Recruiting in China

Just five years ago, when you wanted to watch a movie you went into a cinema and bought a ticket. These days, however, you can use your Internet-connected mobile phone to group-buy a virtual ticket, which can be exchanged for a real ticket.

If that seems easy and inexpensive, it is, and the ease and possible profit margin was not lost on eagle-eyed investors and others. The situation today is something of an economic mystery.

From Sept 23 to 5:30 pm, Oct 21, a total of 17,085 people group-bought their movie tickets, together with popcorn and a bottle of fruit juice, for 31 yuan ($5) on nuomi.com, a Chinese group-buying website. The original price for a single ticket in the cinema on Fuxing Road, Haidian district, Beijing is 90 yuan (almost $15).

The arrangement, and many like it, seemed like a win-win situation. Consumers saved money, while goods and service providers, such as restaurants, hotels and hairdressers, were able to capitalize on their unused capacity, promote their brand, or expand their service area.

South Beauty, a high-end restaurant chain hit hard by China's frugality campaign, group-sold 12,165 "dinners for four people" at a price of 298 yuan on the group-buying sub-site of Dianping.com, a website where people post their reviews for restaurants, from April 11 to 5:30 pm, Oct 21. The original price was 1,234 yuan.

Tuan800.com, a group-buying navigation site, which also releases regular data analyses, provides a general picture of the industry. According to the website, a total of 120 million people in the Chinese mainland group-bought something or some service in August, up 109 percent year-on-year. Tuan800 added that the value for all these group-buying deals for this single month reached 7.7 billion yuan, up 108 percent year-on-year.

But just as group-buying seemed ready to enter daily life for good, Chinese group-buying websites - once the darlings of venture capitalists, now face an unpredictable future with many being gobbled up by larger companies and acquired, others vanishing from the Internet all together.

The following examples beg the question: what happened to China's major group-buying websites?

October 2014, Lashou.com

Sunpower Group announced on Oct 19 it had acquired Lashou.com, one of China's earliest group-buying websites, but has not disclosed the deal price, according to caixin.com.

Sunpower, headquartered in Nanjing, capital of South China's Jiangsu province, has five business focuses, including real estate, health care and retail. ?Zou Yan, spokesman for Sunpower, told caixin.com that the acquisition of Lashou.com was to help improve Sunpower's O2O (online-to-offline) platform.

Lashou.com, which went online in March 2010, received a total of $166 million yuan from investors between April 2010 and April 2011, according to Tuan800.com. Lashou even tried to go public, the first Chinese group-buying website to launch an IPO in the United States, and was valued at $1.1 billion yuan, but it failed at last.

Group-buying deals worth 300 million yuan were made on Lashou.com in the first eight months of this year, down 1.77 percent year-on-year, according to Tuan800..

The company might now have a market share of only five percent, according to a survey cited by caixin.com.

March 2014, Didatuan.com

Didatuan.com, which went online in July 2010 as a group-buying website and once had a top-five trading volume, closed its group-buying business on March 31 and turned to develop a group-buying navigation service, according to information posted on tuan800.com on April 3.

At the moment, however, didatuan.com cannot be accessed online.

January 2014, Manzuo.com

Shenzhen-listed Suning Commerce Group Co Ltd, China's leading retailer, announced on Jan 27 it has fully acquired Manzuo.com, which went online in January 2010 and was China's first group-buying website, according to cnstock.com. The exact details of the deal were not announced.

Manzuo.com was integrated into Suning's local life department and Fang Xiaohai, Manzuo's founder, stayed in Suning to expand the conglomerate's O2O business.

Group-buying deals worth 70.8 million yuan were made in the first eight months of this year on Manzuo.com, up by 3.74 percent year-on-year, according to Tuan800.

August 2013 to March 2014, Ruomi.com

Baidu announced in August 2013 that it would invest $160 million into Ruomi.com and would gain a 59 percent stake of the group-buying website that went online in June, 2010.

At the end of 2013, Shen Boyang, the CEO of Ruomi.com resigned and on March 6, 2014, Ruomi was rebranded Baidu Ruomi.

According to Tuan800, group-buying deals made on Baidu Ruomi in the first eight months of this year hit 727.6 million yuan, up 7.55 percent year-on-year.

January 2013, 24quan.com

Du Yinan, founder of 24quan.com, a group-buying website, said his company has been closed due to failed talks with investors, Qilu Evening News reported on Jan 14, 2013.

August 2012 to January 2013, GaoPeng.com

In August 2012, GaoPeng.com, the Chicago-based Groupon Inc's China joint venture, merged with Chinese group-buying website Ftuan to form a new company called GroupNet.

However, on Dec 12 the same year Ftuan was renamed GaoPeng and its domain name was changed back to gaopeng.com on Jan 15, 2013.

China's job market proved to be quite resilient although the economic growth slowed in the first nine months, according to data from the Ministry of Human Resources and Social Security (MHRSS) on Friday.

From January to September, 10.82 million new jobs were created, or 160,000 more than a year ago, MHRSS said.

At the end of September, the urban registered jobless rate stood at 4.07 percent, lower than the annual employment control rate of 4.6 percent targeted by the government.

However, the registered jobless rate may undercount the actual unemployment numbers as a survey among 31 big- and medium-sized Chinese cities found the unemployment rate remained at around 5 percent in the first eight months.

The new jobs created in the first nine months exceeded the government's full-year target of at least 10 million new jobs this year.

China's manufacturing sector data failed to ease concerns about capital outflows as investors continued to stay away, bringing down Shanghai shares for the third straight day.

The benchmark Shanghai Composite Index lost 1.04 percent to 2,302.42.

China's six most active exchange-traded funds that track indexes measuring the performance of blue-chip shares have seen 5.37 billion yuan (US$877 million) of redemption this month, the Securities Times reported yesterday, citing data from the Shanghai and Shenzhen exchanges.

Analysts said the redemption indicated a bout of profit-taking by institutional investors pessimistic about the outlook of blue chips.

Fears that new share sales will divert funds from existing shares also weighed on the market as three companies started to take subscriptions for their initial public offerings yesterday. Six other companies will start taking subscriptions from today.

The stock market fell yesterday despite data showing the flash HSBC manufacturing purchasing managers' index rose to a three-month high of 50.4 in October, slightly up from a final reading of 50.2 in September.

But the sub indexes were not as encouraging as the headline index, with new orders sub-index edging down to 51.4 from 51.5 in September and new export orders falling to 52.8 from 54.5.

Gold shares declined after gold prices eased from a six-week high on stronger US dollar. Zhongjin Gold fell 3.2 percent to 8.26 yuan. Zijin Mining Group lost 3.2 percent to 2.43 yuan.

An aluminum sheet processing plant in Zouping county, Shandong province. Global demand for aluminum sheets for vehicles is forecast to record a compound annual growth rate of 30 percent by the end of 2020.

Novelis Inc, the world's largest supplier of light-weight aluminum automotive sheets, said on Tuesday that its new plant in Changzhou, Jiangsu province, would help cater the growing global demand for the fuel-efficient light metal.

The US-based company has invested $100 million on the plant that will produce 120,000 metric tons of light-weight aluminum every year. It will also help the company expand its global footprint to meet the rapidly growing market demand for automotive aluminum as automakers seek to reduce the overall weight of vehicles to enhance fuel efficiency.

Each 10 percent weight reduction can lead to fuel savings of 5 to 7 percent, said Steve Fisher, senior vice-president and chief financial officer of Novelis.

The company expects global demand for aluminum sheets for vehicles, which can be used in lightweight vehicle structures and body panels such as hoods, doors, fenders and lift gates, will record a compound annual growth rate of 30 percent by the end of 2020.

Global use of light-weight aluminum automotive sheets may reach 1.58 million metric tons by 2025.

Shashi Maudgal, president of Novelis Asia, said that in Asia alone, the use of aluminum in auto bodies by major car-making countries is around 50,000 metric tons.

Phil Martens, president and CEO of Novelis, said: "Global automakers seeking to drive fuel efficiency, higher performance and innovative design can now source locally produced Novelis aluminum automotive sheets in every major region where they make vehicles."

Fisher said Novelis has a global market share of more than 50 percent in light-weight aluminum automotive sheets, and the plant in Changzhou will help the aluminum maker solidify its leading position in the industry.

Liu Qing, managing director of Novelis China, said that he believes the company would have a market share of over 50 percent in China also.

Novelis aluminum products are used in more than 180 models of vehicles globally, including some operating in China, and the Changzhou plant will serve domestic demand including the car-making hubs in the Yangtze River Delta, said Liu.

Novelis is planning to triple its automotive sheet capacity to 900,000 metric tons by 2015, and has invested more than $550 million since 2011 to meet the goal.

Growth in China's auto sales will likely slow to 4.6 percent this year, lower than the previous forecast of 8.3 percent, Bloomberg Tuesday quoted the head of the country's auto association as saying.

Dong Yang, secretary-general of the China Association of Automobile Manufacturers (CAAM), noted a slowdown in sales over the past two months and said the industry body was looking into the reason for the weakness.

Auto sales rose 2.5 percent in September compared with the same month a year earlier, its slowest pace in 19 months, dragged down by sluggish sales of commercial vehicles such as trucks, the CAAM said last week. Sales rose 4 percent in August.

Financial innovation, market development and the globalization of the yuan have boosted the index tracking Shanghai's financial industry by 5.3 percent in the first half of this year, a joint industry report said yesterday.

The Shanghai Financial Prosperity Index rose to 3,242 points by the end of June, up 164 points from last year, boosted by innovation activities, market development and the yuan's internationalization, the Shanghai Financial Association and Roland Berger Strategy Consultants said in the joint report yesterday.

The sub-index measuring the general development of the city's financial industry gained 4 percent to 4,517 points as the foreign exchange, money, fund and gold markets ranked the top four by market growth.

Another sub-index that tracks the development of the yuan's internationalization jumped 84 percent from last year to 36,024 points.

"Financial innovation such as cross-border yuan settlement under the current account and for foreign direct investment, and yuan-denominated two-way cash pooling tools launched in the Shanghai pilot free trade zone gave a fresh impetus to the internationalization of the yuan," Jerry Zhang, chief executive officer of Standard Chartered Bank China, said yesterday.

"Meanwhile, the Chinese currency has also gained more acceptance in overseas markets," Zhang said.