The following press releases and media reports about Chinese companies were carried on April 2. To view a full article or story, click on the link next to the headline.
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- Apple (Nasdaq: AAPL) CEO Cook Apologizes For After-Sales Service Lapses (Chinese article)
- Leaked Memo Shows Telcos Diverging on Tencent (HKEx: 700) Weixin (Chinese article)
- Jingdong Mall Rebrands 360Buy.com Site As JD.com (English article)
- Walmart (NYSE: WMT): To Invest 500 Mln Yuan to Remodel 50 China Stores This Year (English article)
- Foxconn Invests 130 Mln Yuan For 20 Pct of LeTV (Shenzhen: 300104) (Chinese article)
China’s unruly and highly competitive Internet space has created all kinds of interesting partnerships, with word of a new tie-up between e-commerce giant Alibaba and former online game leader Shanda Games (Nasdaq: GAME) emerging as the latest. The driving force behind most of these tie-ups is a desire to drive more traffic to Internet sites as companies search for more customers. In this case, it appears the 2 companies are aiming to sell e-commerce goods to Shanda’s millions of online gamers from Alibaba’s hugely popular TMall online shopping mall. (
Online discount retailer Vipshop (NYSE: VIPS) emerged as one of China’s most remarkable turnaround stories in 2012, as its shares rallied sharply in the second half of the year after a miserable IPO. Now the company is passing more new milestones, reporting its first-ever profit in the fourth-quarter of 2012 and also entering the relatively small club of Chinese Internet firms that can boast of market values of $1 billion or more. The company has also solidified its position as China’s most valuable publicly traded e-commerce firm, after taking the title from older rival Dangdang (NYSE: DANG) last fall.
After several misguided e-commerce initiatives that ended in failure, Internet giant Baidu (Nasdaq: BIDU) is finally making what looks like a smart move in the highly competitive space by focusing on what it does best: providing search services. In this case, media are reporting that China’s dominant provider online search company has quietly launched an e-commerce search engine, in what looks like a direct challenge to e-commerce leader Alibaba’s own eTao e-commerce search site.
I’ve lived in a number of Asian cities before taking up my current residence in Shanghai, including 3 years in Taiwan from 2006 to 2009. While I enjoyed may things about Taipei, one of the things that I found less appealing was the tendency for shops and companies there to overpackage many products, especially items intended as gifts. The phenomenon would often cause objects such as bottles of perfume or liquor to suddenly morph into packages that were 3 or 4 times the size of the actual product. I’ll discuss shortly my theories on where this phenomenon came from and the psychology behind it, but first I want to congratulate Shanghai for taking the lead in trying to curb this extremely wasteful practice that has spread from Taiwan to China in the last decade.
I’ve been writing for most of the past year about China’s bloody e-commerce battles, and now we’re getting some figures that finally show how bad the situation is with news that up-and-comer Suning (Shenzhen: 002024) has missed its 2012 online sales target by a relatively large margin. This bad stumble reflects the fact that China’s e-commerce market may have big potential, but the overall space is still limited in size. What’s more, with so many big names fighting for a piece of the pie, everyone is having to sell their products at very low prices that ultimately result in lower overall revenues and operating losses.
There are a few interesting news bits on the e-commerce front, led by word that Walmart (NYSE: WMT) is busy overhauling the management at its newly acquired Yihaodian online store, in what looks like a questionable move that could set the company up for failure. Meantime, media are also reporting that the e-commerce arm of Tencent (HKEx: 700) is launching a direct assault on Jingdong Mall, in the latest chapter of China’s never-ending online price wars.
The China retail scene is buzzing with conflicting signals from these last few weeks, as established names like Tesco (London: TSCO) sound negative notes amid a rapid economic slowdown, even as newcomers like Apple (Nasdaq: AAPL) and Forever 21 open massive new stores. In fact, there really aren’t too many contradictions in this latest news, since these new mega-stores were probably in the planning stages before China’s economic slowdown began. Thus these newer stores are more indicators of investments for the future rather than bets on the present.
Some interesting signs are coming from 2 major Chinese tech firms on the M&A front, with PC leader Lenovo (HKEx: 992) signaling it may finally slow down its acquisition frenzy, even as e-commerce aspirant Suning (Shenzhen: 002024) sends the opposite message with its announcement of a new major purchase. The news from Lenovo would represent a welcome break from the company’s steady stream of acquisitions, which look destined to give the company some major indigestion as it tries to digest such a wide array of assets in a number of very different markets. Meantime, Suning’s purchase of an e-commerce site targeting infants and toddlers isn’t too worrisome by itself, but from a broader perspective also reveals a company trying to grow too big too quickly.
Just 6 years after coming to China, US home improvement giant Home Depot (NYSE: HD) is shuttering most of its China shops, becoming the latest major foreign retailer to discover that China’s 1.3 billion consumers aren’t quite the same as their peers in the West. Home Depot’s departure follows the equally high-profile closure of US electronics retailing giant Best Buy (NYSE: BBY) stores last year (
