Hello and welcome again to TechSwitch’s China Roundup, a digest of latest occasions shaping the Chinese tech panorama and what they imply to individuals in the remainder of the world. It’s been a really busy final week of October for China’s tech bosses, however first, let’s check out what a few of them are doing within the neck of your woods.
TikTok’s troubles within the U.S.
The problem going through TikTok, a burgeoning Chinese video-sharing app, continues to deepen within the U.S. Lawmakers have not too long ago known as for an investigation into the social community, which is operated by Beijing-based web upstart ByteDance, over considerations that it may censor politically delicate content material and be compelled to show American customers’ knowledge over to the Chinese authorities.
TikTok is arguably the primary Chinese shopper app to have achieved worldwide scale — greater than 1 billion installs by February. It’s accomplished so with a group of creators good at churning out snappy, light-hearted movies, extremely localized operations and its acquisition of rival Musical.ly, which took American teenagers by storm. In distinction, WeChat has struggled to construct up a major abroad presence and Alibaba’s fintech affiliate Ant Financial has largely ventured overseas by way of savvy investments.
TikTok denied the American lawmakers’ allegations in a press release final week, claiming that it shops all U.S. person knowledge regionally with backup redundancy in Singapore and that none of its knowledge is topic to Chinese regulation. Shortly after, on November 1, Reuters reported citing sources that the U.S. authorities has begun to probe into ByteDance’s acquisition of Musical.ly and is in talks with the agency about measures it may take to keep away from promoting Musical.ly . ByteDance had no additional remark so as to add past the issued assertion when contacted by TechSwitch.
The new media firm should have seen the warmth coming as U.S.-China tensions escalate in latest instances. In the long run, TikTok might need higher luck increasing in growing nations alongside China’s Belt and Road Initiative, Beijing’s formidable world infrastructure and funding technique. The app already has a footprint in some 150 nations with a focus in Asia. India accounted for 44% of its complete installs as of September, adopted by the U.S. at 8%, in keeping with knowledge analytics agency Sensor Tower.
ByteDance can also be hedging its bets by introducing a Slack-like office app and is reportedly advertising and marketing it to enterprises within the U.S. and different overseas nations. The query is, will ByteDance proceed its heavy advert spending for TikTok within the U.S., which amounted to as a lot as $3 million a day in keeping with a Wall Street Journal report, or will it throttle again because it’s stated to go public anytime quickly? Or fairly, will it bow to U.S. stress, very like Chinese web agency Kunlun promoting LGBTQ courting app Grindr (Kunlun confirmed this in a May submitting), to dump Musical.ly?
Huawei continues to be promoting quite a lot of telephones
The different Chinese firm that’s been taking the warmth around the globe seems to be faring higher. Huawei clung on to the second spot in world smartphone shipments throughout the third quarter and recorded the very best annual progress out of the top-5 gamers at 29%, in keeping with market analytics agency Canalys. Samsung, which got here in first, rose 11%. Apple, in third place, fell 7%. Despite a U.S. ban on Huawei’s use of Android, the cellphone maker’s Q3 shipments consisted largely of fashions already in improvement earlier than the restriction was instated, stated Canalys. It stays to be seen how distributors around the globe will reply to Huawei’s post-ban smartphones.
Another attention-grabbing snippet of Huawei handset information is that it’s teamed up with a Beijing-based startup named ACRCloud so as to add audio recognition capabilities to its native music app. It’s a reminder that the corporate not solely builds units however has additionally been beefing up software program improvement. Huawei Music has a content material licensing take care of Tencent’s music arm and claims some 150 million month-to-month lively customers, each free and paid subscribers.
China’s modern-day nomads need versatile and cost-saving housing as a lot as their American counterparts do. The demand has given rise to apartment-rental companies like Danke, which is typically in comparison with WeLive, a residential providing from the now besieged WeWork that gives fully-furnished, shared flats on a versatile schedule.
Four-year-old Danke has filed with the U.S. Securities and Exchange Commission and listed its providing measurement at $100 million, usually a placeholder to calculate registration charges. Backed by Jack Ma-controlled Ant Financial, the loss-making startup is now leasing in 13 Chinese cities, aggressively rising the variety of flats it operated to 406,746 since 2015. Its smaller rival Qingke has additionally filed to go public within the U.S. this week. Also working within the purple, Qingke has expanded its obtainable rental models to 91,234 since 2012.
Apartment rental is a capital-intensive sport. Services like Danke don’t usually personal property however as a substitute lease from third-party residence homeowners. That means they’re tied to paying rents to the landlords no matter whether or not the flats are in the end subleased. They additionally bear giant overhead prices from renovation and upkeep. Ultimately, it comes all the way down to which participant can organize essentially the most favorable phrases with landlords and retain tenants by providing high quality service and aggressive hire.
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WeChat has been fairly restrained in monetization however appears to be not too long ago lifting its industrial ambitions. The social networking large, which already sells in-feed adverts, is increasing its stock by displaying customers geotargeted adverts as they scroll by way of buddies’ updates, Tencent introduced (in Chinese) in an organization put up this week.
Alibaba reported a 40% income leap in its September quarter, beating analysts’ estimates regardless of a cooling home economic system. Its ecommerce phase noticed sturdy person progress in much less developed areas the place it’s combating a fierce struggle with rival Pinduoduo to seize the subsequent on-line alternative. Users from these areas spent about 2,000 yuan ($284) of their first 12 months on Alibaba platforms, stated CEO Daniel Zhang within the earnings name.
Walmart’s digital integration is gaining floor in China because it introduced (in Chinese) that online-to-offline commerce now contributes 30% gross sales to its neighboorhood shops. Last November, the American retail behemoth started testing same-day supply in China by way of a partnership with WeChat.