91 to Go Public on the GEM of HKSE in the First Half of 2013

 

img:zs.91.com

NetDragon Websoft Inc. (HK: 777) announced that its board was considering the feasibility of the proposed spin-off and the separate listing of its mobile internet business, or 91, on the GEM of Hong Kong Stock Exchange.

Both CEOs of NetDragon and 91 made it clear on various occasions that 91 would go public as an independent body no later than 2013. NetDragon’s CEO, Liu Luyuan, expected 91 would have a market cap at IPO bigger than NetDragon’s, HKD 1 billion, in November 2007.

NetDragon acquired 91, as an iPhone software managing tool, in 2008, and made its whole mobile division renamed 91 Mobile later. To tap into the Android surge, the company launched Hiapk, an Android app platform, in 2011 that didn’t take long to become one of the largest online Android communities in China.

91′s two major revenue sources, mobile games and advertising, contributed 40% and 53% of its total net income, respectively, in Q3, 2012, as disclosed by Hu Zeming, CFO of NetDragon and CEO of 91. The rest is from paid apps. When it comes to revenue, the mobile gaming business increased ten times year-on-year and advertising revenue increased three times in that quarter. Hu expected the total revenues of 91′s in 2012 would be over 300 million yuan ($48mn).

91 Mobile Phone Assistant

Shortly after Apply released the App Store in June 2008, Xiong Jun, wrote an app for users of jailbroken iPhones to organize apps. Later he started collecting apps and offering them in the app. Only two months after the launch in 2008, 91 Mobile Phone Assistant was acquired by NetDragon.

91 Mobile Phone Assistant soon became a must-have app for Chinese iPhone users. It had three million users in early 2010 that accounted for over 90% of jailbroken iPhones in China (Back then there was no official channels selling iPhones in mainland China).

As a well-recognized app platform had been built, the company started launching self-developed apps that were also well received.

Android App platform

When Android quickly caught on, 91 launched an Android platform, Hiapk, among a bunch of others. Then the most well-known one wasn’t 91′s, but Gfan. But 91 caught up soon. Hiapk offers users Android apps, both of third parties and the self-developed, and custom ROMs.

Mobile Games

Since a majority of mobile services are still seeking monetization approaches, 91 is one of the successful in terms of revenue, although a big chunk is from mobile games. The gaming business grows faster than the other two services in terms of both popularity and revenue, according to its CEO.

Most games on the platform are from third-party developers that 91 takes revenue cuts. Though 91 also self develops games, less than 10% of gaming revenues is from the self-developed, as disclosed by 91 management.

With a large number of user base, the monthly revenues generated by third-party games surpassed 10 million yuan in the past July, according to Tony Ho, vice president of 91, and ARPU of paying game players were 252 yuan ($40).

91 has become a well-recognized brand and developed a couple of well-known sub-brands, such as 91 Panda Reading – a mobile reading platform, and iBaby – an app platform for kids that also launched a custom kids’ tablet by partnering with a third-party manufacturer.

But what 91 offers isn’t the kind that would cost users anything to switch to another service. Plus, competitions, including AppChina, Wandoujia and Gfan, out there aren’t minor. Even the founder of 91 Assistant and the founding leader of its Android platform, who went off and build their own businesses, are challenging their former employer’s iOS and Android services, respectively.

Related posts:

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2. Report: Half of iDevices Are Jailbroken in China
3. Mobile Social App Momo Surpasses Half a Million Users, Coming to Android

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5 Must-Read Tech Stories in China This Week

Christmas came and went this week, but was China’s internet naughty or nice? We’ll leave that up to you to decide, but here’s what was happening in China tech while you were unwrapping presents (or not, as the case may be).

1. Xiaomi has sold 6.5 million phones

We knew Xiaomi was finding a market for its handsets, but now we finally have some numbers. The home-grown mobile startup has sold more than six million of its handsets and looks to sell even more in the coming year…

2.Domestic Chinese Smartphones Attract Praise But Not Profits

…But don’t think those Xiaomi sales are necessarily turning into big profits, because they aren’t. Domestic brands are dominating China’s smartphone market but making almost none of its profits.

3. Alibaba Rumored to Be Gearing Up for IPO in 2013

China’s biggest and most dominant e-commerce company may be looking to list. The company may be worth a whole massive boatload of money, so this is one stock investors will definitely be keeping an eye on.

4. China Approves Law Mandating Real-Name Access

To access the web in China, you’ll now have to register your real name and state ID number with your ISP. And that’s only the beginning of the draconian new law (see also: this).

5. Vietnam Bans Popular Chinese Game Over Territorial Dispute

When politics get into gaming, the results can be messy. Giant Interactive learned that the hard way this week when it discovered its hit game Long Journey 2 was banned in Vietnam thanks to a map of China that includes disputed Vietnamese-claimed territory.

That’s all for this week, folks! For our full spread of China coverage, you might like to subscribe to our China RSS feed.

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E-commerce Startup Kumami Sells Imported Kids’ Products to Worried Chinese Mothers

The Kumami team

Being a mother (or father) in China is not an easy thing these days. Numerous scandals involving everything from milk powder to clothing and toys have led many parents to believe Chinese products just aren’t safe. But importing products is expensive and moreover impractical for the average parent, and that’s where brand-new Chinese startup Kumami steps in. It’s a flash sales platform that offers children’s products imported from the US and Europe at discounted prices (the name, fittingly, means “Cool Mommy”). It’s a pretty cool idea and the site looks quite slick, so we got in touch with Kumami Founder and CEO Shaun McWhortor to see what more we could learn about the service.

How did you get the idea for Kumami?

Prior to Kumami.cn, we had a small social network startup for Chinese moms called maozhao.com. We spoke to lots of moms to understand what kind of products they wanted and problems they faced. In doing so, we realized how concerned mothers in China are about the quality of local products for their kids. There are so many product scares and recalls that it really makes you skeptical about buying anything your child can eat, play with or even wear. This is why you find lots of moms in China buying items like milk powder, baby food and gear overseas in Hong Kong, the USA, Holland and other countries.

What we learned is that most mothers in China associate overseas brands with trust and higher quality. Even if overseas brands are manufactured in China, they are typically held to higher production standards. This insight, coupled with a steady increase in the amount of money families are willing to spend on their children and the strength of the Yuan, lead us to pivot our business to focus on offering unique high quality baby and kids products from the USA and Europe.

How has the reception been? Are there any numbers you can share with us?

The reception so far has been extremely positive. Many moms have told us they really enjoy the serendipity of finding cool and unique products through Kumami.cn as opposed to the standard traditional e-commerce experience. Normally, shopping online is a task, but kumami.cn introduces fun and surprise into the shopping experience.

As far as numbers, it’s really been beyond our expectations. We just launched the site two weeks ago and with almost no marketing, over 5,000 moms have visited the site with more than 500 registering to receive our daily sales events emails.

Why flash sales rather than a more traditional e-commerce setup?

From the beginning, we didn’t want to compete with traditional e-commerce companies like Redbaby or Taobao. Those companies are extremely well established and do a good job of supplying daily necessities. But we wanted to differentiate ourselves and offer cool products with a unique shopping experience. The flash sales model allows us to create a fun and serendipitous shopping experience by handpicking high quality unique products that are unavailable or hard to find in China. The other benefit of using a flash sales model is that it allows us to buy in bulk in order to reduce costs and pass those savings along to the customer.

What is the plan going forward?

We believe our success lies in our ability to continue to source really unique products and great deals for mothers. So our plan is to continue to grow our team, improve our inventory and logistics capabilities and build relationships with brands we love. From a technology perspective, our next project will be to develop a mobile app to complement our website for those mothers on the go.

How have you found China, and Shanghai specifically, as an environment to do a startup? Would you recommend it to other entrepreneurs?

Wow, that’s a tough question. Being an entrepreneur anywhere in China is a huge challenge no matter which city you’re located in. However, I believe Shanghai can be a great city to start a business because you have a large talent pool, great logistics infrastructure and a fast growing community of tech companies and venture capital firms. That being said, even the smallest of issues can be major stumbling blocks when doing business in China.

The Chinese tech environment is super competitive with both large entrenched companies and small startups that often copy the latest and most popular business models at frightening speed. So you need to be sure to build unique capabilities into your business that are hard to copy.

Finding good people is really difficult. The competition is fierce and there are lots of choices for talented people in Shanghai. So, you have to continue to motivate your team with non-monetary incentives in order to stop them from jumping ship for higher potential salaries elsewhere.

Also, the cost of doing business is often much higher than people expect. After calculating staff salaries, tax and social benefits into your monthly burn, most people are surprised at how expensive staff and office costs can be.

Lastly, administrative tasks that may be quick and easy in other countries can often be lengthy and expensive processes in China. Items like company registration can cost thousands of dollars and require several months depending on the approach you use and the type of company structure you choose. Even things like renting a server, applying for an ICP license and integrating payment platforms can be complicated processes and take a long time.

Ultimately, for anyone who’s considering starting up a business in Shanghai, I would recommend it. The best advice I can offer to people considering to take the plunge is to make sure you have a strong local network of friends, family and advisors who’ve got experience starting a business in China before jumping in. You’ll need to leverage all those relationships in order to help you navigate the waters successfully.

What else do you want our readers to know about Kumami?

For all the interested mothers out there, as a launch promotion we are offering free overseas shipping which we will be extending until Chinese New Year.

From an investment perspective, we are now looking for a series A investment to help us grow our team, support marketing efforts and improve our inventory and logistics capabilities.

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Vietnam Bans Popular Chinese Game Over Territorial Dispute

Giant Interactive’s MMORPG Long Journey 2 has seen great success in China, but its expansion into Vietnam came to a rapid halt when Vietnamese operator Vinagame shut down the game because it contains a map that indicates disputed territory claimed by Vietnam is owned by China. According to Giant Interactive CEO Shi Yuzhu, Vinagame is now under investigation for operating a game that apparently violates Vietnamese law.

Giant was apparently quite surprised by this news, and Shi described it on his microblog as “like being shot while lying down,” a popular internet slang phrase that refers to suffering a surprising injury without having done anything to provoke it.

In actuality though, conflicts like this are inevitable for any Chinese game containing maps, as Chinese laws forbid the depiction of any map of China that doesn’t include territories disputed with Vietnam, Japan, Taiwan, and India (among other countries), but as tensions about these disputes rise, other countries are increasingly unwilling to tolerate such maps. China raised tensions last month with a new passport map that depicts disputed territories as China’s, and subsequently annoyed a lot of its neighbors. For game devs who want to design games that can work at home and abroad, it seems the only option is not to include maps of China at all.

[via Sina Tech]

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Is 4G Finally Coming to China in 2013?

In news that has got to be making some of the folks at China Mobile drool with anticipation, an MIIT report presented at a recent conference suggests that the regulatory agency may be planning to issue its first 4G network operator permit in 2013. While China Mobile already has a relatively developed 4G “test” network, it cannot actually offer access to the network to subscribers in mainland China until MIIT has issued it an operating permit. Now, it seems that after a long wait, that day may finally be coming.

The key word there, unfortunately, is may. The MIIT report does not say that it will actually issue any 4G network permits in 2013, just that it will “earnestly complete the preparatory work for LTE frequency distribution and license-granting.” In other words, MIIT will be prepared to issue 4G network permits, but whether not the Ministry actually will issue any in 2013 is less clear. It’s possible that China Mobile could have to wait until 2014 to roll out its TD-LTE service.

Still, the MIIT report signals that the Ministry may finally be satisfied enough with 3G growth to begin moving towards 4G. The rollout of China Mobile’s 4G network has been significantly delayed, analysts suggest, mostly because MIIT wanted to allow time for China’s 3G network market to grow and mature before allowing it to be replaced with 4G. But this was a strong year of growth for China’s 3G networks, and Chinese operators have been seeing 3-million-plus monthly user growth even in recent months. Next year could finally be the time for 4G. China Mobile is certainly hoping so.

[via Sina Tech]

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Friendster Gives Dating Another Try

Earlier this month, Malaysian based social-network-turned-social–gaming-website Friendster.com launched new dating features, allowing people to browse and hook up with potential partners online. Used widely as a dating website in the past, the new dating features of Friendster could be welcomed by many of its former users across Southeast Asia.

There are three dating-related features on the website: My Crushes, My Admirers, and My Matches. In the Crush game, users get to choose whether the pictures of potential partners are hot or not. If users say that the picture is hot, then they become an admirer of that person, and that person becomes a crush of the user in return. If both parties say that the other person is hot, then we have ourselves a match. Users can view these three features from the social dashboard.

Another big change is that Friendster is being far more choosy with users’ profile pictures. There is a requirement to add profile pictures with an emphasis on your face, and the pictures will then need to be approved from the Friendster team. When I tried using a picture with my face a little far away from the camera, the picture got rejected by the team. Other profile information is required as well, such as users’ sexual orientation.

There are on-site purchases that can be made using Friendster coins, including features to make profiles more easily discovered through search or through banner spaces. These coins can be bought online using several payment methods, including PayPal and Indonesian banks BCA and Mandiri.

Around two months ago, Friendster CEO Nikolai Galicia said that more than 50 percent of the site’s users come from Asia. Malaysia, Indonesia, India, and the Philippines were the site’s top four countries, which is where Friendster had its social gaming platform. So you might find more search results when looking for potential partners from those countries.

By combining social gaming and dating features, Friendster could potentially make a huge comeback as one of the biggest dating social networks — at least in the Southeast Asia region. That alone would certainly be a good step.

[Source: Lowyat via Trenologi]

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2012 China Mobile Game Sector in Review

Chinese mobile game market will hit RMB 5.21 billion this year and 14.14 billion in 2015, according to a report by iResearch, the Beijing-based Internet market researcher. The robust numbers echoed overall market optimism over the sector as the field is thought to be very promising in the coming years. Local media Sootoo.com provided some very interesting and informative insights into the industry for your better understanding of the market. Take a look.

 

So far, so good

iResearch data showed that in Q1 2011, Chinese mobile game users surged to 23 million, up by 15.05% qoq. Meanwhile the market scale hit RMB 255 million (up by 18.41% qoq). It is predicted that the scale could reach RMB 3billion in 2012.

People have been spending more and more time on smart phones, and on mobile games as well. The user experience on mobile devices is as good as or even better than that on PCs. On buses, in the station, or at dinner tables, you see people staring at the screens tapping and flipping. Yes, it’s not called addiction any more but a usual habit for most of us.

The business model of free game plus paid items seems to work very well in Chinese players. Some web game publishers have been quite familiar with domestic game lovers, so it doesn’t take much difficulty for them to relocate to the mobile land. This makes the situation of traditional console games even worse.

Among all the recent popular mobile games, WangXian is the new legend. Launched in June this year, it managed to earn a monthly revenue of tens of thousands RMB. And the number is still growing rapidly. According to a stats, there are now 792 mobile games available in the market. Surely those who just want a slice of the big cake are also included, mostly with low quality.

The not-so-long history of Chinese mobile game is very similar to that of the web games. In 2010 so many web games flooded in and messed up the market. The chaos didn’t end until some really good ones eliminated the shoddy ones.

 

The Present Trouble

This fresh cake is still growing and it naturally attracts more entrepreneurs as young as the market is. By there’s no dominating or leading player in the market. For those small startups, the various ways of marketing mobile games could be their opportunity of breakthrough. Before 2008 game developers must have never imagined that they could promote one game on so many platforms. Social networks as Renren, Weibo, videos sites or even chatting platforms like Weixin all work as perfect advertising channels for games, at reasonable costs. Apart from those, emerging game platforms are also useful channels to promote small mobile games.

The mobile game enjoys good user base and efficient ways of marketing, then what is the present problem it has? Possibly the user experience is the key concern of all. It is easy to have huge number of users on mobile, but it’s much easier to lose them. After all, mobile games are installed for “killing some time”. The client is small, and easy to download, so once the player feels unhappy he will delete the game within seconds. These are some factors that may hinder mobile games from delivering the best user experience.

1. Mobile traffic fee incurred by mobile games is a big barrier for attracting long-term players. Even if the game is so alluring, calm players will stop when seeing the bills. With the popularity of Wifi and 3G network, hopefully this could be solved soon.
2. As you may have experienced, the network speed in China is neither quick nor stable. Players hate it so much when they get disconnected or crashed in the middle of the game. Especially when the game setting is big and complex, the unsmooth loading will definitely drive away interested users.
3. Next point is the hardware requirements of the game. If your game is only available for iPhone users, you surely have missed a large portion of lower-end users. Also if the requirements are too low, the display quality and experience is lowered as well. Developers really should take good care of the tradeoff.
4. Another issue that gives game developers a headache is the fast updating of operating systems. A mature product needs a longer developing period, while if the system the game is built on changes too quickly previous efforts could be vanished in vain.

 

Boutique, The Future

 Wu Chunlei, CEO of PearlinPalm (a mobile game publisher) said that the future mobile game market would be a Boutique Market. “Finally those really great ones will remain. After the shuffling of the mobile internet industry, the engagement of overseas competitors will force the domestic market to grow and improve to a higher level. I think those high-end games can survive, not the mediocre or the shoddy ones. The future belongs to a boutique game market.”

As many insiders believe, only those games with competitive quality win the loyal users for long.

 Photo credit: Bing Image 

Related posts:

1. Global Mobile Game Awards at GMIC2011 – Submit Your Mobile Game!
2. Report Predicts China Mobile Game Players Hit 192 Million by Year-End
3. Japanese DeNA Launched Mobage, the Mobile Social Game Platform for China

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China’s New Internet Law Legalizes Deletion of “Illegal” Content, Bad News for Sina Weibo

China’s tightened internet controls were passed into law earlier today. As well as requiring broadband and mobile internet providers to have full ‘real name’ details of their customers (which pretty much happens already), the new 12-article law also mandates how all web companies operating in China must control what people post. That effectively legalizes the deletion of posts that contain what authorities deem to be “illegal” content or information.

Again, that’s close to what happens already in practice with the blanket self-censorship and fast-paced moderation that goes on on the Chinese web, as seen very clearly on the Twitter-like Sina Weibo. And so the new law will criminalize companies who do not censor the web with the kind of speed and efficiency that the law now dictates. That has huge implications for social companies like Sina (NASDAQ:SINA), Tencent (HKG:0700), and Renren (NYSE:RENN), and search engines from Baidu (NASDAQ:BIDU), Sohu (NASDAQ:SOHU), and Qihoo (NYSE:QIHU). In fact, it’s an extra strain on the whole internet sector in the country, with possible extra costs involved in the already weighty and arduous practice of removing dissent, as well as other genuinely illegal acts on the web.

It’s surely only a matter of time before one Chinese web company is held criminally responsible for content posted on its service. And what will happen then? A fine? The jailing of the relevant member of staff?

Using Xinhua’s presumably official version of events, the news agency summarizes this aspect of the new law:

Service providers are required to instantly stop the transmission of illegal information once it is spotted and take relevant measures, including removing the information and saving records, before reporting to supervisory authorities, the decision says.

It empowers supervising departments to take technical and other necessary measures to prevent, stop or punish those who infringe on online privacy, requiring relevant service providers to give support during investigations.

There are some positive aspects to all this, as it also puts into law measures that, Xinhua says, “will protect digital information that could be used to determine the identity of a user or that concerns a user’s privacy.”

But as with all new web controls in China, a country where the web is already massively locked down, many will worry that the tightened legal framework will be used to identify people who post online some ‘sensitive’ information, such as – to take a topical example – evidence of corruption among officials.

In practice, a lot of this is happening already, as with recent real name requirements for microblogs like Sina Weibo, or the long-standing need to show ID when buying a mobile SIM. For now, a lot of questions remain unanswered, such as how this affects wifi hotspots, or people who rent homes and whose broadband account will be in the name of the home-owner – and a lot of other issues and unknowns.

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India Internet 2012- What world’s 3rd largest Internet population is like

The Indian Internet space had a great year in 2012. We saw the country become the third largest Internet population in the world with more than 120 million users. Over 25 million Indians now read e-books and over 18 million are on Twitter and Linkedin. There are more than 61.5 million Indians on Facebook, making it the third largest Facebook population. Digital music sales is big in India. E-commerce is taking off and a mobile Internet explosion is in the making. We put together some data on India’s Internet. Take a look.

India Online Landscape 2012 from NextBigWhat

The important bit

• India has over 120 million Internet users now and is likely to have more than 350 million Internet users in 2015. Right now, its the third largest Internet population in the world.
• Accordingto a McKinzie report, Internet contributes to over $30 billion of the Indian economy and its slated to go up to $100 billion in 2015.
• Most Indian Internet users are young and the male to female ratio is approaching 50:50.
• The top categories on the Internet are downloads, social networking, search, e-mail, multimedia, community, news and technology and directories.
• Nearly 80 % of Internet users in India use search and google is used by 80 % of the people who use search. yahoo has a 11 % share and Ask has a 21 % share.
• Most searched people on Google in 2012 were ex porn star Sunny Leone, former Kingfisher calendar girl Poonam Pandey and desceased superstar Rajesh Khanna.
• India is home to one of the largest social networking community. It ranks #6 on Twitter, #2 on Linkedin and #3 on Facebook. Youtube is also gaining popularity in the country.
• Google’s Chrome browser is big in India. Firefox and Internet explorer are also used. Mobile browsing has 56 % share compared to 44 % desktop Internet users in India.
• On mobile, Opera is the favorite browser. Chinese browser UC Browser is big followed by Nokia in the third place.
• Digital music overtook physical music sales in 2010.
• E-books are gaining popularity in the country. There are some 25 million ebook users in India and they are aged between 25- 34.

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[This article is part of our 2012 Recap series, and is supported by CCAvenue.]

CCAvenue is India’s largest payment gateway solution powering thousands of eMerchants with real time, multi-currency, multiple payment options online payment processing services. The solution is powered by proprietary technology that integrates transaction-processing, advance shopping cart, auction payment collection facility, mobile page, risk assessment and fraud control, smart analytical dashboards, financial reporting and order tracking and many more features.

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1. 2012 Recap : The Year Mobile Internet Surpassed Desktop Internet in India
2. Internet and Mobile Startup Funding- India Report 2012
3. 2.4% Of Indian Population on Facebook – MTV India and Docomo Most Popular Fanpages [Interesting Stats]

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