Fujian, a Lesser-known Chinese Tech Hub

Xiamen and Fuzhou are lesser known Chinese tech cities, compared with Beijing, Shenzhen, Hangzhou, Chengdu or Shanghai. Both are part of Fujian, a province on China’s southeastern seaboard historically known for its entrepreneurial spirit.

Though Fuzhou is the provincial capital, Xiamen currently is more attractive to tech startups and talent, being more economically advanced as one of the five Special Economic Zones established in the 1980s. Tech founders in Fuzhou also enjoy the advantage of relatively low labor costs. But talent acquisition is a big problem for entrepreneurs in both cities.

Unlike most other Chinese tech hubs, Fujian has few highly ranked schools in computer science, or even in science and technology in general. Meitu, the fast-growing Xiamen-based mobile photo app developer, is trying to lure employees working at big tech companies in other cities but originally from Fujian province. It has successfully hired staff from companies such as Baidu.

NetDragon

NetDragon, headquartered in Fuzhou and established in 1999, is one of the first and best-known Fujian tech companies. It went public as an online gaming company in Hong Kong in 2008. But to many, it is better known for Baidu’s US$1.85 billion purchase of 91Wireless, a third-party mobile app distributor NetDragon acquired in 2010.

In almost all Fujian-based tech companies I’ve visited or know of, there are key managers who came from NetDragon. Ma Zhijun was one of the first language specialists NetDragon hired to help export its games overseas. Ma, an Arabic-speaking Muslim, and his team successfully took several NetDragon PC games to the Middle East. After leaving NetDragon and briefly working at a mobile game company, Mr. Ma co-founded SoarDragon which focuses on localizing Chinese mobile games and exporting them to the Arabic-speaking countries. Since its licensed games generate healthy revenues, SoarDragon has begun developing mobile games in-house and other utility apps. SourDragon’s goal is to become one of the most highly regarded internet service providers in the Middle East.

Cai Wensheng

Cai Wensheng (also known as Mike Cai) is associated with many Fujian located tech companies, including Meitu, 4399 (casual game platform), Feiyu Technology (game developer) and Feibo (social marketing agency). Briefly, after moving back to China from Southeast Asia in 1999, he made a fortune from internet domain name investment and then began to invest in Chinese tech startups. Besides those located in Fujian, he has also invested in 58.com (NYSE:WUBA), Baofeng (online video streaming and tools), CNZZ (online data service).

There are many stories about how shrewd an industry insider Cai is. In 2003 he founded web directory 265.com, a clone of Hao123.com, launched in 1999 and acquired by Chinese search giant Baidu in 2004. About a year after Google entered mainland China, Cai successfully sold it to Google China, then a direct competitor of Baidu.

What’s interesting is Cai later invested in 4399, the next startup by Hao123 founder Li Xingping, and then became chairman of the board. Though Li isn’t originally from Fujian, 4399 is located in Xiamen. 4399 is one of the most popular small casual game platforms in China. More than 400 million users now consume in-house and licensed games on the platform. The company filed for IPO in December 2014. If successful, 4399 will be the second gaming company invested by Cai to go public, after Feiyu Technology which was listed in Hong Kong in early December 2014.

Cai now serves as chairman of Meitu, the photo app developer based in Xiamen. Starting up in 2008, the company has developed some of the most popular photo editing and sharing apps in China, with 800 million users combined, and is expanding overseas.

Rising Stars

Apart from Meitu, other rising stars in the Fujian tech scene include MeetYou (Xiamen), Wifibanlv (Xiamen) and Babybus (Fuzhou).

MeetYou and Dayima are the two of China’s biggest woman’s health apps. BabyBus is one of the few Chinese app developers making educational content for markets outside China. Wifibanlv (or Wifi Partner) provides a network of WiFi hotspots for free.

Editing by Mike Cormack (@bucketoftongues)