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Dutch chipmaker NXP makes China push by backing radar company Hawkeye

Posted by on Apr 17, 2019 in alibaba, Asia, Automotive, autonomous driving, banma, China, Nanjing, NXP Semiconductors, Qualcomm, Radar, self driving vehicles, semiconductor, Transportation | 0 comments

Dutch chipmaker NXP Semiconductors has come a long way since Qualcomm’s outsize $44 billion to acquire it fell through last year. In an announcement released on Tuesday, NXP said it’s agreed to back and partner with Hawkeye Technology, a Chinese company specializing in automotive radars, as part of an ambition to capture the rapid growth of sensor-powered vehicles in China.

Financial terms of the investment were undisclosed, but the tie-up will see Hawkeye providing a suite of technical know-how to NXP. That includes the Chinese company’s engineering team, a research lab it set up with Southeast University in the Chinese city of Nanjing, and its 77Ghz radar, a long-range sensing technology that enables cars to detect crashes down to sub-millimeter accuracy.

Under the agreement, NXP and Hawkeye will work together to create reference designs rather than retail products.

“The fast development of ADAS [Automatic Data Acquisition System] and autonomous driving technologies has raised new requirements for vehicle-based millimeter radar,” said Alex Shi, co-founder and chief executive of Hawkeye. “By partnering with NXP, Hawkeye will focus on providing advanced millimeter wave radar system level solutions as well as comprehensive technical support for Tier 1 customers.”

The deal is a smart move for NXP, whose claim to fame is its chips for car-related applications, as it strives to be a key player in China’s autonomous driving race. Hawkeye may be little known, but not its CEO. Shi was the former boss of Banma Network, a joint venture between ecommerce behemoth Alibaba and Chinese state-owned automaker SAIC Motors, which is the key force to commercialize Alibaba’s connected car solutions.

In April 2015, Shi and a group of other prominent auto figures from China founded Hawkeye with an initial registered capital of 30 million yuan ($4.5 million).

The Hawkeye funding arrived less than a year after Qualcomm dropped its proposed buyout of NXP, which was set to be one of the largest in the semiconductor space but ended up as a collateral damage in rising trade tensions between China and the U.S. Qualcomm had mulled buying NXP as early as September 2016.

China remained a focus for NXP, which assured that its alliance with Hawkeye is evidence of its “confidence in the Chinese market” and “determination to continuously invest in the country,” said NXP president Kurt Sievers in a statement.

“Innovators in automotive, like Hawkeye and Southeast University, have become the driving force for the transformation of China’s automotive industry. We are pleased to collaborate with these excellent partners, leveraging NXP’s leadership in the fast-growing radar semiconductor market to improve road safety,” Sievers added.


Source: The Tech Crunch

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Surging costs send shares of ecommerce challenger Pinduoduo down 17 percent

Posted by on Mar 14, 2019 in alibaba, alibaba group, Amazon, Asia, bytedance, China, e-book, E-Commerce, Earnings, eCommerce, online marketplaces, Qutoutiao, shanghai, supply chain, tiktok | 0 comments

China’s new tech force Pinduoduo is continuing its race to upend the ecommerce space, even at the expense of its finances. The three-year-old startup earmarked some big wins from the 2018 fiscal year, but losses were even greater, dragging its shares down 17 percent on Wednesday after the firm released its latest earnings results.

The Shanghai-based company is famous for offering cheap group deals and it’s able to keep prices down by sourcing directly from manufacturers and farmers, cutting out middleman costs. In 2018, the company saw its gross merchandise value, referring to total sales regardless of whether the items were actually sold, delivered or returned, jump 234 percent to 471.6 billion yuan ($68.6 billion). Fourth-quarter annual active buyers increased 71 percent to 418.5 million, during which monthly active users nearly doubled to 272.6 million.

These figures should have industry pioneers Alibaba and JD sweating. In the twelve months ended December 31, JD fell behind Pinduoduo with a smaller AAU base of 305 million. Alibaba still held a lead over its peers with 636 million AAUs, though its year-over-year growth was a milder 23 percent.

But Pinduoduo also saw heavy financial strain in the past year as it drifted away from becoming profitable. Operating loss soared to 10.8 billion ($1.57 billion), compared to just under 600 million yuan in the year-earlier period. Fourth-quarter operating loss widened a staggering 116 times to 2.64 billion yuan ($384 million), up from 22 million yuan a year ago.

Pinduoduo is presenting a stark contrast to consistently profitable Alibaba, which generates the bulk of its income from charging advertising fees on its marketplaces. This light-asset approach grants Alibaba wider profit margins than its arch-foe JD, which controls most of the supply chain like Amazon and makes money from direct sales. Pinduoduo seeks out a path similar to Alibaba’s and monetizes through marketing services, but its latest financial results showed that mounting costs have tempered a supposedly lucrative model.

Where did the ecommerce challenger spend its money? Pinduoduo’s total operating expenses from 2018 stood at 21 billion yuan ($3 billion), of which 13.4 billion yuan went to sales and marketing expenses such as TV commercials and discounts for users. Administration alongside research and development made up the remaining costs.

Pinduoduo’s spending spree recalls the path of another up-and-coming Chinese tech startup, Qutoutiao . Like Pinduoduo, Qutoutiao has embarked on a cash-intensive journey by burning billions of dollars to acquire users. The scheme worked, and Qutoutiao, which runs a popular news app and a growing e-book service, is effectively challenging ByteDance (TikTok’s parent company) in smaller Chinese cities where many veteran tech giants lack dominance.

Offering ultra-cheap items is a smart bet for Pinduoduo to lock in price-intensive consumers in unpenetrated, smaller cities, but it’s way too soon to know whether this kind of expensive growth will hold out long-term.


Source: The Tech Crunch

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The “splinternet” is already here

Posted by on Mar 13, 2019 in alibaba, Asia, Baidu, belgium, Brussels, censorship, chief executive officer, China, Column, corbis, Dragonfly, Eric Schmidt, eu commission, Facebook, firewall, Getty-Images, Google, great firewall, Information technology, Internet, internet access, Iran, Mark Zuckerberg, net neutrality, North Korea, online freedom, open Internet, photographer, russia, Saudi Arabia, search engines, South Korea, Sundar Pichai, Syria, Tencent, United Kingdom, United Nations, United States, Washington D.C., world wide web | 0 comments

There is no question that the arrival of a fragmented and divided internet is now upon us. The “splinternet,” where cyberspace is controlled and regulated by different countries is no longer just a concept, but now a dangerous reality. With the future of the “World Wide Web” at stake, governments and advocates in support of a free and open internet have an obligation to stem the tide of authoritarian regimes isolating the web to control information and their populations.

Both China and Russia have been rapidly increasing their internet oversight, leading to increased digital authoritarianism. Earlier this month Russia announced a plan to disconnect the entire country from the internet to simulate an all-out cyberwar. And, last month China issued two new censorship rules, identifying 100 new categories of banned content and implementing mandatory reviews of all content posted on short video platforms.

While China and Russia may be two of the biggest internet disruptors, they are by no means the only ones. Cuban, Iranian and even Turkish politicians have begun pushing “information sovereignty,” a euphemism for replacing services provided by western internet companies with their own more limited but easier to control products. And a 2017 study found that numerous countries, including Saudi Arabia, Syria and Yemen have engaged in “substantial politically motivated filtering.”

This digital control has also spread beyond authoritarian regimes. Increasingly, there are more attempts to keep foreign nationals off certain web properties.

For example, digital content available to U.K. citizens via the BBC’s iPlayer is becoming increasingly unavailable to Germans. South Korea filters, censors and blocks news agencies belonging to North Korea. Never have so many governments, authoritarian and democratic, actively blocked internet access to their own nationals.

The consequences of the splinternet and digital authoritarianism stretch far beyond the populations of these individual countries.

Back in 2016, U.S. trade officials accused China’s Great Firewall of creating what foreign internet executives defined as a trade barrier. Through controlling the rules of the internet, the Chinese government has nurtured a trio of domestic internet giants, known as BAT (Baidu, Alibaba and Tencent), who are all in lock step with the government’s ultra-strict regime.

The super-apps that these internet giants produce, such as WeChat, are built for censorship. The result? According to former Google CEO Eric Schmidt, “the Chinese Firewall will lead to two distinct internets. The U.S. will dominate the western internet and China will dominate the internet for all of Asia.”

Surprisingly, U.S. companies are helping to facilitate this splinternet.

Google had spent decades attempting to break into the Chinese market but had difficulty coexisting with the Chinese government’s strict censorship and collection of data, so much so that in March 2010, Google chose to pull its search engines and other services out of China. However now, in 2019, Google has completely changed its tune.

Google has made censorship allowances through an entirely different Chinese internet platform called project Dragonfly . Dragonfly is a censored version of Google’s Western search platform, with the key difference being that it blocks results for sensitive public queries.

Sundar Pichai, chief executive officer of Google Inc., sits before the start of a House Judiciary Committee hearing in Washington, D.C., U.S., on Tuesday, Dec. 11, 2018. Pichai backed privacy legislation and denied the company is politically biased, according to a transcript of testimony he plans to deliver. Photographer: Andrew Harrer/Bloomberg via Getty Images

The Universal Declaration of Human Rights states that “people have the right to seek, receive, and impart information and ideas through any media and regardless of frontiers.”

Drafted in 1948, this declaration reflects the sentiment felt following World War II, when people worked to prevent authoritarian propaganda and censorship from ever taking hold the way it once did. And, while these words were written over 70 years ago, well before the age of the internet, this declaration challenges the very concept of the splinternet and the undemocratic digital boundaries we see developing today.

As the web becomes more splintered and information more controlled across the globe, we risk the deterioration of democratic systems, the corruption of free markets and further cyber misinformation campaigns. We must act now to save a free and open internet from censorship and international maneuvering before history is bound to repeat itself.

BRUSSELS, BELGIUM – MAY 22: An Avaaz activist attends an anti-Facebook demonstration with cardboard cutouts of Facebook chief Mark Zuckerberg, on which is written “Fix Fakebook”, in front of the Berlaymont, the EU Commission headquarter on May 22, 2018 in Brussels, Belgium. Avaaz.org is an international non-governmental cybermilitating organization, founded in 2007. Presenting itself as a “supranational democratic movement,” it says it empowers citizens around the world to mobilize on various international issues, such as human rights, corruption or poverty. (Photo by Thierry Monasse/Corbis via Getty Images)

The Ultimate Solution

Similar to the UDHR drafted in 1948, in 2016, the United Nations declared “online freedom” to be a fundamental human right that must be protected. While not legally binding, the motion passed with consensus, and therefore the UN was provided limited power to endorse an open internet (OI) system. Through selectively applying pressure on governments who are not compliant, the UN can now enforce digital human rights standards.

The first step would be to implement a transparent monitoring system which ensures that the full resources of the internet, and ability to operate on it, are easily accessible to all citizens. Countries such as North Korea, China, Iran and Syria, who block websites and filter email plus social media communication, would be encouraged to improve through the imposition of incentives and consequences.

All countries would be ranked on their achievement of multiple positive factors including open standards, lack of censorship, and low barriers to internet entry. A three tier open internet ranking system would divide all nations into Free, Partly Free or Not Free. The ultimate goal would be to have all countries gradually migrate towards the Free category, allowing all citizens full information across the WWW, equally free and open without constraints.

The second step would be for the UN to align itself much more closely with the largest western internet companies. Together they could jointly assemble detailed reports on each government’s efforts towards censorship creep and government overreach. The global tech companies are keenly aware of which specific countries are applying pressure for censorship and the restriction of digital speech. Together, the UN and global tech firms would prove strong adversaries, protecting the citizens of the world. Every individual in every country deserves to know what is truly happening in the world.

The Free countries with an open internet, zero undue regulation or censorship would have a clear path to tremendous economic prosperity. Countries who remain in the Not Free tier, attempting to impose their self-serving political and social values would find themselves completely isolated, visibly violating digital human rights law.

This is not a hollow threat. A completely closed off splinternet will inevitably lead a country to isolation, low growth rates, and stagnation.


Source: The Tech Crunch

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Tiger Global and Ant Financial lead $500M investment in China’s shared housing startup Danke

Posted by on Mar 1, 2019 in affordable housing, alibaba, Ant Financial, apartment, Asia, Baidu, Beijing, business intelligence, China, danke apartment, jack ma, LinkedIn, major, property, Real Estate, renting, Tiger Global Management, WeWork, Xi Jinping | 0 comments

A Chinese startup that’s taking a dorm-like approach to urban housing just raised $500 million as its valuation jumped over $2 billion. Danke Apartment, whose name means “eggshell” in Chinese, closed the Series C round led by returning investor Tiger Global Management and newcomer Ant Financial, Alibaba’s e-payment and financial affiliate controlled by Jack Ma.

Four years ago, Beijing-based Danke set out with a mission to provide more affordable housing for young Chinese working in large urban centers. It applies the coworking concept to housing by renting apartments that come renovated and fully furnished, a model not unlike that of WeWork’s WeLive. The idea is by slicing up a flat designed for a family of three to four — the more common type of urban housing in China — into smaller units, young professionals can afford to live in nicer neighborhoods as Danke takes care of hassles like housekeeping and maintenance. To date, the startup has set foot in ten major Chinese cities.

With the new funds, Danke plans to upgrade its data processing system that deals with rental transactions. Housing prices are set by AI-driven algorithms that take into account market forces such as locations rather than rely on the hunches of a real estate agent. The more data it gleans, the smarter the system becomes. That layout is the engine of the startup, which believes an internet platform play is a win-win for both homeowners and tenants because it provides greater transparency and efficiency while allowing the company to scale faster.

“We are focused on business intelligence from day one,” Danke’s angel investor and chairman Derek Shen told TechCrunch in an interview. Shen was the former president of LinkedIn China and was instrumental in helping the professional networking site enter the country. “By doing so we are eliminating the need to set up offline retail outlets and are able to speed up the decision-making process. What landlords normally care is who will be the first to rent out their property. The model is also copiable because it requires less manpower.”

“We’ve proven that the rental housing business can be decentralized and done online,” added Shen.

danke apartment

Photo: Danke Apartment via Weibo

Danke doesn’t just want to digitize the market it’s after. Half of the company’s core members have hailed from Nuomi, the local services startup that Shen founded and was sold to Baidu for $3.2 billion back in 2015. Having worked for a business of which mission was to let users explore and hire offline services from their connected devices, these executives developed a propensity to digitize all business aspects including Danke’s day-to-day operations, a scheme that will also take up some of the new funds. This will allow Danke to “boost operational efficiency and cut costs” as it “actively works with the government to stabilize rental prices in the housing market,” the company says.

The rest of the proceeds will go towards improving the quality of Danke’s apartment amenities and tenant experiences, a segment that Shen believes will see great revenue potential down the road, akin to how WeWork touts software services to enterprises. The money will also enable Danke, which currently zeroes in on office workers and recent college graduates, to explore the emerging housing market for blue-collar workers.

Other investors from the round include new backer Primavera Capital and existing investors CMC Capital, Gaorong Capital and Joy Capital.

China’s rental housing market has boomed in recent years as Beijing pledges to promote affordable apartments in a country where few have the money to buy property. As President Xi Jinping often stresses, “houses are for living in, not for speculation.” As such, investors and entrepreneurs have been piling into the rental flat market, but that fervor has also created unexpected risks.

One much-criticized byproduct is the development of so-called “rental loans.” It goes like this: Housing operators would obtain loans in tenants’ names from banks or other lending institutions allegedly by obscuring relevant details from contracts. So when a tenant signs an agreement that they think binds them to rents, they have in fact agreed to take on loans and their “rent” payments become monthly loan repayments.

Housing operators are keen to embrace such practices for the loans provide working capital for renovation and their pipeline of properties. On the other hand, the capital allows companies like Danke to lower deposits for cash-strapped young tenants. “There’s nothing wrong with the financial instrument itself,” suggested Shen. “The real issue is when the housing operator struggles to repay, so the key is to make sure the business is well-functioning.”

Danke alongside competitors Ziroom and 5I5J has drawn fire for not fully informing tenants when signing contracts. Shen said his company is actively working to increase transparency. “We will make it clear to customers that what they are signing are loans. As long as we give them enough notice, there should be little risk involved.”


Source: The Tech Crunch

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NetEase is the latest Chinese tech giant to lay off a big chunk of its staff

Posted by on Feb 28, 2019 in alibaba, Amazon, Asia, Business, China, Didi Chuxing, E-Commerce, eCommerce, Gaming, JD.com, layoff, netease, public relations, Southeast Asia, Tencent | 0 comments

NetEase, China’s second-biggest online games publisher with a growing ecommerce segment, is laying off a significant number of its employees, adding to a list of Chinese tech giants that have shed staff following the Lunar New Year.

A NetEase employee who was recently let go confirmed with TechCrunch that the company had fired a large number of people spanning multiple departments, including ecommerce, education, agriculture (yes, founder and executive officer Ding Lei has a thing for organic farming) and public relations, although downsizing at Yanxuan, its ecommerce brand that sells private-label goods online and offline, had started before the Lunar New Year holiday.

Multiple Chinese media outlets covered the layoff on Wednesday. According to a report from Caijing Magazine, Yanxuan fired 30-40 percent of its staff; the agricultural brand Weiyang got a 50 percent cut; the education unit downsized from 300 to 200 employees; and 40 percent of NetEase’s public relations staff was gone.

A spokesperson from NetEase evaded TechCrunch’s questions about the layoff but said the company is “indeed undergoing a structural optimization to narrow its focus.” The goal, according to the person, is to “boost innovation and organizational efficiency so NetEase can fully play to its own strengths and adapt to market competition in the longer term.”

NetEase CEO Ding Lei pictured picking Longjing tea leaves in Hangzhou. Photo: NetEase Yanxuan via Weibo

Oddly, ecommerce and education appear to be some of NetEase’s brighter spots. The company singled them out alongside music streaming during its latest earnings call as the three sectors that saw “strong profit growth potential” and “will be the focus of [the company’s] next phase of strategic growth.” The staff cuts, then, may represent an urgency to tighten the purse strings for even NetEase’s rosiest businesses.

The shakeup fits into market speculation about company staff cuts to save costs as China copes with a weakening domestic economy. JD.com, a rival to Alibaba, is firing 10 percent of its senior management to cut costs, Caixin reported last week. Ride-hailing giant Didi Chuxing plans to let go 15 percent of its staff this year as part of a reorganization to boost internal efficiency, though it’s adding new members to focus on more promising segments.

Alibaba took an unexpected turn, announcing last week that it will continue to hire new talent in 2019. “We are poised to provide more resources to our platforms to help businesses navigate current environment and create more job opportunities overall,” the firm said in a statement.

2018 was a tough year for China’s games companies of all sorts. The industry took a hit after regulators froze all licensing approvals to go through a reshuffle, dragging down stock prices of big players like Tencent and NetEase. These companies continue to feel the chill even after approvals resumed, as the newly minted regulatory body imposes stricter checks on games, slowing down the application process altogether and delaying companies’ plans to monetize lucrative new titles.

That bleak domestic outlook compelled NetEase to take what Ding dubs a “two-legged” approach to game publishing, with one foot set in China and the other extending abroad. Tencent, too, has been finding new channels for its games through regional partners like Sea’s Garena in Southeast Asia.

NetEase started in 1997 and earned its name by making PC games and providing email services in the early years of the Chinese internet. More recently the company has intended to diversify its business by incubating projects across the board. It has so far enjoyed growth in segments like music streaming and ecommerce (which is reportedly swallowing up Amazon China’s import-led service) while stepping back from others such as comics publishing, an asset it is selling to youth-focused video streaming site Bilibili.


Source: The Tech Crunch

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Alibaba challenger Pinduoduo is bringing imported goods to rural homes

Posted by on Feb 26, 2019 in alibaba, alibaba group, Amazon, Asia, China, E-Commerce, eCommerce, game publisher, Hangzhou, JD.com, netease, online marketplaces, pinduoduo, taobao, TechCrunch, Tencent, viral marketing, WeChat | 0 comments

Pinduoduo, the latest challenger to China’s ecommerce dominators Alibaba and JD.com, wants to bring affordable, imported items to shoppers in China’s smaller cities and rural areas.

The three-year-old Tencent-backed ecommerce upstart is recruiting importers to set up shop on its marketplace, shows a message on its website. The business is known for offering cheap, sometimes counterfeit goods that initially appealed to users from the less prosperous parts of China but have gradually garnered more price-sensitive urbanites. Its rise is closely linked to Tencent’s popular WeChat messenger, which lets it toy with viral marketing schemes like group deals, a level of access that’s unavailable to, say, Tencent rival Alibaba. Furthermore, the app’s focus on direct sales between manufacturers and consumers helps to keep costs down.

Pinduoduo’s social group-buying model works so well that it’s rapidly closing in on its larger rivals. It claimed 232 million monthly active users by the end of September. That represents only a fraction of Alibaba’s 700 million user base but the newcomer is growing at over 200 percent year-over-year. Pinduoduo already eclipsed JD.com in terms of market penetration according to data analytics company Jiguang. Over the past year, Pinduoduo was installed on 27.4 percent of all mobile devices in China, placing it ahead of JD.com which stood at 23.9 percent and behind Alibaba’s Taobao at 52.5 percent.

And now Pinduoduo becomes attuned to China’s booming cross-border business. People’s cravings for imported, higher-quality goods are surging along with their increasing disposable income. That new demand gives rise to a bountiful supply of “daigou”, or purchasing agents who send overseas goods to Chinese shoppers, and inspires ecommerce operators like Alibaba and JD.com to start their own cross-border businesses. The lucrative sector, estimated by market researcher iiMedia to have generated 9 trillion yuan ($1.34 trillion) in transactions last year, has even drawn unexpected players like NetEase. The Hangzhou-based firm is best known as one of China’s top game publisher but it’s made a dent in cross-border shopping in recent years with its Kaola service, which is reportedly buying Amazon China’s import unit.

TechCrunch has reached out to Pinduoduo for more information on its overseas shopping scheme and will update the story if we hear back. What we know for sure is that the ecommerce site plans to take on 500,000 small and medium-sized merchants for its overseas channel within the next three years, the company’s vice president Li Yuan announced at a November event. Pinduoduo was already delivering imported goods to customers, a business that it said had seen surging transactions last year. Consumers in the countryside have never been more ready to shop online, as Beijing is making a big push to grow digital payments in these regions.

Pinduoduo has yet to make a profit, and the cost of battling Alibaba and JD.com became more evident after it recently announced to raise more than $1 billion just six months after a $1.63 billion initial public offering in the U.S. Time will tell whether cross-border ecommerce — where it plans to replicate its direct sales model — will help it gain an upper hand over the industry giants.


Source: The Tech Crunch

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Xiaomi-backed electric toothbrush Soocas raises $30 million Series C

Posted by on Feb 11, 2019 in alibaba, alibaba group, Asia, China, Companies, electric toothbrush, funding, Hardware, procter & gamble, shenzhen, Smartphones, toothbrush, Xiaomi | 0 comments

China’s Soocas continues to jostle with global toothbrush giants as it raises 200 million yuan ($30 million) in a series C funding round. The Shenzhen-based oral care manufacturer has secured the new capital from lead investor Vision Knight Capital, with Kinzon Capital, Greenwoods Investment, Yunmu Capital and Cathay Capital also participating in the round.

The new proceeds arrived less than a year after Soocas, one of Xiaomi’s home appliance portfolio startups, snapped up close to 100 million yuan in a Series B round last March. Best known for its budget smartphones, Xiaomi has a grand plan to construct an Internet of Things empire that encompasses smart TVs to electric toothbrushes, and it has been gearing up by shelling out strategic investments for consumer goods makers such as Soocas.

Founded in 2015, Soocas’s rise reflects a growing demand for personal care accessories as people’s disposable income increases. Electric toothbrushes are a relatively new concept to most Chinese consumers but the category is picking up steam fast. According to data compiled by Alibaba’s advertising service Alimama, gross merchandise volume sales of electric toothbrushes grew 97 percent between 2015 and 2017. Multinational brands still dominate the oral care space in China, with Procter & Gamble, Colgate and Hawley & Hazel Chemical occupying the top three spots as of 2017, a report from Euromonitor International shows, but local players are rapidly catching up.

Soocas faces some serious competition from its Chinese peers Usmile and Roaman. Like Soocas, the two rivals have also placed their offices in southern China for proximity to the region’s robust supply chain resources. Part of Soocas’s strength comes from its tie-up with Xiaomi, which gives its portfolio companies access to a massive online and offline distribution network worldwide. That comes at a cost, however, as Xiaomi is known to impose razor-thin margins on the companies it backs and controls.

According to a statement from Soocas’s founder Meng Fandi, the company has achieved profitability since its launch and has seen its margin increase over the years. It plans to spend its fresh proceeds on marketing in a race to lure China’s increasingly sophisticated young consumers with toothbrushes and its new lines of hair dryers, nasal trimmers and other tools that make you squeaky-clean.


Source: The Tech Crunch

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A government propaganda app is going viral in China

Posted by on Feb 1, 2019 in alibaba, Apps, Asia, bytedance, China, Government, Instant messenger, Messenger, New Years Day, Propaganda, tiktok, Toutiao, Xi Jinping | 0 comments

Besides binge-watching TikTok videos and battling enemies in the magical land of mobile games, many Chinese people may also pass time during the upcoming Lunar New Year on Xuexi Qiangguo, a news and chat app developed by the country’s top ideology officials.

The app managed to top the Chinese App Store between January 22 and 25 before two ByteDance apps pushed it down to the third place this week, download statistics from App Annie shows. At a glance, the news section is almost exclusively about the Communist Party and president Xi Jinping.

xuexi qiangguo

The app is almost exclusively about the Communist Party and president Xi Jinping.

It doubles as an instant messenger, with development support provided by Alibaba’s Dingtalk enterprise communications tool. That means users can log in via their Dingtalk account and chat with their Dingtalk contacts directly over Xuexi Qiangguo. Alibaba explains this is a “regular business collaboration” between Dingtalk’s open platform and a third-party developer.

xuexi qiangguo

The app doubles as a messenger with technical support provided by Alibaba’s Dingtalk.

Directly translated as “studying strengthens the nation,” Xuexi Qiangguo is the product of a research center under China’s Publicity Department, an important organ in charge of how information disseminates in the country. The digital weapon underscores the Communist Party’s growing efforts in recent years to appeal to phone-savvy generations, though the app seems to have peaked.

As of February 1, the iOS version of Xuexi Qiangguo is rated 2.4 out of 5 from 6,810 reviews. Its impressive download number, as it turns out, is in part a result of top-down order. Many early users are Party members or work in China’s giant state apparatus, who were told to install the app. Several users TechCrunch spoke to, including a public school principal, a director of a district party committee and a municipal government official, confirmed that everyone in their organizations must download the app and every now and then, users may get quizzed on relevant content.

Newspapers and social media posts also suggest local governments have mandated downloads among Party members and encouraged the general public to give it a try. Some take a step further to organize offline study sessions for the app. For some context, China had nearly 90 million Communist Party members by the end of 2017.

xuexi qiangguo

A city in Hunan Province has ordered all Party members to install Xuexi Qiangguo, a local newspaper reported. The photo shows a study session held for the app. Source: 衡阳晚报 via Weibo 

“I believe that most of the downloads were incentivized, probably only a very small portion was initiated by a real interest,” says Kristin Shi-Kupfer, director at MERICS, a German think tank specializing in China. “This app will probably drop out of the rankings of any app store soon.”

To engage the younger crowd, the app takes cues from new media forms in China’s flourishing online world. The news section, for instance, appears to be modelled on ByteDance’s popular news app Jinri Toutiao . While Toutiao uses algorithms to understand user preferences and delivers content from a wide array of third-party publications, Xuexi Qiangguo curates from an army of 18 state-controlled outlets.

The app also has a gamified loyalty program, which rewards users virtual points when they complete a task, such as daily sign-in. Since registrations are on a real-name basis, supervisors can check who in their organizations haven’t installed the app, ushering in a new kind of digital monitoring.

“The timing of the publishing of this app might be linked to the upcoming Chinese New Year Festival, which the Chinese Communist Party sees as an opportunity and a necessity to spread their ideology,” notes Shi-Kupfer.” [It] may be hoping that people would use the holiday season to take a closer look, but probably also knowing that most people would rather choose other sources to relax, consume and travel.”


Source: The Tech Crunch

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First China, now Starbucks gets an ambitious VC-funded rival in Indonesia

Posted by on Feb 1, 2019 in alibaba, alibaba group, android, Apps, army, Asia, carsharing, China, Companies, East Ventures, economy, funding, Fundings & Exits, go-jek, Google, grab, Indonesia, Insignia Ventures Partners, internet access, Jakarta, JD.com, managing partner, mcdonalds, online food ordering, online marketplaces, Pizza Hut, Singapore, Southeast Asia, starbucks, temasek, Tencent, United States, WeWork | 0 comments

Asia’s venture capital-backed startups are gunning for Starbucks .

In China, the U.S. coffee giant is being pushed by Luckin Coffee, a $2.2 billion challenger surfing China’s on-demand wave, and on the real estate side, where WeWork China has just unveiled an on-demand product that could tempt people who go to Starbucks to kill time or work.

That trend is picking up in Indonesia, the world’s fourth largest country and Southeast Asia’s largest economy, where an on-demand challenger named Fore Coffee has fuelled up for a fight after it raised $8.5 million.

Fore was started in August 2018 when associates at East Ventures, a prolific early-stage investor in Indonesia, decided to test how robust the country’s new digital infrastructure can be. That means it taps into unicorn companies like Grab, Go-Jek and Traveloka and their army of scooter-based delivery people to get a hot brew out to customers. Incidentally, the name ‘Fore’ comes from ‘forest’ — “we aim to grow fast, strong, tall and bring life to our surrounding” — rather than in front of… or a shout heard on the golf course.

The company has adopted a similar hybrid approach to Luckin, and Starbucks thanks to its alliance with Alibaba. Fore operates 15 outlets in Jakarta, which range from ‘grab and go’ kiosks for workers in a hurry, to shops with space to sit and delivery-only locations, Fore co-founder Elisa Suteja told TechCrunch. On the digital side, it offers its own app (delivery is handled via Go-Jek’s Go-Send service) and is available via Go-Jek and Grab’s apps.

So far, Fore has jumped to 100,000 deliveries per month and its app is top of the F&B category for iOS and Android in Indonesia — ahead of Starbucks, McDonald’s and Pizza Hut .

It’s early times for the venture — which is not a touch on Starbuck’s $85 billion business; it does break out figures for Indonesia — but it is a sign of where consumption is moving to Indonesia, which has become a coveted beachhead for global companies, and especially Chinese, moving into Southeast Asia. Chinese trio Tencent, Alibaba and JD.com and Singapore’s Grab are among the outsiders who have each spent hundreds of millions to build or invest in services that tap growing internet access among Indonesia’s population of over 260 million.

There’s a lot at stake. A recent Google-Temasek report forecast that Indonesia alone will account for over 40 percent of Southeast Asia’s digital economy by 2025, which is predicted to triple to reach $240 billion.

As one founder recently told TechCrunch anonymously: “There is no such thing as winning Southeast Asia but losing Indonesia. The number one priority for any Southeast Asian business must be to win Indonesia.”

Forecasts from a recent Google-Temasek report suggest that Indonesia is the key market in Southeast Asia

This new money comes from East Ventures — which incubated the project — SMDV, Pavilion Capital, Agaeti Venture Capital and Insignia Ventures Partners with participation from undisclosed angel backers. The plan is to continue to invest in growing the business.

“Fore is our model for ‘super-SME’ — SME done right in leveraging technology and digital ecosystem,” Willson Cuaca, a managing partner at East Ventures, said in a statement.

There’s clearly a long way to go before Fore reaches the size of Luckin, which has said it lost 850 million yuan, or $124 million, inside the first nine months in 2018.

The Chinese coffee challenger recently declared that money is no object for its strategy to dethrone Starbucks. The U.S. firm is currently the largest player in China’s coffee market, with 3,300 stores as of last May and a goal of topping 6,000 outlets by 2022, but Luckin said it will more than double its locations to more than 4,500 by the end of this year.

By comparison, Indonesia’s coffee battle is only just getting started.


Source: The Tech Crunch

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Chat app Line’s mobile payment service is getting its own Visa card

Posted by on Jan 30, 2019 in alibaba, alibaba group, alipay, Apps, Asia, China, E-Commerce, economy, Japan, King, mobile payments, money, online payments, payments, points, Tencent, visa, WeChat | 0 comments

Brown, Cony and the gang are coming to a credit card near you in Japan. Line, the messaging app company behind the cute sticker characters, announced today that it is bringing its payment service to plastic through a tie-in with Visa.

Line is Japan’s largest chat app with an estimated 50 million registered users. The cards will be released later this year and they’ll allow Line Pay, the company’s digital wallet service, to stretch beyond its existing merchant base to allow users to pay at any retailer accepting Visa . In addition, the first year of use will see customers get 3 percent of their spending back in Line’s ‘Points’ virtual currency, which is used to buy stickers and other content.

The partnership is a step up from Line’s own payment cards, which were introduced in 2016 and supported by JCB.

It’s an interesting deal because mobile is generally seen as being the future form factor for payments. In China, for example, using cash or card to pay is considered antiquated — you’ll get glares from other patrons forced to wait while you complete your transaction — but digital payments face a struggle in most other markets.

WeChat and Alipay have become de facto in China, but retailers — and particularly smaller ones — don’t always have the awareness, confidence or resources to add support for Line or other digital wallets. Japan, where cash is still king, is perhaps most emblematic of that struggle. The government is making a sustained push towards cashless — particularly ahead of the 2020 Olympics — and Line, as the country’s dominant chat app, may help that along with this partnership.

Line wrapped up a deal with WeChat last November that allows users of the China-based chat app to make payment via Line Pay points of sale. Tencent’s WeChat and Alipay from Alibaba have spent recent years developing a system that lets Chinese tourists pay while they are overseas.


Source: The Tech Crunch

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