Bottom line: Alibaba’s launch of its popular Tmall into several markets with large Chinese populations shows it is still looking for a strong overseas formula, underscoring its dependence on China for the foreseeable future.
Tmall marches into Singapore
E-commerce juggernaut Alibaba (NYSE: BABA) is making its latest global expansion noise with word that it will launch a version of its popular B2C Tmall online marketplace targeting overseas buyers in Southeast Asia. I have to admit I’m not completely sure about the significance of the move, since the company already has a wide ranging network covering a number of overseas markets through its AliExpress and Lazada services.
The bottom line seems to be that Alibaba is taking a somewhat fragmented and multi-brand approach to the overseas market, as it searches for formulas for success in an area that so far has been somewhat elusive. The company only derives about 10 percent of its revenue from overseas operations at the moment, despite numerous attempts to develop markets outside China. Read Full Post…
Bottom line: Alibaba may have to tone down its aggressive style of data collection from its business partners following a tiff with SF Express, but its business won’t face any major impact.
SF takes on Cainiao in data wars
A conflict involving leading courier SF Express (Shenzhen: 002352) and Alibaba’s (NYSE: BABA) Cainiao logistics arm was all over the headlines at the end of last week, in a clash of titans that saw the pair suddenly sever their business relationship. At the center of the issue was data, and Alibaba’s near obsession with getting its hands on every piece of data possible as it tries to build up a big data empire.
But just as quickly as it consumed the headlines, this particular clash appears to have been resolved with some mediation by the government. There are a number of lessons in all this, but the biggest seems to be that Alibaba will need to rein in its bullying tactics that it wields by virtue of its huge market dominance. Otherwise it could face the wrath of companies like SF Express, and ultimately a commerce regulator that might decide the e-commerce juggernaut is unfairly abusing its near monopoly on the market. Read Full Post…
Bottom line: Alibaba could take control of Ele.me after the latter’s latest fund-raising, and then make a bid for Baidu’s take-out dining service, leaving just two major players in the sector as it nears a more sustainable state.
Alibaba set to swallow Ele.me?
The take-out dining wars have taken another interesting twist, with word that one of the oldest players, Ele.me, is on the cusp of raising a fresh $1 billion in new funds. What’s interesting about this latest fund raising is that it’s being led by Alibaba (NYSE: BABA), which is also trying to carve out a niche in the market through its own Koubei take-out delivery service. But even more intriguing is the possibility that this new funding could be aimed at giving Ele.me the firepower it needs to buy out Baidu’s (Nasdaq: BIDU) take-out delivery service, which is reportedly being shopped by the country’s leading search engine.
There are many threads to this story, but the bottom line is an end game is slowly coming into sight for China’s take-out delivery business, following the typical boom period we often see for this kind of emerging sector. The current field of take-out dining services is dominated by three names, Alibaba-backed Ele.me, Tencent-backed (HKEx: 700) Meituan-Dianping and Baidu take-out. Read Full Post…
Bottom line: Alibaba’s potential new partnership with China’s rail operator could become a major new business opportunity, and could see the pair sign a strategic equity tie-up within the next year.
Alibaba ties with railway operator
Up until now, I’ve written about China’s mixed-ownership reform program mostly in the context of China Unicom (HKEx: 762; NYSE: CHU), the nation’s second largest wireless carrier, which is in the final stages of drafting a plan to sell some of itself to one or more private companies as part of a strategic alliance. But now the latest headlines on the program are coming from a decidedly low-tech source, with word that China’s railway operator has invited Internet giant Alibaba (NYSE: BABA) to participate in its own mixed-ownership reform plan.
This particular development is interesting because it marks the second time that Alibaba’s name has come up in the context of the mixed-ownership reform plan. The e-commerce giant has also come up in reports as a potential partner for Unicom, as have China’s other two Internet giants, Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700). Read Full Post…
Bottom line: A tussle that resulted in injuries to a Tencent worker by a Youku peer at an industry event reflects the big tensions that exist in China’s online video sector due to years of stiff competition that shows no signs of easing.
Wine glass incident reflects tensions in online video
Stiff competition in a wide range of online industries is pretty much par for the course in China, but a scuffle between employees of Tencent (HKEx: 700) and Youkuat an industry event is underscoring just how high tensions can get. This particular case won’t really mean much for either company beyond a few sensational headlines in the next few days, and perhaps some internal emails at both companies. But it does show how tough things are in the online video space, where everyone is looking for the elusive formula for profits.
This particular story looks quite similar to another one that happened in February, in which a video of brawling take-out deliverymen from rivals Meituan and Ele.me went viral. (English article) That particular story had a very blue-collar feel, since most of these deliverymen are migrants from the countryside with relatively low education and who tend to stay at their jobs for relatively short periods. Read Full Post…
Bottom line: Sesame Credit’s new tie-ups with Unicom and a shared phone company are part of a string of deals to aggressively build up its credit rating business, and could add buzz to Ant Financial’s future IPO.
Sesame Credit in 2 new deals
Lest anyone think Alipay is the only asset in financial services giant Ant Financial’s portfolio, the company’s newer Sesame Credit unit is also hankering for headlines these days, with a couple of new deals for its service. The larger of those will see China Unicom (HKEx: 762; NYSE: CHU), the nation’s second largest wireless carrier, waive deposit requirements for some of its users with high credit scores, based on Sesame’s system. The other deal looks similar, and will see a shared phone operator also waive deposits for people with similarly high credit.
This kind of aggressive promotion is quite typical of Jack Ma, founder of e-commerce giant Alibaba (NYSE: BABA) and one of the main people calling the shots at both companies. Ma likes to be ahead of the curve, and is quite aggressive about peddling his vision for emerging sectors like credit ratings. That strategy has served him well in e-commerce and electronic payments, where Alibaba now dominates. Read Full Post…
Bottom line: New anti-corruption moves at JD.com and Meituan-Dianping show the cleanup campaign is moving down to the grass-roots level, in a positive development that should help the companies as many seek to go abroad.
Meituan, JD.com in new anti-corruption snares
Anyone unfamiliar with China might find it peculiar and even worrisome that near simultaneous announcements appear to show problematic internal corruption at two of the nation’s top Internet companies, e-commerce giant JD.com (Nasdaq: JD) and leading group buying site Meituan-Dianping. While the timing does seem somewhat coincidental, this kind of thing is becoming quite common these days, as China’s companies fall in behind the central government’s nearly 4-year-old anti-corruption campaign.
From an observer’s perspective, I have to say this kind of campaign is sorely needed in China’s corporate sector, both for state-run and private companies. The kinds of internal corruption detailed in these latest reports are far too common in companies, where employees regularly use their position to do things like extort money from and cheat customers, and even rip off their own companies. Read Full Post…
Bottom line: Ant Financial’s open letter to MoneyGram could hint at a new raised offer coming soon for the company, though rival suitor Euronet is likely to bid equally aggressively and has a slightly better chance of winning the contest.
Ant makes case to MoneyGram workers, US politicians
Three weeks after being surprised by an unsolicited counterbid for US money transferring specialist MoneyGram, China’s Ant Financial is finally speaking out on the matter beyond its initial reaction to the rival bid. The former financial unit of e-commerce giant Alibaba (NYSE: BABA) frankly isn’t saying much about future plans in its open letter to the MoneyGram community, and there’s no hint on whether it will raise its offer for the US company.
Instead, the letter seems aimed at reassuring MoneyGram employees that their jobs will be safe, and on reassuring wary government officials that information on MoneyGram users won’t be recklessly used. Those messages look squarely aimed at quelling the very real possibility that such a deal could get vetoed by Washington on national security grounds, even though the jobs issue doesn’t really fall into that category. Read Full Post…
Bottom line: China Telecom’s aggressive bidding for a government contract highlights its more entrepreneurial style, while Unicom’s latest announcement on its private ownership plans reflects it conservative, bureaucratic style.
Unicom mixed ownership program crawls ahead
Two of China’s trio of wireless telcos are in the news today, reflecting an effort by Beijing to breathe some life into these laggard state-run behemoths that always seem unable to realize their potential. The first headline has China Telecom (HKex: 728; NYSE: CHA), the smallest of the nation’s 3 carriers, making an aggressive bid to essentially provide services for free to a government agency in northeast Liaoning province. The second has Unicom (HKEx: 762; NYSE: CHU), the second largest carrier, disclosing some more details on its plan to introduce some private capital to the company. Read Full Post…
Bottom line: Ant Financial will counter bid for MoneyGram, following a surprise rival bid for the company, while Alibaba Pictures’ absorption of the former Youku Tudou looks like a logical consolidation of Alibaba’s filmed entertainment assets.
Ant’s MoneyGram offer attracts rival bidder
Two of Alibaba(NYSE: BABA) founder Jack Ma’s biggest endeavors outside his core e-commerce business are in the headlines, led by a counter bid for a US financial services company his Ant Financial is trying to acquire. That particular deal has a US company called Euronet Worldwide announcing a bid for MoneyGram that’s 15 percent higher than Ant’s own $880 million bid made back in January. The other news is slightly more mundane but still significant, and has Ma’s Alibaba moving its Youku Tudou online video service into its separately listed Alibaba Pictures (HKEx: 1060) filmed entertainment unit. Read Full Post…
Bottom line: Alibaba’s anti-piracy PR blitz during the National People’s Congress is aimed at getting attention during the high-profile event, but it will need to keep up its efforts to convince the public and officials its effort is sincere.
Alibaba calls for tougher anti-piracy laws
As the National People’s Congress (NPC) kicks into high gear in Beijing, e-commerce leader Alibaba (NYSE: BABA) is using the annual session of China’s legislature as a soapbox to make its case that it’s being tough in the battle against piracy. In the last 2 weeks alone, founder Jack Ma has made two high-profile declarations on the subject, one equating the problem to the drunk driving menace and the other calling for his country to create tougher laws to fight the problem. Lest anyone think Alibaba is trying to pass the buck, the company has also announced it has filed a lawsuit against a maker of counterfeit pet food. Read Full Post…
