Latest news with #EdSander
TimesLIVE
5 days ago
- Business
- TimesLIVE
Chinese e-commerce leaders brush off regulatory risk to continue ‘instant retail' price war
China's largest e-commerce platforms show no signs of halting an 'instant retail' price war unusual in its resilience to state criticism, indicating the almost existential importance placed on instant retail as the future of e-commerce. Their fight in instant retail, where delivery can be as quick as 30-minutes, risks the wrath of authorities not averse to crackdowns and wary that aggressive price-cutting could entrench deflationary pressure in an economy under fire from US tariffs and restrictions on tech exports to China. Alibaba, and Meituan have pledged almost 200bn yuan R496.5bn combined to subsidise one-hour delivery in recent months, leading to customers who order beverages, for instance, effectively receiving them for free. So extreme is the strategy that the trio was summoned for the second time last week to the state administration of market regulation, which called for 'rational competition' aligned with the government agenda, said a person familiar with the matter. 'It's a battle that takes place now but is more related to the expectations for five to 10 years down the road. The platforms believe this is life or death. It might mean the future or ack of a future for their company,' said Ed Sander, tech analyst at Tech Buzz China.
The Sun
5 days ago
- Business
- The Sun
‘Instant retail' price war in China shows no let-up
SHANGHAI: China's largest e-commerce platforms show no signs of halting an 'instant retail' price war that has proven unusually resilient to state criticism, underscoring the near-existential importance placed on instant retail as the future of e-commerce. Their fight in instant retail, where delivery can be as quick as half an hour, risks the wrath of authorities not averse to crackdowns and wary that aggressive price-cutting could entrench deflationary pressure in an economy already under fire from US tariffs and restrictions on tech exports to China. Alibaba, and Meituan have pledged almost 200 billion yuan (RM118 billion) combined to subsidise one-hour delivery in recent months, leading to customers who order beverages, for instance, effectively receiving them for free. So extreme is the strategy that the trio was summoned for the second time last week to the State Administration of Market Regulation which called for 'rational competition' aligned with the government agenda, said a person familiar with the matter. 'It's really a battle that takes place now but is much more related to the expectations for five to 10 years down the road. (The platforms believe this is) life or death, it might mean the future or the lack of a future for their company,' said Ed Sander, tech analyst at Tech Buzz China. The adoption of artificial intelligence and automated warehouses will make instant retail increasingly profitable to the extent it will cannibalise conventional e-commerce, he said. Examples of instant retail and attendant price war include coupons from Alibaba covering the cost of breakfast delivered within 60 minutes, or from Meituan offering free tea. JD Takeaway offers 10 yuan coupons for orders as little as 11 yuan. Alibaba, and Meituan did not respond to requests for comment. Authorities in China typically take a sustained and firm-handed approach toward practices they deem unfavourable to healthy and rational market development, making dissent rare. State media agency Xinhua was unequivocal in a Wednesday editorial about the negative impact of 'zero yuan purchases'. 'On the surface, platform companies engage in 'price wars' to compete for the instant retail market, but their essence is to use subsidies to give birth to a 'bubble market',' the editorial read. 'To put it bluntly, there is no winner.' China's US$19 trillion (RM80 trillion) economy grew 5.3% in the first half of 2025. Hinting at what may be to come, however, retail sales growth slowed to 4.8% in June from 6.4% in May. Moreover, ANZ economists estimated a 0.1% decline this year in the consumer price index and 3% decline in the producer price index, for what would be the first annual deflation since 2009. 'A price war is never in the interest of businesses. Consumers gain of course, but from a macroeconomic point of view (it leads) price expectations to keep decreasing,' said economics professor Bala Ramasamy at the China Europe International Business School in Shanghai. 'The level of competition we have in China has become unrealistic and at times toxic. Government intervention has become necessary for the sake of the greater good,' he said. The regulatory attention is different to that given to the electric vehicle sector, where price wars stemmed in part from overcapacity. One issued raised by the regulator at the Friday meeting was food waste from unconsumed zero-yuan orders, said the person familiar with the matter, who was not authorised to speak with media and so declined to be identified. 'Everything points in the direction that they (regulators) are not happy with this, definitely not happy with a lot of tech companies just burning money by handing out all of those consumer discounts that will have no long-term effect,' Sander said. The appeal of instant retail battle is difficult to ignore for e-commerce firms that have struggled to unlock growth in the consumer spending slowdown since the Covid-19 pandemic. The instant retail sector is growing around 2.5 times faster than conventional e-commerce and is set to surpass 2 trillion yuan in sales by 2030, showed data from the Chinese Academy of International Trade and Economic Cooperation. While consumers may enjoy the low prices, merchants complain on social media that price wars all but eliminate profit margins and restaurateurs bemoan a fall in profitable in-person custom. 'From a regulatory perspective, authorities are generally in favour of competition, what they oppose most is monopoly,' said catering industry analyst Wang Hongdong, founder of catering data research institute NCBD. 'So, a complete halt to the delivery war is unlikely (though) they are likely to address some current issues, such as the impact on dine-in restaurants.' – Reuters
Malay Mail
5 days ago
- Business
- Malay Mail
China's e-commerce giants lock horns in ‘instant retail' price war despite regulatory glare
BEIJING, July 25 — China's largest e-commerce platforms show no signs of halting an 'instant retail' price war unusual in its resilience to state criticism, indicating the almost existential importance placed on instant retail as the future of e-commerce. Their fight in instant retail, where delivery can be as quick as half an hour, risks the wrath of authorities not averse to crackdowns and wary that aggressive price-cutting could entrench deflationary pressure in an economy already under fire from US tariffs and restrictions on tech exports to China. Alibaba, and Meituan have pledged almost 200 billion yuan (RM118 billion) combined to subsidise one-hour delivery in recent months, leading to customers who order beverages, for instance, effectively receiving them for free. So extreme is the strategy that the trio was summoned for the second time last week to the State Administration of Market Regulation which called for 'rational competition' aligned with the government agenda, said a person familiar with the matter. 'It's really a battle that takes place now but is much more related to the expectations for five to 10 years down the road. (The platforms believe this is) life or death, it might mean the future or the lack of a future for their company,' said Ed Sander, tech analyst at Tech Buzz China. The adoption of artificial intelligence and automated warehouses will make instant retail increasingly profitable to the extent it will cannibalise conventional e-commerce, he said. Examples of instant retail and attendant price war include coupons from Alibaba covering the cost of breakfast delivered within 60 minutes, or from Meituan offering free tea. JD Takeaway offers 10 yuan coupons for orders as little as 11 yuan. Alibaba, and Meituan did not respond to requests for comment. Toxic competition Authorities in China typically take a sustained and firm-handed approach toward practices they deem unfavourable to healthy and rational market development, making dissent rare. State media agency Xinhua was unequivocal in a Wednesday editorial about the negative impact of 'zero yuan purchases'. 'On the surface, platform companies engage in 'price wars' to compete for the instant retail market, but their essence is to use subsidies to give birth to a 'bubble market',' the editorial read. 'To put it bluntly, there is no winner.' China's US$19 trillion economy grew 5.3 per cent in the first half of 2025. Hinting at what may be to come, however, retail sales growth slowed to 4.8 per cent in June from 6.4 per cent in May. Moreover, ANZ economists estimated a 0.1 per cent decline this year in the consumer price index and 3 per cent decline in the producer price index, for what would be the first annual deflation since 2009. 'A price war is never in the interest of businesses. Consumers gain of course, but from a macroeconomic point of view (it leads) price expectations to keep decreasing,' said economics professor Bala Ramasamy at the China Europe International Business School in Shanghai. 'The level of competition we have in China has become unrealistic and at times toxic. Government intervention has become necessary for the sake of the greater good,' he said. Instant appeal The regulatory attention is different to that given to the electric vehicle sector, where price wars stemmed in part from overcapacity. One issued raised by the regulator at the Friday meeting was food waste from unconsumed zero-yuan orders, said the person familiar with the matter, who was not authorised to speak with media and so declined to be identified. 'Everything points in the direction that they (regulators) are not happy with this, definitely not happy with a lot of tech companies just burning money by handing out all of those consumer discounts that will have no long-term effect,' Sander said. The appeal of instant retail battle is difficult to ignore for e-commerce firms that have struggled to unlock growth in the consumer spending slowdown since the Covid-19 pandemic. The instant retail sector is growing around 2.5 times faster than conventional e-commerce and is set to surpass 2 trillion yuan in sales by 2030, showed data from the Chinese Academy of International Trade and Economic Cooperation. While consumers may enjoy the low prices, merchants complain on social media that price wars all but eliminate profit margins and restaurateurs bemoan a fall in profitable in-person custom. 'From a regulatory perspective, authorities are generally in favour of competition, what they oppose most is monopoly,' said catering industry analyst Wang Hongdong, founder of catering data research institute NCBD. 'So, a complete halt to the delivery war is unlikely ... (though) they are likely to address some current issues, such as the impact on dine-in restaurants.' — Reuters
Time of India
5 days ago
- Business
- Time of India
Chinese ecommerce leaders brush off regulatory risk to continue 'instant retail' price war
Academy Empower your mind, elevate your skills China's largest ecommerce platforms show no signs of halting an " instant retail " price war, unusual in its resilience to state criticism, indicating the almost existential importance placed on instant retail as the future of fight in instant retail, where delivery can be as quick as half an hour, risks the wrath of authorities not averse to crackdowns and wary that aggressive price-cutting could entrench deflationary pressure in an economy already under fire from U.S. tariffs and restrictions on tech exports to and Meituan have pledged almost ¥200 billion ($28 billion) combined to subsidise one-hour delivery in recent months, leading to customers who order beverages, for instance, effectively receiving them for extreme is the strategy that the trio was summoned for the second time last week to the State Administration of Market Regulation which called for "rational competition" aligned with the government agenda, said a person familiar with the matter."It's really a battle that takes place now but is much more related to the expectations for five to 10 years down the road. (The platforms believe this is) life or death, it might mean the future or the lack of a future for their company," said Ed Sander, tech analyst at Tech Buzz adoption of artificial intelligence and automated warehouses will make instant retail increasingly profitable to the extent it will cannibalise conventional e-commerce, he of instant retail and attendant price war include coupons from Alibaba covering the cost of breakfast delivered within 60 minutes, or from Meituan offering free tea. JD Takeaway offers ¥10 coupons for orders as little as ¥ and Meituan did not respond to requests for in China typically take a sustained and firm-handed approach toward practices they deem unfavourable to healthy and rational market development, making dissent media agency Xinhua was unequivocal in a Wednesday editorial about the negative impact of " zero yuan purchases "."On the surface, platform companies engage in 'price wars' to compete for the instant retail market, but their essence is to use subsidies to give birth to a 'bubble market'," the editorial read. "To put it bluntly, there is no winner."China's $19 trillion economy grew 5.3% in the first half of 2025. Hinting at what may be to come, however, retail sales growth slowed to 4.8% in June from 6.4% in ANZ economists estimated a 0.1% decline this year in the consumer price index and 3% decline in the producer price index, for what would be the first annual deflation since 2009."A price war is never in the interest of businesses. Consumers gain of course, but from a macroeconomic point of view (it leads) price expectations to keep decreasing," said economics professor Bala Ramasamy at the China Europe International Business School in Shanghai."The level of competition we have in China has become unrealistic and at times toxic. Government intervention has become necessary for the sake of the greater good," he regulatory attention is different to that given to the electric vehicle sector, where price wars stemmed in part from overcapacity. One issued raised by the regulator at the Friday meeting was food waste from unconsumed zero-yuan orders, said the person familiar with the matter, who was not authorised to speak with media and so declined to be identified."Everything points in the direction that they (regulators) are not happy with this, definitely not happy with a lot of tech companies just burning money by handing out all of those consumer discounts that will have no long-term effect," Sander appeal of instant retail battle is difficult to ignore for e-commerce firms that have struggled to unlock growth in the consumer spending slowdown since the COVID-19 instant retail sector is growing around 2.5 times faster than conventional e-commerce and is set to surpass ¥2 trillion in sales by 2030, showed data from the Chinese Academy of International Trade and Economic consumers may enjoy the low prices, merchants complain on social media that price wars all but eliminate profit margins and restaurateurs bemoan a fall in profitable in-person custom."From a regulatory perspective, authorities are generally in favour of competition, what they oppose most is monopoly," said catering industry analyst Wang Hongdong, founder of catering data research institute NCBD. "So, a complete halt to the delivery war is unlikely ... (though) they are likely to address some current issues, such as the impact on dine-in restaurants."($1 = ¥7.1533)
CNBC
09-06-2025
- Business
- CNBC
Shein seen boosting Indian manufacturing as U.S.-China trade war shakes up supply chains
Fast fashion giant Shein is reportedly set to boost its manufacturing in India with a view to bolstering its international supply chains amid the ongoing U.S.-China trade war. The Chinese-founded, Singapore-headquartered brand and Indian partner Reliance Retail are set to expand their supplier base in the South Asian country and begin international sales of India-made Shein clothes within the next six to 12 months, Reuters reported Monday, citing sources. The plans aim to increase Indian suppliers from 150 to 1,000 within a year, they added. Shein told CNBC the partnership was limited to the licensing of its brand to Reliance Retail for Indian domestic consumption only. Reliance did not immediately respond to a request for comment. According to the sources, discussions between the firms were underway ahead of fresh U.S. tariffs on China and the closure of the former's 'de minimis' trade loophole. Analysts nevertheless dubbed it a potentially savvy move given brewing trade tensions and increased scrutiny over Shein's supply chains ahead of its closely watched initial public offering. ''Shein's expansion of its production in India is on the face of it a shrewd move, given the trade headwinds facing the company," Susannah Streeter, head of money and markets at Hargreaves Lansdown, told CNBC via email. "It does look like using India as a manufacturing base is a long-term plan and the current tariff challenges could speed this up," Ed Sander, analyst at Tech Buzz China, added. Shein launched in India in 2018 but it was banned in 2020 as part of a government clampdown on Chinese firms. It returned to India in February, as part of a licensing deal with Reliance Industries, the conglomerate owned by Asia's richest person, Mukesh Ambani. The partnership is one of many Reliance has with global clothing brands including Brooks Brothers, Marks & Spencer and Diesel. Under the deal, Shein-branded clothes are produced domestically in India and sold on the website. This differs from most other Shein websites, which list products made in China. The firm nevertheless has existing manufacturing in Brazil and Turkey. An official from Reliance Retail said at the time that Shein would use India as "supply source for its global operations," according to the BBC. They added that the deal would simultaneously help Reliance in "building the network" and training Indian garment manufacturers as part of India's wider plans to promote its textile and garments export industry. "I doubt if the option of exporting elsewhere from India will be the main aim at the moment," Sander said, noting current limitations around India's factory capacity. "Having said that, this could change in the future if Reliance scales up." It comes as other companies have also been ramping up their production in India as they seek to avoid the most punitive tariffs on China. Tariffs on India are currently held at 10% while trade negotiations remain underway. "With the outcome of U.S. China trade talks still unclear, diversifying the manufacturing base to other parts of the world which could benefit from lower tariffs on exports to the U.S. looks sensible," Streeter said in emailed comments. U.S. tech giant Apple has also been boosting its production in India with a view to making around 25% of global iPhones in the country in the coming years. Those plans sparked backlash from U.S. President Donald Trump, who threatened to impose 25% tariffs on such goods. The timing is especially interesting for Shein, however, as it seeks to overcome scrutiny in its troubled pursuit of an IPO. The e-commerce behemoth reportedly recently shifted its listing from London to Hong Kong after failing to receive approval from Chinese regulators. Shein has long sought to shake allegations over the use of forced labor to produce its low-cost goods — claims it vehemently denies. Still, some raised concerns about whether India would provide the silver bullet. "India is not without risk in this respect. There have been reports of labor violations amounting to forced and child labor occurring on cotton farms supplying to three Indian textile suppliers to 60 multinational clothing brands," Streeter said. "Among responsible consumers and investors, there still may be significant skepticism about this move.'' A spokesperson for the Indian government did not immediately respond to CNBC's request for comment on the claims.
