|
|
 |
 |
 |
 |
   |
|
| April 2005 |
|
| COMPANY IN ACTION |
|
|
|
|
|
|
GM's China Sales up 1.3% in First Quarter
General Motors Corp., the world's largest automaker, said Tuesday it sold
132,401 vehicles to dealerships in China in the first quarter, up 1.3 percent
from the same period last year.
The figure included sales of 59,205 vehicles in March, up from 52,861 vehicles
in March 2004, the company said. GM said its market share in China also rose to
10.4 percent at the end of March from 9.3 percent at the end of last year.
China was GM's second-largest global market last year and has been a major
source of profits for GM in the past two years.
Auto sales in China slumped in the first two months of the year as banks
tightened credit and dealerships tried to sell off inventory, Troy Clarke,
president of GM Asia-Pacific, said Tuesday.
But sales rebounded to a record level in March, according to the China
Association of Automobile Manufacturers. In a survey of 39 passenger car makers,
the group found car sales rose 2.5 percent on-year in March to 256,000 units.
"In the first quarter the overall market has decreased about 3.7 percent on
year," said Chris Gubbey, executive vice president of Shanghai General Motors.
"However, we expect those sales to pick up in the second half of this year as
many of those who have been sitting on the fence will enter back into the buying
game."
GM forecasts 10 percent to 15 percent annual growth in China's auto market this
year and 10 percent growth for a few years afterward.
However, GM's profitability and margins could be slightly lower than in the past
as competition heats up, Gubbey said.
GM is selling more mini-cars and vans and fewer Buicks _ a trend that affects
earnings because of the higher margins on Buicks, Clark said.
"But this is not an unexpected shift and our operations are profitable, and in
fact exceeding our forecast of where we would be at this point in time," he
said. He would not give any figures.
Sources: Associated Press
|
| |
EBay Looks to China for Growth
EBay Inc. became one of the world's biggest e-commerce companies because of its
phenomenal popularity in the United States, Germany and other wealthy countries.
But executives at the San Jose-based online auction powerhouse acknowledged this
week that they'll have a hard time getting new customers in mature markets, and
they say they'll rely on overseas consumers -- particularly the Chinese -- to
sustain scorching growth rates.
Strong growth abroad caused eBay Inc.'s profit to jump 28 percent from the same
period last year. Ebay announced first-quarter earnings Wednesday of $256.3
million, or 19 cents per share, compared with $200.1 million, or 15 cents per
share in the same period of 2004.
Excluding special items, the 10-year-old online auction company earned $275.5
million, or 20 cents per share, up from $210.8 million, or 16 cents per share,
in the first quarter of 2004.
For the three months ended March 31, San Jose-based eBay reported revenue of
$1.03 billion, up 36 percent from $756.2 million in the year-ago period.
Analysts surveyed by Thomson Financial expected eBay to earn 18 cents per share
on sales of $1.03 billion.
Meg Whitman, eBay's president and chief executive, said the company would
investigate new marketing strategies in upcoming quarters to woo Americans and
Europeans who have yet to buy or sell an item on the world's largest auction.
EBay may experiment with loyalty points and educational campaigns, as well as
forge partnerships with mobile phone and Voice-over Internet Protocol providers,
she said Wednesday in a conference call with Wall Street analysts. The company
will spend more money to promote non-auction services such as the "Buy It Now"
feature, which charges impatient shoppers a higher price to bypass the 10-day
auction for most items, she said.
"Everyone's heard of eBay, but in terms of fixed price sales ... we've got a way
to go," she acknowledged.
EBay, which has been growing swiftly in the United Kingdom, South Korea, France
and Italy, reported strong international sales. Revenue outside of the United
States was $393.8 million, up 52 percent from the first quarter of 2004.
EBay added more new users in China than from any other country, and it's now the
No. 1 e-commerce company there. Whitman said eBay would debut PayPal in China
soon, and it is already promoting an escrow payment service similar to one in
South Korea.
Although eBay shares are down 44 percent since the beginning of this year, Caris
& Co. Internet analyst David Garrity was enthusiastic about the growth potential
of several large e-commerce companies -- including eBay, Yahoo Inc., Google Inc.
and Amazon.com. But he said such companies face enormous challenges --
particularly eBay, which is generating a growing number of complaints from users
stung by fraud.
Although less than one-tenth of 1 percent of transactions are fraudulent,
according to company estimates, fraud strikes disproportionately high-priced
items such as computers and automobiles. The number of complaints filed with the
Federal Trade Commission over Internet auctions has nearly doubled from 51,000
in 2002 to more than 98,000 last year, according to the FTC.
"Our view is that the sector will continue to lead global economic growth as
consumers and businesses seek to capitalize on the myriad ways in which greater
productivity is enabled by its underlying technology platform," Garrity said.
"However, the initial success of the companies ... has generated its own series
of challenges."
EBay executives raised their 2005 sales forecasts Wednesday, estimating annual
revenue between $4.27 billion and $4.36 billion, including $1.03 billion to
$1.05 billion in the second quarter. The company expects to earn 71 cents to 73
cents per share, up from previous estimates of 68 cents to 70 cents per share.
Chief Financial Officer Rajiv Dutta emphasized that the company provided a range
of financial guidance to consider risks that could help or hurt earnings in
upcoming quarters.
Challenges include flattening growth in established markets such as the United
States and Germany, and competition from overseas rivals. EBay executives also
said they could face difficulties integrating companies that eBay has acquired,
such as Rent.com or Indian auction site Bazee.com; and expanding into untested
product categories, such as an online classified site launched Feb. 28 called
Kijiji.com.
More than 147 million people were registered to use the site at the end of
March, up 40 percent from the end of 2004. EBay hosted a record 431.8 million
listings in the first quarter, up 32 percent from the end of 2004.
EBay maintained 71.6 million accounts in its PayPal division, which processes
credit card payments and bank transfers between buyers and sellers who may not
know or trust each other. Quarterly revenue for the lucrative division was
$233.1 million, up 47 percent from the first quarter of 2004.
Sources: www.ebay.com
|
| |
Disney Faces Cultural, Economic Gap in China
Ever since Mickey Mouse visited Lin Huanbin's school here last summer, telling
fairy tales and passing out Mouseketeer certificates, the 11-year-old boy has
been unable to get Mi Laoshu out of his mind.
The boy loves the big mouse's funny misadventures. He keeps a photo of Mickey
and himself in a chest for safekeeping. And every chance he gets, he asks his
parents to take him to Hong Kong Disneyland when it opens this fall.
His parents aren't so enthused. They're wary of the theme park's planned high
admission cost. The boy's father, a businessman, also has a more deep-seated
worry.
"If Huanbin receives too much Western culture, in the future he may not cherish
family relations, forget his ancestors and not go back to our hometown," Lin
Zhengguang says.
Inside the Lin home and many others in China, there is a distinct generational,
cultural and economic divide -- and it figures to be a major challenge for Walt
Disney Co. and other Western companies trying to sell entertainment in the
world's fastest-growing emerging consumer market.
Although many Chinese children have grown up eating at McDonald's and watching
Shaquille O'Neal take on Yao Ming, their parents' generation isn't so familiar
or comfortable with many aspects of American life, especially if they cost a
lot.
Chinese movies, theme parks and entertainment merchandise -- although often
lacking in technical or artistic sophistication -- are much cheaper, although
not always legal. Inexpensive pirated DVDs and other knockoffs of Western films
continue to run rampant, despite government efforts to crack down.
What's more, even as Beijing has recently eased restrictions on foreign media as
part of an effort to encourage foreign investment and expertise in China's
entertainment industry, officials remain suspicious of Western cultural
influences.
That's particularly true when sex, politics and social mores are involved.
Popular American television programs such as "Friends" have been censored.
Beijing has long had a quota of how many foreign films it will approve for
theaters, and movies such as "Ocean's Eleven," which makes heroes of criminals,
have been rejected even for the DVD market. Hollywood movies, shown on
prime-time TV a decade ago, are now scheduled only late at night, past
children's bedtime.
"The government is cautious about opening the youth media industry to foreign
companies," says Yin Hong, vice dean of the journalism and communication school
at Tsinghua University in Beijing.
Recently, a few global entertainment corporations, including Sony Pictures
Television and Warner Home Video, have been allowed to form joint ventures in
China and enter markets long closed to outsiders. But government red tape and
rules have slowed their progress.
As much as any Western entertainment company, Disney has a long history in
China. The Magic Kingdom has been in the Middle Kingdom since 1937, when it
first showed "Snow White and the Seven Dwarfs" to a packed movie house in
Shanghai.
It's easy to see why the Burbank, Calif.-based company is stepping up efforts
here. China has about 260 million children younger than 15, not that much less
than the entire U.S. population.
Older teens are an attractive market too. Disney recently launched its ESPN
magazine in China and a mobile-phone subscription service, adding to other
businesses that include a 30-minute daily television show called "Dragon Club,"
cartoon magazines in Chinese and hundreds of Disney merchandise stores.
Despite Disney's overall favorable and wholesome image, however, some of its
more recent releases, such as "Mulan," haven't fared as well. That's in part due
to criticisms of cultural insensitivity. Analysts say Disney's advances also
have been slowed by a rigid, all-or-nothing strategy that has made it harder to
cut deals with the government and Chinese partners.
Late last year, Disney hired Stanley Cheung, a former Johnson & Johnson
executive, to head up its efforts in China. Disney declined requests to
interview Cheung and other managers in China.
But Robert Iger, Disney's CEO-designate, has told investors that China is a
priority. He's counting on Hong Kong Disneyland, scheduled to open Sept. 12, to
drive the company's retail and media businesses in that region, and he's spoken
about more investment ahead, including the possibility of a second Chinese theme
park in Shanghai.
The $1.8-billion Hong Kong park is projected to draw 5.6 million visitors in its
first year. At 311 acres, the park is relatively modest in size, just 10 percent
the size of Euro Disney and less than a third the size of the Disneyland Resort
in Anaheim, Calif. Disney says it will incorporate rides and shows from its
other parks, with Hong Kong Disneyland sectioned into familiar areas such as
Fantasyland, Toontown and Main Street, USA.
Forty percent of the visitors are expected to come from the mainland, many from
Guangzhou and Shenzhen, where Disney is now campaigning hard.
The Lins, with their Mickey Mouse-manic 11-year-old, are just the kind of family
Disney needs to attract to the park. They are among a burgeoning Chinese middle
class with money to spend on leisure and entertainment. And many Chinese
families, having only one child because of government edict, are willing to
spoil their kids.
To reach such households, the entertainment company has undertaken an unusual
grass-roots campaign, partnering with the Communist Youth League to organize
promotional activities at schools and communities.
Disney's visit last July to Fineland Experimental School in Guangzhou was a hit.
The private school has about 500 students, from kindergarten to junior high,
most of them from solidly middle-class homes.
When Mickey and his gang arrived, Zeng Weiqi, a 10-year-old who doesn't easily
get excited, was thrilled. After doing the Mickey Dance and shaking hands with
the mouse -- "I noticed he has four fingers," she said -- the girl, too, asked
her mom to take her to Hong Kong Disneyland.
Her mother, Zeng Shaofang, 35, says she isn't concerned about Western
corporations brainwashing her only child.
"We should let kids be exposed to different cultures," says Zeng, who teaches
fourth grade at another school in Guangzhou.
Yet she says she has no special feelings toward Disney. Unlike her daughter, she
doesn't know any of its stories, only Mickey Mouse. Zeng says she prefers
Doraemon, a popular Japanese cartoon.
Whether Zeng will take her daughter to Hong Kong Disneyland depends on time and
money, she says. China has one of the world's highest saving rates, about 40
percent, and Zeng and her husband, also a teacher, are no exception. But her
eyes widened when she learned about Hong Kong Disneyland's planned ticket
prices: $38 for adults and $27 for children 3 to 11. It will be higher on
weekends and school holidays.
That's a lot even for people in Guangzhou, which has perhaps the highest per
capita income of any city in China.
Happy Valley, an amusement park in Shenzhen, a bustling city less than two
hours' bus ride from Guangzhou or Hong Kong, charges $14.50 for adults and $7.25
for children taller than 3 1/2 feet. Shorter kids get in for free. The 86-acre
park looks like and imitates Disneyland, complete with its own version of
Frontierland and Toontown, which Happy Valley calls Cartoon Street.
Still, Disney and other entertainment companies are betting that the Chinese
public will want the real thing. "I think... Disney's park (in Hong Kong) will
have more clever themes and characters," says Li Dan, 22, a Guangzhou college
student who was visiting Happy Valley on a recent Saturday.
Sources: Los Angeles Times
|
| |
Amazon Courts Chinese Diaspora
AMAZON.COM is planning no more acquisitions in the fast-growing Chinese market,
but hopes to broaden appeal of its China unit to tens of millions of overseas
Chinese, a senior executive said.
Since buying Joyo.com for $US75 million ($97 million) in August, Amazon has
beefed up the site with software that can better analyze shopping patterns, and
has added features like the ability to change an order and the ability to accept
more credit cards, Amazon senior vice president of worldwide retail Diego
Piacentini said.
"Credit cards give much more opportunity for Chinese exports. There are 60
million wealthy Chinese outside of China. We want to position Joyo like we did
Amazon in the past, as the place to buy Chinese products worldwide," Mr.
Piacentini said.
In Beijing to announce a new Joyo management team, Mr. Piacentini declined to
give details of the company's financial operations, saying only that China, with
more than 100 million internet users, was a "huge" opportunity.
"We are really focused on the long-term. Given the number of people who are
going to be on the internet very soon, the evolvement of payments systems, the
opportunities are just large," he said.
"It's very difficult to predict how fast growth will come, but it's definitely
going to be a large amount of growth."
With some forecasting China's e-commerce market to top $US16 billion this year,
competition is fierce, and includes local players Sohu.com, Sina, NetEase.com
and Germany's Bertelsmann.
Amazon's international business is increasingly important to Amazon, which has
operations in six countries outside the United States.
For the first quarter of this year, Amazon's international operating profit rose
51 per cent from a year earlier to $US62 million while its North American profit
fell 13 per cent to $US66 million.
Asked if Amazon was looking at buying more firms in China, such as rival
Dangdang.com, Mr. Piacentini said: "We don't have any plans right now. We are
really focused on improving the customer experience, focused on low prices,
focused on making sure that selection at Joyo will improve."
Eventually Joyo would have to add more warehouses on top of the three it has in
Beijing, Shanghai and Guangzhou, but there was no timetable, Mr Piacentini said.
"It's going to take time. We have defined things we're going to work on first. A
lot of supply chain, how to reach customers better. A lot on the web site, to
help customers find things better. More payment systems available to Chinese
customers in general."
Sources: Australian IT
|
| |
FedEx Covers More of China
FEDERAL Express Corp (FedEx), which currently provides expressway
transportation services to 228 towns and cities in China, plans to extend its
ground network to 100 new destinations over the next five years, said FedEx Asia
Pacific vice-president Malcolm Sullivan.
"Our customers doing business in China are rapidly increasing, so it is
necessary to extend our ground network coverage to keep up with the expanding
customer base," he told StarBiz.
Sullivan added that FedEx currently flew to three gateways in China: Beijing,
Shanghai and Shenzhen.
"We will re-evaluate the opportunities for more flights to other gateways," he
added.
Sullivan said FedEx had just recently introduced three more flights to China
from the United States per week, from 20 presently.
Speaking at the recent China Symposium Agenda organised by FedEx in Penang,
Sullivan said FedEx was organising symposiums in the region to help its
customers understand the complexity of China¡¯s customs clearance regulations.
"We want to share whatever information we have on China's customs clearance
regulations and our experience in China with our customers."
Established in 1973 in Tennessee, USA, FedEx has a fleet of a 643 aircraft and
43,000 motorised vehicles, serving 215 countries and 378 airports worldwide.
With 137,000 employees worldwide, it handles more than 3.1 million shipments
worldwide, 63 million electronic transmissions daily and 500,000 calls per day.
Sources: Star Publications (Malaysia) Bhd
|
| |
|
|
|
|
|
|
