Analysis: “Housewives” heads to China as Hollywood inks deals
SHANGHAI (Reuters) – Hollywood studios are set to break into China’s massive Internet market as domestic video sites scramble to screen U.S. movies and dramas on their digital platforms, a move which could also curb rampant piracy.
China’s Youku’s and Sohu’s online video platforms have already cut deals with Disney and CBS Corporation to stream U.S. drama serials such as “Desperate Housewives,” “Grey’s Anatomy” and “Gossip Girl,” and more such deals are expected.
This represents a lifeline for Hollywood studios who have struggled to make money in China due to persistent piracy and the country’s quota system that limits the number of foreign movies screened in theatres to 20 per year.
“Major Hollywood studios have struggled to find a viable business model in the China market and cooperating with China’s online video sites for paid viewing of their content finally gives them a way to make money here,” said Mark Natkin, managing director of Beijing-based consultancy Marbridge Consulting.
China is the world’s largest Internet market, with more than 450 million Internet users, and online video firms are stepping up their fight to secure a bigger piece of the market share to win advertisers.
Advertising revenue in the domestic online video market, which was virtually non-existent five years ago, is now estimated to be worth 1 billion yuan ($155 million). This is expected to grow at double-digit rate for the time being.
Online video providers such as Youku have also started pay-per-view for some movies, thus giving them a new source of revenue.
China tells US “good old days” of borrowing are over
NEW YORK/SHANGHAI, Aug 6 (Reuters) – China bluntly criticised the United States on Saturday one day after the superpower’s credit rating was downgraded, saying the “good old days” of borrowing were over.
Standard & Poor’s cut the U.S. long-term credit rating from top-tier AAA by a notch to AA-plus on Friday over concerns about the nation’s budget deficits and climbing debt burden.
China — the United States’ biggest creditor — said Washington only had itself to blame for its plight and called for a new stable global reserve currency.
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency said in a commentary.
After a week which saw $2.5 trillion wiped off global markets, the move deepened investors’ concerns of an impending recession in the United States and over the euro zone crisis.
Finance ministers and central bankers of the Group of Seven major industrialised nations will confer by telephone later on Saturday or on Sunday, a senior European diplomatic source said.
The source said the credit rating downgrade had added a global dimension on top of the euro zone debt issue, raising the need for international coordination.
China flays U.S. over credit rating downgrade
NEW YORK/SHANGHAI (Reuters) – The United States lost its top-tier AAA credit rating from Standard & Poor’s, drawing a blast of criticism on Saturday from its biggest creditor China and deepening investors’ alarm over the euro zone’s debt crisis.
China said Washington only had itself to blame and called for a new stable global reserve currency.
“The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone,” China’s official Xinhua news agency said in a harshly worded commentary.
The S&P cut in the U.S. long-term credit rating by a notch to AA-plus resulted from concerns about the nation’s budget deficits and climbing debt burden. The move is likely to eventually raise borrowing costs for the U.S. government, companies and consumers.
By calling the outlook “negative,” S&P signaled another downgrade is possible in the next 12 to 18 months.
Worries that the United States was slipping into recession and the euro zone debt crisis was spreading drove a week-long rout in which $2.5 trillion was wiped off global markets.
Better-than-expected U.S. jobs growth in July helped support Wall Street on Friday but stocks slipped back into the red in late trading.
China taxi drivers strike for third day, some return to work
HANGZHOU, China (Reuters) – A strike by Chinese cab drivers in the eastern tourist city of Hangzhou stretched into a third day on Wednesday, in the latest unrest highlighting frustration among migrant workers struggling with rising costs and burdensome fees.
More than 100 drivers, mostly from central Henan province, and their families, gathered under a bridge in the suburbs of the scenic city about 190 km (120 miles) southwest of Shanghai, demanding higher wages.
“They tell us, ‘if you are so unhappy, why don’t you go back.’ They don’t treat us seriously because we are not from here,” said a driver, who appeared to be in his late 40′s and who declined to give his name.
“I have been driving for a long time, and this is the first time I have been on strike. Xiamen was great, but the daily takings were low so I came to Hangzhou. But with fuel price rises, it is getting too expensive.”
Cabbies in Hangzhou say they make about 500 yuan a day ($77), but pay out nearly 80 percent of that in fuel and vehicle rental fees.
About 1,500 disgruntled taxi drivers went on strike at rush hour on Monday morning, according to state media. Cabbies said many thousands more had gone off the job.
Still, more taxis were seen on the roads in the city center, a popular tourist destination with the famed West Lake, on Wednesday compared with the previous day when they had all but deserted the area.
China taxi drivers strike, dismiss pledges to boost fares
HANGZHOU, China, Aug 2 (Reuters) – Striking cab drivers in Hangzhou denouncing rising fuel prices and demanding the government make good on pledges to raise fares abandoned their vehicles for a second day on Tuesday, and planned street protests despite a heavy police presence.
Hundreds of idle cabs lined the roads in a outlying residential area of the city in eastern Zhejiang province where many of the drivers live.
Chinese state media said 1,500 disgruntled cabbies went on strike at rush hour on Monday morning in the latest protest to hit China’s transportation industry. Cabbies said many thousands more were off the job.
By mid-afternoon on Tuesday, taxis had all but deserted the centre of Hangzhou, a popular tourist destinations with a picturesque lake.
More than 100 drivers marched near a bus station, trying to block traffic and heckling drivers still taking passengers.
As dusk approached, many shirtless cabbies and women bouncing babies on their hips milled about in sweltering summer heat at one of three designated rally points in anticipation of a growing crowd.
Police were out in force, backed up by riot control buses and cars.
A Chinese consumer’s unfortunate encounter with a fake Apple store
On a recent reporting trip to the Chinese city of Kunming to scout out fake Apple stores, I met Wang, a 23-year-old woman who was furious at one particular retailer. As I interviewed her, Wang was nearly in tears as she recounted how she had spent a few months salary at a fake Apple store buying products she now doubts are real.
Wang’s experience is part of a bigger problem foreign brands face in the city, which are racing to reach the millions of potential customers in China’s burgeoning middle class.
On my visit to Kunming, I saw Nike and Adidas stores everywhere and it was hard to determine which stores were legitimate. On one particular road, there are two Nike stores that stood almost directly opposite each other. Both stores, incidentally, displayed the big trademarked “Swoosh.” I doubt that Nike would allow their resellers to be located so closely together for fear of market cannibalization. But, of course, these stories might not have been real Nike resellers.
A little further down on another road, there was a hole-in-the-wall “Walt Disney” store selling generic princess costumes and a “Toni and Guy” salon. That salon, as if trying to convince the passer-by that it was authentic, had the word “England’s” tacked onto the storefront.
Like many second and third-tier cities in China, Kunming has a rapidly growing middle class that is adjusting to rising disposable incomes. This is surely the lure for big foreign brands like Cartier, Zara and H&M, who all have official stores in the downtown area, and for counterfeiters as well.
While major consumer brands like Starbucks, Yum Brands’ KFC and McDonald’s have made second and third-tier cities a priority, many others, like Apple, have not. Which is why the much of the Chinese population is not familiar with the particular subtleties of Apple branding. In the case of the fake Apple store I saw, only experts could tell the difference: the elaborate detail someone went to copy the store layout, design — even the blue staff t-shirts — blew my mind.
In Shanghai or Beijing, these fake Apple stores wouldn’t cut it. Consumers in those cities are far more likely to check prices on the Internet before buying, and are far savvier.
Alibaba.com shares up after parent’s Alipay deal
HONG KONG/SHANGHAI (Reuters) – Shares of Alibaba.com Ltd (1688.HK: Quote, Profile, Research, Stock Buzz) rose to a two-week high on Monday after its parent, Chinese e-commerce firm Alibaba Group, forged a complex deal with SoftBank Corp (9984.T: Quote, Profile, Research, Stock Buzz) and Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz) over mobile payments unit Alipay.
Alibaba.com, the only listed unit of Alibaba Group, rose as much as 7.37 percent to a two-week high of HK$11.66, outperforming the Hang Seng Index’s .HSI 1.39 percent gain.
“I don’t think the rise has anything to do with the listed company, it has more to do with the parent company managing to settle the Alipay issue with its two major shareholders,” said Elinor Leung, a Hong Kong-based CLSA analyst. “Net-net it is good for the entire Alibaba Group development so you don’t have the (risk) overhang anymore.”
Alibaba, Yahoo and Softbank on Friday announced a deal that would see Alibaba receive up to $6 billion in the event that Alipay is listed or sold.
The deal capped months of intense negotiations sparked by the transfer of Alipay to a company wholly owned by Alibaba Group founder Jack Ma.
Alibaba Group said the transfer was necessary for Alipay to comply with domestic regulations in order acquire a license to continue operating as an e-payment service. Yahoo said in May that it was not aware of the transfer, while Alibaba countered that it had kept Yahoo and Softbank board members in the loop.
Alibaba Group, China’s largest e-commerce company, is 40 percent owned by Yahoo and 30 percent owned by Softbank Corp.
Chinese retailers hijack the Ikea experience
KUNMING, China (Reuters) – Nestled in a sleepy southern district of Kunming city in southwest China, is a 10,000 square meter, four-storey building that could make Swedish furniture giant Ikea uneasy.
11 Furniture, as the store is known, copies Ikea’s blue and yellow color scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea’s Swedish meatballs and salmon.
This knock-off Ikea store is emblematic of a new wave of piracy sweeping through China. Increasingly sophisticated counterfeiters no longer just pump out fake luxury handbags, DVDs and sports shoes but replicate the look, feel and service of successful Western retail concepts — in essence, pirating the entire brand experience.
“This is a new phenomenon,” said Adam Xu, retail analyst with Booz&Co. “Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats.”
Brands are much more than a logo on a handbag or some half-eaten pipfruit on a computer.
Many of the most successful consumer companies have invested millions in promoting and building brands which encapsulate ideals, values and aspirations, creating valuable and loyal customer bases that sometimes border on cults.
Last month, an American blogger set off a media storm after she posted pictures of an elaborate fake Apple Store in Kunming, selling genuine if unauthorized iPhones, Macbooks and other widely popular Apple products.
Chinese retailers hijack the Ikea experience in fast-growing west
KUNMING, China, Aug 1 (Reuters) – Nestled in a sleepy southern district of Kunming city in southwest China, is a 10,000 square metre, four-storey building that could make Swedish furniture giant Ikea uneasy.
11 Furniture, as the store is known, copies Ikea’s blue and yellow colour scheme, mock-up rooms, miniature pencils, signage and even its rocking chair designs. Its cafeteria-style restaurant, complete with minimalist wooden tables, has a familiar look, although the menu features Chinese-style braised minced pork and eggs instead of Ikea’s Swedish meatballs and salmon.
This knock-off Ikea store is emblematic of a new wave of piracy sweeping through China. Increasingly sophisticated counterfeiters no longer just pump out fake luxury handbags, DVDs and sports shoes but replicate the look, feel and service of successful Western retail concepts — in essence, pirating the entire brand experience.
“This is a new phenomenon,” said Adam Xu, retail analyst with Booz&Co. “Typically there are a lot of fake products, now we see more fakes in the service aspect in terms of (faking) the retail formats.”
Brands are much more than a logo on a handbag or some half-eaten pipfruit on a computer.
Many of the most successful consumer companies have invested millions in promoting and building brands which encapsulate ideals, values and aspirations, creating valuable and loyal customer bases that sometimes border on cults.
Last month, an American blogger set off a media storm after she posted pictures of an elaborate fake Apple Store in Kunming, selling genuine if unauthorized iPhones, Macbooks and other widely popular Apple products.
Alibaba.com shares up after parent’s Alipay deal with SoftBank, Yahoo
HONG KONG/SHANGHAI (Reuters) – Shares of Alibaba.com Ltd rose to a two-week high on Monday after its parent, Chinese e-commerce firm Alibaba Group, forged a complex deal with SoftBank Corp and Yahoo Inc over mobile payments unit Alipay.
Alibaba.com, the only listed unit of Alibaba Group, rose as much as 7.37 percent to a two-week high of HK$11.66, outperforming the Hang Seng Index’s 1.39 percent gain.
“I don’t think the rise has anything to do with the listed company, it has more to do with the parent company managing to settle the Alipay issue with its two major shareholders,” said Elinor Leung, a Hong Kong-based CLSA analyst. “Net-net it is good for the entire Alibaba Group development so you don’t have the (risk) overhang anymore.”
Alibaba, Yahoo and Softbank on Friday announced a deal that would see Alibaba receive up to $6 billion in the event that Alipay is listed or sold.
The deal capped months of intense negotiations sparked by the transfer of Alipay to a company wholly owned by Alibaba Group founder Jack Ma.
Alibaba Group said the transfer was necessary for Alipay to comply with domestic regulations in order acquire a license to continue operating as an e-payment service. Yahoo said in May that it was not aware of the transfer, while Alibaba countered that it had kept Yahoo and Softbank board members in the loop.
Alibaba Group, China’s largest e-commerce company, is 40 percent owned by Yahoo and 30 percent owned by Softbank Corp.
-
Follow Melanie
