Startupswatch August－a must-read to explore the Chinese web

A U G U S T , 2 0 1 0 , V O L U M E 2 STARTUPS WATCH !"# A M U S T- R E A D TO E X P L O R E T H E L O C A L W E B P RO D U C E D B Y M O B I N O D E This year, no matter what kind of finding, exposing, and exploiting discussion on innovation we have, them. The problems that have to be it seems that people just cannot addressed, however, are not few: help but come back to a few key how to judge these opportunities; topics: microblogging, location- how to cater to and fit into the based services, group purchasing, conditions they come with and the iPad, and mobile networks. create; how to forge one’s own path; how deal with violent Thus, it’s not surprising that in the competition; how to stand out from space of one year we’ve seen a the crowd; and how to deal with massive explosion in group- risk and changing market purchase sites; portal-sponsored conditions. and grassroots microblog platforms; checking-in becoming In this issue, we’ll both popular and explore how With this newsletter we hope to: 1) fashionable; and these major highlight the best content and people going factors affecting opinions from non-mainstream crazy over the development of independent bloggers. 2) provide iPad. More and the mobile m o r e network market overviews and commentaries on the development within China, and views of innovators, and 3) give teams are moving at the same time thoughts on both hot and new topics towards mobile introduce the in Chinese web industry. We hope to networ ks , an d d o m e s t i c bring innovators, entrepreneurs and capital markets microblogging venture capitalists to the forefront to are seemingly scene and its state moving towards of development. spark both conversation and original backing Android as the number one We’ll take a peek at the iPad and thinking. choice for mobile network the development opportunities it development. presents for us, and through these themes showcase the directions in People on the edge of innovation which innovation is proceeding in seem to agree that opportunities China. nnn abound, even though they may be very well hidden – the key is just The report includes 3 parts: Review We review and discuss the MOBINODE's LuGang, CindyJiang, viewpoints covered at the NTalks, a This is a monthly bilingual report. Focus We highlight the brightest and popular event organized by Thanks much to our English translator newest startups in Chinese Internet and MoyHau and English editor Dan Ciez. wireless sectors. MOBINODE monthly. We look forward to hearing your Explore We recommend new products, feedback. services, companies and explore the Feel free to drop us message via This month's Startups Watch is edited mobinodetv@gmail.com trend in Chinese market. by WEB20SHARE’s WatsonXu and

Focus A survey of China’s 4 major microblogging sites Sina Microblog Netease Microblog Launch Date: August 2009 Launch Date: May 20, 2010 Strengths: Sina’s upper management is really Strengths: post through email; follow news; focusing on the service, and it currently enjoys the integration with games; and a large grassroots largest user base in China, with a number of movement celebrities using the platform. It is also an open Registered Users: ~3 million platform. Length Limit: 163 characters Registered Users: more than 10million Length Limit: 140 characters Tencent Microblog Sohu Microblog Launch Date: April 4, 201 0 Launch Date: April 11, 2010 Strengths: Ties into QQ, which has a user base of Strengths: entertainment and sports stars; 500,000,000 integration with blog, video, SNS, and news Registered Users: no statistic products. Length Limit: 140 characters Registered Users: No statistics. Length Limit: none On July 28, Sina announced publically that its official, open microblogging platform was coming online, with the list of projects including collaboration with other websites, desktop clients and cellular clients. This integration with other platforms is the main strength of the service, and close cooperation with other services will grow the user base more quickly. The ease and portability of the microblog account lowers the barrier to entry in terms of registration convenience, and allows users to enjoy other benefits through the same account at different locations. When users post pictures, video, and other content on their microblogs, this will motivate other users to sign up. The use of official microblogs within the community also aims to provide a social driving force within it. Sohu hopes with its microblogging service to provide a platform through which it provides real, quality content that doesn’t lag behind its other products and thus have the microblog site become a real part of the company’s product line-up. For instance, the microblog site could be linked to Sohu’s own group purchase site, providing users with real-time updates on sales and purchases by friends and followers, and potentially resulting in massive gains because microblogging is much more effective than forums for cross-promotion. Additionally, various activities or star sightings could be coordinated through the microblog service, with university students and the like organizing conferences and parties, and then recording the events as they take place. Tencent came onto the microblog scene with a high emphasis on “media platforming” as an effort to bust into the microblog scene. The service is heavily integrated into the 2010 release of the QQ software, with many QQ users being unwittingly roped into the service. It’s not hard to imagine how with five hundred million users, the service might be taking off – making it the real competition that Sina has to worry about. In contrast with the other services, Netease is the only one that’s not trying to boost itself with celebrity posters. The approach that the company is taking is that everybody is a star and can become the center of a discussion, putting its users at the core of the strategy. The service focuses on wide-reaching coverage and real

discussions. Netease hopes to see the microblog service become a unifying link between its mail, games, photo, picture, and search services – users should be able to register as a microblog user to enjoy all services associated with the brand. We’re going to see some very fierce competition between the services in the near future, with different products trying to one-up each other and become the top choice. Try them out for yourself and see which you like. !"#$%&$'%()$*+,"-*% ./")+% vision of your execution path is a local user needs, or a flashy (and #"/,0$%-$+1"2&*%,-%34,-. core strength for a development hopefully useful!) point or feature team. to draw users in. This is 1: Corporate versus small 3: “Geek spirit” or corporate something people really need to development teams: who’s set to practice? pay attention to in the future. come out ahead? Owing to the popularity of app In just this year alone, Tencent has markets, as well as the advent of 5: Android or Symbian: who will already recruited more than 100 popular open-source platforms lead the market in these next few developers for the Android and like Android, the barrier to entry years? iPhone platforms. UC.cn has also is becoming lower and lower. The Chinese scene changes made no small amount of campus Independence and core quickly. Sometimes things go a bit hires. For innovators, it can be competitiveness are going to be overboard – the Chinese capital incredibly easy to have a go at two properties that we see grow in market jumped on the bandwagon development even while short of importance. In the area of mobile so hard that in the past few human capital and cash, only networks, we’re going to see more months we’ve seen dozens of later to be crushed by a big and more of this “geek” vibe, Foursquare clones and literally corporate name. Individuals and whether we’re talking about small hundreds of group purchasing smaller players need to find an groups or individual development; sites. The Android scene is more area in which they can excel and they’re going to shake the market or less the same, and MTK joining leverage the experience they with small apps. in made the trend even stronger. accumulate in order to avoid Since the capital side of things is becoming an example for others 4 Creating new apps, or copying going, people are scrambling to of what not to do. others: what’s really going survive make Android apps, but we also in the long term? have another major player, 2: When it comes to ideas and Currently, a lot of mobile network Symbian, to consider. It may very execution with a dev team, who developers here are still going for well be that Symbian will take plays the key roles? the “copy” model -- just look at lead in the next few years, and In talking with a number of local the number of teams that have we’ll see it as the largest mobile dev teams, we’ve found that there turned out what amount to phone platform in China down the is great variety in the methods of essentially clones of Foursquare’s road. It is better for Dev teams to execution between individual app. (Something we will look in- strike a balance between the groups. A lot of people will depth at later in this issue.) If youvarious platforms to ensure long- complain that they don’t see their actually take a close look at these term safety. ideas executed the way they want products, they show very little them to be due to a lack of individual innovation. This isn’t to resources, with the principal or at say that basing your work on least common reason being a lack others’ is a fundamentally flawed of clarity about future trends and principle, but we need to see directions. If you have a clear people adding at least some goal, you can leverage what you innovative aspect to make their have in your hand to the product worth the consumers time maximum extent. Having a good – for example, better adaptation to Reference: PlusApp

iPad and e-books in China Apple’s announcement of the iPad really made It’s Free waves in China, and reignited interest in the already very large e-book landscape here. Recently, China We like free things in China. Copyright isn’t Mobile announced that it was developing an e-book something we’re crazy about, and the option of product in conjunction with its mobile network, and getting what just came out on paper for free to read China Netcom and China Unicom soon after on whatever device you please is very enticing. announced similar services. Domestic consumption Billing for text files isn’t something that many of e-books is up, with research showing that more people are going to be amenable to, especially when than 70 per cent of net users now being e-book they’re used to what we have now. readers. This represents an increase of more than two-hundred per cent over 2008 figures. The aforementioned problems show that China’s e- book landscape doesn’t exactly constitute a Official statistics show that there were 155 million “market” in the economic sense. If Apple thinks that users of mobile phone e-book technology at the end they’re going to be able to sell content on the iPad + 2010. iBook model or something along the lines of Amazon’s Kindle strategy, they should ask for a However, when you mention this, there are no wake-up call, because they’re dreaming. specific vendors or distribution channels that come to mind. With so many users, where is the problem? Fragmentation On the one hand, you have players like the Shanghai Century Group and China Publishing Group, which all come out with their own readers to which they tie their own contents to. On the other hand, you have groups like Hanwang and Edo that make more versatile readers but also push their own content. Then you have players like Apple, busting into the market and adding heat, and others like Asus and Founder – established electronics manufacturers that Luckily, a few big players have pounded away and are just getting into the e-book game. There’s also a come up with some landscape-changing results. wealth of knockoff readers at a varying range of SNDA’s Bambook has made some big news, as it's price/quality points which attract a number of the first solar-powered e-book reader in the world, consumers. Nobody seems to have a good idea as to which does a lot to counter the “it needs batteries” how to develop the market. argument we hear against electronic text. Additionally, it has TTS, search, and private book Poor Quality capabilities. SNDA also has a large range of content go with it, and we may see some good results in the A lot of what’s out there isn’t exactly caviar. A lot of content + channel + client model on this one. the books that we’re seeing in electronic format are online publications that may not correspond with any actual printed work. This has a lot to do with current distribution formats – simply putting a text file online allows people to bypass restrictions on publishing and revision, and it’s easy to do. Along with it, however, comes a lack of quality.

Explore: Rising Stars Gewara is a venture to supplement real life with Coent is a professional social network that allows information from digital networks, allowing users to check ratings and discussions on other consumers to enjoy benefits outside the traditional companies, as well as their hiring and interview areas of shopping, travel, restaurants, and lodging. It’s practices. Users can publish their own opinions and the first site of its kind to integrate financial, business, experiences. Based on a collaborative system, users and user community advice. The site currently covers have to contribute before they can view others movie theaters, KTVs, fitness centers, and contributions on the site, which keeps quality higher. entertainment facilities. It provides names, addresses, The service is free, as long as you share. The service phone information, pictures, and other information maintains anonymity for all users, and has stats, such as seating for theaters, class times for fitness evaluations, and interview information on over centers, and prices for KTVs, bars, and other 100,000 companies as of now. locations.theatercenter Users can evaluate all aspects of businesses listed, and arrange meetups and events. Link! http://www.coent.cn/ Link!http://www.gewara.com/ This is an information aggregation and push platform 16Fun!Chinese for “Always Fun”"#is a as well as a real-time communications technology for geolocation-based games service. Users are able to mobile phones. It allows users to distribute pointers to make virtual reports and purchases of products and information, webpages, blogs, novels, and shows real-estate in game, and also link to real promotions through mobiles, MSN, fetion, QQ, Skype, Gtalk, and and activities in the true world. other services. Users of this services will able to Services like 16Fun and My Town differ from “push” this content to their friends in real-time through Foursquare’s service in that they add the game a unified platform, which gives people a lot of space in element. Foursquare’s product works on a gain/loss which to play. model, whereas 16Fun operates on the geolocation principle, attracting users through new functionality Link!http://zhui.cn/ and adding more opportunities for fun. This is strong evidence that the location-based services trend is growing in China. Link!http://www.16fun.com/ Duqi is a photo sharing site for the Chinese language community that allows people to post photos with Shangjie is an online graphic advertising service that descriptions. The site is currently the most popular integrates static image content into its strategy. photo sharing platform for young people in China, and Consumers select the pictures they prefer which take integrates simple online photography and upload them to websites they’ll enjoy. services, along with text publishing services and social This is an offshoot of the Pixazza (Via) lineage, which functions, as well as promotion capabilities. received investment from Google at its inception to the tune of $12 million USD. Shangjie seems to be the Link!http://www.duqi.com first major copy in China. Link!http://www.instreet.cn

Review of the Fourth Round of NTALKS"#$% NTALKS "#$ is an offline event organized by NTALKS is a platform and community for grassroots MOBINODE on a regular basis to tighten the and startups to demonstrate their works, share their connection among local start-ups. experience and communicate with the potential partners and investors. The main focus of the last NTalks Competition in the market: which means that they’re going to event was “Groupon like model challenge business on resources, and how we define real value”. If people aren’t setting expansion cost, and service. People have been going crazy in or IPO as their goal, then we’re discussions over the group- going to see different sites existing Trust is still a big issue: fierce purchase phenomenon and how and surviving for different reasons. competition at the start is great it’s going to be. With enough Local and specialized services will unavoidable, but only through said on those topics, we tried to still have a lot of opportunities to good grasp of user needs will users explore the phenomenon and come do well. be able to enjoy good service and up with conclusions on where it want to stick around. For example, will go; what problems it will face; The entry of big corporations into a 72 hour return window would be and the trends and future we can this space shows just how big the a nice trust building step. expect to see. potential for expansion is. Entrepreneurs need to get a solid The future of the sector: We had a number of large players grasp on user needs and fulfil them in the scene show up this time: the to cement themselves in a good We’re going to see a lot of founders of Lashou, Ftuan, 55tuan, place. localized services. Yiqi001.com, and Kutuan, as well as Tuanp, Tuan800, 122.net, As for value: We’re going to see great value for Tuan123, and third party expertise societies in general. from DCCI. People are definitely pumped about the phenomenon, and there’s Just like with other forms of e- The key points touched on were: a lot of attention focused on it. commerce, we’re going to see stratification in group purchasing. The group purchase model itself: There’s a huge opportunity for advertising that we’re going to see We’re going to see the integration People are still forming their here. of a lot of new technologies into habits with regards to this the sector, such as location-based phenomenon, and the phenomenon Innovative services are going to services, social games, and mobile itself is slowly shaping their provide an even wider channel for network technology. habits. this to expand. Grouppurchasing is providing a Problems concerning completely new experience to end- survivability; users, and is providing a new option for distributors. The two We’re going to see these kinds of groups are coming up with new groups taking on promotional ways to work together. responsibilities of their own,

A U G U S T , 2 0 1 0 STARTUPS WATCH !"# Special Thanks to OrangLabs Beijing, BlueRun China and TrilogyVC Feel free to contact us via! mobinodetv@gmail.com Please keep a lookout for our blog! www.mobinode.tv www.mobinode.com www.web20share.com

Startupswatch August－a must-read to explore the Chinese web

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