Bottom line: Baidu’s temporary halting of updates for its mobile operating system is likely to become permanent, and looks like a smart move as it focuses on more efficient ways to boost its mobile market share.
Baidu stops supporting Yun OS
In a move that seemed inevitable, Internet search leader Baidu (Nasdaq: BIDU) has put the brakes on its 3-year-old mobile operating system (OS) that was sapping big resources with little or no chance for long-term success. The move comes just a month after Baidu trumpeted the growing contribution of mobile revenue to its overall business, surpassing traditional desktop PC search revenue for the first time in December. There’s no mention in Baidu’s latest quarterly report of how much of its mobile search revenue came from smartphones equipped with its self-developed mobile operating system, Yun OS, but I suspect the answer was “very little”. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 12. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Preparing To Invest $200 Mln In Snapchat – Source (Chinese article)
Baidu (Nasdaq: BIDU) Halts Updates, Maintenance For Mobile OS (Chinese article)
Car Inc (HKEx: 699) Announces Full-Year 2014 Results (HKEx announcement)
Online Listings Site Ganji Launches IPO Process – CEO (Chinese article)
Chinese Shoe Factory Workers Strike Over Benefits (English article)
Bottom line: A record false advertising fine against P&G and Beijing’s selection of Alibaba to host its procurement platform reflect the current government bias against foreign firms, which is likely to remain strong for the next 1-2 years.
Crest gets record fine for false advertising claims
Today I’m grouping 2 headlines together that look quite different on the surface but seem to underscore a growing bias in China against foreign companies, despite Beijing’s insistence on no such prejudice. One headline has global consumer products giant Procter & Gamble (NYSE: PG) receiving what looks like a large and somewhat arbitrary fine for false advertising. The other has media reporting that Beijing has moved its online government procurement platform onto servers operated by AliCloud, the cloud computing division of e-commerce giant Alibaba (NYSE: BABA). Read Full Post…
Bottom line: Apple Watch should debut strongly in China thanks to extensive partnerships with top Chinese retailers and app makers, giving the product instant relevance in the local market.
Apple Watch coming to China
Global gadget leader Apple (Nasdaq: AAPL) has been in the local tech headlines nonstop these last few days, wowing Chinese fans with a customized version of its new Apple Watch that will debut in China next month as part of its global launch. Pundits are mixed on how the watch will fare in China, but I expect it should do quite well thanks to inclusion of China’s hottest apps together with the company’s own strong reputation for well-designed, cutting-edge products.
In a separate but probably related Apple headline, media are also reporting a new smart air conditioner that the company has developed with local appliance leader Haier (HKEx: 1169) will also debut in April. Apple first announced this alliance last June as part of a broader smart device alliance under the name of HomeKit, and I suspect the Apple Watch will be usable with these new air conditioners. Read Full Post…
Bottom line: China should work with its major trading partners to send unified signals on issues like piracy to create a transparent business climate and avoid confusion.
US, China send crossed signals on piracy
In an unusual reversal of roles, Washington officials who regularly criticize China for piracy found themselves defending Alibaba (NYSE: BABA) on the issue last week, just a month after a Beijing regulator blasted the e-commerce leader for allowing rampant fake goods trade on its popular Taobao site. The conflicting messages are at least partly political, since a similar US condemnation would have contradicted Washington’s praise of Alibaba’s piracy-fighting efforts over the last 2 years. Read Full Post…
Bottom line: Carrefour’s new China strategy ends a period of uncertainty about its commitment to the market, though its move into e-commerce is long overdue and could fail due to its lateness.
Carrefour decides to stay in China
After sending a stream of mixed signals over the last 2 years about its commitment to China, global retailing giant Carrefour (Paris: CA) has finally decided it will stay in the market for now, but only after overhauling its operations. The decision will see the company do a major consolidation of its procurement centers, and also push into convenience stores and e-commerce. The signals seem to imply that the days of rapid expansion for its core chain of superstores is probably finished, with e-commerce and smaller stores likely to form the bulk of its China expansion going forward. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 7-9. To view a full article or story, click on the link next to the headline.
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Amazon (Nasdaq: AMZN) China Opens Store on Alibaba (NYSE: BABA) Tmall (English article)
Momo (Nasdaq: MOMO) Announces Q4, Full Year Financial Results (Globe Newswire)
JD.com (Nasdaq: JD), iFlytek (Shenzhen: 002230) In Smart Home Products JV (English article)
Bottom line: Beijing needs to roll out new rules allowing limited foreign investment in sensitive areas or risk seeing private companies like Ant Financial suffer from slower growth and artificially low valuations.
foreign investment bans need new approach
Alibaba-affiliated (NYSE: BABA) Ant Financial has been on a financial roller coaster ride over the past month, as it tries to raise billions of dollar to fund its growth en route to an IPO that will offer Chinese investors one of their first plays into the private banking sector. Some reports have said the new funding could value Ant, whose largest asset is the Alipay electronic payments service, at up to $50 billion. But others have put the figure as low as $30 billion, reflecting the intense negotiations taking place. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 3. To view a full article or story, click on the link next to the headline.
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58.com (NYSE: WUBA) Buys Real Estate Sales Site Anjuke For $267 Mln (Chinese article)
Britain’s Marks & Spencer (London: MKS) To Close 5 Shanghai Stores (English article)
Home Furnishings and Decoration E-tailer Jia.com Wins $160 Mln Series D Funding (English article)
New China Life Ends Plan For Strategic Stake Sale To Alibaba (NYSE: BABA) (Chinese article)
38 Online Lottery Ticket Sellers Suspend Sales, No Word On Resumption (Chinese article)
Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
Bottom line: Mobile data usage will grow by triple-digit amounts this year as telcos boost 4G promotions, while box office growth will start to slow and the ongoing decline in traditional SMS text messaging will accelerate.
Hongbao chatter fuels mobile data surge
The usual rush of Lunar New Year-related data is coming in, painting a mixed picture for traditional and new media. The clear winner in the mix is new media, whose surging popularity helped to fuel a 70 percent jump in mobile data traffic over the holiday period. Traditional movies also performed well, with China’s box office rising 36 percent during the period. It will also come as no surprise that the big loser over the holiday was traditional SMS text messages, whose volume plunged by 25 percent. Read Full Post…
