VODone: the Biggest Chinese Tech Company You’ve Never Heard Of

For a Chinese tech company of its size and clout, VODone – with its V1.cn video portal, V1Tuan group buy site, mobile ad network, and mobile TV dominance – gets startlingly little attention worldwide. What is the VODone Group exactly?

One of the most notable things about the firm is that it is state-affiliated; indeed, it is a semi-state owned enterprise (SSOE). As such, it has very strong government ties, and boasts of being one of the few companies to have acquired all the requisite broadcasting and video licenses. VODone’s video news portal carries mostly items of state-backed news channels as well as its own in-house content. There’s relatively little in the way of alternative views. In contrast to the news sections of Tudou’s or Youku’s sites, there are no user-submitted news videos or anything else from more unofficial sources.

Despite being an SSOE, VODone is listed on the Hong Kong stock exchange, under the HK:82 ticker. It partners with state-backed firms and private enterprises alike, such as with state-owned China Mobile for mobile TV services, or with Microsoft’s MSN for live broadcast news on MSN China. It has subsidiaries, too, in online gaming, mobile advertising, and in the national lottery market.

Mobile TV and Group Buying

Mobile TV is being strongly pushed by the government and China Mobile. Back in July we reported on how the telco looked on course to hit its goal this year of five million mobile TV-enabled handsets, with new supporting phones from Lenovo, and Huawei.

VODone’s group buy site, V1Tuan (pictured right), is a rare state-backed foray into the group buy market, which is particularly fragmented and cut-throat in China. Given the hundreds of competitors in this sector – where sites like QQTuan and Meituan have eked out precarious market leads – it seems especially odd to see a partly public sector company risk this high cost, low profit field.

VODone vs the Private Sector

This uncertain and not very transparent confluence of the public and private sector in online business might be bizarre in many countries, but in China it’s a part of the enterprise landscape.

Privately, many companies in China – especially in the fast moving tech scene – might privately resent the guanxi that gets some services favorable deals or crucial certificates; but those feelings cannot be vocalised. There are even several state-backed search engines, which are certainly not as open as their private sector counterparts, such as Baidu.

VODone Group annual revenue and gross profit for 2010. Units = HK$, x1000. (Source: VODone 2010 Annual Report).