I’m usually reluctant to report on rumors, but a posting on Sina’s (Nasdaq: SINA) Weibo late yesterday that group buying giant 55tuan was launching massive layoffs seemed too big to ignore, reflecting troubles at both the company and in the money-losing group buying space. Sina itself followed up on the Weibo post by contacting the poster, who reiterated that 55tuan had cut 22 of the 31 people in the local markets division where he works, or about 70 percent of the division. (Chinese article) I suspect we’ll see domestic media follow up on this rumor today, and clearly you can’t extrapolate big cuts in a small regional division to an entire company. But at the very least, assuming this worker is really from 55tuan, this kind of a big cut in a single division probably points to major adjustments being made at 55tuan, which in July had to abandon plans for a US IPO after several investment banks refused to handle the deal over concerns about accounting records at some of its recently acquired assets. (previous post) Rival Lashou, China’s biggest group buying site, was racing to find an investment bank for its own IPO earlier this month, after Goldman Sachs and Morgan Stanley reportedly resigned from the case over similar concerns. (previous post) Both 55tuan and Lashou raised $100 million or more earlier this year amid a boom in China’s group buying sector that resulted in fierce competition, drawing the field of money-losing players deeper into the red. The layoffs at 55tuan, if true, would be the most significant in the sector so far, following major cuts at Gaopeng, the group buying joint venture between US giant Groupon and China Internet leader Tencent (HKEx: 700) earlier this year. Investors look unlikely to pour more funds into these money-losing companies anytime soon, which means that unless they can raise money some other way most are likely to go into a “cash preservation” mode by implementing severe spending cuts including layoffs and reduced marketing activities. When that happens, look for a ripple effect to hit other web firms like Baidu (Nasdaq: BIDU) and Sina, that rely heavily on ad revenues for their income.
Bottom line: Rumors of layoffs at group buying site 55tuan, if true, would mark the most significant sign to date of distress in the overheated sector, which is poised for a major shake-up.
我通常不愿探讨传言，但昨晚新浪(SINA.O)微博上称窝窝团将大规模裁员，这则消息实在不容忽视，它反映了该公司以及整个团购行业面临的困境。新浪後来与微博作者取得联系，对方称其曾在窝窝团工作的部门大幅裁员。我估计今天国内媒体会就此追踪报导，当然我们不能基于一个部门的裁员来推测整个公司。但我们至少可以这麽想，若一个部门大幅裁员，可能意味着公司正进行重大调整。窝窝团此前曾打算赴美上市，後来因多家投行对其收购的一些资产的会计记录存在顾虑，拒绝接手其上市事宜，导致窝窝团7月放弃赴美上市。另一团购网站–拉手网本月早些时候也苦苦寻找投行安排上市事宜，此前摩根士丹利(MS.N)和高盛(GS.N)出于类似顾虑，退出拉手网上市案。今年早些时候，中国团购业如火如荼之际，窝窝团和拉手网均曾筹资至少1亿美元，但後来行业竞争加剧，团购网站亏损严重。如果窝窝团大幅裁员消息属实，则将是高朋网今年大规模裁员後，团购业最轰动事件。短期内投资者不太可能再向这些亏损公司投入更多资金，这意味着它们除非能有别的筹资渠道，否则就不得不保存现金，通过裁员和减少营销活动等途径削减支出。一旦出现这样的局面，势必波及百度(BIDU.O)和新浪等严重依赖广告收入的网络公司。
一句话：窝窝团裁员传言若属实，则是团购业陷入困境的最明确信号，意味着该行业将出现重大调整。
Related postings 相关文章:
◙ Lashou Begs for an IPO Banking Partner 拉手网拼命寻找上市承销商
◙ Group Buying Sites: The First to Fall? 团购网或将在互联网泡沫破灭时应声而倒？
◙ Gaopeng Lay-Offs Auger Ad Spending Downturn 1高朋裁员预示网络广告支出或大幅下降
Beijing is quickly discovering that it can throw a party by making mega-IPOs for some of its best companies in a bid to revive its moribund stock markets, but there’s no guarantee that anyone will come to join the fun. That appears to be the lesson as CITIC Securities (Shanghai: 600030) has been forced to pare back its plans for a Hong Kong IPO by more than 10 percent due to lackluster demand. (
We’re seeing an interesting sign of the turmoil at Chinese banks with a new profit and revenue warning from IT outsourcing firm Camelot Information Systems (NYSE: CIS), which is blaming a sudden drop-off in bank spending for the adjustments. Camelot has lowered its third-quarter revenue outlook about 10 percent to $57 million, resulting in a two-thirds reduction in its earnings outlook. (
Investors must see something I’m missing in Lenovo’s (HKEx: 992) newly announced $300 million joint venture with Taiwanese contract PC manufacturer Compal (Taipei: 2324). That’s the only reason I can find for an 11 percent jump in Lenovo’s stock on Tuesday after it announced the deal, which will see it pair with one of Taiwan’s top contract PC makers in a new manufacturing tie-up. To me, this deal looks more like a step backward than a positive new development, and goes in the opposite direction of global industry trends. First let’s review the facts: under their new deal, the companies will invest the $300 million to build a PC manufacturing plant in the Chinese city of Hefei. Presumably the plant will exclusively supply PCs to Lenovo, which recently passed Taiwan’s Acer (Taipei: 2353) to become the world’s third largest PC seller (
There’s an interesting report in the domestic media on the ongoing consolidation of China’s fragmented cable TV sector, which seems to indicate that not only is this campaign moving forward on schedule but also that the government is determined to make the new national giant a commercially viable company. The report says that the NDRC, China’s state planner, has rejected a plan from the state agency overseeing the consolidation and asked it to submit a new one. (
US-listed China firms have taken a largely passive posture during the months-long scandal surrounding their credibility on Wall Street, but now I’m happy to see that at least a few are starting to fight back to defend their honor. Since the confidence crisis began earlier this year with an accounting scandal at financial software maker Longtop Financial, these companies, many of which never did anything wrong, have made a few reactionary moves, launching share buybacks and dividends and in occasionally offering explanations to fend off short sellers to defend their sinking shares. Now, one of the smaller firms, a silver mining company called Silvercorp Metals (NYSE: SVM) is taking a more aggressive stance, suing a web site called Chinastockwatch.com, for posting false information about it in an attempt to drive down its share price. (
Despite facing a sharp slowdown in the domestic auto market, foreign car makers are showing no signs of slowing down their investment in China — a trend that looks worrisome for big domestic names that are no doubt being forced to curb spending. In the latest development on that front, Chinese media are reporting that Germany’s Volkswagen (Frankfurt: VOWG), China’s largest auto brand with 13 percent of the market, has decided to boost its already sizable investment plan for China, now aiming to spend $19 billion from 2012 to 2016 from a previous target of $14.3 billion from 2011 to 2015. (
There’s some interesting data out from LDK Solar (NYSE: LDK), the weakest of the major solar firms, that seems to show the sputtering sector may still have some energy left, even as it grapples with its worst-ever downturn. According to a new 
Despite receiving numerous advantages from Beijing in China’s fledgling 3G market, China Unicom (HKEx: 762; HKEx: CHU) has shown disappointingly slow progress in boosting its share in the space and now we may know why: a shortage of low-cost handsets. That’s what domestic media are reporting, with Unicom preparing to buy up to 8 million smartphones costing under 1,000 yuan, or about $150 each, in a bid to boost its share in the market. (
There’s been a flurry of news on the electric vehicle (EV) front these last 2 days, as China enlists US heavyweights General Motors (NYSE: GM) and General Electric (NYSE: GE) to try and jumpstart the country’s sputtering drive to environmentally friendly cars. But despite the hype, the two latest initiatives look largely symbolic to me, and it’s hard to tell if either will have much impact. One deal will see GM and Chinese partner SAIC (Shanghai: 600104) step up their EV development, with GM making vague promises to transfer more of its cutting-edge EV technology to China as it prepares to import its state-of-the-art Chevy Volt on a trial basis. (
