Having speculated back in July that VNU's $7 billion acquisition of IMS might give the Asian management team room to breathe as they develop their business media activities, Crain's Bt2B Online and the Wall Street Journal report that the whole VNU Business division may be up for sale.
The Journal says:
VNU NV is considering some radical measures to win the support of institutional shareholders who are skeptical about its $7 billion deal to buy IMS Health Inc., according to people familiar with the matter.
and goes on to suggest:
To appease unhappy investors, VNU could seek to sell its business-information unit, which publishes trade magazines such as Hollywood Reporter and Billboard and organizes trade fairs, according to people familiar with the situation. The division could fetch more than €1 billion ($1.2 billion), these people say.
B2B's Sean Callaghan adds:
Industry observers have long speculated that VNU Business Media did not fit in with VNU’s overall effort to limit its exposure to cyclical ad revenues.
Just what they need: investment bankers crawling all over them.
Update: More on this Steven Ennen's post on ABM's Media Pace and from David Shaw who points out (shame on us for not reading more carefully) that this has been in the air for some while.
Friday, September 30, 2005
Having speculated back in July that VNU's $7 billion acquisition of IMS might give the Asian management team room to breathe as they develop their business media activities, Crain's Bt2B Online and the Wall Street Journal report that the whole VNU Business division may be up for sale.
Posted by Paul Woodward at 3:57 pm
Fons Tuinstra posts a very interesting piece on how the influence of Shanghai and Guangzhou appear to be waning, no longer the only and obvious target for foreign investment activity, particularly in the industrial sector. I had been noticing this for some time in my own business activities with a distinct lessening of the pace with which my clients are engaging themselves with Shanghai. I hadn't noticed it with Guangdong although things there are at a different stage of development to Shanghai in the industries I cover and competition among the western companies remains less fierce at this point.
I had also noticed the Financial Times piece which he quotes on Shanghai. Some quite hard hitting stuff there:
Within China, however, Shanghai is quietly losing its lustre as its economic drivers run out of steam and new leaders in Beijing look askance on the privileges bestowed on the city by the previous administration.
Posted by Paul Woodward at 7:10 am
Thursday, September 29, 2005
Colin Crawford of IDG points us towards this interesting new site from IDG Japan. There is so much going on in the Japanese technology sector that barely makes a ripple in the rest of the world that this has to be a great initiative.
Digital World Tokyo: "IDG Japan has launched a new weblog reporting on the latest news on local consumer technology to the English-speaking world. The site, www.digitalworldtokyo.com is now live. The site will feature news, views, reviews and features not just from Japan, but..(Via Colin Crawford.)
Posted by Paul Woodward at 11:08 pm
Wednesday, September 28, 2005
SEEC Media (HKSE: 0205), the Hong Kong business arm of China's leading, crusading financial title Caijing, is stepping out. Shortly after announcing that it would work with Ziff Davis to re-launch PC Magazine in China, the company is rumoured to be close to a deal with Time Inc. to publish Chinese editions of People and Sports Illustrated.
To add to the Alice in Wonderland elements which seem ever present in Chinese publishing, the SEEC Media titles which report on the financial derring do of China's listed companies are ultimately owned in Beijing by the Stock Exchange Council.
Posted by Paul Woodward at 8:26 pm
Tuesday, September 27, 2005
Much discussion in the industry today about the significance of new regulations in China, immediately effective, describing more precisely controls over Internet distribution of news. The FT's Asian print edition headlined the story "Beijing promises to keep online news healthy".
It's online edition carries a different headline but the meat of the piece is the same. Although the thrust is that the new regulations make it harder for publishers to circumvent print media regulation by going online, there is a ray of hope for b2b and specialist media. The FT says:
"...the rules appear to give a green light to online coverage of areas such as entertainment and the technology industry, since they define online news as reporting and commentary on politics, economics, military affairs, diplomacy, public issues and social “incidents”."
According to the print version of the story, "the rules [also] restate China's ban on foreign investment in local news organisations". As Mr. Murdoch pointed out in New York the other day, things appear to be tightening up in China.
Posted by Paul Woodward at 4:39 pm
China Stock Blog reports on another move towards facilitating e-commerce in the PRC:
Global Payments (ticker: GPN) which processes electronic transactions for merchants, multinational corporations, financial institutions, consumers, government agencies, and other profit and nonprofit business enterprises reached agreement with HSBC (ticker: HBC) that will give them access to the debit and credit card markets of Mainland China and India.
We have been following this trend this month here, here and here. Once the fluff settles from the crazier deals being done, the facilitation of real commerce online in China could be the most important B2B and general business trend we see emerging there in the next 2 - 3 years.
Posted by Paul Woodward at 8:43 am
Former CMP Asia CEO Gary Marshall has left the top job at CMP Media in the US, handing over the reins to his number two, Steve Weitzner. Marshall moved to the Manhasset, Long Island HQ of CMP from Hong Kong in 1999 when the company was acquired by the UK's United Business Media. After two years of dotcom boom times, he held the reins during the dramatic decline of technology media in the US after the bubble burst in mid-2001 and subsequent restructuring of the business. The company has made a number of acquisitions in the healthcare sector in recent months as well as announcing an alliance on outsourcing publications with Cybermedia in India.
Posted by Paul Woodward at 8:04 am
Monday, September 26, 2005
Mark Natkin's Marbridge Consulting picks up an interesting piece in its weekly newsletter on telecoms and IT news from China. Quoting tech.qianlong.com, it notes that blog portal Bokee, of which much is expected by investment bankers, has acquired Alibaba Jack Ma's original company, Chinapages.
It will now, the newsletter says, "launch a new platform designed to help enterprises and merchants develop online business activities, build client trust and enhance interactive communication. The service, called Bizblog, is accessible at www.bokee.net."
It goes on to say that "The new Bizblog portal includes both enterprise blogging and merchant blogging, blogging facilitates communication among employees, managers, shareholders and clients, while merchant blogging combines the features of blogging with a traditional e-commerce platform, allowing bloggers to post supply and demand information."
Posted by Paul Woodward at 2:47 pm
I don't usually report on new event launches. However, ITE's 14th September press release did catch my eye. The London-based company has announced nine new fairs to be launched jointly with the Xinjiang International Exhibition Centre in Urumqi, the capital of China's most north-westerly province. A quick glance at your trusty atlas will show you that this puts them as near to Turkey as it does to Beijing. Xinjiang, long known only for melons and sand, is of increasing importance, partly because of its strategic location and partly because it sits over a massive natural gas field.
The press release picks up these points:
Representing a door to the neighbouring oil-rich states of Central Asia, Xinjiang has become the focus of China’s oil and gas interests. China has been actively strengthening its hand in the industry, having purchased PetroKazakhstan to add to its interest in Mangistau in the Caspian Sea, while also developing its own fields in the Junghar Basin. A major oil and gas pipeline running through Xinjiang province from Atyrau on the Caspian Sea has ensured future supplies from Central Asia and delivery to the East.
The capital Urumqi is beginning to reap the benefits of these developments as well as profiting from the racing Chinese economy. The signs of a forthcoming boom are everywhere, with new building projects dominating the skyline, fully booked hotels and 50 weekly flights, as businessmen flock to see what the region has to offer.
Posted by Paul Woodward at 12:49 pm
Hong Kong-based Steve Vickers is one of Asia's most respected business risk consultants. Financeasia.com reports today on some remarks he has made about doing business in India. Highlights of this: he thinks that reports that Foreign Direct Investment (FDI) into India is one-tenth of the level going into China may be misleading:
The International Finance Corporation suggests the gap is narrower between China and India. Applying a standard measure of FDI, the IFC estimates that China's inflows on average may halve to $20 billion a year while India's more than doubles to $10 billion, reports International Risk.
He also concludes with a suggestion that India business risks are manageable if addressed properly:
"..provided companies take appropriate action to address the risk accordingly and conduct robust due diligence - India works," says Vickers. "It represents a huge opportunity for the investor who has an appetite for detail, is patient and looks to the long term."
As companies find their profits increasingly squeezed in China, and as regulators tighten rather than loosen the boundaries of what can be done in print and broadcast media and, to a lesser extent, the Internet, India will certainly look increasingly attractive. It is not without its challenges, but increasing numbers of people seem to feel that those challenges are worth addressing.
Posted by Paul Woodward at 8:55 am
Friday, September 23, 2005
Fons Tuinstra posts an interesting piece today on Neilsen Media's new report on advertising in China. Good eye-catching stuff.
Total ads spending in China reached 143.4 billion Renminbi (US$17.7) in the first six months of this year, 20 percent more than the same period last year, according to Nielsen Media Research, writes Variety.
What really caught our eye, though, was his advertisement on the same page for an angel investor service with a medical trade magazine as its first offering. Much has been written recently about the difficulty of entrepreneurs in both China and India getting a start. The VCs are much more interested in 'safely' skimming the cream in pre-IPO round financings. Much written, little done about it. So, good luck with this initiative Fons.
China Herald Angel investor service
A market place for great projects, looking for initial investment
A medical trade magazine with great future in China looks for an angel investor for USD 100,000. Interested? Ask for more details at the angel-investor service of the China Herald
(Having a great idea for a business in China and looking for exposure to get seed money? Try this 'no cure, no pay' service by the China Herald.(Via China Herald.)
Posted by Paul Woodward at 10:02 pm
Thursday, September 22, 2005
United Business Media's shareholders (disclosure: including me) have been circulated with a proposal to approve new long-term incentive plans for senior executives at an EGM on 26th September. Like many of these plans, share awards are made if the company's total shareholder return exceeds the median performance of a comparator group.
We were interested to see the list of those the company sees as its peers. There are 20 in all and, of these, two are from the Asia Pacific region; Global Sources and the O'Reilly's APN News & Media in Australia.
- Aegis Group
- CNET Networks
- Dow Jones
- McGraw Hill
- Johnston Press
- Wolters Kluwer
- Axel Springer
- Reed Elsevier
- T&F Informa
- Trinity Mirror
Posted by Paul Woodward at 9:56 pm
eBay's development in China remains of keen interest to those tracking how the web will evolve as a tool for small business there. The Yahoolibaba deal may present challenges enough as Alibaba's Taobao.com gains serious muscle, but eBay's mystifying purchase of Skype seems to carry with it the potential for further challenges in China. Stephen Baker's post on Business Week's Blogspotting gets right to the point:
"The Chinese government is cracking down on Skype usage and blocking downloads. Chinese users are figuring out ways to get around this ban, and sharing info about where else to download Skype. But once Skype becomes part eBay, a blue-chip multinational company with interests in China, will it be easier for the Chinese to get Skype to cooperate with this communications crackdown?"
Posted by Paul Woodward at 9:28 pm
Stockholm has an oddly close connection with China business: Sweden was one of the first countries in the world to recognise the fledgling PRC back in 1950 and, as such, has long been favoured by the Beijing authorities. For many years, the standard international dispute resolution clause in most Chinese contracts with foreign partners called for arbitration in Stockholm.
The interest obviously remains as we read about the country's top business magazine and a new China special:
Top Swedish business magazine devotes special issue to China: "Veckans Affarer, the largest business weekly of Sweden, held a symposium on Chinese economy in Stockholm on September 20, and launched a 156-page special issue on China."(Via People's Daily Online.)
Posted by Paul Woodward at 9:05 pm
China Knowledge has an interesting article on the development of e-commerce in the PRC. It's a good overview, but one thing in particular caught our eye. This follows on from other recent posts about the development of bank cards in China:
According to a recent survey conducted by the China Financial Certification Authority, about 10% of companies and 20% of private individuals in China’s ten major cities have adopted online banking services; these cities include Beijing, Shanghai, Guangzhou and Shenzhen, among others. The survey also showed good growth for the rest of the year, with as much as 35.7% of individuals having the intention to use online banking services over the next one year.
In 2004, the number of Chinese online shoppers stood at 20 million, with nearly half of them adopting online payment systems such as Alibaba’s Alipay, Ebay’s PayPal and credit card methods, among others.
With a growing confidence in online banking and increasing ownership of bank cards, the key impediments to development of really serious e-commerce are rapidly disappearing in China.
Posted by Paul Woodward at 2:59 pm
Wednesday, September 21, 2005
China Stock Blog points us to an interesting piece on B2B web activity in the region and, in particular, developments at Tradeeasy (listed in Hong Kong). The numbers seem small and it appears a bit far-fetched to suggest that they will somehow threaten the Global Sources and Alibaba.com. A lot of people have tried to link Asian suppliers with US buyers directly and, for a large variety of reasons, most haven't been very interested.
Hong Kong Tech Investor on China’s B2B Market - Part 2 (GSOL, EBAY, YHOO, Alibaba): "Two weeks ago Hong Kong technology investor Brent Suen provided an overview of China’s B2B market. In the following article Suen highlights recent accomplishments of one of his investments Tradeeasy (HKSE – 8163) which facilitates trade between China / Hong-Kong suppliers and buyers worldwide. His comments have implications for Global Sources (ticker: GSOL) and Yahoo [...]
It certainly smacks of 1999-talk all over again. I sat through a lot of meetings debating exactly these issues in 1999/2000. Maybe the world has really changed this time...then again.
Posted by Paul Woodward at 10:59 pm
I think this counts as Asia. It certainly counts as an ambitious project in the current climate.
The World’s Most Dangerous Event?: "Holy heartburn! Rich Westerfield posts an interesting piece today about the Kurdistan DBX Trade Show, which concluded Sunday in the tranquil suburbs of Baghdad. 'We trust that the event's tagline isn't to be taken literally - 'The Ultimate Rebuilding Iraq Trade Show and Conference in Iraq.' Because if it really were the last one, that [...](Via expophile.com.)
Posted by Paul Woodward at 10:19 pm
Still in Beijing and, with no access to blogspot.com sites, can't link this post properly back to one we did back in May regarding Bruno Wu and his multiple deals with Sun Business Network (formerly Panpac Media) in Singapore. The company bills itself as the "New Name in Business Media in Asia".
It is the new name with less business now as, the company has announced a shifting of assets into the Nasdaq OTCBB-listed SE Global Equities in which Wu has a strong controlling interest through his wife, China TV star Yang Lan's holdings. SE Global is to be re-named Sun New Media Inc.
Check out the IR announcements page to see the welter of corporate manoeuverings from this still fairly small company. The press release says that the latest deal will "unlock value and reward shareholders".
Prizes offered to anybody who can clearly describe all this...
Update: Those earlier posts were Bruno Wu is keeping us on our toes and Bruno Wu continues to interest us.
Posted by Paul Woodward at 7:36 am
Monday, September 19, 2005
Greetings from Beijing. Lots of interest still in the market from media companies of all shapes and sizes despite Rupert Murdoch telling the world from New York today that things are moving backwards in China and that his businesses have "hit a brick wall" there.
Practical problems do abound even for those with lower profiles than the world's most prominent American with an Australian accent and this CNet piece highlighted on China Digital Times gives a good flavour of how IP abuse still tops the list of worries for many in the media. If content is king and your world is full of lookalike kings, how can you make money?
Posted by Paul Woodward at 8:45 pm
Saturday, September 17, 2005
Thanks for ContentSutra for pointing us towards this Business Standard piece on web conferencing growth in Asia. This is a very significant issue for the potential growth of face-to-face B2B events in large and relatively poor countries like China and India:
Web Conferencing Market To Grow At 44 Per Cent: "Business Standard: The increasing awareness of web conferencing and the availability of broadband networks will fuel the growth of the web conferencing services market at a Compound Annual Growth Rate (CAGR) of 44 per cent, according to Alok Shende, director, Frost & Sullivan, a growth consulting company.
Addressing a conference on the Enterprise Convergence, Shende said that small and medium enterprises would soon adopt this service as it is cost effective and time saving. The Asia Pacific market for web conferencing is expected to grow at a CAGR of 27.2 per cent with Japan as the leader.
‘Web conferencing has many advantages like enhancement of coordination among participants and transmission of more information over broadband network as the files used are lighter,’ said Kiran Datar, managing director, Webex Communications."
Posted by Paul Woodward at 10:23 am
Friday, September 16, 2005
The editors of Haymarket's FinanceAsia.com have obviously discovered that there are still lines which cannot be crossed when it comes to reporting on Singapore. It's daily e-newsletter leads today with two formal apologies for what it apparently reported last month about Temasek Holdings, the Singapore government's immensely powerful holding company of which the CEO is the Prime Minister's wife. One of the apologies was to current Prime Minister Lee Hsien Loong, his predecessor Goh Chok Tong and Lee's father and Singapore's founding Prime Minister Lee Kuan Yew. The other is to the Board of Temasek.
It used to be considered something of a badge of honour for correspondents in Asia to have been banned from Singapore for offending the government. And it wasn't one of the harder badges to earn. Things appear calmer these days but FinanceAsia's editors clearly stepped across the line of what will bring out Singapore's big guns.
Posted by Paul Woodward at 12:11 pm
Thursday, September 15, 2005
German publisher Springer has announced a substantial expansion of its outsourcing operations in India according to contentsutra.com. The report quotes CEO Derk Haank as saying that staffing in India could rise from its current 25% of the group's 5,000 total to 50%. I imagine they're not having to offer six weeks a year of paid holidays in Chennai.
This isn't the first time this has come up and certainly won't be the last. In July, we reported on Reuters outsourcing editorial to India following a post in June about "fear and trembling in the news room".
CMP Media may be the smart ones in all this with their tie-up with Cybermedia to report on the trend. Presumably, the editors won't be sitting in Long Island, though.
Posted by Paul Woodward at 8:13 am
Reality bites for those left holding grossly over-priced baidu.com shares.
Shares of Baidu.com Inc., China's most-used Internet search engine, plunged as much as 24 percent after analysts from two firms that managed the company's initial public offering said the stock is overpriced.
Based on the opinions of China's Internet CEOs we quoted yesterday, the lads at Goldman must be 90% wrong when they say that baidu's shares are worth more like $27 than the $113 for which they closed yesterday. It still sounds a bit generous to me. Mind you, as Goldman was one of the managers of the IPO, they can't be too down on it can they.
Update: Adding fuel to the fire, China Stock Blog tells us that Morgan Stanley's Mary Meeker has initiated coverage of China's internet stocks. "Their top picks include Ctrip (ticker: CTRP), NetEase (ticker: NTES) and Tencent (instant-messaging business traded in Hong Kong). Their top segment pick is online gaming (they expect local players with self development and distribution capacity to emerge as long-term winners)," the post says.
Posted by Paul Woodward at 7:59 am
Wednesday, September 14, 2005
Google's new blog search tool immediately threw up an interesting new site for me: Asia Media Business Monitor. The feed shows up when I add to it My Yahoo but not other readers. This isn't exclusively business media stuff but its good to see other sites focusing purely on Asia and the media industry.
I also like the result that a search for Asia Business Media throws up!
Posted by Paul Woodward at 10:42 pm
Once the China baloney reaches this sort of fever pitch, it is time to head for the hills. I think quite a lot of what appears in Red Herring is good, interesting stuff, but this piece from the web site has the feeling of the back end of a bubble:
"The upside is enormous if China gets it policies right, with some ...going so far as to say that Shenzhen's market capitalization could be greater than the Nasdaq by 2013, and Intel could be taken over by a Chinese company within roughly the same time frame."
Cast your mind back 15-20 years and this is the sort of stuff people were writing about Japan.
Don't get me wrong. I'm not China basher. I've been working here for 20 years and continue to see exciting and enormous potential in the market. But the 'swingometer' of business opinion is way out on the extremes of optimism right now and there are going to be some disappointed people.
Bill Clinton, speaking at the China Internet Summit, appears to have joined the sceptics according to another Red Herring piece.
“I don’t think you can continue to grow at 9 percent forever in a fundamentally imbalanced system which requires you to buy enormous amounts of America’s debt every day so that we keep the value of the dollar up and interest rates low, so we can continue to buy your products,” Clinton is reported to have said.
Posted by Paul Woodward at 2:23 pm
In a great case of biting hands which have fed them so generously, ChinaTechNews.com reports on three of China's tech CEOs rounding on Wall Street analysts during the Alibaba.com-sponsored China Internet Summit in Hangzhou. Sohu, Netease and Tencent are all listed companies but their CEOs believe that analysts' judgement of the Chinese Internet industry "is only 10% accurate, at best". We agree....but wonder which 10% they had in mind. Presumably the 10% that suggests their businesses are worth billions of dollars...
Posted by Paul Woodward at 10:45 am
Tuesday, September 13, 2005
An interesting piece by Dan Slater today on FinanceAsia.com in which he asked "Where is China's slowdown?". There are always prophets of doom who see the collapse of China around the corner but the latest wave of doubt is coming from some who have been amongst the biggest boosters of China's economy in recent years such as CLSA's Jim Walker.
The problem they are particularly focusing on, and which I have been seeing this a lot with my clients in China, is the profit squeeze: costs are consistently rising while pricing power in the immensely competitive marketplace is negligible. In fact, most companies' prices are falling. You don't need a Nobel Prize in economics to work out what effect that has on a company's financial performance. Some people find that they now have quite large businesses in China but that they are still struggling to get healthy margins from them even if they are profitable.
Walker is predicting that China's economic growth will slow to 5 - 7% next year. The stars he is projecting for 2006 which will maintain current growth rates:
Hong Kong (+6.5%)
According to FinanceAsia.com Walker "...expects the majority of remainder of Asian economies to witness 50% declines" in GDP growth.
Posted by Paul Woodward at 1:15 pm
Disneyland opened yesterday in Hong Kong with great fanfare and record-breaking smog blanketing the city. There has been much gnashing of teeth among those afraid of Shanghai that Disney is rumoured to be close to announcing a park there, three times larger than the 'mini-Disney' which they have built in Hong Kong - the smallest of the five parks the group now operates.
The New York Times' Keith Bradsher, writing in the International Herald Tribune, has a different angle on this, though, which highlights the ever-challenging regulatory environment in the mainland. Not long after Rupert Murdoch's efforts to do an end-run around restrictions on foreign ownership of TV channels were torpedoed, Disney now says, according to Bradsher, that any new parks in the Chinese mainland must be linked to access for its TV channels.
As Fons Tuinstra pointed out in his post on the same issue, though, this is pretty much the one thing that the Shanghai city government can't offer Disney! Although President Hu Jintao is now well settled into his job, the administration in Beijing still seems keen to prove its "hard man" credentials and media liberalisation is simply not on the agenda.
Posted by Paul Woodward at 10:49 am
Monday, September 12, 2005
The Alibaba.com-sponsored China Internet Conference in Hangzhou has generated plenty of easy copy for journalists from all over the world. The Indian papers were full of it over the weekend and the People's Daily continues the theme it was addressing last week on how e-commerce is about to take off. It quotes Song Ling of the China Electronic Commerce Association as saying that there are now 20 million "e-commerce dealers". The turn of phrase may be a bit odd but the point seems to be that up to one-fifth of China's regular Internet users are using the web to buy and sell whether for personal or business purposes.
Posted by Paul Woodward at 9:21 am
Fons Tuinstra, on his China Herald blog, has an interesting round-up of some of the commentary and issues surrouding the Yahoo/e-mail/journalist jailing story. There was some discussion about the role of Hong Kong in all this as, technically, under Hong Kong's "one country, two systems" formula, Chinese law enforcement officials have no authority to demand anything of businesses based in the Special Administrative Region.
This is cleared up in an update to Fons' post and one thing particularly caught my eye there:
...the servers of Yahoo's email service are actually hosted in Beijing. That would indeed offer Chinese judicial authorities a handle to demand cooperation. And it would indicate that hosting your servers in China might in this case be a less-than-smart idea.
For some years, a number of B2B magazine publishers have kept clear of the Chinese regulatory and legal minefields by adopting an 'offshore model', publishing in other places (usually Hong Kong) and mailing magazines into subscribers in China. It has some limitations but it still works even for publications as august as Fortune. As increasing numbers of B2B publishers look at going the on-line only route, it will be worth considering very seriously the risks and benefits of placing web servers within the borders of China.
Posted by Paul Woodward at 9:08 am
Friday, September 09, 2005
At Hugo Martin's suggestion (on which it has taken me a while to act), we have created a separate, "corporate blog" for BSG where we will post news about our activities and services. Some work still needs to be done on the pages to add feeds, etc. but the basics are there and we welcome your feedback.
Posted by Paul Woodward at 3:11 pm
Bloggers like Paul Conley continue to raise concerns about what appear to be continuous encroachments on the editorial independence of business and specialist publications. We were tickled, then, to see this story on the BBC about how the august medical journal, The Lancet, one arm of the vast Reed Elsevier empire, is criticising another part of the company for its involvement in the Defence Systems & Equipment International show in London. You'd love to be at the next Board meeting when the heads of those two business units get to the coffee pot wouldn't you...
Posted by Paul Woodward at 10:18 am
Thursday, September 08, 2005
The other side of the online coin in China shows up in a People's Daily Online piece today. For some years, received wisdom has been that online transactions in China were going to be slow starters because not many people had bank cards. This piece suggests that there are now 875 million cards in issue in China, that they account for 30% of retail transactions in the more developed cities and the gross transaction volume on those cards was Rmb24 trillion (US$2.9 trillion) in the first six months of this year. Given that China's total annual GDP is around $2 trillion, I fear for a misplaced decimal point in that last figure but the basic point is clear; limited numbers of cards can no longer be considered a significant restraint on e-commerce in China.
Having been watching this market for 20 years, I often tell clients that there is one mistake I have repeated more often than most: that is underestimating the speed at which things change in China. If you find yourself saying "it will be years before xxx happens...", beware. Six months later, you'll probably find it going on all over the streets of Shanghai and Shenzhen.
Posted by Paul Woodward at 8:30 am
Not much I can add to the wave of comment across the Blogosphere on the accusation that Yahoo's Hong Kong subsidiary assisted Chinese police to arrest mainland business journalist, Shi Tao. There are two business media angles to this:
- Yahoo China (but not Hong Kong, I think) is now controlled by Alibaba.com. They have previously been involved in relatively uncontroversial business areas such as providing an online showcase for Chinese exporters to the world. It will be interesting to see how they respond to the new challenges of involvement in the altogether trickier world of general media and online consumer services in which they now find themselves involved.
- Shi Tao is a business writer for the magazine Contemporary Business News. The view that China is 'light' on business publications when it comes to censorship has frequently been proven wrong by the way in which journalists who are seen to have transgressed are treated.
Posted by Paul Woodward at 8:08 am
Wednesday, September 07, 2005
Just a week after announcing its big new deal in China, Reed Exhibitions is also making moves in India. An announcement from JCK, the company's big Las Vegas jewellery fair, says that JCK New Delhi is set to launch September 28-30, 2006 at the Pragati Maidan expo venue in New Delhi, India. The company will be working in India in partnership with Rajan Sharma's Inter Ads.
Reed currently runs jewellery shows in 9 countries, including Japan (International Jewellery Tokyo and International Jewellery Kobe), the United Kingdom (International Jewellery London), Italy (MACEF), Canada (Jewellery World Expo), Australia (Melbourne Fine Jewellery), France (Bijorhca), Russia (International Jewellery Moscow) and, in the United States, in Las Vegas and New York.
As we pointed out the other day, China remains the big untapped market in this industry where it will presumably end up doing battle with its main rival in this business in Asia, CMP which organises the big September jewellery fair in Hong Kong.
Posted by Paul Woodward at 10:43 am
BtoB's online Daily News Alert reports that Zinio is rolling out its digital publishing and distributions systems in Asia in collaboration with Dow Jones and a partner in Thailand, True Digital Entertainment. In markets across Asia where B2B print models are marginal at best, this looks like an increasingly smart move and we expect to see more following if Zinio and Dow Jones are successful.
Posted by Paul Woodward at 6:55 am
Tuesday, September 06, 2005
Bhupesh Trivedi, in his new edition of the Indian Media Observer, makes some interesting observations from an Indian perspective about the likely impact of China's recent crack-down on media investment. China's regulatory environment is now clearly less welcoming than India's and, although the commercial environment in India remains very challenging, many companies are indeed turning their attention in that direction.
We share Bhupesh's instint that:
In some ways, China has always been an uncertain place to do business in...This announcement is expected to significantly influence international publishers' decisions on making larger investments in an emerging economy.
Hugo Martin, ever quick to pick up on the news, has posted an interesting excerpt from Bhupesh's newsletter which makes it clear that English is far from the dominant language when it comes to magazines. For B2b, English is probably still dominant, but possibly not for ever. There were signs, the last time we looked, that local language publishing may become a more interesting trend in the B2B world as well, whether online or in print.
Posted by Paul Woodward at 8:33 pm
The British, Australian and Candian Chambers of Commerce in Shanghai are running what sounds as though it has the makings of a fun event. The programme promo itself provides a mini-briefing on the perils of advertising in China:
It’s Not Rocket Science But It Can Be As Dangerous
– things to avoid when advertising in China
Practical advice based on recent case studies and learnings from
Neil Hardwick, CEO China, Publicis
Navigating the legal and political landscape of the advertising world in China has proven tricky for a number of MNC’s entering the market.
In December 2003 Toyota had to pull out two advertisements for its China-made sports utility vehicles following complaints that they were offensive. One of the ads showed two stone lions, a popular cultural symbol, saluting and bowing to the company’s Land Cruiser Prado – an image which some Chinese said was a slight that had hurt their feelings.
Nine months later, Nippon Paint ran into a similar controversy with an ad featuring two dragons entwined on the pillars of a Chinese pavilion. The ad depicted, in a tongue-in-cheek manner, how one of the dragons slipped down after the pillar was given a fresh coat of Nippon Paint.
And most recently Nike has had to apologise for running a commercial in China which offended the country's national dignity. The 90-second advertisement was meant to combine Kill Bill-style martial arts with sassy basketball bravado. US National Basketball Association star LeBron James is shown running rings around the animated figure of a wizened and bearded kung fu master, who resembles the martial arts teacher from Quentin Tarantino's latest movie. In the commercial, the American athlete also gets the better of two women in traditional Chinese attire, and a pair of dragons - considered to be a symbol of China.
Posted by Paul Woodward at 5:18 pm
Using Google Earth, you can already peek down on the leaders of Chinese Communist Party hanging out their laundry in Zhongnanhai, their secretive compound in central Beijing which was once the Emperor's private garden. Forbes reports now, though, that Google is moving further into the China search and mapping market by linking up with Mapabc.com.
We can only expect the pace of deal making to heat up as the new Yahoolibaba combine begins to flex its muscles and those who have invested so rashly in baidu.com pressure their baby to grow up fast.
Posted by Paul Woodward at 10:37 am
Monday, September 05, 2005
Great minds obviously think alike and, just as BLOG discussions on this topic have begun to take off, the international magazine association FIPP has announced it will be launching its own site to support licensing business. At the moment, worldmagazinemarket.com looks as though it is only providing back-up to the physical event in London. There is clearly, though, the potential for FIPP to turn this into the sort of virtual marketplace that Hugo Martin was referring to in his posting last week. We expect to see more activity in this area and a lot of interest in it from Asia.
Posted by Paul Woodward at 10:40 am
Saturday, September 03, 2005
Without wishing to understate the broader human tragedy of Hurricane Katrina and the stark human divides it reveals in the world's wealthiest economy, there are some exhibition and events-industry specific implications to the disaster that has hit New Orleans. The city was one of the major convention and exhibition centres in the country. The US-based association IAEM is tracking developments and beginning to coordinate an industry response for which it should be commended.
Posted by Paul Woodward at 11:46 am
Friday, September 02, 2005
In another indication of how signficant China is becoming to a wide range of media companies, we note with interest the announcement of Getty's launching of a China's business. The company says:
Getty Images Inc. (NYSE:GYI), the world's leading creator and distributor of visual content, has launched Getty Images China, a local operation based in Beijing..
The company notes that the full office follows the opening of an editorial presence earlier in the year.
It goes on:
“China is currently the fifth largest market in terms of advertising spending, and is poised to surpass Japan, and become one of the world’s largest advertising markets,” said Jonathan Klein, CEO and co-founder of Getty Images. “As the Chinese economy continues to grow, and with it, awareness of intellectual property rights, it’s clear that China’s strategic importance and potential is a significant long-term opportunity for Getty Images. With a respected and experienced news photography team already in place, this is the time to reinforce our position in China as the leading global force for both creative and editorial imagery.”
They might be getting a bit ahead of themselves with the optimism about IP rights. That, or they have a very long term view of the world...
Given Alan Meckler's efforts to reinvent his business as a tech-savvy picture library, will he be replanting his flag in China soon?
Posted by Paul Woodward at 5:45 pm
An interesting alliance has been announced between CMP Media and newly-listed Indian B2B specialist, Cybermedia. The new joint venture, CMP - Cybermedia LLC, will "build a global media portfolio focused on worldwide services." Cybermedia had announced at the time of its IPO that outsourcing would be the focus of some of its new business developments.
Cybermedia Chairman and Managing Director, Pradeep Gupta, is quoted as saying:
"This will be the first global product from an Indian media house addressing global
readers. This move is part of CyberMedia's plans of expanding globally. We
recognize the tremendous growth that has taken place in the Indian ITES -- BPO
industry. This industry will continue to grow substantially over the next
decade. We therefore chose to combine our BPO portfolio with CMP's Managing
Offshore to broaden our reach into this new and expanding market.
Our most recent posting on Cybermedia pointed to an entirely different venture for Gupta; his involvement in movie financing.
Posted by Paul Woodward at 10:44 am
Hugo Martin today picks up where David Shaw left off earlier in the week with an interesting proposal for a virtual WMM - the annual magazine licensing meeting in London organised by publishers' industry association, FIPP.
Hugo explains what his idea involves:
Our Idea is a Matchmaking platform with
- Publishers / Objects Profile of publishers offering and asking for matchmaking (and presentations)
- Contact module for un-moderated and moderated Search (RFQ)
- Information section Countries, Regions, Markets with catalog feature
- ERFA / Best Practice / Exchange of experience and Interaction (with various Social Software)
- Resource database sector
- Service-Provider Profiles and presentations
(Later maybe including / connecting an eLearning area).
There is clearly a need for this sort of thing and a shortage of resources, particularly focused on the B2B sector which has some particular needs.
Posted by Paul Woodward at 8:11 am