The following press releases and news reports about China companies were carried on September 7. To view a full article or story, click on the link next to the headline.
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Meituan-Dianping in Rumored Merger Talks with Baidu’s Nuomi, Dining Service (Chinese article)
Ctrip.com Proposes Offering of $750 Mln Convertible Senior Notes (PRNewswire)
China’s Online Chatter Muted Ahead of Apple (Nasdaq: AAPL) iPhone 7 Launch (English article)
Didi Chuxing Raises Shunfeng Car Service Prices 20-50 Pct in Some Cities (Chinese article)
Bottom line: China’s anti-trust regulator’s assertion that the Didi-Uber China mega-merger will require its approval could mark the beginning of a new, tougher stance towards the nation’s rapidly consolidating Internet sector.
Anti-trust regulator steps into Didi-Uber marriage
After years of sitting by and doing almost nothing to stop the formation of near monopolies in a number of emerging high-tech sectors, China’s anti-trust regulator may finally be taking notice of rapid consolidation happening in the country’s cyber realm. I’ve frequently complained that China’s commerce ministry has taken a relatively tough position on cross-border M&A for anti-competitive reviews, but pays little or no attention to similar domestic deals that could have similar effects for local consumers. But perhaps that may finally be changing, with word that the Ministry of Commerce is saying its blessing will be necessary for the newly announced mega-marriage between private car services giants Didi Chuxing and the China unit of global leader Uber. Read Full Post…
Bottom line: Didi Chuxing’s new marriage with Uber China could quickly come under stress due to rivalries between the pair outside China, and might force them to forge a broader global alliance.
Didi, Uber set to clash outside China
A couple of new reports are spotlighting how the new mega-merger between Didi Chuxing and Uber’s China unit is creating uncertainty for existing global alliances involving the 2 former bitter rivals. The larger of the headlines has Uber’s US rival Lyft suddenly questioning its alliance with Didi less than a year after the pair formed the tie-up. The other has Didi helping to raise money for Grab, also known as GrabTaxi, a bitter rival of Uber that operates service in 30 cities within 6 Southeast Asian countries. Read Full Post…
Bottom line: Reports that Tencent and Baidu have withdrawn from Wanda’s O2O e-commerce venture are probably true, and the service may be quietly retired over the next 12 month due to lack of progress.
Baidu, Tencent dump Wanda’s ffan.com
Real estate giant Wanda Group may be zipping ahead with its diversification drive into entertainment, but its lower profile move into Internet services doesn’t seem to be gaining nearly as much traction. That’s my latest assessment, following new reports saying Internet giants Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700) have quietly pulled out of Wanda’s high-profile foray into e-commerce announced more than a year ago. The reports are based on market talk citing some business filings that indirectly hint at such a withdrawal, which wouldn’t be too surprising. Read Full Post…
Bottom line: Didi’s merger with Uber China was driven by investor pressure to end their fierce price wars, and the newly combined company is likely to quickly reduce its subsidies and become profitable by year-end.
Didi Chuxing merges with Uber China
Just a week after reports emerged of a truce in the nonstop price wars between private car specialists Didi Chuxing and Uber China, the pair have suddenly announced a merger that will become the latest marriage of former bitter rivals in China. This latest shotgun union, which will put Didi Chuxing in the driver’s seat of the newly combined company, testifies to growing investor impatience at fierce price wars and resulting heavy losses that have become the norm in many emerging Chinese high-tech industries. Read Full Post…
The following press releases and news reports about China companies were carried on July 30-August 1. To view a full article or story, click on the link next to the headline.
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Giant Interactive, Alibaba’s (NYSE: BABA) Jack Ma to Pay $4.4 Bln for Game Firm Playtika (Chinese article)
China Postal Bank’s $10 Bln IPO Stirs Foreign Interest, But Valuation a Worry (English article)
Besttone Holdings to Pay 6.9 Bln Yuan for China Telecom (HKEx: 728) Online Video Assets (Chinese article)
Meituan-Dianping Roll Out New Food and Beverage Platform (Chinese article)
Fosun (HKEx: 656) to Buy Brazilian Real Estate Management Fund Rio Bravo (Chinese article)
Bottom line: Didi and Uber may reach a truce in their China price wars under pressure from their investors, and could ultimately merge their China operations in discussions that could begin later this year.
Didi, Uber under pressure to end price wars
The past year has seen some mergers of former bitter rivals due to financial pressures, and the latest reports indicate yet another such marriage could be coming between hired car services giants Didi Chuxing and Uber. The reports are grounded in word from insiders that the pair have begun talks about ending their bitter price wars, which have helped them to gain big market share but are also costing them millions or even billions of dollars in losses. Those talks have naturally led some to speculate that the pair might even merge, though in my view that possibility seems rather low, at least right now. Read Full Post…
Bottom line: New data from 2 separate reports show the number of smaller venture deals is steadily declining in China, creating a cash crunch for startups as private sector investment slows sharply.
Venture investment deals slow in Q2
In a coincidence of timing, 2 separate consultants that track venture capital spending have just released second-quarter data that show very differing trends for China. China boosters will inevitably like the new figures from Venture Pulse, which showed that venture capital spending in China jumped 26 percent in the second quarter. Meantime, China bears will undoubtedly point to separate data from a Prequin Ltd report that show venture funding in the country plummeted by more than half in the quarter to its lowest level in almost 3 years. Read Full Post…
The following press releases and news reports about China companies were carried on May 27. To view a full article or story, click on the link next to the headline.
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Bottom line: The latest China trip by Apple’s CEO is designed to spotlight the company’s new mega-investment in Didi Chuxing and show its continued relevance for local app makers, as it seeks positive media coverage to halt a recent series of negative news.
Apple CEO looks for positive news on China trip
Less than 2 weeks after media first reported plans for a new China trip by Apple’s (Nasdaq: AAPL) CEO, Tim Cook has appeared in Beijing for the eighth visit to his company’s second largest market. This particular visit comes at a sensitive time for Apple, which has experienced a number of China setbacks recently, led by a sharp drop in sales during the first 3 months of the year.
Against that backdrop, I previously said that Cook’s new trip looked partly aimed at damage control, though we should also note that he was already a frequent visitor to the country. In keeping with the past, Cook was relatively low key this time and didn’t even announce his arrival in China until he was spotted at a meeting with some of the company’s local app development partners in Beijing. (Chinese article) Read Full Post…
Bottom line: Beijing and local governments should move more aggressively to regulate O2O takeout dining services, and encourage consolidation around 2-3 players with the scale and resources to ensure the sector’s healthy development.
Ele.me gets big new funding from Alibaba, Ant
New signs of overheating emerged in China’s online takeout dining realm last week, as one of the nation’s top players and a smaller rival landed major new funds to fuel their money-losing operations. The pair of deals saw China’s two leading e-commerce companies, Alibaba (NYSE: BABA) and JD.com, collectively pump nearly $1.5 billion into new investments in the space, even as other major players like Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU) are also beefing up their services.
The flood of new money has produced a rapidly escalating round of price wars, offering deals for consumers but creating chaos in the market and on the streets of major cities like Beijing and Shanghai. This kind of boom is quite typical for China’s emerging high-tech sectors, but in this case also poses unique challenges due to practical dangers such as threats to food and road safety. Read Full Post…
