Bottom line: Alibaba’s new online credit product and global shopping mall look like smart new initiatives that could help maintain its strong growth to justify its high valuation.
Alibaba financial unit trials credit product
It’s been quite a while since I’ve written about the actual business of e-commerce giant Alibaba (NYSE: BABA), which has captured global headlines for much of the last 4 months for mostly financial reasons after its record-breaking IPO in September. So on that note, I was quite happy to finally read new headlines on some smart-looking moves the company is making to justify its sky-high valuation, which is built on expectation for continuing super-charged growth.
One of those initiatives has Alibaba’s finance unit rolling out a product that looks like a variation of traditional cards, and is aimed at getting shoppers to spend even more on its popular e-commerce platforms. The other is an update on its new global e-commerce initiative that looks like it’s gaining some strong early momentum, at least according to the company’s own telling of the story. Read Full Post…
Bottom line: The NDRC should force Qualcomm to change some of its licensing practices but not force it to lower prices in its upcoming antitrust settlement against the company.
Qualcomm judgment coming soon
All eyes will be on China’s anti-monopoly regulator in the days ahead, when it’s expected to rule in a case involving the pricing and licensing policies of global smartphone chip leader Qualcomm (Nasdaq: QCOM). The case is the latest in a string of recent similar antitrust probes by Beijing against major companies. But it’s also quite different because it involves licensing practices for proprietary technology, which aren’t typically included in the conventional definition of monopolies. Read Full Post…
Bottom line: Dianping’s major new fund raising is likely to be its last before a New York IPO, which could come as soon as the first half of next year and raise up to $800 million.
Dianping in major new fund raising
I’m having a slight feeling of deja vu today, after reading the latest reports that restaurant ratings and group buying site Dianping has just won a major new funding round worth nearly $800 million. This particular news comes just a week after similar reports came out saying that rival group buying site Meituan was on the cusp of closing a new funding round totaling $700 million, in one of the biggest such private investments for China’s Internet sector this year. Internet watchers will recall that the last time we saw this kind of fund-raising flurry around a single industry came nearly 4 years ago, when investors poured hundreds of millions of dollars into the very same group buying space. Read Full Post…
Bottom line: Huawei’s low-cost Honor brand is likely to gain global market share in 2015 at the expense of multinationals like Samsung, which is likely to lose its spot as China’s top smartphone seller in the new year.
Sales soar at Huawei’s Honor brand
Two of China’s leading smartphone sellers are in the headlines today moving in opposite directions, reflecting turbulent conditions in the world’s largest but also most competitive market. On the upside, media are reporting that sales are booming for domestic giant Huawei’s low-end Honor brand, as the company borrows a low-cost marketing strategy from domestic rival Xiaomi. Meantime, other reports say market leader and Korean giant Samsung (Seoul: 005930) is sending an emergency team of rescuers to China in a bid to reverse the company’s sudden slide in the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 27-29. To view a full article or story, click on the link next to the headline.
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Tesla (Nasdaq: TSLA) Helps Chinese Buyers Trade In Old Cars For Model S (English article)
Bottom line: Wanda will face a steep uphill climb in electronic payments following its purchase of 99Bill, while UnionPay will continue to grow rapidly overseas as more Chinese travelers and businesses go abroad.
Wanda buys control of 99Bill
Two big news bits from the electronic payments space are in the headlines as we round out 2014, led by news of a major new acquisition by property giant Wanda Group just days after a Hong Kong IPO for its core shopping mall unit. The other new revolves around industry giant UnionPay, which has feasted on outbound Chinese tourist and business spending to pass larger global rivals MasterCard (NYSE: MA) and Visa (NYSE: V) for issuing credit cards in nearby South Korea. Read Full Post…
A new program to encourage entrepreneurship at the city’s universities has been in the headlines these last few weeks, and on the surface at least looks like a good idea. But the new initiatives at several of our local schools have met with a lukewarm reception, probably because they look like yet another way to add stress to the lives of our city’s youth who already feel incredible pressure to succeed.
As a teacher in one of Shanghai’s major universities, I get to see the huge pressures that many of our students face on a daily basis as they try to satisfy the huge expectations heaped on them by both their parents and society. Encouraging students to take time off from school to start companies would simply add one more thing for them to stress out about. Read Full Post…
Bottom line: Kingfisher’s sale of control of its China home improvement chain to a local partner will produce an uneasy alliance that will ultimately see the UK retailer withdraw its B&Q name from the market.
Kingfisher hands over B&Q China to Wumart
Just weeks after US electronics retailing giant Best Buy (NYSE: BBY) made a final retreat from China, British rival Kingfisher (London: KGF) is making a similar move with word that it’s selling control of its China B&Q store operations to a local buyer. These 2 deals mark an interesting twist on a trend that has seen other global retailers like Home Depot (NYSE: HD) and Germany’s Metro (Frankfurt: MEO) also abandon the tough China market. Whereas the earlier cases saw companies simply close down their China operations and leave, this new wave of deals has firms selling their operations to eager Chinese buyers. Read Full Post…
Bottom line: BBVA’s cut-back in its alliance with Citic represents the latest divorce between western banks and Chinese partners, with little new foreign investment likely in the sector for the next 2-3 years.
BBVA sells stake in Citic unit
A trend that’s been quiet for more than a year has popped back into the headlines, with word that Spain’s second largest bank has dumped its stake in a holding company tied to Chinese financial services conglomerate Citic Group. This particular deal is being driven by a number of factors, including a need for cash by Spain’s Banco Bilbao Vizcaya Argentaria SA (BBVA). But the bottom line is that BBVA and other major foreign banks have ended most of their similar alliances with Chinese partners over the last 3 years after such tie-ups failed to produce any strategic benefits. Read Full Post…
Bottom line: Shares of BAIC and Dalian Wanda will be flat over the next few months after weak trading debuts, while Linekong shares will open down 5-10 percent if they debut before year-end.
Dalian Wanda dips in IPO
The year-end flurry of IPOs happening in Hong Kong is sputtering, with the 2 biggest offerings by shopping mall operator Dalian Wanda (HKEx: 3699) and car maker BAIC Motor (HKEx: 1958) both making weak trading debuts. That doesn’t bode too well for one of the year’s final remaining IPOs for Linekong, since other companies from the highly competitive video gaming sector haven’t done very well in their similar recent listings in Hong Kong. Read Full Post…
Bottom line: China is positioned to become a global leader in development of open platforms as an Internet business model, but regulators should take a more active role in overseeing these marketplaces.
Ctrip joins open platform rush
China is quickly becoming a global leader in a type of online business that uses an open platform model at its core, with travel stalwart Ctrip (Nasdaq: CTRP) becoming the latest entrant into the space after years of operating a more traditional closed platform service. While traditional closed platforms see website operators sell products directly to consumers, open platforms let operators simply manage online marketplaces where consumers can shop for products from a wide range of third-party merchants. Read Full Post…
