Tag Archives: China

Ele.me raises $1.25 billion from Alibaba and Ant Financial

Commentary
Alibaba is on an investment spree. After paying $1 billion to acquire a controlling stake in Lazada, the Chinese ecommerce giant contributed $900 million to Ele.me’s latest funding round. Ant Financial, an affiliate of Alibaba, contributed $350 million. Ele.me, which translates to “Are you hungry now?”, is a food delivery platform based in Shanghai. It previously raised $630 million from Didi Kuaidi at a $3 billion valuation in August. Its total funding is now $2.34 billion, making it China’s third most funded startup.

You can read about the funding here.

Alibaba acquires the South China Morning Post

Commentary
The publishing world is abuzz over the purchase of Hong Kong’s iconic newspaper the South China Morning Post (SCMP) by Chinese ecommerce giant Alibaba. The $266 million deal includes the 112-year-old English-language newspaper and other media properties such as outdoor advertising, digital assets and magazines. According to analysts, the acquisition of SCMP is a political move. By owning SCMP, Alibaba aims to improve and reshape the image of China, directly addressing what it calls the “wrong” portrayal of their home country in Western media. In short, the acquisition is about making China look good in the eyes of Western readers. Although the newspaper is not covered by China’s strict censorship rules, the acquisition will most likely heighten self-censorship, specially on controversial political issues.

Can Uber succeed in China?

Commentary
The rivalry is definitely heating up. Just as Uber raised $1.2 billion for its Chinese operations, its domestic rival Didi Kuaidi is set to raise $3 billion through its latest fundraising round. Both companies are keen on dominating China’s Internet-linked transport market and both are backed by powerful investors. Uber has the support of China’s Internet giant Baidu, while Didi Kuaidi is backed by Alibaba, Tencent as well as sovereign wealth fund, China Investment Corporation (CIC). At first glance, it seems Didi Kuaidi already has the upper hand, being a local player and enjoying the support of the Chinese government through CIC. Uber, on the other hand, is not about to play second fiddle. The company announced that it’s building a strong local team so it can assimilate culturally and administratively into China. It also claims it has a market share of 30% to 35%, a significant growth from 1% at the beginning of 2015. Now the question in everyone’s mind is, can Uber dominate the Chinese market? After all, the Chinese government has always favored local startups to foreign companies and there’s a chance that Uber will eventually be muscled out by its local competitor, just like what happened to eBay and Yahoo, which both failed to gain traction in China.

Should we be afraid of Lenovo?

Commentary

Should we be afraid of Lenovo?

Amidst the rising tension between China and the US, Lenovo Group, China’s largest PC vendor has acquired IBM’s x86-based server business for $2.3 billion. The acquisition comes almost a decade after Lenovo purchased IBM’s ThinkPad business for $1.75 billion. This latest deal, considered the biggest acquisition by Lenovo, is in line with IBM’s effort to shift its business to software and services. Gerry Smith, Lenovo’s President for North America, sees a “great marriage” that will leverage the strength of both companies. Critics, however, see them more as frenemies as the deal still needs to be cleared by the Committee on Foreign Investment in the U.S. (CFIUS), which protects national security. Sensitive acquisitions involving Chinese companies face the toughest scrutiny by the CFIUS.

So what are the implications of this deal on the American market? If the deal is cleared by the CFIUS, there is a chance that Lenovo may lose a great number of IBM customers in the US due to spying concerns, though that may be offset by growing its business in its home market China. The companies that stand to lose are HP and Dell, IBM’s old rivals in the server business, as they will now face new competition that will surely be more aggressive when it comes to pricing.