Tag Archives: e-commerce

latest Business and financial news about E-Commerce in China, provided by Doug Young , E-Commerce expert and former Chief Editor of Reuters in China.

Wal-Mart Finds Bargain in China’s Internet Bubble

By newsdoug on September 13, 2011

Wal-Mart gets bargain with new Yihaodian buy Yihaodian, the online merchant that made headlines earlier this year when it got an investment from global retail giant Wal-Mart (NYSE: WMT) (previous post) looks like the latest company to show signs of distress in China’s growing Internet bubble, following a report that gives it a surprisingly low valuation. According to the report, which cites an unnamed industry source, Wal-Mart, which bought an unspecified stake in the online retailer earlier this year, recently bought another 20 percent for a relatively modest $65 million. (English article) Some simple math will show this puts Yihaodian’s value at about $325 million if the report is correct. The same report cites Yihaodian’s chairman saying reports that Wal-Mart will take over the company are incorrect and that the size of the stake purchase is incorrect as well. But even if the numbers are slightly off, this market valuation for what is presumably an up-and-coming online retailer looks tiny compared to numbers being mentioned for other e-commerce firms, most notably an estimated $10 billion valuation given earlier this year by investors in 360Buy, China’s second biggest online merchant which is now hiring an investment bank for an IPO to raise up to $5 billion. (previous post) I realize that Yihaodian is much smaller than both 360Buy as well as leading online retailer Taobao Mall, owned by Alibaba Group. Still, this $325 million valuation looks like a real bargain for Wal-Mart, and no doubt represents an attempt by the worried seller of the stake, in this case Yihaodian’s controlling shareholder Ping An Insurance (HKEx: 2318; Shenzhen: 601318), to get back some of its investment before China’s Internet bubble bursts. As the Internet bubble swells and starts to pop, look for more of these sales at bargain prices as investors try to recoup some of their investments before it’s too late.

Bottom line: Wal-Mart’s purchase of 20 percent of online retailer Yihaodian for a bargain price will be followed by similar sales, as investors try to recoup their money before China’s Internet bubble bursts.

Gaopeng Lay-Offs Auger Ad Spending Downturn 1高朋裁员预示网络广告支出或大幅下降

By newsdoug on August 8, 2011

Group selling looks tough for Gaopeng There’s more negative buzz coming from Gaopeng, the group buying joint venture between Groupon and Tencent (HKEx: 700), which, when combined with other industry noise indicates a sharp downturn in online ad spending may be on the horizon. Just two weeks after reporting that Gaopeng had stopped advertising on Baidu (Nasdaq: BIDU) and Google (Nasdaq: GOOG) because they were too costly (previous post), Chinese media are reporting that Gaopeng has begun laying off staff to cut costs. (English article) The reports seem a bit fragmented and indicate a gradual lay offs began as early as April. But what does seem clear is that Gaopeng isn’t gaining nearly enough sales and revenue in China to justify the rapid build-up in its staffing and ad spending since its formation late last year. The latest Gaopeng developments echo similar recent buzz, with e-commerce executives saying competition has become incredibly fierce and unsustainable, and many players will be forced to cut back their advertising spending in the months ahead to keep from losing money. None of this should be surprising, since China now boasts at least three other big group-buying sites that have received major new funding this year (previous post), and the e-commerce space has also become a jungle in a very short time, with names like Wal-Mart (NYSE: WMT) joining a space that was already crowded with big homegrown names like Alibaba and 360Buy. (previous post) This kind of hyper-competition can hardly be comforting for companies that derive a big part of their revenue from advertising spending, most notably Baidu, Sina (Nasdaq: SINA) and Sohu (Nasdaq: SOHU), whose sites are popular with advertisers. I would look for all three of these companies to report sharp slowdowns in revenue growth starting late this year, and some consolidation in both the e-commerce and group buying space, which could see Gaopeng close down as Groupon focuses on more promising growth markets.

Bottom line: Web firms that rely heavily on ad spending will see a sharp slowdown in revenue growth around the end of the year, as advertisers slash spending amid fierce competition.

美国团购网站Groupon和腾讯<0700.HK>合资的高朋团购再传出负面消息，结合业内其它消息来看，网络广告支出大幅下降或初露端倪。两周前有报导称高朋因费用太高已停止在百度<BIDU.O>和谷歌<GOOG.O>的广告投放。目前中国媒体报导称，高朋网已开始裁员，以削减成本。这些零散报导指出，高朋网早在4月就开始逐步裁员。但可以确定的是，高朋网自去年底成立以来，其在华销售和营收表现一般，与其雇员人数和广告支出的迅速增加不成正比。业内近期出现类似情况，电子商务高管称，团购行业竞争白热化，发展变得不可持续，许多团购网未来几个月为避免亏损，将被迫削减广告支出。这些都并不令人惊讶，中国今年至少有三大团购网获得大规模融资，电子商务领域竞争也变得异常激烈，本土已有阿里巴巴和京东网等巨头，而沃尔玛也进军中国电子商务领域。这种激烈竞争让收入主要来自广告的公司很难感到欣喜，例如百度、新浪<SINA.O>和搜狐<SOHU.O>。我预计，今年底开始，这三家公司的收入增长将大幅下降，电子商务和团购网领域都将出现整合，由於Groupon关注更具增长潜力的市场，可能会关闭高朋网。

一句话：由於团购网和电子商务领域竞争激烈，广告商将大幅削减开支，严重依赖广告收入的网络公司营收增长将在年底大幅下降。

Sina, Tencent Pose Threat in SNS, E-Commerce 新浪腾讯攻城掠地

By newsdoug on August 4, 2011

Despite their late arrival to the game, Sina (Nasdaq: SINA) and Tencent (HKEx: 700) could soon become potent forces in their newly chosen fields of SNS and e-commerce, respectively. Sina looks the sharpest in this latecomer strategy, reporting that its Boke Qing social networking site, which held its beta launch last month (previous post) has already registered its 1 millionth user. (English article) Sina has achieved the breakneck growth by packaging Qing as a more substantial complement to its wildly popular Weibo microblogging service, considered the Twitter of China. Qing, which links seamlessly with Weibo, is likely to grow exponentially over the next few months, and I wouldn’t be surprised to see it reach 10 million users by year end. If it achieves that kind of growth, it could easily challenge industry leader Renren (NYSE: RENN), which reported 31 million users in the first quarter of this year. If Qing really achieves such fast take-up and Weibo starts generating some profits, I could see Sina packaging these two units together and making a US public listing for the pair as soon as the end of 2012. Meantime, Tencent has detailed plans to develop a mega-platform for both B2C and C2C called Paipai, and will put 500 million yuan, or about $80 million, behind the effort. Like Sina, Tencent has proved to be very adept at leveraging a huge user base for its wildly popular QQ instant messaging service into other areas, overtaking Shanda (Nasdaq: SNDA) and NetEase (Nasdaq: NTES) in just a few years to become China’s biggest online game operator. Of course, it will face stiffer competition in e-commerce, going up against sector giant Taobao, along with other names like Dang Dang (NYSE: DANG), 360Buy and Wal-Mart-invested (NYSE: WMT) Yihaodian. Despite that, I’d still give Tencent’s e-commerce initiative a fair shot at success due to its unique position as China’s Internet leader, while Qing’s success looks almost 100 percent guaranteed due to its links to Sina and Weibo.

Bottom line: Sina’s new Qing SNS service could become a major player by year-end, while Tencent’s new e-commerce initiative also stands a good chance of success.

新浪(SINA.O)在社交网络服务领域、腾讯(0700.HK: 行情)在电子商务领域，都算是後来者，但可能迅速崛起。新浪势头凌厉，上月启动轻博客公测版後，其注册用户已突破100万。新浪以轻博客作为微博的补充，两款产品实现相互联通，实现用户数量迅猛增长。新浪轻博客在未来几个月可能呈飞速成长，若到今年底用户达到1,000万，我一点都不会惊讶。若这成为现实，则可挑战该领域领头羊–人人网(RENN.N)，今年第一季人人网注册用户已达到了3,100万人。如果轻博客果真发展神速，微博也开始盈利，我认为，最快到明年底，新浪就可能将轻博客与微博整合到一起，在美国上市。与此同时，腾讯也制定详细计划，打造B2C和C2C商务平台拍拍网，将为此投入5亿元资源。与新浪相似，腾讯也善于利用其庞大的QQ用户群，将服务拓展至新领域，短短几年时间就取代盛大(SNDA.O)和网易(NTES.O)，成为中国最大的网络游戏运营商。当然，腾讯在电子商务领域面临的竞争会更激烈一些，需要面对当当网(DANG.N)、京东商城、和沃尔玛(WMT.N)投资的1号店等强劲对手。但鉴于腾讯在中国互联网领域的地位，我还是对其在电子商务领域的尝试寄予厚望。至于新浪的轻博客，其成功几乎没有悬念。

一句话：新浪轻博客到今年底将成为社交网络服务领域重要力量，而腾讯在电子商务领域新尝试也很有希望取得成功。

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