Bottom line: Tencent would be wise to roll back a newly announced money-transferring fee on WeChat following state-media criticism, which could indicate a tougher stance by Beijing due to the platform’s increasingly dominant position.
Xinhua calls WeChat a catfish
It’s been quite a while since the last tussle between China’s influential central media and its vibrant private sector, so I was amused to read of a new flare-up in that regard after Tencent(HKEx: 700) said it would start charging fees for a money-transferring service on its popular WeChat platform. This looming flare-up has seen the state-run Xinhua news agency, often considered the voice of Beijing, criticize WeChat’s move as “excessive goose plucking”, which is quite a vivid description and certainly not too complimentary.
This particular assault is somewhat noteworthy, as it hearkens back to another similarly high-profile spat involving Tencent and WeChat 3 years ago. That tussle came as WeChat was beginning its meteoric rise, and saw leading telco China Mobile (HKEx: 941; NYSE: CHL) accuse the service of stealing its traditional SMS text messaging service. Tencent insisted at that time that WeChat would always remain free, defying China Mobile pressure to charge for the service and then divide the fees between the 2 sides. (previous post) Read Full Post…
Bottom line: Beijing should make investigators be more transparent when making publicly visible moves like detaining company executives, or risk financial turmoil when markets are left to try and guess what’s happening.
Transparency needed when big execs are detained
Beijing’s anti-corruption campaign took an unexpected turn into the private sector last week with the sudden disappearance of Guo Guangchang, one of China’s richest men and chairman of one of its most successful private conglomerates, Fosun Group. Word of Guo’s disappearance sparked widespread speculation and also some panic among investors in his dozen listed companies, forcing the group to scramble for answers to avoid financial chaos.
The case highlights the need for greater transparency by anti-graft investigators as they dig deeper into China’s corporate realm to root out corruption that has become all too common in the nation’s business culture. Read Full Post…
Bottom line: AP’s willingness to consider new tie-ups with Xinhua is the result of economic pressures being felt by western media, but is unlikely to produce any major alliances due to the potential for negative publicity.
AP open to deeper partnership with Xinhua
Rapid changes in the traditional media realm are creating some strange bedfellows, and the situation looks even stranger in China due to the strong elements of censorship and state control. That odd combination of circumstances is creating a perfect storm that has led some western media companies to do the previously unthinkable and consider partnerships with some of China’s most centrally controlled media. Recent rumors have said that global financial news leader Bloomberg may be considering such a tie-up, and now the latest reports are saying US media giant Associated Press (AP) is also open to such partnerships. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 31. To view a full article or story, click on the link next to the headline.
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Tencent (HKEx: 700) Dismisses New WeChat Membership System As Rumors (Chinese article)
Xinhua, AP presidents Discuss Cooperation In New Media Era (English article)
Jiayuan.com (Nasdaq: DATE) Engages Financial Adviser For Privatization Bid (PRNewswire)
Alibaba (NYSE: BABA) In Digital Distribution Deal With Music Rights Group BMG (English article)
Minsheng Bank (HKEx: 1988) Announces Annual 2014 Results (HKEx announcement)
With Alibaba’s blockbuster IPO nearly in the past, attention will turn over the next few weeks to tech giant Apple (Nasdaq: AAPL) and the mystery surrounding the lack of a launch schedule for its new iPhone 6 in China. While Alibaba is a story of hype, the iPhone 6 saga is quickly becoming a tale of intrigue, as everyone tries to guess what’s happening behind the scenes to delay this other highly anticipated event. China’s own media are helping to fuel the suspense, with a new report from the Xinhua central news agency providing clues about what looks like a tangle with China’s censors. Read Full Post…
A few weeks ago I praised Shanghai’s laggard media for uncovering one of the biggest stories of the year, so it seems fitting that this week I take another look at our local media’s return to the spotlight for far less positive reasons.
For those who don’t follow the industry so closely, the rare moment of glory for Shanghai’s media I’m referring to came back in late July. That’s when undercover TV reporters from Shanghai Media Group (SMG) exposed that a range of unsavory practices at Husi Food, a US-owned meat supplier to such major global brands as McDonald’s (NYSE: MCD), KFC (NYSE: YUM) and Starbucks (Nasdaq: SBUX). Read Full Post…
Newly listed companies are becoming popular investment targets for some of China’s tech giants, with online classified site 58.com (NYSE: WUBA) and video sharing site Xunlei (Nasdaq: XNET) both picking up major new backers in the form of Tencent (HKEx: 700) and Xiaomi, respectively. Meantime in other IPO news, a long-delayed domestic IPO for the website of the official Xinhua news agency is finally moving ahead, some 2 and a half years after a deal was first rumored. The case of Xinhuanet is particularly interesting because Xinhua and People’s Daily, the official Communist Party newspaper whose People.com (Shanghai: 603000) website is already listed, recently merged their 2 money-losing online search sites. Read Full Post…
Sales and marketing executives at China’s leading brands are almost certainly losing sleeping these last few nights, as they prepare for the Consumer Rights Day annual assault by state media each year on March 15. To their credit, Chinese media are usually relatively unbiased in choosing the subjects for their attacks, focusing on anyone with a big, recognizable brand name. But that often means the big multinational consumer brands are some of the easiest targets, since many are well known and highly respected by Chinese consumers. China executives from many of those companies will probably be spending this Saturdays in front of their TVs waiting to see if they’ve been targeted under a new attack this year. Read Full Post…
Oriental Morning Post owner set to merge with Jiefang Group
As a Shanghai resident with a personal interest in the media, I’ve become quite familiar with my local media scene that is largely dominated by 3 state-owned companies. That’s why I was intrigued and even a little excited to read that 2 of those companies might be preparing to merge, hinting at a broader coming consolidation that could produce a handful of new national media giants capable of challenging stodgy old names like CCTV and Xinhua. Of course there’s no guarantee that any of these newer names would be any more creative than the existing giants, since all come from backgrounds as state-run enterprises that are often far less innovative than their private sector peers. Read Full Post…
When is the merger of search sites operated by 2 major media and a top telco not a very big news story? The answer: When all 3 of those companies are big state-run behemoths that have a poor track record for innovation in the fast-moving Internet world. That’s my personal assessment on reading news that Panguso and Jike, the respective online search sites of the Xinhua news agency and People’s Daily newspaper, have merged their operations to form a new company. (English article) In addition to its Xinhua backing, Panguso counts dominant mobile carrier China Mobile (HKEx: 941; NYSE: CHL) as its other major stakeholder. Read Full Post…
The following press releases and media reports about Chinese companies were carried on January 15. To view a full article or story, click on the link next to the headline. ══════════════════════════════════════════════════════
Xinhua Slams Yum (NYSE: YUM), VW (Frankfurt: VOWG) For Business Practices (English article)
Baidu (Nasdaq: BIDU) in Talks to Invest in Kingsoft (HKEx: 3888) – Blogs (English article)
Guangzhou Automobile (HKEx: 2238) Looks Outside China For Growth (English article)
