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I’ve written lots on China’s e-commerce boom and the huge opportunity it provides, but the less visible courier business is a sideline that is quietly zooming to riches as well on the nation’s growing fondness for buying things online. I haven’t written about this lower-profile part of the e-commerce story before now, mostly because the vast majority of courier firms are small local outfits, often operating with a few bikes, some mopeds and perhaps a van or 2. But now local media are saying that China’s postal service wants to spin off its courier and logistics unit into a separate business, which would then be publicly listed. (Chinese article) Of course this kind of plan must still receive many government approvals and would probably require some major internal restructuring, meaning any such spin-off is still likely a year or more away and an IPO would be even further off. But if and when it happens, such an offering would provide an attractive opportunity for investors looking to cash in on China’s e-commerce craze that has seen nearly all major retailers open online shops and has given rise to major online giants like 360Buy, Dangdang (NYSE: DANG), Alibaba’s Taobao Mall and Wal-Mart (NYSE: WMT) invested Yihaodian. Then of course there’s global giant Amazon (Nasdaq: AMZN), which recently launched a massive new warehouse near Shanghai that will no doubt need thousands of couriers to make sure items get from the facility to their final buyers. Such a postal spin off would also free the new company of many of the burdensome regulations and bureaucracy it now faces, potentially laying the foundation for an eventual Chinese version of a global shipping and logistics company to rival names like UPS (NYSE: UPS) and FedEx. All that said, competition in the courier space is also becoming rampant, similar to the overheated competition among e-commerce companies themselves. Still, this new company, if it takes shape, will have the obvious advantage of huge scale and strong government ties, meaning it could be perfectly placed to cash in on the e-commerce craze for the next 5-10 years.

Bottom line: The China post office’s plan to spin off its courier and logistics service into a separate company for an IPO looks like a great way for investors to cash in on the e-commerce craze.

Related postings 相关文章:

◙ Price Wars Beat Up Online Retailers 网上零售商引爆价格战

◙ New Regulatory, Competitive Waves Hit E-Commerce 监管和竞争冲击电子商务领域

◙ Amazon Name Shift Signals China Ramp-Up 亚马逊改名背后折射中国野心

Dangdang makes late move to e-books I’ll finish my postings on this Winter Solstice day with a few tidbits from the retail sector, which offer some interesting glimpses into the potential power of e-commerce to help Chinese firms expand both at home and abroad. The biggest of these news bits comes from Dangdang (NYSE: DANG), China’s only listed major e-commerce firm, which is launching an electronic book service to complement its industry-leading online book store. (company announcement) My initial reaction to this news is “What took them so long to do this?” After all, online retail pioneer Amazon (Nasdaq: AMZN) has been selling electronic books for years now and there’s absolutely no reason why Dangdang waited so long to get into this space, where it will have to compete with established players like Shanda’s (Nasdaq: SNDA) online literature unit, Cloudary, and new services from other big names like 360Buy. But that said, at least Dangdang is finally realizing the importance of e-books, and it still looks early enough for it to become a dominant player in the space if it offers a good books and e-readers. In another online retail news bit, sportswear clothing chain Li Ning (HKEx: 2331) is taking its first small step outside China by opening an online store for US customers. (Chinese article) I suppose I should commend Li Ning for looking beyond China, but I’m honestly not sure that the online store approach, which is certainly cheaper than opening traditional brick-and-mortar stores, is the right route for entering a major new market like the US, where competition is already fierce from big names like Adidas and Nike. I don’t think I would be taking a very big risk in predicting this initiative is very likely to fail, as it has all the markings of a company trying to expand internationally without properly funding the campaign. Last but not least, sportswear bearing the name of Bjorn Borg (Stockholm: BORG) will soon be coming to China, as the Swedish licensee of the legendary tennis star’s name seeks out a local partner with plans to open stores in China next year. (company announcement) This initiative also looks destined for failure, as Bjorn Borg isn’t very well known in China and this company doesn’t appear to have lots of money for the expansion. But considering the Chinese love of famous brands, perhaps it could still succeed if it finds a good Chinese partner to help fund and market the campaign.

Bottom line: Dangdang’s move to e-books looks late but still likely to do well, while a new overseas foray by Li Ning looks underfunded and set to fail.