Tuesday, November 29, 2005

On the road

Apologies for lack of posts. The good news is, business is good. Clients are keeping me in Bangkok - great city - and Shanghai - very crowded these days - 1 hour waits at Immigration are increasingly the norm. Lots to talk about but not enough time to do so.

Hope to be back to more regular posting within the next week or so.

Thursday, November 24, 2005

Strong revenue growth

China Stock Blog tracks 17 US-listed Mainland companies, many of which are media-related. It has just summarised their Q3 revenue growth. They show an impressive 54.4% average growth, led by Baidu, up 172.9%. The only company showing negative growth is Sina, one of the first wave of portal listings.

I had been getting a little disappointed with this blog's verbatim re-posting of all the analyst conference calls. Far more there than I'm interested to read and easily linked. I much prefer to see punchier pieces, pulling together the poster's own views. The re-posting of transcripts seems to me the blogging equivalent of that standard fallback of the lazy journalist, the verbatim interview....you know the thing, the Q: I asked this. A: He said......... . That doesn't require a journalist or a brain - just a tape recorder and a transcriber. Dull Dull Dull.

Monday, November 21, 2005

Classified India

Good to see two of BSG's business partners, Peter Zollman of Classified Intelligence and Santosh Goenka of BSG India and Diagonal Globalcom working together to drum up new business in the sub-continent. Exchange4media reports that Zollman thinks that "Though classified advertising in India is more visible in the print media, ...the transition from print to online was going to be steady. He cited the example of countries like Norway, Sweden and Finland where most of the classified advertising was now online".

He said, "The transition in India is just getting started and as the Internet penetration grows and as younger audiences migrate from the traditional newspapers to online and to mobile devices, the transition will get faster and more important. There is plenty of opportunity."

They still don't get it

It is ironic that a Republican administration in Washington DC continues to take so many steps which are damaging to business. The exhibitions and business events industry in the US has been seriously hurt by the challenges which visitors from Asia now face in obtaining a US visa. Why bother with a US show when you can easily get to Germany or one of the world's other major trade fair centres? Heck, you're almost made to feel welcome there.

The meetings industry has, according to the Meeting Industry Soapbox blog, started to push back. The specific gripe covered in this post relates to Mexico and Canada but it highlights an issue which is continued problem for visitors to the US from Asia. Even as Embassy officials on the ground attempt to streamline the cumbersome processes, the long-term damage to the US' reputation as a business-friendly destination for Asians will keep European and other Asian event organisers happy for a very long time.

Saturday, November 19, 2005

New Feed

The old RSS feed on this site seems to have stopped working yesterday. I'm too much of a technical duffer to be quite sure why but have set up another one anyway. If you're reader was showing an error (and you're quite possibly not here if it was), try the new feed at http://feeds.feedburner.com/blogspot/wlob.


Friday, November 18, 2005

Chinese internet dissected

Hugo Martin points to an excellent research report (144 pages, downloadable free of charge) on the Chinese Internet. I have only just started dipping in to it, but can see plenty of interesting nuggets.

Hugo points out the following:

- Chinese Internet user spends nearly three hours a day online
- 75 percent have never made an Internet purchase
- 42 percent never use a search engine.
- 85 percent spend their time viewing mainland Chinese-language content only
- 3 percent (sayed, that they) viewed overseas foreign language content

It's not a new insight but the report's conclusion that "Internet development in China is still at a preliminary stage" is one which still gives great food for thought as user numbers accelerate past 103 million.

Global Insight buying into China

US information provider Global Insight is buying a "substantial portion" of the China Economic Information Network (CEInet) according to the China Daily. Global Insight's chairman and chief executive Joseph E. Kasputys is quoted by the newspaper as saying "Yes we have agreed in principle to co-operate with CEInet". It adds that the deal is awaiting government approval.

CEInet was established in 1996 by the State Information Centre and provides economic information on China. Global Insight, a private company, was formed through the merger of DRI and WEFA.

Back in September, Global Insight had announced an expansion of the presence of its automotive group in China. At the time, Kasputys said "The Asian region has become an increasingly important part of our overall business, and the establishment of local Automotive Group operations in Japan and China is therefore a logical next step in our strategy to further exploit the significant growth potential offered by these and other Asian markets."

Thursday, November 17, 2005

No free lunch

Proving the old adage about free lunches, we made a few remarks at a lunch on Monday organised by the China Daily's CEO Rountable. The energetic Editor-in-Chief of the Roundtable, Alexander Wan, pulled together an interesting cross-section of senior hotel and tourism industry people at the Grand Hyatt in Shanghai. The exchanges were picked up by this piece in the newspaper.

Another CMP move in Japan

It may not be Asia's most exciting business, but CMP Asia continues to clock up steady progress and remains one of the strongest B2B players in the region. News today of another acquisition in Japan where it has acquired the Japan Jewelry Fair for $2.7 million - pretty much the exact average cost of trade fair acquisitions in Asia over the past five years according to our calculations (we make the average $2.8 million per business acquired). This move, along with the news that its September fair in Hong Kong will expand to cover the new AsiaWorld-Expo venue as well as the existing Hong Kong Exhibition & Convention Centre, is clearly designed to consolidate CMP's position as dominant player in Asia in this industry....and to give Reed Exhibitions something to think about as they have to defend their home turf in Japan where International Jewellery Tokyo is one of their key products.

Only 8% of exhibitions in Japan are organised by commercial companies. Most are still in the hands of associations as was the JJF, owned until this deal by the Japan Jewellery Association.

Thursday, November 10, 2005

China Finance under fire

One of the worst performing China business information stocks we have been tracking is ChinaFinance.com. (Nasdaq: JRJC), down 41.7% since January. Some interesting discussion about the reasons for this have been knocking about on the China Stock Blog. The dismal performance of China's stock markets is given as one of the key reasons. Probably right. Any self-respecting company would run a mile rather than list in Shanghai or, even worse, Shenzhen. No surprise that the big boys are all piling into Hong Kong (less enthusiastic for New York post Sarbanes-Oxley). That takes them out of the reach of ChinaFinance into the hands of more major players like PR Newswire and Xinhua Finance.

What in heavens, though, is a company with $1.85 million quarterly revenues and a very dodgy looking business plan doing listed on Nasdaq in the first place? A reader on the China Stock Blog today poses the same question in a comment. He captures the key point very succintly:

Simply put, the company should never have gone public. Management does not have a viable business plan yet and their spending is unsustainable.

Search them

"Yahoo! China's new direction can be summed up in one key word - 'search'". That's AFX News on Jack Ma's 'relaunch' of Yahoo! China as quoted in Forbes. The Alibaba.com boss is obviously setting his sights on market leader Baidu.com which, according to the article, has a 37% market share against Yahoo! China's 32%. Google lags in China with just 19%.

Ma dismisses the Google threat in China pretty much out of hand. He is quoted as saying "Today Baidu is probably the only (search) player in China...Google's servers are still in the States, Google does not have a team in China yet. I think we moved fast enough."

Without giving any numbers, he is reported to have said that Alibaba's B2B actvities were "profitable enough to cover the expenses for its customer-to-customer (C2C) website, Taobao.com, and its online payment service, AliPay".

Wednesday, November 09, 2005

Ziff re-marries in China

We are less interested in Ziff's announcement that they will have launched PC Magazine in China than in their choice of partner. The choice of SEEC Media straddles the ease of a Hong Kong-based launch (SEEC is technically a Hong Kong company) with the influence of a good Beijing partner (SEEC Media is a kissing cousin of the publisher of Caijing magazine, the Stock Exchange Executive Council (and thus SEEC), China's top financial services regulator. We have commented on this before.

The results are now in and the first edition of the new monthly PC Magazine China has weighed in at 160, one of the first serious competitors to IDG's 23 year dominance of the sector. Previous efforts by the company to launch in China have revolved around financial partners trying to leverage a set of contacts similar to those used by IDG itself.

In the company's press release yesterday, Robert F. Callahan, Chairman and CEO, Ziff Davis Media was quoted as saying “Ziff Davis searched over a year for the ideal partner to launch the Chinese edition of PC Magazine; a partner with a deep understanding of the business of publishing magazines and operating other media in China...We’ve found that partner in the SEEC Media Group, a Hong Kong listed public company (HK: 205) that has a well-established reputation as a leading source of news and financial information in the greater China region. ”

Tuesday, November 08, 2005

Watch out for the lawyers

The FT's diary section today reports (subscription required) IP lawyers at a chemicals trade show in Scotland hitting 37 Chinese companies with injunctions over patent infringement. The report says:

Companies in the UK are using a novel approach to find knock-offs of their products: going to trade fairs, where the offending goods are often displayed out in the open.

Actually, not so novel. As companies who have participated in the big sourcing fairs in Hong Kong and Guangzhou can attest, knock-offs have been a fact of life for years and many companies have used IP lawyers, sometimes targeting the fair organisers as well as the exhibitors. The Canton Fair people have told us that they employ almost 100 people in the IP department. It seems like a lot although, when you look at the types of companies exhibiting and the number of them - 12 - 15,000 - keeping them all in line is certainly a big job.

A front page report on the same issue (open to non-subscribers), identifies BASF as one of the three main complainants here.

Back to the future

Here's one for you techy types. Look at the People's Daily's RSS feeds in your Reader software. All carry tomorrow's date:

Nov 09, 2005 - Show original item

Chinese Vice-Premier Zeng Peiyan on Monday said China is willing to strengthen its cooperation with other countries and international organizations in the utilization of renewable energy.

Click on the link to the original story and you come back from the future to today in the website itself. This has been going on for some time. What should we make of it?

Monday, November 07, 2005

B2B Asia online top 10

We have done our calculations for October and come up with the following new top 10 B2B internet businesses in Asia by estimated user numbers. Four of the next five sites (tdctrade.com, 51fashion.com.cn, manufacturers.com.tw, fumin.com, and techtarget.com.cn) are moving up strongly so we may see some changes to this next month.

Contact me directly if you want to see the full list of 49 we're tracking.

China BLOG search engine

We reported back in June about rather ambitious financial plans for BlogChina. Now we learn from the excellent Marbridge Weekly newsletter (reporting CCID) that the company recently released its own, Chinese language blog search engine, booso.com. The developers claim a number of advantages from special features including, they say "searching through blog archives. It [also] makes use of "blogcasting" to make possible near-real time updating of its index, making it a valuable complement to traditional search engines".

Chinese blogging is certainly on people's minds this week. Rebecca MacKinnnon has been reporting from Shanghai on what she thinks is the first ever blogger conference there. A couple of the interesting points from the most recent post which caught my eye:

  • There is interest in doing more to communicate with the outside world. Language is a barrier, but people are open to distributed volunteer translation networks and other means of getting Chinese voices heard outside of the Chinese language blogosphere.
  • Censorship is an issue. But people are determined to maximize what they can do within the realities of the system, and to push the boundaries as much as possible.

Saturday, November 05, 2005

Activity down under

Our Asia brief covers Australia and, although we don't very often find our attention pointing in that direction - more's the pity - two stories related to Fairfax did catch our eye.

In the first, blogger Mark Jones talks about the all-to-rare news of an IT-related publication increasing its editorial team. Fairfax's MIS is hiring. This follows a restructuring earlier this year when the magazine's editorial staff was merged with that of the Fairfax flagship business title, Australian Financial Review.

Then, over at Bloomberg, we noticed another Fairfax story. Chief Executive David Kirk is quoted as saying that the company "may add travel and financial services to its Internet sites to boost sales as print advertising growth slows". The report adds:

"As traditional revenue from newspapers slows and circulation declines, it's all about expanding your revenue streams to provide growth,'' said Jason Teh, who manages the equivalent of about $4.1 billion in Australian stocks at Investors Mutual Ltd. in Sydney. "You have to have a serious presence on the Internet.''

Rupert Murdoch has budgeted $2 billion to acquire Internet assets. In Australia, he has taken control of realestate.com after a bid valuing the company at A$269 million ($199 million). Publishing & Broadcasting, controlled by Kerry Packer, last month acquired a 41 percent stake in carsales.com.au.

Friday, November 04, 2005

Past the 100 million mark

Following our post yesterday on estimates of Asia's web population, today's Chinese press includes reports noting that the number of Chinese Internet users already exceeded 103 million in June this year.

According to Mao Qian, head of Optical Telecommunications Committee of China Telecommunications Society, 53 million of these users have broadband connections.

Mofcom stakes its claim

The People's Daily today reports on a press conference by China's vice minister of commerce Jiang Zengwei in which he is quoted as saying that the Chinese exhibition industry is growing at 20% a year. That matches BSG's own estimates which is gratifying.

He made his comments in a press conference promoting the 2nd China Expo Economy Forum scheduled for the end of November in Beijing. What catches our eye about this is Mofcom's increasingly direct involvement in the exhibitions industry in China. It used to be the sole preserve of the CCPIT which plays the mixed role of Chamber of Commerce, national trade promotion organisation, exhibition organiser, venue owner and, in some cases, issuer of licenses to hold trade fairs. Oh, and yes, they organise over-seas exhibitions for Chinese companies too. CCPIT's own exhibition industry forum, CEFCO, will be held in Guangzhou next January.

Mofcom's star is on the rise with its high profile Minister, Bo Xilai, a great success as Mayor of Dalian and Governor of Liaoning Province and son of one of the Communist "immortals" Bo Yibo.

Thursday, November 03, 2005

Asian league tables

We always enjoy a browse through the Computer Industry Almanac's annual world rankings of 224 countries in terms of Internet users, penetration and ISPs. 26 of those countries are in Asia.

No surpise that China ranks #1 in terms of users (99.8 million this report says). Bhutan is bottom of the list with none. The top 10 looks like this:

Internet Users (mn)

1 China 99.80

2 Japan 78.05

3 India 36.97

4 South Korea 31.67

5 Australia 13.01

6 Indonesia 12.86

7 Malaysia 10.04

8 Taiwan 9.52

9 Thailand 7.57

10 Philippines 5.96

When measured by penetration, of course, the picture changes dramatically with Hong Kong taking the top spot and China sinking to 12th:


1 Hong Kong 66.4%

2 South Korea 65.4%

3 Australia 64.8%

4 Singapore 62.1%

5 Japan 61.3%

6 New Zealand 57.9%

7 Malaysia 41.8%

8 Taiwan 41.6%

9 Macau 22.5%

10 Thailand 11.6%

In terms of ISPs, Australia rules the roost with 571, a massive 8 times larger than nearest rival, Japan which has 73. India looks strong in third place with 43 while China has to make do with just 3 ISPs to serve all those users.

Wednesday, November 02, 2005

Reed serious about 'new' air show

In a sign that its vow to relaunch Asian Aerospace in another country is serious, following the breakdown of negotiations with the Singapore government, Reed Exhibitions has appointed an industry veteran to its team. News reports today say that Clive Richardson, currently CEO of the Dubai Air Show, will become Senior Vice President Reed's aerospace and defence business for Asia/Pacific.

Reed's Asia/Pacific President Paul Beh is quoted as saying:

"Clive's coming on board now could not have been more timely given the challenging opportunities ahead, including Asian Aerospace 2008 at its new home".

Comrade Nanny dampens e-commerce potential

We have been writing for some while about the pieces coming together to make e-commerce more viable in China and about how this could be a key trend for business media companies (most recently here). Our last post before heading off behind the Great Firewall (Shanghai this time - same mediocre access to the real Internet as everywhere else in China) was about the Alibaba/Taobao vs. eBay battle.

Now we hear that the powers that be have lost their nerve and China's newspapers all carry the headline "Rules on e-payment in single deal tightened". The Shanghai Daily article kicks off:

INDIVIDUAL users are not allowed to buy products valued at more than 1,000 yuan (US$123.45) through electronic payment in a single deal to hedge against the risk of online fraud, the People's Bank of China said on its Website.

It goes on to suggest that this will not really cramp e-commerce as there are other ways to pay. Indeed there are. Men on bicycles with renminbi notes clamped in cleft sticks will do the job. But that's not really the point is it.

The maximum limit for commercial users is Rmb50,000 (US$6,200) which I dare say will come as a great relief to the paper clip purchasers.