Gucci Archives ~ Business China : news for investors in China

E-COMMERCE: Alibaba Moves on From Piracy Tussle, Goes to Washington

By newsdoug on May 18, 2016

Bottom line: Alibaba’s new lower-key approach to publicizing its fight against piracy is in response to an embarrassing spat with a major industry group, and looks like a smarter way to handle its anti-counterfeiting efforts.

Alibaba takes lower-key approach in anti-piracy fight

Just days after a high-profile and embarrassing tussle with some of the world’s top luxury brands, e-commerce giant Alibaba (NYSE: BABA) is trying to put the matter in the past by reaffirming its commitment to fighting piracy outside an industry alliance it previously joined. At the same time, the company’s talkative chief Jack Ma was uncharacteristically quiet after a trip this week to Washington to meet with unspecified officials.

Anyone who has followed Alibaba for a while knows this kind of behavior is quite typical for the company. Alibaba’s is usually quite talkative and self-promotional, which reflects Ma’s own nature. But that high-profile behavior often magnifies the inevitable setbacks that occur for any company of this size, and Alibaba and Ma often go into “quiet mode” after such negative news. Read Full Post…

E-COMMERCE: Anti-Piracy Group Pulls Out Welcome Mat from Under Alibaba

By newsdoug on May 16, 2016

Bottom line: A brouhaha that has seen Alibaba suspended from an anti-counterfeiting group just a month after joining is an embarrassment but won’t have a major longer-term impact on the company’s stock.

Tiffany quits anti-piracy group after Alibaba joins

A brouhaha over the admission of Alibaba (NYSE: BABA) to a leading US anti-piracy coalition has taken a somewhat strange twist, with word that the group has formally suspended the e-commerce giant just a month after it joined. The development occurred after several of the International Anti-Counterfeiting Coalition’s (IACC) members quit after the group accepted Alibaba, including the latest defection last week by Tiffany & Co.

Tiffany’s defection followed earlier withdrawals from the IACC by 2 other luxury goods makers, Michael Kors and then Gucci a short time later. (previous post) The coalition’s members were unhappy because of Alibaba’s previous status as operator of marketplaces with rampant trafficking in counterfeit goods, even though the company has pledged to strongly step up its fight against such trade. Read Full Post…

E-COMMERCE: Gucci Scorns Alibaba’s Peace Offering

By newsdoug on May 9, 2016

Bottom line: More big global brands are likely to leave a major US anti-piracy group after its admission of Alibaba, which will suffer some negative publicity as it tries to clean up its sites of trafficking in fake goods.

Gucci quits US anti-piracy group after Alibaba joins

How would you feel if your former foe who constantly stole from you suddenly applied for membership in one of your favorite clubs? The answer is “probably not very happy”, which has led luxury goods giant Gucci to abruptly resign from a global anti-counterfeiting group after it admitted Chinese e-commerce leader Alibaba (NYSE: BABA) as its newest member.

This pair of companies have plenty of bad blood between them due to Gucci’s allegations of pirated goods being sold over Alibaba’s popular online marketplaces. Gucci parent Kering has sued Alibaba twice over the issue, most recently a year ago in New York, accusing the Chinese company of knowingly assisting in trade of counterfeit goods over its platforms and profiting from the process. Read Full Post…

News Digest: May 28, 2015

By newsdoug on May 28, 2015

The following press releases and media reports about Chinese companies were carried on May 28. To view a full article or story, click on the link next to the headline.
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Buffett-Backed Automaker BYD (HKEx: 1211) Plans Up To $1.9 Bln Placement (English article)
Blocked in China, Twitter (NYSE: TWTR) Still Courts Chinese Firms For Ads (English article)
Sina Weibo (Nasdaq: WB) to Invest $142 Mln in Taxi App Didi Kuaidi (English article)
Gucci China Discounts Prompt Lines as Bagmaker Clears Stock (English article)
Chinese Airline Juneyao IPO Surges by Limit 44 Pct on Shanghai Debut (English article)

Starbucks Raises Prices, But Who Cares? 没人会在意星巴克提价

By newsdoug on February 1, 2012

Starbucks raises China prices If someone raises the price for an already ridiculously overpriced Gucci handbag, will shoppers really care? That’s the big question for Starbucks (Nasdaq: SBUX), which is tempting the lower-end luxury lifestyle market with its first price hike in 5 years, challenging China’s growing ranks of yuppies to pay 1-3 yuan more for their favorite cup of daily coffee. (English article) From a price perspective, this looks like a relatively modest hike, amounting to a 5-10 percent increase for coffee that already cost as much or more than a full meal at many local eateries. What’s more, Chinese consumers are already accustomed to price increases in this range, as inflation in 2011 hit some of the highest levels seen in years. But the real question is: will consumers even care when they are already so obviously spending money on a product that is really an extraneous low-end luxury good one of whose main functions is simply to let consumers show off their yuppie status? All of that said, my answer to the question is a definitive “no”, and I see little or no impact to Starbucks sales from this price increase. In fact, I could even see the opposite happening, with even more consumers flocking to Starbucks for coffee in order to show the world that higher prices won’t deter them from pursuing the yuppie lifestyle that Starbucks represents. Such consumers may also appreciate the fact that Starbucks waited for inflation to cool before making its move, unlike most companies that already raised their prices last year at the height of the inflationary cycle. I also like the way that Starbucks announced the move, informing its customers first on the popular Weibo microblogging platform in an attempt to ease the mild shock that some may soon feel on learning the price of their coffee has risen. What all of this says more broadly is that people will be willing to pay a premium for luxury goods in general regardless of mild price changes, as the value they get from such goods contains many intangible elements that can’t really be measured by the cost of the good to start with. All that said, Starbucks also realizes it’s not exactly a Gucci or Louis Vuitton, and has taken a prudent approach to its increase by keeping it modest, waiting until broader inflation is showing signs of cooling and being as transparent about it to consumers as possible.

Bottom line: Starbucks’ new price hike is unlikely to deter customers from buying its pricey coffee, and could even bring it more business from China’s growing ranks of yuppies.