Asia back online after quakes, but access patchy
Due to the earthquake in Taiwan a few days ago, the internet services in Hong Kong and many other asian countries are still being affected seriously. Many of the websites are still inaccessible or just very slow to be accessed. We sincerely apologize to our visitors who are being affected.
SINGAPORE (Dec 28, 2006): Telecommunications across Asia were slowly being restored today after earthquakes off Taiwan damaged cables and knocked thousands offline, but access in parts of South Korea and Taiwan was still patchy.
Most of Asia’s telephone traffic was restored while Internet access in many countries had also improved, a day after businesses and home users from Seoul to Sydney were hit by one of the most widespread tech disruptions in Asia.
South Korea’s top fixed-line and broadband operator KT Corp said six submarine cables owned by a consortium of telecoms firms had been disconnected yesterday, knocking out thousands of telephone and broadband connections.
KT Corp restored most of the telephone services but broadband services for some clients, including banks and the country’s foreign ministry, remained unavailable.
Why did ebay close its site in China?
For eBay, It’s About Political Connections in China
(From Nytimes.com)
HONG KONG, Dec. 21 — EBay’s decision to close its Web site in China and take a 49 percent stake in an e-commerce venture with a Chinese company is the latest sign that local knowledge and connections matter in the Chinese market.
While eBay’s new partner, TOM Online Inc., has suffered a series of commercial setbacks in the last three years, no one questions that it knows the Chinese market and has political influence.
TOM Online has been a fairly small, struggling company until now. It earns nearly 90 percent of its revenue from providing cellphone services, mainly sending the latest entertainment news and weather in short text messages or multimedia messages to cellphone users. Most of the rest of its revenue comes from advertising on a Yahoo-like Internet portal that specializes in Chinese entertainment news.
The company’s heavy dependence on value-added cellphone services, without actually being a cellphone service provider, has made it especially vulnerable. Over the last couple of years, Chinese regulators have stepped up their policing of the industry to crack down on certain billing practices and what officials call “inappropriate” content and other unwanted services.
Last summer, to ensure that customers really wanted a value-added service, all companies were required to offer free trials and to require two customer confirmations before starting a service.
TOM Online had to adjust its subscription services, and so it was especially hard-hit because such wireless service accounts for so much of its revenue. Profits at TOM Online promptly plunged 59 percent in the third quarter from a year earlier as a result, to $5.28 million, while revenue dropped 15.2 percent, to $38.95 million.
The company’s reliance on such services has prompted some experts to question how it will fare in electronic commerce. “TOM Online’s line of business is not compatible with eBay’s,” said Liu Bin, an analyst at BDA China, a technology and media consulting firm in Beijing, and “they will need some time” to learn to work together.
But while TOM Online may be struggling now, it has the political connections that remain crucial in China. Li Ka-shing, Hong Kong’s wealthiest tycoon and a man who has cultivated close relationships with top Communist leaders on the mainland for decades, controls the company. Wang Lei Lei, the chief executive of TOM Online and now the chief executive of the joint venture, is the grandson of a People’s Liberation Army general and known for his political connections.
Mr. Wang presented the broad reach of TOM Online’s cellphone services — the company says it serves 70 million subscribers — as an asset. “TOM Online brings tremendous expertise in wireless and reach in China to the joint venture,” he said at a news conference Wednesday in Shanghai.
Shares of TOM Online are traded on the Growth Enterprise Market in Hong Kong and on Nasdaq. But the company itself is based in Beijing, which is crucial at a time when Chinese leaders are starting to become more cautious about welcoming foreign investment.
“The central government must maintain absolute control over industries that concern national security and economic safety,” said Li Rongrong, the director of the Chinese government’s powerful State-owned Assets Supervision and Administration Commission, at a news conference in Beijing on Tuesday. He cited telecommunications as well as civil aviation, shipping, power transmission, coal, petrochemicals and armaments.
EBay has already run into problems in China from not being a Chinese company. By requiring domestic control over financial services companies, Chinese regulations have limited the financial transactions that eBay’s payment mechanism, PayPal, can offer. The Chinese government plans to issue 10 licenses next year for online financial services, but is widely expected to grant them only to companies in which Chinese partners exert a high degree of control.
Meg Whitman, eBay’s chief executive, acknowledged the issue during the same news conference in Shanghai that Mr. Wang addressed. “We will see what happens over the next few weeks and months,” she added, “but we are very committed to PayPal here in China.”
Ms. Whitman also suggested that TOM Online was a natural partner for eBay because TOM Online already owned 51 percent of the Internet phone service Skype China while eBay owned the rest. The joint venture, TOM-Skype, formed in September 2005, has more than 15.5 million registered users, and is gaining new ones at an extremely rapid clip.
With decisions made in China and California, eBay also reacted more slowly in China than its rival, Alibaba. Three years ago, Alibaba set up a rival electronic commerce site, Taobao, which has since passed eBay to dominate the market through steps like taking the lead in eliminating user fees.
This week Alibaba welcomed eBay’s new approach. “We have long expected that eBay would change its model in China, and a dramatic change would be a great thing for eBay and Alibaba, because rather than competing, we would rather focus on cooperation between eBay U.S. and Alibaba’s international Web site,” said Porter Erisman, a vice president at Alibaba.
“More and more eBay power sellers buy in volume on Alibaba and sell on eBay U.S., but the competition between Taobao and eBay in China has always prevented deeper cooperation. So any new deal where eBay changes its model in China would be great for both companies because we now can work out ways to cooperate,” he added.
The TOM Online alliance could help eBay move more quickly, as Mr. Wang has a reputation for decisiveness and blunt words. In one of TOM Online’s many efforts to find a winning formula, the company set up a unit in 2003 to offer multiplayer online video games, only to shut it down the next year when it failed to gain market share.
Duncan Clark, the chairman of BDA China, said the contrast between TOM Online’s quick commercial reflexes and eBay’s slower moving search for consensus among executives in China and California was easily apparent at two recent meetings.
When eBay managers gathered at the Grand Hyatt in Shanghai, they rented a large room to hold what they labeled as a “town hall meeting” for a discussion of business plans by a large group of local managers and executives flown in from California, Mr. Clark said.
But when Mr. Wang recently attended a separate investor conference also held in Shanghai and was asked what happened to employees in the online game division when it was closed, he bluntly said that he fired them, Mr. Clark recalled.
A TOM Online official said that some employees may have lost their jobs then, but that the company tried to find jobs for the employees in other divisions.
To be sure, the initial size of the joint venture between eBay and TOM Online is tiny: eBay is contributing $40 million and its fledgling Chinese operations in exchange for a 49 percent stake in the joint venture. TOM Online is contributing $20 million and its management expertise and relationships with Chinese regulators and other officials in exchange for 51 percent of the joint venture. Having occupied a commanding position in the Chinese e-commerce market as recently as 2004, eBay is now in the position of being a global Internet giant reaching out for local help to what is, by comparison, a small Internet player.
But Ms. Whitman was careful to present the deal in more positive terms.
“We don’t see it as a failure,” she said. “We see it as an evolution of our strategy here in China.”
EBay shifts China strategy
(From KOMO-TV) BEIJING (AP) - EBay Inc. announced Wednesday it is turning over control of its Chinese auction Web site to a Beijing-based partner in a new joint venture, marking a strategic shift as the U.S. company tries to penetrate China’s market.
The deal with Tom Online Inc. comes as foreign companies struggle to adapt to China, the world’s No. 2 Internet market. Yahoo Inc. launched a strategy similar to eBay’s last year, turning over management of its China operation to a local partner, commerce site Alibaba.com.
EBay said it would fold its China subsidiary, eBay Eachnet, into the venture with Tom Online, a popular Chinese provider of games and other value-added online services. EBay will contribute $40 million and own 49 percent of the venture, while Tom Online contributes $20 million, owns 51 percent and has management control.
EBay CEO Meg Whitman said the company is committed to China and she rejected suggestions the Tom Online deal represented a failure of its earlier approach, which included the 2003 acquisition of Eachnet, a Shanghai-based auction site.
“We don’t see it as a failure. We see it as an evolution of our strategy here in China. We are very pleased with the performance of eBay Eachnet,” Whitman said in a conference call with reporters.
“I think you have to be willing to evolve your strategy on a local market basis to make sure you are doing the right thing for your buyers and sellers and the right thing for your company,” she said.
Elsewhere in Asia, eBay took a similar approach in Taiwan, where it merged its auction site in June into a joint venture with local partner PC Home.
“We have determined that every country in Asia is quite unique, and we have to make a decision about every country in Asia, how we want to do business,” Whitman said.
The new Chinese venture faces competition from Alibaba’s Taobao.com, the country’s leading auction site.
Tom Online CEO Wang Lei Lei, who joined Whitman on the conference call, said they plan to build on the company’s strong traffic and 75 million registered users for e-mail, search and other services.
“I think in the future with the partnership, we can have good consolidation of the traffic flow,” Wang said in the conference call.
China has the world’s second-biggest population of Internet users after the United States, with 123 million people online. But in financial terms, the country lags behind the United States, Japan, South Korea and other markets.
Online commerce has been slow to develop due to poor distribution systems for goods and the late development of online payment in a society where few people use credit cards.
China also has more than 400 million mobile phone users, which has fueled interest about possible wireless e-commerce.
“We believe that wireless e-commerce will be quite promising. It’s something that we need to follow up,” Wang said.
In September, eBay tightened restrictions and registration requirements to reduce fraud among Chinese sellers. But it has been unable to significantly reduce fraudulent listings in China, home of pirated software, movies and books.
The first public signs of eBay’s struggles in China came in January 2005, when it warned that its annual financial performance would fall short of bullish expectations.
Fake chinese electronics selling better than the originals!
From iTWire, Australia: It’s a funny old world. Chinese manufacturers are copying the circuit boards and designs of products from Japan and Korea, and they’re doing it so fast that by the time the originals arrive in the marketplace, they’re seen as the fakes!
China is a land of endless factories, with many pumping out the world’s most desirable gadgets, from iPods to portable computers to digital cameras and much more. But with so much electronics smarts to hand, the pirate electronics industry is very active.
Two reports on the Internet, here and here, have indicated that Chinese electronics pirates have been very busy, churning out excellent copies of LG’s Chocolate phone right down to the glowing touch-controlled keypad and smooth sliding action.
LG took so long to get a Chinese version ready, that by the time they launched theirs into the market, the copied Chinese version had been on sale for so long that LG’s phone was seen as the fake item copying the ‘original’ Chinese version.
Another example is the PSP. Rumoured to be coming out with in a version that contains a standard GSM mobile phone, a Chinese manufacturer came out with a phone that looks very much like a PSP, although not as wide, with a stack of pirated Nintendo games thrown in for good measure to beef up its gaming credentials, even if those games have been shamelessly ripped off from Nintendo.
Plenty of other goods, both electronic and otherwise, are routinely copied in China. Everything from designer clothes, handbags, Mont Blanc and other brand pens, expensive cars, golf clubs, jewellery, sports shoes (sneakers), many modern toys including many of the robots in the ‘Robosapien’ series and plenty more including CDs and DVDs is freely available from ‘markets’ all over China, and if you know where to look, at markets in Hong Kong, too.
The cars may not be so easily accessible from the markets, indeed that’s the one place you won’t find them, but the rest of the products are much more easily transportable and copyable that it’s no surprise they are widely available.
The electronics market is just the latest frontier, with costs of electronics production so low in China. Many of these products will not officially make it out of China, but will be smuggled out to appear in stores across Asia, and in likely much smaller quantities to first world Western countries.
The piracy of electronics is nothing new. In the 90s, I clearly remember fake Panasonic DVD players marked as ‘Panesoic’, a brand name so ridiculous only the incredibly dimwitted would mistake it for the original.
But sell these products do, especially in Asia where the prices are low, few questions are asked and in many cases, the quality is actually pretty good.
Samsung is said to have been so concerned by seeing its phones copied on the Chinese market that it tracked the distribution channels back to the source and discovered the electronics guys responsible for copying their latest products.
After offering them a job with Samsung and a chance to go legitimate, they are reported to have declined the offer, saying that they were able to make more money by simply continuing in their pirate ways. What Samsung did next is not known.
Eventually China will crack down on the blatant piracy seen on its shores, but until then, the world will keep on seeing ever more creative and ever better quality copies from Chinese manufacturers, along with complete duds that should definitely be avoided and products of varying quality everywhere in between.
What a funny old world we live in, where people will do almost anything and copy almost anything to make, or save, a buck.