Tuesday Tech Briefing: Ofo, Alipay, Starbucks
DEALS AND FUNDRAISING
1. Ofo Denies Reports That Didi Is About to Acquire It
What: Chinese tech news site 36Kr reported that bike-sharing company Ofo is reaching deal to be acquired by ride-hailing giant Didi Chuxing, citing anonymous sources. The sale would value Ofo at around $1.5 billion, which is about half the price Meituan-Dianping paid to acquire rival bike-sharing company Mobike. However, Ofo said in a statement that no such deal existed.
Why it’s important: China’s bike-sharing industry is in the process of consolidation. Meituan’s purchase of Mobike and Alibaba’s support for Hellobike have put a lot of pressure on Ofo. Both Alibaba and Didi are shareholders of Ofo, so any sale of Ofo would require approval from both companies. (Source: 36Kr, link in Chinese)
2. Semiconductor Company ASE Group Plans to List Mainland Subsidiary
What: Taiwan-based semiconductor company ASE Group is planning to combine all its subsidiaries on the Chinese mainland into one company and list that company on the stock market, ASE Group’s chairman Jason Chang said in an exclusive interview with local newspaper Economic Daily News. Chang said that one mainland subsidiary, Universal Scientific Industrial Co., Ltd., is already listed in the Shanghai Stock Exchange, and that he may use it to acquire ASE Group’s other mainland assets.
Why it’s important: ASE Group acquired fellow semiconductor company Siliconware Precision Industries Co. Ltd. late last year and now needs to raise more money through the stock market. The successful initial public offering of Foxconn Industrial Internet Co. Ltd. in June has encouraged other Taiwanese companies to list their companies on the mainland. (Source: Economic Daily News, link in Chinese)
BIG TECH COMPANIES
3. Starbucks to Partner with Alibaba’s Ele.me to Deliver Coffee
What: Starbucks Coffee Co. has formed a partnership with Ele.me, a food delivery unit under Alibaba Group, to deliver its coffee in China, sources told the South China Morning Post. Starbucks is scheduled to hold a press conference on Thursday to announce its new China strategy.
Why it’s important: Starbucks had a rare sales decline in China in the second quarter, amid intensified competition from several Chinese start-ups. Those startups all offered delivery services for their coffee, as Chinese consumers have grown used to this convenience after the emergence of food delivery apps in recent years. (Source: South China Morning Post)
4. Alipay to Officially Launch Mini Programs This Week
What: Online payment service provider Alipay will officially launch its mini programs — essentially apps that function within the Alipay app — for all users this week, one year after social media company and payment rival WeChat began offering a similar service. Alipay will allow users to connect to local services via its in-app mini programs, which are currently still in a beta stage.
Why it’s important: Mini programs are a way for Alipay to catch up with WeChat Pay in connecting users to a wider range of services without having to download additional apps on their smartphones. Starbucks will soon offer a mini program through Alipay, as part of its partnership between Alibaba and Starbucks. (Source: 36Kr, link in Chinese)
5. Tax Evasion Scandal Rattles Film Studio Stocks
What: Shares of leading Chinese film studios plunged amid a brewing tax-evasion scandal that has rocked the entertainment industry and ensnared top actress Fan Bingbing. China’s entertainment giant Huayi Brothers Media fell nearly 7% Monday, and Zhejiang Talent Television & Film, of which Fan is a shareholder, plunged by the daily limit of 10%. The nosedive came as rumors circulated that Fan has been prohibited from leaving the country because she is under investigation of tax evasion.
Why it’s important: Fan, a household name in China, topped last year’s Forbes list of highest paid Chinese celebrities with earnings estimated at $45 million. Fan has been in hot water since May when the State Administration of Taxation started to look into the tax evasion allegations made by former CCTV talk show host Cui Yongyuan against Fan on social media. (Source: Caixin)
6. China Denies Issuing Business License to Facebook Subsidiary in China
What: Facebook was found last week to have set up a subsidiary in Hangzhou, home of e-commerce giant Alibaba, which the company said was part of plans for an “innovation hub” aimed at supporting local tech talent. However, two Chinese government agencies said on Monday that Facebook has not been issued a business license.
Why it’s important: Reporters found the subsidiary’s registration record on the website of China’s National Enterprise Credit Information Publicity System on July 24. Facebook Hong Kong was listed as the company’s sole shareholder. But that record disappeared after media reports surfaced, showing how difficult it is for Facebook to re-enter the Chinese market amid trade tensions between China and the U.S. (Source: Financial Times)
Compiled by Zhang Erchi and Zhang Yidi
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