, China

Weekly News Wrap: Chinese retailers faced worse loan rejections; JD, Tmall and Vipshop fined over irregular pricing

And bubble tea chain Nayuki owner completes new funding round.

From Bloomberg:

Chinese companies in the retail industry are struggling to access credit amidst a weak recovery in consumer spending, according to China Beige Book International (CBBI). Loan rejection rates for retail businesses rose to 38% in Q4 2020 from 14% in the previous quarter.

A recovery in services revenue was also driven by businesses in telecommunications, shipping, and financial services, but those in consumer-facing industries, such as chain restaurants and travel, continued to lag behind, according to CBBI.

“Don’t confuse fourth quarter’s services recovery with the ‘Chinese consumer is back’ narrative,” said CBBI’s Managing Director Shehzad Qazi. “This is a business services—not consumer-side —recovery.”

Read more here.

From Reuters:

China’s market regulator said on Wednesday it has fined JD.Com Inc, Alibaba’s Tmall and Vipshop $76,657 (RMB500,000) each for irregular pricing.

The State Administration of Market Regulation said in a social media post that it had taken the decision after it received consumer complaints over the companies’ pricing strategies related to 11 November shopping events.

China has stepped up regulations on internet giants in recent weeks. Beijing issued draft rules last month aimed at preventing monopolistic behaviour by internet firms, marking China’s first serious regulatory move against the sector.

The SAMR this month said it would fine Alibaba, Tencent Holdings-backed China Literature and Shenzhen Hive Box $76,657 (RMB500,000) each for not reporting deals properly for anti-trust reviews.

Read more here.

From Bloomberg:

The owner of bubble tea chain Nayuki, also known as Naixue’s Tea in Chinese, has completed a new funding round that values the company at nearly $2b, according to people familiar with the matter.

Shenzhen Pindao Restaurant Management has raised more than $100m in a series C funding round led by private equity firm PAG, said the people, who asked not to be identified as the information is private. Billionaire Jack Ma’s Yunfeng Capital is also among the investors in the latest round, the people said.

The bubble tea chain owner is considering an initial public offering in Hong Kong, after the coronavirus outbreak clouded its earlier plans for a U.S. listing, according to the people. Nayuki in February filed confidentially for an offering in the U.S., Bloomberg News previously reported.

Read more here.

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