Retail News CRM

Author: Mei Ling Tan

  • Illegal, unlicensed and completely unregulated … so why is Airbnb booming in Hong Kong?

    Illegal, unlicensed and completely unregulated … so why is Airbnb booming in Hong Kong?

    Cushions with cartoon dogs on, neatly rolled towels and fresh flowers are the small details that mean the most for Airbnb guests and hosts.

    For one host in Hong Kong, those personal touches are replicated across 52 listings, including at least 31 flats in one building near Lan Kwai Fong.

    Taking up three quarters of the flats in one building on Glenealy, the Airbnb apartments share a common rooftop and range in price from around HK$500 per night to more than HK$2,200 for a four-bedroom flat.

    The flats, which do not appear on the Home Affairs Department’s list of licensed guest houses, are among a growing number of short-term rental properties being rented illegally in Hong Kong.

    Airbnb listings in the city have grown by 59 per cent since September to 6,124 rooms or apartments available for rent at the beginning of June, according to data compiled by Murray Cox, the founder of Inside Airbnb and a data activist.

    Cox found 60.5 per cent of listings were from hosts with more than one room or property listed on the site, suggesting these are commercial operations rather than individuals renting a spare room.

    “The main metric that stands out for Hong Kong is the large number of hosts that have multiple listings,” Cox said. “Cities such as London, New York or Berlin, which have introduced regulations that prohibit commercial Airbnb use of residential properties, generally focus their enforcement efforts first on commercial hosts with many listings.”

    Luxury ‘superyacht’ for HK$58,000 a night: Inside Hong Kong’s most expensive Airbnb

    The highest number of listings can be found in Central and the Western district, as well as Yau Tsim Mong – the area including Tsim Sha Tsui, Yau Ma Tei and Mong Kok – with 1,474 and 2,519 respectively, according to data by Cox. The average rental per night across the city is HK$785.

    When the we called the telephone number for the Lan Kwai Fong Airbnb host given by a person at the property, the woman answering denied she owned the flats. She said she rented other Airbnb flats without a licence, but the government had forced her to stop renting some of those near the University of Hong Kong.

    Airbnb was founded in 2007 in San Francisco by two roommates who were struggling to pay their rent and decided to rent out air beds in the living room to attendees of a design conference. The company is now seeking financial investments, based on the company’s potential valuation of US$30 billion.

    Airbnb here to stay in Hong Kong as the sharing economy takes flight

    The site has faced opposition from regulators in cities from San Francisco, Berlin and London as well as from campaigners that say properties that would normally be let on a long-term basis are being rented by landlords for short stays affecting the supply of housing.

    Regulation has moved to include provision for Airbnb properties in some cities. Laws introduced last year in London allow home owners to rent their properties for up to 90 days a year without any form of registration, but opposition remains even in the service’s home city.

    Premises that offer sleeping accommodation for a fee for any period less than 28 days must be licensed, according to Hong Kong’s Hotel and Guesthouse Accommodation Ordinance.

    The maximum penalty for operating an unlicensed guest house is a HK$200,000 fine and two year’s imprisonment. There is also a fine of HK$20,000 for each day the offence continues.

    Enforcement is carried out by the Office of the Licensing Authority under the Home Affairs Department, and a spokeswoman said the office now has a dedicated team to browse the internet for suspected unlicensed guest houses.

    Last year the Office secured 132 convictions relating to unlicensed guest houses, some of which had been rented over the internet.

    Airbnb told us it “encourages hosts to comply with locally set rules and regulations in Hong Kong.”

    The company did not share the number of listings in the city and said Inside Airbnb data had flaws such as the price per night as this was based on an average of available listings rather than what has been booked or what guests are paying.

    I don’t think this is something you should do for too long. It’s not legal … I’m very surprised that we’ve lasted that long

    Airbnb landlord S

    Airbnb also said there was no reliable way to scrape data for the average income for a host each month or the average number of nights booked. The company did not supply the accurate data from its own internal sources.

    Flats or rooms available on Airbnb in Hong Kong range from small, functional rooms in Mong Kok to penthouses with harbour views and houseboats moored in Discovery Bay.

    While the Inside Airbnb data revealed hosts with as many as 80 listings and at least 20 with 22 or more listings, there are hosts in Hong Kong who rent just one flat or one room.

    S, who asked not to use her full name, is a 33-year-old French woman working in retail in Hong Kong, who rents her 500 square foot apartment in Sheung Wan for around HK$1,000 a night fitting Airbnb guests around visits from family.

    She said she has been renting the flat, which she and her husband own and previously lived in, since July last year and has seen 90 per cent occupancy . On average the flat brings in HK$30,000 a month, she said.

    Eight tips for using Airbnb and similar travel websites safely

    While S knows Airbnb is illegal, she feels the company protects her and her guests if there is any damage or dispute. If the laws were changed to allow short-term rentals, she said she would be happy to be taxed if she could still rent through Airbnb.

    Maintaining the flat and organising bookings is time consuming, S said, as she likes to provide a good service to her guests, but she does not see it as a long term plan.

    “I don’t think this is something you should do for too long. It’s not legal. I might rent it out on a permanent basis,” she said. “I’m very surprised that we’ve lasted that long.”

    Another Airbnb host, who asked to be referred to as Mary, rents out her spare room in the two-bedroom flat she shares with her boyfriend in Sheung Wan for 15 days each month to offset the rent.

    Mary lets the room for HK$500 to HK$600 a night and has made between HK$6,000 to HK$7,000 each month since late last year.

    She said her landlord does not know about the couple using Airbnb, but she is not concerned about the legality of Airbnb, even after a friend was evicted by their landlord for using the service.

    Most of the guests from mainland China are respectful, Mary said, although the couple did once come home late to find chaos in their living room.

    “We just opened the door and found stuff all over the living room. The luggage, some bath towels on the sofa, a bra hanging on my room door,” she said.

    “They were quite surprised to see us. So we kindly asked them to maybe put the stuff in their room.”

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  • Exhibition industry contributes $6.8 billion to Hong Kong’s economy

    Exhibition industry contributes $6.8 billion to Hong Kong’s economy

    Findings from the latest Economic Impact Study on the contribution of Hong Kong’s exhibition industry to the economy in 2014, released today, contained encouraging news for the industry and for Hong Kong. Overall, the study reveals that the exhibition industry contributed an impressive HK$52.9 billion (US$6.8 billion) directly and indirectly to Hong Kong’s economy in terms of expenditure, equivalent to 2.3% of the city’s total GDP for the calendar year 2014. This represents strong positive growth by comparison with the figures from the previous Economic Impact Study, covering 2012.

    At HK$52.9 billion (US$6.8 billion), the expenditure effects of the exhibition industry in 2014 were up by 29% from 2012, at a CAGR of 13.9%. A significant part of this was contributed by the direct spending of international exhibitors and exhibition visitors, who according to the study tend to spend 61% more per visit than the average overnight tourist visitor to Hong Kong, with their spending focused in the retail, hotel and F&B sectors.

    The Study, commissioned by the Hong Kong Exhibition & Convention Industry Association (HKECIA), also shows that apart from direct economic benefits in terms of expenditure, the exhibition industry also provided equivalent of around 83,500 full-time jobs in the exhibition industry and other service and supporting sectors including hotel, F&B, retail, stand design and construction, and logistics and freight forwarding.

    In 2014, the fiscal benefits (i.e. benefits arising from various government taxes associated with exhibition activities and participants) contributed by the exhibition industry amounted to HK$2.1 billion (US$269.9 million).

    Commenting on the findings, Chairman of the HKECIA, Mr Stuart Bailey said, “We welcome this Study and the results because, once again, it highlights just how important our industry is for Hong Kong. The study shows in great detail the many ways in which exhibitions fuel Hong Kong’s wider economy – for example by spinning off economic benefits and extensive workforce to supporting industries, and attracting high-spending international business visitors to the city. The Study also reveals that overseas exhibition exhibitors and visitors continue to spend more than international overnight tourists. We should put efforts in making them visit the exhibitions in Hong Kong regularly.”

    Mr Bailey continued, “To continue providing Hong Kong with benefits at this level, our exhibition industry needs to remain attractive, efficient and competitive. We must continually be looking for ways of differentiating ourselves from regional competitors, in terms of things like providing premium exhibition space, ample capacity, and exceptional value-added services. I hope our policymakers will take the findings of this Study into account as they plan for the infrastructure and facilities that Hong Kong needs in the years to come.”

    This is the sixth in a series of Economic Impact Studies, which have been carried out biennially since 2004. It was once again conducted by KPMG Advisory (Hong Kong) Limited, a respected independent research consultancy.

    KEY FINDINGS OF THE ECONOMIC IMPACT STUDY 2014:

    Economic impact of Hong Kong’s exhibition industry in 2014 and 2012

    Area Benefits (2014) Benefits (2012) Compound Annual Growth Rate (CAGR)

    Expenditure effects HK$52.9 billion
    (US$6.8 billion) HK$40.8 billion (US$5.2 billion) 13.9%

    Fiscal impact HK$2.1 billion
    (US$269.9 million) HK$1.4 billion
    (US$179.9 million) 20%

    Employment 83,500 FTE 69,600 FTE 9.6%

    Expenditure effects continue to grow due to growing visitor number and expenditure

    Hong Kong’s exhibition industry contributed expenditure effects of around HK$52.9 billion (US$6.8 billion) to the Hong Kong economy in 2014, up by 29% from 2012, representing a CAGR of 13.9%. This was equivalent to 2.3% of Hong Kong’s GDP, up from 2.0% in 2012.

    – HK$52.9 billion (US$6.8 billion) – up by 29% from 2012, representing a CAGR of 13.9%.

    – Direct expenditure covers expenditure by Visitor Personal (exhibition visitors) and Business Related (exhibition organisers and exhibitors) and amounts to HK$26.5 billion (US$3.4 billion).

    – Visitor expenditure remains the largest expenditure segment at HK$16.1 billion (US$2.1 billion) in 2014, representing a CAGR of 22.0% from 2012. It is because of a significant increase in the number of visitors from outside Hong Kong in 2014 and an increase of the average spending by visitors.

    – Visitor personal expenditure spilt between international and domestic spending is around 93% to 7% (the spilt was 92% to 8% in 2012).

    – Retail, hotel and F&B sectors were the largest recipients of director visitor expenditure, accounting for 67% of the total visitor personal expenditure.

    – Business-related (exhibition organisers and exhibitors) expenditure amounts to HK$10.4 billion (US$1.3 billion) in 2014.

    Fiscal impact grows with increased visitor and business spending
    The tax take enjoyed by the Hong Kong Government in 2014 as a result of exhibition activities is estimated at around HK$2.1 billion (US$269.9 million), based on the total expenditure effects of HK$52.9 billion (US$6.8 billion).

    Derived from three taxes:

    – Profits tax: HK$961 million (US$123.5 million)
    – Salary tax: HK$1.0 billion (US$128.5 million)
    – Airport tax: HK$88 million (US$11.3 million)

    Equivalent of 83,500 full time jobs provided by the exhibition industry

    Full-Time Equivalent (FTE) employment amounted to around 83,500 in 2014, representing a CAGR of 6.5%, up from 69,600 in 2012.

    – Around 3,400 FTEs, or 4%, were directly employed by exhibition organisers and venues.

    – Remaining 96%, or 80,100 FTE jobs was provided across various supporting sectors. Amongst this group, around 57% of the FTE jobs created came from retail, hotel and F&B. Other supporting industries such as international transport, stand contractors, advertising and others accounted for the remaining 43%.

    International exhibition visitors and exhibitors contributed more than overnight tourists

    The report showed that international exhibition visitors and exhibitors spent on average 61% more than overnight tourists.

    – International exhibition visitors spent an average HK$12,776 (US$1,642) per visit; international exhibitors spent an average HK$12,829 (US$1,649) per visit; compared to overnight tourists spent an average of HK$7,960 (US$1,023) per visit.

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  • Chinese retail real estate crushed

    Chinese retail real estate crushed

    One of the under discussed aspects of rising real estate prices is the attendant rising rents amid a brick-and-mortar retail slowdown. In 2015, the top 100 chain stores saw sales growth of only 4.3 percent.

    Locally, in Beijing the smaller mom-and-pop retail shops as well as national chains are being forced out by high rents, as rental agreements expire and the minimum increases are at least 100 percent. Mix in shifting consumer behavior, particularly the popularity of online shopping, and it is a brutal environment for the least efficient retailers.

    A reporter for the Beijing Evening News heads to Xinjiekou Beida Street to see the impact on the ground.

    Yesterday afternoon, just the beginning of autumn (Liqiu August 7-22) of Beijing is still hot. From Jishuitan subway station out along Xinjiekou North Main Street South a rough count shows about ten small stores at least half with the words “sale”, “clearance” and even more than one “contract expiration” two or three family has to pull the shutter doors, completely closed shop closed state. The old familiar clothes shop has been replaced by a shop selling steamed buns and meat patties. A clothing store retreated from higher rental shops along the street to the alley inside, to attract customers it has a “Grand Sale” promotion red sign hanging.

    Contact by telephone sublease front of the store, correspondent to turn to a store owner. He told reporters that although the lease is to expire in April next year, but because of the difficult business environment, ready to move up, “mainly rents are too high.” The owner said, Xinjiekou traffic here also, but his rented storefront upper and lower rent would more than 1.5 million yuan a year, an average of 129,000 yuan a month, plus the prior renovation costs, operation stress is too great. Now the shop is handbags sale, sell a single inexpensive earn more than twenty yuan, the most expensive also more than fifty yuan. Even under the most expensive 50 yuan terms, without considering other costs, the shop must to sell 2580 each month to pay the rent. The boss said, in order to share the rent pressure, a lot of shops in this street are sharing the rent two- and three-ways.

    Chain stores are feeling the pressure as well:

    In fact, more than street shops closed tide appears, district located in Daphne, Metersbonwe, Ning [ -0.73% ] , Jeanswest and other brand shoes and apparel shops are also rapidly reduced stores. According to Daphne released the first half of 2016, a profit warning report shows only the first half of this year, Daphne net off store 450, including 400 direct sales stores and 50 franchise stores. Once all the rage Metersbonwe business situation is not optimistic about 2013 sales stores and franchise also has nearly 5000, the end of 2015 has been remaining 3700, store sales decreased by about a quarter. Jeanswest in the past 4 years has closed 1012 stores, at the end of 2015 had only 2249 retail stores.

    In the micro-channel circle of friends spread a worldwide brick-and-mortar retail death list, it is revealing physical retail bleak. According to this list were killed in the first half 2016, a second-tier cities major retail companies closed shop more than eighty percent. China Chain hundred reports China Chain Store & Franchise Association released statistics also show that in 2015 the chain of hundred sales volume of 2.1 trillion yuan, an increase of only 4.3%, the lowest ever one. Department stores even have negative growth of -0.7%.

    China Chain Store & Franchise Association, the relevant responsible person said, “This year the store is really a life and death to the moment”, but specialty stores, convenience stores have achieved double-digit growth.

    Entity is not fully closed shop because of the impact of the electricity supplier, there are real weak economic growth, labor costs, rental costs, taxes, weak profits and other reasons. In the late 1990s, chains began a large expansion, rental contracts generally expired in 10 to 15 years, these contracts are now expiring and the rent is at least doubling, some low-margin supermarkets, department stores have been unable to renew the lease.

    Another issue is the failure to embrace changes in the market:

    Beijing Zhi future starting from Consulting Group founder Li pointed out that the impact of the electricity supplier, rent increases, etc. are one of the most direct reason. But more than the rent, labor, electricity providers more powerful impact, and is continuing under the influence of these factors, changes in consumer spending habits occurred. More important reason is consumer behavior, consciousness, the pursuit of consumer convenience, reliance on technology and the like. On the other hand, traditional commercial aspects of the transition moves more slowly. Department stores these years has been to break, suffer not found the right ways, not kept pace with changes in consumers.

    Li Zhi said that from the domestic and international experience, the current transformation of department stores there are two main directions. On the one hand is to break through the high-end direction, shrinking front, the focus is more on the line, service requirements are relatively high business forms; in the other direction is toward a more pluralistic, more inclusive development, to provide similar shopping mall such a large, integrated leisure experience scenes business forms.

     

  • Aeon to accelerate Myanmar supermarket business

    Aeon to accelerate Myanmar supermarket business

    Aeon will open new supermarkets in Myanmar at a faster clip over the next five years, according to business plans announced Monday, with shopping centers also under consideration.

    The Japanese retail group recently established supermarket chain Aeon Orange, a joint venture with Creation Myanmar Group of Companies. The 14 supermarkets purchased from CMGC will be renovated, and the first new Aeon Orange store is to open within the year. Openings will rise to 10 new stores annually after five years.

    The Aeon Orange markets will be roughly 1,000 sq. meters. But for urban areas, smaller stores of 100 sq. meters to 500 sq. meters will open on an experimental basis. The supermarket operator will source items by tapping CMGC’s more than 600 business partners and Aeon’s procurement system established in Thailand.

    Aeon President Motoya Okada also said that “opening up shopping centers is vital” for the future, expressing interest in capitalizing on the company’s biggest strengths.

    “We cannot delay in such a high-potential market,” Okada said, hinting at plans to open a large-scale shopping center in Myanmar like those Aeon operates in Japan and other countries. The company will keep a close eye on changes to restrictions for foreign investment.

    Aeon’s international business segment slumped during the year ended in February with an operating loss of 2.4 billion yen ($23.4 million). A slowdown in Malaysia, one of Aeon’s largest overseas markets, is deemed responsible and increased the urgency to develop a profitable new market.

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  • SingPost eCommerce growth, investment shape results

    SingPost eCommerce growth, investment shape results

    SingPost eCommerce delivered soaring sales growth – and expenses – in the last quarter.

    Revenue in the three months to June 30 grew a robust 30.9 per cent to S$333.4 million, buoyed by continued expansion of cross-border eCommerce-related activities, and the inclusion of contributions from new subsidiaries.

    But net profit attributable to equity holders declined 23.0 per cent to $35.9 million, due largely to one-off gains from the divestments of Novation Solutions and DataPost HK in the corresponding period last year. Underlying net profit, which excludes one-off items, was down 11.2 per cent, due to investments in business transformation.

    Interim group CEO Mervyn Lim said the company continued to invest in its business transformation and that will take time to contribute materially to earnings.

    “We are focused on executing our strategy to create value from our acquisitions and build an integrated global eCommerce logistics ecosystem. SingPost’s strategy to protect the postal core and grow its eCommerce logistics network remains on track.”

    eCommerce-related revenues from across the postal, logistics and eCommerce segments more than doubled from $73.1 million to $164.1 million and now make up 49.3 per cent of group revenue – up from 28.7 per cent last year.

    “The sharp increase reflects continued expansion in cross-border eCommerce-related activities across the group, as well as the inclusion of new US subsidiaries TradeGlobal and Jagged Peak,” the company reported.

    “Correspondingly, overseas revenues rose to make up 50.2 per cent of group revenue, up from 37.8 per cent last year. Increased cross-border eCommerce-related activities led postal revenues to a 1.5 per cent rise, despite the deconsolidation of subsidiaries divested during the previous financial year.

    International mail revenue was up 30.3 per cent to $65.5 million, while domestic mail revenue declined 4.3 per cent to $64.0 million due to lower volumes.

    Logistics revenue rose 11.9 per cent to $156.7 million, with steady organic growth at Quantium Solutions and CouriersPlease, as well as the inclusion of a new subsidiary under Famous Holdings.

    Revenue growth for the eCommerce segment was due mainly to the consolidation of new US subsidiaries, TradeGlobal from November 2015 and Jagged Peak from March 2016.

    Operating losses from the segment increased from $1.9 million to $3.5 million as contributions from the newly acquired US subsidiaries were offset by continued investments in eCommerce IT and operational capabilities, as well as marketing and sales efforts in the US to build scale. Beyond these direct contributions, the eCommerce segment was an important driver of warehousing, freight, last mile delivery and customer care services for the logistics segment.

    Rental and property-related income decreased 8.6 per cent to $9.7 million due to the loss of retail rental income from the redevelopment of SPC retail mall, which is due for completion by mid-2017.

  • Carousell raises $35m for expansion

    Carousell raises $35m for expansion

    Singapore-based online marketplace Carousell has raised US$35 million in a funding round led by Rakuten Ventures.

    Other investors in the Series B funding round included Golden Gate Ventures, Sequoia India and 500 Startups.

    Founded in 2012, the Carousell app lets people buy and sell a variety of items including beauty products, fashion, lifestyle gadgets, furniture and home appliances. Sellers upload photos of items they wish to sell while buyers use the chat function to buy.

    Carousell will use the new funds to speed its growth into new markets, strengthen its product and engineering capabilities and build a “world-class” team, says co-founder/CEO Quek Siu Rui. The company has just hired former AirBNB Southeast Asia MD Chai Jia Jih to oversee its international expansion.

    So far Carousell has raised about $41.8 million, and is available in 13 major Asian cities including Jakarta, Kuala Lumpur, Singapore, Taipei and, most recently, Hong Kong.

    Its marketplace had more than 35 million listings globally as of the second quarter this year, with Quek claiming it has gathers 70 listings a minute.

    To stand out from its competition, Carousell puts emphasis on speed. Quek says it takes as little as 30 seconds to post a listing on the marketplace, and users can communicate within the app, eliminating the need for messaging apps or emails.

  • Asia leads Burger King sales growth

    Asia leads Burger King sales growth

    Burger King sales are growing faster in Asia than in any other part of the world, reports parent Restaurant Brands.

    Sales in Asia rose 5.3 per cent, according to the company’s second quarter earnings data released overnight. Latin America sales rose 4.9 per cent. The performance in those two markets was enough to offset a 0.8 per cent decline in same-restaurant sales across the US and Canada, resulting in flat global systemwide sales growth.

    The success in Asia comes at a time when rivals Yum Brands (parent of KFC and Pizza Hut) and McDonald’s are struggling to maintain growth in Asia, where both companies are trying to sell long-term franchise rights.

    It also partly explains why Restaurant Brands this week announced a priority of expanding its Tim Hortons coffee cafe brand into Asia, with the Philippines the first stop.

    The Asia and Latin American figures were high points in a result best described as “adequate”.

    However, Neil Saunders, CEO of Conlumino, observes that although the headline result of a 0.2 per cent decline in overall revenue looks somewhat gloomy, this is mostly the consequence of a strong US dollar and weak Canadian dollar, which especially affected revenues from Canadian-based Tim Hortons.

    “The underlying numbers are slightly better, with both divisions in positive territory on a comparable sales basis and system-wide sales up by 0.6 per cent even after the impact of exchange rate fluctuations.”

    Saunders says the loss of sales momentum from previous quarters is in line with recent numbers from rivals like McDonald’s and Yum.

    “This trend is being driven, primarily, by a slowdown in spending on eating out by American consumers.  The softness in the US market is disappointing given the initially positive reaction to menu changes and the introduction [by Burger King] of hot dogs. It underlines the fact that menu change and innovation is not now something that can be done periodically: fast food players need to see this as a constant process that has to be supported by ongoing promotions and marketing activity.”

    Saunders believes McDonald’s continues to hold a slight edge over Burger King, and is doing more to shake up its traditional business model to maintain consumer interest and drive growth.

    “All that noted, the one saving grace for Burger King is good cost control which allowed [pre-tax earnings] to grow by 3.7 per cent this quarter.

    “Overall, Restaurant Brands continues to make progress; but with spend tightening and competition intensifying it now needs to up the pace of innovation if it is to grow further,” concluded Saunders.

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  • Time Warner signs up for Hulu joint venture

    Time Warner signs up for Hulu joint venture

    Time Warner will become a 10% owner of Hulu, joining The Walt Disney Company, 21st Century Fox, and Comcast in the joint venture.

    Turner’s entertainment, sports, news and kids networks including TNT, TBS, CNN, Cartoon Network, Adult Swim, truTV, Boomerang and Turner Classic Movies will be available live and on-demand on Hulu’s new live-streaming service, which is slated to launch early next year.

    With no set-up costs or installation, Hulu’s new service will offer an intuitive and personalized interface, and instant access to live and on-demand content, across hundreds of living room and mobile devices.

    Hulu will continue its current offering of ad-supported and ad-free subscription video on demand products to complement both traditional pay TV packages as well as the new streaming service.

    Also, the company said it remained focused on acquiring iconic and award-winning programming like Empire, Homeland, Seinfeld, Curious George, South Park and Fear The Walking Dead, as well as creating original programming that builds upon its success with shows such as The Mindy Project, The Path, Difficult People, 11.22.63 and the Golden Globe-nominated Casual.

    “Our investment in Hulu underscores Time Warner’s commitment to supporting and developing new platforms for the delivery of high-quality content and great consumer experiences to audiences around the globe,” said Jeff Bewkes, chairman and CEO of Time Warner.

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  • China’s LeEco acquires US-based Vizio for $2b

    China’s LeEco acquires US-based Vizio for $2b

    LeEco entered into a definitive agreement to acquire Vizio for $2 billion, with the latter’s hardware and software businesses to be operated as a wholly owned subsidiary.

    Meanwhile, Vizio’s data business, Inscape, will spin out and operate as a separate, privately owned company.

    “LeEco believes in breakthrough technologies, a complete ecosystem and disruptive pricing,” said Yueting Jia, chairman and CEO of LeEco. “Acquiring Vizio is an important step in our globalization strategy and building our North American presence.”

    The acquisition benefits both companies with Vizio offering LeEco a steady install base of users and a brand that is distributed throughout major North American retail channels.

    Commenting on the transaction, which is expected to close during the fourth quarter of 2016, research firm IHS Technology said the biggest challenge for LeEco will be convincing Vizio’s US retail customers that it will be business as usual during the integration, with no loss of product quality/supply, account service or supply chain discipline.

    IHS said the acquisition will help LeEco and Vizio to optimize their supply chain resources. While TV supply chain relationship for both LeEco and Vizio will likely stay unchanged for the next few years, TV manufacturers that supply products exclusively to Vizio or LeEco may have more opportunities as long as they are cost competitive.

    Also, the acquisition is also likely to impact their competitors, should LeEco decide to apply its current business model in China to North America and other markets.

    The Chinese company focuses on the growth of the paid content subscription, while it sells TV hardware at below manufacturing cost or even provides it for free during promotional periods.

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  • Modern Avenue Group cancels Italian store deal

    Modern Avenue Group cancels Italian store deal

    Chinese distributor Modern Avenue Group (formerly Canudilo) has decided not to proceed with its purchase of the luxury Excelsior Milano department store.

    Modern Avenue, which owns sport couture brand Dirk Bikkembergs, has not given a reason for its change of heart.

    A purchase price of €21.3 million (US$23.7 million) was announced at the end of June for the store, launched in 2012 by Italian group Coin. The deal was to have been finalised this month. With a specific selection of high-end fashion, Excelsior Milano is overseen by Antonia Giacinti, who owns the new boutique collective Antonia.

    The Antonia brand was confirmed last month under an agreement with Modern Avenue, with a view to open five franchise stores over the next four years. The first Antonia store will debut next month.

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  • MobiFone builds 300Gbps packet-optical backbone

    MobiFone builds 300Gbps packet-optical backbone

    MobiFone is leveraging Ciena technology to build the Vietnamese operator’s first high-capacity converged packet-optical  network.

    Currently provisioned with 300Gbps, the network spans more than 1,400 kilometers across the country from Hanoi to Ho Chi Minh City.

    This will help MobiFone provide high-speed mobile broadband services to businesses and consumers in more than 25 local provinces.

    With the network, MobiFone will be able to easily scale and automatically adapt network capabilities.

    Additionally, the network will use Ciena’s intelligent control plane technology to ensure survivability even in the case of multiple fiber cuts.

    ELCOM, a Ciena BizConnect channel partner, provided deployment services for this project.

    “Ciena’s cutting-edge optical platforms enable us to have a state-of-art backbone system. Demand for high-speed fixed and mobile data services, video content and the move to the cloud mean that network services in Vietnam have never been more important,” said Le Nam Tra, chairman of MobiFone.

    “With Ciena supporting the next evolution of the MobiFone backbone we can provide the scale and reach our consumer and business customers need for regional and international connectivity,” said the chairman.

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  • NZ’s UFB network now reaches over 1m premises

    NZ’s UFB network now reaches over 1m premises

    More than one million premises in New Zealand, including households, businesses, schools, and hospitals, are now connected to the government’s Ultrafast Broadband (UFB) network.

    “This means 2.4 million New Zealanders are now able to connect to UFB, which is an outstanding achievement this far into the build,” said Communications Minister Amy Adams as she released the latest quarterly report on the UFB and the Rural Broadband Initiative (RBI) programs.

    The report noted that in the last quarter, approximately 240,000 users were connected to UFB, up 22.4% on last quarter. The uptake nationwide is at 23.9%, which covers 19 of 33 towns and cities.

    “There are now more than 830 new households and businesses connected to fiber every working day – more than one every minute – as New Zealanders realize the benefits of the government’s investment in high-speed broadband,” Adams said.

    “Internet connectivity has become an essential part of the day to day life, and access to faster broadband opens up opportunities across business, health, education and within the local community,” she added.

    The first phase of the UFB program aims to connect 75% of New Zealanders with fiber to the premise by end 2019. The network is capable of peak speeds of at least 100Mbps.

    Meanwhile, the government’s Rural Broadband Initiative (RBI) has also been completed and now benefiting 300,000 homes and businesses.

    The government has invested $300 million investment into the program to improve rural access to broadband connections.

    Adams said prior to the RBI build, only 20% of rural lines were capable of speeds around 5Mbps. With the completion of the first phase of the project, this has been increased to 90% of rural New Zealand households and businesses, with speeds well in excess of the 5Mbps threshold.

    The minister also reported that all New Zealand state and state-integrated schools are now able to connect under RBI or UFB, or the Remote Schools Broadband Initiative. Around 39 rural hospitals and integrated family, centers are able to access peak speeds of 100 Mbps under the RBI.

  • TrueMove to be ordered to set up Pokemon no-go zones

    TrueMove to be ordered to set up Pokemon no-go zones

    Thailand’s telecom regulator has summoned Pokemon master license holder True for urgent meetings today (9 August) and will order True to communicate with the franchise holder to set up Pokemon no-go zones.

    Dtac has confirmed it has also been summoned to give evidence about Pokemon to the NBTC. It is understood that AIS will also be present.

    NBTC secretary-general Takorn Tantasit further said that Pokemon have been appearing in inappropriate places such as hospitals, monasteries and government offices and this has led to chaos as players enter to try and catch them.

    Takorn said that Pokemon Go poses a threat to national security and has led to traffic mayhem.

    Royal Thai Police deputy spokesperson Pol Col Krisana Patanacharoen has called Pokemon Go a national security risk with people entering secure government facilities to hunt down Pokemon. He also said that anyone caught playing the game while driving will be prosecuted and fined.

    The only voice calling for reason came from Education Minister General Daopong Rattanasuwan. General Daopong said he would begin his own Pokemon Journey and play the game before passing judgement though he said it was unlikely he would order a ban on the game.

    “If you do not play Pokemon Go yourself, you will not understand the game. I have heard it is good for exercise,” the general said, referring to the distances of up to 10 km trainers have to walk in order to hatch a Pokemon egg.

    Earlier the Culture Minister Vira Rojpojchanarat came out against Pokemon in religious and historic sites as inappropriate and Election Commissioner Somchai Srisutthiyakorn said it was illegal to enter polling stations to catch Pokemon.

    On the other hand, the Sports and Tourism permanent secretary Pongpanu Svetarundra welcomed Pokemon Go and said that they would place Pokemon and Pokestops at key historic sites to promote tourism. The election commission also warned that catching Pokemon in polling stations is illegal.

    ICT Minister Uttama Savanayana has not made a formal comment for or against Pokemon, but he has spent the day re-tweeting news about Pokemon no-go signs across the globe which suggests he is also anti-Pokemon.

    What is clear is that none of the people in power in Thailand have any clue about how the actual game mechanics work. Nor has anyone clarified what rights, if any, True’s Pokemon license gives it over Niantic Labs’ Pokemon Go.

    NBTC secretary-general Takorn compounded his act of total cluelessness by saying that the game needed to be adapted to Thailand as Thai pavements are narrower than in Japan.

    Takorn clearly believes that Nintendo of Japan created Pokemon Go and placed the Pokestops. California-based Niantic, until recently a Google subsidiary, developed the game and the Pokestops are simply re-used sites from its other augmented-reality game, Ingress the vast majority of which are user-submitted.

    True is the master license holder of the Pokemon franchise in Thailand granted by the Pokemon Company back in December 2014. This includes merchandise and TV rights for TrueVisions, but not the right for a game which was made clear when they first held a press conference about the partnership.

    However the telco has recently said the license includes the rights to Pokemon Go, according to True’s head of content Peerathon Kasemsri. True CEO Supachai Chearavanont said there would be special in-game items for TrueMove subscribers and perhaps even a unique Thai Pokemon. None of that has happened.

    When Pokemon go was launched in Thailand through the Apple and Google stores, all telcos had equal access to the game.

    For its part, TrueMove is running a big Pokemon Go promotion campaign under a slogan, “True home of Pokemon” but other than offering an e-book and a Pokemon-branded data package for trainers (which is a simple 5 GB data package that is in any way special or tied to Pokemon Go), nothing exclusive has been launched yet to tap into its Pokemon franchise master license.

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  • Globe to provide free Wi-Fi in LRT1 stations

    Globe to provide free Wi-Fi in LRT1 stations

    The Philippines’ Globe Telecom has agreed to provide free Wi-Fi services in all 20 stations of metro Manila’s Light Rail Transit System-Line 1 (LRT1).

    The company has agreed to provide Wi-Fi services to the roughly 400,000 daily LRT-1 passengers as well as Light Rail Manila Corp (LRMC) employees.

    Globe will also provide a fiber network extending the length of the system, covering all LRT-1 stations and LRMC’s depot in Pasay City, and deploy cell sites in each station to improve wireless connectivity.

    Globe Network Technical Group’s SVP for program governance Joel Agustin said the company will use its newly-acquired spectrum in the 700-MHz, 1800-MHz and 2600-MHz bands to provide the capacity required to handle the massive mobile traffic volumes at the stations.

    “As the purveyor of the Filipino digital lifestyle, we, at Globe recognize customer demand for constant connectivity even as they are on the go,” he said. “We are confident that the deployment of free Wi-Fi services in all LRT stations will bring better communication or even improve work productivity for our customers.”

    The operator separately announced that data traffic through the Globe Telecom network grew 35% year-on-year in the first half of 2016 to 151 petabtyes.

    Mobile data revenues surged 46% over the same period to 17.8 billion pesos ($3.66 billion), the operator revealed in its recent results. This comprised 39% of total mobile revenues, up from 27% in 1H15.

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  • Idea Q1 profit slumps 36.1%

    Idea Q1 profit slumps 36.1%

    India’s Idea Cellular has reported a steep 36.1% decline in net profit for its fiscal first quarter to 4.97 billion rupees ($74.4 million), as spectrum and investment costs weighed down the operator’s bottom line.

    But Idea, the nation’s third largest mobile operator, also revealed that its efforts to cut down on promotional offers helped revenue grow 7.9% to 94.86 billion rupees.

    The operator lost around 700,000 mobile subscribers during the quarter, taking its total to 183.2 million, and voice MOUs declined by 1.1% sequentially to 199.3 billion.

    By contrast, due to its high investments in the mobile data segment, Idea reported its highest ever net mobile data user additions of 5 million.

    The operator also recorded mobile data volume growth of 13.2% to 93.1 petabytes, while mobile data revenue grew by 4.1% to contribute 20.6% of total service revenue.

    Over the period, the company added 5,296 4G sites, taking its total to nearly 20,000. The operator’s 4G network now covers a total population of over 150 million across nearly 2,000 towns and villages. The company ended June with over 1.8 million active 4G subscribers.

    Overall 2G, 3G and 4G mobile data penetration has reached 49 million, and Idea reported a blended mobile data ARPU for the quarter of 142 rupees.

    Idea’s capex for the quarter meanwhile reached 10.8 billion rupees, in line with the operator’s projected capex budget for the full financial year of between 65 billion and 70 billion rupees.

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