Anti-monopoly regulator may need to brandish veto stamp
After years of fragmentation, China’s Internet has undergone a sudden and radical overhaul over the past year, with 3 major firms emerging as major consolidators. The frenzy of new tie-ups and acquisitions has been a welcome development, helping to cool overheated competition in a wide array of sectors where most companies were losing money.
But with the emergence of Alibaba, Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) as the 3 major consolidators, China’s anti-monopoly regulator should start to give closer scrutiny to future deals to avoid too much reduction in the competition necessary to ensure future innovation and consumer choice. Such scrutiny could and should ultimately lead to the veto of some future deals, especially larger ones, by regulators who need to become more assertive in the space. Read Full Post…
Two of China’s fastest rising tech stars are getting ready to take on the world, with word that security software specialist Qihoo 360 and trendy smartphone maker Xiaomi are both launching signature products outside their home market. Xiaomi’s formal move into Singapore marks the beginning of a broader global growth push, as the company looks to replicate its cool and trendy image and business model in both Asia and the west. Meantime, Qihoo is preparing to showcase its security software at one of the world’s top telecoms shows later this month, saying it wants to take the products global. Read Full Post…
Reports of major new funding for online travel site Tongcheng are casting a spotlight on a sudden rise in competition for the sector, which for years was dominated by industry leaders Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG). The trend looks a bit worrisome to me, hinting at a new looming round of price wars and potentially some consolidation. Ctrip could well become a leader of such consolidation if it occurs, since the company now has a huge cash pile of nearly $2 billion following its raising of $800 million through a highly popular convertible bond offer last fall. Read Full Post…
UPDATE: Since originally writing this post, Tencent has announced it will purchase 20 percent of Dianping for an undisclosed amount. (company announcement)
Talk involving major new investments in online clothier Vancl and restaurant ratings site Dianping was buzzing through the blogosphere this past week, reflecting the many new partnerships that are quickly forming amid intense competition plaguing the overheated Internet space.
Vancl has been racing to find profits before it runs out of cash, and recently received a lifeline in the form of $100 million in new funding from a group led by Lei Jun, the marketing-savvy co-founder of trendy smartphone maker Xiaomi. Lei Jun and Vancl CEO Chen Nian engaged in a round of online banter this week on their microblogs that could hint at some of the new directions and tactics that Vancl will take as it searches for the elusive business model that can move it into the black. Read Full Post…
The group of big Chinese web firms driving a recent wave of M&A has a new member, with word that fast-rising e-commerce site Vipshop (NYSE: VIPS) has made its first major acquisition. The move marks the latest step in consolidation in China’s overheated e-commerce sector, which is crowded with around a half dozen major players and many smaller ones that are mostly losing money. Vipshop is one of the few players that is quite profitable, even though it doesn’t have a huge cash pile as it spends heavily to quickly build up its business. That leads to my next prediction that we could see the company raise some money soon through a share or bond sale, as it seeks to build up a war chest to help fund future acquisitions. Read Full Post…
Barely a week into the Lunar New Year, word of 2 new investments by Alibaba shows that China’s leading e-commerce firm has no intent of slowing its recent buying binge as it marches towards its highly anticipated IPO. The far bigger of the 2 deals would see Alibaba purchase 72 percent of digital mapping company AutoNavi (Nasdaq: AMAP) for $1.6 billion, giving it full ownership after Alibaba bought 28 percent of the company last year. Meantime, media are also reporting that Alibaba and venture capital firm IDG have invested a more modest sum of about $25 million in Inman, an online clothing brand that sells over Alibaba’s popular online shopping malls. Read Full Post…
Things have certainly changed over the last 3 years in Lunar New Year messaging, as reflected by the flood of tech executives using their microblogs to weigh in on Tencent’s (HKEx: 700) launch of a red envelope gift function for its popular WeChat platform over the holiday period. Most of the comments were admiring and even in a slight state of awe at the big success of WeChat’s hongbao product, which lets users send gift money to their friends and relatives over the popular instant messaging platform. But at least one post from Alibaba smelled of sour grapes, and a Sina (Nasdaq: SINA) executive also took a backhanded swipe at the rival to his company’s own Weibo microblogging service. Read Full Post…
A flurry of news is coming out of New York as we approach the Lunar New Year, bringing some relief for anxious Chinese companies and their auditors in their ongoing stand-off with the US securities regulator. In the second major development in that standoff this week, the US Securities and Exchange Commission (SEC) has dropped a lawsuit aimed at helping it get audit documents for a Chinese client of Deloitte Touch Tohmatsu‘s China unit. That should be good news for Chinese listed companies in New York and also for new IPO candidates, including software giant Kingsoft (HKEx: 3888), which has just announced plans for a New York IPO for its security software arm. Read Full Post…
Online professional networking leader LinkedIn (NYSE: LNKD) took a big step towards entering the lucrative but tricky China market last week when it created a new China chief position and filled it with an industry veteran as it explores a formal service launch. The move was just the latest in the company’s slow and careful approach to China, and could boost its chances of success in a market that has proven difficult for other global giants like Google (Nasdaq: GOOG), Yahoo (Nasdaq: YHOO) and eBay (Nasdaq: EBAY). Read Full Post…
App stores have suddenly become a hot ticket in China’s online space, with word that 4-year-old operator Wandoujia has just landed $120 million in funding from a group led by Japanese tech investor giant Softbank. The deal comes just a half year after online search leader Baidu (Nasdaq: BIDU) acquired another app store, 91Wireless, for more than $1 billion, leading me to wonder if Wandoujia could soon become a target for one of China’s cash-rich and recently very acquisitive top Internet companies. Such a purchase would certainly make sense for names like e-commerce leader Alibaba and social networking giant Tencent (HKEx: 700), which, along with Baidu, are all spending heavily to build up their mobile Internet business. Read Full Post…
China’s top 2 Internet companies are starting to look increasingly alike, with the latest word that leading e-commerce company Alibaba is challenging social networking (SNS) rival Tencent (HKEx: 700) in the mobile gaming space. Alibaba’s move is just the latest into a new area for this hyperactive company, which spent much of 2013 in a series of major business initiatives and acquisitions as it prepares for a blockbuster IPO. In separate but similar news, media are reporting that Alibaba may be in talks to buy a stake in software security specialist and fast-rising search firm Qihoo 360 (NYSE: QIHU), though I have my doubts about that particular rumor. Read Full Post…
