Bottom line: A growing alliance between JD.com and Tencent could start to seriously challenge Alibaba’s dominance of China e-commerce in the next 2 years, as the rivals use the upcoming November 11 Singles Day to showcase their prowess.
JD joins Nov 11 courtship of online shoppers
This year’s November 11 Singles Day shopping extravaganza is shaping up as a guerrilla courtship of Chinese online shoppers by the nation’s 2 e-commerce leaders, as each vies for supremacy on a date that’s become the world’s busiest for online buying. Just days after leading operator Alibaba (NYSE: BABA) announced its own grand plans to seduce shoppers, rival JD.com (Nasdaq: JD) has come out with its own counter scheme that aims to court China’s hordes or singles in an alliance drawing on its growing ties with leading social networking (SNS) operator Tencent (HKEx: 700).
The stakes in this brewing war are huge. Last year alone, Alibaba reported 278 million orders worth $9.3 billion around the promotion that it created on the November 11 holiday, which represents the epitome of singledom due to its numerical representation as 11-11, or four 1’s. JD declined to give a sales value for its orders last year, but said it posted 14 million orders, which would translate to far more modest but still significant sum of about $500 million worth of merchandise sold based on Alibaba’s rate. Read Full Post…
Bottom line: The MIIT is quite possibly weighing a merger between China Telecom and Unicom, but any final decision might take at least a year due to the regulator’s cautious and slow-moving nature.
Marriage on tap for China Telecom, Unicom?
A new research note is raising the intriguing possibility that a merger could be coming for the smaller of China’s 3 big telcos, saying China Unicom (HKEx: 763; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA) may soon be forced into marriage. The reasons for such a marriage are certainly compelling, and a recent leadership shuffle among the nation’s 3 big telcos could point to such a move.
Some might argue that such a marriage would be anti-competitive, reducing China’s mobile space from 3 carriers to just 2. But the fact of the matter is that China’s telecoms regulator has become quite frustrated with this trio, who constantly fight among each other for market share but do very little to innovate despite controlling the world’s largest mobile market. Rather than focus its efforts on reforming this laggard bunch of state-run behemoths, the regulator has taken a number of other recent steps to bring more innovative, private investment into the sector. Read Full Post…
Bottom line: Tencent’s new WeChat push into Europe looks like a better strategy than its previous failed US effort, though it should provide more support to its local partners if it wants to succeed.
WeChat signs on Italian partner
After a disastrous and costly foray into the US, leading Chinese mobile messaging app WeChat is gearing up for a new attempt at going global, this time setting its sights on Europe. This particular push has WeChat, a unit of Chinese Internet giant Tencent (HKEx: 700), forming small tie-ups with local European partners to promote the service. The latest of those has seen WeChat link with a small Italian start-up called ChatSim, which provides technology that lets users link up different mobile chatting apps.
Announcement of this particular tie-up is clearly the work of ChatSim, which has put out a slightly amateurish press release announcing the partnership. (company announcement) That said, I do think that more broadly speaking Europe looks like a better place for Tencent to try its luck at global expansion. That’s because the US is already quite hotly contested not only with WhatsApp but also rival instant messaging products from Internet giants like Google (Nasdaq: GOOG) and Facebook (Nasdaq: FB), which also owns WhatsApp. Read Full Post…
Bottom line: Tencent WeBank’s rapid growth over the last 2 months shows it intends to focus on high-interest small loans aimed at consumers and small businesses, challenging credit cards and credit lines from traditional banks.
WeBank lends $130 mln in 2 months
Seven months after its launch, Tecent-backed (HKEx: 700) WeBank is showing off some of its first financial accomplishments that hint at the direction it may take as it carves out a place in China’s banking sector. The numbers reveals that the bank, the first to launch under a private-sector pilot program by Beijing, is setting its sights on providing credit to small businesses and consumers. The tack looks like a direct challenge to traditional credit card issuers, and could ultimately provide consumers with yet another payment option in both the online and offline worlds. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 29. To view a full article or story, click on the link next to the headline.
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Chinese ADRs Drop 3rd Day Amid Mainland Rout, Baidu (Nasdaq: BIDU) Plunges (English article)
WeChat Italy, ChatSim In Deal to Jointly Promote Instant Messaging in Europe (company announcement)
Air China (HKEx: 753) to Raise $1.9 Bln in Share Sale to Buy Planes (English article)
Phoenix Satellite (HKEx: 2008) Warns of Substantial Profit Decline in H1 (HKEx announcement)
Perfect World (Nasdaq: PWRD) Announces Completion of Merger (PRNewswire)
Bottom line: WeChat’s recent blockage of Uber reflects challenges the US company will face from rival car service operators and their backers in China, providing yet another obstacle as it tries to build up its local business.
Uber locked out of WeChat
A colorful war of words has broken out in China over the last week between high-flying car services provider Uber and the popular instant messaging service WeChat, providing not only some good entertainment but also valuable lessons for foreign companies doing business on the Chinese Internet. In this instance, WeChat has been blocking keyword searches on Uber, meaning users of the popular mobile messaging service can no longer access Uber’s public account or any articles with the Uber name. WeChat has given its own explanation for the blockage, blaming it on technical issues. Of course it’s probably no coincidence that WeChat’s parent Tencent (HKEx: 700) is also a major backer of rival domestic car services provider Didi Kuaidi. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 17. To view a full article or story, click on the link next to the headline.
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Tesla (Nasdaq: TSLA) Unveils New Model X, to Go on Sale in China Next Year (Chinese article)
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: 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…
The following press releases and media reports about Chinese companies were carried on June 17. To view a full article or story, click on the link next to the headline.
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GuotaiJunan Seeks $4.8 Bln in Biggest China IPO Since 2010 (English article)
JD.com (Nasdaq: JD) to Start Russian Shopping Site in Expansion Beyond China (English article)
Crowdsourcing Site Zhubajie Lands 2.6 Bln Yuan Series C Funding (English article)
Tencent’s (HKEx: 700) WeChat Probed in Taiwan for Potential Illegal Investment (Chinese article)
China’s HNA Group Buys 15 Pct of Red Lion Hotels (English article)
Bottom line: Beijing’s latest online video clean-up is part of its drive to guide a bigger transition from a traditional TV to an Internet-based broadcasting landscape, with more similar moves likely over the next 1-2 years.
Beijing cracks down on cartoons
It’s been at least a month or two since Beijing’s latest crackdown on unhealthy Internet content, so it should come as no surprise that the morality police have launched yet another campaign, this time targeting cartoons. The latest dragnet has snared video superstar LeTV (Shenzhen: 300104), Baidu-backed (Nasdaq: BIDU) iQiyi and most other top industry players, who are among 29 companies being investigated in this latest web clampdown.
China’s broader Internet clean-up campaign is now actually entering its second year, and dates back to April last year when leading web portal Sina (Nasdaq: SINA) had its video license revoked for hosting pornographic content. (previous post) Since then, nearly ever major video site has been investigated and punished at one point or another, and social networking sites (SNS) like Tencent (HKEx: 700) WeChat have also embarked on clean-ups of controversial content. Read Full Post…
