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Posts from the ‘Consumer culture’ Category

Gree interested in investing in Meizu?

Fans of mobile phone brand Meizu were recently allowed a rare glimpse of J. Wong, the reclusive founder of the brand of sleek Android-powered smartphones based in Zhuhai, Guangdong province. In a two-hour speech posted online, Wong announced that he was going to resume his daily work routine at his company office, which he had stopped visiting following his semi-retirement in 2011.

Wong also talked about an incentive program, which aims to transform employees into shareholders as well as bring external strategic shareholders to raise one billion yuan in capital. Gree, China’s leading home appliance brand, was mentioned as one potentially interested investor. Wong also commented positively on Lenovo’s recent deal to buy Motorola, which he believes will help the company gain headway in overseas markets.

Meizu, a pioneer in the Mainland Chinese smartphone market, has been surpassed in terms of sales by its competitors in recent years. Xiaomi, for example, outsold Meizu by a factor of three in 2013. While some industry commentators believe that Wong’s return is an effort to save the company from crisis, others suggest that the prospective cooperation between Gree and Meizu, if it occurs, will help Gree, a traditional industry manufacturer, to establish its Internet pedigree and tap into the smart appliances market.

Companies and brands affected
Gree Electric Appliances Inc. of Zhuhai (SHE:000651)

Internet Poll on changing China’s strange public holiday system

While much of the world looks forward to official holidays that can be predicted years in advance, China’s annual muddle over the coming year’s holiday schedule has long been a reliable source of confusion. But yesterday the Holiday Office published three potential replacement schedules for public input “to make the official holiday schedule planning of our country more scientific and rational.” Sina has put up a poll about it.

Perhaps unique to mainland China is the practice of stealing a day off from a neighboring weekend if necessary to ensure a full three-day vacation. Among the three new options, however, the most popular so far retains the weekend-swapping ways of the current setup, perhaps because it is also the only proposal to grant seven full days off to both the Spring Festival and National Day holidays.

Those dismayed by the current results can take heart in the fact that the only option that would end almost all weekend swaps is currently in second place, only 4,000 or so votes behind. Below is a translation Sina’s poll number of votes for each as of yesterday evening. Read more

China Minsheng Bank to release high-interest debit card as competition heats up

Allied with Taobao and other online marketplaces, Chinese money market funds such as Yu’ebao are making inroads into markets traditionally dominated by banks (see previous Danwei post). Not only are these fund products more accessible for Internet users, their interest rates, usually hovering around 5%, are more than ten times the 0.35% offered to most current account holders.

Feeling the pain, banks are fighting back. The webportal China Finance Information 中国财经信息网 reported on November 12 that China Minsheng Bank has been conducting tests to prepare for a December release of a new type of bank card that promises to offer interest rates on a par with most money market fund products. This move is being hailed by the banking industry as “the first shot of a counterattack” against upstart online financing. Read more

Will a tax rebate rejuvenate China’s restaurant industry?

According to a Southern Daily 南方日报 report, Wang Huiying (王惠英), vice inspector of the “Trade in Services and Commercial Services Department” of Ministry of Commerce, revealed that the Ministry is seeking to lower the business tax rate for restaurants from the current level of 5% to 3%. Speaking at a recent restaurant industry conference, Wang also said that the ministry also seeks to lower the fees that banks charge for credit card transactions.

The restaurant industry has been struggling because of rising wages and rents as well as government’s austerity policies. Worth noting is that Wang said the tax reduction will likely to only apply to low-and middle-end restaurants, so at least for the more expensive ones, now is still not the time to celebrate the end of austerity.

Links and sources
New Express: 商务部:拟下调餐饮业营业税银行刷卡费率

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Does Vancl face a cash crunch?

Upstart Chinese clothing brand Vancl, a rising Internet star that aims to be Zara and Amazon rolled into one, has been the subject of a series of negative news reports. Of late, according to New Financial Observer (新金融观察报 ), a financial newspaper published in Tianjin, not only does the company owe suppliers great amounts of money, it has been delaying paying photographers and models. Some of the company’s creditors took to Weibo to voice their discontent, including one who threatened to commit suicide at the company’s office building.

Rumors that Vancl has cash flow problems started in August this year, when founding CEO Chen Nian announced that the company would move its office location from close to Beijing’s CBD area to Yizhuang, a satellite district off the fifth ring road. The company has also cut the number of its staff from 11,000 at its peak time to the current 3,000. Read more

Hotel customer info vulnerability “threatens family harmony”, a Chinese Internet security forum that publishes information about security loopholes, recently issued a warning about the data security of hotel records. Such information — including customers’ IDs, room numbers, and check-in and check-out times — is stored on the severs of hotel management software providers and can be obtained relatively easily and used for purposes that some worry that can “undermine the harmony of families,” in other words used for blackmail or to reveal infidelities.

Separately, the Qingdao Evening News reports that some such information is currently on sale on the online marketplace Taobao. A journalist contacted one vendor who offered to provide all hotel records associated with one ID number for 1,500 yuan per person. The article also says such companies can delete hotel records for a fee.

The article mentions two hotel brands that have been affected: Home Inn, and Hanting, (China Lodging Group).

Companies affected
Home Inn (Nasdaq:HMIN)
China Lodging Group (Nasdaq:HTHT)

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Infant formula wars: “National team” just a cheap gimmick

On October 14, Caixin’s New Century weekly magazine 财新《新世纪》周刊 published a cover story entitled “The milk formula war”. The article argues that the “milk formula national team” (奶粉国家队), as a campaign launched by the government to hype certain local infant formula companies was dubbed in the media, is just a gimmick from the Ministry of Industry and Information Technology. It was rumored that the government would pump funding into the “team” of six domestic companies, but in fact it transpired that the government would do no such thing, and was merely intending to send out positive signals about domestic formula brands.

Some of the companies that were included on the list are highly dubious. The company which was said to to stood to benefit most is Treasure of Plateau (高原之宝), which produces yak milk in Tibet. Yet the New Century article describes Treasure of Plateau as a company with low capacity, low visibility and high product prices. The only reason why the government decided to endorse Treasure of Plateau is due to its unique product: 90% of the yaks worldwide are found in Tibet, and the company has the potential to produce a luxury Chinese dairy product with export potential. Hong Kong Wissun is another company that was to be promoted in the campaign, although according to New Century the founders of Wissun had previously registered a company that suffered a lot of quality and safety issues. Read more

Pleasant Goat too violent?

A Tom and Jerry style animated cartoon featuring a heroic goat who constantly saves his fellow goats from a wolf who has gastronomic designs over the members of Goatville, Pleasant Goat and Big Big Wolf (喜羊羊与灰太狼) seems an unlikely target for the culture-cleansing campaign that is underway on China Central Television (CCTV). However, the children’s cartoon series, long been lauded for its commercial success and potential to lead China’s soft power vanguard, and boost the less-than-robust Chinese animation industry, was criticized for “excessive violence and vulgar language” by CCTV’s seven o’clock Network News program on October 13.

In response, the producer of the cartoon series said that it had undertaken to re-edit the entire series. Pleasant Goat is not the only title that was criticized. Another popular cartoon Boonie Bears (熊出沒) which is also broadcast on CCTV was also slapped with the same charge in the CCTV program. Boonie Bears is produced by Shenzhen Huaqiang Holding Limited (华强数字动漫), a privately held company.

Shenzhen listed Guangdong Alpha Animation and Culture Co Ltd (002292.SZ) currently owns Pleasant Goat, which it bought from Hong Kong-listed Imagi international holdings ltd. (0585.HK) for 540 million yuan in September.

Companies affected
Alpha Animation and Culture Co Ltd (002292.SZ)
Imagi international holdings ltd. (0585.HK)
Shenzhen Huaqiang Holding Limited (privately held)

Links and sources
China Daily: Pleasant Goat and Big Big Wolf – a guide to the characters

If you’d like to hire Danwei to track your company, investment or other topic of interest in China, please write to and tell us what you want to follow.

Shenzhen bans “skew weeing”

Errant weeing will no longer be tolerated in Shenzhen. From yesterday, new regulations made any instance of uncivilized behavior in public bathrooms in the city liable to a 100 yuan fine. As Shenzhen Evening News reports today, however, enforcing straight weeing is much easier said than done. Read more

Portrait of a Chinese P2P lender

Peer to Peer (P2P) lending websites allow users to lend and borrow money directly to and from each other. China’s first P2P lending website,, launched in 2007. As of 2013, there are scores of websites that operate as online brokers hooking up lenders with borrowers, and taking a small transaction fee. Read more