Antivirus products and services have been a renewed battleground in China in the past couple of years, enveloping several of the country’s top web businesses. According to rumors in the industry heard by TechinAsia, that battle is now taking the form of these companies vying to acquire NetQin (NYSE:NQ), a China-based expert in mobile antivirus apps. Both Baidu (NASDAQ:BIDU) and Tencent (HKG:0700) are thought to be in the running, but the market value of NetQin is proving to be a bone of contention.

NetQin executives even addressed the rumors late last week in the earnings call after revealing their Q1 2013 financials. Directly alluding to the suitors, NetQin co-CEO Omar Sharif Khan said during the call:

Over the past several months, NetQin has been approached by both strategic and financial investors for potential investment opportunities with us, while we appreciate this interest. We remain focused on delivering shareholder value to successful execution of our strategic planning initiatives. We will not fail on delivering shareholder value.

A few minutes before saying that, Khan lamented “a significant gap that exists between the market valuation and our business results”, which could well be the sticking point in negotiations with potential major investors or acquirers. NetQin is currently at $8.25 per share with a market cap of $363 million. Khan elaborated on this pricing:

We’ve also always believed that if we continue to deliver stellar results and growth, the market valuation of the company would appropriately reflect the fundamentals of the company. As both the shareholders and executive management of NetQin, we are not at all satisfied with a significant gap that exists between the market valuation and our business results. Frankly, it’s unacceptable. I want to be crystal clear, we are absolutely committed to creating shareholder value and we will put in a relentless effort to closing the before mentioned gap.

Asked by Oppenheimer analyst Andy Yeung about a 100 percent acquisition, Khan declined to reveal more except for saying that “multiple parties” had shown interest in both financial and strategic investments.

We’ve reached out to Baidu and Tencent about these rumors.

Tencent began pushing strongly into the antivirus market in China in 2010, setting themselves up on a collision course with well-known software maker Qihoo (NYSE:QIHU). After Qihoo launched a search engine last summer, Baidu has retaliated in recent months with antivirus products for Windows PCs aimed at both Chinese and overseas consumers.

Acquiring NetQin would propel Baidu into mobile antivirus products on the Android and iOS platform (where it currently has nothing), and would boost what Tencent already has in terms of mobile antivirus offerings.

NetQin shares fell 14 percent from Wall Street seeing its Q1 financials on Wednesday night to close of trading on Friday. That’s despite revenues rising to $33.2 million in Q1, with operating income up to $2.3 million.

China’s biggest web company by revenue has just posted its Q1 2013 financial report. Tencent (HKG:0700) reports rocketing revenues and profits for the whole group, which covers products across social media, gaming, advertising, e-commerce, media, and more. Tencent’s quarterly revenues hit US$2.161 billion, up 11.5 percent on Q4 last year, and up 40.4 percent from the same period last year; net profits reached $649.4 million in Q1, up 17.3 percent QoQ or 37.4 percent YoY.

Tencent makes China’s biggest social export, WeChat. In today’s report, the company revealed that it now has nearly 195 million monthly active users on the social messaging app (194.4 million to be precise); that’s up 23.1 percent on the previous quarter, which is up 228.4 percent in a year. WeChat has over 300 million registered users, and is likely to exceed 400 million some time this month. As we noted last week, WeChat’s significant number of active users puts it close to surpassing Whatsapps’s 200 million actives, though about 90 percent of WeChat’s user-base is within mainland China, so it’s not that much of a global success yet.

Other social numbers:

• QQ instant messenger hit 825.4 million monthly active users, up 9.8 percent on Q1 2012. QQ’s peak simultaneous users reached 173.0 million, which was down 3.3 percent across the year.
• Qzone, the broader social network around QQ, got up to 611 million monthly actives, up 5.9 percent in a year.
• QQ Game Platform saw peak simultaneous users of 9.2 million, up 5.9 percent over the same period.

In other financial data, value-added services accounted for 78.7 percent of revenues in Q1 this year, reaching $1.72 billion. That’s up 13.6 percent from the last quarter. Online gaming revenues increased 19.3 percent over the same period to amount to $1.21 billion. That was mostly down to China-area gamers on things like Crossfire, and was boosted by increased gaming activity during Chinese New Year.

Founder, chairman, and CEO Pony Ma says in today’s report:

During the first quarter of 2013, we saw broad-based growth in user engagement and revenue across our key activities. This growth has enabled us to fund investments in longer-term opportunities such as WeChat international user acquisition, online video content aggregation, and e-commerce footprint expansion, while maintaining a healthy expansion rate in earnings and cash flow. We saw both strategic and financial benefits from our portfolio of investee companies, including a further special dividend from Mail.ru.

We will continue to invest proactively in innovation and technology, and to cultivate our open platform, in order to capture the mobile opportunities ahead and strengthen our position as the leading internet platform company in China.

WeChat hasn’t really been monetized so far, but Tencent will soon endow it with social gaming integration similar to what has been done by rival apps Line and KakaoTalk.

Find the full report on Tencent’s investor relations page.

Tencent’s (HKG:0700) chat service QQ is used by over half a billion people and is China’s top app for iPhone and Android. When the QQ mobile apps got a radical update and make-over recently to make them look more like WeChat, Tencent probably thought it was a great idea. But the vast majority of QQ users disagree – to the point of anger, hatred, and vitriol.

The new QQ v4.0 for iPhone currently has an average user rating of one star. Of 41,482 reviews of the updated app in the iTunes App Store, an astonishing 39,298 people (that’s 94.7 percent) have given it the lowest star rating. Prior to the WeChat-inspired update for QQ, the instant messaging (IM) app had been enjoying mostly five-star feedback. This is the scene now:

The anger is mostly about the looks – with users mockingly calling it a “second hand WeChat” – as the QQ v4.0 update for iPhone (or v4.1 for Android) has taken on less of a traditional IM user interface. For example, there’s no longer an indicator light besides contacts’ names on your QQ contacts list, so you can’t see who’s online until you click their name. Also, the chat window now looks more like a new-style messaging app – ie: more like WeChat or Whatsapp – which means that there’s a lot of wasted space in between users’ words (pictured top).

It seems that Tencent has not taken into account that their two very popular apps – WeChat will soon hit 400 million users – are used quite differently. QQ tends to be activated when someone specifically wants to chat, so that necessitates clearly seeing who’s online and being easily able to view a fast-paced conversation in one window. WeChat, in contrast, is for more casual messaging, sort of like a replacement for SMS.

QQ users are certainly making their displeasure known wherever possible. On the official ‘Mobile QQ’ account on Tencent Weibo, worried iPhone users are asking how they can downgrade to the previous version; others are telling Tencent that the update is “garbage”, “disgusting”, and “dogshit”. Over on the third-party Baidu Android app store, commenters are being more polite, asking and pleading for previous IM-like features to be restored.

One very useful feature from WeChat that’s in the new version of QQ is that it now supports group chats for up to 50 people. These can be accessed by sending invites through the app, or by sharing a QR code. I’ve been at a conference where this WeChat group chat feature was used to let audience members ask questions to onstage speakers, which was fun; that could also be put to great use in QQ. That is, if QQ has any users left after this kerfuffle.

(Hat-tip to Sina Tech for spotting this – article in Chinese)

With 190 million monthly active users on WeChat, that means the fast-growing app is poised to pass Whatsapp, which has 200 million monthly actives in new data revealed in April.

But Whatsapp enjoys far more international success. Tencent recently revealed that WeChat has 40 million users overseas, meaning that its reach beyond China is far smaller than Whatsapp’s – and behind Japan-made Line app as well.

Hou Xiaonan’s number, spotted by Marbridge Daily, was revealed yesterday at the final day of the Global Mobile Internet Conference (GMIC) in Beijing. The day before that, we saw Tencent CEO Ma Huateng explaining some of the company’s strategies and visions for more mobile success.

This is part of our coverage of GMIC 2013 in Beijing, which was on May 7 and 8. For other stories from this event, click here.

Sina’s report cites a “knowledgable” source in “investment circles” as saying that Sogou is looking for a buyout, and the three aforementioned internet giants have jumped at the chance. According to the source, Qihoo has offered a $140 million deal that includes cash and stock options, Baidu is offering more in cash (he doesn’t cite a specific sum), and Tencent is mostly in the mix because it wants to be sure Sogou doesn’t go to Qihoo.

Furthermore, the report suggests a difference of opinion high in Sogou’s ranks, with CEO Wang Xiaochuan wanting to take the Qihoo 360 deal while board chair Zhang Chaoyang would prefer to sell to Baidu. But as Zhang has reportedly been taking more personal time of late, Wang has been taking the front seat in the proceedings, and Sina’s source says, “it’s a bit more likely that [Qihoo] 360 will win.”

Of course, this is still just a rumor, even if these kinds of rumors do seem to be coming true a bit lately. We’ve contacted Baidu, Qihoo 360, and Tencent for comment, and will update this story if we hear back, but we don’t expect much as most companies have a general policy of not commenting on rumors. All three of them declined to comment for the Sina Tech story (although apparently none of them denied it outright, which is interesting). Sogou CEO Wang Xiaoquan has called the rumor “unreliable” on his Weibo account.

By some counts, Sogou has the third-largest market share in Chinese search, so acquiring it would be a big boost for Qihoo, which has been struggling to close in on Baidu after its initial grab of more than 10% of the market shortly following its launch. But Sogou’s real value may lie in its widely-used Chinese input method software. The company has already begun to integrate search into its input method in a way that I think is potentially very significant. New applications of that concept could be a nice — and very valuable — bonus that comes along with the boost in market share of buying Sogou.

(via Sina Tech, image deleted)

It’s worth noting that compared with Q4 2011, Alibaba also has had the strongest growth both in revenue and profits.

If these numbers are any indication, Alibaba is likely to hold that top spot on the profit charts for some time to come. But of course, all of these companies are making gobs of money, so I don’t imagine any of them are going to be all that upset about who places where on this ladder.

It’s also worth noting that Tencent’s fall in profits could be due to increased investment in WeChat, which is fighting similar apps like Line and KakaoTalk for international users, and which hasn’t been fully monetized yet. Baidu is also moving internationally – we just spotted the company making inroads into Indonesia — and splashed some cash on a big local acquisition, too. And of course, Alibaba is clearly not going to be content to rest on its laurels, as it just invested a boatload in Sina Weibo and rumors are swirling about a number of other acquisitions and a possible IPO on the horizon.

(via Sina Tech)

Tencent’s Pony Ma (sat on right) takes questions from the host and a panel of industry experts.

This afternoon at the Global Mobile Internet Conference (GMIC) event in Beijing, Tencent’s ‘Pony’ Ma Huateng was on stage speaking about his company’s strategy and future. The first question was about the struggle Tencent’s WeChat has with China’s mobile telcos, which is one of the hottest tech topics in China right now. But Ma seems confident that WeChat isn’t going to charge users.

Ma was questioned how WeChat will be monetized by Tencent (HKG:0700). There are quite a few methods – stickers and games – as the onstage panelists suggest. (Line and KakaoTalk have been doing all these so successfully). Ma agrees that these are indeed the ways to make money for WeChat. Another way to make money, he explains, is via offline to online services and also digital products, such as an artist who could share their art on mobile platforms like WeChat. That sounds a lot like digital publishing which Line and KakaoTalk recently started doing.

The next question asked was if QQ, Tencent’s traditional IM service, will cannibalize WeChat. Pony explained that their functions are different, for example push-to-talk and voice messaging never existed on QQ. QQ’s active users are double that of Wechat. Ma says that companies can’t just have a department that helps desktop products turn into mobile products. Rather, there must be a department that needs to focus entirely on building for mobile from scratch.

Ma says that mobile is a very tricky industry; despite the existence of a lot of giant web companies, many of them may not be winners in the end. Tencent is always not at the start of the wave nor at the end. It always comes in at the right time, the host states.

The onstage host commented that Tencent is winning on every front on the Chinese web, especially mobile. But Ma humbly said that search and e-commerce aren’t successful points for Tencent. Indeed, it’s Soso search engine, and its various e-stores, like Paipai and QQ Buy, have always struggled.

Learning from Facebook

Ma says that overs the years, Tencent learned that it couldn’t do everything and will be working with third-party companies closely in the future. He also confirms that WeChat will have social games and assures game developers that Tencent will not be providing their own games. Ma now sees Tencent as a platform company rather than a content company.

The founder and CEO adds that Facebook is the first successful open platform on the web, and that emerged back in 2007. Tencent only got into this kind of space in 2009. Ma says that doing an open platform is technically challenging and must be done with care. So it took Tencent two years, starting in 2011, before Tencent really pushed itself as an open platform company. If I’m not interpreting this wrongly, Tencent seems to be prepping hard for its mobile gaming platform despite seeing KakaoTalk and Line out in the market already.

Will Tencent go into hardware? Ma says he is interested but doesn’t have a clear plan on hardware. One thing’s for sure, Tencent isn’t going to work on a phone. There’s no clue about Tencent doing a Google Glass-like device either.

Pony Ma is also famous for testing the user experience of his own products. Ma explains that he will try to imagine himself as an average user or a not so savvy user to test applications. He says that besides providing a great user experience in its applications, Tencent’s success factor is to keep innovating.

Competition, innovation

WeChat went global in 2012. It now has nearly 400 million users – but most are in China.

Commenting on Alibaba’s investment in Sina Weibo last week, the Tencent CEO says he doesn’t feel threatened; rather, he feels that it is only natural. Instead of clashing, Ma suggests that the real challenge is to keep innovating and create new technologies to serve people better.

When the host asked the panelists if WeChat can help Tencent get on the global stage, all but one person raised their hands. Ma himself feels 50/50 about this opportunity, noting that there are strong competitors overseas – a reference, I believe, to Whatsapp and Line. But as Ma has always said, mobile has given Chinese companies a good chance to innovate and succeed globally.

Ma actually met the NHN Line CEO this afternoon and revealed that there might be a way to collaborate. Both of them agree that once a chat app is popular in the country, it tends to stick on unless something major crops up. Ma explains that in the future, there could be more collaboration. But for now, Line and WeChat are competitors both in China and in the international markets (also note that Tencent has invested in rival Korean-made app KakaoTalk). And Ma believes that to do well globally, localization is important. For example, some aspects of WeChat in China (where the app is called Weixin), such as the ‘drifting bottle’ with secret messages that go out to random people, have been removed from international versions of the WeChat app.

Ma concludes by saying that he is enjoying the journey now as Tencent’s WeChat expands globally. And, regardless of the result, win or lose, he will be giving his best shot to put Tencent and Chinese tech companies on the global map.

This is part of our coverage of GMIC 2013 in Beijing, running today and tomorrow (May 7 and 8). For other stories from this event, click here.

We know that Tencent is developing a social gaming platform for WeChat, its popular messaging app, but so far we’ve not heard about its mobile gaming ambitions. Now, vice-president of Tencent’s Game Division Ma Xiaoyi has explained how WeChat’s gaming features will be influenced by more than a decade of Tencent’s experience in both casual and hardcore gaming, and suggests that the platform will be integrated with QQ, the company’s ubiquitous instant messenger service that already has game and virtual currency elements and also other core mobile products including its Android store, MyApp.

Talking today at the Global Mobile Game Confederation (GMGC) event in Beijing, Ma added that WeChat will be aiming its gaming platform initially at Chinese mobile gamers who he predicted to be at 300 million by the end of this year. Basically, that’s everyone with a half-way decent smartphone. That makes the Chinese mobile gaming market, Ma reckons, worth around RMB 60 billion (about US$9.68 billion) in a year.

Ma shared more about Tencent’s unified platform (translation ours):

In the future, Tencent will release a unified mobile gaming platform. This platform will comprise of Tencent’s main mobile applications. Through this unified platform, we can create an excellent platform for our developers to bring the best games to our users.

Echoing CEO and founder Pony Ma’s view, Ma believes that mobile has provided a great platform for Chinese companies to rise. He says in his speech today that China was 30 years late on video gaming compared to Japan and US, 15 years late on PC gaming compared to US and Europe, and five years late on web gaming compared to Korea. But for mobile gaming he believes that China is finally on the same starting line as other nations. With Tencent’s loyal gamers, reach, proven business model, and resources, Ma is hopeful to work with China’s most talented mobile game developers to bring the best games to users on both WeChat and mobile QQ.

WeChat’s social gaming elements will rival similar platforms from Line, KakaoTalk, Apple, GREE, and DeNA. Tencent is already China’s top gaming and internet company, posting company-wide revenues of $7 billion for full-year 2012.

(Source: Techweb – article in Chinese)

We know that Tencent (HKG:0700) is working on a social gaming platform for WeChat, its popular social messaging app, but what else is in the pipeline? According to industry analyst Guan Peng, the next major version of WeChat app, which will be v5.0 for iPhone and Android, will come with support for three major new features.

Anticipating that WeChat v5.0 will appear later this month, he reckons we’ll see:

• Paid publishing or subscriptions for accounts on the WeChat public platform – ie: those run by celebrities, media outlets, and brands.

• Mobile payments with users able to scan QR codes to make payments within WeChat.

• Social gaming integration will arrive as promised.

In addition to all that, Guan Peng expects the WeChat brand/celebrity accounts to be given more emphasis and prominence.

Of course, none of that is officially coming in WeChat v5.0. We know there is a social gaming platform coming for sure – similar to those from rival apps Line and Kakaotalk – but it might not be ready to go live this month. E-payments are far from a certainty as well; indeed, when we listened in on Tencent’s most recent earnings call in March – revealing $7 billion in revenue in 2012 – Tencent president Marin Lau had this to say of mobile payments:

We take a long-term view – there are so many hurdles and a lack of standardization [for payments]. So it’s an experiment that we take a lot of interest in, but it takes a long time to see what needs to be done to build a business model on it.

As for paid publishing or subscriptions for content, that’s also an area covered by Line and KakaoTalk. Just a few weeks ago, KakaoTalk rolled out its KakaoPage platform for selling digital content, while Line recently started selling e-books. Neither of those will impact WeChat in China, we suspect, where most of its users actually are, but it’s interesting to see these similar patterns.

It’s conceivable that WeChat will pursue many other channels in the future as well, such as a rumored mobile wallet capability.

My own feature request for WeChat is a badly needed makeover – especially for its slow and clunky Android app with its dated, pre-Android 4.0 stylings.

(Source: Techweb – article in Chinese)

Tuesday marked the beginning of the blockbuster Call of Duty franchise’s first real entry into China: Call of Duty Online. Western publisher Activision has paired with China’s Tencent to launch the game in China, and while not everything is online yet — microtransactions aren’t yet available and it’s called “closed beta” for a reason — we should soon begin to see how China’s gaming marketplace will react to the game.

On the one hand, there’s every reason to expect success. Call of Duty is a popular franchise everywhere — China is not an exception — and having an official version and official (hopefully lag-free) servers on the mainland should help to increase the franchise’s popularity.

Even so, though, I have to wonder if the game is offering enough. While it’s being billed as “a totally new game” on the official site, there isn’t much to it that’s new at all. For example, the “new maps” in the latest alpha build of the game are almost all from previously-released Call of Duty games, including a couple from the original Modern Warfare game that is now more than half a decade old.

And while previous Call of Duty games were never marketed to Chinese players, many Chinese gamers have played them. Indeed, Call of Duty titles are among the most widely pirated in China (if street-side pirated game salesmen are any indication). For many Chinese gamers, these “new maps” are six years old because they played the original Modern Warfare at the same time everyone else did. So what’s new and exciting about Call of Duty Online for them? As far as I can tell: nothing, except for the fact that they now have the opportunity to pay for things in the game. Oh joy.

To be clear, I still expect Call of Duty Online to do well, if for no other reason than that the promise of being able to play lag-free games on Tencent’s servers is going to entice a lot of FPS gamers into trying the game out (again). But I suspect a subset of Chinese gamers will still be a bit miffed about having what is very clearly old content repackaged and shoved in their faces while Activision and Tencent shout about how it’s “all new.” Chinese FPS fans have played Call of Duty games and they are not idiots; the game may be fun but there isn’t much about it that’s actually new.

With that said, we’re still planning to take the new game for a spin and kick the tires a bit once it comes out of closed beta. It will be interesting to see just how deeply Tencent and Activision have embedded microtransactions into this game, and whether they ultimately enhance it or cripple it. My hopes are for the former, but neither Activision nor Tencent have a great record when it comes that sort of thing, so we’ll have to wait and see. In the meantime, though, don’t believe the hype about Call of Duty Online being “all new.” It’s not.

Earlier this week, the Guangdong Higher People’s Court ruled in favor of Tencent and against Qihoo in a lawsuit filed over the “3Q War” between the two companies that kicked off in 2010. Qihoo was ordered by the court to pay $800,000 to Tencent and to display a prominent apology to the company on its websites.

If this all sounds familiar, it’s because Qihoo has made something of a habit of losing lawsuits to Tencent, having done so previously twice before. But Qihoo’s executive team remains unbowed, and in the wake of the decision, the 21st Century Business Herald is reporting that several executives including blustery CEO Zhou Hongyi have criticized the ruling.

Their beef revolves around the court’s justification for the decision, namely that Tencent’s QQ instant messaging service isn’t a monopoly because it has strong domestic (Sina Weibo) and international (Facebook, MSN, etc.) competitors. Zhou’s argument is essentially that Sina Weibo is too different to be considered a competitor, and that the international competitors shouldn’t count because they are either too different or too unstable or inaccessible in China to count as competitors.

Qihoo vice-chair Qu Xiaodong added that if QQ and Sina Weibo were similar products, Tencent would not have felt compelled to release its own weibo microblogging platform. Chairmain Ji Xiangdong also shed some new light on the cause of Qihoo’s complaints for the first time, apparently telling reporters that when Tencent forced users to choose between QQ and Qihoo’s 360 Safeguard antivirus software, 20 percent of Qihoo’s users uninstalled the software in a single day. Given Qihoo’s user numbers at the time, that would mean that Qihoo lost 40 million users literally overnight. Damn.

Anyway, it’s hard to imagine what Zhou and company hope to accomplish by criticizing the court’s decision publicly, but if the past is any indication, we can look forward to both companies being embroiled in ugly legal battles for the foreseeable future.

(21st Century Business Herald via Sina Tech)

A web-based battle between two Chinese internet giants that dates back to 2010 is finally being put to rest today. Sort of. The Guangdong Higher People’s Court has this afternoon ruled partially in favor of Tencent (HKG:0700), and against Qihoo (NYSE:QIHU), in a legal wrangle over desktop antivirus software. While the judge dismissed Tencent’s claim to RMB 125 million (US$20 million) in compensation for supposed economic loss, Qihoo is now ordered to pay RMB 5 million ($800,000).

In addition, Qihoo must display a prominent apology to Tencent on one of its portal homepages for a period of 15 days. We’ve reached out to Qihoo for comment, and also to find out where the apology will be placed.

Tencent’s lawsuit alleged anti-competitive practices by Qihoo in the heat of a very ugly and public spat in late 2010 between the two companies over antivirus software. It centered around Qihoo’s ‘360 Safe’ antivirus software for Windows PCs and Tencent’s newer QQ antivirus product. The tit-for-tat battle at that time astonished Chinese web users as the rival companies used their software to launch pop-up notifications accusing the other of misdeeds such as blocking their rival app from operating on the computers of people who had rival software installed. At one point, Tencent accused Qihoo of configuring its antivirus software to prevent people from using Tencent’s QQ instant messaging app – and that was a central point of this lawsuit. China’s long-suffering netizens dubbed it the “3Q War” (as in: QQ vs Qihoo).

Back in 2010: Qihoo’s Privacy Protector app accuses the Tencent QQ free antivirus app of scanning and reading sensitive computer files.

Qihoo, for its part, maintained that it was preventing Tencent’s software from accessing excessive personal information.

Qihoo’s own lawsuit against Tencent was rejected last month by the same court, resulting in Qihoo being ordered to pay RMB 790,000 ($125,000) in legal damages. Qihoo lost another verdict in a Beijing court in 2011 over the same affair, and was fined $62,530 for “slander and unfair competition.”

We’ll update when/if we hear back from Qihoo. Perhaps the 3Q War is finally over. The biggest losers in the whole thing, however, are the Chinese software users who got screwed over by both companies.

(Source: Donews – article in Chinese)

The TV commercial (video above)  will feature WeChat’s so-called Super-Duo Ambassadors, Alan Luo Zhi-Xiang and Rainie Yang (pictured right), who are renowned artistes from Taiwan. The ad will include the duo acting as a couple while introducing the functions of WeChat to the audience. For our readers in Singapore, you will be able to catch the TV ad on Channel 8, Channel U, W drama, and E-City starting this week. It seems that the same video used for promotional purposes in Taiwan will be used in Singapore too.

Speaking about this launch, Louis Song, country manager of Tencent’s International Business Group (Malaysia and Singapore), said the Chinese web giant hopes to strengthen its market position and increase its user adoption within Asia:

Singapore is a very strong market like Hong Kong, Taiwan, Malaysia, and Thailand – we are witnessing a sturdy growth in mobile application platforms.

As we mentioned recently, WeChat currently boasts 300 million users worldwide, with 40 million overseas users.

The company’s stock price has been jumping around quite a bit over the past half year, reaching heights of over $280/share in November 2012 and early March 2013, but also dropping repeatedly to below $250/share. Its current price sits at almost exactly $250/share, and Sina Tech’s report on the stock buyback hypothesizes that Tencent is looking to calm things down a little bit, and perhaps boost investor confidence in the stock.

Whatever the reason, if the company continues to buy back stock over the course of Friday, it will likely approach the $100 million mark. Luckily, Tencent is one of the few Chinese internet companies that has that kind of cash to throw around. Even if WeChat’s monetization is still in the early stages, the company is still making boatloads off its games and other services.

(via Sina Tech)

Couple of hours ago, WeChat sent an official update to all of its users in China that the mobile messaging app will remain free for users. In recent weeks, rumors have it saying that users might have to pay to stay on the mobile chat service. So this official note (see below, in Chinese) sent via WeChat to its users does help put the matter to rest for now.

But still, that doesn’t necessarily mean that Tencent will not be paying the telcos to keep WeChat up and running. The Chinese government and telcos are putting pressure on Tencent’s WeChat stating that someone has to pay the bill, which is of course ridiculous, in my opinion.

While WeChat has lifted Tencent onto the international stage, pressure from the local government and telcos has caused unnecessary distraction for CEO Pony Ma and team.

In recent news, WeChat looks to be prepping up its mobile gaming platform with some of its leaked games looking similar to KakaoTalk’s game. Tencent also recently announced that out of its 300 million users, 40 million are international users.

(Via: QQ tech)

Needless to say, users were not pleased, and there was some speculation that the outage was the result of China’s telecoms exacting revenge on WeChat in the ongoing kerfuffle over whether or not WeChat should have to pay for its access to China’s telecom networks. But with a few hours, Tencent responded with a post on WeChat’s official weibo account, saying that the outage was actually the result of a hardware malfunction, but that the result had already been corrected. The issue, according to the weibo post, affected only “a minority” of WeChat users and lasted for just ten minutes.

Though it might not seem that way, this incident is probably a good sign for WeChat. Obviously no one likes service outages, but the fact that WeChat going down for just ten minutes resulted in so many users complaining and posting on Weibo about it is an indication that WeChat has already become a must-have service for many of its users. When your service goes down for ten minutes and that makes the front page of China’s biggest tech news sites, you know you’ve clearly captured the hearts and minds (or at least the attention) of China’s smartphone users and its tech industry.

(via Sina Tech)

(UPDATE: Tencent responds by saying: “Tencent is in the process of building a mobile games open platform, which is positioned to increase engagement with mobile Internet users — both wireless QQ and Weixin/WeChat. To facilitate the testing of our new open platform, we are developing some games internally and also sourcing from third-party game developers. We are in the early stage of preparation, and have not released any screenshots or images of these games. As the largest game platform in China, we have deep respect for intellectual property and will work with related parties to enforce intellectual property protection on our game platforms.”).

As with platforms like Apple’s Game Center, or the gaming elements of rival chat apps KakaoTalk and Line, the titles will require gamers to sign in – this time with a WeChat (or a Tencent QQ) username – so that you can challenge buddies within the game. The leaked photos, as seen on iFanr, show three similarly named casual games. They’re called WePang (seems like a bit of a rip-off of Anipang, which in turn is basically just Popcap’s Bejeweled), WeLink, and a parkour game called WeRunner:

Tencent is already China’s top gaming company by revenue, with a range of both casual and hardcore games across numerous platforms. But its QQ-based social gaming, which is hugely important to the company’s revenue, is reliant on desktop gaming and its old-style QQ IM service, so Tencent needs to brings its game face to mobile with its popular WeChat app.

WeChat has over 300 million users in total, of which about 40 million are outside of China.

(Source: iFanr – article in Chinese)

China’s Ministry of Industry and Information Technology (MIIT) is pressuring Tencent to subsidize telcos in China for supporting the huge data demands of WeChat’s user base. There are a total of 300 million WeChat users globally and 260 million residing in China. According to Chinese authorities, either Tencent or its users has to foot the bill. But Tencent president, Martin Lau, confirmed over the weekend that WeChat will remain free to users. Good news for users, at least for now.

I find this whole subsidizing the telcos fiasco ridiculous simply because users have actually paid or will be paying for their data packages when using any mobile service. Whether the app is used frequently or not, users shouldn’t be footing an extra bill for data just because the app is popular or uses more data in relative terms than other apps.

While it is assuring to hear from Tencent that it will not be charging users, the Shenzhen-based company can’t stop telecoms firms from jacking up their data packages (which is okay in a free market). Sure, there are other telcos in China that users can switch to. But make no mistake that they are equally unhappy with their shrinking revenue from SMS – and heavy data traffic – because of WeChat. So it is possible that the telcos may gang up to fight against WeChat. Of course, telcos have vested interests and run their own similar messaging apps – China Mobile has Fetion, for example – so there’s an element of preserving their own OTT offerings.

If Tencent is forced to subsidize the telcos to keep WeChat running, then Sina Weibo and other popular social apps out there will be pressured to do the same. If the big boys are facing such crap in China, imagine it happening to a startup whose app got really big but couldn’t grow because the mobile telcos demand a subsidy to keep it running. Tencent, as China’s biggest web company, is probably big enough to get through this. But a bootstrappy startup is likely to be crushed by the demands. It will be tragic for startups in China if that ever happened. And that is why I’m rooting for Tencent to win this battle against MIIT and the telcos – just so WeChat will not be used as a case study of how it is OK for a popular app to subsidize the mobile networks.

Yesterday at Boao Forum For Asia 2013, Tencent president Martin Lau revealed on stage that WeChat has over 40 million overseas users. That’s out of a total user-base of just over 300 million.

Echoing the thoughts of Tencent founder and CEO’s Pony Ma thoughts, Lau believes that mobile internet growth has given a chance for Chinese and Asian technology companies to put themselves onto the global stage. That also includes WeChat competitors, such as NHN Japan’s Line and Korean-made KakaoTalk which has 120 million and over 70 million worldwide users, respectively. Lau also claims that WeChat has topped the app store in Malaysia, the Philippines, and Indonesia. For Malaysia and Indonesia, Lau said that WeChat has become the favorite smartphone application in the country.

Including China, WeChat has over 300 million users in total and has dedicated offices across the world, including Indonesia (a joint venture with MNC), the US and Thailand (via Sanook) to grow its user-base. Last year, Tencent generated $7 billion in revenue with an operating profit of $2.46 billion.

(Also read: Heatmap of WeChat Users Around the World)

(Source: iFeng)

WeChat will definitely have to pay fees, but specifically how those fees will be collected is still being considered and researched.

Tencent hasn’t responded officially (most of China is still on vacation for Tomb Sweeping Day), but separately the company did deny several rumors about specific payment strategies through its official WeChat microblog account on Sina Weibo. The message, which was posted after the release of the Securities Market Weekly report, does not explicitly state that WeChat doesn’t plan to start charging a fee, it merely debunks three specific rumors about fee structures that had been making the rounds online.

Assuming that WeChat does start charging users a fee, Tencent’s baby could be in big trouble. A Xinhua online poll found that around ninety percent of WeChat users say they’d ditch the service if it started costing money. But the MIIT official’s wording doesn’t preclude the possibility that Tencent might pick up the bill without passing the costs along to its customers. And since passing the costs to customers seems likely to sink the app altogether, it seems likely that Tencent will try its hardest to keep the app free and instead cover the fees through online-to-offline e-commerce, added-value services, and games. (For more on Tencent’s three-pronged WeChat monetization strategy, check out this report).

(Securities Market Weekly via Sina Tech)

A Tencent customer service representative explained the process to Sohu IT:

[When setting up an Open Platform account], please fill out the personal information truthfully, and after you submit it this information will be verified by the relevant employees. Before the verification has been completed, you can log into Open Platform, but if the information can’t be verified you will get a notice within around one hour to resubmit your personal information. If you do not do this within 24 hours, you will no longer be able to use your Open Platform account.

Although there seem to be a few bugs in the system — the Sohu IT reporter claims to have signed up with real information but his account was still shut down — a real-name system for Open Platform isn’t likely to ruffle feathers the way Sina Weibo’s service wide real-name requirements did last year around this time. Most companies will likely be thankful for such a system, which should prevent malicious companies from posing as competitors on WeChat in order to hurt their PR efforts.

It’s not clear yet whether this applies just to Open Platform users within China or whether it is the rule for everyone. But at the moment, Open Platform is mostly targeted at Chinese users anyway; there doesn’t’ even seem to be an English-language version of its official site.

(Sohu IT via TechWeb)

The new app, which will be called Yixin, will reportedly be based on China Telecom’s existing chat app Yiliao. The name “Yixin” is itself a little reminiscent of WeChat, borrowing as it does the “xin” from WeChat’s Chinese name Weixin. Sina Tech claims that according to industry insiders and insiders at China Telecom, the company will have a partner in developing and releasing this new app: Netease. Supposedly, China Telecom board chair Wang Xiaochu and Netease CEO Ding Lei have already met in secret to work out a partnership agreement that would see the two companies collaborating on Yixin in the hopes of dethroning Tencent’s mobile messaging giant.

Neither company has yet confirmed the partnership (and a China Telecom spokesman has already denied it), but a Sohu IT report picked up by Chinese state wire service Xinhua features an image of the rumored app in action (pictured above) and provides more detail on the nature of the partnership. According to the article, Netease will help China Telecom add features to and upgrade Yiliao while at the same time integrating its own user account authentication process with the app so that Netease users can log in easily. If the image above is real, it seems that much like other chat apps, Yixin will allow users to share recorded audio, photos, videos, locations, and emoticons with each other in the chat window.

If the rumors do prove true, Netease and China Telecom will certainly have their work cut out for them. WeChat already has more than 300 million users, and most of them are in China. Coming from so far behind, Telecom and Netease are going to have to offer users a very compelling reason to pick Yixin over WeChat, and based on the screenshots above, I just don’t see it. Don’t get me wrong; Yixin looks like a perfectly competent mobile messaging app, but WeChat has the brand, the user numbers, the momentum, and a few cool extras like its business card exchange feature. To enter the game at this stage, China Telecom and Netease would need something pretty revolutionary to take the wind out of WeChat’s sails. I don’t see anything like that in the screenshot above, and neither company has anything approaching the pedigree of Tencent when it comes to chat applications.

Of course, the partnership is still just a rumor, although there seems to be plenty of testimony and even a little photographic evidence that it is real. Since China Telecom has denied the rumor, it seems likely that any product launch is still quite a long time away, if it ever happens at all. A lot could change between whenever the screenshot above was taken and whenever Yixin actually sees the light of day. Perhaps China Telecom and Netease will be able to pull a rabbit out of their hat, but with WeChat at 300 million users and growing fast, it’s going to have to be a pretty damn big rabbit if they hope to stand a chance.

(via Sina Tech, and Sohu IT via Xinhua)

You may not have heard of Sanook, but by internet standards, the company is a grizzled veteran in Thailand, founded by Poramate Minsiri way back in 1998. Over the years it has expanded to offer a number of services and products, including e-commerce, games, news content, advertising, and mobile applications. Today, it is the largest web portal in Thailand.

The company’s e-commerce arm includes Dealfish, a C2C e-commerce marketplace and Sabuy, and B2B2C e-commerce site. This division is led by managing director Tiwa York. The internet portal section and other divisions like mobile, games, and advertising are led by Krittee Manoleehagul, the managing director at Sanook Online Limited.

Part-owned by Tencent and MIH

Sanook started as a Thai-based web directory in 1998 under parent company MWEB. After just a year, MWEB was acquired by MIH Group (under Nasper) (1).

In 1999, the Thai company rebranded fully to Sanook and placed every entity under the single domain of Sanook.com. Back in the 90s, there wasn’t any Thai language portal, and portal sites were really the big thing in the internet business. It took off, and in August 2010, Tencent bought 49.92 percent of Sanook.com. At that time, Sanook.com had about 13 million monthly unique visitors generating 400 million pageviews a month.

Sanook, Mobile, and WeChat

Today Sanook.com boasts a whopping 18.5 million monthly unique visitors generating over 500 million pageviews each month. It has its own editorial team but also syndicates content via other web sources as well.

Krittee says that the top three priorities of his department are WeChat, Sanook.com, and mobile. He estimated that there are about 10 to 15 million smartphone users, about 20 percent of the Thai market, and that number will continue to grow over time. Moving with the mobile trend in Thailand, he says that some of the most popular content on the Sanook portal (like horoscopes, news, and restaurant reviews) are now available on app stores. Krittee adds:

Tiwa and I started looking at certain verticals and said, “Look, this has potential let’s pull it out.” […] Like restaurant reviews, eventually who knows, we might be able to develop it into a business where users can book in advance through the application. [It’s more than just] reviews, you can do more than that.

Tiwa York (Left) and Krittee Manoleehagul (right)

Working with WeChat

The Thai internet giant also runs the mobile messaging app WeChat in Thailand as Sanook is partly owned by Tencent, one of the largest internet companies in China.

For Sanook, working with brands is one of the key strategies they believe can add value for Thai users. Krittee cities Thai beverage giant Chang as an example, the brand that provides utility convenience to its users through WeChat. Users can order deliveries from Chang (E.g. Water refills), a classic case of online-to-offline engagement through mobile.

From a business point of view, Sanook does not only provide online engagement through WeChat for brands. It provides more of a holistic online marketing platform by offering advertising media on its portal. It also helps manage the brand’s Facebook page through Sanook-owned ad agency, Top Space.

We just started this (WeChat engagement) at the end of last year. I don’t think the brands [in Thailand] really understand this whole concept yet. And that’s what we’re trying to do. We see ourselves as marketing consultants […] making them think about the customer lifecycle and how to reach their customers across every touch point.

Krittee said that the number of WeChat users in Thailand “is in the millions” but declined to give an exact figure.

Games are also another one of Sanook’s key verticals. Right now Sanook does Flash and social games but Krittee doesn’t believe that it’s the future. Mobile games will be its focus. Sanook licenses game content and localizes it for the Thai market. WeChat, as faithful readers know, is working on a mobile gaming platform but Sanook’s games won’t be on the platform right away. Krittee is careful not to be overly reliant on WeChat and doesn’t want to start plugging too many things into WeChat just yet.

E-commerce: Sabuy and Dealfish

Sabuy and Dealfish are the two key e-commerce divisions under Sanook. Dealfish, Sanook’s C2C marketplace, was established as a standalone website in September 2011. According to local web analytics site Truehits, Dealfish attracts more than 250,000 unique visitors each day and has an average of 240,000 listings (with a 45 days auto-expiry) generated by 213,000 sellers.

Dealfish works more like a Craigslist rather than something like Taobao — meaning it does not facilitate transactions between users. Embracing social, Dealfish allows cross posting from Facebook to its marketplace listings. The service also has city/region-level listings. For example, chiangmai.dealfish.co.th allows users to view all the listings from Chiang Mai only.

The site is currently free to use, although Tiwa does have plans to implement a freemium model for more serious sellers on Dealfish. But monetization is not yet on his list of priorities. He tells me:

The whole role of business (for Dealfish) is to connect and activate local commerce. Our vision of the business is just that. That’s why we are not in the hurry to monetize. We want to actively provide a great service where people can trade.

Tiwa also revealed that Dealfish will soon roll out its mobile application which inevitably seems to be a direct competition with Shopspot.

In addition to Dealfish, Sanook also has its B2B2C e-commerce property called Sabuy, which is home to more than 1,400 merchants with 210,000 products listed. Sabuy was first launched in November 2007 in a partnership with eBay. After the partnership expired at the end of 2011, Tiwa and his team rebranded it to Sabuy and ran the e-commerce site under the Sanook brand.

We wanted to take the Sabuy business in a certain direction, and we have a vision for being a brightly lit mall model that is safe for all buyers.

The rebranding of Sabuy in late 2011 was also coupled with the Sabuy Guarantee, which promises no defects or late deliveries. Sabuy is also strict when selecting retailers to work with, making sure they are able to meet with Sabuy’s standards of service. In Thailand, Sabuy’s closest competitor is Rakuten’s Tarad.com.

According to Sabuy’s own figures, 35 percent of its customers use ATM and internet bank transfer, and 35 percent pay through counters or at 7-Eleven. The remaining 30 percent pay using credit cards. Two-thirds of all Sabuy’s orders are from outside of Bangkok.

“Our job is to take Sanook to the next level,” said Krittee.

As my interview with Tiwa and Krittee ended, I heard some Sanook staffers singing a birthday song for one of their team members. Tiwa and Krittee walked out of the meeting room to pass on their birthday wishes, mixing naturally with the rest of the staffers. The party went on as I headed off.

Sanook’s culture feels right for an internet company. And its future looks solid under the leadership of Tiwa and Krittee.

(1) MIH Group invests in promising companies in emerging markets. In Asia alone, it owns part of Tencent (China), Ibibo (India), Tokobagus (Indonesia), Mulitply (Indonesia), and many more.

Pony Ma, CEO and founder at Tencent

At a summit for IT leaders yesterday in Shenzhen, China, Tencent founder and CEO Pony Ma said that mobile internet has given a chance for Chinese companies to plant their flags on the global map (h/t DoNews). Specifically for Tencent, Ma is talking about his 300 million-user strong WeChat mobile messaging app.

Ma said that WeChat is now used in many countries and regions including Hong Kong, Taiwan, Southeast Asia, India, US, and Spain (see Wechat’s global heatmap here). In some countries, Tencent chose to run advertisements to acquire users. But Ma said that in some parts of Southeast Asia, he chose to establish partnerships with local companies instead.

Case in point being Indonesia, where Tencent (HKG:0700) recently formed a joint venture with MNC Media to push WeChat in the country. Daily user growth in Indonesia increased from 30,000 to 90,000 thanks to WeChat’s TV ad campaign. Tencent’s WeChat also receives much help in Thailand from Sanook as it owns about 50 percent of the Thai Internet giant. Outside of Asia, Tencent has established an office in the U.S devoted to growing WeChat. Ma said:

Mobile internet has indeed given us a chance in a lifetime. Our products still have a fighting chance on the international stage. To Tencent, WeChat is our window of opportunity for Tencent to become an international brand.

Tencent’s success in the mobile space has brought much envy among Chinese tech giants. Alibaba’s Jack Ma praised Tencent for being more innovative than his company in mobile due to “the powerful WeChat.”

Besides WeChat, Tencent has also recently launched QQ Chat for Facebook users, which is certainly aimed at taking its IM service to international users since Facebook is blocked in China.

Qihoo 360 is a company that doesn’t have many friends in China’s tech space, and Tencent definitely falls into the company’s ‘enemy’ category. That’s one reason why Qihoo sued Tencent in a case that went to court last year, accusing the company of monopolistic practices (Qihoo CEO Zhou Hongyi even wrote an angry memo about it). But apparently the Guangdong High Court didn’t agree, as it yesterday announced that it had found in favor of Tencent, and ordered Qihoo to pay the company 790,000 RMB ($125,000) in legal damages.

Qihoo’s lawyers have stated that the legal team will consult with the company to determine whether or not it wishes to appeal the court’s decision. If the company does appeal, the case would be elevated to China’s Supreme Court.

Adding some sting to this loss to Tencent will be the fact that Qihoo has lost to Tencent in court before. Back in 2011, a Beijing court ordered Qihoo to apologize to Tencent and to compensate it to the tune of $62,530 for “slander and unfair competition.” And amazingly, the two companies have yet another legal case still in the works, as Tencent sued Qihoo for unfair competition related to its software bundling, asking for 125 million RMB ($20 million) in damages. That case has yet to be decided.

(via Sina Tech)

This is how QQ looks as a Facebook app.

With 798 million monthly active users, Tencent’s (HKG:0700) QQ instant messenger is far and away China’s most-used social network. Some of its users are overseas, and today Tencent is hoping to boost that number by launching QQ Chat for Facebook.

In addition to letting users chat via QQ, the new QQ Chat for Facebook is available in six languages and incorporates built-in translation to/from Chinese, Spanish, and Japanese. It’s not the first overseas venture for QQ and its iconic penguin mascot, as Tencent released a business-oriented QQ International app for Windows and Mac back in 2010. But this new Facebook web app seems more focused on fun, cross-border socializing. Mel Yin, head of IM at Tencent, says that “this is the first platform-independent QQ client for English speakers” thanks to it being a web app.

According to the new QQ Chat for Facebook app, 4,400 people have already used it, which sounds like a fairly good start. With Facebook blocked in China, China’s hundreds of millions of QQ users will have to stick with their desktop or mobile apps – but at least some of their foreign friends might be more keen to jump aboard now.

In the age of mobile-only messaging apps, there’s surely not much demand for old style IM services. But Tencent has both bases covered, and has over 300 million users on its Whatsapp-esque WeChat app. A good number of those are outside of China as well, with good traction in Southeast Asia and the Middle East, and Tencent is hoping that WeChat can be China’s first-ever global social media success story.

Alibaba founder and former CEO Jack Ma may have retired, but that certainly doesn’t mean he’s keeping his mouth shut. Earlier this week, Ma spoke candidly about Alibaba’s failures in the mobile arena; specifically its failure to keep pace with competitor Tencent’s WeChat (which is already paying off big time for Tencent). Said Ma:

We [Alibaba] invested a lot of money but we weren’t lucky enough, and we didn’t have that much innovation. When it comes to innovation, Alibaba isn’t as good as Tencent; they have the powerful WeChat.

Of course, that doesn’t mean Alibaba is in trouble. The company is still raking in boatloads of money, and Jack Ma thinks the future looks bright: “The next five years will be the golden age of e-commerce [in China],” he said at a conference on Wednesday.

Still, Ma is right that the company is weak in mobile, and Tencent’s WeChat might not look like a threat as a chat app, but it’s already moving toward monetization and online-to-offline e-commerce is reportedly one of the paths Tencent has chosen for the app going forward. Whether it can unseat Alibaba remains to be seen, but it seems very unlikely. Innovative or not, Alibaba is a beast in China’s e-commerce sector, and not even Tencent will be able to take it down without a real challenge.

(via Sina Tech, Image Getty via Businessweek)

Online-to-offline e-commerce WeChat integration will be tackled (unsurprisingly) by Tencent’s group buying team. It has already integrated a couple things into the service including a WeChat members card, with which you can get prizes and small discounts for following specific merchants, and a daily deals service through the official WeiTuanGou account.

(As a side note, Online-to-offline e-commerce is often referred to as “O2O,” but I refuse to use that term on the grounds that it is idiotic to use one letter to signify two different words in the same acronym.)

Added-value services could include a lot of things. It’s likely, for example, that WeChat will sell special stickers and emoticons for use in chats. It could also make a more comprehensive set of services and sell them bundled through a membership subscription or something of that nature.

Games, of course, are self explanatory, and we’ve already talked about how WeChat’s gaming platform is going to work when it comes out soon and even taken a look at one early way to play HTML5 games within the WeChat app.

The inspiration for quite a bit of this is obviously KakaoTalk, the Korean chat app that already offers a robust gaming platform. Tencent invested 400 million RMB ($61 million) in KakaoTalk last year, and it has obviously been watching its development closely.

One thing WeChat won’t be doing for monetization is ads, though, as Tencent director Liu Chiping says succeeding with an advertising model can be difficult on mobile because screens are too small and ads eat up too much bandwidth.

(via Sina Tech)

Tencent’s iconic penguin gets to grips with the company’s latest full-year financials.

Hong Kong markets have just closed, and Tencent (HKG:0700), China’s biggest web company, has released its 2012 full-year and Q4 financials. With Tencent hoping to have a global success story with its WeChat messaging app, more eyes than ever are on Tencent. The headline figure from today’s financial report is that full-year revenues were up 54 percent in 2012 to hit US$6.994 billion. Let’s just say $7 billion.

Most of Tencent’s growing revenue ($5.09 billion) was from “internet value-added services”, including things like gaming and virtual products. After all, it’s China’s biggest gaming company as well.

With a growing push into e-commerce, $704.4 million of all that revenue came from its online stores, such as Paipai and its open platform QQ Buy.

Tencent’s operating profits for 2012 stand at $2.46 billion, up 26.3 percent on the 2011 figure.

WeChat and Social

The latest version of the WeChat app

Disappointingly, Tencent made only two bland references to WeChat’s overall progress, mentioning “substantial growth” in 2012 and an emphasis on “marketing investment to acquire users for WeChat” – both of which were obvious already. The financials also said that WeChat Moments – the Path-like social network inside the messaging app – has “enjoyed rapid user adoption.”

On its other social platforms, Tencent reported monthly active users on its Qzone web profiles (sort of a mix of MSN and Facebook) “increased by nine percent year-on-year to 603 million at the end of 2012.” As for its Facebook clone Pengyou site, it saw a 22 percent boost in monthly users to reach 247 million. The ubiquitous QQ instant messenger hit 798 million monthly active users.

In addition, its Twitter-esque Tencent Weibo hit 87 million daily active users by the end of the year. That’s out of its 540 million registered users. But the microblog remains out-hyped by the identically-named Sina Weibo.

Getting back onto the subject of gaming, Tencent’s QQ Game Platform saw peak concurrent users reach 8.8 million in the fourth quarter of 2012. That’s the casual, social gaming side of its many online title offerings.

2013 targets

Looking to the year ahead, Tencent teased possible “applications, games, and location-based activities” arriving in WeChat and its mobile QQ IM apps.

While Tencent might be worried in private that its big earners – stuff like games and advertising – are reliant on desktop and not well adapted to mobile, founder and CEO concludes that he’s pleased with the Shenzhen company’s push onto mobile screens:

During 2012, widespread smartphone adoption brought both disruption and opportunities to the China internet industry. At Tencent, we began to see early results from substantial investments we have made, and continue to make, in mobile internet products. Tencent now provides many of China’s most popular smartphone apps for activities such as communications, social networking, web browsing, games, news, and music, among others. These apps enable us to reach users who are increasingly spending time on smartphones, extend our ecosystem from PCs to mobile, and provide new mobile-specific features unavailable on PCs. During the year, we also introduced a powerful targeted advertising system leveraging our social networks, built the market-leading open platform in partnership with third party developers, diversified our game revenue internationally, and ramped up a sizeable e-commerce business. As a result, we achieved healthy increases in revenue and earnings in 2012, while continuing to invest aggressively in platforms, innovation and technology in order to enhance value to our users and drive long-term growth for our company.

We’ll drop in on Tencent’s post-earnings conference call later and post any juicy details that might emerge.

Find the full report on Tencent’s investor relations page.

According to Telecommunications Industry Net, China’s Ministry of Industry and Information Technology (MIIT) recently held a closed meeting to discuss telecom operator subsidies to help the companies cope with the cost of Over-The-Top (OTT) services like Tencent’s WeChat. China Mobile and China Unicom reportedly both sent representatives to the meeting, but apparently were unable to agree on a path forward.

The dispute apparently centers around China Unicom’s concern that large subsidies would provide a greater benefit to China Mobile, increasing that company’s competitive advantage. With its relatively smaller network, China Unicom is less affected by the massive bandwidth WeChat users eat up, and apparently that’s enough reason for Unicom to be opposed to high subsidies.

In the long term, it remains to be seen how China’s regulators and telecom industry will handle WeChat’s growing user base and the bandwidth it eats up. In fairness to Tencent, WeChat is also probably driving some customers to upgrade to 3G wireless subscriptions so that they can do voice and video chat from anywhere, but even so, telecom operators will need to find a way to deal with the way that OTT services like WeChat leach customers away from their own more profitable telephone and SMS messaging services.

(Telecommunications Industry Net via Sina Tech, image source)

When Fast Company published its list of the most innovative companies in gaming, it ruffled a lot of feathers. One-hit-wonders Rovio (the developers of Angry Birds) topping the list seemed weird enough, but the number two spot was given over to a company many Chinese gamers don’t associate with innovation: Tencent. Here’s Fast Company‘s reasoning for giving Tencent such a primo slot:

For leveraging its online distribution network and moving into content. China’s largest online company (its QQ gaming platform boasts 200 million registered users), Tencent is the natural go-to for deploying massively multiplayer games in the Far East. Take-Two Interactive partnered with Tencent for NBA 2K Online, which launched last fall. Earlier this year, a long-term partnership between Activision and Tencent came to fruition with the arrival of the free-to-play MMO Call of Duty Online in China.

Now, even a die-hard Tencent fan might question why releasing China remakes of years-old franchises really qualifies as innovative, and China’s gaming community has been debating Tencent’s innovative tendencies — or lack thereof — ever since. The debate is the subject of Netease Games’ latest Dispute feature, which means that before we go any further I have to remind you: Netease competes with Tencent in the gaming space, so the Netease games editorial staff isn’t really coming from a position of neutrality here. But many gamers really do see Tencent as a copycat; when I searched for relevant posts on Weibo one of the first ones I found was about Tencent copying animation and sounds from the Japanese anime show Naruto for a QQ game.

In Dispute’s usual dueling essays format, Chinese gaming journalist Chang Kong defended Tencent as being innovative, saying that the company really did deserve the title for having brought together 300 million gamers. Chang’s opponent, an anonymous marketing strategist in the games industry, disagreed, arguing that most of Tencent’s own games were highly derivative, and pointing out that its most successful games were virtually all developed by other companies with Tencent merely serving as the publisher.

Gamers were also split on the subject. “[Tencent] has no integrity,” wrote one, and another observed, “When Tencent talks about innovation, all of China starts laughing.” But another commenter suggested that the negative perceptions about Tencent were the result of years of media smear campaigns.

Here at Tech in Asia, we have certainly seen Tencent play host to some egregious copies, but to the company’s credit, it does seem to take the worst of them down when it discovers them. For example, when we contacted Tencent last fall about a blantant copy of the indie game Cloudstone that it was hosting, the company quietly removed the game a week later.

That Tencent is wildly successful isn’t really up for discussion. But is the company an innovator, especially in gaming? Personally, I’m not convinced, and neither are many Chinese gamers. But let us know your thoughts in the comments!

For our coverage of previous Dispute features, click here.

A couple weeks ago, Sina admitted its flagship product Weibo is threatened by WeChat. Then last week, I wrote about why the Weibo vs. WeChat battle is hugely important, and later in the week Han Han even chimed in. But the latest sign that this is the year of the Weibo-WeChat battle (and that Weibo might be losing) comes from TechWeb, which is reporting that Sina Weibo is conducting internal testing on a new WeChat-inspired “Public Platform” feature.

Like WeChat’s platform of the same name, the new Sina Weibo feature would allow users to send group messages, although right now it is apparently targeted only at large media outlets. The chief advantage of this platform, aside from the fact that it’s designed specifically for mobile, is that it would allow for the posting of messages longer than 140 characters. This means that news media, for example, could share full stories within the platform and their followers could read them directly within Sina’s app, without having to click a link and shift to a mobile browser. The same thing, of course, is also possible with WeChat.

Since Sina’s “Public Platform” is currently still in internal testing, it’s not clear what it will actually look like by the time it’s released — if it ever does get released. But one question raised by the folks over at TechWeb that’s worth pondering is whether media outlets will really be interested in engaging with a platform that doesn’t direct readers to their own websites. If users are reading full stories right in Sina’s app, that’s great for Sina, but it deprives those media outlets of website visitors, and thus advertising dollars. Aiming the Public Platform right at media outlets might make it a tough sell.

Whatever happens, it seems clear that both Weibo and WeChat are gearing up for a clash over users. While Sina tests a way to make its service more like WeChat, Tencent is rumored to be adding Tencent Weibo functionality into the WeChat app to make it a bit more like Sina Weibo. It’s not clear what either company will ultimately actually push out the door, but it’s quite clear that the space between Sina Weibo and Tencent’s WeChat is going to be a battleground as two of China’s biggest internet companies fight over the hearts and minds of China’s social and mobile web users.

(via TechWeb)

But first, the data from the iOS App Store shows that, to quote AppAnnie:

One of the fastest growing major countries by downloads for the social networking category is China, where monthly downloads doubled from January 2012 to January 2013. In fact, now half of the category’s worldwide downloads come from the United States and China. Social Networking app revenue in China still remains very minimal, so we look forward to seeing whether publishers monetize these new downloads over the coming year.

Here’s the corresponding chart with China’s social app downloads highlighted in red:

WeChat, Whatsapp, and dating

WeChat is the sole Chinese representative on the global stage in this new monthly data. Made by Tencent (HKG:0700), it makes an appearance in sixth place:

The report notes that WeChat beats Whatsapp in terms of downloads in January, and is seeing good progress in some overseas markets as WeChat takes on rivals like Line and KakaoTalk in Southeast Asia and the Middle East. But, with no consumer-side monetization right now, WeChat makes no further appearances in other rankings. In contrast, Whatsapp, which is a 99 cents download, is second in terms of social app revenue, while Line is in pole position thanks to its paid sticker packs and social gaming platform.

As for the top 10 downloads for iOS just in China in January 2013, it’s dominated by apps for chatting and dating. A complete newcomer steals in as the top iOS download – the dating/chat app MicroLove. The smash-hit messaging app WeChat is in third place. In between is Papa, the Instagram clone that was huge last year in China thanks to one little gimmick – allowing people to post voice messages along with their photos. Tencent, which is China’s biggest web company, continues its reign with top ten spots for its IM-style apps QQ and QQ HD (8th and 9th); Sina Weibo is an interloper in seventh spot.

Star power: WeChat helps Tencent break into top global downloads ranking on iOS.

WeChat might be quiet on the monetization front right now, but then Tencent has already explained to us that it’s focusing on user acquisition and being a useful social tool.

Chinese developers lose out to Japan

Elsewhere in the report, there’s not much more from the world’s most populous nation. For a newly-risen tech giant, Chinese developers are still not really making it on the world stage. Tencent appears in ninth place among monthly downloads on iOS among global publishers, but that’s pretty much it. With so few China-made apps and games having gone global, and local smartphone users being very reluctant to pay up, the scene doesn’t look too encouraging compared to neighboring South Korea and Japan.

The Android black hole

Despite all the good work that AppAnnie does, its Android data is sadly useless in relation to China since not many Chinese consumers actually use Google Play for app downloads (and paid apps are not supported). Instead, China’s Android users turn to a variety of third-party app stores. That leaves us not knowing what Chinese Android fans – of which there are very many – are doing with their phones.

The sole Chinese publisher on the Google Play top downloads rankings is 3G.cn’s Go Launcher team, which makes an array of freeware tools and utilities. The ‘Go’ series of apps – including things like Go Weather – are popular around the world, which helped propel the developers into fifth place in terms of downloads (but not in terms of direct monetization).

It’s a timely reminder that, unlike with Korean and Japanese developers, China’s app creators cannot rely on profiting from their own populace, and have yet to muster a global blockbuster. That leaves Chinese developers struggling to monetize from other sources, like advertising or cross-promotion platforms in their home market, particularly on Android.

The new ‘Taobao Search’ account inside WeChat app.

The 300-plus million users of China-made messaging app WeChat can already use it for video calls, finding dates, or following brands and celebrities – and soon it will gain another aspect. China’s biggest e-commerce site, Taobao, is testing out a sort of e-commerce search engine inside WeChat. Once up and running, it’ll allow WeChat users to directly message Taobao on their phones by typing a kind of product that they’re looking for; then the app will respond with a link to the desired items.

Basically, it’s just an extension of the brands platform that WeChat already has in place, and which is used for social marketing by all kinds of stores and media outlets – from Starbucks to Chinese fashion magazines. All it requires is for Taobao to make use of WeChat’s brand platform to automate the text queries and auto-generate a relevant link. It’s pretty simple, but it helps users to search Taobao more easily than having to jump to a web browser or open up the actual Taobao app.

The ‘Taobao Search’ account is already on WeChat (add it by scouring for “tbsearch” within WeChat), but when we tested it out, the Taobao Search account didn’t respoond to my query about a Xiaomi phone (pictured above). Once this goes live, it will work as described. This is aimed at Chinese users, but there’s nothing to stop other companies implementing this kind of social searching in the popular messaging app.

According to Marbridge Daily, the Taobao Search account within WeChat will also show products for the sister site Tmall. Both are run by Alibaba Group.

Once the search function is working, all those product searches can be turned into mobile purchases in the normal way, by jumping into the Taobao app to complete the e-commerce purchase. This might boost the ratio of Taobao’s mobile purchases slightly – but mainly it looks to be a new and social avenue for searching for products.

Alibaba already has a dedicated product search engine in the form of eTao, which scours pretty much every online mall in China.

From left to right: Pony Ma, Lei Jun, Robin Li

It’s spring in Beijing, and China’s yearly celebrity parties legislative conferences (the “Two Meetings”) are being held in the capital. Among them is the National People’s Congress (NPC), which boasts among its members two new representatives: Xiaomi CEO Lei Jun and Tencent CEO Pony Ma. But the NPC doesn’t have a monopoly on the stars of China’s tech industry. The other meeting, the Chinese People’s Political Consultative Conference (CPPCC), is also welcoming a new representative: Baidu CEO Robin Li.

So China’s tech giants are out in force in China’s legislature. Neither the NPC nor the CPPCC wields much real power, but that hasn’t stopped any of these guys from making proposals. So what have these fine gentlemen suggested so far? Let’s take a look!

Xiaomi’s Lei Jun: Cut away the red tape for startups

Lei Jun’s proposals this year are focused on making things easier for startups. In his NPC proposal, Lei lists five problems and proposes solutions for them.

• Problem: The government industry and commerce organizations often force new companies to register legal documents using specific forms and structures because its employees don’t have the time or expertise to assess the legality of more customized documents, even though those may be better for companies. Solution: Let companies and their lawyers take responsibility for the legality of their documents and don’t require industry and commerce organizations to assess them.
• Problem: In cases of premium capital increase at an LLC, the Industry and Commerce officials only investigate and certify the capital that is on the books when the company is registered, and not the premium increase in addition to what’s on the registry. Solution: The Ministry of Industry and Commerce should start investigating and certifying all of the capital.*
• Problem: Registering a company name can be a long and inconvenient process. Solution: Increase options for communication (such as phone and web communication) and implement web tools to streamline the name-registration process.
• Problem: Official industry and commerce organizations require a specific number to be filed along with a pledge of stock rights, even though some pledges of stock rights aren’t for specific sums of money but rather for fluctuating sums tied to stock prices, voting shares, etc. Solution: Don’t require the registration of a specific sum in some cases.
• Problem: Buying enterprise invoices can become expensive as there are only a few authorized printers and little wiggle-room for debate on price. Solution: Make them free, like other invoices.

Tencent’s Pony Ma: The government should embrace the internet, support tech companies financially

Perhaps unsurprisingly, Pony Ma’s NPC proposals also focus on improving China’s startup environment. According to Sina Tech, he has so far made three proposals:

• The government should support startups by pushing big companies to create epayment, microfinance, and capital investment platforms that will improve the startup supply chain. The government should also establish its own organizations to support and invest in startups, as well as cracking down on IP violations and law-breaking.
• China needs to put more strategic emphasis on the internet by doing three things: establishing a single organization with clear-cut responsibilities for managing the internet, increasing subsidies for basic telecommunications services, and speed up the move to the web when it comes to government and social services.
• China should do more to assist tech companies as they move out internationally by actively participating in international trade agreements and safety standards as well as providing additional support and assistance to internet companies and even establishing an “internet commissioner” in overseas Chinese embassies.

Baidu’s Robin Li: Don’t require real names to use public wi-fi

Robin Li’s proposal to the CPPCC is focused on making public wi-fi faster and easier to use. According to Sina Tech, the current regulations governing public wifi require wifi providers to track and store users real names, and what sites they visited. Public wifi time is also limited, and logging in is difficult. Li’s proposals states:

Under the current system, wi-fi loses the convenience and speed that was originally the point, and raises the difficulty and threshold for using wi-fi to the extent that many people have just given up on it. When you make users take one extra step, you lose 90 percent of them.

Li has two recommendations for combatting this:

• Lower the threshold for getting online by eliminating the real-name and phone number requirement for some public wifi locations.
• Use a web-exclusive ID for logins (such as an email address or a weibo account), don’t require an authentication code every time, and that should solve the problem of repeat registrations and get everybody online more quickly and conveniently.

We probably won’t see more formal proposals from these guys this year, but that doesn’t mean they’re going to keep quiet for the rest of the session, and other luminaries in China’s tech industry will probably also make use of the Two Meetings to call for changes in China’s tech scene. We’ll be keeping our ears to the ground to bring you all of the latest in the Two Meetings tech madness, so stay tuned!

(images via Forbes, therichest, kelikuru)

*This one involves a lot of financial jargon and we’re not 100 percent sure we’ve gotten it exactly right, so we’ve contacted Xiaomi for a bit of clarification and will update the post if needed.

The Chinese-made messaging app WeChat got a version for older Blackberry models late last year. But now the makers of WeChat have promised that the app is making its way to the newest BlackBerry 10 OS “in the near future”. The pledge was made on the official Facebook page of WeChat Malaysia a couple of weeks ago, and was more recently noticed by the crew at 36Kr:

As with the version for older devices, the BlackBerry 10 iteration of WeChat will be crucial in its expansion into Southeast Asia and the Middle East. While much of the app’s 300-million-plus user-base is in China, the parent company Tencent (HKG:0700) is keen for the app to be China’s first social media success story, and gave it an English name in April 2012. WeChat is being promoted overseas via things like its Facebook page, but it’s up against stronger offline marketing by NHN Japan and its Line app.

Surely the BlackBerry 10 version of WeChat would get features that put it on par with its iOS and Android siblings – like video calling, song recognition, and voice chatrooms. Then it wouldn’t be so inevitably bare-bones as the BB5/6/7 and Symbian versions.

Tencent’s focus on Asia seems to be paying off, and a BB10 version of the app should help – so long as BlackBerry’s newest platform proves a hit in the Canadian company’s few remaining strongholds.

This is a heatmap of WeChat’s global user-base so far:

Click to enlarge the map.

(Source: 36Kr – article in Chinese)

Late yesterday, he broke his silence on to share a short post on his blog in which he discusses his impressions of Sina Weibo and Tencent’s WeChat. It’s a pretty interesting post, so we’ve translated select sections of it below for you to enjoy (links added by us, though).

On Weibo Followers:

Personally I think weibo follower numbers are just a way of fooling both yourself and others. I won’t comment on other people, but among my followers [he has more than 11 million], there are definitely plenty of zombies, and weird and inactive followers. In short, there’s definitely some water content [i.e., padding in the numbers].

[...] The way some internet companies count things, this short essay is already 300,000 words long. If Weibo lasts long enough, I look forward to the day when the first V user has more followers than there are Chinese internet users, or even more followers than the world’s total population.

On Weibo Culture:

Weibo definitely has its advantages; it makes it harder to hide news stories, makes speech more free, and in some very specific moments it’s the only thing you can use. But at the same time, it also makes us deceive ourselves; if you say some sentence or some line is taken from your post and retweeted thousands of times, you feel like everyone on the street is passing along your now-famous saying [...] and even the cacti in the Taklamakan desert are talking about it.

[...] The state of things on weibo is actually a lot like Chinese society, one in a thousand people has a little bit of an identity and the ability to speak out, four out of a thousand people are just trying to promote themselves, and the other 990 are just grass people. When the wind blows dirt across grass, optimistic grass believes it is the wind and pessimistic grass believes it is the sand. As for the last five people, they’re out pretending to be the one-in-a-thousand [who can actually make an impact with their posts].

On WeChat Culture:

Now it’s much more likely that [I will] open WeChat instead of Weibo. My circle of friends is getting more and more active, and a lot of the people around me who would fit into the group of 990 people [mentioned above] can find more of a feeling that they actually exist in their friend circles on WeChat. At least on WeChat their posts will be seen by the people who should see them, and it won’t be like being ignored and overlooked with zero reposts and zero comments on Weibo.

On Tencent and Microblogging Also-Rans:

I’m not trying to come off as advertising for Tencent here; Tencent has also done some crappy things. And as far as other websites’ weibo services [besides Sina and Tencent] [...] I suspect there are fewer active users on these sites than there are people in my residential community.

On smartphones and life:

As a writer, taking a non-smartphone out with me is very necessary. I haven’t done enough, haven’t traveled far enough. [...] This is just my personal mindset and reflection, but there are so many lively faces and beautiful scenes [out in the world], I think this year I can waste less time looking at screens. These two “micro” services [Weibo and WeChat] are good, but they can’t encroach too much on my life. The world is vast; if you’re Chinese get out and have a look around.

When I wrote recently about the Weibo vs. WeChat war, a number of commenters expressed skepticism that the two services were really competing given how different they are. In Han Han’s post, we can see that the services compete at the basic level of fighting for users’ attention in the limited time they’re willing to spend on social media, but I think Han Han’s point about how Weibo and WeChat make you feel is also a very important one. Weibo can make you feel very important when a post goes viral, but that’s mostly an illusion. WeChat doesn’t offer that same kind of thrill, but it does give the feeling of actually being heard to the many people who don’t have massive followings on Weibo and have trouble getting anyone’s attention there.

(Han Han’s blog via his Weibo, image source)

Today, China’s internet giant Tencent (HKG:0700) and Indonesian company MNC Media announced that they have made a joint-venture company called MNC Tencent to tap further into Indonesia’s online market. During a press conference this morning in Jakarta, both companies also shared a few updates and statistics regarding messaging app WeChat in Indonesia.

Usually, Tencent explained, it would either put in investment or directly open its own operational company for any expansion into other countries, but this time the Chinese web company chose to build its very first joint-venture company in Indonesia. Tencent president Martin Lau said that this is because the company needs to use a more hands-on, localized approach to reach customers here. Furthermore, he said that Tencent will bring more of its products and services through MNC Tencent.

Last year, Tencent also began pushing its location-based chat app Qute in Indonesia, so this isn’t the first time that the Chinese firm has opted to focus on young and mobile-loving Indonesian netizens.

MNC Media CEO Hary Tanoesoedibjo is known to want to build a local search engine to compete with the likes of Google and Yahoo. Would this mean that he is going to build it together with Tencent? While Hary said that he wants to bring a search engine product from this joint venture, Martin more cautiously said that the plan is still in talks and that they are open to such a possibility. Hary also mentioned that he wants to bring another product in the form of web video.

Indonesians on WeChat

Regarding WeChat’s progress in Indonesia, Tencent disclosed that WeChat’s daily user growth in Indonesia increased from 30,000 to 90,000 (yes, that’s new users per day) thanks to WeChat’s TV ad campaign launched five days ago. That means – using our math for this bit – that the messaging app has gained as many as 450,000 users in Indonesia in just the last week. The total user-base in the country has not been revealed. Besides the TV ad campaign, the company has approached local bloggers and influencers through events and competitions to help the spread of WeChat in the country.

When asked about WeChat’s competition in Indonesia – such as Line and KakaoTalk – Martin answered that because Tencent invested in Korean-based KakaoTalk last year (for a reported 14 percent stake), it’s a win-win solution for Tencent if one of those other apps prevails. But not if Line wins this local battle.

It is interesting to see that KakaoTalk also agrees with WeChat’s strategy of offering localized touches to tap into the Indonesian market. Rather than opening an office, KakaoTalk’s Indonesian stickers is a more simple approach to win over local users.

Note that WeChat is now also a partner with Indonesian media conglomerate Global Mediacom as well as building this joint-venture with subsidiary company MNC Media today. WeChat definitely has a huge advantage when it comes to capital and national exposure. Line, on the other hand, was the first mover to Indonesia and already launched its TV ad campaign earlier this month.

With the messaging app battle looking really fierce now, the collective response of all the Indonesian telcos, which will be dubbed ‘Messaging Indonesia’, better be really good.

Tencent (HKG:0700), makers of the popular WeChat messaging app, is to open an office in America this year as the Chinese company focuses on taking WeChat global. This was confirmed by Tencent corporate development group vice president Zhang Xiaolong in an email to employees this morning and which was seen by Caijing.

The paper says that the new US branch will be a customer relations department for WeChat, which has over 300 million users.

WeChat – known as Weixin to Chinese users – first went global in April 2012 when the English branding was created. As you can see in the graph below, that seems to have accelerated WeChat’s growth even further, though Tencent has never released figures for the numbers of overseas users. However, Justin Sun, director of international WeChat operations at Tencent, told us last year that WeChat is seeing a growing ratio of overseas users and is proving to be a hit in Southeast Asia, America, and across the Middle East.

Tencent already has offices for its gaming operations in San Francisco; it’s not clear if the new office will be nearby – or precisely when it’ll open. We’ve reached out to Tencent at Shenzhen HQ and will update if we hear back [UPDATED:] who tell us: “We recently put together a small project team for WeChat to study the US market and explore future potential opportunities.”

WeChat is up against established messaging apps like Whatsapp, as well as a host of innovative Asian-made rivals. Aside from messaging, WeChat has a feature called Moments that allows users to share albums of photos and other things, making it a challenger to Path and Facebook as well. The biggest rival app out of Asia is NHN Japan’s Line app, which is also expanding aggressively into overseas markets.

Here’s WeChat’s growth in users thus far:

Caijing

Weibo and WeChat are in an old-fashioned duel.

When it comes to Chinese social media, it’s increasingly clear that there are two real players: Sina Weibo and Tencent’s WeChat. Oh, sure, there are others, but they’re all a bit passé these days. Renren and the other traditional social media networks are starting to look very outdated. Tencent Weibo and other microblogging competitors may have big user numbers, but there’s a reason that the big stories always break on Sina Weibo. And while some Chinese BBS forums still boast massive user numbers, they appeal to a limited demographic — chances are your grandmother is never going on Tianya.

So it’s down to WeChat and Sina Weibo for the crown of who’s the coolest and who can grow the fastest. Outside China, WeChat has already won that race, and Sina isn’t even attempting to attract non-Chinese users to its weibo service. But inside China, Weibo boasts an intimidating 500 million users (although most of them aren’t active). WeChat broke 300 million users last month, and although not all of those users are in China, the service is growing fast and poised to overtake Weibo within the next few years.

If you’re not a shareholder in Tencent or Sina or a Chinese social media user, it might seem like this doesn’t really matter. But because the services themselves are so different, who wins the Weibo vs. WeChat war could have a significant impact on Chinese society.

As weibo has grown over the past several years, it has also made a dramatic impact on Chinese civil society and politics. Information spreads very quickly on microblogging services, and because of this Weibo has put a spotlight on social issues from censorship to corruption to environmental problems. I would argue that Weibo has quite literally redefined the way many users think about China, as it has taken what were previously understood to be “local” problems and demonstrated them to be national ones.

Five years ago, for example, you might think that the pollution of a local river was just a problem with a nearby factory, but thanks to Deng Fei’s weibo campaign and others, it’s easy to see on Weibo that many rivers nationwide have similar problems. So, what you previously considered a local problem is now a national one, and when that happens, you’re more likely to try to push for national changes instead of just complaining about your local authorities.

The access Weibo grants to unfiltered information (if you check it fast enough) from across the country instantly has already changed Chinese society, forcing both companies and governments to be more transparent, more responsive, and more willing to interact with the people they affect. Obviously, Weibo hasn’t transformed China into a representative democracy or anything, and there are plenty of problems with the service itself (starting with its draconian censorship practices, though they’re often circumventable). But even so, I think Chinese society is better off with Weibo than without it.

That’s why Weibo’s fight with WeChat is so crucial. WeChat is a totally different service with a very different focus, but the more time users spend on WeChat, the less they’re spending on Weibo. And while chatting with your friends and following celebrities is fun, the service just isn’t designed for the swift passing-along of information the way that weibo is. WeChat’s focus is your circle of friends and your local area, Weibo’s focus is far wider. To return to our polluted river analogy, on Weibo you share your photos of the river with your followers all over the country, and they pass it on to theirs; quickly, it can go national. But on WeChat, you bitch with your friends and coworkers about the river and it stays in your (mostly) local social circles. Even if it does spread, that spread isn’t easily visible or trackable, which makes it seem like fewer people are talking about it and thus reduces its impact.

WeChat is still an evolving service, and obviously there are ways of using it to move information quickly and distribute it widely (for example, getting a celebrity to share a message with all of their followers). But because it’s simply not designed for this kind of information sharing, I fear that the social impact that Weibo has had — which in my opinion has been mostly positive — could be undone if Chinese social networking users start spending their social time on WeChat instead of Weibo.

Unfortunately, things are already looking grim, and even Sina has admitted it faces a stiff challenge in WeChat. 2013 looks to be WeChat’s year, but I hope that it doesn’t come at the expense of Weibo and the impact it has had on Chinese civil society.

(image source)

Alibaba’s Jack Ma (left) and Tencent’s Pony Ma (right) are unlikely new biz partners.

China’s insurance regulator has confirmed approval, say sources, of a major new online insurance joint-venture between two Chinese web giants. As was first proposed last August, the new business sees e-commerce company Alibaba teaming up with social and gaming-oriented Tencent (HKG:0700), who – along with the country’s top insurer, PingAn (HKG:2318) – will soon launch this online-only joint-venture that will be called ZhongAn.

Neither Tencent nor Alibaba have commented on the apparent approval, pending official word from the China Insurance Regulatory Commission (CIRC) itself.

Unlike traditional insurers – like PingAn – the forthcoming ZhongAn company will not open brick-and-mortar stores across China. The new business will reportedly focus on liability and guarantee insurance, such as for homes and possessions. It’s not clear how much of a financial investment this entails.

Alibaba, which runs online malls like Tmall and Taobao, will be the top shareholder in ZhongAn with a 19.9 percent stake. Tencent (makers of QQ and WeChat) and PingAn Insurance will each own five percent. There are also six smaller shareholders, including online travel booking site Ctrip.

E-commerce rivals forced to work together

With China having over 200 million e-commerce shoppers at present, and an anticipated 420 million e-shoppers by 2016, these companies will be hoping that the populace is ready and keen to handle its financial services online as well.

Both Tencent and Alibaba are old hands in the online finance business, as they run major e-payments platforms (Tenpay and Alipay, respectively). Plus, Alibaba has been micro-lending to small businesses on its e-commerce platforms for quite some time. Nonetheless, it’s still a major business move by the two web companies.

Tencent also has its own e-commerce business, making it a rival to Alibaba in several areas. But it’s likely that China’s strictly regulated financial sector necessitated the two rivals working together for this new business.

(Source: GlobalTimes; Image from Techweb.com.cn)

Cmune, a game developer with offices in Beijing and Berlin, announced today that it has secured a new round of funding from global venture firm DCM via the firm’s Android app-focused A Fund (which gets funding and support from Tencent, NHN, and GMO). The amount Cmune has raised has not been disclosed, but it’s clear that the developers — who created UberStrike, Facebook’s most popular FPS — have big plans for the future. The company’s target is to follow in the steps of Call of Duty and become the next billion-dollar FPS gaming brand.

I got in touch with Cmune’s business intelligence chief Benjamin Joffe to ask a few questions about the company and its plans for the future. First on the list: why would a China-based developer be working on Facebook games? Isn’t that a bit awkward in a country that has blocked Facebook? Not really. As Joffe pointed out, “any serious tech company in China has a VPN.” But the company is actually moving away from the social network and towards tablets, and China has been a good place to do that. Says Joffe,

We started on Facebook and it’s still growing as the platform is maturing to better games [...] but we see now a bigger opportunity on tablets. China has great expertise on free-to-play monetization, and it’s a surprisingly good place to assemble an international team.

Of course, I also wondered whether Cmune has ever considered making a game for China’s social platforms. Joffe told me:

We have been looking into it for a long time, but the market structure and expectations are quite different. In China the popular shooters are mostly military client-based games. Very heavy and very hardcore. Our positioning is more “fantasy shooter”, mid-core, in the browser or on tablets.
This market will come in time too in China, which is why we are happy Tencent is now one of our investors [via the A Fund].

Finally, I wondered about the billion-dollar-shooter target that Cmune has set for itself. UberStrike has undeniably been successful; with 1.2 million fans and over 10 million registered players, its one of the most successful social shooter games ever. But to reach the billion-dollar level is far from easy, and thus far, the only shooters to do it have been PC/console-based shooters like Activision’s Call of Duty franchise. Is a billion-dollar shooter even possible on social platforms or tablets? Joffe was optimistic:

If you look at the pure number of users, Facebook and tablets already have more gamers on them than there are consoles out there. It is just a matter of time for creating suitable games for gamers. This is the opportunity we want to grab. To have some comparables: To reach $1B on consoles, you need to sell 20 million boxes at $50, which is the Call of Duty model. To reach $1B on tablets or Facebook you need to make less than $3 million per day.

With a management game, SuperCell already makes over $1m per day. Some games in Japan also make millions on mobile. Considering shooters are among the top selling genres on consoles, shooters will be successful on tablets too. Tablets are the new consoles!

As an FPS gamer myself, I am pretty skeptical about the ability of tablets to replace consoles and PCs, so I pressed a bit, and Mr. Joffe was kind enough to send me a list of reasons why he thinks Cmune could be the first company to take a tablet FPS into the billion-dollar range:

• There is a “learning curve” to get from a puzzle game to a hardcore game. The same happened on Facebook where the first games were text-based zombie games. Now you have 3D shooters, The Sims, and many more real-time hardcore genres.
• Tablets are now powerful enough to run a fast-paced multiplayer shooter (since iPad2, and getting better with each new device)
• Players want them, and many Premium games like Modern Combat by Gameloft are already making millions
• Most games are still single-player because real-time multiplayer is much harder to do (it’s the hardest for FPS due to sensitivity to lag)
• So it’s also a technology/backend/gameplay issue, that almost no company has solved yet. We are pioneers for that, like we have been on Facebook for over 2 years.
• Controls schemes are being improved to make it playable on touch screen.
• We found virtually no competitor in the classic Quake/Doom genre that was FREE and MULTIPLAYER at the same time. They will come eventually, but we plan to be the first and largest!

So there you have it! While I still maintain a little of my curmudgeonly skepticism, I thank Ben Joffe for talking this through with me, and I think it’s clear that whether or not there is really a billion dollars on the table. Cmune is poised to take advantage of a market that is likely to continue growing substantially over the next few years.

(By the way, if you’d like to try out UberStrike for yourself, you can check out its official site; the game is available on a number of different plaforms so no matter what device you’re on, there’s probably a way to play it.)

The rumored investment, which was reported by Sina Tech, has not yet been confirmed by either Tencent or JiaThis, and Sina Tech’s source did not reveal any of the particulars of the deal. While it therefore makes sense to take this report with a great deal of salt until the details have been confirmed, it does make some sense that Tencent might be interested in the platform given its success and given the ways it might integrate with Tencent’s own social and gaming platforms.

We have reached out to both Tencent and JiaThis for comment and will update this post if we hear back.

(Sina Tech)

Chinese startup blog 36kr is reporting that WeChat is testing a new feature that would allow public WeChat accounts (like those of brands) to create custom menus to facilitate shopping and other kinds of transactions within WeChat itself. In the image below, for example, you can see that where previously a brand could communicate only via posted messages, this beauty brand has been able to add customized buttons along the nav bar at the bottom. The one on the left, for example, links to the company’s official site; the center button leads customers to a phone number through which they can set up appointments, and the button on the right will automatically display shop locations near the user based on their phone’s GPS location.

The service doesn’t actually feature a mobile payment solution yet — though Tencent has its own Tenpay, which is rumored to be on its way into WeChat in China — but a Tencent rep told 36kr that more changes to WeChat’s brand accounts would be coming this year, and it seems quite likely that the company will try to facilitate in-app purchases and then take a small cut from the transaction like other online and mobile payment solutions. It’s all just another step in the direction of Tencent putting the entire mobile internet inside the ever-expanding WeChat app.

At present the custom brand menus feature is available only to a very limited number of test cases, but it seems likely that Tencent will begin to roll out this, and other monetization-focused changes, sooner rather than later. WeChat has momentum and has been evolving at a breakneck pace; Tencent likely won’t want to slow down for fear that they might get passed by one of the many other excellent chat apps available to Asian users.

(via 36kr)

Perhaps some wires got crossed, or perhaps someone on weibo got even more tired of the spring festival news lull than I am and decided to drum up something interesting. Whatever the reason, something strange happened on weibo this week: people started reporting that Tencent CEO Pony Ma had died. Specifically, the fabricated report, which was passed along by thousands of people, said that Ma had died of a heart attack due to fatigue and excessive drinking at the People’s Hospital in Shenzhen. This, of course, was total bullshit.

The rumor was debunked by Ma himself, who after learning of the rumor, posted this message to his weibo account:

I just got off the plane and got a WeChat message from a colleague, apparently an irresponsible verified weibo user is starting rumors; is this intentional or accidental?

It might well be intentional. According to the Beijing Times, rumors of Pony Ma’s death by heart attack have been surfacing and resurfacing on the web since 2010, although there doesn’t seem to be any basis at all to them as Mr. Ma is clearly not dead. This most recent outbreak of rumor seems especially unfounded given that Ma is apparently an ardent smoker but not a big drinker. Perhaps next year’s rumor will be that he has died of lung cancer?

In any event, if you see this information floating around on the Chinese web, have no fear, the inventor of QQ and WeChat is alive and well.

(Beijing Times via Sina Tech)

After several people asking us for a review, we finally got two of our team members to update to the latest WeChat version 4.5.0.9 and give the live chat a test. Sorry for the slight delay, people.

Overall? I would rate it a lukewarm good. There were times when our voices were unclear (though that could be the sucky internet!) but generally the experience was pretty decent. Long story short, WeChat’s live chat works like a walkie-talkie. You and your friends are put into the same group (see right) to have quick voice chats. Push the button and speak. Release to send. Not rocket science.

It’s similar to the current voice chat but more fun and convenient, plus it enables you to converse in a group. If the network connection is OK, you could practically replace your walkie-talkie with the WeChat app. We can foresee ourselves using the app to do quick communication when running our conferences. Only thing that might be of concern is that voice messages in live chat mode aren’t trackable. But that seems like an acceptable sacrifice for fast mass voice communication.

We also asked ourselves how the live chat is different from call and recorded voice chat. Our conclusion was that walkie-talkie live chat allows you to save data usage and also battery life. Data is only used when voice messages are sent and received, so there’s minimal data consumption when live chat is on standby mode. Meanwhile, calls charge money regardless of whether you’re speaking or not, and voice recorded chat isn’t real-time enough to facilitate fast communication in groups.

The rest of the changes are pretty minor and straightforward. With the updated app, you can now invite friends to a group chat using QR codes, search through chat histories, and perhaps more importantly backup and restore your WeChat conversations.

WeChat recently also hit the 300 million users milestone.

While that’s all very nice for Tencent Weibo, it still doesn’t change the fact that it’s not as cool as Sina’s (NASDAQ:SINA) offering. And, more importantly, Sina Weibo has more active users:

Thanks to We Are Social for the graphics. Yes, at 2012 Q3, Tencent Weibo had 10 million fewer active users a few months back. Xing Hongyu also revealed yesterday that Tencent Weibo has 100 million daily active users.

But the main reason for all the buzz going to Sina Weibo is the nature of its user-base. That’s because Sina’s users are mostly living in China’s wealthiest cities (tier one and two areas, from Beijing to Wuhan, Shanghai to Hangzhou), while Tencent Weibo’s users are in poorer cities or rural areas, and are not worth as much for social media marketing and are not the kind of folks who can set the national agenda when discussing issues online. Here’s the comparison:

Of course, Tencent Weibo does do some cool things; its coordinated approach to the London Olympics coverage was fun and popular, and you can even buy cars directly within the social service. But its Sina rival remains the “Weibo” that people are actually talking about.

Yesterday, WeChat app officially hit an impressive new milestone – 300 million registered users – and that coincided with an iOS beta release of v4.5 of the app. The update shows that WeChat will focus even more on being chatty, adding multi-user voice chatrooms, Siri-esque vocal reminders, and a song search feature kind of like SoundHound or Shazam (pictured above).

WeChat first added voice calls – along with video chats – last summer, so this forthcoming update looks to be a major extension of that. The chatroom in the leaked screenshot shows three users in the hangout, but it’s not clear how many it can hold in total.

The updated app – which is likely to hit iPhone first once out of private beta, and then Android a few weeks later – also lets WeChat users speak into the app to set reminders for themselves at a designated time. But it’s the song search that might prove to be the most widely used new feature, which can listen in on a piece of music just by shaking your smartphone. Once identified, WeChat will stream the song and even provide lyrics. Due to rights issues, this might only come to Chinese users of the app, as the app’s makers, Tencent (HKG:0700) already have the China-oriented music streaming service QQ Music, which is presumably the source of its streaming tunes.

The v4.5 beta will also see a much needed UI refresh for some of its buttons:

[Source: QQ Tech - article in Chinese]

The makers of WeChat said recently that the messaging app will likely soon surpass 300 million registered users – and now that has officially happened. The massive milestone is confirmed by Tencent (HKG:0700) CEO Pony Ma himself, who hailed the huge growth in the Whatsapp-style app since its launch on January 21st, 2011.

WeChat went global in April of 2012 with an English name (it’s called Weixin in China), and its growth seems to have accelerated a bit since that time (see the graph below). But it’s still not clear how many WeChat users are overseas, though an analyst’s heatmap that we looked at this week suggests that it’s seeing a lot of traction in India and Southeast Asia. Indeed, those are the focus areas for Tencent in its push to make WeChat into China’s first big social media export.

The road to 300 million registered users has not been easy. Just last week, WeChat temporarily seemed to have implemented keyword blocking for politically sensitive phrases in Chinese – but that was soon turned off after a backlash over how it was affecting users worldwide.

Here’s our updated graph, using four official data points from Tencent, showing WeChat’s growth over the past two years. Note that it added its last 100 million in the space of just four months:

[Source: QQ Tech - article in Chinese]

The WeChat messaging app seems to be China’s biggest social media export to date. But, apart from Tencent telling us that the “focus is Asia,” no one knows where WeChat is proving popular. Keen to find out where the app is doing well, the China-oriented consultants Value2020 have come up with this neat heatmap.

We’re told that the map is collated “based on app stores’ rankings” of WeChat, balanced by a “percentage of smartphones connected to the internet” in that country. While it’s far from an official way of tracking WeChat’s near 300 million user-base, it seems like a decent approach to find such elusive information. Of course, download numbers and app store tallies don’t equate to registered or active users, so that has to be thrown in there as a disclaimer.

In demand in India, Malaysia

The WeChat heatmap reveals that Tencent’s Asia strategy is paying off, with strong popularity for the app in places like Malaysia. Indeed, Tencent’s country manager for that area revealed a while back that WeChat has one million users in Malaysia, so that’s a useful, solid reference point. The Value2020 team says that India is actually the second-most popular area for WeChat outside of its native China. So long as the app’s censorship slip-up last week doesn’t put off overseas users, it looks like WeChat is building up a strong bulwark against Line and Whatsapp in some crucial, mobile-oriented markets.

In terms of recent trends, we’re informed that the messaging app is now growing even faster in India than it was last year, and it has been taking off in Spain, Mexico, and Argentina since last summer. Here’s the heatmap that Value2020 cooked up:

[Source: Value2020]

For more fun graphics like this one, check out previous entries in our infographic series.

The evidence.

Yesterday we broke the story of how WeChat, the world’s biggest Whatsapp-style messaging app, was apparently censoring words that are deemed “sensitive” on the Chinese web right now. In what looked like a case of keyword filtering of certain Chinese text (which could be replicated by many, but not all, users around the world), WeChat was not permitting some phrases to be sent via the app. After contacting Tencent (HKG:0700) last night, now the makers of the hugely popular app have responded.

Referring to the case as a “glitch”, the full statement given to us reads:

A small number of WeChat international users were not able to send certain messages due to a technical glitch this Thursday. Immediate actions have been taken to rectify it. We apologize for any inconvenience it has caused to our users. We will continue to improve the product features and technological support to provide better user experience.

Indeed, testing out the offending phrase today, it does now work within WeChat.

Incriminating evidence

But there’s clear evidence (see the screenshot collage above) of very specific “sensitive” phrases being blocked by the app – particularly the Chinese name of the outspoken magazine Southern Weekend, which has been embroiled in a battle with authorities over a fiery editorial in its New Year’s edition – it’s hard to see how it was a technical error.

But what about that warning that many saw? It’s as clear as day in many screenshots. “The message “南方周末” you sent contains restricted words. Please check it again.”

Yes: Restricted words. That’s no error message. It’s very far from being: Ooops, our servers are a bit busy right now, please try again a few minutes later.

If so, why was WeChat (known as Weixin in Chinese) not blocking the word “coffee” in Chinese, or “boobies”, but it was very specifically prohibiting, in many instances, the name of that magazine. And a controversial cult group. And perhaps more Chinese-language politically taboo words. Unless the hidden meaning of the “technical” issue in the Tencent statement is that keyword filtering was turned on by mistake.

In the long run, so long as the app safeguards free speech for all other languages, the damage from this incident might be contained. Censorship is a fact of life in China and on the web in the country, usually instigated by the media and web companies themselves so that they avoid getting in trouble with authorities. That’s how it works.

But this kerfuffle has shown that, if a web company wants to expand overseas – like Tencent with WeChat, or Sina Weibo and its new English version this week – then the legal and cultural practices of the Chinese web have to be shaken off. Oh, and iron out the “glitches” too.

[Extra screenshot evidence courtesy of The Next Web and @hu_jia on Twitter]

A few days ago, I wrote about a rant posted to Sina Weibo and spotted by Global Voices Online in which an alleged member of Sina’s censorship team explains the company’s censorship in part by saying that Sina doesn’t want to censor weibo posts, but it is required to do so in order to follow Chinese law.

That’s a refrain we hear from Chinese internet companies over and over again when it comes to censorship: ‘we don’t want to be doing this, but these are the rules of the game in China, and we have to play along.’ That is true, of course; any company that didn’t censor its user-generated content for the domestic market would be on the fast track to being shut down. But it is also a little bit of a lie. If these companies only censor because it is mandated by the Chinese government, why are their services still censored for users abroad?

Just a few hours ago we noticed that Tencent’s WeChat app was censoring “sensitive” words, even in some cases where both the sender and the receiver of the “sensitive” message were outside China. But Tencent is not an outlier. Weibo posts from overseas that contain sensitive words still get deleted, and politically sensitive searches are blocked for everyone, not just users in China. If I search for “Tiananmen” on Baidu from the US, I still get heavily censored responses. Every other Chinese web platform I’m aware of operates the same way; all content is censored according to Chinese law, even content that is being sent and received outside of China’s borders.

The obvious reason for this is that most of these companies have their servers within China’s borders, so content sent and recieved outside China still has to go through China along the way. When I post a message to weibo, for example, even though I am in the United States, that message has to be transmitted to Sina’s servers in China, which ostensibly have to be scrubbed in accordance with government policy. The same general principle can be applied to most other Chinese internet companies, too. So they really are trapped after all then, right?

Well, yes and no. Technically and legally, it should be possible for any Chinese company to set up servers and offices outside of China, from which it should be free to serve uncensored content to users without violating Chinese law, so long as those users were not in China. In fact, they could probably do it legally from Hong Kong (despite being technically a part of China, Hong Kong has different internet laws). And while that certainly would require some effort, many of the companies we’re talking about (especially Tencent and Baidu) already have extensive operations abroad, and virtually everybody has an office in Hong Kong.

If these companies were truly committed to freedom of speech, they could establish overseas servers and a technical process such that when I post to weibo, for example, the post might need to be hidden from domestic users but could still be displayed to Sina’s international user base. Yet none of them (that I’m aware of) actually offer this sort of service. The reason is not that it’s impossible, it’s just that it isn’t a priority.

(Granted, the vast majority of these companies’ user bases are within mainland China. But most of them also have millions of users collectively in Hong Kong and overseas in Taiwan and among the immigrants and students living in the West.)

I do not mean to suggest that Chinese internet companies are evil, or that they benefit much from censoring content. The reality is that they all know their users would be happier with uncensored content, but even in a space where Chinese laws do not technically apply, un-censoring “sensitive” things could potentially damage their relationship with the government. It seems all of these companies have made the calculation that the potential benefits gained from un-censoring overseas content do not yet outweigh the risks such a move would generate for the company’s domestic operations and continued relations with the government.

That is each company’s choice to make, and I do not condemn them for making it. To a certain extent, I buy the Sina censor’s argument that a censored weibo (for example) is still better than none at all. At the same time, though, I think the narrative of victimhood many of these companies present to the outside world — that they are forced by the government to censor user-generated content — is misleading. Any Chinese internet company could offer completely uncensored service outside China’s borders if it so chose. Most have them have simply decided that doing so would be bad for business.

That, of course, is a perfectly fair decision for a business to make. But I wonder at what point that decision is going to harm these companies’ aspirations of overseas growth. How much faster would Sina Weibo grow in Taiwan if it was uncensored? How big could WeChat be if it didn’t have the stigma of political censorship draped around its neck like a dead albatross? For most overseas users, censorship of China-related topics is going to be a little-noticed minor annoyance, but it is absolutely terrible for marketing and branding. That is doubly true if the companies are also not transparent about what is allowed and what isn’t, which is often the case on Chinese content platforms.

Just as global internet companies adjust their practices in accordance with Chinese laws and customs when they enter the country, Chinese internet companies need to embrace a freer global internet culture as they move increasingly outside their home country if they want to have any hope of competing with other global brands. Most users are not going to choose a censored platform over an uncensored one voluntarily, so if Chinese internet companies really want to make waves abroad, they’ll have to do more than just complain about their legal obligation to censor. The level of transparency and free exchange many users demand may be illegal in China, but the barriers stopping Chinese companies from implementing a freer exchange for overseas users — both existing users and ones that they hope to attract in the future — are financial and (corporate) cultural, not legal barriers.

Right now, the Chinese name of the outspoken magazine caught up in a tense struggle of wills with the government – Southern Weekend in English, 南方周末 (nan fang zhou mo) in Chinese – is censored in Chinese on WeChat. But it’s not just restricted to users in China (where the app is called Weixin), and typing that name in the Chinese language is now blocked globally. The restriction notice says (pictured):

Click to enlarge.

The message “南方周末” you sent contains restricted words. Please check it again.

We’ve tested it out going from users in China to Thailand (blocked), Thailand to China (blocked), and even Thailand to Singapore (blocked); the prohibited words are not sent at all. The name of the magazine can be sent in English.

While some long-standing bugbears of Beijing – like the name of a certain cult group – are already blocked on WeChat, this is the first major case of topical censorship seen on WeChat that we know of. It might seriously affect the app in overseas markets if users feel unease over these kinds of restrictions – even if it apparently doesn’t affect English words or phrases.

All media outlets in mainland China are required to operate a form of self-censorship to keep themselves in line with what authorities don’t want being discussed. This is often highly visible on Sina Weibo, China’s most popular Twitter-like social site, where ‘sensitive’ words or phrases are blocked on a very regular bases.

It’s shit like this that caused us to declare 2013 as the worst year ever for tech in China.

(Hat-tip to @Weigu on Twitter for spotting this; UPDATE: See another example and screenshot from this Twitter user)

China’s tightened internet controls were passed into law earlier today. As well as requiring broadband and mobile internet providers to have full ‘real name’ details of their customers (which pretty much happens already), the new 12-article law also mandates how all web companies operating in China must control what people post. That effectively legalizes the deletion of posts that contain what authorities deem to be “illegal” content or information.

Again, that’s close to what happens already in practice with the blanket self-censorship and fast-paced moderation that goes on on the Chinese web, as seen very clearly on the Twitter-like Sina Weibo. And so the new law will criminalize companies who do not censor the web with the kind of speed and efficiency that the law now dictates. That has huge implications for social companies like Sina (NASDAQ:SINA), Tencent (HKG:0700), and Renren (NYSE:RENN), and search engines from Baidu (NASDAQ:BIDU), Sohu (NASDAQ:SOHU), and Qihoo (NYSE:QIHU). In fact, it’s an extra strain on the whole internet sector in the country, with possible extra costs involved in the already weighty and arduous practice of removing dissent, as well as other genuinely illegal acts on the web.

It’s surely only a matter of time before one Chinese web company is held criminally responsible for content posted on its service. And what will happen then? A fine? The jailing of the relevant member of staff?

Using Xinhua’s presumably official version of events, the news agency summarizes this aspect of the new law:

Service providers are required to instantly stop the transmission of illegal information once it is spotted and take relevant measures, including removing the information and saving records, before reporting to supervisory authorities, the decision says.

It empowers supervising departments to take technical and other necessary measures to prevent, stop or punish those who infringe on online privacy, requiring relevant service providers to give support during investigations.

There are some positive aspects to all this, as it also puts into law measures that, Xinhua says, “will protect digital information that could be used to determine the identity of a user or that concerns a user’s privacy.”

But as with all new web controls in China, a country where the web is already massively locked down, many will worry that the tightened legal framework will be used to identify people who post online some ‘sensitive’ information, such as – to take a topical example – evidence of corruption among officials.

In practice, a lot of this is happening already, as with recent real name requirements for microblogs like Sina Weibo, or the long-standing need to show ID when buying a mobile SIM. For now, a lot of questions remain unanswered, such as how this affects wifi hotspots, or people who rent homes and whose broadband account will be in the name of the home-owner – and a lot of other issues and unknowns.

Observe, if you will, the dates in the trademark applications below (they’re in the upper right of each application). You’ll see that Tencent’s application (right) was filed on January 24, 2011, but an application for the “Weixin” name had already been filed by a company called Beijing Lianzhi Zhaoyang Cultural Dissemination LLC on January 17.

This certainly seems like a case of trademark trolling, and while we don’t want to jump to too many conclusions, I rather doubt that the timing of these applications is a coincidence. Troll or no, though, it looks like Tencent may have to deal with the Beijing company to secure its trademark, and that could mean giving away a big lump of cash. Still, the company doesn’t have much other choice at this point; the service is already branded domestically as Weixin, and a name change now could negatively impact the service’s skyrocketing growth.

[via Sina Tech]

We know that the China-made messaging app WeChat has global ambitions, and that’s made even more clear today with the launch of a beta version of WeChat for BlackBerry. Since pretty much no-one in China uses BlackBerry phones, this is certainly aimed at markets where WeChat is already seeing good growth (and where the BB OS is huge too), like Indonesia, Malaysia, and across the Middle East.

The new WeChat for BlackBerry is not on the app’s front page, and is instead announced on a backroom WeChat page; it seems to be in public testing for a while. It supports group messaging via text, voice, or photos – but it doesn’t have major features like video calling, as seen in the iPhone and Android versions.

If you really want it, the new release supports BB OS5, 6, and 7, and is in this ZIP file. Here are a couple more screenshots:

WeChat will reach 300 million registered users next month, according to its makers, Tencent (HKG:0700). Whatsapp never reveals numbers, but it’s likely ahead of some newer challengers such as Line (80 million) and KakaoTalk (70 million).

Get more info on WeChat v1.0 for BlackBerry (but in Chinese) on this page. If you test it out (I have no BlackBerry device to give this a spin), let us know how it performs in the comments.

[Source: 36kr - article in Chinese]

In an all-too-rare instance of web companies and content providers teaming up to give users exactly what they want, China’s video sites are currently thriving, packed full of legit and fully licensed movies and TV shows from across the globe to watch, on-demand, and mostly for free. It’s somewhat ironic that Chinese web users will find it easier to stream the latest episode of Breaking Bad or watch the entire back-catalog of House, or view a recent Hollywood blockbuster, than their counterparts in the US.

Among the many strong contenders are video-streaming services from Chinese web giants such as Baidu (iQiyi), Sohu (Sohu TV), Youku, LeTV, PPS, and – the nation’s biggest online company – Tencent (HKG:0700), with its Tencent Video portal at V.QQ.com. To get a sense of the scale of Tencent Video, and why it even needs to compete in this pricey and crowded sector in the first place, we talked to Alex Liu (pictured below), general manager of Tencent’s online video department.

Alex states that Tencent Video is no longer playing catch-up, and is already a top choice for Chinese viewers:

iResearch’s UserTracker September 2012 report on video sites for web and PC clients shows Tencent’s 275 million monthly user coverage was more than Youku’s 266 million, making Tencent Video the number one platform in the industry. [… And] the October monthly coverage was 272 million, leading Youku again by six million.

There are a lot of metrics out there, of course. [UPDATE: It's also worth noting that the iResearch data mentioned above does not include mobile/app views, so it's not a full reflection of the market. Factoring in mobile video views, Tencent Video might not be top]. When we last got a sneak peak at some ComScore data a few months ago, it showed that the stickiest video streaming site in China, in terms of viewing time, was Youku, which was being used for 698 million hours of web video viewing. Tencent Video was third with 474 million hours of eye-ball time. But Tencent’s portal looks to be growing with the strongest year-long growth in the industry by iResearch’s stats [1]. In terms of importance, Tencent recently declared web video, among its very many products, to be one of its top five goals.

To Hollywood and beyond

Alex Liu.

Aside from all the stats, what these video sites need is quality, big-name content to bring in viewers – viewers who are dissatisfied with the dull and safe programming on CCTV, the state TV broadcaster. That means things that young Chinese really want to see (unlike CCTV), such as Korean romantic series, Taiwanese game-shows, American dramas, topical Chinese dramas and comedies, new Hollywood movies, the latest manga. And all that will bring in advertisers. Alex explains:

Tencent Video has always emphasized the importance of investing in the [broadcast] rights to TV series to create a TV viewing platform with diverse, high-quality content, and broad, total coverage. Tencent video already has 61 TV series with more than 100,000,000 plays, and our coverage includes 85 percent of the year’s popular TV content. In 2013, Tencent video wants to cover 80 percent of the content on the top satellite TV stations, plus have exclusives each month, and we’ve already signed agreements with 15 hot shows.

That extends even to Hollywood and other nations:

As far as overseas content, Tencent Video’s Hollywood film theater is already online, including nearly 400 films across 20 genres. We also have 24 series and more than 1,000 episodes of American TV on Tencent Video, including a worldwide web exclusive for the first 13 seasons of CSI, and 500 episodes of Korean soaps from MBC will also be exclusively shown on Tencent Video.

Self-produced shows

All these video-streaming rivals have pushed up the price of web broadcast rights in China, with 30 episodes of one Chinese drama costing as much as $4.6 million last year. Many sites are therefore producing their own content – even dramas – to bring in viewers. Alex adds:

Original content has always been a source of competitive strength for Tencent, and was established early on as one of Tencent video’s strategic directions. At present, Tencent video has successively released [lots of Chinese dramas] and other news, sports, entertainment, and finance; plus Tencent original programs. [… We’re] planning “Burst Forth 2013,” a strategic plan to produce 100 microfilms and 100 web series over the course of the year.

Mobile cinema

Tencent – which also makes the huge messaging app WeChat, which it has launched worldwide – is the nation’s biggest web company by revenue – and by the sheer weight of registered users. Its QQ instant-messenger is used, it’s no exaggeration to say, by pretty much everyone in China. That gives the video portal a big boost in terms of reputation, already registered users, traffic, and its perceived power as an advertising platform. Alex insists it’s a “dual platform for marketing” that includes displaying ads on the Tencent Video mobile apps (for Android, WP, iPhone, and iPad), the Windows PC app, and of course on the website too. But Alex won’t be drawn to give a number for how many video views come from the smartphone and tablet apps.

The V.QQ.com site is different from Baidu’s iQiyi – and Hulu – in also having user-generated content (UGC) in the form of videos, but, we’re told, “less than 10 percent of Tencent Video is UGC.” It’s mostly social stuff that comes from the company’s many social services, such as WeChat, QQ, QZone, or the Facebook-esque Pengyou.

Paying up?

The new Tencent Video section for Hollywood movies – with support for paid streaming. Click to enlarge.

Although Tencent doesn’t lack the resources to buy all this content or monetize the videos from advertising, some of the streaming content requires a small fee to watch – usually as little as 2.5 or 5 RMB (40 to 80 US cents). We’ve seen the web company do this kind of thing for a long time, including on QQ where it has 30 million paying members. For the video site, the payment experiment is still very new, launched last month to coincide with the new “Hollywood film” section of the portal, here. Alex explains more fully:

Tencent Video is currently testing the waters of the user payment model. This November when we were pushing out the Hollywood theater [section], we tested user payment models, asking between 2.5 and 5 RMB for each film, or 20 RMB [$3.20] for a month of membership to watch unlimited movies. Through the implementation of this user payment model, Tencent Video will give users the newest, the hottest, and the most classic Hollywood films, to give users an exclusive platform for a Hollywood-level experience.

At present the films there include Clash of the Titans, Inception, Green Lantern, and more including animation, science fiction, comedy, and also thrillers among 20 total genres and 400 high-definition North American films. Taking this year’s Oscar contender Argo as an example, it premiered on October 12th in the US, November 15th in Hong Kong, and then just 40 days after the initial premiere it was first available on Tencent Video on November 21st, breaking a new record for online arrival speed.

Despite Chinese web users being very used to e-commerce and paying for things online, it can be more of a challenge to get them to cough up for digital content. Nonetheless, a very reasonable price coupled with a quick roll-out (and better streaming quality than pirated movies), should help to make it a persuasive and attractive proposition.

We’ve seen rival site Youku do the same kind of thing with its Youku Premium channel that focuses on top movies. Back in June of last year, Youku revealed that it had seen 200,000 paid transactions for its library of more than 300 movies. That sounds pretty good, but it’s a small fraction of the hundreds of million of visitors to these kinds of sites.

For China-based fans of films and TV series, they have more high-quality choice online than ever before – all while having to endure less ads than on TV. And that sounds like a great reason to turn off the TV and tune into the web.

Big thanks to my colleague Charlie for Chinese-to-English translations!

The ‘drift bottle’ feature in WeChat.

Li did this with a couple of WeChat location-based features, says the China Daily today, called ‘Drift Bottle’ (pictured right) and ‘Look Around’ to connect with strangers – specifically young boys – in his area. The court heard how Li somehow persuaded at least three of the boys to have sex with him, and the man faces “up to five years” in prison.

The case prompted the state-run paper to warn of the danger of such smartphones apps, which is something we’ve heard in the country earlier this year too. Criminals could also use these social apps with location-based tracking to find targets nearby for thefts, fraud, or for touting illegal services. The paper adds:

Police from Hangzhou, Zhejiang province, said they have observed an increase in reported thefts and sexual assaults coinciding with the popularity of [such apps on] high-tech gadgets. […] The Hangzhou police said they have seen some 20 Weixin-related theft and fraud cases since last December. Their counterparts in Beijing, where specific data are currently unavailable, confirmed seeing a similar increase.

WeChat’s ‘Drift Bottle’ and ‘Look Around’ are features that are turned off by default, and require the user to turn them on in order to be found and receive messages from strangers. Both those features are plug-ins (sort of like browser add-ons), so they can be uninstalled if a user wishes. Most people use WeChat – and other apps like Line and KakaoTalk – to talk with friends and family. The makers of WeChat, Tencent (HKG:0700), expect its mobile-only messaging app to surpass 300 million users next month.

Dangers lurk, of course, in any form of contact with strangers, so these messaging apps – even flirty ones like Momo – are mostly safe, and it’s up to developers to build in safeguards, and for users to be wary and exercise common sense. Parents, too, need to be aware of what kinds of apps and social services their own kids are using.

The court has yet to reach a verdict in the Li case.

[Source: China Daily]

The last major milestone for WeChat – an app like Whatsapp, Line, or KakaoTalk – was back in September, when it sailed past 200 million registered users. Ma mentioned at the time that the app was generating 700 million location-based activities each day.

We have four confirmed data points for the app’s progress, so here’s a visual look (updated with a correction) at WeChat’s growth:

Ma’s extrapolation of the next big, round number shows that WeChat, far from hitting saturation point, is growing even faster than before. While going from 100 million to 200 million took six months, the leap from 200 million to 300 million will take a mere four months.

The app went global in April of this year when it also picked up its catchy English name. It’s hard to decipher, despite our best attempts, how many on WeChat are in China and how many are its newer foreign users. When we prodded Tencent about this a few months ago, Justin Sun, director of international WeChat operations at Tencent, said that the Chinese-overseas ratio was starting to get a bit more level, but no numbers were forthcoming. On the plus side, we know the app is doing well in Hong Kong, Taiwan, Singapore, Malaysia, Thailand, Vietnam, the US, and across the Middle East.

But it’s not all rosy for WeChat, with a growing number of people concerned about whether Chinese laws mean that authorities in Beijing could have access to user data.

[Source: People’s Daily - article in Chinese]

This week was a surprisingly busy one in China technology news, with Apple finally dropping its new iPhone and a few new retail stores to boot. We also saw some interesting developments in the chat app space, with a foreign player entering China to challenge the dominant Weixin (Wechat). In case you missed any of the action, here’s a quick roundup of the past week’s headlines.

1. Is Firefall, The9’s Free-to-Play FPS Gamble, Any Good?

Early in the week Charlie gave us his impressions of Firefall, having participated in a closed beta. Unfortunately the much-anticipated FPS did not make a great first impression.

2. Tencent’s WeChat is a Threat to Everyone

The WeChat chat app has certainly impressed many in China and around Asia with its rapid rise to popularity. But there are some concerns about security and privacy for its users.

3. Line App Launches in China, Keen to Fight with WeChat

Right on cue, enter NHN Japan’s Line app to see if it can take a bite of the China’s messaging market. It has a tough road ahead, and it’s unlikely that it could ever catch up with WeChat (Weixin) in China – but it doesn’t necessarily have to. If it can get even a portion, then NHN Japan will likely be pleased to have a channel to market its other games and apps.

4. China’s App Apocalypse? Regulators Explain, Developers Worried

Will China’s MIIT institute registration or permit procedures to regulate apps in the country? This news has many developers are worried that a change in landscape might be on the way.

5. CONFIRMED: Google Shopping Search Engine for China Shuts Today

Another Google service bites the dust in China, as the Google Shopping service is finally closed up. Google hopes to refocus efforts on products that are doing well, namely AdMob, its mobile advertising platform, which is doing quite well in China.

6. You’ll Never Guess What The9 and ZTE Are Teaming Up to Work On

These two Chinese companies will be joining forces to create an internet television joint venture, aiming to reach 90 percent of Chinese households within two or three years.

7. iPhone 5 Finally Launched in China, No Reports of Violence

In perhaps our favorite non-news news of this week, the iPhone 5 finally launched in China without any reports of violence. In what was a busy week for Apple, the company also launched retail stores in Hong Kong and way out in Chengdu too.

That’s all for this week, folks! For our full spread of China coverage, you can click here or subscribe to our China RSS feed.

Many of our readers have probably already come across this article in The Guardian, which paints the service as a threat to dissidents in China in part because it can report location data in addition to whatever is being said. And while it seems new and hip, dissident Hu Jia is quoted as saying that the guobao — the police in charge of China’s internal security — are on WeChat in full force already, and were able to quote messages that he had sent via the service verbatim.

That WeChat, like all domestic social media, poses a security risk to dissidents should not come as a surprise. Nor is it particularly surprising that countries like Taiwan are concerned about the potential security implications of the service. But interestingly, Chinese authorities see the service as something of a threat as well. On Sunday evening, state-run broadcaster CCTV ran a feature piece about the dangers of WeChat, focusing primarily on how its anonymity and location-reporting features can give criminals an easy in. For example, the report told the story of Xu Xiaohong, a single woman who was ultimately ambushed and murdered when a man she met on WeChat attempted to rob her. He knew where she was, and when she was going to be there, because of WeChat.

And WeChat-related crimes are apparently quite common. In one three month span in the city of Hangzhou, for example, authorities say that the service was used in more than twenty crimes. That was around one year ago; the service is far more popular today and is likely used as a tool in far more crimes.

Of course, any chat tool can be used to perpetrate fraud, robbery, and other crimes, and many Chinese commenters have already pointed out that the CCTV seems to be unnecessarily blaming WeChat for the faults of its users. And it’s worth mentioning that the app does have a warning message reminding users not to trust strangers when they first engage its find-users-in-my-vicinity feature. Still, though, it’s clear the location reporting has made a lot of people nervous. Expectations of privacy in China can be lower than they are in some Western countries (if you’ll forgive the sweeping generalization), so it is interesting to see that WeChat’s location-reporting unnerves both China’s dissidents and its police. The concerns of those groups don’t seem to have had much effect on regular users, though, who are still signing up at an impressive clip.

This time last year I was raving, I was gushing, all over startups making video-sharing apps. I named one such venture as one of my standout Chinese startups of 2011, and compiled a list of 10 Chinese-made social video apps. Over in the US, there are ones such as SocialCam and Viddy.

But I was wrong.

On neither Twitter [1] nor Weibo have I seen anyone post a short video clip of their own among the 1,500+ people that I collectively follow. I made three videos myself. But that’s far fewer than the hundreds of photos that I shared socially.

So what went wrong exactly? Before looking at six reasons behind this social video anticlimax – both in China and overseas – it’s worth pointing out that the “standout” video app that I highlighted last year has pivoted away from doing this. Yes, iShehui app, despite over $1.5 million in backing from CyberAgent Ventures in the very early stages, gave up on this sector a few months ago and is now a cloud file backup service. It’s just as dire in the US, with BusinessInsider (showing remarkable restarint in not using all-CAPS for the headline) recently also holding up its hands to say, “Nope, that whole ‘Instagram of video’ thing was bullshit.” Indeed, Viddy was supposedly valued at $370 million from its series B funding, but now limps along with a mere 660,000 users. I think my local noodle shop has fed more people than that.

Here are the things holding back these video apps, both in China and in general:

Time constraint

When a friend shares a photo, your eyes and brain can immediately decide how much time and energy to invest in that image. Perhaps glance over it for barely a second, or pore over it and opt to ‘like’ it and leave a comment. Video content, however, inherently takes more time, and is much more likely to be a let-down. From one preview image in the video player window (usually a blurry or badly-lit one) you have to decide whether it’s worth 10 seconds – or three minutes or whatever – of your time and attention. Usually it’s not. Social videos are 98 percent let-downs, so it’s little wonder that few people are either making them or watching them. To quote one of this year’s top viral video stars, “Ain’t nobody got time fo dat.”

Also, if you look at the Socialcam homepage, you might get the feeling that most of the videos are not only ones you don’t have the inclination/time to watch, but also enough to make you wish for some sort of zombie apocalypse that only affects stupid people – perhaps zombies that are on a diet and can only eat tiny brains.

Photo apps are more fun and rewarding

As I touched upon in the first point, photos give a much higher emotional return-on-investment, so to speak, and never leave people feeling robbed of their time. Even a GIF that takes a while to load, but then turns out to be lame, can be a disappointment. But a dull photo is, thankfully, easy to pass over.

Little traction

With social videos so likely to rub people up the wrong way, there’s not much viral traction. And when a smartphone-made video does actually go viral, you’ll likely see it on YouTube. For Chinese web users, the same applies to Youku, the nation’s biggest YouTube-esque site.

Buggy apps

When I first used the Chinese-made iSheHui app, it was very crashy, but it slowly got better. The same for Weiku and YiXia. And Weipai. Even today, I noticed an update to YiXia that took it up to v3.0; but when I go try to upload a Path-like background image for my profile page, it doesn’t even work. Weipai, when I tried it at first, wouldn’t even upload a damn video, which was its sole purpose. All the startup video apps felt rushed, as if running headlong to some imaginary finishing line that had the words “Congratulations, you’re the ‘Instagram of video’ and the founder is going to be a billionaire” on it. But, in reality, people just deleted your rushed, flakey, half-assed app and never gave it a second thought.

No video embeds

On both Twitter and Sina Weibo, there’s no support for smaller video services to be embedded in the apps or webpages, which severely limited the social aspect of these supposedly very social services. And so viewing a Socialcam or Weiku video that’s shared by someone on Twitter or Weibo requires an extra click through to another site.

Eating up 3G

In China in particular, 3G data plans are miserly, and you won’t get far on a 300MB per month deal with even basic stuff like emailing and browsing. Though sites like iShehui initially promises very clever data compression to save you your 3G data plan, not enough people were convinced.

How many smartphone video apps did you share this year? Tell us in the comments.

The first is a sort of matrix presenting China’s various social networks, classifying them according to relationship type (do they connect real-life friends, or strangers?) and the user’s needs. What’s most interesting here I think is Tencent’s (HKG:0700) properties, including old reliable QQ instant messenger, which spans both strangers and acquaintances.

Looking at Tencent’s other presences which spawned from its QQ userbase – like its Qzone social network, its Weibo microblog, as well as the Weixin chat app (which is being marketed abroad as WeChat) – it’s hard not to be impressed with Tencent’s social portfolio. Of course, none of this information is really new, but seeing China’s major networks laid out in this manner sort of puts them in a new light, a light that is quite flattering for Tencent.

When I think about how Tencent (and now Line and Kakao) have leveraged the user base of their respective chat services, it makes me wonder why Microsoft can’t pull off something similar with MSN Messenger. (Because it’s Microsoft?).

Desktop Favorites

The report presented China’s most favored desktop software in a similar manner, claiming that due to the slow speed of the internet in China in its early days, that desktop software has become popular in comparison. What’s stands out in the chart below is not the classification of various desktop applications, but rather their comparative size of their user bases.

Again Tencent stands out, but so does rival 360 [1]. Sogou’s IME, Xunlei’s P2P client, and Microsoft’s Internet Explorer (ughh…) also have pretty impressive numbers, as you can see below. [h/t Global Voices]

One-click saving to Evernote in the updated Tencent ONE Browser for Android.

Unlike Tencent’s QQ browser, ONE Browser (formerly called Ibibo Browser in India, or as iBrowser elsewhere) compresses mobile data, and claims to be able to reduce users’ data costs by up to 85 percent. It competes with Opera Mini, which is arguably the most widely used mobile browser (also with data compression capabilities) in Indonesia, as well as UC Browser.

With 40 million users worldwide, including 200,000 users in Indonesia, Evernote seems to be placing a great deal of focus on Indonesia, a nation which matches up very well with Tencent’s mobile strategy. The Chinese company recently partnered with media conglomerate PT. Global Mediacom and also stated its ambitions quite clearly at our Startup Asia Jakarta conference in June of this year.

Andy Pan, Tencent’s Director of International Mobile Products, said:

We are rapidly introducing our products in the Asian region and Indonesia is a primary market for us. With the mobile phone subscribers’ base now topping more than 260 million, Indonesia’s mobile phone penetration has tripled in five years.

Evernote seems to be rapidly ramping up partnerships and initiatives across Asia in 2012. In May, it launched Yinxiang Biji, an Evernote service localized for the Chinese market which was then followed up by Alipay integration (to pay for Evernote pro services). In July, we noted that Evernote has 1.1 million users in China. Just recently, we wrote that Moleskin also creatively launched a smart (paper) notebook which enhances the quality of your photos taken with your mobile phone within the Evernote app.

Tencent’s (HKG:0700) “QQ” brand might be China’s first household name that emerged from the web – along with its iconic penguin – but the cutesy name has not been much help in the nation’s cut-throat e-commerce market. And so Tencent is rumored to be ditching the “QQ Buy” branding on its B2C online mall (which came late to the scene, launching just over a year ago) and instead running with the 51Buy moniker of its successful subsidiary.

Tencent first invested in startup 51Buy – which is like a mini Amazon, focusing on selling electronics – in 2011, and then earlier this year upped its stake to 80 percent. Tencent’s own QQ Buy runs in direct competition to its subsidiary. And while the web giant’s e-commerce effort does have greater market share than 51Buy (see the graph below), it’s the smaller store that’s said to have stronger traction and a better reputation with Chinese consumers.

Market share in China’s B2C e-commerce sector in 2012 Q2 – Click to enlarge.

According to Chinese business site 21CBH, sources at Tencent say that 51Buy is doing well in this tough industry to be actually making money, averaging a profit margin of 1.5 percent to 3 percent, and generating daily sales revenue of RMB 20 million (US$3.2 million) on average. The insider source added, “The trade volume on 51buy.com is tenfold of that on buy.QQ.com.” That’s quite remarkable given that Tencent’s store has slowly risen up to be China’s third-largest B2C e-commerce site, albeit with a modest 3.6 percent market share. 51Buy, meanwhile, is down with the ‘others’ fighting over the scraps in a sector dominated by Tmall and 360Buy.

So, while the QQ name and its little penguin have worked wonders in Tencent’s social and gaming efforts, it looks possible that the company will opt for a newer name, and a blank slate, as it tackles China’s vicious B2C market.

[Source: 21CBH (site currently offline, so can't find URL), via related site MorningWhistle]

Tencent’s mobile messaging behemoth Weixin (known as WeChat outside China) is, like other Chinese messaging services, legally responsible to some extent for the content its users share. And although the service is extremely popular, users have expressed concerns about how safe it is when strangers can pretend to be whoever they want. For these reasons, the company had previously initiated an optional real-name verification system, but recently suspended it temporarily. Now, it’s back open with a brand-new auto-verification option: users who have verified accounts on Sina Weibo or Tencent Weibo can log in via those accounts to have their Weixin accounts verified automatically.

The new verification system appears to be only in effect within China, and should not affect overseas users of WeChat in any way.

The system is a smart move on Tencent’s part, for several reasons. First, it greatly reduces the workload of the verification process, which would otherwise require each verification request to be processed by a Tencent employee. Second, it increases the ease of verification for new Weixin users in China and thus increases the likelihood that they will choose to verify their accounts. Finally, it allows users who would prefer to, ahem, circumnavigate real-name verification to verify via their Sina Weibo accounts (since Sina’s implementation of real-name requirements has been pretty half-assed by the company’s own admission).

As a chat app, the need for any political censorship on Weixin that would be facilitated by a real-name system is probably not as significant as it is on weibo, but the location-based nature of the app could facilitate stalking in such a way that real-name verification might become something that users actually demand. If that happens, allowing users to verify their identities via Weibo could turn out to be a bit of a mistake, as users are well aware of the holes in weibo real-name registration. But if that doesn’t happen, this change will have been a smart move for Tencent to ease the verification process both for users and for itself.

[Sohu IT via TechWeb]

MIS Asia is reporting that Tencent (HKG:0700) claims 400 percent growth for its WeChat app in Malaysia since June, and currently has more than 1 million users in the country. Louis Song, the country manager for Indonesia, Malaysia, and Singapore, commented on the app’s progress in the country to date:

We are very proud to achieve a great and healthy base of subscribers in the Malaysian market in just five months. Our team is committed to continuously improve the user experience and this will definitely be the impetus for WeChat to achieve even greater heights.

Reportedly, a number of Malaysian celebrities are using the service to communicate with fans, and that likely helps WeChat in terms of visibility.

Currently the Android version of the app is ranked 12th overall in the free app category in Malaysia, but it has been one of the top ten communication apps since back in August. On iOS it has been doing even better, and is currently ranked fifth among all free apps, and second in the social networking category.

WeChat launched in Indonesia back in September and it looks to be performing well in there too.

Much like UCWeb’s mobile browser which recently surpassed 1 million Android users, WeChat is an example of a Chinese company that is leveraging the power of app stores to reach consumers around the world.