Dangdang, GOME In New Alliance, More to Come 国美携手当当网或开启类似合作序幕

By newsdoug on March 2, 2012

Dangdang, GOME in new tie-up I’ll close out the week with a couple of Internet items, starting with a tie-up between home electronics retailer GOME (HKEx: 493) and e-commerce specialist Dangdang (NYSE: DANG), both top firms in their spaces, that has the online world buzzing. The other deal involving a small European acquisition by Internet leader Tencent (HKEx: 700) also looks interesting, mostly because it represents one of the company’s first steps into more developed western markets. Let’s start with the GOME-Dangdang deal, which is still unconfirmed but presumably would see the former move most of its online operations onto the latter’s platform. (Chinese article) This kind of tie-up could be the wave of the future, allowing traditional retailers like GOME to focus on their core real-world shops while letting e-commerce specialists like Dangdang handle their online business. We saw a similar tie-up a couple of weeks ago at Dangdang rival 360Buy, which sold a limited number of cars online in a highly successful tie-up with Mercedes Benz. These kinds of tie-ups could work to everyone’s advantage by helping companies focus on their core business while outsourcing related ones to partners, lowering costs and perhaps cooling down an overheated e-commerce market racked by rampant competition and soaring costs. These kinds of tie-ups will play to the advantage of big players like Dangdang, 360Buy and Alibaba’s Tianmao, formerly called Taobao Mall, forcing many smaller players out of business. Moving on to Tencent, media are reporting the company has acquired ZAM Network, a European site specializing in news and online community for gamers. (English article) The fact that no price was given tells me this deal was relatively small, probably less than $20 million. Nevertheless, it still looks interesting as cash-rich Tencent looks to leverage its expertise as a gaming and community development expert into a western market, following its recent string of similar small acquisitions mostly in developing markets. I like Tencent’s overseas acquisitions approach, as it focuses mostly on smaller targets in areas related to its core strengths as an operator of Internet communities. I get the sense that Tencent is still trying to figure out how to become more active in helping its acquisitions to grow and integrate them into its own operations, which is always a challenge but can offer big rewards if done properly. This latest buy could signal a more aggressive advance by the company into more lucrative but also more competitive western markets, with an eventual aim for tying these offshore assets together more closely with the parent company to create a global network of online community specialists.

Bottom line: A new alliance between electronics retailer GOME and Dangdang could mark the start of a wave of similar tie-ups, helping to lower costs and cool down the overheated e-commerce space.

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