More Chinese enterprises jump on e-commerce bandwagon

December 23, 2013 Leave a comment

More Chinese enterprises jump on e-commerce bandwagon

Staff Reporter

2013-12-22

In line with the growing integration of virtual and physical commerce, Chinese e-commerce giant Alibaba Group announced on Dec. 9 a strategic partnership with consumer electronics and appliance producer Haier, under which Alibaba will inject 2.822 billion yuan (US$465 million) into Haier in exchange for a 34% stake in the latter’s subsidiary Ririshun Logistics.The partnership will on one hand facilitate Alibaba’s penetration into the logistics sector, essential for e-commerce operations and represents a major step for Haier to enter the e-commerce sector on the other. “Haier and Alibaba will complement each other greatly via the powerful digital platform of Alibaba,” said Su Liang, brand superintendent of All View Consulting.

Lei Jun, CEO of low-cost smartphone maker Xiaomi said that the era of e-commerce for consumer electronics has begun.

Another example of the blending of the virtual and physical marketplaces was the recent low-profile launch of wanhui.cn by realty developer Dalian Wanda Group. Observers here however are dubious about how profitable the new venture may be. “Wanda’s core business is general commercial property, rather than retail business and it’s unclear how its new website can make profit. The road ahead for Wanda for its e-commerce business will be rough,” said e-commerce industry analyst Wu Zhenwang.

Shan Ren, a commentator at state TV broadcaster CCTV, has a rosy outlook for wanhui.cn, however, saying traditional enterprises can take advantage of their solid customer base in developing e-commerce.

Two notable examples are Gome and Suning, two leading retailers of consumer electronics who have added a powerful online presence to their network of retail stores. “I believe even more traditional business giants will jump onto the e-commerce bandwagon in 2014 and 2015 as they become aware that the trend is irresistible, as shown by the Double 11 (Singles’ Day, Nov. 11) online shopping festival,” said Shan. “The real value of e-commerce lies in the use of the internet by traditional enterprises to maximize their advantages in the fields of capital, products, manufacturing and services.”

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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