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Asia Tech Review: 18 November 2019

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Welcome back, Last week was eventful for Asia tech. Aside from the fluff and hype of Alibaba's Singl
 
November 18 · Issue #137 · View online
Asia Tech Review
Welcome back,
Last week was eventful for Asia tech.
Aside from the fluff and hype of Alibaba’s Singles’ Day sales – not helped by a multitude of others jumping on the bandwagon – we also witnessed the potential creation of a Japanese internet giant through a proposed merger between Yahoo Japan and Line; a too-good-to-be-true Chinese browser that lets users vault the Great Firewall with some worrying compromises; huge growth in India for Oppo spinout Realme; and tragic deaths in Indonesia after car crashed into e-scooters.
Then there’s some very tech industry-focused news: Web Summit’s Rise event, the biggest tech show in Asia, won’t run next year due to the ongoing situation in Hong Kong.
Without further ado, let’s get into it.
See you again next week!
Jon

The myth of Alibaba's huge Singles' Day sales numbers
Alibaba reached $38B GMV on Singles’ Day, which is also known as 11.11 because it falls on November 11. That’s once again a new record BUT it’s important to remember a few things.
Alibaba doesn’t actually make money from transactions, its revenue is based on advertising slots that sellers buy to reach eyeballs. Increased GMV is usually good for the company because it means business is generally trending up – it can, like all metrics, be gamed – but there’s no direct correlation between Singles’ Day sales and Alibaba income.
So why did it in the first place?
Today, the sale appears to function more like an exercise in marketing and new user acquisition/existing user re-engagement. Alibaba spends a lot promoting the sale, so it is almost certainly making a loss overall – but for that spend it gets massive attention and that might kickstart future sales, new downloads and registrations, etc.
Related, it’s worth noting that while consumers get deals during the sale, the party bearing the cost of the discount is very often vendors themselves. Alibaba pushes them to compete with other sellers, so some effectively slash their margins – or post small losses on some items – in a strategy that is likely also about generating new customers with repeat purchase potential.
Finally, Singles’ Day is huge – I’d suggest a large chunk is gamed as pre-sales – but the sheen is coming off and growth is slowing. Co-founder Jack Ma even admitted that the company had missed expectations this year. That gives us something to chew on.
Jon Russell
Don’t be fooled by the big numbers (yes, $38B GMV is BIG), the major growth times are over for Alibaba’s Singles’ Day

Today it functions as a massive marketing/user-acquisition event with generous subsidies — in other words: loss-making not profitable https://t.co/S4Wzmudgkz
9:58 AM - 12 Nov 2019
But be careful how you frame this slump. Alibaba is suing a commentator who suggested Jake Ma faked Singles’ Day sales numbers link
Related: It’s much the same in India when Amazon and Flipkart run sales for Diwali link 🔒
China
New browser goes beyond Great Firewall but comes with privacy cost
Alibaba reached $38B GMV on Singles’ Day, again a new record BUT lots of caveats… so many that I wrote about the myth of the sale below link
A look at how design decisions fuelled the success of WeChat link
XPeng motors raised $400M from investors that included Xiaomi link
Huawei is paying out massive bonuses to staff for helping it weather the impact of a US trade ban link
Things seem easier now with the US reportedly set to grant Huawei an increase exception that will allow it to continue to do business with US companies link
Meanwhile the BBC is in hot water for glowing sponsored content it wrote for Huawei link
ByteDance is in trouble with the government of certain search results within its Toutiao app link
Luckin Coffee remains unprofitable but it did post smaller-than-expected losses thanks to the early success of its new tea brand link
Before it was acquired by ByteDance, Musical.ly was reportedly an acquisition target for Facebook link
Tencent Music posted 23% paying user growth but admitted short video apps – such as those by ByteDance – have caused average user spend to drop link
ByteDance’s much-speculated music streaming service is reportedly coming soon (link) meanwhile, TikTok is testing the waters of social commerce link
Related: a report on ‘Social Commerce In China’ from WPP link
OneConnect Financial Technology, the fintech unit of China’s largest insurer Ping An Insurance, has filed for a US IPO link
Hong Kong
The Hong Kong protests haven’t prevented Alibaba from planning its Hong Kong IPO, but it did force a planned investor lunch to be canceled link
It has also seen Web Summit cancel plans to run Rise, Asia’s biggest tech event, next year link
India
Oppo spinout Realme takes chunk of India mobile market as Samsung slides
Alternative streaming service Mubi launched in India link
Freshworks confirmed it raised $150M from Sequoia Capital, CapitalG and Accel at a $3.5B valuation link
Disney+ will reportedly land in India and Southeast Asia next year link
How Walmart has overhauled Amazon link 🔒
Co-living startup Guesture in talks to raise $50M link
Microsoft says it is using AI to diagnose cervical cancer faster in India link
Snapdeal is reportedly raising $100M at a valuation of up to $1.2B – really?! link
Japan
Yahoo Japan to merge with Naver's Line app
A look at how Vision Fund companies, including OYO and Ola, rely on others around the world, often with little regard for their sustainability or future link
Grab kind of launched in Japan – this isn’t a full launch as many media reports claimed, but Grab users visiting Japan will be able to ‘roam’ and use its app to book taxis using local Japanese services link (this is thanks to Grab’s partnership with Splyt which I wrote about earlier this year)
Southeast Asia
Singapore's government launches plan to develop world-class AI tech
Vietnam jailed a teacher for 11 years after it judged that posts he made to Facebook were ‘anti-state’ link
Following a fatal collision, Indonesia will limit e-scooters in Japan – Singapore banned them last week link
Travelio, which helps facilitate apartment rentals, raised $18M link
Sea. owner of Shopee and Garena, is raising $1B through a convertible note sale link
Egypt-based bus transport startup Swvl is planning launches in the Philippines, Indonesia and Bangladesh next year – it just enter Pakistan link
India’s UPI payment tech comes to Singapore, presumably to tap Indian travellers link
Outside of Asia tech
Blockbuster New York Times scoop on how China organised the mass detentions of Muslims in the Xinjiang region – the fact information has leaked out suggests some in the Communist party are concerned at President Xi’s approach link
China is building its own take on Yellowstone park, located near Tibet link
How Amazon’s heavy recruitment of Chinese sellers puts consumers at risk link
Photo of the week
Richard Lai
Xiaomi's e-commerce platform Youpin is offering an earwax removal probe with a built-in camera, because why not. https://t.co/1PnwBqSCln https://t.co/WPpCQfwOJ5
3:23 AM - 18 Nov 2019
That's all for now, see you next week!
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