Cartoons

When you wish upon a (red) star
Nov 30, 2018 (WiC 434)

Among the American companies most at risk of collateral damage from trade war tensions or the threat of consumer boycotts in China, high up on the list would be Disney.

Not only is Disney increasingly dependent on the Chinese box office (see page 16 for more on the success of its latest Marvel hit Venom), it has also made a major financial commitment to the country through its newest theme park in Shanghai.

But if Disney’s boss is worried about the side effects of Donald Trump’s tariff policy, he isn’t showing it publicly. During a recent earnings call Bob Iger focused more on the rising visitor numbers at Shanghai Disney – in part driven by the opening of its Disney Toy Story Park in April – expressing confidence in the park’s future. A six-year $1.4 billion expansion has been agreed for its Hong Kong park too – which again is mostly reliant on mainland tourists.

In fact, the company has strongly hinted that another Disney park could soon be built in China, reports the Beijing Business Today. A location near Beijing is said to be favoured (rival Universal Studios is due to open one of its own theme parks in the capital by 2020).

The Chinese authorities also seem to be supportive of Disney’s prospects. Earlier this month the country’s antitrust body approved – without conditions – the US media giant’s $71.3 billion acquisition of studio 20th Century Fox. Reuters said that meant that the merger had cleared its last major hurdle.

A sense of an ending
Nov 23, 2018 (WiC 433)

While Alibaba celebrated record sales on Single’s Day this year, a lot of daigou were overwhelmed by a sense of their own demise. Literally meaning “buying on behalf of”, daigou is a uniquely Chinese occupation that capitalises on delivering to locals quality foreign goods (and bypassing heavy import duties if the same are purchased in China). It started with amateurish, part-time personal shoppers – mainly expatriate students and housewives looking to make extra income – and gradually blossomed into a minor industry that led to dedicated cross-border e-commerce platforms such as Little Red Book (see WiC413). To cater to daigou Australia Post even opened stores solely tasked with shipping health and beauty products to China.

So what is killing the flourishing trade? Apparently China’s new e-commerce law set to kick in on January 1. It requires facilitators of overseas shopping – be it companies or individuals – to register in both the source and selling countries and pay taxes accordingly. Nor is the new rule just window dressing: the Guangdong provincial government this month sentenced a daigou – who operated a fashion store on Taobao – to 10 years in jail for tax evasion and smuggling. The seemingly draconian law has contributed to the declines in the share prices of luxury brand owners such as LVMH and Kering in recent weeks.

Leaving their mark
Nov 16, 2018 (WiC 432)

Relations between Beijing and Washington have darkened because of the trade war. Yet the sour mood has not affected the business interests of Donald Trump’s daughter Ivanka in China. According to CNN, she has been granted approval for 16 trademarks in her name for consumer goods like shoes and handbags.

Ivanka’s success is a rare one. Foreign brands have typically struggled to protect their intellectual property rights, particularly when it comes to the Chinese versions of their brand names. Former NBA superstar Michael Jordan and sportswear firm New Balance, for example, have both been mired in legal tussles with firms that operate under their Chinese identifiers.

Added to the list recently was Japanese retail chain Muji. Its Chinese name wuyinliangpin, ironically meaning “good products with no trademark”, is one of the best known Japanese brands in China. The problem is that local firm Beijing Miantian registered the wuyinliangpin characters almost 15 years ago, long before Muji opened its first store in the country.

Miantian now sells household goods with a minimalist style similar to Muji and a court ruling in Beijing late last month ruled in favour of the local firm, meaning that Muji can no longer identify itself under the Chinese characters of its Japanese brand name (unless it buys Miantian, of course).

Some of the Chinese media outlets were surprised to see Muji losing out, although there have been plenty of other cases in which international firms have been too slow to protect their trademarks from local applicants. Over in Taipei newspapers took a different view, speculating that Muji did itself no favours this year by listing Taiwan as a country in its company literature…