Bottom line: Pokemon Go could launch in China as soon as the end of this year, but is likely to get a tepid reception due to its late arrival and fading buzz in other countries.
After months of silence in the world’s largest mobile market, Pokemon Go, the wildly popular mobile game that debuted this summer in most of the world, may be finally coming to China soon. That’s the word coming from new media reports, which are citing the CEO of Niantic, the San Francisco-based developer of the popular title that takes mobile gaming to a new level by adding global positioning (GPS) technology. But the bigger question is whether Pokemon Go will get much attention from Chinese gamers, since it seems to be well past its prime after making global headlines over the summer. Read Full Post…
Bottom line: Yum and McDonald’s are likely to complete spin-offs of their China units by year end, offering a new business template for multinationals that should be encouraged with incentives from Beijing.
Yum names board for China unit
Separate plans by fast food giants KFC and McDonald’s (NYSE: MCD) to spin off their China businesses into separate companies were in the headlines last week, in a new trend that could see other big multinationals take similar steps to address the market’s huge size and unique qualities. Each company is using a slightly different strategy, with KFC parent Yum Brands (NYSE: YUM) choosing a key strategic partner and separate listing for its China unit. By comparison, McDonald’s is simply selling its China stores to a strategic partner in a franchise-style arrangement, while maintaining control of its bigger China operations. Read Full Post…
Bottom line: A new global tie-up between UnionPay and PayPal could auger another alliance by the end of the year that would allow the US company to launch a domestic electronic payments service in China by the end of this year.
PayPal in tie-up with UnionPay
In what must certainly be one of the slowest marches to China of all time, US electronic payments giant PayPal (Nasdaq: PYPL) has just formed a tie-up with UnionPay, operator of China’s largest electronic transactions settlement network. On reading the headline I thought that PayPal had finally cracked the market for domestic transactions in China, following more than a decade of trying to enter the lucrative business. But it turns out the new tie-up only covers cross-border transactions and is mostly for UnionPay’s benefit, meaning PayPal is still being locked out of the domestic China market. Read Full Post…
Bottom line: Apple’s decision to keep iPhone 7 prices in China roughly the same as the 6s is aimed at reversing its sliding sales, but won’t have much effect due to lack of major new features and stiff competition from domestic rivals.
Apple holds firm on iPhone 7 prices in China
Despite skidding sales and early bets that its latest smartphone won’t do well in China, Apple (Nasdaq: AAPL) won’t be giving any bargains to its fans in the world’s biggest smartphone market, according to newly released global prices for the iPhone 7. The move comes as a bit of a surprise, since Apple desperately needs to reverse its recent downward plunge in China, which is now its second biggest global market after only the US. But a number of factors are at play here, including a rapidly devaluing Chinese currency and also Apple’s hesitation to lower its prices into the same realm as some of its fast-rising homegrown Chinese rivals. Read Full Post…
Bottom line: Western Digital’s new China joint venture is unlikely to raise national security objections from Washington, but could add to a looming global semiconductor glut due to an aggressive build-up of the sector by Beijing.
Western Digital China JV moves ahead
Just a half year after Washington killed its plans for a major investment from China, memory storage giant Western Digital (Nasdaq: WDC) is thumbing its nose at US security regulators by moving ahead with joint venture that was part of the earlier tie-up plan. I’m probably overstating Washington’s objections in this instance, since US officials never formally vetoed a deal that would have seen Western Digital sell 15 percent of itself to China’s Unisplendour for $3.8 billion.
Instead, Washington simply said the deal would require a review for national security risk, refuting Western Digital’s earlier view that the sale shouldn’t require such approval. The threat of a review was enough for both sides to decide to scrap the sale, though their latest announcement shows they are continuing ahead with a joint venture that was part of their broader tie-up plan. Read Full Post…
Bottom line: The iPhone 7 series of smartphones will log lower sales in China at their launch than the previous iPhone 6 series, due to minimal changes and similar designs to their predecessors.
iPhone 7 to get tepid China reception
By Xiaohan Tay
Apple(Nasdaq: AAPL) announced the launch of its latest iPhone 7 and 7 Plus on 7 September and there were a few things that stood out. The new iPhone is finally IP67 certified and water resistant, has a better dual camera with a lower aperture, and longer battery life. These are upgraded features that consumers will appreciate. Read Full Post…
Bottom line: The antitrust regulator’s decision to review Didi’s proposed union with Uber China marks the start of a new era of much-needed government oversight of major Internet mergers.
Antitrust regulator starts review of Didi-Uber union
After years of turning a blind eye to rapid consolidation in many emerging high-tech industries, China’s anti-trust regulator has finally adopted a more active posture with its recent decision to review the proposed landmark merger of homegrown car services firm Didi Chuxing with the Chinese unit of US rival Uber. The announcement by the Ministry of Commerce that the deal would require its approval caught Didi and Uber by surprise, since such a review would be the first for a major Internet deal since China rolled out its anti-monopoly law 8 years ago. Read Full Post…
Bottom line: New Teavana-branded drinks at Chinese Starbucks will get a relatively strong reception, prompting the opening of experimental stand-alone Teavana stores in Beijing or Shanghai within a year.
Starbucks launches Teavana drinks in China
Not content with its phenomenal success in China already, trendy coffee chain Starbucks (NYSE: SBUX) is hoping to extend its winning streak in the market with the roll-out of new tea beverages from its sister Teavana chain. This particular move was actually announced back in March, but the two new Teavana-branded drinks just hit Starbucks stores this week, in line with the previously announced schedule for a September launch. Read Full Post…
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: McDonald’s is likely to choose a buyer for its China stores in the next 2 months, while China Foods’ decision to sell its stakes in several Coca-Cola bottling plants is probably a simple business decision that reflects changing priorities.
McDonald’s near a sale of China stores
Two western consumer giants are in the headlines of China’s rapidly shifting corporate landscape, led by word that the list of bidders vying to buy McDonald’s (NYSE: MCD) 1,650 China restaurants has been narrowed to 2. The other headline has one of Coca-Cola’s (NYSE: KO) top China business partners, China Foods (HKEx: 506), announcing its intent to dump its stake in several local bottling joint ventures.
Each of these stories illustrates the vital role that local partners play in the operations of foreign companies doing business in China. McDonald’s has largely owned and operated its thousands of China stores independently since entering the market in the early 1990s. But it wants to find one or more local partners to take over those operations as it moves to a more franchise-style model. Coca-Cola also uses a franchise model for the companies that bottle its trademark drinks that include Coke, as well as Sprite and many others. 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…
