Bottom line: China’s apparent partial blockage of some Whatsapp functions for brief periods is unlikely to end with a total blockage, mostly because the service is used almost exclusively by foreigners.
Whatsapp temporarily blocked in China
Foreign media are buzzing about what appears to be the blockage of some functions on Whatsapp, with the obvious implication that a full blockage of the the popular instant messaging app could be next. This particular story has a few interesting angles, led by the fact that Whatsapp isn’t used by very many Chinese and also that it’s owned by social networking giant Facebook (Nasdaq: FB).
There are a also a number of precedents to go by, none of which looks too positive for the future of Whatsapp. Just about every other major global social networking app has been blocked in China by now, including Facebook itself, as well as Twitter (NYSE: TWTR) and Japan-listed Line (Tokyo: 3938). But there are a few notable exceptions that have been allowed to keep operating in China, one of which is Whatsapp and two others being the Microsoft (Nasdaq: MSFT) owned Skype and LinkedIn. Read Full Post…
Bottom line: A probe against WeChat in Taiwan is likely to see its local offices shut down and Tencent evicted, reflecting the many challenges Chinese tech companies will face as they try to expand abroad.
WeChat faces Taiwan eviction
Taiwan may share many cultural traits with China, but its government certainly doesn’t seem to have much love for Chinese technology. The list of Chinese firms running into trouble on the island has just gained a new member, with word that Tencent’s (HKEx: 700) hugely popular WeChat is facing eviction from Taiwan for possibly violating local investment rules.
This brewing setback is interesting mostly for political reasons, and also because it reflects the troubles that WeChat has faced in its fledgling global expansion. From a practical perspective, Taiwan looks like an easy market for Chinese tech companies due to the shared language and culture. But the fact is that Taiwanese preferences are often quite different from China’s, and in this case the reality is that Japan-leaning Taiwanese far favor rival Japanese product Line to WeChat. Read Full Post…
Bottom line: China Mobile’s new unnamed social networking platform based on RCS technology has a 50-50 chance of posing a serious challenge to WeChat due to the many advantages it will enjoy from its China Mobile connections.
New China Mobile platform to challenge WeChat
After 2 years of standing on the sidelines as Tencent’s (HKEx: 700) WeChat rapidly stole its text messaging business, leading telco China Mobile (HKEx: 941; NYSE: CHL) is finally preparing to fight back with its own competing product offering, according to ZTE (HKEx: 763; NYSE: CHL), which is supplying networking equipment for the product. ZTE’s cloud computing chief Zhu Jinyun told me the new product will be an entire platform for social networking and other services based on rich communications suite (RCS), a technology developed by a global telecoms association.
I’m admittedly not too familiar with RCS, though some web searches showed it’s a platform that allows for a wide range of functions, from one-on-one instant messaging to group chats, file transfers, IP voice calls and location-based services (LBS). Anyone looking at that list will instantly recognize that many of those features are already present on WeChat, whose popularity has rapidly siphoned texting business from China Mobile and the nation’s other telcos. Read Full Post…
Bottom line: WeChat will face slow progress in the US and other global markets due to strong competition, and will be hobbled by concerns that it may monitor its users activities like it does in China.
WeChat in US promotion on UCLA campus
Tencent’s (HKEx: 700) WeChat mobile messaging service may be wildly popular in China, but it’s facing a steep uphill climb outside its protected home market. My own recent experience using the service in Hong Kong this week highlights one of WeChat’s biggest problems, namely concerns among users that their activities may be monitored and censored. That kind of issue could push users to more popular western brands like WhatsApp and Line, which have cleaner reputations. Tencent itself isn’t helping the situation by using a half-hearted promotion strategy in the US, as highlighted in a new report on some of its recent activities to crack that highly competitive market. Read Full Post…
Bottom line: NetEase’s withdrawal from microblogging represents a broader decline for the overall sector, and is likely to put downward pressure on Weibo shares over the medium to longer term.
NetEase microblog withdrawal looks bad for Weibo
Media reports that web stalwart NetEase (Nasdaq: NTES) will finally shutter its microblogging service don’t come as a big surprise, since it’s been years since anyone has posed a challenge to the dominance of sector leader Weibo (Nasdaq: WB). But what does come as a slight surprise was the reaction to the news in Weibo’s share price. One would normally expect Weibo shares to rally on news of a competitor’s demise, but instead Weibo’s shares actually fell nearly 4 percent in the latest trading session. Read Full Post…
I’m no fan of censorship, but I still have to compliment Beijing on its recent unusual decision to inform South Korea of the reasons behind its recent decision to block the popular mobile instant messaging service called Line in China. This kind of explanation would sound normal in any other country; but it represents a big step for Chinese censors, who are highly secretive when they choose to block Internet sites, ban foreign films and TV shows and take other similar actions.
Many people, myself included, won’t be truly satisfied with China until it completely removes its practice of censoring material that simply expresses different views from the central government or is critical of high government officials. But at least this unusual act of openly explaining one of its censorship actions marks a move in the direction of more transparency, which could be a small sign of improvement in helping companies navigate the difficult Chinese media market. Read Full Post…
Two of the world’s biggest social networking service (SNS) operators are in the headlines as the new week begins, starting with word that Facebook (Nasdaq: FB) is moving ahead with its plans to open in China. Meantime, separate reports are saying Japanese-based mobile instant messaging service Line has been disrupted in China, perhaps for carrying sensitive content.
These news bits may look different on the surface, but they’re really quite similar in broader terms. China is extremely wary of offshore-based SNS like Facebook, Line and Twitter (NYSE: TWTR), because they are not subject to the country’s strict self-censorship laws. Thus companies that want to develop a China business must open offices and host their Chinese services on local servers to placate Beijing, which is what Facebook and Line are doing now. Read Full Post…
New data is showing an acceleration in the decline of text messaging (SMS) in the new age of over-the-top (OTT) services like WeChat, underscoring the urgency for China’s 3 telcos to find new replacements for this important revenue generator. The decline of SMS isn’t new, and has been discussed by all 3 of China’s state-run telcos at one time or another over the last 2 years. The issue was also at the center of a high-profile dispute between China Mobile (HKEx: 941) and Tencent (HKEx: 700) in late 2012, involving the rapid rise of WeChat. But the latest figures do point to an acceleration of the decline, which will lead to hundreds of millions of dollars in lost revenue for the big telcos. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 14-16. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Targets 100 Mln Annual Cellphone Sales In 3 Years (Chinese article)
Boeing (NYSE: BA) Wins Biggest Ever Order From A Chinese Airline (English article)
MIIT To Issue Third Batch Of VNO Licenses In 1-2 Months (English article)
Dangdang (NYSE: DANG) On Logistics Drive In Yangtze River Economic Belt (PRNewswire)
Line Plans Major China Push This Year, To Set Up Locally-Based Team (Chinese article)
After years of hovering at the edge of China’s gadget and app markets, Japanese mobile instant messaging giant Line and Microsoft’s (Nasdaq: MSFT) Xbox gaming console are both reportedly preparing to enter the market. Line’s plan looks the most exciting to me, as the product has quickly gained a major following in Asia and could find a receptive audience in China with its new partnership. Meantime, I’m less optimistic about Xbox, as its China entry comes after its consoles have been available on the local gray market for years, and it will face competition from a new group of homegrown products. Its choice of the struggling Shanghai Media Group (SMG) as its partner also doesn’t look too exciting to me. Read Full Post…
The following press releases and media reports about Chinese companies were carried on May 3-5. To view a full article or story, click on the link next to the headline.
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Sina (Nasdaq: SINA) Announces Preliminary Q1 Results (PRNewswire)
China Mobile (HKEx: 941) Says In Talks With 2 Rivals For Base Station JV (HKEx announcement)
