Bottom line: Huawei’s decision to go ahead with a US market entry for its latest high-end phone, despite collapse of a tie-up with AT&T, is likely to produce very limited results due to lack of a carrier partner.
Huawei goes solo into US
If you can’t get a serious business partner, at least get a pretty face. That seems to be the message coming from a frustrated Huawei, which has announced it has signed on “Wonder Woman” star and model Gal Gadot as chief experience officer as it prepares to enter the US. This somewhat frivolous move was most likely part of a bigger announcement the company hoped to make for a grander entry to the US in partnership with corporate partner AT&T (NYSE: T).
But as many market watchers may already know, the AT&T deal reportedly collapsed at the last moment for unexplained reasons. The new tie-ups were all set to be unveiled at the Consumer Electronics Show (CES) taking place this week in Las Vegas. While the show went on and Huawei announced plans to release a version of its high-end Mate 10 in the US, with Gadot as product spokeswoman, the AT&T announcement never came. Read Full Post…
Bottom line: Asos’ China retreat is due to the country’s extremely competitive e-commerce landscape, and shows that western retailers need to devote significant resources to succeed in the market.
Asos bows from China
In what looks like a first for a major western retailer, British fashion seller Asos (London: ASC) has officially pulled the plug on its China operations. Some might say that’s nothing new, since much bigger names like supermarket operator Tesco (London: TSCO) and electronics seller Best Buy (NYSE: BBY) have made similar moves in the last 5 years after failing to find a big enough audience among Chinese consumers.
But Asos is a different case, since it’s one of a growing number of western retailers that are choosing to come to China as a pure e-commerce plays, in a bid to save the huge costs involved with traditional stores and also take advantage of the nation’s online shopping craze. The problem is that China’s e-commerce craze has also attracted thousands of other retailers, and Asos couldn’t find a way to differentiate itself from the crowd. Read Full Post…
Bottom line: Wal-Mart’s discussion of plans to open 115 new China stores and several new local initiatives look like mostly PR to show its commitment to the market, following its announcement of a major global overhaul earlier this month.
Wal-Mart discusses commitment to China
Just a week after announcing a major retrenchment for its global empire, retailing giant Wal-Mart (NYSE: WMT) is saying it will continue to open new stores at a brisk pace in China. The vast and somewhat unique China market also looks set to become a testing ground for new concepts, with Wal-Mart discussing plans to open its first shopping center format and also to expand its cross-border e-commerce business in the country.
The latest developments are discussed in a local media interview with a top Wal-Mart China executive, which is probably timed to quash any potential buzz that the company is planning a similar retrenchment in China to the global plan announced earlier this month. That plan saw Wal-Mart announce it will close 269 stores this year, representing just over 2 percent of its global count of 11,600. Read Full Post…
Bottom line: Toys “R” Us’ big China expansion plan contrasts with pull-backs and departures for many major western retailers in the tough market, and could be aimed at generating buzz in the run-up to a potential IPO.
Toys “R” Us steps up China expansion
China’s economy may be headed for a rapid slowdown that casts a chill on the retail sector, but don’t tell that to US veteran Toys “R” Us. The retailer whose name is synonymous with children and fun has disclosed it’s planning an ambitious China build-up that will see it increase its local store count by 30 percent this year, even as other major western retailers are closing shops and even leaving the difficult market.
All that leads to the question of whether Toys “R” Us really intends to open so many new stores at a time of uncertainty, or whether this China toy story is part hype with other motivations. If the latter is the case, this particular story could be designed at least partly to generate some excitement around an otherwise boring traditional retailer, as it gets set to potentially re-list in New York more than a decade after being privatized. Read Full Post…
Bottom line: Wal-Mart’s loss of China Resources as one of its major Chinese partners reflects rapid changes in the traditional retailing market, and could prompt Wal-Mart to accelerate an overhaul of its broader China strategy to focus more on e-commerce.
China Resources dumps Wal-Mart JV stake
Just 3 months after sacking the founders of its China e-commerce site, US retailing giant Wal-Mart (NYSE: WMT) has suffered yet another blow in the huge but difficult market with the loss of a major local partner for its traditional brick-and-mortar stores. That move is seeing China Resources, one of the country’s biggest and oldest consumer names, dump shares worth $515 million in a number of Wal-Mart stores that it jointly owns with the US retailing giant.
The move isn’t all that surprising for a number of reasons, but still doesn’t look too good for Wal-Mart in the fast-changing Chinese retailing market. For starters, China Resources is already a major owner of smaller supermarket chain called Vanguard. It also moved into the hypermarket business 2 years ago when it effectively took over the China-based operations of British giant Tesco (London: TSCO) through a joint venture. (previous post) Read Full Post…
Bottom line: Gubuli’s foray into the coffee business is doomed to failure, while Carrefour is likely to sell part of its China business to a local partner later this year.
Gobuli tries coffee with Gloria Jean’s
You know the China coffee market is overheated when one of the nation’s most famous names in a traditional food like steamed buns enters the market. That’s what’s happening now, with word that Gobuli Group, a restaurant chain whose name is synonymous with a popular kind of meat-filled steamed buns, is launching a coffee chain joint venture in partnership with Australia’s Retail Food Group.
While the coffee business is quickly overheating, the opposite is true for the traditional supermarket business, which has seen several major western retailers leave the market or scale back operations as they face a growing challenge from e-commerce. Now it looks like French giant Carrefour (Paris: CA) could become the next in that trend, with word that it might consider selling some or all of its China business to a local partner. Read Full Post…
Bottom line: Best Buy’s sale of its Five Star chain represents a long-overdue withdrawal from traditional retailing in China, and it would be wise to consider an e-commerce option if it tries to return later.
Best Buy sells Five Star chain
Some might see retailing giant Best Buy’s (NYSE: BBY) newly announced sale of its Five Star electronics chain as a retreat from China, but I would personally congratulate the company for a shrewd move that was long overdue. That’s because traditional retailing is rapidly dying in China, as shoppers opt for the convenience, better selection and lower prices of e-commerce. What’s more, the traditional electronics retailing sector is already overcrowded and highly competitive, dominated by big national chains led by Suning (Shenzhen: 002024) and Gome (HKEx: 493) Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 5. To view a full article or story, click on the link next to the headline.
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Best Buy (NYSE: BBY) To Sell Its Five Star Business In China (Businesswire)
Haitong Securities (Shanghai: 600837) In Talks For Portuguese Investment Bank (English article)
Intel (Nasdaq: INTC) To Invest $1.6 Bln In China Factory (English article)
E-House (NYSE: EJ) Gives Details of Partial Spin-off Of Leju (NYSE LEJU) Shares (PRNewswire)
P&G (NYSE: PG) Sells China’s Biggest Battery Maker To CDH For $600 Mln (English article)
Several news bits from the electronics retailing space are in the headlines today, reflecting the volatile state of a highly competitive sector where margins are razor thin. US retailing giant Best Buy (NYSE: BBY) leads the headlines, with word that it’s mulling a sale of its China business 3 years after closing most of its own-brand stores in the market. Leading e-commerce firm Amazon (Nasdaq: AMZN) is also reportedly eying a retreat in the China home appliance market, while homegrown player Aisidi (Shenzhen: 002416) is moving in the other direction with its purchase of one of the nation’s top online cellphone retailers. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 26. To view a full article or story, click on the link next to the headline.
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China’s Postal Savings Bank Said To Plan $4 Bln IPO (English article)
Vanke (HKEx: 2202) Completes Transition of B-Shares To H-Shares (Chinese article)
Best Buy (NYSE: BBY) Considers Sales Of China Business – WSJ (English article)
Skyscanner Acquires Chinese Travel Search Start-up Youbibi (Businesswire)
China Forestry (HKEx: 930) Extends Bond Buyback After Missed Payment (English article)
It’s a relatively quiet news day, so I thought I’d take this opportunity to write about an intriguing rumor that would see struggling US electronics retailing giant Best Buy (NYSE: BBY) purchase its equally struggling Chinese counterpart Gome (HKEx: 493). There are quite a few reasons why there may be no truth to these rumors; but at the same time, there are also some indications that perhaps something is happening, which makes it worth taking a look at this potential tie-up.
It’s a relatively quiet news day, so I thought I’d take this opportunity to write about an intriguing rumor that would see struggling US electronics retailing giant Best Buy (NYSE: BBY) purchase its equally struggling Chinese counterpart Gome (HKEx: 493). There are quite a few reasons why there may be no truth to these rumors; but at the same time, there are also some indications that perhaps something is happening, which makes it worth taking a look at this potential tie-up.
