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  • Kobe Bryant joins Katy Perry in 11.11 launch

    Kobe Bryant joins Katy Perry in 11.11 launch

    Legendary Los Angeles Laker Kobe Bryant will join Katy Perry as the headline celebrities in Alibaba’s 11.11 Countdown Gala Celebration on November 10.

    US pop-rock band OneRepublic has also been confirmed, likely to perform its hit song Counting Stars

    11-11

    Alibaba had earlier named Katy Perry as a “global ambassador” for the gala, which is being held in Shenzhen in the hours leading up to the eCommerce giant’s 11.11 Global Shopping Festival’s midnight kickoff. The American singer will perform a number of her chart-topping singles, including her most recent, Rise.

    Mixing sports stars, singers and actors is a variety show formula that has been long dormant in the West as broadcast entertainment, Alibaba’s eclectic event – a way to warm up online shoppers for the world’s largest online sale – drew 100 million Chinese viewers in its debut last year.

    Alibaba Group chief marketing officer Chris Tung called the gala “a global carnival, a world-class performance that involves the audience throughout the event with many touch points and is like nothing else you have experienced”.

    It’s those touch points that Alibaba is focusing on in order to make the four-hour broadcast something viewers can participate in instead of just watch. One interactive feature planned for the show will give the audience a chance to win prizes by shaking their phones with the Mobile Taobao and Tmall apps open during key moments. Alibaba will also offer a sort of “choose your own adventure” feature where viewers can vote to decide how some segments of the gala play out.

    While the Hangzhou, China-based company did not release the full roster of celebrities expected to appear on the live broadcast, choosing instead to tease out names over the coming week, Alibaba did say that Beth Behrs, star of US sitcom 2 Broke Girls, which is wildly popular in China, and German footballer Thomas Muller are on the list.

    Alibaba has recruited Hollywood talent to produce the gala. David Hill, who is known for his work on the Oscars, NFL Super Bowls and reality show American Idol, was brought on board earlier this month to oversee the event. “Combining Alibaba’s technology with my experience at other global events we are going to develop a spectacle like no other,” Hill said in the statement.

    In addition, four one-minute time slots will be awarded to those merchants, consumers and charities who submit the best advertisements or promotions to Alibaba. Those winning videos will be aired during the gala.

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  • U-Freight welcomes call for global e-trading platform

    U-Freight welcomes call for global e-trading platform

    The U-Freight Group has welcomed the call for the establishment of an electronic world trade platform (eWTP) whose objective would be to reduce barriers to make it easier for small and medium-sized enterprises to expand their trading capabilities worldwide.

    The call was made recently by Jack Ma, executive chairman of e-commerce giant Alibaba Group, who believes that such a platform is going to be very fundamental for the next 20 or 30 years for the world economy, and for this century.

    U-Freight agrees that e-commerce can significantly reduce costs for SMEs and also ease access to customers. It believes that such an eWTP will provide SMEs with a transparent and open platform to sell their goods and services globally, thus facilitating their inclusion in cross-border e-trade.

    In Ma’s vision, businesses would create hubs for e-commerce and governments would create virtual free trade zones for small businesses. The eHubs would allow small businesses in one country to sell to consumers in another, with low or no import duties, speedy customs clearances and better access to logistics. When connected, this would create a global network that becomes the eWTP.

    U-Freight Group ceo, Simon Wong says that his company has been showing its commitment to developing e-commerce logistics and in respect of cross-border e-commerce in China, U-Freight has already been qualified by China Customs and CIQ as a licensed Cross-border E-Commerce Enterprise, as well as a Cross-border E-Commerce Logistics Service Provider.

    “We are now concentrating on leveraging the experience that we have already gained in Chinese cross-border trade to make sure that our other strategic hubs in Asia, Europe and North America are equipped to handle the boom in business that will be associated with ever-growing global e-commerce.

    “What Mr Ma is proposing is a platform that can lower the threshold and enable more people around the world to conduct trade by reducing barriers and making it easier for SMEs to expand their trading capabilities.

    “U-Freight believes that such an eWTP would provide SMEs a transparent and open platform to sell their goods and services globally, thus facilitating their inclusion in cross-border e-commerce and leading to a massive growth in cross-border shipments.

    “That’s why we are making significant investments to make sure that we are ready to deliver the logistics services that will be required.”

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  • Indonesia asks Alibaba’s Jack Ma to advise its e-commerce development

    Indonesia asks Alibaba’s Jack Ma to advise its e-commerce development

    Indonesia has asked the chairman of China’s Alibaba Group Holding Ltd, Jack Ma, to act as adviser in the development of the Southeast Asian country’s nascent e-commerce industry, according to a video released by the government.

    Indonesia has the world’s fourth-largest population, boasting a young, internet-savvy demographic, and a thriving e-commerce market that is increasingly attracting global investors.

    Earlier this year, Alibaba bought a controlling stake in Southeast Asian online retailer Lazada Group for around $1 billion, while a group of investors led by private equity firms KKR & Co LP and Warburg Pincus LLC poured more than $550 million into Indonesian ride-hailing start-up Go-Jek.

    To promote growth in the e-commerce industry, the government is setting up a “steering committee” consisting of 10 ministers for which it has asked Alibaba’s Ma to be an adviser, Communication and Information Minister Rudiantara said.

    “The thinking behind this is to make Indonesia’s positioning in the international marketplace more prominent,” Rudiantara said in a video released by the state secretariat. The minister, like many Indonesians, only uses one name.

    Rudiantara is part of President Joko Widodo’s delegation attending the G20 summit in the Chinese city of Hangzhou.

    An Alibaba spokeswoman confirmed that Ma was asked to be adviser to Indonesia’s e-commerce steering committee, but declined to say whether he had accepted the offer.

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  • Alibaba Group Holding Ltd Should Stop Fooling Stakeholders on Counterfeits

    Alibaba Group Holding Ltd Should Stop Fooling Stakeholders on Counterfeits

    On Tuesday, founder and chairman of Alibaba Group Holding Ltd, Jack Ma wrote to its investors, customers, and traders highlighting that his recent words about counterfeited goods was taken out of context and his company has no tolerance for fake goods trading on its e-commerce portal.

    Mr. Ma said in his article: “When Alibaba went public in 2014, I told our customers, employees and investors that what we had earned was trust—in myself, my team, and our company’s mission, vision and values.” Mr. Ma further highlighted that with trust come great responsibility and Alibaba’s responsibility is to protect all of its stakeholders.”

    Last week, Mr. Ma released a statement saying that “counterfeited goods are better than original products,” after which Alibaba came under fire and many foreign brands owners challenged the company’s credibility and its efforts to fight against fakes traded on its e-commerce platform.

    He stated: “The problem is the fake products today are of better quality and better price than the real names. They are exactly the [same] factories; exactly the same raw materials but they do not use the names.”

    Yesterday, Mr. Ma indicated that whatever he said was an observation and has nothing to with the reality. He further added that “Failing to protect original designs, trademarks, and technology is akin to thievery, and it is detrimental not only to innovation but also to the integrity of the marketplace,” and Alibaba will never forgive any act of stealing.

    Last year, several leading foreign brands filed lawsuits against the Chinese e-commerce giant, accusing it of deliberately promoting the counterfeited goods traded on its websites.

    Kering SA, a French luxury goods holding company filed a lawsuit against the Chinese e-commerce giant last year, claiming that Alibaba is directly involved in the promotion of counterfeited goods. However, the company denied all such accusations and later, the case was resolved on mutual consent. Like Kering, many other foreign brands have alleged Alibaba of doing little to stop the trading of fake goods on its leading platforms including Taobao and Tmall.com. Likewise, many of them have even shifted to other e-commerce stores including those of JD.com Inc.

    Last year, Alibaba also narrowly escaped the US black list for notorious goods; however, it received official warning from the US trade officials to quickly resolve the issue and prevent sale of counterfeited goods on its leading online platforms such as Taobao. Mr. Ma saw this escape a huge victory and assured the trade officials that his e-commerce firm is 100% committed to lead the fight against global counterfeiting, both online and offline.

    The Chinese e-commerce giant has invested heavily and devoted significant efforts to develop an unparalleled level of technology to put a stop to this counterfeiting work. The Chinese e-commerce giant takes out full-bodied data processing and analytics to enable real time scanning of nearly 10 million new products a day by looking at key features such as pricing, trademarks, and buyer and seller identity. Despite such aggressive measures the world’s second largest retail network is yet to satisfy customer, trade officials, and most importantly brand owners.

    In his write up, Mr. Ma emphasized on the fact that a cooperation spread globally is needed to fight the counterfeited goods issue. It’s a “long term crusade,” he said, a battle against human greed for which there are no short term fixes and easy way out.

    Mr. Ma’s statement was not welcomed with gratitude by investors, brand owners, and trade officials. According to some analysts by terming the case a long term crusade, Mr. Ma has indicated that the counterfeited goods is likely to continue to trade on Alibaba’s online platform. He said he expected Alibaba to become the “fifth largest global economy” after Japan by 2020. This is likely to happen because China’s middle class consumption has increased massively, and the country’s middle class holds about $4.6 trillion in savings.

    Recently, Security and Exchange Commission (SEC) have inquired Alibaba to present complete details of the company’s accounting policies and for one of its delivery affiliate, after the company was accused of using inappropriate financial measures and not disclosing complete transactions of its delivery affiliate.

    In May, the Chinese e-commerce giant was handed a suspension from International Anti-counterfeiting Coalition (IACC), a supervisory body for retail industry after several leading members threatened to step down against Alibaba’s inclusion. Those members included Tiffany, Gucci America, and Michael Kors.

    Role of Chinese Government

    Though the Chinese e-commerce giant faces tremendous international criticism and pressure from trade officials, the government has done little to tackle the counterfeited goods issue i.e. no more than a few warnings. Even Mr. Ma himself proclaimed that the Chinese government can’t even ban his company for two hours due to its significant economic importance. We believe that there are solid reasons as to why the Chinese government can do very little to take action against Alibaba.

    The following revenue table clearly depicts that Alibaba’s retail business generates significant profits, which is a vital catalyst for growth in China’s deteriorating economy. The country’s GDP growth is at its slowest in the past 25 years, and with crude oil continuously remaining on a lower side, the Chinese government is shifting to services and retail sector to inject growth in the Chinese economy, and Alibaba is the big connection to it.

    It is indicated that Alibaba’s China retail business amounted to nearly 78% of total revenue generated in the quarter, while international retail also surged 15% year-over-year (YoY).

    Its international retail segment growth also highlights the company’s eagerness to expand its footing in the international market. We depicts Alibaba’s international retail revenue for the past six years.

    Though the growth is imminent but many analysts opine that is far below the expectations. As a result of counterfeited goods scandal, the company’s international retail revenue growth has plummeted 41% on average in the past five years.

    At the recent investor’s day conference, the Chinese e-commerce giant also released its annual revenue forecast estimating a 48% YoY surge, mainly driven by the acquisitions of Youku Tudou and Lazada the Asian e-commerce giant. It said: “The Company expects to record 6 trillion yuan ($912 billion) in gross merchandise volume (GMV) in fiscal 2020, nearly double 3.09 trillion yuan in fiscal 2016.”

    Despite achieving significant success, the Chinese e-commerce giant is surrounded by controversies since the past few years. Earlier on Wednesday, it also won the dismissal of a US lawsuit accusing the company of defrauding its stakeholders by “concealing a regulator’s warning about its ability to suppress counterfeiting on its websites.”

    Overall, analysts have been keeping a mix view on whether Alibaba is right or wrong; however, Mr. Ma indicates that his company works hard each day to ensure that its stake holders are protected and its consumers are not fooled by shoddy fake products. However, he asserted that to completely eliminate the issue from the root cause, a time period is required and global assistance is necessary.

    We believe that it is high time now that Alibaba should stop fooling customers and brand owners and should work with sincerity, rather than consoling and giving false hopes. Authenticity of the product is of key importance and Alibaba should return its stakeholders a favorable response or get ready to lose customers. We also believe that the Chinese government should embrace the rule of law. The government should stop promoting double standards and treat both foreign and domestic firms at permissible level. Has it been Amazon Inc or any other foreign e-commerce retail network, the consequences and treatment would have been different.

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  • Alibaba expansion plan targets 2 billion

    Alibaba expansion plan targets 2 billion

    Chinese eCommerce pioneer Jack Ma has unveiled an Alibaba expansion plan aiming to quadruple its customer numbers to 2 billion by 2036.

    Alibaba is also aiming for a record 6 trillion yuan (US$912 billion) in gross merchandise volume (GMV) in 2020 from 3.09 trillion yuan this year.

    Ma has also pledged to intensify the fight against counterfeit products and intellectual property rights violation, saying the company is more confident than ever it can solve the problem.

    Alibaba became the world’s largest retailer (by its own definition of retailer) in April, surpassing Walmart. The company says its online trading accounts for 10 per cent of all retailing in China and has generated 15 million jobs.

    Alibaba, whose gross sales totalled $9.3 billion in 2014, hit a record $14.3 billion in sales on Singles’ Day alone last year, a Chinese holiday in November. This is more than double the eCommerce sales in the US from Thanksgiving, Black Friday and Cyber Monday combined.

    The company also holds the title of the biggest IPO in history, raising $25 billion in four days in September 2014, $7 billion more than Visa and $9 billion more than Facebook and General Motors.

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  • Alibaba makes unconventional strides in Korea

    Alibaba makes unconventional strides in Korea

    Alibaba Group is raising its profile here in a slow, yet unconventional way, as its business strategy is far from that of other companies whose primary goal is to maximize profit.

    China’s largest e-commerce company was not well known to Korean customers before it surprised the world in 2014 with its record-breaking initial public offering at the New York Stock Exchange.

    In the same year, the company made its first noteworthy appearance here, with Chairman Jack Ma visiting Seoul to meet President Park Geun-hye to discuss business collaboration with Korean companies.

    Alibaba and its key affiliates have since formed partnerships with local companies in what critics say is a move to diversify its revenue streams, as other overseas information and communication technology (ICT) giants have done.

    But revenue generation has not been the core of its business and partnerships, given its two-year operations here. The company, instead, has focused on building an environment in which small Korean companies can sell things abroad.

    This is in line with its corporate vision: Making transactions easier anywhere. The Alibaba founder identified the need to build such an environment in China when he established the firm in 1999. He said he wants to apply the same philosophy to other countries, including Korea.

    “Alibaba does not have any plans to directly open an online shopping platform in Korea, as our ultimate goal is to become a company helping other firms to benefit from e-commerce,” he said last year when celebrating the launch of the Korea Pavilion on its business-to-customer (B2C) retail site, Tmall.

    The Korea Pavilion was Alibaba’s first official country pavilion on its website, selling genuine Korean products to Chinese customers.

    He then dispelled concerns that the company may become a potential threat to local e-commerce operators. The Alibaba chief made it clear that Alibaba hopes to become a “facilitator” to help Korea’s e-commerce grow, allowing small companies to sell their products to Chinese customers.

    All of its partnerships in Korea have so far come under this corporate motto.

    Major collaborations include the Korea Exemplary Food Exhibition project, for which the nation’s Ministry of Agriculture, Food and Rural Affairs and 1688.com, Alibaba’s business-to-business (B2B) online trading site in China, joined hands. This was in October 2014, in the e-commerce giant’s bid to introduce Korean food to the Chinese B2B market.

    In May, its cloud-computing affiliate, Alibaba Cloud, partnered with two Korean firms ― SK C&C and Bankware Global. During the announcement, Alibaba allowed its two local partners to announce their visions through the collaboration.

    This symbiotic corporate management policy is part of Alibaba’s efforts to make the company last for more than 100 years, which will cross three centuries, according to the Alibaba chief.

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  • Alibaba suspended from counterfeit-fighting group

    Alibaba suspended from counterfeit-fighting group

    After Alibaba had its IACC membership suspended, founder Jack Ma has cancelled his keynote address to the counterfeit-fighting group’s conference.

    Ma was to have been a drawcard speaker at this week’s two-day annual spring conference of the International AntiCounterfeiting Coalition (IACC) in Orlando, Florida, an event that attracts more than 500 leaders from business, law, security and government.

    His move also follows Alibaba Group and the coalition creating the IACC MarketSafe Expansion Program last week. The original program was created by Alibaba and the IACC in 2013 in recognition of the counterfeiting problem being too pervasive and complex for any single company or industry to fight alone.

    Alibaba last month became the world’s first eCommerce company to join the IACC, the largest non-profit organisation dedicated to combating product counterfeiting and piracy. At least three members of the Washington-based coalition, including board member Tiffany & Co, quit the group in protest and others threatened to leave after Alibaba was admitted as a member. The IACC suspended the new category in which Alibaba had been admitted, effectively terminating its membership.

    Alibaba Group president Michael Evans has stepped in to speak at the conference instead.  Alibaba international corporate communications head Jennifer Kuperman repeated that the company is “firmly committed to the protection of ­intel­lectual property rights and combating counterfeits”.

    On the same day Ma cancelled his conference appearance, he had lunch with US President Barack Obama at the White House, telling reporters afterward that the meeting had been “very good”.

    Among the brands that quit the IACC in protest was Michael Kors, which blasted the organisation for providing “cover to our most dangerous and damaging adversary”.

    Michael Kors was followed out by Gucci.

    Alibaba has meanwhile hired an army of employees to weed out fake brands from its website. It has also called for comprehensive changes at the IACC so it can counter trends and new technology in counterfeiting “instead of being held captive by some members’ interests”.

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  • Jack Ma’s grand eCommerce plan

    Jack Ma’s grand eCommerce plan

    Alibaba Group executive chairman Jack Ma wants to knock down barriers to global eCommerce by creating a business-driven, Internet-based platform that will function something like the World Trade Organization – but without all the controversy.

    Speaking at the Boao Forum for Asia, the founder of the world’s largest eCommerce company called for the establishment of “a new platform on which we are not debating, not having disputes, we are sharing trade,” Ma said.

    “On this platform we are promoting technologies as well as inclusive financing, so all [small businesses] and young people can enjoy the benefits of trade, so we are connecting the world with trade.”

    Ma’s ultimate goal is the creation of a virtual, borderless economy not constrained by politics. He calls the vehicle for achieving this the World e-Trade Platform, or eWTP. As envisioned, the eWTP would be set up primarily to formulate international rules to eliminate barriers to eCommerce and help small businesses and consumers everywhere participate in cross-border trade. The online platform would be open to a wide range of stakeholders including SMEs and would not be dominated by governments and multinational corporations.

    At the Boao forum – a business, government and academic leadership conference held annually on China’s Hainan Island – Ma said the WTO, which promotes free trade through lower tariffs and other trade barriers, “did a great job” in the last century in fostering a more global economy.

    China in particular after its accession to the WTO in 2001 experienced tremendous economic growth, he noted.

    But globalisation’s benefits have accrued unevenly and the WTO’s current rulemaking round, called the Doha Development Round, has been stalled for the last 15 years, largely over differences between developed and developing nations, Ma pointed out.

    The eWTP’s purpose is to help “the 80 percent of companies and developing countries that cannot participate in world trade,” he said, adding, “It is not the purpose of the eWTP to destroy the WTO, but to try to destroy trade protectionism.”

    Ma, who said last year he wants to help 10 million small businesses outside of China sell into global markets, stressed that he saw the proposed body as “complementary to the WTO … [so that] more nations that are poor like China was 15 years ago, let them enjoy the trade.”

    “Let’s make trade simpler, let’s take out some of the rules and laws that are not working, to move trade faster,” Ma said. “Let businesses drive it with governments and NGOs and other organisations participating.”

    During a Boao panel discussion focusing on Ma’s eWTO proposal, Indonesian trade minister Thomas Lembong and Luis Alberto Moreno, president of the Inter-American Development Bank, expressed support for the initiative.

    The explosive worldwide growth of eCommerce is spawning new business models and has the potential to spark fundamental changes in the way international trade is conducted by eliminating costly layers of intermediaries and shortening global supply chains. At the same time, the borderless, relatively frictionless nature of Internet trade offers small-and medium-sized businesses everywhere unprecedented access to global markets.

    “It’s hard to comprehend how fast things are changing, how fast things are moving,” Lembong said. “We really are talking about the dawn of a new era alongside the old one.”

    The eWTP could speed these changes, Lembong said, calling it “an intriguing concept.”

    “To me, eCommerce is an oasis of freedom in a world that threatens to be over-regulated and politicized” by protectionist trade barriers, he said, comparing the current trade regime to “a traffic jam.”

    Ecommerce “is an antidote to the poison of protectionism,” Lembong said. “Technology is a great equaliser, the best tools are available to the smallest companies. Now, thanks to technology and the mobile Internet, anybody with a mobile phone can become an entrepreneur.”

    Moreno noted that international eCommerce faces a number of challenges. Products can’t be consistently delivered quickly across borders because of inefficiencies in international logistics and customs procedures.

    “For a product to enter a country there might be 10 agencies you have to deal with,” Moreno said.

    Boao panelist Kasper Jakobsen, CEO of US-based infant formula maker Mead Johnson, agreed that global import regulations needed greater uniformity.

    “The biggest barrier to expanding [trade] platforms across boundaries is so many products have to comply with different regulations in all the markets they are sold in,” Jakobsen said.

    A clue to what reduced barriers with eWTP might look like can be seen in China’s efforts to boost cross-border eCommerce by setting up free-trade zones and bonded warehouses where certain goods ordered by Chinese consumers from overseas companies are subject to lower tariffs and receive expedited customs processing.

    “We have to ramp up and get ready for that platform Jack is inviting us to join,” Moreno said.

    Panelists also agreed backing should be sought for the eWTP proposal from world leaders at the upcoming G20 summit, scheduled to be held in September in Hangzhou, China, where Ma’s Alibaba Group is headquartered.

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  • China’s Alibaba signs 5-year loan deal

    China’s Alibaba signs 5-year loan deal

    China’s Alibaba Group Holding Ltd  said it has signed a deal for a $3 billion five-year loan, which will help the e-commerce giant as it snaps up stakes in companies within China and overseas.

    Alibaba, led by founder Jack Ma, has been expanding in areas beyond its core e-commerce base, such as online video, as volume growth in its online shopping business slows.

    The firm said in a filing to the US Securities and Exchange Commission (SEC) that it had signed the syndicated loan deal with a group of eight lead arrangers. It added that the amount could increase if there was steep demand.

    “The loan, which is subject to upsize through over subscriptions in syndication, has a five-year bullet maturity and is priced at 110 basis points over LIBOR,” the company said in the filing, referring to the benchmark interest rate used by many global banks when making loans.

    Alibaba added that the loan would be used for “general corporate purposes”, without expanding on what this meant.

    The Wall Street Journal cited sources last month saying Alibaba was in talks with several banks to borrow up to $4 billion to fund expansion plans, including acquisitions.

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  • Apple Pay launched in China

    Apple Pay launched in China

    Apple has confirmed that its alliance with China’s state-owned bankcard association, China UnionPay, will allow the lender’s cardholders to use Apple Pay from 3rd week of February.

    The union between Apple and UnionPay was announced late last year, but was subject to various approvals.

    Shoppers around the world are being encouraged to use smartphones instead of cards to pay for in-store purchases.

    Alibaba’s Alipay currently dominates China’s electronic payments market.

    Apple confirmed its expansion into China on its website.

    “You can now support Apple Pay for your customers in China, providing an easy, secure, and private way for them to pay using their China UnionPay credit and debit cards,” the firm said.

    Apple’s head Tim Cook later announced the launch of Apple Pay in China early on Thursday via his Weibo account.

    Several reports have indicated that as many as 20 China-based lenders will be supporting Apple Pay, including the Industrial and Commercial Bank of China (ICBC).

    ICBC had not responded to written inquiries on Thursday, however.

    Growing market

    There has been a rapid take-up of smartphones in China, with an estimated 68% of the population now owning one – and digital wallets are becoming a more popular way to pay for goods and services.

    UnionPay’s alliance with Apple is an extension of its plans to make the most of that growing market.

    However, analyst Bryan Ma of research firm IDC told the BBC that Apple was likely to garner a smaller user base in China compared to competitors like AliPay and Tencent’s WeChat Payment.

    “This is in part because Alibaba and Tencent payment systems are used for more things, like money transfers, whereas Apple Pay might be limited to just retail point-of-sale and possibly App Store transactions for now,” he explained.

    “There will be a natural, gravitational pull though for some people to Apple Pay – particularly people in big cities – because of Apple’s brand. So they will be able to attract a selected customer base that way.”

    Mr Ma said another issue was that Apple Pay would use the Near Field Communication (NFC) method of contactless communication, rather than the barcode-like method of electronic payments using QR codes.

    QR codesImage copyrightCameron Spencer
    Image captionQR codes are used by a wider market because more phones can read them compared to phones that can read NFC tags, IDC’s Bryan Ma said

    QR codes were widely used by Apple Pay’s China-based competitors like Alipay, Mr Ma said, and could reach a wider market because more phones could read them compared to phones that could read NFC tags.

    By 2017 it is estimated the global mobile payments market will be worth some $1tn (£650bn).

    In addition to Apple Pay, Google’s Android Pay is available at more than one million locations in the US, while Samsung Pay was launched in South Korea in August, followed by a launch in the US the following month.

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  • Jack Ma versus George Soros: who do you trust on China’s economy

    Jack Ma versus George Soros: who do you trust on China’s economy

    No one really trusts China’s official statistics. In the past ten days since the government announced the economy grew at the much-slower-but-still-solid pace of 6.9 per cent last year, a roll-up of economists and money managers have been putting forward their own best estimates for growth.

    Billionaire investor George Soros raised Beijing’s ire by claiming last week the current growth rate was probably around half the official figure at 3.5 per cent and said a hard landing was “unavoidable.”

    Other economists say growth is somewhere between four and six per cent, which leaves investors looking around for alternative measures of the economy.

    When it comes to a gauge for consumption, it’s hard to go past the profit result for China’s biggest e-commerce company, Alibaba, which now accounts for about 80 per cent of the online retail market.

    And there was much to cheer about in Alibaba’s better-than-expected third-quarter results, released on Thursday in the United States.

    Revenue jumped 32 per cent to 34.5 billion yuan ($7.4 billion) compared to the same period a year earlier, while profit more than doubled to 12.5 billion yuan, largely driven by consumers shopping on their mobile devices.

    Despite the strong result, there were some signs of China’s slowdown.

    The value of overall product sold across Alibaba’s retail platforms – the so-called gross merchandise revenue (GMV) — rose 23 per cent to 964 billion yuan, much slower than this time last year.

    Still, it’s a strong result and the smaller increase in GMV might be partly due to the company’s efforts to crackdown on the sale of counterfeit goods on its platforms.

    Alibaba said China’s growing middle-class was driving sales especially to younger people, who are more likely than their parents and grandparents to spend money rather than save.

    Alibaba’s founder Jack Ma set up the company in his Hangzhou apartment, an hour’s train trip from Shanghai, in 1999. At the time, it was an online listings service, connecting Chinese manufacturers to potential customers. But four years later he launched Taobao, revolutionising China’s online retail market. He followed Taobao with Tmall, which allows global brands such as Nike and Gap to sell direct to consumers and the company listed on the New York Stock Exchange in 2014.

    More than 400 million people are now active buyers on Alibaba’s retail marketplaces.

    The company is also investing in financial services, video and media content and cloud-computing to diversify its earnings.

    Investors had been betting against Alibaba this year because of China’s economic woes, pushing its shares down 14 per cent before the result came out. Alibaba fell 3.8 per cent to $US66.92 in New York on Thursday.

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  • Starbucks China plans massive expansion

    Starbucks China plans massive expansion

    Starbucks China is planning to open a further 1400 cafes by 2019, the company has revealed.

    Currently, the US headquartered coffee giant has about 2000 locations in 100 Chinese cities – and it uses Alibaba’s Tmall to sell giftcards and coupons to Chinese customers, at the same time boosting its brandawareness and appeal.

    Starbucks said its Tmall Global virtual store collected 300,000 registered fans in the past month and launched a “social gifting” feature that allows users to send those cards and coupons to friends and family through the Tmall platform. On top of its digital push, Starbucks said it was aiming to boost its overall store count to 3400 by 2019.

    “As Starbucks’ second largest and fastest-growing market globally, China represents the most important and exciting opportunity ahead of us,” Schultz said.

    The news followed a milestone meeting between Starbucks CEO Howard Schultz and Alibaba founder Jack Ma who said afterwards they sought to “redefine the roles and responsibilities of a for-profit public company, one that invests in its people, giving back to the local communities in meaningful ways, and creating unique developmental opportunities for the youths of today.”

    Alibaba and Starbucks share a similar vision, according to the two businessmen: building a company that’s doing more than just generating profits.

    During a speech in Chengdu at an annual Starbucks event celebrating the company’s Chinese employees, Ma emphasised the point by highlighting the important role that young people play at both companies. At Alibaba, the average employee age is 26, while at Starbucks it’s 26.

    “Alibaba hopes to work together with Starbucks to create even more opportunities to develop Chinese youth because they are our future,” Ma said at the Starbucks China Partner-Family Forum, sharing the stage with famed Starbucks CEO Howard Schultz. “All of you at today’s event represent China’s future.”

    The China Partner Family Forum celebrates Starbucks’ 30,000 Chinese employees, reinforcing the company’s commitment to what it calls “conscious capitalism.” The goal is to boost company productivity by enhancing the work experience for those employees.

    Starbucks launched its Tmall Global, store in December. The platform allows foreign companies to sell into China without having a physical presence in the country. Already major brands such as Costco, Macy’s and Nike, Japan’s Uniqlo and Germany’s Metro Group operate stores on the platform. Some of these companies, including Nike and Metro Group, do have physical stores in China, but they are selling through Tmall Global because the continued growth of eCommerce gives them another way of reaching consumers.

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  • Kering ratchets up legal fight with Alibaba

    French-headquartered luxury brand owner Kering has unsuccessfully sought to fast track its legal suit against Alibaba after what it considered “greatly troubling” comments by Jack Ma.

    Kering, which owns Gucci and Yves Saint Laurent among others, filed suit against the Chinese eCommerce giant in May after it considered more passive efforts to get Alibaba to stop selling counterfeit versions of its goods on its websites were not bearing fruit.

    Last week Kering has asked a US judge to waive the mandatory obligation of mediation between the two parties, citing a quote by Ma in a magazine article.

    Kering’s lawyers say the company was “greatly troubled” by Ma being quoted in Forbes saying there was no chance of settling.

    “I would [rather] lose the case, lose the money… But we would gain our dignity and respect,” Ma was quoted saying.

    Kering’s lawyers argued if this is indeed Ma’s position, mediation would be futile.

    But Judge Kevin Castel disagreed, on Monday urging the parties to continue with mediation.

    “Needless public comments can undermine talks. Yet public positions and positions in confidential talks have been known to vary… The Court strongly recommends that the parties proceed to mediation,” he wrote in an order.

    Kering maintains Alibaba is a giant conduit for counterfeiters and alleges the company has knowingly made it possible for traders to sell fake good on its sites.

    According to a letter to the judge, seen by Reuters, Kering’s counsel said of the interview: “It leaves the impression… that Alibaba‘s request for mediation was not made in good faith, but rather as a tactic to delay this case and to force Plaintiffs to expend resources spinning their wheels in an expensive and time-consuming mediation.”

    An Alibaba spokesman Bob Christie said Ma had made the comments prior to Kering agreeing to Alibaba‘s proposal to mediate.

    “If they want to return to the path of litigation, instead of mediation, we will vigorously defend our legal rights and reputation,” he said in an email to Reuters.

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  • Alibaba smashes Singles’ Day records, so why did shares dip?

    Alibaba smashes Singles’ Day records, so why did shares dip?

    November 11 is a day of sombre reflection across much of the West, with Commonwealth nations observing Remembrance Day while Veterans’ Day is an official public holiday in the US.

    It’s a world away in China, though, where it’s Singles’ Day – an idea begun in 1993 by four lonely Chinese students who reckoned the 11th day of the 11th month (note the four single ‘one’ digits) would make a great day to celebrate being unattached.

    It became a sort of anti-Valentine event, where those without partners bought themselves gifts and – as you do in China – enjoyed lots of karaoke.

    Enter e-commerce giant Alibaba – owned by Jack Ma, up until February China’s richest man – which swooped on the event to offer discounts on its goods.

    November 11 in China has since morphed into an orgy of online spending. More and more firms have jumped on the bandwagon to make it the world’s biggest day of internet shopping.

    On Wednesday, Singles’ Day smashed sales records by midday. Shoppers were out in droves, racking up $5 billion of sales in the first 90 minutes on Alibaba, roughly double last year’s haul in the same period, reports the Financial Times. Alibaba also netted nearly twice the entire take of last year’s Cyber Monday – the day the US, fresh from feasting on Thanksgiving turkey, feasts on shopping deals – itself a record.

    Alibaba’s sales on the day rose 60% from last year to $14.3 billion. Another online retailer, JD.com, reported record transactions of more than 20 million.

    But despite beating records, Alibaba shares dipped nearly 2%. Why weren’t investors impressed?

    It’s because those concerns about China’s slowing growth still won’t go away – a point that Jack Ma himself highlighted on Thursday. Although he believes the government’s 7% GDP target for this year is achievable, he told CNBC: “I believe the next five to 15 months will be a tough time for China for various reasons, of course, one, the anti-corruption will definitely have some effect.”

    Jasper Lawler, a market analyst at CMC Markets, adds that Alibaba continues to be used as a US proxy for Chinese economic health “so shares dropped alongside industrial production figures”.

    Another batch of mixed data from China on Wednesday did little to allay concerns that the world’s second largest economy is slowing.

    “Industrial production growth matches its weakest since 2008, although retail sales improved,” wrote Mike van Dulken and Augustin Eden at Accendo Markets. Coupled with Alibaba’s new Singles’ Day record “we have further evidence of the nation’s shift from export-led to consumer economy”.

    Michael Hewson, chief market analyst at CMC Markets UK, remains concerned about retail sales in China.

    “The latest October retail sales numbers did improve to 11%, from 10.9% in September, which is still below the levels we were seeing at the end of last year of 11.8%,” he writes.

    “Furthermore this modest improvement doesn’t really chime with the stories circulating out of China at the beginning of October during Golden Week about surging sales in the restaurant, cinema and travel sales sector.

    “According to some reports, turnover at restaurants and retailers totalled more than one trillion yuan during the seven days, which equates to over $156 billion, so for retail sales to only improve 0.1% does seem rather at odds with the early October optimism.”

    Alibaba shares closed on the New York Stock Exchange at $79.85 on Wednesday, down more than 20% in the year to date. However, they’ve recovered from a yearly low on September 28 of $57.39 to trade currently at $80.00.

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  • Alibaba feels China pain as it trims sales forecasts

    Alibaba feels China pain as it trims sales forecasts

    E-commerce giant Alibaba has succumbed to the crisis gripping the Chinese economy a year after the company became the world’s biggest float.

    Founder and former English teacher Jack Ma became an overnight billionaire when Alibaba launched on the New York Stock Exchange in September 2014, as the firm raised a record-breaking $25 billion (£16.3 billion) in a float valuing the company at $186 billion.

    Alibaba is the biggest player in the Chinese e-commerce market — where spending is set to hit $1 trillion by 2019 — accounting for 80% of online sales in China.

    The firm is also among the top picks of UK retail investors, according to fund manager Hargreaves Lansdown.

    But the company admitted today that a weakening Chinese economy has taken its toll on business, as it slashed forecasts for the total value of transactions it expects to take place in the current quarter.

    This will now be “mid-single digits lower” than the giant’s initial estimates for the quarter.

    Alibaba’s head of investor relations, Jane Penner, said consumers were still willing and able to spend but that the company had been seeing a “negative impact of the magnitude of the spending”. Average order values are also lower, Penner added.

    What is Alibaba?

    The latest fears over the e-commerce giant come a month after it reported its slowest growth in transactions for more than three years.

    Shares in the company are now below their $68 float price after a near-5% slump overnight to $60.91. The stock has halved since the end of May, when Alibaba’s shares hit $119 — valuing the company at a staggering $300 billion.

    The latest bad news out of China comes hard on the heels of a dramatic slump in imports — fuelling fears of a hard landing for the world’s second biggest economy — and a month of turmoil in global stock markets following Beijing’s sudden devaluation of the yuan.

    China also cut its official growth estimates for 2015 this week. China has also cut interest rates five times since November and intervened directly to stem plunging stock markets.

    Rathbones investment director Jane Sydenham said: “Investors are beginning to adjust to what was initially quite a shock in terms of the renminbi devaluation, share repurchases — normally those kind of activities on the part of central banks signal something really quite serious.

    “It’s taken some time for investors to adjust to the fact that clearly, growth is slowing, perhaps more than we’d thought.”

    Despite the gloom from Alibaba, shares rallied in China for the second day running on hopes of more government stimulus.

    Asian markets rose on Wednesday

    Shanghai’s main market gained 2.3% after the finance ministry set out plans to boost infrastructure spending and speed up reform of its tax system to support the economy.

    Japan’s Nikkei also saw its biggest single gain in seven years — rising 7.7% — as markers rallied on comments from prime minister Shinzo Abe raising hopes of a corporate tax cut and a new trans-Pacific trade deal.

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