The list of traditional retailers suffering from the e-commerce challenge has gained a new member, with domestic giant Wumart (HKEx: 1025) reporting its profit for 2013 fell for the first time in 5 years. It’s noteworthy to point out the last time Wumart’s profit fell was at the height of the global financial crisis in 2008, when the reasons for the downturn were sudden and severe but also relatively short-term. This time the reasons are much more gradual and signal a longer term decline for traditional retailers like Wumart, which are facing an unprecedented challenge from big e-commerce names like Alibaba, JD.com and Amazon China (Nasdaq: AMZN). Read Full Post…
Tag Archives: Suning
Tencent-JD Tie-Up Takes Aim At Alibaba
The new week is just beginning, but it could well go down as a pivotal moment in Chinese Internet history with Tencent’s (HKEx: 700) new announcement of an e-commerce alliance with JD.com that could threaten the dominance of sector leader Alibaba. The tie-up, which was first rumored last month, will see Tencent pay $215 million for 15 percent of JD.com, which will also receive some of Tencent’s e-commerce assets including a minority stake of its flagship Yixun.com B2C service. (company announcement) The companies will merge their e-commerce businesses, creating a new player with nearly a quarter of China’s B2C e-commerce market. Read Full Post…
Telco Execs Flock To VNOs
A new report about a sudden exodus of middle- and top-level executives from China’s big 3 telcos is forcing me to rethink my earlier assertion about the relationship between those carriers and a group of new competitors called virtual network operators (VNOs). Earlier reports about the defection of a top executive from one of the big telcos to a new VNO had prompted me to declare the big 3 state-run carriers were trying to sabotage the new VNO scheme to quash any new competition. But now this new report reveals that similar defections at all levels of management are becoming widespread, indicating perhaps that market economics really are at work here. Read Full Post…
News Digest: February 15-17
The following press releases and media reports about Chinese companies were carried on February 15-17. To view a full article or story, click on the link next to the headline.
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- US To Pursue Trade Dispute Over Chinese, Taiwanese Solar Imports (English article)
- China’s Wanxiang Wins US Bankruptcy Auction For Fisker Automotive (English article)
- Vipshop (NYSE: VIPS) Acquires Controlling Interest In Lefeng For $133 Mln (PRNewswire)
- Tencent’s (HKEx: 700) Guangdiantong Unveils WeChat Public Account Ad Product (English article)
- Suning (Shenzhen: 002024) Sets Up Transport Services Headquarters (Chinese article)
- Latest calendar for Q4 earnings reports (Earnings calendar)
News Digest: February 8-10, 2014
The following press releases and media reports about Chinese companies were carried on February 8-10. To view a full article or story, click on the link next to the headline.
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- Alcatel (Paris: ALUA) In Talks To Sell Phone Unit To Chinese Investment Firm Huaxin (English article)
- MIIT Says New VNOs Banned From Building Telecoms Infrastructure (Chinese article)
- Suning (Shenzhen: 002024) Obtains Overseas Courier License (English article)
- China To Extend Subsidies On Electric Cars Past 2015 (English article)
- Google To Own $750 Mln Lenovo (HKEx: 992) Stake After Motorola Deal Closes (English article)
- Latest calendar for Q4 earnings reports (Earnings calendar)
News Digest: January 30, 2014
The following press releases and media reports about Chinese companies were carried on January 30. To view a full article or story, click on the link next to the headline.
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- Lenovo (HKEx: (992) To Buy Google’s Motorola In China’s Largest Tech Deal (English article)
- ICBC (HKEx: 1398) To Buy Control Of Standard Bank Unit For $765 Mln (English article)
- 500.com (NYSE: WBAI), China Mobile (HKEx: 941) In Strategic Partnership (PRNewswire)
- MIIT Gives 2nd Round Of VNO Licenses, Winners Include Suning, Gome (Chinese article)
- Buffett-Backed Chinese Automaker BYD (HKEx: 1211) Settles US Wage Dispute (English article)
Midea Enters Banking Queue
Traditional Chinese appliance makers are showing a sudden interest in moving outside their usual comfort zone, with word that sector giant Midea (Shenzhen: 000333) is applying for a banking license. Midea joins a fast-growing queue that has seen rivals Haier (HKEx: 1169) and Gree (Shenzhen: 000651) make similar moves outside their traditional areas, in what looks to me like a typical herd mentality that one often sees in Chinese industries.
In this case the urgency to diversify doesn’t seem that critical, since I don’t expect consumer demand for big appliances like air conditioners and refrigerators to fade anytime soon. That contrasts sharply with a parallel diversification drive in the traditional retailing sector, where companies like electronics seller Gome (HKEx: 493) and supermarket operator Wumart (HKEx: 1025) are facing an unprecedented challenge from a new generation of e-commerce firms like Jingdong and Yihaodian. Read Full Post…
Gome Chases Odd Tie-Up, Bain Exit Near?
The latest signals coming from former electronics retailing high-flyer Gome (HKEx: 493) are a bit confusing, reflecting the fast change of pace in China’s retail environment. I also get a slight sense of desperation in the latest news that Gome will close 50 stores in top-tier cities this year, as it explores an odd-looking partnership with Wumart (HKEx: 1025), a mid-sized supermarket chain. It has now been nearly 5 years since Bain Capital purchased a 10 percent stake of Gome, and I suspect the US equity giant is getting restless with the investment and looking for reasons to sell it. Read Full Post…
News Digest: January 8, 2014
The following press releases and media reports about Chinese companies were carried on January 8. To view a full article or story, click on the link next to the headline.
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- Tencent (HKEx: 700) In Talks To Invest In Jingdong – Source (English article)
- Yingli (NYSE: YGE), China National Nuclear Corp In Solar Projects JV (PRNewswire)
- Lenovo (HKEx: 992) To Gradually Enter US Smartphone Market – Americas Chief (Chinese article)
- Alibaba, Suning Chances Good For 1st Round Of Private Bank Licenses (Chinese article)
- China Suspends Ban On Video Game Consoles After More Than A Decade (English article)
Weibo: Jingdong, Alibaba Rush IPO, SNS; Parcel Services in Chaos
The microblog realm has been buzzing loudly this final week of 2013 with stories that are likely to be major themes in the new year, led by a probable IPO by Jingdong, China’s second largest e-commerce firm. Meantime, e-commerce leader Alibaba was showing no signs of slowing down the endless promotion of its recently launched mobile instant messaging (IM) service Laiwang, as it tries to catch up with Tencent’s (HKEx: 700) hugely popular WeChat rival service. Lastly, tweets coming from top e-commerce firms Dangdang (NYSE: DANG) and Suning (Shenzhen: 002024) hint that 2014 could see the start of consolidation in the booming but also fiercely competitive parcel delivery sector, perhaps including a few major acquisitions and closures and a long-awaited domestic IPO for China Postal Express, the parcel delivery unit of China’s Post Office. (previous post) Read Full Post…
China Gloss Fades With Revlon Exit
We’ll start off this first day of the new year with what could well become a major theme for 2014, with word that make-up giant Revlon (NYSE: REV) is officially pulling the plug on its China operations. This timing of this move, which was officially announced just before year end, was most likely related to accounting issues, as Revlon probably wants to take some or all of its resulting $22 million write-down in the fourth quarter. But that said, Revlon’s withdrawal shines a spotlight on the tough market for consumer goods in China, as a slowing economy leads many to cut back their spending on non-essential daily items like make-up. Read Full Post…
