Uber suspends thousands of driver accounts in China’s Chengdu

Uber Chengdu has suspended thousands of its driver accounts, China Business Journal on Monday reports.

It is reported that Uber drivers, whose accounts have been banned, have gathered at the QingYang district police station where Uber Chengdu has its business registration. Drivers are demanding they receive the account balances from their suspended Uber accounts.

Announcing via Weibo today, Uber Chengdu claimed suspensions were due to fraud or ‘Shua Dan’ – the Chinese term for fake trip – detected when drivers claim compensation for deliberately falsifying trips.

According to Uber China’s driver service center, fraud committed by drivers or passengers can usher in the permanent suspension of accounts and confiscation of account balances.

Uber Shanghai has also punished drivers for the same fraud practice.  A few suspended drivers last month picked fights with Uber staff after negotiations broke down over account balances. Police were later called to the scene.

Uber founder and CEO, Travis Kalanick claimed at the Baidu World Conference earlier this month, that Uber China sees over one million transactions per day. Uber Chengdu is among Uber’s top 10 cities for business development in the world, according to the statement it released today.

Uber Chengdu was investigated by the Chengdu Traffic Management Bureau in May but operations have not been influenced. Last month, a case was filed against an Uber Chengdu driver for robbery and molestation of a female passenger.

Apart from the new regulatory climate which will soon affect all ride-hailing services in China, regulating its own operations remains a problem for Uber.

Three Chinese bidders of the Buffett lunch

Rhea Liu

Among the nine publicly declared bidders who have bid on Warren Buffett’s yearly charitable lunch auction – a 15-year-old publicity stunt with proceeds donated to the Glide Foundation – three have been Chinese businessmen. AllChinaTech reveals who these Chinese bidders are and what businesses they run:

2006 Duan Yongping USD 620K

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Photo from Sina

Duan Yongping is the founder of BBK Electronics and OPPO Electronics. BBK’s Vivo mobile phones account for 10% of the Chinese mobile phone market, right behind Xiaomi, Huawei and Apple, as reported. OPPO stands out in the Southeast Asian market where it has over 10% market share in Vietnam, Malaysia and Indonesia the company claims.

Duan himself is also known for investing in technology companies. In 2001, he invested in NetEase when its stock price was only eighty US cents. Two years later, NetEase’s stock price soared to USD 100. Duan also holds a large amount of Yahoo stock. Duan is considered the “Buffett of China” among investors.

In 2006, Duan bid for the chance to have lunch with Warren Buffett with USD 620,100.

2008 Zhao Danyang USD 2.11M

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Photo from Liaoning Daily

Zhao Danyang is one of the most experienced private equity managers in China, also known as the Godfather of Chinese private equity among the public. He has been working at Guotai Junan International since 2002. Zhao is now running Pureheart Capital, a China focused “Value” fund manager.

In 2008, Zhao successfully bid and lunched with Warren Buffett with USD 2.11 million, almost twice the amount he pledged the year before. Zhao’s mention of a stock to Buffett during their lunch caused the stock to appreciate by 24% the following week. It’s reported Zhao earned about HKD 130 million (USD 16.8 million) as a result. Because of this incident, Buffett no longer discusses individual stocks with his lunch attendees.

2015 Zhu Ye USD 2.3M

Zhu Ye successfully bid to have lunch with Buffet this year with his pledge of USD 2.3 million.

Zhu is the CEO of Zeus Interactive, an entertainment company focused on mobile games. Zeus Interactive was founded by Zhu in 2010. Its online video game ‘Ao Jian’ or ‘Sword’ was once ranked first in the Vietnamese game market earning Zeus RMB 5 million in its first month the company noted. Zeus Interactive is the primary stock holder of Zeus Entertainment, an A-share listed company.

In 2015, Zeus Entertainment made a income of RMB 319 million for the first two quarters, according to its half year financial report. In April, Zhu sold 965,500 shares of Zeus Entertainment at RMB 90 per share, raising RMB 87 million cash in return.

There’s an interesting detail shared by Shang Hua, Zhu’s wife who said that Buffett asked about the financial report of Zeus Entertainment.

(Feature photo by Sina)

Xiaomi’s manufacturer reveals its Amazfit, Weibo users not impressed

Huami, manufacturer of Xiaomi’s Mi Band, launched its own fitness band, Amazfit, on Wednesday at a price of RMB 299 (USD 47).

Huami launched two distinct models of the Amazfit, Yueshuang (Moon Frost) and Chidao (Equator) at the launch event. Both models mainly consist of a ceramic body and are waterproof for daily use.

Photo from Amazfit's official website
Photo from Amazfit’s official website

In contrast to Mi Band’s low price strategy, Amazfit targets the high end with improvements on design and functionality.

Amazfit can be adapted to use with pendants, earrings and other accessories. Different from the oval shape of the Mi Band, Amazfit adopts the shape of a hollow circle, resembling a traditional Chinese jade Ping buckle. Amazfit supports wireless charging and mobile payments in addition to the Mi Band’s activity and sleep tracking, call alert, and alarm functions.

Though Amazfit has tried to establish a fashionable brand image, user reviews over on Weibo seem to be fairly disapproving.

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“Huami just launched a… jade pendant…”
“Huami’s new fitness band is not only ugly, but also expensive.”
“Huami’s new fitness band is not only ugly, but also expensive.”

The Amazfit will be released in mid-October. Applications for beta testing will open on September 17th via Amazfit.com.

Huang Wang, CEO and founder of Huami, disclosed at the Amazfit launch event that Xiaomi’s Mi band has seen shipments of ten million. Overall shipments for wearable device trackers in Q1 2015 were 11.4 million units, according to IDC.

Huami raised USD 35 million from Banyan Capital, Sequoia Capital, Morningside Ventures, and Xiaomi CEO, Lei Jun’s Shunwei Capital last December. Huami’s estimated value is reported to be USD 300 million.

Photo from Amazfit's Weibo account
Photo from Amazfit’s Weibo account

Apple Pay’s Entry into China Confirmed before Google Returns

Jian Dalian, Director of the Shanghai Free Trade Zone, confirmed on Thursday that Apple Pay has officially registered in China.

Apple Pay was registered as Apple Technical Service (Shanghai) Ltd. in June with registered capital of USD 13.4 million and a business term up to 30 years, according to public data. Its legal representative, Gary Joseph Wipfler, is the Vice President and Corporate Treasurer of Apple Inc.

Apple Pay's registry information
Apple Pay’s registry information

Apple Pay is based on NFC (Near Field Communication) technology, which was first introduced by Philips and Sony back in 2003. Apple Pay enables users to make payments with their Apple devices in participating stores by touching their devices against store sensors.

There are an estimated 290 million Chinese using online payment systems, according to a report from iResearch Consulting Group. Alibaba’s Alipay and Tencent’s WeChat currently attract more users than state-owned UnionPay. Foreign players have also tried to enter the sector.

In May, Apple CEO Tim Cook visited China. It’s reported that the major purpose of his visit was to introduce Apple Pay into China. Rumor has it, Cook discussed partnerships with Alipay, China UnionPay and other financial institutes, reports Tencent Tech.

apple-pay
Photo from NetEase.

Google’s Android Pay launched in the U.S. earlier this month. Google intends to return to China with a customized version of its Google Play app marketplace, Reuters reports. China may become the next battlefield for Apple and Google as they compete through mobile payments. Apple currently appears to have the lead in the game.

Apple gave no comment as to when Apple Pay would be put into operation in China. Apple Pay is now only available in U.S. and U.K.

The Shanghai Free Trade Zone was established in 2013 as a test area for trade and commerce with special financial policies. The registering of Apple Pay in the Free Trade Zone may provide its nascent service with greater flexibility in its future operations in China.

Ride-hailing app UCAR plays catchup raises USD 550 million

Rhea Liu

Ride-hailing app UCAR raised USD 550 million in a B-series round of funding including USD 50 million from China Auto Rental (CAR Inc.), primary investor CAR Inc. announced today.

According to the announcement, investors including Tourmaline, Harmony, Lu Zhengyao – the CEO of CAR Inc. – and Haode Investment participated in the B-series funding. After this round of funding, UCAR’s valuation will be at USD 3.55 billion.

Two months ago, UCAR raised USD 250 million from investors including CAR Inc. and Legend Holdings, the parent company of Lenovo. Haode Investment, who holds 22.4% of the total issued and outstanding shares of UCAR, is wholly owned by Lu’s spouse, Ms. Guo Lichun, the announcement said.

In an investor meeting prior to the announcement, Lu said that UCAR was ready to invest at least USD 2.5 billion in new users with no cap on investment, Yangcheng Evening News reported.

UCAR was launched by CAR Inc. in January this year targeting the business-car-hailing sector. Cars used by UCAR are owned by auto rental companies like CAR Inc., instead of being privately-owned as is normally the case with other riding-hailing businesses, like those of Uber and Didi Chuxing.

As of June, Didi Chuxing accounted for 80.2% of the ride-hailing business in China while UCAR only accounted for 0.8%, below Uber and Yidao Yongche’s market share, which together accounted for close to 20% in China, according to a report released by CNIT-Research.

It’s reported new regulations against the ride-hailing business are about to launch in China which may prohibit private cars from business use. UCAR’s model of renting business cars from third parties may adjust well to the new regulations.

Top campus-focused O2O services providers in China

Rhea Liu

Campus-focused O2O service providers are a popular sector among investors in China this year. This week, two of the top service providers, Zhai.me and Xiaohehe, both announced big rounds of funding. Zhai.me has received USD 35 million in financing from one of China’s biggest O2O service providers, Meituan and, Xiaohehe has received a few dozen million RMB and gained logistical support from supermarket chain Darunfa. AllChinaTech.com explores three companies setting the standard for excellence in the sector.

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Photo from PEdaily

59store

59store focuses on online grocery deliveries to campuses. By hiring student representatives, 59store is able to deliver between nine o’clock and eleven o’clock at night, the peak demand time for students based on sales history. Reports suggest that by August, 59 Store reached 2000 schools with over 100,000 transactions per day.

Last month, 59store claimed they received RMB 200 million in pre-series B funding from investors, including A-series investor Shenzhen Capital Group. With the investment, 59store will further develop its supply chain, increase recruitment and expand its consumer finance platform.

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Zhai.me (Otaku Fans)

Zhai.me’s business model is very similar to 59store but it has no limit on its business hours. Zhai.me also hires college students as sales representatives, who in turn use their dorms for warehousing instead of establishing their own storage space, enabling them to greatly reduce delivery times. Zhai.me claims to covers 70 cities and 800 schools with about 200,000 active daily users.

Zhai.me is the hotshot of the capital markets this year. After launching last December, it received an Angel Investment in March, its A-series in April, its A+ series in May and a USD 35 million B-round this month from Chinese O2O giant Meituan.

Meanwhile, they’re also collaborating with Fenqile (Fenqile), one of the major players in the Chinese consumer finance sector to explore other possibilities for the company.

The CEO of Zhai.me was also one of the co-founders of 59 Store.

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Xiaohehe (School Giggle)

Xiaohehe is also a location-based online grocery service provider. Xiaohehe has its own storage space and logistics operation. Focusing on second and third tier cities, Xiaohehe has already built over 100 storage houses around 200 campuses, which has allowed them to boost their daily transactions tenfold to 30,000 with an average per customer transaction of 15 RMB, according to Xiaohehe’s CEO Lin Yining.

This week, Xiaohehe received a strategic investment from supermarket chain Darunfa which will enhance Xiaohehe’s logistics setup, allowing Xiaohehe to have a more stable supply chain at lower cost. The strategic collaboration between Xiaohehe and Darunfa also indicates new possibilities for cooperation between traditional retailing businesses and online services.

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Redmi 2 blasts through a new sales record, Lei Jun says

Rhea Liu

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Xiaomi CEO, Lei Jun, claims that their recent Redmi 2 smartphone have achieved a new sales record for the company.

Lei said 2.15 million models have been sold in a single month, this despite the overall challenge the company has faced trying to sell its smartphones in 2015.

“We prepared our largest inventory to date for the Redmi 2, “ he wrote on his Weibo account with a smiling emoji.

The Redmi 2 was launched last month at the price of RMB 799 (US$127) with over 800,000 units sold on its first day, the company said.

The model sold more than 1.5 million units in two weeks and has achieved a new monthly record.

Sales of the Redmi 2 have been a breakthrough for Xiaomi, a company which has seen its half-year 2015 sales fall below amounts from the previous year.

Xiaomi said it sold 34.7 million smartphones in total for the first six months of this year. That number was at 36 million last year.

Xiaomi’s foreign rival, Apple, topped the Chinese smartphone market in the first quarter, helped by demand for the new iPhone 6, Kantar Worldpanel ComTech’s report said in May.

“Consumer expectations for Xiaomi are too high,” Lin Bin, Xiaomi’s co-founder and president, told Tencent Tech.

“It’s impractical for us to make another 200% increase on our current performance, we’d need to sell another 150 million units.”

Snapshot from Xiaomi's official website
Snapshot from Xiaomi’s official website

Huami is about to launch its own fitness band on Wednesday

Rhea Liu

Screen Shot 2015-09-14 at 11.55.46

The manufacturer of Xiaomi’s ‘Mi Band’, Huami, will launch its own fitness band on Wednesday.

The new model, Amazfit, has its eyes on high-end design and will explore a different direction from Xiaomi’s cheaper price tag strategy, a Huami official said.

Huang Wang, CEO and founder of Huami, said Amazfit will focus on high-end design and outdoor sports in comparison with Xiaomi’s earlier fitness band, NetEase Mobile reports.

“The new model targets consumers who care more about fashion and design, similar to the Jawbone,” he said.

Huami was founded in January 2014 with a joint investment from Xiaomi and Shunwei Capital, a venture capital fund led by Xiaomi’s CEO Lei Jun. Xiaomi’s fitness band product, Mi Band, is as an important wearable device in Xiaomi’s tech eco-system, Xiaomi said.

Last August, Xiaomi sold the Mi Band at the unexpectedly low price of RMB 79 (US $12) in China, and managed to sell one million units within the first three months, reported NetEase Finance.

The Mi Band launched at the price of US $15 in the United States on June 2015. As of Q2 shipments of Xiaomi’s fitness band have reached 3.1 million, accounting for 17.1% of the global market, right next to Fitbit and Apple, according to IDC, leading global research provider on the ICT market.

On Wednesday, Huami will release updated sales data for the Mi Band .