Page 74 - How China Is Winning the Tech Race

the number of times people click on a Web page. Jeremy Goldkorn at Danwei
points out that Chinacars has hit a home run because, “Cars are a very popular
subject among men in China, and men are the heaviest Internet users.”
Growing competition is a potential speed bump, though. Goldkorn ticks
off at least six rivals going after the popular auto service space. The large
Chinese Internet portals Sina.com
and Sohu.com have started their
“Cars are a very popular subject among men own automotive channels and have
in China, and men are the heaviest Internet soaked up one-quarter of the $50
users.” million in auto ads on the Web. A
close competitor is the two-year-
Jeremy Goldkorn,
old United Automobile Association
publisher, Danwei
(UAA) in Beijing, which has 1.2
million members compared with
Chinacars at 1.5 million (and the
AAA at 43 million). In June 2007, UAA nabbed $21 million in venture capital
from the top-tier firm Kleiner Perkins Caufield & Byers and the Chinese
venture outfits Legend Capital and Ymer Venture Capital. Accelerating to
stay in the lead, Chinacars recently teamed with China’s Tom Online to
provide rankings and online stores to its new partner’s WAP (wireless appli-
cation protocol or interactive channels on mobile phones) sites.
Chinacars has piggybacked on the AAA idea, but it’s strictly a com-
mercial enterprise, whereas the AAA is a nonprofit organization with 66
profit-making chapters nationwide. There’s no exact match to Chinacars in
the United States, although it seems the full-service auto concept would work
well in America. Automotive Web sites in the United States are more spe-
cialized than the full-service Chinacars. Autobytel.com is an online car-buying
site, Edmunds.com is known as a resource for buying and selling vehicles, and
eBay Motors is an auction-style market for buying and selling vehicles.
Like many other Chinese “returnees,” Zhang has borrowed heavily from
Silicon Valley’s entrepreneurial culture to mold Chinacars. He used his quanxi
(connections) to raise initial funds from the Wanxiang Group, the largest car
parts maker in China, and then received $33 million from Goldman Sachs
and Granite Global Ventures. As a motivational tool, Zhang granted stock
options to one-third of his staff, who are looking to cash out when the firm
goes public. A perennial issue he’s faced is finding qualified managers to fill

48 SILICON DRAGON