Spin doctors from Chinese tech titans Tencent (HKEx: 700) and Alibaba have been hard at work these last few days, doing their best to promote their products and add positive interpretations to news involving their companies. Tencent chief Pony Ma was actively hyping up several of his company’s products and services, while an Alibaba executive was touting a visit between founder Jack Ma and visiting British Prime Minister David Cameron. Tencent also got a helping hand from restaurant ratings giant Dianping, whose low-key founder was hyping a new tie-up between Dianping and the payments platform on Tencent’s wildly popular WeChat instant messaging service. Read Full Post…
It may be a new year, but there’s nothing new about the latest development in the group buying space where an ongoing cleanup has claimed one of the biggest victims yet with reports of mass layoffs at a mid-sized player called Qianpin. This latest shake-up is part of an ongoing retrenchment that has now reached its late stages, and I do expect we’ll see 1 or 2 more major fireworks in the next 6 months before this long and painful consolidation wraps up around the middle of the year.
On this day before Christmas, I’ll take a look at 2 of China’s more interesting privately held Internet plays, online wine seller Jiumei and restaurant ratings site Dianping, which are making innovative new moves that could make them attractive investments when they make eventual public offerings. In Jiumei’s case, the company is forming an interesting tie-up with European banking giant Rothschild to create a product for Chinese who want to invest in wine. Meantime at Dianping, founder and CEO Zhang Tao has given a rare interview in which he reveals his company is making big investments in the mobile Internet in a bid to translate its current desktop PC dominance to the fast-growing mobile space.
The long awaited clean-up of China’s cluttered group buying sector appears to be accelerating, with new reports that a potential cash-rich consolidator has emerged in the form of GroupNet, which is itself the product of the merger earlier this year between former mid-sized players FTuan and Gaopeng. The new reports say that GroupNet has raised $40 million in new funds, which it will use to acquire other companies in the money-losing space where many players are now on life-support after burning through hundreds of millions of dollars in investor dollars over the last 2 years. (
It’s Monday morning and the news flow from the weekend is rather slow due to the summer holidays, so I’m going to be a bit whimsical and comment on the potential for new M&A following a new $60 million funding round for Dianping, an interesting and profitable company which started as a restaurant ratings company but which has also expanded into the problem-plagued group buying space. I’ll start by saying I have absolutely no reason to think Dianping has plans for any major M&A, but then will quickly add that its recent receipt of the $60 million in new venture funding looks suspiciously like it might be intended for such a purchase.
The steady stream of executive departures at the ailing LaShou has reached a new high with the resignation of the company’s CEO, in the latest sign that the end may be near for China’s leading group buying site as it rapidly runs out of cash. I last wrote about LaShou back in late April, when it looked like the company may only have months left to live as it bled cash after a failed New York IPO and the departure of a number of top executives, including its regional managers in Shanghai and Beijing and a vice president. (
The shakeup in China’s online auction space continues, with global pioneer Groupon (Nasdaq: GRPN) effectively retreating from the market just a year and a half after it entered while up-and-comer Dianping passes an important milestone in the mobile space. The shake-up has been going on since the beginning of the year, fueled by rampant competition that has caused many Chinese consumers to rapidly lose interest in group buying deals from companies that look increasingly shaky as many run out of cash and are forced to close or make massive cutbacks. Of course the big really news from this space has yet to come, but could be just a month or 2 away when I predict that cash-challenged giant LaShou will either be forced to shut down or get purchased by one of the industry’s stronger players. But more about that in a moment.
