05/10/12

Amex wants to turn tweets into dollars

In March 2012, Amex decided to introduce a new plan (https://sync.americanexpress.com/twitter/Index) in order to turn its customers’ tweets into rewards. Participating brands include 1-800flowers.com, Best buy, Dell and H&M. Here is how Amex describes the service:

  • Sync your eligible American Express® Card with Twitter
  • Tweet the special offer #hashtags to load exclusive Cardmember offers directly to your Card
  • Save with an automatic statement credit when you make a qualified purchase in store or online with your synced Card

It’s mostly aimed at customers in the US and doesn’t seem to be available to European American Express clients. I couldn’t spot it either on the UK or France pages.

The idea is clever as it mainly touts the benefits of not having to use coupons. The main challenge will however remain, as always in e-marketing, with the ability to offer a great service (and big discounts) while reassuring clients that they are free to choose and opt-out (or even not opt-in at all).

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Amex Video promoting the Sync Tweet and Save programme
02/13/12

Chinese Internet: the global battle has begun (1/2)

In a previous series, Alban Fournier, a young French professional who fell in love with Asia warned us that China was the next worldwide International giant in the making. In this piece, he is expatiating on this previous report and delving into the details of what makes Chinese Internet players stand out from the crowd.

[this report is published in instalments, type http://bit.ly/albanchina2 to put all the pieces back together]

alban qq inter 2010

Fournier: the man who prefers QQ ID: 1557637787 to his Twitter handle

What is currently planned at Alibaba, Tencent, Sina, and Baidu is worth further investigation, hence this sequel to my initial piece on Chinese Internet. My duty is to continue the story published last year and called “Chinese Internet industry ready to grow beyond borders”.

People were quite sceptical in 2008 when I announced that China, as a country, was good at disruptive innovation following a trip in Beijing. At that time, I placed my bets on a Chinese Internet becoming almost the only alternative to its American predecessor. Who would have imagined that change would accelerate so much at the very beginning of 2012?

China: already an Internet giant

China has the world’s largest Internet traffic thanks to its population, the world’s biggest with more than 1.3 billion people. With the strong increase of its Gross Domestic Product, extraordinary engineering talent, plenty of venture capital, Chinese entrepreneurs and large firms now have the necessary resources to compete worldwide.

Baidu Yi

[Baidu : screen capture by Alban Fournier]

From a social behaviour point of view, there is a fundamental difference between American and Chinese people: in the U.S.A. (and in Europe too) a majority of online users are “spectators” while a majority of users in China are “creators”[1]. China is therefore much more active market and its users generate a lot of UGC (user generated content) every day. This discrepancy is one of the reasons behind the success of QQ games, a Tencent service dedicated to free online gaming.

Now that Chinese Internet players are giants at home, aren’t we just about to see them thrive beyond borders?

Strategic investments before 2012

In 2011, Tencent formed several strategic partnerships in China: among them, Kingsoft Corporation Limited, an Internet security software editor and eLong, Inc, a leading online travel service provider in China. Outside China, in addition of being active in the U.S.A., Russia, India, Vietnam, Thailand, Tencent acquired a majority stake in Riot Games, a Los Angeles-based developer and publisher of online video games. [2] In 2010, Tencent invested $300m in Digital Sky Technologies (DST) of Russia, bringing two internet powerhouses of the emerging markets together in a long-term strategic partnership.

Alibaba prepared the future of Alipay reaching an agreement with Yahoo!, and SoftBank. Alipay is a leader in China in providing payment processing services. Alibaba also developed operations in the U.S.A. and formed a partnership with Turkey’s Logo Group to reach Turkish companies.

Among others, Renren and Dangdang are listed on the New York Stock Exchange. We can expect more US IPOs by Chinese companies. There are at least 10 Chinese Internet companies which have made confidential filings through the Security Exchange Commission. Those Chinese tech companies aiming at an IPO are also growing their business through innovation.

to be continued …


[1] http://blogs.forrester.com/gina_sverdlov/12-01-04-global_social_technographics_update_2011_us_and_eu_mature_emerging_markets_show_lots_of_activity

[2] http://usa.chinadaily.com.cn/epaper/2011-03/01/content_12095412.htm

09/2/11

Chinese Internet industry ready to grow beyond borders (2/2)

Photo: Tencent home page

imageby Alban Fournier (http://www.value2020.net)

QQ ID: 1557637787

Alban Fournier is a graduate from Essec Management School in Paris. He has proficiency in Management, Change Management, Marketing and Consulting services. He has worked on various engagements with Schneider Electric and Tencent, the leading Chinese Internet company.

This is part two of an article on Chinese Internet companies

A success story named Tencent

Founded in November 1998, Tencent has grown into China’s largest and most used Internet service portal. In its ten year history, Tencent has been able to maintain steady and fast paced growth. In 2005, Tencent entered the social network market with QZone and Internet shopping with PaiPai.com platform. In 2006, the firm decided to compete directly with Baidu and Google with the launch of the Soso search engine.

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above picture: the soso.com search engine: wait a minute, I think the graphic design vaguely rings a bell …

Tencent’s QQ Services is China’s largest and most used Internet service portal, with the largest customer base in the world. Key platform statistics are 647.6 million of active Instant Messaging (“IM”) user accounts and a peak of simultaneous online IM user accounts of 127.5 million. Active user accounts of Qzone, a social network included in QQ Instant Messaging, numbered 492 million. [2]

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R&D staff group is large at Tencent. The company has obtained patents relating to the following technologies: instant messaging, on-line shopping and payment services, search engine, information security, gaming, and many more. In 2007, Tencent invested more than RMB 100 m (note: RMB stands for Renminbi, which is the other name of the Chinese Yuan)  and in setting up the Tencent Research Institute, China’s first Internet research institute, with campuses in Beijing, Shanghai, and Shenzhen. The institute focuses on developing core technologies.  The revenue of the firm increased by 57% in 2010 compared to 2009, which means that Tencent is now more profitable than Microsoft Online or Google.

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The business model of Tencent is not only based on advertising but based mainly on revenue generated by users and online sales. The firm is very well positioned in latter market. Furthermore, it has already a large user base which it can leverage. Online sales in China are a fabulous market for Tencent. We can expect at least a 35% increase per annum in the three coming years.

Estimate in growth of revenue generated by virtual micro-transactions will be outstanding according to Strategy Analytics[3]Compared to 2009, the global market of 2015 will be multiplied by seventeen (from US$ 1 billion to US$ 17 billions).

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Conclusion

As a conclusion, you now know that the Internet industry in China and Tencent in particular are rather successful on their home turf. Now you must be wondering whether Tencent or any other Chinese Internet firms will  decide (and when) to go beyond its borders and tackle the rest of the world.


[1] http://www.cnnic.net.cn/

[2] Tencent corporate website http://www.tencent.com, Alexa site

[3] Source: Strategy Analytics, Inc

09/1/11

Chinese Internet industry ready to grow beyond borders (1/2)

chinese-flag-Internet Attribution Chinese flag photo, some rights reserved by Philip Jägenstedt

imageby Alban Fournier (http://www.value2020.net) QQ ID: 1557637787

Alban Fournier is a graduate from Essec Management School in Paris. He has proficiency in Management, Change Management, Marketing and Consulting services. He has worked on various engagements with Schneider Electric and Tencent, the leading Chinese Internet company.

China will be the World’s next Internet giant!

Which Internet company generates the greatest number of micro transactions for virtual goods on a daily basis? If they were asked this question, most of our Western readers would undoubtedly mention Google, or Facebook and they would be wrong. In this piece, I will explain why China is virtually the only country that is able to compete with the United States of America with regard to the growth of its Internet industry.

China has the world’s largest Internet audience thanks to its population, the world’s biggest with more than 1.3 billion people. With the strong increase of its Gross Domestic Product, extraordinary engineering talent, plenty of venture capital, Chinese entrepreneurs and large firms have now the resources to compete worldwide.

What makes the the Chinese market stand out is that Chinese people use intensively their mobile phones. They are not just using their devices to communicate with other people : they also play games, issue payments and perform many other things online.

Overall, Asia is ahead of us with regard to the usage of mobile devices, Japan and Korea being the most advanced countries. This high and ever growing usage of mobile communications empowers local players such as China Mobile (70% of the market), China Unicom (20%) and China Telecom (10%).

[China Telecom phone booth image AttributionNoncommercialShare Alikesome rights reserved by mjaniec]

According to CNNIC[1], the total number of wireless Internet users in China reached 302.7 million at the end of 2010, representing 66.2% of the local Internet user base. Such high equipment rates were mainly driven by the superior wireless data infrastructure in the country and the availability of mobile applications such as WAP portals, Instant Messaging (IM) and social games. Secondly, while traditional Text Messaging (SMS) continued to develop after a year of strong growth in 2009, microblogging enjoyed explosive growth and emerged as a major social media contender in China.

Telecom is still a local industry in China … as of now

A characteristic of the Chinese technology industry however is that few of those Chinese companies, however successful, have decided to go beyond their own borders. There are counter examples with firms like Huawei which has now managed to become a global company and has clients in many countries, namely by providing infrastructure equipment to Western network and service providers.

And the winner is … Tencent

Getting back to the question I asked at the beginning of this post, the World’s leading Internet company in terms of the number of online transactions on a daily basis is neither Google or Facebook; it is a Chinese company and is name is Tencent. The next part of this piece will be dedicated to their success story.

… to be continued.

________________ [1] http://www.cnnic.net.cn/

10/27/10

the status of Social Media in the Middle East straight from the Arabian horse’s mouth in Cairo

I have just come back from Cairo, where I was invited by the heads of the Cairo Orange Labs (see the video here) and their French counterparts in order to perform a presentation of what we do at Orange Business Services in the field of social media for a large carrier. I had the opportunity to present in front of a panel of representatives its form various carriers from the region including our local partner Mobinil. In this presentation, I not only presented what we do at Orange Business Services in Western Europe and in the United States, but also what is happening in the Middle East itself, as seen through the eyes of this excellent report entitled the Media Arab Outlook, the third edition of which can be accessed from this link.
The exchange of views that we had during that meeting was quite frank and quite direct and very eye-opening on the status of social media in the region. As a matter of fact, the development of social media in the Middle East is a bit schizophrenic. On the one hand, the uptake social media sites like Facebook in the Middle East, and particularly in Egypt is tremendous. The numbers which are quoted by the Media Arab Outlook report are even probably grossly underestimated. The report quotes something like 900,000 Egyptian users of Facebook whereas the audience mentioned almost immediately that this number was far below what it really is.
Of course, the status of broadand adoption (see picture below) in these countries is not at all what we are witnessing in Western Europe and the United States, which is easily understandable. If we except a few places in which broadband equipment is close to 0 because of local warfare or particularly difficult situations like the one in Sudan, Egypt is unfortunately coming at the bottom of the list in terms of broadband adoption namely.
Optimists would see that as a tremendous opportunity for carriers to equip the country with better broadband and better Internet access in general. Yet, it seems that in this kind countries the usage of the Internet is collective, a bit like what happened in India 10+ years ago and is still happening now in poorer areas; I suspect that people are grouping together around one Internet access and lend each other computers. The cybercafe, I was told by some attendees, has become so central to the life of villagers in Egypt and other Arab countries, that “cybercafe” itself was turned into a verb in Arabic, and is now part of the everyday vocabulary, and is commonly used by farmers and workers alike. Sometimes in India, it’s even shop owners who actually resell their Internet access to their clients when they shop. I also witnessed in Lebanon, more than 10 years ago, that people went to each other’s homes to look at the computer, check their mail and do things on the Internet.
Therefore, on the one hand, we have a tremendous uptake of social websites like Facebook, at the same time a terrible lack of broadband in countries like Egypt, and other countries doing a little bit better like Saudi Arabia and others doing a lot better, understandbly, like Qatar and the  United Arab Emirates.
There is also this widespread feeling that there is a terrible lack of content in Arabic available, because the vast majority of the country does not and will not speak and write in English. After all, Germans prefer to StudyVZ and Xing to respectively Facebook and LinkedIN, so it is perfectly understandable that Arab people favour local platforms. At the same time, local versions of the equivalent of Facebook and the like, are few and far between. There is one successful platform coming out of Jordan (Jeeran, see the report on page 72), and there is the famous Maktoob which was taken over by Yahoo! recently (important question: will it survive this change?).
pasisonate discussions in the room at Smart Village in CairoFacebook in itself is not an issue in the Middle East: people type either in English or in Arabic on the same walls and fan pages and it doesn’t really matter to them. But the main question is that of the ownership of Facebook which is definitely seen as American, which poses problems not only in terms of “not invented here” syndrome, but also from a political point of view (think about who created Facebook for instance and his origins even though he considers himself an atheist, and imagine how it resonates in the Arab world, regardless of westernised political correctness if I am allowed).
So, at the end of the day, there are tremendous opportunities in the Middle East for the development of social networks, in an area where conversations are anything but a view of the mind. It’s a way of life, which preexisted in real life way before the Internet arrived. Those service providers who will be able to seize this opportunity and provide social media platforms and services in Arabic, from/in partnership with independent Arab-owned media companies, will reap the harvest of a booming sector and, judging by the liveliness of the Facebook fan page of Orange Tunisia, which has now reached a little bit more than 110,000 users in just a few months, we can imagine what can be done in terms of advertising, brand loyalty programmes and co-creation.