It may be a new year, but there’s nothing new about the latest development in the group buying space where an ongoing cleanup has claimed one of the biggest victims yet with reports of mass layoffs at a mid-sized player called Qianpin. This latest shake-up is part of an ongoing retrenchment that has now reached its late stages, and I do expect we’ll see 1 or 2 more major fireworks in the next 6 months before this long and painful consolidation wraps up around the middle of the year.
News Digest: January 30 报摘：2013年1月30日
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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- Chinese Firm Wins Bankrupt A123 Despite US Tech Transfer Fears (English article)
- Suning.com (Shenzhen: 002024) To Adjust Structure After Chinese New Year (Chinese article)
- China’s 2012 Group Buy Transaction Value Grows 61 Pct in 2012 (English article)
- People.cn (Shanghai: 603000) Says 2012 Profit Up More Than 50 Pct (Chinese article)
- New Oriental (NYSE: EDU) Announces Results For Quarter Ended Nov 30 (PRNewswire)
Huawei, ZTE: Uneasy Smartphone Giants 华为和中兴：创业易守成难
I’ve been following the world of technology for more than a decade now, and so many big names have come and gone during that time that nothing really surprises me anymore, especially in the cellphone space where 2 years is the equivalent of an eternity. That seems like an appropriate backdrop for the latest smarphone data, which show that Huawei has come roaring out of nowhere to become the world’s third largest player, according to the latest quarterly figures from data-tracking firm IDC. (English article; Chinese article) At the same time, another recent Chinese fast-riser, ZTE (HKEx: 763; Shenzhen: 000063), has also cemented its place in the global top 5 by finishing at number 5. For anyone too lazy to connect the dots, that means that China now owns 2 of the top 5 spots in the important global smartphone market, with Huawei and ZTE collectively controlling about 9.2 percent of the market in the fourth quarter of last year, up from 7.5 percent a year earlier.
SMS At Start of Long Decline For Telcos 短信业务风光不再
New government data on mobile text messaging, also known as SMS, is underscoring how this former cash cow for China’s telcos is quickly losing its audience, forcing the carriers to quickly look for replacement revenue sources. The new data also adds some new perspective to the high-profile clash between leading telco China Mobile (HKEx: 941; NYSE: CHL) and top Internet player Tencent (HKEx: 700) that erupted last month, as the former accused the latter of stealing its SMS business.
Xiaomi In New Misstep With CCTV 小米与央视的新合作
I quite admire scrappy smartphone start-up Xiaomi for its savvy marketing tactics, but I’m beginning to have doubts about some of its more strategic choices after reading about its latest tie-up with the stodgy China Central Television (CCTV), China’s dominant state-run TV broadcaster. Xioami is in a challenging place in its development, as it tries to make the transition from a niche maker of low-cost, high-performance smartphones to a more mainstream company with a wider range of product and service offerings. The company in many ways is trying to follow in the footsteps of its idol, US tech giant Apple (Nasdaq: AAPL), which also has made the transition in the last 5 years from a relative niche player to the world’s biggest tech company.
News Digest: January 29 报摘：2013年1月29日
The following press releases and media reports about Chinese companies were carried on January 29. To view a full article or story, click on the link next to the headline.
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- Goldman (NYSE: GS) Launches ICBC (HKEx: 1398) Selldown Of About $1 Bln (English article)
- Ban On Games Consoles May Be Lifted, Suggests Culture Ministry Source (English article)
- Xiaomi, CNTV Partner on Internet TV Set-Top Box (English article)
- China’s SMS Volume Grows Just 2 Pct in 2012 (Chinese article)
- Huawei Enters Global Top 3 For Smartphones, Profitability Low (Chinese article)
Gome Cuts Online, As Dangdang Waits 国美和当当网或加强合作
Just days after announcing it would shutter its Hong Kong stores, we’re getting word that struggling home appliance and electronics retailer Gome (HKEx: 493) is also cutting positions in its online division as it looks to return to profitability. These latest job cuts look particularly interesting to me, as they seem to represent a retreat in the important but ultracompetitive e-commerce space, where rivals like Suning.com (Shenzhen: 002024) and Jingdong Mall continue to add staff even as everyone is losing massive money. In this case, Gome’s online cut-backs could perhaps presage a future strengthening of its current alliance with e-commerce specialist Dangdang (NYSE: DANG), and even result in a future marriage between these 2 companies whose e-commerce and traditional retailing businesses are quite complementary.
Cars: Donfeng-Volvo, VW Chases Low End 东风与沃尔沃联姻 大众进军中国低端汽车市场
A couple of news bits from the auto space are underscoring how competitive the sector has become, with domestic carmaker Dongfeng Motor signing a new tie-up with Swedish truck maker Volvo, as Germany’s Volkswagen (Frankfurt: VOWG) moves closer to entering the low-end market traditionally shunned by foreign names. Both of these cases show that big-name automakers, both domestic and foreign, will have to look for creative new ways to keep their business growing in the hyper-competitive Chinese market, and that the days where companies could simply construct a new multibillion-dollar factory to fuel additional growth may be in the past.
Huawei’s Ren: China’s “Wizard of Oz”? 华为任正非：中国的《绿野仙踪》？
I’m just coming back after a week’s absence, so thought I would mark my return by writing about one of my favorite subjects: Ren Zhengfei, the super-shy founder of telecoms giant Huawei Technologies. I don’t usually believe in conspiracy theories, but if I did I might be starting to wonder if Ren is really the powerful and insightful person Huawei keeps describing for us. Instead, I might be starting to wonder if perhaps Ren was a myth created for public consumption, much like the title character in the famous novel “The Wizard of Oz” turned out to be a modest, largely powerless man instead of the powerful wizard he wanted everyone to believe he was.
News Digest: January 26-28 报摘：2013年1月22-28日
The following press releases and media reports about Chinese companies were carried on January 26-28. To view a full article or story, click on the link next to the headline.
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- Lenovo (HKEx: 992) Considers Research In Motion (Toronto: RIM) Acquisition – CFO (English article)
- Volkswagen (Frankfurt: VOWG) Says May Enter Low-Cost Market With China-Built Car (English article)
- China Mobile (HKEx: 941) Starts Macro Investment Analysis of 5 Countries (English article)
- Truck Maker Volvo To Take Minority Stake in Dongfeng Motor (HKEx: 489) (English article)
- Gome (HKEx: 493) Confirms To Cut 200 Workers From Online Division (Chinese article)
Shanghai Street View: Scam City 沪经动向：欺诈之城
I often fill this column with positive stories on Shanghai’s sophisticated approaches to problem solving, but today I want to explore a darker issue that has seen China’s biggest city rapidly emerge as a haven for increasingly sophisticated fraud. Perhaps it’s just my personal view, but it seems like the number of con artists in Shanghai has exploded in recent months, with the result that media reports now appear regularly about the latest sophisticated racket. I’ve also seen growing signs of the problem in my personal life, and recently nearly fell victim to one clever scam which I’ll detail shortly.
