Digital China First alternative to the Silicon Valley · 2016-03-25 · Alipay was founded in 2004 The fund is managed by Ant Financials partner Tianhong Asset management Sells

ACCELERATING BUSINESS

12016, L’Atelier © | No distribution or reproduction without authorization | www.atelier.net March 11th 2016

Digital China – First alternative to the Silicon ValleyMarch 11th, 2016

Judy Wei & Jean de Chambure

2March 11th 2016 2016, L’Atelier © | No distribution or reproduction without authorization | www.atelier.net

Agenda

China, the first alternative to Silicon Valley

• Top digital cities in China

• BAT’s Vs GAFA

• Mobile is the Key

• WeChat Phenomenon

Atelier THEMAS

• Future of Retail

• Fintech

• E-Health

• Smart Cities


China, the first alternative to Silicon Valley


Top digital cities in China

Beijing

Shanghai

Hangzhou

Shenzhen

Political capital, yet China

version of Silicon Valley,

nation’s ultimate startup

center, also the city is filled

with HQ of local internet

giants

China version of New York,

strongly vibrant in:

Financial (FinTech)

Industries

Real Estate

Luxury

Booming

Manufacturing industry

and Hardware

E-commerce, HQ of

Alibaba

ChengduR&D, and data center

Hong KongHub of future Fintech in APAC


BAT’s evolution compared to GAFA

Google (Alphabet)

1998, Mountain View

• Market Cap.*: $485.7 Bn

• Revenues**: $ 75 Bn

• Scope: Search engine,

technologie innovation

(car), R&D.

Apple

1976, Cupertino

• Market Cap.*: $535.6Bn


• Scope: devices, m-

payment (Apple Play),

Systems, R&D

Facebook

2004, Menlo Park



• Scope: social media,

Virtual Reality, R&D

Amazon

1994, Seattle


• Revenues**: $107 Bn

• Scope: E-commerce,

device (e-ebook), R&D

Baidu

2000, Beijing


• Revenues***: $2.892 Bn

• Scope: Search engine,

video, mapping, O2O

(Ctrip & Uber), e-Health.

Alibaba

1999, Hangzhou



• Scope: E-commerce

(Tmall, Taobao), O2O

(Didi Kuaidi), Internet Fi

(Ant), entertainment

(Youku), e-Health.

Tencent

1998, Shenzhen

• Market Cap.*: $169Bn

• Revenues***: $ 4.1 Bn

• Scope: Social media, gaming,

Internet finance (WePay), O2O

(Didi Kuaidi) & e-commerce

(JD.com), Pan entertainment,

e-Health

* Market Cap for Feb. 25, 2016

** In 2014

*** In the third quarter of 2015


China’s Big Online Number in 2015 – Mobile is the Key

Population: 1.37 billion

688M

620M

127M

50.3% Internet Penetration Rate

Mobile internet penetration rate

90.1%

They only access

internet via mobile

Source: CNNIC 2016


WeChat: Massive Scale & Various Uses

Make in store

payments

Hail a cab – and

pay with app

Transfer moneySend lucky

envelops

Split the bills Send some

Bitcoins to a

friend

Pay utility

bills

Send instructions

to your butler

Share realtime

location with

friend

Order some

food/wineGet gaming

rewards

Source: Tech in Asia

1 2 3 4 5 6

8 97 10 11 12

Catch up on

some reading

More than 650 millions users + overseas extension


Future of retail in China


Mobile discovery and research Buy m-coupon, m-redeem Select & Pay with QR Code in

Mobile

Mobile is the natural link between every commercial interaction

The rise of mobile centric generation


Examples of BATs iconic investment deals in O2O sector that took place in 2015

O2O Category

Transportation Investment USD 1200 million in

Uber

Investment in China version of

Uber: Didi

Investment in China version of

Uber: Didi

Travel Acquired 25% stake in China

l#1 online travel portal Ctrip

Online food

ordering

Investment in the leading

platform Ele.me

Investment in the leading

platform

Ele.me

Group Buying Became the shareholder in the

#1 Group Buying site Xinmeida

Became the shareholder in

the #1 Group Buying site

Xinmeida

Life service

directory

Held 25% stake in #1 platform

58ganji

BATs are entering the arena of O2O through aggressive corporate investment, merger and acquisition

They are buying the territory of O2O in every front, even though they have their own self-operating O2O entities

BATs dominate O2O in China (estimated 80%)


Fintech trends in China


Internet giants boosting

the market

• Jack Ma, founder of Alibaba

established Ant financial

(rebranded from Alipay*) in 2015

• Runs China’s largest money

market fund by AUM ‘Yu’ebao’**

• Provides micro-credit services to

SMEs

• Launched a direct banking service

‘Webank’, China’s first online-only

bank in 2014

• Offers extensive financial services

– on/offline payment, fund

investment, micro-credit etc. through

its mobile messaging app, ‘Wechat’

Incumbents pushing

aggressive strategies

• Runs China’s No. 3 E-commerce

‘Rong e Gou’*** by sales volume, its

total transaction exceeds ¥100 bn

• Launched e-ICBC platform for

combining online services - e-

commerce, product direct sales…

*Alipay was founded in 2004 **The fund is managed by Ant Financials partner Tianhong Asset management

***Sells investment products, property, gold, art pieces along with other lower basket value products –food, home appliances etc. Source: Bloomberg, Company Web

No holy ground for internet finance

VS

• Established China’s leading P2P/

open investment platform Lu.com

• Launched a direct banking brand

‘Orange bank’ in Nov 2014, within a

year, the customer # reached 4.5m

• Runs a loyalty point e-commerce

‘Wanlitong’


With QR Code payment at PoS, the 3rd party payment market size reached ¥ 4.3914bn (€ 608.23bn) in 3Q

2015 (26.4% growth)

Apple pay, launched in Feb 2016, drew 30 million users on the first-day debut

Market Share

Community

Driven

Holiday

Booms

Eco System

Active Users 400M In China

200MIn China

169MGlobally

77%In China

13.5%In China

Less Than 1%In China

350MActive Alibaba/Taobao users

Over

400MActive Wechat users

157MActive eBay users

RMB

240M2014 CNY HongBao

RMB

1 Billion2014 CNY HongBao

62% Jump in mobile shoppers on

Paypal 2014 black Friday

E-commerce, cloud,

entertainment, finance,

logistics

SNS, IM, content, gaming,

finance, govt. services,

transport

Limited to core e-commerce

transactions at the moment

* Mobile payment volume reached 18.17 trillion RMB, 194.86% increase YoY*, which takes up ~0.02% of the market’s total non-cash transaction amount

(859.74trn RMB) in 3Q 2015 in China / Consumption payment volume via bank card is 14.26 trillion in 3Q 2015 , ~30% YoY increase (PBoC).

Mobile payment is soaring*


Mainland China

• Internet giants boosting the Fintech

disruption – Mobile Payment

• Incumbents advancing with

aggressive digital strategies

• Rapid growth of P2P platforms

Main actors

- Mobile payment by Alipay, Wechat pay

- P2P by Lu.com (Ping An), Ppdai etc.

Hong Kong

• Gov. support for startup e.g.

Invest HK (1,558 start ups)

• Major financial center

Main actors

- Super Charger Fin Tech accelerator

- P2P lending by Welend

China: Hotbed of Fintech disruption


E-Health trends in China


E-Health market significant growth within last 5 years

M-Health China 2015

Market Size:

RMB4500 million

User #:

151 million

User Penetration

Rate:

22%

# of Major Health apps:

Over 2,000


E-Health aims to solve China’s health care problem

Key Needs Digital Solution

1. Accessibility •Improve access to quality

healthcare services

•Eliminate inefficiencies in

hospital operations

•Online scheduling

•Remote consultation

(Platform/family doctor/specialist)

2. Delivery • Enhance experience in

hospitals

•Enhance diagnosis and

treatment capability and

efficiency

• Integrated registration, payment

and e-report platforms

3. Distribution Purchase drugs with more

convenience and at lower cost

•Drug sales O2O

•Online Consumer Health/OTC

platforms

4. Community More knowledge sharing and

support among physicians and

patient communities

•Physician & patient networks

•Complied knowledge / database

•Social media

5. Personal Care •Increase in awareness of

disease on large scale

• Better management of

personal health

•Healthcare knowledge & disease

management

•Data health management

• Wearable devices


Smart city in Asia


Smart city trends in Asia

South Korea

Singapore

China

South Korea is the first country to launch smart city project in 2003.

Singapore launched the «Smart Nation project »in 2015 to improve lives and business.

This project focus on 4 points:

transportation, smart city, healthcare and ageing population.

Chinese Government oriented the 13th Five-year plan (2016-2020) towards green economy

(绿色生态), saving energy.

In February, the Chinese State Council launched a guideline on “new-type of urbanization”

to prevent problems such as pollution, traffic.


Merci !

Thank you!

谢谢!


Questions?

Documents

Digital China First alternative to the Silicon Valley · 2016-03-25 · *Alipay was founded in 2004 **The fund is managed by Ant Financials partner Tianhong Asset management ***Sells

Digital China First alternative to the Silicon Valley · 2016-03-25 · Alipay was founded in 2004 The fund is managed by Ant Financials partner Tianhong Asset management Sells