China Marketing Blog

11 Chinese startups to look out for in 2014

Misha Maruma — Tue, 05/27/2014 - 15:02

The Lean Startup book

Every year new startups in China get funding. Some go on to become well known money making brands and others fall into the dustbin of history.

Three startups of note that were predicted to do well in 2013 and indeed did were Xiaomi, Wandoujia and Momo. All three have blossomed and are now used by huge numbers of people.

In this blog post I’ll look at 11 startups that I think will do well in China in 2014 and beyond. Some of the predictions are based on our experience at Nanjing Marketing Group. The others are startups that I think will do well from my own personal experience. A few are ones that I’d like to see do well.

I’ve put the startups into seven categories:

Pets

Education

Translation

Food

Social

Gaming

QR codes

 

Pets

Pet social network

Rather than put your pet on YOUR social network, why not create a social presence for your dog or cat? That is the idea behind the startup SmellMe according to 36KR (website in Chinese). In fact, it is following in the footsteps of popular pet social network app LiuLiu.

The name is rather strange, which might put some people off. But China’s pet-care market is worth US$1.2 billion with 33 million households in the country having a dog or cat. 

Pet E-store

The rise of pet owners in China inevitably means that there will be more demand for pet-related goods. Shanghai based Boqii intends to fill this gap reports startup blog network 36KR (website in Chinese).

Only two per cent of Chinese households own a cat and seven per cent own a dog. In America 40 per cent of households own a dog. However, only 10 per cent of Chinese pet owners feed their pets commercial pet food.

The company has grown from a retailer on China’s e-commerce platforms to developing in-house branded pet products, social forums, group-buying and directories. There is talk to moving into O2O marketing.

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Education

E-learning

The worldwide language learning market is worth more that US$60 billion.

Increasing numbers of people are starting to take online courses. Chinese education startup Haowaijiao is planning on taking a piece of this market. 

I believe that face-to-face virtual learning will become very popular amongst Chinese language learners in the near future. At the moment there is too much of an emphasis on spelling, writing, and passing tests in English classes in China.

Haowaijiao helps learners to boost oral skills in a one-to-one environment. The classes are conducted online using video chat, worksheets, a virtual whiteboard, and choice of textbooks. A written progress report is given after every class.

Haowaijiao are not the only startup to move into this competitive field. But they have financial backing from one of China’s biggest brands, Lenovo. Expect to see more of these language-learning platforms with Haowaijiao leading the way in future.

English writing

Daily Themes is a Shanghai based startup with the aim of helping non-native English speakers to write better. It does this by encouraging users to write a short daily blog and submit it to the site.

This is then analysed by the site’s real-time analytics to give the author some data insight into their writing. Suggestions are then given to help the writer improve their prose.

The paid service lets members receive feedback from externally validated experts using Cambridge University standards. The feedback is received within one day of the piece being submitted.

Daily Themes is hoping to tap into a massive market. There are 300 million English-as-a-second-language learners in China. But this is a potentially global market. The second largest user base comes from Italy.

Admissions

ChaseFuture is moving in a different direction to most education startups. Instead to producing a learning platform, the startup wants to tap into China’s rising middle class aspirations of studying abroad.

There is a massive trust gap in China when it comes to admissions because there are so many fraudulent providers. ChaseFuture hopes to fill this gap. 

Students who use the service will be paired with a mentor, ideally an alumni from the institution they hope to study in. Students work with these mentors via video chat to prepare CVs, admissions essays, interview questions and a range of other admissions hurdles.

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Translation

In a country like China where it’s impossible for foreigners to read the language without having studied Chinese, translation apps are essential. Waygo hopes to be the go-to app for travellers in China.

The app works by simply pointing the phone camera at some text. The on-camera recognition (OCR) turns the script into English. The vocabulary is tailor-made for travel purposes so the translations are not incomprehensible like some translations in dictionary apps.

Having lived in China for some time now, I think this would have been a brilliant app when I first arrived. Indeed it could still help now even though I have learnt to read Chinese.

But this startup will be successful because of the rise of foreign travellers to China on short trips. They will be able to read menus and signs helping to make them feel comfortable when travelling around China.

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Food

Ricebook is a social network for foodies to share experiences of different restaurants. If you’ve ever seen a Chinese person’s social media newsfeed then you’ll understand that taking pictures of food is very popular.

The idea with this mobile only app is for users to take pictures of dishes in restaurants and share with their network so people can like, dislike and comment. Over time users will have a record of they and their friends favourite places to eat.

The report on 36KR (website in Chinese) says the funding that Ricebook has recently received will help the app to monetize. I think that it may prove a great idea. There are a number of food apps in China, but this is a nice mix between social and useful.

Chinese people love talking about food. One way to flirt in Chinese is to ask “do you eat tofu? (你吃豆腐吗). Mobile social food apps could tap into a very Chinese way of thinking.

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Social

Selfie apps

2013 was the year of the selfie. 2014 is the year of the selfie app. One app made in China is testament to this prophecy. Pinco is using the selfie trend to push a viable business.

This app designed just for the Chinese market is similar to Instagram. Users take a photo and can add filters and tag any designer brands around them.

For example, a girl might take a selfie in a coffee shop. She could then tag her Prada sunglasses, Zara top, the MacBook on the table along with the Starbucks coffee and Beats earphones. The tags show along the top of the app and the user can follow streams related to the tagged brands.

The beauty with this startup is that it connects lots of competing ideas together, social media marketing on Sina Weibo or WeChat with O2O marketing and clever time related promotions.

I think that its success will stem from a modern middle class in China using popular social media and the Chinese love of the simple selfie.

Fun

There are 500 million mobile internet users in China. This has seen a massive growth in mobile-only apps. Wecomics hopes to tap into this potential. It is a Chinese version of Bitstrips, the user created shareable comic strips that started popping up on Facebook last year.

36KR (website in Chinese) reports that this Chinese startup has utilisied China’s most popular social networks, Sina Weibo and WeChat, to help gain traction amongst Chinese users. Whether this is a fad or grows into a fully-fledged business generating decent profits remains to be seen.

But the potential of Wecomics to go viral at any moment has convinced me that we will see more user-generated comics on Chinese social media in the next year and beyond.

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Gaming

Gaming is big business in China. China’s online game operators made over US$13 billon in 2013, with this expected to rise to around US$16 billion in 2014.

Until January this year, games consoles were banned in China. This has meant that PC games have dominated the business in terms of revenue. Mobile-gaming is also huge business as more people get comfortable with in-app purchases. Tencent is without a doubt China’s gaming giant.

This leads me to believe that virtual reality (VR) gaming is the next big gaming area in China. ANTVR, a Beijing based startup, is currently competing with Sony’s Morpheus and Oculus Rift (owned by Facebook) for this potentially lucrative market. 

60 per cent of Chinese gamers prefer 3D graphic games and 59 per cent prefer to play role-playing games, first-person action games and shooters so VR gaming would accommodate these gamers.

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QR codes

I am an advocate of QR codes. I think that they are very useful for everything from social networking to O2O. But one of the criticisms of QR codes, and I don’t disagree, is that they are ugly. Startup Visualead plans to make QR codes sexier.

China is leading the market in terms of use and awareness of QR codes. But there is also traction in parts of South America and Northern Europe.

But in China Visualead has teamed up with Renren, a social network popular amongst students, to create personal QR codes linking a users account using a picture of them.

I see this startup being very successful in China. QR code use is high, but by making them better looking I think this startup is creating even more demand for something that is very useful indeed.

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Are there any startups in China right now that you think will become household names? Start a conversation in the comments.

 

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