QQ is by far the most popular instant messaging service in China, with almost 320 million active accounts, according to owner Tencent. And while major international competitors have tried and failed to break QQ's dominance, one service in particular is worth a closer look: China Mobile's mobile-IM platform, FeiXin (Fetion).
Since its release in 2006, the service had around one million active users by the end of 2007. More importantly, China Mobile had 400 million users overall--a huge pool of customers to pull from.
Any China Mobile user can register for the service. The service is free of charge for PC users sending SMS to China Mobile users--up to 600 messages per day. Messages from phones to PCs are charged at the standard RMB 0.1 rate for SMS; phone users can choose between an SMS interface or a more traditional instant messaging window (if the phone can support this function).
Would China Mobile’s subscribers like to use this? I think so. SMS is the most popular form of communication for many Chinese people. During peak times, such as Chinese New Year, operators have recorded as many as 12 billion SMS sent every day. Much of Tencent's revenue over the past ten years has been paid by the mobile operators, in exchange for the mobile value-added services (MVAS) that Tencent provides, and the company would have difficulty giving up such a steady revenue stream without anything to replace it.
Because it already handles most of the SMS sent in China, China Mobile is in a strong enough position to challenge QQ's dominance. I don't think Fetion is a threat to QQ in the near term, but with China Mobile's backing, it is certainly positioned to become QQ's biggest competitor in the future.
China Mobile's move into instant messaging is further proof of its increasingly aggressive expansion into what was formerly the terrority of wireless value-added services (WVAS) providers such as Tencent, Sina, and Kongzhong. In fact, the operator and Tencent had previously partnered on a similar service a few years ago. The name? Fetion QQ, of course.
Tencent, which has built its QQ instant messaging service into one of China's leading internet companies, recently launched a QQ-branded credit card together with China UnionPay (CUP) and Industrial Bank. Back in 2005, Tencent launched a QQ-branded debit card, but this marks its first foray into credit cards.
QQ users can apply for this card with through their existing QQ account on it or get a new account when applying for the card. The card enables automatic online payment for a variety of products and services and Tencent and other online merchants--no extra trips to the bank needed to "activate" online payment. As might be expected, many Tencent products can be bought at a discount with the card. Users can pay off their bills with any UnionPay bank card online--again, no trips to the bank needed.
Given QQ's relatively young user base, pushing a QQ-themed credit card provides more evidence that the battle for new credit card users is increasingly focused on young users. Just how effective it will be in QQ's hundreds of millions of users into the habit of using a credit card is another question.
The recent earthquakes in Western China has rattled the lives of many. To offer support to the victims and their families, Chinese online payment company IPS is now accepting cash donations via its website and all proceeds will go to the Red Cross Society of China.
Donations are accepted via IPS' payment system through the following partner banks: China Merchants Bank, China Construction Bank, Agricultural Bank of China, China Everbright Bank, Bank of China, Industrial & Commercial Bank of China, China Minsheng Banking Corp, Industrial Bank, Guangdong Development Bank, Shanghai Pudong Development Bank, Shenzhen Development Bank, and Huaxia Bank.
As usual, the first speaker was a government guest--this time it was Yu Xiaohui from the MII. He talked about the global growth of VoIP, noting that in March 2008, people spent 100 billion minutes making phone calls on Skype. He also said that according to MII data, most of VoIP users in China are adults--a significantly older user group than in North America and Europe, both of which have younger users on average.
The next speaker was from James Yang from UTStarcom, which grew to prominence supplying much of China's PHS/Xiaolingtong equipment and handsets and is not trying to shift its focus to newer technologies, including VoIP. He discussed the "Telecom 2.0" buzzword and how VoIP fits in. Overall, he described a fairly rosy future for operators and the telecom sector in general.
The most popular speaker of the day was Kan Kaili, a well-known professor at Beijing University of Posts and Telecommunications (BUPT). Professor Kan has a long reputation of publicly and loudly voicing his opinions on telecommunications development in China. Many of his arguments took opposite positions from the previous speakers. Notably, he said he hoped that all the telecom and mobile operators would go bankrupt, and that such an event would "set the industry free" and lead to period of great growth and development.
Here are a few more highlights from Prof. Kan's speech [I quote from memory here]:
There is little difference between telecom operators and thieves...Operators should be like workers building a road--they should build it and then get out of the way. They shouldn't be able to endlessly charge citizens who only want to walk down the road...
The government should not protect operators who engage in this kind of behavior. Doing so will only hinder the development of China's telecom sector...
Ideally, in the future, all the operators' networks will be interconnected, controlled by the government, and free of charge to the citizens....
[Spoken in English, for emphasis!] The Internet should of the people, by the people, and for the people...No company should be able to monopolize it.
YeePay recently announced an innovative (if somewhat roundabout) payment solution for 3G.cn, a leading Chinese WAP-portal. 3G.cn users were already able to buy its products and services -- which include games, email, e-books, forums, and ringtones -- through China Mobile's Monternet and China Unicom's Uni-info platforms.
The new service also uses the mobile operators' platforms. A user first purchases a prepaid Easyown card (a.k.a. Shenzhouxing, China Mobile's most basic and most popular prepaid service) and then enters the account number and PIN on the card to make the payment. After payment is complete, the remaining sum is transferred to the user's YeePay account (if it exists) or into a new account, which the user is given the option of opening. Th card can no longer be used to top-up one's mobile account directly; however, YeePay does offer just such a service, so once the funds are in one's YeePay account, they can be used for mobile top-up.
This is different from traditional operator-centered payment methods, in which the top-up card funds are first transferred into the phone account, where they then can be used for payments. It also differs from existing WAP-based mobile payment services, which generally require linking one's mobile number and bank account. And while Chinese consumers have been able to use mobile top-up cards for topping up their online (internet) payment accounts, this new service specifically targets mobile payment users.
Many consumers are wary of linking up their mobile numbers and bank accounts. By avoiding such a need and by partnering with the ubiquitous Easyown/Shenzhouxing brand, YeePay is giving China's fledgling m-payments market another push in the right direction. Of course, YeePay may only have been able to provide this "anonymous" payment method because of the news that Easyown/Shenzhouxing would require real-name registration sometime this year.
