China Tech News

Former Microsoft Executive Hops To Baidu

Chinese search engine company Baidu announced that Zhang Yaqin, former president of Microsoft Asia Pacific Research and Develop Group, officially joined Baidu as president responsible for leading emerging businesses.
Before joining Baidu, Zhang was Microsoft's global senior vice president and Asia-Pacific Research and Development Group president, leading Microsoft's comprehensive scientific research and product development in Asia Pacific. Zhang joined Microsoft in 1999 and he was a co-founder of Microsoft Research Asia. In 2006, he established the Asia-Pacific Research and Development Group, which integrates various departments and covers basic research, technology implementation, product development, and strategic cooperation.

Robin Li, chairman and chief executive officer of Baidu, said that they welcome Zhang, who has good technical knowledge and rich business experience. Li said he believes that Zhang will make precious contributions for Baidu's development in the emerging business sector.

Zhang said that he is excited to join Baidu during the key turning point of the Internet industry. Baidu has a great vision and development courage. He said the company actively deploys resources in important cutting-edge technical sectors and continues to enhance research and development investments. Zhang said he shares the vision of Baidu and is looking forward to becoming a member of the team.


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Sinopec has signed a framework cooperation agreement with Tencent aimed at cooperation in non-oil businesses.
According to the agreement, Sinopec and Tencent will work together in various sectors, including business development and promotion, mobile payment, media campaigns, O2O businesses, map navigation, user loyalty management, big data application, and cross-marketing. Financial terms of the deal were not announced.

Fu Chengyu, chairman of Sinopec Sales Company, previously said at the company's semi-annual performance meeting that the company will actively explore the potential of non-oil businesses and will focus on emerging businesses such as convenience stores, automobile service centers, O2O areas, financial services, environmental products, and advertising. The company would establish a new business model and gradually transfer from an oil supplier to a comprehensive service provider.

Sinopec has opened 23,000 convenience stores, serving 2,000 customers every day. In 2013, the company's turnover of non-oil products reached CNY13.3 billion and it is expected to be over CNY15 billion in 2014.
Sinopec's retail and e-commerce affiliate already implemented similar deals with Rt-mart, SF Express, and Yhd.com.


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Terry Gou, chairman of Hon Hai Group, announced that the company will invest over CNY5 billion in Shanxi to develop the electric car industry.

Gou revealed that in 2014, Foxconn's output in Shanxi will surpass CNY60 billion and the company already has 100,000 employees in this province. The company is expected to invest over CNY5 billion in Shanxi to develop the electric car industry by using the province's rich energy resources.

Hon Hai has been deploying resources towards the electric car sector for many years and has achieved decent results in batteries. The group has been supplying auto parts for the American electric car maker Tesla.
Gou previously said at a shareholders' meeting that the electric car is a popular subject and Hon Hai's products will feature prices below USD15,000. The investment in Shanxi is considered a key move to realize the low-price electric car strategy.

Reportedly a son of Shanxi, Gou has invested in the province for over ten years and Foxconn has two factories in Taiyuan and Jincheng, respectively. The one in Taiyuan mainly produces high-end smartphones and accessories; while the one in Jincheng manufactures industrial robots, automation devices, precision tools and dies, and optical lens.


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Microsoft has established a new wholly-owned subsidiary in Shanghai named Microsoft Asia-Pacific Technology Limited, which will focus on the global research and development of the Microsoft cloud operating system.

The wholly-owned subsidiary is based around the Chinese teams of Microsoft cloud computing and corporate departments. It will mainly focus on the global development of Microsoft's cloud operating system, covering Microsoft Azure, Windows Server, SQL Server, payment platforms, and development tools.

Scott Guthrie, Microsoft's global executive vice president, said that the establishment of the new company represents Microsoft's belief in building a world-class research and innovation center and business center in China.

In addition, Microsoft announced that Shen Yuanqing, chief operating officer of Microsoft Asia-Pacific Research and Development Group, will take the role of managing director of Microsoft Asia-Pacific Technology Limited concurrently.
Capitalization details and specific legal scope of business for the new company are not yet available.


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Media have been opining and hyping Alibaba's USD21.8 billion IPO impact on the global Internet ecosystem and how the company plans to invest its new wealth.

Unlike most IPOs, many early investors in Alibaba will have no lock-up period and they can sell their shares today. Though CEO Jack Ma pledged that customers are more important than investors to Alibaba's growth, this uncommon nod towards investors may instead be a bellwether to how insiders view Alibaba's future. If those investors sell on the first day, it may solidify the Chinese technology insider rumors over recent years that Alibaba fears a slowdown of its growth in China. This IPO may then just be an exit for those investors who feared future losses if the company remained private.

So with a China slowdown, the company is expected to seek growth overseas in places like Brazil, Southeast Asia, and Eastern Europe. Startups and mature companies are said to be eager to grab some of Alibaba's new wealth. But how does the hype translate into profit for Alibaba?

There was hype in the late 1990s when Chinadotcom went public, then sank. There was hype and hope when China's top Web portals Sina.com, Sohu.com, and Netease.com listed, followed quickly by Netease.com's near-suicide and delisting — and the subsequent hush over the industry. Then there was hype for the wireless value-added service companies in China listed in the United States who rose on Western dreams, and crashed on Chinese regulations. And now there is Alibaba, who again is expected to replicate its success in China around the world.

Alibaba most likely will be able to globally grow through acquisitions, but its focus will and should still remain on China. While rumors swirl that its B2B Alibaba.com business is slowing, the company is doing well with its B2C Taobao.com business. And there is enough room in the market for Chinese competitors like JD.com to grow with Taobao.com. Alibaba is the powerhouse in Greater China for e-commerce, and it has honed its customer-centric mantra through years of tests and victories.

But perhaps the biggest strength for Alibaba is not part of the Cayman Island company that is listing in New York. Alipay.com is Alibaba's online payment service and it was recently separated away from Alibaba Group and now operates as a separate, independent business that has no direct impact on Alibaba's bottom line. Like China UnionPay's ventures into foreign markets, Alipay may become Alibaba's first true international business. It's unfortunate that Alibaba investors do not directly benefit.

A few weeks ago, Amazon.com announced plans to begin operations in Shanghai's new free trade zone to allow Chinese exporters easier access to global customers. Alibaba can do the same thing, but if it expects to truly dominate the entire supply chain, it could purchase a global logistics and courier company like DHL, Fedex, or UPS.

Or maybe Alibaba takes a different route, and instead focuses on global retailing strength. Could it purchase a chain of convenience stores? Alibaba already partners with many Greater Chinese retail operators to use the outlets as drop-off points for delivery of goods to customers.

But what if it changes strategy altogether? Instead of focusing on trade of physical goods, what if Alibaba focuses on digital consumption? Alibaba could ramp-up its focus on online entertainment investments, and maybe even focus more on business media assets. Maybe Alibaba even gets involved in cryptocurrency like Bitcoin, or invents its own Alicoin competitor.

Ultimately, Alibaba now has enough cash to pursue many of these ideas in tandem, but it must juggle those plans with the corporate governance headaches of being a Chinese publicly-listed overseas firm. Today's big payday comes with lots of hope and many more opportunities.


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Chinese telecom device maker Huawei opened a new research and development organization in Southern France.
Located at Sophia Antipolis, this new R&D unit currently has 20 engineers and it will add ten more engineers by the end of 2014. Most of those engineers previous worked for Texas Instruments.

According to Huawei, Sophia Antipolis has a good information technology ecosystem and a large number of senior engineers who have rich experiences in electronic devices and software, which are the major reasons for Huawei to build the R&D unit there. At present, Huawei has 17 R&D units in eight European countries, including Belgium, Finland, Ireland and Sweden.
Huawei revealed that the company started operating in France from 2003 and the company announced in 2013 that they planned to recruit 170 researchers in the country by 2017. Huawei also said that they will invest GBP125 million, which is about USD203.3 million to build a new R&D center in Bristol, Britain. Huawei currently has a R&D unit in Britain's Ipswich. By 2017, Huawei plans to hire 300 employees for those two R&D units in Britain, so as to realize its goal of creating 5,500 jobs in Europe.

In addition, Huawei launched a new innovation center in Walldorf, Germany, in August 2014, which focusing on development of integrated products.


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Aisidi (HK) Limited has signed a three-party agreement with Xiaomi Singapore and Flipkart India Private Limited to sell Chinese Xiaomi smartphones in India.

According to the agreement, the three parties will reportedly work together to promote the sale of Xiaomi smartphones in India as well as the development of other emerging smartphone markets. The contents of this agreement include but are not limited to the sale of Xiaomi smartphones in India, supply chain logistics services, funding platform services, and a sales target of USD200 million for 2014.

Flipkart India is a leading e-commerce company in the local market and it provides over 15 million products of more than 70 categories. Founded in 2007, the company currently has 22 million registered users and over four million average daily visits. With complete technologies, the company ensures the shipment of five million items on a monthly basis, and it also provides various innovative services such as cash-on-delivery and a 30-day return policy.

Xiaomi Singapore is the sales and support center for Xiaomi's overseas expansion. It is mainly responsible for the sale and support of smartphones and consumer electronic products.

Registered in Hong Kong on November 6, 2013, Aisidi Hong Kong is the wholly-owned subsidiary of Shenzhen Aisidi and the company focuses on realizing the international strategic development goals for Aisidi.


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Xueqiu.com, a Chinese social investment website, has completed its third round of financing of USD40 million with investors including Renren.com and Morningside Ventures.

Xueqiu's products include its website and an application for smart devices. Officially launched in November 2011, Xueqiu has been providing data inquiries, information, and interactive communications services to Chinese investors. Its services cover various categories such as stocks, funds, and bonds. Prior to this, the company already gained investments from Sequoia Capital and Morningside Ventures.

Commenting on the investment, Chen Yizhou, chairman and chief executive officer of Renren group, said that the most important thing about Internet finance and investment is quality users with investment judgment and Xueqiu has such users. The reason for investing in Xueqiu is that the company has good development prospects and potential and Renren believes the community products will create huge value.

Fang Sanwen, founder of Xueqiu said that with great efforts, Xueqiu has established its position in the investor communication service market. Fang said when communication integrates with transactions, the value of community will increase. After the new round of financing, Xueqiu will promote that integration.


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China's X86 server shipments reached 448,000 units, a year-on-year increase of 22.2%; and its server sales reached USD1.43 billion, a year-on-year increase of 34.6%, according to latest statistics from IDC.

Statistics from IDC showed that during the second quarter of 2014, the global shipment of X86 servers increased by 1.5% year-on-year to 2.2 million units; while the related sales increased by 7.8% year-on-year to USD9.8 billion. Of that total, China's shipment of X86 servers increased by 22.2% to 448,000 units and its related sales increased by 34.6% to USD1.43 billion, making the Chinese market a growth highlight among the world's server markets.

Statistics also revealed that the Chinese server manufacturer Inspur achieved the fastest shipment growth of 69% and it contributed a major part of the market growth. Its market share reportedly exceeded IBM, HP, Lenovo and Huawei, and the company continued to lead with a triple growth rate.

By product form, the rack server was still the mainstream product in the Chinese market and it was the strongest driver of growth. During the second quarter of 2014, the sales and shipment of rack servers increased by 43% and 34.4%, respectively.

By industrial markets, the Internet sector was the largest industrial market and it promoted the growth of overall markets. Large Internet operators like Alibaba and Qihoo continued to develop their cloud computing, gaming and search businesses, which created strong demand for servers. Meanwhile, medium and small operators such as JD.com, Yhd.com, and Cntv.cn also enlarged their procurements.

IDC said that in 2014, the server market began to recover from the weak situation of 2013. In the second half of the year, traditional industries, including government, finance, telecommunications, and manufacturing, will will help the server market maintain stable growth.


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Chinese technology company Lenovo announced a new cloud computing program during its enterprise business strategy and ThinkServer Gen5 launch meeting.

The company also published its self-developed cloud platform management solution named ThinkCloud.
Gerry Smith, Lenovo Group's executive vice president, head of enterprise and head of Lenovo's North America operations, said that apart from PC, enterprise business is another major profit contributor for Lenovo. By acquiring IBM's X86 server business, Lenovo aims at the top of the global server market.

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