Business Bagua: China Protects Consumer Rights, Made in America’s Tarnished Rep, and more!

Posted by AW on 21. Mar 2011

<p><em>Another bumpy week in Chinese business as Suntory gets a 136 Million kuai fine for sneaking calories, while Qihu360, China&rsquo;s biggest security software, shows down with QQ. Ku6 proves that honest business will never win in China, as Ford makes &ldquo;Made in China&rdquo; look good. And remember Tencent? Well, get a final look, because they might not be here much longer. </em></p> <p><strong>Zero Calories for only 142 million RMB</strong></p> <p>On March 14<sup>th</sup> the Shanghai Administration of Industry announced ten investigations on behalf of the interest of consumers. The two big &ldquo;winners&rdquo; for false advertising in this case were Suntory (Shanghai) and Yon Ho, who receives fines of RMB 136 million and 6 million, respectively. Suntory is a famous beverage provider, whose famous &ldquo;zero calorie but always sweet&rdquo; Oolong tea was actually packed with calories. Turns out Chinese consumers don&rsquo;t always like free extras! Our other big looser was Yon Ho, a famous soymilk chain-store that was faking its numbers and misled customers with deceptive prize competitions that doesn&rsquo;t exist. Maybe the two should join forces, and work out one real product between the two of them.</p> <p><strong>Security guard is ready to attack</strong></p> <p><em>Qihu 360</em>, the leading security software company in China, is submitting their listing to the New York Stock Exchange, and one number floating about for their IPO is 200 million USD. Qihu 360 plans to invest the IPO raised funds on research and development, acquisition of products, technologies and business. This comes after the grand 3Q battle that has been raging for months, and during which QQ threatened to boot users if they failed to uninstall Qihu 360. It&rsquo;s enough to make you wonder whether or not QQ is planning its own security software launch.</p> <p><strong>Pirated Content 1: Honest Business 0</strong></p> <p>Li Shanyou, founder and CEO of <em>Ku6</em>, resigned last week for &ldquo;personal reasons.&rdquo; Personal reasons, means, of course, that Ku6 has taken a financial beating this year, suffering major losses by throwing away millions on acquiring the rights to original content and building their information infrastructure. This profit model isn&rsquo;t quite profitable in China. While gargantuan competitor Baidu has recently been charged as a copyright violator, the cost of a bad reputation is still less than that of honest business.</p> <p><strong>I don&rsquo;t know&hellip; it&rsquo;s Made in America&hellip;.</strong></p> <p>AQSIQ issued a risk warning notice that the imported Windstar has hidden safety problems, which will lead to serious loss of control without warning signs, and AQSIQ requires Ford Motor Company to carry out maintenance as soon as possible. Spokesman Li Yuanping from AQSIQ said that Ford Motor Company submitted a report, saying it would recall the Windstars imported between 1999 and 2003. There are a total of 260 vehicles involved in mainland China. A small dent in a giant reputation. Let&rsquo;s hope they rebound.</p> <p><strong>Tencent&rsquo;s Stock Price dropped 8%</strong></p> <p>On 16<sup>th</sup> March 2011 <em>Tencent</em> released its fourth quarter financial statements showing the lowest net profit growth during the last three years, and a net profit less than what the analysts expected. This, in turn, caused, Tencent&rsquo;s shares to plummet 8% today. Goldman Sachs claimed &nbsp;that Tencent&rsquo;s non-game Internet value-added chain revenues increased by 2%, probably affected by the disputes with <em>Qihu 360</em>. Also, because of the prosperity of Sina microblog and RenRen.com, Tencent&rsquo;s core platform faces its first threat over the years.</p> <p><em>QQ Penguin image courtesy of nipic user liilym, who probably borrowed it from QQ. </em></p> <p><em><a href="http://agendabeijing.com/business-bagua-chinese-businesses-get-smashed/#more-827">http://agendabeijing.com/business-bagua-chinese-businesses-get-smashed/#more-827</a></em></p>



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