It is still early in the year, but already some big online companies have exited China’s chaotic world of e-commerce. The release of an ‘e-commerce dead list’ (#2017电商死亡名单#) became top trending on Chinese social media on February 22, and triggered discussions on the status-quo of the market.
“One by one they collapse, one by one they pop up,” one netizen (@逛吃秦皇岛) says. With an ever-growing Chinese online population and the world’s largest e-commerce market, more companies seek to join, hoping to find a goldmine. Instead, many of them soon end up on the e-commerce graveyard. The popular idea about China’s e-market that “when there’s enough wind, even a pig can fly” (当风来了, 猪也会飞起来) does not seem to hold true for all online businesses.
Their collapse does not necessarily mean the end – for many, it is just a new beginning. “This whole business is like gambling,” one Weibo commenter responds. Another micro-blogger says: “E-commerce companies all soon become like conventional businesses. The large online companies are just too strong. It is easy to join [the market], but hard to survive.”
Let’s take a look at 3 big companies that have already collapsed this year, and what experts say goes wrong in their approach to the Chinese online market.
“China’s 2017 e-Commerce Dead List”
Along with other Chinese media, China’s influential online e-commerce magazine Ebrun.com recently released a list of big companies that have closed their doors this year. We have selected the 3 biggest ones.
1. Dingfangbao 订房宝
Business: Online Hotel Bookings
With the slogan “You only sleep ten hours, why would you spend all your money for the day on it?” (只睡十小时,为何要花整天的钱), Dingfangbao was an up-and-coming online hotel booking site (app + website) selling high-class hotel rooms at low prices, focused at offering clients a luxurious room for the night.
The company started in late 2014 with its own formula that allowed customers to search for available hotel rooms after 6 pm. Through the Dingfangbao app and site, four and five-star hotels in big cities such as Beijing, Shanghai, Guangzhou, and Shenzhen could offer their rooms at competitive prices if they were not occupied or reserved by 6 pm. A win-win situation: Dingfangbao users could get a top room for a cheap price, and hotels wouldn’t be left with empty hotel rooms.
The Dingfangbao service (Dingfangbao literally meaning ‘booking treasure’) was especially aimed at business travelers who won’t arrive at their hotels until the evenings due to late meetings and leave again early in the morning.
With Japanese nude model/(adult) film actress Sola Aoi (苍井空) as their company ambassador, it seemed that Dingfangbao was also aiming at luring customers to luxurious hotels at nighttime for other purposes – similar to the ‘love hotels’ in Japan.
Dingfangbao had a promising take-off in 2014, with various fundings and an initial angel investment of 6 million RMB (±870K$), followed by second- and third-round funding of a total of 13 million RMB (±1.9M$) in 2015 and 2016.
But on 27 January 2017, Dingfangbao announced that it would be stopping its services. CEO Sun Jianrong (孙建荣) told the media that although there certainly is a market for the Dingbaofang formula, the frequency with which its clients used these services was too low and not enough to cover their operational costs.
On Weibo, the company still has around 19000 followers. Sola Aoi, who has a staggering 17 million fans on her Weibo page, announced on February 8 that she would step down as the company’s spokesperson. A day later, the company officially closed its doors, although its website is still live at the time of writing.
2. Greenbox 绿盒子
Business: O2O Children’s Clothing
Online trendy children’s clothing brand Greenbox (绿盒子) was a success story when it first entered China’s O2O (online-to-offline) retail market in 2010. The company was already established by businesswoman Wu Fangfang (吴芳芳) years before, but it made a conscious shift from offline to e-commerce when Wu realized the potential of middle-class moms spending more time shopping for their kids on the internet.
In 2010, Greenbox received two rounds of funding from Trust Bridge Partners (TBP) of 20 million RMB (3M$), and of 100 million (14.5M$) from DCM. Children clothing brands such as Miss de Mode, M.I.L. Boy, Jenny Bear, and a special Disney brand all belonged to Greenbox, which soon was named one of China’s top 10 e-retailers.
Greenbox tapped into the children’s clothing at the right time, as this retail segment has become especially booming business over the past few years. Together with the surge in other children-related products, there has been a shift to bigger sales of these ‘non-traditional products’ that show that China’s ‘Mummy Economy’ (妈妈经济) has become increasingly more relevant.
Soon after the brand was established, it became one of the most popular children’s clothing brands (ranking no.1 for three years in a row) on Alibaba’s online malls Tmall and Taobao. But Greenbox was not solely sold through Alibaba; it was also available through other online shopping platforms such as JD.com and Dangdang. The brand also had its own shop on WeChat.
In 2015, Greenbox started opening up physical stores besides its online ones. It had around 100 (flagship) stores in China’s first-tier cities, solely focused on online sales for the second- and third-tier cities. Was the company taking on more than it could? According to some Chinese media, the brand was “blindly expanding” and growing too fast, too soon, which led to recurring financial difficulties throughout the years. Their financial problems severely worsened in 2016, as the children’s clothing became increasingly competitive. In January 2017, the brand finally announced its bankruptcy.
On Weibo the brand still has 76000 fans, but it has been inactive for months. Some netizens are surprised that the well-known brand has quit, and wonder what this means for the future of other successful ‘Taobao brands.’
3. An Home 安个家
Business: Online Real Estate
An Home (安个家) was established in April of 2015. Headquartered in Shanghai, it was independently funded (10 million RMB, 1.5M$) by CEO Liang Weiping (梁伟平). Its business offered online real estate services with a focus on its mobile app, attempting to rival with traditional real estate services.
Different from offline realtors, An Home aimed to be an online (mobile) platform where its home-seekers, homeowners, and consultants could connect with each other, making the process of buying and selling a house less time-consuming and more efficient.
An Home was a promising start-up for which Liang Weiping gathered a team coming from prosperous companies such as Tencent and Alibaba.
But by late December of 2016, Liang admitted to Chinese media that the company was facing financial hardships, and that they had not succeeded in finding the right way to compete with their offline rivals through online channels. As booming as all corners of China’s e-commerce market might seem, people might not be ready for O2O when it comes to real estate.
One of the reasons for its failure was that eventually, no matter online or offline, access to a large number of houses is the key to winning over the real estate market – and it was precisely this issue where the company feel behind compared to the more traditional channels.
Late 2016, CEO Liang sent out a letter to all of its staff that An Home had to halt operations due to financial difficulties. The company has now closed its doors.
What Can We Learn from the Graveyard Companies?
The aforementioned online companies are not the only ones who did not make it this year. Bollain Home Textile (帛澜家纺天猫店), founded in 2012 and selling bedding and home textiles through over 50 online stores in China, has collapsed after running behind approximately 16 million RMB (2.3M$) in its payments to suppliers and staff.
Online recruitment company Job Tong (周伯通招聘), established in 2013 as a major social recruitment platform and even receiving a 28 million RMB investment from NetEase, also went down earlier this year – its online competitors, including lagou.com, liepin.com, and zhipin.com, simply grew too strong.
“Even the most clever housewife cannot cook without rice”
And then we have not even mentioned foreign brands such as Lotte and others that closed their doors this doors in the highly competitive Chinese e-market.
So what is the lesson to be learned from these start-up failures? Of course, there is not one answer.
Wang runs a large networking group called the ‘Laogao Club’ for online entrepreneurs in China that are active on Taobao, Tmall, JD.com, etc, and in response to the ‘2017 failing e-commerce list’, published a blog on February 22 in which he gives some main points on how to succeed in this dog-eat-dog e-commerce world.
According to Wang’s article (in Chinese), which received many views on Weibo on February 22, building up an online community is key for any e-commerce business in China.
“Even the most clever housewife cannot cook without rice”, Wang argues, seeing an online following as the key ingredient to any online-based business. Drawing in communal media followers costs time and energy – haste makes waste.
The ‘guru’ says that online businesses can’t just gather their following by simply arranging a KOL (Key Opinion Leader) or online celebrity (see the first Dingfangbao example) for their brand; it is something a brand has to do themself, since they are the core that needs to attract fans.
“No matter how good you are, or how good your product is, it is worth nothing without an online community.”
“No matter how good you are, or how good your product is, it is worth nothing without an online community,” Wang writes. In a time when netizens are drowning in the information that is presented to them, it is essential that brands and companies are precise in targeting their relevant audiences and shooting their arrows in the right place.
Wang strongly advises companies to set up the right online environment that suits their target audience, and to pick the right timing to market their messages. Sometimes brands are lucky when their campaign goes viral, but mostly it is about smart strategy.
Before converting your assets into cash, it is important to continue to be valuable to followers and give them a reason to stay. Wang stresses that it is never a good idea to start the money-making machine too soon – you first need to make sure you have a steady and loyal group of online followers that is attached to your brand/company.
“Don’t drown the pond to get at the fish.”
“Don’t be overhasty, don’t drain the pond to get to the fish” (不能操之过急、竭泽而渔), is one of the messages of the Laogao Club for their online entrepreneurs. You can only transform your brand and starting making money once your ‘fans’ trust your brand/company enough and feel connected to its ‘flavor.’
Keeping up the quality of your services and products, and always making sure it brings more than just a ‘bargain’, it is therefore key to survive in the fiercely competitive Chinese e-commerce market.
Reading from the Laogao Club’s road to e-success, we could draw the conclusion that Dingfangbao had not worked enough on creating its own communal following of trusting and loyal fans before attempting to converting its assets into cash. An Home jumped into the pond before there were any fish at all, and Greenbox went ahead of itself and became too hasty to expand.
“If you enter the pit, be cautious”, some netizens respond on Weibo: “It is risky business.”
“There are too many people who don’t understand and think they are already running an e-business simply because they openened an online company. It looks good on paper, but in reality, it’s nothing,” another person writes.
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The Fisherman’s Advantange? China Post Starts Partnership with Huawei
Today marks the start of an unexpected ‘romance’ between Huawei and China Post, as the two just announced their strategic cooperation.
On June 5, the topic “China Post Starts Cooperation with Huawei” (#中国邮政与华为合作#) became one of the hottest topics on social media site Weibo shortly after the state-owned China Post Group Corporation announced that it would start a strategic partnership with the Chinese multinational tech company.
According to CNbeta.com, one of China’s major tech news sites, China Post and Huawei will start a close partnership and set up a “China Post Huawei New Technology Application Lab” (中国邮政·华为新技术应用实验室) to jointly develop strategies concerning financial services, tech innovation, big data, post logistics, and more.
News of the cooperation was widely shared on Chinese social media today by various state media outlets, with some threads attracting thousands of comments.
For many Chinese netizens, the press release apparently was the right time to complain about China Post being “too slow,” expressing hopes that the new partnership would make the postal services run more smoothly.
“Little Huawei crying on the shoulders of China Post.“
Others suggested that the recent trade war with the US, in which Huawei plays a key role, might have to do with this new move. “This is like little Huawei was being bullied outside, and then came back home to cry on the shoulders of China Post,” one Weibo user jokingly writes, soon receiving over 10,000 likes.
Others called China Post the “the fisherman with an advantage.” This comes from a Chinese saying, that goes 鹬蚌相争,渔翁得利 Yù bàng xiāng zhēng, yúwēng dé lì : “When the snipe and the clam fight, the fisherman has an advantage,” with the ‘fisherman’ being the third party who catches both the snipe and the clam, profiting from the conflict of two others.
The Chinese telecom giant Huawei was added to a trade blacklist earlier last month, as the China-US trade war reached another tipping point. Some experts suggest that US President Trump is using Huawei as a bargaining chip after he earlier stated that Huawei could be included in “some kind of trade deal” with China.
News of the Huawei/China Post partnership also comes days after China’s postal regulator said it would launch an investigation into US delivery company FedEx, which diverted two parcels destined for Huawei in China to the US. Chinese government authorities reportedly issued a statement saying that FedEx’s actions had “violated Chinese laws and regulations on the express delivery sector.”
“China Post kissed Huawei’s face and said: I will handle this for you.“
Chinese netizens seem to be creatively inspired by Huawei’s tough spot in the China-US trade war situation and the sudden appearance of China Post in this story. Many commenters personify ‘Little Huawei’ and ‘Big China Post,’ imagining that China Post comforts the crying Huawei and takes it in its arms.
One person writes:
“One day, Hua returned home, and went straight to bed. China Post saw it, and softly asked ‘What happened, who made you upset?’ Huawei pulled the blanket over his head and sighed: ‘Nothing, it’s a trivial matter, I can handle it myself.’ But the Post pulled down the blanket, bowed down to kiss Huawei’s face and said: ‘You go and rest now. I will handle this for you.’“
“They’re so cute together!”, multiple Weibo users write, suggesting that the Huawei China Post partnership has a ‘romantic’ element to it.
Although some people expect that there are ulterior motives behind the sudden cooperation between China Post and Huawei, many do applaud the fact that it is truly a ‘Chinese’ cooperation. “In crucial times we always rely most on our own family,” a student remarks.
By now, the cooperation is not just triggering people’s fictional creativity, it is also setting off the online meme machine, with a potential new logo for the China Post x Huawei company circulating online (see below).
Whether or not Huawei and China Post indeed get to live happily ever after? We’ll just have to wait and see.
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Top 10 China’s Most Popular Smartphone Brands & Models (May/June 2019)
These are the ten most popular smartphone brands and models in China right now.
In 2018, What’s on Weibo listed the top 10 most popular smartphone brands in China. With a smartphone market that is dynamic and rapidly changing, it’s time for an update to see which smartphones brands are currently most popular in the PRC.
Since 2017, we’ve seen various smartphone trends coming and going. Bezel-less devices, increasing the size of the screen, have gone from trend to norm. In the selfie era, the same holds true for high-performing front-facing cameras. More temporary trends have given way to more sophisticated gadget design. It’s all about superzoom cameras, full-view displays, pop-up selfie cameras, and let’s not forget about 5G.
One other major trend that is ongoing for the past years is that despite the popularity of Apple and Samsung, ‘made in China’ brands are dominating the smartphone and tablet market.
But the biggest trend now, more so than trendy and colorful design or smooth edges, is photography: the latest devices from different brands are now, more than ever, competing over who has the best (main) camera.
Looking at popularity charts on Baidu and Zol.com, leading IT portal website in China, the brands Oppo, Vivo, and Huawei are still the top popular smartphone brands in China. Huawei, Oppo, and Vivo were also the best-selling smartphones on the market in Q1 (Sohu), followed by Xiaomi, Apple, and Samsung.
Making an absolute top 10 of most popular smartphone brands in China at this moment is not so straightforward, however, since the rankings are different depending on the source and on which phone models are sold the most at a particular time.
The charts of leading e-commerce platforms JD.com and Suning, for example, are not exactly the same as Zol’s smartphone popularity rankings. We will stick to the Zol rankings for this article, looking at brands first and matching them with their most popular device models.
#10 Realme and the Realme X
Realme is a Shenzhen-based company that was established in 2018: it is the youngest smartphone brand in this list. Previously, it was a subbrand of OPPO but became independent in May of last year.
The Realme phone price starts at ￥1499 ($216) for the 4GB + 64GB storage variant. It has a a 6.53-inch full-HD+ (1080×2340 pixels) AMOLED screen, and features a 48-megapixel primary camera.
On social media, the Realme is mostly praised for its strong camera and friendly price.
#9 OnePlus (一加) and OnePlus7 Pro
OnePlus is a Shenzhen based Chinese smartphone manufacturer founded by Pete Lau and Carl Pei in December 2013. The company officially serves 32 countries and regions around the world as of January 2018.
The OnePlus 7 Pro of ￥4999 ($722) is currently listed as the number one popular smartphone by Zol.com; the brand itself is on the lower end of the top 10 most popular smartphone brands in China.
The 7 Pro device was called “one of the best Android phones you can buy” by AndroidCentral, on top of being “the best phone OnePlus has released to-date.”
The phone is big: it features a 6.67-inch display with a screen resolution of 1440 x 3120 pixels. It has fingerprint sensor, a 4000 mAh battery, and a rear 48MP + 16MP + 8MP camera.
#8 Meizu (魅族) and the Meizu 16s
Meizu is another Chinese homegrown brand, established by high school dropout Jack Wong (Huáng Zhāng 黄章) in 2003.
The Meizu device that is currently ranked in the top 10 hot-selling lists is the 16S that was released in April and is priced at ￥3198 ($462). The device has a 6.2 inch AMOLED screen (1080 x 2232 px). The main camera is a 48 MP, and the device is equipped with a 3600mAh battery.
The cheaper 16Xs (#魅族16Xs#) was a popular topic on social media on May 30, which is when it was launched.
#7 Xiaomi (小米) and the Redmi Note
Since the launch of its first smartphone in 2011, Beijing-brand Xiaomi has become one of the world’s largest smartphone makers. In the Zol rankings the brand is currently listed at number 7, in JD.com’s hot-selling lists, it’s ranked 3. The Redmi is actually a sub-brand of Xiaomi, but it’s still listed as Xiaomi in ranking lists such as that of JD.com.
The Xiaomi Redmi Note 7, Redmi K20, and Xiaomi 9 are all doing well, with the Redmi being the more popular device within the PRC. Techradar describes the Redmi Note 7 as a “great budget smartphone” with “stellar battery life.”
The Xiaomi Redmi Note 7 has a 6.3 inch (1080 x 2340) full-HD display (Full HD+) and a 12 MP main camera(the Redmi Note 7S has a 48 MP main camera). The cheapest models of ￥998 ($144) are among the lowest priced devices in this list.
#6 Apple (苹果) and the iPhone XR/XS Max
The position of Apple in China’s smartphone market has become a hot topic of discussion on social media recently in light of the rising China-US trade tensions. Although iPhone sales in China have indeed been dropping according to news reports, the iPhone XR and iPhone XS Max currently rank number 8 and number 10 most popular devices according to Zol at time of writing, with Apple ranking 6 in the top 10 smartphone brand charts. In the current list of best-selling smartphones on e-commerce site JD.com, the iPhone XR even ranks number one.
The iPhone XS Max is bigger than ever: it has a 6.5-inch OLED (2,688 x 1,242 pixels) screen whereas the XR has a 6.1-inch LCD (1,792 x 828 pixels). The camera of the XS Max has a dual 12-megapixel camera with wide-angle and telephoto. The XR has a single 12-megapixel wide-angle.
Some Chinese bloggers don’t understand why the iPhone is still so popular in China. Influential Weibo tech blogger Keji Xinyi (@科技新一) recently wrote: “The exterior of all Android flagship devices looks better than iPhone, they take better pictures too, why do girls still like the iPhone so much?”
Some of the popular answers include that people like iOS, that they prefer the “uncomplicated” use of the iPhone, and praise it for being “stable.”
With its ￥8399 ($1214) price tag, the iPhone XS Max is the most expensive phone around. The XR is currently priced at ￥5399 ($780).
#5 Honor (荣耀) and the Honor V20
Honor, established in 2013, is the budget-friendly sister of the Huawei brand. The company’s sub-brand has been doing very well over the past years. Honor focuses on great value for money.
The brand has over 21 million fans on Weibo. Honor targets younger consumers, not just with its relatively low prices, but also with its trendy designs, often offering phones in vibrant blue, pink and purple colors.
While the Honor brand currently ranks 5 on China’s nationwide smartphone brands popularity charts, its most popular device, the Honor V20, now ranks number 9 within smartphone device rankings. Another bestseller is the Honor Magic 2.
Priced at ￥2799 ($404), the V20 device is one of the cheaper ones in the popularity charts. It has a 6.40-inch display with a resolution of 1080×2310 pixels. Its rear camera is a 48-megapixel camera, with its selfie camera being a 25-megapixel one. It is available in colors Charm Sea Blue, Magic Night Black, Charm Red, Phantom Red, and Phantom Blue.
#4 Samsung (三星) and the Galaxy S10
Samsung currently is the most popular smartphone brand in the PRC that is not made-in-China. The brand seems to have been able to win back consumer’s trust after its previous problems with overheating and exploding batteries. In the first half of 2018, China actually replaced the US as the biggest market for Samsung.
The Galaxy S10 is the most popular Samsung device of this moment, and recent reports on bugs that allegedly come with a recent update have not seemed to impact its ranking.
The S10 has a 6.1-inch Super AMOLED QHD+ screen with 1440 x 3040-pixel display resolution. Like most devices on this list, its camera is good: a triple rear camera (12 MP x 12 MP x 16 MP) that can shoot panorama shots on ultra wide. The device has a dual-SIM tray/microSD card slot, and is water-resistant.
Price: ￥5999 ($867).
#3 Huawei (华为) and its P30 Series
In light of the China-US trade war, Huawei has been making international headlines recently. Judging from e-commerce ranking lists and ZOL.com popularity lists, Huawei’s popularity within the PRC seems to be unaffected by the recent consternation; if anything, it has only made the brand more popular within mainland China. Huawei remains to be one of China’s top smartphone brands.
The most popular device of the Huawei brand currently is the Huawei P30 Pro mobile, ranking fifth in Chinas most popular smartphone charts of this moment. The Huawei P30 is slightly less popular, ranked at number 8.
The P30 Pro features a Full HD+ OLED 6.47 inches display, an integrated fingerprint sensor in the display, with a screen resolution of 1080 x 2340 pixels. It has a 40MP + 16MP + 8MP camera that is the best part of the device, with an impressive zoom function:
The device has been called “one of the best and most unique phones” to be released this year, and is an absolute winner for its camera compared to the Samsung S10 or the iPhone XS Max. The Pro price is set at ￥5488 ($793), also making it one of the most expensive phones in the top lists of this moment.
#2 Vivo and its Vivo X27
Vivo is another Chinese brand that has gained worldwide success since it first entered the market in 2009. Its headquarters are based in Dongguan, Guangdong.
Vivo often cooperates with Chinese celebrities in its marketing campaigns, such as Chinese singer and actor Lu Han (born 1990) or Chinese actress Zhou Dongyu (born 1992), clearly targeting the post-90s consumer group.
The brand has over 37 million followers on its Weibo account, making it the most popular brand in terms of online fans.
The Vivo X27 device was launched in China in March of 2019 and is specifically marketed as a “night photo” wonder tool.
The VivoX27 is a 6.39-inch dual-sim device with a super AMOLED screen. It has a 48 MP main camera and 12 MP selfie camera, and in-display fingerprint sensor.
The Vivo X27 Pro hashtag (#vivo X27 Pro#) has over 96 million views on Weibo at time of writing, with most netizens mostly praising the device for its ability to make good photos at night. The device is currently also ranked number one on Zol.com in the best mobile gaming device category.
Priced around ￥3598 ($520).
#1 Oppo and its OPPO Reno Series
2019 is the year of 5G, and OPPO Reno is ready for it. Oppo launched its latest 5G supported OPPO Reno smartphone in April of 2019 and has since been a hit on Chinese social media. The OPPO Reno hashtag (#OPPO全新Reno#) has a staggering 560 million views on the Sina Weibo platform at the time of writing, with the launch of the orange Reno becoming a trending topic in late May.
OPPO is a Guangdong-based brand that officially launched in 2004. The brand is known for targeting China’s young consumers with its trendy designs and smart celebrity marketing. In 2016, the brand hit international top smartphone lists and ranked as the number 4 smartphone brand globally.
OPPO currently has over 25 million fans on Weibo.
The OPPO Reno has a 6.4-inch AMOLED display, a 48-megapixel main camera, a wedge-shaped pop-up camera (16-megapixel front-facing), and in-display fingerprint scanner. Besides the standard Oppo Reno, there is also the OPPO Reno’s 10x Hybrid Zoom, and that model is mostly praised on Chinese social media for its photo quality under the OPPO Reno 10 X Zoom hashtag (#OPPOReno10倍变焦版#). Check the photos below of one Weibo user (@塔湾小魔王) trying out the zoom.
Price starting from: ￥3599 ($520).
Some brands that did not make this top 10 list are still worth mentioning. One of them is Nubia (努比亚): Nubia may not be a very well-known brand outside of China, but in the PRC it’s been consistently hitting top brand lists. Nubia, owned by parent company ZTE, has been doing very well in China’s top-scoring smartphone lists since it was officially launched in 2015.
Other popular brands include Lenovo, ZTE, and Smartisan, Meitu: all Chinese companies.
“China has so many domestically produced smartphone,” Chinese tech blogger Keji Xinyi (@科技新一) recently wrote on Weibo: “Xiaomi, OPPO, vivo, OnePlus, Meizu, Lenovo, etc. etc. Why is it that if we’re talking about Chinese phones we’re always talking about Huawei?”
Among the hundreds of responses, many think Huawei is simply the best, with others saying it just has a very strong marketing campaign. Most people, however, agree that Chinese smartphone market has much more to offer than Huawei alone.
By Manya Koetse
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