Just 6 years after coming to China, US home improvement giant Home Depot (NYSE: HD) is shuttering most of its China shops, becoming the latest major foreign retailer to discover that China’s 1.3 billion consumers aren’t quite the same as their peers in the West. Home Depot’s departure follows the equally high-profile closure of US electronics retailing giant Best Buy (NYSE: BBY) stores last year (previous post), and I suspect that the reasons for both companies’ failures are similar. Put simply, both Best Buy and now Home Depot discovered that price is by far the most important factor for Chinese consumers, who are always looking for the best bargains. Brand loyalty and customer service — 2 important elements that attract consumers to Best Buy and Home Depot stores in the West — are far less important to the Chinese.
Unicom Fumbles Another iPhone Launch iPhone 5开售在即 中国联通再次不给力
China Unicom (HKEx: 762; NYSE: CHU) should be ashamed of itself for its recurrent ineptitude that has once again resulted in China’s exclusion from the list of countries where the newest iPhone 5 will make its global debut. That’s my major conclusion from an increasingly recurrent theme that has seen Apple launch major new products in the US and in numerous countries globally, only to delay their launch in China for months for unexplained reasons.
Lee Kai-Fu, Huawei Turn Up the Offense 李开复“军团”和华为开始反击
I lauded a group of Chinese Internet leaders earlier this week for finally taking a more offense-oriented approach to a prolonged series of short seller attacks against them, saying Chinese firms needed to be more aggressive when they found themselves being bullied by foreigners on the global stage. Now it seems that same group is turning up its attack a notch by demanding an apology from the short sellers; and in a similarly aggressive and offense-oriented move, telecoms equipment maker Huawei is indirectly expressing outrage and frustration at a steady stream of US allegations that its equipment contains deliberate security lapses designed for to enable spying by Beijing.
Alibaba Catches Baidu, Trails Tencent 阿里巴巴追上百度，落后于腾讯
The headlines have been buzzing this week with word that e-commerce giant Alibaba will soon announce the sale of 20 percent of its shares held by Yahoo (Nasdaq: YHOO) to a new investor group for $7.6 billion, in the first step of a slow-motion divorce between these 2 Internet giants. (English article; Chinese article) From my perspective, the most interesting elements of the announcement will be the latest valuation Alibaba gets as a result of the deal, and also the names of the new investors in this massive new stake sale. Both will hint at what the future holds for Alibaba in terms of growth as it moves towards an IPO as soon as 2014.
News Digest: September 14, 2012 报摘： 2012年9月14日
The following press releases and media reports about Chinese companies were carried on September 14. To view a full article or story, click on the link next to the headline.
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- China Unicom (HKEx: 762) to Release iPhone 5 within 3 Months – Official (English article)
- Paper Published By China’s Huawei Decries US Treatment (English article)
- Aviva (London: AV) Exits China Funds Sector Amid Rising Competition, Falling Assets (English article)
- Simcere Pharmaceutical (NYSE: SCR) Announces Appointment of New CEO (PRNewswire)
- Lee Kai-Fu, Business Leaders Demand Apology First From Citron (Chinese article)
Shanghai Street View: Setting the Table for Hairy Crabs 沪经动向：摆好桌子迎接大闸蟹
It’s already mid-September, and that means seafood lovers from Hong Kong to as far afield as Japan and Singapore are foaming at the mouth with expectation for the annual arrival of one of Shanghai’s most famous exports — the hairy crab. As a resident of Asia for a decade now, I know that these crabs have developed an almost legendary status throughout the region. Their arrival each season from the famous Yangcheng Lake in nearby Jiangsu province is an annual rite of passage for the end of summer and beginning of fall, and is marked by big banquets of seafood lovers feasting on these green crustaceans with beady eyes and thick mounds of muddy-looking hair on their front claws.
Tencent Wechat Wows Mobile IM 腾讯微信主导移动即时通讯
The fight for dominance in of China’s mobile Internet is producing some interesting global shifts, with big names like Baidu (Nasdaq: BIDU) and Alibaba facing aggressive, younger competitors as they try to translate their dominance of the older desktop Internet to the mobile space that will become a key growth driver in the next decade. But one company that seems on track to maintain its dominance is Tecent (HKEx: 700), China’s largest Internet company by market value, which rose to prominence a decade ago with its highly popular QQ instant messaging product. Now it seems that Tencent’s mobile instant messaging product Wechat, better known by its Chinese name of weixin, is facing little or no opposition in its rapid rise to become China’s dominant mobile IM product. (previous post)
Samsung NAND Plant: Ode to China Market 三星NAND工厂落户西安 看好中国市场
There’s lots of interesting news on smaller company developments today, but I want to take a step back from some of those to write about a much bigger development that will probably get much less attention, namely a massive new memory chip being built by Samsung (Seoul: 005930) in the interior city of Xi’an. This plant, which was first announced in April, will manufacture NAND memory chips used in smartphones and USB computer memory drives. The plant is in the news once again because construction has just officially begun in Xi’an, with top officials from Samsung, South Korea and Shaanxi province all in attendance at a ground-breaking event. (company announcement)
News Digest: September 13, 2012 报摘： 2012年9月13日
The following press releases and media reports about Chinese companies were carried on September 13. To view a full article or story, click on the link next to the headline.
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- Alibaba to Announce Completion of $8 Bln in New Fund Raising Next Week – HK Media (Chinese article)
- Trina Solar (NYSE: TSL) Streamlines its Operations (PRNewswire)
- 4 Regional Managers Leave LaShou – Source (Chinese article)
- Samsung (Seoul: 005930 Breaks Ground for Memory Manufacturing Complex in China (Businesswire)
- China’s 3SBio (Nasdaq: SSRX) Gets Buyout Offer From CEO (English article)
Haier Breaks China Pattern of Sickly M&A 海尔打破中国并购旧模式
I have to admit that my first reaction was one of skepticism when I read earlier this week that Chinese home appliance giant Haier (HKEx: 1169) was weighing a bid for New Zealand’s Fisher & Paykel (NZ: FPA), as the bid appeared to follow a familiar and largely unsuccessful pattern for Chinese companies making overseas M&A. But a closer inspection of the financials reveals that after previously falling on hard time, F&P may actually be a company on an upward trajectory, giving this potential acquisition a much better chance of success.
Jingdong Mall Tries Gaming 京东商城有意进军网游业
When future historians look at the early days of the China Internet, Jingdong Mall will probably be remembered as a sort of hyperactive organism that had too much money and tried to do too many things, wreaking havoc on the entire web community in the process. That’s my latest assessment of this hyperactive e-commerce giant, which also calls itself 360Buy, following the latest reports that Jingdong now plans to get into the online games business. (English article; Chinese article)
