Alibaba raises its bet in the logistics industry, China’s coffee war continues to brew, Bytedance adds a crucial piece to its e-commerce puzzle.
Elliott, James, and Michael Norris discuss quarterly earnings reports of Alibaba, JD, and Pinduoduo, and what investors can expect.
The case follows other high-profile controversies involving the bank, including its 2019 spying scandal and loans to the cafe chain Luckin Coffee.
The US Securities and Exchange Commission (SEC) is investigating Baidu’s iQiyi (IQ), aka “the Netflix of China,” after an activist crew of short sellers alleged the video streaming platform cooks its books. “The SEC‘s Division of Enforcement is seeking the production of certain financial and operating records dating from January 1, 2018, as well as documents related to certain acquisitions and investments that were identified in a report issued by short-seller firm Wolfpack Research in April 2020,” said IQ in its quarterly earnings release, published Thursday and shared by CNN. The Wolfpack Research report in question boldly claimed that IQ, a Nasdaq-listed company, was committing… This story continues at The Next WebOr just read more coverage about: Netflix
Iqiyi said it is under investigation by the SEC over a short report released in April that accused the company of inflating 2019 revenue by up to 40%.
It also plans to list its non-China business, which includes popular short-video app TikTok, in Europe or the US, sources said.
Lessons from the Luckin Coffee debacle, and how online grocery shopping is helping a Burmese ride-hailing startup weather Covid-19.
Ctrip is the fourth Chinese tech company that mulls delisting from the US financial markets in around one month as the tension between the two countries intensify.
Though there were warning signs that Luckin’s prospects were too good to be true, investors were too dazzled by the company’s growth story.
The new service expands on previous partnerships between Starbucks and Alibaba, including voice ordering on virtual assistant Tmall Genie
Chinese beverage chain Luckin Coffee replaced founder and former chairman Charles Lu with its acting CEO, Guo Jinyi.
Former acting CEO Jinyi Guo will replace Lu and lead the company as its new CEO.
Startups are tackling work-from-home problems, Facebook is testing TikTok-style features in India, this e-tailer received US$58 million in funding.
Here’s what you missed from last week’s headlines.
Luckin Coffee’s fortunes have changed in a flash. Here's a timeline of what happened.
Shares for Chinese coffee chain startup Luckin Coffee surged 13.1% Wednesday after reporting better-than-expected Q3 results.Why it matters: The results reassured investors concerned with the company’s subsidy-fueled expansion.The company’s net losses slowed during the period, reflecting an improved cost control strategy.Details: Luckin’s net loss per American Depositary Share (ADS) was RMB 2.24 ($0.32), beating consensus analyst estimates of $0.37, and compared with a loss of RMB 3.60 in same year-ago period.Luckin’s total net revenues were RMB 1.54 billion ($215.7 million), up 540.2% year on year from RMB 240.8 million in Q3 2018, topping analyst expectations of $211.88 million.Net revenue uptick was driven by growth in its core beverage business, for which the number of transacting customers, effective selling price, and number of products sold per transacting customer increased.
The global digital economy is moving into its next phase as we observe a growing number of Chinese tech companies targeting overseas markets, bringing along their capital, expertise, and technology.The tech development gap between Southeast Asia and China creates vast opportunities for investors to profit from investing in up-and-coming tech companies.Will the going abroad (chuhai) endeavor prove to be a success or a flop?There is an accelerating need for innovation across the food & agriculture value chain due to the changing consumer tastes and preferences in recent years.Consumers not only seek healthier and more affordable options, but they also demand expanded varieties and convenience.We have witnessed Luckin Coffee bursting onto China’s coffee scene in January 2018, filling the unmet gap with a more appealing price point and its efficient delivery service.
Suning Xiaodian, the convenience store unit of Chinese retailer Suning.com, is testing the leisure beverage business with the launch of its first in-store coffee shop as the company looks to double down on its coffee market bet.Why it matters: Coffee chains in China like Starbucks and Luckin face growing competition from the likes of Suning, which has an extensive offline presence.Convenience stores are increasingly offering coffee-based beverages are entry-level pricing.China’s coffee market size has grown to RMB 56.9 billion (around $8.01 billion) in 2018 from RMB 15.6 billion in 2013.It is expected to grow 26.0% annually to reach RMB 180.6 billion in 2023, according to Frost & Sullivan.In September, China’s state-owned gas and petrochemical conglomerate Sinopec rolled out a new coffee brand called EasyJet to approximately 50,000 convenience stores located in the company’s gas stations across the country.
Chinese drone maker Ehang has secretly filed an application for an initial public offering with Nasdaq, seeking to raise as much as $200 million, Bloomberg reported on Thursday, citing people familiar with the matter.Why it matters: The drone maker joins a number of Chinese startups seeking to raise funds on US stock markets, such as coffee chain Luckin Coffee, despite Beijing’s efforts to lure high-tech firms to list domestically.China has set up a Nasdaq-style tech board on the Shanghai Stock Exchange to boost investments to the country’s high-tech sectors, but the bourse gives its preference to companies in the semiconductor and traditional manufacturing industries.Details: Ehang plans to offer 10% to 15% of its shares in the IPO, with the company’s valuation not yet set due to volatile market conditions, according to the report.The company is still deliberating the matter and details of the offering including timeline and fundraising size could still change.Context: Founded in 2014, the Guangzhou-based company specializes in drones used for commercial uses such as agriculture.
Chinese coffee chain upstart Luckin Coffee has signed an agreement with Louis Dreyfus Company (LDC), a European food processing company, to sell Luckin Juice in China through a joint venture (JV).Why it matters: Known as China’s Starbucks challenger, Luckin is expanding aggressively across product categories and overseas markets.After adding snacks and fruit-based beverages, the Xiamen-based company announced plans this month to spin off its tea-based beverage line known as Xiaolu Tea, or “Fawn Tea” in English, as an independent operation.The company has been growing at a breathless pace and is still loss-making.Expansion to more product categories will add to financial pressures on the US-listed company.The deal appears to have been in discussions for months.
Coffee giant Starbucks is deepening its partnership with Alibaba with the launch of voice-activated delivery on smart speaker Tmall Genie as it fends off competition from Chinese coffee chain, Luckin.Why it matters: Closer alignment with Alibaba may help Starbucks in its competition with Luckin as the rivalry expands beyond coffee.Starbucks is not only leveraging Alibaba’s lifestyle services, but also the benefits of its broader ecosystem, from the AI assistant to the music streaming business.The feature connects membership accounts for Tmall Genie, food delivery platform Ele.me, e-commerce giant Taobao, and Starbucks.Luckin said in May that it was seeking a tie-up with Alibaba-owned Ele.me, Starbuck’s exclusive delivery partner.“The Starbucks feature through Alibaba’s Tmall Genie ushers in a new era of digital customer engagement for Starbucks, leveraging ground-breaking digital technology to create an unprecedented experience that elevates our connection with customers to new heights.”
Nasdaq-listed Luckin Coffee announced plans today to split off its tea-based beverage line known as Xiaolu Tea, or “Fawn Tea” in English, as an independent operation.Officially known as Luckin Tea, the new unit will boast its own branding and physical stores.Luckin will also launch a separate app as well as mini-program for online orders and delivery.Why it matters: The move coincides with the Xiamen-based beverage giant’s expansion into China’s lower-tier cities.Luckin has been looking for ways to steal a march amid intensifying competition with Starbucks.The firm is also looking to tea-based beverages to diversify revenue streams and find new growth.
Starbucks rival Luckin Coffee has rolled out a lineup of branded merchandise, including celebrity figurines and a limited edition cup with fawn antlers, on Monday.Why it’s important: This is the first time Luckin has sold such merchandise as it evolves its marketing and branding strategy.The company aims to duplicate the success of its US rival Starbucks whose drinkware and other accessories are popular in China.Starbuck’s cat paw cup caused in-store brawls earlier this year.The company’s latest industrial and commercial update has added clothing, clocks, glasses, and shoes to its business scope.Detail: The company also launched its store on both JD.com and Tmall.
Shares in Luckin Coffee tumbled in the US overnight after the Chinese coffee chain upstart reported widening losses in the second quarter despite beating revenue expectations.Why it’s important: Widely considered as a challenger to Starbucks’ crown in China, Luckin Coffee burst onto the scene in 2018 and soon became the country’s number two chain despite burning through cash to fuel its rapid expansion.The Xiamen-based firm raised $561 million in a US IPO in April this year.Details: Luckin Coffee shares closed 16.7% lower in US trading overnight after it reported that net losses doubled to RMB681.3 million ($99.2 million) in the quarter.Revenue rose sevenfold to RMB 909.1 million ($132.4 million) in Q2, beating Refinitv’s analyst estimate of $130.2 million.The firm’s per-share loss was 48 cents, missing Refinitiv’s estimate of 43 cents and Zacks Investment Research’s 44 cents.
This article by Eudora Wang originally appeared on China Money Network, the best data intelligence platform tracking China’s tech and venture capital markets (access requires subscription).Joy Capital, a venture capital firm that has backed Chinese Starbucks challenger Luckin Coffee, announced on Monday the final closing of an early-to-growth-stage fund at over $700 million, reloading its ammunition to back start-ups in the fields of technology, media, and telecommunications (TMT) and innovative consumption.The completion of the new fund took the capital managed by the Chinese investment firm to over RMB 10 billion ($1.45 billion), said Joy Capital in a statement.The company said that the fundraising attracted the continuing support of its existing limited partners, with the participation of several public pension funds and large-scale insurance companies.The company did not provide more detailed information on the investors.“Joy Capital firmly believes that the construction of new infrastructure will undoubtedly bring entrepreneurial and investment opportunities to China.
Chinese coffee chain announced on Monday that it has signed a memorandum of understanding with Kuwaiti food company Americana Group for a joint venture to expand its coffee chain business in the Middle East and India.Why it matters: This is the first time the Chinese coffee chain has announced plans to expand its operations overseas.Luckin’s expansion to the new region will extend its competition with Starbucks to more international markets.Despite its stunning rate of growth, the company is still loss-making.Expansion to more markets will add to financial pressures on the US-listed company.The agreement was signed in Beijing with government officials from both sides in attendance, underscoring government support of the deal, which aligns with Beijing’s Belt and Road infrastructure development initiative.
China’s biggest live-streaming platform Douyu announced on Wednesday it raised $775 million after pricing its US initial public offering (IPO) at the low end of the indicated range.Why it’s important: The deal is so far the largest Chinese IPO in the US in 2019, eclipsing that of Luckin Coffee which raised $645 million, according to Reuters, citing market data.The Tencent-backed video game live-streaming platform in April filed its IPO application to Securities and Exchange Commission (SEC), following its largest Chinese competitor Huya, which listed in May last year.The company delayed its IPO roadshow in May amid the intensifying US-China trade war.Details: The Wuhan-based company sold American depositary shares (ADS) at $11.5 each, compared with a previously stated target of $11.5 to $14.0, said the company on Wednesday.The company’s market cap reached $3.73 billion after the pricing.
Beijing-based CloudMinds, an operator of cloud-based systems for intelligent robots, has filed to raise up to $500 million in an initial public offering (IPO) on the New York Stock Exchange, joining a slew of Chinese tech companies seeking funding abroad despite efforts from the government to attract domestic listings.Why it matters: CloudMinds says it is the first in the world to commercialize a cloud-based robotics system in a rapidly growing market.Developments in cloud and robotics are critical to smart manufacturing, an important part of China’s initiative to become a global leader by 2025 in core technologies.The government is implementing financial reforms—of which its new STAR Market Nasdaq-style technology bourse in Shanghai is the centerpiece—in an effort to lure tech companies to list domestically and push forward this initiative.The US remains an attractive IPO destination for Chinese companies because of its maturity and liquidity relative to domestic capital markets, which have tightened as the country’s economy slows.CloudMinds joins China Starbucks challenger Luckin Coffee and cosmetic surgery platform So-Young in US IPOs this year.
Luckin Coffee has taken the wraps off a new tea drink brand dubbed Xiaolu Tea, meaning “Fawn Tea” in Chinese, joining Starbucks in expanding into country’s already crowded bubble tea market.The company wiill gradually roll out a range of tea-based beverages, including cheese tea and more traditional styles across its 3,000 stores spanning 40 cities from Thursday, Luckin said at a press conference on Monday in Beijing.Co-founder and Senior Vice President Guo Jinyi pointed out that coffee and tea drinks are the two most popular types of drinks among China’s young office worker segment and the move represents “a sound strategy for Luckin.”As always, the Xiamen-based coffee upstart plans to give out generous freebies and discounts to attract quick adopters for the brand.It’s worth noting that Yang’s Monday speech marked a rare public appearance for the controversial marketing figure who has been absent from the company’s corporate filings and press conferences after coming under scrutiny early this year over his previous imprisonment.Obviously, Luckin’s tea ambitions have been brewing for months since it already rolled out four fruity summer drinks, also named “Fawn Tea” in April.
Chinese coffee startup Luckin is planning on a new project focused on self-service coffee machines, which is expected to be a central part of the company’s expansion strategy, Chinese media reported.Branded as Luckin Coffee Express, the self-service machine is designed for public spaces like schools and office buildings.Users can locate the nearest coffee machine and place an order through the Luckin app.Drinks are ready 30 seconds after scanning the pick-up code.The company will launch a pilot program to test the project soon, according to media reports.Luckin declined to comment on the news when contacted by TechNode.