Issue 25 | February 19, 2018

996 Podcast: Lin Bin on How Xiaomi Engineered its “Surprise Comeback”
In this episode, Lin Bin, the co-founder, president, and head of mobile for Xiaomi, reveals the secret sauce of one of the most valuable private companies in the world, which is reportedly going public later this year. Xiaomi had an unprecedented “comeback year” in 2017. In January 2018, Xiaomi was the third-largest smartphone seller in the world by shipment, and the No. 1 smartphone seller in India.

Lin Bin, a former engineering executive at Google and Microsoft, recounts the founding story of Xiaomi, the uniqueness of the Xiaomi ecosystem, the phenomenon called “Mi Fans,” how he fell in love with offline retail, and his takeaways from Xiaomi’s meteoric rise in 2017 following a sluggish 2016.

Hans Tung, one of the earliest investors and a former board member of Xiaomi, discusses how he first met the team and why he believed in a company whose success was considered “almost impossible.”

Memorable quotes from the episode:
“Externally, it looked like we were facing challenges [in 2016]. Internally, it was actually a golden year that made us stronger.”

“We realized the most powerful business model was not e-commerce; it was selling direct to consumers.”

Listen now on iTunesOvercast, or SoundCloud.
We’re on XimalayaFM too! Just search “GGV996.”

A Number: 
5.2 billion yuan ($826 million) – the amount of free money Alibaba and Tencent gave to Chinese users this Lunar New Year
This week, China celebrated Lunar New Year, its national holiday. For China’s tech giants, the annual tradition has become a key battleground for users’ attention. Alibaba and Tencent pledged to give away a combined 5.2 billion yuan ($826 million) worth of hóng bāo (red packets) in order to enhance user engagement and win new users.

Users of Alipay can win lucky money if they manage to collect five types of digital lucky cards with the Chinese character 福 (fú, blessing). One way users can collect these cards by scanning the character with the Alipay app anytime they see it offline (e.g. on scrolls or billboards).

Another way is to scan a friend making the “5 fú” gesture (五福到).
Tencent’s QQ had a promotion where it dispensed red packets to its more “active” users (literally). For every 100 physical steps a user walks, they get a chance to enter a lottery to win a red packet.

On Toutiao (the flagship product of Bytedance, a GGV portfolio company), users can record a short video of themselves saying “happy new year” for a chance win one of the billion red packets the company is giving away. The short video app Kuaishou also gave away over 600 million red packets in a similar promotion. Tweet this

A Chart: China Produced 8 Times as Many STEM Graduates as the US in 2016

Stem graduates in the world
 Tweet this

A Big Deal: China Launches Blockchain-Based Apartment Rental Platform
Alibaba’s Ant Financial is working with China Construction Bank and online real estate agency Lianjia to launch a blockchain-based apartment rental platform in China’s Xiongan New Area, China Money Network reported. (Wondering what the “Xiongan New Area” is? Click here to read more.)

The platform will record individuals’ rental histories, enabling the local government to introduce a scoring system for tenants to ensure fair housing allocation, according to local media. Due to poor record keeping and leasing fraud, mistrust between tenants and landlords is common in China.

Though China has clamped down on cryptocurrency exchanges, the country has enthusiastically embraced blockchain technology. According to the Blockchain Patent Report, Alibaba is world’s fourth most active patent filer in the field of blockchain and cryptocurrencies. Almost 50% of the world’s blockchain patent applications originate from China.