Tencent Beats Alibaba To Banking License

Tencent beats Alibaba to banking license

Earlier reports of e-commerce leader Alibaba’s strong political ties appear to be overstated, following word that archrival Tencent (HKEx: 700) has become the first of China’s major Internet firms to win a highly sought banking license. Both companies had been aggressively expanding into financial services over the past year, though each was reliant on partnerships with other companies that already had licenses to offer services in the highly regulated sector dominated by big state-run companies. But now Tencent will be able to offer many of those services on its own, following this ground-breaking award of a license from the nation’s banking regulator. Continue reading

Lenovo Expands Into Smart Devices

Lenovo tries out smart devices

PC giant Lenovo (HKEx: 992) has never been a company to sit still for very long, which is both a positive and negative trait, as it announces yet another new foray into the smart devices sector. The company’s inability to be satisfied with the status quo has helped propel it to the world’s top PC maker through a series of acquisitions over the last few years, making it one of China’s best known global brands. But that same inability to focus also means Lenovo is constantly venturing into new areas, both for products and geographies. Some of those look good, but many often lead to headaches and disappointment. Continue reading

GUEST POST-WeChat Story Part 2: Tipping Point In V 5.0

The following is Part 2 in a multi-part series about the rise of WeChat, the popular mobile instant messaging service owned by Tencent.

By Lanie Nie

Wechat finds tipping point with new functions

If WeChat’s story can be divided into two parts, the big dividing point would be the launch of its 5.0 version on August 5, 2013. Before that, users of the popular mobile chatting app were mainly focused on fancy gimmicks like “shake“, “people nearby” and “drift bottle” that help users make contact with a few strangers. The hyperactive “moments” feature is also very popular, allowing users to share photos, status updates, links and locations with friends; and so were “official accounts” that enabled business owners, media outlets and even individuals to push out messages and articles to their followers.

But after the launch of WeChat 5.0, people began to wonder if the real ambition of this chatty app might go beyond its dominant role as a center for Chinese socializing on mobile. With a newly introduced mobile payment solution and an enhanced “scan” function that is no longer restricted to QR codes but also applicable to bar codes, book covers, street views and even basic English to Chinese translation, WeChat showed a strong interest in bringing out the next generation of shoppers in its post-5.0 era.

Moreover, WeChat began to take initiatives to develop an ecosystem around its core messaging function. For example, its 5.0 version divided the category of official accounts into service accounts and subscription accounts, and capped the number of mass messages that could be sent to their followers at one per month and one per day, respectively, in a bid to curb abuse of the system by overly aggressive sellers.

Re-Educating The Public

While things like the mobile payment revolution may still need time to find a following, the ubiquitous WeChat has already ingrained some profound changes into Chinese society. Here are some critical features WeChat offers, of which we’re just starting to see the implications:

A return to private networks

Unlike the dedicated WhatsApp, the Middle Kingdom-born WeChat is structured in a way that allows it to function not only as a communications tool, but also a user-centered networking platform like Facebook (Nasdaq: FB) and a social media platform like Twitter (NYSE: TWTR). However, the social network-style feature on WeChat creates a very different space for private sharing than currently exists through other social networks. Users are only allowed to see comments about others’ posts by people that they are also friends with, reducing the visibility people have into one another’s lives given by open social network sites.

Moreover, instead of being miserable finding the balance between friend posts and sponsored content and making story scoring and ranking algorithms smarter like other social networks, WeChat simply asks users themselves to decide what they want to share and with whom, an approach that controls information outflow and possible social network fatigue and is flexible for catering to different privacy needs.

When all the various functions of the whole social networking service are accommodated into one big mobile app and autonomy of one’s network is given back to the user himself, WeChat actually facilitates “sharing with smaller groups”, the next big trend for social proposed by Mark Zuckerberg, founder and CEO of Facebook, in an interview with Wired magazine last year.

Executives, who are not that technology-savvy, swarm after extremely expensive courses to learn the tricks of WeChat, afraid of missing out chances to join small coteries on metrics of either wealth and social status or interests and profession.

Online communities on WeChat demonstrated the reach of small-group sharing on December 18, 2013, as the Shenzhen-listed film production company Huayi Brothers (Shenzhen: 300027) saw its stock fall by the daily limit of 10 percent that day, mainly dragged down by bad reviews from fund managers and securities analysts. In that instance, the negative talk centered on comments the night before, after a pre-screening of the company’s highly anticipated blockbuster film “Personal Tailor”, that swept through the moments column of literally every relevant person.

Lanie Nie is a writer, translator and participant observer of localization and internationalization efforts by Chinese technology, media and entertainment companies. She freelances regularly for Chinese business and technology news websites and can be emailed directly at lanienie@hotmail.com.

News Digest: July 26-28, 2014

The following press releases and media reports about Chinese companies were carried on July 26-28. To view a full article or story, click on the link next to the headline.
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  • Tencent (HKEx: 700) Among Chinese Companies Approved to Set Up 3 Lenders (English article)
  • Shenyin & Wanguo (HKEx: 218) Buys Hong Yuan (Shanghai 000562) For $6.4 Bln (English article)
  • Shanghai Disneyland (NYSE: DIS) Eyes Opening At End 2015 (Chinese article)
  • NDRC Determines Qualcomm’s (Nasdaq: QCOM) Anti-Trust Guilt, Collects Sales Data (Chinese article)
  • US Sets Anti-Dumping Duties On Solar Imports From China, Taiwan (English article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)

Xiaomi Shoots For Middle In Late 4G Arrival

Xiaomi hypes style with Mi 4

After an embarrassing recent gaffe that saw him ridiculed by fellow smartphone executives, Xiaomi founder Lei Jun was back in the spotlight this week with the launch of his company’s fourth-generation phone aimed at mid-end users. The company managed to get the usual widespread media coverage for the launch of its Mi 4, which it hopes will give it a sales boost necessary to meet an aggressive growth target for this year. But that said, I do sense that media and consumers are starting to tire of the company’s relentless hype and marketing. That could ultimately hurt its growth prospects, especially as China’s mid-range smartphone market becomes flooded with similar products from other domestic manufacturers. Continue reading

GUEST POST-WeChat Story Part 1: In-House Roots

Note: Today marks the start of a series of guest posts on the rise of WeChat, China’s wildly popular mobile messaging giant that now boasts more than 600 million users. The series by freelance writer Lanie Nie will run on alternating days over the next 2 weeks.

By Lanie Nie

Chronicling WeChat’s rapid rise

If you recently traveled by bus or subway in a big Chinese city, you probably noticed one thing immediately — nearly everyone was fixated on the small screens of their smartphone handsets, no matter how crowded the place or how long the journey. At the center of that obsession is the mobile messaging app called WeChat or Weixin in Chinese, which is owned by Chinese Internet giant Tencent (HKEx: 700) and is similar to services like WhatsApp, Kakao Talk and Line.

WeChat might share the same starting point with these popular services, but it has already been telling another story in its home market. With a claimed domestic user-base of more than 600 million, the native mobile app for average Chinese smartphone owners has become a village square of friend updates and subscription feeds, an online storefront for money market fund products as well as a portal into a taxi ride, a group-buying deal and a movie ticket reservation. It’s also an urban guide and offers business review services and a catalog of top smartphone games, which makes it fair to say the world is your WeChat. Continue reading

News Digest: July 25, 2014

The following press releases and media reports about Chinese companies were carried on July 25. To view a full article or story, click on the link next to the headline.
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  • Baidu (Nasdaq: BIDU) Announces Q2 Results (PRNewswire)
  • Xiaomi Plans HK Back-Door Listing Using Shell Company – Market Talk (Chinese article)
  • ZTE (HKEx: 763), TIM Brasil to Set Up Next-Generation Broadband Innovation Center (Businesswire)
  • Smartphone Brand Awareness Increasing in China; Apple Still Holds Top Spot – TrendForce (Businesswire)
  • Qualcomm’s (Nasdaq: QCOM) Profit Hurt by Dispute Over China Royalties (English article)

Luxury Dip Takes Bite Out Of Phoenix

Luxury clampdown hits Phoenix

Beijing’s crackdown on excessive spending by officials has claimed one of its first victims in the media sector, with word that leading independent broadcaster Phoenix Satellite TV’s (HKEx: 2008) profits tumbled in the first half of the year due to flagging revenue from luxury goods advertisers. The news isn’t all that surprising, since Beijing’s crackdown has been going on for more than a year now. Now we’ll have wait and see how long the slowdown lasts, whether it intensifies, and who else is most vulnerable. Continue reading

China Telecom Jumps Into 4G, Out Of Airports

China Telecom launches 4G service

China Telecom (HKEx: 728; NYSE: CHA) could quickly regain the growth momentum it lost in the first half of this year, with word that the smallest of the nation’s 3 mobile carriers has already launched 4G service just weeks after getting a license for the business. At the same time, media are reporting that both China Telecom and larger rival China Mobile (HKEx: 941; NYSE: CHL) are preparing to shutter their airport VIP lounges, in a move that was long overdue as each faces pressure to cut marketing costs. The pair of developments show that China Telecom should soon return to positive subscriber growth, after posting net losses in the first half of this year as it waited for a 4G license. Continue reading

Weibo: Xiaomi’s Gaffe, Baidu’s Crawl To Brazil

Lei Jun in online gaffe over Xiaomi 4

Smartphone maker Xiaomi’s co-founder Lei Jun is a marketing master, but his lightweight status as a technology expert landed him in the middle of an embarrassing gaffe in the microblogging realm over the past week. I normally would sympathize with someone caught up in such a gaffe, as such mistakes are usually harmless even if they’re somewhat embarrassing. But in this case I don’t feel too much sympathy for Lei, who is such a tireless promoter for his company that this kind of stumble was almost inevitable.

Meantime, the number “2″ seems to be a magic one for leading search engine Baidu (Nasdaq: BIDU), which made a rare appearance in the microblogging realm to trumpet the formal launch of its new search service in Brazil — its second major foray outside China after a dismal first effort in Japan. In this case, Baidu isn’t really trumpeting the “2″ element of its Brazilian story, even though it took more than 2 years for the launch since reports first emerged of its plans for the site. Continue reading

News Digest: July 24, 2014

The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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  • McDonald’s (NYSE: MCD) Sticks By Meat Supplier OSI After Yum Severs Ties (English article)
  • SAIC (Shanghai: 600104), Alibaba Partner In Internet Car Initiative (Chinese article)
  • First Foreign-Invested Hospital Approved, Obstacles Remain (Chinese article)
  • Phoenix Satellite TV (HKEx: 2008) Announces Profit Warning (HKEx announcement)
  • Lenovo (HKEx: 992) To Launch, Air Purifiers, Other Smart Devices (Chinese article)
  • Latest calendar for Q2 earnings reports (Earnings calendar)