Bottom line: Tencent’s inclusion in a national credit database initiative reflects the big commercial potential of WeChat, but a lawsuit over rumor spreading also highlights one of WeChat’s biggest liabilities.
Tencent joins credit card database drive
Two stories in the news are showing how WeChat is likely to become the future big bread-winner for Internet giant Tencent (HKEx: 700), even as the wildly popular mobile messaging service poses tricky liability risks for its parent. The first headlines spotlights WeChat’s huge potential, with reports that the central bank has invited Tencent to take part in development of a new national credit database. The latter news isn’t quite so upbeat, with a Shenzhen-listed drugmaker suing Tencent for failing to stop the spread of rumors about its products over WeChat. Read Full Post…
Regulators in new role as judges for industry clashes
China’s regulators have become involved in mediating a growing number of business disputes, reflecting the recent rise of a new generation of multibillion-dollar private sector companies that are rapidly growing beyond their traditional roots. In most cases, companies that began as Internet firms and high-tech manufacturers have encroached into a wide range of new areas like banking, TV and telecoms services, raising the hackles of big state-owned firms that previously dominated those sectors. Read Full Post…
The worrisome “vampire” moniker heaped on Alibaba’sYu’ebao has died a quiet and appropriate death, with word that China’s top banker has no plans to kill the wildly popular investment product. The pronouncement from central bank Governor Zhou Xiaochuan caps a brief period of turbulence for Yu’ebao, beginning when an influential financial commentator branded the product a “vampire” nearly 2 weeks ago. That comment triggered a heated debate about new competition that private companies are suddenly posing for stodgier state-run banks, which until recently were the only low-risk option for most consumers to deposit their savings. But Zhou didn’t completely let Yu’ebao off the hook, adding that the fast-rising private banking sector needs to be more tightly regulated. Read Full Post…
