E-commerce

Jack Ma’s American dream clashes with China First

20 Sep 2018

Alibaba’s retiring founder rescinded a promise to create 1 mln U.S. jobs. He blamed tariff tensions, but Kroger and other foreign brands have not had a level playing field on the global Tmall site. Unless that changes, the company will be more of a trade problem than solution.

Jack Ma’s exit plan just raises more questions

10 Sep 2018

Alibaba says CEO Daniel Zhang will succeed the $420 bln group's co-founder as chairman in 2019. Planning ahead is laudable, but the sketchy blueprint, after a baffling interview, leaves worries over the top job and Ma's influence unanswered. It's one step forward, two steps back.

Jack Ma’s next moves will instruct China tech

8 Sep 2018

The charismatic co-founder of Alibaba says he plans to retire. It’s a sign of the $420 bln company’s maturity that others are ready to step up, unlike at rivals like scandal-hit JD. But he will still wield huge influence. Investors will want clarity on who really holds the reins.

Amazon’s next challenge: $1 trillion of revenue

4 Sep 2018

The U.S. retailer’s 13-digit market capitalization puts it in a club whose only other member is iPhone maker Apple. But market values have limited real-world meaning. Achieving sales of the same magnitude – twice top dog Walmart’s – would be more crunchy. It could happen.

Japanese chipmaker deal is hard to process

3 Sep 2018

Renesas Electronics is considering buying U.S. peer Integrated Device Technology, for a price that could be around $6 bln. Its last acquisition hasn’t obviously delivered and the implied return on investment of this one is just 5 pct. Small wonder that investors are skeptical.

Gig economy throws wrench into China labour policy

28 Aug 2018

App-based jobs are becoming controversial in the People's Republic, too. Factory strikes may be waning, but reports of worker protests involving startups like Meituan and Didi are rising. That's leaving Beijing stuck between two priorities: social stability and tech innovation.

Babytree’s Hong Kong IPO robs the cradle

24 Aug 2018

The Alibaba-backed Chinese parenting site wants to raise up to $1 bln. Targeting tiger mothers might seem timely, given Beijing’s fertility push. Yet the chat-and-shopping combination is unprofitable after 11 years, and its desired value exceeds the wildest demographic optimism.

Alibaba channels old-school conglomerates

23 Aug 2018

Quarterly sales at the Chinese e-commerce firm soared 61 pct to $12 bln, but earnings were flat compared to a year ago. That's due to investments in cloud computing, supermarkets, video streaming and other bets. Alibaba's unwieldy mix of businesses may merit a valuation discount.

JD’s shopping problem worsens bad financial habits

16 Aug 2018

Quarterly earnings at China's $46 bln web retailer halved year-on-year, as it pays up for new users. The market is maturing and competition with Alibaba is fierce. JD's off-piste bets, and its use of non-conventional accounting practices, are adding to the noise.

India’s dated M&A rules let tycoons bet the house

6 Aug 2018

The Shroff family’s chemical group, UPL, is the latest to exploit a statute that lets companies do big overseas acquisitions without shareholder consent. Ring-fencing offshore debt does not protect investors. With Indian buyers at their most active, it's time for a tighter leash.

New rules will spoil India’s e-commerce party

3 Aug 2018

A draft plan to force online retailers to limit discounts, among other things, shields mom-and-pop stores from competition and strikes a nationalist tone. That could dramatically upset the strategies of Amazon and Walmart and leave India's marketplace looking rather Chinese.

Asian videogame giant gives away online store

31 Jul 2018

Tencent-backed Sea, at $4.5 bln, trades at a 50 pct discount to the sum of its three parts, Breakingviews calculates. Investors essentially get the Shopee e-commerce business for free. With Alibaba-owned Lazada a big rival in Indonesia, the valuation gap may prove hard to close.

Amazon’s growth is leaving the shop behind

26 Jul 2018

Jeff Bezos's outfit gets only about half its revenue from its online stores, down from two-thirds two years ago. E-commerce is growing, but the businesses Amazon has built around it are expanding faster and producing much more profit. That makes its valuation a little less crazy.

Amazon starts pharmacy war with carpet bombing

28 Jun 2018

Walgreens’ CEO isn’t “particularly worried” about Amazon buying online drugstore PillPack. But the deal prompted investors to lop some $30 billion off the value of drugstore chains, distributors and insurers. Consumers will happily fuel the fight over the sector’s fat margins.

U.S. sales-tax fix has global parallels

21 Jun 2018

The Supreme Court scrapped precedent and said states can force retailers to collect levies on sales to residents even if the sellers aren’t physically present. States will regain a tax base eroded by geographical arbitrage and the internet – two causes of worldwide tax tensions.

Buffett and pals pick good medic for U.S. tapeworm

20 Jun 2018

Berkshire Hathaway, Amazon and JPMorgan chose Atul Gawande to lead their fight against rising medical bills. The surgeon has written extensively on how the system rewards excess, but not outcomes. Changing this focus would be a good start, even if neither easy nor sufficient.

Google takes JD.com to lunch to discuss Amazon

18 Jun 2018

The U.S. search firm’s $550 mln investment won’t buy much direct influence over the Chinese internet retailer. It’s more a hint that Google’s strategically flighty parent, the $800 bln Alphabet, hasn’t forgotten about taking on Amazon and Alibaba – and someday returning to China.

Japanese unicorn runs astray ahead of IPO

4 Jun 2018

Mercari, an online flea market, could raise over $1 bln when it lists this month. Tokyo unicorns are rare and this bazaar appeals: it is wooing shoppers and growing fast. Still, a costly push into the United States, tempting but crowded, may warrant a discount at the till.

Alibaba’s delivery route missing a few turns

30 May 2018

The e-commerce titan is leading a $1.4 bln investment into China's top courier service, ZTO. It's the latest in Alibaba's scattershot approach to logistics. Keeping up with rival JD may be the real motive, but it isn’t clear how the pieces fit together into a cohesive strategy.

Walmart could be spreading itself too thin

16 May 2018

The $250 bln retailer is paying $16 bln for most of India’s Flipkart, its biggest buy yet, even as it exits other overseas forays. Boss Doug McMillon is also up against Amazon on his home e-commerce turf – and he’s promising to keep on buying back shares. It’s a lot to juggle.