Wednesday, January 31, 2007

India online focus for Publicis?

Further to the earlier post on China, it appears that the ad agencies believe that marketing spending is moving quickly online in India too. Contentsutra reports that French mega agency Publicis is possibly thinking of launching its just acquired Digitas subsidiary in India.

Looking at the sources, it seems that the talk is fairly speculative at this stage and has led to another round of breathless speculation in Mumbai about who will be acquired and for how much. The story comes from DNAIndia which quotes Arvind Sharma, head of Leo Burnett India, saying “Digital communications accounts for business worth Rs.450-500 crore in India. Push for this area comes mainly from travel and tourism players and financial players. Both Arc and Starcom Digital cater to the digital communications space, but we are sure that Digitas would be able to bring in proprietary knowledge, much of which is not available in India.”

China online advertising underestimated

We were interested to see this long-ish post on the China Stock Blog from W.R. Hambrecht analyst James Lee. He believes that "recent checks indicated that the online advertising market could be once again underestimated in China" and has upgraded Sina Corp. as a result. He is targetting a share price of $45, about 30% over where it ended yesterday.

Lee notes "Advertising agencies we spoke with estimated that as much as 10% of ad dollars could go to the Internet, representing roughly 50% upside to our industry forecast ($1.3B vs. our $882M estimate)".

He also picks on Yahoo!'s planned exit from the mainstream portal business (on which we commented yesterday) as a plus for Sina. On Alibaba's decision for Yahoo! China he notes "makes sense given the company’s synergies with e-commerce sites such as Alibaba (B2B) and Taobao (C2C). After moving back and forth between portal and paid search, Yahoo China’s market share of online advertising revenues dropped from 9.5% in 2005 to 8.0% in 2006. Despite a smaller market focus, we believe that Yahoo! China will differentiate itself on the core strength of Alibaba’s e-commerce. We believe the company should build its search to facilitate e-commerce transactions in B2B, B2C and C2C results".

Update: for information on a more general report about online advertising, see the press release from Outsell that we have posted on our BSG News blog.

Tuesday, January 30, 2007

Fair Isaac China

I said a week ago that I didn't want to turn this into a China online payments blog. However, the stories continue to flow in and I noticed this one on the China Payments News site about Fair Isaac's plans to open an office in Beijing.

Not only is this a company with one of the wackier names in the B2B online world, but it offers "data management services and predictive analytic systems that bring complete customer information and more intelligence to every decision, and decision management systems that implement decision strategies in a real-time environment for faster, more consistent and accurate decisions". That may be one full stop short of a good sentence and rather hard to understand but the significance to me is that the banks and service providers are gearing up in China for serious e-commerce.

China search revenues pick up in Q4

A report from Analysys International in China (this link in Chinese) is highlighted by the China Tech Stories blog which suggests that Q4 search revenues in China were up 14.4% to Rmb476 million (a not super-exciting US$61.3 million). This, it says, represented an acceleration from the Q3 growth rate of 10.5%.

Of particular relevance to the B2B world is the revelation that Google overtook Yahoo! to take second place in the market, a long way behind the leader Baidu. This comes not long after Yahoo!'s management in China at revealed that they were throwing in the towel in the general portal and search business and turning Yahoo! China into a specialised B2B search engine. Good luck!

Monday, January 29, 2007

Blackstone ups the ante in India

We have posted several times recently (here and here) on the rate at which PE and VC investment in Indian media and related services is outpacing China. Now we see from that Blackstone has significantly raised the bar with a $275 million investment in Hyderabad-based print and broadcast media company Ushodaya Enterprises.

Akhil Gupta, Chairman and Managing Director of Blackstone Advisors India Private Limited,
is quoted in the company's press release saying, “We believe that the Indian media sector will be a key beneficiary of a secular trend in growth in personal consumption that is driving India’s economic expansion which in turn will spur advertising growth".

Journalism as a lucrative business

Sorry for anybody who jumps to this post thinking that I've finally solved the problem for them. I am talking here about the "you pay, I write about you (or not, if you prefer it that way)" culture which pervades much of the media and PR world in China. I finger both, as they feed off one another and one tends to blame the other. Those with the money to start with (rarely the journos in my experience) must shoulder a heavy portion of the blame.

Two interesting pieces on this today: the Silicon Hutong blog runs through the process by which companies get sucked into an ugly cycle of bribery for good coverage. This quotes a Washington Post piece which, in my opinion, may be getting a bit far-fetched in laying the blame for all this at the door of the Communist Party:

In many ways, blackmail journalism grew naturally out of a system in which Communist Party censors control the news rigorously, barring reports that could be seen as unfavorable to the party or contrary to the government's political goals. If the ruling party distorts the news for political reasons, blackmailing reporters have concluded, why wouldn't they do it themselves for financial reasons?

In addition, local party officials, long used to manipulating information, have been complicit in the payoff system when it suits their needs. In the everybody-does-it atmosphere, even non-reporters have found ways to get in on the take by posing as journalists.

Update: China Law Blog has picked up on this too with some interesting perspectives.

Sunday, January 28, 2007

Google, China and competition

It was an interesting week to watch Google's position on China. Co-founder Sergey Brin, garnered himself many column inches from Davos (check the FT here and Guardian here for examples) by expressing his regret at the way in which the company had entered China last year. Mea culpa all the way to the bank perhaps.

Two aspects of this week's coverage caught my attention and struck me as more generally applicable to media companies trying to find their way in China:

  1. The FT piece points out the fact that much of the crackdown on what is happening may be more protectionist than really censorious in nature. “I think a lot of these challenges and policing may be side effects of lobbying by local competitors there,” Brin says. Maybe. However, it has certainly increasingly come to my attention that media companies are 'shopping' each other to the authorities with increasing regularity as a way of gaining a small competitive advantage. It's a very dirty business there these days.
  2. Brin also admitted that bad decisions in China had damaged the company more generally. China can be a high profile market even for relatively small companies and mis-steps there will be seen as a sign of possible international weakness - vis eBay's "this is not a withdrawal from the market" withdrawal.

Saturday, January 27, 2007

10 Commandments for China business

The China Law Blog could be really dull but, thankfully, is one of the more interesting sites that I look at on a regular basis. Today's piece on Ten Commandments for Doing Business in China is typical of what I mean. Not only has Dan Harris pointed us to a really interesting post on another blog (ChinaSolved in this case), but I also agree with his reservations about it.

Friday, January 26, 2007

Farewell, Joanne

Attended a nice farewell dinner this evening for Joanne Davis, stepping down soon as Deputy Managing Director of the Hong Kong Convention & Exhibition Centre after almost 16 years. Known throughout the industry as "the landlady", she will be missed by all those who value her professionalism and the sharp insights into the exhibitions business which she generously shared with many of us.

I have particularly valued and benefitted from Joanne's insistence on developing good quality data on the industry. What is available in Hong Kong, mainly as a result of her work, is second to none in terms of quality and consistency.

So, thank you for that, and good luck with wherever your travels take you Joanne.

Thursday, January 25, 2007

ABM China Focus

It's good to see American Business Media keeping up its focus on China. Following last year's Leadership Tour the much livelier MediaPace blog devotes an in-depth posting to the subject today. As well as recapping some of the key developments in magazine publishing, she talks of their involvement in last week's CEFCO through Claudia Flowers' moderating of the M&A session as well as noting a little healthy scepticism about just how open the door is to foreign investment.

I have added a comment to the piece reminding Sara about the tremendous potential for B2B online in this market as well. With new figures showing that Internet users now top 137 million, 50 million+ of them with broadband access, the potential for aggressive online-only strategies combined with wholly-owned face-to-face must be very attractive to many B2B companies.

Wednesday, January 24, 2007

Taobao is bigger than Walmart

OK, just in China. Still, it's an impressive figure according to this Xinhua report posted on the HKTDC web site. It notes "The transaction volume of than doubled to 16.9 billion yuan (2.11 billion U.S. dollars) last year, up 110 percent from the 8.02 billion yuan in 2005.... The figure topped the annual turnover of traditional retail giants Lotus at 10 billion yuan and Wal-Mart at 9.93 billion yuan in 2006".

Now the boys at Alibaba/Taobao just have to work out how to make some money from all that activity.

Baidu news

Via the Chinamemes site, we were interested to see this piece on Baidu being granted an Internet news content service license. This is a big deal in the Chinese media world; the transition from being an entertainment or information provider to one authorised to print news is a big one. It's also one which most foreign companies, for the foreseeable future at least, won't be able to make.

The Shanghai Daily quotes one government official saying "A news license is a rare resource to Internet companies in China. So far only very few Websites are allowed to report news legally in the country".

It was obviously a big day for Baidu as China Web 2.0 Review reports that it has a new-look home page. As well as providing screen shots of what to me look like two remarkably similar pages, it notes "The most important change in this new version is adding links of login and Baidu Space onto homepage. Baidu Space is already one of the top 5 most popular blogging service in China, by adding link of Baidu Space in its homepage, the users of Baidu Space is expected to increase significantly due to the high traffic of Baidu’s search service."

Tuesday, January 23, 2007

Fairfax cuts the cord with Factiva

While poking around on the Australian Financial Review site for the last story, we came across this interesting announcement from Fairfax about their plans to cut syndication with Factiva and AAP and launch their own channels:

Fairfax Business Media ends Factiva and AAP News Centre contract

Fairfax Business Media has announced that effective 31 March 2007, its content will no longer be accessible via Factiva and AAP News Centre.

The decision to discontinue syndications follows our decision to develop our own channel and content management systems. As we have indicated with the launch of Fairfax Business Media aims to build a fully digital approach to its growing market opportunities.

Fairfax Business Media is developing a new service with search and monitoring of news across Fairfax content including deep archives.

Based on a usage model the service will incorporate content from all of the Fairfax Business Media titles including The Australian Financial Review, AFR Magazine, BOSS Magazine, BRW, AFR Smart Investor, Asset, CFO, and MIS as well as other major Fairfax mastheads.Fairfax Business Media are planning to have a BETA version of the new service by 31 March 2007, and those interested in receiving further information on the service can register their details here.

Come to Silicon Beach

We don't write about Australia often enough for my liking. I was taken by Mark Jones' latest post on his Filtered blog about a front page story (only click if you're willing to grapple with a really clunky pay-per-view system) in today's Australian Financial Review about technology investment in Sydney's hi-tech community which has been dubbed Silicon Beach.

Mark notes "There's truckloads of money available for web startups in Australia if they've got a good business model. But many of the new companies Joshua quotes (such as Atlassian, Tangler, Quotify and the Freshview boys pictured on page 1 with their surf boards) are building companies with real revenues and real customers".

Monday, January 22, 2007

PE floods into India

Two weeks ago, I was comparing the levels of venture capital activity in India and China. I noted, then with interest, this post from Om Malik on the $125 million investment in media group Nimbus by 3i, Cisco and Omani interests. He notes "...thus began another crazy year of private equity investments in India" adding that "PE investments in India topped out at $7.46 billion2 in 2006 and are estimated to touch $10 billion in 2007".

Update: directed us to this release about media, communications, entertainment and information PE firm Providence Equity Partners opening new offices in Hong Kong and India. Does this all mean that the media PE tsunami is about to roll over Asia?

Research on China e-payment

While I don't want to turn this into the China e-payment blog, it is certainly a topic which has elicited some interest from the posts in the last week or so (here and here). I was interested then, to see that the prolific, Shanghai-based iResearch has produced its "Online Payment Research Report 2006" and includes two excerpts on its web site.

The first talks of the size of the online payment market. Interestingly, online payment is falling as a percentage of the total with mobile and telephone payment increasing, the research suggests. Overall, though, online payment continues to grow quickly:

The other piece notes that the overall e-payment market grew 122% in 2005 with equally fast growth predicted for 2006 and 2007:

Sunday, January 21, 2007

New BSG report

I direct your attention across to our corporate blog for news on a new - and we hope interesting - report from BSG's Tracker Service on M&A activity in Asia's business media, information and events industries.

Saturday, January 20, 2007

India mobile content boom

We posted the other day on the fact that we think that business media and information companies should be looking more at mobile than broadband opportunities in India. We were interested, then, in this post from about a new Rs500 million (US$11 million) incubator fund from Cellebrum (and Lehman Bros.) to boost entrepreneurial mobile content activity.

The post draws on an Economic Times article which quotes the President of Cellebrum's parent company, Mcorp Global, Dilip Modi. He says that the incubator fund represents 50% of the company's development plan. The article notes:

The company also plans to extend its VAS services to data and enterprise customers. The Delhi-based company is talking to corporate houses in sectors like insurance and manufacturing for a possible tie-up. The tie-up would mobile-enable the client’s back-end database. For instance, an insurance company instead of making promotional calls to their customers will be able to send SMS alerts for the same using Cellebrum’s services.

I fear that concept of mobile-enabling a back-end database might give rise to a variety of vulgar jokes but will leave that thought for your weekend contemplation.

Friday, January 19, 2007

Former Asia CFO takes up CEO position

United Business Media has announced that it has appointed John Day as CEO of its RISI, Inc. forest products media subsidiary (formerly known as John, a former colleague, has most recently been CFO at CMP Technology but, prior to that, held the same position at CMP Asia through the late 1990s.

At the same time as this announcement, United noted that it had acquired an additional 2% of the equity of RISI from its private equity partner Pegasus Capital Advisors L.P. for $1m. The equity purchase brings UBM’s total shareholding in RISI to 52%, giving UBM a controlling interest in the company.

The press release notes that "in recognition of China’s role as an increasingly important customer to the forest products industry, RISI also headquarters its Asian business in Shanghai".

Good luck with it, John.

Goodbye VNU!

My crystal ball must have been well polished this week. Chatting in Shanghai this week, I asked a former colleague if he thought the VNU name had any value in the US. He thought it did. I suggested that I thought they'd find Nielsen the more valuable brand. Obviously the US management agreed as we see from this announcement via TradeShowWeek:
VNU has changed its name to the Nielsen Company effective today. Divisions that include exhibitions will be renamed Nielsen Business Media (in the United States), Nielsen Exhibitions Asia and Nielsen Exhibitions Europe. The new name comes from two of the company's well-known assets, ACNielsen and Nielsen Media Research.

B2B education

I was talking to somebody only yesterday about the forms which 'content' is taking in the new world of Asian B2B. For the companies serving the international trade of Asian manufacturers there are clearly some important opportunities in the "how to trade" sector.

Global Sources has just announced a tie-up with Peking University, one of the trio of older Universities which make China's equivalent of the Ivy League. The new alliance will offer export education courses for Chinese executives.

Thursday, January 18, 2007

More on e-currency

Mark Herpel from the Digital Money World blog asked in a comment yesterday for more on the QQ virtual currency. I said I'd look for more. Without looking far, this post on the rather cool YouMeiTi (= "Have Media") blog popped up. Blogger Tricia Wang quotes an Asia Times article:

“The QQ coin is challenging the status of the renminbi [yuan] as the only legitimate currency in China,” the Asia Times quotes public prosecutor Yang Tao.

A cautionary tale

Forget for a minute all those dime-a-dozen "guanxi is important in China" guides to making your fortune in the Middle Kingdom. China Law Blog posts an excellent piece on the "China buyer scam" which goes something likes this:

1. International company (big or small) receives an inquiry about their product.

2. Inquiry quickly turns into an order.

3. The Chinese “buyer” invites the foreign firm to China to sign the contract.

4. Unwary seller flies to China (Yunnan, Guangdong and Hainan are among the favorite destinations) for the signing and a big dinner. Buyer wants some cash for the event and/or a “commission” payment to get the deal through in the face of some internal politics, or whatever . . . .

Do read the rest of the piece. It's very insightful and relevant to anybody trying to do business in China.

Wednesday, January 17, 2007

Go mobile, not broadband in India reports that wireless/mobile subscribers in India at the end of 2006 hovered at just under 150 million. Broadband subscribers touched just 2.1 million which is pretty pathetic. By contrast, China is set to overtake the US in terms of total broadband subscribers this year with 79 million subscribers predicted.

China's virtual e-currencies

A piece in yesterday's Shanghai Daily caught my eye about China's instant messaging giant Tencent suing Alibaba's over unauthorised re-sale of its e-currency, Q Money, traded through QQ accounts. The article notes:

Before the litigation, Tencent had, through its lawyers, complained to Taobao and demanded it delete trading information of QQ accounts and Q money, a virtual currency for buying Tencent's service like icon and electronic cards. has set up a trading zone in QQ accounts and other Tencent's products like Q money at a discount on Tencent's official price.

The Q currency, for instance, is on sale at a discount of up to 50 percent of the official price of one yuan apiece.

Now, I notice an interesting and longer piece on the China Stock Blog from research Shaun Rein which gives some background to the trend. He notes:

Q coins can be used to buy virtual products such as items to use in games, or accessories for the avatar that they use for instant messaging conversations. The virtual currency can also be used to vote for real world talent contests, and allows users to play online games, purchase electronic greeting cards, and use antivirus software. Baidu currency can be used to watch feature length movies on Baidu’s website and to download music, and Sina’s U coins can be used to purchase real goods from Sina’s online mall.

He quotes interviews with young people who say they find these systems for convenient than banks and credit cards which remain decidedly un-user friendly in China. He extrapolates to predict a bright future for e-payment and credits as well as e-commerce in China.

Update: while on the topic of unusual things for sale on Taobao, the AsiaPundit blog has a great post about how many of the not-yet-released iPhones are already for 'sale' on eBay bashing Chinese auction site.

Update Update: Wow, e-funny money is really the topic of the day. The very next blog I turned to was which talks about the volume of transactions done in India online with cash cards.

Tuesday, January 16, 2007

Battle of the Titans

Far and away the most interesting session of the CEFCO exhibitions industry conference so far was the technology debate yesterday afternoon which pitted the new President of's B2B division, David Wei, against Global Sources COO Craig Pepples and HC International founder and CEO Guo Fansheng. Given that Global Sources now owns 10% of HC, you could argue that the decks were somewhat stacked against Wei who is still feeling his way into the job having recently switched over from his previous position as China CEO for the UK hardware stores, B&Q.

Despite this, honours were probably pretty even at the end. Wei came out fighting with a strong statement that is committed never to launch an exhibitions business itself unlike, he pointed out bluntly, his competitor at the table. He suggested that it was a low margin business they didn't want to get into. I was surprised to hear that. Print media may be low margin but large and successful trade fairs are anything but.

Pepples, surprising the large audience with the fluency of his Mandarin Chinese, argued that 1+1+1 = more than three referring to Global Sources' integrated print, online and trade fair offering.

Guo was more direct in his attack on Alibaba, suggesting that it was not appropriate for a Chinese web business to be owned by foreign investors ( has long had VC investment from the US and Japan as well as now being part-owned by Yahoo!). His company, he said was more than 50% owned by its employees. Careful classification of B2B categories was, he said, the secret of HC's success adding that, although the company had withdrawn from organising exhibitions, they would do it themselves if they could. Echoing Pepples with a slightly different formula, he said that HC is always open to partnership but only if 1+1 = at least 2.

Monday, January 15, 2007

China auto blog

Automotive is one of those sectors like IT where industry publications and web sites can straddle a B2B and consumer interest. We stumbled across the China Car Times over the weekend and that seems to fall right into this category.

Their current lead story talks about (and pictures) a car from Shuang Huan (bet most of you haven't heard of that brand yet) which bears a striking resemblance to the Daimler-Chrysler group's Smart.

Sunday, January 14, 2007

In Shanghai

Just arrived in Shanghai for the annual CEFCO exhibitions industry conference. This has developed into an interestoing event with 400 - 500 people from around the world and from China's own enormous exhibitions industry. It's sponsored by UFI (who I'm representing), SISO and IAEE and organised by CCPIT.

The Mori building next to the Jinmao Tower - destined to take over from Taipei 101 as the world's tallest building when completed - has shot up since I was last here and the new second terminal at Pudong International Airport looks as though it's almost finished. Things keep moving right along here in Shanghai.

They must be saving decent Internet speed for the hotels as I'm not experiencing here the problems being reported by others accessing the Internet in Shanghai from their homes and offices.

Saturday, January 13, 2007


As the number of posts in this blog nears the 1,000 mark, I have revamped the template using some of the new Blogger functions and upgraded the use of labels to group related stories. I find it useful and hope you do. I've been going back to some early posts and labelling them. That process will take a while and I notice that they are being re-posted by the newsfeed. So, apologies if you're suddenly seeing loads of old ones from me in your blog reader. It will all be over soon!

Looking away from China

Hong Kong has a famous Cassandra economist, Marc Faber, otherwise known as Dr. Doom. His career appears to have built on the basis that if you keep calling for doom and destruction, when it does ultimately happen, you can declare yourself correct.

I am feeling a bit that way about south-east Asia. For a year or so now, I've been predicting that we will see a resurgence of interest in the region for the first time since the 1997 Asian financial meltdown triggered by revaluation of the Thai baht. Now, it has to be said, Thailand's generals seem to be going out of their way these days to prove me wrong, but I continue to see signs.

As ASEAN leaders meet in the Philippines, the Economist is running a story talking about how manufacturers are looking at alternatives to China. The first line: "China is choking on its success at attracting the world's factories. That has handed its Asian neighbours a big opportunity".

Vietnam emerges from the story as a particularly big winner along with Malaysia which, with Mad Maht now just sniping from sidelines, appears to be regaining favour. Back in June we posted on Vietnam and continue to see increased interest in this market, now a member of the WTO.

Friday, January 12, 2007

Blog influence in Asia

The thought of PR companies trying to master the world of blogging is one that makes me a bit nervous. And, as this is the second time in recent weeks that we have mentioned Edelman's blog-related activities, they clearly are having a serious run at it.

Rebecca MacKinnon, newly-arrived in Hong Kong (welcome!), points to this study of global blog readership published by the company. She was not surprised by the extent to which decision-makers (I'd have to read the study properly to find out what they mean by that) rank blogs as important in Japan, Korea and China compared to the US and Europe. I have to confess that I was very surprised, particularly to see that as many as 91% in Japan said they were reading blogs.

This study is linked to Edelman's tie-up with Technorati about which we wrote on 31st December. I have my suspicions that the audience being polled were mainly bloggers and thus the oddly high results. I don't believe that a truly random selection of Japanese decision-makers would generate a number anything like as high as 91%. But, maybe I'm wrong. What do you think?

Paypal to India

Contentsutra reports that Paypal is establishing a new presence in India. It is "establishing up a development centre in Chennai and plans to recruit hundreds of technology professionals to man the centre", the piece says. What's not clear, the article notes is whether this also means that PayPal plans to start providing online payment solutions in India.

Thursday, January 11, 2007

Hong Kong needs more space

We reported in November on HKTDC Executive Director Fred Lam's call for additional exhibition space in Hong Kong over and above the Phase II 1/2 expansion under way now. It seems that the HK Government has been listening and, according to both Xinhua and the Standard newspaper, now accepts the need for more space.

The Xinhua report quotes Secretary for Commerce, Industry & Technology Joseph Wong saying that "the government and the Trade Development Council are considering the need for expanding Hong Kong's exhibition facilities, including a third phase for the Convention & Exhibition Center". He added that "the government is [also] liaising with AsiaWorld-Expo on the early start of its second phase, which will increase its exhibition space to 100,000 square meters".

The Standard adds that "Last month Premier Wen Jiabao said the central government would ensure that Hong Kong's position as an international exhibition and conference center...was strengthened".

Shanghai repairs in the slow lane

With Hong Kong ISPs having re-routed traffic around the broken cables in the Bashi Channel and established almost normal service since before the New Year, it had not occurred to me that this wasn't the case around the region. According to Fons Tuinstra in Shanghai, though, things are still very slow there. He complains "yesterday I could not even get on Skype, let along the internet would let me upload pictures. Maybe this weekend".

Wednesday, January 10, 2007

China vs. India for media/information VC?

Has anybody had a serious look at the different amounts of VC funding flowing into India and China in terms of media, information and web services? This post about $10mn being invested in Indian Google look-alike search engine made me think. I see deals like this all the time on that site.

I reported yesterday on the miserly trickle of VC funding into Chinese social networking sites and, with a few big exceptions, Web 2.0 doesn't seem to be attracting big flows of VC or private equity money into China. Am I wrong?

If anybody's up to funding a proper study of that, do let me know. We'd be pleased to oblige :-)

Why Asia is important to the future of B2B media

They may be designing and announcing the iPhones in California (I want one, NOW, or I'll throw my Blackberry out of the pram), but it is, of course, in Asia that they're making all this stuff. In terms of phones, it will also be in Asia that they're using them with 400 million+ mobile phones in China and India coming up fast.

Further to my post the other day about the number of Internet users in Asia, I was interested to see this piece on the PanAsiaBiz blog where Bill Belew expresses his suprises that 96% of the world's computers are now produced in Asia. That low? Why are any still produced in Europe I wonder?

Here, in descending order, is the top 10 he has identified of computer manufacturing:

10. South America - 0.05%
9. Europe - 2.2%
8. North America - 1.4%
7. Thailand - 0.04%
6. Singapore - 0.5%
5. Philippines - 0.7%
4. Malaysia - 0.9%
3. Japan - 2.5%
2. South Korea - 4.1%
1. China - 79.2%

Tuesday, January 09, 2007

Free software from Alibaba reports that will launch itself into the software business with Alisoft, "a business software company aimed at China’s small and midsize businesses". The article says that "the company will initially offer five types of software: CRM, inventory management, sales force management, financial tools and marketing information management".

The company's press release quotes Jack Ma as saying "E-commerce is changing the way companies do business, from communications, to customer relationship management, to after sales services. Alisoft will provide easy solutions for customers to integrate e-commerce with their back-end systems."

Following the strategy used for all the other parts of the Ali-empire, Alisoft will start by giving the software aware but, the CIO report suggests, hopes to start charging in the first half of this year. That's a much quicker conversion to the 'paid-for' model than any other part of the business, much of which is still basically free to users.

The existing e-mail and instant messaging tools available to users will be rolled into the Alisoft division the article says.

We recall that Alibaba's great rival, Global Sources (check out the new-look web site), tried to supply specialist software to trading companies for a number of years in the early 1990s. That seems to have disappeared from their range of product offerings as they concentrate on their core sourcing services and high tech media. I wonder if Alibaba will be any more successful?

VC money trickling into Chinese social networking

You will already know that I am sceptical of the long-term appeal of social-networking sites. I suspect they're like conferences; much enthusiasm for the networking opportunities in the beginning which wanes as the regulars all become networked and they discover more efficient ways of staying in contact.

HOWEVER, I seem to be in the minority on this and noted with interest a piece on the China Web 2.0 Review about VC money directed at Chinese social networking sites. The amounts are pretty tiny - 16 sites and $93 million in funding over four years.

The blog helpfully translates the full list of deals:

Update: Underlining my point that I appear to be in a minority of one here, the new-ish and much livelier ABM blogger, Sara, has just posted on the way in which US media companies are crowding on to this band-wagon. Mind you, I most like the quote she gives from Scott Donaton at AdAge: “…too many of these sponsored viral-video (and fake-blog and social-networking) thingies really, really suck, and there's a reason for that: They are not the end result of an actual idea or strategy but are born of a desperate desire to do something, anything, in the new-media space".

Monday, January 08, 2007

The shirt tail myth

Various blogs point to an excellent piece in the FT (only partly visible outside the subscriber area I think) by Arthur Kroeber, managing editor of China Economic Quarterly and one of the more sensible commentators on China's economic growth. In it, he takes to task the over-excited young investment bankers who are predicing all manner of things for the Chinese consumer markets.

Key takes:

  • "stories of a Chinese consumption boom are largely fantasy, the latest version of the nineteenth century Manchester mill-owner’s dream of every Chinaman adding an inch to his shirt-tail".
  • "the retail market in China is only about half as big as commonly reported and that the so-called “Chinese middle class” is smaller, more scattered, and has far lower purchasing power than many hopeful sales managers imagine".
  • "For the most part, China remains what it has long been: a large country, inhabited by many people, most of whom do not have any money".
Kroeber defines a "Surviving China" (most of it) and a "Consuming China" which he pegs at 100 - 300 million depending on where you draw the lines. In 15 years, at 10% annual growth, the Consuming China market, he suggests, will be roughly as big as Germany is today. Not something to sniff at, but not necessarily the key driver of world economic growth.

Sunday, January 07, 2007

The name's Ma, Jack Ma

In a timely nod to the latest Bond flick, Casino Royale,'s Jack Ma reveals in an IHT interview that "I've learned a lot of business philosophy by playing poker". He goes on to suggest that "I'm not very good, because I don't want to calculate, I just play by instinct".

Well, his instincts seem to be serving him well in business as the article earlier reveals that "Last year, Taobao's transaction volume, or gross merchandise volume, reached $1 billion, an eightfold increase from the previous year".

And finally, we think more companies in Asia might benefit from sharing this philosophy: "You should learn from your competitor, but never copy. Copy and you die." A bluntness worthy of that other poker player du jour, 007.

Healthy CES report bodes well for Asian B2B media

Business Week's Heather Green pointed us towards the Consumer Electronics Association's annual forecast released just before the opening of the Consumer Electronics Show, "the world's largest consumer technology tradeshow". "Factory-to-dealer sales of consumer electronics are projected to exceed $155 billion in 2007, or seven percent growth", the release says.

This is good news for Asia's B2B media; print publishers, web site operators and trade fair organisers serving Asian manufacturers all rely very heavily on healthy growth in the consumer electronics sector.

Saturday, January 06, 2007

Japanese e-commerce in China

This Reuters piece is a bit confusing. It talks about Japanese e-commerce company Rakuten entering the Chinese market. It talks of on-line shopping malls which suggests B2C activity but then goes on to talk about China's Rmb46 billion (US$5.9 billion) B2B e-commerce market (sounds like an ambitious figure to me) and says that Rakuten will be competing with the likes of

The tag line "Shopping is Entertainment" certainly sounds like the world of B2C. Of course, if it were to be launching in Hong Kong, it would say "Shopping is our National Sport".

Rakuten already owns part of the leading Chinese travel portal, Ctrip.

Friday, January 05, 2007

UBM busy in China

Two of a cluster of 3 press releases yesterday from United Business Media refer to small acquisitions in China:

  1. CMP Technology in the US has acquired Beijiing-based Customer Contact Center Standard for $350,000, a call centre quality and certification business which it says will complement its International Customer Management Institute unit.
  2. CMP Medica has acquired MediReach Healthcare Communications, a medical marketing business, in Shanghai for up to $3.85 million.
As acquisition targets in the US are predicted to be in short supply in 2007, I wonder if the appetite for (albeit small) Asian acquisitions will increase. Last year saw a pretty pathetic record of 21 B2B deals worth around $265 million (the value was not a record thanks to Yahoolibaba in 2005).

Online vs. print battle in China goes to court

This story has been coming at me from various different places over the past couple of weeks and increasingly looks as though it will be watched as a new benchmark for several key China media issues:

1. Internet and mobile content as fully-fledged media businesses.
2. Copyright.

The International Herald Tribune ran a story yesterday which notes that "The Beijing News is seeking $400,000 in damages from a popular Internet site called for having copied and republished more than 25,000 articles and photographs without authorization since 2003". On the IPR front, some have welcomed this; only once Chinese companies start to value their own IPR the argument suggests, will copyright 'religion' really come to China. We shall see.

The other angle to this, as pointed out by Fons Tuinstra on Christmas Day is the way it throws light on the way in which the Chinese authorities continue to constrain on-line businesses from running their own fully-fledged media operations. He reminds us of the history of all this:

When the internet emerged at the end of the 1990s in China as a new medium, the newly-established internet companies started to hire journalists. That caused a fit in the government, because they suddenly discovered they had set up a new media channel that lacked the sophisticated censorship systems the traditional media are having. In stead of setting up a new censorship system, the government ruled that online companies could not hire their own journalists but could only republish news from the official media.

This is all somewhat complicated, of course, by Tom Group being officially a Hong Kong company and, according to Chinese media regulation, theoretically treated as a foreign company. As part of the Li Ka Shing empire, however, Tom appears to have been exempted from many of the restrictions on foreign ownership which trouble other media companies.

Thursday, January 04, 2007

BITEC to expand?

Nice piece in today's Bangkok Post quoting my good friend Sarnit Karunyavanij, the business development director of BITEC, the second largest exhibition centre in Bangkok. In the real estate business, location is, of course, said to be "everything" and BITEC finds itself on the expressway linking the city centre to Bangkok's new Suvarnabhumi Airport.

So, it is no big surprise to find Khun Sarnit saying that expansion plans are in hand to boost the venue's size to between 70 and 100,000 square metres. He is quoted as saying "What we are waiting for is just an opportune time and stable politics, probably simultaneously with the construction of the skytrain extension from Onnuj to Samrong, or after the completion of the skytrain extension".

Wednesday, January 03, 2007

Yahoo! India mobile

At the risk of boring you by droning on about the same themes, I sense a real wave of activity on the mobile front. My New Year's Day post talked about the Google/China Mobile link-up. Now contentsutra points me to a piece in The Hindu newspaper about Yahoo!'s mobile developments in India. The article, based on an interview with Prabhakar Raghavan, Head, Yahoo Research says:

In India, Yahoo, along with partners such as mobile manufacturers, is working on bringing location-based information, Bluetooth (so you would be notified if your friends are nearby), more languages and speech-to-text to mobile search. The mobile usage patterns of youth in India are also being observed by researchers at the Bangalore centre, informed Mr George Zacharias, Managing Director, Yahoo India.

Tuesday, January 02, 2007

Asia dominates the Internet

I was caught by surprise when checking some Internet usage statistics on my favourite source of country comparison data, Internet World Stats. I realise that China is already #2 in the world to the US and that India has rushed past the 40 million user level. It hadn't quite dawned on me though, just how far ahead of the rest of the world Asia already is.

And, given the source of so much of the technology and thinking behind the web, who would answer 3rd place when asked to place N. America in the world rankings? Not me.

Monday, January 01, 2007

Happy New Year from Hong Kong with a few interesting links I've picked up in the past few days browsing.

B2B social networking with Chinese characteristics
The engaging China Law Blog points to 9spaces, a B2B networking site linking US and China business. Its home page focues on relationships, research and referrals. As I've said before, I remain sceptical about social networking as a business tool but wish this venture well.

The GAPP shuffle
Meanwhile, back in the old world of China publishing, Danwei informs us that there has been some reshuffling at the top of GAPP, the government organisation with which every publisher has to grapple one way or the other as they juggle the regulatory challenges.

Mobile search
I've also suggested before that I think this could be a very big year for mobile content. I was gratified to pick up today, then, a Christmas Day story on Forbes about Google and China Mobile planning to launch a mobile search service. It notes that this followed a similar deal the week before with Chunghwa Telecom in Taiwan (who I trust continue to be very busy repairing cables broken in the earthquake).

Pay for Alipay
And, finally, I see that is launching itself into the new year with another effort to get customers to pay for some of its erstwhile free services. CNN Money runs a Reuters report suggesting that Alibaba, "China's largest e-commerce company, will soon start charging some users of its free Alipay online payments service as it seeks new sources of revenue". It goes on to quote Jack Ma saying "that he hoped Taobao-related services would contribute 30 percent of revenue by around 2010 or 2011". It suggests that "Alibaba's revenue in the first half of 2006 was about $100 million, matching the figure for all of last year, and the firm expects total revenue to hit $1.25 billion by 2009".