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Chinese brands are rising globally
By Mike Bastin (China Daily)

Domestic firms have gained consumer trust with their competitive goods in world markets

It is that time of year again, when the annual BrandZ report on the most valuable global brands is published. The highlights this year are not too dissimilar to those of previous years: The rise of Chinese brands globally and the impressive purchasing power of Chinese consumers.

Both of these represent great news for European brands, with whom increasingly competitive Chinese brands are seeking to form alliances to continue to expand internationally. At the same time, alliances with Chinese brands will enable European brands to penetrate the Chinese market and cash in on the purchasing power of Chinese consumers.

Specifically, BrandZ 2015 places 14 Chinese brands in the world's top 100 most valuable brands. Ten years ago, only one Chinese brand made the top 100.

This international expansion is all the more spectacular for the following BrandZ findings: 25 percent of this year's top risers are Chinese brands, and three of this year's seven new entrants are Chinese brands. The newcomers perhaps exemplify the rapid rise internationally of Chinese brands, as well as the changing nature of the Chinese economy, away from low-cost manufacturing and heavy industry to technology and innovation-focused privately-owned brands.

Highest-ranked of this year's new entrants is Alibaba, which splashes in at 13th, two places behind Tencent, the highest ranked Chinese brand overall. Tencent, whose many offerings include the social messaging app WeChat and a range of e-commerce services and multiplayer online games, and Alibaba, China's e-commerce behemoth that raised $21.8 billion at its New York initial public offering late last year, are prime examples that typify the new, emerging Chinese economy in which private companies with modern, market-oriented business models are increasingly dominant.

Huawei and China Telecom, another two Chinese brands that have entered the top 100 for the first time this year, ranked 70th and 99th, respectively, provide further, demonstrable proof of a sizeable shift toward technology and entrepreneurship across Chinese industry.

In particular, Huawei, a leading multinational networking and telecommunications equipment company whose headquarters are in Shenzhen, has expanded most impressively internationally. In 2012, for example, Huawei overtook Ericsson to become the largest telecoms equipment manufacturer in the world, and now sells products and services in more than 140 countries.

Of particular note to European firms should be Huawei's international expansion strategy, which is based solidly on long-term alliances. Huawei serves 45 of the world's 50 largest telecoms operators.

Huawei is the second highest-ranked newcomer, behind Alibaba.

Among China's now numerous technology companies that have achieved international success recently is Baidu, the Internet search engine, which has been listed on the Nasdaq for several years. BrandZ 2015 ranks Baidu as the 21st most valuable brand in the world, up four places on last year, with a 35 percent increase in brand value year-on-year.

Baidu's international expansion activities appear to be behind its recent brand value increase. European potential partners should be aware of the now global vision at Baidu and many Chinese companies. Baidu's takeover late last year of Brazilian company Peixe Urbano, the Brazilian equivalent of Groupon, exemplifies its global expansion strategy.

Chinese brands are also leading the way compared with other fast-growing regions and countries. Only one of the highest-valued Asian brands is not Chinese, and only seven other Asian brands find themselves in the world's most valuable 100, alongside 14 Chinese brands.

Furthermore, despite China's recent economic slowdown, its brands contribute eight of the top 10 ranked Asian brands, the other two being Samsung (6th) and Toyota (8th).

BrandZ also reports on the growth of brands across emerging nations such as Brazil, Russia, India and China (along with South Africa they make up the BRICS bloc), the four countries often cited as the new engine of global economic growth. China and its brands also shine brightly here. None of the top Brazilian brands have made it into the BrandZ 2015 top 100.

BrandZ 2015 provides a separate section on the BRICS in which it is made clear that Russian brands remain relatively weak compared with Chinese competitors, and even Indian brands have struggled to grow internationally. No Indian or Russian brands appear in the top 100.

This year's BrandZ report cites the robust purchasing power of Chinese consumers as one of the key drivers of brand value growth, despite the relative slowdown in the Chinese economy. Combined with the increased competitiveness of Chinese brands, this provides huge opportunities for European brands and their penetration plans for the Chinese market.

BrandZ 2015 also researched perceptions of "Made in China" and "Brand China", looking at the image associated with China-made products and Chinese brands around the world.

It found that North American and Western European consumers' perceptions of Chinese brands have changed markedly in recent years. In particular, technology brands are no longer tainted with the low-cost, low-quality image that had dogged many Chinese companies for many years.

However, it is also important for many British and European brand producers to take note of the BrandZ 2015 findings on changes in the behavior of Chinese consumers. Consistent with my research in recent years, BrandZ reveals that Western brands have lost their mystique and the automatic allure they once commanded in the minds of many Chinese consumers. Improved competitiveness among many Chinese brands has contributed to the typical Chinese consumer now taking longer and thinking more rationally over many brand choices. Western brands such as Chanel and other previously invincible brands are no longer perceived as automatically superior.

BrandZ also reports that Chinese consumers, via careful consideration of the Chinese Dream, now engage and identify more with brands that build an image in the consumers' minds based on Chinese brand associations.

As a result, BrandZ 2015 is perhaps pointing more and more to the need for more Sino-European brand tie-ups, where a symbiotic relationship should help both partners penetrate each other's geographic market.

Above all, BrandZ 2015 forecasts the continued international rise of Chinese brands as well as the growing importance of Chinese consumers' purchasing power.

The message to European brand producers, therefore, is clear: Identify a suitable Chinese brand partner and consider a Chinese image for the Chinese market.
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Top 10 most valuable Chinese brands of 2015

With a brand value of $76 billion, Internet company Tencent tops the Chinese brands on the list of most valuable global brands of 2015, released by advertising firm WPP and market researcher Millward Brown at the end of May.

Among the 14 listed Chinese brands, three of them are new, including Alibaba, Huawei and China Telecom. And Chinese technology firms are also showing growing strength as Tencent and Alibaba are the No 1 and the No 2 brands respectively.

Millward Brown first released such a list in 2006, and in that ranking only one Chinese company made the cut.

Compared to last year, most of the brands saw an increase in value, with only Industrial and Commercial Bank of China and China Construction Bank witnessing a decline.

Now let's take a look at the top 10 most valuable Chinese brands on the list.

No 10 Bank of China

Brand value in 2015: $16.44 billion

Overall rank on the list: 65

No 9 China Petrochemical Corporation (Sinopec Group)

Brand value in 2015: $17.27 billion

Overall rank on the list:63

No 8 China Life Insurance Co

Brand value in 2015: $17.37 billion

Overall rank on the list: 62

No 7 China Agricultural Bank of China

Brand value in 2015: $20.19 billion

Overall rank on the list: 50

No 6 China Construction Bank

Brand value in 2015: $22.07 billion

Overall rank on the list: 41

No 5 Industrial and Commercial Bank of China

Brand value in 2015: $38.81 billion

Overall rank on the list: 22

No 4 Baidu Inc

Brand value in 2015: $40.04 billion

Overall rank on the list: 21

No 3 China Mobile

Brand value in 2015: $59.90 billion

Overall rank on the list: 15

No 2 Alibaba

Brand value in 2015: $66.38 billion

Overall rank on the list: 13

No 1 Tencent

Brand value in 2015: $76.52 billion

Overall rank on the list: 11
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Alibaba breaks into Fortune China 500 list, but still trails

Alibaba Group Holding Ltd has cracked the list of Fortune China 500 companies for the first time after being ranked in 81st position.

The list, compiled by using companies' gross revenue, showed that the Chinese e-commerce giant had revenue of more than 70 billion yuan ($11.3 billion) in 2014.

This is lower than its domestic e-commerce rival Inc, which was ranked 45th. Last year it occupied 79th position.

JD posted 115 billion yuan in revenue last year, up 66 percent from a year earlier, making it the highest-ranking Chinese Internet enterprise on the list.

The company is the country's largest direct sales online retailer and a significant proportion of transactions on its site are counted as revenue. In comparison, Alibaba, which functions as a platform to connect buyers with sellers, doesn't sell goods.

Fortune's report said companies in the Internet industry are rising at the fastest pace. The revenue growth rate of listed online enterprises is on average nearly 40 percent, higher than the average 5 percent growth of all listed companies.

Among the 53 new entrants on the list this year, commercial property developer Dalian Wanda Group Holdings Ltd was ranked 51. The nation's largest pork producer WH Group Ltd is listed in 35th position.

In terms of profit-making ability, the Industrial and Commercial Bank of China Ltd topped the list with 275.8 billion yuan. It beat Apple Inc, the most profitable company in the United States, which raked in $39.5 billion last year.

According to the magazine, the combined gross revenue of the top 500 Chinese companies amounts to 30.4 trillion yuan, accounting for almost half of China's GDP.

China International Capital Corporation Ltd, which assisted Fortune in compiling the list, said the rankings proved that despite a slowdown in economic growth, emerging industries such as Internet-related service providers and the pharmaceutical sector are expanding quickly.
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More Chinese companies become world top 500

BEIJING -- A total of 106 Chinese companies made this year's Fortune Global 500 list, up from 100 firms in 2014, according to the annual ranking released Wednesday.

Sinopec Group, China's top oil refiner, was the second largest company in the world this year by total revenue, up from the third place in 2014, according to the new list topped by US retail giant Walmart.

PetroChina, the largest oil and gas producer in China, remained in fourth place this year, while the State Grid Corporation, the largest electric utilities company, remained seventh.

The number of Chinese companies in the list trailed only the US, which boasts 128 companies.

The world's 500 largest companies generated $31.2 trillion in revenues and $1.7 trillion in profits in 2014.

Related story: SOEs keep hold on Fortune 500, by Wei Tian in Shanghai

Private companies usually perform better when it comes to profitability State-owned enterprises continue to dominate China's top 500 companies in terms of revenue, but their private counterparts are gaining strength, Fortune Magazine said on Monday.

The total revenue of the 500 companies increased 10.4 percent last year to 28.9 trillion yuan ($4.6 trillion), equivalent to more than half of China's GDP. Total profits were 2.5 trillion yuan.

Oil giants China Petrochemical Corp and China National Petroleum Corp held onto their undisputed leading positions, coming first and second on the latest Fortune 500 list.

They generated 2.88 trillion yuan and 2.26 trillion yuan, respectively, in sales in 2013

The sales of third-ranked China State Construction Engineering Corp were merely one-third of the CNPC's. But the financial sector stayed in first place in terms of profits.

Fortune said 29 financial institutions reported combined profits of 1.27 trillion yuan, accounting for more than half of the total profits of the 500 companies.

The "Big Four" State-owned banks remained the most profitable domestic companies, and their profits all grew at a double-digit pace last year.

Industrial and Commercial Bank of China Ltd was the single most profitable Chinese company, with 262.6 billion yuan in profit in 2013.

At the other end of the scale, China Shipping Container Lines Co reported the largest loss last year, at 2.6 billion yuan.

The market value of the 500 companies declined slightly, from 24.9 trillion yuan in 2012 to 24.4 trillion yuan last year.

"After the second-longest suspension of initial public offerings, investors have a pessimistic view of the stock market. And the capital market's development this year is adding uncertainty to the direct financing of large companies," said Zhang Maiwen, executive editor-in-chief of Fortune China.

Thirty-six companies made their debuts on this year's list, including Inc, which was listed on the Nasdaq in May. Footwear producer Anta Sports Products Ltd fell from the list.

SOEs dominated it, taking 19 of the top 20 spots. Although SOEs are superior in scale, private companies take precedence in efficiency.

In terms of return on equity, an indicator usually used to measure profitability, private companies in general achieved a better performance than their SOE counterparts.

Home appliance maker Hisense Kelon Electrical Holdings Co had the highest ratio of 45 percent.

"China's private companies are small but strong," said Li Wei, a professor at Cheung Kong Graduate School of Business. "The big gap in scale between SOEs and private companies is a barrier for China's economic development.

"But on the bright side, if the government can treat SOEs and private companies equally in sectors that are dominated by SOEs, it will greatly enhance the efficiency of these sectors, which may foster 'big and strong' companies," Li said.
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Wanda sinks $30m in 1st US-made film

The boxing film Southpaw, backed by a $30 million production investment from Chinese property developer Wanda Dalian Corp, took in $20 million during its opening weekend at US and international box offices.

The film starring Jake Gyllenhaal is the first investment in a US movie by Beijing-based Wanda, which owns the second-largest US movie theater chain, AMC Entertainment Holdings, according to the Wall Street Journal.

In addition to Wanda's investment, the Weinstein Co spent $35 million marketing the film, according to the newspaper, and the two companies will split any profit.

Southpaw grossed $16.5 million in the domestic box office and $3.5 million internationally. Though it has not been released in China, Weinstein Co is hoping that Wanda's investment will make it more likely that the government will allow the release in Chinese theaters, it was reported.

Directed by Antoine Fuqua, the movie has not been well-received by critics. Variety magazine called it "heavy handed" and the Los Angeles Times said it was "gleefully preposterous." The Wall Street Journal said Southpaw is " a win for Mr Gyllenhaal, while the movie loses out to its clichs". And The New York Times' critic wrote: "It's strictly an undercard bout, displaying enough heart and skill to keep the paying customers from getting too restless".

Rob Cain, a California-based producer who has worked on US and Chinese film productions, said that a company of Wanda's size has the capital to invest, and backing Southpaw might have been a way for it to learn about the American film-making process. David Glasser, president of Weinstein, told the Journal that Wanda was on the set and involved in all parts of the process. "They wanted to learn how we do what we do," he said.

"They've got lots of money to play with, and I think they're going to continue to be mainly focused on the domestic Chinese market, but maybe what they're doing is taking an opportunity to spend some money to invest and learn about the American approaches to filmmaking, and strategies and what goes into marketing films. I don't think learning is the only reason, but that's maybe one of their motivations for making an investment like this," said Cain.

Though Weinstein Co invested in Southpaw's marketing, Wanda is the sole financier of the project for investing in production, a "much riskier" investment for a company, he said.
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Alibaba inks tie-ups with global brands to sell in China

Alibaba Group Holding Ltd has signed exclusive partnerships with more than 20 apparel brands including Zara and Timberland, the Chinese e-commerce giant said on Thursday, the latest step to woo big international brands as it competes with rivals such as Inc.

Alibaba said its fast-growing online marketplace will become the only third-party online sales platform for the apparel brands in China. The Hangzhou, China-based company did not disclose details on financial terms of the agreements.

Alibaba also said in its announcement that it will deepen its collaboration with more than 160 brands including Adidas and Gap.

"Apparel is one of the key product categories on Tmall. We have an extensive collection of brands on the platform, and it is imperative for us to deepen our collaboration with them so we can work together in more strategic ways to enable their success within our ecosystem," Jeff Zhang, president of Alibaba's China retail marketplaces, said in a statement.

Alibaba recently picked former Goldman Sachs banker Michael Evans to lead its expansion outside of China as it tries to attract popular American and European brands to list products on its site. Alibaba has 350 million annual active buyers worldwide.

Alibaba's rival recently announced it would begin selling US products like Converse, Samsonite and other major apparel brands to Chinese customers through a new store on its site.

Last month, Japanese retailer Fast Retailing Co Ltd said it had closed its Uniqlo store that it opened in April on, citing a conflict with its China e-commerce strategy. Alibaba declined to say if Uniqlo had agreed to an exclusive partnership with the online retailer.
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Tencent tops list of most valuable Chinese brands
By Shi Jing (

Tencent, with an estimated value of $44.7 billion, was crowned this year's Most Valuable Chinese brand on a list released by the Hurun Institute on Thursday, marking the second time in a row it came up on top.

Taobao, subsidiary of Alibaba, came in second place, with a brand value of $42.9 billion, overtaking China Mobile, Baidu and ICBC.

Of the 200 nominated companies, 101 are privately-owned, while the rest are State-owned enterprises. The total value of these 200 listed brands has risen by 36 percent year-on-year to reach $696 billion, with the top 10 accounting for 46 percent of the total value.

Led by Letv, Anbang and Eastmoney, 26 newcomers are on the list; 70 percent are privately held. Mi was the fastest riser, with its value shooting up fivefold year-on-year, to come in at $7.3 billion, followed by TCL and Huawei.

"While most Chinese brands remain unknown to the outside world, within China they are establishing themselves with ever more sophisticated campaigns," said Rupert Hoogewerf, Hurun Report chairman and chief researcher.

Finance and real estate made up the backbone of home-grown brands, with 38 and 23 companies coming into the list respectively, and accounting for 30 percent of the brands on the list.

Information technology was the third largest sector with 18 brands shortlisted. The total value of listed IT brands accounted for 22.5 percent of the list. Average value increased 10 percent. Beijing is the preferred headquarters location for the IT sector, and 12 listed IT brands set their headquarters there.

The average value of the household appliance sector soared 74 percent, showing the biggest increase among top 10 sectors. E-commerce and retail followed, with their value up 69 percent. The medical health care sector climbed up 32 percent. The financial service sector increased 18 percent and the alcohol sector rose 17 percent. Real estate gained 15 percent and food and drinks were up 11 percent.
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Xiaomi brings Segway to the masses with $315 Ninebot mini

We'd be throwing money at our screen right now, if we could. Chinese company Xiaomi has launched a small Segway device, the Ninebot mini, for a mere $315 (£203), on the same day it revealed a $790, 60-inch 4K TV. If you'll recall, Xiaomi is a major investor in Ninebot, the China-based company that recently purchased Segway. This is the first device the companies have launched since the acquisition, and while the self-balancing scooter looks a bit like the original, it costs less than a twentieth the price.

The performance is nothing to sneeze at, though -- it can move at up to 16km/h (10 mph), tackle 15 degree hills and run up to 22 km on a single charge. It's portable at 12.8 kilograms (28 pounds) and "fits easily in the trunk of your car," according to Xiaomi. You can also upgrade the firmware and monitor your speed, traffic data and systems via a smartphone.

Sure, Xiaomi's marketing the Ninebot mini as a "cool youth toy," according to the rough translation -- but it looks like it could get you around nicely, too. You'll have to put your checkbook away for now, though. The self-balancing device is coming to China on November 3rd, but there's no word on Xiaomi's plan for a wider launch. That said, Ninebot has updated its French website with an offer to be "informed of the availability." That means it'll likely be sold in Europe, so it may come to the US after all. We've reached out to Xiaomi for more information
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Xiaomi will let you replace the brains in its new smart TV

Xiaomi is more than just a phone manufacturer -- it makes almost every kind of consumer electronics now, including Segways, wearables and GoPro-style action cameras. Today, the company is expanding its living room lineup with a 60-inch 4K TV, which measures 11.6mm at its thinnest point and costs only RMB 4,999 (roughly $786). That's a lot of display for your money, although it's not quite as sleek as the $645 Mi TV 2S Xiaomi announced in July

Plenty of dongles and set-top boxes can transform your old TV into a "smart" one -- but what if you could do away with them entirely, and get the same features out of a TV speaker instead? That's the idea behind Xiaomi's "Mi TV Bar," anyway. To the naked eye it looks like a classic soundbar, but inside there's a MStar 6A928 processor, 2GB of DDR3 RAM and 8GB of flash storage. Once connected through the Mi Port -- which also carries power -- you'll gain access to MIUI TV, Xiaomi's Android-based smart TV platform.

It's designed to work in conjunction with the Mi TV 3, although you can also buy it separately and hook it up to any TV, monitor or projector. According to Xiaomi, a TV's motherboard usually accounts for 20 percent of its overall cost -- and it's also a part that customers have to replace every 18 months. By taking the related components out and putting them in a separate device, Xiaomi hopes they'll be easier to upgrade and replace -- meaning you, the consumer, can just focus on buying (and keeping) a stellar display. It's the same argument behind modern TV set-top boxes, although here you're also getting a beefy speaker thrown in too. It'll set you back RMB 999 ($157) on its own -- for comparison, the new Apple TV costs $149 in the US, while Amazon's 4K Fire TV is up for $100.

These devices are meant for China, however, and we don't expect either of them to be sold in the US or Europe anytime soon. Xiaomi might have online accessory stores for both of these markets, but it's a long way off selling all of its electronic wares to the world.
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Huawei challenges Apple with premium smartwatch
(Xinhua)Updated: 2015-11-05 09:39
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LONDON - As a direct challenger to the Apple Watch, Chinese technology company, Huawei, Wednesday launched its high-end smartwatch products in Britain.

Two months after being launched in the United States, the Huawei Watch arrived in Britain as one of the most expensive smartwatches that run on Google's Android Wear operating system. Huawei's ambitious wearables product will be priced between 289 pounds to 599 pounds, depending on the style, according to the company.

Measuring 42 mm in diameter and encased in a cold-forged stainless steel frame, the smartwatch features a fully circular 1.4-inch touch-sensitive AMOLED display, which is coated in scratch-proof sapphire crystal.

This is part of Huawei's efforts to bring more products into major markets outside of China.

Huawei has emerged as second largest Android brand in European Union's big five markets, namely Britain, Germany, France, Italy, and Spain, according to the latest smartphone sales data from Kantar Worldpanel ComTech for the third quarter of 2015.

But when it comes to the wearables, the market is by far a tough nut to crack, as many consumers are yet to be convinced that they need these products, at least in major markets like the United States.

The wearables market is still in its infancy, with only three percent of the U.S. population aged 16 and up owning a smartwatch or a smartband, according to the latest data released by Kantar Worldpanel ComTech, which specializes in monitoring and analyzing consumer behavior.

The figures are based on a survey conducted in late August among eleven thousand consumers.

The survey showed that among the non-owners of smartwatch interviewed, 20 percent were not sure what these devices were, and 11 percent had never heard of them.

"Considering the poor job vendors have done thus far in defining the smartwatch category it is surprising that 52 percent of those interviewed were able to identify what these devices are: something you wear like a watch, and that let you runs apps," said Carolina Milanesi, chief of research at Kantar Worldpanel ComTech.

But according to Kantar, manufacturers, ecosystem owners, and developers all see significant opportunities ahead in the wearables market, despite the numbers.
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Wanda plans film arm's IPO, eyes Hollywood size
By Zhu Wenqian (China Daily)

Privately owned property conglomerate to consolidate diversification into entertainment
Dalian Wanda Group Co Ltd, the privately owned Chinese property conglomerate, plans to list its film production and distribution business within a year, Wang Jianlin, its chairman has told Caixin magazine.
"The two parts will be listed individually or as a package, we haven't decided yet," China's richest man said.

"Once they go public, it will prompt even higher growth and position us at the top of all parts of the business chain."

Wanda's cinema unit is already China's largest cinema chain with nearly 2,000 screens, while the film production and distribution operation has also been taking increased market share, despite being relatively new.

Liu Cuiping, research director at EntGroup, said the potential listings are further evidence Wanda is looking to become a major player in the entertainment industry "comparable to those in Hollywood".

"The company already has a mature business in every part of the industry chain, and going public will provide it with more capital.

"But Wanda also has a lot of big competitors in China, such as China Film Group Corp," said Liu.

Wanda's film production and distributing operations grew faster this year than its cinema business, which became the first of its kind in China to list when it went public on the Shenzhen Stock Exchange in January.

The giant property developer has also been diversifying its portfolio into sport.

Earlier this month it completed a $650 million merger with World Triathlon Corp, creating the world's largest sports company.

It bought Swiss sports marketing group Infront Sports & Media for 1.05 billion euros ($1.2 billion), and took a 20 percent stake in Spanish soccer team Atletico Madrid.

In 2012, Wanda completed the high-profile acquisition of Los Angeles-based AMC Entertainment Holdings Inc for around $2.6 billion, which helped pave the way for further inroads into the international film industry.

"Back then, we were nervous about acquiring AMC since it was our first overseas investment. But the price was really good. It doesn't matter that it has suffered losses, we can turn it around," Wang said.
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Hi, smart gadgets, you have fans that you may not know
By Song Jingli (

On October 25, when my family was sharing photos and videos via WeChat, my mother-in-law's smartphone went down all of a sudden. She tried many times to restart it, but failed.

The urgent task to buy a new one for her fell on me. She wanted a reasonably priced phone that featured a camera that was as good as possible and an operation system that ran smoothly.

All possible choices quickly narrowed down to a Huawei Honor 7 smart phone.

The phone arrived the next morning from a courier of JD, an online retail platform , after I ordered the previous night. It was China speed, I guess.

The phone astonished us as it was more than what she wanted.

She could actually talk with this $343.9 phone, ask various questions, such as how to go to the Badachu park in South Beijing from our home in North Beijing. It surprised her as the solution provided by the phone was exactly the same as the solution I found by typing and searching in Baidu. When she forgot where she had put the phone, she could get a response from it by simply saying "Where are you, little Seven?"

Every time she wanted to unlock the phone, all she needed to do was to press the phone with her finger, which made her feel that it was really "her" phone.

All these were brand new thing for a 60-years-old grandma. And, to be frank, also new for me, as this was achieved by a "Chinese-brand phone", not an expensive device like an iPhone.

Since a Chinese-brand smartphone could bring so much fun without costing the buyer "a kidney", I decided to buy a new phone for my father-in-law. Although the one he was using had a broken display screen, he was reluctant to "let it go". In fact, all the phones he had used were the last-generation phones of us, which we stopped using because they were too out of date.

The first that attracted our attention was Nubia, which claimed its phones could be used as "single-lens reflex cameras" and could even be used to shoot stars. The three-year company also said its Nubia Z9 Mini Elite had an eye-scan encryption function, which was inviting enough.

When I was trying to order it on JD, I found there were more than 300,000 soon-to-be buyers like me and what we could do was to pre-order and wait until JD finally got the products.

The 1,499 yuan phone came on the night of Nov 4, but stayed at our home for a short time.

My father-in-law said he disliked the phone and wanted to return it as he found colors in the photos taken by this Nubia phone were different from actual colors and the eye-scanning capacity turned out to be useless for him as it can only be applied to encrypt applications, not the whole phone.

The JD delivery guy came to pick up the phone and JD refunded me the second day. Thank you JD.

Usually returning goods once purchased is a cumbersome process. But in this case returning the device was a breeze, the best ever experience.

Half a month later, a post-sales woman called me and asked me in a very soft voice why I had returned the Nubia phone. I explained and she said "We will improve our products."

At last, my father-in-law chose a Huawei Honor 7i smart phone, because it, with a rotating camera, was really different and my mother-in-law's phone really made a good impression on him.

The phone-buying story, which lasted for more than 20 days and finally came to an end, has greatly enriched my whole family's understanding of the smart phone industry in China.

But what is intriguing enough is that both the grandma and the grandpa are not the targeted consumers of these two types of smart phone, who are assumed to be youngsters in favor of "new, cool, fabulous" things, according to the advertisements of Huawei.

It happened that the Nov 11 shopping festival created by Alibaba but used by all online retailers to promote shopping, also took place when we were "buying" phones.

When you check the top 10 merchants on Tmall, Alibaba's B2C platform ,on the shopping spree day, you could find six were smartphone vendors or dealers, including LeTV, Meizu, Huawei and Xiaomi. Xiaomi, the rising star in the smartphone industry, defended its crown as the top seller by raking in 1.25 billion yuan on this single day. Its Redmi Note 2, priced at 699 yuan only on that day, was the best-seller among all smartphones.

Although there are no specific demographic data on who bought these phones, I guess, papas, nannies, migrant workers, farmers and many others, who were traditionally assumed as late adopters or even laggards of innovative products, were among them.

One day, when I was trying to put on my first-generation Mi Band 1, a step and sleep tracker produced by a Xiaomi eco-system company, my mother-in-law asked what that was.

I told her and said this one was old as the second-generation has already come to the market.

"The Mi Band 1s could monitor your heart rates." I said.

"How much is that?"

"Ninety-nine yuan." " Jawbone’s UP3, a similar one, retails at $179.99,” I added.

"Oh, really? I want one."

"A band like this that can track my blood pressure would be better," she said.

Although I wasn’t sure, I said," what you want is not in the market now."

"It does not matter, I can wait."
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Alibaba Internet finance extends its reach to South Korea
By Ma Si (China Daily)

Group-backed online bank receives initial permit from South Korean government

Alibaba Group Holding Ltd is expanding its Internet finance business beyond China, after a local lender it helped co-launch got an online banking permit from the South Korean government.

Zhejiang Ant Small & Micro Financial Services Group Co, the Internet financial affiliate of Alibaba, said on Monday that the South Korean government has given preliminary approval to K Bank, the Internet bank it is jointly launching with telecom company KT Corp and other investors.

South Korea also gave preliminary approval to the online banking application of Kakao Corp, operator of South Korea's leading messaging app KakaoTalk, one of whose partners is affiliated to Tencent Holdings Ltd, the operator of WeChat service.

According to experts, the new online banking permits are an effort by the South Korean government to inject new momentum in the sector amid slow growth and slim margins.

"K Bank has got permission from the South Korean government to start preparatory work," Ant Financial said, adding the lender will soon apply for a banking license before starting full-fledged operations.

K Bank will be allowed to offer all banking services, including handling deposits, loans, credit cards and providing wealth management products, Ant Financial said. It is not immediately clear as to how much stake Alibaba has in K Bank.

The move comes close on the heels of Paytm, an Alibaba-backed Indian mobile payment platform, getting the Indian central bank's approval in October for a payment bank.

"We will leverage our experiences in Internet finance services to help Indian and South Korean partners better serve small and micro enterprises," said Jin Xiandong, president of Ant Financial.

In September, Ant Financial obtained a license from Chinese authorities to launch an Internet bank in its home town of Hangzhou, Zhejiang province. As of November, it has served 430,000 enterprises, with outstanding loans hitting 5.2 billion yuan ($813 million).

Analysts said the intensified efforts by Alibaba to explore international markets demonstrate the company's ambition to build an Internet-based financial empire.

Ma Tao, a senior analyst at Beijing-based Internet consultancy Analysys International, said co-launching an Internet-only bank is the most cost-efficient way for Alibaba to gauge the potential of overseas markets.

"No offline branch is involved in the partnership. If the plan fails, it will not incur too much of losses. But if it succeeds, it will help Alibaba better understand the South Korean market," Ma said.

Ant Financial already allows Chinese tourists to pay bills with its mobile payment tool Alipay in certain South Korean stores.

"Alibaba's experience in Internet finance and its cutting-edge technology such as big data and cloud platforms can give the e-commerce giant an edge in competing with foreign online banking operators," he said.

But Ma also warns that Alibaba is only one of the 20 investors in K Bank.

"Significant differences exist between offering online financial services itself and launching a joint bank."

Chinese Internet heavyweights are scrambling to offer consumers online financial services like money market funds, consumer credit and small loans.

Internet companies said the data they collect from their users, such as social networking behavior, e-commerce transactions and search results, can help measure the credit worthiness of consumers and enterprises.

Earlier this month, Baidu Inc, the largest Internet search engine in China, co-launched an online bank with China CITIC Bank Corp Ltd. Social networking giant Tencent Holdings Ltd also introduced its Internet bank, the first private online-only bank in China in December last year.

But Alibaba is the first among Chinese Internet players to expand its Internet finance services abroad.

Li Chao, an analyst at iResearch Consulting Group, said Alibaba may promote cooperation between the three Internet banks it supports. "Going global is one of the priorities for Alibaba. Partnerships in cross-border Internet finance will be instrumental to promoting its e-commerce business abroad."
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Chinese brands take center stage at Milan show
By Marzia de Giuli and Song Jian in Milan ( China Daily )

Fifteen models wearing Made-in-China brands took part in a recent event at a mansion in the heart of Milan, attracting plenty of interest from the fashion world.

The models were dressed in creations produced by six Chinese fashion brands.

Each brand used the sketches of a finalist designer of Vogue Talents for Asia, a scouting project conceived by Elite and Vogue Italia, its senior editor Sara Maino tells Xinhua.

"Integration between creativity and industry is very important," she says, adding the event allowed designers to meet China and for China to display its creativity.

Yu Min, head fashion designer at Canudilo H Holidays, among the brands on stage in Milan, says the event was an occasion for Chinese brands to showcase themselves and integrate into the global market.

"We have a lot to learn from the Western fashion world, but now Chinese fashion brands have started blending Asian culture with Western trends," Yu says.

Yi was another one of the selected Chinese brands.

Fashion designer Hu Yi, who created the brand, says: "Red is the predominant color in our collection. We like to spread a strong bright-colored feeling.

"Our style is quite simple, but at the same time enriched with handmade weaving in the details," she says.

Meanwhile, John Hooks, CEO of PGM Group, a holding company with a focus on fashion services and luxury brands of which Elite is a part, says that China not only is an enormous market, but also a "workshop of the world".

Hooks says there is enormous space for making "high-quality products and special things" in China.

"They have a wealth of craftsmanship, a long tradition of lace-making and embroidery. They are a fantastic world of inspiration and creativity that we would love to be able to be inspired by," he says.

Elite, a leading modeling agency group with a network of 30 agencies, was the first international agency to open in China.

Hooks says that models are "the human face of fashion" and "China is a very great source of models".

Beppe D'Elia, hair stylist at the event, says: "I find their (the models) look, hair and make-up very suitable for experimentation."

Italian fashion designer Marco De Vincenzo says he is attracted by China's fashion world.

"They have a very personal way of interpreting contemporary fashion. They have millennia of history, but at the same time a newly born fashion world free from some influences of the past," he says.

"We will have great surprises from them."
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Letv, Aston Martin unite to develop connected cars
By Li Fusheng (China Daily)

China's young Internet company Letv is planning to develop connected electric cars with British luxury carmaker Aston Martin.

The two companies will start a series of research projects ranging from connected technologies to car engineering and manufacturing, according to a memorandum of understanding they signed on Thursday night.

Ding Lei, co-founder of Letv's car unit, said the partnership is a "landmark" in its car making plan, which was made public in December.

The dotcom firm has big ambitions in the new-energy vehicle industry, which is being encouraged by the Chinese government to cope with air pollution.

The MOU signing, which Aston Martin CEO Andy Palmer described as "getting engaged", came after their initial contact and "dating" during the Shanghai auto show in April.

Palmer said their collaboration was partly because of their common interest in electric cars. "We see the electric vehicles as a vital part of our future product portfolio and welcome Letv as a research partner in this exciting venture."

He said that Aston Martin is 102 years old and it is necessary for old dogs that want to learn new tricks to work with young dogs in this fast-changing world.

"The motoring industry is sometimes complacent so you need new blood. …The best way for us to be relevant as a brand is to bring the best of the old and the best of the new," Palmer said.

He said the cooperation would begin by bringing Letv's touch-screen system to Aston Martin's Rapide S to be exhibited at the Consumer Electronics Show in January in the United States.

More connected technologies will feature in its first electric car RapidE, which the British carmaker said would roll off its assembly line in the United Kingdom in about two years.

Jia Yueting, Letv's chairman and CEO, said in addition to the connected technologies, the two companies will leverage their respective resources to carry out long-term, allaround cooperation in building connected electric vehicles, with the aim of providing next-generation transportation tools and global traffic solutions.

"It is a win-win venture which symbolizes the deepening collaboration and reformation between the IT and automobile industries," Jia said.

Jia said on its Sina Weibo on Friday morning that Aston Martin will be the OEM for Letv's first electric car.

The car has completed testing in the US and a small scale trial production is on the horizon, the company said at a news conference in Beijing in late October.

Letv's car unit has more than 700 engineers worldwide, with 400 of them based in the US. Letv is also a large shareholder of Atieva, designer of models such as the Tesla Roadster, Audi R8 e-tron and Chevrolet Volt.

In early September, Letv became a major investor in a new-energy vehicle charging station producer in China as part of its green auto campaign.
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Smart move will help Lenovo build its brand in India
By Gao Yuan in Mumbai, India (China Daily)

Amar Babu is convinced he has the recipe of success to make Lenovo a major player in India's rapidly expanding smartphone market.

As chairman of the group's operation in India, he feels the Chinese company has the edge when it comes to high-quality products, technological innovation and affordable prices.

The numbers certainly look good for the world's No 1 PC manufacturer.

In the third quarter, Lenovo shipped a record 2.7 million smartphones in India with a market share of close to 10 percent.

This made the Beijing-based giant the fourth biggest smartphone manufacturer in terms of shipment in the country behind Samsung Electronics Co Ltd, and domestic brands Micromax and Intex.

"The first milestone was crossed ... we are expecting even faster growth here," Babu, who is also vice-president and chief operating officer of Lenovo's Asia Pacific division, said.

Only hours earlier, he had poured over the latest shipment figures.

Now, he was sitting in an empty dining room at a Four Seasons hotel in downtown Mumbai as he talked about his team's outstanding performance and the company's online to offline marketing strategy.

One goal was finally within reach after Chen Xudong, who heads Lenovo's global smartphone operation, made double-digit market share in India a top priority during the summer as the company goes head-to-head with Samsung.

When he came out with his remarks, the group had a market share of just 6 percent compared to the current number of 9.5 percent. "Getting the latest technology, such as 4G, into the products will help to grow sales even more," Babu said.

Lenovo's K3 Note, a 4G Android smartphone which costs 9,999 rupees ($150), was the best-selling mobile in its class in India during the third quarter, according to consultancy Counterpoint Technology Market Research.

With a 5.5-inch (139 millimeters) screen, the stylish pamphlet-size device hit a sweet spot in terms of specifications and price, Counterpoint said.

Part of the allure is its 4G capability after India's major telecom carriers, such as Bharti Airtel Ltd, rolled out the service less than a year ago.

Most of Lenovo's brands target the mainstream market, which revolves around a price range of between $150 to $250.

"It was a good call for Lenovo because 70 percent of India's smartphone sales are generated by devices priced below $300," Babu said.

But the sector is incredibly competitive with a list as long as your arm vying for market share. Included in the mix are Chinese companies like ZTE Corporation, Xiaomi Inc, Oppo Electronics Corp and vivo Mobile Communication Technology Co Ltd. All of them have spent heavily on marketing.

Still, Lenovo's early investment in "brand building" has helped the company stay ahead of most of its rivals.

"We started to do brand building on phones about two and half years ago," Babu said. "Nobody knew Lenovo made phones back then. The next step is to increase offline sales."

More than half of the company's smartphone sales are generated online. But that is changing as Lenovo has about 7,000 traditional outlets.

The group is also in talks with Indian electronics store chain Croma to sell a wider range of devices across the country.

Earlier this year, Lenovo opened a smartphone assembly plant near the port city of Chennai. It also makes PCs.

By setting up a manufacturing base in India, the company has managed to keep costs low-a major advantage in a cut-throat business. "I am very, very positive about sales next year," Babu said. "Even if we do not increase our market share, Lenovo will still produce 25 million phones in the next 12 months just to feed India's growing demand.

"In the next three to four years, the market is expected to double from this year's industry figure of 120 million," he added.

In the third quarter, Lenovo reported worldwide smartphone shipments of 18.8 million units, putting the company in the global top five.

"We are beating our numbers every time," Babu said about the market in India.
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Baidu wants to interconnect virtual with real world
By Dai Tian (

Baidu is reinventing itself from a search engine to interconnecting the real world, said Zhang Yaqin, president of the country's largest Internet search company.

The online-to-offline (O2O) businesses linking users with brick-and-mortar services will serve as new Baidu's engine and the company will continue to invest while giving them time to grow profitable, said Zhang.

"In the past, our focus has been searching the right information for users anywhere. In the future, we want to interconnect the real world, connecting people to services," said Zhang to China Daily at the World Internet Conference in Wuzhen, Zhejiang province, on Wednesday.

Despite robust core search business, the Internet giant has been betting big on the O2O sector, with billions of dollars spent on buying startups ranging from group-buying site Nuomi, online travel agency Qunar to on-demand laundry service edaixi and boutique e-commerce

Describing the journey as a "very exciting" one, Zhang said Baidu aims to create a platform catering to all dimensions of location-based lifestyle, where consumers can buy movie tickets, order food delivery and book rides as well as flight tickets.

"The O2O market is much bigger than the online search market," said Zhang, adding that despite the cash-burning competition to snatch customers, edge in technology willfinally enable Baidu to "laugh last".

The O2O sector has everything to do with algorithm and mathematics which is the key for the business to sustain and become profitable, said the president. "It just takes some time and patience."

Baidu reported a 36 percent year-on-year fall in the third-quarter operating profit despite a jump in revenue, due to the rapid growth of its heavily invested O2O. Its American depository shares slid 12.7 percentsince the beginning of this year as of Wednesday.

Zhang said the huge opportunity in China's O2O may not be well understood in the US, as the two countries are different in the segment. "In China, because of its demographics, cost structure, and population density, you can leverage a lot, and the infrastructure and technology will help us."

"That's a huge opportunity here in China, and that is the profit in the future," the veteran concluded. Prior to joining Baidu since September 2014, Zhang Yaqin was Microsoft's corporate vice-president and chairman of Microsoft's Asia R&D Group, its biggest research center outside the US.
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Apple Pay to launch in China in 2016
By Liu Zheng (

Apple and China UnionPay announced a partnership on Friday to bring Apple Pay, a mobile payment solution provided by the US tech giant, to its Chinese customers next year.

According to the company's statement, users do not have to download an app or push display on their smart device in stores. With the innovative NFC antenna design, iPhone users can simply hold their phones near China UnionPay's QuickPass-enabled POS terminals with their fingers on Touch ID to pay.

"With Apple Watch, just double click the side button and hold the watch face up to the contactless reader to make a purchase right from your wrist," said the statement.

According to the company, Apple Pay will roll out to China UnionPay cardholders as soon as early 2016 after relevant tests and certification required by Chinese regulators, with the service itself in compliance with the applicable national mobile payment and financial industry standards in China.

China UnionPay cardholders will be able to add their bank cards to Apple Pay on iPhone, Apple Watch and iPad to enable the function.

"Apple Pay has revolutionized the way millions of people pay every day with their iPhone, Apple Watch and iPad," said Eddy Cue, Apple's senior vice-president of Internet Software and Services. "China is an extremely important market for Apple and with China UnionPay and with support from 15 of China's leading banks, users will soon have a convenient, private and secure payment experience."

"China UnionPay is dedicated to promoting payment innovations and providing secure, convenient mobile payment experiences for its hundreds of millions of cardholders, aligning multiple parties in the industry," said Chai Hongfeng, executive vice president of China UnionPay. "We're very excited to offer Apple Pay among a diverse set of innovative payment options that work with China UnionPay QuickPass."

"China UnionPay's QuickPass and Apple Pay together will protect customer payment information through industry-leading payment tokenization technology," said the statement.

Apple also expressed that security is at the core of Apple Pay, so when users add credit or debit cards, the actual card numbers are not stored on the device, nor on Apple servers. Instead, unique Device Account Numbers are assigned, encrypted and securely stored in dedicated chips called the Secure Element on devices. Each transaction is also authorized with a one-time unique dynamic security code.

Currently, the total number of the UnionPay Card issued both at home and abroad has been over 5 billion. The UnionPay network has been extended to all the cities and rural areas in China.

In addition, UnionPay has enabled UnionPay Card acceptance across more than 150 countries and regions through extensive cooperation with financial and payment institutions around the world.

UnionPay cards can be used in more than 26 million merchants and 1.9 million ATMs.
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Alipay now supports facial recognition login

BEIJING - Alipay, China's largest digital payment service, run by e-commerce giant Alibaba, has begun to provide consumers with a simpler and more secure login method - facial recognition login, the Beijing Daily reported.

The technology has achieved a success rate of over 90 percent during the experimental beta phase, although it now only works with iOS and some Android smartphones.

Users can enable logins by scanning their faces with a smartphones in a place full of light.

A team in Alibaba's subsidiary firm and finance affiliate Ant Financial is developing the face recognition technology for use with the Alipay online payment service and Alipay Wallet as well.

Chen Jidong, a senior data expert responsible for the team, says it is a trend to replace traditional identification measures with biometric technology.
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Huawei ships record-breaking 100m smartphones in 2015

GUANGZHOU -- Chinese tech company Huawei announced Tuesday its smartphone shipments have topped 100 million this year, breaking the record among domestic players and making it the world's third biggest mobile brand following Samsung and Apple.

The market share of Shenzhen-based Huawei Technologies Company has risen to 9 percent globally and surpassed 15 percent in China, leading for six consecutive months, data from a third-party market consulting agency showed.

"It's a stunning increase," said He Gang, president of Huawei's mobile phone line. "Beginning in 2010 with a sales figure of no more than 3 million, Huawei took five years to reach 75 million and another year to achieve 100 million."

He said Huawei has gained a firm foothold in the middle and high-end market over the past year, thanks to innovation and marketing. Middle and high-end smartphones costing more than 2,000 yuan ($308) jumped to 33 percent of Huawei's total shipments in the third quarter in China.

Huawei's Mate 7 alone has sold 7 million sets so far, making it one of the most popular smartphone models in China. Sales of the new Mate 8 in the first two weeks were ten times that of Mate 7.

Mate 8 falls in the same price category as the Samsung Galaxy series and Apple's iPhone models.

"It's just a matter of time before we introduce high-end smartphones at a price above 5,000 yuan," He said.

Huawei has also been nurturing its overseas terminal market. The company's mobile phones are sold in more than 170 countries and regions.

Smartphones sold for between 400 and 500 euros claimed a market share of more than 60 percent in some Western European countries. Huawei also saw a good year in Central, Eastern and Northern Europe, where the number of smartphones it sold reached more than 3.46 million and increased 114 percent compared with the same period last year.

Huawei has already overtaken Samsung and Apple in some developed countries, including Spain and Portugal. International sales are expected to account for 40 percent of the company's revenue by 2016.

According to a company report released on Tuesday, Huawei invested 40.8 billion yuan in research and development in 2014, or 14.2 percent of annual revenue.

Huawei has set up 16 overseas R&D institutions, according to CEO Ren Zhengfei, adding his company has invested more than 190 billion yuan in technological innovation and holds a total of 76,687 patents. More than 18,000 patents are related to terminals, which has laid a foundation for expanding its smartphone offerings.

"We are putting money in all the cutting-edge technology in the communications industry. Huawei is not second to global brands such as Ericsson and Nokia in technology," He said.

"Believe it or not, our goal is to overtake Apple in the near future," He said.
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