Bottom line: KFC’s and McDonald’s latest moves to add high-tech elements to their China stores are a savvy way to update their images, and could help to attract a younger trendy crowd that has abandoned both chains in recent years.
KFC links up with Alipay
Leading global fast food chains McDonald’s (NYSE: MCD) and KFC (NYSE: YUM) are both in the headlines as we head into the heart of summer, each trying new high-tech approaches to reignite their faltering China stories. Announcement of these latest initiatives seems especially appropriate right now, as we’re approaching the first anniversary of a food safety scandal that dealt a major blow to both chains in China.
KFC’s deal will see it pair up with Alibaba (NYSE: BABA) to offer its affiliated Alipay electronic payments service at hundreds of its China stores. The McDonald’s news is similarly high-tech, and will see the chain extend its new state-of-the-art hamburger customization program to the China market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 1. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Eyes $600 Mln Investment in India Online Payment Firm Paytm (Chinese article)
Baidu (Nasdaq: BIDU0 to Invest 20 Bln Yuan in Nuomi.com Over Next 3 Years (English article)
KFC (NYSE: YUM) Forms Alliance With Alipay (Chinese article)
Yingli (NYSE: YGE) Seeks Public Solar Investment With Internet Financing Platform (PRNewswire)
Amazon (Nasdaq: AMZN) to Offer Loans to Sellers in China, 7 Other Countries (English article)
Bottom line: China’s opening of the electronic payment services market could see PayPal and other foreign providers finally receive long-awaited licenses to operate in the market by year-end.
PayPal may finally get China green light
Foreign financial companies came a step closer to realizing a long-awaited goal last week, when Beijing announced it would allow them to open fully-owned electronic transaction processing ventures for e-commerce services in the year-old Shanghai free trade zone. The move comes after years of lobbying by foreign companies like PayPal, MasterCard (NYSE: MA) and Visa (NYSE: V), which have watched enviously at the rapid growth of a domestic financial system that China committed to open when it joined the World Trade Organization (WTO) in 2001. Read Full Post…
Bottom line: Alibaba’s technical glitch at Alipay, the launch of its new bank and use of its Taobao platform to auction of bad loans reflect its growing clout in financial services, as it attempts to build up its Ant Financial unit for a future IPO.
Technical glitch interrupts Alipay
E-commerce leader Alibaba (NYSE: BABA) is in a trio of finance-related headlines, spotlighting its growing bet on financial services that could be a huge growth area as Beijing opens the sector to private investment. One headline has seen Alibaba get official permission from its home province to open a bank, after it became one of the first 3 entities to receive private banking licenses under a pilot program by Beijing.
The second headline has seen the company’s popular Alipay electronic payments service experience technical problems that cut off access for 2 hours earlier this week, prompting it to quickly say that no accounts were compromised. The final news bit comes in a larger story about China’s growing bad asset crisis, which will see the nation’s top bad asset management company use Alibaba’s Taobao marketplace to auction off some of those assets. Read Full Post…
Bottom line: Sina stands a 50-50 chance of getting a takeover bid within the next year, as suitors eye it for its low valuation, well-respected name and controlling stake of Weibo.
Sina anticipating suitor?
Leading web portal Sina (Nasdaq: SINA) has become one of China’s perennial Internet underperformers, leading to occasional talk that it might become a takeover target for a larger, better-run peer. Now Sina has just announced its renewal of a “poison pill” plan designed to prevent such a hostile takeover. This particular move looks like a formality rather than indicator of a looming takeover bid, since Sina launched the original plan 10 years ago and perhaps it is now is now set to expire. But the fact that Sina is not only renewing the plan, but doing so in a very public way, indicates it may feel it could become a takeover target in the current hot climate for Chinese Internet M&A. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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At $5 Bln Valuation, Alipay To Buy 25 Pct Stake In Micromax (English article)
China’s BYD (HKEx: 1211) Wins Its Biggest Electric-Bus Order In US (English article)
Sina (Nasdaq: SINA) Adopts Continuation Of Previous Shareholder Rights Plan (PRNewswire)
Huawei Targets $5 Bln In Sales This Year For Honor Smartphone Brand (Chinese article)
The following press releases and media reports about Chinese companies were carried on April 9. To view a full article or story, click on the link next to the headline.
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Eying Developers, Intel (Nasdaq: INTC) Launches 120 Mln Yuan China Incubator (Chinese article)
Bottom line: Apple Watch should debut strongly in China thanks to extensive partnerships with top Chinese retailers and app makers, giving the product instant relevance in the local market.
Apple Watch coming to China
Global gadget leader Apple (Nasdaq: AAPL) has been in the local tech headlines nonstop these last few days, wowing Chinese fans with a customized version of its new Apple Watch that will debut in China next month as part of its global launch. Pundits are mixed on how the watch will fare in China, but I expect it should do quite well thanks to inclusion of China’s hottest apps together with the company’s own strong reputation for well-designed, cutting-edge products.
In a separate but probably related Apple headline, media are also reporting a new smart air conditioner that the company has developed with local appliance leader Haier (HKEx: 1169) will also debut in April. Apple first announced this alliance last June as part of a broader smart device alliance under the name of HomeKit, and I suspect the Apple Watch will be usable with these new air conditioners. Read Full Post…
Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
Bottom line: Mobile data usage will grow by triple-digit amounts this year as telcos boost 4G promotions, while box office growth will start to slow and the ongoing decline in traditional SMS text messaging will accelerate.
Hongbao chatter fuels mobile data surge
The usual rush of Lunar New Year-related data is coming in, painting a mixed picture for traditional and new media. The clear winner in the mix is new media, whose surging popularity helped to fuel a 70 percent jump in mobile data traffic over the holiday period. Traditional movies also performed well, with China’s box office rising 36 percent during the period. It will also come as no surprise that the big loser over the holiday was traditional SMS text messages, whose volume plunged by 25 percent. Read Full Post…
Bottom line: The huge success of Tencent’s hongbao promotions over the Lunar New Year reflects the growing dominance of WeChat, which could marginalize other mobile services unless regulators step in to create a more level playing field.
WeChat clobbers Alibaba in red envelope promotions
I remember a time not long ago when we China tech reporters used to write annual stories about the number of people who sent billions of simple Lunar New Year text greetings over their mobile phones. Those days now seem like a distant memory, and new data from Tencent’s (HKEx: 700) WeChat and Alibaba’s (NYSE: BABA) Alipay are showing just how small those earlier figures were, even though they seemed impressive at the time.
But the real story in this new tide of “red envelope grabbing wars”, known as qiang hongbao in Chinese, is the huge victory for Tencent over Alibaba, which I’ll describe shortly. That victory owes directly to the huge popularity of WeChat, which saw many of its hundreds of millions of users glued to their smartphones for much of the Lunar New Year while they ignored everything else. Instead of the usual New Year activities, they spent much of the holiday trying to “grab” millions of yuan in gift money being doled out over WeChat by their friends, bosses and also by Tencent and Alibaba themselves. Read Full Post…
