Recently listed e-commerce giant JD.com (Nasdaq: JD) was making plenty of noise in the microblogging realm this week, as it hyped a June 18 promotion that it’s trying to build as an alternative to Alibaba’s wildly popular November 11 Single’s Day event. Meantime, Xiaomi’s talkative CEO Lei Jun was in a rare defensive posture on his microblog, discussing a recent major price cut as his company tries to meet the huge expectations it has set for itself. Last but not least, officials from Alibaba and its recently acquired UCWeb web browser unit took advantage of a recent controversy involving a massive fine against a Shenzhen company to criticize rival Tencent (HKEx: 700) for wielding too much power on the Chinese Internet. Read Full Post…
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News App, VNOs In Start-Up Setbacks
It’s not easy being a high-flying start-up, and the burden becomes even heavier when a company builds up huge expectations for itself through excessive hype. Smartphone sensation Xiaomi was in the headlines last week when it launched a big price cut, leading some to speculate the company was struggling to meet its aggressive sales targets. Now in the latest setbacks for other start-ups, media are reporting that a fast-rising news app called Today’s Headlines is being assaulted on several fronts for copyright infringement. Separately, a newly launched group of mobile service providers called virtual network operators (VNOs) has also received a setback after experiencing widespread technical glitches. Read Full Post…
IPOs: Xunlei’s Strong Debut, Tiange Eyes HK
After a 2 week pause with no new listings, the market for overseas tech IPOs has come chugging back to life with a strong trading debut for video sharing site Xunlei (Nasdaq: XNET). That solid performance could bode well for online karaoke company Tiange, which has just filed for its own new listing in Hong Kong, continuing a recent trend towards more Chinese Internet listings in the former British colony. Both news bits provide the latest evidence that the overseas market for Chinese IPOs is finding a second wind after a losing momentum in April and May. That new momentum is likely to last through August when e-commerce leader Alibaba is expected to make what could be the largest IPO ever by an Internet company. Read Full Post…
Shanghai Street View: Popularizing Parks
This week’s Street View takes us for a stroll through the city’s parks, many of which will extend their opening hours under a trial program to improve access to Shanghai’s open spaces. As a westerner, I find the idea of limited access and operating hours for city parks a bit strange, since most US parks are “open” all the time and have no barriers or fences to limit public access.
Accordingly, I hope this trial program will ultimately lead to the removal of fences and other barriers that now surround are city’s parks in the next few years, providing much-need open spaces to offset the rapid encroachment of skyscrapers and other tall buildings. Read Full Post…
Jiugui Retreats As Baijiu Clean-Up Looms
China’s homegrown traditional liquor industry has been plunged into turmoil over the last 18 months, and now the shakeup may have claimed its first victim with word that Jiugui Liquor (Shenzhen: 000799) is retreating from the national market. Of course the big question will be whether other makers of baijiu, the traditional Chinese liquor, will follow Jiugui’s lead, and whether Jiugui itself will survive as an independent company. I suspect the answer is that some limited and much-needed consolidation will finally begin to occur in this crowded and money-losing sector. But the process may be difficult, since regional stakeholders will be reluctant to give up control of liquor brands that are often closely tied with the identities of many smaller cities and towns throughout China. Read Full Post…
Fosun In Hollywood, ‘Transformers’ Clears China Way
A day after I wrote about a conflict that threatened to delay the premier of the new “Transformers” movie in China, media are reporting the commercial dispute in the matter has been resolved. Meantime, leading Chinese private equity investor Fosun International (HKEx: 656) is also catching the Hollywood fever that has been infecting Chinese media companies lately, announcing a major new investment in a start-up production house led by a former Warner Bros (NYSE: TWX) chief. Both of these stories show that the through train connecting China and Hollywood continues to gain momentum, and even Beijing is getting on board to help solve business disputes that could otherwise cost millions of dollars in lost sales. Read Full Post…
Congress Report Spotlights China Company Risk
US-listed Chinese companies were in the spotlight last week, after a new congressional report detailed the risks they pose to investors due to the unique structure they use to qualify for trading in New York. Uncertainties created by the variable interest entity (VIE) structure are just the latest in a long list of unusual risks that highlight why Chinese firms are quite different from other companies that trade in New York.
But while their risks may be different and often bigger, the rewards of investing in some of China’s biggest corporate names are also potentially huge, as evidenced by exponential growth for shares of some names. Read Full Post…
SMS Teeters On Extinction In 4G Era
New data is showing an acceleration in the decline of text messaging (SMS) in the new age of over-the-top (OTT) services like WeChat, underscoring the urgency for China’s 3 telcos to find new replacements for this important revenue generator. The decline of SMS isn’t new, and has been discussed by all 3 of China’s state-run telcos at one time or another over the last 2 years. The issue was also at the center of a high-profile dispute between China Mobile (HKEx: 941) and Tencent (HKEx: 700) in late 2012, involving the rapid rise of WeChat. But the latest figures do point to an acceleration of the decline, which will lead to hundreds of millions of dollars in lost revenue for the big telcos. Read Full Post…
Pangu Trips Up ‘Transformers’ China Debut
Everyone loves to talk about the huge potential of the China box office, but equally noteworthy are behind-the-scenes risks due to the market’s many unique uncertainties. Regulation is one of the biggest risks due to Beijing’s strict censorship policies. Now legal issues are also coming into the spotlight with news that a company is trying to delay the Chinese premier of the new “Transformers” movie due to a business dispute. We’ll have to wait and see if the complaint by a company that paid for promotional space in the film wins its request for the delay, which could translate to big headaches for US film studio Paramount. Read Full Post…
Investors Favor Online Travel With Tujia Funding
Online travel is quickly taking on a new cult-like status among investors, with word of a major new funding for vacation rental site Tujia. This latest fund-raising frenzy in online travel looks very similar to what happened in group buying about 4 years ago, when investors pumped billions of dollars into a wide range of money-losing start-ups. Internet watchers will know that many of those companies later went bust, raising the prospect that a similar fate could be waiting for the online travel sector. Read Full Post…
KFC Goes Upscale In Search Of Growth
Nearly 3 months after announcing its first major overhaul since entering China in the 1980s, fast-food giant KFC (NYSE: YUM) is saying it plans to move upscale as part of a drive to reignite its sputtering growth in the market. This kind of repositioning looks quite shrewd, and plays to a more upscale image that overseas brands naturally receive due to their foreign status. KFC actually enjoyed such upscale status when it first came to China in 1987, when its clean restaurants, friendly service and and quality food were considered superior to the fare at many local eateries at that time. But as China’s economy has boomed and income levels have risen, KFC’s image has moved considerably downscale, and the chain is now considered quite average. Read Full Post…
