Bottom line: Toys “R” Us’ big China expansion plan contrasts with pull-backs and departures for many major western retailers in the tough market, and could be aimed at generating buzz in the run-up to a potential IPO.
Toys “R” Us steps up China expansion
China’s economy may be headed for a rapid slowdown that casts a chill on the retail sector, but don’t tell that to US veteran Toys “R” Us. The retailer whose name is synonymous with children and fun has disclosed it’s planning an ambitious China build-up that will see it increase its local store count by 30 percent this year, even as other major western retailers are closing shops and even leaving the difficult market.
All that leads to the question of whether Toys “R” Us really intends to open so many new stores at a time of uncertainty, or whether this China toy story is part hype with other motivations. If the latter is the case, this particular story could be designed at least partly to generate some excitement around an otherwise boring traditional retailer, as it gets set to potentially re-list in New York more than a decade after being privatized. Read Full Post…
Bottom line: Weibo’s elimination of the 140-character length limit for posts looks like a good strategic decision, as it consolidates its position as an alternative news source to traditional state-owned media.
Weibo lifts length limit for posts
Social networking (SNS) leader Weibo (Nasdaq: WB) is taking a radical new step and dropping the rule that strictly limits the length of microblog posts, in its bid to remain relevant and avoid being marginalized by dominant rival WeChat. The move is quite bold on the one hand, but also probably long overdue, in a world where people have many SNS options that provide more flexibility in the kinds of information and messages they share online.
The decision looks broadly positive for Weibo, which has evolved into an informal news source for many of its 200 million users. The company operates a service nearly identical to American SNS pioneer Twitter (NYSE: TWTR), and rapidly rose to become the clear leader in the space after Twitter itself was blocked in China in 2009. Read Full Post…
Bottom line: Billionaire Guo Guangchang’s new sporting venture reflects his desire to move into entertainment, and also to win goodwill by supporting Beijing’s initiative to build up Chinese athletics.
Fosun’s Guo in sports tie-up with Europe’s GestiFute
After his brief and somewhat ominous disappearance last month, the man once called China’s Warren Buffett is back in the headlines, with word that Guo Guangchang has joined the growing ranks of Chinese billionaires making major investments in sports. In this case Guo is teaming up with Portuguese “super broker” GestiFute, whose main business is engineering the deals that allow European players to move from one soccer club to another. Among its deals, GestiFute was involved in previous transfers involving superstar Cristiano Ronaldo, showing the company is itself a major player in the business.
This particular deal is just the latest by some of China’s richest men and biggest private companies, which have suddenly discovered a huge appetite for all things sports. Previous investors in the growing trend include Alibaba (NYSE: BABA) founder Jack Ma and Wanda Group chief Wang Jianlin, who are 2 of the country’s wealthiest individuals. They also have been joined by a growing number of entertainment-related companies like online video firm LeTV(Shenzhen: 300104) and electronics retailer Suning (Shenzhen: 002024), which also owns a major online video site. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 21. To view a full article or story, click on the link next to the headline.
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Bottom line: TCL’s smart TV alliance with LeTV brings together 2 strong names and is getting off to a good start with a strong lineup of new products, but could have trouble over the longer term due to the rapidly changing industry.
TCL announces new products with LeTV
TV stalwart TCL (Shenzhen: 000100) has just announced an expansion of its young partnership in smart TVs with industry high-flyer LeTV (Shenzhen: 300104), in what could become the first of an earlier wave of such tie-ups to finally gain some traction. Many of the similar tie-ups were announced in rapid succession a couple of years ago, as newer online video companies rushed to forge partnerships with traditional TV manufacturers.
The idea was that the TV makers would produce customized products optimized to offer video services from a particular Internet company, creating a new generation of online-connected smart TVs that could compete with traditional cable TV services. But it seems many of those alliances never really got very far, and these days many video companies have decided to focus instead on making special set-top boxes that be easily mounted on any TV. Read Full Post…
Bottom line: Sina’s latest board reduction to just 5 members looks like a strategic move by Chairman and CEO Charles Chao, as he prepares a sale that will give him a major executive position at his company post-merger.
Sina board shrinks to just 5 members
The share price isn’t the only thing shrinking these days at leading web portal Sina (Nasdaq: SINA). The board of one of China’s oldest Internet companies has also just undergone a major reduction, with 2 of its 7 members leaving without any sign of replacements. I’m not extremely familiar with Sina’s board and its dynamics, but it does seem like 5 members is quite small for a company of Sina’s size and could reflect a power play by longtime Chairman and CEO Charles Chao.
Such a play could be prelude to the sale of Sina to a rival, with e-commerce giant Alibaba (NYSE: BABA) as the most likely candidate. I’ve been predicting such a sale for a while now, and this latest move looks like the latest signal that Chao could be clearing out board members who might oppose such a deal. With just 5 members left on the board, Chao would only need 2 to agree with him to approve a deal that he would personally negotiate. Read Full Post…
Bottom line: New scandals involving fraudsters using Baidu and Ctrip platforms highlight a major problem for major web companies from third-party merchants, but are unlikely to have a big impact on their business.
Frausters make headaches for Baidu, Ctrip
Two new scandals involving leading travel services provider Ctrip(Nasdaq: CTRP) and top search engine Baidu (Nasdaq: BIDU) are shining a spotlight on the daily battle China’s top Internet firms must do with the hundreds of fraudsters lurking online. The first case has Baidu dealing with fraudsters who tried to sell products on its Tieba social communities service, while Ctrip has landing in trouble after 2 people bought invalid tickets from independent travel agencies on one of its open marketplaces.
The biggest case for this kind of fraud came a year ago, when China’s commerce regulator released a report showing huge volumes of trafficking in pirated goods on the Taobao marketplace operated by leading e-commerce site Alibaba(NYSE: BABA). In all of these cases the fraud isn’t being directly committed by the big-name companies, but rather by small, third-party merchants doing business on their sites. But the big Internet names are realizing that they are ultimately responsible for the reliability of all transactions taking place on their sites. Read Full Post…
Bottom line: Lenovo’s plans to turn around its struggling smartphone business lack focus and are likely to fail, which could ultimately result in the exit of longtime chief Yang Yuanqing this year.
Lenovo denies plans to change Motorola logo
Computer giant Lenovo (HKEx: 992) was busy showcasing its latest PCs at a major trade show last week in Las Vegas, but industry watchers were far more interested in the outlook for its struggling smartphone business. That’s because 2016 could easily become a make-or-break year for Lenovo, which desperately needs to turn around a smartphone unit that will be critical to its future growth.
In response to a flurry of questions focused on its smartphones, talkative CEO Yang Yuanqing said his company is making steady progress in the BRICS markets of Brazil and India, and that he’s aiming to set Lenovo back on an upward track in its home China market. Lenovo also announced a vague new smartphone partnership with Google (Nasdaq: GOOG), and denied any plans to jettison its the famous bat-wing logo for its recently acquired Motorola brand.Read Full Post…
Bottom line: Vipshop shop shares could see some upside if the company improves its public relations and its revenue and profit growth stabilize at current levels.
Vipshop dogged by fake liquor scandal
A scandal involving pirated liquor is cooling down former e-commerce high-flyer Vipshop (NYSE: VIPS), in an episode reminiscent of a much larger brouhaha that devoured sector leader Alibaba (NYSE: BABA) almost exactly a year ago. In this case, the scandal involving fake Moutai liquor has been dragging on for more than 2 weeks now, and the latest development has Vipshop apologizing for its lack of transparency in handling the incident.
Some are saying this particular scandal could just be the tip of the iceberg, and that numerous other fake products could be lurking on Vipshop’s website that specializes in bargains for lesser-known brands. But in my view, slowing growth is the real cause for concern among Vipshop investors, many of whom are taking advantage of this news as an excuse to sell their stock. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 9-11. To view a full article or story, click on the link next to the headline.
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Ping An’s Online Finance Platform Lufax Wins $900 Mln Series B Funding (English article)
Lenovo (HKEx: 992) Making First Google (Nasdaq: GOOG) Project Tango Phone (English article)
Vipshop (NYSE: VIPS) Apologizes Over Fake Moutai Scandal (Chinese article)
Alibaba (NYSE: BABA) Sports in Alliance with NFL American Football League (Chinese article)
Xiaomi Removes Qihoo 360 (NYSE: QIHU) Products From App Store (Chinese article)
The following press releases and media reports about Chinese companies were carried on January 9. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Approved for Internet Bank in South Korea (Chinese article)
Gaming Firm Perfect World Returns to China A-shares via TV Studio Affiliate (English article)
Ctrip (Nasdaq: CTRP) Announces $180 Mln Investment in Indian Peer MakeMyTrip (PRNewswire)
ZTE (HKEx: 763) Chairman Hou Weigui to Step Down at Next Board Meeting in March (Chinese article)
LeTV Sports in Partnership to Live Stream Major League Baseball Games in China (Businesswire)
