Bottom line: China’s Internet companies are expecting a slowdown this year as the nation’s economy slows, but their shares could see some upside if the declines are less severe than many are forecasting.
Qihoo, Phoenix, LITB see slowing growth
It’s not often that we see any major macroeconomic trends when a diverse group of Internet companies all report results on the same day, since individual company and sector factors often have a big influence. But we’re seeing just such a trend emerge in the new results from the high-tech trio of software security specialist Qihoo 360 (NYSE: QIHU), e-commerce firm LightInTheBox (NYSE: LITB) and online media firm Phoenix New Media (NYSE: FENG), which all are forecasting a sharp slowdown in the first quarter of this year. Read Full Post…
Bottom line: China’s regulators are unlikely to veto the merger of taxi apps Didi and Kuaidi, and should encourage similar consolidation to allow for creation of Internet firms that can be globally competitive.
Yongche accuses Didi-Kuaidi of creating monopoly
Just a day after China’s leading 2 taxi apps announced their plan to merge, a series of observers are voicing concerns that the marriage would be anti-competitive and should be vetoed on antitrust grounds. The sudden debate about the merger of Kuaidi Dache and Didi Dache isn’t too surprising, since it would create a company that would control the vast majority of China’s market for taxi and private car services. But the regulator will need to decide whether such talk of monopoly is justified, since in many ways the newly merged company is still quite small and will also face strong competition from global rivals. Read Full Post…
Bottom line: New online service platforms from Lenovo and Tencent could both do reasonably well, but will face challenges due to inexperience and product limitations, respectively.
Hisense, Tencent join hands in gaming smart TV
The “platform” concept is becoming a hot area in China’s overcharged Internet world, as companies look for newer and better ways to deliver their products and services over a growing number of devices and online channels. That rush is behind 2 of the latest big moves in the space, one from PC giant Lenovo (HKEx: 992) and the other from Internet titan Tencent (HKEx: 700).
Lenovo’s new foray into online products and services has been in the headlines for the last few months, but I’ve finally received some clarification on what exactly is behind its plans for an online platform with the new name of ShenQi. Meantime, Tencent is aiming to boost its leading position in the online gaming space through a new tie-up with household electronics giant Hisense (Shanghai: 600060). That tie-up looks set to produce a new gaming TV that could compete with more traditional consoles from Microsoft (Nasdaq: MSFT) and Sony (Tokyo: 6753). Read Full Post…
Bottom line: Alibaba’s Meizu investment is likely to spark a round of similar buying by major Chinese Internet firms, but could jeopardize Meizu’s access to the latest Android technology from Google.
Alibaba invests in Meizu
E-commerce giant Alibaba (NYSE: BABA) is finally making a smart acquisition to revive its flailing smartphone initiative, with word that it’s investing a hefty amount in the well-respected second-tier player Meizu. This particular investment comes just 2 months after another similar deal that saw security software specialist Qihoo 360 (NYSE: QIHU) form another tie-up with smartphone maker Coolpad (HKEx: 2369), and could auger a new wave of similar investments by Baidu (Nasdaq: BIDU), Tencent (HKEx: 700) and perhaps one or two other cash-rich Internet companies.
The news could provide some new breathing room for companies like Meizu and Coolpad, since they and many of their domestic peers are probably losing big money due to intense competition in China’s overcrowded smartphone space. But this new buying spree could also mean that competition is unlikely to abate anytime soon, since wealthy companies like Alibaba and Qihoo are unlikely to give up easily on their new smartphone initiatives. Read Full Post…
Bottom line: China’s Internet companies should create a code of conduct to ensure fair competition, and the regulator should step in when they abuse their market dominance to promote their other products.
WeChat freezes out Alibaba
Internet giant Tencent (HKEx: 700) was in the headlines for much last week, as reports circulated that it had cleansed its popular WeChat mobile messaging platform of several services from rival Alipay, the popular electronic payments unit of rival Alibaba (NYSE: BABA). Tencent certainly isn’t alone in this kind of “freeze out” behavior, which has become a unique characteristic in China’s brutally competitive Internet landscape. Read Full Post…
Bottom line: China’s overall Internet growth will continue to slow as the market starts to become saturated, with messaging and other mobile services continuing to steal share from microblogging and video operators.
Microblogging decline bites Weibo
A newly released annual government report on China’s Internet is full of good news for the online business community, with most sectors posting double-digit growth as overall penetration neared the 50 percent mark. But a few sectors stood out as distinctive losers in the report from the China Internet Network Information Center (CNNIC), led by the microblogging space that saw a sharp decline in users.
That’s not too surprising due to departures or pull-backs in the space last year by big names like NetEase (Nasdaq: NTES) and Tencent (HKEx: 700), though it certainly doesn’t bode too well for sector giant Sina Weibo (Nasdaq: WB). Another relative loser was online video, which posted only tiny growth last year as the sector came under regulatory assault aimed at reining in companies like Youku Tudou (NYSE: YOKU) and Baidu’s (Nasdaq: BIDU) iQiyi. Read Full Post…
Two big news stories were at the center of heated discussion in of the microblogging realm this past week, led by Alibaba’s (NYSE: BABA) high profile dispute with one of China’s main business regulators over accusations of being soft on piracy. At the same time, Tencent’s (HKEx: 700) roll-out of advertisements on its WeChat mobile messsaging platform also drew lots of comments, as users were suddenly greeted with unsolicited messages in the popular Moments feature that functions much like Facebook’s (Nasdaq: FB) newsfeeds.
Of course no weekly microblogging round-up would be complete without a mention of the media savvy Xiaomi, which was once again creating buzz after an embarrassing gaffe by global marketing chief Hugo Barra. That gaffe saw Barra use a politically incorrect version of a map of India in one of his presentations, showing India as the correct owner of parts of a disputed area of its long border with China. Read Full Post…
Bottom line: The broadcasting regulator needs to rethink the way it treats online video companies and create a uniform set of standards that apply to both to them and traditional TV stations.
Tencent ties up with NBA
Internet giant Tencent (HKEx: 700) made headlines last week with an exclusive deal to broadcast live NBA games over the Internet in China, literally scoring a major victory over its rivals in the hotly contested online video space. But having won that victory over its Internet peers, it’s probably only a matter of time before China’s traditional TV broadcasters call foul and complain that Tencent’s deal will compete with their own live broadcasts of hugely popular NBA basketball games. Read Full Post…
Bottom line: Tencent’s strong early showing for a new WeChat-based advertising service and its investment in a take-out dining service reflect building momentum in its drive to build WeChat into a major new profit center.
BMW, Coke launch ad campaigns on WeChat
A couple of media reports are shining a spotlight on Tencent’s (HKEx: 700) WeChat, and some of the new steps it is taking to monetize the hugely popular service that is rapidly expanding beyond its roots as a mobile messaging service. At the same time, another report from Tencent itself is providing some insight into who exactly uses WeChat. It should come as no surprise that the report shows WeChat’s biggest fans are young and mostly male users, which are some of the most attractive targets for the online merchants and advertisers that Tencent wants to do more business on the platform. Read Full Post…
Internet executives were busy quashing a number of rumors on their microblogs this week, with smartphone sensation Xiaomi trying to stamp out reports of bitter relations with SNS giant Facebook (Nasdaq: FB), and e-commerce giant Alibaba (NYSE: BABA) quashing talk of a major new investment in South Korea. But some of the more interesting chatter focused on the concept of company valuations, and just how widely such valuations can vary for China’s dynamic tech firms.
At the same time, a coming flurry of year-end parties began to kick off in the run-up to the Chinese New Year holiday that’s just a month away. The microblogging realm saw e-commerce giant JD.com (Nasdaq: JD) singing its own praises at the company’s annual party, taking a shot at fast-fading rival Dangdang (NYSE: DANG) in the process. At around the same time, a stumbling Sina Weibo (Nasdaq: WB) also held an annual awards ceremony for notable microbloggers, in its own attempt to remain relevant in the social networking realm. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 17-19. To view a full article or story, click on the link next to the headline.
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