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Cite wants close ties with Tom's mainland units

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Tom Group, the media arm of Hutchison Whampoa, says its Taiwan publishing business is seeking closer ties with its sister companies on the mainland such as internet arm Tom Online and China Popular Computer Weekly Group (CPCW) to break the mainland media regulatory deadlock faced by the company.

Cite Publishing Holding, Tom's Taiwan publishing arm, will meet the management of Tom Online, led by chief executive Wang Lei-lei and CPCW's management in Beijing for the first time this week to discuss business strategy that will mutually benefit the companies, said James Jin, the chief executive of Cite.

The change in mainland strategy came after Cite admitted it was difficult for the company to build a successful business model in China by leveraging on its own effort since 2003, adding fierce competition in the country's magazine market led to the change.

The company's investment in the mainland was conservative. It has invested only 70 million yuan since 2002 and investment last year was 33 million yuan. However, the mainland business was still making a loss last year, according to Mr Jin.

The company expects to cut losses in the mainland by more than 100 per cent this year from last year, according to James Yang, Cite chief operating officer.

'We will have a substantial transformation in our mainland business by leveraging more on local partners, rather than deploying Taiwanese staff to China. We will establish a single business unit responsible for mainland development,' Mr Jin said.

He said the new strategy also responded to Tom's group chief executive Tommei Tong Mei-kuen's focus on creating more synergetic benefits within the group's business units.

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