GUEST POST: Why Uber’s Global Expansion Won’t Succeed, Especially In China

Bottom line: Uber will face a difficult time in its global expansion due to poor understanding of local markets and lack of control of its rental fleets.

By Lu Jin

Uber faces uphill road in China

In the last few days, while I was still pondering the big news about a $600 million investment by China’s leading search engine Baidu (Nasdaq: BIDU) in Uber (English article), the more powerful news broke that the car service provider had quadrupled its fares during the Sydney cafe hostage crisis this week in Australia. This kind of hasty and poorly conceived move convinced me once again that Uber’s global expansion will not succeed in many global markets, especially one like China. Continue reading

Shanghai Street View: Coffee Craze

Coffee craze percolates through Shanghai

A new report on Starbucks (Nasdaq: SBUX) plans to accelerate its China expansion made me realize just how overheated Shanghai has become with a recent explosion in new coffee shops. In the last 6 months alone, at least a dozen trendy new shops have opened within easy walking distance of my home in an up-and-coming area of the Hongkou District, including 3 or 4 of those by Starbucks itself. Continue reading

News Digest: December 19, 2014

The following press releases and media reports about Chinese companies were carried on December 19. To view a full article or story, click on the link next to the headline.
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  • Microsoft (Nasdaq: MSFT), LeTV (Shenzhen: 300104) In Global Video Cloud Service (Chinese article)
  • Alibaba (NYSE: BABA) Investors Aren’t Fazed As IPO Lockup Expiration Looms (English article)
  • WTO Body Says US Duties On Chinese Solar Panels Break Rules (English article)
  • JD.com (Nasdaq: JD) To Sell Gap Clothing, Vying With Alibaba For Western Brands (English article)
  • MIIT Issues New Round Of VNO Licenses, Stops Accepting New Applications (Chinese article)

CONSUMER: Gree, Airdog Join War Of Piracy Accusations

Bottom line: The snowballing of a recent series of mudslinging remarks by major companies underscores the rampant lack of business ethics in China, and could prompt some much-needed public debate on the topic.

China business ethics in need of fixing

What started as a couple of stories highlighting the shady business practices that are all too common in China is starting to snowball, with home appliance giant Gree (Shenzhen: 000651) and a local start-up air purifier maker adding their voices to this entertaining year-end war of words. At the heart of this verbal mudslinging is a toxic Chinese business culture where practices like illegal copycatting, corporate espionage and violation of business contracts are quite common and even accepted to a certain degree. Continue reading

MULTINATIONALS: Complex Sino-US Ties Shine In Avon, Solar, Qualcomm Cases

Bottom line: China and the west will continue to find common interests in fighting corruption, while Beijing’s state support for certain industries will remain an area of contention for the foreseeable future.

Obama press Xi on Qualcomm case

Sino-US business ties are on display in 3 separate headlines today, reflecting the increasingly complex relationship between these 2 economic superpowers that sometimes agree but often clash on different issues. One of the few things they agree on is the need to fight corruption, which is the theme in one headline that has the US fining health care products maker Avon (NYSE: AVP) for bribery at its China operation.

But the areas of disagreement are a bit more numerous, including US disapproval of Beijing’s strong state support for industries it wants to develop. That disagreement was at the center of another headline that saw the US finalize anti-dumping tariffs against Chinese solar panels, capping a 3-year-old clash on the issue. Heavy western ownership of globally used technologies is another sore spot, which was in the headlines as the US pressured China on a probe it is conducting into the licensing practices of mobile technology giant Qualcomm (Nasdaq: QCOM). Continue reading

SHANGHAI STREET VIEW: Shanghai-fying Canto Diners

Tsui Wah brings retro Canto to Shanghai

Cantonese cuisine has become a local favorite in Shanghai these past few years, reflecting the city’s growing taste for both regional and international foods. An interesting twist on that trend has seen China’s financial capital snub higher-end Cantonese food for more down-market chacanting-style restaurants, which are Hong Kong’s equivalent of the local greasy spoon diners in the west. But these Canto diners that have rapidly colonized Shanghai hardly look like their Hong Kong cousins, and have taken on a decidedly mid- to even high-end approach to the dining experience. Continue reading

News Digest: December 18, 2014

The following press releases and media reports about Chinese companies were carried on December 18. To view a full article or story, click on the link next to the headline.
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  • Baidu (Nasdaq: BIDU) To Buy Uber Stake In Challenge To Alibaba In China (English article)
  • Dalian Wanda Sets IPO Price At HK$48, Near Upper End Of Range (Chinese article)
  • Avon (NYSE: AVN) Ends Bribery Probe Tied to China With Guilty Plea, Fine (English article)
  • US Confirms Duties On Solar Goods From China, Taiwan (English article)
  • Unicom (HKEx: 762), China Telecom (HKEx: 728) To Expand LTE Trial Networks (Chinese article)

CELLPHONES: Qihoo’s New Coolpad JV, Xiaomi Back In India

Bottom line: Qihoo’s new joint venture looks like a smart tie-up to promote its software and online services, while Xiaomi’s resumption of India sales looks like a hollow win in its patent battle with Ericsson.

Qihoo, Coolpad in JV

A trio of smartphone stories are in the news today, including updates on major news involving security software specialist Qihoo 360 (NYSE: QIHU) and the ultra-cool Xiaomi. The first headline has Qihoo moving into the overheated smartphone space through a major new joint venture with domestic giant Coolpad (HKEx: 2369). In the second headline, Xiaomi has been allowed to resume selling some of its smartphones in India, after a judge last week ordered it to stop sales amid an ongoing patent dispute with Swedish mobile technology giant Ericsson (Stockholm ERICb). Continue reading

COMPUTERS: Geely Slides In Russia; Lenovo, TCL At Risk

Bottom line: Lenovo and TCL Communications’ profits are likely to take a hit in the current quarter and into early 2015 due to currency loses related to economic turmoil in Russia.

Geely profits slip on Russia crisis

The economic crisis in Russia is capturing headlines around the world, but far less attention is going to non-Russian companies that are likely to take a hit as a direct result of the turmoil. Automaker Geely (HKEx: 175) has become one of the first to reveal the damage that some companies may face, citing the slide in the Russian ruble as one of the biggest causes for a halving of its profits for 2014. Continue reading

INTERNET: Xiaomi, Momo Bad Ethics Tarnish China Tech

Ericsson sues Xiaomi for infringement

A national anti-corruption campaign at major state-run firms has filled the headlines these last few months, but a spate of smaller scandals last week cast a spotlight on another lower-profile problem that is far too common in China’s private corporate sector. That problem is deficient business ethics, which created embarrassments twice for smartphone sensation Xiaomi, and also for social networking app developer Momo (Nasdaq: MOMO) and security software specialist NQ Mobile (NYSE: NQ). Continue reading

News Digest: December 17, 2014

The following press releases and media reports about Chinese companies were carried on December 17. To view a full article or story, click on the link next to the headline.
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  • Geely (HKEx: 175) 2014 Profit Drops 50 Pct On Forex Loss In Russia (HKEx announcement)
  • Baidu (Nasdaq: BIDU) To Announce $600 Mln Investment In Uber – Source (Chinese article)
  • Insurer Delta Lloyd (Amsterdam: DLL) Sells Belgian Bank To China’s Anbang (English article)
  • Xiaomi Allowed To Resume Sales In India (Chinese article)
  • Qihoo 360 (NYSE: QIHU) Announces Strategic Partnership With Coolpad (HKEx: 2369) (PRNewswire)