China Tech News

Hugo Barra, global vice president of Xiaomi, recently issued a statement that claims Xiaomi is moving its international user data from servers in Beijing to U.S. and Singapore.

This is reportedly a response to previous incidents which exposed that Xiaomi smartphones automatically returned global user data to Beijing servers. Chinese telecommunications regulations require Chinese companies to store domestic data on local Chinese servers.

Is this move by Barra enough to quell security and privacy concerns that a Chinese mobile phone company may be in cahoots with the Chinese government for harvesting global user data?

According to Barra the international user data migration aims to improve experience of users all over the world, cut down latency and reduce failure rates. At the same time, it will help the company maintain high privacy standards and comply with local data protection regulations.

Based on Xiaomi's plans, the company will first migrate their global e-commerce platforms and user data for all international users from Beijing data centers to Amazon AWS data centers in California, U.S. and Singapore, which is expected to be completed at the end of October 2014. It will benefit users in all international markets, including Hong Kong, India, Indonesia, Malaysia, Philippines, Singapore, and Taiwan.

For the second step, Xiaomi will migrate their MIUI services and corresponding data for all international users from Beijing data centers to Amazon AWS data centers in Oregon, U.S. and Singapore, realizing the migration of Mi account, cloud messaging and Mi cloud services. The migration is expected to be completed at the end of 2014.

Finally, Xiaomi plans to improve user experience in emerging markets such as India and Brazil in 2015. Due to the lack of Amazon AWS services in those markets, Xiaomi will cooperate with local data center providers.


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Chinese telecom operator China Unicom announced its financial report for the first three quarters of 2014, stating that by September 30 its operating revenue reached CNY215.34 billion, a year-on-year increase of 5.3%; while its net profit reached CNY10.56 billion, a year-on-year increase of 36.1%.

For the mobile sector, China Unicom's revenue during the reporting period was CNY119.1 billion, the number of its mobile users reached 297.07 million, and its average revenue per user was CNY45.5. Meanwhile, its mobile broadband service revenue was CNY80.36 billion, a year-on-year increase of 24.3%, the number of mobile broadband users reached 145.71 million, and the average revenue per user was CNY65.7.

In the fixed-line broadband sector, China Unicom's revenue in the first nine months of 2014 was CNY66.92 billion. Of that, fixed-line broadband service revenue increased by 9.7% year-on-year CNY37.52 billion, accounting for 56.1% of the total fixed-line business service revenue, the number of fixed-line broadband users reached 68.482 million, and the average revenue per user was CNY62.4.

From January to September 2014, China Unicom's costs were CNY201.27 billion, a decrease of 3.7% compared with the same period of last year. For details, the company's asset depreciation and amortization was CNY55.14 billion, a year-on-year increase of 8%; its network, operation, and support costs were CNY27.77 billion, a year-on-year increase of 12.6%; its sales expense was CNY31.79 billion, a year-on-year decrease of 0.3%; and its mobile broadband business interruption subsidies were CNY3.91 billion, a year-on-year decrease of 32.7%.

Due to the change of Chinese inter-network settlement policies, China Unicom's inter-network settlement costs decreased by 26.1% year-on-year to CNY11.12 billion.

China Unicom's pre-tax profit was CNY14.07 billion and its net profit was CNY10.56 billion, representing a year-on-year increase of 36.1%. The company's earnings per share were CNY0.443 and its earnings before interest, tax, depreciation and amortization were CNY72 billion, a year-on-year increase of 12.5%.


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Chen Yizhou, chief executive officer of Renren, says the company is planning to sell some non-core businesses to improve their profitability and they are also considering investment and expansion opportunities in America and Hong Kong.
Chen revealed during an interview with local Chinese media that under the current model it is hard for the company to make any profit. They will therefore implement a complete transformation and change their business model.

Renren was once known as the Facebook of China. Founded in 2005 in its present incarnation, the Chinese company has already been listed on the New York Stock Exchange. The company took a typical Chinese Internet company path of developing diversified operations, covering online games, online video, e-commerce, group buying, and social networking.
Though the company claims to have 214 million monthly active users by June 30, 2014, they never achieved stable profit. In the second quarter of 2014, Renren realized net profit of USD31.3 million. However, its operating revenue was only USD25 million and its earnings of USD86 million were from short-term investments. The company suffered operating losses of USD30.4 million during the reporting period.

The third quarter is even worse. Renren predicted that its operating revenue will decrease to between USD19 million and USD21 million. Chen attributed the situation to the severe competition from Tencent and other Chinese Internet companies.

Chen refused to disclose which business the company plans to dump. Prior to this, Renren sold its e-commerce business to Baidu in August 2013. With exception of its social networking core business, Renren holds an open attitude towards cooperation with large technology companies.


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Alibaba Group's chairman Jack Ma and Apple's chief executive officer Tim Cook jointly announced last week that Alibaba and Apple will work together on payment services.

Apple Pay plans to enter the Chinese market via Alipay and become a payment method for Chinese Apple users. But more importantly, Apple will help Alipay to expand into the international market.

In the future, major U.S. department stores like Kohls, Macys and Dillards will be able to support payment via Alipay. In addition, those three department store companies will become the import partners of Alibaba to provide products to Chinese consumers through channels on Alibaba.

Ma revealed during the announcement that imports of goods will be an important part of Alibaba's overseas strategy and China can import a lot of things from America.

In mid-October, Alibaba announced a strategic deal with Costco. With the cooperation, Costco will open a flagship store on Tmall.com, Alibaba's B2C e-commerce site, and provide Chinese consumers with food and health products.
Financial terms of the Apple and Alibaba deal were not released.

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Alibaba Group Holding Limited says its revenue grew as it announced its financial results for the quarter ended September 30, 2014.

The e-commerce company's revenue increased to USD2.74 billion in the quarter ended September 30, 2014, up nearly 54% year on year. Mobile revenue increased by 1,020.2% year on year to USD606 million in the quarter ended September 30, 2014.

China retail marketplaces had 307 million annual active buyers in the twelve months ended September 30, 2014, compared to 279 million in the twelve months ended June 30, 2014, and 202 million in the twelve months ended September 30, 2013, representing an increase of 52.0% compared to the same period in 2013.

Income from operations in the quarter ended September 30, 2014, was USD708 million, or 25.8% of revenue, a decrease of 17.2% in the same quarter of 2013. The decrease was primarily due to share-based compensation charges and an increase in amortization of Alibaba's intangible assets.

Alibaba's net income in the quarter ended September 30, 2014, was USD494 million, a decrease of 38.6% compared to the same quarter of 2013. The decrease was primarily due to the same share-based compensation charges and increased amortization expense, and an increase in the company's effective tax rate.

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Chinese Bitcoin exchange website BTCChina has reached a strategic deal with e-commerce providers, including online game service provider Shenzhoufu.com; Internet P2F financial management website Aicaike.com; and maternal and child product retail website Dandanchina.com.

According to the agreements, BTCChina will provide Bitcoin payment services to those e-commerce enterprises, which expand payment channels for Internet users, help e-commerce enterprises attract more users, and improve their competitiveness.

Bobby Lee, chief executive officer of BTCChina, said that they are honored to cooperate with those well-known e-commerce providers to jointly expand the payment sector. Payment channels are crucial for e-commerce companies and as a supplement of traditional currencies, Bitcoin has attracted wide attention on the Internet. The introduction of Bitcoin is expected to attract new user groups for those e-commerce websites.

In addition, BTCChina's services can also support cross-border payments, which will help Chinese e-commerce websites to attract overseas customers and vendors and expand overseas markets.

By June 2014, there were 63,000 physical stores and websites that accepted Bitcoin payment, including well-known brands like Dell and Neweggs. The world's leading Internet payment company Paypal also announced on September 23, 2014, that the company has accepted Bitcoin payments and users can purchase digital content such as games, music, videos and news with Bitcoin.


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Lenovo and Google jointly announced that Lenovo formally completed its acquisition of Motorola Mobility from Google, and this now makes Lenovo the third largest smartphone maker in the world.

Yang Yuanqing, chairman and chief executive officer of Lenovo Group, said that while enhancing the company position as the third largest smartphone maker in the world, Lenovo will challenge the top two competitors.

After the acquisition, Lenovo will operate Motorola as a wholly-owned subsidiary and the latter's headquarters will remain in Chicago. On the completion of the acquisition, Lenovo welcomes the addition of nearly 3,500 employees around the world, including about 2,800 in the U.S., who design, engineer, sell and support Motorola's devices, which are now considered "Chinese devices".

The total purchase price of the transaction is about USD2.91 billion, including approximately USD660 million in cash and 519,107,215 newly issued ordinary shares of Lenovo stock, with an aggregate value of USD750 million, representing about 4.7% of Lenovo's shares outstanding, which were transferred to Google at close. The remaining USD1.5 billion will be paid to Google in the form of a three-year promissory note. In addition, a separate cash compensation of about USD228 million was paid by Lenovo to Google primarily for the cash and working capital held by Motorola at the time of close.

Commenting on the acquisition, Yang said that they achieved a historic milestone for Lenovo and for Motorola. Lenovo has a clear strategy, great global scale, and proven operational excellence; while Motorola brings a strong presence in the U.S. and other mature markets, great carrier relationships, an iconic brand, a strong intellectual property portfolio and an incredibly talented team.

Google's chief executive officer Larry Page said that Motorola is in great hands with Lenovo, a company that is all-in on making great devices.

The transaction has satisfied all regulatory requirements and customary closing conditions, including clearance by competition authorities in the U.S., China, EU, Brazil and Mexico, and by the Committee on Foreign Investment in the United States.


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Lei Jun, chairman and chief executive officer of Chinese smartphone maker Xiaomi, says the company will invest USD1 billion in the video content industry as it aims to improve content of its TV and TV box products.

For content, Lei said they prefer to cooperate with partners in the video content sector and realize joint growth in the area.

Lei said the most important thing for Xiaomi in the current stage is the integration and operation of video content. The company aims to establish a complete network which closely combines software, hardware and contents to enhance the competitiveness of the company.

At the same time, Xiaomi announced that Chen Tong, former executive vice president and chief editor of Sina.com, has joined Xiaomi as vice president, leading content investment and content operation.

Xiaomi is rumored to be raising a new round of funds, which could evaluate the company to about USD50 billion. This new round of financing negotiation is reportedly at its early stage and no substantive agreement has been achieved yet. In addition, DST Systems, an existing shareholder of Xiaomi, may participate in the new financing.

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China's biggest e-commerce company claims more than USD1 billion worth of goods were sold over its sites within the first 20 minutes of this year's 11.11 Shopping Festival.

Alibaba says it hit USD1 billion in gross merchandise volume at 12:17 A.M. this morning. As impressive was news that nearly half of all transactions took place via smartphones and other mobile devices.

Alibaba Group is rolling out the sale worldwide this year. Globally, the company says the strongest overseas traffic was coming from Hong Kong, the U.S. and Taiwan.

Last year's 24-hour sale saw USD5.8 billion worth of goods transacted over Alibaba Group's Tmall.com and Taobao Marketplace platforms, making it the biggest shopping day in the world, topping the sales on Black Friday and Cyber Monday combined.

Previous 11.11 Shopping Festivals have been limited mostly to the mainland. But for the first time this year, AliExpress, Alibaba Group's English-language consumer shopping platform will be participating, offering 50% off on one million products to customers overseas.


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Chinese Internet portal NetEase.com announced that the company will officially close its blog services and recommends users to move their blogs to LOFTER, a microblog service at NetEase.

According to NetEase, the blogs moving to LOFTER will maintain the same contents. Meanwhile, the company will completely shut down its blog services in the coming weeks.
LOFTER is a microblogging platform launched by NetEase in 2011. After moving blogs to LOFTER, NetEase users can login using their original blog accounts.

This move represents NetEase's permanent closure of the blog business. Prior to this, the company tried to integrate its blog, microblog, and email services. However, it still could not catch up with its competitor's Weibo service in the blog market.


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