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Tag: China

  • Rivian CEO Eyes Smaller Electric Vehicles For China, Europe

    Rivian CEO Eyes Smaller Electric Vehicles For China, Europe

    Electric vehicle startup Rivian, which is backed by Amazon and Ford Motor Co, on Wednesday said it plans to follow up its first two products, a full-size pickup and SUV, with smaller models targeted at China and Europe where it may eventually build some vehicles.

    While Rivian plans to begin selling the SUV in Europe in 2022 and China soon after, “what will really drive volume in those markets is the follow-on products” that are smaller and tailored for overseas customers, Rivian founder and Chief Executive R.J. Scaringe told Reuters.

    The smaller models, which are expected to share key components with the pickup and SUV, will “fit some of those other markets really well, in particular China,” Scaringe said.

    “To really scale in those markets as we bring on follow-on products, having a production footprint outside the U.S. is going to be important,” he said. “That’s a ways off.”

    Scaringe added: “We wouldn’t be serious about building a car company if we weren’t thinking about China and Europe as important markets long term.”

    The company’s first plant in Normal, Illinois, has begun pilot production ahead of next year’s launch of three models – the R1T pickup and R1S SUV, which Scaringe described as “halo products” for Rivian, and a large electric delivery van for Amazon.

    Speaking from a room overlooking the assembly line, Scaringe said the former Mitsubishi Motors plant reflects an unusual degree of vertical integration, with room for building motors and battery packs for the vehicles and for further expansion.

    Rivian has said deliveries of the pickup would start in June 2021, while those of the SUV would begin in August. Launch editions of the vehicles are priced at $75,000 (GBP 56,454) and $77,500, respectively, with a 300-mile (480 km) driving range for both.

    The electric pickup market will soon be crowded as Ford, General Motors Co and Tesla Inc, as well as several other startups, are developing similar models. Numerous automakers also are rolling out electric SUVs.

    In July, Rivian, founded in 2009, boosted its war chest with a $2.5-billion investment round led by T. Rowe Price, raising total investment in the startup to $6 billion. Investors include Soros Fund Management, Fidelity and BlackRock, as well as Saudi auto distributor Abdul Latif Jameel Co (ALJ).

    Amazon, which has relationships and deals across the auto industry, led a $700 million investment round in Rivian last year.

    The e-commerce company also ordered 100,000 electric vans from Rivian. The first Amazon vehicles go into production in Normal in late 2021, with all deliveries to be completed by 2024.

    Scaringe said Rivian has begun setting up service centers and will deploy mobile units to handle maintenance and repair work on Amazon’s vans, as well as Rivian vehicles for retail customers.

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  • JD revenue soars with post-Covid online sales boom

    JD revenue soars with post-Covid online sales boom

    Chinese e-commerce company JD.com Inc posted a better-than-expected quarterly profit on Monday as online sales remained strong even after coronavirus-led restrictions were lifted in the world’s second-largest economy.

    The Beijing-based company, which recorded growth across a wide range of product lines, joined competitors Pinduoduo and Alibaba Group in racking up double-digit growth as China’s economy recovers from COVID-19 damage.

    JD.com Chief Executive Officer Richard Liu said its business partners are recovering rapidly as well.

    Last month, data showed that China’s retail sales edged up 3.3% in September from a year earlier, beating analysts’ forecast for a 1.8% growth.

    Sales in JD.com’s product segment, which includes online retail sales, rose 27% to 151.4 billion yuan ($22.99 billion) in the quarter.

    JD.com’s net revenue rose 29% to 174.21 billion yuan in the third quarter ended Sept. 30. Analysts had expected revenue of 170.2 billion yuan, according to IBES data from Refinitiv.

    Excluding items, JD.com earned 3.42 yuan per American depository share (ADS) while analysts had expected a profit of 2.65 yuan per ADS.

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  • Nissan Plans To Invest Heavily In China Luxury Segment, COO Says

    Nissan Plans To Invest Heavily In China Luxury Segment, COO Says

    Japan’s Nissan Motor plans to invest heavily in China’s luxury auto segment, its chief operating officer said on Monday.

    Ashwani Gupta made the comment in an interview during the Reuters Auto Summit teleconference. He also said that while he was satisfied with the automaker’s business in the United States, it wasn’t enough.

  • Pinduoduo sales beat expectations

    Pinduoduo sales beat expectations

    Pinduoduo, China’s largest e-commerce platform for agricultural products, has expanded its online grocery ordering service to most provinces since introducing it in the cities of Wuhan and Nanchang in August.

    Duo Duo Maicai, as the grocery feature is called, was introduced in response to the surging demand for buying groceries online following the onset of Covid-19 in the first quarter. The pandemic-related lockdowns forced many households to seek alternative ways to buy their food and essential supplies as brick-and-mortar shops were closed and movements severely restricted.

    But even after the coronavirus was brought under control and restrictions were lifted, a survey by GlobalData found that 56% of Chinese consumers were buying food and groceries online more frequently than before the lockdowns.

    By 2025, nearly half of China’s grocery shopping is expected to take place online, up from 20% currently, according to Goldman Sachs. The online grocery market is projected to reach 7 trillion yuan in five years, the bank said.

    “We are seeing sustained consumer behavior post-pandemic and expect a further shifting from wet markets to structured retail, together with multiple models and build-out of cold-chain logistics to drive ongoing online share gains in” the fresh and FMCG categories, Goldman Sachs said in a report.

    The boom in online grocery shopping in China is a marked change for a society where going to the local market is woven into the fabric of daily life for many households. But with an increasingly fast pace of life, especially in the bigger cities, more and more consumers are availing themselves of the option to buy their groceries online and picking them up the following day.

    Sensing a seismic shift in consumer preference, internet companies have poured resources into catering to this growing need. Other companies that have gone into the online grocery business include Alibaba, Meituan and Didi, the ride-hailing giant.

    “We believe that grocery shopping in China is undergoing similar structural changes in consumer behavior that we saw in other sectors a few years ago,” Chen Lei, Chief Executive Officer of Pinduoduo, said in the company’s post-results conference call on Thursday. “The presumption that most consumers still prefer to go to the wet markets or supermarkets for their daily essentials has been challenged over the past few months.”

    Pinduoduo reported its first quarterly profit since its IPO in 2018. The company has garnered 731.3 million active buyers in the space of five years, an unprecedented feat for an e-commerce company.

    With Duo Duo Maicai, consumers can place their orders before 11 pm each day and pick up their agriculture products the next day from 4 pm onwards at designated pick-up points. Duo Duo Maicai is available as a mini-program and on the main Pinduoduo app.

    This trend of “planned consumption” is driving a surge in agricultural sales, which are estimated to double this year to at least 250 billion yuan in GMV on Pinduoduo. The company said earlier this year that GMV from agriculture could surpass 1 trillion yuan in five years.

    Logistics

    To ensure that supply can keep up with this increased online demand requires a sophisticated supply chain. China’s agricultural supply chain is characterized by small farms, multiple distribution layers, and wastage at various stages. As a result, distribution costs for agricultural products typically account for 40% of the total cost (60% for fresh produce), compared with about 10% in developed economies.

    To improve the supply chain efficiency, Pinduoduo has invested in optimizing key areas including logistics, warehousing and delivery. The company has developed a nationwide and regional agricultural logistics system to cater to the different needs of consumers.

    In the fast-changing consumer and e-commerce industries in China, companies must stay nimble and cater to their users to survive.

    Comparing the shift in grocery shopping habits to the apparel industry five to seven years ago, Chen said: “No one could have imagined then that a significant number of consumers would use online shopping to choose, try out, and return clothes.”

    “But that’s exactly what we are seeing today.”

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  • Alibaba shoppers shatter Singles Day record

    Alibaba shoppers shatter Singles Day record

    Singles Day on Nov. 11 is an unofficial Chinese holiday. The holiday has surpassed Cyber Monday as the largest online shopping day of the year globally.

    What Happened: Alibaba Group Holding owns the trademark to Singles Day and is the largest participating retailer.

    Yahoo Finance reports that Alibaba has added three additional days to the 2020 Singles Day holiday shopping season. The added dates are Nov. 1, 2 and 3.

    Shoppers can also get an early look Saturday with a countdown gala.

    Alibaba had over 1.3 billion orders in the 24-hour event in 2019.

    Rival JD.com holds a similar Singles Day event. JD.com reported Singles Day sales of $29.2 billion in 2019 spread out over 11 days.

    An estimated 300 million new users are expected to participate in the shopping event in 2020. Alibaba segment Tmall Global is expected to add 2,600 new brands for the event including Prada, Cartier and Chloe.

    Alibaba adding several days could break records.

    A survey from AlixPartners suggests spending will rise, with 39% of consumers saying they would spend more than in 2019.

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  • Alibaba E-commerce sales sky high

    Alibaba E-commerce sales sky high

    Alibaba Group beat third-quarter revenue estimates, driven by e-commerce growth after China emerged from coronavirus lockdowns, and said it was assessing the suspension of its affiliate Ant Group’s listing.

    China’s surprise suspension of Ant Group’s planned $37 billion Shanghai initial public offering (IPO) was seen by some analysts and investors as an attempt by Beijing to cut founder Jack Ma and his financial services empire down to size.

    Alibaba CEO Daniel Zhang said during an earnings call that added that Alibaba is “actively evaluating” the impact of the Ant Group IPO’s suspension on its business and will “take appropriate measures accordingly”.

    Ant Group said separately it would decide whether to restart its IPO after fully reviewing and evaluating relevant measures.

    Alibaba’s results also coincided with markets awaiting the outcome of the US presidential election results, with Democrat Joe Biden edging closer to victory.

    Under Donald Trump, the world’s top two economies have clashed over trade, forcing some Chinese companies to put off US IPOs and list on exchanges close to home.

    Revenue at Alibaba’s cloud computing business, a focus area for the company, jumped 60 percent to 14.9 billion yuan (US$2.25 billion), while sales from its core e-commerce business rose 29 percent to 130.92 billion yuan in the reported quarter.

    Net income fell 63 percent to 26.52 billion yuan, as Alibaba had booked a one-off gain last year from its 33-per-cent stake in Ant Group.

    Revenue rose 30 percent to 155.06 billion yuan in the quarter ended September 30, compared to estimates of 154.74 billion yuan, according to IBES data from Refinitiv.

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  • JV arrives to create US$7.9bn Chinese pharmacy giant

    JV arrives to create US$7.9bn Chinese pharmacy giant

    China’s Laobaixing and Yixintang Pharmaceutical Group are in advanced talks to create the country’s biggest drugstore chain via a share swap, three people familiar with the matter said.

    Laobaixing’s founders, Xie Zilong and Chen Xiulan, are expected to have a bigger stake in the merged firm than Yixintang’s founder Ruan Hongxian, said two of the people. Shanghai-listed Laobaixing, formally known as LBX Pharmacy Chain Joint Stock Company and which boasts Tencent Holdings as a backer, has a market value of around US$4.4 billion, while Shenzhen-listed Yixintang is valued at about $3.5 billion.

    The talks have been ongoing for more than three months, the two people said. One person said the firms are aiming to finalize and announce the deal in the coming days, adding that Laobaixing would remain the listed entity.

    The sources declined to be identified as the discussions were not public. Laobaixing, Yixintang did not immediately respond to requests for comment.

    Tencent, which took a 1-per-cent stake in Laobaixing to become a strategic partner this year, has endorsed the merger and is planning to work with the combined firm to speed up implementation of a “smart retail” strategy, according to two people.

    The tech giant is looking at helping with the integration of their online and physical store businesses and will help drive traffic through its messaging service WeChat as well as other platforms, said one person.

    Laobaixing, also backed by private equity firms FountainVest Partners and Primavera Capital, had 6.7 billion yuan ($1 billion) in revenue for the first half, while Yixintang had 6 billion yuan, filings show.

    Together they exceeded the 8.6 billion yuan in first-half sales for a current industry leader, state-backed Sinopharm Holding Guoda Drugstores. Their combined number of stores at around 13,100 would also be more than double Guoda’s.

    China’s drugstore market is, however, highly fragmented. According to market research firm Qianzhan, Guoda had a market share of 2.9 percent last year, ahead of Laobaixing with 2.6 percent and Yixintang with 2.4 percent.

    Both Laobaixing and Yixintang sell pharmaceuticals, traditional Chinese medicine, nutritional supplements, and medical equipment. They also complement each other geographically with Laobaixing strong in central and eastern China while Yixintang has focused on the southwest of China, particularly it’s home province of Yunnan.

    Laobaixing, established in 2001, is 33-per-cent held by its founders. For years it counted EQT as a key backer but the Swedish private equity firm sold its 25 percent stake to FountainVest and Primavera for $557 million a year ago.

    Yixintang, founded in 1981, is 31-per-cent owned by founder Ruan.

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  • Sheng Siong profit climbs but management tempers expectations

    Sheng Siong profit climbs but management tempers expectations

    Listed Singaporean supermarket chain Sheng Siong’s profit soared 54.4 percent in the third quarter to US$23.27 million, riding a wave of increased sales in the grocery sector.

    Revenue jumped 28.9 percent to $239.5 million, while gross profit grew 28.7 percent to $64.68 million, largely off the back of increased home cooking and stocking of pantries throughout, and beyond, the country’s Circuit Breaker period.

    However, with stay-at-home orders easing across Sheng Siong’s markets, this elevated demand is likely to begin to stabilize in the following months, said CEO Lim Hock Chee.

    “Competition in the supermarket industry is expected to remain keen and challenging among the traditional brick and mortar operations and e-commerce platforms, which have gained a larger share since the onset of Covid-19,” Chee said.

    “The risks to supply chain disruption because of Covid-19 and other natural disasters are still there and may lead to higher input prices.”

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  • China sales rebounds for Ralph Lauren, after Covid-19

    China sales rebounds for Ralph Lauren, after Covid-19

    Luxury retailer Ralph Lauren says sales growth on the Chinese mainland returned to pre-Covid-19 rates in the second quarter, increasing by more than 30 percent year on year.

    However sales across greater Asia decreased 7 percent to US$237 million on a reported basis, with same-store sales down by 11 percent, and a 12-per-cent decline in brick-and-mortar store sales partly offset by a 32-per-cent increase in digital commerce.

    Globally, net revenue fell by 30 percent to $1.2 billion, with declines in all regions due to the impact of Covid-19 on consumer shopping behavior.

    But the company achieved a net income of $107 million, down from $182 million in the same period last year.

    Ralph Lauren, executive chairman, and chief creative officer said despite the tough time the world is experiencing he is optimistic the company can “take the great learnings and creativity that have emerged from this time to become even stronger”.

    He said the results reflected the strength of Ralph Lauren’s timeless brand “and the values that have always been our touchstone” are continuing to anchor the business through a time of change and uncertainty”.

    “Looking across the first half of the fiscal year, we continued our elevation journey while fast-tracking connected retail and our company-wide digital transformation,” said president and CEO Patrice Louvet. “We also began the hard but necessary work of simplifying our organizational and cost structures to position the company for future growth.

    “Looking ahead, we will continue to work proactively to deliver an elevated experience that inspires consumers around the world and creates value for all of our stakeholders,” concluded Louvet.

  • Le Saunda roams from profit to loss

    Le Saunda roams from profit to loss

    Chinese footwear retailer Le Saunda saw revenue and profit fall by more than 30 percent in the last six months as the impact of the Covid-19 pandemic ravaged the fashion industry.

    Revenue for the six months to August 31 fell to US$38.7 million, 30.8-per-cent lower than the same period last year, while gross profit fell 32.1 percent to $24.24 million.

    The impact of Covid-19, which severely hit Le Saunda’s main markets of Hong Kong, Mainland China and Macau, led to a $4.4 million overall loss.

    “Overall, during the first half of the financial year, the group changed from profitable to loss-making,” the business said.

    “The group made timely adjustments to its strategy to reduce daily expenses, including a 25-per-cent pay cut for all directors for a period of six months from March and … tapped into emerging Mini Programs and social-media marketing platforms to expand its online sales channels.”

    However, the business’ e-commerce revenue also took a significant hit, down 15.7 percent during the six months.

    And now, with the worst of the virus seemingly behind it, Le Saunda is looking to learn from the “new normal” that has developed – investing in the development of goods in the athleisure space, as customers become more health-conscious, as well as sales and marketing on social media to better leverage social commerce and reach a younger consumer base.

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  • Profit up for Yum China despite Covid-19

    Profit up for Yum China despite Covid-19

    Yum China has reported a flat third quarter to September, with sales up 1 percent year on year to US$2.35 billion.

    The company said operations improved during the period, but sales were still impacted by reduced traffic at transportation and tourist locations, a delayed and shortened school-holiday season, and other lingering effects of the Covid-19 outbreak.

    “Dine-in volume has been recovering, while delivery and takeaway remained popular options,” the company said in a statement. “Our primary focus continues to be safety, efficiency, and driving traffic.”

    The fast-food company, which completed a secondary listing on the Hong Kong stock exchange during the quarter, said it has launched digital and membership campaigns offering strong value propositions to consumers to drive a recovery in sales post-pandemic.

    Yum China achieved productivity improvements and improved operating profits through trimming costs and improving productivity, however, the company now plans to increase staffing levels in the coming months to balance service and efficiency.

    Same-store sales declined 6 percent year on year, excluding foreign exchange, but the results included the consolidation of the Huang Ji Huang chain since April and a further 25 percent ownership of the Suzhou KFC operator since August.

    The company opened 312 new stores during the quarter taking its count to 10,150 at the end of September.

    Operating profit rose 86 percent from $300 million to $556 million (excluding foreign exchange impact), largely due to the gain from remeasuring the contribution of the Suzhou KFC business, of which Yum China now owns 72 percent. Net income increased 96 percent to $439 million.

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  • Korloff opens new store in Shanghai

    Korloff opens new store in Shanghai

    French jewelry house Korloff has opened its first flagship store in Shanghai.

    Located at Shanghai Avenue Mall, the store offers Korloff’s full range, including fine jewelry, bridal collection, watches, small accessories, and fragrances.

    The store’s facade features glass doors and windows highlighted with back frames. The interior uses beige and brown as its theme colors.

    The launch is part of the brand’s international expansion plan and its strategy to strengthen its presence across Asia. According to Korloff, the company aims to expand in more international markets in the coming months.

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  • Puma launches crossover with Chinese streetwear brand Attempt

    Puma launches crossover with Chinese streetwear brand Attempt

    Puma has collaborated with Chinese streetwear brand Attempt to launch a “hacking the archive”-themed range.

    The Puma x Attempt Collection offers a selection of footwear, apparel, and accessories, featuring both classic Puma style and Attempt’s signature minimalist and functional designs.

    “The designs feature deconstructed elements with technical designs and the tonal color palette comes alive with bold color pops, resulting in a collection that is fresh, unexpected, and raw,” the company described.

    The collection also offers a mix of Puma footwear, including the RS-2K, Oslo Pro, and Style Rider. The apparel range features five tees and outerwear items for the warmer months. The accessories range consists of a crossbody bag and a cap.

    Founded in 2015, Attempt is known for its casual clothing featuring minimalist aesthetics with functionality and fresh styling.

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  • Huawei’s breakthrough Petal Search app helps users install content banned by the U.S.

    Huawei’s breakthrough Petal Search app helps users install content banned by the U.S.

    You might remember that back in May, we told you about Huawei’s plan to work around the manufacturer’s inclusion on the U.S. Commerce Department’s Entity List. The U.S. put the company on this list because it considers the firm to be a national security threat. Placed on the Entity List, Huawei is not allowed to access its U.S. supply chain which means that it cannot license the Google Mobile Services version of Android. It also means that Google’s Android apps like Search, Maps, YouTube, the Play Store, Drive, and Gmail can not be installed on a Huawei phone. Most of Google’s apps are banned in China anyway, so only the international variant of the company’s phones are impacted.

    The Entity List placement also means that Huawei cannot work with U.S. firms including app developers. So Huawei’s phones, both inside and outside China, do not give users a selection of popular U.S. based apps to use. For example, in Huawei’s own AppGallery Android app distribution platform, you won’t find apps like Amazon, Snapchat, Speedtest.net, and AccuWeather. But as we pointed out in May, Huawei developed a new search engine called Petal Search. Petal Search will not only list “daily weather forecasts and top news; live sports scores and schedules; video, image, and music searches; and financial news and stock market updates.” When it comes to travel, it will “search millions of hotels worldwide and book rooms; and check flights and travel info for top global destinations.” Petal Search will also “look up local services and businesses with comprehensive directories.” But that isn’t the exciting cool feature.

    When you open up Petal Search and tap in the name of an app, the search engine looks for the one that you have in mind. If it finds the title in the AppGallery, it will be installed on your Huawei handset. If Petal Search can’t find a listing, it will search for it on third-party app stores. If it finds the app, a simple tap of the Install button will handle the task of downloading it on your phone.

    When we first heard about Petal Search, we told you that the idea behind it was to help Huawei customers find and install apps that are blocked due to the U.S. ban. These include Google’s own Android apps and U.S. developed social media and entertainment apps. And now, according to Forbes, Petal Search has become a full-service search engine as well. Petal even got some promotion during last week’s unveiling of the new flagship Mate 40 series.

    With the U.S. continuing to be offended by Huawei’s will to survive, the company could end up having to leave the smartphone industry and concentrate on providing an ecosystem to other phone manufacturers. Huawei created its own Mobile Services ecosystem that has over 700 million users, a 32% annual gain from last year. More importantly, the number of app developers registered by Huawei has risen 76% year-over-year to 1.6 million. This is of major importance because the larger the number of developers working on content for HMS, the more of a challenge Huawei becomes to other phone manufacturers.

    The main challenge that Huawei has at the current time is finding a foundry that can produce cutting-edge chips without using American-made technology. Back in May, the U.S. Commerce Department changed its export rules preventing foundries like TSMC from shipping chips to Huawei without a special license issued by the U.S. Recently it was discovered that the Chinese manufacturer ordered 15 million units of its 5nm Kirin 9000 chipset but received only 8.8 million of them. The new export rule started to take effect on September 15th.

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  • Geely’s New EV Plant Will Build Premium Polestar Cars

    Geely’s New EV Plant Will Build Premium Polestar Cars

    An electric vehicle (EV) factory planned by the Chinese automaking group Geely will produce cars under the premium Polestar marque, two people with direct knowledge of the matter told Reuters on Monday. Zhejiang Geely Holding Group Co Ltd plans to build a plant with an annual manufacturing capacity of 30,000 premium EVs in the western city of Chongqing, run by a wholly-owned, newly registered company, showed documents on its website.

    Geely and Polestar declined to comment on the marque. The plan comes as foreign automakers including BMW AG and Tesla Inc expand EV production in the world’s biggest market, sourcing major EV components such as batteries locally and often exporting the end product.

    Hangzhou-based Geely is China’s most internationally known automaker. It owns Volvo Cars and Lotus, almost half of Proton and 9.7% of Daimler AG. Its Hong Kong-listed Geely Automobile Holdings Ltd is planning a Shanghai float.

    Through wholly-owned company Polestar, it builds low-volume Polestar 1 hybrid performance cars in the western city of Chengdu and Polestar 2 volume sedans in Taizhou in the east.

    It also plans to begin production of the Precept sedan, displayed at this year’s China auto show.

    Polestar aims to eventually offer bigger, more sporty vehicles at its showrooms, which currently span nine countries and whose number it plans to raise to 45 from 23 by year-end.

    Polestar Chief Executive Thomas Ingenlath told Reuters the firm is scouting markets in Asia-Pacific and the Middle East.

    Geely is also building a factory in China to make sport-utility vehicles under the Lotus marque, Reuters reported.

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