One could be forgiven for thinking that after purchasing Uber’s China operations, Didi Chuxing—which now boasts over 300 million users and over 80% of China’s market—would be on easy street. But things are never that simple in the Chinese market. Figures have shown Didi is losing users and drivers. Under strict Chinese local governments’ new policies, Didi may face bigger challenges than Uber China. Meanwhile more people cast doubts over its business model. Boasting a sharing economy model, car-pooling, the company now relies more on providing car-hailing services with prices lower than taxis to maintain its scale. Once the subsidies withdrew, users walk away.
Live streaming in China is not new. Even back in 2005 there were live streaming businesses based on the PC, but it was not until 2014 that this industry really started to take off in the Chinese market, as China’s almost 700 million internet users became aware that mobile live-streaming is fun and can even be profitable. China’s internet giant companies have long recognized that live streaming is going to be the new portal to bring in traffic, so just like their competition in other battle fields, Baidu, Tencent and Alibaba have spread their tentacles to live streaming and mapped out their respective businesses.
Imagine when you walk in a shopping mall, a mobile advertisement pops up on your phone, giving you a coupon on exactly what you planned to buy. Or speaking to your friend about an interesting ad you saw on Facebook then discovering, to your surprise, that your friend is also interested in buying that exact product—that’s the beauty of well-designed marketing, thanks to big data. Professor Ghose at Stern Business School analyzes what consumers do with their smartphones and how businesses can tailor effective offers that occur at the optimal time, while also ensuring that information exchange is a healthy two-way street.
The writing is there on the wall for all to see: the era of personal computers is over and this is the age of smartphones. Lenovo, a giant PC maker, seems to be late to the party. The hotly contested Chinese smartphone market already has strong global players like Apple and Samsung, and aggressive domestic brands like Huawei, Xiaomi and ZTE. How can Lenovo gain a foothold in such a competitive market? Will selling in overseas markets help? Will its Motorola acquisition be of use? And finally, can Lenovo become the proverbial dark horse that catches up from behind and ultimately wins the race?
Xiaomi, once the most popular smartphone vendor in China, is showing signs of decline. Back in the day, Xiaomi broke the mold by offering a feature-rich phone at an impossibly low price point. Its unique marketing strategy and business model helped it to break online sales records. But soon others started copying Xiaomi’s strategy and the novelty wore off. The company has been slow to innovate. For phone buyers, Xiaomi ended up being a low-end phone: once they had enough money, they would upgrade to an Apple or Samsung. Today Xiaomi is quickly diversifying from phones to rice cookers and drones. But is that enough to come back to relevance?
Companies that have spent months being feted by the media don’t tend to revise down their sales target, but in March Chinese smartphone maker Xiaomi did just that—from 100 million units set in December 2014 to 80-100 million. Rival Chinese brand Huawei overtook Xiaomi in the third quarter as China’s top smartphone vendor. It’s a reality check for the upstart vendor, which soared to fame and a $45 billion valuation in less than five years as China’s first-time smartphone buyers snapped up handsets at a furious rate. But Xiaomi isn’t the only one hurting from the smartphone market slowdown in China.
Tencent has used WeChat to create a mobile ecosystem for China, which has more smartphone than PC users. By steadily integrating value-added services into a social media app, Tencent has made it increasingly useful to both consumers and businesses. That means WeChat has more opportunities than other messaging apps to make money. In contrast to Facebook, which earns most of its revenue from advertising, WeChat monetizes by integrating online payment functions that encourage shopping through the app and selling games. In the second quarter, Tencent recorded RMB 4.5 billion in revenue from games purchased through WeChat and its older instant messaging app QQ, up 11% year-on-year.
Dating back to 1935, China’s system of five-year plans has long been dismissed as anachronistic, but it remains crucial to guidance of the economy
This year Alibaba broke all records on Singles Day with sales of $14.3 billion. Singles Day, or China’s Black Friday, was first invented by Alibaba in 2009. The idea was to create an annual sales event with crazy discounts supposedly for those who are single. (The fact that everyone, irrespective of their romantic status, jumped in and shopped is a different matter altogether.) This year a whopping 95 million users joined the cyber shopping fest. In other words, approximately almost one out of eight people in the world clicked the “buy” button on Alibaba’s marketplaces. What did it take to pull this off?
China’s internet world is ruled by three big players: Baidu, Alibaba and Tencent, collectively known as BAT. The three companies generated revenues of $20 billion in 2013 and $8.16 billion in the third quarter of 2014. The big three account for a significant, and perhaps disproportionate, share of China’s internet market. Another technology company that has risen to prominence pretty quickly is Xiaomi. BAT and Xiaomi are quickly making inroads into new areas outside their core business—by either investing in or acquiring companies. Take a look at the brand and companies that are backed by these four companies.