The National Development and Reform Commission announced on Aug 7 that it had launched a second round of domestic frozen pork purchases to prevent any further drops in the price of pork, according to China Daily on August 8.
Due to a slack season and continued overproduction, pork prices have shown signs of sliding and likely remaining low for a period ahead, the National Development and Reform Commission said in a statement on its website. According to the statistics released by the Ministry of Commerce, the pork prices in July decreased 23%, compared to the same period of last year, which contributed greatly to the drop of CPI.
In April, the hog-to-corn price ratio, a major indicator of the sector’s profitability, fell under 6 to 1, the break-even point for farmers. To avoid drastic price fluctuations, the government then initiated a round of frozen pork purchases. Price drops narrowed in May and reversed to moderate gains in June and July.
With the effect of drought in the U.S. continued, the feed price will surely increase during the next half, even in the first quarter of 2013, because feed costs account for 60 to 70 percent of farmers’ production cost in China.
The rapid increase in pork imports, which doubled in the first half of this year compared with last year, had severely dampened the domestic pork market. Imports of pork offal accounted for about 70 percent of China’s pork imports, but the import price was 70 percent lower than the domestic pork offal price, said by Feng Yonghui from Soozhu.com.
Feng Yonghui also pointed out if the decrease of pork prices continued, passion of farmers would be damaged and then led to a possible retaliatory increase later. Hope things will be better in the following peak season. The government’s purchase was mainly to stop further price falls and to protect the interest of farmers. But the amount of purchase will not be big enough to affect the domestic price of pork because of the six-month expiration of frozen pork. Overall, structural adjustment is urgent.
China to release corn and rice from reserves
According to the announcement by State Administration of Grain on August 10, China will release corn and rice from state reserves to help curb inflation and reduce imports as the worst U.S. drought in half a century pushes corn price to global records, creating fears of a new round of world food crisis.
China Daily reported on August 13 that the announcement was the first release since September last year, when China said it would sell 3.7 million tons of state corn to keep inflation under control. The release may prompt Chinese importers to cancel shipments in the near term and take some pressure off international corn prices, which set a new alltime high as the US government slashed its estimate of the size of the crop in the world’s top grain exporter.
A report by the US Department of Agriculture (USDA) on August 10 raised its forecast for China’s corn crop this year by 2.5 percent to 200 million tons. Moreover, the USDA also cut its estimate of Chinese corn imports by 3 million tons to 2 million. It makes sense to release some corn from reserves under such circumstance.
“It can help stabilize the market somewhat, but the volume is too small compared with the 10 million to 15 million tons of monthly consumption nationwide,” said Xu Wenjie, an analyst with Zheshang Futures.
Comment
Releasing some corn and rice from reserves surely can help to tame the pressure of inflation to some extent. But the volume of corn or rice should be specified and details should be released as soon as possible.
Gold market: investors eye China stimulus
Gold’s performance reflects continued challenging economic climate, said by the World Gold Council in the Gold Demand Trends Report Q2 2012 on August 16.
The report showed that global gold demand in Q2 2012 was 990.0 tonnes (t), down 7% from the 1,065.8t in Q2 2011. In value terms gold demand remained relatively stable year on year at US$51.2 billion, compared to US$51.6 billion in Q2 2011. During the quarter, the average price of gold was US$1609.49 per ounce, 7% higher than the average for Q2 2011.
Though China is the largest consumer of gold, the investment and jewellery demand was 144.9t, down 7% from 156.6t in the same quarter last year. Investment demand fell by 4% year-on-year to 51.1t as Chinese investors exercised restraint in response to the lack of direction exhibited by the gold price. The lack of sustained upward momentum in the gold price and the slowing of domestic GDP also discouraged consumers from buying gold jewellery, which saw a 9% year-on-year decline to 93.8t.
Jewellery demand in China, during the typical weaker second quarter, dropped by 9% from year-earlier levels to 93.8 tonnes. Chinese consumers were discouraged by the slowing of GDP growth during Q2 as well as by the lack of a clear trend in the gold price. Chinese consumers prefer to buy into an established trend in the gold price and the period of consolidation during the second quarter therefore acted as a deterrent to gold jewellery demand. Demand for wedding jewellery was resilient, aided by 2012 being the auspicious Year of the Dragon.
Investment demand during the seasonally weak second quarter slipped 4% year-on-year to 51.1 tonnes. Demand in value terms was stable at RMB16.7bn. Taken in a historical context, investment demand continues to grow: Q2 demand was 38% above the five-year quarterly average of 37.0 tonnes. The consolidation in the gold price during the second quarter promoted a decline in net new buying. However, interest in gold bars and coins remains fundamentally strong, as evidenced by an increase in the number of smaller, regional banks that are starting to promote physical gold products.
“Gold demand in China has grown consistently over the past several years driven by the liberalization of the Chinese gold investment market, the introduction of innovative gold savings accounts and a strong interest from Chinese citizens in buying gold to preserve wealth,” said Marcus Grubb, managing director at the World Gold Council. More and more Chinese choose to buy gold as an investment when inflation is seen as a concern.
While there are many uncertainties in financial markets and trading — probably one certainty that investors can count on is that there will be another crisis and yet another. Recently, individual investors around the globe have lived through a number of financial crises like European sovereign debt crisis. More and more common investors feel that physical ownership of gold is one way to protect and preserve assets. Something to consider.
Comment
Steady growth in Chinese gold demand is expected to resume in the third quarter. The fundamental factors driving demand remain in place and economic growth is expected to pick up following the monetary easing implemented during the second quarter.
China’s steel prices hovering near record lows
Reuters reported on August 16 that China’s daily crude steel output in July slipped 0.8 percent from the previous month to 1.99 million tonnes, and still, a darkening outlook for the economy will keep pressure on prices for iron ore and Chinese steel, which have fallen 24 percent and 16 percent, respectively, from their 2012 peaks.
The reasons behind such decline trend are the weak domestic demand and rising supply pressure. In the middle of August, Baosteel, China’s leading steelmaker, cut prices again for its finished products and mills across China have been following suit to push their steel product inventories out the door in a slack market.
Government’s efforts to cool the property market, combined with slower economic growth, have resulted in a sharp slowdown in steel demand growth which is projected to expand at 4 percent this year after enjoying double-digit growth rates on average over the past decade.
China’s slowing construction activity and economic growth are also weighing on prices for iron ore, a key steelmaking ingredient that influences the price of everyday item.
High stock and high productivity are the most important reasons for the loss of the whole steel industry. Du Hui, an analyst from Qilu Securities, said that profits of the steel industry may continue to be lower and lower in the following months.
Comment
High inventories of steel add to evidence of slower growth in China. The government has pledged to put more focus on boosting the domestic demands. Balancing the supply-demand relation, improving the quality and changing the structure are possible ways to solve the excess capacity problem.
Stockpile of crude hits high point
China’s stockpiles of crude for commercial use rose to the
highest level in at least 31 months in July, while diesel inventories shrank to their lowest this year, according to data from Xinhua News Agency.
Supplies of crude, excluding emergency reserves, climbed 3.1 percent at the end of July compared with June for a fifth monthly gain, according to Xinhua’s China Oil, Gas& Petrochemicals newsletter on August 20.
That puts inventories at 32.28 million metric tons, the most since January 2010. Diesel stockpiles fell 8.1 percent to 9.29 million tons, the least since December, the data showed, Bloomberg reported.
China’s crude production rose 3.2 percent to 17.03 million tons in July, government data show. The country, the second-biggest oil consumer after the United States, cut fuel prices in the month to the lowest level since December 2010 after global crude costs dropped.
The daily demand for oil product increased 1.2 percent from June and 6 percent compared with the average in the first half of the year, the National Development and Reform Commission, China’s top economic planning agency, said.
Gasoline inventories fell 1.8 percent and kerosene dropped 9 percent, according to the newsletter. It has pub- lished the monthly percentage changes for stockpiles since July 2010, when it stopped reporting volumes.
The country’s crude oil production in the period from January to July reached 117.35 million tons, down 1.3 percent year-on-year.
Its crude oil imports increased 10.2 percent to 161.9 million tons in the first seven months, according to customs data, underlying the country’s increasing dependence on imports to meet its domestic demand, according to the NDRC.
A fuel price cut on July 11 boosted sales of oil products and helped draw down fuel inventories.
To trim high domestic fuel inventories, the top Asian refinery Sinopec cut its crude throughput by more than 243,000 barrels per day in June from an earlier output target, and cut throughput by some 236,000 bpd below its target in July, industry sources have said.
Comment
Imports have been curbed in the last couple of months as refineries sank deeper into the red. Gasoline price in China was also reduced three times between May and July.
Oil majors see losses in overseas investment
Two thirds of three Chinese oil majors’ hefty overseas in
vestments have sustained losses, the 21st Century Business Herald reported, citing a report from China University of Petroleum.
China Daily reported that China’s three oil giants, China National Petroleum Corp (CNPC), China Petrochemical Corporation (Sinopec Group), and China National Offshore Oil Corporation (CNOOC), invested in as many as 144 overseas projects to the tune of $70 billion by the end of 2010, as the paper cited the China Petroleum and Chemical Industry Association (CPCIA).
In 2010 alone, their mega-sized mergers and acquisitions surpassed $30 billion, making up 20 percent of world’s upstream mergers and acquisitions, according to CPCIA.
Meanwhile, the International Energy Agency said in a report that the three companies’ overseas mergers and acquisitions in 2009 accounted for 13 percent of the world’s total that year.
The paper said the three oil companies had stakes in about 70 million tons of crude oil overseas in 2010, but little was shipped back to China. Instead, most was sold at spot prices on the international market, the paper said.
An unnamed source said that CNPC shipped back about 5 million tons of crude oil in 2010, one twelfth of its overseas oil stakes.
China’s oil consumption reached 420 million tons in 2010, and it imported 239 million tons of crude oil that year, according to Customs.
As state-owned companies, the oil giants should supply oil for the country and its strategic reserves, said Wang Yong, the former secretary general of the private petroleum division with the China Chamber of Commerce.
Compared with those in developed countries, the amount Chinese oil firms ship back is not in accord with their expensive costs, he said.
“Not only the three companies, but many centrallyadministrated state-owned enterprises (SOEs) have suffered shocking losses,” an unnamed official with the Development Research Center of the State Council told the paper.
Most of these losses are the result of wrong decisions and investment failure, and some are the aftermath of arrogance, he said.
Comment
The National Development and Reform Commission (NDRC), China’s top economic planning agency, gave the green light to more outbound investment at the beginning of this year. But as news of SOE’s heavy losses emerged to the public, the State-owned Asset Supervision and Administration Commission tightened controls on this matter, and stated that SOEs are responsible for their losses in overseas investment. Time to cool down.
Solar panel makers call for efforts to counter EU investigations
China’s major solar panel manufacturers have called for united efforts by government, industry and enterprises to cope with European Union (EU)’s anti-dumping investigations, according to Xinhua.
The Ministry of Commerce summoned the country’s leading solar companies — Yingli, Suntech, Trina and Canadian Solarto to Beijing to discuss a solution to the investigations, according to the Economic Information quoting unnamed sources.
The four companies delivered a report to the ministry calling on the government, industry and enterprises to work together and formulate necessary countermeasures against the EU dumping allegations.
Germany’s SolarWorld and other European solar panel makers in July filed a complaint seeking import tariffs on Chinese-made solar products. There would be a 45-day period before EU’s executive commission decides whether to start the investigations, ending in early September.
SolarWorld spearheaded a similar initiative in the U.S., leading the country to impose duties of about 31 percent on solar panel imports from China, in May. In response, China launched investigations into imported U.S. solar-grade polysilicon in mid-July.
China’s solar products exports totaled 35.8 billion U.S. dollars in 2011, with the EU receiving a share of more than 60 percent, according to industry data.
Once the EU opens the investigations, China’s solar industry will suffer a severe blow, risking output losses of 350 billion yuan (about $55 billion) and 300,000 to 500,000 jobs losses, said Liang Tian, director of public relations at the Yingli Green Energy.
China’s Ministry of Commerce earlier called the dumping allegations groundless, saying protectionist measures will harm the European solar industry.
“Amid global economic uncertainties, a stable free trade environment guarantees the common development of solar industries on both sides,” the ministry said.
Comment
The ongoing trade dispute over solar industry which often happens is harmful to the industry of both sides. Both should strive to seek for an efficient solution.
China’s on-grid wind power capacity sees substantial growth
China’s wind power sector has witnessed substantial growth, with the country’s on-grid wind power capacity reaching over 50 gigawatts to date, the State Grid said on Aug. 15, Xinhua reported.
The State Grid, China’s largest utility company, said in a press release that on-grid wind power capacity under its distribution has reached 50.26 gigawatts as of this year, indicating an annual growth rate of 87 percent for the last six years.
However, the regional concentration of wind resources and technical obstacles has prevented the efficient use of wind power, the company said.
Zhang Zhengling, spokesman for the State Grid, said China’s utilization of wind energy has reached a “relatively high level” following a string of measures to monitor and adjust the use of the energy.
In 2011, power generated from wind totaled 70.6 billion kilowatt-hours (kwh), 28.2 times the amount generated in 2006, according to Zhang.
Linking regional networks to the national power grid remains a stumbling block for the growth of the sector, Zhang said.
“The key problem is that regional connections are still weak, and there is not yet a unified national market and corresponding grid network,” said Shu Yinbiao, deputy manager of the State Grid.
Shu said China should speed up the construction of trans-regional power grids in order to meet its new energy development goals.
The country’s on-grid wind power capacity is expected to reach 100 gigawatts by 2015 and 200 gigawatts by 2020.
The focus on new energy comes as the country tries to shift away from fossil fuels and cut carbon dioxide emissions by 17 percent per unit of gross domestic product by 2015.
Comment
Compared with the ever growing wind power, China’s grid network is still weak. More need to be done for trans-regional power grids.
Automobile imports in China total 684000 units from January to July
China imported 684,000 foreign automobiles in the first seven months of the year, Beijing Business Today reported, citing statistics from China Automobile Trading. Although the figure still represents positive growth of 25.5 percent, it is still far less than the growth figures China was seeing last year. CATC anticipates final retail sales growth rates for imported vehicles this year to be around 20 percent.
Among the three segments, sales of imported minivans increased the most over the seven month period, with its year-on-year rate over 30 percent. SUVs managed to maintain growth of over 20 percent. The import market as a whole has sustained strong growth rates. In July alone, 35,000 imported sedans, 54,000 imported SUVs and 3,600 imported minivans were sold in China. Year-on-year growth figures for the three segments were 38.1 percent, 58.1 percent and 3.8 percent, respectively.
SUVs have already surpassed sedans to become the most imported vehicle type, dominating over 50 percent of the import market. Wang Cun, head of CATC’s marketing and sales division, believes that a large reason that import sales are able to maintain double-digit growth figures comes from the popularity of foreign SUVs in the country.
Comment
CAAM Executive Vice Chairman and Secretary General Dong Yang predicted that Chinese automobile exports will exceed one million units this year, expecting overall growth to be between 25 percent and 30 percent. China market is still of big potential to foreign auto manufacturers.
Chinese own brand manufacturers see net profits fall in first half of 2012
Performance reviews reveal that the first half of the year has been especially tough for domestic Chinese own brand manufacturers. According to a report in the Securities Daily, the majority of own brands announcing negative growth in their net profits for the first half of the year, with FAW Car going as far as reporting a 75 million yuan($119.07m) deficit, equivalent to a year-on-year decrease of over 35 percent.
According to statistics from the China Association of Automobile Manufacturers (CAAM), a total of 3.15 million own brand passenger automobiles were sold in the first half of the year. Own brand manufacturers controlled 41.39 percent of the market, falling three percent points from 2011. Among them, own brand sedan sales totaled 1.42 million units, falling a full 6.8 percent from the previous year.
Despite own brands having made several significant advancements over the past few months, the CAAM maintains that a large gap exists between them and Sino-foreign joint ventures. Combined with increased competition in the market overall, own brands have failed to perform ideally.
With the exception of FAW Xiali, China’s nine publicly listed passenger automobile manufacturers all announced falls in their net profits for the first half of the year. Commercial vehicle manufacturers have not been immune to the market either, with Jiangling, Ankai, Dongfeng and Haima’s commercial vehicle divisions witnessing net profit falls of 24 percent, 48 percent, 70 percent and 98 percent respectively.
On the bright side, exports of Chinese brand vehicles have noticeably increased in the first half of 2012. According to CAAM statistics, a total of 487,900 vehicles were exported during the six month period, growing 28 percent from last year. Monthly exports in May and June both exceeded 100,000 units.
Comment
According to a recent study conducted by the National Development and Reform Commission’s Department of Price Supervision, prices of domestically manufactured and imported vehicles in the 36 cities covered by the study have continued to fall in recent months. More difficult time for Chinese domestic autos is yet to come.
Foreign cotton impacts on domestic market
According to statistics from China National Textile and Apparel Council (CNTAC), the price difference between foreign and domestic cotton has reached to as high as 5000 Yuan per ton recently, which seriously affects the domestic textile industry.
According to the report by USDA on August 13 that in China, the cotton crop is forecast at 31 million bales in 2012/13, 7.5 percent below the estimated 33.5 million produced last season. Planted area is expected to decline 9 percent; however, a record yield projection of 1,350 kg/ha is expected to help stabilize production there.
As the leading mill user of cotton, China continues to trend lower and is projected to use only 39 million bales in 2012/13, one million below last season and the lowest since 2004/05. China’s cotton spinners are losing market share due to the country’s established price floor, which has resulted in domestic prices about 50 percent above world prices.
The above phenomena have led to two results, according to Economic Daily on August 16. On the one hand, many enterprises in downstream sectors are willing to choose foreign cotton because of its price edge, which leads to a higher and higher stock of domestic cotton and affects upstream enterprises of cotton production. On the other hand, many corporations cannot get access to the foreign cotton because of the limitation of the import quota control, which will further bring loss of profits because of higher domestic cotton price.
The price of domestic cotton is keeping growing, while the price of cotton yarn is decreasing, which means lower profits with higher output. Therefore, many small and mediumsized enterprises are making efforts to cut down capacity and just maintain core clients, said by Xiao Shan, the owner of a small textile factory.
How to break through the bottleneck of raw materials is the question requiring to be solved immediately. Accelerating the industry integration and concentration degree maybe an effective way to go out of the present dilemma.
Comment
Statistics show that some brand clothing listed corporations still realized stable increase in net profits in such an environment, which suggests that besides developing alternative materials of cotton, strategic adjustment and structural optimization are also of great importance.
Textile: recessive but resilient
The 13th China Textile and Apparel Trade Show was held at New York’s Jacob K. Javits Convention Center in Manhattan during July 24 to 26, China Daily reported on August 3. The three-day show brought together 356 textile producers from China and 300 others from Turkey, South Korea, Indonesia and the US.
The Chinese textile industry experienced “an extraordinary year”, said Zhang Yankai, vice-president of the China National Textile and Apparel Council.
Zhang, who headed the Chinese delegation at the New York show, said the sluggish global economy, slow growth in international trade, rising prices for raw materials, and increased production and environmental costs all contribute to the industry’s struggles.
“However, the textile industry in China held fast to the road of scientific development, steadfastly restructuring and upgrading, and with the efforts of the industry as a whole and the enterprises within it, turned in impressive results nonetheless,” he added, according to China Daily.
One obvious and significant change of Chinese corporations at the show is worth mentioning. Many suppliers came here with products they designed and made on their own because they’re no longer satisfied with doing simple processing like before, which is greatly significant for the textile industry to develop in a healthy and stable way.
Comment
The updated and fashionable design and high-quality products have attracted more and more people’s attention. Corporations need to make efforts to increase the added value of products as well as the service.
Online price war worries some consumers
An ongoing price war between Chinese online retailers may have temporarily spiked sales, but it has also triggered concerns among consumers over potential market disruptions, Xinhua reported.
Starting from Wednesday morning, major online retailers like 360buy, Suning and Gome started offering massive discounts, with each company claiming to sell its products at lower prices than its competitors.
However, online shoppers and experts who have seen similar price-cutting races in previous times have been skeptical about the offer, despite scooping up a fair number of bargains.
The Ministry of Commerce on Thursday also expressed concern over the battle by reiterating that all marketing strategies must comply with laws and market rules.
Shen Danyang, spokesman for the ministry, said online retailers should focus on boosting management and service while protecting the interest of consumers and suppliers.
In a survey conducted on Sina Weibo, the country’s most popular microblogging site, 90.7 percent of 42,003 respondents said the price war is simply a promotional stunt.
“Prices on their websites have wobbled somewhat, but only a few items owned by both stores have a distinct discount,” said “Tongkongshishang.”
Meanwhile, market observers worry that excessively low prices may dampen the enthusiasm of suppliers and create problems in securing sufficient stocks, which may lead to a delay in giving the customers their discounted goods.
Chunlan, a major air conditioner manufacturer, said the price war may affect upstream suppliers and create disorder in the home appliance market, adding that consumers will ultimately suffer.
Chinese law forbids companies from selling at prices lower than cost in order to squeeze out competitors.
Liu Junhai, vice president of the China Consumers Association, said the companies engaging in the price war are not making an effort to offer diverse products and better services, but to try and occupy a larger portion of the online retail market.
Zhang Yin, an analyst at venture capital fund Matrix Partners, said the price war is a fairly efficient marketing strategy for online retailers, as they can raise sales revenues by sensationalizing the situation.
“In this sense, all companies involved in the war are winners,” Zhang said.
Comment
The price war among major e-commerce websites is deemed to be a marketing strategy, which annoys the online shoppers. Fortunately, the Ministry of Commerce said recently it would introduce more specifications to better guide the development of the nation’s e-commerce market.
Liquor industry urged to be more consumer oriented
China’s liquor industry should be more consumer oriented to catch up with world-famous liquor brands in terms of international recognition, China National Light Industry Council’s Chairman Bu Zhengfa was quoted as saying by China Daily on Aug 16.
To expand the influence of Chinese liquor brands, Bu suggested that, while they keep producing high-quality products, Chinese companies should study the culture and drinking habits of other countries, understand consumers’needs and closely cooperate with local brands.
The total output of China’s national clear liquor companies last year reached over 1 billion liters, a 30.7 percent increase compared to the previous year.
However, the industry’s reputation has been undermined by backward production technology, flawed regulation and fake products.
“China’s booming economy and rising international status have provided an opportunity to the liquor industry,”said Wang Yancai, chairman of the China Alcoholic Drinks Association. “We should commit ourselves to developing a healthy market and presenting the best of China’s clear liquor to consumers worldwide.”
Comment
Chinese liquor industry, though expanding rapidly, still lacks behind in going global. To set a foot in the international market, the industry should be more consumeroriented with its quality products.
Motorola Mobility to cut 4,000 jobs
Google on August 13 confirmed that Motorola Mobility, now a wholly-owned subsidiary of the Internet search giant, will cut about 4,000 jobs or 20 percent of its workforce, as reported by Xinhua.
Two-thirds of the reduction is set to occur outside of the United States, Google said in a regulatory filing with the U.S. Securities and Exchange Commission.
According to the filing, Motorola Mobility also plans to close or consolidate about one-third of its 90 facilities worldwide, and will simplify its mobile products offering by shifting the emphasis from low-end phones to more innovative and profitable devices.
The layoff is expected to cost Google nearly 275 million U.S. dollars as the process incurs severance-related and other charges, which the company said will be largely recognized in the third quarter of this year.
Google closed the acquisition of Motorola Mobility in May 2012 with a hefty price tag of 12.5 billion dollars, in a bold move to beef up its strength in mobile computing.
Comment
Since the completion of the purchase of Motorola Mobility, Google has taken a series of measures to turn around the moneylosing cellphone maker. The new changes including the layoff are designed to return Motorola Mobility’s mobile devices unit to profitability, after it lost money in 14 of the last 16 quarters.
Prices make feathers fly for Angry Birds’ merchandise
In comparison with its sizzling debut as a mobile game, the opening of the first Angry Birds retail outlet in China was more of a damp squib, according to China Daily.
Its producer, Rovio Entertainment Ltd, announced an ambitious target of a billion fans for the popular game via brick-and-mortar stores but sales have not been as encouraging as the Finnish company expected, at least in the first three weeks following the grand opening in July.
On the underground floor of the Grand Gateway mall in one of Shanghai’s central business districts, Xujiahui, a small group of high school girls walked into a three-dimensional version of the virtual world.
As well as colorful soft toys such as red birds and green pigs, the store sells a wide variety of Angry Birds merchandise including iPhone cases, shirts, bags, toys and, of course, games.
However, the girls decided to leave after just five minutes. No other customer was inside the shop before they entered.
“Those products are not cheap at all, especially when you compare them with the price online,” said Pan Yankai, a 16-year-old who used to play the game a lot.
And by “online”, she was not referring to Rovio’s official e-store on Tmall.com, the country’s most influential business-to-customer site, but the pirated spin-offs flooding other websites.
It is true. An Angry Birds-themed T-shirt costs 259 yuan ($40) in the store and an iPhone case sells for 138 yuan. Fakes can be bought through unauthorized channels at a fifth to onethird of the price of authentic ones.
Peter Vesterbacka, the company’s global chief marketing officer, has declined to reveal the sales figures of online stores and brick-andmortar shops. But he said the Shanghai store marks the first in a chain of 25 scheduled to open in the country by the end of this year.
Before the store opened, the first official apparel to go on sale in China was a line of Angry Birds shoes, sold on Letao.com, an online retailer exclusively selling footwear.
To further penetrate the market that has helped to drive the company’s thriving growth, the firm outlined a series of China-related business plans in June that also include opening activity parks.
According to Vesterbacka, two Angry Birds activity parks will be established in the coming autumn. One will be in Haining, Zhejiang province, and the other, smaller in scale, will be in the Sino-Finnish Center at Tongji University in Shanghai.
Comment
While the bird-slinging game gained popularity because of its simplicity and the little time commitment it required, it is not easy to maintain “stickiness” of use. That would put a dent in the sales of spin-offs in the long run. Besides, in a largely cost-conscious market, many users just want birds that look like those in the games, no matter whether they are authentic or not.
Google to better integrate its services with Gmail
Google is creating an information bridge between its influential Internet search engine and its widely used Gmail service in its latest attempt to deliver more personal responses more quickly, according to Shanghai Daily report.
The experimental feature unveiled on August 8 will enable Google’s search engine to mine the correspondence stored within a user’s Gmail account for any data tied to a search request. For example, a query containing the word“Amazon” would pull e-mails with shipping information sent by the online retailer.
Such Gmail results will typically be shown to the right of the main results, though in some instances, the top of the search page will highlight an answer extracted directly from an e-mail. For example, the request “my flight” will show specific airline information imported from Gmail. Something similar could eventually happen when searching for a restaurant reservation or tickets to a concert.
Blending e-mail information into general search results could raise privacy worries. Google is trying to mitigate that by showing Gmail results in a collapsed format that users must open to see the details. For now, users must sign up to participate.
Google Inc ran into trouble over privacy in 2010 when it tapped the personal contact information within Gmail accounts to build a social networking service called Buzz. Google set up Buzz in a way that caused many users to inadvertently expose personal data from Gmail. An uproar culminated in a Federal Trade Commission settlement requiring the company to improve its privacy controls and undergo audits for 20 years.
Google is treading carefully as it hooks Gmail up to its Internet search engine.
The new feature initially will be available to 1 million Gmail users who sign up at http://g.co/searchtrial.
That’s a small fraction of the more than 425 million Gmail accounts that have been set up since Google launched its free e-mail service eight years ago to compete against the offerings from Yahoo Inc and Microsoft Corp.
Comment
Although Google has a commanding lead in Internet search, it remains worried about the threat posed by social networking services such as Facebook Inc. As social networks have made it easier to share information online, the web is starting to revolve more around people than the keywords and links. It has been trying to adapt by building more personal services and plugging them into its search engine.
Firms should watch out for Internet threats
Chinese companies should be more cautious with web threats and cybercrime, as more of their data is being placed on the cloud and an increasing number of mobile devices are being used in the workplace, according to China Daily report.
Web security problems have disrupted global business operations from time to time. On average, a new cyber threat emerges every second, and every five minutes there could be a hacking case, said Eva Chen, chief executive officer of Japan-based security company Trend Micro Inc.
“More than 90 percent of the world’s companies have hidden malicious software in their computers,” said Chen at a Beijing security forum in early August. The threats have already resulted in a series of information hacking cases among renowned companies, she pointed out.
In April last year, hackers attacked Sony’s PlayStation Network services. The security breach may have compromised personal information, including credit card data, for its 70 million users. Sony estimated a $171 million loss from the attack.
The most recent case happened with South Korea’s No 2 wireless service provider KT Corp. KT said in July that two computer programmers had hacked the personal information of about 8.7 million of its subscribers. The figure was more than half of KT’s total service subscription membership of 16 million.
Though China hasn’t reported such devastating hacking cases so far, it does not mean that the nation is immune to cybercrime.
Liu Zhengping, senior manager of the marketing department at Trend Micro, said Chinese companies also face severe security challenges, especially as the country catches up with global trends and introduces new technologies and devices.
China surpassed the United States last year to become the world’s biggest smartphone market. More than 42 million smartphones were shipped to Chinese retailers in the second quarter, an increase of 199 percent year-on-year. The country accounted for 27 percent of the world’s smartphone shipments during the period, according to a report released by research firm Canalys.
Comment
Wide use of mobile internet and cloud services put corporate data at risk. Few Chinese companies have the awareness to protect themselves at the moment. There will be explosive growth in the security software market in the near future.