China’s Alibaba Group Holding Ltd announced that it has formed a strategic partnership with Bailian Group, the largest retailer by store numbers to join the e-commerce giant’s drive to use big data to improve and profit from brick-and-mortar sales.
The deal, which does not include any financial investment in Bailian, is the latest in Alibaba’s still nascent efforts to capture a bigger share of the retail market as online sales growth slows.
It has also spent $4.6 billion on a minority stake in appliances retailer Suning Commerce Group Co Ltd, is leading a $2.6 billion bid to take department store and shopping mall operator Intime Retail Group Co Ltd private and has bought a stake in grocery chain Sanjiang Shopping Club Co Ltd.
News of the agreement sent shares in Bailian Group firms surging but analysts cautioned it may take several years before returns from using big data can make a significant difference to earnings.
“There is a big push right now across brands to try and figure out how to mix physical and online shopping but gains so far have been limited,” said Shanghai-based retail analyst Ben Cavender at China Market Research Group.
The two firms will initially cooperate on supply chain technology using Alibaba’s big data capabilities and will integrate Alipay payments with Bailian Group’s existing membership program.
Bailian operates 4,700 outlets in 200 cities including supermarkets, convenience stores and pharmacies – more than double the stores owned by Suning, Intime and Sanjiang combined.
An Alibaba spokesman declined to comment on how many stores will be involved in the new partnership. A Bailian spokesman did not respond to a request for comment.
Alibaba, which has an active user base of around 500 million, has said it wants to tap China’s entire $4.8 trillion retail economy by developing data-driven management tools for retailers and brands.
China’s e-commerce market is expected to average around 18 percent annually until 2020, according to consultancy Bain & Company, compared with an average rate of 35 percent during the preceding four years.
And while e-commerce has seen phenomenal growth in China, brick-and-mortar sales still accounted for 84 percent of total retail sales in China last year, Bain said.
Among Bailian Group firms, shares in Shanghai Bailian Group Co Ltd were up by the 10 percent daily limit in afternoon trade. Lianhua Supermarket Holdings Co Ltd rose 7 percent and Shanghai Material Trading Co Ltd climbed 5 percent.
Hackers have taken the path of least resistance, moving from in-store fraud to e-commerce fraud, according to security experts.
Deterred by the security capabilities of chip cards for in-store payments, thieves have resorted to stealing credit-card numbers and passwords or opening new accounts with false credentials to use in making online payments for purchases, according to recent studies. Botnets also comprise some of the biggest increases in online card fraud.
Chip cards were instituted on Oct. 1, 2015, and since then, e-commerce fraud on U.S. merchants has jumped 42% as of the fourth quarter of 2016, according to a study by research firm Pymnts.com.
“We predicted this [online fraud increase] would happen following [chip] cards in the banking industry years ago,” said Mike Lynch, chief strategy officer at InAuth, a vendor of mobile and browser security products. (InAuth was recently purchased by American Express, but will remain a subsidiary.) Other countries, including Canada and Australia, also saw big jumps in online card fraud after chip cards were adopted, he said.
Lynch said the online fraud increase is probably higher for financial institutions than for merchants, but merchants are more open about the problem and discuss it more freely. “Banks don’t typically want to disclose fraud,” he said.
The amount of dollars put at risk by online fraud went up 55% from the second quarter of 2015 to the second quarter of 2016, according to the Pymnts.com study. That was a jump from $4.90 to $7.60 per $100 of online sales. For luxury goods alone, the dollars at risk were $12.10 per $100 in sales in late 2016.
Botnets were behind many of these attacks. The rate of attacks by botnets increased by 47% for the same period for all goods and by 87% for luxury goods alone, Pymnts.com said.
Javelin Strategy & Research this week reported that identity fraud of all types, the bulk of which comes from card activity, hit a record high in 2016. There were 15.4 million U.S. victims in 2016, up 16% from 2015. Losses from fraud in 2016 hit $16 billion.
“The increase in [chip] cards and terminals was a catalyst for driving fraudsters to shift to fraudulently opening new accounts,” Javelin said in a statement. Fraud using existing cards also increased by 40% in 2016.
The company is recalling an additional 101,000 batteries in some laptops sold between March 2013 through October 2016. This is an expansion of the recall initiated in June 2016, which involved HP’s recalling 41,000 batteries.
The batteries are in laptop brands including HP, Compaq, ProBook, Envy, Compaq Presario and Pavilion laptops. Battery packs sold separately are also affected.
Batteries are being recalled in the U.S, Canada and Mexico. Most are in the U.S., while 3,000 are being recalled in Canada, and 4,000 in Mexico. The laptops were sold through big-box retailers and online.
You may need to check that your battery is eligible for recall. The batteries are black and should have the bar codes 6BZLU, 6CGFK, 6CGFQ, 6CZMB, 6DEMA, 6DEMH, 6DGAL or 6EBVA printed on the back of the battery.
Users can also download software from HP’s recall website to check if the battery qualifies for a recall. In the U.S., users can call HP customer service at 1-888-202-4320 to request a replacement battery.
Overall, HP received one report of a laptop catching fire in Canada, and eight reports of the battery overheating, catching fire or melting in the U.S. In one case, HP received a report of the “battery overheating, melting and charring and causing about $1,000 in property damage,” according to a statement issued by the U.S. Consumer Product Safety Commission.
In Canada, HP received one report of a laptop catching fire, but no one was injured, according to a statement issued by Health Canada.
The online retailer launched its thumb-sized Dash button in 2015, allowing Prime members to re-order products such as Tide detergent, Huggies diapers and Gillette products by pushing a button.
Prime customers can create virtual dash button on “millions” of Prime eligible products on Amazon, the company said in a video.
The fraud increase was based on hundreds of millions of online transactions with major merchants globally. Also, the number of e-commerce transactions grew by 16% for the same period, ACI said.
Some of the fraud attempts came from the use of credit card numbers purchased in underground chat channels, ACI said.
“Given the consistent and alarming uptick in fraudulent activity on key dates, merchants must be proactive in their efforts to identify weak spots and define short and long-term strategies for improved security and enhanced customer experience,” said Markus Rinderer, senior vice president of platform solutions at ACI.
The data showed that the highest fraud attempt rates were on Christmas Eve and on days when shipments were cut off. The key shopping dates by volume (number of transactions) were Cyber Monday, which showed 15% growth, and Black Friday, which showed 19% growth.
The average sales ticket declined by 7% during the 2016 holiday period. The average was $228 in 2016, down from $243 in 2015.
In 2016, one of every 97 transactions was a fraudulent attempt, compared with 1 out of 109 transactions in 2015.
ACI defines a fraud attempt as a transaction confirmed by a merchant as fraudulent; a transaction that matched a record in an ACI database for a credit card number that was sold online in an underground chat channel; or as reported as fraud by a bank or other issuer. ACI also includes as fraud attempts those data patterns that match a recently confirmed fraud behavior.
Chinese telecom equipment maker ZTE, which is facing U.S. trade sanctions that may upend its supply chain, is cutting nearly 3,000 jobs, including a fifth of positions in its struggling handset business in China, company sources said.
The sources said the Shenzhen-based company, one of the world’s biggest telecoms gear makers, is axing about 5 percent of its 60,000 global workforce.
Its global handset operations will shed 600 jobs, or 10 percent of the total, with the cuts concentrated in China, where it has been losing market share.
A local manager in one of the company’s overseas branches said a 10 percent quota was given to shed staff in his department by the end of January.
“I was also given names that must go because they had tried to apply for jobs at (rival) Huawei and are therefore branded as ‘unstable factors’,” said the manager, who is not in the handset unit and asked not to be identified.
The company declined to comment.
ZTE is the only Chinese smartphone vendor with a meaningful presence in the United States, where its 10 percent market share makes it the fourth-largest vendor.
The U.S. Commerce Department first announced in March that it would impose a ban on exports by U.S. companies to ZTE for allegedly breaking Washington’s sanctions on sales to Iran.
The ban has not yet come into effect following a series of reprieves, the last of which expires on Feb. 27, but if it does go ahead, the company’s supply chain could be severely handicapped. It relies on U.S. companies including Qualcomm, Microsoft and Intel for about a third of its components.
Panasonic has previewed a flexible lithium ion battery fit for use in wearable devices that maintains its electrical characteristics even after repeated bending.
The battery means more freedom for designers of wearable devices, who are constrained by the need for inflexible areas to hold the battery and some electronics.
Three prototypes of the battery were on display at this week’s CES electronics show in Las Vegas. The largest is 40mm by 65mm, the medium size is 35mm by 55mm, and the smallest is 28.5mm by 39mm.
All three are just 0.45mm thick, considerably thinner than a credit card, which is 0.76mm thick. They can be bent up to a radius of 25mm or twisted to an angle of 25 degrees.
The batteries weigh just a gram or two and output 3.8 volts.
The batteries are small enough to be embedded inside credit cards or similar sized card systems. Batteries currently used in such cards degrade faster than normal because of the flexing and twisting they experience from being in a wallet.
The new batteries, which are still under development, don’t suffer from the same problems. Flexing up to the 25mm limit results in a loss of just 1 percent of capacity.
Panasonic is one of the world’s largest lithium ion battery makers. It produces cells for numerous applications, from consumer AA cells to the batteries used in electric cars. The company is in a high-profile partnership with Tesla to supply batteries for its cars from the custom built Gigafactory in Nevada.
The launch marks the first new smartphone carrying the iconic handset name since 2014 when Nokia Oyj chose to sell its entire handset unit to Microsoft.
The new device, Nokia 6, runs on Google’s Android platform and is manufactured by Foxconn. It will be sold exclusively in China through online retailer JD.com, HMD said.
Nokia was once the world’s dominant cellphone maker but missed the shift to smartphones, and then chose Microsoft’s Windows operating system for its “Lumia” range.
After the 2014 deal, Microsoft continued selling cheaper basic phones under Nokia’s name and Lumia smartphones under its own name, but last year, it largely abandoned both businesses.
HMD in December took over the Nokia feature phones business and struck a licensing deal that gave it sole use of the Nokia brand on all phones and tablets for the next decade.
It will pay Nokia royalties for the brand and patents, but Nokia has no direct investment in HMD. Nokia Oyj is currently focused on telecom network equipment business and technology patents.
HMD CEO Arto Nummela, who was once responsible for Nokia’s sales and product development, told Reuters last month that HMD aims to be one of the key competitive players in the smartphone business where it faces tough competition from Apple, Samsung and dozens of other players.
Samsung is counting on the S8 to rejuvenate sales after it scrapped the Galaxy Note 7 smartphones last year in one of the biggest product safety failures in tech history.
The firm has yet to disclose what caused some Note 7 phones to catch fire on their own.
Maersk, the world’s largest container shipping line, has joined forces with Alibaba to enable customers to make reservations for space on its vessels through the Chinese company, illustrating growing cooperation between e-commerce and logistics firms.
Maersk, a unit of Denmark’s A.P. Moller-Maersk, began offering the service to Chinese shippers on Alibaba’s OneTouch booking website on Dec. 22, a spokeswoman for the shipping line said on Wednesday.
Shippers traditionally go through freight forwarders to book space for goods on container vessels, but lines such as Maersk are allowing cargo owners to book directly via the internet.
Amazon.com has registered a Chinese business as a freight forwarder and has leased aircraft to handle more of its own deliveries in the United States.
Alibaba, owner of China’s largest e-commerce platforms, has been making inroads into logistic services in recent years by taking stakes in couriers and buying warehouses. The company was not immediately available to comment on the Maersk relationship.
Maersk said this was part of the shipping line’s strategy to provide digitized services for customers and that it plans to launch more pilot programs on third party portals.
Acquired by Alibaba in 2010, OneTouch targets small and medium-sized Chinese exporters with online services such as customs clearance and logistics. It also allows them to book air freight and parcel delivery services and supports its parent’s Alibaba.com business-to-business marketplace.
Maersk said that the launch of the service was not about bypassing the industry’s traditional middleman freight forwarders, as the OneTouch platform still used such firms to provide services such as haulage.
“The initial launch …allows existing Alibaba OneTouch (registered) users to lock in the price of required cargo spaces on selected routes by pre-paying a deposit amount,” the Maersk spokeswoman said.
The Cupertino, Calif. company warned customers that the product would be available in “limited quantities at launch.”
The $159 headphones — which resemble enlarged ear buds sans wires — debuted on Apple’s online store earlier Tuesday. Within minutes, the estimated ship date shifted from Dec. 21 to mid-January 2017.
Today’s launch came just four days after a report by the Wall Street Journal, which claimed that the AirPods would miss the holiday selling season.
Sales of the Apple Watch to consumers racked up an impressive record during the first week of holiday shopping, and the current quarter is on track to be the best ever for the product, Apple Inc Chief Executive Tim Cook told Reuters.
Cook said the gadget’s sell-through – a measure of how many units are sold to consumers, rather than simply stocked on retailers’ shelves – reached a new high.
Cook’s comments followed a report on Monday from technology research firm IDC estimating that the tech giant sold 1.1 million units of the Apple Watch during the third quarter of 2016, down 71 percent from the year-ago quarter. The comments offer a glimpse of the gadget’s performance during the holiday quarter, which is typically Apple’s strongest.
“Sales growth is off the charts. In fact, during the first week of holiday shopping, our sell-through of Apple Watch was greater than any week in the product’s history. And as we expected, we’re on track for the best quarter ever for Apple Watch,” he said.
Cook did not respond to a request for specific sales figures for the gadget.
Apple has disclosed few details about the performance of the Apple Watch, its first new product released under Cook. The company has not broken out sales of the gadget in its earnings, instead lumping it into an “other products” category that includes devices such as the iPod and Apple TV.
Strong sales of the Apple Watch are to be expected during the holiday quarter as the gadget is a more natural gift than some of the company’s other products such as the iPhone or Mac computer, said analyst Bob O’Donnell of TECHnalysis Research. Apple also lowered the price of the gadget this year, potentially helping the holiday sales comparison, O’Donnell noted.
An e-commerce site will typically block a credit card number after 10 or 20 failed attempts to enter the corresponding expiry date and CVV (card verification value), making life difficult for fraudsters who don’t have a full set of credentials.
But there are plenty of e-commerce sites out there, and it’s possible to obtain missing account details by submitting slightly different payment requests to hundreds of them in parallel.
It takes less than six seconds to perform the “distributed guessing attack,” according to the researchers at Newcastle University in the U.K. who figured out how to do it.
Guessing the expiry date of a valid card isn’t all that difficult: Cards are typically issued for five years at most, so sending the 60 possible values to different websites will get a confirmation from one of them. The three-digit CVV is a little harder, involving spreading 1,000 requests across multiple websites.
“Practically unlimited guesses can be made by distributing the guesses over many websites, even if individual websites limit the number of attempts,” wrote researchers Mohammed Aamir Ali, Budi Arief, Martin Emms, and Aad van Moorsel.
The title of their paper asked the question: “Does The Online Card Payment Landscape Unwittingly Facilitate Fraud?”
Their answer is emphatically yes — at least for Visa cards, for which they were able to submit sufficient requests to obtain the missing values.
MasterCard’s centralized payment network, on the other hand, detected their attack on a card account after fewer than 10 authorization attempts.
Ali and colleagues studied 389 websites drawn from the 400 most-visited according to Alexa.com. Of those, just 47 used the 3D Secure authorization system, making them immune to the attack.
The weak links in the system were the 26 sites that required only the card number and the expiry date to validate payment. The 20 of them allowing at least six guesses provided ample capacity for guessing such an easy answer.
A further 291 sites would validate a card number with just the expiry date and CVV — but with 238 of them allowing six or more guesses, the CVV could soon be obtained.
Online spending by U.S. deal seekers exceeded $1 billion by Thanksgiving evening, according to Adobe Digital Index, surging almost 14 percent from a year ago and reflecting a broader trend away from brick-and-mortar shopping.
At the start of the first holiday shopping season since the U.S. Presidential election on November 8, U.S. consumers loosened their purse strings and spent $1.15 billion online between midnight and 5 pm ET on Thursday, according to Adobe.
Traditionally the day after Thanksgiving, or Black Friday, has started the holiday shopping season in the United States with retailers offering steep discounts and turning a profit. But its popularity has been on the wane given the emergence of online shopping and cheap deals through the year from retailers including e-commerce giant Amazon.com Inc.
U.S. stores are now opening on Thanksgiving to try and boost in-store sales, while retailers have been offering online deals weeks in advance to cope with lower demand and stiff pricing competition.
“We saw one of our strongest days ever online,” Brian Cornell, chief executive of discount retailer Target, told reporters on Thursday evening. He added that online sales grew by double digits, without giving further details.
The holiday season spanning November and December is crucial for retailers because it can account for as much as 40 percent of annual sales. Retailers try to attract shoppers with deep discounts, sometimes as much as 85 percent.
The National Retail Federation, which has been bullish with projections in the past, expects holiday sales to grow 3.6 percent this year to $655.8 billion.
“Online discounts are earlier and a lot bigger than last year,” said Tamara Gaffney, principal research analyst at Adobe Digital Index.
Walmart Stores Inc will start offering online deals reserved for Cyber Monday two days earlier this year, joining a growing list of U.S. retailers who offer web promotions over the Thanksgiving weekend.
Walmart’s special web promotions will be available on Black Friday, the retailer said in a statement late on Sunday. Cyber Monday is the biggest day of the year for internet shopping and follows Black Friday, which is the busiest shopping day for brick-and-mortar retailers.
Walmart recently said it will boost its online inventory for Black Friday by more than half this year, as it pulls out all stops to grow online sales this holiday season. The retailer has grown its online inventory to 23 million items from 8 million at the start of the year.
The year-end shopping season, which spans November and December, is crucial for many retailers because the two months can account for anywhere from 20 to 40 percent of their annual sales. The National Retail Federation expects industry holiday sales to grow 3.6 percent this year to $655.8 billion.
Walmart said orders that were ordered on the Walmart mobile app and picked up in store, increased more than 75 percent during the first two weeks of November from the same period a year earlier.