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Navigating China domain registration and hosting.

Navigating China domain registration and hosting.

By Saurav Bhattacharyya for China Brain

 

 

When it comes to appearing to a Chinese audience on the internet, there are multiple factors about your website you need to consider: your host servers location and domain suffix being two of the most important.

 

 

For businesses and websites wanting to reach a Chinese audience within Mainland China, the preferable option is to host within Mainland China. The reason for this relates not so much on geo-targeting, as it does in the majority of western countries, but more about control. When the servers are within China, through approved Chinese hosting providers, using approved Chinese ISPs (all government run) this makes monitoring of the sites content a lot more manageable. This is a main reason why Google is more or less a redundant search engine within China. However in order to run a website within China to a Chinese audience, you are required to submit an application to the Chinese Ministry of Industry and Information Technology for an ICP license (Internet Content Provider). This application needs to be approved and the ICP number displayed on your website: most commonly you can find this number in the footer of a websites. This ICP can be obtained from http://www.miibeian.gov.cn

 

 

China Domain names

Similar to how location based search works in the western world, a country code top level domain (ccTLD) is a still a very beneficial element in ranking with in China. Ensuring you have a .cn domain will go a long way to ranking well organically in China.

 

 

Recently the registration of China .cn and com.cn domains opened up to both individuals and businesses outside of China. Registration is now possible by providing the following documentation:

 

 

Businesses outside of China must provide the following:

  • Business registration number
  • A scanned copy of the registrant’s business certificate
  • A scanned copy of the registrant's proof of identity
  • A scanned copy of a signed Letter of Commitment

 

 

Individuals only need to provide two of these items:

  • A scanned copy of their proof of identity
  • A scanned copy of a signed Letter of Commitment

 

 

The .com or .cn question

Generally non Chinese businesses should always register both the .com and .cn domains to specify that they are both international and well as operating in China. Additionally .com domains are often seen as more trustworthy in the eyes of Chinese consumers. Shorter domains are always better since they are easier to remember. If you use several English words in your domain: placing hyphens in between words will make it easier for Chinese Internet users to remember as well as providing good keyword definition for search engines.

 

 

Hosting in Hong Kong

If you are unable to get your site hosted on the mainland, Hong Kong is both a viable and effective option, which also has the added benefit of allowing your site be fast for International users. Having a website hosted on a Hong Kong server would not require and ICP number and is generally as fast as a Mainland server. Unfortunately this method would slightly reduce a sites organic search engine ranking on Chinese search engines such as Baidu (site performance is a major component in their ranking algorithm. So provided the site loads well and quickly for Chinese users, this is not a major issue).

 

 

Finally there are a few points to take up with your web developer whilst designing a site for the China market:

 

  • Do not utilise western platform functionality i.e: Google Maps, Google API, YouTube video, Facebook or Disqus plugins

 

  • Limit or completely eliminate the use of externally pointing social functionality i.e: Facebook, Google Plus, Twitter

 

  • Limit your external linking to other non-Chinese sites, especially to sites with potentially banned content

 

  • Avoid shared hosting: if someone with the same IP address as your site is blocked, then your website will also be blocked. Use a dedicated server or VPS with a unique IP.

 

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Saurav Bhattacharyya is the Managing Director of China Web Designers, a Beijing based web design and development company.

 

Search Engine Advertising in China Start...

Search Engine Advertising in China Starts With Knowing the Market

Search engine advertising is an effective way to boost website traffic and generate leads – and, when done correctly, many have found it is the most effective way. Knowing the market well is the key to start a successful search engine advertising campaign. This is as true in the U.S. as it is in China. However, the tools used to execute search engine campaigns are different.

 

 

In China, Baidu search engine has Baidu Phoenix Nest Promotion, a paid advertising platform similar to Google Adwords. It includes search networks, display networks, and mobile DSP networks.

 

 

We will particularly talk about text search advertising today and discuss how to use some of the Phoenix Nest functions to optimize your search engine advertising for the China market.

 

 

As with Adwords, marketers using Baidu need to understand their target audience and industry, then build the account with clear account structure, well-organized keyword groups, and relevant ad creatives and landing pages. More so than AdWords, to pursue better Baidu search engine ad performance, marketers need to have deep insights and wide knowledge of the China market and integrate that information with a strong understanding of the target audience and platform. Let’s consider four ways Baidu Phoenix Nest allows for greater insights, strong targeting, and optimization solutions.

 

 

Location Targeting

There are three types of location targeting available in Baidu Phoenix Nest. They can be used within a particular account or specific campaign.

 

 

Providences/Cities Targeting

China has been developing very fast in the past 30 years, and many cities have experienced unexpected economic growth. As the map shows, there are 33 providences in China and more than 600 cities. An understanding of these geographic categories and specific traits is essential to search engine advertising. B2B digital marketers need to leverage that knowledge to set accurate location targeting in their Baidu search engine campaigns.

 

 

A typical classification is the “tier system,” which has categorized the cities into 5 tiers. Different city tiers imply different consumer behaviors, income levels, and business opportunities. Tier 1 represents the most developed areas with the most affluent and sophisticated consumers. Tier 2 and 3 cities become increasingly attractive to the investors because the economy is growing there, while Tier 4 and 5 are less-developed small cities.

 

 

Another classification is coastal regions and inland/westwards. Typically, the cities/providences in the coastal regions are developed areas and inland cities are less developed.

 

 

Both classifications help marketers know where their target customers are and how to reach them. Compared to the Adwords location targeting, Baidu search engine advertising requires more thorough and strategic thinking when creating an account or adjusting campaign settings.

 

 

For example, most of the industrial or manufacturing companies are located in the coastal regions, and advanced technologies companies are located in tier 1 and 2 cities. With a deep understanding of the China market and where the majority of potential customers are located, marketers can better control their budget.

 

 

Region Radius Positioning

The second type of location targeting is Region Radius Positioning. It allows marketers to select a particular location on a map and establishes a radius of 5 to 50 kilometers. It is an excellent tool for companies interested in local search. Also, if marketers know potential prospects, they can even put in the prospect’s business address as the targeted location and deliver relevant campaigns to them.

 

 

Both of these location targeting methods allow marketers to set the bid adjustment with a ratio of 1 to 10 in order to increase the bids for a particular location. Meanwhile, while the campaigns are running, marketers can track the data and generate a geographic report, and then optimize accordingly.

 

 

Local Store Targeting

The third type of location targeting is more focused on local stores, like retail and restaurants, which is not very relevant to B2B marketing.

 

 

Scheduling

Most B2B marketers are very familiar with Adwords Scheduling. Baidu Phoenix Nest has a similar function that allows users to set targeted dates and times to run campaigns. For U.S. campaigns running in Adwords, three time zones need to be considered in campaign settings. Normally, B2B marketers start by scheduling a campaign from 7 a.m. to 10 p.m. Eastern Time and then optimize based on results. However, there are different considerations in China and Baidu PPC scheduling. Although China is a country with vast territory, people across the country only use one time – Beijing Time.

 

 

Normally, people go to work from 8 a.m. to 5 or 6 p.m. For campaigns with a limited budget, marketers can set the campaign to run from 8 a.m. to 6 p.m., or 7 a.m. to 7 p.m. without consideration of time zone.

 

 

In many cases, B2B marketers set campaigns to run on weekdays. However, some Chinese companies also work on the weekends, and, in many cases, there are leads coming in on the weekends with a lower CPL and visits with a longer page visit time and lower bounce rate. All of these metrics indicate a targeted audience is visiting the site. To capture these customers, we often suggest continuing branded campaigns seven days a week and running the other campaigns with a smaller budget.

 

 

Because Baidu does not have a function to set bid adjustments in the scheduling interface (Adwords does), a manual operation is needed to change the budget for the weekend. Normally, marketers could lower the budget on Friday afternoon, and increase it back to normal on Monday morning.

 

 

People Targeting

In September 2016, Baidu released a new setting function called people targeting. It helps identify search engine users’ interests and search behavior and then generates more clicks and qualified conversions by presenting the most relevant ads to those target people.

 

 

It covers 21 interests, including business service, travel, manufacturing/device, e-commerce, finance, etc. If a company’s targeted audience includes any of the above interests, marketers can set a targeted interest to engage them. In addition, marketers can target people who have been exposed to your competitors’ ads in advance through this setting. Marketers can customize the bids for both types of people targeting using a ratio of 1-10.

 

 

Leads Type

In China, people prefer direct and effective communication. While form submissions are common practice for lead generation in the U.S., leads as calls and QQ instant chat are more effective to the Chinese people. B2B marketers can include a phone number and QQ number in the ad creative or on landing pages to signal to potential customers that they can contact your business directly. Other options include using a call-extension to simplify the dial process for mobile users or inserting QQ tools onto the business site.

 

 

The data can be more accurate by using call-tracking third-party tools. But even if marketers don’t have that type of technical support, they can design an easy-read report to record each phone call and QQ. Then, you can ask the sales team to follow up.

 

 

Douban, reaching the white collar worker

Douban, reaching the white collar worker

Douban is one of the lesser known social medial platforms in China, that we first wrote about back in 2012. It’s been around since 2005 and still enjoys widespread popularity amongst white collar workers. It has about 60 million registered and about 150 million unregistered users. In fact, one of the unique features of the network is the fact that users, who are not registered, can still enjoy 90% of the site’s functionality.

 

 

Marketing on Douban offers some unique opportunities for brands targeting niche audiences and could present an interesting opportunity for certain companies. Of course, compared to Weibo, WeChat, Renren or Qzone, those are fairly small numbers but what sets Douban apart is the unique culture created by a core of dedicated users. Unlike Weibo, it appeals to white collar, sophisticated Chinese urbanites. According to Doctor Yang Bo, the founder of Douban, most of the users live in major big cities of China. They are office workers, artists, freelancers and students who share common interests in arts, culture and lifestyle.

 

 

Douban is a truly unique Chinese social media phenomenon which can be loosely described as a sophisticated hybrid of Amazon’s book reviews, IMDB.com, Blogger, MySpace, Pandora and Pinterest wrapped up into one platform.

 


The main core of the site is its communities grouped into:

  • Books section, where people review and discuss books and can buy them directly from Chinese version of Amazon. This is one of the revenue sources for Douban;
  • Movies section. This one is similar to imdb.com (which is periodically blocked in China) and is the main forum for movie reviews and latest gossip. Here users can book tickets and even book seats in cinemas nearby;
  • Music section is, perhaps, the most popular one and it provides a platform for young musicians to post and promote their works. It is somewhat similar to what MySpace is all about these days;

 

 

Another part of the site features Groups which are, in turn, categorized by interests such as fashion, entertainment, photography, technology or lifestyle.

 


The City section features various events nearby, such as festivals, exhibitions, film screenings, theater performances etc. There is a section for people willing to get together for games, group shopping, dating or any other other local activity.

 

 

Douban.FM is a music streaming service. In its structure and functionality it is similar to Pandora. It streams music that matches listener’s taste based on his/her history of favoring  or skipping tracks.

 

 

In its latest attempt to generate more revenue, Douban has added a section simply called Stuff (which is still in beta). It is all about discovering and shopping for cool things but it is quite unlike a bazaar style of Taobao. Items can be reviewed by users, favored, added to wish list or a shopping card and purchased. The Stuff section is somewhat a fresher and more sophisticated version of an online shopping site targeting buyers looking for individual style and less focused on searching for the cheapest bargains.


 

In the past, Douban has been criticized for slow user base growth as well as for failing to properly monetize its service by restricting its ads. It is true that advertising options are somewhat limited on the community pages with very little screen real estate dedicated to ads. Also, those spots tend to be quite expensive selling between 15 to 20 RMB per CPM, an order of magnitude higher than on comparable sites.

 

 

With the addition of the new Stuff section, Douban seems to have found a potentially lucrative formula to keep its distinct and sophisticated character and yet take advantage of the desire of the urban elite, its main user base, to express their individuality through buying unique things.

 

 

Douban seems to be one of the most underrated  Chinese social media sites with great potential. Besides the obvious option of promoting products thorough its new Stuff section, marketing on Douban should be an excellent option for a more sophisticated promotion campaign targeting upscale urban consumers through its communities and groups platform.

 

 

Several high visibility brands have also established what is called a brand stations on Douban. One example is of Adidas that features its collections but also actively promoting the brand through completions and events.


 

Douban, being a one of a kind social media site in China, is often overlooked by Companies as an alternative venue to appeal to increasingly sophisticated big city based users and can be effectively used to target niche sectors of the Chinese online community.


 

 

Whats next for Didi Chuxing?

Whats next for Didi Chuxing?

When China’s largest cab-hailing app company Didi Chuxing announced at the end of July a merger with Uber after a bitter battle for dominance, it was unclear what, exactly, would become of Uber’s China operations. Essentially, Uber sold its China operations to Didi, leaving Uber free to focus on less challenging markets ahead of a widely expected IPO.

 

 

In August, Didi said that the two companies would remain independent. More recently, Didi has said that “customer facing operations” will remain independent. Over the next two weeks, Uber users will have to download the new app.

 

 

This new app is in Mandarin only, is not compatible with Uber international, uses the same map software as Didi, uses the same drivers as Didi, and does not work with foreign credit cards.

 

 

So…Uber is dead, though the company did announce an “international edition” planned for next year. Given Didi’s international aspirations, it’s unclear whether this would be “Uber” as such. As for the present, there have been reports of difficulties using the app and of price hikes, which commentators are attributing to the fact there is a monopoly, compared to in the past when there were two companies offering generous subsidies in order to undercut each other.

 

 

Inside China, Didi’s future is even more difficult to discern. While it has become the undisputed number one in the car-hailing app market (there are still much smaller competitors like Yidao Yongche), there were sweeping new laws introduced just before the merger.

 

 

The devil is most certainly in the details. The new laws specify requirements for drivers and ban the large subsidies that characterized the Uber-Didi battle, but mostly, they palm off the heavy duty rule-making to local governments to do as they see fit.

 

 

And earlier this month, a host of local governments did just that. The big problem relates to migrant workers—the people who already find it tough to live in big cities because they lack a hukou (household registration, basically citizenship of a city) for that area. The rules issues by Beijing, Shanghai and Shenzhen all prevent migrant workers from being drivers, presumably in an effort to ensure drivers don’t have criminal backgrounds.

 

 

Critics say it is an effort to assist cab companies, who provide a fair chunk of revenue to local governments, and say that this is effectively regulating car-hailing apps to the point where they are basically just cab companies that use apps instead of part of the sharing economy.

 

 

The Wall Street Journal cited Didi as saying that just 2.6 percent of its Shanghai drivers were local residents. This rule would effectively lock migrant workers out of one of the more stable work opportunities for the upwardly mobile. Unsurprisingly, Didi loudly voiced its objections, in a rare case of the company being openly critical of government regulation.

 

 

It is important to note however, that these are draft regulations. The final version may end up being less harsh if Didi persuades the authorities that these requirements are too onerous. On the other hand, there have been strikes by cab drivers specifically complaining of the savage competition from car-hailing apps, and effectively turning Didi into a big cab company would make things far easier from a regulatory standpoint.

 

 

One thing is certain: while the war between Didi and Uber is well and truly over in China, the struggle to regulate the winner is ongoing. And with Didi gearing up to go international, the company still has its work cut out for it.

 

 

Source: This article originally appeared in “The World of Chinese” magazine.

 

 

China’s outbound medical tourism

China’s outbound medical tourism

Chinese tourists spent $215 billion overseas last year - $10 billion that went towards overseas medical tourism alone. China is on the rise to become one of the world’s largest outbound medical tourism markets, and this trend for future Chinese demand is set to drive the global market for medical tourism up to $678.5 billion by 2017 – an impressive 54.7% growth from the $438.6 billion charted in 2015.

 

 

Chinese residents, spurred by rising income and growing awareness are increasingly demanding better quality private healthcare, a key factor underpinning Boston Consulting Group’s forecast that private health insurance spending in China will grow to RMB 1.1 trillion in 2020 from last year’s RMB 241 billion.

 

 

China’s population is ageing fast, which means more and more Chinese are discovering serious health problems that comes along with old age. Considering there will be more than 250 million urban households that are classed as middle class by 2020 this will further fuel the demand of foreign medical care.

 

 

While China’s super wealthy HNWI favour the US or Europe for medical holidays, China’s middle-class prefer more affordable treatment options in South Korea, Singapore, or Thailand.

 

 

We review 8 booming medical tourism destinations that are set to grow in the coming years:

 

 

United States

With four hospitals ranking in the top ten facilities in the world, combined with extensive travel links between China and US cities, and recent visa policy changes to quicken visa application processes, it’s no surprise why the US dominates as one of the most popular destinations for Chinese seeking medical treatment abroad.

 


Japan

At just a mere 2-3 hours away by plane and offering increasingly liberalised visas for Chinese visitors, Japan is a highly-accessible and popular medical tourism destination for Chinese, especially for standard health checks. Japan invests heavily in its health system, hence its health system is not only one of the world’s best equipped and most cost-effective, but also one of the most fastidious and reliable ones. This makes Japan highly attractive to Chinese patients – many who are jaded with China’s tenuous medical offerings – which explains the 310,00 Chinese medical tourists expected to visit Japan by 2020.

 


Germany

Boasting first-rate medical facilities Germany is ranked as the fifth-best medical system in the world by the US-based Commonwealth Foundation. Germany is also home to the second-best medical facilities in the world, as voted by Medical Tourism Index, and this largely due to the fact that the German government is the second-largest investor in healthcare among the countries in the OECD.

 


United Kingdom

Ranked top out of 11 of the world’s wealthiest countries in a study by the US-based Commonwealth Foundation, the UK healthcare system is a huge draw for Chinese medical tourists, particularly for those in search for liver transplants. Besides that, its quality of care, efficiency, and low cost at the point of service are also other factors attracting Chinese medical tourists to the UK – now even more so with the pound’s depreciation post-Brexit.

 


Singapore

Proximity, cultural and language similarities, as well as great food make Singapore a popular option for Chinese medical tourists. Singapore’s excellent facilities are made even more compelling by Singapore’s move to relax visa requirements for Chinese travellers - 9,000 Chinese medical tourists ventured to the Lion City in 2015 for treatment.

 


Thailand

Excellent and fast-growing range of medical facilities have rendered Thailand as one of the biggest medical tourism markets in the world, attracting an astonishing 2.81 million overseas patients in 2015. A big reason can be attributed to the Bumrungrad Hospital in Bangkok, which not only offers a range of premier and VIP suites and 24-hour hotline service, but even provides an embassy contact service, a visa application assistance service, reception service, and airport transfer service, making it a luxury medical experience. Having received approximately 7,500 Chinese customers in the past year, Bumrungrad Hospital added a ward staffed by Chinese speakers, adding to a customer base that has been growing at approximately 25% per year.

 


South Korea

A favourite for Chinese medical tourists seeking cosmetic surgery, South Korea’s medical tourism drive, including specialised medical visas for foreign patients, saw 56,000 Chinese medical tourists visits in 2014. Last year, that number surged to 179,000 Chinese patients, who spent $1 billion on hospital fees, accommodation, and travel in South Korea, making Chinese the largest group of foreign patients in South Korea.

 


India

Low cost, increasingly accessibility, and with an expanding range of private hospital chains like Fortis, Appollo, and Max, India is currently ranked as the top country in the world by Medical Tourism Index This is especially so for those seeking treatment for diseases, such as Hepatitis C and malaria.

 

 

Sources: Caixin, Boston Consulting Group.

 

 

One Belt, One Road: A bridge to the...

One Belt, One Road: A bridge to the world

The much spoken of ‘One Belt, One Road’ (OBOR) initiative, launched in 2013, is fast coming to fruition. In this piece we take a look at the major new routes of global trade.

 

 

The five major goals of the Belt and Road Initiative are: policy coordination, facilities connectivity, unimpeded trade, financial integration, and people-to-people bonds.

 

 

The Belt is an adaptation of China’s historic Silk Road, a land-based trade route linking East and West. In its modern incarnation, a land-based Silk Road Economic Belt starts at China’s Luoyang and ends at Port of Hamburg in Germany. It ties in with a maritime Silk ‘Road’, focusing on Chinese coastal ports, that begins at China’s Quanzhou and ends in Rotterdam in the Netherlands.

 

 

Export agencies in over 60 countries now support OBOR. This encompasses two-thirds of the world’s population with six clear channels to different markets:

 

 

(1) The Eurasia Land Bridge Economic Corridor – an international railway line running from Lianyungang in China’s Jiangsu province, through Alashankou in Xinjiang to Rotterdam in Holland. These new rail routes offer freight transport, as well as the convenience of ‘one declaration, one inspection, one cargo release’ for any cargo transported.

 

 

(2) The China-Mongolia-Russia Economic Corridor – the three heads of state agreed to bring together the building of China’s Silk Road Economic Belt, the renovation of Russia’s Eurasia Land Bridge and the proposed development of Mongolia’s Steppe Road. This will strengthen rail and highway connectivity and construction, advance customs clearance, promote cross-national cooperation, and help establish the China-Russia-Mongolia Economic Corridor.

 

 

(3) China-Central Asia-West Asia Economic Corridor – this runs from Xinjiang in China and exits the country to join the railway networks of Central Asia and West Asia and reaches the Mediterranean coast and the Arabian Peninsula.

 

 

(4) China-Indochina Peninsula Economic Corridor – this corridor will deepen the relations between China and the five countries in the Indochina Peninsula.

 

 

(5) China-Pakistan Economic Corridor – the two countries will proactively advance joint projects, including highways, a new international airport, a new economic zone, and the China-Pakistan cross-national optic fibre network.

 

 

(6) Bangladesh-China-India-Myanmar Economic Corridor - OBOR could be the bridge that restores relevance for both Britain and Europe to China; it will keep Britain in the European fold post-Brexit. Following the financial crash in 2007/08 the changes in world trade that had been developing were revealed. East to South and South/South trading patterns took predominance in driving the world economy and the old West to East paradigm was shattered.

 

 

China`s agricultural outlook 2016

China`s agricultural outlook 2016

Chinese policymakers have always considered the agricultural sector to be central to the structural transformation of China’s unbalanced economy and to long-term goals of maintaining social harmony and achieving “all-round moderate prosperity”. China today accounts for about 19 percent of the global population, yet has just 8 percent of its arable land. And unlike other countries with growing populations, there’s no land left to till; indeed, given years of chemical abuse in the countryside and industrial pollution that sowed heavy metals through rice paddies, China’s available farmland is actually shrinking.

 

 

A large and growing metropolitan population expect greater quality of product, security of supply and to have confidence in the safety of the food they consume. This urban population demand a world-class agricultural sector with strong links to high quality global producers. These two forces are driving unprecedented public-private experimentation and innovation and a reshaping of China’s agricultural sector.

 

 

The latest No. 1 Document released by the Chinese Communist Party Central Committee and the State Council in early 2016 signaled a relentless focus on ‘accelerating the modernisation of Chinese agriculture’ by improving the supply side, efficiency and quality of the sector and by pushing forward programmes to improve food safety, reduce agricultural inputs and the loss of arable land. The document announced a range of innovations and experiments such as the introduction of a pilot plan to invest in 53 million ha of ‘high quality’ farmland. Similarly, the recently approved 13th Five Year Plan (2016-20) puts forward the goal of nurturing the creation of professional farmers and reforming rural land and land operation systems. The drive towards the modernization of Chinese food production, processing and distribution means China’s agricultural sector has entered a period of profound transformation.

 

 

What these changes mean for businesses, governments and food producers outside of China remains unclear. At one level, rationalising the food and agricultural sector in China is a task of extraordinary magnitude and one where Chinese policymakers fully acknowledge the vast challenge of moving away from small-scale, traditional farming systems. Based on previous experience and the progress to date, however, there is every likelihood that these efforts will create new forms of competition and tighter regulatory requirements for international food exporters.

 

 

At another level, the modernisation of Chinese agriculture creates opportunities for foreign companies to play a role in the development of the sector either within China or through joint partnerships at home. Of the later, the new focus on maintaining food security through access to global markets presents a shift-change in policymakers’ attitudes to security of supply issues and increases opportunities for various forms of joint investment and partnership. At the same time the rapid expansion of public and private investment in domestic capacity within China presents a medium to long-term challenge for global food producers.

 


 

Structural Change to Livestock Sector

There are signs that China’s demand for feed grains has reached a turning point as a tightening labour supply and rising feed costs force significant structural change in China’s livestock sector. Over the last 5 years, economic growth has absorbed surplus rural labour and rural wages began rising 15 to 20 percent annually. Labour scarcity, animal disease pressures, and rising living standards are prompting rural households to abandon “backyard” livestock production. More recently, livestock production has increasingly become a specialized farm enterprise, with farmers focusing on maximizing growth of animals, and substituting commercial feed for wastes and forages gathered from the countryside.

 

 

Rising feed demand has pushed up costs and motivated feed mills and livestock producers to explore new feed ingredients like distillers dried grains and sorghum—both imported from the United States. More importantly, China has switched from being a corn exporter to a consistent importer of 3-to-5 mmt annually since 2009. A few years ago Chinese officials announced a new strategic approach to food security which tacitly acknowledges a need for imported feed grains. The strategy still stresses the importance of self-sufficiency, but it allows for “appropriate imports” and focuses concern on food grains—rice and wheat—while placing a lower priority on corn self-sufficiency.

 

 

Demand for meat.

 

China’s meat consumption is expected to rise at a pace similar to the trend over the past decade. Pork plays a central role in China’s meat economy—China accounts for half of world production and consumption—but poultry is gaining in popularity, largely because it is cheaper than pork. Restaurants, fast food chains, and cafeterias play a key role in diversifying meat consumption since many feature specific kinds of meat or chicken. In particular, beef and mutton are important parts of popular hot pot, kebabs, and other types of ethnic cuisine that are becoming popular among the broader population.

 

 

Per capita pork consumption is projected to rise 6.6 kg by 2023/24, more than three times the increase in poultry (2.7 kg) and more than seven times the increase in beef (0.85 kg). However, poultry is projected to account for an increasing share of China’s meat consumption, with per capita consumption rising 2.4 percent annually during the next 10 years, compared to a 1.5-percent annual growth rate projected for per capita pork consumption.

 

China produces nearly all of its own meat. Its output of pork, poultry, and beef rose from about 20 mmt in 1986 to over 70 mmt in 2012, with the fastest growth during the 1980s into the early ‘90s. Projections suggest an increase in pork, poultry, and beef output to 90 mmt by 2023/24, an increase of about 30 percent. Since about 3 kilograms of feed are needed to produce each kilogram of meat, feeding a large and increasing population of animals will be a growing challenge. Growth in feed consumption has accelerated recently, and as China’s livestock farms transition to a more concentrated mode of operations that uses commercial feeds more intensively. China’s combined use of corn and soy meal for animal feed is expected to rise from 200 mmt to over 300 mmt over the 10-year projection period. Chinese animals also consume a variety of other grains, protein meals, bran, and hulls from grains, and growing use of these commodities is expected to support the expansion of meat output.

 

 

China’s soybean imports are expected to reach over 70 percent of global soybean imports by 2023/24, while China’s corn imports are projected to rise to 22 mmt by 2023/24. China will rely on imported soybeans for most of its soybean meal supply, but imports are expected to account for less than 10 percent of corn consumption by 2023/24.

 

 

China is expected to account for 40 percent of the rise in global corn trade over the coming decade making China the leading importer of corn by 2023/24.

 

 

Conclusions.

The growth of meat production will fall slight behind consumption growth, and the imports  are expected to consistently rise in the short term. The dairy production will grow by an average annual rate of 3.5%, the fastest amongst all products. The demand of poultry, eggs, vegetables and fruits for processing will grow rapidly, but the trade balance of these products will remain in surplus.  China will continue to provide fundamental support to China's economic development, and China will make new contributions to world food security and safety.

 

LeEco, China`s new tech giant

LeEco, China`s new tech giant

When people talk about China’s tech scene, there are the obvious giants: Baidu, Alibaba, and Tencent. Then there are the big state-linked firms (the telecoms, Huawei, and ZTE), the internet players (Sina, Qihoo), and the hot mobile startups (Xiaomi, OnePlus). But there’s a Chinese company that often doesn’t get mentioned as one of the big names: LeEco formerly LeTv.

 

 

 

Just a couple of years ago it primarily operated a streaming video site. But as its popularity grew, Letv (over 50 million daily users & over 730 million active monthly users) has rebranded into LeEco and branched its business out aggressively in numerous directions: it now operates 7 Ecosystems. The company now makes smartTV`s as well as smart phones and smart bikes. And a whole range of other smart devices and electronics. It has a cloud computing division. It offers internet finance products. It’s working on a smart electric car. It now has a music division (Le Music), a film division (LeVision Pictures), and a sports division (LeSports). What was once just an internet video company has branched out into a multi-armed technology and entertainment company.

 

 

Le Holdings and Its Seven Business Ecosystems

 

Recently, LeEco has been taking a different tack: splashing cash to acquire a wide variety of companies. In late spring, LeEco spent almost US$500 million buying two Chinese real estate companies so that it could expand into that space. Just a few weeks ago, it bought US TV maker Vizio for US$2 billion. This week, it was confirmed that the company has nabbed a bigger chunk of Chinese smartphone maker Coolpad. It was also confirmed recently that LeEco is working on some sort of deal with Netflix (at the end of last year Letv marked another milestone in its globalization - Le Super TVs started to be sold in the US). At present, Le Eco has been officially established in the US, India, and Hong Kong and the "Beijing-Los Angeles-Silicon Valley" strategy has proved hugely successful from its conception.

 

 

There are genuine questions about some of LeEco’s funding habits, and whether or not the company can sustain its breakneck pace of expansion that it has been keeping up over the past several years. But with a market cap of more than US$13 billion, LeEco is already bigger than some of China’s most storied internet and tech companies.

 

 

LeEco is both polarizing and opaque: some think the company is one of China’s most innovative and exciting tech firms, however until some of LeEco’s bigger projects – like that smart electric car come to fruition it will be difficult to judge whether their expansion has been thought out.

 

 

LeEco is now a major player in China’s tech scene, with the ability to influence industry sectors ranging from streaming video to smartphones to autonomous vehicles. LeEco certainly hasn’t overtaken any of China’s true giants – it’s not yet on the level of a Tencent or an Alibaba. But increasingly, it can be argued that LeEco deserves a spot at the table, and a place in the conversation.

 

 

LeMall is ranked among the top three B2C e-commerce websites in China

 

 

 

Stats for Understanding China’s e...

Stats for Understanding China’s e-commerce Market

The U.S. Department of Commerce recently provided new stats for China’s growing e-commerce market, they make for interesting reading for any company considering marketing to China:

 

 

  • China ecommerce accounted for around 15.9% of all retail sales in 2015.
  •  
  • China e-commerce is estimated to grow to 19.6% in 2016.
  •  
  • 53% of the 688 million internet users in China are online shoppers – more than the combined population of the United States, Russia, and Brazil.
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  • China has over 1.28 billion mobile phone users which is the preferred method of online shopping.
  •  
  • E-Commerce sales in China totaled $672.01 billion in 2015, up 42.1% from $449.01 billion in 2014, according to the Chinese government’s National Bureau of Statistics (CNBS).
  •  
  • By 2019, it is estimated that one out of every three of China’s retail dollars will be spent online, the highest percentage in the world. The estimate for the U.S. is one out of ten.
  •  
  • 71% of shoppers are in cities; 82.3% are between 25-45; 55% are female.
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  • Top purchases are: apparel, food, skin care and beauty, and baby/pregnancy care.

 

 

 

Online Market Growth:

Rising disposable incomes, the increasing popularity of ecommerce and in-app purchases, coupled with a rapidly improving internet infrastructure is accelerating China’s online revenue growth potential

 

 

Internet Challenges:

Companies are presented with many technical challenges when trying to build a web presence within Mainland China. An infrastructure flawed with inefficiencies, distance and the constant monitoring of the Great Firewall imposes negative impacts on performance of foreign hosted sites trying to reach users in China. Websites hosted in the US or Europe can expect 10+ seconds of latency versus hosting within Mainland China
 

 

Customer demand:

Chinese online shoppers are willing to spend, but at the same time demand a high level of value and service. They expect to be able to return any item purchased online, and the cash-on-delivery payment method popular in China often results in a higher-than-average return rate. In particular sectors, such as luxury, expectations are especially high. At one luxury marketplace, Chinese shoppers expect 24-hour customer service, free insured two-day shipping, and the option to pay and return at their convenience.”

 

 

Mobile Commerce:

The majority of China’s 1 billion smartphone users browse for products on their mobile devices, and those with greater incomes search even more than the average on mobile devices driven by a over 60% smartphone penetration rate in China’s Tier-1 and Tier-2 cities

 

 

Social Commerce:

China’s ecommerce growth is majorly fueled by the hyper-social behaviors of it’s online shoppers. Alibaba Group Holding Ltd. owns both Taobao and its B2C online marketplace counterpart, TMall (TMall sells 70,000 Chinese and international brands from 50,000 merchants).

Chinese social network and SinaWeibo, as well as instant messaging turned ecommerce, gaming, and financial services social platform WeChat, are the top two power players bridging any gap there may have been between social media and ecommerce. To get any kind of market penetration in China, international brands must sell on social channels and keep a cyber-eye out to mine for consumer insights.

 

Alibaba, the future is Aliyun

Alibaba, the future is Aliyun

At the start of the year Alibaba announced that they had crossed the RMB 3 trillion mark in gross merchandise volume (in excess of $450 billion USD). Founder and CEO Jack Ma has now announced that the company's dream is to reach 2 billion people around the world with his business and hit a transactional volume of $1 trillion. That would make them the equivalent of being the fifth largest country in the world by GDP.

 

 

Overview.

China's e-commerce market is dominated by Alibaba. Though the company operates through a unique combination of business models, Alibaba's core business resembles that of eBay. Alibaba acts as a middleman between buyers and sellers online and facilitates the sale of goods between the two parties through its extensive network of websites. The largest site, Taobao, operates as a fee-free marketplace where neither sellers nor buyers are charged a fee for completing transactions. Instead, the nearly 7 million active sellers on Taobao pay to rank higher on the site's internal search engine, generating advertising revenue for the company.

 

 

While the majority of sellers utilizing the Taobao website are smaller merchants, Alibaba also has a dedicated space for larger retailers: Tmall is the e-commerce site owned and operated by Alibaba that caters to well-known commercial brands that would normally operate on the high street. Even though Tmall has a fraction of the number of active sellers listed on Taobao, Alibaba is able to generate revenue from deposits, annual user fees and sales commissions charged to retailers utilizing the site.

 

 

In addition to its e-commerce sites, Alibaba has emerged as a player in the Chinese financial system. To combat customer concerns over the security and validity of transactions completed online, Alibaba created Alipay. As a secure payment system, Alipay protects buyers in the event sellers are unable or refuse to deliver goods sold. In addition to this platform, Alibaba also generates revenue from its newly launched micro-lending business arm that caters to individual borrowers.

 

 

The Alibaba Marketplaces

Alibaba's marketplaces are obviously their core revenue streams. As such, these will be the biggest drivers of growth. As of the most recent quarter, Alibaba had 423 million annual active buyers and 410 million monthly active users and transactional volume for the quarter was $115 billion - a 24% increase over the same quarter last year.

 

 

However the Chinese market is yet to be fully penetrated, by their own estimates they currently only reach about 55% of potential consumers. Furthermore it still does not have enough traction in international markets to claim the kind of long-term growth that they would require to become a truly global household name.

 

 

The future is Aliyun.

The next growth driver for the company is a brand that many do not recognise, but is nevertheless growing at a tremendous rate that may one day outdo its rivals: the cloud and specifically Aliyun Cloud. With data centers around the world having a first quarter of 2016 growth of 175% it is definitely a growing entity which Alibaba is well positioned to grow in part due to preferential government policy, regional focus and domain expertise. Aliyun certainly has the potential to become one of the growth drivers of Alibaba's future considering it currently accounts for less than 2% of its revenue.

 

 

Outlook.

The entire global market is potentially at their doorstep, not only for marketplace services, but also cloud capabilities. Not forgetting their other web and content properties like UCWeb with 400 million users, content distribution platform Youku Tudou (newly acquired) and web payment service Alipay, which has 400 million registered users and a transaction volume of $519 billion (as of 2015).

 

 

 

 

Goodbaby: baby boom

Goodbaby: baby boom

Established in 1989, Goodbaby Group is China's largest and the world's leading provider of infant and children's products such as strollers, car seats and child safety devices. Goodbaby is a professional production, manufacturing and design company with customers located in more than 70 countries and regions worldwide. According to a survey from Frost & Sullivan, in each sale of 1000 baby carriages in North America, Europe and China, 435 come from Goodbaby Group. In 2007, Goodbaby Group was listed as one of the `Top 50 Fastest-growing Companies in the World' by Boston Consultancy. Currently, the company owns four global R&D centers, 11 subsidiaries, has 35 branch offices and more than 13,000 employees worldwide.

 

 

Today they have over 3,200 stores in China, including multi-brand children's shoe stores, Mothercare shops and baby superstores, but this number is due to grow to 7,000 to 8,000 in the next few years in the wake of the relaxation of the One-Child-Policy.

 

 

The group has another listed company: Goodbaby International Holdings Ltd, which was floated on the Hong Kong stock market in 2010. It focuses on baby-care products design, production and sales, while Goodbaby China will sell those products in its network of shops.

 

 

Analysts believe China has more than 16 million to 17 million babies born each year adding that baby-related products had in recent years triggered a billion dollar market estimated $46.5 billion in 2016, involving both Chinese and Western players who needed to understand each market's specific needs.

 

 

To capture this opportunity Goodbaby launched a stroller called Pockit, able to be folded and carried onto passenger planes, which became an international best-seller. The group added two further brands it acquired in 2014: Germany's Cybex and US brand Evenflo. In particular to capture, the market for medium and high-end baby products.

 

 

Amongst Goodbaby`s leading competitors are:

Combi (Shanghai) 

Pigeon 

Procter & Gamble (China) Ltd. 

Zhejiang Beingmate Scientific Industrial Trading 

 

 

Rare-Earth Market: China monopoly?

Rare-Earth Market: China monopoly?

Most people have no idea what’s in an iPhone. Yttrium and praseodymium don’t exactly roll off the tongue, but they’re part of what make smartphones so small, powerful, and bright. These exotic materials are among the planet’s 17 rare-earth elements, and surprisingly, the soft, silvery metals are not at all rare. But they’re found in tiny concentrations, all mixed together, and usually embedded in hard rock, which makes them difficult — and messy — to isolate. In China, which mines 89 percent of global output, toxic wastes from rare-earth facilities have poisoned water, ruined farmlands, and made people sick.

 

 

Beyond high-tech gadgets, rare earths play a critical role in national defense, enabling radar systems and guided missiles. Ironically, they also power clean-energy technologies, such as wind turbines and electric cars. This year, global consumption is expected to be about 155,000 tons, far more than the 45,000 tons used 25 years ago. Demand will only grow — likely at an accelerated pace — as the world tries to rein in climate change.

 

 

At the moment, only China can satisfy that hunger. Yet in 2010, Beijing cut rare-earth exports by 40 percent — possibly to boost its high-tech sector — and cut off supplies to Japan over a territorial dispute. Its muscle flexing caused prices to soar, sparking new exploration for rare-earth deposits around the world. A boom in illegal mining in China has since driven prices back down, making it extremely difficult for non-Chinese mines to stay open or get off the ground. Nevertheless, the rest of the world hasn’t given up: There are currently 50 deposits at an advanced stage of development (see map below) that could someday challenge China’s dominance.

 

----------------------------------

 

Source:This article originally appeared in the July/August issue of  FP magazine.

Hanergy Solar Group (2016 Update)

Hanergy Solar Group (2016 Update)

Beijing based Hanergy is China`s largest, privately owned, producer of renewable energy. The group operates in the hydropower, wind power and the solar power fields, whilst it`s focus has now shifted towards the latter, the company has become the largest thin film solar panel producer in the world and has a presence in Europe, North America and Asia-Pacific. The company was featured in the MIT Technology Review’s “50 Smartest Companies of 2014” ranking,  due to its almost 1000 patents, mostly related to photovoltaic innovation.

 

 

Currently Hanergy’s installed capacity for hydropower exceeds 6 GW, whilst the same figure for wind power stands at 131 MW according to the company’s reports. The company also has the world’s largest, privately built, power station, Jin’anqiao. Its Wind power plants are in Jiangsu and Ningxia provinces.

 

However, today, the core business and focus of the company is the development and production of photovoltaic panels. Hanergy has made striking progress in becoming a global leader in the field, considering it only started the development of its photovoltaic arm 5 years ago. Local media in Guangdong, province where Hanergy launched its solar panel operations, coined new term – “Hanergy speed”. The company claims its annual capacity for producing PV panels is now over 3 GW, which would translate to 4 billions kWh of electricity annually. The group has signed construction agreements for solar power plants with a 4 GW total capacity in Inner Mongolia, Ningxia, Jiangsu, Hainan, Shandong, Hebei and other provinces, as well as in several European countries.

 

Hanergy focuses on thin film photovoltaic solar panels. Production line start-up costs are relatively high whilst efficiency is lower than traditional silicon panels, but the lower production costs and consistently improving transformation rate should increase thin film panels commercial attractiveness. Over supply in the solar industry forced numerous companies out of business, some of which were rescued by Hanergy Solar Group (HNS), in which Hanergy Group acquired a controlling stake in February this year.

 

Hanergy Group and Hanergy Solar Group have been aggressively expanding in both the domestic and international markets. It recently signed a partnership with IKEA, where it will furbish its retail stores with solar panels in the UK and China. Furthermore, by acquiring MiaSole and Global Solar Energy in the US and Solibro in Germany it has significantly strengthened its R&D capacity The latter has been working on improving conversion efficiency of Copper Indium Gallium and Selenium (CIGS) panels since the acquisition, with highest efficiency rate of patented panels being 15.5% conversion, while the latest lab tests are reaching 19.6% conversion: meaning about a fifth of sun’s radiation is being converted into electricity. Moreover, Hanergy has signed an agreement with Aston Martin Racing, and will explore possibilities of solar technology application in motorsports.

 

 

However, despite all positive news, Hanergy’s future plans seem to be both risky and reliant on Governmental patronage. The group’s investments into wind and solar farms are only 30% - 40% funded by the Hanergy itself, the rest of the capital usually coming from local governments. If Hanergy fulfills its expansion plans, it will have a solar panel production capacity of around 6.6 GW, while globally added capacity was just less than 40 GW last year, with a quarter of it coming from China. It believes that its markets success is dependent on it`s development and delivery to customers of its latest CIGS panels and considering Hanergy does not currently figure among the top sellers globally, all will indeed depend upon the volume of its CIGS panels shipped to end users.

 

 

Hanergy launches full-solar-power vehicles with daily range of 80km (2016 Update)

 

 

Hanergy Board chairman & CEO Li Hejun launched 4 new fully solar powered vehicles. The new series of vehicles includes the Solar O, Solar L and Solar A and sports car 'Hanergy Solar R” each targeted at different groups of users.

 

 

With a solar energy conversion rate of 31.6%, Hanergy's gallium arsenide (GaAs) dual-junction solar cell was awarded with a World Record Certificate by the World Record Association at the launch event. Previously, on 5 January, the technology had been recognized by the US National Renewable Energy Laboratory (NREL) for its record efficiency.

 

 

The four new full-solar-power vehicles are integrated with flexible, highly efficient GaAs solar cells, maximizing the area covered (3.5-7.5m2). Through a series of precise control and managing systems (including a photoelectric conversion system, an energy storage system and an intelligent control system), the zero-emission vehicles use solar energy as the main driving force. With 5-6 hours of sunlight, the thin-film solar cells can generate 8-10kW-hr of power per day, allowing the vehicle to travel about 80km (equivalent to over 20,000km annually), and hence satisfying the requirements for city driving under normal circumstances.

 

 

Users can manage different travelling and weather modes in a real-time, mobile, networked and smart way, selecting charging modes in accordance with varied weather conditions through Apps on their mobiles. In everyday-use mode, the vehicles can charge themselves with solar energy while traveling, making 'zero charging' possible for medium- and short-distance journeys. So, unlike traditional electric vehicles, the full-solar-power vehicles hence no longer need to rely on charging posts, eliminating the concept of 'distance per charge'. For weak sunlight or long-distance travel, the lithium batteries in the vehicle can get power from charging posts, enabling them to travel a maximum of 350km per charge.  

 

 

Hanergy claims that the four new vehicles are the first full thin-film solar power vehicles that can be commercialized, breaking the bottleneck of poor practicality of previous solar-powered vehicles. The firm has also signed a framework agreement with Foton Motor to cooperate on developing clean energy buses.

 

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