Alibaba forms automotive, 'smart living' business units

China's Alibaba Group Holding Ltd, the world's biggest e-commerce company, has formed an automotive unit and a 'smart living' division in the past week, the firm said on Friday, as it ramps up its cloud computing, hardware and big data operations. 

PHOTO: REUTERS

10 Apr6:24 PM

[SHANGHAI] China's Alibaba Group Holding Ltd, the world's biggest e-commerce company, has formed an automotive unit and a 'smart living' division in the past week, the firm said on Friday, as it ramps up its cloud computing, hardware and big data operations.

Alibaba, like many rival Chinese tech firms, is racing to introduce Internet and computing capabilities to various kinds of everyday products, ranging from televisions and home appliances to cars.

This has the US$214-billion company pitched against rivals like social networking and online entertainment giant Tencent Holdings Inc, search leader Baidu Inc, e-commerce competitor JD.com Inc and hotshot smartphone maker Xiaomi Inc.

In this packed field, China's online shopping titan is banking on its big data analysis and cloud computing abilities to provide an edge, as it looks to repeat the successes it has seen in overall e-commerce with more specialised categories.

The automotive business unit includes car marketing services built around Alibaba's big data analysis, online retail site Tmall's car sales section and providing loans to help people buy vehicles, an Alibaba spokeswoman said in an email to Reuters on Friday.

Almost 50 car brands and 10,000 dealerships have partnered with Alibaba in China, the company said. Last month, Chinese auto maker SAIC Motor Corp Ltd said it would join forces with the e-commerce company to invest 1 billion yuan (S$221.63 million) in a fund to develop Internet-connected cars.

Alibaba's new 'smart living' division is comprised of Tmall's electrical appliances online shopping category, some cloud computing operations and online customer-to-customer marketplace Taobao's crowd funding platform, said the firm. This platform allows smaller businesses to raise capital from a large group of investors and promote and sell their goods.

REUTERS

    
 

China to cut VAT for struggling coal producers: state financial paper

China is considering plans to cut the value-added tax (VAT) paid by coal companies from 17 per cent to 13 per cent to support a sector stricken by slowing demand, the official China Securities Journal said on Friday.

PHOTO: BLOOMBERG

10 Apr6:15 PM

[BEIJING] China is considering plans to cut the value-added tax (VAT) paid by coal companies from 17 per cent to 13 per cent to support a sector stricken by slowing demand, the official China Securities Journal said on Friday.

The 17 per cent tax was imposed on coal miners in 2009 following a rapid increase in prices, and industry officials have complained that no corresponding cuts have been made to the VAT rate despite a market downturn that began in 2012.

The newspaper, citing unnamed industry sources, said the Ministry of Finance is now considering a cut, but no timeframe was given.

Premier Li Keqiang told parliament last month that China would strive to reduce its dependence on coal, a major source of pollution, but would also take action to "turn around" the sector, which employs nearly 6 million people nationwide.

More than 70 per cent of China's coal enterprises suffered losses last year, the result of a rapid decline in prices over the last two years as well as a chronic supply glut.

The China Securities Journal said the operating income of large-scale coal miners reached 397 billion yuan (S$87.98 billion) in the first two months of this year, down 8.3 per cent from the same period in 2014.

The government has tried to curb the inflow of cheap imports and cut production, but prices have continued to slip.

Benchmark Qinhuangdao thermal coal is down more than 13 per cent so far this year, after dropping 15 per cent over the whole of 2014.

Coal producers could also be squeezed further by the decision this week to trim the tariffs paid to coal-fired power producers. Mine officials have already complained that their power customers were driving prices down further in anticipation of the price cut.

REUTERS