The following press releases and media reports about Chinese companies were carried on November 4. To view a full article or story, click on the link next to the headline.
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JD.com (Nasdaq: JD) Says Alibaba Pressuring Merchants Before Singles’ Day (English article)
Over 40 Pct of China’s Online Sales Counterfeit, Shoddy: Xinhua (English article)
Bottom line: Baidu’s new upscale online shopping mall looks more focused and well designed than its earlier e-commerce initiatives, but could have a difficult time finding an audience due to stiff competition.
Baidu tries e-commerce again with upscale mall
Online search leader Baidu(Nasdaq: BIDU) is hoping the third time is the charm for its drive into e-commerce, with the formal launch of its new online mall with a distinctly foreign flavor targeting high-end shoppers. I’ve followed Baidu for a long time now, and the company certainly has a poor track record in e-commerce and more broadly for homegrown initiatives like this latest one called Baidu Mall.
But that said, the company has found more success recently by buying assets outside its core online search area, and then giving them access to its own vast cash and other resources to help them quickly gain market share. Perhaps it’s hoping to use that strategy as well for the newly launched Baidu Mall, even though the platform itself seems to be Baidu’s own creation rather than an acquisition. Read Full Post…
Bottom line: SouFun should be commended for its proactive and open approach to a recent crackdown on internal corruption, which could provide some potential upside to its shares after negative publicity subsides.
SouFun clamps down on corruption
Real estate services provider SouFun (NYSE: SFUN) has become the latest Chinese Internet firm to join a national anti-corruption campaign, with its issue of a slightly cryptic statement that looks related to a scandal that rocked the company earlier this month. That scandal saw media report that SouFun had fired a number of salespeople over vague allegations of inflating their business. (previous post)
More than 2 weeks after those reports broke, SouFun has just issued a statement outlining a recent internal probe that netted an unspecified number of employees who were engaged in corrupt practices. I have to commend SouFun for taking the action and also being relatively open about what it’s doing, even though this particular statement isn’t extremely clear and was almost certainly prompted by the earlier reports. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 28. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Announces September Quarter 2015 Results (Businesswire)
3 Chinese Suitors Show Interest in Starwood Hotels (NYSE: HOT): Source (English article)
Apple (Nasdaq: AAPL) Beats Wall Street, Investors Wary of China Sales
Bottom line: New signals that China’s 3 telcos are reducing their spending could presage a rumored consolidation of the trio into 2, with China Telecom and Unicom the most likely to be merged.
China telcos rope in spending
The latest sign of a potential shake-up in China’s stodgy telecoms sector came late last week, when global networking equipment giant Ericsson (Nasdaq: ERIC) attributed reorganization and weak spending by the nation’s big 3 carriers as a major factor behind its disappointing quarterly results. Despite expectation that China’s big 3 carriers would spend heavily on 4G this year, actual amounts so far have been relatively modest from the trio of China Mobile (HKEx: 941; NYSE: CHL), China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA).
The unexpected spending slowdown could be the latest sign that Beijing is planning an industry overhaul, following reports that first emerged last month of a possible consolidation of the 3 current mobile carriers into just 2. Such a move would reflect Beijing’s disappointment at the failure of China’s state-run carriers to become global innovators over the last decade, even after receiving monopoly rights over a market that has become the world’s largest for mobile and broadband services. Read Full Post…
Bottom line: A growing alliance between JD.com and Tencent could start to seriously challenge Alibaba’s dominance of China e-commerce in the next 2 years, as the rivals use the upcoming November 11 Singles Day to showcase their prowess.
JD joins Nov 11 courtship of online shoppers
This year’s November 11 Singles Day shopping extravaganza is shaping up as a guerrilla courtship of Chinese online shoppers by the nation’s 2 e-commerce leaders, as each vies for supremacy on a date that’s become the world’s busiest for online buying. Just days after leading operator Alibaba (NYSE: BABA) announced its own grand plans to seduce shoppers, rival JD.com (Nasdaq: JD) has come out with its own counter scheme that aims to court China’s hordes or singles in an alliance drawing on its growing ties with leading social networking (SNS) operator Tencent (HKEx: 700).
The stakes in this brewing war are huge. Last year alone, Alibaba reported 278 million orders worth $9.3 billion around the promotion that it created on the November 11 holiday, which represents the epitome of singledom due to its numerical representation as 11-11, or four 1’s. JD declined to give a sales value for its orders last year, but said it posted 14 million orders, which would translate to far more modest but still significant sum of about $500 million worth of merchandise sold based on Alibaba’s rate. Read Full Post…
Bottom line: Beijing needs to accelerate reform of traditional media in the face of rising challenges from players like Alibaba and Baidu, or risk seeing many of these state-run companies fall into irrelevance.
Alibaba challenges traditional media to speed up reform
A wave of mega-mergers sweeping through China’s Internet over the last 2 years saw its biggest deal to date announced late last week, when e-commerce leader Alibaba (NYSE: BABA) offered $4.6 billion for the more than 80 percent of leading online video site Youku Tudou (NYSE: YOKU) it doesn’t already own. The move marked the latest challenge to China’s traditional media industry, which has been monopolized for years by state-run broadcasters and printed publications.
If this latest mega-deal gets completed, a new Youku Tudou with access to Alibaba’s cash and other vast resources will almost certainly accelerate its challenge to traditional media by aggressively rolling out compelling new on-demand products and premium content. Read Full Post…
Bottom line: Alibaba could make a bid for Weibo in the next 6 months, in a deal that would share many similarities with its newly launched blockbuster offer for Youku Tudou.
Weibo next on Alibaba’s M&A menu?
China’s Internet is buzzing over the industry’s biggest acquisition to date with Alibaba’s (NYSE: BABA) offer for Youku Tudou (NYSE: YOKU), but that deal could presage an even higher-profile one that sees the fading Twitter-like Weibo (Nasdaq: WB) follow a similar fate. Or even more intriguing, Alibaba could make a potential play for Weibo’s parent and founder Sina (Nasdaq: SINA), in a move that would spell the end for China’s leading web portal and one of its oldest Internet firms.
There would be many similarities between such a deal and the Alibaba offer for leading online video site Youku Tudou deal announced late last week. Investors appear to also believe such a deal could possible, based on stock reactions to the blockbuster deal that would see Alibaba pay $4.6 billion for the more than 80 percent of Youku Tudou it doesn’t already own. Weibo shares leaped 13.4 percent after the deal was announced, second only to Youku Tudou’s own 22 percent jump. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 17-19. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Offers $4.6 Bln for Rest of Youku (NYSE: YOKU) Video Site (English article)
Rare Store Sales Data Highlights Wal-Mart’s (NYSE: WMT) China Challenge (English article)
BrightFood to Buy 50 Pct of New Zealand Meat Processor for $200 Mln (English article)
Marvell (Nasdaq: MRVL) Cuts 800 Jobs in China, Workers Stage Protest (Chinese article)
IBM (NYSE: IBM) Gives Beijing Access to Software Code (English article)
Bottom line: LeTV’s fledgling e-commerce business could rise quickly but may also experience growing pains that bring negative publicity, as media start to tire of the company’s constant hype and its fortunes start to stagnate.
LeTV jumps into e-commerce
Online video sensation LeTV(Shenzhen: 300104) has never been one to do anything quietly, and that’s true once more with its sudden jump into the hotly contested e-commerce space. In its usual high-profile fashion, LeTV has sent out emails to reporters detailing its huge success with a recent e-commerce promotion, and also its launch of a US e-commerce site.
But the media weren’t giving to much ink to LeTV’s hype, and instead focused on negative reports of logistical problems connected to its recent promotion on September 19. Such problems don’t come as a huge surprise for an e-commerce newcomer like LeTV, which is far better known for its online video service than Inernet shopping. Read Full Post…
Bottom line: Jiuxian’s decision to list in China and Dangdang’s continued effort to de-list from New York show that low-quality Chinese firms will have difficulty getting attention from US investors and are probably better listing in their home market.
Jiuxian wine cellar to list on China’s OTC
Two news items continue to show a growing distaste for New York by Chinese web firms, led by word that veteran online wine seller Jiuxian has just received approval for an IPO on China’s over-the-counter (OTC) board. The second items comes from veteran e-commerce site Dangdang (NYSE: DANG), whose outspoken CEO is quoted complaining about his company’s low valuation and saying his plans are moving forward to de-list from New York and re-list in China.
The most commonly heard theme to these stories is that Chinese firms can get better valuations in their home market than New York, because their names are more recognized in China. But another theme that gets far less attention is that many of these complaining companies are simply low-quality products whose only real attraction is their “made in China” label. Read Full Post…
