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P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

With this newsletter we hope to: 1) highlight the best content and opinions from non-mains t r eam inde penden t bloggers. 2) provide overviews and commentaries on the views of innovators, and 3) give thoughts on both hot and new topics in Chinese web industry. We hope to bring innovators, entrepreneurs and venture capitalists to the forefront to spark both conversation and original thinking.

STARTUPS WATCH 星 观 察

FocusWe highlight the brightest

and newest startups in

Chinese Internet and

wireless sectors.

Explore

We recommend new products,

services, companies and explore the

trend in Chinese market.

ReviewWe review and discuss the

viewpoints covered at the NTalks,

a popular event organized by

MOBINODE monthly.

Preface: Gunning for the market, and recognising the power and value of innovation.

Over the past four years, the prominent bilingual tech blog MOBINODE has strived to provide insightful, detailed coverage of the Chinese IT sphere and its newest stars. With the introduction of MOBINODE.tv in 2009 and the NTALKS forums this year, we're by no means just a blog, but we do cooperate with other blogs and grassroots movements to bring together innovative, passionate, hardworking individuals for various causes and colloquia.

Our colleagues and friends are people who truly love the internet, and who are willing to share and contribute. Therefore, we work hard to bring them out and together to record their opinions, views, and innovations in the name of progress.

With this report we hope to: 1) highlight the best content and opinions from non-mainstream independent bloggers. 2) provide overviews and commentaries on the views of innovators, and 3) give thoughts on both hot and new topics in Chinese web industry. We hope to bring innovators, entrepreneurs and venture capitalists to the forefront to spark both conversation and original thinking.

In this issue, we'll be summarising the situation of the Groupon-like-services and Foursquare-like-services sectors in the Chinese market, as well as the penetration of the iPhone and Android-based devices into China.

In our recommendations section, we'll be touching upon 9 different companies that have come online within the past month in China, or sites or services in China that have recently come to the forefront. In the recaps section, we'll be talking about the internationalisation of the development process.

This month's Startups Watch is edited by MOBINODE's Lu Gang, Cindy Jiang, and WEB20SHARE’s Watson Xu This is a monthly bilingual report. Thanks much to our translator Moy Hau. We hope everyone is satisfied with the issue, and we look forward to hearing your feedback.

J u l y , 2 0 1 0 , V o l u m e 1

P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

热点视野

Twitter hits $1 billion valuation within 3 years. Facebook reached equal valuation with 2 years. Groupon, however, broke the record, it only takes a year and a half. On April 19th of this year, a consortium, led by DST (a Russian investment company), invested $135 million on Groupon, making the valuation of Groupon shoot up to $1.35 billion. As New York Times said, Groupon was the craziest the Internet company in history.

The business model in Groupon is that it only sales one product or service per day, and via daily updating and bulk-discount price, Groupon is able to attract mass purchasers and then, collect 50% of the transaction commission in return. Groupon creates a new Internet business model consists of e-commerce, social marketing and online ads.

FOCUS- Five Perspective to Know Groupon Like Service in China

Certainly, there are many Groupon-likers in China. Those imitators copied all the virtue of Groupon, and some of them even involves its interface and model. Resource said there were already over 100 of them, but be frank, even the number is

200+, I would not be surprised. This market is already overheated and going much crazy than people expected. Some of them already raised a large bucket of money, and several

deals I heard are around $5 millions; RenRen, the leading Chinese social network also launched its own group purchase site called Nuomi, and it only took hours, amazingly 152,095 users

bought the offer (costs around $5.8 for 2 movie tickets, 2 coke, 1 box of popcorn and 1 Häagen-Dazs icecream.

1. Group Purchase, New and Old business model

We would strongly suggest you Rethink if you believe Groupon model is 100% new for China too. In fact, Group Purchase (in

Chinese it’s called Tuan Gou) is hugely popular in China especially in Home improvement/Home decoration market where thousands of people got connected online and buy the

same products together in street shops in order to get a good bulk-discount. It is an ‘old’ model, but also ‘new’ to Chinese consumers as Groupon represents a new format of ONLINE group purchase with the interesting ‘deal of the day’ strategy. No

one ever made the online group purchase experience so easy in China.

2. An easier model for Groupon-likers to survive?Groupon is very easy to copy. But, the interesting point we have to see is that unlike video-sharing, social networks, twitter models which are all about user-base (at burning money) at the beginning, Groupon is making cash-flow since the first day. And Groupon model focus on one deal in one city, and the fact in China is that it’s not difficult to find a deal (from restaurant, spa etc) and the

Internet in China is very geographic. In other words, it should be relatively easier for those startups to survive. However, if you have many targeting at the same market, then it’s all about how to do the marketing in the end. Can you offer better share with those merchants? Do you have enough money to reach more industry sectors and grow faster? Surviving is one thing, at some point, you

may also need huge money to burn. (Why did Groupon raise such amount of $$$ even when it’s already hot!!)3. Better Service or Better Price?I’ve read some feedback from some Chinese Groupon users. They’ve started complaining on the service they got. ‘Cheap price does

not mean we also accept Cheap service’, they said. Groupons can offer you good price, but they can not guarantee whether or not the merchants are able to offer mass customers the service with the good quality. When your users come to you only for cheaper price, be careful, because that might also imply the customer loyalty is low. Especially in China, your customer can quickly move to another one with cheaper price or a big one with better service guaranteed.

4. Happy or Sad story in the end? Startups vs. Big guysThis is typically Chinese-style sad story. When those giants see the interesting new business models, instead of partnering with you or acquiring yours, they prefer to launching something on its own. Renren’s Nuomi has shown its super power with huge user base.

Taobao, has launched its Groupon service on ju.taobao.com, and Dianpin (the leading Yelp-like service) has also launched its

J u l y , 2 0 1 0 , V o l u m e 1

P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

FOCUS- Foursquare Like Service in China

Foursquare made big waves when it blew up onto the location-based services scene like a firestone tire in 2009. Both Foursquare and Gowalla attracted interest from serious investors, with rumour being that Yahoo, Microsoft, and Facebook all having interest in acquiring the company. The venture got a lot of people thinking about the area, and people are estimating that the sector will grow to 12.7 billion USD in income by 2014. Talk like this is getting people in China interested, too, and now we’re seeing some similar services here.

Foursquare’s success comes from a few important aspects, more or less: it brings offline services and locations into its framework, and provides good offline service. Second, It is easy to use and fun. Third, in addition to Twitter and Facebook, it has some good third party applications, such as PleaseRobMe, an autotracker based on Foursquare Data and Fourwhere, an app that tacks your Foursquare data onto Google Maps.

Similar services in China are going to need to think not just about what Foursquare has done right, but also about how the services need to be changed to adapt to the Chinese market. The first is the lower penetration of smartphones, especially ones with GPS, and another is how to acquire good POI data – good relationships with offline parties

We might also see two other major players come into this game in China: China mobile, and Dianping.

* Popular LBS service * Waze：* http://world.waze.com/

* BooYah：* http://www.booyah.com/* FoodSpotting：

* http://www.foodspotting.com/* Whrrl：* http://whrrl.com/

* Flook：* http://flook.it/* Yelp：

* http://www.yelp.com/* Rummble：* http://www.rummble.com/

* Aka-Aki：* http://www.aka-aki.com/*

Popular LBS Application in China：*玩转四方Play 4F：* http://play4f.cn/

*街旁Jiepang* http://jiepang.com/*开开Kaikai

* http://k.ai/*蘑菇团Mogu Tuan* http://m.133.cn/

*多乐趣DuoLeQu* http://m.duolequ.cn/*一起游吧17you8

* http://17you8.com

t.dianping.com. They have not started heavy promotion yet, but they are watching the market until they are fully ready and the market is more mature. So why Chinese VCs still rush for those startups? How do they expect these sites to exit one day? A few very lucky ones could take the lead in the end with enough money to burn, or one of them could be acquired by Groupon if it comes to China one day? Well, I don’t know.

5. Innovation or just Interesting? The Groupons’ AggregatorGiven the fact that there are so many Groupon service in China and I am assuming there are more to come. So the question

becomes, where to efficiently find those deals on each service. The answer is obvious, we need a search engine. Now we see the sites such as tg123.com, niutuan.com, 122.net etc the Groupon services aggregator/navigation site. I don’t know what kind of partnership involved with those groupon services aggregated, but it’s smart, isn’t? At least, it perfectly fits for Chinese!

J u l y , 2 0 1 0 , V o l u m e 1

P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

EXPLORE- Surveys of Android Users in Local Market

Surveys of Android users in China have shown that the most common application categories in use domestically are: games, SNS, multimedia, everyday tools, and personalisations (such ask skins).

The demand for games is of course still very strong, but the number of games produced for the platform remains relatively small with most being ports, especially from the iPhone platform. Issues with the ROM as well as difficulties arising from different resolutions on varying devices have resulted in developers being slow to go for the platform. With the newer 2.2 ROM and 800x480 resolution, compounded with the addition of flash, we should see better and better games.

It's safe to say that the iPhone is a product of the internet, and with the strong Google push for the "cloud" concept, the Gphone is becoming a true personal internet centre – seamless syncing with google contacts, google calendar, gmail, and gtalk will help people to stay connected, and SNS may find itself handily pushed back to number two. Android users plug into twitter through seismic, twidriod, and twigee, and Chinese users have microblog services available from Tencent and Sina, as well as services like Foursquare.

Everyday tools are the category that ordinary users pay the most attention to as the demand for them is more rigid. Good applications help us get through our work and day-to-day lives more efficiently, streamlining our workflows and adding to quality of life. We're talking about classics

such as dropbox, sugarsyc, and calendars.

Multimedia and personalisation are numbers four and five, and nothing new in the mobile market.

There are two methods by which users in China can attain apps for their Android devices – buing them directly from a marketplace such as Google Market or the Android market, or by downloading them from various websites or forums as .apk files and installing them on their own – the latter method seems to be favoured, with 63% of Chinese users picking it as their primary method of attaining apps. Thus, the recommendations and reviews of friends and other fans on forums play a big role in acquisition.

As far as stores go in Chin, the hiapk.com is relatively popular, a success linked with the very successful promotions by the Android network in China. When you buy a Gphone, i t comes with the Hiapk Marketplace preinstalled. Most of the Android devices in China are knockoffs, such as the especially hot-selling HTC G3 and G2 that come with modified roms – optimised or converted into the Chinese language, modified by Android fans who keep the Android Market on top.

As far as feelings towards price go, most domestic users see apps as belonging in the .5 to 2 Yuan category – cheap commodities. This, when combined with the 57% of apps that are free goes to show that the concept of cheap is intrinsically linked to the app landscape in China. It wouldn't be easy to import other price concepts to the market.

The original data from: www.gfan.com

J u l y , 2 0 1 0 , V o l u m e 1

P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

EXPLORE- Survival of iPhone Development Teams in China

Statistics from an iPhone developer in China show that of the 200,000 apps available in the app store, more than 110,000 are produced by any one of 27,097 Chinese developers of development teams.

Going it in China

The developers in China can be divided in to three categories: larger companies such as 139.me and ibokanwisdom.com that got started early, major internet players such as Tencent and Sina that jumped on the bandwagon later, and small and medium size development teams.

There are big differences between the groups and their current states. 139.me, started in July 2008, was the earliest App developer in China. The company makes apps in basically two ways – developing and then marketing directly, and outsourcing. It helps other companies promote their apps that they have built for the platform. Now the team are doing fine. They cover costs and live well. Other players, such as Tencent, aren’t in the game to make money, but rather to have a visible position in the market.

Things are most difficult for the small players. “Some of these little companies will put up an app they've made on Apple's platform only to come away with less than $10 USD”, said a developer who declined to be named. The smaller players lack a strong grasp of user needs and marketing strategies, and most of them right now have nothing. Reports have found that of the tens of thousands of domestic iPhone developers in China, between 70 and 80 percent are currently faltering.

Problems with the domestic app market

There are a number of reasons for the difficulties developers are experiencing. For instance, Apple has already developed good payment systems for overseas customers, and the prices for the Apps are reasonable. However, Chinese consumers are not used to paying for software, and with a limited number of iPhones in Chinese clients, most of the apps are limited to sale abroad. However, Chinese developer s lack understanding of international market principles, and Chinese markets suffer from immense piracy problems. The App Store and iPhone are both incredibly closed platforms, with apps only being saleable

after gaining approval from Apple itself, yet piracy provides a much more efficient and usable channel to Chinese users.

If a developer doesn’t gain quick recognition for its apps, it will fall in the rankings in the App Store and become invisible. Things don’t look good for developers in China. Many developers and companies in China only make a few US dollars a day and have essentially no income from the app store. It does not appear as if they will pan out.

The Way for Chinese developers

Chinese developers need to change their strategy from traditional models to value-added services. The app store doesn't protect against plagiarism, and a maker of a popular app could find their product copied – as a result, people are moving more towards free apps, which Chinese developers need to prepare themselves for by developing some free apps now that will generate value-added income later.

Additionally, developers need to think big. The apps don’t necessarily have to be consumer-targeted. China has huge ventures in import-export, medicine, education, and other industries – all which could be purchasers of these applications – an app that gave realtime bloodwork results, or a way to bring textbooks to students, or logistics software – all these things are possibilities.

Orig ina l Data f rom A Report on 21CBH.com

h t t p : / / w w w. 2 1 c b h . c o m / H T M L /2010-6-8/4NMDAwMDE4MTE4Ng.html

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P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

EXPLORE- Startups Show

T.SDO is an SNS-like site that provides tight integration with a microblogging-like service. The site is divided into two main parts – the left-hand side, services, which include ShanDa's flagship games, literature, video, and other entertainment sources – and the right-hand side, which is a microblogging site in through which users can communicate while engaged in any of the other activities on the site.The site supports feeds, friend-making capabilities, and message threads. For instance, you could be playing a game with your friends your status through your feed, and you could publish the game's results to your feed afterward.（t.sdo.com)

Youfeeling is a Web 2.0 dating service. Users first register at the Youfeeling site and fill out their personal details, and then write a letter to someone they have feelings for. If it turns out their object of affection has listed them in turn, then the site will notify the two people for the concordance of feelings. If the love turns out to be one-sided, the site will keep your secret for you in perpetuity. Users are also able to administer the list of their interests, adding and deleting people at will.（www.youfeeling.com)

Juandou.com is a network that provides e-commerce solutions to site owners, with LinkMiner being its first product. It can convert product pages (such as Taobao product links and seach results) into commission-yielding partner links for site owners without influencing the end-user experience. It’s supposed to be able to c o n v e r t a b o u t 5 5 % o f l i n k s .(www.juandou.com)

Jamguo is an independent ly-deve loped mus ic marketplace that makes use of the new MBC 2.0 cooperative model to allow music makers and promoters to earn money together.One of a number of new music networks, the site allows users to preview songs and download high-quality recordings, as well as provides other services. Among them, the site uses special protection mechanisms combine with noise-injection methods to prevent stream capturing of samples and thus protecting artists rights and interests. Additionally, through the MBC2.0 model, promoters, partners, and distributors are all able to cooperate with artists and share profit.(www.jamguo.com)

Uqude.com is a services platform with SNS functions at its core, which allows groups to share internet content in a relaxed environment, and provides refined interactive information to stimulate users’ thoughts.Uqude has abandoned the static-content paradigm for a more complex framework that includes testing, voting, quizzes, and evaluations to provide better service to users, resulting in better content provided to everyone.(www.uqude.com)

GeekPark i s a t ech and bus ine s s information-focused SNS which includes microblogging, gossip, and realtime sharing capabilities. Its model is similar to a combination of Slashdot and twitter – editors pick the hottest topics for highlighting on main areas of the site.(www.geekpark.net)

GoodTeamStudio began developing games for the Android platform in October 2008, and has become one of China’s hottest Android game developers in the time since. The team has done great on Google’s Android Market, and has been ranked in among the top 20 developers worldwide for the past 7 months in a row. Their RDC: Black jack app has been downloaded more than 250,000 times. They currently have 14 games for Android, 3 for iPhone, and 10 for OMS. (www.goodteamstudio.com)

Wandoujia is a Windows-based Android phone administration tool, which allows users to send SMS, administer contacts and programs, and load music and videos onto phones as well as take screenshots from the phone. It's said to be a product of Innovation Works.（www.wandoujia.com)

51qiangzuo.com is an online event and conference planning tool which allows people to create and RSVP to events, as well as promote and sell tickets, streamlining and simplifying the whole process. Users are able to create registration forms through a simple process resembling Google Forms, and easily administer attendee information as well as issue notifications to attendees and share information through easy integration with Douban, Sina, Renren, and Kaixin to inform others about and promote their events. The ticketing functionality is powerful and allows for the compilation of accurate statistics.Many events abroad are scheduled through Evenbrite – although 51qiangzuo.com differs slightly, we feel that it’s much more suited to the Chinese market.(www.51qiangzuo.com)

In this section, we focus on the local startups we explored lately. If you are interested in getting them in touch, please

feel free drop us an email on [email protected]

J u l y , 2 0 1 0 , V o l u m e 1

P r o d u c e d b y M O B I N O D E • c o n t a c t i n f o : m o b i n o d e t v@ gm a i l . c o m

REVIEW- Survival in a Global Context for Chinese Application Development Teams

The topic for the third round of NTALKS was “Survival in a Global Context for Chinese Application Development Teams”. Speaker invitees comprised a number of outstanding developers for the iPhone, Facebook, and other mobile platforms, including AppLeap, IsMole Inc., iBokan Wisdom, 139.me, PeoPeo, and Mocaworld. With them we explored the differences between the Chinese and foreign markets, as well as the special considerations that need to be taken for surviving on the international market – the developers that app developers face, and the directions to be taken for future products. People shared their experiences in developing for the Apple App Store, Facebook, Mixi, and other platforms, and discussed methodologies and hopes for survival on the global playing field.

Major topics included:

1）A comparison of China with other markets. Foreign markets are relatively better developed, and are nicer to their developers – a better way for small to mid-size Chinese developers to start.

2）Competition abroad: on both Facebook and the iPhone App Store, competition is especially fierce. It's hard for developers to really make it big. Things are the same in the Japanese market, with the playing field dominated by bigger fish.

3）Taking advantage of new market opportunities: apart from social networks, there are also a number of mobile application for enterprise market that provide opportunities.

4）Five things to consider for Chinese development teams going into the international market. 1; The Market: The App Store has already opened the market up. 2; Planning: The biggest factors are societal and cultural. For instance, the rules of the Chinese and the foreign farming games differ dramatically. 3; Development. 4; Promotion, Sales, Customer Service, SNS, etc. 5; Competition with Foreign Enterprise; Foreign developers may be able to understand or meet customer demands better.

5）Android Development: speakers mostly agreed that Android provides excellent opportunities for Chinese developers and deserves our attention.

6）Future trends for app development: Games are becoming intrinsically linked with SNS development, and SNS game development and Mobile game development seems to be merging. Small to medium-size enterprise needs to grasp user needs and demands better to be able to survive.

More info from：www.mobinode.tvMore viewpoints about the topic(in Chinese)：www.ifanr.com/14218

NTALKS群音荟NTALKS is an offline event organized

by MOBINODE on a regular basis to tighten the connection among local start-

ups. NTALKS is a

platform and community for grassroots and

startups to demonstrate their works, share their

experience and communicate with the potential partners and investors.

Special Thanks to OrangLabs Beijing, BlueRun China and TrilogyVC