Maverick China Research

According to MIIT's latest statistics Personal Handset subscribers this month dropped 0.99 million to 79.488 million. 

According to MIIT's latest statistics mobile subscribers this month increased by 8.627 to reach 583.511 million. China Mobile's subscribers increased by 7.411 million to reach 399.548 million and China Unicom's subscribers increased by 1.5 million to reach 168.5 according data release by China Mobile and China Unicom, respectively.

Approximately 229 billion SMS messages were sent this month.

According to Alipay representatives, the top online payment company in China expects to break RMB 100 billion in transaction volume this year. At an estimated RMB 350 million in daily transactions, year-end 2008 volume would be RMB 128 billion. End-2008 tranactions are expected to reach 540 million, or an average of RMB 237 per transaction.

With new offline payment options and the Alibaba Group's acquisition and integration of Koubei.com (a Chinese classifieds listing site) with Yahoo China, we are very positive about Alipay's continued growth as China's top online payments provider, going forward. Alipay's main merchant partners (and sister companies under the Alibaba Group) Taobao and Alibaba.com are each continuing strong growth in their respective markets, which combined contribute the majority of Alipay's 90 million registered users.

In our latest market report, Alipay, Alibaba's Payment Arm - 2008 update , we reveal how Alipay has grown to become the top e-payments company in China, in spite of Paypal China's challenge early on and challenges from numberous payment startups in the market today. In our report series on Third-party Payment Companies in China, we have identified the top 10 payment companies to track, covering both online payments and mobile payments, and discuss the strengths and weaknesses of each in becoming the "Paypal of China". 

Recently the Beijing Administration for Industry and Commerce announced new regulations for online merchants, including the millions of individuals selling through sites such as Taobao, Eachnet, and Paipai, China's top three C2C e-commerce websites:

According to the e-commerce supervision and management regulation promulgated on its website by the Beijing Administration for Industry and Commerce, from August 1, 2008 profit-making online shops must get a business license before starting operation.

 

However, the regulation also says that nonprofit online shops that are intended to sell or exchange items for personal use do not need to register.

The C2C online markets have been growing very fast since 2002, in part because there were few restrictions or taxes on sales. But I'm not so sure this new regulation, which aims to cut down on fraudulent merchants and fake products, will really be helpful for the industry. If it is strictly enforced, I think it's more likely to make make some sellers give up their small online businesses rather than pay the registration fees, which were not listed and are likely to be different for different products.

An even bigger problem for many merchants is the registration process itself. The government appears to want to force every single individual to register a business as if it were a normal bricks-and-morter operation. This process can take weeks or months. But Taobao and others have made it so easy to sell things online, many of these merchants haven't had to put in much effort beyond registering an account and posting a few advertisements. Many may not have the time or motivation to go through this ordeal.

It's also questionable just how much this policy will clean up the online marketplace. In the real world, there are many regulations in place, but fake goods and fraud abound. A dissatisfied Taobao customer can return products to the seller if there's a problem. Try doing that at many offline shops and you'll simply get ignored by the merchant.

Just one week before the iPhone 3G is set to make its debut onto store shelves worldwide, it appears that Apple has finally agreed on a deal with China Mobile. According to a recent article that appeared in Reuters UK , Apple has relinquished its demand for a share of the content fees, while China Mobile has agreed to offer users subsidized rates to purchase the iPhone.

By backing down on its demands for mobile content revenue sharing, it looks like Apple has learned first hand of the strength that China Mobile holds in the telco markets here in China, and that they cannot bully them with revenue sharing and mobile content particulars like they do with operators in the US and in other markets. This is a pretty big concession on the part of Apple to enter the China market, though I wonder if it was necessary.