There is a trend that seems to be settling into the Chinese tech sphere where companies like to deny every piece of information about their financing or cooperation agreements with other companies. This may be part of a broader cultural aspect of the industry in China where the go-to phrase of every institution seems to be “getting rid of rumors” in order to save face.
Still there is clearly a reason that they sprout up in the market, which is through a combination of anonymous sourcing and a lack of clear information from the top.
The latest such rumor indicates that Masamaso, an online retailer for formal and business attire, says it is definitely not seeking financing from Suning! Despite previous sources that said otherwise, the company says it is not considering a sale, though frankly it is still looking for financing.
Suning, a popular retailer in China for consumer electronics, has been looking recently to acquire other B2C firms, and sources have said that Masamaso has already entered due diligence talks with them. Yet according to an unnamed Masamaso executive, they have no plans to work on a merger with Suning. False again!
Masamaso says that it has higher profit margins of approximately 60% compared with Suning’s own at 5%, though their sales volume is significantly lower. This is why the two companies are not so compatible for integration, according to the executive’s assessment.
Needless to say, these developments in the market are a bit frustrating, as it becomes more and more difficult to hear anything particularly interesting other than half-rumors. Maybe companies should stop trying to hide their information and instead play up to the real situation. It’s much more professional. Even if talks fail, don’t just deny they never happened.
Source: Sina Tech