Bottom line: Yihaodian could regain momentum in China’s online grocery market under an aggressive 1 billion yuan promotion by new owner JD.com and strong support from former owner Walmart.
Yihaodian launches 1 bln yuan promotion
One major obstacle for foreign companies in China is their reluctance to engage in the kind of cut-throat price wars that are all too common in many of the nation’s huge but extremely competitive emerging markets. Such reluctance was a big factor behind the disappointing progress for Walmart’s (NYSE: WMT) local e-commerce venture Yihaodian, and prompted the US retailer to sell the company in June in exchange for shares of local e-commerce powerhouse JD.com (Nasdaq: JD). Now we’re getting word that JD is preparing to position Yihaodian as its flagship online grocery store, and is getting set to launch a massive price war in its bid to achieve that target. 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)
Bottom line: A spike in short-selling of China e-commerce stocks led by JD.com and Alibaba is cyclical and unrelated to their longer-term prospects, and a bounce-back is likely by year-end.
Short sellers gobble up JD stock
It seems even a new partnership with global retailing giant Walmart (NYSE: WMT) can’t help sagging shares of JD.com (Nasdaq: JD), China’s second largest e-commerce company, which has recently become flavor of the day among short sellers. That’s the word coming from a new Bloomberg report, which says short seller interest in JD’s stock reached a record high in mid June, after already doubling over the previous month. This story isn’t really new, as I wrote about a similar short-selling boom for shares of JD rival Alibaba (NYSE: BABA) a couple of weeks ago also. Read Full Post…
Bottom line: Fresh food sellers Yiguo and FruitDay could see strong growth and go public in the next 2-3 years, banking on strong partnerships with Alibaba and JD.com and growing consumer willingness to buy groceries online.
Yiguo in big new funding
Fresh fruit and other grocery items are the latest hot ticket in China e-commerce, with 2 up-and-coming players receiving big new fundings of $100 million or more. The larger of the pair has e-commerce leader Alibaba (NYSE: BABA) and global private equity giant KKR helping online fresh food seller Yiguo raise about $260 million in new money. The other has an online fruit specialist called FruitDay, whose backers include Alibaba arch-rival JD.com (Nasdaq: JD), raising its own $100 million.
This particular trend is really a sub-trend of a broader movement by China’s e-commerce giants into the grocery business over the last few years, encroaching on traditional supermarkets and also Wal-Mart’s (NYSE: WMT) Yihaodian that found early success in the space. Even Amazon (Nasdaq: AMZN) China has gotten into the business, though many of these companies specialize in more traditional packaged foods rather than fresh products. Read Full Post…
Bottom line: Wal-Mart’s discussion of plans to open 115 new China stores and several new local initiatives look like mostly PR to show its commitment to the market, following its announcement of a major global overhaul earlier this month.
Wal-Mart discusses commitment to China
Just a week after announcing a major retrenchment for its global empire, retailing giant Wal-Mart (NYSE: WMT) is saying it will continue to open new stores at a brisk pace in China. The vast and somewhat unique China market also looks set to become a testing ground for new concepts, with Wal-Mart discussing plans to open its first shopping center format and also to expand its cross-border e-commerce business in the country.
The latest developments are discussed in a local media interview with a top Wal-Mart China executive, which is probably timed to quash any potential buzz that the company is planning a similar retrenchment in China to the global plan announced earlier this month. That plan saw Wal-Mart announce it will close 269 stores this year, representing just over 2 percent of its global count of 11,600. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 29. To view a full article or story, click on the link next to the headline.
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Walmart’s (NYSE: WMT) Yihaodian Overhaul Sparks Mass Resignations (Chinese article)
Google (Nasdaq: GOOG) Leads Huawei into US Smartphone Market (Chinese article)
Didi Kuaidi Invests in Indian Car Hire App Ola (English article)
Beijing Commerce Department Opens Inquiry into Xiaomi False Claims (Chinese article)
Yahoo (Nasdaq: YHOO) Says on Track to Spin Off Alibaba (NYSE: BABA) Stake This Year (English article)
Bottom line: Carrefour’s new foray into upscale, lifestyle-oriented convenience stores could stand a reasonable chance of success and breathe some new life into its struggling China business.
Carrefour expands Easy convenience store concept
After tinkering with a new convenience store concept for the last year, global retailing giant Carrefour (Paris: CA) has finally come up with a smaller-store model it likes and is planning a big expansion for its new chain of Carrefour Easy convenience shops. The move is part of Carrefour’s broader overhaul of its poorly performing China operations, which the company even considered selling at one point.
I do find this particular move somewhat contrary to industry trends, since Chinese are clearly buying more and more of their products online over popular services like Alibaba’s (Nasdaq: BABA) Tmall and JD.com (Nasdaq: JD). But that said, there will always be a place for traditional shops in the bigger retailing landscape, especially convenience stores whose main audience is usually impulse buyers looking for a quick drink, a bite to eat or just a place to quickly surf the web. Read Full Post…
Bottom line: Alibaba’s massive online grocery promotion looks aimed at countering potential new challenges from Walmart, as the US retailing giant overhauls its China e-commerce operations.
Alibaba launches major grocery promotion
Just days after Walmart (NYSE: WMT) made a major shift in its China e-commerce strategy, local market leader Alibaba (NYSE: BABA) is firing back with a massive 1 billion yuan ($160 million) promotion that looks squarely aimed at the US retailing giant. This particular promotion comes in the grocery space, which also happens to be a core strength of Yihaodian, the major plank in Walmart’s China e-commerce operation. Alibaba’s announcement also comes just days after Walmart announced it was buying out its partners in Yahaodian to take full control of the site and better integrate it with its existing China operations. Read Full Post…
Bottom line: Walmart’s Yihaodian could sharply boost its share of China’s e-commerce market in the next 2-3 years, following a buyout that will give the site better access to its parent’s experience, offline stores and global connections.
Walmart buys out Yihaodian partners
Just a week after sacking the 2 founders and top executives of its China e-commerce site, global retailing giant Walmart (NYSE: WMT) has taken the next step and bought out its partners in their Yihaodian joint venture. The buyout completes a takeover that began with Walmart’s purchase of a controlling 51 percent of Yihaodian 3 years ago. It also signals that Walmart is preparing to pump major new investment into the site, as it tries to become a major player in a market dominated by local giants Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD).
I have to applaud Walmart for finally taking control and tossing out Yihaodian’s founders, who weren’t doing much to challenge any of the nation’s top e-commerce sites. But that said, foreign companies have a very poor track record competing with homegrown Chinese Internet firms, and its far from clear if Walmart can succeed where other big names like Google (Nasdaq: GOOG), Yahoo (Nasdaq: YHOO), Expedia (Nasdaq: EXPE) and eBay (Nasdaq: EBAY) have failed in the past. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 24. To view a full article or story, click on the link next to the headline.
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Walmart (NYSE: WMT) Takes Full Ownership of Yihaodian Business in China (Businesswire)
China’s H1 2015 Mobile Internet User Base Hits 594 Mln (English article)
Tsinghua Holdings Chief Says Still in Micron (Nasdaq: MU) Talks, Hopeful on Deal (English article)
China Postal Savings Bank Seeks Strategic Investors in Run-Up to IPO (Chinese article)
Uber Partners With Xiaomi for Smartphone Sales in Singapore (English article)
Bottom line: Walmart’s dismissal of Yihaodian’s 2 top executives marks a major shake-up due to the unit’s disappointing performance, and could be followed by closer integration with Walmart’s own China operations.
Yihaodian in management shake-up
A major shake-up has just occurred at Walmart’s (NYSE: WMT) China e-commerce unit, reflecting its disappointing progress 3 years after the US retailing giant took control of local upstart Yihaodian. The shake-up has seen the sudden resignation of Yihaodian’s 2 founders, Yu Gang and Liu Junjun, who were also the chairman and CEO, respectively. Yihaodian confirmed the departures, and said they were announced after a high-level Walmart official came to visit the company. (Chinese article)
The reports say Walmart issued a nicely worded statement on the matter, saying “A company’s founders will naturally leave after a certain stage of development, and we wish them well”. But the fact of the matter is that Yihaodian has been quite a disappointment for Walmart, which took control of the company in 2012 and has made it the central focus of its e-commerce strategy in China. Read Full Post…
