Chinese media are finally discovering something that I’ve know all along, namely that Starbucks (Nasdaq: SBUX) coffee here is ridiculously overpriced. Some might say a new investigative report from national broadcaster CCTV could be cause for alarm for Starbucks, as previous similar reports have spelled headaches for other big foreign names like Apple (Nasdaq: AAPL), KFC (NYSE: YUM) and McDonalds (NYSE: MCD). But in this case, I’m actually quite encouraged to see the story is actually sparking some healthy and relatively well-informed debate about free markets and the premiums that “luxury” brands should be able to charge for their products. Read Full Post…
High-flying smartphone maker Xiaomi is at the center of 2 recent strings of microblog posts, one touching on an interesting new connection with Facebook (Nasdaq: FB) and the other hinting at an increasingly cozy relationship with struggling online clothing seller Vancl. Interestingly, Xiaomi’s talkative co-founder and chief executive Lei Jun is largely absent from the dialogue in both cases, which each has sensitive overtones, implying that perhaps we could see more news in the weeks ahead. Read Full Post…
I’ve been watching with interest this week as e-commerce leader Alibaba has discovered a sudden urgency to grow its business in the social networking (SNS) space, with founder Jack Ma leading the charge. In the last few days, media have reported that Alibaba has made a major new acquisition in the sector, and Ma is also trumpeting the importance of the company’s recently launched Laiwanginstant messaging service that will compete with Tencent’s (HKEx: 700) hugely popular WeChat service. All this comes after Alibaba earlier this year signed a landmark agreement to buy a major stake in Sina’s(Nasdaq: SINA) Weibo service, often called the Twitter of China. Read Full Post…
Update: After originally posting this item, a Renren spokesman has gotten in touch to deny there are any talks for asset sales to Baidu beyond the original Nuomi sale.
Baidu (Nasdaq: BIDU) is the subject of a new flurry of news bits, including growing ties with social networking leader Renren (NYSE: RENN) and a new financial services initiative, spotlighting the sudden urgency it feels to grow beyond its core search business. The Renren news bits are the most interesting to me, because they highlight the importance of social media to the growth strategies of most major Chinese Internet companies and could also presage an eventual acquisition. The financial services initiative also reflects the sudden rush by Chinese web giants into this area, though Baidu looks a bit late in its arrival to the space. Read Full Post…
KFC picks India, ignores China, in new milestone announcement
A new announcement from KFC parent Yum Brands (NYSE: YUM) is interesting for what it doesn’t say, spotlighting the fact that the company would prefer not to talk about the many difficulties it has recently faced in China. Anyone who has followed the KFC story closely over the last decade will know that China featured prominently in many of Yum’s announcements during that time, as the market posted consistent double-digit gains that helped to boost Yum’s profits by similar amounts. But lately those gains have evaporated, and KFC has now posted same-store sales declines in China for much of the past year. What’s more, Yum keeps extending its timeline for a recovery, which now isn’t expected until next year at the earliest. Read Full Post…
My earnings seasons officially kicks off today with reports from leading telco China Mobile (HKEx: 941; NYSE: CHL) and former e-commerce superstar Dangdang (NYSE: DANG), whose third-quarter results are sending a subdued message of stiff competition and slowing growth. Each company is struggling with its own individual issues, but the common theme is that both have missed market expectation by a significant margin. A number of factors are at work that I’ll describe shortly, but fierce competition and China’s slowing economy seem to be 2 of the biggest issues facing both companies. If this shaky start turns into a trend, we could see other companies reporting similarly disappointing results in the weeks ahead. Read Full Post…
I don’t usually write about expat-specific topics in this column, as I prefer to focus on broader issues of interest to everyone here in Shanghai. But a recent news story on the difficulties faced by an expat who obtained a rare Chinese green card seemed like a good opportunity to look at the bureaucracy that affects all of us here as we go about our daily lives. Read Full Post…
Rupert Murdoch’s News Corp (Nasdaq: NWSA) ended its stormy love affair with Chinese television late last week, when it sold its last remaining major asset to a private equity firm. The company’s gradual withdrawal over the last 3 years underscores the difficulty that many western media firms still face in China’s TV market despite rapid changes over the last year. Domestic and foreign companies alike need space to act more commercially in a streamlined regulatory environment for China to develop a truly world-class industry that can someday challenge the dominance of Hollywood. Read Full Post…
We’re rapidly running out of days in October for 2 major telecoms developments that many were expecting this month, namely the awarding of new licenses for 4G wireless service and for new telecoms service providers known as virtual network operators (VNOs). There are still 10 days left in the month, so it’s possible that one or both could still happen. But the usual delays could mean we may not see any major announcements for a little while longer. Meantime, media are reporting some new information on a timetable for the VNO roll-out; and in another major development that could shake up the status quo, media are also saying that leading wireless telco China Mobile (HKEx: 941; NYSE: CHL) could soon get a license to offer fixed-line telecoms services. Read Full Post…
Update: After publishing this originally, a Qunar spokeswoman pointed out that Goldman Sachs was among the investment banks underwriting its IPO. So that changes the tenor of the last part of the post, which says that no premium investment banks were involved in the offering.
A long awaited year-end fund-flurry of fund raising by Chinese tech firms is gaining momentum, with online travel sites Qunar and Ctrip (Nasdaq: CTRP) leading the charge as investor interest finally returns to the market. Qunar has just made the first public filing for its long-delayed IPO, while Ctrip continues to dazzle the markets by raising the size of its recent mega bond offer for the second time, underscoring strong demand from investors. Read Full Post…
I wanted to take a break from the usual companies I write about to look at the quietly rising NQ Mobile (NYSE: NQ), which has just joined a elite club of top Chinese web firms with a new major bond issue. The fact that NQ, formerly known as NetQin, could issue these bonds at all reflects its growing attractiveness to investors as a strong bet on China’s security software market. I can’t comment too much on its products, as I haven’t used them; but the company certainly looks well positioned to gain share in a market now dominated by Qihoo 360 (NYSE: QIHU), whose free security software is becoming the subject of growing controversy. Read Full Post…
