Global Marketing News – 14th July 2016
Alibaba and Baidu are expecting a cut in earnings, due to increased taxes on search advertising in China.
New rules to regulate paid searches from September were announced last week by China’s State Administration for Industry and Commerce.
Currently, around 50% of Alibaba’s revenue would be affected which would lead to a 2.4% drop in annual earnings, whilst Baidu is expected to see a 4% drop in earnings in 2017.
Alibaba has said that the effect the rules would have on their earnings would be small, as its methods of creating revenue are becoming more diverse.
Meanwhile, Baidu said that it accepted the changes fully but that they could become “excessively burdensome” and it may have to stop posting certain types of adverts, such as pay-for-performance services.
The Line Corporation has made the largest technology initial public offering (IPO) so far this year.
The messaging app, which has over 200 million monthly users across Asia, this week priced 35 million shares at just under 33 US dollars each; equalling a total value of 1.15 billion dollars.
These shares will be split, with 22 million accounting for depositary shares for an international offering in the US, and the other 13 million being sold in Japan.
With trading expected to begin later this week in New York and Tokyo, the IPO price means that Line is currently valued at around 7 billion dollars.
The move was originally delayed after the market became unstable due to Britain’s decision to leave the EU, but the demand for shares since has meant Line has become only the third tech company to debut above its original range this year.
Nestlé has signed a deal with the Egyptian ecommerce retailer Souq.com that will allow it to become the first company to sell grocery products online in the country.
The deal is Souq.com’s first step into the e-grocery market and will be selling a wide range of Nestlé products, including some that will be entirely exclusive to the website.
Good news also lies in the fact that a recent study from Nielsen revealed that 55% of those in Egypt would be happy to start ordering groceries online.
Nestlé’s Mohammed Abo El-Fotouh said that the partnership allowed it to reach all Egyptians who would then be “only a few clicks” away from purchasing their groceries over the internet.
Ecommerce businesses in Turkey are seeing impressive market growth of 31% this year.
Following concern around the country’s security following a string of terrorist attacks last year, global investment has reduced in the country, but due to high mobile penetration levels of 94% and a young average age of just 30, the country has a huge growth potential that it looks to be fulfilling.
One of Turkey’s best known online retailers, Trendyol, expects to see growth of around 50% in 2017 from 188 million US dollars this year.
Its founder Demet Mutlu said that Turkey’s young population is pushing online growth and that Trendyol averages 35 million visitors a month, over 20 times more than the busiest shopping mall in the country.
Whilst ecommerce only accounts for 2% of the country’s entire retail market, it has recently seen investment from eBay, Naspers and Amazon.
And finally, BT, Nokia, Orange, Vodafone and Deutsche Telekom have all signed a manifesto promising the launch of 5G networks across the EU by 2020.
The document states that the businesses involved will commit to launching the 5th generation of the high-speed data network in at least one city per EU country in the next four years.
However, they also state that the ‘net neutrality’ concept of stopping content providers gaining advantage over competitors, a regulation enforced by the EU, stops free competition between companies and limits innovation.
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