Bottom line: Alibaba’s decision to sell one of its early US e-commerce sites just a year after the launch looks smart and decisive for new ventures that aren’t performing well, while its new China-based dining services site will face stiff competition.
Alibaba tries dining services with Koubei
Acquisitive e-commerce leader Alibaba (NYSE: BABA) is throwing up a rare white flag of surrender in the US, selling off its 11 Main site just a year after launching the e-commerce platform. That surrender looks relatively minor, as Alibaba never really gave the site much time to develop. But the quick decision to call it quits reflects the challenges Alibaba will face as it tries to show investors that it can be competitive outside its home China market, which will be critical to its future growth.
Meantime, Alibaba was in another separate headline that looks much more typical for the company, announcing a new mega tie-up worth nearly $1 billion that will take it into the dining services category. That initiative looks squarely aimed at Dianping, often called the Yelp (NYSE: YELP) of China, and Dianping’s major backer Tencent (HKEx: 700). Read Full Post…
Bottom line: Alibaba’s new fund-raising activities are relatively small but provide insight about its future direction, hinting at a major pushes into the gadget and financial services spaces.
Alibaba, Foxconn invest in Pepper
A couple of new fund-raising headlines involving e-commerce giant Alibaba (NYSE: BABA) show company founder Jack Ma engaged at one of the things he does best, namely making deals and forging new partnerships. Neither deal is particularly big in terms of dollar investment, but both provide some insight on the kinds of partners and tie-ups that Ma is pursuing for both the New York-listed Alibaba and its separate but affiliated Ant Financial unit. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 25. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Revives Koubei to Take Fight With Tencent to Food (English article)
LeTV (Shenzhen: 300104) in Spotlight Over Sales Figures (English article)
Momo (Nasdaq: MOMO) Announces Receipt of “Going Private” Proposal (GlobeNewswire)
KKR Bets on China Professional Education With Tarena (NYSE: TEDU) Investment (English article)
Bottom line: Oriental Pearl’s new purchase of a stake in a set-top box and TV maker is part of a broader series of recent moves that could help position it to emerge as a viable rival to China’s private online video companies.
SMG buys into TV maker MTC
State-run broadcaster Shanghai Media Group (SMG) is wasting no time telling the world who it sees as its main rivals, with word that the company is buying a major stake in a TV and set-top box maker after completing an overhaul of its own digital TV assets. Anyone who follows the industry will know that the high-flying LeTV (Shenzhen: 300104) appears to be the major target of this new SMG tie-up, which is seeing the company’s newly launched Oriental Pearl (Shanghai: 600637) digital video unit purchase a major stake in a Shenzhen-listed company called MTC (Shenzhen: 002429) for 2.2 billion yuan ($350 million). Read Full Post…
Bottom line: Uber and rival homegrown Chinese hired car services are likely to ultimately get a green light to operate throughout China, providing a much-needed shot of competition to traditional taxi fleets.
Uber plows big bucks into China
Anyone who thought that US hired car services hotshot Uber might be stalling in China might want to reconsider that view, following new reports that say the company has budgeted a cool $1 billion for its China expansion this year. The reports are all citing an internal company email, which strongly suggests that Uber deliberately leaked the message to quash any talk that it might be losing its resolve to push ahead in a China market that is quite difficult but also has huge profit potential.
At the same time, another report is saying that Uber and other providers of similar hired car services could ultimately find their business model outlawed, as a number of cities consider banning or heavily restricting the use of private cars that compete with traditional taxis. I seriously doubt that will happen, however. That’s because Beijing has shown an usual desire to accommodate these newer, high-tech services that have the potential to drive China’s economy in the future as many traditional industries lose momentum. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 19. 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 Valued at $45 Bln After New Funding: Source (English article)
Huawei to Make Nexus Smartphones for Google (Nasdaq: GOOG) – Employee (Chinese article)
Bottom line: More than $20 billion in new fund-raising deals by China companies outside the country reflects the huge amount of global money now chasing Chinese investments, lured by the nation’s soaring stock markets.
Billions flood into Chinese companies
I was so surprised by the number of major new China-related deals churning through the fund-raising system that I decided to do some math, which showed that 5 deals in the headlines today were worth a staggering total of $21 billion. Those deals involved a wide range of topics, led by a new $9 billion privatization bid for software security specialist Qihoo 360 (NYSE: QIHU), the largest such plan to date among a wave of Chinese firms de-listing from New York.
That deal was followed in size by another similar one from Focus Media, whose $7.4 billion plan to re-list in Shanghai following its own New York privatization has hit an unexpected hurdle with an investigation of the shell company that is hosting the backdoor listing. The there’s a hefty $3.5 billion fund-raising plan by leading brokerage Citic Securities (HKEx: 6030; Shanghai:006030), which has attracted 2 of Singapore’s leading investors as it prepares to issue new shares in Hong Kong. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 18. To view a full article or story, click on the link next to the headline.
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Citic Securities (HKEx: 6030) Seeks $4.7 Bln in Share Sale; Temasek Among Buyers (English article)
Qihoo 360 (NYSE: QIHU) Announces Receipt of Proposal to Acquire the Company (PRNewswire)
Alibaba (NYSE: BABA), Foxconn in Talks to Invest $500 Mln in India’s Snapdeal (English article)
Trina Solar (NYSE: TSL) Plans $500 Mln India Plant Amid Ban (English article)
Imax (NYSE: IMAX) Sets China Unit IPO Goal at $300 Mln (English article)
Bottom line: A probe against WeChat in Taiwan is likely to see its local offices shut down and Tencent evicted, reflecting the many challenges Chinese tech companies will face as they try to expand abroad.
WeChat faces Taiwan eviction
Taiwan may share many cultural traits with China, but its government certainly doesn’t seem to have much love for Chinese technology. The list of Chinese firms running into trouble on the island has just gained a new member, with word that Tencent’s (HKEx: 700) hugely popular WeChat is facing eviction from Taiwan for possibly violating local investment rules.
This brewing setback is interesting mostly for political reasons, and also because it reflects the troubles that WeChat has faced in its fledgling global expansion. From a practical perspective, Taiwan looks like an easy market for Chinese tech companies due to the shared language and culture. But the fact is that Taiwanese preferences are often quite different from China’s, and in this case the reality is that Japan-leaning Taiwanese far favor rival Japanese product Line to WeChat. Read Full Post…
Bottom line: China’s traditional broadcasters need to move quickly to forge new, meaningful partnerships with private companies outside the media space, or risk being overtaken by new media rivals.
Mango TV ties with China Mobile
Two of China’s leading regional broadcasters have been in the headlines these last 2 weeks, as they scramble to transform themselves to compete with a new generation of web-based private companies that are rapidly stealing their viewers and advertising dollars. Both stories involve new tie-ups with industry outsiders, reflecting the need to bring in new expertise to help these state-run broadcasters leverage digital and web-based technologies that will dominate the media landscape of the future.
The first big story came 2 weeks ago, when Shanghai Media Group (SMG) signed a landmark deal with e-commerce titan Alibaba (NYSE: BABA) to develop a financial news and information service that could someday take on the likes of global giants like Bloomberg and Reuters (NYSE: TRT). The second came last week, when media reported that Hunan Satellite TV had raised 1 billion yuan ($162 million) in the first private funding round for its fledgling paid video service Mango TV. Read Full Post…
Bottom line: Alibaba’s new video streaming service could presage a buyout offer for Youku Tudou, while Didi Kuaidi’s massive new fund-raising presages a bloody battle with Uber in the hired car services market.
Didi Kuaidi in big new fund-raising
Two major strategic moves are in the Internet headlines today, reflecting growing rivalries between some of the biggest names in the red-hot markets for online video and hired car services. One move has e-commerce giant Alibaba (NYSE: BABA) disclosing its plans to launch a video streaming service that it hopes can emulate the success of US giant Netflix (Nasdaq: NFLX). The second has Didi Kuaidi, which was recently formed by the merger of China’s 2 largest taxi app operators, disclosing it is raising $1.5 billion in new funding to take on the aggressive Uber. Read Full Post…
