Posts tagged ‘Alibaba Group’

29/11/2016

Digital payment firms cash in on India’s money mess, but can it last? | Reuters

Digital payment providers in India have mobilised hundreds of extra workers to enrol small merchants and offered their services for free, betting that severe cash shortages will prove to be the opportunity of a lifetime.

Signing people up, however, may be the easy part.

Getting shops and customers to change their reliance on cash permanently will involve convincing people like Mohammad Javed, a 36-year-old meat shop owner in New Delhi.

Working out of a bustling market in the capital, he is surrounded by banks and ATM machines, but says he does not know how to use a credit card machine, let alone a mobile wallet.

He says business has dropped since Prime Minister Narendra Modi‘s shock move on Nov. 8 to ditch higher value banknotes, but Javed does not believe mobile app providers offer a solution to his problem – or to his customers.

“We don’t have knowledge or resources to open a mobile wallet or card-swipe machine, and our customers who pay 100-200 rupees ($1.46-$2.92) are not interested either,” he said.

Javed’s reluctance is a reality check for the likes of Paytm and smaller rival MobiKwik, which have gone into promotional overdrive since Modi’s announcement.

The prime minister, whose government supports digital payments, brought in demonetisation to crack down on the shadow economy and improve tax collection.

“Why should India not make a beginning in creating a ‘less-cash society?’,” he said on Sunday, “Once we embark on our journey to create a ‘less-cash society’, the goal of ‘cashless society’ will not remain very far.”P

ROMISING SIGNS

The companies say results have been promising so far.

Paytm, backed by Chinese Internet giant Alibaba Group Holding Ltd (BABA.N), has added 700 sales representatives since Nov. 8, taking its number of agents to 5,000.

Advertisement boards of Paytm, a digital wallet company, are seen placed at stalls of roadside vegetable vendors as they wait for customers in Mumbai, India, November 19, 2016.

The company, which has 4,500 full-time employees, plans to double the number of agents to more than 10,000, as it aggressively expands its network.

It says it has nearly doubled the number of small merchants signed up to its services to 1.5 million in the last few weeks and added eight million clients to the 150 million it had before the banknote ban.

MobiKwik, whose backers include U.S. venture capital firm Sequoia Capital and American Express (AXP.N), said it had increased its agent base to more than 10,000 from about 1,000 before the Modi move.

Merchants on its platform have risen to 250,000 from 150,000 previously, and chief executive Bipin Preet Singh said they were aiming for a million in up to two months. It has added 5 million accounts since Nov. 8, bringing the total to 40 million.

But challenges loom.

Credit Suisse estimates more than 90 percent of consumer purchases are made in cash, as millions still do not have bank accounts. Those who do have bank cards mainly use them to withdraw from cash machines.

Sales of cheap smartphones have boomed in recent years, but internet networks remain patchy, especially in rural India. Financial literacy and technology usage also remain low.

Dillip Kumar Agrahari, a vegetable seller in a Mumbai suburb, recently signed up to Paytm but does not know how to operate a smartphone.

He hopes switching to digital payments will improve his business as the cash crunch drags on, but says he will have to depend on a cousin to help with accounts.

Many businesses have traditionally opted for cash transactions because they are hard for the tax man to trace, given sales taxes are typically at least 10 percent.

Mangal Singh, a furniture store owner, said nearly 80 percent of his business was transacted in cash, even though he accepts credit card payments.

“We are working on wafer-thin margins,” he said. “If we are asked to pay 12.5 percent tax and other charges, we will have to close down our shops.”

Concerns also remain about the infrastructure for mobile payments, as customers or merchants from one platform cannot transfer payments to another.

MobiKwik said it had started offering wallet-to-wallet transfers, though not all rivals were on board.

WHEN WILL PROFITS COME?

The challenges raise questions about whether the business models of mobile payments providers are sustainable.

Paytm recently slashed fees until Dec. 31, from a system of fees that ranged from 1 to 4 percent, with the most lucrative coming from telephone and utility bill payments.

MobiKwik is not charging fees until March 2017.The closely-held companies are loss-making.

Paytm Chief Executive Vijay Shekhar Sharma said the company expected to reach profitability in two years, without giving details. MobiKwik’s co-founder Upasana Taku said they hoped to become profitable in mid-2018.

Fitch Ratings believes that once the cash crunch subsides, some merchants and customers will go back to business as usual, using notes to pay for transactions.

“I would expect some amount of behavioural changes,” said Fitch analyst Saswata Guha. “We’re still not sure if this shock per se is incentive enough for them to completely change the way they do things.”

($1 = 68.1384 Indian rupees)

Source: Digital payment firms cash in on India’s money mess, but can it last? | Reuters

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13/08/2016

How Alibaba is Tapping India – The Numbers – WSJ

As its business matures at home, Chinese e-commerce giant Alibaba Group Holding Ltd. is looking to boost growth elsewhere in Asia — especially India, home to a nascent but fast-growing online shopping sector.

Here’s how — and why – it is targeting the world’s second-most-populous nation.

1.2 billion

The number of customers outside of China that Alibaba would like to reach, according to the company’s Chairman Jack Ma.

$127 billion

The projected value of India’s e-commerce market in 2025, up from $11.2 billion last year, according to Goldman Sachs Global Investment Research.

$500 million

The amount of money New Delhi, India-based e-commerce startup Snapdeal.com raised in a fundraising round led by Alibaba last year.

More than $500 million

The amount Alibaba and its affiliate Ant Financial Services Group last year paid for 40% of One97 Communications, the parent company of Noida, India-based online-payment and marketplace startup Paytm.

2 or more

Prominent executives Alibaba has hired in recent months who have experience in India’s e-commerce sector.

Source: How Alibaba is Tapping India – The Numbers – WSJ

13/08/2016

U.S. and UK tech startups welcome in China – with a little supervision – The Stack

U.S. and UK tech startups welcome in China – with a little supervision Martin Anderson. Editor, The Stack, Friday 12th August

On August 1st Travis Kalanick, CEO and co-founder of Uber, finally admitted defeat regarding the company’s three-year crusade to gain a foothold in China, with the ‘merging’ (most consider it a ‘sale’) of Uber’s Chinese operations with local incumbent Didi Chuxing. Whatever Kalanick may have recovered from the concession, it seems unlikely that Uber will recoup the billions it has already poured into its most distant territory. But there was no alternative – by January of this year, the Uber board was urging that the ride-sharing giant – such an indefatigable combatant in so many contested territories – throw in the towel.

Ultimately Didi was going to win this battle; despite cash and equity of $28 billion vs Uber’s $68 billion, Didi had reserved $10 billion to strengthen its grip on this fundamental societal change in China – almost on a par with what the  better-financed Uber was willing to invest.

A headline-grabbing contest of this nature gives the false impression of China as isolationist in terms of cooperating with global tech startups – it isn’t. The country runs a UK-China tech incubator in Shenzhen, backed by Tencent and providing crucial advice on the peculiarities of the Chinese market to Brit startups. The deal even offers free office space, business counsel and pitch opportunities. Whilst willing to repel boarders on the scale of Uber, China has no problem in contributing to a post-Brexit UK brain drain.

Likewise Alibaba runs a similar scheme to increase tech migration from the United States – almost impossibly tempting for new companies dazzled by the economy-of-scale that Chinese success promises, and struggling for attention in saturated home markets. Perhaps the most useful aspect of these international schemes is the business advice from native sources – western entrepreneurs see huge opportunities in Chinese numbers, yet fail to take account of national psychology; either on an individual level (the Chinese consumer), or at the level of a state which is well aware of its riches – and needs only as much western genius to exploit them as serves its future interests in the post-sharing economy.

Source: http://email.thestack.com/q/11mUpgMA6G1pvcOkWw5ppxj/wv

23/02/2016

‘Weird’ new buildings banned in Chinese cities| Society

Cities will not be allowed to build more “oversized, xenocentric, weird” buildings devoid of cultural tradition in the future, according to a new directive from the central government.

The State Council, or the cabinet, and the Communist Party of China Central Committee issued the directive on Sunday. It says buildings should be “suitable, economic, green and pleasing to the eye.”

Cities have built some unusually shaped buildings to create memorable skylines in recent years, but many have drawn criticism. Here is one of sixteen very weird buildings in China!'Weird' new buildings banned in Chinese cities

See the other fifteen at:

Source: ‘Weird’ new buildings banned in Chinese cities[12]| Society

27/01/2016

With China weakening, Apple turns to India | Reuters

As China sales show signs of cooling, Apple Inc (AAPL.O) is touting India’s appetite for iPhones, betting that rising wages and an expanding middle class will pull consumers away from the cheap alternatives that currently dominate the market.

In an earnings call in which the company reported meager iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple.

Sales of the company’s flagship smartphone climbed 76 percent in India from the year-ago quarter, Apple Chief Financial Officer Luca Maestri said.

According to data compiled by Counterpoint Technology Research, Apple sold an estimated 800,000 iPhones in India in the fourth-quarter, its highest ever amount but one that is a fraction of the 28 million smartphones sold during that period.

Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market. While revenue in Greater China rose 14 percent in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters in an interview.

But with nearly 70 percent of smartphones selling for less than $150 in India, Apple’s high-end phones remain out of reach of most consumers. The basic iPhone 6S sells at just under $700 in India, or nearly half the average annual wage.

“In many ways India is very similar to what China was a few years ago, but the middle class here is still very small and it can be two to three years before Apple gets a similar level of success in India,” said Counterpoint Technology Research analyst Tarun Pathak.

Apple CEO Tim Cook struck a more optimistic note, saying the company was “increasingly putting more energy” into India, citing a largely youthful population with rising disposable income as more people join the workforce.

With faster 4G coverage expanding, Apple has already asked Indian government for a license to set up its own retail stores just as the market seems to be turning in its favor.

As in China, Apple products are a coveted status symbol in India, a market that analysts say is likely to overtake the United States next year to become the world’s second largest smartphone market. “The love for the iPhone is there,” said Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel ComTech, a consumer research firm.

Source: With China weakening, Apple turns to India | Reuters

31/03/2015

China aims to double doctor numbers as cure for healthcare woes | Reuters

China will almost double the number of its general doctors by 2020, trim its public sector and improve technology as it seeks to fix a healthcare system plagued by snarling queues and poor rural services, its main administrative authority has said.

People queue at a hospital in Shanghai, September 2, 2014.  REUTERS/Aly Song

China’s fast-growing healthcare market is a magnet for global drug makers, medical device firms and hospital operators, all looking to take a slice of a healthcare bill expected to hit $1 trillion by 2020, according to McKinsey & Co.

“Healthcare resources overall are insufficient, quality is too low, our structures are badly organized and service systems fragmented. Parts of the public hospital system have also become bloated,” China’s State Council said in a five-year roadmap announced late on Monday.

The roadmap, which laid out targets for healthcare officials nationwide between 2015 and 2020, said Beijing wanted to have two general doctors per thousand people by 2020, close to double the number at the end of 2013, as well as increasing the number of nursing and support staff.

China suffers from a scarcity of doctors – partly caused by low salaries – which has created bottlenecks at popular urban hospitals leading to rising tension between medical practitioners and often frustrated patients.

The roadmap said China would also look to use technology such as mobile devices and online “cloud systems” to meet some of the issues, a potential boost to tech firms like Alibaba Group Holding Ltd and its healthcare subsidiary Alibaba Health Information Technology Ltd.

China should also have digital databases for electronic health records and patient information covering the entire population to some degree by 2020, it said.

Providing access to affordable healthcare is a key platform for President Xi Jinping‘s government. However, recent probes have turned the spotlight on corruption in the sector, while patients often have large out-of-pocket expenses due to low levels of insurance coverage.

The roadmap said China would push forward the development of grassroots healthcare, a fast-growing business segment, while reining in some large public hospitals in urban centers.

The document also suggested further opening to the private sector, where Chinese and international firms have been taking a growing role in running hospitals.

“The role of public health institutions is too big, with the number of beds accounting for around 90 percent of the total,” the State Council said.

via China aims to double doctor numbers as cure for healthcare woes | Reuters.

14/02/2015

Jack Ma Tells Alibaba Staffers: No Red Packets This Year – China Real Time Report – WSJ

Instead of handing out envelopes of cash to Alibaba’s employees this Lunar New Year, Jack Ma is distributing a huge reality check.

Chinese companies typically hand out red envelopes – known as hongbao – stuffed with money to employees on the eve of the big Lunar New Year holiday, which begins Wednesday. Alibaba Group would seem to be good for a similar reward, given its $25 billion initial public offering bonanza in September.

But in a post on his personal microblog site Friday, Mr. Ma said such rewards are reserved only for exceptional results.

“The reason for not distributing red envelopes is that in the past year, Alibaba Group has not had exceptional results and not had any special surprises,” said Mr. Ma, the company’s founder and executive chairman. “The success of becoming listed should not be a surprise as it was the result of all of Alibaba’s employees’ work over 15 years. But aside from going public, objectively speaking, we haven’t been that satisfied with our results in 2014 that we should distribute red envelopes.

“We must objectively and calmly see our own results, rationally regard external views and not let ourselves be lost in illusory fame,” he said.

Ouch.

via Jack Ma Tells Alibaba Staffers: No Red Packets This Year – China Real Time Report – WSJ.

05/02/2015

Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters

Ant Financial Services Group, an affiliate of China’s Alibaba Group Holding Ltd (BABA.N), has agreed to buy 25 percent of Indian payment services provider One97 Communications, tapping into the country’s smartphone and online industry boom.

The companies did not provide the value of the deal, but a person with knowledge of the matter called the investment a precursor to One97 listing on the stock exchange, and said the stake was worth more than $500 million.

The deal values One97 at more than $2 billion, making it one of the most-valuable start ups in the country. One97 runs Paytm, an online platform through which users can shop or pay utility bills, whereas Ant runs Paytm’s Chinese peer Alipay.

Alibaba spokeswoman Teresa Li and One97 founder Vijay Shekhar Sharma declined to disclose the value. Sharma told Reuters that Ant would buy new shares in his company.

Paytm has benefited from the spread of affordable handsets and internet connectivity which has turned India into the fastest-growing smartphone market in the Asia-Pacific region, according to researcher IDC.

via Alibaba’s Ant Financial to buy 25 percent of India’s One97 | Reuters.

29/01/2015

China pledges to ‘regulate and revamp’ e-commerce sector amid Alibaba row | South China Morning Post

The Ministry of Commerce said it will boost regulation of China’s e-commerce sector amid the continuing row between Alibaba Group, over alleged sale of fake goods by its subsidiary Taobao.com, and the State Administration for Industry and Commerce (SAIC).

Alibaba's corporate headquarters in Hangzhou, Zhejiang province. Photo: Reuters

Shen Danyang, a spokesperson for the Ministry of Commerce, said on Thursday that the move was aimed at revamping the entire sector.

Last year, the ministry investigated more than 11,000 violations in the fast-growing e-commerce industry, and closed 3,400 websites, Shen said. The ministry would continue its campaign to build a safe and reliable market for consumers.

Online media company Sina reported on Thursday that a SAIC spokesperson denied they had received a formal complaint from Taobao.com against director Liu Hongliang, despite Taobao’s claim yesterday that they would do so.

An open letter was published on Taobao’s official Weibo account on Tuesday accusing SAIC director Liu of commissioning an “unfair” quality survey of goods sold on the platform, which resembles eBay of the US, and making public the results without giving online shop owners a chance to appeal.

Alibaba Group is due to release its quarterly earnings tonight.

via China pledges to ‘regulate and revamp’ e-commerce sector amid Alibaba row | South China Morning Post.

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