Bottom line: Alibaba’s launch of its popular Tmall into several markets with large Chinese populations shows it is still looking for a strong overseas formula, underscoring its dependence on China for the foreseeable future.
Tmall marches into Singapore
E-commerce juggernaut Alibaba (NYSE: BABA) is making its latest global expansion noise with word that it will launch a version of its popular B2C Tmall online marketplace targeting overseas buyers in Southeast Asia. I have to admit I’m not completely sure about the significance of the move, since the company already has a wide ranging network covering a number of overseas markets through its AliExpress and Lazada services.
The bottom line seems to be that Alibaba is taking a somewhat fragmented and multi-brand approach to the overseas market, as it searches for formulas for success in an area that so far has been somewhat elusive. The company only derives about 10 percent of its revenue from overseas operations at the moment, despite numerous attempts to develop markets outside China. Read Full Post…
Bottom line: A blossoming price war between Alibaba and JD.com in the online grocery space could stretch out for the next year, costing each hundreds of millions of dollars on promotions as they battle for market share.
Alibaba to spend billions on Tmall Supermarket
Just days after e-commerce partners JD.com (Nasdaq: JD) and Walmart (NYSE: WMT) revealed a major promotion for their online grocery business, sector leader Alibaba (NYSE: BABA) is firing back that it will outspend its smaller rivals in the hotly contested space. This sudden price war in online groceries space looks remarkably similar to another battle that broke out nearly a year ago, when Alibaba launched another major promotion against online grocer Yihaodian, Walmart’s main China e-commerce site at the time. Walmart appeared to later concede defeat in that battle just two months ago when it sold Yihaodian in exchange for shares in JD.com, Alibaba’s chief rival. Read Full Post…
The following press releases and news reports about China companies were carried on August 11. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Announces June Quarter 2016 Results (Businesswire)
Yihaodian Launches 1 Bln Yuan Price War Against Tmall Supermarket (Chinese article)
Accused of poor regulation and unfair competition by traditional import-export traders, cross-border e-commerce in China has been subject to new regulations since the beginning of April. Over the long term, the new regulation is expected to improve the shopping experience by focusing on the quality of goods.
With over 5,000 cross-border online trading platforms and more than 200,000 enterprises involved, e-commerce has become a major force for foreign trade into and out of China. In 2015, cross-border consumer deals settled online reached $ 40 billion, up 50 percent, representing over 6 percent of the total consumer e-commerce sector. China’s Commerce Ministry estimates the broader cross-border e-commerce market is much larger, growing at an average rate of 30 percent to reach up to $1 trillion by 2018. (analysis report) Read Full Post…
The following press releases and news reports about China companies were carried on April 29. To view a full article or story, click on the link next to the headline.
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Carl Icahn Says Sold Entire Apple (Nasdaq: AAPL) Stake on China Woes: CNBC (English article)
Bottom line: Asos’ China retreat is due to the country’s extremely competitive e-commerce landscape, and shows that western retailers need to devote significant resources to succeed in the market.
Asos bows from China
In what looks like a first for a major western retailer, British fashion seller Asos (London: ASC) has officially pulled the plug on its China operations. Some might say that’s nothing new, since much bigger names like supermarket operator Tesco (London: TSCO) and electronics seller Best Buy (NYSE: BBY) have made similar moves in the last 5 years after failing to find a big enough audience among Chinese consumers.
But Asos is a different case, since it’s one of a growing number of western retailers that are choosing to come to China as a pure e-commerce plays, in a bid to save the huge costs involved with traditional stores and also take advantage of the nation’s online shopping craze. The problem is that China’s e-commerce craze has also attracted thousands of other retailers, and Asos couldn’t find a way to differentiate itself from the crowd. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 22. To view a full article or story, click on the link next to the headline.
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Carrefour (Paris: CA) to Double China Convenience Stores by Chinese New Year (Chinese article)
Suning (Shenzhen: 002024) Logistics Begins Delivery Service for Tmall Supermarket (English article)
Xiaomi Caught in New Switcharoo Scandal for Redmi 2A Screen (Chinese article)
China’s Sky Solar (Nasdaq: SKYS) Soars After Signing $100 Mln Funding Pact (English article)
TAL Education (NYSE: XRS) to Acquire Firstleap Education (PRNewswire)
Bottom line: Alibaba’s new tie-up with a leading US wine maker is mostly symbolic and represents a boom in the e-commerce market for imported goods, while NetEase’s new share buyback plan is unlikely to provide much support for its sagging stock.
Robert Mondavi launches on Tmall
Leading Chinese Internet companies Alibaba (NYSE: BABA) and NetEase (Nasdaq: NTES) are trying different approaches to boost their sagging stocks, amid a broader sell-off for US-listed Chinese companies in tandem with China’s own tanking markets. The first case has e-commerce leader Alibaba launching a new online wine shop with US giant Robert Mondavi, as part of a broader move to let Chinese consumers buy imported goods online. The move by online game giant NetEase looks a bit more conventional, with its announcement of a plan to buy back up to $500 million of its stock.
Alibaba and NetEase certainly aren’t alone in watching their shares tumble, amid a broader sell-off for US-listed Chinese stocks over the last 2 months. Alibaba shares have lost nearly half of their value from their all-time high reached last November, and now trade about 5 percent below their IPO price from a year ago. NetEase shares have lost a quarter of their value since early August, in a plunge coinciding with China’s own tumbling stock markets. Read Full Post…
Bottom line: Qihoo’s new Dazen smartphones stand a low chance of success, even if they provide better quality to comparably priced rivals, due to their late entry to the overheated ultra low-end of China’s smartphone market.
Qihoo unveils Dazen smartphone
About a half year after announcing its intent to enter China’s crowded smartphone space, software security specialist Qihoo (NYSE: QIHU) has unveiled its new product under a brand name that sounds clever and catchy but is decidedly downscale. Qihoo has just announced that its new smartphones will carry the brand name of Dazen, and will sell for a bargain basement price of 899 yuan, or about $150.
The move appears to be an extension of Qihoo’s longtime strategy of selling products cheaply or even giving them away for free, and then using those products as a marketing tool for its other paid products and services. But in this case the strategy of going after the ultra low end looks a bit questionable, since that part of the market is already quite crowded and many brands are believed to be losing money. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 17. To view a full article or story, click on the link next to the headline.
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Tesla (Nasdaq: TSLA) Unveils New Model X, to Go on Sale in China Next Year (Chinese article)
Bottom line: A probe against WeChat in Taiwan is likely to see its local offices shut down and Tencent evicted, reflecting the many challenges Chinese tech companies will face as they try to expand abroad.
WeChat faces Taiwan eviction
Taiwan may share many cultural traits with China, but its government certainly doesn’t seem to have much love for Chinese technology. The list of Chinese firms running into trouble on the island has just gained a new member, with word that Tencent’s (HKEx: 700) hugely popular WeChat is facing eviction from Taiwan for possibly violating local investment rules.
This brewing setback is interesting mostly for political reasons, and also because it reflects the troubles that WeChat has faced in its fledgling global expansion. From a practical perspective, Taiwan looks like an easy market for Chinese tech companies due to the shared language and culture. But the fact is that Taiwanese preferences are often quite different from China’s, and in this case the reality is that Japan-leaning Taiwanese far favor rival Japanese product Line to WeChat. Read Full Post…
