Daily Digital Pulse of China: E-Commerce Alliances, Alibaba & E-payments
Alibaba May Buy AutoNavi
Alibaba Group Holdings revealed that they are interested in buying Autonavi. The E-commerce enterprise has provided a non-binding proposal letter to digital map content and navigation company AutoNavi, purposing $1.1 billion to make it a wholly owned subsidiary. Currently Alibaba holds about 28% of AutoNavi’s shares. If the deal goes through, Alibaba said the goal is to improve customer service capacity by sharpening the competitiveness of AN’s map engine and navigation business. An independent committee has been established by the digital map company to evaluate the proposal.
Source: Finance Takung
Chinese Wholesalers Suffer After Rise of E-Commerce
The rise of e-commerce companies have taken a huge toll on Chinese apparel wholesalers. The wholesale market is starting to be seen as outdated, especially with the growing trend of apparel branding. While wholesalers keep seeing a decline in sales, more and more business owners choose to work with retail or e-commerce. Sending products straight from the factory to retail stores or online platforms is simply more lucrative, whereby wholesalers are cut out of the chain. Since online businesses are known for its low prices, an increasing number of wholesale operators see it as a must to open a channel for e-commerce, an industry analyst said to WCT.
Source: Want China Times
Tencent invest in Tourism Booking Platform
Together with Boyu Capital and Oriza Holdings, Tencent has invested CNY500 million in the online Chinese travel agency 17u.cn. The company announced that they will use the funds to become the best Chinese leisure tourism market, aiming to improve services in domestic and outbound traveling – as well as mobile sectors. 17u still holds the controlling stake in the company and informed media that they plan to achieve an independent IPO in the future.
E-payments Worth $306 Billion in 4Q13
The value of China’s third party e-payments in the fourth quarter of 2013 meant a 23.5% increase compared to 3Q2013 and 53,3% compared to the previous year. The total amount generated in 4Q2013 was CNY1,864 trillion (USD306 billion). Alipay’s market share in the fourth quarter amounted to 46,9%, followed by TenPay which had 18,7%. ChinaPay landed on 9%, 99Bill had 6.5% and China PnR had 5,8% market share, according to Analysys International.
More statistics from Analysys Internation show that online search engines in China generated CNY11,42 billion (USD1.87 billion) in 4Q2013, Baidu being market leaders with 78.4%. The total revenue from Chinese online advertising was valued at CNY30.07 billion (USD4.94 billion). Baidu, being market leaders in this category too, had a share of 31.4% followed by Taobao (17.5%).
Source: Digi Times
E-commerce Alliances Grow More Common
DangDang Inc, the major e-commerce site that specializes in electronics, and Yahaodian (Yhd.com), the online supermarket majority owned by WalMart, are expected to team up to gain more market share. Alliances like these are growing more common in the heated Chinese E-commerce sphere. Although the market is still expanding, the growth momentum is not as strong as it was one or two years ago. Dangdang and Yhd may not have the same customer base, but their alliance is a great opportunity to expand to new sectors.
DangDang has looked for ways to move into food sales for quite some time and with the new partnership, known for its wide portfolio of food offerings, the expansion will be more natural. The companies are not going to compete head-to-head, rather build a more comprehensive online platform with more categories of products which will lead to an increased, shared, user base. The partnership will be announced in Beijing on March 5.
Source: iResearch China