If we look at the Internet giants like Google, Yahoo, and Amazon, despite their success in almost all other geographic r
CHINA INTERNET WHITE PAPER ● INTERNET USERS: THE GAP BETWEEN BAIFUMEI AND GRASSROOTS / Page 1 ● DESKTOP SOFTWARE: UNIQUE AND POWERFUL / Page 2 ● CHINA SNS: THE "OPEN" PLATFORMS / Page 4 ● ONLINE-ONLY BRANDS: UNIQUE E-COMMERCE OPPORTUNITIES IN CHINA / Page 5 ● MOBILE APPLICATIONS: CONTENT LOCALIZATION IS NOT ENOUGH FOR FOREIGN DEVELOPERS / Page 7 ● INTERNET REGULATION: A MAP TO NAVIGATE WEBSITE LICENSES / Page 8
WHAT IS UNIQUE? If we look at the Internet giants like Google, Yahoo, and Amazon, despite their success in almost all other geographic regions, they enjoyed only brief bright moments in China before they lost their hard earned market share to their domestic competitors. How is Internet in China different? There is no simple answer, but at least it is simpler than to answer how China is different. In this white paper, we try to offer glimpses into some unique aspects of Chinese Internet with the hope that an aggregate view can gradually be developed if one knows more specific differences in culture, regulations, demographics, competitions, and behavior for both the companies and the users.
www.idgvc.com
INTERNET USERS: THE GAP BETWEEN BAIFUMEI AND GRASSROOTS Gongtao Zhang
[email protected]
The terms “Baifumei” (literally, “good-looking and rich”) and “Grassroots” have become popular ways of describing divergent groups of Chinese Internet users. Grassroots is a popular term for China’s many novice Internet users. Baifumei refers to the urban elite, who are largely educated professionals.
other provinces. The average Internet penetration rate for cities and towns is 54.6%, but it is only 20.7% for rural areas. The lack of access to and education about information technology is a major obstacle for the development of the Internet in rural areas. In a 2011 poll, 57.8% of respondents, who described themselves as rural non-users of the Internet, reported that “computer/Internet illiteracy” was their primary reason for avoiding use of the Internet.
Below is a summary of the demographics of each group, as well their online behavior: Baifumei Demographics Age Education
Occupation Monthly income Population Distribution
25-40 University or higher qualification White-collar workers, young professionals in large companies and organizations Over US$1,200 Less than 50 million Beijing, Shanghai, Guangzhou, Shenzhen and other Tier-1 cities
- Educational gap. According to the China Internet Network Information Center (CNNIC), as of June 2012, only 11.5% of Chinese Internet users had a university or higher-level education.
Grassroots 15-25 Mainly primary school, high school or lower education qualification
Cybercafes and mobile phones
Grassroots users account for the vast majority of Chinese Internet users. According to the data, 74% of Chinese Internet users have a monthly income of less than US$500, 57% have a monthly income of less than US$300, and 74% are either students, blue-collar workers or jobless. While most western companies have failed to accommodate Grassroots users after entering China, a number of local Internet companies have been successful due to their thorough understanding of both Grassroots users and their needs. For both Internet companies and investors, in order to comprehend the business models of Chinese Internet companies targeting Grassroots users, it is essential to understand the unique behaviors and motivation of this group of users.
Frequently pay for virtual goods and services
The successes of 9158.com and hao123.com are two examples of Internet companies profitably targeting Grassroots users:
Rural residents, blue-collar workers, small business owners, the jobless, etc. Below US$500 Over 300 million Primarily Tier-2/3/4 cities
Internet usage Internet skill Internet access method
Paid or free
Tolerance to ads
Online entertainment method
Early adopters of the Internet, familiar with various online services PC computers and mobile phones Accustomed to free and shared content and can efficiently search for free alternatives. Commonly unwilling to pay for online goods Are particular about web page layout and design, ignore ads and may switch to an alternative
Novices, unfamiliar with information technology
- 9158.com——catering to the psychological needs of Grassroots users. While largely unknown to most urban white-collar workers, 9158.com has been one of the highest grossing and most profitable unlisted Internet companies in China. 9158 has approximately 200 million registered users, 30 million active users, 700,000 concurrent users, and US$11 million in monthly operating income. The services 9158 provides are not complicated. They make it possible for visitors to watch “beauty hosts” singing, dancing, parodying, chatting and even flirting. They also make it possible for viewers to buy these beauty hosts virtual gifts, which range in price from US$0.01 to US$90. 9158 has shrewdly identified the vast numbers of Grassroots users who are eager to have fun and make friends on the Internet.
Do not mind slow speeds or pop-up ads, and sometimes follow ads to outside sites Primarily focused on Are proactive in searching games, videos and songs; for free entertainment don’t actively search for alternatives
The formation of these two groups corresponds to the imbalances present in the Chinese economy and educational system: - The digital gap between East China and Midwest China, and between urban and rural areas. The Internet penetration rate in Beijing exceeds 70% but is less than 25% in Yunnan, Jiangxi, Guizhou and 1
- Hao123.com——catering to the Internet usage behavior of Grassroots users. Company founder Xingping Li is only a junior high school graduate. However, when he was working as a cybercafe administrator, he observed Grassroots user behavior firsthand. He realized that these users typically had difficulty remembering website names, had trouble browsing, frequently ignored search engines and were unfamiliar with how to use bookmarks. They exhibited an elementary understanding of the Internet, simply clicked around and were unwilling to learn more about the technology. As a result, Xingping Li established a website navigation station, Hao123, characterized by its simple layout. As soon as the browser opens, the most popular Chinese websites automatically appear, and users can log onto them with just a click. Hao123 has developed rapidly. It now ranks 14th in the Alexa China website ranking and 65th in Alexa’s overall global ranking.
time the differences between them may become increasingly irrelevant, as urban workers in China’s Midwest and Tier2/3 cities start earning higher incomes and as e-commerce becomes more popular among white-collar workers. This trend will become even stronger as inexpensive smart phones improve, become easier to use and increase in popularity. While it is important to take into account the significant differences in behavior that currently exist between these two groups, it is also vital to recognize their increasing convergence when selecting Internet start-up teams and evaluating markets to enter.
It is critical to understand that the habits and behavior of the Baifumei and Grassroots groups are not static. In fact, over
Gongtao Zhang is Senior Analyst at IDG-Accel China in Guangzhou.
DESKTOP SOTFWARE: UNIQUE AND POWERFUL Xiang Gao
[email protected]
OVERVIEW competitive and monopolistic practices. Companies are even allowed to publicize such behavior, leading to intense competition in China’s software market.
The framework of today's Internet would be radically different if Microsoft had won its antitrust case and was able to bundle IE with Windows. As a result of the ruling, people who use browsers other than IE in Windows may encounter compatibility issues, hidden risks and errors.
DESKTOP SOFTWARE COMPETITION Desktop-based software is immensely popular in China. largely due to (1) the slow Internet speed in the early days, (2) the aggressive effort by the Chinese Internet companies to populate the personal computers, and (3) weak privacyprotection regulations. Among the most popular services used by Chinese Internet users, five are desktop-based: QQ IM, IE browser, 360 Safe Guard, 360 anti-virus and the Sogou input method. Although the other five services (Baidu.com, QQ.com, Sina.com, Sohu.com and Youku.com) are webbased, they have undoubtedly benefited from their affiliated desktop-based software over the course of their development.
On the other hand, had the ruling been in Microsoft’s favor, it is easy to presume that IE would have swiftly dominated the global browser market, dramatically decreasing the market share of competitors such as Firefox and Chrome. After monopolizing the browser market, Microsoft could also have obligated users to make Bing their homepage and compelled them to use Bing as their default search engine. These developments would rapidly have given Bing a commanding share of the global search engine market. This is the power of desktop software: the ability to unconsciously guide and shape user behavior.
For example, prior to 2006, QQ.com recorded lower traffic volume than Sina. However, after publicizing and integrating with QQ IM software, QQ.com’s traffic volume swiftly exceeded Sina’s, and QQ.com quickly became one of the
The U.S. frequently acts to stop monopolistic practices, and has numerous laws aimed at restricting such behavior. In China, however, there are no legal penalties for anti2
software from Internet companies can exert enormous control over Chinese Grassroots users, influencing their entire online experience. Tencent’s QQ IM software is a good example of this phenomenon. By leveraging the user base of QQ IM, China’s most popular desktop IM software, Tencent was able to rapidly expand into many market sectors, including news portals, videos, music, online search, e-commerce, online games and Internet security. Currently QQ’s web portal has the highest traffic among its competitors, its online gaming platform has the highest revenue in China’s gaming sector and its online music platform has the most Chinese users.
most popular news portals in China. In another example of trying to generate higher traffic, Baidu introduced its own search bar for Internet browsers. As the Baidu search engine gained market share, its competitors, including 3721 and Zhongsou, responded by introducing their own search bars, leading to intense competition. Even Google was affected as search bars became more popular. In yet another example, Sohu.com benefited from the widespread adoption of the Sogou input method and was able to maintain its position as one of China’s top three portals for the past five years. These trends reveal Chinese Internet companies’ continued deep interest in developing desktop software.
THE THREE LEVELS OF DESKTOP SOFTWARE
In recent years, with the extraordinary rise of 360 Safe Guard, competition in desktop software has become increasingly fierce. For example, during the “3Q War” at the end of 2010, QQ Computer Butler (similar in function to 360 Safe Guard) was launched by Tencent and rapidly took market share away from 360 Safe Guard in Tier-2 and Tier-3 cities. This development triggered a strong response from 360 Safe Guard. It launched 360 Koukou Bodyguard, a program that could block all advertisements and value-added services provided by QQ IM software. In a counterattack, Tencent then required users to choose between QQ and 360, forbidding 360 users from using QQ’s popular game services as well as implementing other restrictions. Finally, the government intervened and ended the war with neither party facing penalties.
Because of the importance of desktop software to Chinese users, the Internet companies that make this software have enormous influence and control. As users increasingly rely on desktop software to navigate the Internet, the software’s controlling power and expansion capabilities increase correspondingly. We have divided desktop-based software into three levels according to the strength of its behavior-controlling power: - The first level is system software such as programs for security, instant messaging, browsing, etc. Users have strong loyalty to this kind of software, because they use it so frequently. Once users adopt the software, they are reluctant to replace it because of their investment in time and content.
360 announced it was entering the search engine market in August 2012. Within one week, it had acquired nearly 10% of total search traffic volume by changing both the homepage and default search engine of 360 browser users to 360 Search. Baidu's response was not as hostile as QQ’s counterattack in the “3Q War”. Baidu chose instead to upgrade its technology to improve user experience. If 360 Search had been better prepared, in both technology and business strategy, it surely would have become the second largest search engine in China.
- The second level is content software such as programs for videos, music, games, etc. The demand for these services is strong, and users access them frequently. However, compared with the first level, there is a greater choice of software, and the switching costs for users are low. - The third level is utility software that controls such functions as input methods, picture browsing, etc. This kind of software has average demand, average usage frequency and low switching costs. Users can easily switch to other software providers if they are dissatisfied.
GRASSROOTS USERS PREFER DESKTOP SOFTWARE As of December 31, 2011, China had 513 million Internet users. Nearly 80% had been using the Internet for less than five years and more than 50% had been using it for less than three years. These Grassroots users prefer products that are easy to operate, require little input effort, have simple functions, and are largely entertainment-oriented. Compared with web-based applications, desktop-based software is more flexible in terms of user experience and interface design and thus can better meet the needs of Grassroots users.
Desktop Software in Three Levels Operating ability
Numerals in brackets are the number of users of each software
The Internet is a relatively recent development in China - only about 15 years old. As a result, the Chinese government is still working to better understand and regulate the Internet. The government has not yet released policies or laws to regulate the behavior of Internet companies. This has resulted in aggressive actions by many large Internet companies. Moreover, the desktop-based
Tencent (296 million)
Sogou input method (247 million)
Xunlei (125 million) Kuaibo (50 million)
Meitu (30 million)
WINRAR (90 million)
ACDSEE (30 million)
3rd Level: Utility (input methods, picture viewers, etc.)
360 (276 million)
Baofeng (70 million)
PPS& PPTV (60 million)
Kugou (40 million) Kuwo (40 million)
2nd Level: Content (multimedia players, games, etc.)
Kingsoft Antivirus(30 million)
IE (267 million)
1st Level: System (IM, security, browsers, etc.) Controlling power
3
Whether or not a company can leverage the controlling power of its software to attract more users and collect more revenue depends on its operational ability. Despite the early dominance of several Microsoft products in China, such as IE and Windows multimedia player, Microsoft has continuously ceded market share to companies such as Tencent, 360 and Sohu that have stronger operational abilities and more effective management.
Xiang Gao is Partner at IDG-Accel China in Guangzhou and focuses primarily on investments in Internet, mobile Internet and digital media.
CHINA SNS: THE "OPEN" PLATFORMS Bin Yue
[email protected]
SNS Platforms in China
Since Facebook launched its open platform in May 2007, it has attracted a number of third-party application developers. Companies such as Zynga, Instagram and Viddy were able to access a large user base and rapidly obtain substantial revenue. Facebook’s open platform enabled it to grow into a giant and far-reaching company. While China’s SNS companies have gradually adopted more open policies since 2008, and multiple Facebook clones, came to existence, China has not witnessed breakout stars comparable to Zynga and Instagram. A significant percentage of Chinese app developers’ revenue still comes from Facebook and other foreign SNS platforms. This is mainly the result of a hurdle Chinese app developers have yet to overcome: China SNS platforms are not yet fully open and transparent platforms.
Relationship
Acquaintances
Strangers Social Driven Communicate / Make Friends
Jiayuan(online dating)
QQ IM
Weixin
(No.1 IM, cover both strangers & acquaintances)
Weixin
(Mobile IM, based on mobile address book & QQ relationship)
(find ppl nearly)
51.com
For Fun
(strangers’ SNS social game site)
Qzone
(No.1 SNS)
User’s Needs UGC
Renren, Kaixin, Tencent Pengyou (top-tier SNS sites, more acquaintances oriented)
Tencent Weibo
Baidu Zhidao
(claim more users than Sina Weibo)
(No.1 Q&A site)
Sina Weibo Douban
PGC
Content Driven
DEVELOPERS FACING MULTIPLE SNS PLATFORMS
(high quality comments on book, movie, music, etc)
Mogujie, Meilishuo
(Social shopping sites)
Zhihu
(Quora copycat)
(more high-end users than Tencent Weibo)
Diandian, etc
(Tumblr copycats)
Sina Blog, etc (blog site)
U N C L E A R A N D U N FAVO R A B L E P L AT F O R M RULES FOR DEVELOPERS
In the U.S., developers primarily deal with two SNS platforms: Facebook and Twitter. In China, however, the situation is more complicated. China currently has a multitude of SNS platforms, and the sector is heavily fragmented, with none being as powerful as Facebook. Even though Chinese developers are able to work with many SNS platforms, such as Qzone, Tencent Weibo, Tencent Pengyou, Sina Weibo, Renren, Kaixin and Douban, each SNS platform has its own disparate open policies. Furthermore, deep cooperation between developers and SNS platforms largely relies on offline business development communication. According to users’ needs and relationships, the Chinese SNS sector can be summarized as follows: the most influential social networking products are QQ IM, Qzone, Weixin, Sina Weibo and Tencent Weibo. In social networking, although QQ is preeminent in the field and currently unsurpassable, QQ has not yet developed into as commanding a presence as Facebook.
Facebook has clear open platform rules: 70% of the revenue generated is distributed to developers. In China, the rules on revenue-sharing have been uncertain for quite a long time. At the beginning, the revenue-sharing percentage varied among different levels of cooperating third- party developers and different social applications. While the "open" SNS platforms hope to retain developers, they share as little revenue as possible with them. Developers have struggled to make decent earnings from Chinese SNS platforms for a long time. At the end of 2010, Tencent launched an open platform that let developers potentially take advantage of the enormous number of active Tencent users to earn substantial revenue. Currently, the most successful developers on this Tencent platform earn over US$3 million per month from revenue sharing. 4
REFEREE VS. PLAYER
However, Tencent tends to provide stronger support and offer higher revenue sharing percentages to small- and mediumsized developers than to large ones. The most recent revenue sharing rules for the Tencent platform are as follows:
In theory, the open platform can be said to play the role of referee. However, Chinese SNS platforms also act as players. They strive to develop their own winning applications that often incorporate great ideas. These (often copy-cat) inhouse applications tend to grow quickly, and earn substantial profits.
- Tencent gives 100% of revenue back to small- and medium-sized developers with monthly revenue of less than US$16,000
At Qzone, top applications include QQ Supermarket, QQ Restaurant, QQ Metropolitan, QQ Clothing store, QQ Baby and additional Tencent applications. At Renren, top applications include Renren Cook, Renren Happy Farm, Renren City and other games developed in-house by Renren. Another interesting phenomenon is that some executives working at SNS companies with open platforms have, after identifying profitable opportunities, quit their jobs to start their own application development businesses. Tencent and Renren have both experienced the loss of key employees after launching their open platforms.
- Tencent gives 70% of revenue back to developers with monthly revenue between US$16,000 and US$160,000 - Tencent gives 50% of revenue back to developers with monthly revenue between US$160,000 and US$1.6 million This revenue sharing system prevents developers from achieving significant revenue from their applications. For example, for developers who obtain 50% of revenue from Tencent after spending ~20% for marketing, ~10% for operating cost and additional sums for business tax, income tax, etc., the profit margin can be as low as 10%. Despite these problems, Tencent may invest in or acquire developers, and these developers often accept Tencent’s investment. A similar situation exists with the open platform of Sina Weibo, which has invested in more than ten companies in the past year.
Bin Yue is Vice President at IDG-Accel China in Beijing and focuses primarily on investments in mobile Internet and SNS.
ONLINE-ONLY BRANDS: UNIQUE E-COMMERCE OPPORTUNITIES IN CHINA Feng Li
[email protected]
Marketing efforts aimed at increasing brand awareness in China are not as effective as in the U.S., due to China’s underdeveloped offline retail channels. In the U.S., 60% of total retail sales volume takes place at brand name clothing franchises and large shopping malls. In contrast, 97% of total retail sales volume in China is generated by small and nonbranded stores. These small, independent stores are harder to reach with traditional marketing efforts and, as a result, are commonly unaffected by campaigns to increase brand awareness. This difference makes it hard for offline brands to target and influence young people in third-tier and smaller cities. These youths, a new and valuable group of consumers, spend a significant amount of time on the Internet, making them more open to marketing efforts directed online. As a result, retailers in China are turning to the Internet to strengthen their marketing presence and pursue new opportunities.
Third-tier cities have developed into significant drivers of China’s consumer economy. The increasing number of Internet users will fuel the continued growth of this trend. The e-commerce market in China is well on its way to surpass the US. e-commerce market in the near future. Chinese companies already achieve higher returns from online marketing activities than their U.S. counterparts. In January 2012, there were 193 million shoppers in China using e-commerce websites, comprising 40% of China’s total Internet users. As the market continues to mature, millions more consumers will head to e-commerce websites to do their shopping. China’s total e-commerce activity is currently growing at a faster rate than in the United State. In 2012, it had already reached 63.3% of the corresponding value for the U.S. market. 5
U.S. vs U.S. China -‐commerce Penetra5on Rate (out of total vsEChina E-commerce Penetration Rate retail volume) (out of total retail volume)
selling new merchandise from online-only brands. Taobao’s early focus on online-only brands has had a major influence on both consumer and retailer behavior. Over the past eight years, it has taught entrepreneurs and retailers how to quickly establish and develop online-only brands, communicate with online consumers and leverage China’s supply chain advantage. In the process, Taobao gave rise to a large group of online-only brands. In addition to Taobao, there are over 40 online e-commerce platforms in China. Competition between e-commerce platforms is intense, with several platforms participating in each market. For example, there are currently six online platforms for general retail, six for 3C, six for clothing, seven for luxury items, six for maternity, and five for cosmetics. Fierce competition will force these platforms to favor the online brands that most effectively navigate the market and understand the e-commerce sector.
Source: Guosen Securities Research
Growth of Internet Users in 1st -‐,2nd -‐ and 3rd -‐ Tier Ci5es
Growth of Internet Users in 1st-,2nd-and 3rd-Tier Cities 1st -‐Tier C5es
0,000’
YOY Growth
2nd -‐Tier Ci5es YOY Growth
3rd -‐Tier Ci5es YOY Growth
Large marketing investments aimed at reaching consumers, especially young people, about online shopping have created a virtuous cycle that continues to reinforce the attractiveness of e-commerce. The Internet functions as both the distribution channel and marketing platform for online brands. Having foreseen these events, IDG-Accel China began to invest in online brands in 2008 and has established leading investment positions in this sector. Investments include Vancl, the largest online youth clothing brand, One Percent and Handu, the most popular women’s clothing brands on Taobao, and Three Squirrels, China’s largest and fastest growing food brand.
Source: Guosen Securities Research
How to navigate this market in China:
E-commerce in China is continuing to grow rapidly, as vast numbers of retailers move their businesses online. This trend has led to upheaval in the retail industry and has forced traditional retailers to adapt their business models to online consumer behavior. Because many traditional offline brands were unprepared, they missed a critical opportunity. Today’s winners are those who were quick to adapt to the new online platforms of e-commerce.
- C u l t i v a t e r e l a t i o n s h i p s w i t h C h i n a ’ s manufacturing factories and recognize their value in providing a quick production base for online brands. - Understand the sophisticated Taobao ecosystem and learn its rules. Taobao is a unique platform that provides over 200 third-party tools to help shops sell their merchandise. It is important to note that Taobao also changes its rules periodically.
China is the world’s largest manufacturing center of consumer products. Its manufacturers are OEMs for more than 220 categories of consumer products, making China the main production base for a multitude of consumer brands, especially those that require short production schedules. Chinese manufacturers currently have excess production capacity due to the slowing global economy and corresponding decrease in global exports. They are looking to domestic retail brands to fill the gap.
- Acquire a deep understanding of the numerous online platforms and channels operating in China. Maintain good relations with these service providers, while simultaneously searching for opportunities that arise from their competitors.
Taobao’s platform plays a fundamental role in the growing presence of online -only brands. Taobao currently has more than 70% of the total e-commerce market in China. In 2011, Taobao’s marketplace had more than 6 million shops, which offered some 800 million categories of products with 10 billion SKUs. Unlike eBay, which began primarily as a marketplace for second-hand products, Taobao began by
Feng Li is Partner at IDG-Accel China in Beijing and focuses primarily on investments in e-commerce and mobile Internet. 6
MOBILE APPLICATIONS: CONTENT LOCALIZATION IS NOT ENOUGH FOR FOREIGN DEVELOPERS xiaojun li
[email protected]
The launch of Apple’s iPhone and App Store in 2007 signaled the beginning of the transformation of China’s mobile market, as mobile phones evolved from simple communication devices to platforms that included entertainment and utility. The subsequent release and widespread adoption of Android smart phones also catalyzed this shift in consumer behavior. Even though China is the largest mobile market in the world, with one billion mobile users, including 30 million iOS users and 150 million Android users, China’s mobile penetration rate is still lower than that of the United States. On the other hand, owing to the popularity of Android phones priced at US$150 and less, the growth rate of smart phone users in China exceeded 150% this past year. Furthermore, Barclays research estimates that in 2013 more than 300 million smart phones will be sold in China, and that the smart phone penetration rate will exceed 50%.
Because approximately 30% of China’s 350 million mobile internet users access the internet exclusively through their mobile phones, many users are already comfortable paying for mobile goods and services. For example, many are accustomed to playing games with a freemium model, paying for customized ring tones, and shopping on mobile phones. Another unique trend in China’s mobile market is that over 10 million users download applications through “Jail Breaker”, software that allows users to bypass the restrictions of official stores and access third-party stores. It is most commonly used to add functionality, “crack” phones locked by operators and access applications that are not officially approved. The increasing global interconnectivity of the iOS and Android platforms provides opportunities both for international application developers to enter the Chinese market and for Chinese application developers to enter the global market. Globally popular applications like Angry Birds, Evernote and Shazam have tens of millions of users in China. Currently, only 1% of the total income of the top 10 non-Chinese game developers comes from China, while more than 75% of the total income of the top 10 Chinese game developers comes from overseas. Some games developed in China, for example High Noon and Hypi Kingdom, have even been placed in the top 10 in U.S. gaming rankings.
Chinese smart phone users are enthusiastic consumers of mobile applications. In the second quarter of 2012, Chinese iPhone users downloaded more than 900 million iOS applications, accounting for 18% of the global total. Revenue from applications in China, however, is still low when compared to the United States. For example, the average revenue generated from each gaming download is only US$0.08, one-sixth of average revenue in the U.S. (US$0.48). According to data in App Annie, an app store analytics provider, income from iPhone apps in the Chinese market has grown tenfold in the past two years.
In order to succeed in the Chinese market, international application developers not only need to localize their products through language, they also need to adapt their distribution methods to the local market. This means working with local application stores, developing pre-loaded applications in partnership with mobile phone manufacturers, and cooperating with local advertising alliances such as iMedia. While China currently lacks stable and convenient cloud services and communication APIs like those offered by Amazon and Twilio, there are numerous local services that provide similar functions to application developers. These include user data analytics from Umeng, anti-tampering from Bangcle and testing services from Testin. In the age of open mobile platforms, the Chinese market is increasingly interconnected with the international market, providing both international and domestic application developers with many unique opportunities. Making products that meet users’ needs and finding the right local strategic partners is vital for success.
China: iphone Download and Revenue Trends
During the same period, the total number of Android application downloads exceeded 3 billion. The official Google store, however, accounted for a very low share of overall downloads (3%). This is mainly a result of government policy constraints affecting Google’s basic services such as its calendar and address book, which has made their performance unstable in China. China also has a multitude of local independent application stores such as 91, AppChina, and those operated by individual carriers.
Xiaojun Li is Partner at IDG-Accel China in Beijing and Silicon Valley. He focuses primarily on investments in Internet, mobile Internet and software. 7
INTERNET REGULATION: A MAP TO NAVIGATE WEBSITE LICENCES Jing Chen
[email protected]
Internet regulation in China is a complicated subject. There are over 10 authorities responsible for regulating websites and issuing licenses. Prior to operating a website, it can be quite unclear which authorities provide which licenses.
◆
Filings with MPS + ICP License + Operating Website Filings + License for Operating Audiovisual Products + Internet Publishing Services License + Internet Medical and Health Service License + Online Drug Transaction Service License
In the figure below, we reveal which licenses are required for certain online services. State Council Information Office
Ministry of Public Security
People's Bank of China
Internet News Information Service License
Third-party payment
State Administration of Radio, Film and Television
AudioVideo Program License
Payment Services License
Website Filings
Online media
State Administration for Industry and Commerce
E-commerce
Ministry of Health
License for Advertising and TV Play Production and Operation
ICP License
Video website
Music website
Online Drug Transaction Service License
General Administration of Press and Publication
License for Operating Audiovisual Products
SNS
Internet Publishing Services License
Ministry of Culture
Internet Culture Operation License
Online game
Surveying and Mapping Certificate
State Food and Drug Supervision Administration
For example, the following table outlines the required licenses for operating several types of websites:
State Bureau of Surveying and Mapping
In addition to understanding which licenses are necessary, it is also imperative that Internet companies have a strong PR ability, good government relations and an accurate understanding of government policies in order to conduct smooth and sustainable businesses in China.
A basic public website:
Filings with the Ministry of Public Security (MPS) + ICP License ◆
Ministry of Industry and Information Technology
Operating Website Filings
Internet Medical and Health Service License
◆
An e-commerce website whose products include books, videos and medical products:
A news portal that involves media services, multimedia services, mapping services, and advertising services:
Filings with MPS + ICP License + Operating Website Filings + Internet News Information Service License + Audio-Video Program License + License for Advertising and TV Play Production and Operation + Internet Medical and Health Service License + Online Drug Transaction Service License + Surveying and Mapping Certificate
Jing Chen is Director of Public Relations at IDG -Accel China in Beijing. 8
About IDG-Accel IDG-Accel is a leading investment team in China, among the first to introduce foreign venture capital investment into China in early 1990’s. Since then it has invested in around 200 diverse successful portfolios, such as Baidu, Sohu, Tencent, Soufun, Ctrip, Home Inns, Hanting Inns and Kanghui Medical. Up to date, there have been nearly 70 exits through M&A or IPO’s in the stock exchange markets in the United States, Hong Kong or China A-share market. IDG-Accel primarily focuses on leading companies in Internet, mobile Internet, digital media, consumer products & services, healthcare, and clean-tech industries.
韩都衣舍基础元素设计规范
标准字体横排
竖排
中英文组合横排
中英文组合竖排
方形
font 中文小字／微软雅黑 中文大字/方正大黑简体 英文／arial （标题用加粗，内容用正常）
（标题用方正大黑简体，内容用微软雅黑）
color
C17M92Y72 R219G50B62 #db324a PANTONE 711C
C79M74Y71K45 R51G51B51 #333333 PANTONE Black 7C
C46M38Y35 R153G153B153 #999999 PANTONE Cool Gray 7C
C8M6Y6 R238G238B238 #eeeeee PANTONE 7541 C
