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Mobile Internet in China: Opportunities for U.S. Firms. David Chao DCM. Agenda. DCM Introduction Growth in China Areas of Mobile Opportunity in China Recommendations for U.S. Companies What U.S. Companies Can Bring. DCM Overview.
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Mobile Internet in China: Opportunities for U.S. Firms David Chao DCM
Agenda • DCM Introduction • Growth in China • Areas of Mobile Opportunity in China • Recommendations for U.S. Companies • What U.S. Companies Can Bring DCM • Proprietary and Confidential
DCM Overview Established early stage venture capital firm with unique access to the U.S., China and Japan – Golden Triangle Leveraging “One Firm – One Fund” culture to deliver consistenthigh performance Managing over US$2 billion across six funds from ouroffices in Silicon Valley, Beijing and Tokyo Experienced team with deep sector expertise investing in TMT (Technology, Media, Telecom) and Cleantech Backedindustry pioneers and creators of paradigm shifts across the Golden Triangle: About.com, Foundry Networks, Sling Media, 51job, Dangdang and AllAboutJapan DCM • Proprietary and Confidential
DCM China IPOs Leading outsourcer in China “Monster.com” of China “Amazon” of China (Nasdaq: JOBS) (NYSE: DANG) (NYSE: VIT) “Facebook” of China Largest auto media (NYSE: BITA) (NYSE: RENN) Leading packaging company in China China Local Listing (SZSE: 002565) Multimedia semiconductor Semiconductor foundry (NYSE: SMI) (Nasdaq: VIMC) DCM • Proprietary and Confidential
China is Experiencing Phenomenal Growth in Mobile and Spending CAGR: ~150% RMB Billion China E-commerce Market Estimation(GMV) CAGR:50% Source: CCID, Source: Innovation Works / Umeng estimates DCM • Proprietary and Confidential
China has the 2nd Largest Android App Store in the World World’s Top Apps Stores (Daily Downloads) Wandoujia #2 in Android globally Source: Techcrunch, Cnet,, BGR, industry research DCM • Proprietary and Confidential
Category Leader Parallels in Mobile Show Many Similar Opportunities DCM • Proprietary and Confidential
Capabilities U.S. Companies Can Bring to Mobile in China Contentand branding – recognized, branded content and existing products (games, apps, etc.) Product design and process – mature product development process, data-driven analysis, A/B testing, understanding virality etc. Technology – mobile handset technology and design, cloud services technology Business models – business model innovation to create new categories DCM • Proprietary and Confidential
Many U.S. Companies Have Partnered Locally for Mobile in China U.S. companies utilizing China partners for local distribution; going at it “alone” can be difficult Source: Industry research DCM • Proprietary and Confidential
U.S. Companies Who Want to Go to China Market Should Consider Partner with right distribution channel and go to market partners • Social networks • Game developers and platforms • Handset providers and carriers Adapt product and monetization to local habits • Virtual goods instead of just “paid apps” DCM • Proprietary and Confidential
Summary Mobile in China is large and growing – mobile smartphone usage, particularly in Android, is growing; China consumers have money to spend Many opportunities – many mobile opportunities in the U.S. have parallels in China U.S. resources – U.S. companies have existing content, products, and resources that can be helpful in China Partner locally – U.S. companies should consider partnering locally to distribute and adapt their products and services for China DCM • Proprietary and Confidential
global connected experienced successful
Cloud and Mobile-Centric Apps Have Investment Traction Within China Cloud – cross-platform device usage increasing cloud and syncing needs • App store • Storage Mobile-centric apps – applications / services need mobile-feature centricity; China internet incumbents copy very quickly • Tablet-focused apps • Mobile advertising • LBS DCM • Proprietary and Confidential
DCM China Portfolio Internet /Digital Media Social and Gaming NYSE: RENN Nasdaq: JOBS NYSE: DANG NYSE: BITA Other SZSE: 002565 Cross Border Software & Services Components NYSE: VIT Nasdaq: FTNT NYSE: SMI Nasdaq: VIMC DCM • Proprietary and Confidential 14