Priceline.com, Hutchison Take Concept to Asia
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The duo will ply the name-your-price e-commerce format in China, Hong Kong, India, Taiwan, Indonesia, Singapore, Thailand, Korea, Malaysia, the Philippines and Vietnam. Japan, however, does not fit into the plan.
The two will create a new company which will be licensed by Priceline.com (PCLN) for regional business. Priceline will add its technology and marketing resources to the venture, while Hutchison will bring its Asia customer base, retail network, infrastructure and Asia partnerships.
While financial terms of the deal were not disclosed, the companies did say that Priceline.com will not initially take a stake in the company, but will retain the option to control up to 50 percent.
Priceline, which lists 4 million customers and generated $500 million in revenue for the past year, is aiming for a $2.6 billion market. Asia is also being hailed by several research companies as the next e-commerce boom region.
"Any Internet company expecting to be a major world player needs to establish a significant, meaningful and long-term presence in Asian countries," said Richard S. Braddock, Priceline.com's chairman and chief executive officer.
Hutchison Whampoa, which has unleashed several separate e-commerce schemes this week, boasts a market capitalization of over $53 billion. The conglomerate also owns significant infrastructure resources, which it will also contribute to the recently announced iBusiness Corporation.com joint venture with its parent company Cheung Kong (Holdings) Ltd, HSBC Ltd., and Hang Seng Bank. Hutchison is also the largest stakeholder in German media giant Mannesmann AG.