Categories
News

New ‘Private Relay’ feature will not be available in China


Apple CEO Tim Cook delivers the keynote address during the 2020 Apple Worldwide Developers Conference (WWDC) at Steve Jobs Theater in Cupertino, California.

Brooks Kraft/Apple Inc/Handout via Reuters

GUANGZHOU, China — Apple’s new feature designed to give users more privacy when browsing the web will not be available in China, one of the iPhone maker’s most important markets.

Apple revealed a new service called iCloud+ at its Worldwide Developers Conference (WWDC) on Monday. One of the features included in that is “Private Relay.”

When users browse the internet using Safari, their data will be sent through two separate servers in order to mask the user’s identity and what sites they are visiting. As a result, even Apple or the user’s network provider cannot see that data.

It’s a little like a virtual private network (VPN) where users can route their internet traffic through a server located somewhere else in the world to mask their browsing activity.

China so-called Great Firewall effectively allows authorities to block websites from being accessed within China including Google and Facebook. VPNs are often used to get around China’s strict internet controls.

An Apple spokesperson told CNBC that Private Relay will not work in China and some other countries including Saudi Arabia, Egypt, Belarus and Uganda.

Apple said it could not offer the feature in these countries due to local laws.

Using unauthorized VPNs to access blocked websites is illegal in China. While Apple’s Private Relay is not technically a VPN, it acts in a similar way.

In 2017, the U.S. technology giant removed a number of VPN services from its China App Store to comply with local regulations.



Source link

Categories
Future

Ant Group Explores Future Without Chinese Billionaire Jack Ma


Text size



Source link

Categories
Future

Luxury Brands Are Betting Their Future On China, But It May Be A Risky Gamble


LVMH just came out with a strong first quarter 2021 report, reassuring industry watchers that the Covid pandemic is finally in the rearview mirror for the luxury market.

Total revenues reached €14 billion, nearly equal to $17 billion, with organic revenue growth over same period last year up 30%, excluding currency fluctuations and its acquisition of Tiffany. Fashion and Leather Goods were the company’s primary mover, showing 52% year-over-year organic growth.

Since 1Q2020 was such an unprecedented year, the company also provided comparisons to first quarter 2019 and the results were impressive too.

Overall organic growth was reported at 8%, with Fashion and Leather Goods up 37%, followed by Wine and Spirits rising 17%. Selective Retail, under which Sephora and its travel-retailer DFS Group reports, were still underwater compared to 2019, down 30%.

All eyes on China

Assessing LVMH’s continued leadership in the global luxury market, Cowen luxury analyst Oliver Chen explained strength in China, along with the rest of Asia excluding Japan, was a key driver of success. Demand there rose 86% in the first quarter 2021 compared to same period last year.

Such strong growth is even more impressive since Asia is LVMH’s single biggest market, accounting for 34% of total revenues in 2020, with the U.S. trailing at 24% of sales. And further, since the second half of 2020, Asia has been in full recovery mode for LVMH, posting growth in the second-half 2020 of 17%.

The Chinese appetite for luxury is so hot that Bain & Company predicts China is on track to become the world’s leading luxury market by 2025.

With prospects like that, is it any wonder that luxury brands are all in to get their share of the Chinese business. But while China presents the greatest opportunity for growth, luxury brands face a real and present danger by putting all their eggs in the China growth basket. They risk sacrificing their long-term future for short-term gain.

“If the Chinese sneeze, the luxury sector gets pneumonia,” said Luca Solca, senior research analyst for luxury goods at Bernstein, to Jing Daily, in describing luxury brands’ over-dependence on China.

Out of balance

“China is a place where brands risk to get lost in their quest for easy success,” shares Susanna Nicoletti, author of Luxury Unlocked and management lecturer at Instituto Marangoni. She also boasts a resume that reads like a who’s who in luxury, including leadership roles with the top three luxury groups along with several independent luxury fashion brands.

“China’s become a ‘honey trap’ for luxury businesses. Ever since the crisis of 2008, that was the place where most of the growth was for luxury brands,” she states.

Acknowledging that the prospects for making money in China are overwhelmingly attractive – the “honey” – Nicoletti is very clear about the trap too.

“Brands have to make a huge effort to understand the Chinese culture and market. It takes enormous energy and investments,” she states and continues, “Once you are totally focused on one market, the result is you neglect other key markets that have a different approach to luxury, like the United States and Europe.”

In a global luxury market approaching €300 billion, a balanced approach is needed but many companies are failing in that regard.

“Brands are obsessed with margins, SKUs and things like that in their search for potential sales. But the luxury brands have become lazy in finding new solutions and trying to reinvent their business model,” she says.

Cultures clash

Overall, Nicoletti singles out Chanel and Hermes as having found the right balance in China. But many other brands are in danger by catering too much to younger Chinese consumers where extravagant displays of luxury excess, like prominent logos, are valued. By contrast, in the developed Western markets, luxury consumers favor a more understated, classic approach.

The Shanghai-based GMA marketing agency describes this emphasis on conspicuous consumption as “Mianzi,” which means “face,” or to keep one’s honor and reputation in any situation.

“Purchasing luxury items is a symbol of prestige and social status and accumulated wealth. The more you take care of your appearance and lifestyle, the more you show to the world you succeed,” the agency writes in its “China Luxury Market Guide.”

While it may be easy to translate words from one language to another, it is not so easy to translate cultural norms. That’s what Dolce & Gabbana painfully learned when it created a cultural backlash through a social media campaign showing a Chinese woman trying to eat pizza with chopsticks.

Professor Glyn Atwal at the Burgundy School of Business and co-author of Luxury Brands in China and India describes this as when luxury brand love turns to hate.

“Marketing budgets are invested to develop and nurture emotional relationships. The downside, however, is that brand love can too easilty transform to brand hate,” he warns. “The reason consumers hate luxury brands can vary from poor customer service to ethical and moral transgressions. The concept of hate is a powerful emotion that can manifest into varying degrees of negativity from brand rejection to brand revenge.”

The danger for luxury brands turning love into hate is amplified in China because of the collectivist structure of the society and with social media being a most powerful medium through which it is engendered.

“When the wave of criticism starts, it’s very difficult to stop,” shares Nicoletti.

Levers of power

And luxury brands conveniently forget that China is a tightly controlled economy with the government freely exercising its power to turn on or off the spigot. Brands have no control over diplomatic tiffs and political wranglings, as learned in the most recent U.S.-China trade war. And further back in 2012-2013, luxury good sales took a hit when the government enacted anti-corruption policies.

Most recently Burberry, along with Nike

NKE
and H&M, as members of the Better Cotton Initiative, got on the wrong side of the government when the BCI announced it would responsibly disengage from sourcing cotton from the Xinjiang region because of alleged harsh treatment of workers there.

Burberry lost a partnership with Tencent to feature virtual designs in its popular “House of Kings” mobile game and Chinese actor Zhou Dongyu ended her contract as a Burberry ambassador. Adding insult to injury, Tencent also owns popular WeChat and Tencent Weibo websites.

Of note: the Better Cotton Initiative, which numbers nearly 100 brands supporting its initiatives for more sustainable and responsible cotton production, has since removed its offending Xinjiang statement from its website, only to get into more hot water because it did not give an explanation for doing so, according to South China Morning Post.

What goes up must come down

From her nearly 25-year perspective working in the luxury industry, Nicoletti reminds us of the cyclical nature of luxury. Two of LVMH’s shining stars today –Louis Vuitton and Dior – were nearly bankrupt before Arnault acquired them in the 1980s.

“This cycle is scaring me a lot, because brands haven’t learned from the past,” she says. And what the past teaches is that creativity and innovation has historically been the engine of growth for luxury brands, not just catering to what’s trendy or fashionable today.

She sees luxury brands adopting an investment bankers’ approach to managing business, leaving behind the passion, creativity, excellence and craftsmanship.

“While they are just looking for the easiest way to make money, the brands have left the soul behind. Just making money can’t be the purpose of luxury. Customers are really looking for a meaningful brand. That is the key point those obsessed with finance have forgotten: the dream of luxury,” Nicoletti concludes.



Source link

Categories
Gadgets

China’s Xiaomi to launch electric car business and invest $10 billion


Xiaomi’s headquarters in the Xuhui District of Shanghai.

Costfoto | Barcroft Media | Getty Images

GUANGZHOU, China — Chinese smartphone giant Xiaomi has announced plans to launch an electric vehicle business and invest $10 billion over the next 10 years.

The company will set up a wholly-owned subsidiary and the initial phase of investment will total 10 billion yuan ($1.52 billion), it said Tuesday.

Xiaomi Chief Executive Lei Jun will also be the CEO of the car unit.

“Xiaomi hopes to offer quality smart electric vehicles to let everyone in the world enjoy smart living anytime, anywhere,” the company said in a statement.

The Chinese technology firm, which is the world’s third-largest smartphone maker, is jumping into an incredibly competitive space in China.

Not only is Xiaomi competing with established automakers in the country, such a Geely and Warren Buffet-backed BYD, but also upstarts such as Nio and Xpeng Motors.

And internet companies are also entering the smart electric vehicle arena. Chinese search giant Baidu launched a standalone electric car company in January and last month hired a CEO for that business.

Electric cars have taken off in China thanks to strong policy support from Beijing, including subsidies. Even though some of these measures have been reduced, research firm Canalys forecasts that 1.9 million electric vehicles will be sold in China in 2021, representing year-on-year growth of 51%.



Source link

Categories
News

Encrypted messaging app Signal appears to be blocked in China


The Signal Messenger app is displayed on a smartphone in Hong Kong, China.

Roy Liu | Bloomberg | Getty Images

GUANGZHOU, China — Encrypted messaging app Signal has stopped working in China and is now only accessible via a virtual private network (VPN).

China blocks many foreign apps and services including those from Facebook and Google. But Signal had previously not been barred by the so-called Great Firewall.

Signal claims to be end-to-end encrypted, meaning the company itself nor any outsiders can view the contents of messages between a sender and the intended recipient. This also means authorities cannot snoop on messages.

CNBC tested Signal on three different devices and messages did not go through, suggesting it has been blocked by authorities. The app was still available for download via Apple’s China App Store.

Signal was not immediately available for comment when contacted by CNBC.

The messaging app, however, still worked when used with a VPN. A VPN or virtual private network allows users to protect privacy and circumvent internet restrictions by connecting to servers around the world.

Signal being blocked in China highlights the increasing internet censorship in the world’s second-largest economy.

Downloads of Signal surged earlier in the year after rival WhatsApp changed its terms of service to allow the sharing of some data with its parent company Facebook.

Signal is relatively small in China with 510,000 downloads to date from Apple’s App Store, according to Sensor Tower. But the app provided a rare avenue for sending encrypted messages through a foreign platform without a VPN.

Still, the dominant messaging app in China remains Tencent-owned WeChat with over a billion users.



Source link

Categories
Future

Dow Futures Are Softer Amid a Fed and Treasury Clash


Text size



Source link