WEIBO: Xiaomi’s Apartment Play; China Mobile’s Nakedness
Tech executives have been uncharacteristically quiet on their microblogs this past week, possibly due to the US Thanksgiving holiday that saw light activity in New York where most of their stocks are traded. But all the holidays in the world could never quiet the talkative Lei Jun, CEO of Xiaomi, who was busy talking up one of his company’s latest investments. That particular investment came in the unlikely property management space, involving a developer of YMCA-style buildings that rent out apartments to young people.
A separate series of posts from 2 executives at leading mobile carrier China Mobile (HKEx: 941; NYSE: CHL) also provided some interesting food for thought, reflecting the steady stream of new assaults that this slow-moving behemoth regularly faces from smaller, more innovative firms.
In one instance, a regional China Mobile executive commented on Tencent’s (HKEx: 700) new product that lets users make voice calls over the popular WeChat platform, in a direct challenge to traditional telcos. The other saw a China Mobile executive direct a pile of criticism at a newly rolled out “Data Bank” program that gives customers of China Unicom (HKEx: 762; NYSE: CHU) more flexibility in managing their mobile data allowances.
Perhaps the recent shortage of buzz from Chinese tech executives also owes to the fact that many of their stocks have taken a bath over these last few weeks, after many surged during a wave of IPOs earlier this year. Shares of e-commerce leader Alibaba (NYSE: BABA) have dropped 6 percent from an all-time high over the last 3 weeks, and even Hong Kong-listed Tencent is down 9 percent from a mid November peak.
That kind of pull-back may be dampening executives’ enthusiasm, and many may also be worried that microblog hype might be seen as a desperate attempt to pump up their flagging share prices.
Against that backdrop, perhaps it’s not too surprising that Xiaomi’s CEO Lei Jun was one of the few executives busily tweeting away on his micrblog over the past week, since his company is privately held. Lei was buzzing about a new investment in a firm whose name roughly translates to “you+International Youth Apartments“, or you+guoji qingnian gongyu.
I couldn’t even find a website for this company, which is a bit strange since Xiaomi likes to do most of its marketing on the Internet as part of its broader strategy to position itself as a cool brand that appeals to young hipsters. But the you+ certainly looks like it caters to the kind of audience Xiaomi is targeting.
Under its business model, you+ finds buildings in big cities and remodels them to create small apartments specifically targeted at young people just starting out in their careers. Rents are typically in the 2,000 yuan ($325) to 3,000 yuan range. This kind of renter is indeed the type of person Xiaomi is targeting with its mid- to low-end smartphones.
Lei says the investment was aimed at helping employees of his company find places to live. (microblog post) This kind of place is certainly needed in big cities like Beijing and Shanghai, where affordable choices for young people are often limited and not very attractive. If the plan really works, I could easily see these you+ places quickly developing into hipster hang-outs that are fertile ground for Xiaomi sales, which should help the company in its drive to become China’s version of Apple (Nasdaq: AAPL).
We’ll close out this week’s abbreviated microblogging round-up with comments from the 2 China Mobile executives, starting with Jiangsu-based marketing executive Ge Changwei, who comments on Tencent’s new WeChat voice product that was quietly launched early last month. That product lets people make voice calls using WeChat, potentially undermining traditional voice calls that are one of the main revenue sources for China Mobile.
China Mobile has a contentious relationship with Tencent, which culminated in a war of words last year that that saw the former accuse the latter of being a de facto wireless carrier. Ge’s microblog post seemed like a sort of surrender to Tencent, conceding that companies like China Mobile may eventually become simple sellers of network access, while all other services including even voice go to more innovative firms like Tencent. (microblog post)
Lastly there was the colorful post from China Mobile’s business support systems manager Ning Yu, who accused Unicom of subversion with its newly announced Data Bank program. (microblog post) The program looks quite innovative, giving subscribers the flexibility to use their monthly data allowances in different ways, including transferring part of their allowances to other users.
Ning made a colorful metaphor by comparing the nation’s 3 telcos to a person slowly disrobing, casting off one piece of clothing after another until they are left standing naked. Such a metaphor does seem somewhat appropriate these days, as China’s telcos slowly surrender their various traditional services like voice and text messaging to private companies like Tencent.
