Bottom line: Microsoft’s spin off of its MSN China portal to a management-led group looks similar to the sale of its cellphone patent portfolio to Xiaomi, and is aimed at handing off underperforming assets to strategic partners.
Microsoft spins off MSN China
Microsoft (Nasdaq: MSFT) chief executive Satya Nadella is making one of his biggest strategic moves in China two years after taking over as head of the company, with word that the software giant is spinning off its local MSN web portal to a management-led group. This particular development actually first surfaced back in May, when reports emerged that Microsoft planned to closed down the Chinese version of its MSN portal that is a central part of its global Internet strategy. Apparently those reports were premature, and the company instead will continue to operate this meager part of its China Internet presence through a third-party partner. Read Full Post…
Bottom line: Baidu’s bitcoin advertising ban represents a more proactive stance that major Chinese firms are starting to take towards controversial business, as they seek to boost their images and avoid scandals.
Baidu bans bitcoin ads
Online search giant Baidu(Nasdaq: BIDU) rippled through the headlines last week with the relatively small news that it would no longer take advertising business from services that hosted trading in bitcoin and other virtual currencies. While seemingly minor on the surface, the move had larger significance due to the controversial nature of virtual currencies and Baidu’s decision to take action without government prodding or the threat of a scandal. Read Full Post…
Much of the conventional wisdom and press commentary about Uber’s recent decision to sell its China business to Chinese rival Didi portrayed the move not just as a defeat for Uber, but a broader setback for all American tech companies in China.
The New York Times described the development as “a stark signal of how difficult it is for American technology companies to thrive in China,” while the Financial Times wrote that Uber had become “the latest in a succession of US Internet companies that have tried to conquer the China market, and walked away with much less than they had hoped for.” Read Full Post…
Bottom line: Meitu’s Hong Kong IPO plan is likely to get a positive reception due to strong sentiment for Chinese tech companies, while a plan to list US-focused Media.net in China via a backdoor IPO is likely to fail due to numerous obstacles.
Meitu eyes HK listing by year end
A couple of IPO stories are in the headlines, including what could become the largest listing for a Chinese tech firm this year by Meitu, operator of an app that helps users make self-enhanced selfies. The other deal looks quite unusual, and has a Chinese investor group buying US advertising services startup Media.net, with plans to list the company in China through a backdoor-style process. In all my years covering China this is the first time I’ve seen this kind of deal, which looks both interesting but also quite speculative.
Each of these deals is quite different, and both have one or two notable points. Meitu looks most notable not only for its size, which could be up to $1 billion, but also for its location. IPOs for this kind of high-tech company have traditionally come in New York, and more recently on China’s Nasdaq-style ChiNext board, but are seldom seen in Hong Kong. Read Full Post…
Bottom line: Lufax’s reiteration of plans for an IPO by year-end indicate China’s regulator may increase new listing approvals as the market stabilizes, while progress in Yunda’s backdoor listing also may reflect a relaxing attitude by the regulator.
Lufax sticks to plan for IPO by year-end
After an anemic flow of domestic IPOs so far this year, building pressure and a stabilizing stock market may finally be prompting the regulator to step up the pace as we head into fall. That appears to be the thinking at Lufax, China’s leading P2P lender, which says it is still targeting an IPO by the end of this year, after previously indicating China would be its first choice for such a listing. Meantime, an easing of the IPO climate won’t come soon enough for parcel delivery firm Yunda, which has joined many of its peers in moving ahead with a backdoor listing plan in Shenzhen. Read Full Post…
Bottom line: The scrapping of a buyout offer for Momo could reflect growing obstacles to re-listing in China, and could presage the abandoning of more similar buyout bids for US-listed Chinese companies.
Momo abandons privatization bid
In a relatively surprising development in the wave of privatization bids for US-listed Chinese companies, social networking app operator Momo (Nasdaq: MOMO) has just announced a group proposing to buy out the company has withdrawn its offer. No reason was given for the reversal, and instead Momo used the official announcement to focus on its latest financial results and outlook. The move came as a surprise because the buyout deal had very strong financial backing from a group that included e-commerce giant Alibaba (NYSE: BABA) and venture capital giant Sequoia Capital. Read Full Post…
Bottom line: Yihaodian could regain momentum in China’s online grocery market under an aggressive 1 billion yuan promotion by new owner JD.com and strong support from former owner Walmart.
Yihaodian launches 1 bln yuan promotion
One major obstacle for foreign companies in China is their reluctance to engage in the kind of cut-throat price wars that are all too common in many of the nation’s huge but extremely competitive emerging markets. Such reluctance was a big factor behind the disappointing progress for Walmart’s (NYSE: WMT) local e-commerce venture Yihaodian, and prompted the US retailer to sell the company in June in exchange for shares of local e-commerce powerhouse JD.com (Nasdaq: JD). Now we’re getting word that JD is preparing to position Yihaodian as its flagship online grocery store, and is getting set to launch a massive price war in its bid to achieve that target. Read Full Post…
Bottom line: A blossoming price war between Alibaba and JD.com in the online grocery space could stretch out for the next year, costing each hundreds of millions of dollars on promotions as they battle for market share.
Alibaba to spend billions on Tmall Supermarket
Just days after e-commerce partners JD.com (Nasdaq: JD) and Walmart (NYSE: WMT) revealed a major promotion for their online grocery business, sector leader Alibaba (NYSE: BABA) is firing back that it will outspend its smaller rivals in the hotly contested space. This sudden price war in online groceries space looks remarkably similar to another battle that broke out nearly a year ago, when Alibaba launched another major promotion against online grocer Yihaodian, Walmart’s main China e-commerce site at the time. Walmart appeared to later concede defeat in that battle just two months ago when it sold Yihaodian in exchange for shares in JD.com, Alibaba’s chief rival. Read Full Post…
Bottom line: Sina’s latest financials show it could be benefiting from recent woes at Baidu, while JD.com’s results show its growth is slowing as it moves towards its important goal of becoming profitable.
Sina jumps on strong profit growth
Two of China’s top Internet companies have just reported their latest quarterly earnings, with web stalwart Sina (Nasdaq: SINA) wowing Wall Street with new numbers that show its Twitter-like Weibo (Nasdaq: WB) service may finally be gaining some traction. Meantime, investors were less impressed by e-commerce giant JD.com (Nasdsaq: JD), which continued to post strong revenue growth but remained squarely in the loss column. JD tried to comfort investors by saying its operations are now quite profitable on a non-GAAP basis, but that didn’t seem to change sentiment too much. Read Full Post…
Bottom line: New global initiatives by Alibaba’s cloud and electronic payments affiliates look smart by targeting Chinese customers abroad, but may only stand a 50-50 chance of longer-term success due to fierce global competition.
AliCloud global expansion moves ahead
Following lackluster results for initiatives involving its core e-commerce business outside China, Alibaba (NYSE: BABA) is pushing ahead on the global stage with new moves for 2 of its other areas with big growth potential. One of those has the company unveiling a global strategy for its cloud services unit, AliCloud, which includes a tie-up with former Taiwan smartphone superstar HTC (Taipei: 2498). The other involves Alibaba’s Ant Financial affiliate, which is rolling out its core Alipay electronic payments service in Europe. Read Full Post…
Bottom line: Ele.me’s new fees will raise the ire of restaurant partners on its platform but is unlikely to produce a mass revolt, and reflects growing pressure on the company to find new revenue sources and become profitable.
Restaurants grumble over new fees from Ele.me
Signs of stress are showing up at leading online take-out dining service Ele.me, which is facing howls of protest from its restaurants partners over a major new fee. This kind of mass complaining is relatively common in China’s cyber realm, especially in industries where online companies are losing money and desperately looking for new revenue sources. The take-out dining industry certainly fits that description, as stiff competition from names like Baidu (Nasdaq: BIDU) and Meituan-Dianping forces companies like Ele.me deeply into the red. Read Full Post…
