E-Commerce in China - Latest News

LightInTheBox, Mengniu In New Foreign Tie-Ups

By newsdoug on January 7, 2014

Mengniu in JV with WhiteWave

Leading domestic dairy company Mengniu (HKEx: 2319) and e-commerce company LightInTheBox (NYSE: LITB) are in the headlines with new foreign tie-ups, including a joint venture for the former and a modest acquisition for the latter. I personally find the Mengniu development more interesting and significant, as it marks the latest move in the company’s drive to become China’s leading dairy products maker and positions it for an eventual global expansion. But investors were much more excited by the LightInTheBox move, which sparked a major rally for the firm’s languishing shares. Read Full Post…

E-Commerce Seduces Wanda, Trade Zone Woos Walmart

By newsdoug on December 16, 2013

It seems appropriate that I’m writing this post on my computer while sitting in a coffee shop at a Wanda Plaza shopping center in Shanghai, since new reports say the Wanda real estate group owned by one of China’s richest men is planning a big new move into the booming e-commerce sector. Wanda Group Chairman Wang Jianlin will certainly have plenty of competition if he makes such a move, including from an increasingly aggressive Walmart (NYSE: WMT), whose China-based Yihaodian site is reportedly getting set to move into a ground-breaking new free-trade zone (FTZ) in Shanghai. Read Full Post…

ZTE Aims At Xiaomi With “Nubia Cool”

By newsdoug on December 12, 2013

I was somewhat amused today to read an announcement from stodgy domestic smartphone maker ZTE (HKEx: 763; Shenzhen: 000063) trumpeting the success of a “cool” new online campaign for its high-end brand of nubia smartphones. But after giving the matter some thought, I do have to compliment ZTE for its new approach to create some buzz around its smartphones, which currently enjoy a reputation as dependable but also quite stodgy and low-end products. Most Chinese refer to phones from domestic names like ZTE, Huawei and Lenovo (HKEx: 992) as guochan, literally meaning “made in China,” which carriers distinctively negative overtones for inferior quality and lack of imagination. ZTE is clearly trying to cast off that image for its nubia line with this new China-based campaign. Read Full Post…

China Mobile, Dangdang Stumble In Q3

By newsdoug on October 22, 2013

Dangdang Q3 revenue misses guidance

My earnings seasons officially kicks off today with reports from leading telco China Mobile (HKEx: 941; NYSE: CHL) and former e-commerce superstar Dangdang (NYSE: DANG), whose third-quarter results are sending a subdued message of stiff competition and slowing growth. Each company is struggling with its own individual issues, but the common theme is that both have missed market expectation by a significant margin. A number of factors are at work that I’ll describe shortly, but fierce competition and China’s slowing economy seem to be 2 of the biggest issues facing both companies. If this shaky start turns into a trend, we could see other companies reporting similarly disappointing results in the weeks ahead. Read Full Post…

Vipshop, Dangdang Look Solid, Shares Sag

By newsdoug on August 16, 2013

Dangdang loss halves in Q2

E-commerce firms Vipshop (NYSE: VIPS) and Dangdang (NYSE: DANG) have both just reported their latest quarterly results that look quite solid, as the former consolidates its position as China’s leading discount online retailer and the latter overhauls its business model. But you would never know the results were good based on shareholder reaction, with shares of China’s 2 largest US-listed e-commerce firms both tumbling after their reports came out. Read Full Post…

Google Rethinks China E-Commerce

By newsdoug on June 3, 2013

Google’s new “good value” site shows continued China commitment

Six months after abruptly shuttering its China-based e-commerce search business, global Internet titan Google (Nasdaq: GOOG) is reportedly rethinking that decision with plans to re-enter the market. The decision looks like the latest acknowledgement by Google that China is simply too big to ignore, following its high profile shuttering of its China-based general search business in 2010 after a spat with Beijing over censorship. If this latest story is true, the next logical question might be whether we could see Google return to the general China search market, where competition is suddenly starting to heat up after years of dominance by market leader Baidu (Nasdaq: BIDU). Read Full Post…

Jingdong Quickens E-Commerce Pace

By newsdoug on May 13, 2013

Jingdong steps on the gas with fast deliveries

I don’t often write about new products and services in China’s hyperactive e-commerce space, since such initiatives have become commonplace in an overheated sector where everyone is always looking for any competitive advantage. But the latest pilot program by Jingdong, China’s second largest e-commerce firm, looks like a potential game-changer since it could significantly challenge the entire industry by introducing ultra-fast deliveries. At the same time, newly released data is showing China’s e-commerce sales posted a major decline in the first quarter, hinting the sector may be headed for a rapid slowdown after several years of breakneck growth. Read Full Post…

Costco, Macy’s Eye China E-Commerce

By newsdoug on April 8, 2013

Costco eyes China e-commerce

E-commerce is quickly gaining traction as a quick and affordable entree to China’s vast retail market, with US giants Costco (Nasdaq: COST) and Macy’s (NYSE: M) both reportedly planning big new moves into the space. Their strategy reflects an emerging trend that has big western chains circumventing the traditional retailing route into China, seeking to avoid the big costs and risks that have led to big losses and retreats for names like Best Buy (NYSE: BBY) and Home Depot (NYSE: HD). But the online strategy also carriers its own risks, as China’s e-commerce space is also quite crowded and retailers that go online face an uphill road getting recognized by brand-conscious Chinese consumers. Read Full Post…

China Regulors Threaten E-Commerce, Group Buying 官方监管威胁到电子商务与团购业务

By newsdoug on October 20, 2011

China's iron fist threatens group buying, e-commerce After standing aside and letting its online sector develop largely unhindered for the last decade, China is suddenly showing a worrisome trend of trying to regulate everything on its often unruly Internet, a move that, while needed, could also interfere with market forces. In separate developments on the same day, media are reporting Beijing is preparing to regulate both its group buying sites as well as its e-commerce sector to bring more order to these spaces that have become ultra-competitive in the last 1-2 years. (group buying article; e-commerce article) In this case the reason behind each move is unrelated. For group buying, the reason seems simply to be a desire to regulate an industry that has become ultra-competitive, with quality control virtually non-existent and many players teetering on the brink of closing. (previous post) For e-commerce, the issue is directly related to a massive fee hike last week by Alibaba’s Taobao Mall, China’s leading B2C site, that led to an uprising by smaller merchants who complained they were being targeted for elimination from the site. These two new rounds of regulation for major emerging sectors follow other recent reports that China will soon regulate the vibrant micro-blogging space, and months after it issued its first round of electronic payment licenses and as it prepares to issue online mapping licenses. There definitely seems to be a trend emerging here, which looks a bit worrisome in light of Beijing’s past record at heavy-handed interference in emerging tech sectors. In one case a few years back, Beijing’s heavy regulatory hand effectively killed a vibrant SMS industry that was once a major source of revenue for the likes of Sina (Nasdaq: SINA), Sohu (Nasdaq: SOHU) and NetEase (Nasdaq: NTES). It has also attempted to regulate online games from time to time, which may be partly responsible for that industry’s unexciting growth profile of recent years after years of explosive growth. While some form of direction is certainly needed to bring order to the unruly e-commerce and online auction sectors, it’s far from clear to me that this direction needs to come from Beijing, which instead would be better advised to provide some “guidance” and let market forces do the main work.

Bottom line: New campaigns by Beijing to regulate e-commerce and online auctions are misguided efforts that will ultimately severely hamper growth in both sectors.

More Internet Froth in Alibaba Valuation, Dangdang Price War 阿里巴巴估值奇高凸显网络泡沫

By newsdoug on September 23, 2011

Alibaba's sky-high valuation The latest signs of froth in China’s bulging Internet bubble are popping up in several places this week, with new investors in e-commerce leader Alibaba Group boasting a ridiculously high valuation for the company, while the latest price war by Dangdang (NYSE: DANG) underscores the overheated competition. And in perhaps the most revealing of the new developments, even state-owned dinosaur CCTV is jumping on the e-commerce bandwagon, with the launch of its CNTV Mall. (English article) Let’s begin with Alibaba, which has received new investment from a group of blue-chip investors including Singapore’s Temasek, private equity firm Silver Lake Partners and Russia’s Digital Sky Technologies (DST), which are boasting their investment values the company at as much as $32 billion. (English article) This sounds ridiculous for a company that analysts were estimating was worth around $10 billion just months ago, and is reminiscent of DST’s estimate earlier this year shortly after it and others invested $1.5 billion in e-commerce site 360Buy that that company was worth up to $10 billion. (previous post) I wouldn’t be surprised if DST was the one giving the $32 billion figure for Alibaba, and would advise DST’s chief Yuri Milner to take a course in remedial finance before throwing out more such overinflated numbers in the future. In terms of Dangdang, the company is reportedly pressuring consumer electronics companies that sell on its site to lower their prices below those of comparable products on 360Buy, in a campaign that a Dangdang insider says has been named “operation decapitation”. (English article) The name of the campaign itself reflects the hyper competition that has appeared in China’s e-commerce space following the infusion of billions of dollars in new investment over the past year. But the biggest sign of a bubble in my view is the arrival of China Central Television, better known as CCTV, to the market. You know that when a slow-moving dinosaur like CCTV finally joins the game, the party is almost over.

Bottom line: A sky-high new valuation for Alibaba Group and the latest cut-throat campaign from Dangdang are the latest signs of a looming burst for China’s Internet bubble.

本周种种迹象表明，中国互联网泡沫正在成形。阿里巴巴市值被投资者吹捧到高得离谱，当当网(DANG.N)近期打响价格战凸显行业竞争白热化。最能说明问题的莫过于CCTV也进军电子商务领域，推出中国网络电视台商城（CNTV Mall）。首先，来谈谈阿里巴巴。该集团近期获得多家蓝筹投资机构投资，包括新加坡淡马锡控股、私募公司Silver Lake Partners及俄罗斯风投公司数字天空科技（DST）。这些机构称，他们对阿里巴巴的投资，促使该公司市值高达320亿美元。这听起来十分荒谬，因为仅在数月前，分析师估算的阿里巴巴市值仅为100亿美元左右。这不禁让人想起今年早些时候，DST与沃尔玛和百度向京东商城投资15亿美元后不久，就对京东商城估值100亿美元。如果是DST提供阿里巴巴市值320亿美元的数据，我一点也不会感到惊讶，我会建议，DST执行长米尔纳（Yuri Milner）以後夸大这类数据前，应先学会补齐财务知识。有报导称，当当网正向其消费电子产品供应商施压，要求其售价应低于京东商城同类产品，当当网内部人士透露，此举被命名为“斩首行动”。这一名字本身就反映了中国电子商务行业竞争白热化的现状。该领域过去一年来获得了数十亿计美元的新注资。但我认为，中国互联网泡沫的最大迹象是CCTV进军该市场。要知道，像CCTV这样行动缓慢的庞然大物加入时，游戏就基本结束了。

一句话：对阿里巴巴集团估值过高，当当网启动“斩首行动”，这些都是中国互联网泡沫破裂的最新迹象。

360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

By newsdoug on September 16, 2011

360Buy IPO off to slow start Just a week after leaking out word that it was accelerating plans for an IPO to raise up to $5 billion, leading online merchant 360Buy is waking up to the reality that perhaps nobody wants to buy into its shaky story, with Chinese media reporting the company has decided to slow down the ambitious offering. (Chinese article) Does this come as a surprise to me or anyone else who’s been watching the rapidly chilling market for Chinese IPOs in the US? Any regular readers will know the answer to this question is a definite “no”, and I wouldn’t be at all surprised to see this IPO shelved indefinitely until 360Buy either runs out of cash or market sentiment improves significantly, which in all likelihood won’t happen until late next year. The latest reports, citing people in the investment banking community, cleverly point out that 360Buy wasn’t even planning an IPO until the second quarter of next year anyway, after those same sources got the market buzzing last week by saying the selection of underwriters was underway, implying the blockbuster offering could come as soon as the end of this year. (previous post) Now those investment banking sources are saying that 360Buy is further delaying the process due to “less than perfect” financials, an obvious reference to the fact that the company has yet to turn a profit and previously predicted it wouldn’t even break even until 2012. With the current rampant competition in China’s e-commerce market, I wouldn’t be surprised if 360Buy, which also goes by the name Jingdong Mall and whose investors include Russian Facebook backer Digital Sky Technologies, has to delay its break-even forecast by another year, meaning it won’t be able to show any meaningful profits until 2014 at the earliest. If that’s the case, I wouldn’t be surprised to see this offering delayed until 2013 or even later and for far less than $5 billion, assuming the company is still in business at that point after China’s looming Internet bubble bursts.

Bottom line: 360Buy’s clumsy attempt to test the market for a blockbuster IPO has met with little or no interest, forcing it to delay the deal to to 2013 or later.

仅在一周前，京东商城透露称将加速赴美上市融资50亿美元的计划，但或许是意识到没人买账的现实，据中国媒体报导称，京东商城已决定放缓IPO进程。对于我和其他关注中国企业赴美上市热潮迅速降温的人来说，感到惊讶吗？一直关注我的专栏的读者都知道，答案绝对是否定的。除非京东商城资金链断裂或市场环境明显改善（在明年下半年前都不太可能发生），否则京东商城无限期搁置IPO计划，我一定都不会感到惊讶。近期报导援引投行人士的说法巧妙指出，京东商城甚至不打算在明年第二季度前进行IPO。上述消息人士上周称，京东商城正在选择承销商，暗示其最早今年底将进行IPO，此话引发市场骚动。这些投行消息人士现在却说，京东商城因财务不完善，将进一步推迟IPO时间，明显是指京东商城尚未盈利的事实，先前有人预计，甚至到2012年，京东商城可能都无法实现收支平衡。鉴于中国电子商务市场竞争激烈的现状，如果京东商城将盈利时间点再推迟一年，即最早2014年才有望实现大幅盈利，我不会对此感到惊讶。如果确实如此，我认为，假如中国互联网泡沫破裂後，京东商城还在运营的话，该公司IPO将推迟到2013年或之後进行，融资规模也将远远小于50亿美元，

一句话：京东商城以大规模IPO计划，笨拙试探市场，但感兴趣者寥寥无几，迫使其推迟IPO计划至2013年或之後。