E-Commerce: 360Buy Explores IM, Wal-Mart Gets Serious 京东商城内测即时通讯工具,沃尔玛有意控股一号店

By newsdoug on January 12, 2012

360Buy places misguided bet on instant messaging There are a couple of interesting tidbits from the e-commerce space today, with 360Buy reportedly making a dubious move into instant messaging, as Wal-Mart (NYSE: WMT) prepares to boost its online presence by taking control of its Chinese online partner, Yihaodian. Let’s look first at 360Buy, also known as Jingdong Mall, which has reportedly developed an instant messaging product that it will launch later this year, according to Chinese media reports. (English article) If you had asked me 10 years ago about this move, I would have said that maybe it looked smart, as online shoppers and merchants should theoretically enjoy chatting with each other about their latest favorite products, discounts and so forth, just like any other community. The problem is, online auctions leader eBay (Nasdaq: EBAY) tried just such a move with its purchase of IM specialist Skype in 2005, in what looked like a logical move at the time. Of course, industry watchers will know that move ended in disappointment with eBay selling Skype to Microsoft (Nasdaq: MSFT) last year after failing to reap any synergies from the company. The case here is a little different as 360Buy is a B2C specialist whereas eBay is C2C. But I see no reason why the result will be any different, especially as 360Buy’s IM product will face stiff competition from existing offerings like Skype, Microsoft’s MSN Messenger and Tencent’s (HKEx: 700) popular QQ service. In the other news bit, financial services group Ping An is getting ready to sell some or all of its large stake in online retailer Yihaodian, with Wal-Mart lining up to buy more shares to become the company’s controlling stakeholder, Chinese media are reporting. (Chinese article) Wal-Mart already bought an undisclosed minority stake in Yihaodian last year (previous post), and has made it clear it intends to become a major player in Chinese e-commerce, after largely losing out in its home US market to big names like Amazon (Nasdaq: AMZN) due to its initial dismissal of the potential of online retailing. Yihaodian has already begun to boost its activity following Wal-Mart’s initial purchase, and look for it to become even more aggressive after the world’s biggest traditional retailer takes control, adding even more pressure to a space plagued by rampant competition and non-ending price wars.

Bottom line: 360Buy’s new instant messaging product is bound to fail, while Wal-Mart will add even more competition to the overheated e-commerce market by taking control of Yihaodian.

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