Sina Telling Investors There Will Be No Fees To Verify Real Names

  • Posted by on January 10th, 2012 at 2:12 am
  • Comments: 0

Sina ($SINA) has been telling Wall Street analysts and some investors that there will be no charges to verify real names on Weibo, in contrast to the report in the Chinese press last week that the company may have to pay 2 RMB per verified user.

This information was in the market before the market opened Monday, and while it is good news Sina shares still dropped.

Perhaps there are other issues that are making investors nervous about Sina.

You can follow me @Niubi on Twitter, @Niubi on Stocktwits and @Billbishop on Sina Weibo.

Internet Post Accuses Perfect World CEO Of Dirty Dealings

  • Posted by on January 10th, 2012 at 2:37 am
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Shares of Chinese online game firm Perfect World ($PWRD) plunged 26% Monday because of a Chinese Internet posting accusing CEO Michael Chi of insider dealings, tax evasion and other misdeeds. The CEO denied the charges to at least one sell side analyst but so far the company has not issued an official press release.

I have no idea if the charges are true, but the last thing Chinese Internet stocks need is the exposure of bad behavior at one of the top online game firms. If the accusations turn out to be even partially true then expect other Chinese net stocks to fall further.

When it comes to Chinese companies and accusations of wrongdoing in this market environment, investors may be right to shoot first.

[UPDATE: Perfect World has issued a press release denouncing the accusations as "inaccurate, defamatory and malicious", claiming they followed "several extortion activities attempting to extort money from the Company and Mr. Chi, and malicious and false allegations reported to certain local government authorities in China." In addition "independent audit committee of the Company's Board of Directors has been working to thoroughly review these allegations and will engage an independent legal counsel to assist with its review."  END UPDATE]

You can follow me @Niubi on Twitter, @Niubi on Stocktwits and @Billbishop on Sina Weibo.

Near Riot At Beijing Apple Store As iPhone 4S Goes on Sale

  • Posted by on January 12th, 2012 at 9:58 pm
  • Comments: 0

Beijing’s Flagship Apple Store Not Selling iPhone 4S After Fight Breaks Out Between Scalpers » M.I.C. Gadget

Apple ($AAPL) needs to rethink its launch plans in China, perhaps by launching simultaneously or near simultaneously in the US and China and by allocating much more supply to many more retail outlets in China. The government is not a fan of near riots, for whatever reason.

As I said on Twitter, Apple has a strange relationship with China:

 

How Can Apple Avoid Launch Chaos In China?

  • Posted by on January 13th, 2012 at 5:59 am
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Apple ($AAPL) cancelled today’s iPhone 4S retail launch in China after a near riot at its Beijing flagship store. Some may see that it is good news for Apple as it shows insane Chinese demand for its products, but having a mass incident in Beijing is not going to endear Apple to the Chinese government, especially after a similar fracas last year at the launch of the white iPhone 4.

We all know Apple builds great products (I am writing this on one) and that they have perfected launch mania and scarcity marketing. But things are out of hand in China.

Here are a few suggestions about how Apple might avoid future launch melees:

1. Introduce products in the US and China simultaneously or nearly simultaneously. As anyone who has tried to buy an iPhone or iPad at launch in the US knows, the lines tend to have a heavy contingent of Chinese who are part of organized networks that purchase the devices in America and smuggle them to China for resale at a rich premium. Perhaps Apple needs more time to obtain PRC approval of its devices, but given the long development and planning cycle, why can’t Apple apply earlier for Chinese approval?

2. Allocate a much larger percentage of early production to China. Apple must have excellent data on how many devices are in use in China and so knows very well the true Chinese demand. Scarcity marketing works, but when combined with the peculiarities of the Chinese market (such as poor Chinese who are happy to wait in line overnight for 100 RMB, or $16, to meet the demand of rich Chinese) it can be very combustive;

3. Cut deals with the major scalping networks and resellers in the big Chinese cities to ensure that in exchange for an adequate supply of phones they stop trying to prevent customers from buying directly from Apple. This could be tricky, as it appears that the scalpers’ strategy is to block all legitimate buyers, monopolize supply, and force buyers to pay an extra 1000 RMB or so to get an iPhone. But if Apple can make such wonderful devices and then get them approved in China it can also find a creative solution to working with the well-organized scalping networks;

4. Build a better system to screen for legitimate buyers and limit their initial purchase to one device. All buyers should be required to register online, link their registration with an iTunes account, and pay with a credit or debit card whose account name matches their PRC National ID card. Scalpers apparently took down Apple China’s preorder website. Apple IT has to do better than that.

5. Don’t launch a hot product 10 days before the Chinese New Year. Gifting demand likely exacerbated the iPhone 4S frenzy, and had Apple waited until just a few days after the Chinese New Year many of the scalpers, who are not from Beijing, would probably be back in their hometowns celebrating the holidays.

Any other suggestions?

Apple has an interesting relationship with poor Chinese. They make Apple products, sometimes in dangerous and exploitative conditions, and they also wait in line to buy those Apple products for rich Chinese.

You can follow me @Niubi on Twitter, @Niubi on Stocktwits and @Billbishop on Sina Weibo.

Tencent Is Going After Sina Weibo

  • Posted by on January 16th, 2012 at 11:42 pm
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I have written about Tencent’s Weibo efforts in Will Tencent’s Weibo Spending Spree Destroy Sina’s Weibo Profit Potential? and Can Tencent Weibo Threaten Sina Weibo?. My point was that Sina ($SINA) investors should never underestimate a company like Tencent.

Tencent wants elite Chinese netizens, has nearly unlimited resources, and recently bought a large stake in white-collar SNS Kaixin001, of which Sina was a 20% or so shareholder.

Today we have a terrific post from Kai Lukoff about Tencent’s Weixin product and the inroads it is making with white collar users–With Weixin Lifestyle, Tencent Is Finally Building A White-Collar Brand | TechRice. From Kai:

Weixin is for White-Collars

With Weixin, Tencent finally has a product for white-collars (50 million registered, 20 million actives), an objective that had eluded the firm for over a decade. We at TechRice thinks that’s a very big deal.

Simon Fong, CEO of Xueqiu, writes:

Tencent’s problem is that it’s very difficult for it to reach the highest-end users at all. At the very least, in some situations it’s embarrassing to share your QQ number (whether a user has one is besides the point, this is about social conventions). But now Tencent has a new product that is finally penetrating that market: Weixin Mobile IM. Look around you, aren’t all your fancy friends using Weixin too?

Yes, yes they are–all of my fancy Chinese friends are now using Weixin. A new friend of mine signs up for Weixin virtually every day now, and I’m always prompted to add them because the app scans my address book. One senior Chinese media executive told me that 800 of his 2000 contacts (undoubtedly a far fancier contact list than mine) are now using Weixin.

So while the there’s significant similarity with QQ IM in functionality, there’s significant difference in user demographics and brand positioning. The penguin is for no-collars, blue-collars, and white-collars, while Weixin is for white-collar elites.

Sina has a big lead in Weibo, but unlike Tencent it does not have a massive, diversified, cash puking machine to subsidize a huge marketing war for China’s elite netizens.

You can follow me @Niubi on Twitter, @Niubi on Stocktwits and @Billbishop on Sina Weibo.

How One Chinese Firm Intimidates Short Sellers

  • Posted by on January 22nd, 2012 at 8:27 pm
  • Comments: 0

Crazy story–How They Do It: The White Shoe Lawyers, SkyPeople And The Case Of The Disappearing Documents : The Financial Investigator.

Will Focus Media or Qihoo try this with Muddy Waters and Citron?

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