Retail/Consumer

E-COMMERCE: Alibaba, JD.com Step Up Supermarket Drive

Bottom line: Alibaba could buy the RT-Mart supermarket chain this year to boost its grocery business, while JD.com’s more online-focused effort and push into smaller cities looks like a better approach to the sector.

Alibaba grocer drives into Sun Art, JD goes to small cities

The online supermarket wars that began last year between e-commerce rivals Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD) are heating up in the Year of the Rooster, though the pair seem to be taking slightly different tacks, at least based on the latest headlines. Leading those are reports that Alibaba is in talks for a tie-up of some sort with Sun Art (HKEx: 6808), operator of the popular RT-Mart supermarket chain. Meantime, JD is making its own headlines in the space, with an executive detailing the company’s plans to achieve 100 billion yuan ($14.5 billion) in sales from its operation this year. Read Full Post…

ECOMMERCE: Wanda’s E-commerce Foray Running on Empty?

Bottom line: Wanda will continue to operate its ffan e-commerce site for another year, following the departure of its CEO, but could quietly end the initiative afterwards due to lack of synergies with its brick-and-mortar shopping malls.

Success evades Wanda in e-commerce

The headlines have been buzzing this week about the departure of the chief executive of the e-commerce unit Wanda Group, the real estate-turned-entertainment giant with a voracious appetite for global acquisitions. The big theme from the chatter is that the departure of Li Jinling, the unit’s third CEO in 3 years, marks a setback and possibly even presages a death knell for the Wanda initiative into the online shopping realm.

Wanda is speaking out on the subject, saying it never intended to launch a website that would compete directly with the likes of sector leaders Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD). Perhaps that’s true, though that didn’t stop Wanda and its ultra-confident chief Wang Jianlin from boasting of lofty ambitions when it signed up Internet titans Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700) as partners to its ffan e-commerce site in 2014. Read Full Post…

INTERNET: Baidu Tackles Profit-Challenged Nuomi, Takeout Dining

Bottom line: Baidu could soon make big cuts at Nuomi and sell or spin off the unit by year end, while it will also put its takeout dining unit on a strict diet that forces it to show a clear path to profitability by year end.

Nuomi set for haircut in 2017?

After years of hemorrhaging money from its newer online-to-offline (O2O) businesses, leading search engine Baidu (Nasdaq: BIUD) may finally be saying enough is enough. That seems to be the message coming from new reports that say the company has launched a campaign to improve performance at its massive businesses that combine real-world services like watching movies and buying restaurant food with web-based ordering systems.

The reports point to Baidu’s Nuomi group buying site as a particular center where the clean-up campaign has begun, but I also suspect a similar move may be taking place at its equally massive and money-losing takeout dining service. That pair of new businesses are massive cash-burners at Baidu, alongside the company’s iQiyi online video service and its Qunar (Nasdaq: QUNR) online travel agent. Read Full Post…

RETAIL: Yum China Looks Flat in Maiden Report

Bottom line: Yum China’s maiden quarterly report and $300 million share buyback program highlight a company that needs to move more aggressively and take more risks to regain its footing after being spun off from its US parent.

Yum China posts unimpressive maiden quarterly report
Yum China posts unimpressive maiden quarterly report

Fast food operator Yum China (NYSE: YUM) has just put out its maiden quarterly earnings report that looks decidedly ho-hum, including a somewhat surprising announcement of a $300 million share repurchase program. The operator of KFC and Pizza Hut stores in China was formally split off from its parent, Yum Brands (NYSE: YUM), late last year, following shareholder pressure to let the unit operate more independently in the somewhat unique and fast-changing Chinese market. Read Full Post…

SMARTPHONES: Xiaomi Gets US Black Mark

Bottom line: Xiaomi’s poor handling of a case involving malfunctioning fitness bands in the US is unlikely to erupt into a crisis, but shows how unprepared the company is for moving into PR-savvy western markets.

Xiaomi wristband suffers from bad race relations in US

Smartphone maker Xiaomi just can’t seem to catch a break in the final days before the Lunar New Year. Earlier this week the company made headlines when Hugo Barra, its prized foreign catch who was heading its global expansion, announced he would be resigning and returning to his home in Silicon Valley. Now the latest negative headline is also coming from the US, where media are reporting that blacks are complaining that Xiaomi’s wristband-style fitness tracker doesn’t seem to work for people with dark skin.

It does seem somewhat coincidental that this pair of negative items have occurred in the same week, since Xiaomi has largely fallen from the top news pages these days. If we wanted to say that bad news comes in threes, I could even mention another more significant headline saying Xiaomi’s share of the global smartphone market fell to 3.7 percent last year from 5.2 in 2015. (press release) But that’s a story for another day. Read Full Post…

INTERNET: Alibaba’s Koubei Raises Funds in Late Arrival to Take-Out Services

Bottom line: Alibaba’s Koubei is unlikely to gain major traction despite its $1.1 billion in new funding, due to its late arrival to a crowded O2O take-out dining space already dominated by Baidu, Ele.me and Meituan-Dianping.

Koubei raises $1.1 billion

The longer I stay in China, the more the latest stories coming from the Internet sector look like I’ve seen them before. That’s certainly the case with Koubei, the Alibaba (NYSE: BABA) online-to-offline (O2O) take-out dining delivery service, which is close to landing a fresh $1.1 billion in new funding. In this case, Alibaba’s extremely late arrival to the space looks a lot like its vain attempt to play catch-up to Tencent’s (HKEx: 700) WeChat with a service called Laiwang back in 2013. Read Full Post…

INTERNET: Meitu Fires Up Online Services in Bid for Excitement

Bottom line: Meitu’s new disclosure of rapid growth in its internet services revenue looks encouraging, as it takes advantage of its early arrival status in a beauty products sector with big profit potential. 

Meitu makes over image with internet revenue growth

A month after its lackluster IPO, beauty app operator Meitu (HKEx: 1357) is trying to shore up its sagging stock by releasing some financial data that proves it’s more than just a place for people to doll up selfies to share with friends. The particular data shows that Meitu actually earned some relatively sizable Internet revenue from online sales and advertising in the month of December, proving it can make money more directly linked to its core beauty app.

Before that, the lion’s share of the company’s revenue had come from sales of smartphones optimized for its app. Critics had argued such a business model wasn’t really sustainable, since many such purchases are one-time items that might not be repeated. By comparison, online advertising and sales of products linked to its core app seem more sustainable. Read Full Post…

E-COMMERCE: Alibaba Gets Alter Ego with Yahoo-Turned-Altaba

Bottom line: Alibaba will closely watch the performance of the newly minted Altaba over the next 1-2 years, and could make a privatization bid with Softbank if it feels the company is undermining its own stock.

Yahoo to morph into Altaba

Yahoo (Nasdaq: YHOO) co-founder Jerry Yang never would have dreamed a decade ago that the ground-breaking search engine he co-founded might someday morph into a Chinese e-commerce company called Alibaba (NYSE: BABA). But that’s pretty much what has just happened, with official word from Yang’s former baby that it will change its name to Altaba following the pending sale of its core Internet business. Read Full Post…

E-COMMERCE: Alibaba Finds Friend in Trump, Quagmire in Intime

Bottom line: A meeting between Jack Ma and Donald Trump is a major coup for Alibaba and bodes well for its US relations, while a privatization plan for its partly owned Intime Retail reflects its spottier record for strategic investments.

Jack Ma scores Donald Trump meeting

E-commerce giant Alibaba (NYSE: BABA) is wasting no time making big headlines in the New Year, starting with a major coup that has seen founder Jack Ma become the first big Chinese business leader to score a meeting with incoming US president Donald Trump. At the same time, the company is also suffering a much smaller defeat back at home, with word that Alibaba will help to privatize Intime Retail (HKEx: 1833), after becoming a major shareholder in the brick-and-mortar retailer nearly 3 years ago.  Read Full Post…

E-COMMERCE: Alibaba Gets Christmas Coal from Washington

Bottom line: Alibaba’s Taobao marketplace is likely to be included on the annual US “notorious markets” for piracy list for the next 1-2 years, after its return to the list this year.

Alibaba’s Taobao gets coal for Christmas

Christmas may be just around the corner, but the folks at e-commerce giant Alibaba (NYSE: BABA) won’t be feeling much holiday cheer this year. That’s because Alibaba’s hugely popular Taobao C2C marketplace has just been included on the latest edition of Washington’s annual “notorious markets” for piracy list, in a sharp rebuke to the company. The move reverses an earlier decision by Washington 4 years ago, when it took Taobao off the list to acknowledge its efforts to fight the problem. Read Full Post…

CONSUMER: Bright Food Gets Indigestion from Weetabix

Bottom line: Bright’s plan to sell Weetabix 4 years after the purchase is mostly due to declining performance at the British cereal maker, with similar sales likely to follow for other poorly planned food purchases by Chinese buyers.

Bright loses appetite for Weetabix

After splashing into the global M&A headlines 4 years ago with its purchase of a well-known British breakfast cereal maker, Shanghai’s Bright Food has decided that Weetabix apparently isn’t its cup of tea. That seems to be the message in the latest headlines, which say that Bright is looking to sell the British company for quite a discount to the price it paid at the time of the ground-breaking deal in 2012.

Of course much has happened since Bright, known in Shanghai for its biscuits and dairy products, first announced the deal. Bright brought Weetabix’s core breakfast cereal products to China not long after the deal was closed, and even talked about making a separate listing for the British company. Read Full Post…