China Business Corner is a weekly window into Chinese-language coverage of business, technology, and the broader economy, brought to you by co-writers Huang Sizhuo and Jordan Schneider (who hosts the ChinaEconTalk podcast). Sign up here to get this column in your inbox every Thursday.
Folding screens are wooed by Samsung, Huawei, and Xiaomi
By Ouyang Weikang 欧阳伟康 for 36Kr
February 25, 2019
Folding screens. Folding screens, I tell you. Politics aside, Huawei can make some pretty cool, if albeit outrageously expensive, phones. Its latest Mate X, priced at a cool $2,600, can take advantage of 5G and can turn from a phone into a mini-tablet, making you marginally better at Honor of Kings.
Most big cell phone innovations have relatively quickly trickled down from flagship to the sorts of models SupChina columnists can afford. Yet we shouldn’t get too excited about having some folding magic in our pockets anytime soon. Lei Jun, Xiaomi CEO, made the point that there isn’t much capacity for mass production, and battery life is a major issue. One OPPO CEO said straight up that “there’s no chance we get universal folding screens in the next two to three years.”
36kr argues that the real winners of this push to flexible screens is Samsung, the only player in the space that can supply its own flexible OLED.
The biggest differences between iQiyi and Netflix
By 亚澜 Ya Lan for Shenxiang 深响
February 22, 2019
iQiyi, the Baidu-affiliated video platform, is one of the most popular places to watch TV, films, and other videos, along with Youku and Tencent Video. While often given the moniker of “China’s Netflix” in Western media outlets, iQiyi in fact has a number of critical differences in its business model from its American-owned analogue.
iQiyi has from the start relied on a number of different revenue streams (for example, 37 percent from advertising and 9 percent from content distribution fees) compared to Netflix’s sole reliance on paying subscribers (98 percent of its revenue). Encouraging for iQiyi, subscribers from 2017 to 2018 grew from 50 million to 87 million.
Unlike for Netflix, the cost of content for iQiyi is trending down. Thanks to news like Fan Bing Bing’s tax evasion, regulation around salary ceilings, and an increasing willingness of Chinese customers to watch content that doesn’t have megastars in leading roles, it’s cheaper than ever for iQiyi to make shows. iQiyi also has had far more success than Netflix in making reality shows, a far cheaper type of content to produce than fully scripted drama.
Most importantly, iQiyi and Netflix grew up and currently operate in different competitive environments. While Netflix has to contend with the likes of HBO and Disney, “upstream content providers who do their own producing,” iQiyi faces none of the same. While Netflix faces near market saturation in its home market, iQiyi can still hope to persuade hundreds of millions of Chinese to start paying for subscriptions.
Count yours truly as a satisfied iQiyi customer: its back catalogue of movies matches what Netflix has to offer. Further, part of being someone fluent in modern Chinese culture means watching the iQiyi mega-hits like The Story of Yanxi Palace 燕西公路, Rap of China 中国有嘻哈, and last week’s featured show, Like a Flowing River 大江大河， which live behind iQiyi’s modest (around $2/month) paywall.
More young people would rather work in delivery than in a factory
By Bā Jiǔlíng 巴九灵 for Wuxiaobo Channel 吴晓波频道
February 22, 2019
There’s short-term labor shortage every Spring Festival, but this year was exceptional. “This time wasn’t a tiny gap — we were almost 50 percent short,” said a human resources employee from Foxconn. If Foxconn, a giant manufacturer, faced huge demand for young people, other labor-intensive factories were likely experiencing the same strains.
So where did Chinese workers go?
Research published by Meituan revealed that about 31 percent of Meituan food delivery workers used to be factory workers. And Meituan’s latest quarterly report showed they had about 600,000 couriers, up from just 15,000 in 2015.
Another food delivering platform, Ele.me, had 3 million registered couriers. Package delivery industries are also attracting numerous young people out of factories.
So why are young Chinese workers ditching factory work?
A few factors. First, factory workers earn less. Foxconn’s workers earn 6,000 yuan ($900) per month on average, but full-time Ele.me couriers can earn more than 8,000 yuan ($1,200) on average. Next, the workload is excessive in factories, leaving young workers with not much time to live life. And some manufacturing industries are looking to Southeast Asia for lower labor and land costs. At the same time, automation and robots are kicking out young people from factories. For instance, the city of Dongguan has cut out more than 200,000 workers in favor of machines.
The author argues that unlike veteran and skilled workers in Western societies, Chinese workers do the most basic, unimaginative, and dispensable work.
Third-tier city moms are paying for knowledge-sharing apps
By Tiě Lín 铁林 for Hedgehog Commune 刺猬公社 (cìwèi gōngshè)
February 25, 2019
There is a hunger for knowledge in China. Many are willing to pay for online lectures via “knowledge-sharing” apps (check out the most recent episode of TechBuzz China for a deep exploration into this trend), and while these online lectures aren’t as rigorously academic or professional as TED Talks or what one finds on Coursera, speakers are often sincere, using their life experiences to teach others how to navigate challenges.
While many think these lectures aren’t substantive, this article argues that these knowledge-sharing apps have been especially well received by one group of people: mothers in small cities.
“The lecturer is like a Buddha in my heart. His compassion lets people turn knowledge into wisdom and find inner happiness,” said Lili, a real estate agent who purchased a membership that runs out in 2030. She used to endlessly complain, but listening to lectures has taught her trust, communication, and encouragement — and repaired an icy relationship with her son.
Lili is so obsessed with listening and learning that through the app, she finished 210 books in two years.
Why is this business model successful for rural mothers? A few reasons:
- Unlike first-tier city residents, they have more personal time and fewer living costs, so they might be more willing to purchase lectures.
- Middle-aged women always take on multiple identities, such as employer, mother, daughter, wife, etc., meaning they need to be naturally curious about a more diverse range of issues. For example, they need to have financial skills to manage family wealth, managerial skills to get promoted at work, knowledge of nutrition to feed her family, and emotional strength to deal with relationships.
- These paid platforms tend to offer offline events that gather similar people together.
Many researchers have criticized knowledge-sharing apps as all about selling anxiety and fragmented information. “But you cannot deny that many never-read-books people are listening to my lectures, which is much better than watching Douyin all day long,” a professor from Nanjing University said.
The author believes that while learning from apps is different from traditional education, for millions of people like Lili, it could be a positive way of passing the time.