Archives December 2015

Smartphone makers set sights on iris scanning tech

While the year 2015 has witnessed fingerprint recognition scanner becoming a must-have feature in top of the line handsets, iris scanning technology is expected to be the center of attraction in high-end smartphones in the next few years.

Iris recognition, an automated method of biometric identification, enables you to unlock the phone as well as secure mobile payment by scanning your eyes instead of the tip of your fingers.

The new recognition method, which analysts said is widely regarded as becoming the next security standard, has found its way to mobile devices.

South Korean tech giant Samsung is rumored to be working on its next generation of Galaxy S7 smartphones, which will come with the iris scanning technology in 2016.

Another South Korean smartphone manufacturer, LG, which hadn’t originally even intended to integrate fingerprint scanner on its LG G4, is reportedly very likely to become a front-runner in smartphone technological breakthroughs. According to tech news portal techradar.com’s report in November, LG’s next generation LG G5, which is expected to be released early 2016, could sport an iris scanner.

Smaller smartphone makers, Guangdong-based Vivo and Japan’s Fujitsu, have already tried out this technology on their flagship smartphones, Vivo X5 Pro and Fujitsu ARROWS NX F-04G, respectively.

Fujitsu promoted its gizmo that can unlock a screen with a 0.6-second glance, and Vivo X5 Pro claimed it can secure almost all mobile applications. The two devices created quite a sensation among tech enthusiasts when they were launched in May, but their sales were reportedly not particularly high, as iris recognition doesn’t seem to be a feature ordinary consumers are looking for in the next generation of smartphones.

“I will not change or buy a smartphone only for the sake of enjoying the new technology, which is like a supplementary feature for passwords, not a necessary one,” Shang Xin, a 31-year-old Beijing resident, told the Global Times on Tuesday.

He added that it is slightly inconvenient to constantly have to lift the phone to your eyes, and the infrared light will also make the technology annoying and invasive if done regularly.

“I think fingerprint scanning technology is enough for my daily use with respect to security and speed,” he said.

Fingerprint recognition, another biometric identification method, was widely integrated into high-end smartphones this year.

“Technologically speaking, iris scanning will be more secure than other identification methods,” Zhu Dalin, an industry analyst with Beijing-based market consultancy Analysys International, told the Global Times on Tuesday.

“But this does not mean that fingerprint scanning technology will head out of the door in favor of iris scanning, especially when current iris scanning technology is not significantly faster,” said Zhu. “One of the reasons why fingerprint scanning caught on was thanks to Apple’s solution – Touch ID – which slightly edged out typing in passwords in terms of speed.”

Experts are concerned that the new technology may still carry some disadvantages for users who have eye-related disorders as well as those who are trying to unlock their phones without enough light present.

But consumers are likely to see the adoption of iris scanning technology in next year’s smart devices as a strong selling point as the global smartphone market continues to mature.

U.S. market consultancy International Data Corp (IDC) forecast on December 3 that 2015 will be the first full year of single-digit growth of 9.8 percent year-on-year in worldwide smartphone shipments, settling at a total of 1.43 billion units. IDC also predicted that the once red-hot smartphone market in China would grow by only 1.2 percent this year, down from 19.7 percent in 2014.

E-commerce creates more jobs for the disabled

Su Qianqian, who runs an online store for hand-drawn postcards, discusses her business with Luo Runfa, an e-commerce instructor, after a training class in Hangzhou, Zhejiang province, in September.

A newly released e-commerce report showed that the Internet has created more job opportunities for China’s disabled population.

As of June, 316,000 disabled people had opened online stores on Taobao, China’s biggest online shopping platform, with sales of 10.5 billion yuan ($1.63 billion) in 2014.

The report, prepared by the Ali Research Institute, was released on Thursday at the China Disabled Persons’ Federation in Beijing. It analyzed aspects of the store owners and customers on Taobao, one of Alibaba’s main online marketplaces.

It showed that disabled online store owners in eastern coastal cities had the best sales, with Zhejiang province on top, followed by Guangdong and Shanghai.

Male online store owners accounted for about 64 percent, while female owners accounted for 36 percent.

Nearly 25 percent of online stores owned by disabled owners sell clothing.

The report also said that nearly 80 percent of owners had no chance for a college education, and their highest degree for most was a high school diploma. About a quarter only finished elementary school.

The report also showed that 80 percent of the owners earned less than 30,000 yuan a year from the online stores, or about 2,500 yuan per month.

The research institute also studied disabled customers, finding that 2.69 million disabled clients shopped on Taobao as of June, spending 13 billion yuan in 2014.

Disabled clients spent more on electric cars, family health, online games and instruments and spent less on travel than other customers, the report found.

The Internet is a gateway for many disabled people to engage in society, said Zhang Haidi, chairwoman of the federation. The cooperation with Alibaba is a seed that encourages disabled people to work, she said.

“We are dedicated to cooperation with the China Disabled Person’s Federation and other organizations to establish an online ‘barrier-free’ ecology that allows disabled people to enjoy equal rights with others on the Internet,” said Alibaba’s President Jin Jianhang.

Alibaba will invest 300 million yuan over the next five years to provide 50,000 online jobs for disabled people and to train 100,000 online, Jin said.

China has more than 80 million disabled.

Zheng Ran, a former Paralympic Games basketball player, retired from the court and became a star online store owner in 2012 selling equipment for the disabled in 2012.

“Sports changed me, and the Internet business changed my life,” she said.

Top 10 products

What disabled online store owners sell on Taobao

· Clothing

· Shoes, suitcases and bags

· Furniture

· Online games

· Digital products

· Cosmetics

· Office supplies

· Food

· Sports equipment

· Jewelry and accessories

Source: Ali Research Institute

London property company Savills plans office in Wuhan

London-listed property services provider Savills Plc’s China operation will open a new office in Wuhan in central China’s Hubei province in 2016, expanding its business in the country as the company holds optimistic outlook for market demands, said Jeremy Helsby, Group CEO.

During his visit to Shanghai Tuesday evening, Helsby said he believes that China’s demand for property services will grow fast, making China one of the most active property markets in the next five years, and Savills continues to expand its business and investment in China.

Savills is still bullish about China economic growth despite GDP growth not as rapid as that of past years, he said.

“China is still a very important growth region. I am not worried about China’s growth, and I am still excited about it,” said Helsby.

Savills opened its 15th office in China’s mainland in Xi’an, west China’s Shaanxi province. The Xi’an office will serve increasing demands amid China’s Belt and Road Initiative rejuvenating westbound trading routes and further opening markets to investors.

Savills will also continue to assist its Chinese clients to develop business in overseas market as they expand their footprint globally in commercial and residential property sectors, including development of hotels to meet mounting demands of Chinese outbound tourists, said Helsby.

Didi Kuaidi plans car sales to diversify its business

Didi Kuaidi is planning to sell cars through its platform, as the ride-hailing major seeks to diversify its business mix to more segments and sectors.

The Beijing-based company said on Monday it will sell 200 new vehicles by Mercedes-Benz and Tianjin FAW Toyota Motor Co Ltd, on its platform on Saturday.

Consumers can pay 40,000 yuan ($6,200) less to buy two models of automobiles on Didi Kuaidi, whose market prices are about 300,000 yuan. Users can book appointments and pay a deposit on the car-hailing platform before picking up the cars at designated 4S stores.

The sales event targets consumers in six cities: Beijing, Shanghai, Hangzhou, Guangzhou, Shenzhen and Chengdu where Didi Kuaidi is offering test-drive services.

Zhu Lei, vice-president of Didi Kuaidi, said the campaign marks the company’s latest attempt to offer more targeted marketing services for automakers

“By offering test-drive services, we can accumulate data on what types of cars consumers like. Selling automobiles online offers a chance to turn such understanding of consumer preferences into precision marketing, which in turn will boost the proportion of consumers who actually buy cars,” he said.

In October, Didi Kuaidi launched test-drive services, a product it said “has a huge business potential”. Through its platform users can get hands-on driving experience of about 100 models.

Zhu said the company plans to expand the service to more than 30 cities within a year but more studies are necessary to make car sales a regular business.

Wang Xiaofeng, an analyst with market research firm Forrester Research Inc, said the move is part of Didi Kuaidi’s broad efforts to monetize its huge user traffic.

“I don’t think Didi Kuaidi wants to become an e-commerce site to sell cars, which demands large investments. Instead, it is in a better position to become a marketing platform. This is a low-cost strategy and the most efficient way to tap into its sizable user base,” she said.

Currently, Didi Kuaidi has 250 million registered users. With services available in 259 Chinese cities, the company dominates the country’s private-car hailing market with 83.2 percent in the third quarter of this year, according to Beijing-based Internet consultancy Analysys International.

Its arch rival Uber Technologies Inc is a distant second in China with a market share of 16.2 percent. The US-based technology company has also been offering its users on-demand test drives.

Jia Xinguang, a senior analyst with the China Automobile Dealers Association, said it is a well-calculated decision for ride-hailing platforms to offer test-drive services before selling cars, but automobiles can never be sold simply through online channels.

“Customers need to visit the dealerships in person to feel and check a car. Offline dealers are also needed to ensure deliveries and after-sales services. The online-to-offline car deals ultimately are still directed to offline dealers,” Jia said.

China likely to roll out de-stocking measures for property sector

It is expected that during an upcoming key economic meeting Chinese officials will introduce measures to cut housing inventories.

De-stocking the property market will likely be discussed at the upcoming Central Economic Working Conference, which sets economic targets for the coming year, a source told China Business News.

The measures are not expected to boost the real estate market nor set quantitative de-stocking targets for specific regions.

“The most important thing is to reactivate the property sector to help with its liquidity,” the source said.

The housing market experienced a downturn in 2014 due to weak demand and a supply glut. This continued into 2015, with both sales and prices falling, and investment slowing.

According to data from the National Bureau of Statistics, the unsold home inventory hit a record 686.3 million square meters by the end of October, up 17.8 percent from the previous year.

Officials have already showed resolve to address the country’s housing woes. Destocking the property market will be one of the government’s main tasks, President Xi Jinping told a meeting of the Central Leading Group for Financial and Economic Affairs in November.

Premier Li Keqiang also told a cabinet meeting that the government should overhaul China’s household registration system to encourage more rural residents to settle in cities and boost house sales.

Besides existing stimulus measures such as cutting interest rates and easing deposit requirements, measures such as transforming commercial housing into affordable housing are also expected next year, the source said.

Didi ties up to expand globally

Didi Kuaidi said yesterday that it has teamed up with three overseas counterparts as it continues to expand globally.

The Chinese ride-hailing company said it has sealed strategic partnerships with Lyft, GrabTaxi and Ola. Its tie-up with Lyft is an expansion of the global ride-sharing agreement the two firms formed in September.

The four parties will collaborate and leverage each other’s technology, local market knowledge and business resources. This will offer international travelers access to local on-demand rides by using the same application they use at home without shifting to a new software in a foreign language, according to a joint statement yesterday.

Each company will handle mapping, routing and payments via a secure app interface so that customers will experience a seamless ride in China, the United States, Southeast Asia and India.

“As Didi consolidates market leadership in China, we are now focused on leveraging our collective technology and expertise to further develop product innovation and enhance the user experience,” said Cheng Wei, CEO of Didi Kuaidi.

Didi Kuaidi is a merger of China’s two largest ride-hailing applications.

Tencent named one of most innovative companies

Tech giant Tencent was named by the Boston Consulting Group on Wednesday as one of the most innovative companies in the world, rising to 12th from 47th in the rankings.

BCG’s 10 most innovative companies are: Apple, Google, Tesla Motors, Microsoft, Samsung, Toyota, BMW, Gilead Sciences, Amazon and Daimler.

The rankings were compiled from survey responses by 1,500 senior executives at companies from a wide range of industries. The companies were judged mainly for their speed, research and development processes; use of technological platforms; and exploration of adjacent markets.

The report’s authors said that speed has long been seen as a key attribute of strong innovators. Survey results supported speed’s growing importance.

The authors said that “overly long development times were the most-cited obstacle to generating returns on innovation and product development” and that “fast innovators are much more likely to also be strong innovators”.

“I think user platform and speed are two things that Tencent has been quite spectacular on,” said Puneet Manchanda, professor of marketing at the University of Michigan Ross School of Business. “They’ve been moving very fast into many other areas, like media, streaming, advertising, and now apps for taxicab hailing and so on.”

In the past year, Tencent, headquartered in Shenzhen, China, has announced it will roll out a mobile payments service for overseas users; distribute music via its QQ Music platform; partner with a U.S. film studio to make a video-game action film; and work with U.S. publishers to sell American titles on its Tencent Literature platform. Those products extend far beyond the company’s core products like its instant messaging platform QQ and social mobile app WeChat.

“It’s a fast-acting company for sure, but it also has platforms where it can launch new services that plug and play into those platforms. That’s what has made it so fast — anything they want to do in media, advertising, e-commerce, you have close to 800 million on your various platforms and you have a lot of social media data. The platforms can be leveraged very quickly,” Manchanda said.

The report’s authors said that greater agility has the “potential to boost a company’s top and bottom lines, and flexible and mobile consumers demand it.”

Speed allows companies to gain larger market share, reduce development costs and increase forecasting accuracy, they said.

The list of 50 innovative companies includes two other Chinese brands: Huawei and Lenovo, both makers of electronic products.

“Lenovo probably makes it on the lean manufacturing criteria. It has been pretty good at streamlining manufacturing, and the brand has been nurtured reasonably well,” Manchanda said.

“Huawei is actually quite innovative — they don’t get talked about much because they don’t supply consumer-facing products as much but they are very innovative and their electronic equipment is world class,” he said.

Nokia shareholders approve acquisition of Alcatel-Lucent

Shareholders of Finnish telecommunication company Nokia approved the acquisition of French-American rival Alcatel-Lucent at an extraordinary general meeting in Helsinki on Tuesday.

Nokia said that the transaction is expected to be completed in the first quarter of 2016.

With the acquisition, the Helsinki-based company hopes to expand from telecom networks to Internet networks and “cloud” services to better compete with its global rivals.

“Nokia’s shareholders have today shown the full extent of their support for our proposed combination with Alcatel-Lucent. By ratifying the transaction in such great numbers, they have endorsed our strongly-held belief that the combined company will be better positioned to compete as a world leader in network technologies over the long-term,” said Risto Siilasmaa, Chairman of the Nokia Board of Directors.

In April, Nokia confirmed that it was negotiating a takeover of Alcatel-Lucent. The two companies have entered into a memorandum of understanding, under which Nokia will make an offer for all the shares issued by Alcatel-Lucent through a public exchange offer in France and in the United States. The total price of acquisition is 15.6 billion euros (about 16.5 billion U.S. dollars).

Under the terms of the agreement, the name of the combined company will be “Nokia”, its headquarters will remain in Finland. Nokia will hold 66.5 percent stake in the new company, Alcatel-Lucent will hold the remaining 33.5 percent stake.

Currently, Nokia ranked the third largest network equipment manufacturer after Ericsson of Sweden and China’s Huawei. Following the sale of its mobile phone business to Microsoft, Nokia focus on telecommunications infrastructure and mapping services.

Manufacturing slumps to 3-year low

China’s manufacturing activity fell to its lowest level for more than three years in November after recording its fourth straight month in decline.

The official Purchasing Managers’ Index fell 0.2 points from October to 49.6, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing.

The demarcation line between growth and expansion is set at 50 points.

The November reading was the lowest since August 2012.

Bureau analyst Zhao Qinghe said the data suggested worsening conditions due to sluggish demand at home and abroad.

“Some traditional industries, such as nonferrous metals, are in deeper contraction as they seek to rid themselves of overcapacity,” he said.

“But performance remained stable on the whole, as emerging sectors remained in expansionary territory,” he said.

The PMI’s component indexes showed widespread weakness in manufacturing, with new orders — a proxy for domestic and foreign demand — down 0.5 points at 49.8 and exports contracting to 46.4 for the 14th straight month. Input prices fell 3.3 points to 41.1.

Economists at ANZ said this points to persistent deflation in upstream prices, which would add pressure to factory gate prices and industrial profits.

October’s Producer Price Index — a measure of inflation at the factory gate — fell 5.9 percent year on year, extending its downward trend to a 44th month.

China’s gross domestic product in the third quarter rose 6.9 percent year on year, its slowest pace in six years. In an effort to bolster growth, the People’s Bank of China has cut benchmark interest rates and banks’ reserve requirement ratio five times this year.

The moves, however, have yet to have any major impact.

According to earlier figures, the profits of China’s industrial firms in October fell 4.6 percent year on year, following a 0.1 percent dip in September.

“With soft growth momentum and deflationary pressures growing, we expect the government to further ease its monetary policy and continue to implement an expansionary fiscal policy,” said ANZ economist Liu Ligang.

Despite the poor overall performance in November, private and export-oriented companies fared better than state-owned industrial enterprises.

The Caixin China PMI, a similar measure to the official PMI but weighted toward private and export-oriented manufacturing companies, rose to 48.6 last month, from 48.3 in October and 47.2 in September.

“Activity in the sector has been in contraction in each of the past nine months, but the November figure was the best since June,” said He Fan, chief economist at Caixin Insight.

The improvement was partly due to more stable output, which had been in decline over the past six months, he said.

Meanwhile, the official non-manufacturing PMI improved to 53.6 points in November, its highest level since July.

The gains were partly due to the Singles Day online sales event, the bureau said.

Julian Evans-Pritchard, an economist at Capital Economics, said in a research note: “The services sector appears strong, and there are hints that accelerating credit growth and fiscal spending may have continued to support investment growth last month.”

B2B e-commerce to enter a phase of rapid development

Online platforms are becoming integral and crucial for business-to-business e-commerce companies across various segments amid stiff competition, a new survey said.

The study, published on Monday by SAP Hybris, an e-commerce solution provider that is part of German software giant SAP SE, and Forrester Research Inc, showed that the number of B2B firms in China, that make more than one-quarter of their purchases online, will double in the next three years.

“B2B e-commerce is expected to enter a phase of a rapid development. B2B companies that wait too long to implement e-commerce strategies are taking a big risk as they will lag in catering to client requirements and suffer in terms of sales, services and retention of customers,” said Zhang Bo, China manager of SAP Hybris.

The study polled 200 business decision-makers of B2B firms in China. About 34 percent of the respondents said 25 percent or even more of their purchases will be conducted through online channels in the next three years, compared with just 17 percent now.

The majority of the surveyed B2B e-commerce firms, ranging from automotive, high-tech, manufacturing to oil and gas, said they expect online sales to increase in the following years.

It is an opportune time for ambitious B2B firms to set up e-commerce platforms to shape the future of their individual industry, he said.

On Friday, Hangzhou Ali Venture Capital, an investment firm backed by Alibaba, said it will build an online steel trade platform with Minmetals Development Co Ltd to tap into the B2B steel industry.

The firm, in which Alibaba’s Jack Ma has an 80 percent stake, said it will invest 316.8 million yuan ($49.52 million) in the B2B e-commerce platform.

Charlie Dai, principal analyst with Forrester Research Inc, said though Alibaba already has a B2B online trading platform called 1688.com, which sells consumer products such as cloth, machinery and steel, it will still need to dig deep into each sector to become an established player.

“That’s why even e-commerce giant like Alibaba needs to team up with Minmetals to leverage their expertise in steel production and sales,” he said.