Different insight on Baidu vs. Google in China

I have noticed a lot of posts over the past few days about CNNIC's report that Baidu now has 74% market share in China. The general tenor of these is that it's another US Internet giant about to lose its shirt in China to good little feisty local competition. Lots of people like this story (think eBay vs. Taobao).

However, the China Search Ads blog has a somewhat different take on this. Their perspective is:

However the interesting story is Google. TradingMarkets.com report that among educated, older and more prosperous users Google is almost drawing even - which would start to explain why their return on investment tends to be higher than Baidu.

Now, cynics would say that there's a long history in business media of falling back on the quality argument when your numbers are bad. This may be, but it's rarely hard to generate big audiences in China. Whether all of those people actually have any money to spend is often an entirely different matter.

Global Sources links up with Pico in India

A final quick snippet for the day, but a very interesting one: Global Sources has licensed the China Sourcing Fair brand to Pico who will launch two fairs at the Bombay Exhibition Centre in India. This will take them up to 15 CSFs in 2008.

White hats for the good guys

...or at least I assume that must have been the thinking behind Hong Kong Trade Development Council's choice of colour for the safety helmets offered to the great and good of the exhibition and construction industries today. The 'inauguration' of Phase 2.5 of the Convention & Exhibition Centre attracted a good crowd and blazing, midday sun.

As you can see, Global Source's Sarah Benecke pulled off the construction helmet with somewhat more panache than the remainder of this motley crew. Andrew Kay of CP Exhibitions, next to Sarah, is the only person I know with a PhD in the exhibition industry. Then there's CMP's Michael Duck, Munich's Ronald Unterburger and Arthur Spurdle, long-associated with Messe Frankfurt.

The Phase 2.5 project is certainly a dramatic engineering exercise, spanning 100 metres of the harbour and turning what was previously a narrow bridge, linking the first two phases into 20,000 sq. metres of additional space. Oh, and I should add that 'inauguration' in this case meant the ceremonial tightening of a nut on one of the steel girders which will in due course support the new halls.

HKTDC chairman Peter Woo was talking in square feet today (the numbers sound bigger) and told the audience that the HKCEC would only be taken seriously if it joined the "million square feet club". It was Woo's last public function for HKTDC before handing the baton across to Jack So. The speech was clearly setting his successor up for continued lobbying on the Phase 3 development of the venue.

Getting the balance on the quality story

One of the best commentators on Asia affairs and particularly US-Asian affairs is UCLA professor Tom Plate. I have given up subscribing to most e-mail newsletter which clutter my mail box and never get read. Plate's Pacific Perspectives columns are a notable exception.

As the China quality issue looms increasingly large, I was interested to catch up on this column from a month ago, long before Mattel's humiliating climb down. As is so often the case, Plate has picked up the complex currents of this story much more accurately than most other - often hysterical - commentators.

Plate's basic points is that there are certainly incompetent and sometimes wicked businesses in China which produce poor stuff. But there are also incompetent brand owners and regulators in the US which, combined with HUGE price pressure from the chain discount retailers, are as much to blame for this mess as the Chinese manufacturers. Arguably, solutions will need to come as much from Bentonville, Arkansas as they will from Beijing.

What has this all got to do with B2B media? The biggest publishers (online and in print) and trade fair organisers in the region are serving the consumer merchandise sourcing business. The pendulum has swung far to far towards Asia for American companies to have any hope of bringing manufacturing back into the US. But, the uncertainties and cheap political point scoring we're currently witnessing will surely hold back some companies for a while and we may see a small slow down this autumn in that sourcing-related business.

We shall see.

Cybermedia into legal publishing

Thank goodness for news alerts services. I am not a regular reader of the newkerala.com web site. So, I might have missed this intriguing snippet about Cybermedia's tie-up with LexisNexis of which I wasn't aware.

The piece is actually about professional negligence insurance for lawyers. There must be some good jokes to line up around that concept although some of them might, I fear, be in bad taste.

However, it mentions that the the topic was raised by the Chief Justice of India at the launch of LexisNexis' Halsbury's Law Monthly which, it says, is jointly published with our favourite Indian business and technology media company, Cybermedia. The event is 'pre-blogged' here as well.

There is no mention of this on either the LexisNexis India web site or Cybermedia's. This could either mean that the bloggers got it wrong or, possibly more likely, they're a step or two ahead of both companies' PR folk. However, caveat lector.

Kenfair suspended pending acquisition announcement

The details are thin, but Kenfair's shares have been suspended pending an acquisition announcement. This is the Hong Kong stock exchange official notice:

At the request of Kenfair International (Holdings) Limited (the “Company”), trading in the
shares of the Company will be suspended with effect from 9:30 a.m. on 25 September 2007
pending the release of an announcement in relation to a very substantial acquisition which is
price sensitive in nature.
By Order of the Board
Kenfair International (Holdings) Limited
Ip Ki Cheung
Chairman


Needless to say, we wait with bated breath. However, as tomorrow is a public holiday in Hong Kong (Mid-Autumn Festival), we'll have to hold it quite a while.

PE firms look to India to continue the fun

With major private equity deals drying up in the US and Europe in the current much more hostile environment, eyes are turning to Asia. More specifically, they are turning to India. We noted at the beginning of the month that ICICI bank is looking to unload its 63% of the Infomedia business.

The story continues to evolve - relatively slowly it must be said. The Economic Times reports:

Notz Stucki, one of the largest asset managers in Europe, has joined the race for ICICI Venture’s 63% stake in Infomedia (formerly Tata Infomedia). Private equity funds such as General Atlantic, Blackstone and Warburg Pincus have also shown interest to buy out ICICI Venture’s stake in the media firm.

The article suggests that a price of Rs400 crores which, if I've got my lakhs and crores right, is around US$100 million.

Reed Business - which has a joint venture with Infomedia (not with ICICI at the newspaper article reports) - is reportedly interested in this deal too. Given the circling funds, however, they'll probably struggle to match what the financiers are willing to pay if this really heats up.

Supplier assessment is the new B2B currency

No sooner have we posted on the Ali-Credit project in Chengdu, than we are pointed to a Global Sources press release on a similar topic. And, ooh la la, they're working with the French. The release tells us that with "Bureau Veritas, one of the world's largest and most-trusted certification authorities, [Global Sources] have launched the B2B industry's most comprehensive supplier assessment service".

The release continues:

Co-developed by the two companies, the Supplier Capability Assessment Service verifies a range of supplier information including facilities, legal entity status, staffing, export markets, key clients, production capabilities, product capabilities, management systems and accreditations, quality control systems and development and expansion plans.

All information is obtained from in-person visits, face-to-face interviews and third-party verifications.

Whether this has all been thrown into particularly sharp focus by the recent quality issues rocking the Chinese consumer products outsourcing business, I'm not sure. However, I coincidentially stumbled across this on a New Zealand news site over the weekend:

"This is a crisis. The spate of product quality problems is an illustration that China's low-cost strategy has reached an end point," said Craig Pepples, the chief operating officer of Global Sources.

"The only solution now is for China to move upmarket and provide a slightly higher-end quality of product," Pepples said.

He said China, like other Asian Tiger economies before it, needed gradually to abandon its instinct to offer the lowest possible price to attract buyers.

"It's now getting to the point where it's so low that they can't do it without getting into unsafe product and manufacturing practices," Pepples said. "It's a turning point for China."

ITU heading to the City of Angels

This one I've had to keep up my sleeve for a while, but I see that ITU has now confirmed that its Telecom Asia event will return to the programme in 2008 and that Bangkok will be the host. This will be the first time the event has been held since 2004 when it was staged in Pusan.

Some of the technology blogs commenting on this are muddling it with the ITU Telecom World event which took place in Hong Kong last year. That's another thing altogether and will return to Geneva in 2009 on its 3 year cycle.

So, well done to IMPACT in Bangkok and my good friends at TCEB.

As a little Friday aside, if you thought that Thai surnames were difficult to pronounce, try the full, official name of Bangkok: Krung Thep Mahanakhon Amon Rattanakosin Mahinthara Yuthaya Mahadilok Phop Noppharat Ratchathani Burirom Udomratchaniwet Mahasathan Amon Piman Awatan Sathit Sakkathattiya Witsanukam Prasit.

Ali-Credit

A news report has popped up in a couple of places about the launch in Chongqing of a "credit archive" using Alibaba's e-commerce platform. The ChinaTechNews.com story is the first trace I can find of it in English:

According to a representative from Alibaba quoted in local media, the Credit Archive shows the credit records of foreign trade enterprises. By combing the traditional credit certifications and the interaction on the Internet, it dynamically shows the credit situation of each enterprise, making the information more accessible to clients and exposing potentially hazardous companies at the same time.

The trustworthy-ness of potential business partners is clearly an issue on Alibaba's mind and in the minds of its users. We wrote back in May about the credit-rating agency elements of its deal with China Commercial Bank. More recently, we wrote about the woes of naive traders in the US who have forgotten (or maybe never knew) the basics of trading caution. With the demise of Latin in the school curriculum, I fear they don't know the meaning of caveat emptor.

With the traditional ratings agencies under a cloud/almost totally discredited (you choose) by the sub-prime mortgage mess in the US, this may be a tremendous business opportunity for the boys in Hangzhou to carve out another strong niche for themselves in China business.

Hope springs eternal for Asia's English weeklies

In the early days of this blog, we wrote a few times about the demise of English publishing across Asia as Dow Jones shuttered the old FEER not too long after Time pulled the plug on Asiaweek. About six months ago, we reported on a brave effort by Jasper Becker in Beijing to revive the genre with Asia Weekly.

On Time's The China Blog, Simon Elegant does a good round-up of the trend. Becker is not alone in his endeavour. Elegant highlights two other publications, each taking a different route:

Another magazine by the name of Review Asia, a monthly published out of Manila and featuring a number of well know names as columnists, has also thrown its hat into the ring, apparently sharing Becker's view that many of the 210,000 readers FEER and Asiaweek boasted when they folded are still out there and eager for more.

This one is so resolutely old-fashioned that it doesn't even appear to have a web site. The other takes the opposite tack:

Elsewhere, a group of somewhat grizzled but equally respected journalists are behind a completely different vision: Asia Sentinel, an exclusively online magazine. Not only does it eschew an actual printed edition, Asia Sentinel also differs from Asia Weekly in content. The latter is largely a filtering service for those interested in the region but too busy to wade through the tons of information flooding at them each day, featuring clippings from other publications and roundups, Asia Sentinel in contrast has a very definite, sharp and often entertaining point of view.

I have long held the view that there is a business opportunity here, just not a very big one and one that isn't big enough for large US corporations. What killed Asiaweek and FEER was not really lack of demand in the market, but corporate overheads. It should be possible to run a business profitably on revenues in excess of US$20 million. But, it isn't when you're subsidising First Class trans-pacific air fares for squadrons of publishers looking to replicate New York expense accounts in Asia.

My fear for the new ventures is that, if any of them is successful, they will be acquired in due course by a major international player who will then slowly strangle them with overhead.

Google targets the mobile $

A market of 600 - 700 million users is hard to ignore and so we're not suprised to see that Japan, China, India and Australia are among the 13 countries targeted by Google for the launch of its Adsense for Mobile programme.

It will be interesting to watch the B2B media impact of this in Asia. As we've pointed out in the past (most recently, here. Click on the Mobile tag for more), on a number of occasions, there are huge numbers of small businesses in China and India run almost exclusively from mobile phones.

As Google's own press release points out:

there are currently more mobile devices worldwide than personal computers and televisions combined.

Quite so guys. It's about a whole lot more than teenagers sending SMS messages about who's going out with who.

We'll watch with interest for Baidu's response.

Ties sacrificed for new office launch

Good to see the news that my old friends at Seatrade have opened up an office in Singapore as its Regional HQ. This is, we see, linked to the biennial Sea Asia event which was launched last year with the Singapore Maritime Foundation.

Maybe Mr. Callaghan and his colleagues had been shifting furniture when this picture was taken, but they appear to have lost their ties in the move. Check the second drawer down on the left, I suspect.

The web is not sugar...or a hotel

The South China Morning Post's very 1998 view of how to develop its online presence is a source of deep irritation to many around the region. It appears that, despite the best efforts of a series of editors and business managers, the company's owners, the Kuoks, having made their fortune in sugar and Shangri-Las, remain unconvinced that giving away content they have paid for represents good business. Pretty much everything sits behind a wall and is available only to the newspapers' paying subscribers or those who subscribe directly to the web site. We assume not many do.

The site was recently revamped but, according to a Brand Republic article quoted by Shanghaiist, the man responsible for that exercise has quit, exasperated at the owners' unwillingness to accept that their business model is doomed. Dan Washington notes:

Subscription-only ... in 2007. They just don't get it. Even the Wall Street Journal gives us something for free. But based on what we hear from SCMP readers, we non-subscribers really aren't missing much.

He's right. It's a pretty miserable web site. Like many in Hong Kong, I have a subscription to the newspaper and so do get to see the web site. I'd score it a D-. If you want to follow what's going on in Hong Kong, the newly-free Standard's web-site isn't bad.

China Sourcing Trade Show

Global Sources has started using YouTube to showcase the China Sourcing Fairs. The video's a bit dull but it's interesting to see them going this route.

Property media on a roll

It's hardly suprising, given Asia's booming property markets (no sub-prime hangovers here), that there's action among the real estate media businesses. Earlier this week, we noted Australia's REA Group moving into the Hong Kong market with its acquisition of Square Foot for A$4.8 million.

As REA is 58% owned by News Ltd., it marks a step back into the Hong Kong publishing market by the former owner of the South China Morning Post. Bad news: a search on Wikipedia for the phrase "Dirty Digger" no longer generates the appropriate result (see the "PS" in this post). More spring cleaning over there it seems.

Meanwhile, over in India, where urban property markets remain red hot, mint reports that "99acres.com, a property portal launched by Info Edge (India) Ltd...plans to team up with Properazzi.com" from Europe. No money changing hands here, but the reports notes that the "strategic partnership will allow users of both these portals to access both real estate databases and listings for buying, selling and renting both commercial and residential properties".

Both REA and Properazzi give as a rationale for the deals a growing interest in European property from Asia and vice versa.

Berlusconi and SEEC Media

Silvio Berlusconi's Mondadori Editori has announced a 50:50 joint venture with SEEC Media to promote advertising sales in China. According to the Thomson Financial story picked up by Forbes, the Italian's will invest EU1 billion in the Beijing-based venture.

Update: Thanks to Mark Cochrane for pointing out the 'deliberate' error here. Even for megalomaniacs, EU1 billion for a Beijing publishing ad company would be a bit steep. It should , of course, be 1 million.

Let 100 Chinese language programmes bloom

OK, it's only 9, but today's post on Mobinode about online resources for learning Chinese is a great round-up. The main point?

Web2.0 is not just the social networks and the entertainment with videos, images etc, it is influencing every part of your life.

I would add that there are clearly business opportunities here and people making a living from this stuff. Also, these services, if they begin really to gain hold, will certainly threaten other, more traditional activities around language learning, whether it's selling books and CDs or running evening classes for enthusiastic beginners.

It includes Ken Carroll's Chinese Pod service which I use when trying to push along from that intermediate never-never land in which I find myself with Mandarin. I'm not familiar with the other 9, but they may be worth a look if you don't like this one.

B2B media streams converge in India

It's interesting to me to see how some elements of the business media and information worlds which were previously seen as quite separate businesses appear to be converging. The latest story that caught my eye on this was the launch of the new Reuters India service. It's reported various places, but check out a simple summary here at btobonline.

The key point which caught my eye was the decision to go for an advertising-supported service. Smart. User numbers in India can be very large. Their willingness to pay subscriptions is not. But that puts Reuters much more directly in competition with other B2B media and information providers than it has traditionally been. One to watch.

Thoughts from the airport

Various things on my mind this morning as I sit at the aiport en route to Korea for the 2007 Asia CEO Forum. I always enjoy being in Seoul and it will be interesting to see who's there this year.

Following up our piece yesterday on the Standard story about HKTDC's plans for Phase 3 of HK Convention & Exhibition Centre, we see a small piece in today's South China Morning Post (I can't find it online although it would be behind their firewall anway) which might best be described as damage limitation.

It basically says that studies are still underway and that there will be more news next year. In other words, the behind-the-scenes lobbying isn't finished yet and they're not ready to engage in the public battle over a major new building on the waterfront.

The other thing catching our eye this morning is a pretty upbeat press release from Reed about last week's Asian Aerospace. So far, they're saying that the industry likes the focused B2B-only style of the show and that they had 11,000 visitors. So far, no word of where the event will take place in 2009 although dates have been announced. We assume that vigourous lobbying is under way and await the final result with great interest.

HKTDC to build a swimming pool in the sky

I had been wondering how the HKTDC would tiptoe around the PR minefield of needing to demolish a public swimming pool and sports centre (both in very short supply in Hong Kong) in order to build the Phase III of the Hong Kong Convention & Exhibition Centre it so dearly wants. Today's new, free Standard newspaper gives a clue.

It reports today that the government is favouring early approval of Phase III and that TDC will hope to overcome likely public opposition to its plans by re-building a public swimming pool on top of the new extension. Let's hope it doesn't leak.

The story shows that the Macau, Venetian 'bogeyman' line is being pushed by proponents of the project. "How can we compete without it?", they plead. Hmmm. Maybe they should propose a casino on top instead of a pool....

Sausages at the Frankfurt Book Fair

Only one blog entry made me laugh out loud today and, not for the first time, it was from Richard Charkin, CEO of Macmillan and one of the most engaging writers on publishing. Based on his own consumption, he worries that the caterers may be under-provisioning the sausage stalls at the upcoming Frankfurt Book Fair.

We spoke earlier in the week about publicity stunts. Charkin is not above pulling his own. At the
Book Expo America earlier this year, his "Google heist" was a dramatic way of demonstrating his discontent (along with many other publishers) of the Googleplex's cavalier attitude to copyright.

It would be nice if there were few more CEOs who could make us smile while making money.

Denny vs. Jack...all over again

We commented a few days ago on the news that Jack So is coming back to the HKTDC. We had missed until we were poking around on AsiaWorld-Expo's web site a few minutes ago the news that his old nemesis, Denny Yung is also back with a jewellery fair at the airport. This is due to take place in the 3 days before the HKTDC's own March fair.

Those with long memories will recall that Denny Yung's former company, Headway, was involved in a bitter spat with the TDC over two competing September jewellery fairs. This was finally resolved in 1995 (I think) when Miller Freeman (now CMP Asia) acquired Headway and folded in the TDC event into what is now one of the world's largest jewellery fairs.

The spelling mistake in the logo of the new Neway show at AsiaWorld-Expo doesn't give full confidence that this event will have the capacity to bruise the TDC March show seriously. But, there must be a few old hands standing on the sidelines to watch how this one shapes up with great interest. It's the Hong Kong exhibition industry's version of Rocky IV.

Don't fight on price

Had a good chat at lunchtime today with Eddie Choi, the founder and CEO of Tradedot which also runs Vertical Expo. I'm speaking on a panel he's chairing at next month's ad:tech event in Beijing.

We seemed to share opinions on quite a few things and I certainly agreed with the "Good Show, Bad Show" post on Eddie's new blog where he warns against the dangers of competing on price int the trade fair business. He suggests:

...in my humble opinion, many trade show organizers are now competing in price will end up running a “Bad” show. Because those organizers who involve in price war can only afford to produce no-frill event. Hey, this is show business. Skinny trade show budget will only drag the business into a lose-lose cycle. No frill -> no public eyeball -> no traffic -> no exhibitor -> no business.

Infomedia in play

India's Economic Times has reported that one of the country's leading directory and specialist magazine publishers Infomedia is likely to move into private equity ownership. A 63% stake in the company, formerly part of the Tata empire, has been controlled by Indian bank ICICI since 2003.

The article reports that General Atlantic, Blackstone and Warburg Pincus are all thought to be interested in the business which, if sold, will record a tidy profit for ICICI:

Given the fact that whoever buys the stake will have to make an open offer and also pay a controlling premium, the buyer should sell out upwards of Rs 400 crore. Infomedia’s market capitalisation is Rs 474 crore and its shares closed at Rs 240 at the BSE on Wednesday.

There was no confirmation of any of this from either ICICI or Infomedia boss Prakash Iyer.

Going vertical

I was having an interesting discussion this morning about who, if anybody, can challenge the Alibaba/Global Sources duopoly at the top of the Asian B2B tree. I look forward to receiving the calls from both of you saying that you can't be compared. The conversation will continue ladies and gentlemen.

EC21 is arguably sailing in the same ocean, although about a continent behind. Others like TradeEasy chug around in a much smaller pond.

No, the ones that catch my eye are those who are building strong positions in verticals. It's no coincidence in my opinion that Zhejiang Netsun had for a while (I haven't checked recently) the highest market cap of any stock on the Shenzhen stock exchange.

So, it caught my eye that those good folk at Ninetowns are pushing into verticals. Their tootoo.com has a cute name and is trying to compete with its quality rating scheme. But, it's interesting to seem them making some tactical purchases such as this Rmb5 million acquisition of 22% in Hangzhou Tophere Info-Tech Inc. The press release notes that:

Through its B2B website (http://www.21food.cn), Tophere has successfully conducted various trade transactions between domestic buyers and suppliers. Currently, Tophere employs approximately 80 full-time employees in China, and has approximately 1,000 paying members. In addition, Tophere has accumulated information of 149,000 food and beverage products available from over 136,000 Chinese suppliers.

The publicity stunts get bigger

Last week, it was Diana Ross in Macau. This week Reed Exhibitions organised an even bigger publicity stunt for the opening of its first Asian Aerospace in Hong Kong (you may recall we covered the uncomfortable exit from Singapore last year). The harbour fly-through by thee A-380 gave Hong Kong's aviation shutterbug's their best photo op since Kai Tak closed in 1998.

As the Standard newspaper has just announced that its going free, I trust they won't mind me linking to their story through the photo here. Their editor was just on the Hong Kong morning news radio talking about how hard they've been hit by the Stock Exchange's decision to loosen the requirement for publicly-listed companies to place all those enormous official announcements in one English and one Chinese newspaper.

Jack's back

There will be a little nervousness among its competitors at the news that Jack So has been appointed as new chairman of the Hong Kong Trade Development Council from 1st October. During his tenure as Executive Director (1985 - 1992), So gave the TDC a much more hard-nosed commercial focus than it had before and has since repeated the act at Hong Kong's MTR (subway) and, more recently, at local telecoms giant PCCW. This latter job, however, Bloomberg reported on March 28th that "So quit as Hong Kong's largest phone company reported an unexpected 22 percent slump in annual profit".

With it's web sites, catalogue magazines and trade fairs, TDC is one of the biggest players in business media in Hong Kong. It is also the owner of the Hong Kong Convention & Exhibition Centre.

Half the world's most wired cities in Asia

It seems that the holidays have focused the minds of US editors on the challenges of competing in the wired world. No sooner do we see the Washington Post wringing its well-manicured hands over the superiority of Japanese broadband than we find the endangered species which is editor of Business 2.0 reinforcing the point with a piece on the 12 most wired cities in the world.

The TechnoKimchi blog points out that "6 out of the 12 cities are Asian cities: Bangalore, Hong Kong, Seoul, Shanghai, Singapore, and Tokyo." None is in the USA. The other six are Barcelona, Helsinki, London, Stockholm, Tallin and Tel Aviv.

Back to future with Japan

This Washington Post article, posted on his Facebook page by Hugo E. Martin has a distinctly 1980s feel to it. It is full of angst and chest beating about how Japan is racing ahead of the US with better Internet technology. It begins:

Americans invented the Internet, but the Japanese are running away with it. Broadband service here is eight to 30 times as fast as in the United States -- and considerably cheaper. Japan has the world's fastest Internet connections, delivering more data at a lower cost than anywhere else, recent studies show.

Heck, before we know where we are, they'll be buying Hollywood movie studios and Rockefeller Center...

It makes a change from the China hysteria on which so much US newsprint is now wasted.