Mobile Internet in China:
Opportunities for U.S. Firms
David Chao
DCM
Agenda
 DCM Introduction
 Growth in China
 Areas of Mobile Opportunity in China
 Recommendations for U.S. Companies
 What U.S. Companies Can Bring
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2
DCM Overview
 Established early stage venture capital firm with unique
access to the U.S., China and Japan – Golden Triangle
 Leveraging “One Firm – One Fund” culture to deliver
consistent high performance
 Managing over US$2 billion across six funds from our
offices in Silicon Valley, Beijing and Tokyo
 Experienced team with deep sector expertise investing in
TMT (Technology, Media, Telecom) and Cleantech
 Backed industry pioneers and creators of paradigm shifts
across the Golden Triangle: About.com, Foundry Networks,
Sling Media, 51job, Dangdang and AllAboutJapan
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DCM China IPOs
“Monster.com” of China
“Amazon” of China
Leading outsourcer in
China
(Nasdaq: JOBS)
(NYSE: DANG)
(NYSE: VIT)
Leading packaging
company in China
“Facebook” of China
Largest auto media
China Local Listing
(SZSE: 002565)
(NYSE: RENN)
(NYSE: BITA)
Semiconductor foundry
(NYSE: SMI)
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Multimedia
semiconductor
(Nasdaq: VIMC)
4
China is Experiencing Phenomenal
Growth in Mobile and Spending
CAGR: ~150%
RMB Billion
China E-commerce Market
Estimation(GMV)
15,000
10,000
10,000
CAGR:50%
7,900
5,900
Source:
CCID, Source:
Innovation
Works / Umeng
estimates
5,000
1,282
2,484
4,100
-
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2008
2009
2010E
2011E
2012E
2013E
5
China has the 2nd Largest Android
App Store in the World
Millions
World’s Top Apps Stores (Daily Downloads)
35
33
30
25
20
Wandoujia #2 in
Android globally
15
11.1
10
5
7.62
3
2.5
1.6
1.2
0.585
0.43
0.05
0.048
0
Source:
Techcrunch,
Cnet,, BGR,
industry
research
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Category Leader Parallels in Mobile
Show Many Similar Opportunities
Opportunity
Mobile Leaders in
U.S.
Mobile Leaders in
China
Application/content
store
Social networking
services
Storage
Browser / News
browser
Advertising
POS Payment
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Capabilities U.S. Companies Can
Bring to Mobile in China
 Content and branding – recognized, branded
content and existing products (games, apps, etc.)
 Product design and process – mature product
development process, data-driven analysis, A/B
testing, understanding virality etc.
 Technology – mobile handset technology and
design, cloud services technology
 Business models – business model innovation to
create new categories
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Many U.S. Companies Have Partnered
Locally for Mobile in China
U.S. Partner
China Partner
Partnership
Develop and launch “Fruit Ninja” in
China
PapayaMobile to help Kiloo deploy on
Android and in China
Tom to help develop a Chinese gaming
storefront for Glu (glu.cn)
Develop tablet computers and mobile
phones
Source:
Industry
research
U.S. companies utilizing China partners for local
distribution; going at it “alone” can be difficult
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U.S. Companies Who Want to Go to
China Market Should Consider
 Partner with right distribution channel and go to
market partners
• Social networks
• Game developers and platforms
• Handset providers and carriers
 Adapt product and monetization to local habits
• Virtual goods instead of just “paid apps”
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Summary
 Mobile in China is large and growing – mobile
smartphone usage, particularly in Android, is
growing; China consumers have money to spend
 Many opportunities – many mobile opportunities
in the U.S. have parallels in China
 U.S. resources – U.S. companies have existing
content, products, and resources that can be
helpful in China
 Partner locally – U.S. companies should consider
partnering locally to distribute and adapt their
products and services for China
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global
connected
experienced
successful
Cloud and Mobile-Centric Apps Have
Investment Traction Within China
 Cloud – cross-platform device usage increasing
cloud and syncing needs
 App store
 Storage
 Mobile-centric apps – applications / services need
mobile-feature centricity; China internet incumbents
copy very quickly
 Tablet-focused apps
 Mobile advertising
 LBS
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DCM China Portfolio
Internet /Digital Media
Social and Gaming
NYSE: RENN
Nasdaq: JOBS
NYSE: DANG
NYSE: BITA
Other
SZSE: 002565
Cross Border
Software & Services
Components
NYSE: VIT
Nasdaq: FTNT
NYSE: SMI
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Nasdaq: VIMC
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