Bottom line: The recent case involving criticism of Alibaba by Washington and Beijing over piracy should form a template for how the 2 governments can collaborate on commercial issues where they have common interests.
US warns Alibaba over fake goods
Washington and Beijing showed a rare sign of collaboration on commercial issues last week when the US sternly rebuked e-commerce giant Alibaba (NYSE: BABA) for widespread trafficking of pirated goods on its websites, reinforcing a similar message delivered by China at the start of this year. While it’s doubtful the US Trade Representative’s (USTR) office and China’s State Administration for Industry and Commerce (SAIC) consulted each other in their separate actions, the parallel moves showed just how effective the 2 governments can be when they work together in some of the many areas where their interests overlap.
That contrasts sharply with a more clashing style on many other issues like high-tech hardware security and new energy products, where both sides have similarly common interests but more often take actions that result in trade wars and angry verbal exchanges. 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)
Bottom line: Alibaba’s new announcement of expansion in France and Germany looks largely incremental rather than a major move, and is aimed at creating positive buzz around its international growth story.
Alibaba names France country head
E-commerce giant Alibaba(NYSE: BABA) is closing out 2015 with a couple of big new hires in Europe, as it tries to give investors new reason to cheer about its future growth prospects. But a closer read of the announcement detailing the hires of country chiefs in France and Germany reveals a distinctly Chinese story, rather than the global expansion tale that many investors are eagerly awaiting.
In this case, Alibaba is choosing to focus on how the new office openings in France and Germany will help merchants in those markets sell into China. That’s part of a broader trend that has seen Alibaba, archrival JD.com (Nasdaq: JD) and global names like Amazon (Nasdaq: AMZN) and Wal-Mart (NYSE: WMT) try to offer more global brands to increasingly affluent Chinese consumers who are willing to pay more for these trusted names. Read Full Post…
Bottom line: STO’s backdoor listing and Wumart’s pending de-listing reflect the rise in China of e-commerce, which is boosting delivery companies like STO and undermining traditional retailers like Wumart.
STO delivers back-door IPO
A couple of listing stories are shining a spotlight on China’s rapidly changing retail landscape, which is seeing consumers migrate en masse to e-commerce from traditional shops. The e-commerce boom has fueled a parallel explosion in demand for delivery services, and now one of the largest private couriers, STO, is getting set to make a backdoor listing. On the other side of the shopping aisle are struggling traditional retailers like Wumart (HKEx: 1025), which is reportedly getting ready to abandon its longtime Hong Kong listing through a privatization bid.
This pair of stories also reflects a few other emerging trends for publicly traded Chinese companies, including a growing preference for domestic listings compared with an earlier one for offshore IPOs in places like Hong Kong, New York and Singapore. Shenzhen in particular is fast emerging as a hot spot for high-growth companies to list, thanks to rapid growth in the 5-year-old Nasdaq-style ChiNext board. That trend is likely to continue with plans for a similar board in Shanghai, which could reportedly launch as soon as next year. Read Full Post…
Bottom line: Declining Wal-Mart China sales and Suntory’s decision to dissolve a China joint venture reflect difficulties foreign consumer names face in the fast changing market, and also challenges posed by local rivals like Bright Food.
Sales fall 6 pct at Walmart China JV stores
Two new consumer stories are shining a spotlight on the difficulties many big foreign brands are facing in China’s tough retailing market, where they compete with both homegrown giants and also smaller names that can quickly gain scale over the Internet. One story reports on falling sales at US retailing giant Wal-Mart’s (NYSE: WMT) China stores, based on rarely seen data from a local joint venture. The other reports that Japanese brewing giant Suntory (Tokyo: 2587) is putting a lid on its 3-year-old Chinese beer-making joint venture.
Meantime, a third outbound M&A story involving Shanghai-based Bright Food shines a spotlight on one of the rising local giants that is posing a growing challenge to the big western consumer names. That deal has the acquisitive Bright, which has made billion-dollar purchases in Britain and Israel, signing another smaller deal to buy half of a major New Zealand meat processor for $200 million. Bright’s agreement to buy the stake in Silver Fern Farms looks similar to WH Group’s (HKEx: 288) blockbuster deal 2 years ago that saw it purchase leading US pork producer Smithfield for nearly $5 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on October 17-19. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Offers $4.6 Bln for Rest of Youku (NYSE: YOKU) Video Site (English article)
Rare Store Sales Data Highlights Wal-Mart’s (NYSE: WMT) China Challenge (English article)
BrightFood to Buy 50 Pct of New Zealand Meat Processor for $200 Mln (English article)
Marvell (Nasdaq: MRVL) Cuts 800 Jobs in China, Workers Stage Protest (Chinese article)
IBM (NYSE: IBM) Gives Beijing Access to Software Code (English article)
The following press releases and media reports about Chinese companies were carried on October 10-12. To view a full article or story, click on the link next to the headline.
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China Resources Unit to Sell Wal-Mart (NYSE: WMT) China Store Stakes for $525 Mln (English article)
Bottom line: Suning’s Japanese expansion and receipt of a new license to build and operate a private broadband network are both positive developments, but also reflect a lack of quick progress in transforming its core China-based retail business.
Suning in Japanese expansion
A couple of new reports involving Suning (Shenzhen: 002024) made me realize it’s been quite a while since I’ve written about this company that is trying to transform from a traditional retailer to a major e-commerce player. Both reports are interesting and noteworthy, though neither is related to its e-commerce drive, which doesn’t appear to be going anywhere quickly.
One of the deals involves Suning’s purchase of a money-losing Japanese electronics seller 5 years ago, and will see it now plow several billion yuan into a major expansion of the Laox chain of home appliance stores. The second deal has Suning named as one of 4 companies to receive licenses to build broadband networks to offer services under a newly announced pilot program to open the sector to private money. Read Full Post…
The following press releases and media reports about Chinese companies were carried on April 30. To view a full article or story, click on the link next to the headline.
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Bottom line: Carrefour’s new China strategy ends a period of uncertainty about its commitment to the market, though its move into e-commerce is long overdue and could fail due to its lateness.
Carrefour decides to stay in China
After sending a stream of mixed signals over the last 2 years about its commitment to China, global retailing giant Carrefour (Paris: CA) has finally decided it will stay in the market for now, but only after overhauling its operations. The decision will see the company do a major consolidation of its procurement centers, and also push into convenience stores and e-commerce. The signals seem to imply that the days of rapid expansion for its core chain of superstores is probably finished, with e-commerce and smaller stores likely to form the bulk of its China expansion going forward. Read Full Post…
Bottom line: A new audit reveals how widespread counterfeit goods are on Chinese e-commerce sites, which will remain a major risk for site operators and their shareholders.
Taobao slammed in piracy audit
A new audit from State Administration For Industry and Commerce (SAIC) is showing just how pervasive fake goods are on the Chinese Internet, underscoring the huge risk that consumers face when purchasing online. The results underscore the huge risk to e-commerce firms as well, since many of China’s top names including Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD) operate so-called “open platforms” that are simply online marketplaces where third-party merchants can sell their goods. Such merchants are notoriously hard to police, and these latest results show that they frequently offer fake and substandard products to buyers. Read Full Post…
