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Archive for the ‘China Outsourcing’ Category

Alibaba Optimistic About Future

April 30th, 2008

Alibaba.com is the largest business-to-business website, which started out helping millions of Chinese small and medium-sized enterprises sell their goods on the internet.

Last year, the company’s revenue grew 58.6% to 2.16 billion yuan and its net profit surged 340% to 968 million yuan, which was attributed to the rise in the number of the company’s paying members and their increased averaged online consumption.

Despite the current economic slowdown at the global scale, Alibaba.com expected to see dynamic growth this year. “I think we will maintain fast growth this year because people in difficulties tend to diversify their product sourcing and supply in order to reduce risks,” said Wei Zhe, CEO of Alibaba.com.

According to Alibaba.com, 72% of the company’s revenue came from online trade between China and foreign countries and only 28% from trade within China. Revenue from domestic trade is expected to rise as China’s internal demands grow. Meanwhile, the company also has plans to open a joint venture with Softbank in Japan this year and increase its business presence in Europe and India to seek greater international opportunities.

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Sohu Reports Fivefold Profit Growth

April 30th, 2008

In recently years, Sohu.com Inc, the Chinese Web portal, has initiated its Olympic marketing strategy and became the official internet content sponsor for the Beijing Olympics in 2005. To avid fluctuations on the market, it has also been endeavoring to make revenue outside the online advertising sector.

Recently Sohu posted a nearly fivefold profit growth in its quarterly result, which is attributed to its sponsorship of the upcoming Olympics in Beijing and the success of an online role-playing game that it introduced last May.

Sohu’s revenue in the first quarter ended last month grew 156% to $84.8 million, while profit surged 383% to $21.6 million. Revenue from brand advertising reached $33.2 million, up 41% on a yearly basis while online game revenue increased 24 times to $41 million, boosting the company’s non-advertising revenue by 570% to $50.1 million.

A new report by Goldman Sachs indicates that the Beijng Olympics is expected to create an additional $65 million in terms of online advertising revenue for Chinese Internet companies, mainly from Olympic global partners like Samsung and Adidas that have been vigorously exploring the Chinese market.

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JV Expansion for BASF and Sinopec

April 29th, 2008

In 2000, BASF and Sinopec set up their 50-50 joint venture BASF-YPC Co Ltd in Nanjing. This year, the two sides have reached an agreement to spend $900 million to expand their joint project to meet increasing demands in the domestic market.

The two companies have submitted the technical and commercial feasibility study for the expansion of the steam cracker from 600,000 to around 750,000 tons of ethylene per year and the expansion of manufacturing facilities of other petrochemical products. The expansions are expected in phases starting this year and the cracker expansion is scheduled between 2009 and 2010.

“The completion of the feasibility study marks an important step in the cooperation between Sinopec and BASF… it is expected to make a significant contribution to meet the domestic market demand,” said Wang Tianpu, president of Sinopec Corp.

And for the German company, “the expansion strengthens BASF’s close partnership with Sinopec. It is another significant demonstration of the company’s commitment to China’s chemical market,” said Martin Brudermuller, member of the board of executive directors of BASF.

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Ping An Expects to Invest in Fortis

April 29th, 2008

Ping An Insurance Co last month announced its plan to acquire a 50% stake in Fortis Investment Management for 2.15 billion euros from Fortis Band based in Brussels, aiming to increase its presence on the international asset management market.

In 2007, the company’s net profit rose to 19.2 billion, up by 140.2% compared with the year before, which was attributed to its “comprehensive earning mode” that seeks to balance income from insurance, banking and investment. And the total revenue last year amounted to 137 billion yuan, up 55.4% from the year before. Earnings per share was 2.61 yuan, compared with 1.27 yuan in 2006. Its rate of investment return improved from 7.7% in 2006 to 14.1% in 2007.

“The proposed equity investment in Fortis is an effective way to strengthen our competitiveness in the asset management business,” said Ma Mingzhe, chairman and CEO of Ping An Insurance. “The cooperation will enable both parties to diversify earning resources and seek greater growth in different markets.”

If approved by the managements of Ping An and Fortis Bank, the name of the joint venture will be changed to Fortis Ping An Investments, in which the two sides are equal partners.

The company looks forward to benefiting from Fortis’s asset management expertise of the highest international standard while Fortis is in a position to leverage on Ping An to expand its business in the emerging markets in the Asia-Pacific region.

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Shanghai Port Expects 10% Yearly Growth

April 28th, 2008

According to a China Ports Future Forum, the container throughput of Shanghai’s seaport is expected to see steady annual growth of about 10% until 2010, which is attributable to the booming economy in the Yangtze River Delta and preparations for the 2010 Shanghai World Expo.

Last year, container throughput at the port rose to 560 million tons, up by 4.2% compared with 2006 and the city’s cargo shipments increased by 26.15 million TEUs, overtaking Hong Kong as the world’s second-largest container seaport after Singapore.

Although China’s port industry still faces challenges, such as the shortage of large deep-water berths and land and energy as well as insufficient number of professional port pilots, container handling equipment supplier Kalmar Industries foresees plenty potential in China’s port facilities market. Ken Loh, president of its Asian operations, said construction has begun on the second phase of its Lingang plant in Shanghai. The $20-million facility will boost production capacity and help the firm to maintain its position as a market leader on the mainland.

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Foton Motor Plans to Go Global

April 28th, 2008

Founded in 1996, Beiqi Foton is one of the largest commercial vehicle producers in China, which went public on the Shanghai Stock Exchange in June 1998. Headquartered in Beijing, it has assets exceeding 7 billion yuan and more than 20,000 employees. Up until now, the company has sold more than 2 million vehicles in both the domestic and overseas markets, the brand value of which is estimated at 17.54 billion yuan. Currently, the company has mapped out an ambitious plan to improve its competitiveness at home and abroad by enhancing brand awareness, strengthening R&D and promoting international cooperation during the 11th Five-Year Plan period (2006-2010). Foton expects a sales volume of more than 1 million vehicles, 20% of which to be sold overseas, and projected income surpassing 80 billion yuan by the year 2010.

Starting its globalization strategy five years ago, its exports are now sold in West Asia, North Africa, Eastern Europe, South Asia and Southeast Asia. With its high-quality and value-for-cost products and services tailored to clients in each region, it has been widely acknowledged among overseas dealers and clients.

To further promote the globalization process, Foton continues to strengthen cooperation with foreign research institutions and companies such as AVL in Austria, the Bosch Group in Germany, Lotus Co in the UK, MIM Design in Japan and Eaton International Corp in the US.

Besides drawing upon experience of overseas partners, the company also attaches great importance to self-innovation and independent R&D. It has established an innovation approach that combines the Beiqi Foton Academy of Automobile Engineering in Beijing working in conjunction with overseas R&D centers in Japan and Europe as well as China’s Taiwan province. It also works closely with domestic and overseas universities, research institutions and suppliers to track the latest development in the global automobile industry and keep pace with current needs and trends.

The company has invested over 3 billion yuan in developing new products and building a well-structured technology innovation system and major breakthroughs have been made in core expertise. Its emission reduction laboratory became operational in August 2007 to make sure its vehicles meet international standards. It has also imported the latest technologies, techniques and equipment from foreign partners to ensure its product quality to provide customers with satisfactory products and services.

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Self-developed Car Brand Won Wider Recognition

April 28th, 2008

In a sales satisfaction index (SSI) released by the Asia-Pacific branch of J. D. Power, an authoritative US researcher, Tianjin FAW was rated No 1 last September among China’s self-developed automobile brands. And a 2007 passenger car customer satisfaction survey by the China Association for Quality also ranked Tianjin FAW at the top—for its Vita model rated No 1 in its category of compact cars. Both help to demonstrate that Tianjin FAW is one of the shining stars among domestically designed and produced brands.

Tianjin FAW has followed closely the global trends to further develop its manufacturing processes and products, improve quality controls and enhance sales and service to meet international standards. And it has successfully shown its product quality to customers both at home and abroad through the three grueling cross-continental road trips across Asia, Africa, Australia and Russia on its way to the Arctic Circle. Covering nearly 60,000 km, the Vita cars have overcome the harsh challenges of deserts, high-altitude plateaus, high temperature, high humidity and extreme coldness, showing Chinese cars can also survive all kinds of sever conditions.

With over 20 years of history in developing compact cars and benefiting from successful cooperation with Toyota, the company now is capable of producing high-quality compact cars and components like engines. Furthermore, due to its competitive prices and improvements in product quality, its compact cars will definitely enjoy a promising market.

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Popularizing Traveler’s Checks in China

April 28th, 2008

American Express, the world leader in traveler’s checks, is working with Chinese travel agencies to promote the use of travel’s checks in China.

“Traveler’s checks have gained some popularity in China. However, they are not as popular as they should be simply because not many Chinese are familiar with them,” said Diannie Tsai, vice-president and general manager of American Express’s global traveler’s checks and prepaid services division, Greater China. “American Express has partnered with China International Travel Service for promotional purposes and is seeking opportunities to forge cooperation with other travel or overseas educational agencies.”

Altogether 40.95 million Chinese went overseas in 2007, with an average expenditure of $928. And the number is expected to reach 44.8 million this year. China has already overtaken Japan to become the top country in Asia regarding outbound tourists, the number of which is anticipated to be the largest in the world by the year 2020.

Traveler’s checks are available in 7 currencies and 28 denominations and can be cashed through more than 120,000 service outlets around the globe. They do not expire and are refundable when lost or stolen. The convenience and safety they provide will ensure them a promising market among Chinese tourists, students and businessmen.

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Number of Netizens Hit 221 Million, Ranking the First

April 28th, 2008

According to the Ministry of Industry and Information , by the end of February the number of netizens in the country has reached 221 million, overtaking the US and coming to rank the first in the world. A year earlier the figure was 210 million.

This year will not only see the internet come into full play but also its development environment consistently be improved. The country endeavors to improve its fundamental guarantee work on internet management, establish a management mechanism integrating internet development and security guarantee and solve problems regarding intranet management among core networks.

Currently, the emergence of new technologies and new services such as VOIP, P2P, IPTV, Instant Messaging and search engines, has placed harsher demands on internet management.

Given the current situation, James Huang, founder and CEO of BPOVIA Ltd based in China, expects a robust potential market for his business. “With the number of internet users increasing in China, we are in a position to get an easier access to our clients, old and new alike, and offer our personalized services to them.” At present, about 40% of BPOVIA’s clients are seeking help with their personal to-do lists. Among the more common requests are ordering supplies, groceries, online shopping, comparing prices and planning vacations.

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HR Outsourcing Makes A Worldwide Hit

April 24th, 2008

With a slowdown of the world economy, many companies have started paring headcounts in their HR departments and outsource their HR functions to countries like China and India where the labor cost is comparatively low.

James Huang heads an BPO and HR outsourcing firm that has offices across China. Business is booming for freebooters like James as more and more solid, conservative old economy firms start receiving HR outsourcing contracts. The spry services outfits were doing this anyway.As a result, most companies. “It’s turning into a flood of contracts. Most are now being outsourced,” says James.

HR outsourcing is not a very new phenomenon; but what is surprising is the speed with which companies have bought into the idea itself. HR outsourcing covers all functions relating to recruitment, assessment of new candidates, sourcing candidates, background checks of candidates, and talent branding, which is a lot like media planning and deals with where to advertise for candidates and through which channels.

According to BPOVIA, a global consulting, outsourcing and investment services firm, human resource outsourcing (HRO) has come a long way since mere payroll administration or recruitment channel. It has moved up the value chain from tactical HR processes to managing business critical HR.

There are basically three broad classes of companies that are looking at HR outsourcing. First, there are large companies such as TCS and Infosys which have an employee base of close to 1 lakh each. These companies are looking to outsource HR to save costs. The second group comprises mid-size service as well as manufacturing companies with 2,000 to 5,000 people such as Microsoft China and Cisco. For such companies, it is a combination of a need to get the best talent and cost that is leading to the outsourcing of HR activities.Then there are the small companies who have ambition but simply do not have the strength or the expertise to hire big time. So they outsource their functions to BPO companies.

Apart from these functions, payroll and benefit management and performance management, strategic functions and training also form part of HR outsourcing Many of their clients are small firms with big ambitions, which do not have the capability to attract big talent. They also outsource their functions to firms like BPOVIA, who is professional on this.

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