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2014 To See Consolidation For Web, Retail
Photo Credit: Forbes Business

2014 To See Consolidation For Web, Retail

Jan 2 2014, 8:37am CST | by

It’s quiet outside as markets reopen on this first work day after the New Year, so I thought I’d start off 2014 with some predictions for the year ahead in the sectors that I cover. Generally...

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28 weeks ago

2014 To See Consolidation For Web, Retail

Jan 2 2014, 8:37am CST | by

It’s quiet outside as markets reopen on this first work day after the New Year, so I thought I’d start off 2014 with some predictions for the year ahead in the sectors that I cover. Generally speaking, I do think the first half of the year will see a continuation of strong momentum that began in late 2013 for many sectors. But that  momentum will slow as we near the mid-year mark, and 2014 could end with a whimper as the Chinese economy continues to slow and Beijing pushes for higher quality growth.

E-commerce: E-commerce has been the biggest Internet story in China over the last 2 years, fueled by explosive growth that has helped sector leader Alibaba become one of China’s most valuable private companies. The big e-commerce story of 2013 will be Alibaba’s blockbuster IPO, which could value the company at $100 billion and is almost certain to take place in Hong Kong. Other big stories will include the likely New York IPO of Jingdong, the second largest player. We could also see one or more major mergers, with players like Dangdang (NYSE: DANG), Gome (HKEx: 493) and perhaps even Jingdong as some of the most likely candidates to form major new tie-ups.

Online search: The new year will see a new trio of dominant players emerge in this hotly contested space, led by traditional leader Baidu (Nasdaq: BIDU) and up-and-coming rivals Qihoo 360 (NYSE: QIHU) and Sohu (Nasdaq: SOHU). I predict that Qihoo’s market share will top out in the 25-30 percent range following a year of explosive growth in 2013, while Sohu could grab up to 20 percent of the market following the recent tie-up between its Sogou search service with Tencent’s (HKEx: 700) smaller Soso. That should still leave Baidu with about half the market.

Other Internet: 2014 is likely to see some major mid-sized companies close or get purchased, as they struggle to compete with the bigger players. I suspect that online clothing seller Vancl and group buying site LaShou will cease to exist as independent companies by year end. Meantime, many new instant messaging services aiming to challenge Tencent’s WeChat will struggle to find an audience. Most notable among those is Alibaba’s Laiwang, which will post a disappointing year despite aggressive promotion. Elsewhere in social networking services (SNS), Sina’s (Nasdaq: SINA) Weibo microblogging service will finally become profitable and make a well-received IPO in New York during the year.

Smartphones: Trendy smartphone maker Xiaomi will continue its meteoric rise, helped by one or more major new distribution agreements as the company attempts to go global. But stodgier domestic rivals Huawei, ZTE (HKEx: 763; Shenzhen: 00063) and Lenovo (HKEx: 992) could struggle in their global expansion plans, and also see their margins erode sharply as ongoing price wars intensify for control of their home China market, the world’s largest for smartphones.

Retail: Traditional retailers will continue to struggle amid stiff competition, the rising challenge of e-commerce, and overly aggressive expansion over the last few years. Big global names like Walmart (NYSE: WMT) and Carrefour (Paris: CA) are likely to accelerate their closure of underperforming stores, and could also slow down their new store openings. Fast food giants like KFC (NYSE: YUM) and McDonalds (NYSE: MCD) are also likely to see similar trends. We could also see one or more mergers among some major local players, with names like sportswear specialist Li Ning (HKEx: 2331) or grocery operators like Lianhua (HKEx: 980) as likely candidates for new combinations.

Cars: Growth for the domestic auto market will start the year strongly in the low double digits, but could dip into the single digits in the second half as cities restrict their issue of new licenses in a bid to ease congestion and clean up polluted air. Domestic players like Geely (HKEx: 175) and Chery could face the biggest difficulty, though big foreign names will also be forced to offer strong incentives to maintain their growth.

Doug Young is a former China company news chief for Reuters who teaches financial journalism at Fudan University in Shanghai. To read more of his commentaries on China tech news, click on www.youngchinabiz.com .

Source: Forbes Business

 
Update
10

6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rak ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
9

6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

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KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into by rob ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
8

6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

Federal Aviation Administration Bans All US Flights To Israel
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakyat ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
7

6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
6

6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

INDIA-CHINA-DIPLOMACY-TRADE
PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Selatan’ in the southern states last ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
5

6 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2.78 million in compensati ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
4

6 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Musta ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
3

7 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year involving an allocation of ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
2

7 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 
Update
1

7 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara D ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia
 

 

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