China Internet Report 2019

Home , Hillhouse Capital Group, Lifan Group, Miaopai, Mobvoi, SenseTime, Shunwei Capital

www. scmp.com/china-internet-report Table of Contents

China has emerged on the world stage with a brace of global tech companies that is innovative and competitive. And increasingly, their successes are being studied and replicated in other markets. This report, informed by on- the-ground reporting by the South China Morning Post and Abacus, offers insights into China's tech trailblazers and the big important trends shaping the world's biggest internet community.

Special thanks to our contributors in alphabetical order: p54 p27 p27 p38 p89 p27 p101 CHEN Chi Dada Eric XU GONG Yu James PENG JIANG Fan Johnson YEH CEO Co-founder Managing CEO CEO President Head of Greater Xiaozhu Pinduoduo Partner iQiyi Pony.ai Tmall and China and SEA Duanzu GGV Taobao Riot Games

p69 p54 p83 p96 p101 p69 p64 p64 Dr. LEE Kai-Fu LI Kaizhu Miffy CHEN Phil CHEN TAN Min-liang Dr. XU Li XU Ziyang YANG Chaobin CEO Co-founder General Chief CEO CEO CEO President of 5G Sinovation Hellobike Manager Decentralized Razer SenseTime ZTE Corp Product Line, Ventures Alibaba AI Labs Officer HTC Huawei

2 Table of Contents

1 CHINA AT A GLANCE 3

2 2018 LOOK BACK 12

3 TOP TRENDS FOR 2019 14

4 DEEP-DIVE BY SECTOR 25

3 Source: At aGlance At in China than than in China mobileIn States.astheUnitedusers internet number of timesthe threealmostmeans scale itssheer only is 60%, rate penetrationinternet China’s Although CNNIC, National Bureau of Statistics of China, US Census Bureau, weBureau, Census socialare US China, of Bureau Statistics of NationalCNNIC, there are people in the U.S. in theare people there Internet –

China China vs U.S. vs U.S.

Mobile Internet Mobile payments, Internet

the gap is even wider: more people pay with their phones with their pay peopleevenwider:moreisgap the

Mobile Payment Mobile

www.scmp.com/china-internet-report Source: China China China and the U.S. operate in two separate technology ecosystems.technology in twoseparate operatetheU.S. and China SCMP analysisSCMP

U.S. U.S. –

Top PlayersVerticalsKey Top for IN CHINA IN U.S.

www.scmp.com/china-internet-report A Year of Chinese Tech IPOs Tech Chinese Year A of Source: 21Finance, company filings company Source: 21Finance, Note as Chinese 56 Number Number of 2009 : TMT = Technology, Media Telecommunications Media and := TMT Technology, of of US-listed 2 1

Jun 10, 2019. 10, Jun 2010

7 2 Chinese TMT* Company IPOs TMT*10IPOs LastCompanyOver theChineseYears

TMT* 2011 HK-listed 4 3

companies went public in 2018 with a total combined market capitalization of capitalization marketcombined total with a publicin 2018 companieswent 2012

3 4

2013 4 4

2014 13 8

2015 3 7

2016 4 7

2017

5 7

2018 28 28

. . Potential2019 . . 2018 Major IPOs market market valuation: US$25 and isthe primary competitor to 2018 Toutiao (500 millionMAU worldwide) and news US$47cap: managementfacilities and other services. Market construction, accessories worldwide. Market US$35cap: smartphone setsoftware, valued the company at produces produces . Its most recent financing round Octin provides is a short a short video with app owns billion. IPOs

tower tower and and sellsmobilephones, telecommunication

global short global short video hit app

maintenance,ancillary billion. - top top boxes and related US$76

TikTok 300 millionMAU USD$222 billion billion USD$222 billion tower tower . . Latest aggregator aggregator . billion

TikTok .

www.scmp.com/china-internet-report Top Chinese Internet ( Players Internet Chinese Top Source: Source: 10 9 8 7 6 5 4 3 2 1 Crunchbase

, Toutiao CBinsights Meituan Tencent Holdings Alibaba Group Alibaba Ant Ant Financial Didi Company NetEase JD.com Baidu Lufax , company company filings, ,

Chuxing ( Bytedance - Dianping

avcj

)

, caixin , Gregory D GIBB ZHANG reuters Daniel ZHANG Daniel Richard LIU CHENG Wei WANG Xing DINGLei Eric Eric JING Pony MA Robin LI , hurun CEO Yiming . As of Jun 10, 2019 10, Jun of As.

CICC,COFCO, Arbor Ventures, BlackPine Private DFJ,Google, Capital Group, Group, Capital Northern Light Venture Capital, Alibaba Group, NSSF, CDIB,CCB International Sequoia Capital China,SIGAsia Investments, DST Global,Google, Sequoia Capital China, Matrix Partners, Tiger Global Management, Alibaba GeneralGroup, Atlantic, DST Global,GGV Capital,Goldman Sachs,

IDG Capital, Lippo Lippo Capital,IDG Group, Naspers,PCCW Tiger Tiger Global Management,Walmart 1 SoftBank Sina

of of 2) Sequoia Capital China ePlanet

Selected Weibo, Softbank Group Integrity Partners SoftBank SoftBank Capital Softbank Softbank Corp., , Temasek

Equity Equity Capital,Peninsula Capital,

Investors

Holdings

Hillhouse

NASDAQ: NASDAQ: NASDAQ: NYSE: HKG: HKG: Listedon Private Private Private Private 3690 BABA 700 NTES BIDU

As of Jun 10,2019 of Jun As

Market Market Valuation Valuation (US$ 416 418 150 34 39 39 40 45 56 75 bn Cap/ Cap/

)

www.scmp.com/china-internet-report Top Chinese Internet ( Players Internet Chinese Top Source: Source: 20 19 18 17 16 15 14 13 12 11 Crunchbase

Bitmain , CBinsights Cainiao Logistics Tencent Pinduoduo Company Kuaishou JD Digits JD WeBank Xiaomi

, company company filings, , Technologies Ctrip iQiyi

Music

avcj

, caixin CHEN CHEN Qiangsheng , PANG PANG WANG Haichao reuters Daniel ZHANG Daniel ColinHUANG GONG Yu JaneSUN SU Hua GU Min LEI LEI Jun , hurun CEO Kar . As of Jun 10, 2019 10, Jun of As.

Shun

DST Global,Goldman Sachs,JP Morgan Chase & IDG Capital, SequoiaCapital,IDG Capital, Tencent Holdings, JD,Sequoia Capital China,CICC, COFCO, China IDGCapital,SAIF Partners, Today, Capital SIIC Coatue GIC, Baidu, Xiaomi,Providence Equity Partners,

Co., Morgan Stanley, Gaorong Gaorong LightspeedCapital, Capital Khazanah 2

Management,Sequoia China,Capital

of of 2) Selected Taiping Taiping Insurance Tencent Holdings Tencent Holdings Sequoia Capital

Nasional IDG Capital IDG Investment Spotify

Investors Temasek , T

masek

Holdings

NASDAQ: CTRP NASDAQ: PDD NASDAQ: IQ NTSE: NTSE: TME HKG: Listedon Private Private Private Private Private 1810

As of Jun 10,2019 of Jun As

Market Market Valuation Valuation (US$ 12 13 15 15 18 19 21 23 23 30

bn Cap/ Cap/

)

www.scmp.com/china-internet-report Top Top Source 10 9 8 7 6 5 4 3 2 1 : Crunchbase

Chinese Chinese , ITjuzi , , Zero2IPO Ping An Healthcare Meituan Tencent Music Luckin China Tower Pinduoduo Company

Xiaomi Bilibili iQiyi Nio -

Dianping Startup Exits Exits (IPO Startup Coffee

PANG PANG ColinHUANG WANG Xing QIAN Zhiya WANG WANG Tao TONG JILU WilliamLI CHEN CHEN Rui GONG Yu LEI Jun CEO Kar

Shun

) (Jan 2018 2018 (Jan )

NASDAQ: PDD NASDAQ: NASDAQ: NASDAQ: NTSE: NTSE: TME HKG: HKG: 1810 HKG: 3690 NYSE: HKG: 788 Listedon 1833 NIO BILI LK IQ

Jun 2019) Jun 12/12/2018 Date of of Date IPO 12/9/2018 17/5/2019 28/3/2018 29/3/2018 26/7/2018 20/9/2018 4/5/2018 9/7/2018 8/8/2018

Headquarter Shenzhen Shanghai Shanghai Shanghai Shanghai Xiamen Beijing Beijing Beijing Beijing

Jun 2019 Jun 2018 Jan

Market Market Cap ( US$bn 13 23 24 30 44 45 3 4 5 5

)

–

www.scmp.com/china-internet-report Most Most Source Number of Number : ITjuzi

Active VC Active

Investments in in 2018 Investments Firms in in Firms

China China in

2018

www.scmp.com/china-internet-report ByteDance BAT vs BAT TMD Source Note: ( TMD challengers while ecosystemsbuilt have Tencent) Alibaba, asBAT(Baidu, known tech giants ChineseThe Dianping Meituan Tencent Toutiao Alibaba Baidu Didi Toutiao : SCMP analysisSCMP -

is the product the Beijing product of the *, Meituan *,

Ecommerce - Dianping, Dianping,

- based based company ByteDance Didi ) are strengthening their coretheir ) strengthening are

Content Media Content &

Messaging Social&

Mobility/ Logistics businesses.

Travel

Fintech

Gaming

Autonomous Cars

Intelligence Artificial Artificial

Enterprise Enterprise Services

www.scmp.com/china-internet-report Table of Contents

1 CHINA AT A GLANCE 3

2 2018 LOOK BACK 12

3 TOP TRENDS FOR 2019 14

4 DEEP-DIVE BY SECTOR 25

12 Looking Back 2018 Looking at Source Recap of Last Recap Last of Year’sTrends We identified four overarching themes last year. Here’s why they’re still relevant today. stillrelevant why they’reHere’s year.last themesfour overarching identified We 4 3 2 1

: ITJuzi the the Government Embrace‘Social+’ InternetChinese Companies EmpowersRural Chinese are Internet Chinese Giants , CNNIC, China National Bureau Statistics, Bureau of National China CNNIC, , DoingEverything Visible Hand Visible Internet is

Population

• • • • • • • • • • • QuestMobile technologies President deleting more than9,300 smartphone apps to screen out information deemed inappropriate or In Jan2018, Cyberspacethe Administration of China scrubbed the web of more than industry to experienceits slowest revenue growth in over adecade The Chinese government suspended licensing for new games for The government authorities Fintech Time spent online increased by 30% last year. the penetrationrate from 35% to 38 The number of internet users in ruralChina increased by 13 million to 222 million in 2018, increasing overseasinvestments. BAT of these investments in overseascompanies Baidu functions functions within their apps Tech giants, including and growth Social number of P2Ponline lenders has halvedwithin ayear to 1,027 in 1Q 2019 invested in 252 companies in 2017; in 2018, thatnumber rose to 280 with 42 of those being , + refers to the model wherea business is anchored by asocial pillarthat drives user engagement Alibaba , gaming, and content , , 01caijing.com Xi Jinping urged China to go

and

Tencent

Alipay .

have been have stepping up their investments over the past years,few with more

- and JD.com,and areextending their Social+ plans,launching group driven internet companies continue to facetight restrictions by %.

allin . on on scientific self

- relianceand make breakthroughs in core 9 . months months

last year, causing the gaming .

7 million - buy items, harmful.

Stillin 2019?    

www.scmp.com/china-internet-report Table of Contents

1 CHINA AT A GLANCE 3

2 2018 LOOK BACK 12

3 TOP TRENDS FOR 2019 14

4 DEEP-DIVE BY SECTOR 25

14 Four Top Trends Trends for2019 Top Four 3 1

Scale a Massiveon Using China is AI Copied Now Tech China’s ‘Copycat’ Being Being Industry is

4 2

Reality in China Becoming a Social Credit Is Ahead 5G With Racing China is

www.scmp.com/china-internet-report Source: Source: Super now are companies technology Global China has pioneered the “Super App,” a a one App,”“Super the pioneeredhas China services from shopping to ride hailing to money transfers to money hailingride to servicesshoppingfrom 1 Company reports, analysisreports, SCMP Company

1bn+ 1bn+ MAU WeChat A China’s ‘Copycat’ Tech China’s pp to

social+ social+ to flight bookings. to flight

ecommerce to shortvideo. to ecommerce 1bn+ 1bn+ MAU Alipay

replicating - 289mn MAU stop shop for for shop stop Meituan Industry Now Industry is

successful concepts from their Chinese counterparts, from the from counterparts,Chinesefrom theirsuccessfulconcepts The Super Super AppThe chatbots multiple features including features multiple messaging app now has now app messaging Facebook’s standaloneFacebook’s

1bn+ 1bn+ MAU Facebook , games games , payments. and mobile mobile and

Being Copied Being LINE started as a messagingasa startedLINE services, including services, digital comic distribution. digital comic platform and now offers offers andnow platform wallet, news streaming, streaming, news wallet, video on demand video 220mn MAU LINE

a digital digital a and

18+ services, including food food including services, 18+ delivery, mobile mobile delivery, expanded its offering to to offering its expanded motorcycle ride motorcycle and service but has since since has but service Go 27mn MAU massage massage - Jek Go

started as a as started - Jek services payments payments

- hailing

www.scmp.com/china-internet-report Source: Source: 1 Company reports, analysisreports, SCMP Company

pioneered concepts as pioneeredsuch China’s online shopping giants and start andgiants shoppingonline China’s Taobao China’s ‘Copycat’ Tech Industry Now Copied Industry ‘Copycat’ Tech Is China’s Being

streaming. Pinduoduo group buying group

- ups haveups and liveand Mogu Social+ for for EcommerceSocial+

Launched in February 2019, February in Launched Amazon Live features features Live Amazon demonstrating products, demonstrating streamed video of hosts hosts of video streamed directly directly that displays under the under displaysthat which viewers can buy buy can viewers which

Amazon from a carousel carousel froma video. Live

live - tapping on product on product tags, tapping Launched in March 2019, March in Launched Checkout with Checkout without leaving the app. the leaving without has enabled 130 million 130million enabled has users to to users Checkoutwith Instagram buy items by by items buy Instagram

all all

brands to brands to YouTube will will YouTube affiliate fees, and enable enable and fees, affiliate Google YouTube. Later thisyear, Later YouTube. recommendations, share share recommendations, shopping features to to features shopping Shopping YouTube plans to to plans include include ads. give shopping shopping give

shoppable add new add

www.scmp.com/china-internet-report Source: Source: 1 pioneered thisformat back in 2012, Chinesecompanies have beenthe taken the world by storm, Company reports, analysisreports, SCMP Company

iOS TikTok

China’s ‘Copycat’ Tech Industry Now Copied Industry ‘Copycat’ Tech Is China’s Being App App Store for five consecutive quarters. While , the short video app from Chinesecompany first to first to turn the short video concept into a success. TikTok

becoming the most downloaded most downloaded on app the Kuaishou products products like ByteDance

Short Video Short , has Vine sync sync

Challenges”,which TikTok competitors. Snapchat’s “Lens In February, to to songs, thatit considers to be

to to the list of companies Snapchat by by seem TikTok Snapchat to to be inspired let

users users

added lip compete with Lasso, its short video Facebook Facebook launched In November 2018, Facebook’s Lasso Facebook’s app designed app designed to

TikTok

www.scmp.com/china-internet-report Source: Source: time. connectivity massivedevice and capacity system reductions,higher nextregards China than China’s 2 IPlytics

dozen cities with citiesdozen three telecoms three , SCMP analysisSCMP , China is Racing Ahead 5G Ahead With Racing China is

- generation 5G networks5G generation o a perators perators total population total are are piloting of 167 of 5Gin million - more more

which offer faster data rates, reduced latency, energy savings, savings, cost energy latency, reduced rates, data fasterwhich offer

in China 5G China 3,400 patents also leads also

Korea South 2,051

the as a chance to get out in theoutfirstfor in front to get chance asa

world world 1,368 U.S.

another for for dayanother connecting an unlimited number of machines to one one to of machines number anunlimited connecting will support: a million connected devices per square per devices connected million a support: will delay of just 1 millisecond and millisecond 1 of just delay network capacity. It also provides a foundation for foundationfor a provides also It capacity. network The fifth generation of mobile technology meanstechnology of mobile fifth generationThe kilometre more than just faster data speeds and greaterand speeds datafaster just thanmore speeds of up to 20 gigabits per second. per 20 gigabitsto of up speeds ; transmitting - to - What is5G? What day communication. A 5G network A5G communication. day a package of data with a withof data apackage peak peak

data downloaddata

www.scmp.com/china-internet-report Source: Source: China is best positioned to win the global race to roll out5G to roll race totheglobalwin positioned is best China 2024 2023 2022 2021 2020 2019 2018 2 Forrester, Korea Herald, Nikkei, GSMA, SCMP analysis SCMP Nikkei, GSMA, KoreaHerald, Forrester,

China China is Racing Ahead 5G Ahead With Racing China is in 2023 in yuan of forecast China and Mobile, China expenditure of combined The licenses issues and networks 5G Expands cities major adozen than Started and mid and large in coverage with launch commercial Targets

313.3 billion billion 313.3

(US$45.3 billion) billion) (US$45.3

trials in in trials

- to hit a peak peak hit a to

sized cities sized

Telecom Telecom is

Unicom Unicom

5G 5G China China more more

India commercial 5G commercial introduce to Expects projects pilot to severalstart Plans

SE Asia 5G roll out to hopes Thailand

South Korea 2022 by environment afull to establish billion US$26more than to pledges invest government Korean South celebrities six 5G service for Launches -

fledged 5G 5G fledged

infrastructure

Japan commercial commercial 5G introduce to Expects 2024 5G by billion in US$14.4 of atotal to invest plan carriers Japanese Four

, according to severalresearchaccordingto ,

in 19 cities end cities yearby 19 in offer 5G to aims Vodafone fast enough fast rolled if adopted andout 2024, by economy the UK to billion US$20asmuch expected to add 5G as

U.S. million mobile connections million mobile 100 to expected reach 5G cities two in 5G network Launches

firms.

www.scmp.com/china-internet-report Source: Source: smart city city solutions.smart in many outAI is rolling China 3 accounts. linkedtheirfrom deducted automatically fare the haveand gate entrancethe on mounted a ontablet faces can scan theircommuters smartphones,their on QR a or ticketscanning a of presentinginstead Shenzhen, At Paying fare: subway SCMP analysisSCMP

the China is Using AI on a Massive Scale AI aMassive on Using China is Futian

- sized screen sized

station instation

information. places, certain access more reliable to andfaster users grant technology learning Facial control: Access code code recognition and machine and recognition areas, including including accessareas,

resources facial recognition.facial you let and laundry and service look room after that robots 2018, AI features December inopened Alibaba’s Checking

into your room room your viainto FlyZoo into a a intohotel: and

Hotel, Hotel,

control dimensions. body and face hair, similar with avatar customized a clothes ontry through to ability thegives shoppers JD.com’s Shopping: , customized ,

3D Fitting Room Room Fitting3D

recommendations, tailored to their preferences.their to tailored content and products users offer AI recommendations:Customized - driven recommendation enginesrecommendation driven algorithms. driven AIitson based interests different withto people articles personalizednews Toutiao Chinese Browsing content: surveillance and and surveillance

recommends recommends news aggregator newsaggregator

- 21

www.scmp.com/china-internet-report Source: Source: smart city city solutions.smart and surveillancerecommendations, control,customized including access areas,in many out AI is rolling China 3 of of 100suspects. arrest to theledtechnology has recognitionpattern andanalysis of computer company for years20 justice evadingbeen had who criminal a down track authorities Technology Beijing Catchingcriminals: SCMP analysisSCMP

China is Using AI on a Massive Scale AI aMassive on Using China is - based specialises

helped vision; its 3D image 3D its vision; DeepGlint

. The .

police police

in the field thein

intersection in intersection oneLED screenbusy at theon displayed were13,930 jaywalkers as as many debut, system’s the10 the aftermonthsIn foot. on or driving are they whether violators, rules traffic catch cameras and uses Shenzhen Enforcingtrafficlaws: proprietary high proprietary - based AI technology AI Futian Intellifusion -

definition district.

individuals. to monitor authoritiesenable technologies reality augmented and recognition facial vision,Computer Surveillance: to to

with a national database. a national with linkedare that information plate vehicleandcard identification facial, time police access let real which glasses,developed smart company reality Beijing Identifyingcitizens:

based augmented based Xloong

has

- to direct officers on officers foot. to direct controllers traffic allowing inreal imagethermal a intoof a crowd size the translate and vehiclesand movement of peoplethe track systems monitoring real China’s Controllingcrowds: - time crowd crowd time

- time,

www.scmp.com/china-internet-report Source: Source: smart city city solutions.smart and surveillancerecommendations, control,customized including access areas,in many out AI is rolling China 3 surging by surging improvebyflow traffic haveseen Shenzhen sectionsroad in Certainconditions. weatherand vehiclesqueuing with inaccordance lights traffic AI Drivingtowork: SCMP analysisSCMP

- enabled China is Using AI on a Massive Scale AI aMassive on Using China is

15%. cameras, installed near traffic lights, can can adjust lights, traffic near installedcameras,

and performance of urban services. of urban performance and AI city: Smart 8%, technologies enhance thequality enhancetechnologies with the average vehicle speedvehicletheaverage with

class. of risksskipping theabout warning a withalong time, to up showfailon those who issuesauto and mobile phones theircodes via withverificationin to sign enablesstudents that system class attendance out a rolled universityA Goingto class:

in Hangzhou has Hangzhou in

- reminders to to reminders phases in early applicationsOther of adoption of text and voiceinteractions.and text health collects doctor that “AI” virtual users to consult a enableclinics powered booth telephone Ping Seeing An Good Doctor’s Doctor’s AnGood -

related data through data related a doctor: doctor: a

sized, AIsized, -

www.scmp.com/china-internet-report Source: Source: China is creating a system, first announced in 2014, to rank all of its citizens based on their “social credit”2020. by their“social on of based all itscitizens to rank in 2014, firstannounced system, a is creatingChina governments governments scramble show to that they aremeeting their targets. criteria across provinces, cities and villages.Expect to hear about more social credit in the coming asyear theap deadline integrity and trustworthiness in society at socialChina’s credit system 4 SCMP analysisSCMP

Social Credit Is Becoming a Reality in China aReality in Social Credit Is Becoming

community community work hoop and other such to installabasketball behavior given by hand and points the “scores” compiled are Rongcheng In the sleepy city of Low CaseStudy 1: - relies on relieson aseries rewardsof and punishments meant to encourage people and businesses to abide by rules and promote to tech scoring for “positive” such such as helping

in Shandong,

large. In large. are reality, is there no perks like bypassing the first round of job leadership group. It gives those with high scores and Reform Commission (NDRC) in China's Committee (CYLCC) and Nationalthe Development with the Communist Youth League Central The company is working on ascoring app together

central people estimated 460 million between 18 and 45 allChinese people aged credit system thatcovers wants to build a big Management(CY Credit) China Trustscore for youths CaseStudy 2: scoring scoring system but patchwork a and different apps of schemes with differing Youth Credit .

interviews. , - an data

pro aches and differentlocal flights. taking high people arebanned from trustworthiness. These have lost their million individuals judged to Supreme Court maintained by China’s “Discredited” database vicinity Beware,deadbeats in CaseStudy 3:

- speed speed railand

has 13

www.scmp.com/china-internet-report Source: Source: air air courts, China’s been have and of businessesindividuals Millions 4 classified as untrustworthy as of the as of as untrustworthyclassified The number of Chinese individuals of ChineseThenumber 13.5mn China’s National Developmentand National China’s and and SCMP analysisSCMP

end of March 2019, according to according 2019,of March end high Social Credit Is Becoming a Reality in China aReality in Social Credit Is Becoming Reform Reform Commission

- speed restricting rail.

them from them

a number of activities, including accessing financial markets or travelling by by ortravelling markets financial including accessingof activities, number that were restricted as punishment as wererestricted that 20.5mn conducting other “untrustworthy”other conducting The number of plane ticket sales ticket of planeThe number for failing to repay debts or or debts repay to for failing labeled behavior as untrustworthy on a growing blacklist compiled by by compiledblacklist growing a on asuntrustworthy

ticket sales that werethat sales ticket The number of of highThenumber punishment for failing to to repay failing for punishment

5.7mn debts or conducting otherconducting or debts “untrustworthy” behavior behavior “untrustworthy” - speed train speed restricted as as restricted

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

26 Ecommerce Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: and and Fan, JIANG cities.” topin those as products high same the demanding are They shoppers. sophisticated becomingregions developed less China’s in consumers moreand more seeingnow are lifestyle…we their enhance to waysdifferent for look people as upgrade consumption ongoing an experiencingis “China Taobao

President of of President

- Tmall tier - - quality

tapped by e by tapped be to waiting still is industry agricultural China’s population. rural China’s of livelihood of power the unleashes technology whereby revolution digital a witness will 2019 year “The

Dada, Dada, ecommerce Co - founder - commerce.” to benefit the the benefit to , Pinduoduo rea ted and does not represent experts’ represent does not and ted

chain optimization.”chain value and sharing (information) on world the real and world the online between linkages the ecommerce in models business “New Eric XU, Managing Partner XU, Managing Eric views

will further explore explore further will

, GGV ,

www.scmp.com/china-internet-report (1 of 2) of (1 Tier LowerCities Source: Source: third tier or below cities who have not yet bought anything online (vs 74mn in cities).above tierin secondor 74mn (vs online anything yetboughtnot have citieswho belowtierthird or in usersinternet 128mn for areThere citiesuntappedhave ecommerce. potential Lesserstillhugedeveloped Potential Ecommerce Users by City TiersCity by UsersEcommercePotential QuestMobile

1 st

and 2 and 74mn are are nd

Driving Ecommerce Consumption Ecommerce Consumption a Driving Tier

3 rd

Tier and Below and Tier 128mn

nd nd Growth

www.scmp.com/china-internet-report (2 Tier LowerCities Source: QuestMobile, filings Source: Company QuestMobile, targeting lower targeting Pinduoduo’s User Percentage by City Tiers City by PercentageUser Internet users Internet Tier Tier 4 of 2) of Pinduoduo Tier Tier 3

rise is being driven by usersisbeingrise drivenby lowerfrom - tier

Tier Tier 2 cities. 34% 43%

Tier Tier 1

are are

19%

23% Driving Ecommerce Consumption Ecommerce Consumption Driving

31%

26%

16% - tier cities. tier 9%

lower The . . And theAnd city users. tier lower attract group JD also It 2019. in cities tier 3 to shifted JD big ecommerce players ecommercebig - tier cities tier rd

and lower lower and

launched ecommerce market leaders are alsoareleaders marketecommerce

buy to to buy

focus as

opportunity marketsopportunity are alsoare . lower from came usersin 3Q18 active annual in increase the of 70% than More and and eyeing - tier cities. tier

Growth Growth

www.scmp.com/china-internet-report are Getting in (1 of 3) of (1 in Getting are an Stillat EcommerceisFresh Food Early MorePlayers Stage, but Source: Source: battlefield. important becomehasan and in China market US$28bn size estimatedof groceryan hasecommerce Fresh US$bn Size EcommerceMarketFoodFresh iResearch

2014

2015

2016

2017

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2018e

2019e

2020e

www.scmp.com/china-internet-report are Getting in (2 of 3) of (2 in Getting are an Stillat EcommerceisFresh Food Early MorePlayers Stage, but Source: Source: Most major ecommerce players are expanding into the business of selling fresh businessinto sellingtoproduceexpanding consumers.theof are major players ecommerce Most Key B2C Fresh Grocery EcommerceGroceryFreshKeyB2C iResearch Meituan Dong Ding Hema Jingdong Missfresh Dmall Company

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Maicai

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by Alibaba by

Dianping in by in partner of of partner

Players

Tencent

service points so far so points service launched Newly MAU 0.8mn MAU 2.5mn MAU 3.3mn MAU 3.7mn 10mn

MAU MAU

(Apr 19) (Apr (Apr 19) (Apr 19) (Apr 19) (Apr Key

Jan and has and Jan

stats

10 Estimated 20min 30min 29min 30min

1hr 1hr d eliverytime -

2hr

www.scmp.com/china-internet-report are Getting in (3 of 3) of (3 in Getting are an Stillat EcommerceisFresh Food Early MorePlayers Stage, but Source: Company filings Source: Company China’s Sysco. China’s become and market totrying win the wholesaleare players moremarket, theasnotcrowdedB2C asAlthough Key B2B Fresh GroceryEcommerceFresh B2B Key Songxiaocai Kuailv Meicai Company

Affiliation with Affiliation Owned byOwned BAT/TMD Dianping Meituan - -

Players -

Business Fresh food B2B food Fresh B2B food Fresh Vegetable

+ SaaS +

model

B2B

Covers 45 cities with with 20k cities 45 Covers Covers 200 cities with with 2.7mn cities 200 Covers Covers 38 cities with with 450k cities 38 Covers KeyStats clients clients

merchant clients merchant

merchant merchant

merchant

www.scmp.com/china-internet-report (1 of 3) of (1 Search From Source: Source: Alibaba Taobao’s Taobao Aug Aug 15 18 Aug

App Daily Daily App

recommendation

Product Page Views ProductPage - based based Recommendation Shopping to - feed traffic surpassed its surpassedsearchtraffic traffic in Aug feed

Recommendation Search 2018.

- based Shopping based Shopping

www.scmp.com/china-internet-report (2 of 3) of (2 Search From Source: Company filings, filings, Source: Company also known as an influencer, is the most preferred marketing format by by format marketingthemostis preferred influencer, asan known also mosteffectiveKOL, method. popularmorebecomingadvertising thedriving atInfluencersare purchasesand the platform sold has festival, the top influencerwho worth worth of goods within 3 hours. During over over 40 millionfollowers Kuaishou’s Admaster

US$7.2 million

ecommerce - based based Recommendation Shopping to on on

million selling15,000within lipsticks5 A beauty livestream,holds a record of million followers on followers on vlogger, minutes. who who has Douyin

Taobao

and and 4 24

60% Social marketing format preferences in in 2019 preferencesformat marketing Social KOL

livestreaming Short advertisers. videos/ 55% - form form

accounts WeChat Official 54%

based Shopping based Shopping ecommerce 39% Social Social

Social Social CRM 39%

accounts

Official Official Weibo 32%

www.scmp.com/china-internet-report (3 of 3) of (3 Search From Source: SCMP analysis Source: SCMP User - generated content about reviews and tips are influencing tipsusers'reviews influencing otherand areabout purchasingcontent generated

- clothes. modeling their taken by buyers showcase photos Taobao Merchants on based based Recommendation Shopping to

now Xiaohongshu this example of a purchase links, like with embedded recommendations Users share

user. - decisions.

based Shopping based Shopping

UGC

www.scmp.com/china-internet-report Ecommerce Startup Alibaba Service Company LocalLife Source (1) Total funding amount highly depends on company disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and on company depends highly amount Totalfunding : Crunchbase Alibaba LifeLocal ServiceCompany Beijing

MissFresh Wanda Wanda E ( Ele.me+ Dada Xiaohongshu Weiying JD Logistics JD Chehaoduo JD Health JD Company Meicai -

JD - E Commerce - Commerce Koubei Daojia

Technology

)

Total Total

( US$mn 1,000 1,360 2,500 3,370 4,000 Funding 418 793 802 950 975

)

(1)

Baidu, Alibaba Group, GGV Capital,GSR Ventures,Tencent Holdings, China Growth Capital,Goldman Sachs, Sofina,Tencent Holdings, Tiger DST Global,SequoiaJD.com, SequoiaCapital, Capital China,Walmart DST Global, Matrix Partners DST Global,Partners Matrix China,Sequoia SequoiaCapital, Capital CMCCapital Group, China Group, Merchants

GGV Gopher Capital,Asset Management, Alibaba Ant Group, Financial,Primavera Group, Capital SoftBank is Centec t he Most Funded Funded Most Chinese he

Baring Baring Private Equity Asia,CICC, CPE, JD.com Networks, Tencent Holdings, WANDA Group, Sequoia Capital China,Tencent Holdings Tencent Holdings, WANDA Group GlobalManagement, Hillhouse China,Tencent Holdings Global ManagementGlobal InvestmentAdvisers SelectedInvestors Hillhouse

Capital Group, Group, Capital

Capital Group, K11 Investment, ZhenFund iDreamsky

Shunwei

As of 2019of JuneAs

Technology, Capital, Tiger Tiger Capital,

Xude ZhenFund

Rendao

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

37 Content and Content Media Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: GONG Yu, us better understand consumers.”understandbetterus morebeto platformour enables onlynotIt industry.entertainmentintherole important increasinglyan playingis technology AI content. originaland technology models, business in innovationsaround revolvestillwill developmentindustry2019,“In CEO, iQiyi

technologically rea ted and does not represent experts’ represent does not and ted - advanced views

, but also helps alsobut , 38

www.scmp.com/china-internet-report 800 Million Chinese Consumers Regularly Watch Short Videos Regularly WatchShort Consumers Million Chinese 800 Source: Source: Short Short QuestMobile 134% 560 Mar - - video market’s growth rate is expected to slow down after growing 42% in in 42% growing after down toslow expectedis rate growth videomarket’s Video UsersVideo

132% 2018 630 Jun MAU (Mn) MAU

95% 670 Sep

YoY YoY growth 75% 750 Dec

2019 42% 800 Mar

Shortvideo company apps apps for each Mn Short Unique

Bytedance 332

Xigua Huoshan Douyin 503

Video MAU of of VideoMAU Kuaishou 231 Kuaishou

361

2018. Key CompaniesKey March 2018March

12 Baidu Quanmin Haokan

March2019 Tencent 7

Weishi Yoo 82

www.scmp.com/china-internet-report (1 of 2) of (1 Consumers Online Chinese to Pay for are Willing Source: Source: 2018 Dec as of users Paid (1) music. long suchcontent,asfor to pay willing and sophisticatedmorebecome have consumersChinese US$bn VideoRevenueServices Online Subscription Advertising Copyrightand Others iResearch 2014 3.6

, Company Company ,

2015 5.9 filings

2016 9.3

2017 10.6

2018e 14.0

2019e 18.5

Number of Paid Users by Video Player of by Users Paid Number Netflix ( Netflix Tencent iQiyi 1 US)

Users (Mn) Users Paid 61 86 89 Entertainment Entertainment

Mobile Internet Pop. InternetMobile - form videos form and Paying/ Users 20% 10% 10%

www.scmp.com/china-internet-report (2 of 2) of (2 Consumers Online Chinese to Pay for are Willing Source: Source: Across (1) alternatives. provideslow entertainment asonline environment macro theslowing despite tocontinue expectedis Growth US$bn ServicesMusic Revenue Online 2014 iResearch 0.1 all Subscription Advertising Copyright Tencent

, Company Company ,

apps ( apps 2015

0.3 KuGou filings

, QQ, KuWo 2016 0.5 ) as of Dec 2018 (2) US paying users as of Feb Feb 2019 of as users USpaying (2) 2018 Dec of as)

2017 0.7

2018e 1.1

2019e 1.5

Number of Paid Users by Music Player Music of by Users Paid Number Tencent Music apps Music Tencent Apple Music (US) Music Apple Spotify (US) Spotify 2

Users (Mn) Users Paid 26 28 27

Entertainment Entertainment

Mobile Internet Pop. InternetMobile Paying/ Users 10% 10% 3%

cost

www.scmp.com/china-internet-report Online Video: Growth aPlateau Growth Reached Has Video: Online Source: Source: (1 intense. iQiyi Bn (YoY growth Bn %) growth (YoY Growth and MAUVideo Mobile ) Exclusive paying users means the user user is the means users Exclusive paying ) +13% QuestMobile Mar 1.0

and and

Tencent , Trustdata +13% 2018 Jun 1.0

are the largest playersafter largest arethe

a paying paying a +11% Sep 1.1 member of only 1 of the 3 video video 3 platforms the member of only 1 of

+10% Dec 1.1

market 2019

+7% Mar 1.1

consolidation, followed by by followed consolidation, Mn | Exclusive paying users% paying | Exclusive Mn Users Paid of Proportion and MAU 72% Tencent Video Tencent

286

Youku 71%

. Competition remains Competition . iQiyi 252

53%

Youku 135

www.scmp.com/china-internet-report Online Video: Competition Shifts to Original Content Original to Shifts Competition Video: Online Source: Source: All three major video platforms, amid heavy competition, have increased investment in in original increasedinvestment have competition, heavy videoplatforms, amid major threeAll Original content Original Percentage Jingxiangyule 2018 2019 2018 2019 2018 2019

, SCMP, Google, Google, SCMP, , of Original vs AcquiredContentvs of Original

| 45% Acquiredcontent Company Company 51% 53% 56%

65% 65%

filings

55% 49% 47% 44%

35% 35%

Most Googled Shows in in 2018 Googled Shows Most 5 4 3 2 1

(“Love Destiny”)(“Love บุพเพสันนิวาส Altered Carbon Altered (“Motu Yanxi मोटू Roseanne

पतलू Palace Patlu

”)

year ago. year during reachedmembers 27.August billion tuning

views by its finale on finale itsviewsby the period vs period the in, and in,

iQiyi’s content. garnered over garnered million people million 53012with China in record viewer single a set of iQiyi’s

subscribing 80 million million 80 Yanxi 43 million million 43

on August on The Story Story The

Palace Palace - day 15

a 43

www.scmp.com/china-internet-report ByteDance Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

NetEase Cloud Cloud NetEase Music Kuaishou Kuaishou Technolgy CMCCapital Group Focus Focus Media ByteDance Douyu Douyu TV Le Sports Company Miaopai Youku

PPTV is the Most Funded Chinese Content Startup Media Content & Funded Chinese Most the is

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total Total

( US$mn 1,130 1,340 1,350 1,360 1,510 2,242 4,300 Funding 707 709 775

)

(1)

Goldman Sachs, Kohlberg Kravis Roberts, Morgan Stanley,SoftBank, TCV BlueRun Fortune Link, HNA Group, Prometheus Capital,WANDA Group, YF Capital Baidu, Boyu CICC,Capital, GeneralAtlantic, ShanghaiMedia Group CMB InternationalCorporation, Capital Nanshan PhoenixCapital,

Alibaba ChengweiGroup, Ventures,MaverickCapital, Sutter Hill Alibaba CMBGroup, International Capital Corporation, Tencent Sequoia Capital China,Shanghai MediaGroup, Weibo, Sina, YG

Ventures, DFJ, SAIF Partners, Capital, SequoiaCapital, Capital China,Tencent Holdings 3i Group, Ventures, YF (Yunfeng Capital Capital)

Alibaba Group, SelectedInvestors Tencent Holdings (Yunfeng (Yunfeng Capital) Holdings, Vanke Entertainment Group SoftBank

CDH Investment

Capital, As of 2019of JuneAs

Suning

Holdings

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

45 its Dominance Dominance its Tencent’s Source: Company filings Source: Company Mn Wechat Q1 Q1 2014

396

and and

Weixin Q1 Q1 2015

549 WeChat has has WeChat

Combined

in M in Q1 Q1 2016 762 MAU essaging 2) essaging of (1

Managed Managed Q1 2017 Q1 938

Q1 Q1 2018 1040 so far to

Q1 Q1 2019 1112 Fend Fend

▪ ▪ off off yet. threaten of None of development the for opportunities no almostare There respectively million of users which QQ, and Tencent’s by dominated is China in industry messagingTheinstant

Challengers Challengers 1.1 billion billion 1.1 them have them Tencent’s

two platforms, two have latecomers

and and dominance . managed to to managed daily active active daily

700 Wechat to to .

www.scmp.com/china-internet-report its Tencent’s Source: Company filings Source: Company App Dominance 2) Messaging Dominance of (1 in

( Feiliao Liaotianbao Matong Duoshan Flipchat

MT )

WeChat has Managed so far to Fend off Challengers Challengers offto so far Fend has Managed to WeChat

TikTok Technology Kuairu Ringle TikTok Company

Video focusedVideo Differentiation Product forums interest plusmessenger instant of an Hybrid app the on time money earn can Users Anonymous

spending - based

social

21st 21st May on Launched employees of Laid ecommerce content pivoted App operating Still Current

off majority off

Status

into into

▪ ▪ ▪ employees. its of majority the Liaotianbao while messaging from away pivoted operating. remain two players Only same on the launched were Matong of Three launched were new Four day, Jan Jan day,

and and them ( them social apps social Matong

has laid off off laid has Liaotianbao 15. 15. in in 2019. Duoshan

has

, )

www.scmp.com/china-internet-report Mini Source: Source: acquire users and improve theuser experience.and usersimproveacquire Major ifanr launched mini launched Jan 2017 , players, including including players, 36 - kr Programs Programs

100 million DAU “Jump mini gaming Dec2017 ,

Tencent Jump - program , Baidu miniBaidu Alipay Tencent fo KeyFigures Tencent’s ” achieved - program program

Tencent mini

mini are are

- - program program - program r BAT Mini r BAT launched mini launched Jul , a Proven Proven a Baidu 2018

in the next 3 years"3next the in yuanbillion 1to invest and programs mini launched 2018Sep

, , Baidu - Alipay Programs - program ,

Alipay

and Model (

- promised MAU: 200mn (May 19) 200mn(May MAU: DAU: 170mn 200mnDAU:

Toutiao

launched mini launched Oct , have have launched all ,

(Jan 19) (Jan (Nov 18) 1 2018 launched mini launched Nov 2018 of of , TikTok

2 - program ) ,

Toutiao - program mini

- programshelpmerchants to program developersprogram innovativeininvest (US$145mn 1 Dec2018

- billion developers mini support to fund (US$145mn) a 1 up set Jan - yuan , Baiduset , 2019 ) fund ) ,

- Tencent to to billion

mini - up a a up program program - - yuan

also also 48

www.scmp.com/china-internet-report Mini Source: Source: Tencent Number of Apps With >5mn MAU>5mn of With AppsNumber Questmobile -

has successfully influenced users and merchants toadopt merchants and usersinfluenced successfully has Programs Programs

Aug 2018 Aug 406

are are a Proven Proven a

Dec 2018 Dec 434

Model (2 of of 2) Model (2 Number of of Mini Number mini Aug 2018 Aug 165 - programs

Programs on on Programs since its launch in in sinceitslaunch WeChat Feb 2019 Feb

237 With > With

2017. 2017. 5 mn mn MAU

www.scmp.com/china-internet-report Norm” Norm” ( “New are Moderating User Privacy and the Censorship, Content Source: SCMP analysis Source: SCMP risks immediate punishment, ranging from from punishment,ranging torisksclosure immediate “undesirable” of scrubtheirplatforms and tomonitor moderators content of thousands Similar to content. sensitive politically irregular to censor platform the on streams Inke users. active monthly million 25 some with country the in apps streaming live top the of one to become2016, live Inke contentcompany’s a inside Look -

streaming frenzy that started in in started that frenzy streaming staffs 1,200 people who watch all watch who people1,200 staffs China’s amid quickly grown has Facebook, internet companies in in companiesinternetFacebook, behavior

1 live of - , pornography and and pornography, streaming moderation 2 )

centre -

China, Weibo suchChina, as removal from thefrom app removal , Tencent, , Netease store.

, Sina content. Failurecontent.

and and Click to view Kuaishou full video

, employ , tocomply 50

www.scmp.com/china-internet-report Norm” Norm” “New are Moderating User Privacy and the Censorship, Content Source: SCMP analysis Source: SCMP campaigns to campaigns internet China’s content up cleaning to volunteeredboth Apr 2018 harmful content harmful or politically vulgar sensational, deemed that accounts media authority 2018Nov

Weibo and Tencent Weiboand

(2 lowbrow lowbrow video to have posted posted haveto remove low remove scrubbed scrubbed cyber China’s , regulator, theregulator, of 2) of begin

9,800 social 9,800social were

- brow Cyberspace Administration of Cyberspace content and tighten regulation on on privacy regulationtighten and content handling of user information evaluated of userinformation handling policiesprivacy and havetheiralso to people’s everydayconnection Apps users. internetChina’s of intereststheand informationpersonal campaign, a launched Jan internettheon information” “negative spread that applications web and websites 6 a announced Jan 2019 2019 that have “big havethat , China’s cyberspace authoritycyberspace China’s , China’s , aiming year - month campaign targeting campaign month - long long cybersecurity to protect the security of of security protect the to user basesuser joint clean joint

China, China,

and close close and police police - lives” has launched successivewaves“clean launchedof has up

will will

policies. effort to clean up content up clean to effort ongoing itsof part as accounts official of thousands closed 2019Feb

, WeChat , said it said

has - up” 51

www.scmp.com/china-internet-report Zhihu Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

is the Most Funded Chinese Social & Messaging Startup Startup Social &Messaging Funded Chinese Most the is Kaixin001 Company Maimai Zuiyou Blued Zhihu Baihe Hupu Getui 36Kr DXY

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and Total Total

( US$mn Funding 108 124 132 160 166 182 253 300 338 455

)

(1)

DCM Ventures, DST Global, IDG Capital, MorningsideVentures,DCMCapital, IDG DST Venture Capital Global, Ant CICC,Greenwoods Asset Management, Haitong Kaiyuan Investment, CMC Capital Group, GGV Capital, Lightspeed China Partners, Qiming China Lightspeed Partners, Group, Capital GGV CMC Capital, China Minsheng Bank, Haitong Securities, SAIF Partners, WI Harper SAIFHarper Partners, Bank, WI China MinshengSecurities,Haitong DCMVentures, Legend ShunweiCapital,TencentCapital, Holdings

Northern Northern Light Venture QimingCapital, Venture Partners, Tencent CDH Investments,StreamCrystal DCMCapital, Ventures,Shunwei Dahu Aquaculture, GSRVentures, MayfieldFund, New Enterprise Goldman Sachs, Qiming Venture Partners, SAIF Partners, Sogou, Sogou, Sachs,Goldman Partners, SAIFQimingVenture Partners,

Financial,China Associates,Zero2IPO Capital Merchants Venture Partners, Partners, Xiaomi Venture Quansheng Investment Industry Win Capital, VentechCapital, China Matrix Matrix SelectedInvestors Tencent Holdings Tencent Partners

Group Capital, - Win Fund Win

China e.ventures

, Infinity As of of JuneAs

Ventures,

2019

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

53 Sharing Economy Sharing Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: CHENChi development in 2019.”in development trackon back get to set is economy more a the turmoil, of down dying Afterthe sector. the in services qualitylow the toled Chinain share marketfightfor to investment anindustry of the burst with year last education’ ‘growth important economy sharing “China’s , CEO, Xiaozhu Duanzu Xiaozhu CEO, , - wide bubble wide

had gone had —

mature the cash the

to sharing through an through - burning sustainable while maintaining growth.” maintainingwhile profita turn even and even break to expected are top year, This wars. subsidy irrational in engage longer nothey and operationsrefining onmore spendingare Enterprisesdevelopment. sustainableof direction the in moving already industryis the factinburning,but cashof stage the in be still maysharing bike eyes, outsiders’ “In rea LI ted and does not represent experts’ represent does not and ted Kaizhu , Co - founder views

, Hellobike

- tier companies tier 54

www.scmp.com/china-internet-report Chinese Consumers are Embracing the Sharing Sharing Economy Consumers Embracing are the Chinese Source: Source: Compared with with Compared U.S. Lloyd’s Innovation Report 2018 Report Innovation Lloyd’s U.S. % U.S. Have used a sharing economysharing a usedHave vs

China attitudes to sharing economy tosharing attitudesChina 47 service/product

China % China U.S.

consumers, Chinese consumers are more actively involved with and open to sharing platforms.open tosharing and involved with more actively are consumers consumers,Chinese 60

Have provided a sharing sharing a provided Have

service/asset U C

Believe benefits outweigh outweigh benefits Believe 42

the risks the U C

www.scmp.com/china-internet-report (1 of 2) of (1 Kitchens Consumers Sharing Cars, are and Clothes Homes, Chinese Source: SCMP analysis Source: SCMP vehicle rental vehicle service under service state EvCard SAIC Motor Motor SAIC In 2018, automobile sales fell for the first time since the 1990sthe sincetime first thefor fell sales 2018,In automobile electric Corp. - owned

is anis

than 1mn MAU MAU 1mn than GoFun Shouqi state with more more with backed by backed platform platform in part due to car sharing. car to due inpart in 2018.in sharing -

owned iscar a

Group Group

Car - - operator under operator Sharing vehicle rental vehicle is Auto Panda Lifan Chongqing automaker automaker an electrican based the

Group

- .

Togo oneTogo was China but has but China of the largest of the companies incompanies operations suspended car recently - share .

There are two primary home twoprimary are There backed by backed Tujia

is a market leader market a is listings. Ctrip , with 1.4mn with,

answer toanswer Home - sharing services inChinaan as sharingservices Airbnb - Sharing Xiaozhu by Alibaba .

Duanzhu listings. , has overhas 500k,

, backed backed , 56

www.scmp.com/china-internet-report (2 Kitchens Consumers Sharing Cars, are and Clothes Homes, Chinese Source: SCMP analysis Source: SCMP from young professionals for affordable luxury rentals and from from and rentals luxury affordable for professionals young from college Apps, Apps, of 2) of Sept 18 Sept million items in stock. stock. In initems million Ycloset undisclosedstrategic such as as home such - age fast age investment.

has more has than Alibaba

- fashion fans without the income to constantly constantly to theincome without fans fashion

made an made - grown grown

Fashion update 1 Ycloset looks. focusing only on gowns andon only gowns focusing luxury, has tapped into the intotapped has luxury, MSParis market for everyday wear. for everydaymarket

- and and Sharing

MSParis , which started out out started which,

, tap demand tap

Compared to othersharingservices, to Compared relatively newin China,relativelydriven inby part on officer at bicycle at officer Zhang The services. marketing and technology management, businesseswith beverage andfood to provide China Los Angelesbring to plansKalanick CEO TravisUber Former Uber Kitchen Yanqi

co delivery. - , the former chief operating chief former the , founder is partnering with partneringisfounder real estate real - sharing firm sharing - -

based Sharing kitchen sharingkitchen CloudKitchens , facilities , - demand meal demand Ofo

is still is

to to 57

www.scmp.com/china-internet-report Ride Source: Source: PwC Meituan China’s ride China’s 2 Shouqi % 2%

Sharing Sharing

- sharing market by share, Q4 2018 Q4 share,marketby sharing Continues to be Dominated Dominated by be to Continues

91 Didi %

Didi

Shenzhou 2%

Caocao 2% Yidao 1

www.scmp.com/china-internet-report But is Source: Source: China Automotive Net Automotive Information China There There Alibaba Suning FAW

a New Challenger Challenger New Chongqing Chongqing Dongfeng Automobile Tencent

Changan Motors

on the the on

Horizon? ▪ ▪ ▪ ▪ with a with Suning a have Changan alternative on focus mainly will ventureThenew Chuxing ride of dominance the test couldthat move a venture, a up Automobile, Chongqing including Tencent, Alibaba, US$ 19

15 will be the biggest shareholder biggest the bewill .

, 1.5 1.5 % stake. % % stake in venture. the in joint stake % FAW -

fuel billion Chinese ride Chinesebillion FAW and and vehicles.

and and Suning - sharing giant sharing giant Dongfeng Changan Dongfeng

and car makers car and

will each will

- have sethave Didi hailing hailing

www.scmp.com/china-internet-report Bike Sharing has has Dramatically Cooled Bike Sharing Source: Source: are demanding their deposits back.theirdeposits demanding are piling upin are bikesfailing, are companies Today, in funding. dollars of reported that weyear, Last 10 15 20 25 30 ( Monthly active users for usersactive Monthly Mn 0 5 Questmobile )

Mar 26 , Analysys

2018

Nov

Ofo 2019 Ofo Feb 10

and and

and and Mobike

Mobike 10 15 20 25 30 0 5

commanded over 90% of thebike of over 90% commanded Mar 22

2018 Nov

2019 Feb

graveyards and and graveyards

ecosystems. However, new bikes than find and repair misplaced/broken be be made from data the harvested and how the service monthly monthly memberships for significant a period time of The return The return from bike sharing was largely expected to Huge piles of abandoned bikes havebecome a norm. Oftentimes it was cheaper for companies to restock - Ofo did did not yield meaningful revenue in the would would be integrated into various company tech sharing market and raised billions billions and raisedmarket sharing User data revenue materializednever

and and Over Mobike Unsustainable pricewar What went wrong? went What - expansion and over millions of angry users of angry millions

were running behavioral behavioral

1 yuan 1 yuan and and geolocation data - supply (USD$0.16)

interim.

ones.

www.scmp.com/china-internet-report What What Source: SCMP analysis Source: SCMP Happened Happened

to to Ofo , one of China’s ofChina’s one , ▪ ▪ ▪ Most Prominent Start Most Prominent staying in in luxuryhotels. staying businessflying golf, playing from banned he’s meaning defaulters, of credit blacklist a on placedbeen High demanding users 12m nearly had it 2018, In December China. Thestart years. four of the span in company bankrupt nearly billion a to project Ofo

has gone from a Peking University University Peking a gonehasfrom - profile profile - up once up

founder and CEO Dai Wei Dai and CEO founder deposit had had - dollar unicorn to a a to unicorn dollar over 200m users in in usersover200m

refunds. class and and class

- ups has ?

www.scmp.com/china-internet-report UCAR is the Most Funded Chinese Sharing Startup Sharing Economy Most Funded Chinese is UCAR the Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

Shouqi Car Rental Guazi Guazi Car Rental HelloTransTech Xiangwushuo Meituan Ucommune Bluegogo Company SpeeDx Che300 UCAR

Bike

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and Total Total

( US$mn 1,750 2,390 Funding 120 149 579 680 928 34 66 89

)

(1)

Ant Financial, Chengwei Capital, Fosun Fosun WM Group, Motor GGV Capital, Capital, ChengweiAnt Financial, GGV Capital, Hillhouse Capital Group, Group, Sequoia Matrix China,Partners Capital HillhouseGGV Capital, CCB International, Jiashi Fund CCBFund International, Jiashi Shouqi Management, Group, Taikang

FutureCap, FutureCap, MorningsideCapital,IDG SequoiaGroup, China,Capital Line Corporation, Qiming Venture Partners, SequoiaChina, Capital All N5Capital, SAIC Motor, Sequoia Capital, Source Source Capital SAICCode Capital, Motor, Sequoia N5Capital, Alibaba Group, CAR Inc., CICC, Credit Suisse, Warburg CAR Pincus Suisse,CICC,Group, Credit Alibaba Warburg Inc., - Stars Investment,Stars AssetGopher Sequoia Management, Capital Temasek Holdings, Tencent Holdings Asset, Tianan Property Tianan Co. Insurance Asset,Property Black Black Hole ElexCapital, Technology Sinovation China, Yintai Group, Group, ZhenFund Yintai China, Capital China, ZhenFund Capital Source Source Code Capital SelectedInvestors

Ventures, ZhenFund

As of of JuneAs

2019

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

63 5G Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: Huawei Huawei YANG market in the world.” the in market other any surpasses farthat scaleand speed a the of year end by country the the across stations base5G 200,000of upwards deploy to expected end the devices, and equipment networkingto standards,to research From 5G China. in for yearexciting an be “2019 will

Chaobin Technologies , President of of President - to - end value chain is ready. China is China ready.is chain end value

5 G Product Line, Line, Product G –

ecosystem.” industry comprehensiveandhealthy a create to partners with together working while applications industry other and security intelligent industry, intelligent ports,intelligentof implementation the for cross of development the promoting industryapplications, based 5G of number large a explore to partners our with worked have we cooperate,will 5G practitionershow of model business the in change the with coupled 5G for demand strong “With the rea XU ted and does not represent experts’ represent does not and ted Ziyang

, CEO, ZTE Corp ZTE CEO, views - industry integration, advocating integration, industry

- based applications,based - wide wide - 64

www.scmp.com/china-internet-report 5G is on the Horizon the on is5G Source: Source: GSMA connections in in connectionsthe of total 28% for accounting 2025, the endof by connections5G million to reach 460 is expectedChina Mn in China Connections5G 2020

2021 95

country. 2022 170 + 63

% p.a. % 2023 260

2024 350

2025 460

▪ ▪ telecommunications network operatorsand the nation’s cable network economies,negating any first scaleof China’s market islikelyto dwarf the combined of size those commercialinitial 5G services insecond the quarter of the2019, WhileSouth Korea, the US, Australia and the UK have launched Information commercial 5G services,according to the Ministry of Industry and Broadcasting China ChinaMobile, Commercial 5G licenseshavejust been grantedto China’s three Technology. Network Unicom and ，

were each awarded wereawarded each a licenseto run giant ingiant June - mover China Telecom,as well as China advantage.

www.scmp.com/china-internet-report China and the U.S. U.S. Global the 5G Readiness in Lead China and Source ( The U.S. has tied with China in the lead for global 5G readiness, according to the latest study by by lateststudyaccordingtothe readiness,5G globalfor in thelead with China tied has U.S.The 1 ) Based Based ) Rank Rank Country/Region : Analysys 10 on on 9 7 7 5 5 4 3 1 1 Analysys

Mason

assessment of amount and timeline of spectrum to be released, spectrum roadmap, government support and policy, industry industry policy, and support be timeline released, government spectrum spectrum and of amount to roadmap, of assessment

United Kingdom South Korea Hong Kong Australia Germany Japan China Spain Italy USA

5G Readiness Score5GReadiness 11 13 14 14 15 15 17 18 19 19

trials, industry commitment industry trials, ▪ ▪ Analysys firm researchtelecoms by study latest to the according reality, as augmented such applications, of mobile range among a cities, autonomous ( of things internet thenetworkswill powerThese telecommunications to nextdeploy race economies largest two world’s for global lead intheChina with tiedhas The U.S.

Mason.

driving - generation 5

G readiness, as as the G readiness, IoT Analysys and networks. ),

smart smart

Mason.

www.scmp.com/china-internet-report The Promise of 5G is Already Already is5G of Promise The Source: Source: SCMP 5G is enabling real enabling is5G 1 showcased showcased its autonomous vehicle technology which allowed adriver at Shanghaithe show to , network 000 At At Shanghai’s takethe wheeland control acar more than km ( analysis, company websites company analysis, 620 that miles) away had 2019 Click Click to view full video only only a Auto Auto Show, ChinaMobile - world applications in healthcare services,autonomous in healthcare applications world 10 in Beijing

- millisecond delay. .

It used used a 5 –

seven timesseven size the of New York’s Manhattan Brain will be able to process greateramounts deployed deployed in underground pipes to find water computing computing and artificialintelligence urban traffic of of datagathered from arange of IoT units, including including lamp posts, manhole covers and island. With 5G networks, Hangzhou’s City total area of 420 infrastructure would enablesensors to be electricity meters.The advancedmobile Hangzhou’s Hangzhou’s City Brain project, acloud - Visible in in Visible management system, managementcovers a leakage. km 2 (162 (162 miles

2 ) – - China

driven that’s driving driving

laboratory test animalat aremote location, by only only remote connection. The lag timelag was said to be controlling controlling robotic surgical arms over a device and the robot in surgicalthe room. China successfully Chinasuccessfully tested the world’s first province of Fujian removed the liverof a procedure, adoctor in the southeastern network technology in January.In the and smart and 0.1 0.1 - seconds seconds betweendoctor’s the control surgery surgery equipment using Click Click to view full video cities.

5 G G mobile 5 G

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

68 Artificial Intelligence Artificial Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: Dr. embrace embrace and infuse AI into their businesses.” from more traditional industries China, and arguably globally, will be coming years to come, the biggest growth of AI in revenue, and publications. In the year and AI, supported by AI innovations, valuation, “China is globally recognized as a leader in LEE LEE Kai - Fu, CEO, Sinovation

starting starting

Ventures to

mindset and a clear strategy.” AI must be driven with a human bigger role in transforming lives, innovation in across industries.all As AI continues to play a shift in AI technologies having real impact “I believe in 2019 we will see a monumental rea Dr. XU ted and does not represent experts’ represent does not and ted Li, Li, CEO, SenseTime views

- centric 69

www.scmp.com/china-internet-report China Has Set a Goal to be a Global Leader in AI by by aGlobal AI Leader Goaltobe in a China Has Set Source: Source: autonomous intelligence systems,cross intelligenceautonomous intelligence, AI foundational theories AI foundational intelligence, SCMP Focus intelligence,Focus data bigon intelligence, hybrid enhancedhybrid intelligence, medium intelligence, swarm swarm intelligence, medium

- construction, AI laws construction,AI andlaws AI will be applied to medicine, cityapplied beto medicine, AI will security assessment and control control assessmentand security infrastructure, manufacturing, infrastructure, agriculture, national agriculture, capabilities

defense regulations, Main national defense construction,defense national focus on social social on focus governance, industrial value chain value industrial 2030 ( 1 of of

2 )

www.scmp.com/china-internet-report China Has Set a Goal to be a Global Leader in AI by by aGlobal AI Leader Goaltobe in a China Has Set Source: SCMP and and Source: SCMP companies to champion the development of of of variousaspects tothedevelopmentchampion companies ministry named and sciencetechnology China's ChinAI

▪ MedicalImaging ▪ IntelligentVoice ▪ Car Autonomous ▪ RecognitionFacial ▪ City Smart Focused on five key disease areas: colorectal, lung, breast, cervical, cervical, breast,colorectal, lung, areas: diseasefive key onFocused Committed to to investing Committed Has 920k developers as of of Dec 920kHas developers as Co chipsubsidiary, a Has up set - leading creation of Malaysian AI research park, complementing R&D in Beijing and HK and inBeijingR&D complementing researchpark, AI of Malaysian creationleading

Baidu

, Alibaba 10bn yuan to yuanto 10bn Pingtouge 18 , AI; AI; Tencent and speech recognition now covers covers 23now recognitiondialects speech and Sensetime 100 autonomous driving , with plans to to AI developplansan semiconductor with ,

and and iFlyTek joined their ranks in in theirranks joined

in 2017 2030 - related businesses related as the first batch of of the firstbatch as cancer cancer 2018 ( and eyeand 2 of of .

2 )

www.scmp.com/china-internet-report China is On Track to Outpace U.S. in Some Measures of AI AI Prowess Measures of Some in Track OutpaceU.S. On to China is Source: Allen Institute Artificial Institute for Source: Allen However, Chinese companies have fewer of the world’s top AI experts than theU.S. than AI expertstoptheworld’s of fewer have companies Chinese However, US in thethe poised toisovertake than more analyzing After U.S. vs China: Top of Share China: vs U.S. 10% 20% 30% 40% 50% 60% 70% 80% 90% 0% 1980 1985 1990 Intelligence, Intelligence, 1995 2000 China AI Development AI2018 Development Report China 2 million million 2 2005 U.S. % 1 % of AI AI Papersof % 2010

top 50% of of top 50% AI papers published up until the end of 2018, the Allen Institute found that China China that found Institute theAllen endof 2018, thepublishedup AI until papers 2015 China % 28% 36% 2020

2025

cited papers this year and and in the yearcitedthis papers Number of Top International AI AI International of Top Number General Electric General AstraZeneca Qualcomm Microsoft Samsung Siemens Novartis Ericsson Huawei Eli Lilly Eli Google Philips Sanofi Roche Merck Nokia Pfizer Intel ABB IBM 7 8 8 9 9 9 9

10 10

11 11

top 1% of of top 1% 31 32

Experts by

cited papers by 2025. 2025. citedby papers Company Rest of world China US

www.scmp.com/china-internet-report China is Stepping Up Investments AI in Investments Up Stepping China is Source: Source: China’s startup scene is gaining gaining isscene startup China’s Volume (%) Volume U.S. vs China: Share of Global AI Deals AI Global of Share China: vs U.S. CBInsights 2014 23% 74 3%

2015 30 65% 5% %

momentum, momentum,

2016 35 58% 7% with China accounting for morefor accounting with China %

2017 41% 10% 49%

global 2018 45% 14 41% % AI AI deals

than than five Rest of world China share deal US share deal years ago.

www.scmp.com/china-internet-report past incidents. to reviewand reconstruct Recordings allow the police recognition capabilities. and may soon get facial the authorities track phones and Huawei. The system lets the state by two Chinese companies, ECU Ecuador’s system, called Surveillance Tech is Becoming Export Chinese Becoming a is Tech Surveillance Source: SCMP, New York Times, Freedom Freedom House York Times, NewSource: SCMP, security and surveillance in government and commercial markets across Southeast Asia, Latin Latin Asia, acrossSoutheastmarketscommercial and in government surveillance and security startintelligence Topartificial reportedly considering blacklisting Chinese surveillance technologysurveillanceChinese blacklistingconsideringreportedly Chineseusing areHouseFreedom by countriesassessed 65 of 18 - 911, was largely made - controlled C.E.I.E.C. controlled C.E.I.E.C.

- ups suchas ups government on amass facial recognition project. strategic cooperation agreementwith Zimbabweanthe Cloudwalk

Technology, aShenzhen SenseTime

and and - based company, signed a Megvii -

are becoming major exporters of AI solutions for solutions AI exporters of major becoming are made surveillance technology. The U.S. is U.S. The technology. surveillance made

firms.

technology as using Chinesesurveillance Identifiedby Freedom House provided provided positive initialfeedback. Chinese start technology, called Face++, by havereviewedsurveillance Police departments in Thailand the police database. matching with images stored in nearreal time comparison and facial recognition system, enabling mounted camerasthat use equipping officers with body Malaysianpolice has been The auxiliaryforce of the America

- up up Megvii and and

, and Africa. Yitu’s

www.scmp.com/china-internet-report SenseTime Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

Tongdun Horizon Horizon Robotics UBTech UBTech Robotics Yitu Yitu Technology SenseTime Company 9F 9F Group AIWAYS Mobvoi Megvii

G7 Technology is the Most Funded Chinese AI AI Startup Funded Chinese Most the is

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total Total

( US$mn 1,360 2,640 Funding 250 253 355 510 581 700 792 940

)

(1)

China Growth GGVCapital, LinearCapital,IDG Capital, Venture, HillhouseCapital Group, IntelCapital,Linear Venture, SK Hynix,Vertex CreditEase, QimingHaier, Venture Partners, Telstra Ventures,Tencent Gaorong Gaorong GCCapital, Sequoia Capital, Capital China,ShanghaiPudong

Alibaba CICC,Group, Qualcomm, TemasekHoldings, Tiger Global Google, Sequoia Capital China,SIGChina(SIGAsia Investments), Alibaba Ant Group, Financial, Macquarie Group, QimingVenture Bank Bank of China, Eastern BellTemasekCapital, Holdings, Tencent Cinda International Holding, PingCapital, IDG An Ventures, SBI Investment,SIGChina(SIGAsia Investments) DevelopmentBank, ZhenFund Mingchi Volkswagen Group, ZhenFund Holdings, Total Ventures Partners, Group SK SelectedInvestors Venture Partners

Management Fund, Holdings Ventures Shagang

Group

As of 2019of JuneAs

Qiming

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

76 Source: Source: IDC Chinese Chinese and display their leadership by pioneering new features.new pioneering by leadershipdisplaytheir and share theirmarket togrow way finding a arebrands Chinese contracting, is markettheBut while 11%. dropped worldwide contracting is market smartphoneThe Mn ShipmentVolume Top5SmartphoneCompanies

shipments

2017 1 , 466

Global - 4

% Brands Brands Thrive

2018

1,405

2017 444

- China 11% in a in

2018 398

Slowing Smartphone Market Smartphone Slowing –

and the picture is even more stark in China, where shipmentswhere starkin China, theevenmorepictureis and Huawei, OPPO Huawei, OPPO and

2017 25% 11% 8% 6%

Global

2018 32 15 Xiaomi’s 8% 9 % % %

Share of of ChinaGlobal Share and Smartphones 2017 50% 20% 18% 12%

China

2018 26% 20 13% 59% %

www.scmp.com/china-internet-report Source: SCMP analysis, company websites company analysis, Source: SCMP Features Chinese Huawei’s P Huawei’s for for its 50 X optical X optical zoom nightand Smartphones Smartphones 30

sight mode. sight Pro has been lauded lauded has beenPro

are are Vivohas Being Recognized Recognized Being pop - up announced selfie

cameras. notch -

free for Xiaomi Innovative Innovative under

- and OPPO are pioneeringare OPPO and display selfie

cameras.

www.scmp.com/china-internet-report Source: SCMP analysis Source: SCMP Overseas Overseas Technology But Huawei pieceimportantreliesPro’smostpartP30 on piece: by Huawei the U.S. U.S. the

Huawei’s Kirinchips Blacklisting Huawei Of The company usesalso “U.S. origin technology,” leadingto Arm having to cut tieswith Huawei.

are based on ARM architecture licensed from British chip giant Arm Holdings. Reveals a a Reliance on Reveals U.S. tech.U.S.

www.scmp.com/china-internet-report Source: Source: IDC Chinese Companies Companies Chinese across African countries, some of which are still dominated by feature phones. feature by stilldominated of aresomewhich countries, across African be might market smartphone China's While % in Africa, Share Smartphone Market

10 33% %

23% 2018

Dominate Dominate 34%

saturated, with competition with saturated, Others Huawei Samsung Transsion in in Africa (1 of 2) of (1 Africa % Share PhoneinAfrica, Market Feature

fierce, interest in smartphones is growing growing is interestin smartphonesfierce,

10%

2018 59%

Others Nokia Transsion 80

www.scmp.com/china-internet-report Source: SCMP analysis Source: SCMP Chinese Companies Companies Chinese across African countries, some of which are still dominated by feature phones. feature by stilldominated of aresomewhich countries, across African growing is interestin smartphonescompetitionfierce, with be saturated, might market smartphone China's While

Dominate Dominate in in Africa (2 of 2) of (2 Africa . . competitively offerarange of consumers because they have strong holds on African Tecno Transsion’s sell phones in China based company that doesn’t Transsion What is What , Infinix

is aShenzhen

Transsion threebrands - and priced phones. itel

- ?

all -

. . Who should wewatchout should Who year. increase by in 48% lastthe seen smartphone shipments parentcompany Huawei,has Honor, combined with current vice president department headed by a Africa,launching a its first officialventure into Xiaomi

for Africa? for in

recently announced

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

82 Smart Devices Smart Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: Miffy devices.” homes,our controlto commandsvoice using life,inour scenariosdifferentfor connectionof point betheand devices morewith itconnectedbe will decade, coming inthe thatbelieve life.I inourplayer important increasingly anbecomewill AssistantVoice"The CHEN,

General Manager, AlibabaAI Labs rea ted and does not represent experts’ represent does not and ted

vehicles and vehicles views

our personalour 83

www.scmp.com/china-internet-report China Has Surpassed the U.S. U.S. Global in China Has Shipments the Speaker Surpassed Smart Source: Source: than the than Q As of Global Smart Speaker Shipments SpeakerSmart Global Market Share By Country (%) Country Share By Market Canalys 1 2019 1

previousyear , China takes up over half of global smart speaker shipments at shipmentssmart speaker global of half up over takes China , 30% .

Q4 2018

44%

24% 25 % Q1

2019

51% 10.6

million, nearly five morefive times nearly million, Rest of world of Rest US China

www.scmp.com/china-internet-report But China’s But China’s Source: Source: population internet of China’s 3% only million, is which 22.5 hit speakersof basesmart installed China’s 2018, endof Atthe Canalys

Internet populationInternet 772mn Smart Speaker Market Still has Still has forMarket Smart Potential Speaker

smart speaker owners speakersmart Estimated number of of number Estimated

1 Population , 400 China mn mn

smart speaker owners speakersmart Estimated number of of number Estimated 329mn 329mn Population

293 populationInternet mn Growth

www.scmp.com/china-internet-report Baidu For the First Time Has Become the # the Become Has Time Baidu First For the Source: Source: unleash the market’s full potential full themarket’s unleash more interaction, Improved AI Mn Shipments SmartSpeaker US$ with entering the market devicescosting as production production the of

Canalys littleas US$ year,before re units Baidu 256 Xiaodu

Raven H last

stopped

branded branded 13 - .

real -

2018 life life Q1 Q1

use

2019 cases 3.3 Q1 Q1

and a broader ecosystem of smart home appliances will help will appliances smart home of ecosystembroader a and 2018 Q1 Q1 1.1

2019 3.2 Q1 Q1 1

Player in China Player in 2018 Q 0.6 1

2019 3.2 Q1 Q1

www.scmp.com/china-internet-report UBTech Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

Yunding Yunding Technology

Meizu Technology is the Most Funded Chinese Smart Device Startup Startup Device Smart Most Funded Chinese is the UBTech UBTech Robotics Energy Monster Company Coocaa XGIMI Rokid Haier Tuya DJI

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total Total

( US$mn Funding 105 111 127 158 200 218 507 890 940 60

)

(1)

Alibaba Group, Forebright Alibaba Forebright Group, Haichuanghui,Capital, Innovation Ventures, Baidu, Baidu Ventures, K2VC,Red Star ShunweiSIGCapital,ChinaMacalline, CreditEase, QimingHaier,Venture Partners, Telstra Ventures,Tencent GF GF CICC, Future Fund, NEA, New Enterprise Associates,Oriental Fortune Credit Suisse,IDG LinearCapital, Venture, TemasekHoldings, Vision

Xinde Accel, LighthouseAccel, Management,Capital SequoiaChina Capital Partners Partners China,Pan Bojiang

InvestmentManagement, Alibaba Group, Haitong Alibaba Haitong Group, InvestmentKaiyuan

Capital ( Capital Capital,Sky9Capital, Xiaomi Baidu, Tencent Holdings BoomingStar (SIGAsia Investments) - SelectedInvestors Lin Asset Management,SailingCapital TF TF Securities Plus Capital Holdings Capital Hillhouse

Ventures for the fund), US Matrix

Capital Group, Group, Capital

As of 2019of JuneAs

Shunwei

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

88 Autonomous Autonomous Car Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: James James industry’s development.”industry’s regionoutrolled have rule Chinesefor year foundationa was2018 market. inthis deploymentdriving autonomous “Policy PENG, support and guidance from Chinese regulators will give a big push for pushbiga givewill regulatorsfromChinese guidance andsupport CEO, Pony.ai - making on autonomous driving…now more local governmentslocalmore driving…now autonomous on making

- specific guidance which will further speed up theup speed further will which guidance specific

rea ted and does not represent experts’ represent does not and ted views

www.scmp.com/china-internet-report Development Development ( Behind Autonomous its Throwing Weight China is Source: Source: connectivity. China sold to be equipped with smart and smart with equippedto besold expects one in every two new cars cars two everynewexpectsonein China is expected to be home to to a homebe to expectedis China market for intelligent connected for intelligent market 100 Ministry of Industry and Information Technology, National Development and Reform Commission, McKinsey Reform Commission, Development and NationalTechnology, Information and Industry of Ministry at least partially autonomous autonomous least partially at vehicles by vehicles is to striving billion

functions. yuan 2020 2020

(US$

gain leadership in nextin developingleadership gain . China also also . China

14 billion) 1 of 2 )

completed, increasing traffic completed, compatible “super highway” compatible “super Ningbo is expected to to be expectedisNingbo connecting Hangzhou to to Hangzhou connecting An autonomous vehicleAnautonomous speedsby 2022 20

- - 30 generation cars with autonomous driving internet driving and with autonomouscars generation %.

- night autonomous autonomous vehicles,including Car Car Mass adoption of of highlyadoptionMass - time and peak hour driving,hour peak and time will start. likelywill

2027

www.scmp.com/china-internet-report Development of 2) Development (2 Behind Autonomous its Throwing Weight China is Source: China Automotive Network Information Automotive Industry Source: China areas designated in tests for road allowsvehicle, which for is one license Each (1) 101 licenses for autonomous vehicle road tests have been issued2019. roadbeenJan licenses as have of testsfor autonomousvehicle 101 Most of of theMost licenses 1

issued are for tests in testsfor are issued

Shanghai has designated 123 Beijing has designated autonomous vehicle

37km 37km roadsof for 44 km, for autonomous vehicle testing. roads, totaling testing .

Beijing

50 51 Baidu

accounts for morethan licensesfor of accounts half testtheissued

Car Car

www.scmp.com/china-internet-report Chinese Companies Have Strong Hopes For Autonomous Autonomous Hopes For Strong Driving Have Companies Chinese Source: California Department of Motor Motor of Vehicles Department Source: California Front - runners among Chinese autonomous driving companies include driving companies autonomous Chinese among runners Faraday FuturesFaraday Roadstar.ai TuSimple WeRide AutoX Baidu

Changan

Pony.ai PlusAI SAIC NIO

11 of the 48 companies that submitted test data to the to data testsubmittedthat companies48 the of 11

California Department of Motor Vehicles in Feb 2019 2019 Febin Vehicles of Motor Department California

have their headquarters or main operations in China. in operations main or headquarters their have

Baidu

and Pony.ai. and

www.scmp.com/china-internet-report Chinese Companies Leading StillLag Companies Chinese Source: California Department of Motor Motor of Vehicles Department Source: California U.S. Average Distance Traveled Before Human NeededHuman Interventionis Before Traveled DistanceAverage companies are far ahead of Chinese firms in terms of miles travelled without human human without travelled of firms miles in terms of Chinese ahead are far companies 1mile 205 1 , 022 miles

miles

5,200miles

11,000miles

▪ ▪ ▪ in self in champion” “national the as & Technology Science of MinistryChina’s Baidu Volvo andCars Ford, such as companies car with partnerships securedhas The company 2017.April inlaunched Apollo project,the called undertaking,vehicle Baidu’s U.S. U.S.

- is identified by identifiedis driving cars. driving

self Players - driving BMW.

Did You Know Did You

▪ ▪ intervention. in April. in round funding latest the with valuation US$1.7bn The into was it before project car autonomous X’s Google at worked Tiancheng and Baidu, at architect chief former the Peng, James by 2016 in co was Pony.ai

company landed landed company Waymo

Lou, Lou, who .

spun off off spun - founded founded 93

www.scmp.com/china-internet-report BAIC BAIC BJEV Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

CHJ Automotive (Chehejia) Singulato Motors Xiaopeng Motors Youxia WM Motor BAIC BJEV Company AIWAYS Souche BYTON is the Most Funded Chinese Autonomous Autonomous Car Funded Chinese Most Startup the is LeSee

Motors

company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total

(

US$mn 1,080 1,082 1,210 1,290 1,600 1,660 1,335 593 700 792 Funding

)

(1)

Contemporary Contemporary ShenzhenCapital Group, Alibaba Group, CICC,GGV Capital,Lightspeed Venture Partners, UCAR Alibaba Group, Ant Financial,Sequoia China,Capital UCAR, Warburg Funcity

GX ITOCHUCapital, Corporation, Qihoo 360 Technology, TaoYun China Cinda Management,Asset Zhongji Daimler, Investment Baidu, Linear Venture, Sequoia SIGCapital,China(SIGAsia

Capital, Matrix Partners Partners Matrix Capital, China,Plum Ventures, Source Code Group, Group, China Environmental Protection Industry Co. Amperex Suning Investments),Tencent Holdings Mingchi Beijing InvestmentFund

Technology, FAW Group, Foxconn Technology

Capital, Holdings Group, Tencent Holdings Hongzhao SelectedInvestors Macrolink

Fund, Pincus Yintai Shagang

Capital, LegendCapital, Holdings, Lenovo,

Group

As of of JuneAs

2019

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

95 Blockchain Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: Phil CHEN, security of the system becomes fundamentalof importance in any kind of store mediumof value or of exchange, the a going and role are play confidencecryptocurrencies to instill “For 2019 Chief DecentralizedOfficer, HTC

, , crypto in Chinaneeds tofocus on security. If rea ted and does not represent experts’ represent does not and ted views

.”

www.scmp.com/china-internet-report Blockchain Lovea China Continues Source: Cyberspace Administration of China, China, of Administration Source: Cyberspace clamp to continues China hand, Buttheother on development. blockchain upwarming isto China onehand, On the 25% of world’s world’s 25%total. of as of 2018,ChinaBlockchain inlocated projects 263 grown five timessincefive2016. grown which patents, crypto andblockchain China’s 1,500 2019.in blockchain March providers list of registeredfirst the made that Companies 164 down on all things crypto things all on down

Blockdata

, Startup Genome Startup ,

- related.

Hate Relationship Relationship Hate have In late 2017/early 2018, China closed all closed 2017/early2018, late China In China’s top economic planning body has body top economic planning China’s and blocked all overseas sites related to to overseassites relatedall blocked and proposed new rules that would see the seewould that proposedrules new financial institutions to stop providing to institutions financial funding to any crypto to any funding crypto mining facilities if enacted. China is Chinaenacted. facilitiesif mining cryptocurrency exchanges, ordered exchanges, cryptocurrency closure of all local local of closure all cryptocurrency - trading and ICOs. ICOs. these All of and trading cryptocurrency mining farms. mining cryptocurrency rules are still in effect today. effect still inare rules home to the world’s biggestworld’s to homethe - related activity,related With Crypto and and Crypto With

butoverseas. VeChain including providers, registeredoflist firstthe that made 164 theoutof 9companies factFun

, raised ICOs, ICOs, raised,

www.scmp.com/china-internet-report Baidu, Baidu, Source: Cyberspace Administration of China, Baidu, Alibaba, Tencent Alibaba, Baidu, China, of Administration Source: Cyberspace The three internet giants are developing and commercializing theirown commercializing and developingare giants internet threeThe . . Blockchain Administration of China, Baidu three:has Baidu Of the registered197 projects by the Cyberspace digital rights managementand logistics digitization, public welfare,identity systems, clients and community building, asset in consumer finance,management of financial first In September 2018, Baidu Finance releasedits blockchain

. Engine, Alibaba The world’s biggest producer of bitcoin mining rigs has given up on its plan to

whitepaper outlining capabilities company company struggled through mass lay Superchain go go public in Hong Kong afterthe offs and aleadership reshuffle. , and

and Tencent are Getting Into Into Blockchain areGetting too and Tencent Tuteng .

. blockchain build build atrusted cloud architecture. enterprise Blockchain In October 2018, Alibaba Cloud launched its global . . . blockchain Tencent’s requirements and financial industry demands. source platform that regulatorymeets Their goal is to develop China’s firstopen Shenzhen Consortium (FISCO). companies, formed the Financial Tencent,along with Huawei and severalother - levelplatform help services to companies - as -

a offerings. - Service(BaaS) offering, provides which

registered projects include Tencent

and Tencent Cloud’s

TBaaS

Blockchain

platform. -

www.scmp.com/china-internet-report Startup Startup Financial Ant Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

Du Xiaoman Financial CMCCapital Group

Suning Ant Ant Financial Yixin Capital Company 9F Group JD Digits JD Bitmain Souche Lu.com

Finance is the Most Funded Chinese Fintech and and Fintech Chinese MostFunded the is company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total Total

( 22,000 US$mn 1,130 1,210 1,510 3,015 3,020 4,800 4,949 Funding 581 765

)

(1)

CDH Investments,CICC, Goldman Sachs,JP Morgan Chase,Macquarie Sequoia SilverCapital, Lake Partners, TemasekHoldings, The Carlyle Alibaba Ant Group, Financial,Sequoia China,CapitalUCAR, Warburg

Coatue Coatue Management,IDG Newegg,Capital, Sequoia Capital China, Tencent Holdings, PA Grand Opportunity, Baidu, Bitauto Holdings, YF Capital (Yunfeng), Bank of Nanjing, BNP Paribas Private Equity, Cinda Alibaba CMBGroup, International Capital Corporation, Tencent GeneralAtlantic, Sequoia Capital China,CICC, Harvest Global

International Holding, PingCapital, IDG An Ventures, SBI Investment,SIGChina (SIG Asia Investments) Investments,ChinaTaiping Investments Bank of Tianjin,The Carlyle Group, TPG ShenzhenCapital Group, GP Capital Group, Group, Warburg Pincus Temasek Holdings SelectedInvestors Holdings, Vanke JD.com Pincus Group

Blockchain

As of 2019of JuneAs

www.scmp.com/china-internet-report Table of Contents

Ecommerce 27

1 CHINA AT A GLANCE 3 Content & Media 38

Social & Messaging 46

2 2018 LOOK BACK 12 Sharing Economy 54

5G 64 3 TOP TRENDS FOR 2019 14 Artificial Intelligence 69 Smartphones 77 4 DEEP-DIVE BY SECTOR 25 Smart Devices 83 Autonomous Cars 89

Blockchain 96

Gaming 101

100 Gaming Note: The commentaries from our experts do not represent SCMP's position and SCMP's analysis in the report is independently c independentlyis report theSCMP's in SCMP's analysis andrepresent do not position experts our from commentariesThe Note: TAN Min TAN Southeast Asia are theirlogical first stop.” Initiative, emerging markets such as markets…in line with the their pace of expansion in overseas Chinese gaming companies will accelerate livestreaming phenomenon of trend. “Cloud gaming will become an important Esports - liang

CEO, is drawing increasing attention. will be a main driver…the esports Razer

tournament One One Belt One One Road

continue to get stronger in 2019 and beyond fashionable lifestyle athlete one day. It’s a new way of life, a new games in the hopes of becoming an games, and even want to practice playing see more and more people growup around the mainstream audience sees. We will start to “Gaming rea and Southeast Asia, Riot GamesRiot Asia, Southeast and Johnson ted and does not represent experts’ represent does not and ted YEH, Regional Head YEH, Regional is nowno longer a sub views

and and this trend onlywill of Greater China China of Greater

- culture that esports

.”

101 www.scmp.com/china-internet-report

China’s China’s Source: Source: China. Global USD 2019 NewZoo

Esports

esports , Niko Rest of World

Partners, Partners, $411mn

38% Revenue Esports

revenue will exceed US$1 billion for the first time in 2019. Nearly a fifth come from will fifth that a of Nearly in 2019. firsttime thebillion for exceedUS$1 will revenue Esports

Market is Big… is Market North America $409mn $210mn China 37% 19%

S. Korea

$ 66 6 % mn

17 767mn , 2 000

Security in 2019:‘ in Security Number of PC and mobile gamers of PC andNumber recognized by China’s Ministry of of MinistryChina’s by recognized academy Hangzhou’s designatedHangzhou’s Human Resources and Social Resources Social Human and in town, featuring an featuringtown, and ‘ and New professions officially New Area in square meters for for meters square inArea China expected byexpected China esports , theme park, theme, even hospital.even

professional’. esports esports hotel

2023 esports operator’ operator’ and

102 www.scmp.com/china-internet-report

And And Source: Source: streamers. the2 has China Global average Global GenderDistributionof United United States South South Korea Nielsen, Nielsen, Unique Unique SuperData China

; 2018 Digital Gaming GlobalOverview Gaming Digital 2018 ; nd

17% highest distribution of femaledistribution of highest 22 30% 32 % in in

Women Esports

That That

Fans Men

it Leads Leads esports the way in in way the Percentage of PercentageGamingContent not Createfor TheyPaid Streamers

fans globally and is welcoming to female gaming gaming tofemale welcoming is and globally fans unpaid female percentage of 14% The lowest streamers China

22 %

Gender Equality Gender Global averageGlobal 43%

38%

47% US

countries countries gender pay The biggest among among Men Women surveyed the gap

103 www.scmp.com/china-internet-report

And And Platforms Are Streaming Live Game Video Biggest Two The Source: Source: ‘China’s Twitch’ can refertoeither can Twitch’ ‘China’s model Revenue Payingusers activeusers Monthly IPO Huya

financial results, results, financial Douyu

95% 95% of revenuetotal in Q4 RaisedUS$180mn from its Douyu NYSE NYSE listingMayin 2018 2018 came from live

IPOprospectus streaming gifts 120mn 4.8 mn

Huya

and and 2018 came from virtual gifts that that users Filed for US$500mn IPO on 86% 86% of revenuetotal in Q4

the NYSE Aprilin 2019 Douyu to to tip their favorite streamers 160mn that that users bought 6 , both of which are backed by by backed of bothare which , mn

▪ ▪ ▪ Panda Panda TV, whichwe shortage streamers major were reasons behindthe cash High entrepreneur and son of Chinese tycoon Wang Panda to failingraise fresh funds to keepoperations going. Shanghai theno. game 4 network, streaming endedhas its bandwidth bandwidth costs and salariesrisingfor TV TV was founded 2015in by Wang . - based Panda TV shut down its Tencent mentionedin service. .

last last year’sreportas servers Sicong Huya Jianlin , an , after after

104 www.scmp.com/china-internet-report www.scmp.com/china-internet-report China’s China’s Source: Source: outside China, with with outsideChina, Tencent China’s Gaming China’sShare by Market Revenuein iResearch

and and

Tencent NetEase Biggest Gaming Companies Companies Gaming Biggest 52%

both winning the winning both

have long dominated their home market. Now their expertise in recognized being isin mobile expertisetheirNow market. home their have dominated long NetEase 17% right to develop smartphone versions of some of the world’s biggest games.biggest of somethe world’s of versionssmartphone todevelop right Others 31% 2018

are are Going 2) of Going (1 Global ▪ ▪ ▪ 2019, also made by Tencent.by 2019, made also late version a in mobile see will iconicActivision’s NetEase giant gamingChinese developedby role follow Diablo:Immortal May. in 100mnMAU surpassedjust and game most world’s popular smartphonethe Mobile Battlegrounds) PUBG ( - playing game, will be co will begame, playing - PlayerUnknown’s

up to Blizzard’s popular up action popular Blizzard’s to .

, the mobile the,

Call Call of of by

Duty Tencent

- - only

game game

105 www.scmp.com/china-internet-report

2013 2012 2011 Source: SCMP analysis Source: SCMP China’s China’s Tencent

and and ▪ ▪ ▪ ▪ ▪ ▪

2015 in acquiredfully then and 2011 in stake majorityAcquired Legends of of League Maker estimated at 5% 5% stakeat estimated buyout, investor Activision in Participated of Maker development Fortnite when valuation US$825mnat stake a40% Acquired of Maker NetEase Biggest Gaming Companies Companies Gaming Biggest

was still in in still was Fortnite Overwatch - Blizzard

have stakes across the gaming industry. acrossthegaming have stakes

2015 2017 2016

▪ ▪ ▪ ▪ ▪ ▪ US$126mn for stake 14.6% Acquired Dash of Diner Maker developer UK the in stake a9% Acquired Evolution World of Jurassic Maker US$8.6bn Supercell of 84% Acquired Clans of of Clash Maker

for for

2018 2018 2018

are are

Going 2) of Going (2 Global ▪ ▪ ▪ ▪ ▪ ▪ stake minorityAcquired studio game VR Interactive Skydance of company Parent Acquired Creed Assassin’s of Maker stake majorityAcquired Exile of of Path Maker

5 % % stake

2019 2018 2018

▪ ▪ ▪ ▪ ▪ ▪ US$100mn for stake minorityAcquired SpatialOS of Maker stake minorityAcquired HumanBecome of Detroit: Maker US$100mn for stake minorityAcquired of Destiny Maker

106 www.scmp.com/china-internet-report

Douyu Source (1) Total funding amount highly depends on depends highly amount Totalfunding : Crunchbase

TV Chukong ANTVR ANTVR Technology Happy Happy Elements Shanda Games Easy to play Longzhu Longzhu TV Fuze Fuze Game Douyu Douyu TV Panda Panda TV Company is the Most Funded Chinese Gaming Startup Gaming Most Funded Chinese is the Noitom

Technologies company company

disclosure and may vary by sources. Best estimates apply here. here. estimates apply Best sources. by vary may disclosure and

Total Total

( US$mn 1,130 Funding 219 243 517 25 35 44 56 60 83

)

(1)

New Horizon New Horizon Capital,GGV Capital,Horizon Capital,Northern Light

Akashi CMB InternationalCorporation, Capital Nanshan PhoenixCapital, Investment Capital,Sequoia Capital China,Tencent Holdings CDF Haitong - Venture SequoiaCapital, ChinaCapital Fosun Fosun Ventures, LinekongCapital,IDG Capital, Kickstarter, Sequoia Capital China SAIF Partners, Tencent Holdings DCM Ventures,DCM Legend Capital , Han Fu Han Fu , Capital,

SoftBank, SoftBank, Tencent Holdings Kaiyuan Gibbic, Heart Network Gibbic,Heart SelectedInvestors Working Working Capital

Investment,Legend Capital LeCloud

, Light Source Capital,

As of 2019of JuneAs

10 7

www.scmp.com/china-internet-report Acknowledgement Table of Contents

Ang Jin, Bien Perez, Chua Kong Ho, Craig Addison, Gareth Nicholson, Iris Deng, Joey Liu, Kyle Hutzler, Li Tao, Meng Jing, Pablo Robles, Ryan Chui, Sarah Dai, Vivien Siu, Yifei Shao, Yingzhi Yang, Zen Soo

Matt Haldane, Ravi Hiranand

Edith Yeung

108 Disclaimer

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