Bottom Line: Despite strong competition, e-commerce giant Amazon stands a chance of success in China by leveraging its unique strength supported by its global logistic system and trusted brand.
By Lu Jin
Amazon launches imported goods store for China
Even as numerous buyers and sellers in China created another record online shopping spree in the virtual malls of Alibaba (NYSE: BABA) on Double Eleven day last week, global e-commerce giant Amazon (Nasdaq: AMZN) also did something new: It launched its Chinese language online store offering imported goods, called “shop overseas”.
Voices were heard in the market in no time: “Here comes the wolf!”
Just how bad is this “wolf”, or is the wolf really even coming? Read Full Post…
Chatter in the microblogging realm this past week was squarely focused on the Double Eleven shopping binge that saw e-commerce sites and smartphone makers log impressive sales on the date also known as Singles Day. But not everyone was boasting about huge sales, as executives from early e-commerce leader Dangdang (NYSE: DANG) and smartphone aspirant Smartisan were both uncharacteristically quiet on their microblogs, hinting at mediocre results on the shopping holiday.
The situation was just the opposite at e-commerce leader Alibaba (NYSE: BABA), which single-handedly commercialized a day that now generates more sales than even Black Friday or Cyber Monday in the US. That rapid success in such a short time was putting a strain on Alibaba’s Alipay electronic payments arm, which reportedly was restricted to processing payments from Alibaba’s own e-commerce sites. That meant other companies’ sites often couldn’t accept Alipay for payments on their sites during the day.
The following press releases and media reports about Chinese companies were carried on November 19. To view a full article or story, click on the link next to the headline.
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Qihoo 360 (NYSE: QIHU) Sues Baidu (Nasdaq: BIDU) For Attack On Reputation (Chinese article)
Bottom line: Apple’s new UnionPay tie-up is aimed at an eventual roll-out of its Apple Pay in China, while Baidu’s reported purchase of 99Pay marks a late but needed bid to boost its electronic payments capabilities.
Baidu eyes 99Bill
A couple of electronic payments stories reflect the rapid changes taking place in China’s banking market, where such payments are quickly making cash and even traditional credit cards obsolete. The higher-profile of the 2 deals has global gadget leader Apple (Nasdaq: AAPL) in a deal to accept payments for its China app store in partnership with leading electronic payments firm UnionPay. The second deal has leading Internet search Baidu (Nasdaq: BIDU) reportedly looking to boost its presence in the space with plans to buy existing player 99Bill for 2 billion yuan ($325 million). Read Full Post…
Bottom line: JD’s quarterly results look typical for recently listed Chinese Internet firms, showing fast-growing revenues and soaring costs, which will pressure company stocks in 2015 as short-term investors leave the space.
Marketing costs soar at JD.com
Reality is finally coming to Wall Street, as investors dumped shares of e-commerce giant JD.com (Nasdaq: JD) after it reported earnings that looked strong but not quite good enough to justify the company’s meteoric valuation. The bigger question now is whether the 7 percent drop in JD’s shares marks the beginning of a much-needed correction in their price. Regular readers will know that my answer to that question is a definitive “yes”, and that the coming correction won’t just be limited to JD but will also hit leading e-commerce firm Alibaba (NYSE: BABA) and many other recently listed Chinese Internet stocks. Read Full Post…
Bottom line: The new connection between the Shanghai and Hong Kong stock exchanges will make China tech stocks accessible to Chinese investors, and could prompt more companies to abandon New York for Hong Kong IPOs
HK-Shanghai link opens doors for Chinese tech buyers
The newly launched link between the Hong Kong and Shanghai stock markets should breathe new life and stability into China’s volatile stock markets by making shares of mainland-listed firms accessible to sophisticated Western buyers with billions of dollars to invest. But equally exciting is a bumper crop of new investment opportunities that will soon become available to Chinese investors, who will finally gain access to wide range of top domestic high-tech firms that for years were beyond their reach. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 18. To view a full article or story, click on the link next to the headline.
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Bottom line: Qunar could experience some short-term loss of business due to the withdrawal of Home Inns properties from its site, and its open platform business model makes it prone to such problems.
Home Inns checks out of Qunar lodge
Signs of turmoil are coming from the lodge operated by Qunar (Nasdaq: QUNR), with word that the online travel agent has just lost a major customer with the abrupt departure of leading budget hotel chain Home Inns (Nasdaq: HMIN). The departure of such a major customer, if true, would mark a big blow to Qunar, which had a recent similar break-up with chief rival Ctrip (Nasdaq: CTRP). Home Inns’ decision is motivated by different reasons than Ctrip’s, which I’ll explain shortly. But the 2 spats highlight the fact that Qunar’s business model, which centers on an open platform for third-party travel agents, is far more prone to problems than traditional travel sites that directly sell products like hotel rooms and air tickets to consumers. Read Full Post…
Bottom line: A year-end rush of Chinese IPOs will include mostly second-tier firms seeking to capitalize on positive market sentiment, leading to weak pricing and delayed trading debuts.
eHi IPO delayed
The year-end rush of IPOs that I’ve been predicting has hit a speed bump, with word that one offering set to debut last week has been delayed and a second has been scaled back dramatically. The first piece of news saw car rental specialist eHi (NYSE: EHIC) unexpectedly delay its offering at the last minute, reportedly after the company came under suspicion of submitting false information in some of its earlier IPO filings. Meantime, Sky Solar Holdings (Nasdaq: SKYS) had to dramatically scale back its planned US listing after meeting with lukewarm demand, as it became the first solar panel-linked company to make a US listing in 4 years. Read Full Post…
Bottom line: Alibaba’s new mega bond will pressure it to find good uses for its huge cash pile, while Tencent’s Warner Music tie-up is part of a new wave of deals to monetize its SNS platforms.
Alibaba plans mega bond offer
Leading Internet companies Alibaba (NYSE: BABA) and Tencent (HKEx: 700) are both in the headlines today with major new deals, spotlighting their growing need to stay in the news to remind investors why they are valued so high. The larger of the 2 news bits has Alibaba planning to raise a hefty $8 billion through a bond offer, while the other has Tencent in a major new tie-up with Warner Music, one of the world’s top record labels.
I was mostly impressed by the sheer size of Alibaba’s bond offer plan, which is easily the largest I’ve seen by a Chinese Internet company. Tencent launched its own $5 billion bond program earlier this year, but has had to offer the notes in several tranches due to the huge size. (previous post) Baidu raised its own $1.5 billion in a bond offer 2 years ago, and in June announced plans for another major offering without specifying any specific fund-raising targets. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 15-17. To view a full article or story, click on the link next to the headline.
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Major Hedge Funds Piled Into Alibaba (NYSE: BABA) In Third Quarter (Chinese article)
eHi Car Services (NYSE: EHIC) IPO Delayed By False Information Claims (Chinese article)
Bailian Group Takes 10 Pct Of Shanghai Disneyland (NYSE: DIS) Operator (Chinese article)
China Mobile’s (HKEx: 941) TD-LTE Subs Reach 50 Mln (English article)
Home Inns (Nasdaq: HMIN Removes All Listings From Qunar (Nasdaq: QUNR) (Chinese article)
