Weibo: JD's 6-18 hype, Xiaomi's price cut | South China Morning Post
  • Thu
  • Apr 9, 2015
  • Updated: 6:01am
Corporate China
PUBLISHED : Monday, 23 June, 2014, 4:29pm
UPDATED : Tuesday, 24 June, 2014, 10:39am

Weibo: JD's 6-18 hype, Xiaomi's price cut

BIO

Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young’s China Business Blog (www.youngchinabiz.com), commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, “The Party Line: How the Media Dictates Public Opinion in Modern China.”
 

Recently listed e-commerce giant JD.com (Nasdaq: JD) was making plenty of noise in the microblogging realm this week, as it hyped a June 18 promotion that it's trying to build as an alternative to Alibaba's wildly popular November 11 Single's Day event. Meantime, Xiaomi's talkative CEO Lei Jun was in a rare defensive posture on his microblog, discussing a recent major price cut as his company tries to meet the huge expectations it has set for itself. Last but not least, officials from Alibaba and its recently acquired UCWeb web browser unit took advantage of a recent controversy involving a massive fine against a Shenzhen company to criticize rival Tencent (0700.HK) for wielding too much power on the Chinese Internet.

There's no real overriding theme to this week's tech talk round-up from the microblogging realm, which saw executives from top firms pursue their own agendas in the run-up to the slow months of summer. JD.com used the last official week of spring to talk up its annual June 18 promotional event, as it seeks to boost its profile following its IPO last month.

Probably the most memorable images from the event were numerous photos in the media of JD's founder Richard Liu, also known as Liu Changdong, riding around on a motor scooter delivering products to different places in Beijing. JD later reported its order intakes for the promotion doubled from year-ago levels for an event it first began in 2010.

The usually talkative Liu was uncharacteristically quiet on his own microblog, perhaps because he was too busy delivering parcels to tweet about the promotion. But other JD executives went into overdrive on their own microblogs.

Vice president Xu Lei led the charge with numerous posts that are largely hype and not worth repeating here. In addition to promoting JD's own activities, Xu was quick to point out that other e-commerce rivals were holding their own events. Officials from both Suning (Shenzhen: 002024) and Alibaba both tweeted about their own promotions, giving a bit more credibility to June 18 as a major sales event in its own right. At the end of the day, other e-commerce firms can't complain too much since everyone prosper when online shoppers spend more.

Meantime, Xiaomi's Lei Jun was on the defensive after his company cut the price of its third-generation model by 25 per cent to 1,499 yuan (HK$1,884). Netizens speculated that Xiaomi was making the cuts to clear high inventory and to meet its aggressive target of selling 60 million smartphones this year.

Lei actually mentioned specific points raised by the speculators, though he didn't directly deny any of the insinuation. Instead, he let out a string of "ha ha" and other amused posts, attempting to laugh off the talk and point out his company was aggressively expanding its capacity to meet demand. Personally speaking, I do expect that Xiaomi is probably starting to struggle under the weight of the huge expectations it has set for itself, and a flood of cheap, high-quality smartphones into the market from other Chinese firms isn't helping either.

Finally we'll end our round-up with a look at some cynicism coming from Alibaba and its newly acquired UCWeb, one of China's leading web browsers. The case involves a recent record 260 million yuan fine imposed for piracy against the Shenzhen-based QVOD, operator and developer of a popular video site and video player.

The case previously made headlines in May when the fine was first announced, but has recently come back as a hearing has gotten underway and reports emerged that Tencent was a major force that convinced Shenzhen to impose the record fine. UCWeb vice president He Xiaopeng criticized Tencent for using its clout to get the fine, while CEO Yu Yongfu also voiced some implicit criticism by reposting an article revealing Tencent's role in the matter.  

Alibaba's public relations chief Gu Jianbing was more direct, reposting another article and commenting that the "penguin" was behind the record fine, in a reference to Tencent's trademark penguin. I do find it just a little strange that any major Internet players would be critical of Tencent's actions, since this kind of big penalty is exactly what's needed to finally clean up China's Internet of rampant piracy that stifles innovation and development. But personal rivalries are often just as important as commercial considerations on China's Internet, and this minor war of words looks like a simple escalation in the growing rivalry between China's two largest Internet companies.

To read more commentaries from Doug Young, visit youngchinabiz.com

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