April 17- April 23, 2017
THE WEEK'S TOP STORIES:
WeChat doubles down on Mini Programs
WeChat scraps tipping feature on iPhones
Tencent invests USD 200M in second-hand trading platform
Baidu to open source autonomous driving technology
Former Baidu SVP sets up self-driving startup in the US
Alipay expands in SEA with helloPay merger and rebranding
Yidao founder blames LeEco of embezzling RMB 1.3B
LeEco plans sale of USD 420M Beijing property
Power bank rental business rise after rental bikes
Bike-sharing sector still hot, new startups more funding
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WeChat doubles down on Mini Programs
Mini programs - akin to lite functionality apps - have been a new function available within WeChat since January. With mini programs, users no longer need to download and install conventional apps from different app stores to access online services.
WeChat has rolled out a number of new features for its mini programs. On April 18, it enabled a new kind of QR code dubbed 「Mini Program Code」, through which users can directly access mini programs beginning with WeChat version 6.5.7.
The process of using QR Codes for mini programs is just the same as using regular QR codes to make payments or add new contacts in WeChat - long press and choose the 「scan」 option. According to the WeChat team, this new QR Code has been implemented to expand the different scenarios available for using mini programs.
On April 20, WeChat announced that WeChat Official Accounts can at most be associated with 13 mini programs. This limitation is meant to better integrate WeChat OA with mini programs so as to spike the usage of both features.
On April 22, WeChat began allowing Official Account operators to add a 「Mini Program Card」 to posts published through their OA accounts. Through this feature, users can access mini programs via articles posted on WeChat.
It’s quite surprising to see so many new features launched in such a short period of time with WeChat seemingly now heavily promoting the use of its mini programs. When mini programs were firstly released, WeChat deliberately restricted their ease of access. They could only be opened through scanning a QR code in offline consumption scenarios, through sharing a WeChat contact or chat group, or by directly searching for the name in the 「mini program」 tab.
WeChat scraps tipping feature on iPhones
On April 19 the WeChat team, citing new In-App Purchase terms by Apple Inc., announced the iOS tipping function on its Official Account(OA) platform would be shut down from 5:00 p.m. IPhone users will now no longer be able to tip emoji designers and content creators on WeChat through the tipping button at the end of an article.
Apple’s App Store version 3.1.1 terms and conditions stipulate that 「apps may not include buttons, external links, or other calls to action that direct customers to purchasing mechanisms other than IAP.」 Thus, WeChat either had to adapt its tipping function to use Apple’s own IAP mechanism or face the danger of being removed from the App Store. WeChat chose a third choice: it abolished its tipping function.
There are discussions on Chinese media that this incident signifies the wrestling between Apple and WeChat, both wanting to expand the influence of their own ecosystems. Putting aside these speculations, the direct victims in this incident are the content creators based on WeChat. However, a more worrying situation is: what if Apple is going to go hard on apps in the content business (including online education platforms, column subscriptions and online audio session providers)? They are the new innovations utilizing the paying-for-content trend in China. What if users do not want to use Apple’s IAP payment method? What other choices do they have if they don’t stick with Apple’s IAP?
Finance in the news
58.com, the biggest classifieds site in China, announced that its second-hand marketplace Zhuanzhuan, founded in November 2015, has received USD 200 million in investment from Tencent. Though the second-hand trading business in China has yet to blossom this hasn’t stopped enthusiasm for the sector. Zhuanzhuan’s biggest local rival is Xianyu, a second-hand trading platform owned by Alibaba.
Tencent also made a USD 143 million strategic investment in game developer xishanju.com. This gaming company, founded in 1995, is owned by Kingsoft and is one of China’s earliest gaming studios.
Baidu to open source its autonomous driving technology
On April 19 Baidu launched its 「Apollo」 project, announcing it would provide a software platform for its partners in the auto industry and autonomous driving sector. Baidu says it will open source its software capabilities in self-driving cars including: route planning, obstacle perception, vehicle control and operating systems, so as to accelerate the popularization of autonomous driving technology and help car manufacturers to make autonomous vehicles faster.
To be specific, the Apollo Project will encompass software and hardware and will be comprised of four parts, a vehicle platform, a hardware platform, a software platform and a cloud service.
The company will open up Project Apollo in July first for cars operating in restricted environments, then simple urban road conditions by the end of this year, and completely autonomous driving on highways and urban roads by 2020.
Baidu started its large scale development of self-driving technology in 2015. At year end 2015, its autonomous cars completed road tests on a route with mixed road conditions in Beijing. As of last July, Baidu had applied for 439 patents in autonomous driving technology. Last September, it acquired the road test license for autonomous car driving in California. On April 17, a vehicle with autonomous capabilities operated on highways for a test drive.
Former Baidu SVP sets up self-driving startup in the US
With Baidu’s Autonomous Driving Unit, once headed by former Baidu senior vice-president and general manager, Wang Jin, being integrated into the company’s Intelligent Driving Group(IDG), Wang announced his exit from the company at the end of March announcing he intended to start his own self-driving business. The Chinese media reports Wang’s new startup is named Jingchi Corp and was registered in the US in March.
In an interesting turn of events, China’s Didi rival, UCAR INC. initiated legal proceedings in California against the company. UCAR claimed that four Jingchi employees in charge of R&D at UCAR’s Silicon Valley autonomous driving lab, resigned on the same day on March 14 and joined Jingchi Corp. They were alleged to have stolen intellectual property and leaked commercial secrets
Ant Financial, the financial services affiliate of Alibaba Group, has bought helloPay, the payment service of e-commerce firm Lazada Group, in which Alibaba has a controlling stake with USD one billion from last April. The payment subsidiary is based in Singapore, however it has a presence in Singapore, Malaysia, Indonesia and the Philippines. After the deal, helloPay will be rebranded as Alipay, interpreted as part of the company’s effort to drive brand recognition in the SEA markets, where Alibaba has made a series of investments in payment firms in recent months. HelloPay is the firm's first foray into re-branding an acquisition under the Alipay name.
LeEco drama
Yidao founder blames parent company LeEco of embezzling its RMB 1.3b fund
Zhou Hang, founder of Yidao Yongche, a local Chinese Didi rival backed by LeEco, was rumored to have left the company earlier this month to join the VC firm, Shunwei Capital, founded by Xiaomi founder Lei Jun. On April 17, he publicly accused LeEco of having embezzled the RMB 1.3 billion investment that Yidao had raised previously, with LeEco alleged to have diverted it into its other brand name subsidiaries.
Although Zhou was the founder of the first Uber-style car-hailing company in China, Zhou had actually steadily faded out of Yidao's daily operations and management when LeEco became the controlling investor in Yidao in 2015 and placed its own people in management. This latest announcement is largely in response to the financial problems Yidao has been faced with. Impacted by its much troubled parent company LeEco, Yidao also has been faced with a cash crunch, especially following several rounds of subsidy wars conducted with the likes of Didi. Local media reports that Yidao has delayed payments to third-party customer service providers, seven promotion service providers and its drivers. Chinese media reports that on the 18th of April, several Yidao drivers paid a visit to Yidao headquarters to claim the deposits on their Yidao accounts.
Not long after the letter by Zhou, Yidao and LeEco made a joint announcement in the evening, accusing Zhou of slandering the company. LeEco claims that last November it took out an RMB 1.4 billion loan under Yidao’s name using a building owned by LeEco as collateral. RMB 100 million was used for Yidao and the remaining RMB 1.3 billion was apparently used in LeEco’s car arm, which according to the company, Zhou was completely aware of.
Three founding members of Yidao resign
Following the latest drama has been the resignation of three Yidao co-founders. It is rumored that Yidao is presently seeking a new round of financing, and original founder Zhou Hang is apparently trying to regain control of Yidao through investments.
LeEco plans sale of USD 420 million Beijing real estate
Reuters, citing people with inside knowledge of the matter, reports that LeEco is in talks to sell Shimao Gongsan, real estate in the central area of Beijing it acquired last year with USD 420 million. Sources tell Reuters that the company plans to sell either all or a majority of the retail property and it has been in talks with potential investors for months.
New Trends
Power bank rental business rises after rental bikes
Chinese entrepreneurs can’t get enough of the sharing economy. After the bike-sharing buzz, startups in China are now enabling users to rent power banks with this sector having seen quite an influx of capital. Five startups in the industry have received a combined RMB 300 million (USD 43 million) in finance, less than ten days since the beginning of April, with over 20 investment institutions entering the arena, according to a TechNode report.
Here’s a list of the major players in the field.(stats collected by TechNode)
Xiaodian: RMB 100 million Series A led by Tencent and Hangzhou Vision Capital Management.
Hidian: Eight-digit RMB angel round
Laidian: USD 20 million A round from SIG and Redpoint Ventures China
AnkerBox: Eight-digit RMB angel round from IDG and Sunwoda
Mobao: Seven-digit RMB angel round
There are now two major kinds of rental power bank, the first category is fixed charging stations placed in restaurants, stores in shopping malls and subways. This category is represented by Xiaodian and charges by time, accepting payment through mobile payment apps.
Xiaodian
The other category is portable power bank rentals, which can be rented for use and are required to be returned to power stations. This category is represented by Laidian and AnkerBox with both varying in the distribution of their power bank stations.
Laidian
Jiedian
Bike-sharing
Bike-sharing sector still hot, new startups more funding
Late comer to the field, Hellobike, founded just last September, announced it has completed a nine-digit RMB Series B funding round. Hellobike previously completed two financing rounds last November and this January, both led by GGV Capital with amounts not disclosed.
Hellobike
Chengdu-based bike-sharing startup, Yibu Bike, announced it has completed a Series B financing round with the amount undisclosed.
Yibu Bike
UniBike, another new comer to the market landed RMB 100 million in a Series A financing round. It is backed by Mobike, with RMB 5 million offered in a previous funding round and has been operating mainly in campuses as a side brand of Mobike. Mobike’s close rival ofo expanded its presence from college campuses. Now with new funding, UniBike plans to enter into cities.
UniBike
Ofo announced last weekend that it received a strategic investment from Alibaba finance affiliate, Ant Financial without disclosing the amount. The startup said it will partner with Ant on Internet and credit card payments and its international expansion plan.
Chart of the Week
According to pedata.cn, a big data platform owned by Zero2ipo, a leading investment institution in China’s private equity industry, there were altogether 234 AI companies from April 2001 to April 2017 that have landed funds from investment institutes. Among them, there were as many as 112 companies receiving funded in 2016 alone. And as of April, around 90% of them were before B series funding round (not included).
Written by Dannie Li and Rohan Malhotra
Recorded by Rohan Malhotra
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