The latest sign of distress in the battered e-commerce sector is coming from online clothing retailer Vancl, with media reporting the company has slashed operations at its package delivery arm in what looks like a desperate cost-saving move. Frankly speaking, I wholeheartedly support this kind of move, if it’s really true, as I personally believe that e-commerce companies shouldn’t be delivering parcels to begin with, and instead should leave that part of the business to professional specialists like UPS (NYSE: UPS) and China’s own China Postal Express, which itself is preparing for a domestic IPO to help fund its ongoing expansion. (previous post)
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China Ends UnionPay Monopoly 中国结束银联垄断
Beijing made the right decision last week in deciding not to oppose a World Trade Organization ruling that it unfairly supported its domestic UnionPay financial transactions network at the expense of foreign rivals like MasterCard (NYSE: MA) and Visa (NYSE: V). Now it needs to show it is prepared to wean its other big industries from unfair state support, starting with the unrelated solar energy sector that has recently become a major source of friction between China and its major trading partners.
Baidu Takes Qihoo Battle to Customers 百度要求代理商切断与奇虎360关系
The blossoming war between Internet search leader Baidu (Nasdaq: BIDU) and challenger Qihoo 360 (NYSE: QIHU) is becoming more colorful each day, with Baidu resorting to some interesting new tactics to defend its market dominance. In the latest wrinkle of this fast-developing story, Baidu appears to be asking many of its corporate clients to cut their ties to Qihoo, in what is looking like an increasingly dirty war where either side will do anything to attack the other.
Smartphones Surge As Apple Support Fades 中国国产智能手机崛起 运营商或减少iPhone补贴
There are a couple of interesting reports out today from the smartphone space, highlighting the rapid rise of these feature-packed phones with the growing availability of affordable, high-quality models supplied by newcomers like ZTE (HKEx: 763; Shenzhen: 000063), Huawei and Xiaomi. Those increasingly popular models, many selling for 2,000 yuan or less, could quickly pose a major challenge to high-end specialists like Samsung (Seoul: 005930) and Apple (Nasdaq: AAPL), amid early signs that Chinese mobile carriers are looking to cut back their generous subsidies for these more expensive models.
Citic Securities Results: Set for Rebound? 中信证券业绩：预计反弹？
Securities brokers certainly aren’t having much fun these days, watching their profits shrivel as China’s stock markets hover at 3-year lows. But the latest results from leading brokerage CITIC Securities (HKEx: 6030; Shanghai: 600030) hint that a rebound could be coming towards the end of the year, as bargain hunters — led by a growing number of foreign investors — start to pour into the market. It’s obviously too early to say whether this potential rally will be sustainable since it hasn’t even begun yet. But the chances of a rally lasting at least a half year or longer seem realistic as China opens its doors wider to foreign investment in its stock markets and domestic firms make an effort to become more transparent and clean up some of their questionable accounting practices.
Shanghai Street View: Angry Birds Sputter 沪经动向：“愤怒的小鸟”安家上海
They may be all the rage on video screens, but the globally popular Angry Birds franchise has sputtered into Shanghai as owner Rovio Entertainment kicks off an ambitious plan for the brand in China. The lackluster debut for China’s first Angry Birds store, while not completely unexpected, underscores the fact that even in an international city like Shanghai, big global entertainment brands face a tough uphill battle for recognition among Chinese who tend to flock to domestically developed brands with a more local flavor.
Suntech: More Trouble in Italy 尚德在意大利惹上新麻烦
The sounds of a death knell for fast-falling solar star Suntech (NYSE: STP) keep growing louder, this time with word that Italian officials have charged a company affiliate for illegally abusing the country’s solar subsidies meant to promote clean energy development. After 2 weeks of nearly non-stop news about its questionable relationship with a firm that Suntech set up to buy its solar panels at inflated prices, Suntech had largely faded from the headlines as the stream of new revelations started to subside. But now we’re getting word that an Italian court has filed criminal charges against GSF, the fund that Suntech set up to build solar farms to take advantage of generous Italian subsidies. (English article)
Lenovo NEC: Here to Stay? 联想与NEC能否长相厮守？
A year after announcing their landmark joint venture, Lenovo (HKEx: 992) and NEC (Tokyo: 6701), the leading PC makers in China and Japan, are releasing some numbers to try to convince the world that their marriage was correct and the venture will dominate the difficult Japanese market. I’ll admit that I’m not quite a skeptical as I was when the 2 sides first announced their joint venture, as they seem to be taking a relatively cautious approach to the business. Still, I would only give this venture a relatively modest chance for success, perhaps around 40 percent, versus a previous prediction for around a 35 percent.
SARFT Comments: Media Clampdown Coming? 中国传媒业对外开放要放缓？
I’ve been writing about China’s media industry long enough now to know that a blossoming love affair with Hollywood might be too much too quickly, and new comments from the TV and film regulator appear to hint that a crackdown or at least a slowdown could be looming for this fast emerging relationship. If it comes, such a crackdown would hardly be a new thing, as China has twice before signaled it was preparing to open its media to foreign investment, only to quickly slam on the brakes after the big foreign players got too aggressive.
CNOOC Rolls out Exploration Welcome Mat 中海油向外国油企开放26块合作区块
In what looks like a brilliant tactical move, oil major CNOOC (HKEx: 883; NYSE: CEO) has just issued a massive new invitation for foreign companies to help it develop oil fields off the China coast, a move that should help both the company and Beijing to advance some of their most recent initiatives. In CNOOC’s case, the latest offering of 26 offshore blocks for co-development could help to show that it isn’t only interested in buying assets in other countries but is also prepared to offer assets in its home China market to foreign oil majors. On a more geopolitical level, the offering of so many new blocks for development is likely to send the signal that China wants to move aggressively to settle some of the noisy territorial disputes with many of its Asian neighbors, many of which involve disputed islands in ocean areas that could contain valuable new oil deposits.
Tencent Bonds: Activision in View? 腾讯债券：目标是动视？
Update: A short time after I issued this article, Tencent released its formal plan to issue $600 million worth of bonds. The notes will mature in 2018 and carry an interest rate of 3.375 percent (company announcement)
Internet leader Tencent (HKEx: 700) is taking a dip into the corporate bond market, an interesting move that should not only test investor aippetite for a new kind of financial product from China’s Internet space, but may also hint at the company’s future M&A plans as it explores a potential bid for Activision Blizzard (Nasdaq: ATVI). Longtime China Internet watchers may recall that it’s been quite a long time since any companies from this space have issued corporate debt. Veteran players Sina (Nasdaq: SINA), Sohu (Nasdaq: SOHU) and NetEase (Nasdaq: NTES) all issued bonds shortly after becoming profitable about a decade ago, but none really needed the money and largely retired the fund-raising method after that.
