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Mobile Internet is a “Strange” Market in China, Though Opportunities Abound for Traditional Industries

Li Feng, Partner, IDG Capital Partners

For many would-be entrants and startups in China, it can be very hard to decipher the opportunities and challenges in the mobile Internet environment.  Fortunately, there are VCs and experts in the market who are willing to offer some guidance on the direction of the industry.

Last week, GWC held its “M4U” (Mobile for You) event in Beijing, where investors Li Feng of IDG and James Tan of Quest VC gave some poignant advice on the market in China and where they see the best opportunities in the next few years.

We are “very bullish on mobile internet,” says Li Feng. He points out that middle to low-end smartphones in China will add a predicted more than 200 million users this year.

James Tan agrees. There are approximately 500 million Internet users and 1 billion mobile users, he says, and they are getting increasingly wealthy. Chinese consumers are also “3 to 4 times” more willing to spend their money online.

China’s mobile Internet market is unique in the sense that “there is nothing dominant yet,” explains Li Feng. Competition is also “a little weird,” he says. Taobao is blocking Baidu, Tencent is blocking Taobao, and Sina and Baidu are also fighting. All of the dominant players are working to undermine the other, but none have gained a dominant position yet. Still, he says, avoid the trap of mobile apps, which he believes are not the main drivers in the market.

One issue Li Feng sees in mobile is that the advertising model has not yet matured. Mr. Li believes this will be revolutionized when a common entry point for mobile traffic is established. “Search is not the entry point for traffic in mobile,” he declares. It could be “graphic technology, voice technology, geographic technology” or others.

James Tan, Managing Partner, Quest VC

James Tan also points out that China’s market is not the most innovative in the world. The world’s top 100 most innovative cities list does not include any Chinese cities.  However, there is not much data on China, and it is apparent that there is a lot of activity, IPOs, and opportunities for growth.

Mobile will develop in different ways than the Internet in the long term, especially as it integrates deeply into everyday activities like socializing, shopping, and traveling. Currently search is not the easiest or most functional tool in mobile, as it is still quite awkward to find information on the phone. With the growing use of applications such as WeChat in China, it is not as farfetched as it may sound to imagine a social or geographic entry point for mobile.

Traditional industries can take advantage of this transition and find new ways to reinvigorate their businesses. With the question of how the mobile market will mature still up in the air, brick and mortar retailers, healthcare representatives, and real estate agencies to name a few are beginning to make inroads with new mobile services. It will not be long before they become large drivers of the transition.

As part of a growing need for companies to understand the value of mobile in their business, the Great Wall Club has a new event series called “M4U”, aiming to explain the way that mobile can be leveraged  in a variety of traditional industries and platforms. It is a monthly event that promotes cross-industry connections with leaders in mobile tech and finance through speakers and discussions . 


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