China Tech Newsletter — Jan 12, 2017

Paying-for-knowledge is so hot in China that e-commerce firm JD.com is joining in the trend

Tech companies in China are being so proactive putting out innovative models to attract Chinese consumers to pay for online content that “pay-for-knowledge” has become a buzzword in the Chinese tech scene. Even e-commerce firm JD.com will launch a paid audio Q&A function. According to media reports, the product is almost the same as the viral paid Q&A app Fenda. Users pay to ask questions, mainly of authors of books sold on JD.com. Others who listen to the answer have to pay a small amount, which is distributed to both the parties who asked and who answered the question.

CTI: Taobao has a free Q&A function that facilitates communication between Taobao users who have bought the same product. Prospective buyers of a product can ask those who have already bought it about the quality, for pictures or about the features of the product.


Kai-Fu Lee bets big on AI; brings in several AI experts to his VC firm

Back in September 2016, Sinovation Ventures, the VC firm founded by Dr. Kai-Fu Lee, announced it would establish an AI engineering faculty in order to facilitate AI research and focus on investing in AI companies. This AI faculty was officially established on Tuesday. Dr Lee will head the faculty as president, along with several other newly introduced experts that will serve as sub-heads, including a senior engineer from Google, a researcher from Microsoft Research and a machine learning expert that has experience working at Microsoft and Twitter.

CTI: Dr. Lee has, on many occasions, said that there’s almost nothing that won’t be touched by AI. His VC firm has, as of now, invested in more than 30 startups that are employing AI technology to create commercial value.


Fights between Alibaba and Tencent just never end; Alipay rumored to be launching Mini Programs

WeChat just launched its “Mini Programs” function that makes a collection of cloud-based apps available to WeChat users. These mini programs allow users to access services without having to download a full app. Chinese media reports have disclosed that Alipay has been preparing to build an open platform for third parties to develop light apps, which is also dubbed “Mini Programs.” According to insiders, the biggest difference between Alipay’s and WeChat’s Mini Programs is that Alipay will provide recommendations for certain programs, thus directing traffic to those programs.

CTI: Alipay has met adversity in its efforts to better engage its users and pivot into a social platform, but it won’t be satisfied with just being a mobile payment tool.


Annual red envelope war upgraded! Tencent’s QQ finally reveals its AR red packet

Not long ago, Alibaba’s payment app Alipay created quite a sensation with its new AR red envelope function. QQ officially announced its own AR red envelope on Wednesday. The red envelope war between the two tech giants has been upgraded this year by integrating AR and LBS technology, probably inspired by Pokémon Go. Since 2014 there has been an annual war between Tencent’s WeChat and Alipay during the Chinese Spring Festival holiday. The battle promotes their payment services by encouraging users to send red envelopes online through the apps.

CTI: WeChat won’t participate in the red envelope war this Spring Festival, saying its mission to popularize WeChat’s mobile payment service has been completed and that WeChat doesn’t need to start another huge campaign.


Part of Alibaba’s globalization plan: a one-year immersion program for new foreign hires

As reported by Wall Street Journal, Alibaba has brought over 30 employees from around the world to China for a yearlong immersion into Chinese business and language and the company’s culture. Alibaba executives are betting that a new leadership program will produce China-trained, globally-minded leaders able to make and manage partnerships with Western retailers. in the end accelerating its goal to achieve 40% income from overseas markets in the following ten years. The firm has also promised this program will be in place for at least ten years, with 100 new hires each year.

CTI: The program works by selecting talents from around the world, training them for one year in China on how Alibaba conducts business, and then sending them back to Alibaba offices in their home countries. It is a small part of the tech giant’s strategy towards globalization.

Chart of the Day

WPP Group and Millward Brown recently released a Top 30 Chinese Global Brand Builders report that identifies and ranks 30 Chinese brands across nine categories based on their strength in seven overseas countries, including the UK, the US and Japan. According to the report, consumer electronics and mobile gaming are two leading fields in which Chinese companies have built their brands overseas. In terms of brand recognition and purchasing intention for Chinese brands, French, German and Spanish consumers rank higher on the list than those in Japan, the UK and the US.

Fundings

Zhihu: USD 100 million

China’s Quora, Zhihu announced to have landed USD 100m in its D series financing round. It could be called a unicorn because its valuation surpasses USD one billion after this round.

Hellobike: amount not disclosed

Bike-sharing startup, Hellobike, which was just launched in last September, announced to have completed its A+ series funding round led by GGV Capital.

Next Entertainment: USD 25 million

Next Entertainment, co-founded by China’s leading live streaming startup Inke landed USD 25 million from multiple investors. It owns a live streaming app MeMe that targets markets outside China.

svinsight.com: around ten million yuan

svinsight.com, a Chinese tech blog that writes about products and tech news of Silicon Valley startups raised around ten million yuan in its pre-A series funding round.

AI Era: more than ten million yuan

AI Era, a tech blog based on social media platforms that focuses on AI, big data, robot, etc secured tens of millions of yuan in its Pre-A series round. Its investors include BlueRun Ventures and Sequoia Capital China.

Quote of the Day

“A CEO should be ‘aggressively inactive’ in daily work. To be specific, a CEO should not dabble in fields in which he/she doesn’t have an obvious advantage or variant perception.”

— — Joe Chen, Chairman and CEO of Renren Inc.

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