Archives March 2016

Working in Disneyland a dream job for many

A prospective candidate facing the interview board in Shanghai in October, 2015. The Shanghai Disney Resort, expected to open early next year, is set to create more new job opportunities in the city.

As Shanghai Disneyland stands 98 days away from unveiling its wonders to the public, employee recruitment becomes the priority this month, Shanghai Morning Post reported Thursday.

The tempting benefit and career development the company provides keep job hunters willingly lining up in the cold. It takes five to six hours to finish the interview.

Ms. Shen, who walked out of the Disneyland recruitment office at 3pm Wednesday, told a reporter that she arrived at 10 am and had just finished the interview. Trying to get a job with the retailing service booth, she didn’t make a reservation online and found herself waiting with other 30 people early in the morning.

“If your online application got accepted, you can just walk in and join the next round of interviews,” she said.

“Many applicants got denied because of the lack of experience or their age… sometimes they eliminate an applicant within a minute.”

The reporter found that few applicants got job offers. Ms. Zhang, a college student, got a job as an intern and could only be hired after she graduated and make through the trial phase of the job.

Ms. Shen was one of the lucky applicants who made it to the final interview. “I was told that all positions are very popular,” she said.

Even though all positions are filled at this point, there’s still a ‘waiting list’ posted by the company’s HR department. Anyone on the list has a chance to be hired once there’s a job opening, the newspaper said.

Taiwan inflation rises on surging food prices

Taiwan’s consumer price index (CPI) rose at its fastest pace in three years in February, the island’s statistics agency said on Tuesday.

The 2.4 percent year on year rise was mainly due to higher prices for vegetables, fruits, aquatic products and household electricity, the agency said.

The authority said vegetable supply was limited by a cold front that hit Taiwan in January, and meanwhile food demand was higher around the Chinese Lunar New Year holidays.

In the first two months, the CPI rose 1.6 percent year on year.

The wholesale price index declined by 4.93 percent year on year last month, mainly due to the price of metal, crude oil, coal and chemical products falling, the agency said.

Online vendors promote the digital wallet

In the battle for third-party payment users, fees may loom large in artillery.

Internet giant Tencent recently stirred heated debate among netizens by slapping a commission charge on users who transfer 1,000 yuan ($154) or more from their WeChat “pocket money” to debit cards.

The commission amounts to 0.1 percent of the transfer amount once it exceeds the 1,000-yuan life-time free allowance.

Online reaction to the new fee drew comparisons with Tencent archrival Alibaba, whose affiliate Zhejiang Ant Small Financial Services Group operates the popular online payment service Alipay.

In 2013, Alipay started to charge commissions on transfers between Alipay accounts for users on desktop computers. The rate ranges from 0.15 percent to 0.2 percent. Transfers from smartphone users’ Alipay balance accounts to debit cards remain free.

Tencent set its threshold at 1,000 yuan because most users’ pocket money balances are below that figure. Users who register a separate WeChat account or debit card won’t be exempt from the rules.

China had 358 million mobile payment users at the end of 2015, up 65 percent from a year earlier. The proportion of online payment customers among smartphone users grew to 58 percent from 39 percent at the end of 2014, according to a report published in January by the state-backed China Internet Network Information Center.

Walking around downtown Shanghai, it’s easy to find convenience stores, coffee shops and snack bars that accept Alipay and WeChat payment services, not to mention the existing point-of-sale machines.

Tencent said its WeChat can be used for payments at more than 300,000 offline vendors nationwide, and Alipay’s offline payment network operates on a similar scale.

Market response

Most of my friends say the impact of the new rule is marginal.

“Several hundred yuan of pocket money is really no big deal with WeChat payment services available at so many online vendors and offline merchants,” said Shanghai resident Chris Xu, who is in her early 30s.

Others are more pragmatic. “I will ask my friends to transfer money directly to my bank accounts or Alipay accounts since I don’t want to pay any additional fees if I wish to move my money from my account to my debit card in case of emergency,” said Shanghai office clerk Doris Li said.

Very few consumers have undying loyalty to only one payment service. Most people choose whatever discount is available from either of the payment service providers.

An internal survey of more than 17,000 urban WeChat users by Tencent shows that nearly 30 percent who receive e-Hongbao (or digital “red envelope” money) have transferred their balance into debit cards, while only 12 percent have used their balance to pay for online shopping orders.

More than 78 percent of users passed e-Hongbao on to other friends and colleagues.

Some 200 million people have connected their credit or debit cards to their WeChat accounts.

A Tencent official insisted the new fee is to cover part of the cost of online payment services that connect with banks and to optimize support for small-sum transfers between WeChat accounts, which would be free of charge compared with a daily free-of-charge limit of 20,000 yuan.

Explanations aside, it’s obvious that Tencent is hoping to create a de-facto virtual bank account system where one can use pocket money either to pay bills or buy merchandise from offline vendors.

Independent industry watcher Wang Yunhui said the exponential growth of e-Hongbao lands Tencent in the dilemma of transaction sizes and ever-climbing costs to connect its payment service with banks’ online small sum payment systems.

“Tencent needs to give users incentives to use their account balance for online or offline payments,” he added.

Besides, that would be a boost for wealth management products sold on the WeChat platform, he said. The wealth management platform, which is a stand-alone feature in the WeChat application, currently connects with 10 mutual fund and insurance companies, with combined transaction volume of about 100 billion yuan.

Currently, WeChat’s pocket money can be used to pay credit card bills at 23 domestic banks.

Alipay, which is expanding its service network, drew more users during its Chinese New Year campaign last month. Its continuing efforts to team up with offline vendors and wealth management companies and financial institutions ratchets up the battle for users.

Now with Apple’s contactless payment service Apple Pay available to Apple’s smartphone users, consumers will have even more options. That opens up a wide horizon for more innovative services to be introduced.

Air-conditioner maker Gree to buy electric car company

An outlet of Gree Electric Appliances Inc in Yichang, Hubei province.

Gree Electric Appliances Inc, a leading Chinese home appliances maker, is planning to branch into new-energy vehicles by acquiring a local electric car producer which controls a Nasdaq-listed US battery firm.

It’s the latest effort by China’s largest air-conditioner manufacturer to diversify its business, as dwindling air-conditioner sales weigh on revenue and profitability.

Gree is planning to issue new shares to buy Zhuhai Yinlong New Energy Co, which itself is the controlling shareholder in Altair Nanotechnologies Inc, a Nevada-based lithium battery company, the company said on Sunday.

Headquartered in Zhuhai, Guangdong province, Gree did not disclose what stake it would take in Zhuhai Yinlong or the possible investment value. A spokesman for Gree said details are sill under discussions.

Zhuhai Yinlong was China’s seventh-largest seller of electric buses in 2015, after racking up 7,000 orders and producing more than 3,100 electric vehicles, data from its official website show.

With three production bases across the country, it has the capacity to make 33,000 electric buses and 100,000 electricity-powered SUVs yearly.

Liu Buchen, an independent researcher on the home appliances sector, said its move comes as Gree is under mounting pressure to seek for new growth points.

“Gree generates about 95 percent of its revenue from selling air conditioners,” Liu said.

“But over-reliance on a single product is increasing the company’s financial risks, especially as the air-conditioner industry is having bad years.”

In the first three quarters of 2015, Gree’s revenue plunged more than 17 percent year-on-year to 81.5 billion yuan ($12.5 billion) due to overcapacity and weakening demand.

“Undoubtedly, the new-energy vehicle market boasts huge growth potential, but it is difficult to say whether that can be Gree’s opportunity, given the fierce competition,” he added.

Internet giants Tencent Holdings Ltd and Baidu Inc, as well as e-commerce heavyweight Alibaba Group Holding Ltd are all eyeing the sector through either partnerships or acquisitions, partly stimulated by strong policy support from the government.

Last year, sales of new-energy vehicles more than tripled to more than 331,000 units in China, including more than 247,000 pure electric cars and 83,600 plug-in hybrids, according to the China Association of Automobile Manufacturers.

The central government expects that cumulative sales of new-energy vehicles to reach 5 million units from 2012 to 2020.

Gree’s interest in new-energy vehicles is not the company’s first step to branch beyond the home appliances sector.

In 2015, it launched a 1,600 yuan smartphone designed to meet consumers’ growing demand for quality products, but sales failed to meet Gree’s expectations.

Adidas to add 3,000 outlets

Adidas aims to add 3,000 stores in China in the next five years to the current 9,000 nationwide as the German sportswear and apparel group expects emerging cities to contribute to over 60 percent of sales.

“More than 60 percent of our sales increase will be coming from emerging cities in the next five years thanks to an increase in consumer purchases,” Colin Currie, managing director of Adidas Group China, said yesterday.

The company’s sales in China rose 16 percent on a currency-neutral basis in the fourth quarter. Full-year sales jumped 18 percent to 2.5 billion euros (US$2.75 billion) in China.

The company also aims to open 20 women specialty stores in China by the end of 2020, compared with the current four outlets.

Women driving growth of online-to-offline business in China

Females have become the driving force behind China’s booming online-to-offline shopping sector, despite their minority position in the country’s overall Internet-using population.

According to a new report from group-buying e-commerce website Baidu Nuomi, women now account for 46 percent of the country’s Internet users, but they generate 62 percent of O2O revenues.

Baidu Nuomi claims it now accounts for a fifth of daily O2O sales?a rapidly growing market that enables online customers to pay online for bricks-and-mortar services, such as movie tickets and restaurant bookings.

Tang Lihua, a director at Baidu Nuomi, said the results show that attracting, then retaining, female shoppers has become critical for any O2O platform.

“We plan to provide more baby-related and beauty-related services and products, for instance, in order to further grow our business, as we think that’s likely to be strong selling-point for women,” she said.

The study showed that since the start of 2015, female O2O spending has far-outstripped that by males, and the gap is growing, particularly during the country’s flagship shopping events such as Qixi, Chinese Valentines Day.

As well as the beauty-related sector, women outspent men in other lucrative areas, too, including gyms and leisure, and hotels, said the report.

Gao Shuang, an analyst with China Internet Network Information Center, said the main reason is simple: Women are more decisive when it comes to shopping.

“They are not only buying for themselves, they are also shopping for their parents, their husbands and children,” she said, adding their pickiness, too, is also driving up improvements in services and product innovation.

According to the center’s statistics, the number of female online shoppers grew to 180 million by the end of 2015, more than double the number in 2010.

They also showed female online shoppers spend 4.17 hours a day surfing the Internet, against a daily average of 3.74 hours by all Internet users in China.

Restaurants, travel spending and movie trips were the top three O2O sellers for women.

Zhou Shu, a senior executive at Yuxiang Renjia, a restaurant chain specialized in Sichuan dishes, said it had certainly noticed that women have the stronger say when it comes to deciding where to eat.

“And they are more willing to try new services and new products,” she said.

“Most importantly, though, they are happy to communicate and exchange their feedback after eating at a new restaurant, which makes them more influential in the O2O market.”

Foreign businesses positive on Shanghai

Foreign businesses are confident of Shanghai’s growth prospect and eager to engage in the city’s various development strategies, participants said during a briefing by Shanghai’s commerce affairs yesterday.

More than 500 people, including foreign diplomats, executives of foreign-invested companies in Shanghai and local government officials, attended the annual meeting hosted by the Shanghai Commission of Commerce.

“Shanghai will try to maintain a stable economic growth rate and accelerate the industrial restructuring to further raise the city’s growth quality,” Vice Mayor Zhou Bo told the gathering. “We sincerely hope foreign investors will continue to help us in the process.”

Lee Min-ho, director-general of Korea Trade-Investment Promotion Agency (KOTRA) in Shanghai, said South Korean companies are expecting more interaction with China after the implementation of the free trade agreement signed last year between the two countries.

“Our investors are confident that bilateral trade will get a boost this year thanks to the free trade agreement, in particular in areas like fashion, health, cosmetics and tourism,” Lee said.

“Shanghai is an important hub for China’s trade of consumer goods … we will enhance our operation here,” Lee said.

Indonesia’s Consul General in Shanghai, Kenssy D Ekaningsih, said her country was eager to engage in China’s Belt and Road initiative.

“We have seen massive scale of operation in place under the initiative in the past two years,” Ekaningsih said. “It is of huge importance for us because Indonesia stands at a core geographic location in the maritime Silk Road … we hope our presence in Shanghai will play a constructive role in bolstering bilateral economic and cultural interaction,” Ekaningsih said.

Manufacturing continues to decline

China’s economy continued to weaken in February with activity slowing in both the manufacturing and service sectors, according to the latest figures.

The official Purchasing Managers’ Index, a comprehensive gauge reflecting operational conditions in largely state-owned manufacturing companies, fell 0.4 points from January to 49 last month, according to the National Bureau of Statistics and the China Federation of Logistics and Purchasing, below the 50 mark that separates contraction from expansion.

It was the seventh consecutive month manufacturing had been below 50.

The official non-manufacturing PMI, a counterpart for the service sector, fell to 52.7 in February, down from 53.5 a month earlier.

Bureau analyst Zhao Qinghe said factors including production being suspended during the Spring Festival holiday, which also led to less demand, were major reasons for the continuing decline.

The manufacturing PMI’s component indexes showed production fell to 50.2 last month, down from January’s 51.4. New orders lost 0.9 points to 48.6, staying below 50 for the second straight month. The purchase volume of raw materials lost 1.1 points to 47.9, while employment retreated 0.2 points to 47.6, both worse than a year earlier.

“The overall performance was disappointing,” Zhao said. “But there were some positive signs such as a small rebound in the price of crude oil that led to higher sub-index measuring the costs of raw materials. Meanwhile, with the implementation of supportive policies, we have seen strengthened confidence among industrial companies.”

The price of raw materials rose 5.1 points to 50.2 last month, above 50 for the first time since August 2014.

Liu Ligang, chief economist at Australia & New Zealand Banking Group Ltd, said the figures suggested policy-makers may take further measures to manage an economic growth target of between 6.5 percent and 7 percent for 2016.

“The proactive fiscal policy will be needed to support investments and we expect the fiscal deficit could be increased to a range of 3 percent to 4 percent of the economic output in 2016, up from 2.3 percent in 2015,” Liu said.

Robert Subbaraman, chief economist of Asia (ex-Japan) at Nomura, said earlier that China needed to expand fiscal investments, but should be cautious not to slow industrial restructuring.

In line with the worsening performance of state-owned industrial companies, their private and export-oriented counterparts also reported weakening activity.

The Caixin China PMI, an indicator slanted toward private and export-oriented manufacturing companies, landed at 48 in February, a five-month low that was down from 48.4 in January, according to the Caixin magazine and research firm Markit.

He Fan, chief economist at Caixin Insight Group, said: “The government needs to press ahead with reforms, while adopting moderate stimulus policies and strengthening support of the economy in other ways to prevent it from falling off a cliff.”

China’s gross domestic product grew 6.8 percent in the fourth quarter of last year, concluding 2015 with a rate of 6.9 percent, the slowest growth in 25 years.

Qualcomm JV to focus on drones and robots

Thundercomm will have access to intellectual patents from U.S. chip giant

Qualcomm Inc on Monday set up a joint venture with a Chinese tech firm to develop technologies used in drones, virtual reality goggles and other “smart devices” that the U.S. chip giant believes will be the next big thing after the smartphone boom.

The new JV, named Thundercomm, will provide products and technologies for local firms which are building the next-generation drones, robots, VR devices and wearables, according to a statement from Qualcomm and its Chinese partner Thunder Software Technology Co Ltd, or Thundersoft.

The registered capital of Thundercomm was 18.74 million yuan ($2.8 million) and the Beijing-based Thundersoft will control nearly 82 percent of the JV, according to a statement from Thundersoft. An investment subsidiary of Qualcomm took the rest of the new company’s stake.

The JV will be located at the Fairy Peach Data Valley in Yubei District, southwest China’s Chongqing municipality. The inland mega city has become one of the world’s largest manufacturing bases of the smart devices in recent years.

Zhang Shutao, general manager of Thundercomm, said the JV will get to use intellectual patents from Qualcomm.

“We will have a lot opportunities to work with Qualcomm in IP, … the JV will find ways to help customers get access to Qualcomm’s IPs,” Zhang said.

Frank Meng, chairman of Qualcomm China, told China Daily in an exclusive interview earlier this month Chinese startups are set to lead the world in innovation in an array of emerging sectors.

Chinese tech firms are making technological breakthroughs instead of waiting for ideas imported from overseas companies, said Meng.

“Local vendors are coming up with gigantic amount of ideas that suit requirements of Chinese customers. Qualcomm wants to be a part of this new trend that will unlock another trillion-yuan market,” said the 56-year-old.

Ma Longwen, an analyst from Changjiang Securities Co, said the new JV will give an edge to Thundersoft in many areas, including drone making, smart automobile and VR.

“It requires a large number of high-end chips to make a drone, as global orders for drones reaching the highest level on record, the JV is facing a huge market demand because it is endorsed by Qualcomm technologies,” according to Ma.

While sectors such as VR and operating system used in automobiles are not big today, they are set to receive huge user base like smartphones did, he added.

The establishment of Thundercomm was also the first major China investment from Qualcomm since it set up a Guizhou-registered firm to manage investments on the Chinese mainland in January.

Qualcomm is moving its investment focus to inland provinces to echo a number of national strategies aimed to boost economy in the less-developed regions taking advantage of the Internet and new technologies.