Bottom line: A steady series of leaked photos of a smartphone co-produced by Google and Huawei is designed to give face to Beijing, and could pave the way for a China entry for Google’s Nexus phones and app store by year end.
China wins face in Google-Huawei tie-up
Barely a day has gone by recently without a leaked photo appearing on the Internet of a new smartphone being developed in a landmark tie-up between Chinese up-and-comer Huaweiand Google’s (Nasdaq: GOOG) Nexus brand. A cynic like me would speculate that the growing volume of noise looks rather deliberate, and that both sides are intentionally trying to drum up buzz for a new Nexus model that will become the brand’s first to be made by a Chinese manufacturer.
Huawei
Huawei’s motivations for leaking the information are obvious: this particular tie-up will bring it the validation it craves for its young smartphone business, giving its products the stamp of approval from one of the world’s leading technology names. But Google’s motivations are a bit more subtle. Certainly it’s natural to hype up this kind of new product before the launch. But in this case Google is almost certainly aware of the “face” that China will receive from such a move. That could help to soothe its tense relations with Beijing as it eyes a return to a market it can’t afford to ignore. Read Full Post…
Bottom line: Alibaba’s massive online grocery promotion looks aimed at countering potential new challenges from Walmart, as the US retailing giant overhauls its China e-commerce operations.
Alibaba launches major grocery promotion
Just days after Walmart (NYSE: WMT) made a major shift in its China e-commerce strategy, local market leader Alibaba (NYSE: BABA) is firing back with a massive 1 billion yuan ($160 million) promotion that looks squarely aimed at the US retailing giant. This particular promotion comes in the grocery space, which also happens to be a core strength of Yihaodian, the major plank in Walmart’s China e-commerce operation. Alibaba’s announcement also comes just days after Walmart announced it was buying out its partners in Yahaodian to take full control of the site and better integrate it with its existing China operations. Read Full Post…
Bottom line: Walmart’s Yihaodian could sharply boost its share of China’s e-commerce market in the next 2-3 years, following a buyout that will give the site better access to its parent’s experience, offline stores and global connections.
Walmart buys out Yihaodian partners
Just a week after sacking the 2 founders and top executives of its China e-commerce site, global retailing giant Walmart (NYSE: WMT) has taken the next step and bought out its partners in their Yihaodian joint venture. The buyout completes a takeover that began with Walmart’s purchase of a controlling 51 percent of Yihaodian 3 years ago. It also signals that Walmart is preparing to pump major new investment into the site, as it tries to become a major player in a market dominated by local giants Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD).
I have to applaud Walmart for finally taking control and tossing out Yihaodian’s founders, who weren’t doing much to challenge any of the nation’s top e-commerce sites. But that said, foreign companies have a very poor track record competing with homegrown Chinese Internet firms, and its far from clear if Walmart can succeed where other big names like Google (Nasdaq: GOOG), Yahoo (Nasdaq: YHOO), Expedia (Nasdaq: EXPE) and eBay (Nasdaq: EBAY) have failed in the past. Read Full Post…
Bottom line: Walmart’s dismissal of Yihaodian’s 2 top executives marks a major shake-up due to the unit’s disappointing performance, and could be followed by closer integration with Walmart’s own China operations.
Yihaodian in management shake-up
A major shake-up has just occurred at Walmart’s (NYSE: WMT) China e-commerce unit, reflecting its disappointing progress 3 years after the US retailing giant took control of local upstart Yihaodian. The shake-up has seen the sudden resignation of Yihaodian’s 2 founders, Yu Gang and Liu Junjun, who were also the chairman and CEO, respectively. Yihaodian confirmed the departures, and said they were announced after a high-level Walmart official came to visit the company. (Chinese article)
The reports say Walmart issued a nicely worded statement on the matter, saying “A company’s founders will naturally leave after a certain stage of development, and we wish them well”. But the fact of the matter is that Yihaodian has been quite a disappointment for Walmart, which took control of the company in 2012 and has made it the central focus of its e-commerce strategy in China. Read Full Post…
Bottom line:Weibo’s new micro-showcasing e-commerce initiative looks well-conceived and could stand a good chance of success, but the company needs to move faster if it wants to compete over the longer term with more aggressive rivals.
Weibo & E-Commerce in China
Weibo launches new e-commerce initiative
After posting profits in the last 2 quarters, early social networking (SNS) leader Weibo (Nasdaq: WB) is aiming to bolster its longer-term residence in the black with a new drive into the lucrative but also highly competitive e-commerce space. The move looks a bit late, since many were hoping for quicker moves into e-commerce for Weibo 2 years ago after its landmark tie-up with sector gorilla Alibaba (NYSE: BABA).
But the cautious Weibo was never one to move too quickly, and in this case its newest initiative actually looks quite well conceived and customized to fit the usage patterns of its subscribers. That means it could have a good chance of success, perhaps helping to lift the company’s sagging stock. But that said, Weibo will still have to vie with similar services from a faster-moving Tencent (HKEx: 700), which is aggressively rolling out e-commerce services tied to its popular WeChat social networking (SNS) platform. Read Full Post…
Bottom line: Suning’s Japanese expansion and receipt of a new license to build and operate a private broadband network are both positive developments, but also reflect a lack of quick progress in transforming its core China-based retail business.
Suning in Japanese expansion
A couple of new reports involving Suning (Shenzhen: 002024) made me realize it’s been quite a while since I’ve written about this company that is trying to transform from a traditional retailer to a major e-commerce player. Both reports are interesting and noteworthy, though neither is related to its e-commerce drive, which doesn’t appear to be going anywhere quickly.
One of the deals involves Suning’s purchase of a money-losing Japanese electronics seller 5 years ago, and will see it now plow several billion yuan into a major expansion of the Laox chain of home appliance stores. The second deal has Suning named as one of 4 companies to receive licenses to build broadband networks to offer services under a newly announced pilot program to open the sector to private money. Read Full Post…
Bottom line: New moves against e-commerce and online video firms are extensions of a broader crackdown on rogue Internet practices, which will slow short-term growth at some companies but ultimately create a healthier business environment.
E-Commerce in China
Crackdowns widen on video, e-commerce
It seems like I write about the latest Internet crackdown far too often these days, as Beijing focuses on a wide range of industries where it wants to clean up what it sees as unhealthy business practices. Another 2 such crackdowns are in the headlines as we head into spring, one in the scandal-wracked e-commerce space and the other in online video. Both crackdowns actually began earlier, and these latest moves just show the regulators don’t feel that their job is finished yet.
Of course it’s a slight oversimplification to say this broader series of crackdowns is coming from a single source, since the commerce regulator has been the main driver behind the e-commerce crackdown and the broadcasting and publishing regulator is behind the video clean-up. But those 2 concurrent campaigns, along with other similar ones, probably underscore a recent resolve by central leaders in Beijing to clean up a Chinese business landscape that’s often riddled with corrupt and illegal practices. Read Full Post…
Bottom line: Alibaba’s clean-up of its Taobao marketplace is likely to last for the next year, and could see growth in trading volume on the platform fall by about half of current levels to the 15-20 percent range.
Alibaba evicts 26 sellers from Taobao
Two months after a scandal erupted over high piracy rates on one of its main websites, e-commerce leader Alibaba (NYSE: BABA) has moved to address the problem with the expulsion of 26 merchants from its popular Taobao C2C platform. Alibaba’s description of the campaign shows the company is still avoiding the word “piracy” in its discussion of the clean-up, reflecting the sensitivity of the situation. But the larger question is just how many merchants will ultimately be expelled from Taobao, and what that will mean for Alibaba’s top and bottom lines. Read Full Post…
Bottom line: Amazon’s opening of a shop on Alibaba’s popular Tmall looks like a shrewd move to boost its struggling China business, but is unlikely to raise its market share significantly.
Amazon opening store on Alibaba’s Tmall
Word that Amazon (Nasdaq: AMZN) will open a China store on Alibaba’s (NYSE BABA) popular Tmall marketplace has the online world buzzing that the US e-commerce giant is admitting defeat and failure of its China strategy. Some are even saying the move could mark an eventual closure of Amazon’s own China site, which has failed to attract a major audience despite huge investments by the company. But anyone reaching those conclusion should think again, as this particular move looks quite shrewd and could actually help Amazon to boost its struggling China business. 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…
Bottom line: New global e-commerce moves by JD and LightInTheBox look well conceived and could yield some strong results, while Baidu’s new e-commerce investment reflects its lack of focus and broader strategy in the space.
LightInTheBox opens US warehouse
A flurry of e-commerce moves are in the headlines today, including new globalization steps by number-two player JD.com (Nasdaq: JD) and the struggling LightInTheBox (NYSE: LITB). Meantime, search leader Baidu (Nasdaq: BIDU) is also in the headlines as it searches for its own e-commerce business model, with reports it has made a major investment in a site being developed by PC giant Lenovo (HKEx: 992). The flurry of moves reflects the hyperactive state of competition in China’s e-commerce market, which requires constant innovation in order to survive. Read Full Post…
