Revenue growth slows at Tencent
Nov-28-2013 By : agxadmin
Tencent, China’s largest listed internet company, posted the lowest revenue growth in six years in the third quarter while net profit missed expectations, weighed down by investments in its mobile and e-commerce businesses. The Shenzhen-based company reported a 34.3% year-on-year jump in quarterly revenue to CNY15.5 billion. Net profit rose 20% to CNY3.87 billion. Since Tencent launched in August its latest version of WeChat, which is connected to an online payment service, investors have been hoping the firm will start making profits from its mobile messaging application. Xue Yongfeng, Analyst at Analysys International, estimates the games on the WeChat platform will contribute CNY1.5 billion to CNY2 billion this year. Tencent saw revenue from social networks, including WeChat and QQ, grow 3.7% year-on-year in the quarter to CNY3.2 billion and a 124% increase in the number of active users of WeChat to 271.9 million. Selling and marketing expenses increased 79% to CNY1.47 billion from the third quarter of last year. Online games, which contributed 75% of the company’s total revenue, rose 24.9% to CNY11.6 billion. E-commerce income more than doubled to CNY2.36 billion from CNY1.13 billion. Tencent has expanded into e-commerce with platforms including business-to-customer Yixun.com and Paipai.com, rivalling Alibaba Group.
Online currency Bitcoin is booming in China
By : agxadmin
Bitcoin, the unofficial online currency, is booming in China. A co-founder of China’s biggest bitcoin exchange said there were “boundless opportunities” for the digital currency in the country because of the Chinese saving ethic. “The main reason why Bitcoin has become big in China is because Chinese people are savers, and more people are seeing Bitcoin as a way to store and invest their money,” Linke Yang, Vice President of BTC China, told reporters on the sidelines of a conference in Singapore. Bitcoins, a form of digitally-created ‘e-money’ which is stored in a virtual wallet and bypasses banks, allowing users to remain anonymous, have soared in value in recent months. They were created in 2009 in the aftermath of the global financial crisis by an anonymous programmer who wanted a currency independent of any central bank or financial institution. Yang attributed the sharp rise in Chinese demand for bitcoins to a documentary broadcast on state-run CCTV, as well as increased acceptance of the crypto-currency as an investment instrument. Other participants at the Bitcoin Singapore conference echoed Yang’s bullishness on the digital currency’s prospects in China. Investors however are closely watching to see if China’s government will place specific restrictions on Bitcoin trading. Hundreds of Chinese investors were left with more than CNY20 million in combined losses after Global Bond Limited, a Bitcoin trading platform, suddenly closed in October, the South China Morning Post reports.
“Taobao villages” reaping rich e-commerce harvest
By : agxadmin
In some villages in China, including Wantou village in Shandong province, Taobao online stores have been proliferating. On entering Wantou, row after row of courier shops emerge and wi-fi signals instantly appear on smartphones. Store owner Ma Yaofei, 28, runs an online store selling hand-woven craft, including straw-made chairs, tables, cases and small decorative items. He moved from Dongying city to Wantou 2½ years ago and set up his shop there. Wantou, crowned a “Taobao Village”, is home to more than 500 online stores on Taobao Marketplace, Alibaba’s popular consumer-to-consumer (C2C) online shopping platform. Ma said the internet allows him to reach out to the outside world. His online store’s sales are CNY3,000 to CNY4,000 per day and his products are sold across the country. “This year in our village, sales increased by 30% to 40% from last year,” Ma said. But now competition is increasing as too many vendors rushed in after seeing the success of the online business. Almost all households that do business have linked their real stores to virtual shops. Wantou is just one of 14 Taobao villages in China. Alibaba defines a Taobao village as a one in which more than 10% of households run online stores and village e-commerce revenues exceed CNY10 million a year. By the end of last year, more than 1.63 million Taobao stores were registered in rural areas, with total transactions from the 14 Taobao villages hitting CNY5 billion last year, according to Aliresearch. Importantly it has liberated farmers from the field and created new jobs for couriers, drivers and online shop designers. Even some university graduates are now moving back to the villages to operate online stores, the South China Morning Post reports.
Mobile payment market growing strong
By : agxadmin
More consumers are making payments via mobile devices and the size of the market is expected to exceed CNY800 billion this year, more than five times the volume in 2012, according to a report by a research group headed by Ba Shusong, Analyst with the Development Research Center of the State Council. Last year, 535 million payments were made through mobile phones with the transfer volume at CNY2.31 trillion, a year-on-year increase of 116% and 132%, respectively. In 2013, one third of transactions on Alipay were made through phones, a staggering jump of over 800% from a year earlier. Online shopping surged in the third quarter of the year with transactions totaling CNY454.76 billion. The figure was a 42.4% year-on-year increase, according to iResearch. Two factors contributed to the surging trend, online shopping in third and fourth tier cities and better marketing by e-business firms, said the report. Business-to-customer (B2C) platforms covered about 36.6% of the online shopping transaction volume, up 5.6 percentage points compared with the third quarter last year. Online retail is set to account for at least 10% of total retail sales by 2015, the Ministry of Commerce (MOFCOM) said. E-commerce is also likely to account for over 10% of imports and exports by 2015. The size of China’s e-commerce market will continue to grow 32% annually in the next three years and is expected to be 50% bigger than the U.S. in 2015, consultant Bain & Company said in its annual “China E-commerce Report” earlier this year.
Supreme Court hears first web anti-monopoly case
By : agxadmin
The Supreme People’s Court heard the country’s first internet anti-monopoly case in which Qihoo 360 Technology Co, a leading anti-virus software developer, accused Tencent of “abusing its dominant market position”. This is Qihoo’s second lawsuit against Tencent. On March 28, the Guangdong High People’s Court ruled that Tencent was not in violation of the Anti-Monopoly Law and rejected Qihoo 360’s monopoly claims. Attorneys for Qihoo 360 claimed the first trial was held unfairly and that the top court should reject the March 28 verdict. Qihoo 360 claims it has lost CNY825 million because of Tencent’s abuse of its dominant market position. It is seeking CNY150 million in compensation. Qihoo 360 claims Tencent has a nearly 90% share in the domestic instant messaging service market and also said none of Tencent’s competitors have more than a 5% market share. Tencent countered by saying that Qihoo 360 lacks the evidence to support its claims. It said the 90% market share is not based on commercial revenues but on the length of time users spend on Tencent’s instant messaging service. Qihoo 360 claims Tencent also abused its dominant position by forcing users to choose between the two companies’ services. It points to Tencent’s announcement on November 3, 2010, that it would shut down its QQ instant messaging service on computers that had installed security software by Qihoo 360, the China Daily reports.
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