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Talk about cutthroat competition. Chinese Social networking behemoth and shameless facebook clone Xiaonei.com was accused of attacking direct competitor and equally shameless facebook clone Tongxue.com. Tongxue released a press statement (in Chinese) decrying the cyber attack as irresponsible and urging competitors to exhibit mutual respect.

Its interesting to think about the Chinese Social-Networking-Service (SNS) space. SNS remains very much a college-oriented, and white collar worker space. Also, more than their English-speaking peers, Chinese web users enjoy an integrated SNS. For example, Tongxue offers streaming radio from many terrestial Chinese stations as well as video. The coming showdown between Xiaonei and Tongxue is sure to be a clash of the titans to be watched closely. Which service will be able to move away from its roots as a facebook clone and customize its user experience to suit the preferences of Chinese users more quickly?

In this struggle for supremacy, Xiaonei is the clear leader at present. Xiaonei justifies its previous 550 million USD funding round by having 22 million users from over 3000 Chinese universities and over 1500 foreign universities. Such is the optimism surrounding Xiaonei that there is already talk of going public. Tongxue on the other hand has recently just secured 2.2 million in funding from Tano Capital LLC, in recognition of the vast expansion potential for Chinese SNS.

The insular nature of the Chinese internet sphere, due to language barriers and also the Great Firewall of China, effectively protects Chinese web start-ups from their English language counterparts. Watching the Chinese internet sphere is almost like watching the internet grow anew. Watch this space for more updates.

This post today can almost be called a stock tip. What would you do if you were one of the largest battery manufacturers in China for cell phones and were looking to diversify?

Which of the following moves would you choose to implement and secure your company’s future?

1. Research into super-efficient batteries that will indirectly help cut back on emissions from power plants.
2. Buy up electronic components manufacturers to capture more of the value-added chain in producing electronic devices.
3. Diversify and enter the car manufacturing market with one of the country’s first hybrid cars.

If your razor-sharp business acumen led you to pick option three, congratulations! Your brand of strategic leadership is worthy of a massive capital injection from Warren Buffett.

Chinese companies are not known for the build quality, or the safety, of their products. But with this baby from BYD Auto already in mass production, there is every chance that this could soon change.

Here’s an observation about modern life. Much of what we love comes in small portions. Happy Meals with toys from McDonald’s come in sets. “Collect all 7!” Sitcoms come in seasons of 20 episodes, and even Harry Potter came in 7 books. Would it now surprise any of you, really, if I told you that games are now produced in episodes?

“American McGee‘s Grimm” is an episodic game with 23 episodes of dark, twisted fun. In it, the titular character “Grimm”, is a foul, wicked little bearded dwarf who befouls anything he touches. In each episode, Grimm uses his putrid, filthy influence on his surroundings to turn our modernized, sanitized versions of fairy tales into the vile, cautionary tales of days-gone-by. It is actually true that modern fairy tales were mostly gruesome, disgusting tales used to scare boys and girls into behaving themselves. Don’t be surprised if your favourite fairy tale as a child turned out to be a harrowing story of sex and gore.

Gruesomeness aside, American McGee’s Grimm is a pioneering work that has started to mature. There is even talk recently of turning it into a graphic novel. Aspiring entrepreneurs should take note. Your next favourite sitcom might turn out to be an episodic game.

What to know how Alibaba will survive from the economic downturn?
See the most recent interview from FT.com at www.ft.com/jackma

I happened to chance upon this report today. Click on the link if you’ve never seen an uber-adorable Prada Panda before. I dare you not to.
Once you get past the panda though, the report by Liana Cafolla is an absorbing one.

There is a great deal of disagreement among economists whether China’s phenomenal economic growth rate is inflated by overzealous party officials. However, for luxury goods, there is no such ambiguity. Montblanc Asia’s chief executive Jim Siano is quoted as saying growth is ‘phenomenal’. Liana goes so far as to say that a “desire for status and embedded gift-giving culture” create “frantic levels of spending.”

Curious, I searched and found a KPMG report on luxury. KPMG conducted a survey of Chinese consumers in 15 mainland cities. The report states, “On average, survey participants in the report recognised 64 different luxury brands compared to 52 in the 2006 survey. In Shanghai, this rose to 73 brands, while the figure for tier-two cities stood at 62 brands.” The full, fascinating report can be read free here.

A report on Chinese website ic98.com states, in 2007, Chinese consumption of luxury goods reached 8 billion USD, representing 18% of the world market. 13% of the chinese population are luxury goods consumers.
The report continues, in China, the luxury consumer is usually an educated yuppie between the ages of 25-40, with monthly income of between 5-50 thousand yuan. This is in stark contrast to the west where Forecast, a Shanghai-based think tank, claims that luxury consumers are middle-class individuals between 40-60 years of age.

Why is this fascinating from an entrepreneurial point of view? The answer is startlingly simple. Name me just one Chinese luxury brand. Can you? I thought not. It’s just a vacuum waiting to be filled.

I recently returned to Singapore in July from a year long internship in Shanghai. While there one of the most remarkable things, for me, was how vibrant and developed the web ecosystem was. There was a local chinese clone of every website of significance, as far as I could tell. Search engine – check, blogs – check, video-sharing site – check, google even goes the extra mile to make their search engine easily remembered by non-english speakers by buying the domain name “http://g.cn/” . So, it might come as a little bit of a surprise that there isn’t a chinese clone of craigslist, reddit or digg of any significance.

Even now, things have hardly changed. Granted, Baidu has a sort of bookmark service now that seems to be on that track, though it looks nothing like reddit, and QQ has a bookmark service that bears a lot of similarities with digg, they still aren’t anywhere near as successful as they could be. Given the enormous popularity of QQ (by far China’s most popular IM client), QQ bookmarks is pitifully insignificant.

The only 2 faithful clones of digg are diglog and feedou. With user traffic in the tens of thousands though, they are probably not going to attract too much attention anytime soon. What then is the reason for the dearth of popular digg clones? Is it the web surfing patterns of chinese netizens? Do they prefer to have all their web services provided by one company like Baidu, Yahoo or Sina? Is it a lack of interesting content in chinese to be shared?

These are questions that are intriguing. Digg is losing money, but it isn’t a foregone conclusion that a chinese clone will meet with the same fate. After all, QQ charges its users for even the most basic things like emoticons, buyable with QQ coins.

We know that chinese users will spend online, and we know that sharing online is an obvious idea. Now why aren’t we seeing it happen?

We learn something new everyday. If this Financial Times article is correct, then the NOC program I just spent a year on was an utter mistake.

The article claims and shows that Wenzhou, a small city 250km south of Shanghai, and surrounded on 3 sides by mountains, is the true hub of entrepreneurship in China. In a city of 7.9 million people, there are over 300,000 small businesses. That works out to one startup for every 26 persons. The ratio is easily even smaller once we factor out the young and the old, as well as workers in large firms and civil servants. Granted we’re not talking about Web2.0 in this town, but the fact remains that local companies like Chint and Delixi undeniably a true testament to the entrepreneurial spirit of the locals.

It makes one wonder what the ingredients for nurturing an entrepeneurial hub are. Numerous explanations have been put forward by academics within China. Some attribute Wenzhou’s success to its freedom from state influence due to its remoteness, others say its the protestant work ethic. Whatever the case may be, it is definitely food for thought for Singapore bureaucrats who seek to do the same to Singapore. I for one will be planning my next holiday to China rather more differently now.