My preceding posts on this site are already leading to such a massive conclusion. Read:
The low priced, Android based smartphones of China will change the global market [‘Experiencing the Cloud’, Sept 10, 2012]
$48 Mogu M0 “peoplephone”, i.e. an Android smartphone for everybody to hit the Chinese market on November 15 [‘Experiencing the Cloud’, Nov 9, 2012]
$99 Android 4.0.3 7” IPS tablet with an Allwinner SoC capable of 2160p Quad HD and built-in HDMI–another inflection point, from China again [‘Experiencing the Cloud’, Dec 3, 2012]
UPDATE Aug’13: Xiaomi $130 Hongmi superphone END MediaTek MT6589 quad-core Cortex-A7 SoC with HSPA+ and TD-SCDMA is available for Android smartphones and tablets of Q1 delivery [‘Experiencing the Cloud’, Dec 12, 2012; Aug 1, 2013]
China: Entry-level dual core IPS WVGA (480×800) smartphones $65+ now, quad-core $70+ in June [‘Experiencing the cloud’, April 29, 2013]
GiONEE (金立), the emerging global competitor on the smartphone market [‘Experiencing the cloud’, July 22, 2013]
Eight-core MT6592 for superphones and big.LITTLE MT8135 for tablets implemented in 28nm HKMG are coming from MediaTek to further disrupt the operations of Qualcomm and Samsung [‘Experiencing the cloud’, July 20-29, 2013]
Xiaomi, OPPO and Meizu–top Chinese brands of smartphone innovation [‘Experiencing the cloud’, Aug 1, 2013]
Superphones turning point: segment satured with Tier 1 globals while the Chinese locals are at less than 40% of the Samsung price [‘Experiencing the cloud’, Aug 3, 2013]
IMT-Advanced (4G) for the next-generations of interactive mobile services, China is triumphant [‘Experiencing the Cloud’, Oct 24, 2010]
Good TD-LTE potential for target commercialisation by China Mobile in 2012 [‘Experiencing the Cloud’, July 13, 2011 – Feb 8, 2012]
TD-SCDMA: US$3B into the network (by the end of 2012) and 6 million phones procured (just in October) [‘Experiencing the Cloud’, Oct 18, 2011]
China becoming the lead market for mobile Internet in 2012/13 [‘Experiencing the Cloud’, Dec 1, 2011]
MWC 2012: the 4G/LTE lightRadio network [‘Experiencing the Cloud’, Oct 16, 2012]
China: 20,000 TD-LTE base stations in 13 cities by the end of 2012 and about 200,000 base stations in 100 cities launched in 2013 with the 2.6GHz TDD spectrum planning just started—SoftBank with TD-LTE strategy in Japan getting into global play with Sprint (also the 49% owner of US TD-LTE champion, Clearwire) acquisition [‘Experiencing the Cloud’, Oct 16, 2012]
The latest information collected to support my headline here is providing further evidence:
The new frontier: application service (e.g. WeChat) global expansion with lead market advantage and tremendous growth opportunity lying ahead
Online shopping growing very fast
Applications, applications to be added to the search
Xiaomi to take Apple place
Strong central government support
Country-wide 4G roll-out by year end 2013 after extensive trials
From operator branded to white-box superphones supporting all that
My preliminary investigation was concluded in an ‘April 13, 2013 Report’, which is following after the above sections, and organized around the following findings:
- Digitimes Research: Smartphone sales to reach 329 million in China in 2013 [DIGITIMES Research, March 18, 2013]
- China Mobile aims to sell 100-120 million TD-SCDMA handsets in 2013 [DIGITIMES, March 15, 2013]
- China Mobile 2013 capex increases 49% on year [DIGITIMES, March 14, 2013]
- China Mobile to build world’s largest 4G network [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
- China Mobile launched 100 cities 1 million terminals-covered 4G plan to create world’s largest 4G network [GTI News, March 8, 2013]
- China Mobile to procure TD-LTE devices from Huawei, ZTE, Samsung [DIGITIMES, March 19, 2013]
- China Mobile: 4G licensing expected by year-end [China Daily, March 13, 2013]
- China to lead mobil payment technology [CCTV News via GoUTube123 YouTube channel, Feb 27, 2013]
- Commercializing 4G in China needs 1 yr: minister [China Daily, March 15, 2013]
- FRANCE 24 Report : Chinese smartphone brands take bite out of APPLE [france24englishYouTube channel, Feb 18, 2013]
- Rise of Chinese smartphones [CNNInternational YouTube channel, Feb 26, 2013]
- Mike Walsh on Global Innovation [cmispeakers YouTube channel, Feb 5, 2013]
- China Smartphone Sector [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
- Chinese Smartphones [FinancialTimesVideos YouTube channel, April 5, 2012]
- Chinese smartphones going big [CCTV News via the GoUTube123 YouTube channel, July 11, 2012]
- Handset Industry 2013 Outlook [Asia Pacific/China Equity Research, Credit Suisse, Jan 7, 2013]
- SED Electronics Market (Tablets Market) in Shenzhen walk-through [Charbax YouTube channel, March 17, 2013]
- Allwinner A31 9.7″ Retina factory tour at Celeb Tech [Charbax YouTube channel, March 17, 2013]
Then followed by More information
This getting even more interesting as the quite dramatic by itself introductory information is only one of the reasons (more will follow below) why we can say that China is the epicenter of the mobile Internet world, so of the next-gen HTML5 web … even if such a power of influence is too new for the country to be able to exercise that to a greater degree (yet): China Knocks Off U.S. to Become World’s Top Smart Device Market [Peter Farago on the Flurry blog, Feb 18, 2013]
…
Nevertheless the collection given below in the ‘Background’ section is showing that potential. Just look at the major headlines in that section:
China becomes world’s top smartphone producer
China’s e-commerce revenue hits over 1 trillion yuan in 2012: minister
China’s top microblog site boasts 500 mln users
China expected to issue 4G licenses this year: minister
Preparing for a 4G network across China
ZTE leads in 4G wireless networks
EU telecom demands raise tensions with China
China has till June for solar, telecoms trade deal: EU
China’s mobile phone users reach 1.11 bln
China market: Samsung takes up 22.5% of 2012 smartphone sales, says iiMedia Research
Smart phones cover 70 pct of mobile market: report
Android powers a third of all mobile phones shipped in 4Q12, says Canalys
Google controls too much of China’s smartphone sector: ministry
Too late for China to develop own mobile operating systems, say Taiwan makers
China handset makers hope to reduce reliance on Android
China to modify plan to open up mobile telecom sector
4M[bps] broadband to cover 70 percent of Chinese users in 2013
Broadband network expansion in the pipeline
DETAILS
1. The new frontier: application service (e.g. WeChat) global expansion with lead market advantage and tremendous growth opportunity lying ahead
The new frontier: WeChat striving for global expansion [ChinaDaily, Aug 5, 2013]
Lisa Tseretzoulias, a 51-year-old office administrator living in Montreal, Canada, came across WeChat a year ago and instantly fell in love. “I like it a lot and have recommended it to family and friends.”
WeChat, known as weixin in Chinese, is the country’s most popular messaging and social media app developed by Tencent, China’s biggest Internet firm. WeChat is often likened toWhatsApp, developed by a US firm, and Japan’s Line.
But WeChat is more than a messenger app and packs a host of other features, including a hold-to-talk function that allows users to send audio messages to other WeChat users, much like a walky-talky. It’s also a social media platform to post photos and make comments, much like Facebook. Companies and celebrities can open a special account to interact with fans and build a following. NBA basketball player LeBron James has an account.
Founded in 1998 in the southern city of Shenzhen, Guangdong province, Tencent has over the past decade proven itself to be China’s undisputed king of messaging, with its banner instant messaging service called QQ, China’s largest instant messaging service with over 800 million users. With a shift in Internet usage from personal computers to smartphones and tablets, Tencent launched WeChat in 2011.
By the end of the first half of 2013, the number of WeChat users in China had exceeded 400 million, driving revenue growth from mobile traffic up by 56.8 percent, according to the Ministry of Industry and Information Technology.
Just like the impact Skype has had on landlines, the heavy use of WeChat in China now poses a challenge for telecom operators, whose revenues for text messaging—its most profitable business—fell markedly, leading to a debate overwhether or not to charge a user fee for the application. The attempt by telecom operators to pressure WeChat to charge for the service was roundly condemned by Chinese netizens and others who called on the phone companies to leave WeChat alone and develop their own products to compete. So far, Tencent has no plans to charge users for the popular app but says it will cooperate with China’s big telecom players in other ways.
WeChat is already a huge domestic success and is used by everyone from teenagers to their parents to their grandparents. But Tencent is not satisfied with success in the home market and is branching out globally tooth-and-nail. Roadblocks, however, remain.
With an eye on the international market, WeChat is now available in 18 languages, including English, Indonesian, Spanish, Portuguese, Thai, Vietnamese and Russian. The app can be used on almost all mainstream mobile phone systems thanks to a first-class research and development team at Tencent. WeChat is growing quickly in overseas markets. Tencent announced on July 3 that WeChat has accrued over 70 million registered overseas users, a sharp jump from the 40 million users it claimed it had back in April.
“The software has been especially successful in Indonesia, India, Malaysia, Mexico, Singapore and the Philippines,”said Martin Lau, President of Tencent, at a developer conference held in Beijing on July 3.
To further expand its user coverage, Tencent has unveiled an advertising campaign featuring internationally famed soccer star Lionel Messi to run in 15 countries, including Argentina, Brazil, India, Italy, Mexico, South Africa, Spainand Turkey.
WeChat has adopted a localization strategy when branching out by hiring celebrities as part of its marketing efforts. A much-loved feature of WeChat is a wide range of cartoon emoticons that users can send to each other, called emoji. With overseas markets in mind, WeChat hasd esigned emoticons featuring local big names. For instance, in India, Tencent roped in popular Bollywood actors Parineeti Chopra and Varun Dhawan as brand ambassadors. Emotes featuring the two Bollywood stars caused a sensation in the country. WeChat is also working closely with businesses overseas and is cooperating with Chang, a well-known beverage company in Thailand.
WeChat’s fun features coupled with Tencent’s strong marketing skills have made the app popular across different markets and helped the app’s popularity soar. User growth is one encouraging sign for the tech company, one of several Chinese Internet companies that have ambitions to expand their businesses abroad. “Successful or not, this is an once-in-a-lifetime opportunity for Tencent,” said Ma Huateng, co-founder and Board Chairman of Tencent, speaking about Tencent’s global layout.
Not easy
While boosting popularity among users outside China, WeChat is faced with competition in the global mobile-chat app market from WhatsApp, Line and Kakao from South Korea.
WhatsApp announced in June it has racked up over 250 million active monthly users worldwide. Line announced on July 23 that it has amassed 200 million global users, and Kakao said in July that the number of its users has topped 95 million. The four are bound to duke it out in the global market.
WeChat has made a splash in emerging nations, especially in Southeast Asia, and has yet to gain a foothold in a large developed economy like the United States, a highly coveted market. By the end of September 2012, there were 100,000 registered WeChat users in theUnited States, a distant cry from the numbers WeChat will need to make an impact beyond the limited population of Chinese-Americans and Chinese students studying there. To that end, Tencent opened an office in February to study the US market and form partnerships with US firms to boost the app’s popularity.
In comparison with the boom in Southeast Asia, WeChat is in its nascent stages of development inthe United States. WeChat faces stiff competition from Line and the Japanese company also has designs on the US market. For now, it’s unclear exactly how WeChat stacks up against its rivals in the battle for the UnitedS tates.
“The US market is a difficult and important one for any Internet company. Many first-class Internet products and companies were born there. The US market is highly sought out by many foreigncompanies and products, and WeChat is no exception,” reads a recent statement from Tencent in February.
“The United States is the most difficult market to tap in our global campaign,” said Ma. “China’s Internet companies lag far behind their globally successful peers and have never been a globals uccess. But now mobile phone and Internet use is developing faster in Asia than in the West. This has given China’s Internet companies a precious opportunity to surpass Western ones,” said Ma, who touts that WeChat is more innovative and user-friendly than its rivals.
But one major concern has Tencent worried: If its popularity grows, could other nations erect the same kind of roadblocks to expansion that have plagued Chinese telecommunications companies like Huawei and ZTE? Both companies have seen their efforts to expand into the United States halted over “national security” concerns.
WeChat has already run into such resistance. India’s intelligence bureau has reportedly proposed a ban on WeChat, saying that the app has already possessed too much personal information on Indians. The United States and other Western nations may suggest the same, fearing that too much citizen data could easily fall into the hands of the Chinese Government.
In response, a spokeswoman for Tencent said, “We have taken user data protection seriously in our product development and daily operations, and like other international peers, we comply with relevant laws in the countries where we have operations.”
Given the recent revelations that the US National Security Agency has been snooping on the e-mails of Americans, users may have few nagging doubts about downloading the Chinese app.
Another issue is whether China’s global image will hold back WeChat in international markets since China is often associated with producing cheap, low-quality products. Persistent foods candals and toxic toys have created a lack of trust of Chinese-made goods in developed countries and beyond.
Duncan Clark, Chairman of BDA China, a consulting firm that specializes in China’s technology and Internet sectors, told The New York Times that WeChat has the potential to overcome anylingering doubts in the West over the made-in-China label, saying potential users would haveno idea the product is Chinese when visiting, for example, an app store, thereby leveling theplaying field for mobile-chat app developers.
Robin Pinsto, a 54-year-old WeChat user in Canada, said she was surprised the app is Chinese.
“I started using WeChat six months ago and I use it every day now. I think WeChat is even better than WhatsApp, with its wide range of cartoon images and other functions,” said Pinsto. “I think WeChat has a shot at being a global success.”
Tseretzoulias, the office administrator in Montreal, has no qualms about WeChat’s origins.
“It doesn’t concern me which country developed it, as long as it’s good to use.”
The lead market advantage: China´s online population nearly 600 mln [CCTVupdates YouTube channel, July 19, 2013]
China’s online population hits 591 million [Shanghai Daily via Xinhuanet, July 18, 2013]
China’s Internet population reached 591 million by the end of June, fueled by a booming mobile Internet user base, a top industry group said yesterday.
More than 70 percent of the new users accessed the Internet via smartphones or other wireless devices. These users are already accustomed to services like instant messaging such as Tencent’s WeChat and payment modes like Alibaba’s Alipay on handsets, according to the China Internet Network Information Center (CNNIC), a government-authorized Internet research organization based in Beijing.
CNNIC publishes China’s Internet development report twice a year, which is regarded as an authoritative dot-com review of the country.
“The traditional Internet applications (e-mail and search engine) have developed smoothly in the period but mobile Internet has come into the spotlight,” CNNIC said in a statement on its website.
By the end of June, China had 591 million Internet users, a 10 percent growth from a year ago, and indicating that 44.1 percent of the country’s population uses the web. The Internet penetration rate was 2 percentage points more from the end of last year, CNNIC revealed.
The growing web applications were online music, video, games and literature, according to CNNIC.
China’s mobile Internet user base reached 464 million by June, 78.5 percent of the total Internet users, compared with 72.2 percent a year ago, the center said.
Mobile Internet has become new economy development engine with an increasing number of users and latest innovation, according to Analysys International, a Beijing-based research firm.
WeChat, which is mainly used on mobile platforms, has attracted more than 400 million users in China within about a year. Its developer Tencent has launched WeChat in overseas markets and expects to reach the 500-million user mark soon.
GSMA, a global mobile communications industry association, said last month that by 2017, the Asia Pacific region will have 1.9 billion mobile subscribers, accounting for almost half of the predicted global total of 3.9 billion.
The popularity of smartphones and wider coverage of 3G network, which provides faster web access, will continue to boost the user base of mobile Internet, CNNIC added.
And there is tremendous growth ahead. Here are the latest quarterly trends for the current situation of the mobile Internet according to operators’ company data:
China’s H1 telecom income up 8.9% [Xinhua, July 24, 2013]
China’s telecom business income increased 8.9 percent year on year in the first half of 2013, with 319 million users of 3G technology, a Ministry of Industry and Information Technology (MIIT) official said on Wednesday.
At a press conference about the communication industry, Zhu Hongren, the MIIT’s chief engineer, also said that from January to May, the country’s information consumption surged 19.8 percent year on year to 1.38 trillion yuan (223.68 billion U.S. dollars).
He said the mobile Internet sector has grown along with broadband access, online shopping and mobile payments.
Information consumption has become a new way to stimulate domestic demand and has been crucial in boosting China’s economy as foreign trade of goods and services only contributed 0.9 percent to the gross domestic product in the first half of 2013.
Zhu said China had more than 400 million users of Weixin, a popular free WhatsApp-like messaging service with all the functions of short messaging service (SMS) by the end of June.
The application, developed by one of the country’s largest information technology (IT) companies, Tencent Holdings Ltd., helped income through mobile Internet data traffic rise “56.8 percent in the January-June period,” according to Zhu.
Thanks to new platforms like Weixin and Sina Weibo, China’s most popular Twitter-like microblog, the country’s e-commerce market size grew 38.5 percent year on year to 5.4 trillion yuan and sales of smart phones and televisions both surged over 25 percent, Zhu added.
Chinese Premier Li Keqiang demanded at a meeting of the State Council, China’s Cabinet, on July 12 an average growth rate of over 20 percent in information consumption in the next three years.
Zhu Jun, another MIIT’s official, said the ministry is mapping out measures to realize the growth objective through building and upgrading the network communication infrastructure, enhancing the application and service of 3G technology and promoting the private capital in the telecom market.
Meanwhile, the government will push the share of education and medical treatment resources, encourage innovation in e-commerce and strengthen the safety of private network information, Zhu Jun added.
Digitimes Research: China 3G service subscribers to top 300 million in 1H13 [DIGITIMES Research, June 26, 2013]
The number of 3G service subscribers in China is expected to top 322 million by the end of the first half of 2013, representing a penetration rate of 27.1%. Meanwhile, sales of smartphones in China will total 170 million units in the first half of 2013, up 51% on the prior six-month period, according to Digitimes Research.
In the second quarter of 2013, Samsung Electronics delivered a total of 14.5 million smartphones, including entry-level to mid-range 3G models and the high-end Galaxy S4, in China, accounting for a 15.7% share.
Lenovo ranked second with smartphone shipments totaling 8.6 million units in the second quarter, followed by Coolpad with 8.4 million units, Huawai with 8.0 million units and Apple with 7.7 million units.
Buoyed by brisk sales of its 3.5-inch entry-level models and CNY1,000 (US$163) dual-core models, Coolpad outperformed both Huawei and Apple to take the third-rank title in China in the second quarter and accounted for a 9.1% share.
Sales of Apple smartphones were lower than expected in the second quarter as the US-based vendor did not release any new models during the period. But Apple may see its sales rebound in the second half of 2013, powered by the planned launch of a low-priced model as well as a TD-SCDMA version iPhone.
The penetration rate of 3G telecom services in China is expected to reach 30-40% for all of 2013, and total smartphone sales will reach 390 million units in the year, including 280 million units sold through the retail channels of telecom carriers, estimated Digitimes Research.
The world biggest operator, Chinal Mobile is heavily increasing its 3G penetration. Here are the latest monthly change trends for the current situation according to operators’ company data:
CBBC Webinar – The Evolution of Social Business in China [China-Britain Business Council YouTube channel, recorded on July 17, published on July 30, 2013]
Wednesday 17th July 2013 – Presented by: Lewis Rosa, Consulting Manager, Social Business Consulting, CIC Background: China is home to an active community of over half a billion internet users, or netizens, over three quarters of whom are creating original content, which when compared to less than a quarter of American internet users, puts any accusations that China lacks creativity firmly to bed. They’re also far more inclined to discuss brands, products and services. This committed engagement and creativity begets a bonanza of social business intelligence if you know where to look, or more accurately, how to listen This webinar covers: • China’s vast, fractured and dynamic digital landscape • The evolving tastes and behaviors of Chinese netizens • Social listening to inspire creative and inform strategy • Operational implications of social business development
Half of Chinese urban kids surf Internet [Xinhua, July 30, 2013]
About half, or 52.6 percent, of kids aged four to six in urban areas of China know how to use the Internet, according to a report on the lifestyle of Chinese children.
In the survey, which covered 9,114 four-16 year olds in 10 provincial areas or cities including Beijing, Wuhan and Qingdao, 93.2 percent of 13-16 year olds have used the Internet, The Beijing Times cited the report as saying on Saturday.
The report put the proportion of seven-nine year olds and 10-12 year olds accessing the Internet at 58.6 and 77.1 percent respectively, according to The Beijing Times.
In addition, it showed that 57.5 percent of the respondents use mobile phones, about 26 percent use Twitter-like microblogs, and 17.9 percent use tablet computers.
China’s netizen population, the world’s largest, continues to grow and reached 591 million at the end of June, according to the China Internet Network Information Center.
China Blocks Swedish Town Because of It’s Name [ChinaForbiddenNews, Feb 16, 2013]
Beijing launches platform for debunking online rumors [Xinhua, Aug 1, 2013]
Six Chinese websites jointly launched a platform on Thursday to refute online rumors, a move that an official has termed Beijing’s latest endeavor to clean up the “Internet environment.”
The platform is a website that collects statements from Twitter-like services, news portals and China’s biggest search engine, Baidu, to refute online rumors and expose the scams of phishing websites.
The platform operates under the instruction of the Beijing Internet Information Office (BIIO) and the Beijing Internet Association, a non-profit social organization.
The popular use of the Internet has expanded Chinese people’s channels of expression, but also facilitated the circulation of rumors and false information, said Chen Hua, director of the Internet information service and management department under the BIIO.
“The platform will be a new try by Beijing’s websites to eradicate online rumors and raise Internet users’ awareness of telling rumors from the truth,” he said.
The platform was jointly launched by websites Qianlong, Sogou, Sohu, Netease, Baidu and Sina Weibo, a Chinese Twitter-like microblogging service.
So far, the first phase of the platform has been completed, said Chen.
It has collected about 100,000 brief statements on online rumors and phishing websites and offered Internet users about 30 websites through which they can report online rumors or scams.
Operators of the platform will spend another year finishing the second phase. Once that is complete, more entertaining and interactive programs will be introduced to encourage the public to report online rumors.
WHY RUMORS TRAVEL FAST
Some Internet users create rumors to attract attention, while others do it to blow off some steam. But rumors fabricated on purpose can be dangerous and incite panic, said Min Dahong, a researcher on Internet usage.
Based on Wu Chenguang’s observations, rumors travel especially fast in times of emergency such as natural disasters and other mass incidents.
Wu is the news center director of Sohu. In June last year, the web portal’s news center launched a program called “Rumor Terminator” and has handled 300 rumors to date.
Soon after downpours hit Beijing on July 21, 2012, Internet users began disseminating photos of severe flooding that had been taken years earlier.
Another example involves rumors about earthquake forecasts. Internet users claim that people had successfully predicted that an earthquake would shake Lushan County, Sichuan Province, as early as five years ago, but these claims weren’t made until after a 7.0-magnitude earthquake struck Lushan County on April 20, leaving at least 196 dead.
Such rumors had an extremely harmful influence, Wu Chenguang said, adding that the government’s slow pace in releasing information has allowed Internet users to spread their rumors easily.
When explaining why rumors travel fast in China, Min Dahong proposed that it is because rumors touch on issues of common concern.
The Chinese people now care about their surroundings. Rumors travel fast because they cater to public curiosity and concern about environmental protection, food safety and corruption, he said.
2. Online shopping growing very fast
CHINA’S SHOPS SUFFER AS ONLINE RIVALS BOOM [CCTVupdates YouTube channel, June 4, 2013]
CBBC Webinar – yourcompany com cn — Online Presence in China [China-Britain Business Council YouTube channel, recorded on Jan 16, published on July 30, 2013]
Wednesday 16th January 2013, presented by Richard Unwin, Backbone IT Group. This webinar discusses webpage content, social media and how Chinese people interact with the internet. The topics covered are as follows: – How does the internet differ between UK & China? – Visual impact of web design in China – Content — what do Chinese readers want to learn from your website? – Engage your target audience while retaining your corporate image – Social Media
China Focus: Online shopping penetrates smalltown China [Xinhua, July 30, 2013]
Online shopping is no longer exclusively for city dwellers, as residents of smaller locales are now spending more money buying goods on the Internet.
People living in counties and townships each spent an average of 5,628 yuan (910.7 U.S. dollars) online in 2012, almost 1,000 yuan more than their urban counterparts, according to a report released Monday by Taobao, China’s leading online shopping website.
The report showed that township residents placed an average of 54 orders each on Taobao in 2012, far more than the 39 orders placed by e-shoppers living in China’s first- and second-tier cities.
Major international brands like Estee Lauder have sold well in counties and townships. Shoppers in those locations spent an average of 765 yuan apiece on Estee Lauder cosmetics, slightly more than the 652 yuan spent by first- and second-tier city residents.
Over 30 million county residents spent a combined total of 179 million yuan on Taobao, according to figures posted online by the company.
Although residents’ incomes tend to be lower in small towns and counties, their online spending habits are similar to those of urban residents, according to a report released in March by McKinsey Global Institute.
The McKinsey report said that for every 100 yuan spent online, 57 yuan is spent by people in third- and fourth-tier cities, greater than the national average of 39 yuan.
The county-level city of Yiwu, ranked by Forbes as the richest county in China, topped the Taobao ranking, with online spending totaling 3.4 billion yuan.
Residents in Qingliu County in southeast China’s Fujian Province spent a staggering 20,151 yuan, or 72.55 percent of their combined income, on online shopping. In first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, the ratio has yet to exceed 27 percent.
The report also showed that 22 percent of Taobao customers in small towns used its mobile application to shop online. But the percentage declined to 17 percent in first- and second-tier cities.
Commentary: Global online shopping benefits Chinese manufacturers [Xinhua, July 16, 2013]
With just a few clicks on a shopping website, a Nigerian girl buys her favorite wig, to be delivered to her home several days later from China.
That was a scene shown Sunday by Chinese national broadcaster CCTV.
An African girl buying Chinese products on the Internet is, by no means, an isolated case. In fact, cross-border online shopping has become quite a frenzy in recent years.
Despite that, though, online sales of Chinese-made goods in foreign markets are still a new phenomenon and represent a strategic opportunity for China’s giant manufacturing sector.
If the popularity of global online shopping continues to grow, it would provide a vital channel for China to sell more of its products to the rest of the world. In the long run, it may even reshape the face of global trade.
Overseas consumers can save a lot of money by purchasing quality goods from China via the Internet because the products are generally cheaper than their counterparts from elsewhere in the world.
This comparative advantage has made Chinese goods popular among online shoppers in Russia, Brazil, America and Europe. Chinese-made commodities such as clothes, suitcases, mobile phones and shoes are among the best-selling items.
In the larger picture, the trend may also help modify the unfair distribution of profits in global trade.
China has been the world’s largest exporter since 2009. However, it receives only a small portion of the profits generated by goods that are domestically produced but sold through retailers in developed economies.
The situation may be corrected, though, if online shopping continues to prosper across the globe and the made-in-China label can be brought directly to individual consumers.
Global online shopping, however, is still in its infancy and its future is closely tied to the development of online payment mechanisms, cross-border deliveries and tax issues.
It is safe to say, meanwhile, that online shopping is a rising wave sweeping the globe. Online shopping boasts unprecedented vitality and its significant role for Chinese-made goods should not be underestimated.
Mobile payment new technology [NFC] changing ways of consumption [CCTVupdates YouTube channel, July 3, 2013]
Beijing China Mobile users can make purchases with phone [cntv.cn via Xinhuanet, July 23, 2013]
Transit cards make taking the bus and subway in Beijing an easy thing. But they may soon be unnecessary.
Starting Monday, China Mobile users can use near-field-communication, or NFC-enabled handsets to get access to public buses and subway lines in Beijing. They can also make payments below 1,000 yuan at a number of up-scale shops. Beijing China Mobile customers can visit any of six designated China Mobile shops to switch their SIM cards out for new ones that will allow them to connect their phones to their bank accounts.
Samsung’s Galaxy S4, the HTC One, and some Huawei and ZTE models can support NFC functions.
China’s mobile payments to exceed 9 trln yuan in 2015: report [Xinhua, July 30, 2013]
Online payment transactions handled by Chinese mobile payment service providers will exceed 9 trillion yuan (1.45 trillion U.S. dollars) in 2015, according to an industry report published on Monday.
In 2012, the country’s mobile banking sector handled 800 billion yuan in online payment transactions, an increase of 265.3 percent from a year earlier, according to a report published by the Internet Society of China (ISC).
Last year, the country’s online payments rose 66 percent to nearly 3.7 trillion yuan, with fast growth in payments on premiums, according to the report.
Online premiums payments grew 123.8 percent year on year to 3.66 billion yuan in 2012, the report said.
The country’s online payment market is maturing with an accelerated growth of internet finance, said Shi Xiansheng, deputy secretary-general of the ISC.
Online payment transactions handled by Chinese payment service providers totaled 830 trillion yuan in 2012, according to data from the Payment & Clearing Association of China (PCAC).
China’s online payments total 830 trln yuan in 2012 [Xinhua, June 27, 2013]
Online payment transactions handled by Chinese payment service providers totaled 830 trillion yuan (about 134.3 trillion U.S. dollars) in 2012, according to an industry report published on Thursday.
In 2012, banks handled 19.2 billion online payment transactions totaling 823 trillion yuan, according to a report published by the Payment & Clearing Association of China (PCAC).
Another 10.46 billion online payment transactions amounting to 6.89 trillion yuan were handled by other payment agencies last year, the report said.
Online transactions are being used not only in traditional areas, such as online shopping and bill-paying, but also in areas related to education, tourism, fund products, insurance, community services and medical and health services, the report said.
But experts noted that the increasing variety of payment tools has also caused problems concerning the safety of funds and customer information, calling for strengthened regulation and supervision.
“The payment business is closely linked with people’s daily lives, so customers will be less tolerant of risks,” said PCAC’s deputy secretary-general Kang Lin.
The People’s Bank of China, or the central bank, has so far approved 197 non-financial institutions to provide payment services, of which 72 are eligible for online payment business, tPCAC data showed.
The association said mobile payments, or online payments made through mobile phones, totaling 2.31 trillion yuan were handled by banks in 2012, as well as 181.2 billion yuan in transactions handled by non-bank payment service providers.
China cloud computing conference kicks off [CCTVupdates YouTube channel, June 6, 2013]
[1:36] “China’s biggest cloud is Aliyun run by e-commerce giant Alibaba [China’s Amazon].” … … [2:44]
Alibaba, e-concierge, soon at your service [ChinaDaily via Xinhuanet, July 26, 2013]
Chinese e-commerce giant Alibaba Group Holding Ltd plans to boost its presence in China’s online market, and is adding services to ease consumers’ daily lives, from ordering food to booking movie tickets.
The company expects the new business area to become a major revenue source in the future.
Online shopping has become a new way of life for many Chinese consumers, said Zhang Jianfeng, vice-president of Alibaba Group. And the company has realized that customers are not satisfied with merely buying items on Internet.
“Gradually, consumers are developing a strong demand for daily life services, in fields like catering, entertainment and travel,” Zhang said at a Beijing news conference on Thursday.
Taobao Life, a platform owned by Alibaba that provides such services, has been receiving unprecedented attention from Alibaba’s management since the beginning of the year. In March, Alibaba’s chairman Jack Ma said that “amazing” things will happen if everyday activities are combined with mobile Internet services.
Ma compared the growing importance of e-commerce in people’s lives to “the rising sun at 5 or 6 am”, and Alibaba expressed its ambition to develop the new business to reach a scale similar to its booming Taobao Marketplace.
If so, investors who are eyeing Alibaba’s possible initial public offering will find another bright spot for the company’s future profitability, analysts said.
Alibaba is said to be planning to include its e-commerce platforms – Taobao Mall, Taobao Marketplace and eTao – into the planned IPO package. Last year, Taobao Mall and Taobao Marketplace posted about 1 trillion yuan ($163 billion) in total transaction value.
Zhang revealed that the Taobao Life platform has three strategic business sectors. One is Taobao Diandian, a mobile application launched in July that helps customers order food. More than 100 restaurants in Beijing, Shanghai and Hangzhou have opened services on Diandian.
Meanwhile, Taobao Movie is the nation’s biggest mobile platform to buy film tickets. It allows clients in more than 100 Chinese cities to select seats from about 800 theaters, Zhang said.
The company also set up a platform on Taobao Life, known as Offer, which provides people with classifieds in areas such as apartment rentals and housekeeping services.
Song Yang, e-commerce senior analyst with the Beijing-based research firm Analysys International, said that there’s a promising future for companies able to successfully combine people’s everyday needs with the Internet-based services.
“There are no official statistics about the size of the market, but this is the future of e-commerce. Because the services are all about making people’s everyday life better and easier, ” Song said.
Video Alibaba Group launches China Smart Logistics Network [CCTVupdates YouTube channel, May 30, 2013]
Tencent invests in Fab, takes on Alibaba [ChinaDaily via Xinhuanet, June 20, 2013]
US e-commerce website Fab.com said on Wednesday it had raised investment of $150 million from companies including Chinese Internet giant Tencent Holdings Ltd.
Analysts said Tencent may help Fab enter the Chinese online market, which is expected to record nearly 2 trillion yuan ($326 billion) in sales by the end of this year.
Shenzhen-based Tencent said it will make a “minority investment” in the US company, but has not disclosed the value of its investment.
Tencent will have a seat in Fab’s boardroom after the deal is done.
Fab could take on as much as $100 million in further investment over the following months, company CEO Jason Goldberg told The Wall Street Journal.
The funds will be used to build its online stores, develop exclusive products and expand its international footprint, he said.
“Fab is one of the leading online design retailers in the world. Tencent believes Fab has the potential to further develop under the wave of the global, social and mobile transformation of the e-commerce industry,” Tencent said via e-mail.
Founded in June 2011, Fab recorded revenue of $120 million last year. That figure is likely to reach $250 million by the end of this year, tech news website TNW said.
The Manhattan-based startup has 14 million registered members.
Tencent said its social strength and technical capabilities will help bring Fab to Internet users around the world.
Fab’s other investors include Japanese retail conglomerate Itochu Corp, an indication the company may be looking toward Asian markets.
China’s online shopping business is dominated by the Alibaba Group Holding Ltd. The company’s customer-to-customer platform, Taobao, contributed roughly 70 percent of the sector’s turnover. Alibaba also owns Tmall, the country’s No 1 business-to-customer portal.
Tencent has been vigorously building up its e-commerce segments to challenge Alibaba’s dominance. Its most recent attempt is authorizing payments via WeChat, its popular smartphone application.
Statistics from the China Internet Network Information Center revealed that China had 242 million online shoppers by the end of 2012 – or more than 40 percent of the country’s entire Internet population.
Internet giants enter online pay market [ChinaDaily via Xinhuanet, July 11, 2013]
Chinese Internet giants Baidu Inc and Sina Corp received third party payment licenses from the People’s Bank of China, the central bank, to conduct related online payment services within the country.
According to the bank, the two Internet companies received official approval on July 6. Both companies were granted a five-year permission to conduct Internet payment businesses. Sina, which operates the twitter-like micro-blogging service Weibo, also got the nod to run a mobile phone payment business.
It means all major Chinese Internet companies, including Alibaba Group Holding Ltd and Tencent Holdings Ltd, have obtained third party payment licenses. Alipay, the online payment arm of Alibaba, together with Tencent’s Tenpay, were among the first companies to receive licenses from the People’s Bank of China – in May 2011.
The reasons why Baidu and Sina are latecomers in the online payment industry, even lagging far behind some Chinese telecom companies, is because their online payment branches are weak and didn’t receive much attention from their management, said Zhang Meng, an analyst with Beijing-based research firm Analysys International.
“Baidu’s and Sina’s application for online payment licenses have more strategic significance than immediate practical meaning for the two,” Zhang said.
Sina started to explore the Internet payment business in 2011. It launched the online payment tool SinaPay that year and upgraded the service into WeiboPay (micro-blogging wallet) in 2012. Every Weibo user automatically has a WeiboPay account. Sina said it hopes to provide a more convenient way for micro-blogging users to conduct transactions online and developers to charge users for products and services.
Sina Weibo introduced Alibaba as a stakeholder in May to act as a bridge for Sina to make use of the Alipay service. Analysts said it’s safer for Sina to have its own payment tool as it’s important to keep transaction data in Sina’s own realm.
“An online payment service will prompt Sina Weibo’s commercialization process,” Zhang said. Previously, Sina had made some attempts to generate money from its Weibo platform. It cooperated with mobile phone manufacturer Xiaomi Corp to sell Xiaomi smartphones through WeiboPay last year. However, some shoppers complained after WeiboPay was paralyzed for a while through excessive use.
Baidu started investigating an online payment service as early as 2008 but the company’s enthusiasm for it cooled alongside the fall of its e-commerce business Baidu Youa.
Alibaba’s Alipay still dominates the Chinese Internet payment market. According to a report issued by Analysys International, Alipay had a 46.3 percent share of the online payment market in the first quarter of 2013, followed by Tencent’s Tenpay, with 20.3 percent.
Alipay had a total of 800 million registered accounts by the end of April. Tenpay said it had 200 million registered users by the end of last year.
Alibaba´s new online investment tool faces regulation challenge [CCTVupdates YouTube channel, June 24, 2013]
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