Chinese Big Tech’s metaverse party
Welcome back to Protocol China! Hope you had some delicious tang yuan for the Lantern Festival yesterday. The Winter Olympics are closing this Sunday, and you’ve already heard a lot about the games from us, so we'll talk about something else that also has both enthusiastic fans and cynical observers: the metaverse.
Also in this week’s newsletter: how “Friends” got censored in China, India bans more Chinese apps, and workplace surveillance tools that predict if an employee will quit.
If you don’t already have a plan for the metaverse, are you even a Chinese Big Tech company?
Most U.S. Big Tech firms — besides Meta — are taking it slow with their metaverse plans, but the Chinese tech industry is all about the craze.
Why? Because Chinese users are responding quite well to the metaverse. Last week, a metaverse app called Jelly surpassed WeChat to become the most downloaded app in China’s iOS app store. It was a remarkable achievement given that nobody had really heard of the app before, and showed the viral potential of social media disruptors.
- Jelly allows users to create cartoon, 3D versions of themselves and interact with up to 50 close friends in the app.
- The explosive popularity came with accusations that the app violates user privacy and plagiarizes designs from fashion brands. The app’s developers pulled it on Sunday to make urgent fixes.
- In a recent note, Morgan Stanley predicted China’s metaverse industry will become an $8 trillion market in the future.
Big Tech is taking note. Many companies have significantly invested in forming or acquiring teams to work on metaverse projects.
- Tencent bought a hardware company to make VR headsets, resurrected and upgraded its 19-year-old virtual avatar system, and is forming an “Extended Reality” (XR) team.
- ByteDance bought VR headset company Pico, released two metaverse apps — Paidui Dao (Party Island) in China and Pixsoul in Southeast Asia — and invested in several virtual idols.
- Everyone else is doing something too: Alibaba is making virtual meeting gadgets; Baidu built the first metaverse platform, Xirang; Genshin Impact developer miHoYo just announced its new brand HoYoverse; and the list goes on.
Social media is the most popular form of the metaverse so far. The concept of the metaverse can cover pretty much every technology that we know of, but Chinese firms have moved most quickly to offer uses in fun, game-like social networking.
- This is why Tencent recently reinvented its virtual avatar system QQ Show, a staple in pre-2010 Tencent communication software that has gradually lost its relevance in the WeChat age. (It’s time for me to shine, as I used to spend all my lunch money on QQ Show back in grade school.)
- A recent survey of 1,282 Chinese people by the consultancy iiMedia Research shows that gaming, virtual avatars, personal virtual space and communal virtual space are the most anticipated parts of the metaverse.
- The problem is, once the feeling of freshness wears off, can these metaverse apps make users return? We’ve seen novelty social media apps climb the charts virally countless times, but the users always go back to WeChat in the end.
The Chinese government has Big Tech’s back. Part of why Chinese tech companies are willing to go all-in on the metaverse is because the government has been surprisingly friendly to the idea so far.
- Local officials around the country are voicing their support for the metaverse and courting metaverse companies, as I explained here.
- While most Chinese consumer internet industries are having a hard time right now, the metaverse is one of the few being actively encouraged. The reduced political risks alone can be an important incentive for companies to flock to the metaverse.
— Zeyi Yang (email | twitter)
Strengthening China’s hand in cyberspace has been a longstanding priority during Xi’s tenure, and it even has its own buzzword slogan: 网络强国, translating to “cyberspace superpower” or “strengthening the country through the internet.” The Cyberspace Administration of China frequently used the term until 2019, when mentions dropped off. In 2021, however, “cyberspace superpower” made a small comeback, showing up more consistently and more often. Mentions jumped in the summer and autumn, during CAC’s crackdown, and again after the 6th plenum, which made clear that cyberspace sovereignty is a top priority. If mentions increase further, it may be a subtle signal of more action to come.
A MESSAGE FROM ENVOY
The concept of flex work isn’t new, but its widespread adoption is. Flex work helps all of us find some semblance of control in the middle of an uncontrollable pandemic. Giving options makes people happier and less stressed. This leads to a greater desire to participate, which helps us build our communities and culture.
On Protocol China
Eileen Gu’s defense of China’s firewall got censored. Olympic medalist Eileen Gu commented on Instagram with a pushback against criticism of China’s censorship. But not everyone in China appreciates it, and screenshots of the comment quickly got censored on Weibo. Shen Lu has more.
China’s local governments have turned into metaverse believers. Why did at least 10 Chinese cities suddenly endorse the metaverse, an industry whose future is still under debate? Zeyi Yang explains the appeal of this vague concept to Chinese governments.
Big Brother Beijing
No lesbians or orgasms are allowed in “Friends.” China’s major streaming services recently purchased the rights to air “Friends,” but Chinese fans of the widely popular ‘90s sitcom immediately recognized the show has been heavily censored: All LGBTQ+ content has been cut out, and sexual references are deliberately misinterpreted or removed. Beijing is increasingly tightening its grip on online and entertainment content and reinforcing traditional gender roles. Last September, China’s broadcast and film regulator released a new rule to ban “sissy pants” on TV.
The ride-hailing industry is getting reined in. On Tuesday, eight top ministries in China collectively announced stronger regulations in the domestic ride-hailing industry. The announcement vows a “holistic regulation before, during and after accidents happen,” which includes tougher rules on gig-driver accreditation, algorithmic price discrimination and privacy protection. Many of the new rules are reminiscent of the regulatory and public opinion controversies that DiDi got into in recent years.
China goes global
How is TikTok different from other social media companies? In a YouTube video, former TikTok employees in the United States shared their experiences working for the app and unpacked the secrets of the Chinese-made global sensation. For example, a few years ago, TikTok gave hundreds of millions of dollars to American creators to grow their influence. “At the time, this was highly unconventional in the US, but it worked,” Lucas Ou-Yang, a former TikTok tech lead manager, wrote on Twitter. “[And] YouTube/IG followed suit.”
India bans 54 more Chinese apps. The Indian government, for the fifth time since June 2020, has banned dozens of Chinese apps, citing security concerns, Reuters reported. Most apps on the list are lesser-known utility apps and games, but Free Fire, a globally successful battle royale game developed by Tencent-backed Singaporean company Sea, is also included. Here’s a summary of all 321 Chinese apps banned in India so far.
Straight from China's web
Thinking about quitting? Sangfor is watching you. Every once in a while, employee surveillance software becomes a trending topic on Chinese social media. This time, the discussion is about a spying system developed by Shenzhen-based Sangfor Technologies that can predict whether workers are flying the coop by tracking their web browsing histories and even email outboxes. The publicly traded cybersecurity company quickly went viral on China’s web after a fired tech worker shared screenshots of Sangfor’s surveillance software being used by their employer, according to Chinese tech publication Lianxian Insight.
Hybrid work as a way to boost the birth rate. As the junior year of COVID-19 comes, a hybrid work model is poised to become the new normal in the U.S. But in China, it is still largely a novelty. Shanghai-based Trip.com just became one of the first known Chinese tech companies to push for hybrid work. Liang Jianzhang (James), co-founder and chairman of Trip.com’s board, who is also a demography scholar, said among the benefits of remote working, hybrid work could help increase China’s birth rate. And he hoped other companies would follow suit.
One more thing
What do you get when you combine NFTs, a lootbox and a viral Olympics mascot? Here you are: the officially licensed Bing Dwen Dwen digital pins, just $99 for a box of “epic level rarity art.” Unfortunately, the 500 boxes have all been sold out, but feel free to right-click and save any photo of the ice-coated panda.
See you next week!