Bottom line: Alibaba’s new tie-up with Car Inc hints at a looming divorce with Didi Kuaidi, while a major new funding for its Koubei unit foreshadows a major new push that will further heat up intense competition in take-out delivery services.
Koubei seeks big new funding
Just days after reports emerged of a massive new funding for its Ant Financial unit, e-commerce leader Alibaba (NYSE: BABA) is back in the fund-raising headlines with big plans for its Koubei take-out dining unit. At the same time, an intriguing new story about a strategic Alibaba alliance with an aggressive new player in the hired car services space hints that the company may also be contemplating a divorce with national leader Didi Kuaidi.
Both of these stories reflect the catch-up game that Alibaba is playing in two important growth areas of the Internet. Alibaba previously had a presence in both through investments in hired car service provider Kuaidi and group buying site Meituan. But both of those partners entered mega-mergers over the last 6 months with their major rivals. As a result, Alibaba has divorced itself from the current Meituan Dianping, and is looking to build up its own rival Koubei take-out dining service. (previous post) Read Full Post…
Bottom line: Hertz’s sale of its Car Inc stake reflects the Chinese company’s new focus on hired car services, and could see Car Inc fall into the red as its UCar affiliate vies with Uber and Didi Kuaidi in the fiercely competitive market.
Hertz dumps Car Inc
A complex transaction involving Car Inc (HKEx: 699) is making the headlines as the new week begins, reflecting a transformation from its roots as a rental car specialist into a hired car services company competing with Uber and Didi Kuaidi. The deal will see former strategic stakeholder Hertz (NYSE: HTZ) sell most of its stake in the company to UCar, Car Inc’s hired car services affiliate. At the same time, Car Inc’s chairman and one of its largest shareholders will also sell his stake in the company to UCar, which will become one of Car Inc’s biggest shareholders.
There’s no explanation for the shuffle in the announcement, but it does seem to show that Car Inc’s Chairman Charles Lu wants to move his company more quickly into the hired car services sector, which is growing faster but is also fiercely competitive. That would explain Hertz’s decision to sell its stake, since Hertz is a global rental car company that probably has little interest in China’s ultra competitive hired car services market. Read Full Post…
The following press releases and news reports about Chinese companies were carried on February 25. To view a full article or story, click on the link next to the headline.
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Didi Kuaidi Raising $1 Bln at Valuation of More Than $20 Bln (English article)
China Southern (HKEx: 1055) Makes Deep Discount Tickets Exclusive to Own Site (Chinese article)
Wanda Seeking $1.5 Bln Investment for Film Unit – WSJ (English article)
Vipshop (NYSE: VIPS) Reports Q4 and Full Year Financial Results (PRNewswire)
Xiaomi Announces Next-Generation Mi 5 Smartphone, Mi 4s (Chinese article)
Bottom line: Yahoo’s reversal of its earlier decision to spin off its 15 percent of Alibaba into a separate company will have no impact on Alibaba, which is indicating separately that it will hold onto its own big stake in Uber China rival Didi Kuaidi.
Yahoo reverses course on Alibaba stake spin-off
A couple of news items are showing that the long and complex relationship between Internet search pioneer Yahoo (Nasdaq: YHOO) and Chinese e-commerce juggernaut Alibaba(NYSE: BABA) is far from over, and how the companies may remain hopelessly entangled for a while to come. The first item made global headlines, and has Yahoo reversing its earlier decision to spin off its 15 percent of Alibaba into a separate company. The second item has Yahoo founder Jerry Yang getting named as a top adviser to Didi Kuaidi, China’s main rival to US private car services giant Uber, which counts Alibaba as one of its major stakeholders.
At the heart of this complex dance is a personal relationship between Alibaba founder Jack Ma and Yahoo’s Yang. The pair struck up a friendship more than a decade ago, and ultimately formed a major alliance that saw Yahoo purchase 40 percent of Alibaba for about $1 billion. Yahoo later sold down that stake, netting billions of dollars in profits. But it still holds 15 percent of Alibaba, which is currently worth about $30 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 10. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) Reverses Plan to Spin Off Alibaba (NYSE: BABA) Stake (English article)
Wal-Mart’s (NYSE: WMT) China Imports Cost 400,000 US Jobs in 2001-2013: Report (English article)
President to Buy Qihoo 360’s (NYSE: QIHU) Enterprise Security Business – Source (English article)
Didi Kuaidi Appoints Yahoo (Nasdaq: YHOO) Co-Founder Jerry Yang as Adviser (English article)
Alibaba (NYSE: BABA) E-Auto to Become Presenting Partner of FIFA Club World Cup (Businesswire)
A new pilot program for Shanghai’s taxis was small news in the headlines this week, even though the move itself is quite revolutionary. That’s my humble view after reading about the program being rolled out by Qiangsheng, our city’s largest fleet operator, which is taking the ground-breaking step of actually tying taxi drivers’ pay to their service rather than just how many miles they drive each month.
The program probably won’t have much impact on local traffic congestion, but could go miles towards restoring the rapidly-fading image of our city’s thousands of taxi drivers. I remember a time not so long ago when Shanghai was quite proud of its taxi fleet, which consisted of relatively courteous drivers who were immediately identifiable by their trademark white gloves and willingness to take you almost anywhere you wanted to go without complaint. Read Full Post…
The following press releases and media reports about Chinese companies were carried on December 5-7. To view a full article or story, click on the link next to the headline.
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Ola, Didi Kuaidi, Lyft and GrabTaxi Gang Up to Kill Uber (English article)
Bottom line: Uber’s 2016 China expansion plan looks aggressive but typical for the company, while Didi Kuaidi should invest its big cash pot on expansion and becoming profitable rather than unrelated services like O2O take-out dining.
Uber, Didi race towards 2016 with big investments
Private car service leaders Uber and Didi Kuaidi are both in the headlines as we race towards the end of 2015, a year that will go down as a watershed for this fast-rising sector both in China and globally. The first news comes from Uber, which is detailing an aggressive expansion plan for 2016 as China surpasses the US to become its largest global market. The second headline has Didi Kuaidi confirming a major new investment in online take-out dining site Ele.me, just days after separate reports said that e-commerce giant Alibaba(NYSE: BABA) also wants to invest in the company.
This year has certainly been a watershed for both Uber and Didi Kuadi in China, reflecting the rapid rise of their private car services that use location-based (LBS) GPS technology to challenge traditional taxi operators. Uber has said repeatedly that China is its top priority outside its home US market. Reflecting that position, Uber took the unusual step of spinning off its China unit into a separate company earlier this year, and also said it would spend $1 billion in 2015 to build up its service in the market. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 4. To view a full article or story, click on the link next to the headline.
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JD.com (Nasdaq: JD) Says Alibaba Pressuring Merchants Before Singles’ Day (English article)
Over 40 Pct of China’s Online Sales Counterfeit, Shoddy: Xinhua (English article)
Bottom line: The equity tie-up between Ctrip and Qunar is likely to be an uneasy one driven by necessity rather than desire to work together, and stands a 50-50 chance of ending in divorce.
Ctrip, Qunar get hitched … sort of
The year 2015 will go down in Chinese Internet history as the year of the uneasy partnership, as several pairs of former foes suddenly merged even as their outspoken heads refused to work together. The latest of those unions is seeing former bitter rivals Ctrip (Nasdaq: CTRP) and Qunar(Nasdaq: CTRP) get together in a quasi marriage that qualifies as the largest and also strangest union to date.
This particular union isn’t even really a true marriage, and instead is a very big equity swap that will see Qunar’s controlling stakeholder Baidu(Nasdaq: BIDU) get 25 percent of Ctrip. Ctrip will get a larger chunk of Qunar on a percentage basis, ending up with 45 percent voting interest in its former rival. (Baidu announcement; English article; Chinese article) Like the other odd marriages this year, this latest one looks set for troubles, and could stand a very real chance of divorce. Read Full Post…
Bottom line: LeTV’s latest hired car services investment and high-profile poaching of top talent from a rival look similar to the recent rapid rise and sputtering of Xiaomi, and the company could follow a similar trajectory by this time next year.
LeTV steals top talent from Youku Tudou
After watching the meteoric rise of online video sensation LeTV (Shenzhen: 300104) over the past year, I’m quickly tiring of this company and its hyperactive diversification strategy. The latest move in that drive is taking LeTV onto the road, with word the company is investing a hefty $700 million for a controlling stake of struggling private car services firm Yidao Yongche.
At the same time, other media are reporting that LeTV has just stolen a top executive from chief rival Youku Tudou (NYSE: YOKU), which announced last week it has received a buyout offer from e-commerce giant Alibaba (NYSE: BABA). Anyone feeling a sense of deja vu from these latest 2 LeTV headlines, and from LeTV’s meteoric rise in general, would be correct. Read Full Post…
