Archives July 2015

Sony lines up new games for Chinese gamers

Shuhei Yoshida, president of Sony’s Worldwide Studios for SCE introduces Project Morpheus HMD, the company’s latest virtual reality (VR) gear, during a press event held on July 29, 2015 in Shanghai.

A series of new games for Sony’s PlayStation 4, PS Vita and virtual reality device Project Morpheus debuted Wednesday at ChinaJoy 2015 in Shanghai.

More than 70 new games will be launched in the Chinese market for PS 4 video game consoles in the coming month, Sony announced.

ChinaJoy, or China Digital Entertainment Expo & Conference, is the largest gaming and digital entertainment exhibition held in the Chinese mainland.

Sony debuted its game console PlayStation 4 in 2013, and started selling the Chinese version on March 20 this year.

Priced at 2,899 yuan ($468) for the basic package and 3,299 yuan for a console plus a camera, the PlayStation Eye, the products are available at Sony Store, Tmall.com and JD.com.

It is the second foreign console allowed to enter the Chinese market after Microsoft launched its Xbox One in late September.

A new rule that allows both foreign and domestic gaming console makers to manufacture and sell their devices anywhere in the country was announced last week, according to a statement from the Ministry of Culture.

Due to government officials’ concern over objectionable content, China in 2000 banned gaming consoles via a moratorium. As a result, Microsoft, Nintendo and Sony, three of the world’s largest video game console makers, were shut out of China’s lucrative video game industry.

In 2014, the country limited foreign console makers to operations within the Shanghai Free Trade Zone (FTZ) in 2014.

Industrial insiders believe that such series of progressive policies could shake up the domestic gaming sector.

According to the working committee of China’s audiovisual, digital publishing and game publishing association, in 2014, the sales volume of China’s gaming market reached 114.48 billion yuan, up 37.7 percent year-on-year.

In the first half of 2015, the number reached 60.51 billion yuan, up 21.9 percent year-on-year. Since last year, overseas sales volume reached 1.76 billion yuan, reflecting a rapid growth of 121.4 percent.

A model poses with Project Morpheus HMD, Sony’s latest virtual reality (VR) gear, during a press event held on July 29, 2015 in Shanghai.

Project Morpheus head-mounted display (HMD)

Shuhei Yoshida, president of Sony’s Worldwide Studios, brought Project Morpheus HMD, the company’s latest virtual reality (VR) gear, to the press event to demonstrate their Chinese strategies.

VR, also known as computer-simulated life, first appeared in science fiction in the1950’s, and was developed for medical use, pilot simulation and military training in the 1990’s.

The entire industry began to draw the public’s attention as a developer kit named Oculus Rift, which was the first truly immersive VR headset for video games. It was initially mooted on the US crowd-funding platform Kickstarter by 9,522 backers who pledged more than $2 million.

Sony unveiled their bold VR gamble to the world at the Game Developers Conference in March 2014.

During the Electronic Entertainment Expo, or E3, held in Los Angeles this year, more than 20 demos designed for Project Morpheus were unveiled to the public.

“Summer Lesson”, “The Deep”, “The Playroom VR” and “Hatsune Miku Expo” will be demonstrated at the ChinaJoy PlayStation booth and visitors will have the chance to experience the Project Morpheus on the spot.

“Many people think that Project Morpheus is an accessory to PS4; the truth is that Project Morpheus is a new system, and both happen to work well together,” Yoshida said during a group interview after the press event.

“Project Morpheus is still at version one, Sony is trying its best to bring the product to the fans, we are testing internationally, to make sure the product is improving,” he said.

Sony announced at Game Developers Conference 2015 that Morpheus’ consumer VR headset is due to ship in Q1 2016.

Yoshida said that the global launch time will the same, but he didn’t give a specific date and he also mentioned that the device’s price has not been confirmed.

According to Yoshida, PC games can be migrated to Project Morpheus. He noted one example, saying that after refined and optimized the code, a user migrated Oculus games to Project Morpheus within just two days.

Sony London Studios’ Director Dave Ranyard, whose team is working heavily with the PS VR headset Project Morpheus, believes that VR HMDs could become the ‘technological icon of the age’, similar to Sony’s Walkman in the 1980’s and smartphones in today.

Lenovo leads salary list

Yang Yuanqing, CEO of Hong Kong-listed Chinese computer technology company Lenovo Group, topped the 2015 Chinese Hong Kong company CEO salary list released by Forbes China, the daily newspaper Beijing Times reported on Wednesday.

Yang was the richest CEO in 2014 with an annual salary of 119 million yuan ($19 million), putting him in first place for the third consecutive year, according to the report.

This year’s list included 334 CEOs of companies from the Chinese mainland that are listed in Hong Kong whose annual salaries exceeded 1 million yuan, up 107 from the previous ranking.

Forbes also released a 2015 Chinese A-share company CEO salary list, on which Ma Mingzhe, chairman of Ping An Insurance Co, was in first place with an annual salary of 109 million yuan.

China LinkedIn users top 10 million

The number of LinkedIn users in China has topped 10 million, a year and a half after the world’s largest professional network launched a Chinese version of its online services.

Founded in 2003 in the United States, LinkedIn has more than 300 million users. Before tapping into the Chinese market in February 2014, the company had just 4 million users from China, who registered on its global website.

LinkedIn China chief Derek Shen told reporters Tuesday that measures to boost its presence have included incorporating Twitter-like services Sina Weibo and Tencent Weibo into its platform and allowing users to bind their LinkedIn accounts with those on Chinese mobile app WeChat.

“We published more than 20 reports on the job market in China, which provided career advice for job-hunters,” Shen said. He added that helping companies like PC maker Lenovo and telecom equipment maker Huawei recruit talent also enhanced its influence.

LinkedIn hopes to further tap growth by launching a job-hunting application for Chinese graduates, many of whom are struggling as a record number of young people search for jobs amid a slowing economy.

Volkswagen China car sales hit by slowdown

China, the world’s biggest auto market currently in the throes of slowdown, has become a drag for Volkswagen, which had set a target to outsell Toyota, the world’s biggest carmaker by sales volume.

In the first half of this year, Volkswagen’s global deliveries shrank 0.5 percent from a year earlier to 5.04 million units as performance in China, its largest sales contributor, fell 3.9 percent to 1.74 million units, the company said yesterday.

That lagged the Chinese market’s 1 percent growth in general, which is itself in a dramatic slump from a compound average growth of 16.6 percent from 2005 to 2014.

A 48 percent surge in SUV sales in China was the only bright spot in the first half of this year. And with just one localized SUV in its Volkswagen brand’s portfolio here, the wheels of fortune have been on downward spiral for the company.

Sourcing about 30 percent of its sales from China, Volkswagen has a bigger risk exposure from the economic slowdown than its biggest rival Toyota, which accounts for only 10 percent of its sales in China.

Carmakers and dealers are trying to sail through the market downturn together. Volkswagen’s Audi brand has set aside a 1.2 billion yuan ($193 million) subsidy plan for its cash-tight dealerships.

Earlier this month, BMW announced up to 2 billion yuan reward package for sales achieved by dealers in the second quarter. That was on top of the 15 percent quarterly sales target reduction.

Price war looms as smartphone market booms

Domestic mobile phone makers demonstrate the selfie functions of their products at a smartphone expo in Nanjing, capital of Jiangsu province. Major Chinese players are gearing up for a price war in the high-end smartphone sector.

China’s big players are gearing up for a price war in the high-end smartphone sector, and the only big winner will be the consumer.

Xiaomi Corp, Huawei Technologies Co Ltd and ZTE Corp’s Nubia have all rolled out new products in what has been dubbed the “Godzilla” handset business, as they battle to wrestle away more market share from South Korean-based giant Samsung.

“By introducing premium devices, the average price of high-end smartphones will be dragged down,” Antonio Wang, an analyst with the United States-based market research company IDC in Beijing, said. “This will benefit consumers.”

It will also create more problems for Samsung, which has already been badly mauled by the aggressive tactics of China’s big three.

Earlier this month, the world’s largest smartphone manufacturer reported that its second quarter operating profit would probably fall by 4 percent to 6.9 trillion won ($6 billion) because of poor sales of its new Galaxy S6, particularly in China.

As the brand loses its mass appeal here, consumers are switching to cutting-edge domestic products from Xiaomi, Huawei and Nubia.

“Chinese smartphone companies are now more willing to invest in innovation by putting state-of-the-art technology into their devices,” Xiang Ligang, an independent analyst and founder of telecom website cctime.com, said.

“They know the ‘low performance for low price’ strategy does not work in today’s market. Cheap devices will never make big profit margins,” Xiang said.

The rise of China’s smartphone companies from low-cost labels to upmarket brands has been meteoric.

Xiaomi shipped out 34.7 million smartphones in the first half of this year compared to 26 million during the same period in 2014 without revealing detailed financial figures.

Huawei announced shipments of 31 million units during the same period, a 40 percent increase compared to last year, without revealing detailed financial numbers. Nubia has yet to report its shipment figures in China.

For Samsung, the data are depressing. In the first quarter of this year, its shipments to the Chinese mainland were 9.6 million devices compared to 20 million during the same period in 2014, according to IDC. That left it in fourth spot behind Apple, Xiaomi, and Huawei in China’s smartphone market, which is still the biggest in the world with estimated annual sales of about 400 million handsets.

“It (the fall in Samsung shipments) highlights the volatility of Chinese consumers’ brand preferences,” Wang, of IDC, said.

And there could be more pain on way for the South Korean company, analysts point out.

Xiaomi, Huawei and Nubia have launched models that target the 3,000-yuan ($480) price range, which used to be Samsung’s territory.

The Mi Note Pro from Xiaomi retails at 2,999 yuan, with the company reporting 1 million pre-orders before it hit the stores in May.

The P8 from Huawei came out in April and costs 2,888 yuan, while the Z9 from Nubia is more expensive at $3,499 yuan.

“These new products illustrate that consumers are shifting to devices that provide better user experience,” Wang Jingwen, an analyst at Canalys China in Shanghai, said. “They are going up upmarket (which is where Apple and Samsung are).”

At the top of that pyramid is Apple, the iconic iPhone brand. Despite the high cost and high rental fees charged by telecommunication providers to use their networks, the iPhone dwarfs its rivals.

At the start of the year, Apple consolidated its No 1 position in China by introducing a trade-in program, which saw a jaw-dropping 14.5 million smartphones delivered to the Chinese mainland in the first quarter. That was 1 million more units than Xiaomi in No 2 spot, according to IDC.

Since iPhone models retail at around 4,000 yuan, the gap in revenue with Xiaomi was stretched even further. To eventually challenge Apple, China’s leading companies will have to come up with better products and better deals.

“Apple’s trade-in initiative attracted more mid-end Chinese buyers and further increased the distance between local players,” Wang, of IDC, said.

Apart from having Apple and Samsung in their sights, China’s big three will have to keep a close eye on a new wave of domestic rivals. “Bringing down prices will be part of their strategy as other players enter the market,” Wang said.

Weeks after LeTV Holdings Co Ltd, an online video company, unveiled a large screen Android device, known as Le Max, in April, Xiaomi cut the price of its flagship Note Pro device by 300 yuan.

Motorola Mobility, now a Lenovo subsidiary, also followed suit by announcing a 300 yuan discount on its latest high-end Motorla X series model in a move to target young buyers.

Joining them will be a new smartphone launched by Zhou Hongyi, an Internet tycoon who owns the nation’s largest online security company Qihoo 360 Holdings Ltd.

Qihoo has linked up with Dongguan-based budget contract phone maker Coolpad Group to produce the Qiku range in the fall. Prices are believed to be around 3,000 yuan.

“The competition will be extremely fierce this year for Chinese vendors, especially for those who are moving up to high-end segment,” Zhou said. “But there will be winners.”

30% of global duty-free shopping driven by Chinese travelers

Chinese shoppers drove 30 percent of all global duty-free sales in 2014. They have contributed the most to duty-free sales since 2009, and growth in duty-free spending outstrips local retail-sales expansion, said Catherine Lim, senior analyst at Bloomberg Intelligence.

The number of outbound Chinese tourists will surge 19 percent to 139 million this year and rise to 164 million in 2016, which will boost global duty-free and travel-related retail sales, Lim said.

Last year, Chinese tourists spent more than $163 billion on overseas shopping.

Chinese spending on tax-free shopping could hurt the country’s retail sales, Lim said. Last year, Chinese duty-free spending grew 18 percent, faster than the 12 percent rise in domestic retail sales, based on Bloomberg Intelligence.

Chinese visitors to Japan surged 113 percent from a year ago in April, the 19th straight month of more than 40 percent growth as weaker yen fell against Chinese currency, data from Bloomberg Intelligence.

With South Korea grappling with MERS and other countries easing visa restrictions, Japan and other nations will draw more Chinese visitors, Lim said.

ZTE unveils ‘Axon’ phone with dual cameras in U.S. market

Chinese smartphone manufacturer ZTE unveiled Tuesday its latest offering “Axon” in New York, a Hi- Fi audio phone the company called its “first phone made in the U.S, for the U.S.”

The device, a 5.5-inch unlocked phablet for the U.S., boasts of “duel lens,” 13-megaixed and 2-megapixed camera on the rear, which would lead to sharper video capture.

The dual-lens system will allow users focus before and after taking a shot.

The features of the phone included low-light and fast-image capture and high-quality audio.

It is available for order direct from ZTE, Amazon, Ebay starting Tuesday, with shipping beginning on July 27.

Lixin Cheng, Chairman and CEO of ZTE USA, said, “We put consumers at the heart of everything we design, build and deliver, and our phones reflect what consumers want, value, and use. ZTE AXON is a product that devotes to meet all of consumers’ requirements.”

ZTE USA, the fourth largest smartphone manufacturer and the second largest in the non-contract market in the U.S., has more than 20 million customers in the United States.

Chinese shares continue broad rally

Chinese shares rallied for a third consecutive trading day on Monday, following dramatic moves by the government to stabilize the market.

The benchmark Shanghai Composite Index rose 2.39 percent to close at 3,970.39 points. The smaller Shenzhen Component Index surged 4.78 percent to close at 12,614.16 points.

The ChiNext Index, tracking China’s Nasdaq-style board of growth enterprises, climbed 5.8 percent to end at 2,683.07 points.

Winners outnumbered losers by 856 to 44 in Shanghai, and by 831 to 11 in Shenzhen. Some 900 shares jumped by their 10-percent daily limit.

More than 1,000 firms continued to suspend trading of their shares.

The combined turnover of the two bourses rose to 1.174 trillion yuan (192 billion U.S. dollars), from Friday’s 1.08 trillion yuan.

The Shanghai index climbed above the 4,000-point psychological mark during the afternoon session, before retreating to close at around 3,970 points.

Chinese shares began to pick up on Thursday, after a free fall since their peak in mid-June.

On Friday, the benchmark Shanghai Composite Index leaped 4.54 percent to finish at 3,877.8 points. On Thursday, the Shanghai index soared 5.76 percent, the biggest daily rise in six years.

Before Thursday, the Shanghai index had lost about 28 percent of its value since a spectacular bull run ended with a peak of 5,178.19 points on June 12.

For fear of the market rout threatening overall financial stability, the Chinese government stepped in with measures including pouring in funds and restricting futures trading on a major small-cap index.

On Thursday, Chinese police joined the securities regulator to investigate “malicious short selling”, a practice held to be a big contributing factor in the market chaos. The central bank also reiterated that it will continue to support the market’s liquidity needs.

Despite the eye-catching rebound, analysts have predicted some continuing instability in Chinese stocks.

Xu Xiaoming, a market commentator, said the rebound lost some momentum in the afternoon trading session on Monday. He said he expects the market to fluctuate in the coming two trading days.

Earlier, Minsheng Securities forecast that the market will struggle at times in the near future, as it will take time to disperse market panic and rebuild confidence.

Wanda ‘a work in process’ as it pursues shift to e-finance empire

Dalian Wanda Group Co Ltd announced moves over the weekend that it said will support its transformation into a services empire by 2018.

The conglomerate said that it would establish a financial group and that it would accelerate its acquisition of banks, securities firms and insurance companies in the second half of the year.

The moves were announced by chairman and founder Wang Jianlin during a strategy presentation in Beijing on Saturday.

Wang said that the vision for the financial group entails a focus on Internet finance, a strategy that will allow Wanda to distinguish itself from traditional financial enterprises.

As part of its transformation, Wanda will reduce the number of physical stores to cut costs and raise profits with the help of e-commerce and online payments, according to Wang.

Wanda now conducts its business in the financial sector mainly through 99Bill Corp, a Shanghai-based online payment service provider in which Wanda bought a 68.7 percent stake for $315 million in 2014.

In June, Wanda and 99Bill Corp jointly launched an Internet financial product to raise funds for Wanda to build shopping plazas.

The crowdfunding effort raised 10 billion yuan ($1.61 billion) within two weeks, according to the presentation.

In terms of expansion and diversification, Wanda will complete the acquisition of three domestic companies and three foreign enterprises in the second half, according to a press release posted on Wanda’s website on Saturday. None of those companies was identified.

Wanda spent more than 15 billion yuan in acquisitions in the first half, taking a 20 percent stake in the Atletico Madrid football club in January, acquiring Swiss sports marketing firm Infront in February and buying a dozen cinemas in China and abroad in June.

It also invested 3.58 billion yuan in Suzhou-based online travel platform Tongcheng Network Technology Co on July 3.

Wang said that the group aims to derive more than 65 percent of income from services by 2018, which would be a decisive shift away from its current focus on property.

Alibaba to get boost from rural e-commerce

Group expects turnover to jump as more farmers trade online

Alibaba Group Holding said in a press release Thursday that it would generate more than 3 trillion yuan ($483 billion) in transactions this year, as the company is actively introducing e-commerce to rural areas.

“We believe that our global transaction volumes this year will surely surpass that of Wal-Mart Stores Inc,” Zhang Yong, Alibaba’s CEO, was quoted as saying in a press release e-mailed by Alibaba to the Global Times Thursday. The company handled 2.4 trillion yuan worth of transactions in 2014.

Alibaba’s market valuation will rise if it can persuade 700 million people in China’s rural areas to embrace e-commerce, according to the press release.

“Alibaba pins hope on rural e-commerce, which not only can generate new growth for the leading online shopping platform operator but also boost the rural economy,” said Zhang.

As an example of the huge potential of rural e-commerce, the company revealed in the press release that in June, hundreds of thousands of residents in the rural areas shopped on its online marketplaces every day.

The e-commerce leader has already made strides in rural e-commerce, touting goods on its online consumer-to-consumer marketplace taobao.com to rural residents by painting advertisements on walls since 2013.

And in October 2014, Alibaba announced that it would invest 10 billion yuan to build 1,000 county-level and 100,000 village-level e-commerce service centers around the country within three to five years.

Its arch rival JD.com Inc (JD) also actively carved out space for rural e-commerce, running over 800 e-commerce service centers to support delivery and home appliances maintenance in more than 30,000 villages, a PR representative from JD told the Global Times Thursday.

The companies’ foray into the rural market is in line with the aggressive push by central and local governments to promote rural e-commerce.

As the country’s rural heartland, Henan Province in Central China had opened in Xinxiang 300 e-commerce service centers as of December. It plans to establish 1,200 in the city alone this year, according to an announcement on the Henan government’s website in December.

The Ministry of Commerce and the Ministry of Finance in May reportedly announced that a group of 200 counties in China’s central and western regions would receive 2 billion yuan in financial support from the central government as part of a rural e-commerce pilot program.

Premier Li Keqiang, who continuously emphasizes the key role of e-commerce in boosting the real economy, encouraged graduate students and migrant workers to start their own business such as e-commerce in the rural areas during a routine State Council press conference in June.

In May, some rural merchants reaped in as much as 16,000 yuan per month in profit by selling goods on taobao.com, according to media reports.

E-commerce, which can attract investment into and promote sales of local specialties, will play a key role in boosting the rural economy, Feng Lin, a Hangzhou-based independent analyst, told the Global Times.

Data from Ali Research, a market research arm under Alibaba, showed that online sales in rural China are expected to hit 460 billion yuan in 2016, compared to 180 billion yuan in 2014.

Feng’s view was also shared by Lu Zhenwang, founder of Shanghai Wanqing Commerce Consulting.

“Rural residents like to shop on online marketplaces, which offer an easier and convenient access to various products sold around China and abroad, while farmers can sell their agricultural products online,” which will also contribute to the local governments’ fiscal revenue, Lu told the Global Times Thursday.

Given China’s current economic slowdown, total government fiscal revenue stood at 3.64 trillion yuan in the first quarter of the year, up 3.9 percent from a year earlier. In the same period of previous year, the growth rate was 9.3 percent.

However, analysts said that much work remains to be done to ensure product quality and availability of capital.

E-commerce companies also expect to have specific regulations covering the rural e-commerce category.

JD told the Global Times in an earlier interview in May that the company is working together with local governments to improve distribution standards and quality control system for agricultural goods sold online.

Logistics is another bottleneck in the development of rural e-commerce, as not all express companies have distribution networks covering rural areas, said Lu.