Tag Archives: Dangdang

Latest business news and financial news from E-Commerce China Dangdang Inc. (DANG) by Business expert on China’s market Doug Young

News Digest: March 31-April 2, 2012 报摘： 2012年3月31日-4月2日

By on

The following press releases and media reports about Chinese companies were carried on March 31-April 2. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

◙ Apple (Nasdaq: AAPL) Preparing to Invest $9.76 Bln in Taiwan’s Hon Hai (Taipei: 2317) – Report (Chinese article)

◙ People’s Daily Website IPO Approved, to Launch After Qing Ming Festival (Chinese article)

◙ Dangdang (NYSE: DANG), Gome Online Launch Electronics, Computers B2B2C Platform (PRNewswire)

◙ IBM (NYSE: IBM) China to Build Cloud Computing Center in Jilin (English article)

◙ Sino-Forest (Toronto: TRE) Files for Bankruptcy Protection, Seeks Sale (English article)

Dangdang Cuts Back in Latest Internet Distress Sign 当当网战略收缩

By on

I’ll close out the week with the latest trouble signs for China’s overheated Internet sector, where Dangdang (NYSE: DANG), the country’s lone major listed e-commerce company, is starting scale back some of its operations to save money. Media are reporting on the cutbacks as separate newly released data is showing just how badly bloated the sector became last year, when a flood of new money gushed in from investors buying into the hype of China’s Internet growth story. Let’s look at Dangdang first, as the company is showing all the signs of becoming the latest victim to feel the pinch of super-heated competition in the e-commerce space, where it competes with big names like 360Buy, also known as Jingdong Mall, as well as online retail sites invested and operated by other global giants like Wal-Mart (NYSE: WMT) and Amazon (Nasdaq: AMZN). The latest media reports quote Dangdang CEO Li Guoqing saying his company is initiating a “strategic pullback” in its geographic coverage, in a bid to lower its transport costs. (English article) Li added his company will put more focus in the future on its VIP customers, who obviously offer better returns than the mom-and-pop buyers in smaller cities that are far more expensive to serve. His comments come after Dangdang swung squarely into the red in its latest reporting quarter, posting a net loss of nearly $21 million after earning a $2 million profit in the year-ago period. (previous post) Hyper competition in the e-commerce space is partly the result of a massive influx of money last year that saw both domestic and foreign investors pump tens of billions of dollars into start-ups and larger companies like 360Buy, which made headlines last spring when it received more than $1 billion in new funds. New data just released by venture capital tracking firm Zero2IPO shows venture capital and private equity firms, who tend to focus on start-ups with smaller investments of $1-$10 million, pumped a record $5.8 billion into young Chinese firms last year, with Internet companies emerging as the clear favorites as 276 such companies received $3.3 billion in new funds — a 3.6-fold rise over the previous year. (English article) Those figures only reflect the smaller investments that Zero2IPO tracks, but other firms like group buying sites Dianping and 55tuan received much larger sums in the hundreds of millions of dollars, truly bloating the sector. One executive at Groupon.cn, another group buying site unrelated to US giant Groupon (Nasdaq: GRPN) summarized the current situation nicely in a recent interview, saying the investors who once fawned on all these Chinese Internet companies have suddenly lost their appetite to provide new funds due to concerns of a bubble, causing companies like his to make mass layoffs just to survive. Dangdang seems big enough to survive this bubble in the long term, but look for more short-term pain at Dangdang and just about everyone else in the e-commerce and group buying spaces for the rest of this year and possibly into 2013 until the bubble finally finishes bursting.

Bottom line: Dangdang’s business scaleback and new investment data from 2011 are the latest reflections of last year’s China Internet bubble, whose bursting is starting to accelerate.

Related postings 相关文章:

◙ China IPO Train Hits Bump With Vancl Resignation 中国上市事件撞上凡客诚品CFO辞职

◙  Mid-Sized Firms Suffer First In Internet Bubble Burst 中国互联网泡沫破裂

◙ Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

 

News Digest: March 23, 2012 报摘： 2012年3月23日

By on

The following press releases and media reports about Chinese companies were carried on March 23. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

◙ China Mobile (HKEx: 941) Formally Announces Wang Jianzhou’s Retirement As Chairman (Chinese article)

◙ Dangdang (NYSE: DANG) Plans Strategic Pull-back (English article)

◙ China Unicom (HKEx: 762) Announces 2011 Annual Results (HKEx announcement)

◙ Agricultural Bank of China (HKEx: 1288) Announces 2011 Annual Results (HKEx announcement)

◙ China’s Geely (HKEx: 175) Hopes to Get Volvo JV Approval in H1 (English article)

◙ Latest calendar for Q4 earnings reports (Earnings calendar)

NetEase Name Change: Spin-Off Coming 网易更名：预示业务分拆

By on

So, when is the dropping of the .com suffix from a company’s name big news? The answer: When you’re an Internet veteran like NetEase (Nasdaq: NTES), whose new announcement that it plans to formally change its name from NetEase.com to simply NetEase Inc will fuel expectation that the company is nearing a spin-off of its portal business, its oldest asset since it originally went public in the late 1990s. In a decidedly low-key announcement, NetEase said it has scheduled a rare extraordinary general shareholder meeting for March 29, at which owners of its stock will be asked to approve the name change. (company announcement) China Internet historians will note that NetEase began its life as a web portal operator, competing directly with China’s other 2 web stalwarts, Sina (Nasdaq: SINA) and Sohu (Nasdaq: SOHU). But its path diverged about a decade ago, when it found more success as an operator of online games, which now account for the large majority of its revenue. During that time, the company’s portal business, which includes a popular email service, started to languish, even though it remains a well-known and respected brand to this day. Realizing there may still be some value in the portal business, NetEase made signals last year that it  might spin off the unit in a bid to breathe new life into it by making it stand on its own. (previous post) Since then, industry buzz has also surfaced that the portal could make a nice asset to sell  or put into a joint venture with another Internet site operator, which could use the portal to diversify its own holdings and drive traffic to its core site. The number of such potential buyers could be huge, running the range from social networking sites like Renren (NYSE: RENN) to video sites like Youku (NYSE: YOKU) and perhaps even one or 2 e-commerce sites like Dangdang (NYSE: DANG). I haven’t heard any specific rumors about M&A talks, but this name change by NetEase looks like it is paving the way for the company to make a big move soon. If I were a gambler, I would bet we will see some kind of deal involving the portal business by September. What that deal will be is still probably under discussion, with a sale, joint venture or even a spin-off into a separate publicly listed company all possible. I think the joint venture is probably the most likely, as NetEase would like to retain a stake in this asset since it is so closely identified with the company. At the same time, the joint venture structure would allow NetEase to delegate management of the portal to someone else to let it focus on its core online game business.

Bottom line: NetEase’s pending name change means a spin-off of its portal business is likely in the next 6 months, with a new joint venture the most likely option.

Related postings 相关文章:

◙ NetEase Sharpens Up Messaging in Run-Up to Portal Spin-Off 网易剥离门户网站 再度磨砺电邮服务

◙ NetEase Looks to Reinvigorate Portal 网易似要重振门户

◙ NetEase Makes Buzz With Buyback, Pigs 网易回购股票和养猪重大决策或在即

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 on

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.

Related postings 相关文章:

◙ Group Buy Clean-Up Grows, E-Commerce Next 团购行业洗牌加剧，下一个是电子商务

◙ Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

◙ 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

 

Group Buy Clean-Up Grows, E-Commerce Next 团购行业洗牌加剧，下一个是电子商务

By on

Growing signs are emerging that the much-needed clean-up of the overheated group buying space is well underway, with domestic media reporting a massive closure of websites in January alone, as the stalled IPO for industry leader LaShou remains nowhere to be seen. According to the domestic reports, some 117 group buying sites shut down in January, although the space still remains crowded with nearly 3,800 players still in operation. (Chinese article) Reflecting the cutthroat competition that still remains, other media reports are saying the government regulator has stepped in and limited the size of discounts on movie tickets, in the latest of a string of such moves that look designed to cool down the sector, despite cries of protest from group buying sites themselves. (English article) The latest wave of closures at mostly smaller sites follows a string of layoffs at much larger names like Gaopeng, the joint venture between global leader Groupon (Nasdq: GRPN) and Tencent (HKEx: 700), and Groupon.cn, which is unrelated to the US company. But perhaps the biggest sign of trouble has come from sector leader LaShou, which, like most other players in the space, was reportedly bleeding cash when it filed for a New York IPO last year, only to see the offering indefinitely delayed when regulators reportedly questioned some of the company’s accounting methods and asked for more information. (previous post) A couple of Chinese Internet companies have filed for New York IPOs already this year (previous post), but LaShou’s offering seems to have completely disappeared, with no news on what’s happening since the first reports of trouble first emerged in November. Rival 55tuan has also said it is going ahead with its own planned IPO, but I would be surprised to see that offering go forward until the second half of the year at earliest, if at all. Meantime, the big questions are: who will be the first big victim in the space to close shop; and who is next? In answer to the first question, the situations at Groupon.cn and Gaopeng both sound quite dire, based on the media reports, and I wouldn’t be surprised to see one of them become the first big victim of the cleanup. For the second question, the next big space in big need of a cleanup is clearly e-commerce, where competition has also grown rampant over the last year and most players are reportedly bleeding cash. Dangdang (NYSE: DANG), one top player, reported a large and widening quarterly loss last week (previous post), and news reports regularly appear about the latest company to lay off employees and close shop. Look for the e-commerce cleanup to accelerate in the year ahead, with more layoffs and the closure of one or more larger players likely as well.

Bottom line: The cleanup of the online group buying sector is picking up pace and should peak around mid-year, with e-commerce following close behind.

Related postings 相关文章:

◙ Groupon.cn Becomes 2012 First Group Buy Victim 团宝网员工被放假 中国团购业料将加速整合

◙ LaShou IPO Derails

◙ Group Buying Turmoil Grows With 55tuan Layoffs 窝窝团撤站裁员 团购业整合在即

Dangdang Loss Balloons In E-Commerce Wars 当当网在电子商务大战中亏损严重

By on

Dangdang (NYSE: DANG), China’s only major listed e-commerce site, has just released its latest quarterly results that show its losses ballooning, reflecting the overheated competition in the space that is already starting to hit many smaller companies and could soon even claim a bigger player. Dangdang’s latest report shows its loss jumped to 130 million yuan, or nearly $21 million, in the final quarter of last year, reversing a $2 million profit the previous year. (company announcement) But perhaps more worrisome, the loss was nearly double the company’s loss for the previous quarter, as its margins tumbled amid a series of price wars with archrivals 360Buy, Amazon China (Nasdaq: AMZN) and Wal-Mart-backed (NYSE: WMT) Yihaodian, in an increasingly bloody war that has already started to claim a number of smaller victims. Earlier this week, another online retailer, money-losing Vipshop became China’s first Internet company to file for a New York IPO this year, amid a flurry of chatter that the company was in desperate need of cash that boded poorly for the offering, which I suspect may never happen. (previous post) Another high profile dispute has seen a company named Pinju Wang have to suspend operations after saying it failed to receive promised funds from entities connected to online entertainment specialist Shanda. (Chinese article) Also significantly, 360Buy, one of the biggest forces behind the current price wars, has denied several times this week it has plans to launch a New York IPO this year, even after it announced such plans late last year, only to almost immediately start running into delays. Such denials are always problematic, as Chinese companies will often deny something even when it’s true. But in this case, I suspect that 360Buy may be afraid to proceed with an offering right now for fear of having to release a set of very ugly financials that would show the markets just how badly it is bleeding cash — hardly a way to attract investors. The markets are already showing their displeasure at the rampant competition, bidding down Dangdang’s shares by as much as 10 percent after its results came out, though they bounced back a bit afterwards to close down just 4 percent. Still, Dangdang’s shares are trading at a quarter of their level from just a year ago, and I see further pressure until the current price wars finally start to subside — a turn unlikely to happen until late this year at the earliest.

Bottom line: Dangdang’s ballooning loss in its latest results reflect rampant competition in China’s e-commerce space, with little relief in sight until late this year at the earliest.

Related postings 相关文章:

◙ Vipshop Vies For First Internet Listing of 2012 唯品会欲在赴美上市电商公司中力拔头筹

◙ E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

◙ Dangdang Discovers E-Books — Finally 当当推电子书仍有成功希望

News Digest: February 24, 2012 报摘： 2012年2月24日

By on

The following press releases and media reports about Chinese companies were carried on February 24. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

◙ Apple (Nasdaq: AAPL) Prevails in Shanghai Court, Blocks Proview Bid to Halt IPad Sales (English article)

◙ China’s Minsheng Bank (HKEx: 1988) Gets Approval For H-share Issue (English article)

◙ Dangdang (NYSE: DANG) Announces Q4 and Full Year Results (PRNewswire)

◙ Trina Solar (NYSE: TSL) Announces Q4 and Full Year Results (PRNewswire)

◙ Baidu (Nasdaq: BIDU) Opens Singapore R&D Center to Explore SE Asia Opportunities (Chinese article)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

By on

China’s Internet companies are famous for straying from their core businesses in pursuit of new growth even though such initiatives seldom work, and now e-commerce specialist 360Buy looks set to joint the club with a new travel services initiative. (English article) Nearly ever major Chinese Internet firm has dabbled in areas outside its core competency, with names like Baidu (Nasdaq: BIDU), Sina (Nasdaq: SINA) and Alibaba all making such initiatives, nearly all of which have ended in abysmal failures. None of these companies seem to have noticed that the big western names like Google (Nasdaq: GOOG), Amazon (Nasdaq: AMZN) and Expedia (Nasdaq: EXPE) have succeeded largely by focusing on their core areas, and only expanding into new ones when they can leverage some of their existing expertise. So that makes the latest move by 360Buy, which also goes by the name Jingdong Mall, look perfectly consistent with what other Chinese companies have done. In this case, 360Buy says it will launch a hotel booking service, and that it has already signed up 20,000 hotels in China, Hong Kong and Macau as partners. A company spokesman said the move is part of the company’s drive to become a more diversified online services company, instead of just an e-commerce specialist. Never mind the fact that the online travel services sector is already quite competitive, dominated by Ctrip (Nasdaq: CTRP) and Expedia-controlled eLong (Nasdaq: LONG), or that Baidu also recently entered the space with its investment in a company called Qunar. (previous post) We should also ignore the fact that 360Buy is currently locked in a series of price wars with rivals like Dangdang (NYSE DANG), and that rival Alibaba has learned its lesson and remains focused on e-commerce after its foray into online search ended in a complete disaster several years ago. In fact, I suspect this latest initiative is probably designed to generate market interest in 360Buy, which wants desperately to make a New York IPO to raise much needed cash. 360Buy launched its IPO process last fall, only to see the offering fall victim to abysmal market sentiment due to a series of accounting scandals at US-listed Chinese companies. This new travel services initiative looks like fantasy to me, and an initiative that’s 95 percent likely to fail. But those kinds of difficult odds never stopped a Chinese company from this kind of initiative before, and I would expect to see a few more strange initiatives coming out of 360Buy before it relaunches its IPO bid, probably sometime in the first half of this year.

Bottom line: 360Buy’s new initiative in the travel services space is almost guaranteed to fail, and could be more designed to generate hype in the run-up to a US IPO later this year.

Related postings 相关文章:

◙ E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

◙ Internet Investors Seek Refuge in Big Names 互联网投资者选择性支持中国市场领头羊

 

 

News Digest: February 11-13, 2012 报摘： 2012年2月11-13日

By on

The following press releases and media reports about Chinese companies were carried on February 11-13. To view a full article or story, click on the link next to the headline.

══════════════════════════════════════════════════════

◙ Huawei Makes 20 Mln Smartphones in 2011, Up 5 Times From Previous Year (Chinese article)

◙ Wind Tower Makers in U.S. Hurt by China Imports, Trade Commission Finds (English article)

◙ Dangdang (NYSE: DANG), Gome Form Strategic Partnership – Source (English article)

◙ Geely (HKEx: 175) Announces January Sales (HKEx filing)

◙ Joy Global Completes Tender Offer for International Mining Machinery (HKEx: 1683) (Businesswire)

◙ Latest calendar for Q1 earnings reports (Earnings calendar)

E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

By on

There are a few interesting items out there on the e-commerce space, where local giant 360Buy continues to ready itself for a New York IPO while global giant Amazon (Nasdaq: AMZN) continues its China expansion but is also learning just how price sensitive local consumers can be. Let’s look first at 360Buy, which also goes by the name Jingdong Mall. The company made headlines last year when it received a $1 billion investment from a group that included Russia’s Digital Sky Technologies (DST), which estimated at that time that 360Buy could be worth $10 billion. (previous post) Since then, the company has been locked in a series of cutthroat price wars in the overheated e-commerce space, most notably with Dangdang (NYSE: DANG), causing it to burn through a big portion of its cash and announce last fall it was preparing for a New York IPO, even though it was still losing big money. (previous post) Now Chinese media are reporting the company has been quietly bringing in a new group of professional top-tier managers as it still readies for the IPO despite several delays. (Chinese article) I’m sure that 360Buy desperately needs cash from the IPO, and that it is just waiting for 1 or 2 Chinese companies to make successful offerings before filing its own prospectus. That said, we could see this offering take place as early as March or April if market sentiment improves. Meantime, media are reporting that Amazon is continuing its aggressive China expansion by opening a new logistics center to serve the Tianjin-Beijing area, following its opening of another massive center near Shanghai last fall. (English article) But I was also amused to read another report that the company is adding a delivery fee to all orders under 29 yuan, in what clearly looks like some frustration at the small size of orders from many Chinese consumers. (Chinese article) My advice to Amazon would be to be careful, as it risks raising the ire of Chinese consumers with this kind of move, and everyone knows that upsets Chinese Internet users are quite effective at running negative backlash campaigns.

Bottom line: Cash-starved 360Buy could launch its IPO as early as March, while Amazon’s rapid expansion will add even more competition to the market.

Related postings 相关文章:

◙ 360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

◙ Amazon Name Shift Signals China Ramp-Up 亚马逊改名背后折射中国野心

◙ More Stumbles for Saab Rescue, 360Buy IPO 搭救萨博和京东商城IPO两计划注定命运多舛