Coal mines, forests....anything but B2B

We reported before on Kenfair's acquisition of a coal mine (click on the Kenfair label if you want to follow that saga more closely). It seems that they were trend setters.

We wondered why non-exhibitions people were buying into Eddie Leung's Info Communication, the Hong Kong GEM-listed parent company of Paper Communication, organiser of industrial trade fairs in China. All is now becoming clear as they too appear to have gone into the coal mining business. This set the market alight on Friday when volume spiked to 142,550,000 shares, 147 times above the daily average of 966,034. Mind you, after all that excitement, the share price ended up down 3¢ at HK$0.32.

Meanwhile, B2B online market TradeEasy has gone down the same route, announcing the acquisition of a forestry project in Papua, Indonesia for US$157 million. We first reported that back in October in the same posting linked above relating to Kenfair's entry into the coal-mining business.

It seems that the China's hunger for natural resources is looking like a better bet to some than US consumers' demand for Chinese-manufactured bric-a-brac these days.

Reuters India update

We've written a couple of times over the past year about Reuter's activities in India including its divorce from Bennett Coleman and its launch of the "Market Light" service for farmers. There's an interesting interview today on contentsutra.com with Azhar Rafee, Executive VP Media (Asia). Highlights include:

• Market light is now covering prices of 17 crops and is targeted to be in three States with 250 - 300,000 farmers using it. Rafee emphasises the need for the service to be multi-lingual so that the farmers can access it easily, a challenge for all providers of business information in India as they dip down below the English-speaking elites in the major cities.
• On the divorce from Bennett Coleman (the owners of the Times of India), he says "from the strategic partnership perspective we felt that the direction we wanted to take in India was different from theirs. Sometimes what happens is that the goals we set for ourselves - we did achieve them - but to move forward it was better for us and them that we work with separate strategy. We remain extremely bullish on India and the team size is increasing, but more importantly, it’s important to note that we are engaged to figure out how to take this forward and whom to take this forward with". Which is corporate waffle speak for 'it didn't work out with them, we know that India's important but we're not really sure still how we're going to do it'.

Shuffling the pack at Xinhua

Much discussion yesterday about the significance of Fredy Bush's decision to step aside as CEO of Xinhua Finance in favour of Jae Lie (both pictured here...Fredy's the woman).

According to Reuters, the company will focus on its "aims to divest non-core assets and focus on its main China market as it tries to boost a share price off almost 60 percent this year". It notes that, as well as the CEO change, the company "launched a consent solicitation on $100 million of 10 percent senior guaranteed notes due 2011. The move is aimed at providing it flexibility to dispose of some non-core businesses, including communications and investor relations firm Taylor Rafferty". It quotes new CEO Lie as saying "We're trying to get the bondholders' consent to allow us to possibly divest some of the assets that we have that are tied down to the bond."

Founder Fredy Bush will step up to the role of Vice Chair of Tokyo-listed XFL while retaining the CEO position at NASDAQ-listed subsidiary Xinhua Finance Media which she seems intent on building up into a stand-alone China media business.

According to Barron's, which describes XFL in a somewhat self-serving way ("kinda"...what kinda writing is that?), the market was underwhelmed. It notes that "shares of China’s two answers to Barron’s Online (kinda) are trading in opposite directions today, as Xinhua Finance Media Limited (XFML) falls 11% TO $3.01, one of the biggest decliners on the Nasdaq, and China Finance Online (JRJC) rises almost 16% to $23.80". Click back through the Xinhua labels below if you want to recall the hatchet job that Dow Jones did on Fredy Bush last year.

Developing in a striding manner

I should stand in the corner with my hands on my head for making fun of other people's English. With schoolboy French and kindergarten Chinese to my name, who am I to poke fun?

However....as China Economic Net chooses to illustrate their posts with dodgy bikini shots of Jessica Biel (shame on you all for clicking through that link), I'll treat them as fair game. Today's article on e-commerce payment systems tells us that " the third party electronic payment industry in China has been developing in a striding manner". It goes on to tell us that, while 50 or more Chinese companies are engaged in this business, that 80% of the market is controlled by the top three:

1. Alipay.com
2. tenpay.com
3. Chinapay.com

It goes on to note that "In 2007, the trading volume in the third party payment market broke through RMB100 billion yuan, more than doubled year on year and thus continuing to maintain a growth rate over 100 percent for five consecutive years".

There's lots of intereting detail in there and, if that all gets a bit much for you, they also link to the story about how "American supermodel Marisa Miller has knocked actress Lindsay Lohan from the top of men magazine Maxim's list of the 100 hottest women in the world".

Glory be. We wouldn't want to take ourselves too seriously now would we. I was sore tempted to post the picture of Jessica Biel but thought that would be cheaper traffic-generating ruse than writing the word "sex" in the labels. We'll leave that to China Economic Net.

Thoughts on mobile and China's restructuring

I won't add to the torrent of coverage of China's decision to restructure its telecoms industry. See Ogilvy's Kaiser Kuo here if you would like to see some comment. The China Daily yesterday also confirmed that the long-delayed launch of China's domestic 3G networks will follow in the wake of the restructuring announcement. China Mobile is deemed to have got the short end of the regulatory stick as, according to the newspaper, it "will be granted a 3G license based on the country’s home-made technology TD-SCDMA, while China Telecom and China Netcom will get theirs based on the WCDMA and CDMA2000 standard respectively".

Just last Thursday, I was posting that the business opportunity of mobile was on my mind and it still is. Interesting then to see Tangos' post over at the China Web 2.0 Review in which he reports on also-ran browser Opera's report on its Opera Mini usage in China. The top 10 sites visited from mobiles (and, using Opera Mini - so not a very representative sample) are, it says:

1. www.sina.com.cn
2. www.baidu.com
3. www.google.cn
4. www.ko.cn
5. news.sohu.com
6. www.xiaonei.com
7. www.3g.cn
8. www.paojiao.com
9. www.188bet.com
10. www.feiku.com

As Tangos notes, this means that web portal content and search account for about 55% of mobile Internet use in China. Neither e-mail nor e-commerce are really showing up the rankings.

That doesn't mean that it's all vertical search and SMS marketing for the B2B world, though. The post goes on to the note that "Two social networking sites are on the list: Ko.cn is a mobile social networking site operated by Kong.net, which is the partner of Opera Mini in China, Xiaonei.com also has quite big mobile user base. Paojiao.com is a website for mobile software information and downloads".

Update: There's a particularly clear description of what's happening over here at David Feng's techblog86.

Alibaba Japan to list as well?

There's an interesting Reuters piece which appeared in various places over the weekend (here in the UK Guardian newspaper). The two key highlights of the article which focuses on the newly-constituted Softbank/Alibaba Japan venture are:

1. The company expects to double its workforce in Japan by March next year. The article says the company "currently has 80 people in China and 35 employees in Japan dedicated to the Japanese site".
2. More interesting is the suggestion from incoming CEO Makoto Kouyama, formerly of MySpace (a Newscorp JV with Softbank) that the company may go for a separate listing in Japan. The article quotes Kouyama saying "Softbank is regarded as a telecoms company, so if companies like Yahoo (Japan) stay under the blanket of Softbank without listing, no one knows how they are valued. It's hard to gauge the value of Internet companies like us unless we go out on the market. So in that sense, the possibility (of listing) is there."

This will be interesting to watch.

Highlights from Global Sources' conference call

Seeking Alpha generously posts its transcripts of analyst conference calls and allows humble bloggers like your truly to use up to 400 words of them. Thanks guys! Here are some highlights from their transcription of last night's Global Sources call:

Merle Hinrichs on the earthquake’s business impact: From a business perspective which is on the minds of many investors, I am sure we do not expect any particular impact. Global Sources has a very small number of customers in this area. And all of our team members and their families in the vicinity are safe.

Hinrichs on print: …as expected, our print services lagged behind the strong growth in online, and exhibitions and were down approximately 1% to 11.6%. While our English-language export focus titles performed well, our Chinese-language titles including Electronic Engineering Times for China and the Chief Executive China Publications continue to be slow.

Hinrichs on the economic slowdown: …our business has counter-cyclical aspects to it. And to date our numbers are demonstrating this strength. While others are experiencing flatter declining business, the number of our online customers is growing and the number of booths at our shows in April was higher than ever. …Our value proposition remains strong for both buyers and sellers and becomes even more important during an economic slowdown. Suppliers need our services. They need to grow revenues or alternative revenues. The key issue for suppliers, in order to remain successful and to survive in a difficult market, is to open new markets by generating a steady flow of quality sales leads. This, in today's market, includes high growth areas such as Eastern Europe, Latin America and the Middle East. From the buyers prospective, in a slowdown, buyers still need to fill their retail shelves, with appropriately designed products, and at appropriate price points. They have to source and we are here to make that job easier for them.

Hinrichs responding to a question on whether Global Sources is an e-commerce company: Now, our revenue is derived from providing comprehensive marketing services, including the online service. In fact, the majority of our revenue comes from online services. So we have called it, of course it is a marketing service as opposed to an e-commerce service. Our competitors, who provide basically the same service, have referred to their revenue from precisely the same of value proposition as e-commerce.

Global Sources posts strong Q1

It looks as though the first quarter has been strong for Global Sources. Highlights of the just-released Q1 numbers:

• Revenue was $40.6 million, up 16% from $34.9 million.
  ∗ Online revenue was $21.9 million, up 27% from $17.3 million.
  ∗ Exhibitions revenue was $6.0 million, up 24% from $4.8 million.
  ∗ Print revenue was $11.6 million, down 1% from $11.8 million.
  ∗ Revenue from mainland China was $24.1 million, up 30% from $18.4 million.
• GAAP net income was $8.2 million vs. $6.5 million in 2007, up 26.1%

CFO Eddie Heng said "For the rest of 2008, we expect online and trade shows to continue to serve as the main growth drivers, and we anticipate revenue from China to continue growing faster than overall revenue. We also expect a positive impact from expanding sales representation for all of our products.”

Q2 revenue guidance has been increased to US$62 - 63 million.

Mobile on my mind

As regular readers will know, I have flushes of enthusiasm for mobile and what it might mean for B2B media and information in Asia. With 650+ million phones in China and India alone and over 3 billion around the world, it remains an under-utilised platform.

Yesterday, I attended a lunch organised by the American Chamber of Commerce in Hong Kong where a panel talked about mobile advertising. Marketing covers it here. A key focus of the three panelists was that, in order to be effective, advertisers should make use of the capacity to target messages. This is, in my view, central to any value which can be developed for the B2B markets where targeting is everything.

They were perhaps not quite as defensive as they should have been about the damage already done to the medium by blanket SMS spam campaigns although some questions from the floor were pretty pointed in bringing this up.

This is obviously all taking off in India as well as I came across three interesting pieces on this just yesterday:

1. WATblog.com does a round-up of mobile advertising channels already active in India. Some of them sound pretty intrusive and unappealing to me, but there's clearly good mileage in others.
2. Linking Hong Kong and India, contentrasutra.com reports on Buongiorno's launch of its mobile advertising solution into that market. Buongiorno is a Hong Kong-based value-added service provider focusing on mobile marketing solutions in which Japanese trading giant Mitsui is an investor. Unfortunately, their web site appears to have keeled over this morning amid all the excitement of expanding in the Indian market.
3. Getting closer to my interest in market-specific, B2B applications is the announcement that "People Group’s real estate property, Makaan.com, has launched an SMS based mobile application, developed by sister concern, Mauj Mobile". Interestingly, the product eschews GPRS/3G mobile internet functions and is entirely SMS based.
   

Earthquake - what's going on and how to contribute

Congratulations to my friends at Alibaba for a homepage banner which links to this page. It's the clearest I've seen, telling you what's going on, how to donate and with latest news updates.

The series of pictures of the wedding party immediately after the quake don't have the immediate impact of the dead children and weeping parents, but are very striking all the same.

A sad note, by the way, from yesterday's Aliblog entry: the company has 33 team members in Wenchuan who have not yet been accounted for.