Mobile Internet in China: Opportunities for U.S. Firms David Chao DCM.

Mobile Internet in China:  Opportunities for U.S. FirmsDavid Chao

DCM

Agenda

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DCM Introduction

Growth in China

Areas of Mobile Opportunity in China

Recommendations for U.S. Companies

What U.S. Companies Can Bring

DCM OverviewEstablished early stage venture capital firm with unique

access to the U.S., China and Japan – Golden Triangle

Leveraging “One Firm – One Fund” culture to deliver consistent high performance

Managing over US$2 billion across six funds from ouroffices in Silicon Valley, Beijing and Tokyo

Experienced team with deep sector expertise investing in TMT (Technology, Media, Telecom) and Cleantech

Backed industry pioneers and creators of paradigm shifts across the Golden Triangle: About.com, Foundry Networks, Sling Media, 51job, Dangdang and AllAboutJapan

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DCM China IPOs

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“Amazon” of China

Largest auto media

(NYSE: BITA)

(NYSE: DANG)

“Facebook” of China

(NYSE: RENN)

Leading packaging company in China

China Local Listing(SZSE: 002565)

“Monster.com” of China

(Nasdaq: JOBS)

Leading outsourcer in China

(NYSE: VIT)

Multimediasemiconductor

(Nasdaq: VIMC)

Semiconductor foundry

(NYSE: SMI)

1,282 2,484

4,100 5,900

7,900 10,000

-

5,000

10,000

15,000

2008 2009 2010E 2011E 2012E 2013E

China is Experiencing Phenomenal Growth in Mobile and Spending

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RMB Billion

China E-commerce Market Estimation(GMV)

Source: CCID, Source: Innovation Works / Umeng estimates

CAGR: ~150%

CAGR:50%

0

5000000

10000000

15000000

20000000

25000000

30000000

35000000 33000000

11100000

7620000

3000000 2500000 1600000 1200000 585000 430000 50000 48000

China has the 2nd Largest Android App Store in the World

Source: Techcrunch, Cnet,, BGR, industry research

World’s Top Apps Stores (Daily Downloads)

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Wandoujia #2 in Android globally

OpportunityMobile Leaders in U.S.

Mobile Leaders in China

Application/content store

Social networking services

Storage

Browser / News browser

Advertising

POS Payment

Category Leader Parallels in Mobile Show Many Similar Opportunities

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Capabilities U.S. Companies Can Bring to Mobile in China Content and branding – recognized, branded

content and existing products (games, apps, etc.)

Product design and process – mature product development process, data-driven analysis, A/B testing, understanding virality etc.

Technology – mobile handset technology and design, cloud services technology

Business models – business model innovation to create new categories

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U.S. Partner China Partner Partnership

Develop and launch “Fruit Ninja” in China

PapayaMobile to help Kiloo deploy on Android and in China

Tom to help develop a Chinese gaming storefront for Glu (glu.cn)

Develop tablet computers and mobile phones

Many U.S. Companies Have Partnered Locally for Mobile in China

Source: Industry research

U.S. companies utilizing China partners for local distribution; going at it “alone” can be difficult

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U.S. Companies Who Want to Go to China Market Should Consider Partner with right distribution channel and go to

market partners

• Social networks

• Game developers and platforms

• Handset providers and carriers

Adapt product and monetization to local habits

• Virtual goods instead of just “paid apps”

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Summary Mobile in China is large and growing – mobile

smartphone usage, particularly in Android, is growing; China consumers have money to spend

Many opportunities – many mobile opportunities in the U.S. have parallels in China

U.S. resources – U.S. companies have existing content, products, and resources that can be helpful in China

Partner locally – U.S. companies should consider partnering locally to distribute and adapt their products and services for China

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global

connected

experienced

successful

Cloud and Mobile-Centric Apps Have Investment Traction Within China Cloud – cross-platform device usage increasing

cloud and syncing needs

App store

Storage

Mobile-centric apps – applications / services need mobile-feature centricity; China internet incumbents copy very quickly

Tablet-focused apps

Mobile advertising

LBS

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Internet /Digital Media Social and Gaming

Software & Services Components

Other

Cross Border

DCM China Portfolio

NYSE: RENN

NYSE: DANG

NYSE: BITA

SZSE: 002565

Nasdaq: FTNT

Nasdaq: JOBS

NYSE: VIT

NYSE: SMI Nasdaq: VIMC

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