2016, the small offline shop arcade sits in the city center of Shanghai. He says the arcade charges RMB 35 to customers to experience VR for 30 minutes.

The rising house rent is the threshold for VR arcades to secure the ROI. Ming says that it is RMB 20,000 to rent this space in this mall. On the weekdays, about 10 people come here, 25 people on the weekend, and they earn about RMB 14,000 sales every month. Considering the number of visits slowing down in the weekdays, the VR arcade is seeing a loss. To bring in more new customers, Wow VR arcade had to set a temporary booth at Pudong for two months.

“If there are more people in the mall, then more chances of seeing our shop and more people come to experience VR,” Ming says.

Another VR arcade in Shanghai, Hive VR sits on the 20th floor of an ordinary downtown apartment. The VR arcade charges customers 50 RMB for 30 minutes use of any VR headset in their arcade. The cost of rent is about 15,000 yuan a month; the co-founders say that they are breaking even. Compared with other VR arcades, Hive VR is more popular among foreign customers as its two co-founders speak fluent English.

Hive VR arcade is one of the few VR arcades in Shanghai that has HTC Vive, Play Station VR, and Oculus Rift (bought from Netherlands since Oculus is not officially available in China). For that reason, their VR arcade often serves as an offline spot to try out different VR headsets for VR game gurus. Sometimes, customers copy their VR arcade to start one on their own.

“One customer tried our VR devices one time and opened his own VR arcade. He called us to inquire technology details of VR,” Nancy Yao, co-founder of Hive VR told me. 31-year-old Nancy quit her job at Bayer to start a new business with her boyfriend Nick. “We could clearly see they have no knowledge in VR. The competition is growing.”

Challenges for VR Arcades, and pivoting

“The challenge is that both the novelty and headset prices are going down. Later on, VR will be more accessible to more people. Then VR arcades need to consider if it’s a sustainable business. VR arcade business entry barrier is very low at the moment,” Nancy says.

When the co-founders first started Hive VR in June 2016, there were only 15 VR arcades searchable on Dianping. Now there are more than 300 VR arcades on Dianping in less than nine months. With rising rental cost and labor costs, and growing competition of VR arcades, it’s going to be hard for VR arcades to make a profit.

“The number of visitors has slowed down after Chinese New Year. When we started, we foresaw the novelty of VR will go down gradually, that’s why we are not purely targeting individual customers. To be a sustainable business, you should go deeper into the industry. We believe VR arcade is not only about gaming nor targeting individual customers,” Nancy says. “Education is a big trend that is going to lead VR this year. AR is already used a lot in education.”

Some VR arcades are pivoting to the B2B sector. Hive VR is getting into VR education, introducing VR apps to schools and universities, opening art workshops for designers using VR application like Google Tilt brush and a 3D printer. FAMIKU, one of the biggest VR arcade in Shanghai, is positioning to be a VR game testbed for overseas game companies.

“People say the year 2016 was the first year of VR. For the year, 2017, I think it will see rather steady growth,” Wow VR arcade’s Ming says.

The challenge of VR arcades is that the cost of hardware is going down, lowering barriers to entry for individual users. As the competition gets fiercer, it will be hard for them to sustain their revenue stream. VR arcades have to pivot to a vertical they can specialize in.

Editor’s note: This was produced in partnership with Start Alliance, a business network between the most vibrant startup hubs around the globe. Start Alliance supports startups to adapt business models to international requirements and accelerates corporate innovations. Partner cities are Berlin, New York, Paris, Tel Aviv, and Shanghai.

I have worked in four startup cities: Silicon Valley, Tel Aviv, Seoul, and Shanghai. If you ask me, which city I liked the most, I can tell you for sure, Shanghai is my favorite startup city. For me, Shanghai is a land of freedom, free from cash, free from the thing you own owning you, free to try out something new, and free to join any community.

When I first arrived in China in January 2015, I saw how I could pay for all my meals, snacks, and even my electricity and water bills using Alipay. It was a mind-blowing experience. I’m from South Korea, notorious for long online payment process. This made me largely depend on brick-and-mortar stores even just before coming to China. Since then, China is, what I call, the “IT heaven.” Now I feel most home in China since I have all the mobile payments and Mobike here.

Yes, in China, you cannot access Google nor Facebook. Many chatting apps like Whatsapp, KakaoTalk, and LINE are blocked in China, so you will have to use Chinese replacement of these apps. Thankfully, Chinese apps have matured enough to fill in all the empty spots, and some are doing better than foreign ones. The title of a Forbes article published in August 2016 was “It’s time for Facebook to copy WeChat.” Silicon Valley startup Whale even got the idea for their product from Chinese knowledge sharing startup Fenda.

If you want to find out Chinese innovation for yourself, then come to China. Don’t sign up for roaming on your phone in your country, and instead, buy a SIM card in China to get a Chinese phone number. Then take your phone and passport, go to the Chinese local bank to open your
Chinese bank account. With your new bank account, set up your Alipay or WeChat payment, which will make your China experience like Alice in Wonderland.

As an expat tech blogger, the cool thing is that you get to actually experience the startups that I write about. Here I will share with you some startups that make life here so fruitful and interesting: Living (Ziroom), transportation (Mobike, ofo), work (WeChat), hobby (Alipay), workout (Keep) and food (Dazhong Dianping).

Living: Ziroom

Ziroom is a startup under the Chinese big real estate group Lianjia. You can browse their website or app to search the location you want to live in, and the number of people you want to live with. The good thing is that they have a custom design, and all the interior of the house is done neatly and all clean, to meet the young generation’s taste. When you enter the house to check your room, you will find that it’s not so different from the picture you saw on the website.

When you choose to rent out a room and live with other housemates, you have your own room, and live with other people, and share the common area with your housemates. A cleaning lady comes every 2 weeks to your house to clean the common area, so you don’t have to quarrel with your housemates about who will do the cleaning. Back in Tel Aviv, I had to move house four times in 7 months and had to depend on a secret Tel Aviv Facebook group to post my house, which made me suffer a lot. Ziroom’s staff, who always dress professionally, manage your complaints through WeChat and tries to solve the problems of apartment living, from broken appliances to housemate issues. When you leave the house, they will take care of your empty room, so you don’t  have to a replacement to sublet or take over your lease.

Transportation: Mobike and ofo

Mobike really changed how I live. Now I barely ride a bus or metro, instead, I ride Mobike. It helped me realize how beautiful the French concession is, and the beauty of small alleys and trees filling up Shanghai’s antique atmosphere. It also changed my fashion, from dresses to comfortable pants. Every morning, I go ‘hunting’ for a Mobike around my spot and find a Mobike that is clean and has the right height seat for myself. The best thing about Mobike is that you can drop the bike anywhere, and you can pick it up anywhere, wherever you are. As a humble business development manager for a startup in Silicon Valley back in 2014, I still remember having to walk on a sizzling highway on a scorching hot day in San Jose, to get to one place to another.

Mobike is actually changing Chinese cities. According to Mobike’s white paper released this May, survey respondents reported a 55% decline in usage of private car services since the introduction of bike-sharing. Mobike’s competitor Ofo is yellow bikes and come out with bigger sizes which might be much more optimal for German riders.

Work: WeChat

Working is largely done on WeChat. In fact, 83% respondents now use WeChat for work, according to 2017 WeChat user report. Firstly, you don’t need a business card in China. When you meet someone, you just show them your QR code, or you scan their QR code. You get to see his/her WeChat Moments, where you get a clue of what this person does and like. Sometimes they link their LinkedIn account to their WeChat profile so you can add them directly. Secondly, my company’s teamwork is done through WeChat. We have three WeChat groups: one with all the former-TechNode members including the people who used to work for TechNode, one with all the TechNode Chinese and English reporters, and one with only TechNode English reporters. Our English reporters do weekly meetings through WeChat call, connecting all the writers based in different cities like Shanghai, Beijing, Shenzhen and other places if someone is on a business trip. We also share interesting, noteworthy articles in the group, and sort out our tasks.

As a reporter, I do my interviews over WeChat and find sources through the group chats I’m in. It’s also very useful when I go on a business trip to an unfamiliar city. I ask in a group, if somebody is based in Shenzhen for example, and that person invites me to a WeChat group full of 500 people in Shenzhen, where I can ask the group members for the connection I’m looking for.

According to the 2017 WeChat report, the top 2 reasons to join a group chat of more than 100  people were for corporate internal communications and for professional networking. So if you’re thinking of starting your business in China, I advise you to ask someone to invite you to join a WeChat group related to your interest. There are so many WeChat groups where people share their ideas and meet up offline. For example, I run a WeChat group called Masumo for Korean business people in Shanghai (Masumo is a shortened word for “gathering every last Wednesday of the month” in Korean). I share what I found as an interesting tech trend during the month, and two more people volunteer to give a speech.

WeChat works like a one-stop platform for us to share information both online and offline. There are a lot of business-related WeChat groups, but also hobby groups, such as podcast discussions and book discussions. In Silicon Valley or Israel, I used Meetup.com to find these offline communities and used Facebook to find these offline communities in Seoul. WeChat, primarily an online chatting room, gives people a much more open environment to talk about your interests.

You can make amazing things happen through these WeChat groups. The best experience I had in Shanghai was caroling around the city, two weeks before the Christmas. The organizer, Jenny Tang, simply gathered up volunteers in a WeChat group. For most of us, it was the first time we had ever or practiced together. With Santa hats, we went out into the busy streets and subway and suddenly burst into singing. Passersby paused, smiled at us, chanted, cheered, and applauded. They also scanned our WeChat group QR code and sent us photos and videos.

Hobby: Alipay

My hobby in Shanghai is traveling. I purchase train and flight tickets on Alipay, and book accommodation on Airbnb, linked to Alipay. Previously, I had to wander through Skyscanner to compare the flight fares and go through many steps to make the payment using my bank cards or to make a money transfer at an ATM around my house. Using Alipay, I can book flights in less than three minutes on my phone.

Alipay also makes it easy to transfer money to my friends or merchants. Many cases, it’s a friends gathering and one of the friends pays for the meal, and we transfer money to that person using Alipay. I used to go to oil painting classes, and I paid the 10 class fee directly to my teacher Una Deng. Running a small business and getting mobile payment is this easy in China. Even a small fruit shop on the outskirts of Shanghai, or on a mountaintop, can receive payments via Alipay.

Workout: Keep

Keep helps you shed some extra weight. Last year, I found out that I spent more than 26,900 RMB ($4,000) in the gym membership and five months training session with a personal trainer. It did help me lose weight and gain muscle, but I couldn’t believe I spent so much money.

This year, instead of registering for a personal trainer, I rely solely on Keep. I first set out a 4-week-long plan that I  wanted to gain muscle and shed extra weight. Then I chose the level I wanted. Then everyday, Keep sends me 2-3 exercise videos that count the number of your movements and motivates you to do more. I bought a yoga mat, and dumbbell and my room became my gym. After each session they let you take a photo with a day number and post it on the timeline so that you feel a sense of achievement and be proud of yourself.

When I go to the gym, I now see more people exercising by themselves with a yoga mat using Keep. Yes, this app is replacing personal trainers. I measured Inbody on this July, and checked my muscles and body fat, and could see that my body fat reduced and muscles increased. It’s great that you don’t have to spend money, and an application helps to you achieve this result. Keep is also the company that Apple CEO Tim Cook visited when he visited China.

Food: Dazhong Dianping

Dazhong Dianping allows me to find the best restaurants around my home and anywhere I go for the first time. It’s like Yelp in China. This is also how a tiny brick-and-mortar store can attract customers. Once I wanted to perm my hair and found a five-starred hair salon around my house. It was run by post-90 generation (those born after the 1990s), and all the hairdressers were in their twenties. They told me that they used to work at a bigger hair salon as an apprentice, and decided to start a business on their own. They were really skilled in styling, and their best part was that after the customer’s hair is neatly done, they take professional pictures of customers using Chinese popular photo filtering app like Meitu. They also had a special light and wallpaper inside the hair salon. This is very smart because Asian women like to take pictures of their new hairstyle and post on their social network. This way, they went viral on Dazhong Dianping and attracted a lot of customers without spending any money on marketing. Customer like me became a regular. Even though I don’t live near there any longer, I still travel to come to this hair salon. Dazhong Dianping really works on top of word of mouth, as you can see.

I recommended all these apps to my friends who visited China for a short period. They were lazy to try out these Chinese apps, but one particular app captivated them. Whenever they had free time, they would open the app and giggle. It’s, Tantan, which is like a Chinese version of Tinder, letting you find a romantic partner around you. If you’re looking for a Chinese girlfriend or boyfriend, or just to practice your Chinese, it’s a good option.

So this is how cool Shanghai is. You can see how these apps are a huge part of my life. Using these apps, Chinese people are setting up their business, earning money, and building up their reputation. Shanghai has sharing culture. We share houses, offices, bikes, information, and connections. Many things here are so affordable, shareable, and help you live a healthy and smart life.

What will tomorrow’s fashion look like? It is worth noting that fashion-conscious and tech-savvy millennials not only care about uniqueness but also sustainability. In a recent study done by Nielsen and Deloitte, of the respondents who look out for sustainability, 51 percent were millennials.

The fashion industry is the second biggest polluter of freshwater resources on the planet, and a quarter of the chemicals produced in the world are used in textiles. Vincent Djen, co-founder of FashionEx, a fashion accelerator based in Shanghai, believes this needs to change.

“The hot topic now is sustainability. Since two or three years ago, the fashion industry has been really pushing forward sustainability, to use less water in the whole process of making a garment in order to lower the impact on our environment,” Vincent said at Fabernovel Shanghai Talks on September 22nd.

As an example of sustainable fashion, Vincent introduced a jacket co-developed by Odd Molly, Spindye, and himself. The jacket uses recycled polyester from used PET bottles, cuts down water usage by 80% and saves 30% carbon emission in the making process. Most of all, it uses new solution for dyeing textile. Traditionally dyeing fabric is very water and energy intensive. To dye a T-shirt, a factory uses tons of water and up to 120 – 140 degrees Celsius. This wastewater becomes a pollutant so the factory needs to use a lot of water and expensive water treatment process to turn the dirty water into clean water again.

“Our dyeing solution starts with mixing color with the recycled polyester chips before spinning into yarns form. Think of turning clear lego bricks into color with pigment. This dyeing technology is also used in other industries, too,” he said.

That way, companies don’t need to use water to dye the fabric after the fabric is weaved. The filling is made with Sorona yarn which uses about 40% less energy and cuts down about 40% of greenhouse gases compared to petroleum-based yarns. The jacket will be sold in the Europe first, Vincent said.

“How do you close the loop? We can do it by creating a timeless design jacket and extending the life of the jacket. Recycling the jacket and turning into insulation or new fibers can also be an option,” he said.

Currently, Beijing, Shanghai, Zhejiang province in China, parts of US, Germany, and Canada offer garment recycling services.

Vincent says smart garments can be divided into two categories. First is data collecting and functional garments, such as a sports T-shirt that tracks your activity and ECG, monitors user’s blood and oxygen level and notifies the user in case of an emergency.

Second is functional garments such as the heated garment or lighted garments for safe biking at night or for clubbing.

“Heated garments are getting popular because we don’t want to wear too many layers of clothes and look like a fluffy bear. We want it light but also warm,” Vincent said.

The jacket that uses smart dyeing solution also has seamless detachable heating modules to make it both warm and light. Recently PolarSeal, a heated base layer top raised 4.6 million HKD on Kickstarter and Ravean, a heated down jacket that also charges mobile phone raised $1.3 million.

“It’s fashion tech, not tech fashion. It should come from fashion with help of technology in making something people want to wear and something people want to buy,” Vincent said.

Another Shanghai-based company that combines fashion with technology is X suit. They make suits that support high mobility and are liquid and odor resistant, and wrinkle repellent. It allows each fiber in the lining to attract, isolate, and neutralize odors immediately, and helps to reduce the amount of dry-cleaning and overall maintenance necessary for the suit.

“Classic suits are formal and elegant but uncomfortable, while sports suits are comfortable but too casual. We try to combine the strong parts of the two, making a formal and comfortable suit,” Max Perez, co-founder & creative director at X Suit said at the event.

Chinese have become notorious for pirating software: in 2015, 70 percent of software installed on computers in China was not properly licensed, followed by Russia and India, according to a study last year by BSA, a trade association of software vendors. Now, however, the situation is changing.

Chinese people have developed a paying habit for content published by KOLs. Top content writer on Dedao earns $3 million in annual revenue with its close to 100,000 subscribers. And other Chinese platforms like Zhihu and Weibo have created ways for its KOLs to monetize their fan base. WeChat has introduced a tipping function to its WeChat service account, with 22% of the users tipping more than RMB 10 ($1.45) every month (in Chinese).

Tipping culture even has a history in China. In ancient China, audiences would give gifts or cash to performers, which partly explains why tipping artists and content creators is popular in China.

To find out if this is also true for software, we interviewed three software companies in China: Mockingbot, Strikingly, and Teambition.

“Five years ago, domestic users really didn’t have the habit to pay for online services. The online payment environment was also very immature,” CEO of Mockingbot, Zhang Yuanyi told TechNode. Mockingbot is a Beijing-based prototyping tool company.

When the first version of the Mockingbot came out in 2012, it was targeting overseas users, who are relatively used to paying in a freemium model. However, the China market environment has gone through a big change since then: the payment infrastructure.

“I think you can say Chinese users are paying more. But it’s not because they are developing a paying habit for software they didn’t pay for before. It’s that the consumer base and the infrastructure changed enough that allow them to do so now,” David Chen, CEO of Strikingly told TechNode.

China’s mobile payment system is developed and widespread now. Thanks to WeChat and Alipay’s online and offline promotion in 2014, many Chinese users started to try out mobile payments. In three years, China is now going cashless, with 84% respondents in a report saying they feel comfortable without carrying cash around because they can use mobile payment.

For Chinese consumers, they gradually started to value the time and efficiency in exchange for money.

“Chinese people haven’t been paying for efficiency improvement tools as much in the past, given that the labor cost is just way cheaper here, so the need for boosting efficiency is not that strong, and hence if you all of a sudden ask them to pay for something they haven’t paid for in the past, it will be hard,” Chen says. “But the newer generation has been taught and trained to care about efficiency, and they are becoming more of the purchaser in the economy now, and as a result, they can put a price on efficiency. That’s why they are paying for software that can help now.”

Earlier trials to make Chinese people pay online was done by Chinese video sites. QQ Video, Youku, and Tudou started to charge its viewers as they started to purchase licenses to show the content in China.

“A number of domestic video sites started charging users in 2013. Afterwards, they gradually realized that online services are actually valuable, and some online services are worth paying for,” Zhang says. “The pricing of our product is just one-fifth or one-tenth of our competitors, but still we achieved this revenue. As long as your product is good enough to really help users to solve their pain point, the user is willing to pay for your product.”

How do you make enterprises pay for your product?

Teambition is another Shanghai-based company providing team collaboration tool for different types of industries. Individual users can try out their website and app for free, then they can use the enterprise version if they want additional functions. This freemium model has become like a norm for many software companies in China.

According to Teambition CEO Qi Junyuan’s data, there are more than 3 million users on Teambition in many diverse sectors including TMT, advertising, education, professional services and other 38 industries. Among them, there are more than 4,000 enterprise version users including Huawei, TCL, and OPPO.

So how do you guide enterprises to pay for office software? Qi shared why Chinese enterprises pay for their software to our sister media TechNode China.

“The advantage of collaborative teamwork tool is that everyone in the department understands how it works,” Qi Junyuan said. “The marketing department is not interested how I can find the product department, or the product department is not interested how I can find the HR department. People can find the contacts of other departments within Teambition, and this forms economies of scale.”

“The second point is that SaaS software’s price is still much lower than the traditional enterprise software.” Qi Junyuan explained. For an enterprise to buy software, one needs review, ask for approval, and make layers of application for money. The whole transaction process is particularly long, but the process to purchase SaaS software is particularly shorter. “Our annual subscription fee for the most basic enterprise version is tens of thousands of RMB, I believe that an enterprise has this budget.”

“Third, the enterprise will always pay for business services that help them achieve high priority. For them, the high priority is always achieving their goal,” Qi Junyuan said. So Teambition will tell the customer, “We are here, not to help you solve a particular problem, but to help you achieve your goal.”

We asked: why do you pay for software?

TechNode asked some Chinese business people why they pay for software. One reason for buying licensed software is to avoid malware, as frequent software piracy of Chinese people leads to ransomware attack. According to New York Times, computers at more than 29,000 organizations had been infected reciting Chinese security company Qihoo 360’s report.

“If people can access pirated software, they will still choose it, but when people know the pirated software will damage their device, or the content cannot be well protected, they will choose the original one and pay for it; more and more people are aware that software is not free,” a Chinese businessman who refused to reveal his name told TechNode.

Another reason is the boom of Chinese mobile games, attracting gamers to make in-app purchases. In fact, China ranks #1 in total game revenue, recording $27.5 billion in 2017, according to Newzoo’s Global Games Market Report. The revenue bonanza here mostly comes from Tencent, with its revenue of RMB 12.9 billion generated from online games in the first quarter of 2017.

“I cannot represent everyone, but at least for me, I started buying authentic games from Steam, PS4 store and other copyrighted platforms instead of downloading pirated software anymore. The awareness of using authentic software only gained momentum in China in the past couple of years. Even five years ago, pirated software was still everywhere,” an avid gamer told TechNode.

“I paid for some games, especially football and baseball related, also Japanese and French dictionaries. We didn’t pay for music content before but we are paying for them now. We also pay for good apps. The key should be the content, not the app itself,” Carman Deng, senior vice president of HSBC told TechNode.

Chinese bike rental company ofo is in talks to raise new financing of more than $1 billion, Reuters is reporting.

Ofo’s co-founder Yang Pinjie, now based in the Moscow, told Reuters that the amount of financing may exceed $1 billion, but refused to disclose that what banks were involved in the talks.

September 22nd was World Car Free Day, encouraging people to use public transportation in the urban areas, either riding a bike or walking. Ofo landed in four European countries on this day, including Russia, Czech Republic, Italy, and Netherlands. Ofo has established a close relationship with a local company Velobike and is expected to begin piloting in Moscow in 2018.

Zhu Xiaohu, president of ofo investor GSR ventures, said that if the merger between ofo and Mobike happens, then the merged company may be profitable, our sister media TechNode China is reporting.

Both the founders of Mobike and ofo said they have no need to merge. At the Summer Davos Forum in this June, where both the founders of Mobike and ofo attended, Hu Weiwei, co-founder and president of Mobike dispelled the rumors of a merger with ofo, and founder and CEO of ofo Dai Wei also said that they “do not need to merge, the industry is not about dominating a market, rather co-existing in the market together.”

Zhu Xiaohu said that the current bike rental industry is dominated by the two companies, accounting for 95% of the market share, at China Chief Economist Forum held at Fudan University.

In addition, he said that although ofo and Mobike accounted for the vast majority of market share, they still have to invest a lot of money every month to operate, so only the merged entity of two companies will likely to profit. And about “who mergers who,” the Zhu said that it is not important in terms of the capital.

Chinese children go online at increasingly younger ages, Guangzhou Daily is reporting.

According to a survey released at the Guangdong Internet Security for Children Forum on September 23, 2017, some children use social media as early as 3 years old, go online shopping at 7, and surpass their parents level of internet skills by the age of 14. The survey shows over 23% of preschool children (aged 3 to 6) go online for more than half an hour per day.

Chinese children consume and publish information at the very young age. Among the 7-year-old children surveyed, over 60% of them have downloaded games, videos or music on their own; 8.5% of them have shopped online; around 15% of them have posted pictures, videos or words on the internet; and 4.7% of them even claim to have fans.

Social media influences Chinese children at younger ages, too. Some children start to use QQ or WeChat, at the age of 3. Around 10% of 7-year-old children use QQ or WeChat, while over 70% of children aged 12 use social media.

The Chinese younger generation loves QQ, as a new report published by QuestMobile shows that QQ remains the top app for post-00’s generation (in Chinese). According to the report, the post-00 generation love spending time on instant messaging (89%), followed by online video (88.4%), online music (75.5%), e-commerce (71.8%), Weibo (66.4%), K12 (47.9%), and map navigation (46.3%). K12 here means that Chinese children do their homework with the help of internet platforms like Zuoyebang.

It’s interesting to see Tencent is largely dominating the apps that post-00 generations use. The top 10 apps chosen by post 00 generation were QQ, iQiyi, QQ Music, Taobao, Weibo, Zuoyebang, Baidu Map, Honour of Kings, Tencent News, and Meitu. Four apps are Tencent owned (QQ, QQ Music, Honour of Kings, Tencent News), three apps are Baidu backed (iQiyi, Zuoyebang, Baidu map), and two apps are Alibaba backed (Taobao, Weibo).

“At the age of 14, children surpass their parents in key digital skills, which shows those ‘digital natives’ (children born after 2000) have advantages in employing internet tools,” said Zhang Haibo, from the authority that conducted the survey. “This poses a great challenge to traditional methods of education as well as cybersecurity.”

So why do Chinese children go online from so young age? It turns out that most children are getting attached to mobile devices in replacement of their busy parents. The children in the survey said they wanted to be accompanied by their parents rather than to play online games. “I’m really in sports, but no one plays with me,” said one boy surveyed,”so I can only play with my cellphone at home.” Given, however, Chinese media’s moralistic bias, we at TechNode take this explanation with a grain of salt.

For a foreigner first entering Chinese websites, or a Chinese app, the first experience can be pretty overwhelming. Taobao, 58.com and Dazhong Dianping provide so many buttons of categories and promotions on one page, as Chinese people prefer this user interface. It’s not only the design of the Chinese app or website, but also workflow and working style of Chinese designers and tools, platforms that they use creates the difference. For foreign startups looking to find Chinese designers, they should first understand these differences before they scan job applicant’s skill sets.

According to the 2015 London Consulting Report, there are 17 million designers in China. Along with the rise of China’s app, website, and digital products, product designers have been increasing steadily in the market, and now accounts for about 30% of the entire designer workforce. The report says product designer is the most promising sector in design.

To assist these increasing designers to develop apps, prototyping tools (原型工具) help startups to design but also manage different versions. We interviewed the CEO of Chinese prototyping tool Mockingbot, Zhang Yuanyi to discuss the difference between Chinese designers and overseas designers.

Beijing-based Mockingbot has observed their user cases since their first product release for international users in 2012, followed by their domestic product launch in 2014. Among Mockingbot’s total users of 600,000, overseas users currently account for about 10%. Interestingly, Mockingbot’s overseas customers are mainly concentrated in BRICS countries: Brazil, Russia, India, China, and South Africa. Indian users currently account for more than 50% of our overseas users, Zhang says. According to him, Mockingbot’s users are 50% product manager, 20% designers, 10% entrepreneurs, 10% small design and developer outsourcing team, and 10% students.

Mockingbot, having both Chinese users and outside of China users, gave a view of how Chinese product designers are different from US product designers.

1. China’s app development workflow is product manager-centric

In a previous interview with TechNode, Mockingbot pointed out that the workflow is product manager-centric in China, while the workflow is designer-centric in Europe and the United States.

Zhang believes this difference is actually decided by the product. As an example, he compared Paypal and Alipay. Paypal’s function so simple and straightforward, but Alipay is rather complex.

“Foreign product logic is relatively clearcut and simple, so you can ask UI, UX designer and functional designer to take over the task. But in China, because of the complexity of the product, a person can not take all the work. It needs to be broken down into tasks, which required a position like a product manager who is responsible for product interaction and business logic behind,” Zhang said.

Hao Jie, Senior Designer at Mockingbot, told TechNode what China’s product manager is responsible for.

“Product manager needs to follow up with their boss, designer, developer and participate and control all these stages: product architecture, planning, demand, design, project and management and much more. This leads to the uniqueness of this career,” Hao Jie said. “But in recent years, more and more large companies adopt project manager-centric workflow.”

2. Chinese people prefer using Sketch over Photoshop

While Photoshop still dominates the market with 57% market share, Sketch is catching up. 2015 data on Avocode shows that Chinese users prefer using Sketch to Photoshop. Now more and more people use vector design tool Sketch, which offers a bunch of plugins as well as its own API. Using Sketch, the designer doesn’t have to think about screen densities to make the image bigger or smaller.

“People around me, including myself are already loyal users of Sketch,” Hao Jie said.

According to Zhang, about 25% of Mockingbot users use Sketch. Sketch plugin is one of the popular plugins provided through Mockingbot, and Sketch plugin usage is about 5% among all Mockingbot users.

3. Chinese designers aren’t remote workers yet

“Working remotely” trend has been popular in foreign countries for many years, the concept took off with the book Remote: Office not required published in 2013. However, Zhang Yuanyi sees that because of the differences between domestic and foreign environment, remote work is not very suitable for China market to achieve its biggest output.

“City development the US is more balanced, so the talents are also relatively scattered, but in China, most of the talent, especially internet talent are concentrated in Beijing, Shanghai, Guangzhou and Shenzhen. Remote work can lose the advantage of efficiency,” he said.

For example, let’s say you’re considering about hiring a person with capacity of 100 in US. But he and the CEO are based in the different city. Assuming that remote working efficiency is 10% lower than working in the same office, his output will be 90. This is still more cost-effective than hiring a person with a capacity of 80 and working in the same office. But in China, remote workers in lower-tier cities have a capacity of 80, and coupled with the loss of communication efficiency, it really is better to look for a capacity 90 who can work in the same city.

4. WeChat service account and WeChat mini program are on the rise

While developing an app is still norm outside of China, WeChat service account and WeChat mini program have supplemented or replaced mobile apps in China. According to Q2 2017, WeChat mini program monitoring data released by Aladdin, there are now 10,000 WeChat mini program developers and over ten million users using WeChat mini programs (in Chinese). Aladdin founder Shi Wenlu mentioned that there are now over 25 million WeChat service account in the market.

Zhang Yuanyi believes that WeChat’s service account and mini programs are more of an opportunity for them, helping them to broaden the audience and usage of their products.

“Not long after WeChat introduced mini program, we added mini program-related templates to Mockingbot, and this template and our previous WeChat public account template has been the most used among all the Mockingbot templates,” Zhang said.

The winner of Asia Hardware Battle in 2017 was underwater drone Fifish P4 developed by a female CEO who is passionate about diving. Asia Hardware Battle was held in Shanghai on September 16th hosted by TechNode, with Shanghai Yangpu District People’s Government support.

In previous Asia Hardware Battle held in Chengdu, we had 10 finalists, but this time, more than 300 hardware teams from ten cities in eight countries applied for the competition, namely Beijing, Shanghai, and Shenzhen in mainland China, Hong Kong and Taiwan and overseas countries, including South Korea, Japan, Singapore, and Thailand. This year’s battle had a total of 15 finalist teams on the stage, attended by leading domestic venture capital, media, and domestic and foreign guests.

“I enjoyed a lot yesterday. Good point is that the final startups were very international. When judges chose the winners, the three winners and close runner-ups are all coming from different regions, I thought it was very interesting,” Nobuaki Kitagawa, managing director of CyberAgent Ventures told TechNode.

“Overall, the startups were solving very practical problems. Some of them could be commercialized in the near future, and I felt that the overall technology of startup was developing towards IoT and big data. Chinese startups were concentrated in bigger scale fields such as logistics and VR, while Korean startups concentrated on niche areas such as beauty and environment. I thought that three Korean startups were excellent in terms of skill, detail, and design even though they were not included in the rankings,” Woody Han, CEO of China Lab, a Korean media focused on China market told TechNode.

Here are the list of top 3 winning startups of Asia Startup Battle:

1. Fifish / Shenzhen, China

Fifish P4 allows divers to take photos and videos easily under the sea. Users can see real-time video shot by the machine underwater, let it automatically follow the diver or remote control it to go anywhere. The most unique feature of Fifish P4 is that it can support both wired and wireless control.

The machine has integrated with high precision depth sensor and posture sensor, with a single click of a button, the machine can hover at any depth and location with high precision and great stability. Also, it has a few interfaces where people can easily attach multiple sensors to expand the machines’ functionality.

CEO of Fifish, Zhang Chong who is also a PADI (Professional Association of Diving Instructors), claims that the camera has advantage comparing with other underwater robots in the current market. The professional camera is designed with an ultra-wide-angle of 162 FOV, 4K high-definition video, and 20MP, combining lighting with 4000 lumens, which guarantees stable footage. The team won CES innovation award in 2017.

2. Youibot / Shenzhen, China

Youibot is an autonomous inspection mobile robot equipped with indoor and outdoor robot navigation system to ensure safety. The company has researched and developed autonomous mobile robot platform independently, based on the latest generation of laser radar and visual real-time SLAM map creation and navigation technology.

CEO of Youibot,  Zhang Zhaohui says its bus tire inspection robot can achieve high-frequency night patrol inspection. Using self-positioning navigation in parking lots, it can identify vehicles, do the autonomous inspection, and report problematic vehicles.

The robot meets the inspection requirements through collaboration robotic arm with 6 DOF and free expansion module. Through the intelligent background monitoring system, the robot can also generate monitoring report with image analysis.

3. QT Medical / Taiwan

According to WHO, Cardiovascular diseases (CVDs) are the number 1 cause of death globally, representing 31% of all global deaths. Of these deaths, an estimated 7.4 million were due to coronary heart disease and 6.7 million were due to stroke. For better cardiac care and remote monitoring of elderly people and patients with chronicle heart disease, QT Medical is developing medical grade 12-lead electrocardiogram (ECG) devices and services for home use.

Dedicated to making 12-lead ECG available to everyone at anytime and anywhere, the team will be launching three products in 2018: QT ECG, QT Pro, and QT Mini. QT ECG is compact 12-lead ECG for patients to use at home. QT Pro is 12-lead ECG for hospital use. QT Mini is medical grade wearable ECG for the consumer market. Founded in 2013, the team has 16 employees in Taiwan and LA offices, led by founder Dr. Chang, a cardiologist and professor at UCLA.

Other 12 finalists

Renogy / Suzhou, China: RENOGY develops solar energy products, including solar panels, solar kits for home use.

Pium / South Korea: Pium is a smart scent diffuser providing aromatherapy allowing its user to sleep, rest, and concentrate better. It follows user’s daily routine and automatically provides appropriate scents.

Artificial Anything / Thailand: Rinn is a smart cup that tells you how much water you drank during the day.

Nature / Japan: Nature’s Remo is a smart controller for room air conditioners and automates wall mount AC use for to save energy and reduce electricity bills.

uHoo / Hong Kong: uHoo’s indoor air toxin sensor monitors building’s temperature, OM2.5, TVOCS, analyze them, and gives personalized insights.

Clef Technologies / Singapore: Clef Technologies have built the device that detects water leaks. The founder claims that it ensures 98% accuracy and is easy to install, and avoids contamination.

Zhen Robotics (真机智能) / Beijing, China: Zhen Robotics makes robots that deliver parcels. The robot can run 8 hours after charging 4 hours.

Aira Lab / Malaysia: Aira Lab allows robots to connect through a platform where users can program it on the go, control it through apps, and able to share it with others.

Line Dock / Shenzhen, China: Line Dock provides up to 100W of USB-C charging on the go while adapting its power supply to user’s device.

Shado / Singapore: SHADO builds Autonomous Fleet Own Vehicles to solve the inefficiency of Freights and Logistical sector for both Sea & Airports.

Lululab / South Korea: Lumini is a personalized beauty IoT device that analyzes the user’s skin and recommends the best skin products and services for each user.

Ecubelabs / South Korea: Ecube Labs provides a solar-powered trash bin ‘Clean Cube’ that compresses trash and holds up to eight times more trash than ordinary bins do, which reduces the operating cost of trash collection vehicles.

Overseas expansion is not only important for startups, but also for VCs. CyberAgent Ventures is a venture capital firm that does early-stage investments focusing on consumer internet startups in China, South Korea, and Southeast Asia, among which six companies successfully completed IPO.

Japan-based CyberAgent Ventures had zero investment outside Japan when Nobuaki Kitagawa joined in 2006, and now with Nobuaki in charge of China, South East Asia, and South Korea markets, CyberAgent has made 150 investments with setting up 8 offices throughout Asia, including Jakarta Indonesia, Ho Chi Minh Vietnam and Bangkok Thailand run by head of each country operation.

CyberAgent Ventures was founded in 2006 and is run by two managing partners Nobuaki Kitagawa and Hirofumi Kondo in Tokyo. All of their funds are in USD with separate funds for China, South East Asia, and South Korea. With about 150 million USD assets under management, 50% of the fund is invested in Japan and about 30% is invested in China, and less than 20% is invested in South East Asia and South Korea.

Some of the standout companies of CyberAgent’s portfolio are:

• invested in Tudou in 2007. Founded in 2005, video sharing website Tudou merged with Youku in 2012.
• invested in Kakao’s series A in 2011. South Korea-based Kakao has instant messaging app KakaoTalk and merged with Daum in May 2014. 
• invested series A in Tokopedia, Indonesian e-commerce startup in 2011. Tokopedia was invested by SoftBank in 2014 and got $1.1 billion investment from Alibaba this month.

We sat with Nobuaki Kitagawa Managing Director of CyberAgent Ventures to ask the future trend of startups and get some insights from his previous investments.

Are Chinese startups open to receiving USD investment from overseas VC?

Most of the startups are looking for a going global eventually. That’s why they take USD investment. We have various networks across Asia, and that’s our unique point as an investor. If they want to expand to other Asian countries, this network will be useful for them.

For Chinese startups in the market, receiving RMB investment is much easier. It depends on their focus: stay in the domestic market or expand outside of China. Chinese companies have a unique structure for going IPO in the US market. They either eventually exchange USD investment into RMB in China or they keep USD investment in preparation for outside use.

What are some of the areas in tech that your funds are focusing on right now?

Almost all of our investment is in the consumer internet sector, and we will keep this strategy. In China, we are focusing on IoT and hardware related companies. The key is not only the hardware but the data behind the hardware. More data becomes the real body of the service and can make meaningful service applications. If you manufacture an item, the cost is the key. Manufacturing is the biggest advantage of China. That’s why hardware and IoT services China has the most advantage.

Rental economy service, say the next of Ofo, Mobike should come out, and it will have big potential. If there’s any rental service hardware that collects the data, that startup should have very interesting opportunities ahead.

Can you share your failure stories?

We have a lot. We invested in about 150 startups so far, among them successful ones are only 25~30 startups (20%) and the rest of them all failed. We want to have more successful investment, but we need to take a risk.

In terms of sector, any VC can determine what’s going to come in the next five years: IoT, VR, AI, and cryptocurrency. It’s not hard to determine. What’s hard to determine is to find the best player in the sector. Still, there is no clear way to make the right decision in the category. Judging a company, management team, and people is not based on a mathematical formula. You can’t have 100% correct answers. Every year, we invest about 5-6 companies in overseas and we know still, 3 or 4 companies will fail.

After the “capital winter” in China, has investment behavior changed in your firm?

Compared with the US or Southeast Asia, I don’t think China suffered from a capital winter. Because still there are active VC investors with more and more angel investors in the market. In terms of early-stage investments, Alibaba and Tencent are aggressive in investing in startups.

How competitive is the environment between VCs in China right now?

China has the highest competition with the biggest number of VCs and startups. It’s the highest return and highest risk. That’s why we are doing it here in China because we cannot expect a return on investment in other parts of the world that is as big as China. It’s good dynamic and strategy to have business portfolio comprising of China and Southeast Asia, that way we take a big risk and have a big return in China and take a middle risk and have a middle return in Southeast Asia.

Current hi-­tech trends in mind, what do you think will be the biggest winner within five years?

The biggest winner within five years will be IoT in our perspective. To talk about other countries, Japan is focused in fintech right now and it has the biggest opportunity in the market. Japan’s banking industry is old and conservative, and there will be innovation in Japan’s finance market. Southeast Asia is five or ten years ago of China, we are still looking at sectors like e-commerce, O2O, content, games, online payment.

Apple has removed its controversial App Store policy of taking a 30% cut on tipping from users to content creators in China, The Paper is reporting (in Chinese)

App Store Review Guidelines on Apple’s official website updated its tipping policy on section 3.2.1 article 7:

(vii) Apps may enable individual users to give a monetary gift to another individual without using in-app purchase, provided that (a) the gift is a completely optional choice by the giver, and (b) 100% of the funds go to the receiver of the gift. However, a gift that is connected to or associated at any point in time with receiving digital content or services must use in-app purchase.

The newly modified policy shows that Apple will not allow Weibo, WeChat and other platforms, to monetize from original content creator getting tips from users. Apple clearly says reward behavior only involves “monetary gifts,” so the beneficiaries should be content creators on WeChat public account, Zhihu, or Weibo. Live streaming platforms will still charged 30% commission from Apple, because the live streamers are awarded with virtual currency used in such platform, rather than monetary gifts.

Apple previously required its iOS applications to either change “Reward (打赏) to “In-app purchase (应用内购买)” or provide 30% cut to Apple on all transactions inside iOS apps.

“. . . Apple will play as a partner of the content creator who is rewarded, and doesn’t want to make other specific content or service to monetize on the reward. If a WeChat public account is directly attached to the WeChat reward plug-in, then Apple will take 30% of the reward given to the content creator. If the developer really want to avoid this, then they should choose another interface so that Apple will not charge 30% commission,” an insider at Apple The Paper.

Apple’s new rules are now in effect, but application developers also need some time to develop a new reward interface, so original content creators will have to wait for some time to 100% receive the reward without getting commission cut.

According to WeChat’s Economic and Social Impacts in 2016 report, 10.7% of the WeChat users have used tipping feature, and 22% of the users were tipping more than RMB 10 ($1.45) every month.

China’s internet giant Tencent announced their “ONE TENCENT” plan yesterday at their 10th MIND conference on September 12th at the Shanghai World Expo Center. Celebrating the 10th year of their MIND conference, Tencent puts forward “ONE TENCENT” to integrate content, data, and technology.

This new concept aims to benefit advertisers to best make use of Tencent’s integrated online channels to achieve higher traffic. Online advertising is the main revenue source for Tencent, along with smartphone games and payments. According to Tencent earnings report on Q2 2017, online advertising revenue rose 55 percent to 10.15 billion RMB.

Under “ONE TENCENT”, Tencent will connect the Tencent’s internal resources together, and provide the integrated marketing solution to the customers. Tencent will simplify the marketing process, by integrating content, data, and technology into ONE TENCENT.

The business unit of Tencent that will be responsible for “ONE TENCENT” is OMG (Online Media Group), responsible for the operations and development of Tencent’s online media business, including QQ.com, Tencent Video, Tencent News and other core services.

TechNode interviewed vice president of Tencent, Steven Chang at the MIND conference.

So what is ONE TENCENT and how will advertisers benefit from this?

Ten years ago, Online Media Group was a news portal. That was an online advertising channel for clients and advertisers and it was very straightforward. Over the years, Tencent has developed a lot of products in multiple platforms including Tencent Video, Tencent news portal, games, QQ, and WeChat.

Our users are most interested in three parts: one part is the technology, the second part is the data, the third part is the content. Clients and marketers like to integrate this into what we call our ecosystem. Tencent can function as a sales channel for our clients.

We have a lot of content in different business units, we have been doing the work is to give customers the best solution. It is easy for us to connect the internal resources together, and then provide the integrated solution to the customer. We want to simplify this process and integrate content, data, and technology into ONE TENCENT.

If you have a marketing need, you can partner with us and we can provide marketing solution within the Tencent ecosystem. That way, we can concentrate on the content integration of data usage and the technology for the interaction mechanism together. That’s not restricted to one business group, but it’s all across Tencent business group.

How will Tencent’s technology (A.I., big data for example) help “ONE TENCENT”?

We developed AI lab last year April, and we have a big group of talents. Particularly, we asked Dr. Zhang Tong, a distinguished scientist to lead the team. Their team is focusing on AI, firstly facial recognition technology and secondly, voice recognition technology.

You need to have a scenario to apply AI technology, and we have a lot of use cases. The award winning user case this year was done by QQ. QQ ran a missing children advertising campaign based on facial recognition technology using our database of missing children. Once a child is missing, it’s not easy to find them after 72 hours. We used QQ groups in the different cities and used facial recognition to forecast how will they look like after the 10 years. The accuracy rate is 99.5%. This way, 286 cases of missing children have been pushed on QQ and 176 children have been found through the technology. We also used Tencent Cloud to host a lot of data.

This is how we did community marketing using the data. You can extend this use case into the commercial market. We have the data, cloud and AI technology for different marketing need, including commercial and community marketing.

How do you see China’s online media business to develop in the next 5 years?

Advertising growth in China is under 30% this year. If you look at the figure of every year, it’s been slowing down. In the next three to four years, the advertising revenue [of Tencent] will double. This speed is the highest in the market. What is contributing? It’s the usage of our media group. In Tencent video, we are getting better and more relevant content. Traffic on Tencent Video and Tencent News portal will grow. Advertising revenue will go up contributed by our users.

There are a lot of applications to provide the relevant content for the users. By analyzing user’s interest, we fit in the right content for them. Online business is related to marketing and advertising capability. We are working on AI to feed the relevant and interesting content for the user, and how advertisers can slot into the media to send out valid marketing messages.

On the other hand, on technology usage, Chinese users love interaction. Technology is helping them on enhancing the experience and interaction. Chinese are using the QR code and loves to scan them, but it is said QR code usage is declining in the Western world. Thanks to the popularity of WeChat, users love scanning QR code and use “Shake Shake” function, and it easily helps business interaction and enhance the interaction rate.

What will be the next content for Tencent, after text, image, and video?

Three buzzwords for last year in China were AR, VR and AI. AR and VR is a matter of the experience. It needs to be sophisticated and improved on time. We are the biggest game developer in the world, and we are studying these a lot.

Tencent has been using AR for client’s marketing solutions. For example, when a user scans a picture attached to a McDonald’s hamburger, AR holograms will appear just like how Snapchat works. As Chinese people love to try out these and share it. This AR technology is rather easy to apply.

As you need VR headset [to enjoy VR], it’s not so popular now. In terms of VR, we worked with BMW on launching a live concert. We try to meet different client needs and 360 broadcast events through our channels. Using the gear 3D all angle, we are applying VR to commercial solutions already. For example, for a fan who loves to watch NBA game on VR headset, relevant advertisement message and content will appear. Say, Nike products will appear on the newsfeed. These technologies are still popular. It will get some time to get sophisticated.

Does OMG have any plans to invest in another media company to develop Tencent’s online media business, just like how Alibaba purchased SCMP?

My understanding is that it depends on the market. We are pretty much interested in technology startup, game startup and instant messenger.

Power bank rental startup Xiaodian (小电科技 in Chinese) officially announced their performance on September 11th. Xiaodian now covers 70 cities in China. Xiaodian’s data also shows that the daily order increased 195% in August (in Chinese), and the daily average usage number of a power bank is more than once. Xiaodian’s daily use times exceeded 240,000 in August, with its peak day use times exceeding 310,000. From the April this year until today, the cumulative number of users exceeded 10 million people.

“Looking at the current performance of the industry as a whole, Xiaodian is in the absolute leading position, the highest return on investment in the industry. In terms of capital utilization efficiency and fine operation, Xiaodian’s performance is in line with their investment expectations,” Xiaodian’s angel investor, GSR Ventures Managing Director Zhu Xiaohu said.

Xiaodian partnered with WeChat Pay and mini program to launch pilot testing power bank rental service which a fee of 1 fen (USD 0.014) from users since June 20th. According to 2017 Q2 WeChat mini program index statistics (in Chinese), Xiaodian’s mini program ranked 15th, showing the highest traffic in the power bank rental industry. Among the rental economy startups, Xiaodian ranked second, after Mobike.

“There are two interesting figures to share. First, the purchase rate was less than 4% in the beginning, which now increased more than 30%. Second, Xiaodian’s number of business orders increased from hundreds to nearly ten thousand per month,” Xiaodian’s CEO Tang Yongbo said. “These two sets of data fully explains the consumer behavior changes after our aggressive expansion into the region. The majority of consumers use our service in radius of 5 km.”

Xiaodian is now working with Foxconn and BYD, the Chinese manufacturer of automobiles and rechargeable batteries, to swiftly expand its presence into more Chinese cities.

Xiaodian is also looking for ways to serve users in instant need for phone charging. Not long ago, Xiaodian collaborated with Hangzhou City Management Committee and Alibaba’s Sesame Credit to pilot a public power bank station in Hangzhou (in Chinese). If a user’s Sesame Credit points more than 600 points, then users don’t have to pay a deposit and can directly rent a power bank from the kiosk.

Founded in December 2016, Xiaodian raised RMB 100 million series A led by Tencent and Hangzhou Vision Capital in this April.

To explore the possibilities of next-generation smartphone photography and videography and to improve their brand image as a top second largest smartphone manufacturer, Huawei Consumer Business Group (CBG) launched its Next-Image Awards program in partnership with New York’s International Center of Photography (ICP). Along with the launch of annual competition, Huawei and ICP signed an MOU for longterm collaboration.

Any Huawei user from around the world can participate by uploading their photos to the official website. Entries are open until the November, and the awards will be announced on December 19th. The grand champion will be awarded to $20,000 and their works will be exhibited at ICP.

“These days, people are using their smartphone to take photos. I support more ideas to come out using this future medium,” Mark Lubell, Executive Director of the ICP told TechNode. He explained that one of the courses in ICP accepts students only carrying their mobile phones.

“We are focusing much more on telling the story through images and we are working on future ways to present your work and to tell the story in an effective way. Through participating in this competition, we encourage people to challenge themselves to document their lives,” he added.

The awards will give more credit to Huawei’s Leica dual camera as participants should only use Huawei phone to submit their photography. Changzhu Li, Vice President of Huawei told TechNode.

“To get an exact photo is not enough. Consumers want really good quality photos. To bring up the image quality, we put in all the technology to control the light and the speed. We have an inner team working on AI and Neural Network Processing Unit (NPU). We can put stronger sensors and the algorithms to improve the current camera technology,” he pointed out.

WeChat has released a new feature for its mini programs—bidding for ad space in the “Mini Programs Nearby” list (in Chinese). Now open for internal testing, the function is still in closed beta and is only available through a mini program interface, not on the WeChat social advertising platform Guangdiantong.

When a user opens the “Mini Programs Nearby” list, they are served mini programs based on their location and other metrics, including age gender and operating system. With this new feature, advertisers can bid on ad space on this list.

Tencent has embarked on monetizing WeChat’s 963 million user base since August 2016 by launching WeChat “Moment Ads”, which is Tencent’s biggest attempt to achieve monetization yet. This attempt proved quite successful over one year after its launch. According to Tencent earnings report on Q2 2017, online advertising revenue rose 55 percent to 10.15 billion RMB, helped by a 61 percent rise in “social and others advertising” revenue, mainly from WeChat advertisements.

Tencent officially released its WeChat mini program this year on the 9th of January. When the idea of WeChat mini program was initially introduced to the public, it was expected to replace mobile apps, but it turned out that WeChat mini program failed to reach user’s expectations. On June this year, WeChat made mini program discoverable by searching keywords. 

Popular live streaming platform Inke announced that it has recorded 240 million RMB ($36.6 million) in profit in Q1 2017 (in Chinese), showing that it is possible for platforms to make on live streaming.

Inke’s success so far has been attributed to their early entry into the market as well as their track record of getting big acts onto the platform, including actresses Liu Tao and Jiang Xin as well as Korean boyband BIGBANG

At the same time, Shunya International Inc announced the completion of the purchase of a 48.2% stake in Inke. They are now the largest shareholder and controlling shareholder (in Chinese).

Shunya International Brand Consulting is an integrated communications agency, providing public relations, advertisement, digital marketing, and related services. The Beijing-based company aims to build a “Live+” model through the acquisition of Inke, optimizing and aligning its communication solution to live streaming.

Shunya International said in the announcement, after the completion of the acquisition of Inke, client companies will be able to fill in the communication gaps and enhance the platform’s ability to achieve monetization.

The Korean regional pitch competition of TechNode’s Asia Hardware Battle was held in Seoul, South Korea on August 28th at D.CAMP. With this year’s theme of “creative innovation and new energy”, ten Korean hardware startups were selected after the preliminary selection pitched their business projects to our judges.

The winner of the Asia Hardware Battle regional pitch competition in Korea was Pium, smart scent diffuser, and the team will be one of the 15 teams going to Shanghai to fight for the championship in the final battle. Second place went to Huinno while third place went to Lululab.

South Korea is home to startups armed with high technology, with the influx of seasoned professionals from conglomerates like Samsung, LG. Based on data from 2016, 5 booming startup sectors in South Korea were O2O, fintech, multi-channel network, healthcare, and beauty, and we could definitely see these booming sectors also reflected on Asia Hardware Battle’s winning teams.

“The South Korea-China relationship has been affected by the deployment of THAAD missile, and I think startups in both countries need more collaboration. This event was very meaningful, opening the collaboration between Korean and Chinese startups. It also allowed me to see more potential of Korean hardware startups to enter China and Asia market. I believe this has also served as avaluable experience for the participating startups,” Matthew Lee, co-founder and managing partner of Cognitive Investment, and one of the judges of the competition told TechNode.

“Firstly, overall standard was higher than I imagined as these startups were founded by previous employees from big companies like LG or Samsung, or seasoned industry experts. Secondly, there were a lot of lifestyle hardware, combining the traditional industry with technology. Personalization and overall designs were greatly improved,” Jason Koo, managing director of LB Investment and one of the judges of the competition told TechNode.

Here’s are the 3 winning hardware teams from South Korea:

Pium – 1st place

Pium is a smart scent diffuser providing aromatherapy allowing its user to sleep, rest, and concentrate better. It follows user’s daily routine and automatically provides appropriate scents. In the morning, it infuses your bedroom with scents to freshen up. At night, it provides scents for your better sleep.

“Natural scents has the power to change our mood and mind. We build a database for natural scents and recommend the best scent combination for you,” Jaeyeon Kim, founder of Pium and Ph.D student at Cornell Information Science said.

“I believe Pium’s design and personalization aspect has potential to match Chinese user’s taste. Korean startups really need to make what the market wants,” Jason Koo, executive managing director at LB Investment and one of the judges of the competition told TechNode.

Huinno – 2nd place

Started by medical professionals with over 20 years of experience, Huinno allows its users to monitor important health data like blood pressure, heart rate, ECG, and blood oxygen saturation levels. Huinno is a wrist wearable and it connects with an app and cloud-based ecosystem that gives longitudinal trend analysis of blood pressure, medication compliance, nutritional and exercise habits, as well as coaching and medication titration from its clinical experts. It is capable of continuously measuring a variety of clinically-relevant health data in real-time, simultaneously and with clinical-grade accuracy. Then it sends the collected data to remote doctor, health coach, and caretakers.

Lumini – 3rd place

Lululab’s flagship product, Lumini is a personalized beauty IoT device that analyzes the user’s skin and recommends the best skin products and services for each user. Lumini examines the skin using a phone’s camera, so you can get the skin data of the whole face in one shot. It analyzes six factors: acne, wrinkles, pores, pigmentation, sebum, redness through image analysis and machine learning based algorithms.

The skin analysis results are instantly shown through the app, and a chatbot within the app provides the most accurate skin analysis based on skin measurement and lifestyle. Then it recommends cosmetics that matches user’s skin type and beauty content. The founder of Lululab, Yongjoon Choe, previously worked at Samsung Electronics/

Other participating teams include:

• Algi: Algi is a smart IoT lamp made with Korean traditional paper that provides audio speaker, wireless charging, sleeping hormone adjustment function and video communication.
• Ecube Labs: Ecube Labs provides a solar-powered trash bin ‘Clean Cube’ that compresses trash and holds up to eight times more trash than ordinary bins do, which reduces the operating cost of trash collection vehicles.
• Linkflow: Linkflow’s FITT 360 is necklace-like ‘Wearable 360 camera’ that captures full 360-degree of user’s body and allows its users to record their experience vividly and easily, and produce their own VR content.
• Luxrobo: Lurobo is lego-like modules for building IoT and robotic devices. After users code their own program on MODI Studio by simple drag-and-drop method, they can simply upload your program onto the 13 modules, to activate their own IoT and robotic device.
• Reziena: homecare IoT product Reziena allows users to do the anti-aging medical trial by themselves.
• Twoeyes Tech: TwoEyes VR is 3D 360 degree VR Camera that mirrors human eye sight and captures 360 degree surroundings using four fisheye lenses.
• Visualcamp: Visualcamp provides eye tracking algorithm and gaze data analysis technology that is optimized for applications to standalone and smartphone virtual reality (VR) headset. The technology can be used for VR ads monetization.

Inner Mongolia is an autonomous region of China, located in the north of China. While the area might be unknown to a lot of China observers, it is a thriving region: per capita GDP reached RMB 28,350 in 2015 ranking 10th among all 31 provinces with an annual growth rate of 9%. It also has an abundant land area: While the area holds only 24 million people, it takes 12% of China’s total land area.

The area will see more growth as China Railway Corp plans to launch a high-speed train that connects Inner Mongolia’s capital city Hohhot to Beijing, reducing its average nine hours travel time to less than three hours.

According to a statistics released by 21 Caijing, Oppo (40%) and Vivo (30%) phones are the most sold phones in third tier cities, followed by iPhone (29%). The order goes same for fourth tier cities, as Oppo, Vivo, and Apple take 31%, 25% and 22% market share, respectively.

We hit up local people on the bus, train and on the streets of Hohhot, the capital city of Inner Mongolia and a third tier city as well as  Xilingol, the fourth tier city famous for its vast grasslands near the city. Are Oppo and Vivo phones really popular in Inner Mongolia? Read on to find out; the answer may surprise you!

Oppo and Vivo brick and mortar stores were easily seen in Inner Mongolian cities. As these cities were going through rapid urbanization, Hohhot city was constructing first subway station on its main street, and Xilingol city was building new apartments and shopping areas. As a fourth tier city in China, Xilinggol didn’t have Starbucks, but it did have 2 KFCs and 1 McDonald’s. There were no city buses in the Xilingol, and people were moving around the city with taxis, easily caught on the streets, paying only 6 yuan. Mobile payment has not penetrated deeply in these cities yet, as some restaurants and taxi drivers only accepted cash. For delivery times, many locals said that it takes 3-6 for a Taobao order to arrive.

Ethnically, Han—China’s main ethnicity—comprises 79% of the population in Inner Mongolia, followed by Mongol at 17%, and Manchu at 2%.

We interviewed 5 Mongol people, 4 Han people, and 1 Manchurian person (all in Mandarin Chinese!). Among them, 6 used an iPhone, 2 used a Vivo, 1 used an Oppo, 1 used a 2G Gionee phone. iPhone interviewees were all younger generation, from 13 years old to 31 years old.

Dolina Boroton (13), Mongol, student

I use the iPhone5 my parents gave me. Most of my classmates have their own phone, too. I cannot download Alipay yet, so I used my mom’s account to buy a pair of soccer shoes on Taobao; it took about 6 days to get to my home. I don’t play games on my phone, just chat with friends on WeChat and take photos.

Oyundalai (28), Mongol, singer

I am a singer at a live bar in Hohhot city and perform here every night. I’m from Xilingol and moved to Hohhot in 2011. I use an iPhone7, and my favorite app is YouTube. I watch how other music bands perform at rock festivals.

(Continue reading on the following pages)

Apple is now allowing WeChat payment for the App Store and Apple Music.

On November 2016, Apple allowed Chinese users pay for apps using Alipay. With today’s announcement, Chinese two biggest payment software are now supported by Apple.

This feature is only supported on iOS 10 and the latest iOS 11 system. The experience will be similar to Alipay payment, and users won’t have to type in the password, rather they can use their fingerprints to confirm a purchase.

Cash is now being replaced by mobile payments in China. A recent study conducted in China by WeChat showed that 74% of respondents felt they could survive on less than 100RMB in cash. Alipay was the pioneer to bring mobile payment in China, but 13-year-old Alipay is losing market to Wechat Pay, which was born in August 2013. In Q1 2017, Alipay’s market share dropped to 54 percent, while WeChat Pay claimed 40 percent.

Baidu’s vice president, as well as head of Baidu’s AI department Wang Haifeng, will serve as director of Baidu Research Institute (in Chinese). With Wang’s increased dominance in Baidu’s AI arm, Baidu’s Artificial Intelligence Group (AIG) will strengthen R&D on the AI application technology for commercial use, including autonomous driving and airport services.

In March this year, AI expert Andrew Ng announced that he’s leaving Baidu; at the same time, Baidu’s vice president Wang Haifeng was promoted to head of Baidu’s AI department, reporting directly to Lu Qi, president of Baidu Group and Chief Operating Officer. This is Wang Haifeng’s second promotion this year.

As the person in charge of AI Technology Platform System (AIG), Wang Haifeng will lead Baidu Research Institute (including Depth Learning Laboratory, Big Data Laboratory, Silicon Valley AI Laboratory, Augmented Reality Laboratory), Voice Technology Department, Natural Language Processing Department, Knowledge Map, large data department, and AI platform department.

Baidu’s AI technology autonomous driving and airport services

Baidu is working on the “Apollo project” to enable cars to drive autonomously on highways and open city roads by 2020, powered by its face recognition technology and fatigue monitoring to guarantee driving safety. To boost Apollo project, Baidu’s voice assistant DuerOS operating system has reportedly partnered with 100 branded consumer appliance partners.

On the other hand, Baidu AI technology’s collaboration with aviation services industry is advancing. On August 24th, 2017, Baidu and Beijing Capital International Airport started testing their facial recognition system.

Didi, the Chinese ride-hailing giant, is looking for ways build up its big data and artificial intelligence capabilities. While widening its global presence with its partners, the company is also deepening its big data technology and artificial intelligence capabilities to become a global leader in smart transportation and automotive technology.

The Beijing-based company raised $5.5 billion this April, giving the company a value of $50 billion. It now has a presence all over the world, having invested in a number of taxi hailing companies on multiple continents.

In Southeast Asia, Didi and SoftBank invested $2 billion in ride-hail company Grab this July. In August, Didi partnered with Dubai-based Careem to make a move into the Middle East and North Africa and invested in Taxify, which currently serves 2.5 million users across 18 countries in Europe and Africa. Before Careem, Didi led a $100 million investment in Brazilian company 99.

But it’s not only globalization that Didi is interested in. According to Didi, among their 7,000 employees, 50% are engineers and data scientists. At the 2015 TechCrunch Beijing, Stephen Zhu, VP of Strategy at Didi stated that Chinese cities are a bigger challenge than US cities, forcing engineers to seek more sophisticated technology solutions. 

So how is Didi using big data to help solve China’s congestion problems? As the above visualization tool shows, Didi uses a data-driven intelligent matching technology to find drivers for riders in a way that maximizes overall transportation for a given area. Red spots show that there is an excess of demand for taxis and private cars, and the green spots show that there is an oversupply of drivers.

We visited Didi’s Beijing headquarters and talked to Paul Wang Zhanwei, a data analyst working on Didi’s urban transportation program. Here are 3 ways Didi is helping to solve China’s traffic problem.

1. Didi helps urban development economists

“You see a China map with colorful lights glowing in 400 Chinese cities. Didi can monitor in real time, from which area a user is calling Didi,” Wang told TechNode. “Didi’s  operation is a vivid representation of a city’s or even an entire region’s economic and demographic dynamic.”

Wang noted that after the Pearl River Delta, Yangtze River Delta, and the Beijing-Tianjin-Hebei triangle, Didi’s data shows that Sichuan is coming up to become China’s next hub for growth and regional integration.

Didi is rapidly expanding beyond China’s first- and second-tier cities, even expanding into the underdeveloped counties and townships. Didi’s service covers 518 out of China’s 823 underdeveloped counties. In lower-tier cities, Didi is welcomed because it takes away the pervasive verbal price haggling process between taxi drivers and passengers.

“This makes a difference to local employment and economic vitality,” Wang said. “Affordable and efficient transportation is a way to help smaller cities to develop together with the main centers.”

2. Didi is getting closer to predicting and eliminating traffic jams

The Holy Grail of big-data scientists, Wang said, is the power of forecast and therefore intervention. With the value of data analytics, Didi can predict the traffic congestion, by analyzing accumulated previous traffic data combined with their real-time data.

“Today, we can forecast demand about 15 minutes in advance, with 85% accuracy, within a specific region. This allows us to start building our predictive dispatching models, sending vehicles to those hot spots of congestion a bit sooner,” Wang told us. “What if we can do this for entire cities, for longer time periods? When our algorithms are trained with more data, the technology will improve, the traffic manager will be close to the point of a perfect forecast, when a traffic jam is anticipated and prevent it from happening.”

3. Didi is working with traffic police to cut urban congestion

Chinese cities, like their counterparts from Singapore to Helsinki, are working on building sustainable “smart cities”, where Didi believes that it could play a key role. Didi is now working with 20 cities including Nanjing, Shenzhen, Jinan, and Wuhan to improve traffic management with its data capacities.

One such experiment took place in Jinan, where Didi adapted its city dispatch and monitoring system for local traffic police. Besides providing real-time transportation data, the company is also working on projects like smart traffic lights, physical traffic directing screens and reversible vehicle lanes. When applied to traffic management along the city’s main avenue, Wang said, the technology is already cutting journey lengths by 10 –  20%. “We are working on traffic lights at about 100 out of 900 intersections in the city,” Wang said. “If we cover all the traffic lights in the city, then traffic congestion will be hugely improved.”

Didi said data insights are even helping local traffic chiefs better evaluate the performance of their precincts, in terms of traffic operation and management.

Chinese internet giant Tencent’s music arm, Tencent Music Entertainment Group, has filed a lawsuit against Netease’s music services over copyright infringement in a Shenzhen court. Nine infringement cases were pointed out, involving more than 200 best-selling songs from Chinese well-known musicians (in Chinese).

Tencent Music insists that Netease Cloud Music disseminated the music which Tencent owns exclusive rights without permission. It is reported that Tencent Music asked the defendant to immediately stop providing playing and downloading service on the mentioned recorded audio products on Netease Cloud Music website, PC client, mobile client, and tablets. Tencent Music also asked for compensation for economic losses and asked the plaintiff to issue a public apology statement to the public.

Tencent Music’s prosecution of Netease Cloud Music involves the contents of Lin Weizhe studio, Huayi Brothers, and many other record companies, mainly related to music artists including Sodagreen, Shang Wenjie, and Xie Na. In addition, Tencent Video’s music variety show “The coming one (明日之子)” also appeared in a large number of Netease Cloud Music platform without authorization.

Netease Cloud Music responded in a public statement that it is now going through the negotiations with Tencent music on copyright license transfers. However, currently Netease Cloud Music has not completed the negotiation, so the company will have to pull down those songs from their music library.

Tencent Music’s songs are an easy target because Tencent-backed music apps KuGou, QQ Music and Kuwo were the three most popular music apps in China in terms of monthly active users (MAU) in the first quarter of 2017, followed by Netease Cloud Music.

China’s three major telecom operators have released 2017 interim results report on the first half of this year on August 23rd. They recorded an average daily net profit of about 429 million RMB ($64.3 million), which China Mobile accounted for 80% of them, Chinese media iFeng is reporting (in Chinese).

In terms of 4G development, China Mobile (中国移动) outshines the market in both the number of users and the net increase of the users. In the fixed-line broadband, China Telecom (中国电信) still triumphs over the two players, but China Mobile is growing its users base with fierce momentum.

In terms of net profit, China Mobile is far ahead of the others: China Mobile recorded a net profit of 62.7 billion RMB, an increase of 3.5%, 4 times bigger than the combined net profit of China Telecom and China Unicom (中国联通). China Mobile’s profitability is 5 times that of China Telecom and 26 times that of China Unicom. This means that China Mobile daily earn 348 million in less than a week, and what China Mobile earned in 7 days equals to what China Unicom earned in six months.

From the 4G market share, China Mobile is still the largest, with its 4G users reaching 594 million, while China Unicom and China Telecom only take 23.4% and 25.6%, respectively, of the market. From the growth point of view, China Telecom’s 4G users are the fastest growing, with its total number of users has outnumbering that of China Unicom.

In the fixed-line broadband development, China Telecom still maintains to be the Big Brother. In the first half of this year, China Telecom’s cable broadband subscribers reached 128 million, a year-on-year increase of 4.98 million, of which fiber-optic broadband (FTTH) subscribers reached 117 million, a net increase of 11.24 million over the end of last year. China Mobile is the second biggest player, with its mobile fixed-line customers showing a net increase of 15.42 million, reaching 93.04 million users, is expected that its cable broadband customers will exceed 100 million by the end of this year.

In 5G development, the three major telecom operators are launching field experiment and putting R&D efforts. China Unicom said in the interim report, that the company is launching 5G network field test in cities, and is jointly developing 5G applications and solutions with its partners. China Mobile launched a 5G field experiment this year and said it will start the construction of mobile networking, to speed up the SDN and Network Function Virtualization (NFV) to bring the next generation of cloud network transformation in 346 cities in China. China Telecom announced that the company 5G network field test in 6 cities.

China Unicom is falling behind in almost all the race: net profit, 4G development, and fixed-line broadband development. As Chinese tech giants Alibaba, Baidu, Tencent, JD acquired shares in China Unicom and has been cooperating with BAT  since October last year, we’ll have to observe how China Unicom further develops.

From now on, all Beijing subway lines will support NFC-enabled mobile phone entrance. The passengers no longer need to use public transport cards or tickets, and can just swipe their phone to enter the subway, Chinese media Beijing Youth Daily is reporting.

Smartphones installed with NFC (near-field wireless communication) module can support the public transport smart card function. When you use it, it’s just like how you swipe your transport card to the reader. In addition, users don’t have to pay a deposit to use this service.

Since Fangshan line of Beijing subway promoted the use of mobile payments phone ride in June, they reportedly added new 200,000 mobile cards in a month. This feature got very popular from the trial period, and from today all the Beijing subway lines will provide this service.

Although theoretically all NFC-enabled mobile phones can be used, at present Apple has not released public transport card function in China. The latest news says that Apple may support the public transport card function for iOS 11, which is said to be launched in October.

This feature can be used by all NFC-enabled Android mobile phones. Beijing subway supports Xiaomi, Huawei, Samsung, Meizu and other 160 brands of mobile phones. Different mobile phones have different ways of activating this service. Xiaomi 5 users need to open the Xiaomi wallet while Samsung Galaxy S8 Plus users need to download the Yikatong (一卡通) app or use Samsung’s own designated application that supports the same function. If an Android phone doesn’t support NFC, then users can go to the telecom company reception desk, replace the original mobile phone SIM card with an NFC-SIM card.

The battle between Chinese Q&A platforms for K-12 students Yuansouti and Zuoyebang has surfaced following the latter’s fresh funding news. Yuansouti is accusing Zuoyebang of posting pornographic spam on their app, showing how fierce the insider competition is between the two players.

Chinese online K-12 homework help company Zuoyebang announced a $150 million Series C of financing in the morning of August 14th. The funding was led by China-focused venture capital firm H Capital, followed by Tiger Global Management LLC., Sequoia Capital, Legend Capital, GGV Capital and Xianghe Capital.

In the same afternoon, Zuoyebang’s competitor Yuansouti (小猿搜题, meaning “the small apes searching problems”) held a media conference at its headquarters, accusing Zuoyebang (作业帮, meaning “homework help”) of posting pornographic information on Yuansouti’s app. The company claims that media attention of the “obscene messages” has triggered follow-up reports, and has adversely affected Yuansouti’s reputation, Chinese media Tech QQ is reporting.

Yuansouti revealed that they traced the 5 IP addresses used to post the content to Zuoyebang’s office. Based on public data, they also found that one of the IP addresses was previously used by Zuoyebang’s CEO to register an account on Yuansouti.

“This means that those obscene messages were sent from Zuoyebang offices,” Yuansouti vice president Li Xin said.

He claimed that after Zuoyebang posted the obscene message on the app, the company hired PR companies to upload the screenshots to Weibo and to spread false rumors. About Yuansouti’s accusations, Zuoyebang said that they still need internal communication and have not given any official statement.

Chinese Q&A platforms Yuansouti and Zuoyebang both launched in 2014. Zuoyebang, previously a product under Baidu Zhidao, spun out in 2015 to build the Q&A platform dedicated to middle school and primary school students. Yuansouti was launched by the Fenbiwang in 2014, positioning itself as a platform to search for questions and answers. Yuansouti and Zuoyebang have the same target users of K-12, forming a direct competitive relationship.

With surging demand for foreign products from Chinese consumers, China is projected to become the world’s largest cross-border e-commerce market by 2020, according to China Internet Watch. Over the last decade, Alibaba created not only an e-commerce ecosystem on their own but also an ecosystem of business solution providers for foreign brands that want to tap into China’s massive shopping market.

If a brand is targeting Alibaba’s B2C platform Tmall to sell their products, then chances are that they set up their own online store or they asked a TP (淘拍档, Taobao Partner or Tmall Partner) to run their e-commerce business in China.

TP is an online service provider that collaborates with brands, especially those who lack online resources, to open and operate brand’s official online stores through major Chinese market places such as Tmall, JD, and Vipshop.

“If a brand wants to run their own online store on Tmall, they should deliver products, keep inventory, hire people, and build their own flagship store. They can do it all by themselves, but it’s heavy investment and comes with high risk. I mean, it takes time to set up a team in China, to study China market, to communicate with Tmall,” Frank Cho, manager at major TP Accommate, a major TP based in Shanghai told TechNode. Accommate, started in 2009, serves mostly Korean brands such as Amore Pacific, YG Entertainment, SM Entertainment, and Emart.

“JD and Tmall cannot manage all the brands, and on the other hand, brands don’t have knowledge and experience in China. That’s where TP comes in and bridges those two,” he says.

Since Taobao formally launched its Taobao Partner plan in 2009, TP has grown into a huge business with now over 500 TPs in China. One of the biggest TPs is Baozun, founded in 2007, serving over 100 international brands including Nike, Burberry, Coach, Microsoft, and Samsung to set up their online brand stores. After raising four rounds from Ali Ventures, Crescent Point, Goldman Sachs, and Softbank, the Shanghai-based company listed on NASDAQ in 2015, the year when their GMV reached RMB 6,735 million.

What does TP do for brands?

So how does TP work for these brands? Aiming to provide one-stop-service, TP covers IT solutions, operations, digital marketing, customer service, warehousing, and inventory for brands. The price setting and all the content, from web design, image, and video, are provided by the TP, who then take roughly 10% to 15% of the transaction as commission, apart from their regular service fee.

“TPs have the know-how and we understand the rules on Tmall. For example, revenue from e-commerce heavily depends on events. One day sales made on June 18th, JD’s shopping day, take half the transaction made in that month. We know how many coupons you should give to customers,” Frank says.

On June 18th, not only JD, but all the e-commerce companies including Tmall, Suning, Amazon China took the chance to give discounts to drive up the sales. Seven minutes after June 18th midnight, Tmall recorded RMB 100 million ($14.9 million) in Gross Merchandise Volume (in Chinese).

“We build up an economy of scale because there’s a fixed cost. It’s also about bringing high working efficiency and cost efficiency. For brands, it makes it easier for them since they only need to communicate with the TP, rather than dealing with various Chinese e-commerce companies.”

One of the reasons TPs can stay lean is because they don’t hold any inventory. Rather they purchase the products directly from the brands. Some TPs build a big data team to analyze the customer needs and to improve their shopping experiences.

“Chinese people ask a lot of questions and they want them to be answered quickly. So we put in highly professional customer service teams to answer their questions. It goes same for me, because when I buy things on Taobao and ask a question, 10 seconds is my tolerance for waiting,” Frank says.

An inside look at Taobao, Tmall, and JD

China’s e-commerce apps annual ranking in 2016 shows that Chinese customers love shopping on Taobao first, followed by JD, Vipshop, and Tmall. Despite Taobao’s #1 position, more customers purchase brand products on Tmall rather than on Alibaba’s C2C platform, Taobao, since Tmall guarantees that all products sold on its marketplace are authentic. For that reason, brands can only have their flagship store on Alibaba’s B2C platform Tmall in order to sell official or authorized products where Tmall takes a 3~5% commission. For example, Nike can have only one TP on Tmall, but there can be a lot of unofficial Nike sellers on Taobao.

JD communicates with brands directly, working on the merchandise and the delivery side. Comparing Nike’s store on Tmall and JD, Nike has its one and only flagship store on Tmall, but on JD, there are many authorized stores that sell Nike along with other sports brands.

“Since TP model has become so successful, JD also tries to replicate this model and has approached a lot of brands,” Frank says. “Brands are also struggling to balance the relationship between these two channels.”

For example, Korean retailer Lotte Group closed its flagship store on Tmall, and signed an exclusive contract with JD, making it difficult to recover its relationship with Tmall.

Partner challenges

TP business has flourished through these years, but they are facing a number of challenges. Nowadays, Chinese internet companies are investing a lot of money into offline locations, leading their consumers to offline outlets to enhance their shopping experience.

“The cost of doing business online is rising, and the traffic is coming down. So these giant companies are trying to balance their online and offline channels. At this point, we’re not sure if Chinese customers will actually go there to shop,” Frank says.

China’s biggest travel agency operator Ctrip set up 30 offline outlets in Beijing. Alibaba joined the forces with Bailian group to set up brick and mortar Lianhua supermarkets (联华超市), and Xiaomi unveiled its offline plan to open 1,000 retail stores by 2020 in order to boost its revenue and customer’s experience.

Another challenge is brands escaping from TPs. After 2 years of using a TP, fashion brands Zara and Eland decided to run e-commerce store by themselves, which was a huge loss for their TPs, Baozun and Accommate, respectively. Another challenge is that TP is labor intensive industry, and requires a lot of manpower. As the cost of labor cost increases, they are making tough decisions on how many staff to keep full-time.

Advice for brands

For foreign brands, they should analyze which sales channel they want to mainly focus on. According to iiMedia Research (in Chinese), NetEase Kaola showed 21.6% of total cross-border sales volume in 2016, followed by Tmall International (18.3%), Vipshop (16.3%), and JD WorldWide (15.2%).

As Tmall is backed by Alibaba, and JD is backed by Tencent, brands need to make strategic moves when they choose their sales channel. While TP gives a one-stop solution to penetrate Tmall, there are other booming cross-border e-commerce companies like NetEase Kaola and JD. Japanese top e-commerce company Rakuten decided to abandon the Alibaba channels and opened their flagship store on JD and NetEase Kaola in 2015; by now, their transaction volume has grown 20-30 times from 2016.

Alibaba’s first consumer targeted artificial intelligence speaker Tmall Genie X1 was unveiled on August 8th, the same day as the “88 Member Day” (and WeChat’s Cashless day) where Alibaba invited its dedicated 10,000 shoppers to a music concert hall in Shanghai. Pictures of Tmall Genie X1 were shown on the giant screen and the MC started a conversation with the artificial intelligence speaker.

“I can be your personal trainer when you are working out and your assistant at a gathering. If you bought a present, I can also track the package for you. There are many things that I can do,”  Tmall Genie X1 tells the MC on the stage with a friendly voice.

Last month, Alibaba’s Artificial Intelligence Lab released its first beta version and on August 8th, Alibaba officially put its artificial intelligence on the shelves. Priced at 499 RMB, Genie X1 is now available on Tmall, with the sales figure reaching over 12,000 units in two days with a 4.8-star rating.

The release of Tmall Genie is Alibaba’s attempt to allow its users to purchase items on Alibaba’s retail platforms including Taobao and Tmall directly with their voice. When users place an order, Tmall Genie can recommend personalized shopping items on their platforms.

Tmall Genie X1 is the very first voice-controlled smart device produced by Alibaba AI Labs.

Alibaba’s AI push

Alibaba AI Labs, established in 2016, is leading the development of Alibaba’s consumer AI products and is very confident about the growth potential of China’s voice-assistant market.

“As mobile phone usage continues to grow, the next entry point for the internet may well be voice. We want to invest in speech cognition and deep learning technologies so as to keep enriching the features of Tmall Genie,” Lijuan Chen, Head of Alibaba AI Labs told TechNode.

The brain of Genie X1 is called AliGenie, which Alibaba says is the first generation of human-computer interaction system for the Chinese language.

AliGenie runs on the cloud and understands user commands in Mandarin. It has functions such as smart home devices control, voice shopping, bill-payment, food delivery and music streaming.

Currently, Alibaba’s voice assistant comes with AliGenie built in but it can also charge your phone and even help you find it when you misplace it. For food delivery, users can tell Genie X1, “make the same takeaway order as I did last time” or directly say which dishes they want to have. According to Alibaba, more services such as flight and movie ticket booking as well as hotel room reservation are in the pipeline.

In the future, Alibaba AI Labs plans to partner with more third-party service providers such as IoT and content service providers. They mentioned a possible partnership with home device manufacturers and brands to develop a smart home environment where smart devices can be connected with and activated by AliGenie.

TechNode asked Lijuan Chen, Head of Alibaba A.I. Labs how their Genie is better than other competitors like Tencent’s AI assistant Dingdang and Baidu acquired Alexa-like service Raven Tech. Lijuan did not address the competition, but rather gave the advantage of their product:

“We use cutting-edge deep learning technologies in Tmall Genie, which enable the device to provide personalized recommendations throughout our retail platforms that suit the best interest of consumers. AliGenie is an open platform, so that it can be connected with various hardware and software service providers and keep fine-tuning to meet the growing demands of consumers.”

China’s top dating app Tantan announced on June this 21st that it has raised a $70 million worth in a Series D, summing up its total accumulated fund to $120 million, led by NASDAQ-listed online social entertainment firm as well as China’s pioneer of live streaming, YY Inc and Genesis Capital with participation from SAIF and Zhongwei Capital. Considering Tantan’s valuation of Series B and Series D, the valuation nearly increased 7 times in two years, according to LB Investment, an early backer of Tantan who invested in its Series B and achieved a partial exit in this Series D round.

Tantan works through the location base service mechanism and matches you with the person that has been to the same place you’ve been to. Tantan pushes the match based on user’s common tags: same hobbies and interests as well as visiting the same places. The default of Tantan is that it doesn’t show you the people that you have phone contacts. However, if you have a secret crush on someone around you, Tantan helps you to connect with that person.

For example, say you have a secret crush on your classmate. You can save that person’s phone number on your phone, then Tantan will send out a message to your lover, “Someone around you has a crush on you and wants to invite you to Tantan.” After joining Tantan, the photo of that person will be shown to you, and the same goes for that person. If both of you press “Like” rather than “Skip”, then you will be matched.

On July 2015, Tantan’s DAU was reportedly 250,000, and today, Tantan’s DAU reached over 6 million, an increase of nearly 24 times with the next day retention rate of 75%.

Why Tantan is the next generation of QQ and WeChat

“In the 1.0 era, QQ instant messaging tools enabled users to make friends across the city and even across the country. In the 2.0 era, as we are now overwhelmed with too many online friends, it became important how you will remove the invalid social link,” Tony Park, head of LB Investment in China and previously senior director of Alibaba’s overseas strategy told TechNode in an exclusive interview.

When Tantan was about to raise Series B, Tony has been looking for a mobile social application in the 2.0 era.

“WeChat brought in a concept of ‘friend’ to allow users to build the efficient relationship between the online friends, but I thought, there must be an efficient way to meet strangers to exchange and make friends,” he said.

In the beginning, Tony and LB Investment China team downloaded a variety of social applications to do a top-down evaluation, and they finally found Tantan.

“After I decided to invest in this area, I searched all the products in the market and tested them out for myself. I contacted Tantan and met the founder, and decided to invest in them,” Tony says.

Tantan’s design purpose is to eliminate layers of ineffective strangers and encourage the user to take the initiative to choose the person you want to be friends with, then the other person does the same. The two funnels screening reduces invalid users, and improve the user’s dating success rate greatly.

“After the investment, I also participated in the product management and planning, which allowed the company to grow its user base tremendously,” Tony remarked, who served as an acting president of the Chinese game company The9, with his strength in product operation.

Matching investors to Tantan

In the process of closing Series D investment, many investors wanted to join the round, and Tantan’s financing round was oversubscribed by too much demand. To maintain the proportion of the founding team’s shares, South Korea’s renowned VC fund LB Investment sold some of their existing shares to two investors and achieved a partial exit.

“Selling our existing shares to two new investors, who are also giant internet companies in China, will help us form much stronger shareholders in the company. We still have a considerable amount of shares on Tantan and we confidently believe that Tantan can achieve a successful IPO,” Tony said.

Previously, Tantan raised a $5 million Series A in 2015 from Bertelsmann, then completed a $13 million Series B from LB Investment, DCM, KPCB and GX Capital in the same year. LB Investment continued to increase investment leadership in the app and led a $32 million Series C with DST Global, Vision Plus Capital in May 2016.

The Chinese online payment ecosystem will see more regulation as all third-party payment companies including Alipay, WeChat Pay will have to transfer transaction data to Wanglian, Sohu is reporting (in Chinese).

On August 4th, the People’s Bank of China, the central bank of China, issued a document stating:
“Starting on June 30, 2018, payment agencies involved in the online payment business that accept bank accounts will have to use Wanglian (网联, meaning network platform or Non-Bank Internet Payment Union). By October 15, 2017, banks and payment companies should migrate their business to Wanglian.”

So what does this mean? In the past, when people wanted to make an online payment between different banks in China, they could use the third party payment companies directly. For example, we can transfer money from one bank account to the other account using Alipay, without any third party’s intervention. This model bypasses the central bank’s clearing system, and the transaction data is kept by third-party payment companies.

The problem central bank sees here is that by allowing these third party payment companies to control the payment channels and data, it could possibly lead to money laundering, cashing out problems, or stealing funds. To follow with the payment data and to manage the flow of funds, the central bank decided to intervene in the transaction process using Wanglian. Now the third party payment companies online payment channels, no longer directly deal with banks, but send the payment data to the Wanglian.

From the regulatory point of view, the debut of Wanglian, as a real-time monitor, will better control financial risks and to improve the transparency of third-party payment market.

Third-party payment companies will no longer be able to enjoy the freedom of managing user’s funds by themselves. Unlike in the past, when these third party payment companies dealt with a number of banks, now they only need to deal with Wanglian which will reduce their transaction costs and enhance the security of the transaction.

In users’ point of view, it will not change using habit of third-party payment services, just that the payment data will be collected by Wanglian rather than their party payment companies. The good news is that user’s financial security will be more guaranteed and rates could potentially be lower.

Alibaba Group and Marriott International announced on August 7th the establishment of a joint venture to redefine the travel experience for the hundreds of millions of Chinese consumers traveling abroad and domestically every year.

Alibaba does not lack when it comes to cooperation with global companies, as their users seek more international experiences to spend their money and time. To better guide over 500 million mobile monthly active users across Alibaba’s platforms when they travel abroad, Alibaba chose to shake hands with a hotel giant encompassing a portfolio of more than 6,200 properties in 30 leading hotel brands spanning 125 countries and territories.

“Alibaba working with Marriott is a natural outcome. Marriott has the largest user base as well as the largest hotel portfolio and coverage. To serve our 500 million users when they travel overseas, will take us a long way. We will work with them to strive to reach that goal,” Daniel Zhang, Chief Executive Officer of Alibaba Group said in the press conference held in W Hotel in Shanghai.

On the other hand, Marriott has observed a great surge of Chinese travelers. The travel industry is an important growth opportunity as China’s travelers are expected to take an estimated 700 million trips over the next five years, according to Marriott.

As incomes rise, China’s middle class is looking for higher quality products and travel experiences. Thinking of the bigger market, Marriott decided to work with China’s e-commerce giant to benefit from Alibaba’s digital retail leadership and its role as a gateway for international brands.

“We have long admired Alibaba’s digital expertise and deep understanding of Chinese consumers’ needs and behaviors,” said Arne Sorenson, President and Chief Executive Officer, Marriott International. “By forming this partnership, we are pairing our hospitality expertise with Alibaba’s digital travel platform, retail expertise and digital payment platform, Alipay, and driving membership to our loyalty programs.”

Drawing on resources from both Marriott and Alibaba, the joint venture will manage and operate Marriott International’s Chinese-language digital channels that include Chinese language versions of Marriott.com and Starwoodhotels.com. the Marriott Mobile App and SPG App as well as the Marriott storefronts on Fliggy, Alibaba’s travel service platform. It will also market directly to Alibaba’s customer base, provide a link between Marriott’s loyalty programs and Alibaba’s loyalty program, and support Marriott hotels globally with content, programs and promotions customized for the Chinese traveler.

After a period of silence, the power bank rental industry has brought more financing news. On July 27, power bank rental startup Enmonster announced a Series A of RMB 1 million, Chinese media Sina Tech is reporting. However, more competitors don’t seem to be a problem for these companies. AnkerBox, Laidian, and Xiaodian have already staked their claims and now have the biggest shares of the market (in Chinese).

Powered by over 20 investment institutions, these companies are ensuring that new competitors have a hard time entering. Funding amount for more than 10 shared power bank rental startups, including Shenzhen-based AnkerBox (街电), Shenzhen-based Laidian (来电), Xiaodian (小电), HIdian (HI电), Mobo Power (魔宝电源) amounted to more than RMB 300 million ($43 million) this year.

The problem with these power bank rental business is that it doesn’t assure high returns. At a recent panel of sharing economy at RISE in Hong Kong, investors of sharing bikes were also unsure about power charger businesses. However, AnkerBox, Laidian, and Xiaodian say that they are not so much concerned about heating up power bank business.

“Competition in the industry is only a small part of it. Most of the companies are doing win-win cooperation,” Xiaodian’s representative Fang Shulong said at power bank rental conference held on July 28th. “The power bank industry cannot be done by one or two companies because we need to build up consumers habits to use the power bank, and all together, we need to form an economy of scale.”

Ankerbox, on the other hand, is now working to enhance the user experience by introducing foldable power banks and providing fast charging as well as MFi certification for Apple users.

“Ankerbox is mainly focusing on spreading out in the market so that users can find a power bank around 500 meters within their location,” Ankerbox vice president He Shun said.

Laidian, the first player to enter the power bank rental industry, also said power bank itself is only a part of what they are trying to do.

“What we want to do is not only providing battery charging services but a complete set of solutions. We hope to cover the needs of the offline business merchants, and connect them with the users.” Laidian’s COO Huang said.

A Beijing court has approved China Construction Bank (CCB)’s application to freeze the assets of LeTV Holdings and LeEco founder Jia Yueting, with a total value of RMB 250 million ($37.2 million), local media is reporting (in Chinese).

The Beijing civil court ruled on July 25 that assets owned by Jia, Leshi Internet Information & Technology Co., Leshi Holdings, and Jia Yuemin, Jia’s elder brother and Leshi Holdings director can be frozen for up to three years.

It’s been one month since another Chinese court ordered Jia’s assets frozen. On July 5, Shanghai High People’s Court froze 519 million LeTV shares worth around RMB 15.927 billion ($2.3 billion), calculated at 30.68 apiece. The court carried out this order on behalf of China Merchants Bank.

However, China Construction Bank and China Merchants Bank are only some of the banks involved. LeEco has also borrowed tens of billion RMB from Ping An Bank.

LeEco’s early signs of trouble started showing up last October, when its cash crunch worsened at an alarming speed, partly due to its outstretched overseas expansion efforts. LeEco expanded its business to U.S. in 2016, but the company’s expansion to U.S. had gone too far, despite the limited capital and resources, resulting in “an apparent lack of momentum” in various businesses.

One previous full-time employee at LeEco pointed out that LeEco’s failed globalization process attributes to these four reasons: language, the resonance of organizational values, leadership and management skills of those in power, and localization.

Following the difficult situation for LeEco, there has been a transition in LeEco’s leadership. Early July, Jia Yueting stepped as chairman of Leshi, following his resignation from the listed company’s CEO role in May. Jia was then named as a global chairman of LeEco’s electric business to focus on making electric vehicles. On July 21, Leshi named Sun Hongbin, chairman of Sunac China Holdings Ltd. as a chairman of Leshi, now controlling LeEco’s healthier businesses.

In a country of centralized authority, a decentralized database is booming. In China, the trend is now building a new business model on top of the blockchain. Blockchain technology is a chain of blocks that each contains data, acting as a way to record what time the data was inserted into it. The cool thing about blockchain is that it’s decentralized, which allows for transactions to occur between parties without the need for a 3rd-party to establish trust.

In the global blockchain landscape, we are now seeing a Ukrainian blockchain-based Wifi router, energy projects in Eastern Europe, decentralized computing, storage, and VPN networks. In China, Qtum (pronounced Quantum) is now becoming a toolset and a platform for companies to build their business on top of the blockchain.

“Now you can build any business on top of the blockchain without intermediary costs and without friction.” Patrick Dai, co-founder and CEO of Qtum (量子链 in Chinese, meaning quantum chain) told TechNode.

The Shanghai-based blockchain company has their own cryptocurrency called Qtum, which now ranks in the top 20 on CryptoCurrencies Market Capitalization index and provides a blockchain application platform to execute “smart contracts” with a proof-of-stake consensus mechanism. This means that people can facilitate, execute and enforce the negotiation or performance of an agreement, such as a contract, using blockchain technology. The advantage of the Qtum is that it utilizes the core technology from both Bitcoin and Ethereum.

“Blockchain in China is hot these days. Currently, 7 companies are building a business on top of Qtum,” Patrick says.

These seven companies include a Singapore-based blockchain company that announced their first Initial Coin Offering (ICO) on top of Qtum. Energo, uses blockchain technology and smart meters to connect energy producers and consumers in microgrids with traditional electricity users to achieve point-to-point energy trading and energy supply. Other projects building on top of Qtum include Bodhi, a decentralized prediction market, and Vevue, a platform for monetizing digital content.

“Many of these blockchain companies are registered in Singapore, but they are focusing on the Chinese market,” John Scianna, Marketing Director at Qtum told TechNode.

Blockchain trends in China

The Chinese government is also showing positive reactions to this trend of blockchain development, pushing forward the development of blockchain in the coming three years, as blockchain is mentioned in China’s five-year plan (2016-2020) as one of the most promising technologies. The People’s Bank of China (PBoC) is doing research on blockchain technology and completed a successful trial run of self-developed digital currency that uses a limited implementation of blockchain technology.

Patrick also mentioned that authorities will seek to clarify regulations for blockchain projects this year and provide some guidance to help develop the industry.

“The regulation will come for sure and it’s good for the industry. Without regulation, it’s the wild west and it’s not good for the people and for their security,” Patrick said. “It’s a new way for people to collaborate and to build a reward structure to change the idea of VCs and crowdfunding.”

Qtum, as a platform provider for “smart contracts”, is at an early stage to get more adoption in the main society, and Patrick mentioned that the team will slowly build up trust on their blockchain platform.

“We are building trust, not by people, but by blockchain in a decentralized way,” Patrick remarked. “If the blockchain-based smart contracts become popular, the government will make smart contracts legally binding later on.”

Qtum from a consumer product perspective

Patrick Dai, CEO of Qtum was chosen as one of Forbes magazine’s “30 Under 30“, 300 people in Greater China under the age of 30. Forbes China recognized him for his accomplishments in the category of consumer technology. Is blockchain really considered to be a consumer technology? Patrick sees that a consumer product depends on the matter of trust.

“If you see P2P technology as a business model, you aren’t relying on the middleman. Using blockchain, you don’t need escrow, because blockchain is the escrow. The blockchain is offering trust on top of it,” Patrick explains.

An escrow service is someone that holds users’ money when users make a deal to assure their promise. So the blockchain technology can replace the people who do this service. For example, using blockchain, people can make a blockchain-powered application as a counterparty and automate this on blockchain through their computer.

“Each smart contract is a virtual escrow, and this lowers the cost for both parties. The blockchain smart contract program doesn’t sleep,” he said. “You can create 1,000 virtual small escrows this way. It’s like people because they perform the same service.”

Patrick gave an example: China’s biggest real estate company Lianjia has 10,000 people in charge of contract signature and approval, repeating the same process every day for apartment owners, renters, and buyers.

“You don’t need those people. All you need to do is to sign the contract directly, and it’s effective immediately. You can trust each other,” he says. “Blockchain will become the basic architecture and infrastructure like TC/IP protocol. Just like you have a browser as a gateway to the internet, you need a gateway to the blockchain. Qtum is this gateway. Blockchain is the value, like a piece of the house or like a dollar.”

Because of the blockchain, current business models will change, new business models will emerge, and some people will lose their jobs. Patrick says, in some ways, it improves the society.

“Those people who lost their jobs because of changing business models can do other stuff, and it could increase the efficiency of whole society. You don’t need to waste human capital on repetitive tasks,” Patrick said.

BingoBox is becoming one of the more vivid examples of how fast innovation is moving in China’s retail industry along with Alibaba’s initiative in unmanned stores powered by their face recognition technology. However, the concept isn’t without its own teething problems. A BingoBox in Shanghai was closed for being too hot and when we tried one ourselves, we found the service had some flaws, such as invalid product tags and no paper receipts, causing customer frustration.

BingoBox (缤果盒子) is an unmanned convenience store that can greet customers 24/7, and requires the customer to have a mobile phone. It’s like the Chinese answer to the Amazon Go unmanned store. In the supply chain, the company has reached a strategic partnership with Auchan Group, one of the top ten retailers in the world, which is in charge of its supply chain to cover BingoBox convenience stores in the East China region and possible global expansion. It’s not completely unmanned: on site, we met an Auchan employee who was restocking the BingoBox.

BingoBox has completed Series A, acquiring more than RMB 100 million ($14 million) in investment led by GGV Capital, followed by Qiming Venture Capital, Source Code Capital, Ventech China and other institutions, our sister site TechNode Chinese reported on July 3rd.

Youtube

If you can’t see anything, try QQ Video instead.

What is BingoBox and how does it work?

Users only need a smartphone to enter and purchase an item in a BingoBox. To enter, a user scans a QR code via their WeChat account. After a text message authentication, the door will automatically open. Customers choose their wares, then scan the products with a scanner like a cashier would. A screen displays the running total and the shopper can complete the payment using Alipay and WeChat Pay.

The main products in BingoBox are biscuits, potato chips, instant noodles, dairy products, and drinks with about 500-800 different product lines. BingoBox says its stores offer prices about 5% lower than those of other convenience store brands, and that they provide RMB 60 in discounts for new users.

In 2013, the team launched their first service BingoFruit (缤果水果), an O2O version of the fruit delivery business. The company said that it has its own logistics channel, and was also the first to achieve two-hour delivery. In August 2016, they first tried an unmanned convenience store in Guangdong’s Zhongshan city, and on June 6th this year, they opened in two locations in Shanghai.

At the beginning of 2017, they reportedly made progress in artificial intelligence to achieve accurate identification of more than 200 categories of goods. With their team of deep learning experts, they are working on commodity identification and classification algorithms, through the algorithmic optimization and mass training. They are planning to launch a large-scale commercial artificial intelligence solution this August.

Currently, the company holds 16 international patents, including anti-theft systems, automatic billing systems, and facial recognition.

BingoBox benefits

Wang Ran (30)

I was interested in Amazon’s unmanned store, and I read an article about BingoBox on the website and came here to try it out with my friend, Deng Fei. It took me 30 minutes to get here. I previously worked in the technology part of the supply chain at Alibaba’s Tmall. They also want to do this.

I think the idea is very good. You can make the purchase in a store all by yourself. It’s fun. If it’s a packaged product, I can buy it here, and buy fresh groceries at the supermarket. It’s more like a convenience store, and more people will love this kind of store since it’s easy to try it out. I bought a pack of milk, a can of Sprite, and a can of beer.

Auchan’s employee

I’ve worked at Auchan for two years. BingoBox will spread, and more people will use it. It opened on June 6th this year. I come in here about six to seven times a day to fill up the products that have sold out. The price here is same as at Auchan. It’s really convenient, and I use it too to buy drinks.

Fang Tuanzi (29)

We’re a couple living in the area. About two weeks ago, I caught sight of this shop. We buy big things in Auchan and just bought a bottle of water here. I just wanted to buy a bottle of water, and you have to wait in a long line [in other stores]. I think they can put BingoBoxes around bars or basketball courts, that way people will come in to buy drinks and snacks. Simple things are what we need, so the items in the BingoBox are good enough. But I’m not sure if this model would work if the shop gets any bigger.

Nielsen, the world’s leading information and measurement company, announced a strategic cooperation agreement and a data-sharing protocol with China e-commerce giant JD.com that formalizes the collaborative launch of a big data product—Multi-Touch Attribution (MTA).

“What is happening in China right now is the fragmentation of digital media. This phenomenon is much more intense in China than it is compared to the US,” Vishal Bali, Managing Director at Nielsen China told TechNode in an exclusive interview.

So why is this S&P 500 company, which has operations in over 100 countries, partnering with a Chinese e-commerce company? Chinese e-commerce companies are fast becoming advertisement platforms. China’s e-commerce giant Alibaba recorded mobile ad revenues of $11.1 billion in 2016 and are expected to grow to almost $20 billion by 2018, according to eMarketer.

Seeing the fragmented digital media in China with so many media and apps, marketers are confused with which advertisement channels would work and which won’t, and it’s getting even more complex. The idea behind this partnership is to bring clarity and transparency to that.

“Basically, leveraging the actual data of JD.com’s shoppers, we trace the customers’ journey backward to see what are the different touch points they are exposed to. After tracing the path of purchase, you get a sense of what is really important to consumers. Then brands can look at, “Am I advertising on these touch points?” and “Am I doing it in a right way?”,” Vishal explains.

Nielsen’s professional digital media monitoring service leverages JD’s 236.5 million active users, as well as their cloud platform, to calculate ad impact and ultimate sales impact from marketing investment across media platforms–both inside and outside of JD.

Ultimately, it assures more efficient allocation of budget in marketing and advertising and increases in return on investment (ROI). The solution offers marketers a clear idea of which areas to dedicate their spending.

“It drives better performance for brands leveraging the platform data. It’s first of its kind in China to bring the transparency and clarity,” he adds.

Nielsen had an existing cooperation agreement with JD that began this January. Nielsen’s core business is sales measurement, so under the partnership, they got access to JD’s sales data, and then measure JD’s offline and online sales.

“As e-commerce is starting to evolve as an advertisement platform, we wondered how we can further explore our collaboration, so we expanded our partnership,” Vishal said.

At the event, JD also talked about their philosophy about open data, sharing data and their partnership with Nielsen to further bring transparency in the market.

“Under this cooperation, we will leverage the big data analysis to help manufacturers focus on effective investment in digital marketing and make a solid step forward,” Jing Weiping, vice president of JD Group, said. “For the whole market, everyone’s common goal is to improve the manufacturers and brands of marketing efficiency. The cooperation between JD and Nielsen can be described as win-win. It can help us in a comprehensive understanding of the whole channel environment, and actively explore innovative business model.”

In June 2017, the total retail sales of consumer goods in China reached RMB 3.9 trillion ($440 billion), up by 11.0% year-on-year, China Internet Watch is reporting. That is approximately the same amount Greece was loaned over a five year period for its bailout ($440 billion), meaning the amount of money Chinese consumer spent on consumer goods for one month equals what Greece spent in five years.

From January to June 2017, the total retail sales of consumer goods reached 17.2 trillion RMB ($2.5 trillion), up by 10.4% year-on-year. In the first six months of 2017, China’s national online retail sales of goods and services was 3.1 trillion yuan, an increase of 33.4% year-on-year and accounting for over 18% of total retail sales.

As Chinese consumers’ spending largely depends on mobile payments, a total of $3 trillion in transactions using AliPay and WeChat Pay was recorded in 2016. The online retail sales of physical goods were 2.3 trillion yuan, an increase of 28.6%, accounting for 13.8% of the total retail sales of consumer goods.

This indicates a huge market for luxury brands and consumer facing startups to open online retail market and adopt mobile payment options.

From January to June, the retail sales of consumer goods in China’s urban areas was 14.7 trillion RMB up by 10.1%, year-on-year; while that in rural areas was 2.4 trillion RMB, up by 12.3%, year-on-year.

China now sees a new stream of unmanned stores started out by both early stage startup and internet giant. China’s unmanned convenience store BingoBox received RMB 100 million ($14 million) in a Series A from GGV Capital, with its plans to reach 5,000 stores by the end of this year. Alibaba also featured its cashier-less concept shop in July, powered by its face recognition technology.

2017 has been a great year for bike rental startups as they get more money and expand both domestically and internationally. However, that doesn’t mean that everything is rosy. On March 26, a boy under 12 years old was hit by a bus and died while riding an ofo bike. His parents are now suing the company for RMB 8.78 million ($1.3 million) in a wrongful death claim (in Chinese), claiming that company’s combination locks were in-part responsible for the death of their son.

This is not the only case of a tragic death for a minor while riding an ofo bike: On June 18, a 12-year-old boy lost control on an ofo bike and died after cracking the code on the manual lock.

When ofo first invaded China’s streets with its yellow bikes, the company exclusively used manual locks. However, these locks have come with a whole host of problems—not only can users choose to never lock them again, they are also easy to break (in Chinese). At the TechCrunch Beijing event last year, the company even said they had no plans to move away from manual locks.

Faced with these shortcomings—as well as regulations stipulating GPS and other “smart” functions in both Beijing and Shanghai—ofo has begun to introduce smart locks in cooperation with Beidou, the domestically-made alternative to GPS. It would seem, however, that not all these upgraded bikes have made it to all of their users in China.

On the other hand, Mobike, ofo’s largest rival, has included smart locks since they first hit the streets. Because of this, Mobike has done a better job controlling the use of their bikes. Not only do they lock automatically after a certain period of inactivity, but since use of the bike is directly tied to their online database (and Mobike does not allow registration of anyone under 16 years old), young minors are less likely to use the bikes.

A spokesperson for ofo has told TechNode that “we will strictly follow judicial procedures” and would not comment further on the case.

With additional writing from John Artman.

Meituan-Dianping’s CEO Wang Xing responded to negative comments on the recent controversy about food delivery app Meituan Waimai (美团外卖, Meituan Takeaway) using separate boxes for halal food, our sister site TechNode Chinese is reporting.

This week, a picture of Meituan Waimai using a separate food box for halal food was widely circulated on the Chinese internet, stirring up controversy with many netizens claiming discrimination against non-Muslims. The Meituan Waimai app was flooded with one-star comments of angry Chinese netizens claiming that Meituan users should delete the app. Initially, Meituan did not respond to this. And then one user called “Meituan city manager Zhang Wei,” published the user’s comment on knowledge sharing platform Zhihu, which once again led to strong condemnation from the public.

After a long silence, Meituan responded to the issue on its official Weibo account on the evening of July 19th:

After our investigation and verification, we found that Meituan Takeaway agents in Gansu Linxia Hui Autonomous Prefecture area privately produced unofficial distribution boxes and fans, and currently it can be found in only in a small place in the Gansu Linxia area. We will strengthen the supervision of agents and food materials, and keep strict requirements of agents and businesses to only use official materials.

In addition, the Meituan-Dianping CEO Wang Xing said through his account on Fanfou, a 140-words micro-blogging platform, that the company did not have such a staff named “Meituan city manager Zhang Wei”, and said someone deliberately posted the comment to discredit Meituan.

Wang Xing said, “We have checked internally, and there is no such low, pig-like person on our team. Basically, it can be judged that someone deliberately posing as the Meituan staff published disgusting remarks to discredit us. This was an organized attack.”

Then, Wang Xing again said, “These days, we had the opportunity to see how the domestic business competition has no bottom line. Anything can be used to incite, provoke, and discredit.”

Ant Financial, the financial services affiliate of Alibaba, has made a strategic investment in VFinance (维金), a Shanghai-based startup providing digital financial infrastructure solutions to enterprises in China, according to VFinance’s announcement.

At a press conference on July 18th, VFinance also signed strategic cooperation with MyBank (网商银行), an online bank launched by Ant Financial in 2015. The cooperation includes payment and settlement, financing financial products, industry investment and financing solutions, technical personnel team structures to help SMEs who struggle to fit into the financial bracket for loans and services.

The creation of VFinance originated from founder Yu Qianghua’s personal experience in a bank. The communication process at the bank counter and with the staff was not so pleasant. He realized that there needs to be a special financial channel for the most productive people and enterprises, and founded VFinance. Its VFinance Wallet allows enterprise customers to conduct transactions via third-party payment services including WeChat, UnionPay, and Alipay.

Mr. Yu and his core team have more than 10 years of industry-wide R&D and operational experience. For more than three years, VFinance has served more than 60 customers, including Huochebang (货车帮, truck helper) who provides cargo sharing platform, tourism company 8trip (八爪鱼在线旅游, Octopus’s online trip) and Souche (大搜车, search car) who provides second hand car trading platform, and other companies in real estate, home improvement, retail, and electricity sector.

Founded in 2013, VFinace pocketed Series A financing from IDG Partners in 2014, followed by IDG  and  Yunqi Partner’s injection to Series A+ of financing. At the end of 2016, the company received series B financing from Ant Financial.

China’s cosmetic surgery industry to double in market size by 2019, reaching RMB 800 billion ($116.3 billion), making it the third largest in the world behind the US and Brazil, according to China Association of Plastics and Aesthetics‘s report released in 2015.

The problem is that not many hospitals care about the after care element of plastic surgery. The recovery process after surgery is important, because the patients might have negative side effects, and some do suffer from anxiety. Aiming to fill this niche market, Korean startup CareMind provides recovery assistance service after the plastic surgery by connecting doctors to the patients.

Cosmetic surgery is a huge market in South Korea and China. South Korea, the so-called mecca of cosmetic surgery, enjoyed a boom in Chinese tourists heading to Korea for surgery in 2014. At its peak, Yoonje Shin, CEO and founder of CareMind, used to work as a broker to connect Chinese customers to Korean cosmetic surgery hospitals. Now that this boom to go Korea has cooled, in part due to the MERS outbreak in 2015 and worsening political ties, the number of Chinese tourists visiting Korea has since dwindled.

“For patients, it’s not a choice, they all have to go through this process,” Yoonje told TechNode. “After the surgery, doctors just ask the patients to wait a certain amount of time. Plastic surgery can have negative side effects, and the patients want to check if they are recovering well.”

In recent years, cosmetic surgery hospitals in China have mushroomed, along with platforms to promote these hospitals. Guangdong-based Gengmei (更美, more beautiful), a cosmetic surgery app, has more than 15 million users in major Chinese cities. Another cosmetic surgery app, Beijing-based SoYoung (新氧), received Series C funding from Tencent.

“The surgery reviews on these apps go over 100,000. Unlike Korean users, Chinese users share their plastic surgery experiences and also boast about their transformation process to others on these apps,” he said.

CareMind’s business model charges hospitals an annual RMB 2,400 for providing their solution to patients. The solution includes a checklist of actions the patients need to take every day, a chat room with the doctor so that customers can ask questions and doctors can answer them, and Care Diary, where users can take pictures of their recovery process, and note their changes. The company incentivizes the users by giving a monetary gift—hongbao (红包, red envelope)—when they share. Checking the patient’s diary, the doctor can comment and leave medical advice for the patient. Getting the database of customers is another asset for the company. They are now targeting second-tier cities in China, and plan to expand to first-tier cities.

CareMind pitched at the NEOPLY demoday on July 14th in at Chuangyebang in Shanghai. Other fresh-born startups from the demoday include Sodatransfer, a mobile money transferring service with minimal fees, and Wizpace, a Pinterest-like job searching platform for designers. INI Studio, a children’s educational video creator, posted 35 videos on iQiyi and Youku and got 1.3 million views in total, with its highest view of 300,000.

Chinese customers shelled out more than JPY 1 trillion on Japanese merchandise during 2016 via cross-border e-commerce platforms, and Tokyo-based marketing research company Fuji Keizai estimates that the number is projected to more than double in 2019 to JPY 2.1 trillion.

One of the fortunate beneficiaries of this phenomenon is Japan’s largest online shopping mall Rakuten Ichiba. Their B2B2C e-commerce platform global and internet services company Rakuten—which also operates the popular cross-border site known as Rakuten Global Market—saw sales triple in 2017 compared to the same period in 2016.

The transaction amount in Rakuten Ichiba’s flagship stores hosted by JD.com and Netease Kaola has grown by nearly 20-30 times compared to 2016. Rakuten Ichiba has been the primary platform for cross-border sales and accounted for more than half of all international sales transacted through these various e-commerce platforms.

“Our flagship stores hosted by our e-commerce partners in China do not directly compete with each other. There are so many exciting opportunities available to further grow Rakuten Ichiba’s cross-border trade and we’re working very hard for our Japanese merchant partners offering high-quality Japanese products to international shoppers, to make this happen,” Mitch Takahashi, the Senior Manager of Cross Border Trading Section, EC Company at Rakuten told TechNode.

Chinese e-commerce players also picked up on the growing customer demand for cross-border purchase. JD.com launched its cross-border e-commerce platform JD Worldwide (京东全球购), and Chinese gaming company NetEase started Kaola (网易考拉), their cross-border platform, in early 2015. Rakuten Ichiba was quick to open its official flagship store on JD Worldwide during the same year, followed by its official flagship store on Netease Kaola in 2016.

Netease Kaola is not on the list of top 10 e-commerce apps in China, but Kaola it is now offering extensive brands from Australia and Japan on its platform. Kaola’s transaction volume from Japan is ranked first, followed by the US, Germany, South Korea, and Australia.

“We have a strong customer demographic synergy with both Netease Kaola and JD,” Mitch told TechNode. “Although our most active shopping customers are among tech and social media savvy younger females, we also have tremendous success with targeted products and promotion campaigns for the adult males and their specific spending habits.”

Cross-border purchase is ubiquitous

“Now cross-border is becoming so normal. In 2014, only a few Chinese consumers were willing to make a cross-border purchase. JD Worldwide didn’t exist and Rakuten Global Market was the only place to enjoy cross-border shopping from Japan at that time,” Mitch said.

While Rakuten Ichiba carries a very wide selection of Japanese products, the official flagship stores on JD and Netease Kaola only sell some of these products. Mitch also mentioned Chinese shoppers are quick to follow the changing fashion trends of Japan.

“Chinese shoppers are very smart. These days, they know which products and fashions from Japan are popular and trendy, and are very eager to follow these trends,” Mitch remarked. “Change is happening so much faster in e-commerce. More people are now comfortable shopping online, not only in China but also around the world. They are enthusiastic and open to buy trendy new Japanese products from safe and secure online e-commerce platforms, such as JD, Kaola, and Rakuten Global Market.”

Learning from Rakuten’s expansion in China

Rather than entering the Chinese market full bore, Rakuten Ichiba wanted to take a gradual approach. They initiated its cross-border business e-commerce platform in 2008 in four languages including simplified Chinese.

Second, they allowed Chinese third-party payment options. In 2014, the Japanese company established a partnership with Alipay that also includes a special collaboration enabling Alipay customers to qualify for special discounts on their purchases.

Third, with a mission to deliver the best of Japanese products to Chinese online shoppers, Rakuten Ichiba opened an office in Shanghai in 2015 to support Rakuten’s flagship stores on a partner e-commerce platform. Rakuten Ichiba’s operation is still Tokyo-based, said Mitch. Customer service calls from China are handled partly in China, and partly in Japan.

Channel, product, and brand

Rakuten Global Market is now shipping its products to about 200 countries, with its highest sale coming from China, Hong Kong, US, Taiwan, and South Korea. Mitch says that there were three important things for Rakuten that helped China’s expansion: channel, product, and brand.

“Channel is where customers get to see the product. You don’t want to compete with strong local players who know the market and understand the consumer,” Mitch said. “Collaboration with JD.com and Kaola is doing extremely well. We’ll now expand our partnership to local media and content companies to increase the visibility of our channels.”

Second, the product is a differentiator for this Japanese player. Rakuten Ichiba in Japan is very selective to the brands that want to join their e-commerce site. They check the brand’s product quality, and only those passing the stringent merchant standards can open their online stores on Rakuten Ichiba. They not only have global brands but also original brands with better price and higher quality. Over 44,000 merchants in Rakuten Ichiba Japan have received a certificate from Rakuten.

“It’s somewhere between Taobao’s marketplace model and JD’s direct sales model,” Mitch noted. “The biggest difference from Taobao is that these online stores on Rakuten are not just owned by individuals, some are big enterprises with offline retail stores, and for online purchase, they work with Rakuten.“

Both for Japan and cross-border business operations, each brand has access to a warehouse that offers shipping and delivery logistics to consumers in China. Rakuten Ichiba operates a dedicated merchant product and sales management tool called Rakuten Merchant Server (RMS) that helps merchants with product inventory, warehousing, shipping, customer support, and product promotion management.

Many online stores at Rakuten Ichiba offer same-day delivery in major metropolises and next-day delivery to outside of Japan’s major cities. As for cross-border customers, Rakuten Global Express delivers the products to Beijing and Shanghai within three days.

In China, the future of retail is already here. Alibaba Group launched its second Taobao Maker Festival on July 8th and introduced the Tao Café, an experimental cashier-less coffee shop driven by face recognition. Alibaba’s AI and data technologies have made it possible for customers to shop in this offline store without going through the time-consuming process of queuing to pay.

When a user walks to the counter and says she wants a cup of Americano, her face is scanned through the screen and deducts the coffee price from her Alipay account. Such facial recognition payment is backed by Alibaba’s artificial intelligence. Alibaba’s facial recognition payment was first shown to journalists who participated in 2016 Taobao Global Shopping day held on November 11th, Chinese Singles’ Day.

Youku

YouTube

While Tao Café runs with some clerks who prepare the food, buying goods at the Tao Café is done digitally, without the help of a human cashier. Users can grab physical goods and walk through a 1-meter long scanner to purchase the product using Alipay.

“Alibaba is a maker by itself. We would like to share the latest thinking through technology. Last year, we showed VR shopping through Buy+. This year we launched Tao Café, to introduce the new offline experience,” Chris Tung, Chief Marketing Officer of Alibaba Group said at the press conference at the festival.

“We want to bring Alibaba experience to support retail brands, to run the operation with our data capability. It’s about digitizing the footprint the digital store and optimizing the shopping experience,” Chris says.

Alibaba has been putting efforts into “new retail (新零售)” to integrate online and offline commerce. Under the plan, Alibaba has founded Hema (盒马鲜生, Hemaxiansheng) in 2015 to enable cashless checkout, and has collaborated with Bailian Group that introduced a new retail supermarket called RISO last week in Shanghai.

Chris mentioned that Alibaba has been in the online space, and they observed how they can enhance the offline shopping experience using data assets and data technology they have.

“Online experience is shown differently because we personalize the web page for customers. Offline has always been the same, and we believe offline should be more exciting. You have to integrate the data to enhance the in-store experience,” Chris says.

Alibaba has no plans to open a cafe, according to Chris. This demonstration is about showing what is possible for stores of all kinds.

“It’s rather showing retailers that they can do better when they work with us. Department stores, convenience stores are now working with Alibaba. Tao Café just shows what we can do,” he said. “I don’t know if online or offline will lead the future. We are not a retailer, but a data technology provider, and we are showing that this kind of shopping is possible now. It’s our retail partners’ job to choose what is right for them. The goal is to digitize customer’s experience, and it’s not really about an unmanned store or getting rid of people in the store. This technology is all about improving the user experience.”

The first domestic food distribution package disinfection standards were released (in Chinese) on July 11th and formally implemented on the same day. In the future, the disinfection of food distribution boxes will be inspected.

In recent years, online food delivery apps have developed rapidly, but have also caused many to question their safety and hygiene. To ensure food safety for consumers, the Chinese Cuisine Association (CCA) along with China’s delivery services Ele.me and Baidu Waimai released “Disinfection of food distribution box (package)” as association group standards, also the first national standard in such area.

The State Administration of Food and Drug Administration (SDA) is in the process of formulating the Measures for the Supervision and Administration of Online Subscriptions; some of the relevant contents are available in the draft. For example, the staff should keep personal hygiene, use safe and harmless delivery containers and keep the containers clean. The standard also has detailed provisions for how to send a meal box, and how to disinfect and monitor them.

For the frequency of disinfection, currently, Ele.me sterilizes their box once a day, according to Miao Hong, Ele.me’s senior food safety expert who also helped draft the standard.

Industry experts said that the standard and implementation will help regulate the cleaning and disinfection of distribution tools to enhance the level of food and beverage distribution network and food safety. It will also provide a basis for law enforcement inspection for the functioning departments.

The state newspaper People’s Daily criticized Tencent’s mobile game “Honour of Kings” again, publishing an opinion article headlined “Do not let online games become your whole life.” The game is now widespread among Chinese gamers, with its cumulative registered users over 200 million and over 80 million active users.

The criticism follows Tencent’s producer of the game Li Min responding to criticism of the game last week from the People’s Daily that caused Tencent’s share price to plunge.

The writer of the article on People’s Daily, Zhang Yang, cited some recent tragedies caused by addicted gamers. This June in Hangzhou, a 13-year-old student jumped out of the fourth floor, after he got into trouble with his father for playing “Honour of Kings” too long. Previously, a 17-year-old boy in Guangzhou played the game for 40 hours, leading to cerebral inflammation and a near-death experience.

“There are have been several articles around ‘Honour of Kings’ being a threat to personal property and security,” Zhang Yang wrote. “The game is a way of socialization, but if playing time is too long, it can no longer be called ‘addicted’ or ‘social’, it must be called ‘miserable’”

Zhang Yang calls for more regulations around the game, and that government and enterprises should take more responsibility.

“I hope that the government departments secure the internet, as  ‘the biggest variable,’ putting emphasis on teaching materials about building healthy network culture and coming up with more effective regulatory measures. I also hope that enterprises, based on earnest social responsibility, build strict laws, regulations and moral standards to develop better network products.” Zhang Yang said in the article.

The Internet Technology Innovation Patent Observation Report (in Chinese) shows that Tencent has maintained the biggest number of patent applications in information search, database structure and other areas of research and development. In fact, when it comes to digital information transmission, Tencent’s patents reached 6,285, far more than Baidu’s 903, and Alibaba’s 2,052.

From 2012 onwards, Tencent applied for more than 2000 patents per year, including overseas jurisdictions. Tencent focused on strengthening the US market development and put in 200 patent applications in the EU, Japan, South Korea.

Xiaomi is actively expanding its product map, including television, set-top boxes, routers, mobile charger, air purifiers, self-balancing scooters and smart home products. The report shows that Xiaomi’s patent applications have been on the rise since 2014, and even more than half of the 10 IPC (Interprocess Communication) categories showed the highest number of patent applications.

The report, jointly published by Peking University Internet Law Center and the Chinese Society for Science and Technology Law, selected China’s most active 20 high-tech Internet companies and analyzed their patent data, technological innovation activity, and patent applications. The report said that emerging internet technology has led to an increase in patent applications, and brought new business models such as social networks (WeChat Moments), fan-based product development (Xiaomi), and sharing economy models (Didi, bike rentals).

In 2016, the number of Internet and communications companies in China’s patent applications showed rapid growth. The report pointed out that the expansion of enterprise size and the number of enterprise patents is increasing in the digital age. In order to maintain the sustainable development of innovation, enterprises need to be innovative in product design, technology research & development, protect their patents, the report pointed out.

Alibaba is holding its second Taobao Maker Festival to celebrate the maker spirit of the young entrepreneurs on the Taobao Marketplace. The event, running from July 8-12, showcased 108 merchants who run their businesses on Taobao.

“14 years ago, when we started Taobao, everybody could run their own store. China is the factory of the world, with no shortage of good quality products. We started to notice the growing trend of the dominant consumers: the post-90 generation,” Chris Tung, Chief Marketing Officer of Alibaba Group said at the press conference at the festival.

Chinese millenials—dubbed “post-90s” or “post-80s” to denote their decade of birth—now make up more than half of Taobao users.

“Now the post-90 generation have started to open their Taobao stores, and have their own brands. And more than that, they are pursuing their dreams,” Tung said. “About 26% of Taobao merchants at the Taobao Maker Festival are from the post-90s generation.”

The number of merchant participants increased by 50% this year from 2016, a majority of these merchants are first-time participants and almost all are Taobao-native merchants. 

We interviewed three Taobao merchants at Taobao Maker Festival to get a better idea of what inspired them to start their own shops on Taobao. 

Blue Papa (蓝小爸, Lanxiaoba)

Running a Taobao shop selling baby clothes, Blue Papa was voted one of the top 5 Taobao shops at the Taobao festival, selected by more than 300,000 people.

Chen Shuaishuai is the post-90s father to his best model—his 3-year-old daughter. They travel around the world, and Chen takes pictures of his daughter while she plays. Before he started his Taobao shop, he was a founder of a photo-sharing startup in Beijing. Because of the bad air quality, he decided to move to Hangzhou, where he sold the company. Last July, he started this Taobao shop for his daughter.

“I saw how my wife was buying clothes for my daughter, and I thought those clothes were not so pretty and not good quality. I tried to find better ones, but I couldn’t find the right place to buy good quality clothes for the younger generation,” Chen told TechNode.

When he started, he was a level zero merchant and progressed to level 4 in just one year. A dad doing fashion Taobao mall is kind of a new concept in the market. In 6 months, they went in into top 35 Taobao shops and racked up 10 million RMB ($ 1.4 million) in sales.

“Our sales are really high. Product wise, our cost-quality ratio is really high too. We got attention because there are many post-90 generation fathers, but there aren’t that many doing cool baby wear,” Chen says. “The post-90s generation is now getting older. People born in 1990 are now 27 years old. They like to put things into action; they like doing something that nobody has done before.”

Blue Papa relies on the Taobao ecosystem’s content platforms, including live streaming (淘宝直播) and Weitao (微淘, Taobao merchant’s fan and content platform).

“We do live streaming to promote our product, and have become internet celebrities [wanghong, 网红] ourselves. Me, my wife, and my designer are doing Taobao live streaming. One time, we attracted 120,000 viewers in one go!” he said. “We thought of running a WeChat Public Account. But instead, we focused on Taobao, and I only do WeChat Moments, now posting our activities.”

Plum Blossom Oil (梅花油盐水鸭)

In 2012 Chen Ji opened his Taobao shop. Born in Nanjing, he saw that when people visit Nanjing, there weren’t many good souvenirs available. Nanjing is famous for duck, he explains, and since not everyone eats, or likes duck, he decided to make duck stuffed toys.

Chen Ji says the process was not difficult. He found the designers and the factory, then made prototypes, then put them up on Taobao. He uses WeChat and Weibo as well as offline bazaars and does marketing to promote the products. He didn’t hire wanghong to sell his product, but some people bought his product and then sent it to Chinese celebrities who ended up tagging it on Weibo, which helped increase the salesof his Taobao shop.

“Our traffic is lower than that of clothes shops because we sell souvenirs. The Maker Festival can give us traffic. They will give us more push on traffic and customers to our Taobao shop,” Chen said.

Chen Ji then showed us app Qianniu (千牛), which provides visitor stats for Taobao shop owners. After his shop was selected as one of 108 Taobao merchants to participate in the Taobao Maker Festival, traffic and the number of visitors soared. When asked why he hasn’t opened a WeChat service account, which is another way to open an e-commerce store, he said Taobao is more mature.

“Taobao has been here for a longer time as a platform. For channels, we thought not many people might buy our product on WeChat. Whether you do a Taobao shop or WeChat service account and sell your product, you have to find a logistics partner. There is no difference there. We wanted to focus on the bigger market,” Chen Ji said.

“There is no cost to open a WeChat service account, but you have to deal with Weidian (微店), a third player to open your e-commerce store on WeChat,” he said, “If you see the famous WeChat service account like Yitiao, they built their e-commerce channel with HTML5 themselves rather than using Weidian.”

Seeed Studio

Seeed Studio products on Taobao are hardware modules that the customers can buy and assemble. For Seeed, Taobao makes up only 5% of their sales, and their website Seeedstudio.com brings another 25%. Kickstarter is also one of their channels for hardware sales.

“Maker culture in China is still growing. In the US and Europe, the market is bigger. Now there are a couple of makers’ fairs held in China,” Shuang Cheng, online product director at Seeed told TechNode. “’Maker’ is a broad definition. Makers include entrepreneurs, artists, craft workers, and hardware makers. We want designers to get interested in making hardware, not just making furniture. Making hardware had a higher entry threshold in the past, now it’s lower and we help them make anything they want to build.”

There are products that Seeed started by themselves, but for some products, the idea comes from their clients; Seeed helps them throughout the creation process from building the prototype, to production, and promotion.

The original article appeared in Chinese on our sister site TechNode Chinese.

China’s smartphone manufacturer Xiaomi released its latest self-balancing scooter, the Ninebot Plus with an RMB 3499 ($514) price tag on June 28th, two years after launching the Ninebot Mini. For the first time, Ninebot is using radio positioning technology for consumer products, with new remote controls that can be used to enable scooter to follow the user and unlocking. In addition, the user can also fit Xiaomi PTZ camera onto the scooter.

For those of you who not familiar with Ninebot, here’s a refresher: In the spring of 2015, Ninebot officially acquired the self-balancing scooter company Segway, including the U.S. company’s self-balancing vehicle patent and 17 years of research and development experience. This was possible due to its Ninebot’s backer Xiaomi.

Technode met with Wang Ye, co-founder and president of Ninebot at TechCrunch Shenzhen 2017. In the interview, he gave background about the new product and talked about the future vision of the company.

Wang Ye did not disclose any information about Ninebot Plus at that time, but he did admit that the company is cooperating with Intel on artificial intelligence. He believes that AI is the breakthrough point for every technology company seeking innovation.

How self-balancing robots can help our daily lives

He gave an example how self-balancing robots can help Meituan’s food delivery process.

“A customer places ten orders at 12 o’clock at one restaurant on the fifth floor of Wanda Mall. He would normally have to come up to the 5th floor, and line up for 14 minutes. Imagine there are 10 robots that can queue instead of him, and the robots, each holding one meal, will automatically navigate to the door of the mall to hand over the meals to the delivery person. There’s potential for such efficiency growth,” Wang Ye says.

Similarly, they can serve as security robots instead of closed-circuit cameras.

“In many venues, there are security guards walking around, along with moving security cameras. But these security cameras can be replaced by a high-frequency camera fitted to a self-balancing scooter and the security robots can transmit the video to the control room via Wi-Fi. Then maybe 100 security cameras in a park can be replaced with at least 50 self-balancing robots,” he says.

It is not difficult to see that B2B could be the future for such self-balancing robots.

Reducing human labor and cutting costs

Wang Ye and his partner mentioned that they also want these self-balancing scooters to spread among ordinary people, and be regarded as affordable toys.

“We have a novice tutorial, a basic tutorial like an interactive game on a mobile phone app. The new version will have a safe driving tutorial, and the user can use this to assess whether their driving habits are safe and skilled enough,” Wang Ye explained.

“It’s not only about user experience. It comes down to reducing human labor involved, including relying on online sales channels and completely cutting the sales staff and store staff labor costs,” he says.

Ninebot aims to use machines rather than human labor to improve the degree of automation.

“For some tasks that require huge risks or strongly depend on human labor, we are using machines to complete them. For example, when we deploy sensors, we use machines in order to reduce the rate of human operation,” he says.

The second point is to cut costs through technological innovation. Wang Ye said the team went through the algorithm to eliminate a few of the essential sensors, which helped to control the cost greatly.

“Our team’s two experts published two theses on how to use the model to manage the primary resistance to replace the current sensor. We worked on an algorithm so that it can be automatically calibrated as a sensor,” he said. “This way we saved hundreds of RMB on each unit by getting rid of the sensors. Fewer parts still manage to perform the same function, and quality-price ratio naturally goes up.”

Sharing self-balancing scooters? Maybe not

On the topic of sharing economy, largely influenced by sharing bikes in China, Wang Ye and his company did not show much interest.

“I think the sharing economy of self-balancing scooter may be a false demand. Self-balancing scooters have been sales-oriented in China, and the pay-per-use operation has been used abroad,” Wang Ye said.

Ninebot is reportedly cooperating with foreign hotels and resorts on the deployment of 1,800 parking spaces, more than 10,000 Segways and its own brand of self-balancing scooters. The main profit comes from collecting royalties.

“We are also planning to do an app that connects with a unified QR code on top of Ninebot Plus. For example, users can pay RMB 30-50 an hour to ride the Ninebot,” he said. “The price can be set by the business that runs it.”

Bike rental platform ofo announced the completion of more than $700 million series E financing on July 6th. The current round of financing was jointly led by Chinese eCommerce giant Alibaba, Hony Capital and CITICPE, followed by existing investors Didi Chuxing and DST, with China eCapital as the financial adviser of the current financing.

Alibaba investment in ofo is quite worthy of attention. Prior to the new funding round, ofo had already struck a strategic cooperation deal on April 22nd with Sesame Credit, the social credit scoring system developed by Ant Financial, allowing Shanghai ofo users with a Sesame Credit score of 650 or higher to register on the app without making the RMB 99 deposit. This is considered an important sign of Alibaba’s entry into ofo.

Ofo’s founder and CEO Dai Wei said: “Ofo is committed to providing users with convenient, efficient, green and healthy travel services to the world. In the future, we will further promote the user experience upgrade, accelerate the strategic layout at home and abroad.”

Alibaba as the leading investor in the current round was very optimistic about the future development prospects of ofo. Alibaba Group Executive Vice Chairman Cai Chongxin said: “Ofo redefines the short-distance travel so that more people can join the low-carbon life, and deliver a real positive value to the community. We are delighted to be working with ofo to unlock the industry’s greater potential.”

China is heaven for mobile payments. The 84% of Chinese respondents said that they used some form of digital payment systems to pay for online purchases in the past six months, according to Nielsen’s “Global Connected Commerce” report.

High mobile payment penetration in China also means that it is a market ripe to be taken advantage of. One of the main security methods on most phones is the fingerprint. It is used for everything from unlocking your phone to confirming purchases. However, it is not foolproof and can be “spoofed,” or faked, if criminals are willing to put in the time and effort to create fake fingerprints.

Leading mobile manufacturers Huawei, Google, OPPO, VIVO, Xiaomi, Lenovo, Sony, ZTE, Coolpad and HTC are using Precise Biometrics’ software to secure mobile payments from fraud and identity theft.

60 percent of all transactions are expected to be performed via biometric authentication by 2020, primarily via fingerprint sensors in mobile devices, according to the Biometrics Research Group. In fact, the Redmi Note 4X, released this February, and the OPPO R11 released this June, both have integrated their fingerprint sensor.

“Of course, there are a lot of different methods to unlock your phone. Scanning your fingerprint is the most convenient form. It will take longer if you want to do an iris or face. For its convenience, scanning your fingerprint is used for the low-risk activities like unlocking the phone,” Mark Cornett, Senior Sales Director of North America at Precise Biometrics answered TechNode’s question at the Press conference.

The Swedish company launched their new security suite that offers industry leading fingerprint matching software with spoof and liveness detection, as well as standalone anti-spoof products and services. Liveness detection can tell whether a real finger is being used.

Their solutions and services for efficient spoof and liveness detection is designed to protect fingerprint sensors which are vulnerable to spoofing via fake fingers. The main feature in the security suite is the integration of spoof and liveness detection capability into Precise Biometrics’ fingerprint software for mobile devices, Precise BioMatchTM Mobile.

“[Making a fake finger to hack your phone] is not difficult to do, and the risk is there. We will be able to bring a larger sensor to the mobile device market so that we can prevent mobile device hacking,” Mark said.

Precise Biometrics showed a video how to perform a spoof attack, to demonstrate that the risk is real. A fingerprint impression is left on the phone, and a latent print is captured using latent power and tape. Then the image is scanned and uploaded to the computer. Using a laser printer, the fingerprint is then scanned and wood glue is applied on top of it. When the wood glue is dry, then you can use this fake fingerprint to unlock the phone.

The anti-spoof solution is software-based, which makes it easy to integrate without any need for additional hardware. Precise BioMatch Mobile with spoof and liveness detection capabilities will be available by the end of Q3.

“By adding the other features in our security suite, we are offering our customers a one-of-a-kind toolbox for secure fingerprint technology, enabling trustworthy mobile payments,” said Håkan Persson, CEO of Precise Biometrics said in the press release.

Alibaba Cloud today announced that it has partnered with the China Hitachi Group, the China subsidiary of the Japanese conglomerate, to provide cloud computing services in China.

“This announcement with Hitachi is important for two reasons,” said Ziji Song, Head of Alibaba Cloud North Asia, in an exclusive phone interview with TechNode.

“First, Alibaba Cloud continues to look for partnerships with large multinationals. The previous partners were Accenture and SAP, IT vendors. But now we signed the partnership with a traditional manufacturing company, Hitachi China to enhance our brand,” he said. “Second, it shows our ability to serve big enterprise customers rather than only SMEs and startups. Hitachi’s customers are mainly enterprise customers.”

Traditional enterprises flocking to cloud computing

Many compare Alibaba Cloud with Amazon’s AWS since Alibaba and Amazon are the two biggest e-commerce companies in the world. “We are not competing with other cloud players like AWS. We each have our own strength and the market is large enough for us,” Ziji said.

Ziji rather focused on their new category of clients: Traditional enterprises that need this new technology. “The trend is that cloud companies start to provide their service to SMEs and startups, but after building the momentum, they then get into the traditional enterprise to enhance their capability,” he said.

“November 11th global shopping day event last year shows the big success of Alibaba Cloud’s big data-based recommendation engine and data visualization,” Ziji said.

Alibaba Cloud has empowered enterprises in the manufacturing industry to extend their business expertise by building specialized industrial big data solutions and platforms. For example, in 2016, Alibaba Cloud has enabled leading Chinese manufacturer Xuzhou Construction Machinery Group (XCMG) to establish a cloud-based big data platform.

Today, Alibaba Cloud has data centers in 14 locations worldwide, including Japan, mainland China, Hong Kong, Singapore, Australia, the Middle East, Europe, and the U.S. (East and West Coasts). It has also announced plans to establish three new data centers in Malaysia, India, and Indonesia.

The founder and CEO of the Ofo Dai Wei said that the main source of revenue for Ofo will be the user’s riding costs at the 2017 summer Davos Forum site held on June 28th. (Chinese source)

“We now see many people in the street using Ofo, and we are confident that we can make money,” Dai Wei says. The main source of revenue is the user’s riding costs and other profit models are icing on the cake. He predicts that Ofo will reach breakeven this year and will be profitable in 2018.

Just the day before the summer Davos Forum, photo of  Dai Wei and Mobike’s co-founder and president Hu Weiwei spread out in the social platforms quickly, causing rumors that “the two sides are about to merge.”

“I think there is no basis for the merger, do not need to merge, the industry is not about dominating a market, rather co-exist in the market together.” Dai Wei says. He believes that for the new businesses, it will be a better strategy for them to focus on localizing their operations.

The purpose of the deposit is to establish your own credit system

When Ofo announced that all the Ofo bikes will change to smart locks, they also said that the new registered user deposit will be increased from the previous 99 RMB to 199 RMB.

Through Sesame credit (芝麻信用), a social credit scoring system developed by Ant Financial, Ofo provided deposit service for some cities, such as Shanghai, Guangzhou and Hangzhou. By upgrading to the smart lock and the increasing the deposit at the same time, Ofo made sure that they build trust and give an image that they are financially healthy.

“In the business model of Ofo, the deposit didn’t have any meaning. In the long-term, the deposit will be entirely free.” Dai Wei said. Raising the deposit is mainly to deal with the bad credit users, to prevent and reduce their damage to the Ofo bikes.

Dai Wei said that the deposit of a 199 RMB for a user can later be transferred into 99 RMB if the user’s long-term credit is high. If their credit is good enough, they can even cancel the deposit through the Sesame credit.

“Ofo want different credit-level users to correspond to different deposits to build a more scientific and intelligent credit system.” Dai Wei says. “In the future, for those who had a low credit rating, Ofo will plan for a 299 RMB deposit.”

Third or four-tier cities will drive the rapid growth of shared bicycles

Ofo was born on campus, and a year later Ofo began to expand into the cities like Beijing, Shanghai, Guangzhou and other first-tier cities. Ofo now covers 150 cities in China, and Dai Wei said that Ofo will basically cover all the third tier cities from the end of 2017 to the beginning of 2018; then Ofo will cover the city above the county level by June 2018, .

“There are 4-5 times space we can grow in the next 12 months. First-tier cities tend to saturate, and are only a few numbers of cities.” While the third or fourth-tier city based has bigger number of cities, the future of this market is see explosive growth, Da Wei says.

The focus of overseas markets this year is mainly in Southeast Asia and Western Europe

At present, Ofo operates in four countries: United States, the United Kingdom, Singapore and Kazakhstan and has offices in more than 20 countries, with more than 50 full-time employees, responsible for local team formation, management and maintenance of local supply chains.

The reason why overseas markets are relatively difficult to expand is because the sharing of bicycles need to go through the local government’s permit, and the bicycle product specifications are not exactly the same for each country. For example, in the UK, safety lights need to be installed to bicycles.

Ofo will focus on its entry to Western Europe and Southeast Asia in the second half of 2017. At present, Ofo is in communication with many countries to carry out business permits, including: Major European countries like Germany, France, the Netherlands and Spain, Southeast Asian countries like Malaysia, Indonesia, Thailand and Myanmar.

China Mobile (中国移动), China’s largest mobile network operator, released a report today ranking China’s mobile phone brand (in Chinese). According to the report, Chinese brands have caught up with international brands in some areas.

China Mobile surveyed 42 million users from 15 provinces and used 18 network indicators for their analysis and evaluation. They also randomly surveyed some of China’s 60 million active mobile phone over the phone.

According to the report, quality improvement of Xiaomi, Meizu, Smartisan is the most obvious, while customer satisfaction for OPPO and Vivo mobile phone was the best.

Smartphone manufacturers are now trying to establish their brand image and enhance communication performance. Apple, Huawei, Samsung have shown good antenna performance and network compatibility. OPPO and Vivo meanwhile made great progress in network compatibility.

The report says that smartphone manufacturers are increasingly concerned about personalized user experience. For example, Samsung C series was optimized for the local users, showing good performance on system usability while the selfie function of the Meitu phone also achieved high customer satisfaction.

Evaluating the 22 brands’ 57 mobile phone models, Samsung and Huawei’s Honor brand had the top score.

At the Summer Davos Forum in Dalian, Hu Weiwei, co-founder and president of Mobike, took to the stage (in Chinese), dispelling rumors of a merger with ofo and explaining that they are not yet seeking profitability.

Consolidation in the bike rental industry

Hu Weiwei said that the biggest beneficiaries of the Didi and Uber war were mobile payment companies since people had to use mobile payments to call a car. She remarked that the bike rental industry is different from the ride-hailing industry; Didi connects the drivers with the passengers while Mobike connects the object with the people.

“This business is really about density and operational efficiency. If we and the other bike sharing companies do not match in this respect, it doesn’t make sense,” she said.

Expansion over profits

Hu Weiwei said: “If we want to make money now, we can, but making money is not our first goal.”

Hu Weiwei then talked about how bike rental is actually the first step to develop their IoT platform.”Profit is not the most important goal for us for now. We are focused on market expansion,” she remarked.

Global ambitions

Hu Weiwei said that Mobike is now prepared to expand to Japan, the UK, and the U.S., and is now in cooperation with the U.S. company, Dow Chemical to make better tires for Mobike. Launched in April last year, Mobike has entered the 130 cities in the world in 14 months, with 20 million people riding its bikes.

Dealing with local governments

For Mobike to enter many cities, many challenges are inevitable, including negotiating with the local governments. However, Hu emphasized that they are not aggressive when talking with local governments.

“Generally a local government that has self-built public bicycle system does not want to accept us, and local government with no public bicycle is still very willing to accept us,” Hu said.

Volkswagen, Toyota, Alibaba YunOS and BYD displayed their connected cars at the World Mobile Conference Shanghai on June 28, 2017, showing the audience how their cars can integrate with our smarter world.

The global connected car market is expected to garner $141 billion by 2020. Senior Vice President of Alibaba Cloud, Hu Xiaoming, said they expect to put 700,000 connected cars powered by YunOS on China’s streets in 2017.

Comparing the apps that Volkswagen, Toyota, Alibaba YunOS and BYD are using for their connected cars revealed that all companies except for Alibaba YunOS had Ximalya FM integrated. Volkswagen and Toyota were using QQMusic, while Alibaba YunOS, of course, had an array of apps from Alibaba’s ecosystem – Alipay, Xiami, AliTravel, and Taobao.

“The key functions or applications that should be in the car include navigation and FM radio. The AMap (高德地图) and Ximalaya FM (喜马拉雅) applications are currently embedded in third-party cars. We use them because they are the most popular app in each category,” Loic Lee, senior product planning manager at Huawei told TechNode at Volkswagen’s booth.

So are these apps really the most popular app in their category? According to 2016 China App Rankings released by Cheetah Lab, the answer is yes. Ximalaya FM ranked first among China’s audio content apps with three times higher active penetration rate than No. 2 on the list. QQ Music ranked second on the music app ranking, following Kugou; both apps are owned by Tencent. In the navigation category, Amap ranked second, following Baidu Maps. Amap, however, has a higher number of weekly app openings.

Volkswagen – Open to many standards

Volkswagen’s newest SUV Tiguan R-line can connect with Huawei P10, iPhone, and Samsung phones. For example, an owner of Huawei P10 can connect to the car’s cloud via a USB cable. The car’s head unit display and the phone keep the same interface and experience. To control the car remotely from their phone and to call someone from the car’s head unit, users need to have a SIM card in the phone.

German car maker Volkswagen’s connected cars work with several device interoperability standards that offer integration between a smartphone and a car’s infotainment system, including Baidu Carlife, Apple Carplay, Android Auto and Mirror Link. In China, Volkswagen supports connection with Huawei’s P10, P10 Puls,  Huawei Mate 9, and Mate 9 Pro.

“Samsung also supports Mirror link, but Huawei, as a Chinese company, has the power to ask third-party apps to work with them. That way, we can provide more applications,” Loic Lee, senior product planning manager at Huawei told TechNode.

Toyota + SmartDeviceLink

Originally created by Ford, SmartDeviceLink is an open source platform that connects smart devices with a car’s on-board system. Toyota has included five apps that come with the car, including QQMusic, Ximalaya FM, Zuimei Tianqi (最美天气 literally, “the most beautiful weather” in English), Japan Travel Information app made by KDDI, and a four-dimensional navigation app. Toyota says it plans to launch SDL-powered connected cars in 2018.

Toyota and Ford launched the SmartDeviceLink Consortium earlier this year to help car manufacturers and app developers create integrated driving experiences. Members of the SDL Consortium also include Subaru, Mazda, and Suzuki.

BYD – A clean ride

BYD’s Qin (秦, referring to Qin Shihuang, China’s first emperor) comes preloaded with BYD’s own app stores, supporting connection with any Android or Apple phone. The Qin also comes with features made specially for the Chinese market: a Dual Mode that allows drivers to switch between full-electric and hybrid as well as an air filtration mechanism.

“BYD’s Qin model has an app that monitors the PM 2.5 levels inside and outside the car. When PM 2.5 reaches a certain level, the car can purify the air in 5 minutes,” said a BYD staff member at the exhibition.

Alibaba’s YunOS Auto

On March 2017, Alibaba Group’s YunOS released YunOS Carware intelligent vehicle operating system. The software supports applications for the car itself as well as a HUD (head-up display), driving camera, and an intelligent rearview mirror. Cloud-based data services enable YunOS Carware to anticipate user needs and recommend appropriate music, radio programs, or car services.

On top of that, YunOS Auto’s engine is able to process and analyze data about how people drive. Since August last year, the connected car gathered 11.7 billion data points on driving behavior. The data will be used to encourage drivers to change their driving habits, saving fuel and making cities smarter.

Currently, 23 mobile phones are using the YunOS cloud system, including DOOV, SOP, China Mobile, Xiaolajiao (小辣椒) and Meizu.

In July 2016, Alibaba’s joint SAIC officially launched the mass-produced connected car Roewe RX5. Chinese automaker SAIC (上汽) has several connected cars in the market with YunOS Auto integrated, including Roewe RX5 (荣威RX5), Roewe eRX5, Roewe ERX5 pure electric version, Roewe i6, Roewe ei6, 名爵ZS,  andChase D90 (大通D90). The top selling model is Roewe RX5’s with orders exceeding 100,000 in March and average monthly sales of over 20,000.

How can a hardware startup with good technology and enough money still fail to deliver? According to research conducted by the Wharton School of the University of Pennsylvania in March 2015, the broad failure rate of technology projects on Kickstarter—meaning at least one backer considered the project a failure—was over 10%. Chad Xu, the co-founder and managing director of Shenzhen Valley Ventures (SVV) argues that the majority of hardware delivery fails because it is not designed properly.

Importance of inner design

“It’s not the factory, it’s the design that determines whether the production is feasible or not,” Chad says. “Outsiders, like investors and customers don’t understand why hardware startups can’t deliver the product. But inside people like us, we know if a product is properly designed on the inside or not. If it’s not properly designed inside, even Foxconn can not deliver it.”

If the hardware’s design is not done properly, it will be difficult for a factory and its suppliers to manage the supply chain and production. This can affect the entire production from parts and components subcontractors to the factory.

“When Smartisan’s founder built its phone, he saw how Foxconn was helping Apple to manufacture and that the delivery was very smooth. He thought if Smartisan uses Foxconn, then his smartphone will be in a good shape,” Chad explains.

However, this thinking led to a failed launch. They were using the same factory as Apple, yet they couldn’t deliver the product.

“The reason was the design. When we say design, this can be divided into mechanical housing and the electronic parts. Apple has a good design for both, which allowed a smooth production,” Chad remarks. “The core value is created by the software and algorithm. The hardware serves as a carrier.”

What China needs

Spending 25 years in the hardware industry, Chad Xu co-founded Zowee technology in 2004, to help in R&D, manufacturing and sales of 3C products (communication, computer, and consumer electronics). The company was listed on the Shenzhen Stock Exchange in 2010. Chad started Shenzhen Valley Ventures in March 2015 to invest in hardware startups, but he wanted to do more than that. He wanted to help them deliver their products to the market.

The hardware companies that SVV has invested in include Waterbit, a US company providing soil monitoring solutions for farmers to improve farming efficiency, Arraiy, which creates complete computer vision for the film industry, and GeoEar, which is developing an earthquake forecasting algorithm that can predict earthquakes 7-15 days before they happen. According to SVV, GeoEar’s system is now being deployed by the State Seismological Bureau of China. Still, many companies that SVV invested in hail from outside of China.

“I’d say that for the foreseeable future, the US will be in the lead in fundamental research,” Chad says. “China is still putting effort into catching up, especially in basic science research. The country is still falling behind in basic math, chemistry, semiconductors, new materials, and physics.”

Chad, however, remarks that China is taking the lead in some parts, such as mobile payment technology and application.

“The good part is that China has a huge market, and the market itself is creating the demand. And it has the most comprehensive hardware ecosystem in the world,” Chad says. “Comparison between the countries is not necessary, now that all the fundamental research and other resources are shared and everything is becoming a global asset and we have access to it. What matters is how to take advantage of these research achievements and resources.”

How to deliver your product

“We are investors, but fundamentally, we want to help them deliver their product 100% to their customers,” Chad says.

In order to help startups with their expertise, SVV invested millions of dollars in developing and testing machines that a startup may not be able to afford. These machines allow startups to test their hardware’s ability to endure high and low temperatures, humidity, EMC (electromagnetic compatibility), and EMI (electromagnetic interference).

“Startups need these testing machines. They normally have to make a reservation at third-party institutions to test their hardware. It’s expensive and takes a long time. If you fail one test, you still have to come back and go through the test again,” Chad says.

The test lab is only available for portfolio companies that SVV has invested in.

“We don’t want to be just the money guy, we also want to be the design guy. We have mechanical engineering, electronics, and firmware people in-house to help startups design and deliver the product on time,” Chad says.

SVV is also building up hardware engineering and commercialization platforms for startups, VCs firms, and schools. They are now investing in AI and IoT, which Chad believes will improve their core business value and efficiency.

China takes about one fourth of the global game market, with its 600 million gamers in China generating $24.6 billion according to Bloomberg. China’s digital advertising market will reach over $50 billion this year. Now a Chinese company Tuia is betting on these two, huge gaming and advertising markets, to integrate a game format advertisement into mobile phone applications. The Hangzhou-based mobile advertising company is now the advertising platform for major internet companies including Baidu Waimai, Ping’an Insurance, and vip.com.

Tuia (推啊) is an interactive advertising platform, comprising two parts: an advertising platform app and a platform for advertisers. Tuia announced today their interactive performance-based advertising (互动式效果广告) as a new way to engage and monetize users.

Tuia’s interactive performance-based advertising allows its users to play the game and get coupons. When a user opens an application on the phone, a game pops up on the screen. After playing the game for a few seconds, the user can get RMB 100 coupon for an e-commerce platform.

“Such highly interactive advertising engages the users with a fun game so that they won’t even feel that they are exposed to an ad. Users win the coupon by their own efforts, so they will be more likely to spend it,” said Li Shanhong, president of Tuia.

The company says the click-through rates (CTR) of Tuia’s interactive advertising is around 20 to 40 percent, with the highest of up to 49 percent. According to the data from Celtra, the average CTR generated on the mobile phone in the United States in 2013 was 1.37% in 2013. Data from 2015 suggests that the CTR for native ads was only 0.38%.

“For application developers, interactive advertising monetizes users in a way that does not compromise the users’ experience with the application. Moreover, it activates the users and therefore increases the number of DAU (daily active users),” Li told TechNode. “For the advertisers, the cost of the interactive advertising is lower compared to conventional advertising. It captures high-quality users with a strong desire to actually buy the service or commodities being advertised.”

China’s interactive advertising

“Interactive advertising is unique in China because the mobile internet is developing fast in the fields of mobile games, online financing, car and bike sharing, and live streaming,” Li Shanhong, president of Tuia said in the press release.

Intense competition in China’s advertising market has prompted mobile service providers to offer all sorts of discounts to attract users. Chinese users are accustomed to getting coupons whenever they use the applications on the phone. Tuia also uses these coupons as a reward to get their users to play the games.

“Advertisements in applications are mostly information-based advertising at the moment, where information is simply showing up on the screen. It is an inefficient method to make conversions, but it’s easy to increase the CTR in such advertising,” Li says.

“By the end of 2017, the interactive performance-based advertising is expected to make Tuia the third largest advertising platform after Baidu, Alibaba, and Tencent, the top three Internet giants in China,” said Li.

FaceOS (人人智能), a Chinese face recognition system provider for enterprise customers, shared its vision of front-end intelligence at the side-stage event held at TechCrunch Shenzhen 2017.

Front-end intelligence is essential for large-scale application-oriented internet-of-things (IoT), enabling technology for a plethora of applications touching various aspects of our lives, such as health care, wearables, surveillance, home automation, smart manufacturing, and intelligent automotive systems.

As traditional equipment will go through this funnel, developing varied front-end intelligence-smart products will be a popular trend. The issue is how to change and develop this traditional equipment and make creative products by using artificial intelligence.

Starting on top of its embedded, modularized and customized intelligent chips, FaceOS offer products for modularized intelligent chips and facial recognition solution.

“Normal face recognition can be cheated; it is easy to cheat to the machine with photos, and now imitating the human face is not strenuous,” Wang Haizeng, founder and CEO of Zhuhai FaceOS Technology Co. Ltd says.

The core competitiveness of FaceOS lies in its deep learning algorithm, front-end chip acceleration, product system engineering capability and industry application of artificial intelligence. FaceOS has been officially recognized by ARM and provides part of their algorithm for the U.K. company.

“Artificial intelligence is the future of two-way interaction. The core essence of front-end intelligence is that to let the people feel that it is around us, and it is true intelligence to help our daily lives,” Wang explains.

FaceOS has designed their sensor lights design to allow more effective face recognition and a natural interactive environment, and Mr. Wang believes that this will greatly help the public building’s security by stranger’s face recognition.

“95% of human activities is done inside a building. Using multipoint deployment of building space will achieve high-precision personnel control,” he adds.

Face recognition can improve public security

Completely autonomous, the face recognition and identification will start from the door to find out whether someone belongs there. The camera will be embedded in the venue itself so inhabitants aren’t even aware of their existence.

FaceOS’s management team hails from the senior executive ranks of leading telecommunication firms and top scientific research institutions; their core members have over 15 years of experience in R&D for mass-production, based on practical engineering.

With a goal to standardize the application of high precision and modularized artificial intelligence products, the company plans to expand its service to traffic. When a car passes through, the camera will check driver’s documents automatically.

“In China, there is both the need for serving the public, but also need for more regulation enforcement, and I believe face recognition is the best way to achieve these two. There are various areas that this technology can be applied to,” Wang says. “I hope that this will help change human’s lives, reduce the complexity of the process, rather than bring more problems. This should be the future development trend of artificial intelligence.”

For the development of the manufacturers, FaceOS set up a development partner program. By working with their partners, they are looking to put it into application and development.

“Artificial intelligence now requires more partners to collaborate and develop together,” Wang says. “Front-end intelligence can change the future, and the question is how to get there, and with whom we get there.”

Shenzhen, the Silicon Valley in China, is becoming a must-destination for the foreign hardware startups to start their business. On the other hand, Chinese startups are starting from Shenzhen and expanding to global markets, such as educational robot kit Makeblock, drone maker DJI, and smartphone manufacturer Huawei.

In the panel “Startup in Shenzhen”, Benjamin Joffe, Partner at  HAX, the world’s most active early stage investor in hardware with over 200 startups, and Chad Xu, the managing director of Shenzhen Valley Ventures (SVV) discussed how Chinese startups can go global, and global startups can enter the Chinese market.

Eva Yoo: How do you position Shenzhen in the global hardware ecosystem?

Benjamin Joffe: I worked in China, Japan, Korea and Silicon Valley and know that each ecosystem has its own advantages and disadvantages. For example, Silicon Valley also has a lot of problems. Firstly, everything is expensive, it’s hard to hire and retain people, also there is no supply chain and little expertise about manufacturing. In the case of Shenzhen, the supply chain is amazing, but it might not be the place to find engineers, investors or customers. To find everything – engineers, manufacturing, investment, customers – you need to think very globally.

Eva Yoo: Many foreign hardware companies want to enter China. How do you advise them?

Chad Xu: First of all, you need to see if your product is innovative in technology. Secondly, you should see if you can put it into practice. Another point is that you need to deliver your product timely in China. If you are not moving fast enough to deliver, the production concept will eventually be copied by someone else.

Benjamin Joffe: For Chinese or non-Chinese enterprises, you have to consider the market fit. As an early stage foreign company, it is generally a distraction to try to enter China, unless you see a great fit, and if many local people confirm this. For instance, one of our startups from the UK named MilkSafe is developing a device to test breast milk and baby formula. It’s a great fit for China. There are not many examples of foreign hardware startups being successful here. Misfit, who worked with Xiaomi, is probably an exception.

Chad Xu: I advise foreign startups to find a Chinese partner to set up a locally operated company. For foreign startups, there are not many people who know the Chinese market. So first of all, they should have very good local partners to help them understand the local market and adapt to the market.

Eva Yoo: Do you think Chinese companies have a series of innovations? What is the innovation of Chinese companies in terms of technology?

Chad Xu: I think the innovative model between countries is different; some innovation, in fact, to solve a particular demand in a particular country. Here’s an example, air purification machines are sold in China, because the country has a very heavy air pollution problem in northern China. On the other hand, ofo and the Mobike’s model can be applied to the global market.

Benjamin Joffe: There are three innovative Chinese startups that I want to mention: Plecobot makes robots that clean windows of high-rises, replacing “spidermen” who risk their lives. The second is an industrial robot with computer vision named Elephant Robotics – much more versatile and affordable than traditional ones. Last is Sonicam, making 3D cameras with 3D sound using 64 tiny microphones. The founder used to work at Huawei for over a decade and invented over 100 patents before doing his own product.

Huang Wang, CEO of Huami, partner with Xiaomi and maker of the Mi Band series of wearables, took the stage at Techcrunch Shenzhen 2017 to talk about their latest health band Amazfit’s development and the trend of wearables

Huami took the first spot in Worldwide Wearable Device Companies for the first time ahead of Apple and Fitbit with a global market share of 14.7% as the wearables market swells 17.9% during the first quarter of 2017, according to IDC. Huami’s health band Amazfit, priced at $120, features a host of activity-tracking sensors along with a Bluetooth 4.0 LE and Wi-Fi radios, GPS, a heart rate sensor, and NFC.

Du Yu: Huami set up a data mining laboratory last year. How are the things now implemented in the lab?

Huang Wang: Two months ago, we launched the Amazfit (米动 in Chinese) health band, and we embedded an electrocardiogram (ECG) chip in it, so that it can measure the electrical activity of your heart. We can collect more human body data for hospitals. Since the establishment last year, our laboratory is focusing on two things: ECG biometric identification and deep learning. When you measure the ECG, we know you measured it or others measured it, and also it’s easier to test than using fingerprints. Secondly, we use Deep Learning method to do disease screening, when you have an ECG, you can check disease through this ECG screening, and let the doctor judge.

Du Yu: So Amazfit connects the patient, Huami, and the doctor?

Huang Wang: Yes, now we find a problem, in the case of ECG, a large number of doctors may not be able to catch all the problems. Deep learning can catch a lot of problems that doctors can easily overlook. The advantage for the doctors is that after they do the first diagnosis, the amount of data they can refer to is very large. After one week of Amazfit’s release, the backend cloud had 500,000 copies of the user’s ECG data.

Du Yu: The user may buy a wearable and only wear it for a week. How do you deal with this?

Huang Wang: When we researched the market, many users spent a week until they throw away the wearables, and some users stuck with it for three weeks. When we interviewed the user who insisted on wearing the smartwatch for three months, and asked them “How could you use it for such a long time?”

Many said the wearable is too expensive, so they were reluctant to throw it away. So when we developed the first generation of the smart watch, we put importance on the duration of the smartwatch to stay for a month, so that users do not have to charge our band every day. Some users actually use it for a month or even two months. When you don’t have to charge your wearable too often, users can accept using it for as long as two or three months.

Du Yu: Last year, there was a rumor that Huami was seeking new funding. Where do you think Huami’s value lies?

Huang Wang: We spent three years running the first stage. For us, the first stage gathered 30 million users, and now we have more than 10 million active users, who have been contributing data to us. The real value of our company lies on, not our 30 million users, but our 10 million active users. This will increase as we have more hardware sales later.

The second stage for us, is the data, and how we create value with this data. We are not in a hurry to raise another round of funding.

Du Yu: What aspect of artificial intelligence will you be focused on?

Huang Wang: Talking about deep learning in smart hardware, everybody is still watching. If you sell a smart wearable that only sells hundreds of thousands of units, and the number of active users is very small, then doing deep learning is no use.

WeChat has over 800 million users, 83% of whom purchased products through the messaging platform in 2015. This number beats the 375 million users on China’s largest B2C marketplace Tmall. The difference between social commerce and commerce is the engagement, and that’s where social Customer Relation Management (CRM) is finding its time to shine.

Compared with other e-commerce platforms, a WeChat public account not only helps their users to purchase physical goods but also helps brand channels engage followers and interact with them.

“Many Chinese people now buy luxury items on WeChat, rather than using e-commerce platforms. This helps to build trustworthy social commerce, rather than a traditional retail market model,” Anthony Xu, CEO of OCheng told TechNode.

OCheng, a Chinese company that adapts machine learning uses chatbots to respond to the customers showcased their solution on Chinaccelerator batch 11 demo day.

Top luxury brands are finding it more and more difficult to manage over a million customers one by one. AI-powered chatbots are replacing membership cards that not only understand customer’s past purchases, but also engage them in conversation. An artificial intelligence-based chatbot can handle routine questions, send out personalized messages, and recommend products based on their purchase history.

OCheng’s solution for brands helped increase French cosmetic company Sephora‘s fanbase from 90,000 to 3 million in 2016. They looked at Sephora’s WeChat account and segmented based engagement. Targeting certain segments, they invited some to connect with the chatbot and engaged with them based on their purchase history.

Competitors do exist, including Social Touch (时趣) and Youzan, but Anthony says that their competitors focus on SMEs. The Shanghai-based company says they have a more scalable business model and adopt machine learning, which other companies lack.

Aiming to function as a social commerce for brands and the number 1 social CRM for luxury brands in China, OCheng has partnered with 15 lifestyle, fashion and cosmetic brands including Dunhill, HMC, Baby Bear, Sephora, Michael Kors. Now the company is handling 4 million followers with using their chatbot. Established in 2015, the company has since generated an average of RMB 4 million (US$ 586,000) in revenue per year.

Chinese company joining an international accelerator

OCheng is now working with dozens of global luxury brands, where the company needed the global expansion gateway.

“China-based accelerators can provide networks within China, but what I needed was hands-on mentorship from international mentors. Chinaccelerator had good global networks and provided partnership opportunities, and we needed just that,” Anthony says. “We want to approach more international brands and work with them to build a global social commerce platform.”

Luxury brands need innovation

“We have two strong points that other companies cannot replicate. Our technology base is strong and we’re using AI to do the CRM. We have experience in cosmetic and lifestyle brands, and have knowledge and connections,” Anthony says.

35-year-old Anthony previously worked at Alipay’s technology unit, and later worked in a digital marketing department at Yum! and Mary Kay. Leveraging his past experience and connections to start his digital marketing solution company, Anthony believes that OCheng is at the right place and time.

“Fashion, cosmetic and luxury brands need innovation; digital marketing is an important part of that. They want to work with startups to bring innovation within their companies. On the other hand, AI now is being applied to all industries,” Anthony remarks.

OCheng has two business models: software-as-a-service (SaaS) and premium customization services. The former is a 1 year subscription for brands and the latter provides a personalized model with systems integrations. They charge 10,000 ~20,000 RMB (US$1,465 ~ 2,930) a month for brands, based on the number of their followers and the functions they want to use.

Chinaccelerator unveiled its Batch 11 startups at their demo day on June 14th in Shanghai.

Graduates of previous batches include:

• Shopal, helping retailers connect with Chinese investors
• BitMEX, a commercially successful company enabling people in China to invest in global investment vehicles via bitcoin that recorded US$ 70 million USD volume,
• Chozun, helping global travelers to get services in China
• Fashory, a top 5 fashion app in Southeast Asia that growth hacked in China to make RMB 200,000 sales in just one week

As a seed investor as well as a growth hacker for early stage startups, ChinAccelerator has given good examples to growth hack WeChat, social media, content, and companies to get customer and user.

From their latest batch 11, we can see how their startups are monetizing KOLs (Key Opinion Leader). The value of China’s internet celebrity market is tipped to surpass RMB 100 billion in 2018, according to Beijing-based research agency Analysus.

“In China, the opportunity is bigger, but overseas celebrities don’t have a digital presence. Through WeChat, Baidu, and Weibo, we help them to build a social biography and monetize their fans,” Mattia Baldassare, CEO of eFanswer told TechNode.

Superstars in various industries, including music, entertainment, and sports have a huge fanbase in China market, and China represents a huge potential market for these stars to monetize their fandom. However, not many can monetize on it, because of the language barrier, and because these celebrities don’t understand Chinese fans. That’s where these startups come in, allowing them to seek a bigger opportunity in China, using different methods: biography, gaming, and chatbot.

1. eFanswer: Monetizing football through biographies

Mattia Baldassare previously worked as a lawyer for Holland football players. One day, Alessandro Del Piero told him he wanted to publish his biography. Mattia later thought of a new way to write a biography: Fans can submit questions to their favorite football stars. By answering 300 questions from their fans through voice, audio and text, celebrities can easily publish a biography.

In 2015, they sold 50,000 copies of his biography in Holland and made US$ 300,000. Inspired by this outcome, Mattia created a platform where football celebrities can connect with their fans.

With the tagline “Netflix for books,” eFanswer enables celebrities to share their life stories with fans through text, audio, and video across social platforms both online and offline. They have sold over 180,000 copies of 6 football stars’, recording US$ 300,000 revenue and over 1.2 billion total video views in 2016. Now they are targeting China market, where English Premier League fanbase is over 300 million.

Now the platform features 10 celebrities, including Claudio Marchisio, Alessandro Del Piero, Giorgio Chiellini, motor GP champions Jorge Lorenzo and Samuel Etoo, and NBA player Danilo Gallinari. Soon Pope Francis will also receive 300 questions from his followers to publish a book himself.

2. Lihaoma: Monetizing KOLs with gamification and prizes

Lihaoma gamifies social advertisement and KOLs to entertain and engage followers to increase overall brand awareness. Followers can play easy and intuitive games to get social commerce discount game to drive sales on Taobao and Weidian, and win awards.

“Using games, followers show 3 times better engagement. When we included Q&A games, brand’s website showed 30% more traffic, and their WeChat content showed 30% more engagement and conversation. Because consumers needed to find the answers on the brand’s websites to find the answers,” Benjamin Claeys, CEO of Lihaoma told TechNode.

3. B2 Talent Asia: Helping global musicians become KOLs in China

Using chatbots can help KOLs to manage the huge amount of fans. A chatbot strategy combined with Q&A, games, celebrity’s holograms can help KOLs build bigger growth.

“China is the fastest music market in the world, with 20 million digital music downloads. Western superstars can come into China KOLs, but they don’t have tool and teams to do that,” CEO of B2 Talent Asia told TechNode.

B2 Talent Asia enables global musicians to become KOL in China by providing a Pan-Asian celebrity management service and social media service. They help the musicians grow the follower base on social media and monetize their fan base with merchandise sales. Previously, they helped Southeast Asian stars Jannie Weigel and Dome Pakora Lam build 500 million follower base in China.

Internet celebrities or wanghong (网红) are often seen as the golden ticket to promote your brand, but forget not, wanghong campaigns may fail if they are poorly planned, no matter the pedigree of the celebrity. To link wanghong with brands and mitigate risks in brand campaigns, many wanghong agencies were born last year to bridge money-hungry wanghong and audience-hungry brands.

According to Reketan, a wanghong agency with a combined following of 3 million fans, if one brand wants to talk to wanghong without using a middleman agency, the cost for a one-hour video post from a wanghong who owns less than 1 million followers on their Weibo, can be from 2,000 to 3,000 RMB. If their number of followers are over 1 million, then a video campaign can range from 10,000 to 15,000 RMB.

“You might think that you can just give the product to the wanghong and wanghong will do the job for you. But that’s much more difficult than you think,” Hyunjoo Lee, founder and CEO of Reketan told TechNode.

After signing a contract with a brand, these wanghong agencies analyze the brand’s needs and plan a strategy that matches the brand’s image. Then they run a video campaign on brand products with one or more wanghong.

Wanghong agencies add value by providing professional video equipment and know-how, with double or triple the market price. ParkLU, a Hong Kong-based digital marketing agency also advised that hiring multiple Key Opinion Leaders (KOLs) can create an echo chamber to talk about a brand.

“Some brands ask wanghong to post videos about their brand from 10 times to 100 times, so coverage of a single brand could cost up to six digit RMB,” Lee says.

Why some wanghong campaigns fail

Wanghong marketing campaigns fail for many reasons, including the wanghong themselves.

To promote Korean cosmetic brands to Chinese audiences, Reketan prepared a cosmetics tour and invited various wanghong whose total combined Weibo followers amounted to more than 10 million.  These wanghong live-streamed their visit to Garosu-Gil, a street in Seoul famous for fashion and cosmetics, and Jeju Island, where natural ingredients for cosmetics are mostly grown.

“We initially thought that when these wanghong go to these places and if we feature the brands this way, it would appeal to the audience,” Lee says. However, the outcome didn’t meet the exceptions. The wanghong only attracted 10% of their usual viewers.

“The campaign was supposed to run for 10 days. After three or four days of underperformance, I was getting nervous. Our wanghong lacked experience as well as professional knowledge and skills,” Lee says.

“The campaign didn’t turn out to be a successful one. All the efforts to satisfy cosmetic brands and all the parties concerned were frustrated. Wanghong business sure is difficult,” Lee says. “Brands should think about if they really need a wanghong campaign or not. The success rate is less than 10%, and you can use that opportunity cost to do run other marketing campaigns.”

What brands need to understand

“Previously, we asked brands to choose the wanghong they wanted. After 2 years of this matching process, I realized that wanghong and agencies need responsibility to reach the wanted outcome,” Lee says.

The first step is to understand the five types of KOLS in China, categorized by Ashley Dudarenok, CEO of ChoZan as celebrities, wanghong, bloggers with expertise, WeMeida, and industry-specific KOLs.

“Currently, Chinese wanghong are not professional content creators. Chinese wanghong can easily gather a fanbase of 1 million followers, while professional content creators in Korea manage to gather a fanbase of only 20,000. There is a clear difference between wanghong and content creators, who specialize in one vertical like game broadcasting, beauty, or food reviews,” Lee says.

The second step is to understand the fanbase of wanghong. According to a Tencent report, a third of audience members said that they don’t care who the live streaming host is, as long as they are good looking.

“If you do not understand the fanbase of the wanghong, their fans may not affect your brand at all,” he says.

Wanghong, in the future, will need to cultivate professional skills to cement their income sources. One straightforward option to monetize their fanbase with a clear identity is to become a Taobao seller who can generate up to US$ 46 million in revenue. Reketan is now focusing on cultivating professional show hosts.

“We are analyzing successful wanghong on Taobao and will apply this method to instruct our wanghong to increase the sales. There are certain products that are optimal for wanghong campaigns, and we will suggest which brand will match the certain wanghong,” Lee says.

This will gradually create a platform, giving an array of wanghong lists specialized detailed and categorized product line. Reketan says that they will be working on the many same product categories to teach their wanghong and to ensure the consistent performance of wanghong.

It’s not compulsory to outsource wanghong through agencies; for startups and small brands, they can reach out to wanghong individually, first, by checking if they are wanghong from an agency or independent.

“Sometimes a wanghong is part of an agency, sometimes not. You can check where that wanghong is from on live streaming platforms like Inke, or Yizhibo because they show the name of the wanghong agency. Wanghong agencies can make this process easier for you,” Lee says. “Startups can directly reach out to the wanghong they need, too. If there is a resource you need, you will need to find it yourself.”

Forward thinking founders of Chinese breakout companies and Chinese VCs have been exploring and expanding their efforts in the Southeast Asia market. Indonesia, representing almost 40% of the economic output of Southeast Asia is attracting fresh investments and “SEA turtles”, the Southeast Asian returnees who had studied in top universities overseas. Some breakout companies founded by SEA turtles include Go-Jek, Grab, and Traveloka.

Chinese tech giants have tapped into the Southeast Asian market these years. Alibaba invested US$ 1 billion in Singapore-based e-commerce startup Lazada in 2016 and Tencent invested US$ 1.2 billion to Indonesia-based logistics and payment startup Go-Jek last month.

A newly established Silicon Valley fund is following the steps of Chinese money and is dedicated to co-founding and investing in early-stage companies capitalizing on the rapid growth of private consumption in the Indonesian market.

Previous backers of PayPal and SpaceX are founding an Indonesia-focused independent venture capital firm Intudo Ventures, and announced on June 13th, the closing of their first fund with more than US$ 10 million in funds. Eddy Chan (based in Silicon Valley) and Patrick Yip (based in Indonesia) are leading the fund, joined by founding advisor Timothy Chen (based in China, Hong Kong, and Taiwan).

We talked with co-founders of Intudo Ventures, Eddy Chan and Patrick Yip about the  5 reasons why Chinese breakout companies should head to Indonesia.

1. Indonesia is China 10 years ago

There was a window of time in the 2000s when the venture capital ecosystem was emerging in China, where “SEA turtles” were unique and had several distinct advantages over their local counterparts. Now Indonesia is China 10 years ago.

“We feel the Indonesian venture capital ecosystem is still emerging, making it ripe for SEA turtles to return to help build out best practices and infrastructure, which will allow them to capitalize the growth of the venture capital ecosystem. If they do not do return in the next few years, the window may have closed and they may be left on the outside looking in,” Eddy says.

2. Indonesia’s government support

Historically, the internet and physical infrastructure have proved to be a challenge in the Indonesian market.

However, improving Indonesian infrastructure is the top policy priority of the government, and has since made a concerted effort to improve this by upgrading the internet and physical infrastructure and supporting companies. In the 2016 budget, the Indonesian government led by President Joko Widodo earmarked the highest amount ever allocated for infrastructure development (approx. USD $22.9 billion) according to the World Bank.

The Jokowi administration has continued with many initiatives intended to increase infrastructure spending over the period to 2019, and the PWC report suggests that overall infrastructure will rise above the historical average of 5.7% of GDP.

3. Booming sectors: Travel, fintech, and education

China is now Indonesia’s largest tourist source, making 1.43 million trips to Indonesia in 2016, up 25 percent YoY, according to data released by Indonesia’s Central Statistics Agency. Fintech and education are also promising sectors to tap into.

“Indonesia is still a cash-based economy with adult credit penetration of 1%, so there are substantial opportunities in fintech. Education spending is a small portion of GDP, so we feel there is significant potential for online learning and other technical/vocational training,” Patrick says.

4. Rising middle class

In Indonesia, 58-60% of GDP is driven by private consumption and the rising middle class, mostly based in Jakarta. The GDP per capita in the Jakarta metro area is US$ 9,984 which is substantially higher than GDP per capita for the country of US$ 3,620. The percentage of middle class and affluent consumers in Indonesia will double to 141 million people by 2020 from just 74 million people in 2013.

“There are striking similarities to China’s consumer spending and venture capital ecosystem 10-15 years ago. We anticipate continued growth in e-commerce, F&B, fintech, and digital payment companies in Indonesia,” Eddy says.

5. Low cost and high efficiency

“Silicon Valley-based companies generally raise US$5-15 million in a Series A financing, which we feel is similar to China. In Indonesia, a company generally raises US$1-3 million in its Series A financing. We generally raise a US$2-4 million initial financing into the newly incorporated joint-ventures we set up for the breakout companies we bring into Indonesia from China, Silicon Valley, and other overseas markets,” Eddy says.

Taobao’s live streaming function has become the main platform for internet celebrities (网红 wǎnghóng in Chinese) to monetize their fanbase.

Recording 180% growth in 2016, live streaming (直播 zhíbō) was one of the hottest topics in China last year and is still wielding influence in the country. While some investors have raised their eyebrows about the sustainability of mushrooming live streaming apps that secured less than 10 million downloads in China last year, the wanghong business itself is getting bigger and is now targeting for content-hungry niche audiences. For example, as Taobao live streaming serves more detailed and vertical needs of consumers, introducing more categories of products including food, maternal and child product, beauty product, sports, and fitness product.

Taobao, as the biggest C2C marketplace in China, stands on the throne of other live streaming apps, since its live streaming goes directly to sales. After gaining fans, wanghong have clear intention to make more money, and they find various ways to monetize their fanbase, such as being part of a weishang to sell cosmetics, become a fashion influencer to start their own store on Taobao or live stream brand products to viewers.

Taobao added up its gross merchandise volume transacted in FY2016/17 to RMB 2.2 trillion (US$ 320 billion), an increase of 17 percent year-on-year, and mobile monthly active users on Taobao’s retail marketplaces reached 507 million in March, an increase of 14 million over December 2016 according to Taobao.

The e-commerce giant is planning to breed its own wanghong too. Last year, the Alibaba reportedly injected 300 million yuan (US$46 million) in Hangzhou-based Ruhan, a celebrity incubator that teaches wannabe stars how to blog, pose for photos and interact with fans.

Here are 6 things you didn’t know about Taobao live streaming.

1. Taobao wanghong can generate up to US$ 46 million in revenue

For both Taobao shop owners and live streaming wanghong, Taobao provides an optimal platform for them to increase their awareness, as well as to achieve sales. Top Taobao wanghong such as Zhang Dayi and Zhu Chenhui made RMB 300 million (US$ 46 million) and 150 million yuan (US$ 22 million) respectively in 2015, according to data from brokerage Guotai Junan Securities. Chinese superstar Fan Bingbing generated US$ 74 million revenue on Taobao, according to Taobao.

2. Taobao Live currently has more than 10,000 wanghong

Taobao Live currently hosts more than 10,000 people, including content creators, wanghong who has their own shops, and wanghong who works for professional agencies. Taobao act as a platform, to help more hosts to achieve better growth and make more money.

Based on its content on the live production capacity, Taobao Live offers different registration processes and mechanisms for individuals, and businesses. To provide complete and true identity information, is the prerequisite for registration Taobao live. In addition, Taobao live does not charge any fees on the registration process,.

3. Consumer upgrade will be the trend on Taobao Live.

As China’s GNI per capita increased from US$ 990 in 1990 to US$ 22,760 in 2015, Chinese people turned their heads from mass products to premium products. This trend, dubbed as ‘consumption upgrade (消费升级)’ brought in more lifestyle and entertainment services into cities as well as awareness of food safety. Taobao Live itself is the product of this consumption upgrade.

4. Wanghong live stream consumption totals 15,800 years

Over the past year, users in Taobao watch live time totaled 140 million hours, equivalent to 15,800 years, according to a survey conducted by Chinese media.

5. Taobao will soon launch VR live broadcast

Director of Taobao Live, Chen Lei says that Taobao will soon launch a VR live streaming: “Live streaming brings a strong sense of integration and interaction, and virtual reality is also a very strong sense of the product, the combination of the two will bring a stronger sense of reality.”

6. Merchants will be able to use big data and AI to find the target user

From this year, Taobao Live will improve its analysis on the crowd, content, traffic, content consuming pattern, monetization with the help of big data aggregated from its platform. 

“Taobao’s advantage is that we have a large number of user base, a lot of data, we have a decent data distribution capabilities. In the future, we will focus on the trending subject and theme to attract our consumers,” Chen Lei said. “Through analyzing different groups of consumers, businesses will be able to directly reach potential target customers, and optimize their product to meet the consumer’s taste.”

We’ve updated for 2018. Check out this year’s list here.

While Apple continues to have their struggles in China, Android-powered smartphones are picking up the slack. Unfortunately, Google isn’t doing so well in China either. This means that if Android users want to download applications, they must rely on app stores operated by local players.

The app market ranking in April 2017 released by Newzoo shows that Tencent takes almost a quarter of the China’s fragmented Android app market without the presence of iOS. Compares with the top 10 Android app store ranking of 2015, Tencent’s store Myapp (应用宝) is now the king with 24.7% of the market, followed closely by Qihoo’s 360 Mobile Assitant (360 手机助手).

Despite the current trend of using WeChat Public accounts to start a business, the number of installed apps and app usage hours both increased compared to a year ago, according to China Internet Watch. Mobile apps in China have more than 10 million monthly active users in Q1 2017.

App stores of Chinese smartphone companies, Huawei, Oppo, Vivo, and Xiaomi all gain more pieces of market share compared to the figure in 2015. Looking at those peers, Qihoo 360 also jumped into the smartphone business.

Their smartphone sales ranking doesn’t exactly reflect on app store ranking though. Huawei made the biggest sale in April, but Xiaomi still takes the first place in the app store among the smartphone players.

1. Tencent MyApp (24.7%)

“Tencent attracted users through its current services like QQ, WeChat, and games, dwarfed other services by the number of users and the sales,” Hyunjoo Kate Lee, Senior Principal UX Designer at Tencent told TechNode.

As other mobile device manufacturers promote users to use their own app stores, the Android app market will saturate, it is unlikely app market will see much more growth.

“Once artificial intelligence is applied to the phones and the apps in the future, I believe User Experience on applications will be very different from what is now,” Lee said.

2. 360 Mobile Assitant (15.5%)

360 Mobile Assistant lost the market share of 9.5% compared to 2015’s figure. Following in the footsteps of other Chinese smartphone companies, Qihoo also launched its 360 N5S smartphone with 6GB RAM and Dual front camera setup priced at 1699 RMB.

Supplier of anti-virus software Qihoo has several mobile security products including 360 Safe Guard, 360 Anti-virus, and 360 Mobile Safe, which helped the company to gain traction with its own app market. Qihoo, in fact, cracked part of last month’s ransomware virus that breached 200,000 computers on this month with its software patch that can recover the data encrypted by the unidentified attackers, reports CCTV.

3. Xiaomi App Store (13.0%)

“Xiaomi has a better grip on software part than the hardware. In Xiaomi store, they did a good job in the app distribution and user experience, more than 85% of the apps are downloaded and updated, all from their own distribution system,” Cherry, a previous employee at Xiaomi told TechNode.

4. Baidu Mobile Assistant (12.7%)

Baidu Mobile Assistant has given its 3rd rank to Xiaomi, with its market share falling 4.3% than two years ago. After the issues with Baidu’s medical ads, Baidu hurt its reputation as a search engine emperor and is now transitioning away from mobile.

“Baidu is transitioning its core business from its mobile technology to artificial intelligence,” said Lu Qi, currently Baidu’s chief operating officer and a top level AI expert to according to South China Morning Post.

5. Huawei (10.5%)

Founded in 1987 by Ren Zhengfei, Huawei started its business as a networking and telecommunications equipment and services company. After the Shenzhen-based company unveiled their first Android phone in 2009, now it takes the biggest market share in China’s smartphone market. Huawei has expanded aggressively into overseas markets including Europe and South America.

This February, Huawei released its latest high-end smartphone P10, manufactured in their own production line and introduced a Leica dual camera to attract young female customers.

6. OPPO (7.4%)

OPPO app store was not even on the top 10 list of app store ranking in 2015, and has made a big leap to 6th place. Thanks to their low-end phones targeting rural China, OPPO R9s made 1.7 million shipments according to Sunrise Big Data. In Southeast Asia, OPPO has taken the no.2 spot in both Indonesia and Vietnam in two years, according to market research firms IDC and GFK.

OPPO, founded in 2001 by Chen Mingyong, started out by selling DVD players, audio speakers, and later the MP3 players, and expanded into the mobile phone market in 2006, and introduced its smartphone in 2011.

7. Wandoujia (4.0%)

You might wonder what Alibaba is doing in this app store war. Alibaba, rather than developing its own app store, acquired a big app market. Last year July, Alibaba acquired Wandoujia for an undisclosed amount. Wandoujia was valued at more than a US$ 1 billion when it landed a US$ 120 million funding round led by Softbank in 2014. For two years, its market share of 4% has not changed.

8. Google Play Store (3.7%)

Google Play is not shipped on any phone made in China, but it is possible to install it, given the right tools and knowledge.

Wangping, a Chinese tech blogger and a Xiaomi phone user for 2-year-and-a-half tells us how why he uses Google Play.

“Xiaomi’s app store had too many advertisements last year, and there were so many apps that I wanted to download on Google Play. So I started using Google Play Store from 1 year ago,” Wangping said. “I mostly use Google Play to download foreign apps, and use the Chinese Xiaomi app store to download Chinese apps.”

9. Vivo (3.3%)

Oppo’s sister brand Vivo has made progress in catching the favor of lower tier cities in China, with the Vivo X9 making 1.3 million shipments according to Sunrise Big Data. However, its app market dominance fell down to 3.3% this year, from 4% in 2015.

The company signed an endorsement sponsorship with NBA player Lebron James, to increase its brand awareness. In India, Vivo’s sales grew 220 percent, according to Gartner’s research director Ansul Gupta.

10. Hi Market (2.6%)

HiMarket was launched in 2011 by 91 Wireless in an attempt to expand into the Android market. In July 2013, Baidu bought 91 Wireless, which owns both 91 Assistant and HiMarket, for $1.85 billion USD, recording the most expensive deal that time.

A famous Chinese saying goes “first make friends, then talk business” (先交朋友 再谈生意 xīanjīaopéngyou zàitánshēngyì). A large part of making those friends is going to and hosting parties and Chinese VCs are turning out to be the most creative in using online tools to make offline events more fun.

“Chinese culture is different from that of the US. So we have to design different ways to make people feel comfortable and open up. While networking in the US is more straight forward, Chinese usually close their mind first. So the key to a networking party is to make way to open up their mind,” Richard Wang, managing partner at DFJ DragonFund told TechNode.

Richard, having experienced both the US and China before joining a Silicon Valley-driven fund, has invited friends from finance, investment, media, consulting, real estate, law and other sectors into one WeChat group. More and more common, these WeChat groups for professionals play an important role in sharing valuable information between trusted friends.

To ensure that the group members actually show up and engage in real conversation, event organizers try to plan interesting activities. Rather than using a prosaic name like ‘networking party’, organizers attract guests by including and advertising games, raffles, or they emphasize a special dress code like 1920-30s Gatsby style or an all-white outfit.

“In Chinese events, we like to play in groups, especially with people we don’t know. Western events are more like cocktail lounge parties, meeting new people one by one,” Echo Chen, an art critic who attended an event recently told TechNode.

For his networking event on May 21st, Richard used Mafia, commonly known as Werewolf (狼人杀) in China, as bait to attract people to attend.

WeChat and werewolves

Mafia, sometimes called Werewolf, was created by Dmitry Davidoff in 1986. After entering China, it has become one of the most popular party games.

“The werewolf game can test players’ memory, their ability to do logical analysis, and reveals their psychology. Through the werewolf game, we get to have a more in-depth understanding of their character and ability,” Daniel Guo, Executive Director of Strategic Development of SynCapital told TechNode at the event.

Normally played with a moderator to pick out the werewolves, the offline game has now transformed into one that can be played almost entirely on WeChat.

There is no need for cards or a moderator having to tap shoulders. Once the game players search “狼人杀” on WeChat and follow the account, the moderator types down the number of players, and WeChat automatically allocates the roles.

“I liked the theme of this event, it gives us the feeling that everyone is participating. It was my first time to play this game, on WeChat or otherwise. It was an interesting and clever idea to organize an event like this to make new friends and network,” said Feng Yuhang, CEO and founder of Zhanshujia (占数家, literally “data dominator”).

Despite the high profile of the participants at the event, the party does not involve anything business related but instead is filled with playful intrigue. It is overall more of a leisurely, chilled-out weekend gathering rather than a networking party packed with business purpose on weekdays.

“The goal of running this group is to make friends, connect resources, and help out VCs and entrepreneurs,” Richard says.

Chinese culture, especially among people with weak social ties, can be very transactional (“What will you do for me if I do this for you?”). But at these types of events, there are no tangible outcomes.

“I don’t talk with investors so much in terms of business or my profession. I participated in this meet up to expand my social circle and make more friends,” Laijin Zhou, a manager at Alipay told TechNode.

“People who come here all have a purpose. Some come to network, to play a game, to promote their business, to relax, or to find a business partner,” said Mr. Shen from G Group. “We can’t say that this event will directly help our business. It’s just a matter of luck. People are from all different sectors. We will make friends first, then if we get along well, maybe there can be professional help in the future.”

“I attended this event to get to know more people in venture capital and investment. While having a busy week, gathering with friends to chat and laugh in the pub is very relaxing and refreshing. I saw some friends who I have not seen for some time and also met some senior peer investors and passionate entrepreneurs,” Daniel Guo said.

No more business cards

After the werewolf game, it is then so easy and natural to add a new friend’s WeChat. People ask directly if they can add their QR code or just find their name in the WeChat group. There is zero exchange of printed business cards but the business card habit is hard to kick so people still send a picture of their cards.

“WeChat is a powerful tool and we should utilize this tool well, not just for fun,” Richard smiles.

83% of WeChat users responded that they use WeChat for work, according to 2017 WeChat User Report. Important business activities like making introductions, sending out your startup pitch deck, doing a group call meeting are also done through WeChat, rather than email in China.

The outcome of these social events can be huge. Under the pool of hundred VCs in one WeChat group chat, they often co-invest in companies together.

“Yes, we often co-invest in startups in order to maximize benefit to all parties,” Richard says. “Investing is actually all about people. So it is very critical to connect people to exchange resources. In China, we build a friendship first and then talk business, so that’s why I always connect people, and I actually enjoy this.”

“China’s parties are often interspersed with some business topics, while foreign relative will have more family-oriented, life aspects of the topic,” Daniel says. “China’s get-together, because of the practical national conditions, is often held indoors, and less outdoor.”

Understanding the mindset of Chinese people and their interests when participating the event, Chinese event management platforms have also applied Chinese localization to US counterparts.

According to data from GlobalWebIndex in 2015, men are the primary customers of Huawei, while women are more likely to own an iPhone. According to research institute IDC, Huawei’s phone is the top iPhone alternative in China. In fact, Chinese male users strongly supported Huawei in our informal survey last year, and some related Huawei to their best homemade smartphone brand to battle against Apple.

In 2017, men still use Huawei phones more than women, as Shao Yang, President of Cloud Services at Huawei’s Consumer Business Group pointed out on the Huawei Smartphone Open Day event held on May 16th.

“We divide their target group into gender and age. More and more high-end users are using Huawei, and there are more male users than female users. Most of them are older. We haven’t had great performance for younger female users, and we are now putting effort to increase our female user base,” Shao Yang told TechNode.

Huawei’s plan to get more women

Huawei’s first prong is to recruit more female employees to join their marketing team.

“Tech workers from 18 top tech companies are young, highly paid, and mostly male,” is the conclusion from the 2016 data from Payscales. Only one-third of the tech companies including eBay (43%), LinkedIn (42%), Samsung (37%), Facebook (32%), Apple (31%) and Google (30%) had more than 30% of women in their workforce.

Improving the company’s image is one thing, but female employment in marketing department could also help company’s device sales. Samsung attributes its initial Galaxy Note sales increase in 2012 to marketing effort done by its female marketing executive director, Kisun Kim, who worked in the South Korean company since 1990 (Korean source).

“Technology is the core of our brand, however, female users tend to put less emphasis on this. Plus, many of our engineers are men. We start from the root to change, and we encourage female users to join our marketing department,” Glory Cheung, CMO  of the Huawei Consumer Business Group told TechNode. “We will pay attention to users’ daily life cycle to catch the opportunity to invite new users. Women these days are independent and have a strong mindset to control themselves, and it goes along with Huawei’s brand image.”

Huawei’s second prong is to push forward its partnership with Leica camera to appeal to female users. Huawei’s flagship P10’s dual camera, made in partnership with high-end camera-maker Leica, allows users to take high-quality selfies.

Taking selfies is more than just a cultural trend, it’s also a huge business: Meitu, maker of a photo beautifying app and phone, listed in Hong Kong Last year at a US$ 4 billion valuation. In China, you are exposed to huge smartphone advertisement on the streets and subway, featuring top star’s human-size picture with an advertising line that always mentions the camera’s capacity to take beautiful photos.

Huawei’s high-end series P10, featuring a dual-lens camera from Leica, is more than a smartphone for portraits, it’s at the cutting edge of smartphone innovation – that was our impression of the P10 after visiting its production line in Dongguan and test lab in Shenzhen.

The third largest smartphone brand worldwide, Huawei opened its technological production center and test labs to the public for the first time on its “Huawei Smartphone Open Day” held on May 16th, where the Shenzhen-based company showcased its products and technological achievements in the mobile industry.

Huawei opened its production line, as well as its test labs, filled with facilities that are among the most advanced production lines in APAC and even globally, powered by its large R&D investments each year. In 2016, Huawei invested over 11 billion US dollars in R&D, accounting for more than 15% of revenue, according to the 2016 Huawei Annual Report.

During the Open Day, Richard Yu, CEO of Huawei Consumer Business Group (CBG), together with He Gang, President of Huawei Smartphone Product Line, and other product managers, facilitated technical salons on Huawei P10 smartphone design, research initiatives, and future development roadmap.

“We are determined to change and become more open and transparent, and to improve at listening and communication in order to minimize misunderstanding. More importantly, we will take note of your valuable suggestions and incorporate them into the company’s development roadmap, to make Huawei become better and better,” CEO Richard Yu said at the opening of the event.

Here are some of the highlights:

1. P10’s power consumption is lower than their peer competitors.

P10’s power can communicate with the charger, and convert 220V and match it to mobile phone. Normally, each conversion will reduce the efficiency, however, in the same condition, the power loss of P10 will be about 10%. Also, there will be no heat generated from your phone.

2. Super charge can maintain a low temperature while charging P10.

Sometimes the phone can suffer from the thermo problem because of the power charger. However, if the P10 is getting too hot while charging, it will automatically disconnect itself.

3. Users can travel the world with Huawei phone, without having to convert to 3G or 2G.

Usually when a user travels overseas, the phone wouldn’t match the frequency of the other country, so users might have to stick to 3G or 2G. Huawei tries to make P10 compact at the same time keeping the antenna, so that users can keep on using 4G.

4. Huawei phones can grab the red packet faster.

In China, it’s a big deal which brand and model of smartphone you own, because certain phones may lead you to higher chance of grabbing red packets sent through WeChat groups. Starting 2 years ago, Huawei has worked on improving the speed of grabbing the red packet bringing the highest efficiency on the speed of the modem and the backend.

5. Huawei was first in the world to use the dual camera

“Since 2011, we have been working on addressing how to take better pictures and give better lighting effect internally. There were not many materials to make it possible at that time. We had to work on the sensor, and came up with our own chip set solution in 2013. At the end of 2014, we had our prototype,” Bruce Lee, VP of Huawei Consumer Business Group told TechNode.

In 2015, Huawei introduced their dual camera phone, P9. “We chose two colors on the P9 camera, so that the diffusion will be reduced, improve the color, and recognize sensitive lights.”

6. Huawei puts great importance on design

Huawei has global design teams across Xi’an, Shanghai, Beijing, Japan, Korea, London and Paris to find out the trend and do research and a UX studio in San Francisco, full of 200 designers with BFA, MFA design degrees, and engineering degrees. A separated team called the IDC team is dedicated to preparing for the future.

“When we design, we want to apply what consumers look for to our phones. We conduct market surveys, competitor analysis, and focus group interviews on a regular basis to find that out,”Joonsuh Kim, the Chief Design Officer at Huawei told TechNode. “Huawei’s design philosophy is: when we design the product, every design should have reason behind, and the reason should be for the innovation. In other words, design is all about ‘feeling’, and users should be able to feel our design.”

7. Huawei’s production line and test lab are really cool

The Product Experience Testing Lab, which uses the 4th generation of Huawei’s self-developed Automatic Testing System, was one of the highlights of this event. Based on various application scenarios, this multi-million dollar system is designed to test all kinds of problems users may encounter in actual use and provide detailed optimization solutions.

For example, bionic robots can simulate human actions, including clicking, dragging and swiping. The lab can also accurately log the lagging phenomenon in any software to the exact second and detect failure, which is difficult for the human eye to observe. All tests conducted in the Product Experience Testing Lab are based on common scenarios of users’ daily lives.

Expanding your startup to China or starting a business in China is not a piece of cake, especially if you’re an expat not speaking Chinese, or have zero experience in China. Local startup accelerators are there to help you out, but it’s not only a certain amount of funding and a free office space that you want from them in exchange for a stake in your startup. So, how do you know which one is the best for your startup, and do they really provide extra value, like valuable business connections and mentorings?

TechNode interviewed five Korean startups that have gone through 3 months long accelerator programs in China. This is what they say about the accelerator programs.

If you’re outside of China, then you first might want to decide the city that you want to settle down, then find a startup accelerator there. Chuangyebang and Feimalv are both based in Beijing and Shanghai, and other accelerators like Innospace, Chinaccelerator, XNODE, Suhehui, iStart are only based in Shanghai. In Shenzhen, HAX is notably the destination for hardware startup, providing 111 days acceleration process. Some accelerators like NodeSpace targets emerging second-tier cities like Hangzhou and Chengdu.

1. Chuangyebang (创业邦), born out of media, full of Chinese startups

Chuangyebang, a Chinese online and printed publication company, runs its own acceleration program, leveraging its business networks. Headquartered in Beijing, Chuangyebang’s accelerator program is concentrated on its base, but also has wide office space around the Minhang area in Shanghai to further its presence.

In the spring of 2014, Jinsung Kim, CEO of Membersheep and his Chinese co-founder Changyong Cha spent 3 months with the Chuangyebang accelerator program in Beijing. Membersheep is a B2B e-commerce startup that sources brands from the U.S. and Europe and distributes to Chinese retailers including Alibaba. According to the CEO Jinsung Kim, the ecommerce startup made US$ 2.6 million sized order on this April in China, and is seeing average monthly growth of 170%.

“Chuangyebang really tried to help us out. On our first orientation dinner, they created a WeChat chatting room so that startups can communicate with the same batch startups and their previous batch startups. We introduce our startups in the WeChat room, and if any startup thinks that they can collaborate with us, then they send me private message right away. The cool thing is that the best companies in Beijing are all there,” Changyong Cha, the co-founder of Membersheep told TechNode.

“When I have inquiries about legal matters or need advice, then they put me in a meeting room where I can have 1:1 WeChat video chat with a lawyer or a mentor. After the call, I can give feedback on the quality of their service.

In Chuangyebang’s magazine, and there are all the latest and hottest startups of that month. I get to see which VC invested in which company in O2O, commerce sectors and check all my competitors. When I try out apps from these startups, I get special offers like free meal or discounted service, since they are freshly funded, and has a lot of campaigns running!

In our building, there were about 30 startups in our batch, and about 10 employees from Chuangyebang. You don’t have to be a Chinese startup to apply for their program. You can pitch either in Chinese or English.”

2. Feimalv(飞马旅), born out of consultant group, full of Chinese startups

Feimalv (meaning journey of Pegasus) started in 2011, by Yuan Yue, president of Horizon Research Consultancy Group. Based in 9 startup cities in China, including Shanghai and Beijing, Chinese startups like P2P loan platform Chenengdai, Yiwai11, Yitiao, Yiboyo, Chelaile are born out of Feimalv.

Thinkthink kids school is creativity education company with has more than 45 physical offline education centers throughout China. Thinkthink kids school (想象乐) was chosen as one of the top 10 startups in 2012 on a TV program “第一财经” hosted by Yacai. At that time, Feimalv saw the TV program and reached out to the company to be part of their 3rd batch of Feimalv’s acceleration program in 2013 in Shanghai.

“The biggest help I received from them is on networking,” Heejong Kim, CEO of Thinkthink kids school told TechNode.

“People from education sector all know each other. In Feimalv, there were companies from all different sectors, and we are still in a WeChat group of 300 people to exchange information. You just say what you need, then can easily find resources and contacts you need.

In 2013, they chose 3000 teams, mostly startups in O2O sectors, not many startups with physical products. Now they pick out 15 – 20 teams a year, and many businesses flock to trending sectors.”

3. Chinaccelerator, operated by SOSV, full of international startups

Chinaccelerator is famous for its hands-on-approach startup mentoring to localize expat startup’s business to Chinese way, leveraging WeChat public account and Chinese social networks. Operated by venture fund SOSV, the startups hustle to make revenue and co-working partnership with big brands during its 3-month program. CEO of VREX, Rudy said that out of 11 startups in batch 10, 10 startups have pocketed the funding they need after the Demo day on last December.

VREX offers AR-based app Rush that allows K-pop fans and stars to digitally communicate in physical locations. Cherry picked by SOSV managing director William Bao Bean, VREX went through 3-month long acceleration program in Chinaccelerator batch 10 in 2016.

“There are three things that Chinaccelerator do better than other accelerators: communication, mentor, and habits,” Rudy Lee, CEO of VREX told TechNode.

“Firstly, their communication style. They try to provide an open environment where as many people can communicate with each other as possible, such as “Geeks On A Train”. They run a lot of events, inviting alumni to their events, and it’s not like one time and that’s it.

Secondly, they have a huge network, with 240 official mentors and advisors. They are management levels in big corporations, VC, or serial entrepreneurs who successfully expanded to China and Asia Pacific region. They have built up a relationship with people from legal, investment background and all different sectors.

For example, if your WeChat public account is suddenly blocked, they contact the person in charge of that right away to solve the problem. If you want to talk to companies that leveraged WeChat to growth hack, they connect you to them. The depth and width of their network is remarkable.

Lastly, they help you on building up good habits. I think it’s like a personal trainer in a gym. There are things that you have to do, but you don’t feel like doing, such as checking the figures on your app or following up with the investor, something that you want to ignore or feel awkward to do it. They make you do that. Later on, it becomes your habit, and you come to track those things naturally. They drum your eyes on building these habits.”

4. Innospace+, born out of a real estate company, full of Chinese-speaking startups

Innospace, started out by a real estate developer, launched a new space called Innospace+, sitting right in front of Fudan University in Shanghai. They maintain strong relationship with Cyberport in Hong Kong, DMM from Japan, and CCCC and N15 from Korea, and tailor the acceleration program accordingly to meet their needs in bringing their foreign startups in China. For example, Innospace’s autumn batch in 2015 was wholly funded by KISED, a Korean government fund fostering Korean startups, where child’s education gaming startup CREATIVE BOMB took part in. Innospace provided mentorship and other systematic courses as well as a physical working space to the startups.

“Innospace surely had a strong point as a China-based accelerator,” says Yup Ma, CEO of CREATIVE BOMB.

“Innospace invited Dazhong Dianping and other series A, B companies to give a lecture to us on how to expand a startup in China. When we asked questions, they gave us real examples from the China’s business world.

Secondly, they helped us connect with companies that we wanted to reach out to. When we name the specific company names, they somehow got in touch with them and connected us to them.

Thirdly, the staffs checked our business models, and give us advice on how to pivot our business in the Chinese market. For example, my business is about child education, and they advised me to find a local partner to create content together.

In the office, it’s basically all Chinese startups, we have seen Hong Kong and Taiwanese companies apart from us, but haven’t seen other overseas startups than us. On our demo day in June, we pitched with another five Chinese startups.”

5. XNODE, full of Japanese and European startups

XNODE, started in 2015, is home for startup accelerators like Takumi Innovators, connecting Japanese and Chinese startups and Austrade landing pad, providing programs with the support from the Australian government. XNODE, however, doesn’t take equity shares.

“We will launch the first tailor made corporate accelerator program for two leading global MNCs in July,” Zhou Wei, CEO of XNODE told TechNode.

SmartStudy is a child education startup that brings a handful of English learning apps built around its fox character PINKFONG. Last year, the company recorded US$ 15.5 million in sales, leveraging its IP businesses.

“XNODE’s CEO Zhou Wei previously worked in a real estate sector, and he chose a great location for XNODE. The environment is very nice, and the startups in XNODE are very international, coming from all different countries.”

This is the final post of “Now in Vietnam“, where TechNode visits Vietnam’s leading companies, to explore the next startup ecosystem to emerge among Southeast Asian countries. Vietnam GDP growth could surpass China by 2020 according to Turicum Investment Management.

For startups thinking of expanding to SE Asia, Vietnam, a young market with a growing middle class can serve as a test bed and then a gateway to expand to the bigger markets.

According to AmCham Vietnam, middle and affluent class in Vietnam will double in size between 2014 and 2020, from 12 million to 33 million. The cost of living is a lot cheaper in Vietnam, including its labor, living and marketing cost for startups, as its Big Mac index updated on January 2017 shows that Big Mac in Vietnam costs just US$ 2.66, compared to US$ 5.06 in the U.S., and US$ 2.83 in China.

Chinese companies’ rush into Vietnam market

Leveraging its low-cost labor and proximity to China, many Chinese companies have expanded into Vietnam starting in the early 2000s. Chinese companies of varying sizes and sectors, such as courier company SF Express, home appliance company Midea, and gay social network app Blued, have launched in Vietnam. Chinese tech giant Tencent invested in Vietnam-based VNG, famous for its messaging app Zalo while Alibaba invested US$ 1 billion in Singapore-based Lazada to expand into the SE Asia market including Vietnam.

Tencent’s WeChat used to have one million user base in Vietnam by the early of 2013, but they were kicked out of Vietnam later that year, along with other chat apps like Viber, Line, Whatsapp, KakaoTalk because of the Vietnamese government’s chat apps ban in August 2013.

Chinese companies are commonly located in Ho Chi Minh city, the biggest city in Vietnam as well as its commercial and cultural hub. Hanoi, the capital of Vietnam on the other hand, is where anti-China protest have been held, leading Chinese companies to move down to the southern city of Ho Chi Minh.

Among these companies, the ones who seems to be localizing fastest is Midea. Midea was an early player expanding to Vietnam building its production base in 2007 and was awarded “Best of Vietnam 2015” as one of the top ten brands to manufacture in Vietnam.

SF Express expanded to Vietnam in 2013 with its express delivery service but said “the Vietnam branch is newly established” in an email, and refused to comment on its status of expansion in Vietnam.

Gay app takes off in Vietnam

According to Lonely Planet, Vietnam is a rather hassle-free place for gay, lesbian and trans travelers. While Vietnam’s communist government permitted same-sex marriage in 2015, discrimination still remains, however, and couples flock to online websites to avoid eyeballs around them. Gay social network app Blued expanded to Vietnam in May 2016 and shared some of their user statistics with TechNode.

“The total number of users is close to 700,000, close to 2 million daily messages are sent through Blued group, and close to 1,000 chat groups are highly active on our app. The most concentrated age group is from 18 to 25-year-old users, and are mainly based in Ho Chi Minh City, Hanoi City and Nha Trang and other big cities,” Jason Li, overseas marketing manager at Blued told TechNode.

Blued has two full-time and one part-time Vietnamese employee in Ho Chi Minh city, and one Vietnamese employee at its Beijing HQ.

Much of VR content is formed by filming and preserving 360 views. Some viewers confess being stuck in the middle and being exposed to 360-degree view out of context. Owlii, a startup founded by Tsinghua PhDs in 2016, aims to best preserve people as real as possible in virtual reality, helping users to record their memories.

Owlii creates lifelike holograms that can be viewed via both VR and AR using their volumetric capture and 3D reconstruction technology. The Beijing-based VR company has received a US$ 1.5 million investment from several investors including Shunwei Capital, an early stage focused investment firm co-founded by Xiaomi’s CEO and founder Lei Jun. In Owlii’s demo, you can see its holographic applications around mobile AR.

So how does this work? When body movements are scanned through 4 to 20 depth cameras, which the team has self-prototyped, they go through Owlii’s volumetric capture and 3D reconstruction processes, which brings 3D holograms to life. Users can then watch their memories using VR headsets and AR headsets. Their core technologies have a US PCT application patent, two US provisional application patent, and more in the process.

Ziyu said that there aren’t direct competitors in the market, but there are some companies that possess comparable technologies, including US-based 8i, creating life-like 3D holograms for entertainment, and Microsoft Research on holoportation, virtual 3D telepresence software to match its AR headset HoloLens. South Korea-based Reality Reflection is using 160 DSLRs to create 3D models, however, Ziyu says Owlii outperforms these competitors for a couple of reasons.

Betting on the next generation of communication

Owlii’s vision is greater than just more realistic AR/VR video. Owlii projects that its technology will bring to market ‘holographic telepresence,’ or in other words hologram based video conferencing. The easy way to think of telepresence is making communication via holograms possible, just like how remote meetings and messages are delivered in the movie Star Wars.

Ziyu believes that the markets impacted by Owlii technologies total in the hundreds of billions USD, and could not only transform communication and entertainment but also have an impact on business transportation and the physical world.

“This is a humongous market, but there are very few top players in the world that are capable of doing this. Owlii doesn’t compare itself against domestic competitors, but rather amongst its peers world best technology companies such as 8i and Microsoft Holoportation,” Ziyu told TechNode. “There is a huge opportunity for all, and Owlii has demonstrated its tech strength and ability to achieve this in a years time, much faster than other companies. And Owlii also gets the first crack at the huge China market, which is something global competitors cannot easily access.”

The technology behind Owlii is derived from the team, comprising of PhDs and scientists from Tsinghua university, Stanford, Carnegie Mellon, and Cornell with a background in computer vision, computer graphics, communication, machine learning, electrical engineering, and multimedia.

In the Wudakou area, sitting close to Tsinghua University’s front door, the team is renting an apartment going through R&D to make Owlii’s 3D hologram more interactive. Ziyu says their current R&D is targeting better quality, faster processing, and easier setup, such as making the users’ movements scannable to 3D holograms using their mobile phone and drone.

“We have a strong technical and research background, and always loved to film and take pictures, so it was natural for us to start this,” Ziyu says. “We also saw how AR and VR are drawing the market focus, and how all the 2D are moving into 3D. So we decided to work on it.”

While Owlii’s vision remains focused on bringing to market holographic telepresence, its underlying technologies can be applied to a bevy of other applications from creating 3D holographic memories, such as wedding photos, and graduation photos, to mobile AR hologram experiences.

Owlii is currently exploring a number of ways to commercialize its technology in the near term. Ziyu says the company is in talks with entertainment companies and other corporate entities to run pilot programs. There is particularly strong potential in China, a land filled with a tech-savvy user base that expects innovation and the latest technologies for entertainment like offline virtual reality arcades.

This is the final post of Now in Shenzhen, where TechNode visits a handful of Shenzhen-based companies leveraging Shenzhen’s core strength: manufacturing. 

Shenzhen is becoming an ever dynamic place for startups and makers, and the city now is seeing more companies finding a niche in the market that big factories and notable hardware accelerators could not embrace. Workshop, the Uber of manufacturing to beat big factories, and Trouble Maker, a co-working space for non-professional makers are a good example of that trend. You can see that the manufacturing is moving towards serving much smaller scale of startups and individuals. Here’s our video of visiting Workshop, Trouble Maker and Gravity Innovation. Hope you enjoy it!

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“Now In Shenzhen” covered six stories on interesting trends emerging in Shenzhen:

1. Workshop 

Workshop is “Uber for manufacturing”, helping hardware startups on manufacturing and scaling production in China, especially when they go through crowdfunding.

2. Trouble Maker

Trouble Maker is a Shenzhen-based product development platform that works like a co-working space for makers who want to realize their product.

3. Madrasters

Madrasters is a designer community in Shenzhen where people can learn and chat about design trends and network. The key message is “Made In China” needs more expat designers.

4. Focalmax

Focalmax, a Shenzhen-based company that specializes in smart optical technologies and products, says that its artificial intelligence robot combining VR technology will be ready by the end of this year.

5. EcoFlow Tech

EcoFlow Tech, the battery startup founded by ex-DJI employees, launched a mobile power station RIVER that can charge up to 11 devices simultaneously.

6. Gravity Innovation

Gravity Innovation wants to encourage young students to get interested in space with their connected rocket lamp and SpaceGO app.

This is the fifth post of “Now in Vietnam“, where TechNode visits Vietnam’s leading companies, to explore the next startup ecosystem to emerge among Southeast Asian countries. Vietnam GDP growth could surpass China by 2020 according to Turicum Investment Management.

Chinese mobile games have greatly appealed to the Vietnamese gamers in recent years, thanks to its similar cultural background and its convenient paying system. Vietnam’s top game publishing companies, notably VTC Online and SohaGame have constantly expanded their business in publishing foreign games, the former started out with publishing Korean games including hit game CrossFire, while SohaGame focused on Chinese games.

Early 2000’s: Korean games take the lead

CrossFire, a free-to-play online military shooter game made by Korean developer SmileGate in 2007, raked in US$ 1.3 billion in global sales in 2014, and still has solid sales in Vietnam.

In 2002, Yongdeuk Lee opened an internet cafe in Ho Chi Minh city, which he later had to shut down because it was too early for the market then. Korean games got popular in the mid-2000s, and his Vietnamese friends wanted to purchase Korean games and distribute them in Vietnam. Lee started working as a middleman to cherry pick and purchase quality games from Korea and publish them it in Vietnam.

“We earned 50 million KRW (US$ 44,100) a month, a lot of money at that time. Later we wanted to purchase more copyrighted games, so I joined VTC Online in 2006,” Lee says.

VTC Online started with 23 employees, grew up to a company of 1,000 employees with its branch offices in Korea, China, Laos, and Cambodia. CrossFire was a big hit in Vietnam when published in 2008 by VTC Games. With earnings coming through Vcoin as cash currency, its revenue made by the game was only second to Tencent. FIFA Online 2, co-developed by South Korean company Neowiz Games gained recorded another hit in 2009.

“Seeing the success of CrossFire, we hired in-house game developers to develop our own games. However, it was not successful, and we now turned this business into an online training academy,” Yongdeuk Lee, Vice CEO of VTC Online told TechNode.

In the year 2014 came the era of mobile games, where Korean games withdrew to Chinese games.

“All the web games popped out of South Korea, and its development was quicker than others in Vietnam. The Korean web game’s price was lower, and it had great user experience with the better graphics and creative designs,” Lee says. “However, when downloading Korean games, users need to buy security software. Chinese games were better on security, and users didn’t have to buy security software, which greatly appealed to the users.”

From 2011, Chinese games take the lead

There are eight Chinese companies in the list of Vietnam’s top 100 games, including Fishing Diary from Chinese publisher DroidHen, Castle Clash and Lords Mobile from Chinese publisher IGG, according to the Cheetah Global Lab. So why do Chinese games take lead in Vietnam?

“Vietnam shares a common background of history and culture with China, which makes Vietnamese gamers feel very familiar with all the theme and stories inside Chinese games, such as three kingdoms, kungfu style or Chinese fantasy elements. Also, the monetization system of Chinese games quite fits Vietnamese gamers’ paying behavior,” Hieu Ha Trung, co-founder and business director at SohaGame told TechNode.

Chinese elements appeal to Vietnamese gamers, but there surely there is the need for certain localization. The localization of one game contains two main things: translating and localizing the UI, developing new functions and adjusting the price policy for the local market, according to Ha Trung.

“The research is very important and do research on Vietnam market as much as you can. Vietnamese gamers’ taste is similar to China, but operating one game for billions of population in China, then moving it to a 96 million population like Vietnam will surely have different things to consider,” he says. “To make a game that suits the market trend and gamers’ behavior, combining developers’ capacity and publisher’s market knowledge is also very important.”

Now is the time to look at Vietnam’s local games

Given that the most important factor to evaluate the success of the online game in Vietnam now is on product cycle, according to Vietnam Mobile game market report 2016 released by GameK, Vietnam’s local games are on the right path. 

“Some of the top revenue games with most users are: Mong Vo Lam, Dai Minh Chu, and Hai Tac Bong Dem, with the lifespan of each title from 1.5 to 3 years, while the normal lifespan of one game is only around 9 months,” Ha Trung says.

He believes domestic game’s successful expansion in the home country can help it to expand into other SE Asian countries as well. For that reason, SohaGame now is working closely with local game developers in Vietnam to produce games for Vietnam and SE Asia market.

“SohaGame’s products are dominating 20-25% of the market share for 4 consecutive years in Vietnam, and it will help us to have a good reputation when we launch into the SE Asia market this year,” he added.

This is the final post of “Now in Shenzhen”, where TechNode visits a handful of Shenzhen-based companies leveraging Shenzhen’s core strength: manufacturing. 

The great thing about technology is that it raises awareness of people and inspires. 24-year-old CEO of Gravity Innovation wants to encourage young students to get interested in space with their connected rocket lamp and a mobile application called SpaceGo.

“More people want to get into space. I don’t want just to hear “wow”, but I want them to enjoy and participate in this movement. That’s what we are doing now. The problem of space education is that there is nothing after saying “amazing”,” Romax Ren, CEO of Gravity Innovation, told TechNode.

The Gravity Innovation team is made up of a senior practitioner in the aerospace industry, a star content creator in the science field, as well as practitioners of STEM education.

They have developed a rocket-like lamp that will be launched on Kickstarter crowdfunding campaign in July, during the launch of the Falcon heavy rocket. By lighting the lamp, users can have experience of shooting a rocket in their rooms. The flame will light up slowly from top to bottom, with a lifelike sound. To watch the live streaming of the next rocket launch, users can set an alarm clock or play music using the matching app.

The market is huge. On Reddit, there are 11 million fans in the theme “space”. Each Houston space center has 1 million visitors and earns US$ 73 million of revenue every year. Tencent also started its space topic website Tencent Space (腾讯太空), trying to raise awareness of space to Chinese netizens.

Three years ago, less than 500 thousand people watched the Chang’e-3 (嫦娥三号) launch live. Today, there were more than 16 million netizens on Tencent Space who watched the live streaming of the Tianzhou-1 (天舟一号) launch on April 20th.

To allow more children and space fans to join the rocket launching process in a more interactive and innovative way, SpaceGo has an AR feature, where a user can see their rocket lamp actually launching towards the sky through their phone or tablet screen when they point their camera at the lamp. Other functions include flying to Mars, launching satellites into earth orbit, or taking pictures of the earth from space in real-time.

China’s space odyssey

“China’s space technology at the moment is second in this world. The US is the first when it comes to space technology. Obama dropped the Lunar project, but Trump resumed Lunar it. This is the weak point of NASA, that its project operation is not consistent,” Romax points out.

The number of China’s launches has really taken off, starting from the early 90’s. From 1990 to 1995, China only carried out 20 rocket launches, and from 2011-2016, China carried out 110 rocket launches.  China now ranks the first in the world in terms of the number of rocket launches, with a national record 22 times during 2016.

This is powered by China’s young workforce in space organizations and research centers. China’s space organization has a younger generation of people with its 33 years old average age, while NASA is witnessing aging workforce problem with that of NASA now 47 years old.

“In the US, now more people want to work at Google and fewer people want to work in space. You have a better advantage working in China. After 2020, China will be the only country with ISS (International Space Station),” Romax says.

Space education should be cool

Regardless of China’s public interest and China’s space technology now skyrocketing, turning public support into real enthusiasm is not easy. China’s space education improvement and the establishment of private space organizations are in need.

“In the space education of children, China is falling behind 20 years,” Romax says. “From 1990 till now, space education has not changed. The way to teach people has not developed at all. But people’s expectation and technology development in the consumer market have gone further.”

Romax believes that Gravity Innovation’s rocket lamp and AR app can serve as an intimate educational tool to foster future space talents in China. He himself is also one of the younger generation of post-90s who started his company to pursue his dreams in space. Now 24-years-old Romax is leading the NASA group in Shenzhen and has official contacts with NASA. He has experience in Makeblock, Shenzhen-based STEM company, leading the development of four products.

“I want to encourage more people to take part in space. China also needs a private space organization like SpaceX. Many fans are interested in SpaceX, they are very active and it’s a hot topic,” he says. “If we have a private space organization, it can make a huge difference from what the government is supporting this part.”

This is the fourth post of “Now in Vietnam“, where TechNode visits Vietnam’s leading companies, to explore the next startup ecosystem to emerge among Southeast Asian countries. Vietnam GDP growth could surpass China by 2020 according to Turicum Investment Management.

The cream of the US$ 215 million-sized Vietnam’s mobile gaming market is coming from these three demographics of gamers: A teenage male student, business man over 30s, and an office girl in the 20s, according to SohaGame.

 Now is the time for global game companies to enter the Vietnam market, otherwise it will be too late to skim the cream. The volume of Vietnam mobile game market in 2016 was US$ 215 million, an increase of 18% YoY but strongly decreased in comparing the growth rate of 52.5% in 2015. The market will reach to the saturated point in 2019 with around US$ 295 million, according to Vietnam Mobile game market report 2016 released by GameK.

According to the report, there were 216 new mobile games released in 2016, up 51% compared to 2015 (143 new games), meaning there were almost 2 new games released every 3 days. However, revenues in the market only increased by 18%. Also, 35% of newly released games shut down their service right in the first year.

Vietnam will stay as a promising game market in the SE Asia region, but the competition will get fiercer, as Hieu Ha Trung, business director of SohaGame puts it, “the market is not open to everyone like 2 or 3 years ago.” SohaGame is one of the top 2 mobile game publishers in Vietnam based on the number of new games released in 2016, with more than 23 released games.

Hieu Ha Trung, co-founder and business director of SohaGame served in the Ho Chi Minh-based company over six years and helped its mobile games like Socvui.com reach its highest peak visits. We talked to him about his gaming industry insights in Vietnam and tips for global gaming companies entering the Vietnam market.

Who are Vietnam’s gamers?

There are 3 types of typical Vietnamese gamers in my mind: A teenage male student, business man over 30s, an office girl in 20s.

• A teenage male student, who loves to play games day and night, he plays games after he wakes up, in the school during break times. He doesn’t have much money, but he is willing to spend about US$ 20-40 per month for his favorite games. Normally he plays 2-3 games at the same time, he loves manga, anime, Chinese and Hollywood movie and can play all games with those themes.
• A business man over 30, who still remembers all traditional Chinese movies he watched when he was a small child like Three Kingdoms, Water Margin, and Jinyong Kungfu novels. He loves to play the games which can remind him of those good memories. He is busy and can only play games for about 1-2 hours per day when he has free time. He is picky but loyal to the games he likes and is willing to spend money on them.
• An office girl in her 20s, who never play games before, but now she loves killing time on match-3 games or some farming games. She plays for fun, spends a little money on each game she plays. She loves to show the result she gained in the games to her friends.

What types of game appeal to Vietnam’s gamers?

The most popular games in Vietnam are still MMORPG (Multiplayer Online Role-Playing Game), card battle and ARPG (Action Role-Playing Game) with Chinese or manga stories.

VR game is the new trend in the next 2 or 3 years, now we see it still has some barriers in the hardware to reach to all normal gamers as a personal device or for home play. During the next 3 years, e-sport on mobile will be very potential in Vietnam and the region, we are expecting a booming of this new generation of entertainment.

How do you publish your game in Vietnam?

Vietnamese government departments ask companies to have a game operating license. There are 2 types of publishing license required in order to publish games in Vietnam: one for the whole company, and one for each title the company will publish, including the content and technology documents. It’s a big barrier for game companies to enter this business, but in another way, it helps those companies to professionalize their business before providing it to customers.

Why is Vietnamese gaming market the fastest growing market in the Southeast Asia?

Vietnam population is 94 million in 2016, and more than 40% are under 35 years old, and the total number of gamers is 36 million, which is a huge market for the game industry. In geography, Vietnam stays only in one mainland, which is not separated into many islands like the Philippines and Indonesia, and 90% of Vietnam population is from one ethnic; that helps game publishers easier when to publish games and target to the audience.

The basic foundation of internet and 3G in Vietnam is also one of the fastest and cheapest services in the region. Starting from $2.5 USD per month for a 3G subscription fee, you can have 500MB 3G with high speed to play games. Also, the payment method of prepaid phone card is very popular around Vietnam, which helps gamers to buy and pay for the game anywhere, anytime they want.

For expat founders entering the China market, and for Chinese travelers visiting overseas countries, the language difference is the first and essential problem they run into. Aiming to help people have a conversation regardless of their language difference, Travis the Translator recognizes and translates speech in 80 of the most common languages within two seconds and is now launching in China.

Google Translation can be of help, but it eats up your battery if you’re up for a longer period translation work. Targeting China market, Dutch startup is now selling Travis devices through their WeChat public account and will start receiving retail orders starting from the end of May. Their crowdfunding campaign just got funded 746% of their modest $80,000 goal on Indiegogo, summing up to US$ 596,848 with 1 day to go.

The market is huge. There are 7.5 billion people in the world using 7,097 languages, and the 83% speaks only one language. Priced at US$ 139, the translator is a handheld, pocket-sized device and comes with a matching Android app. We couldn’t try out the translation, but Travis sure was light and compact in size.

The Rotterdam-based company is using IBM and Google’s existing AI principle on translation. They use Google Translate for some language and translates other languages using apps from Microsoft, Systran, IBM and 2 apps that the company refused to disclose. The company does not have an in-house AI scientist.

“The more we use, the better it gets. IBM and Google’s existing AI needs more data to get better. We use our app as an umbrella and link with their open source software,” Lennart Van der Ziel, co-founder & CEO Travis the translator told TechNode at an event in Shanghai.

OLE (Open Learning Education) and Travis partnered to donate 200 devices to refugee centers in Turkey so that they can encourage them to learn a new language. The team is also working closely with the Rotterdam city government. With its 12 hour battery, they are looking to have 100 devices in the tourist center, so that tourists can take the translator and use it for one day.

Lennart Van der Ziel, co-founder and CEO of Travis the Translator studied law in Rotterdam and decided to leave his position to pursue his dream.

“Lawyer is about fixing the problem of the businesses. When I thought about it, I wanted to work ahead something and have lawyers to help me. I don’t want to solve someone else’s business matters,” Lennart says.

The 29-year-old Dutch founder started a Venture Cafe in Rotterdam, where a huge community of investors and entrepreneurs gathered and also where Lennard teamed up with other co-founders.

To enter the China market, the company is furthering its presence in first-tier cities like Beijing and Shenzhen.

This is the third post of “Now in Vietnam“, where TechNode visits Vietnam’s leading companies, to explore the next startup ecosystem to emerge among Southeast Asian countries. Vietnam GDP growth could surpass China by 2020 according to Turicum Investment Management. 

Where there is a startup ecosystem, there is co-working space to house their innovation and passion. Boosted by confident views on Vietnam’s future growth, co-working spaces are sprouting up in Vietnam to home its 3,000 startups. In Vietnam’s Hanoi, most of the co-working spaces are circling around West Lake (Tay Ho) and Hoan Kiem Lake, the heart of Hanoi.

Among the dozens of co-working spaces in Hanoi, the UP Coworking Space is becoming a must destination for startups and angel investors in Vietnam and those who want to find out what Vietnam’s startup vibe is like.

The idea for UP Coworking Space was put out on the table in 2016 by Do Hoai Nam, the chairman of SeeSpace InAir, the augmented TV experience which successfully crowdfunded on Kickstarter in 2014. With other Up co-working space co-founders, Mr. Tuan Phan, Mr. Tuan Do and Mr. Hung Tran, Namster had travelled a lot of places and witnessed the significant development of many million dollar startups in Silicon Valley.

“After researching many business models and investing in startups, he found that the main reason why so many startups, especially the young startups, lose their market competitiveness and delaying their development. It was because of extremely high sunk cost,” Mai Lan Van, Head of community at UP Coworking Space space told TechNode. “In order to give support to startups in where they have invested so much of their time and effort, Nam Do created UP co-working space.”

UP Coworking Space aims to give startups better working conditions to work, learn, expand relationships, raise capital and consult with mentors with the best price. The four co-founders are angel investors in companies at UP co-working space as well.

However, it’s not only the creators of the co-working who are seeking for the fresh startups. VIC Partners is a private investment group of credited angel investors that I met at UP co-working space. As a visitor, I couldn’t miss them, because two of the investors were sitting at the entrance of the UP co-working space, with their big logo on their desktop. They were wearing T-shirts just like other founders.

“I spend time in almost every co-working space in Hanoi, but mostly at UP Coworking Space, and Toong co-working space, because they are the largest, have the most startups. You just happened to meet us at UP co-working space,” Managing director of VIC, Trinh Anh Duc told TechNode.

Trinh was previously co-founder of Curnon, a fashion watch brand and currently serves as a Managing director of VIC Partners as well as Hanoi Chapter Director at Startup Grind.

Dedicated to investing and fostering startups in Vietnam, some investors like Trinh will spend time at the co-working space talking to startups, then the group would gather up to discuss whether to invest. VIC Partners’ fund comes from angel investors who are diversified high-net-worth entrepreneurs with different business backgrounds but share the same interest in angel investing.

“We invest in consumer-driven businesses that our insights, experience, and expertise can add the most value. We aim to become the official voice of the Vietnam Angel Investor community, create awareness on angel investments to spur the growth of business angels in the country,” Trinh says.

Priced at US$ 50 a month per a seat, UP Coworking Space is full of hard working entrepreneurs even on a Friday evening.

“In UP Coworking Space, about 70% are tech startups, and about 20% are media. Most startups are early stage companies with 2 or 3 people in the team,” Hung Tran, co-founder of UP co-working space told TechNode.

Apart from their first location in the French quarter in Hanoi, they have another location in Hanoi University, which is 1.5 times bigger than the first one. They are planning to expand the business to Ho Chi Minh city.