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AdMart Failure Hits Hong Kong Dotcoms

Mary Swire, Tax-news.com, Hong Kong

18 December 2000


AdMart, the leading Hong Kong online and phone retailer, closed on Tuesday, adding to the general gloom about the prospects for local 'dotcoms'. The company, owned by Jimmy Lai, the Hong Kong media magnate, is expected to lay off most of its nearly 350 employees by next month.

The AdMart website was carrying a sad message by the end of the week:

'Thank you for visiting the adM@rt/ezVan website. We would like to thank you for your patronage and inform you that adM@rt/ezVan has ceased operations in Hong Kong as of December 11, 2000. We will no longer be providing products and services as of that day. We began this business based on the belief that we could bring customers to buy traditional retail goods online, and because of AdM@rt/ezVan, consumers in Hong Kong have enjoyed significant improvement in price, selection and service as retailers across the industry worked to compete with the adM@rt/ezVan promise.

'However, we did not achieve the results we had hoped. Acknowledging this, we have made the decision to cease operation in this market. All product warranties will be honored, and pre-paid orders will be reimbursed. If you need further information about a purchase or product warranty, please telephone 3182-2082 or email webmaster@admart.com.hk.
Thank you very much for your support.'


This sticky end for AdMart is not really a surprise. Earlier this year Jimmy Lai admitted he was losing $10m a month, although the company's estimate at one point was (only) $4m a month. And he has been open about where the blame lies: "I'm in deep shit," he said. "Maybe it's a conspiracy. But not in the sense that it's secret. It's not. They're out to crush me. It is like I'm trespassing. In Hong Kong, you just don't do that. I guess that's why this feels like a personal vendetta."

It's an open secret that Lai's nemesis is Li Ka-shing, chief of the Cheung Kong and Hutchison Whampoa groups. "You can call Li names; he does nothing," said a prominent media person. "But you put your finger in his pocket and he'll crush you. Jimmy is just in Li's territory, and Li will crush him."

The failure of AdMart follows the closure of most of the other web businesses controlled by media magnate Jimmy Lai's Next Media group. Lai may have been his own worst enemy. The ex-textile trader was successful at first, founding Giordano, the clothing chain that became an Asia-wide brand, then challenging Hong Kong's powerful media moguls in 1995 with his publishing phenomenon, Apple Daily newspaper. But then he stuck his neck out:fter the Tiananmen crackdown, selling Giordano T-shirts carrying photos of the student leaders; later he memorably called former Chinese premier Li Peng "the son of a turtle's egg with zero IQ."

It was no surprise after that when Beijing refused to allow Giordano stores on the mainland, and Lai had to sell the company. Then Li's Hutchison declared war on AdMart by ordering its subsidiaries to pull advertisements from his Apple Daily newspaper. Apple advertising manager Peter Kuo also claims that eight property developers, including industry giants Henderson, Sun Hung Kai and Sino Land, pulled their ads for three months, starting in August. "It really seems like they made this agreement to hold out advertising from us for three months," he says. We think he's orchestrating this whole thing through intermediaries."

A month ago Lai said about AdMart's travail: "This won't put me out of business or bankrupt me. I'd pull the plug before that happened. I just don't think I'll have to." Let's hope he was right.

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