One could be forgiven for thinking that after purchasing Uber’s China operations, Didi Chuxing—which now boasts over 300 million users and over 80% of China’s market—would be on easy street. But things are never that simple in the Chinese market. Figures have shown Didi is losing users and drivers. Under strict Chinese local governments’ new policies, Didi may face bigger challenges than Uber China. Meanwhile more people cast doubts over its business model. Boasting a sharing economy model, car-pooling, the company now relies more on providing car-hailing services with prices lower than taxis to maintain its scale. Once the subsidies withdrew, users walk away.
Over 120 million Chinese went abroad and spent over $104.5 billion in 2015 and more are projected for 2016. But for young Chinese people, their spending isn’t all about shopping in tax-free shops. As Leo Lin Song, chief of staff of TripAdvisor says, Chinese travelers are becoming more sophisticated: they’re reaching to further places and want to have more distinct cultural experience and not afraid to explore the unknown. Yet compared to western travelers, Chinese tourists are still special. They like to read pictures and need clear guidance—and that’s where TripAdvisor chips in.
Chinese companies are on an acquisition spree abroad. On paper, buying abroad may make sense, but from strategy to execution, a lot can go wrong. For every company that buys the right asset at the right time for the right price, handles the regulators of its industry in the right way and manages the integration with just the right touch, as many as four others flounder. Many studies have found that 50-80% of mergers fail to create any additional value, and that in fact a bad acquisition can cost the new company dearly. So how do Chinese companies fare and how can they do better?
Anil K. Gupta, the Michael Dingman Chair in Strategy, Globalization and Entrepreneurship at University of Maryland’s Smith School of Business, questions the logic behind Haier’s giant leap towards its new platform strategy. What’s at stake for Haier if it doesn’t embark upon this ambitious plan? According to Gupta: Haier now faces a major conundrum. Unless the company can find other growth opportunities fast, it faces years of potentially very slow growth. It is in this context that one can understand why CEO Zhang Ruimin has embarked on this new strategy.
White goods manufacturer Haier is turning itself into an internet-based ‘platform company’ made up of several micro-enterprises. The idea is to create an organization that is extremely responsive to customer needs, constantly cultivates new ideas and innovates quickly. To do that it needs to discard the traditional organizational structure where ideas flow top-down and execution is done bottom-up. The company is now a flat organization which is a marketplace of ideas, talent and resources. The plan sounds good in theory but will the execution be easy?
With companies like Baidu, Alibaba and Tencent branching out into new areas, China is witnessing the rise of a new breed of digital conglomerates.
Wang Jianlin’s sprawling business conglomerate, the Dalian Wanda Group, has its fingers in many pies: from real estate and retail to sports and entertainment.
The government should step in and regulate digital monopolies because at the end of the day, healthy competition benefits all.
In China, LinkedIn is offering its tried and tested formula of professional networking with some unique twists.
At times controversial, China’s Anti-Monopoly Law is playing an increasingly important role in the country