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Asia Tech Review: July 1 2019

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Welcome back, The biggest news of last week was a reprieve for Huawei which casually slipped out over
 
July 1 · Issue #121 · View online
Asia Tech Review
Welcome back,
The biggest news of last week was a reprieve for Huawei which casually slipped out over the weekend as part of President Trump’s involvement in the G20 summit – he also became the first sitting US President to visit North Korea… 🙃
This week’s newsletter has some notes on the next chapter of Huawei vs the US, as well some key parts of a Wall Street Journal report on ByteDance’s global ambition. The Journal also wrote a deep story on OYO – see further below – and there’s plenty of other news including a new $3.4B fund for China/SE Asia from Warburg Pincus, a clutch of new services from Line, a secure messaging app for India’s government works and more money for Grab.
See you again next week!
Jon

Huawei gets a reprieve, but the trust is gone
Well, well, well, it turns out that the Trump administration’s pursuit of Huawei was pragmatic more than anything else.
It was always tempting to look at the listing of the company – and its subsequent ban from trading with US companies – as a move designed to hobble a company with a sprawling global business. But Trump’s decision to relax to US supplier ban suggests Huawei was a mere pawn in whatever his gambit with the Chinese government may be.
So, yes, this is good news for Huawei – which has spent the last month or so expediting plans for its own Android alternative, non-US chip supply chain, etc – but the longterm issue remains the same: it is vulnerable. With one move, the US government crippled the company – to the tune of an estimated $30B in lost revenue for 2019 and 2020 – leaving Huawei and Beijing helpless.
CNN International
President Trump has appeared to soften his tone on Chinese communications giant Huawei, suggesting that he would allow the company to once again purchase US technology https://t.co/4YNJCyKLTg https://t.co/jr45f40ghP
2:33 PM - 29 Jun 2019
Huawei isn’t about to launch phones with its own OS, but, despite this reprieve, those internal projects are likely to now go into overdrive. Huawei will know that can’t afford to be in this position again. (Huawei’s US research arm is now, for example, its own entity.)
Ditto, the situation was a huge concern for Google and other US firms who profit directly from Huawei’s success. The ban made things so messy – something I had said that I thought would ultimately drive a solution – and Trump said he heard their feedback, but they too will likely reassess the situation to avoid a repeat.
Meanwhile, the saga continues: the US is reportedly considering requiring all 5G equipment for domestic use be made outside of China, while the uncertainty has been a boon to manufacturers in Vietnam and Indonesia.
ByteDance and billion dollar burns
The Wall Street Journal took a dive into ByteDance’s social strategy for TikTok with a few interesting tidbits that show the kind of money it is prepared to spend to meet its goal:
  • The report claimed the Chinese company spent nearly $1 billion last year on advertising across Facebook, Instagram, Snap, YouTube etc – most people have seen the ad blitz but I haven’t heard a solid number for it before
  • ByteDance is apparently keen to buy Snap, but Snap is apparently not keen to be bought
  • It is also said to have eyed deals to acquire Twitter and Quora
  • It is said to be planning to go public this year or next
  • It reportedly canceled a TikTok Super Bowl ad due to fears a raised profile could bring the attention of the US government
  • TikTok is said to have 104M US downloads, and nearly 1.2B worldwide
It’s clear that TikTok has made a mark, but this story just underlines the fact that it has taken an insane amount of money spent on user acquisition to make that happen.
China
Apple is reportedly moving Mac Pro production to China
Video service iQiyi now has 100M paying users and it is looking to expand out of China link
The US-China trade war is impacting DJI link
PDD has leapfrogged JD.com to become China’s e-commerce number two behind Alibaba, according to industry numbers link
Xiaomi’s newest smartphone brand is aimed at young people – and powered by its acquisition of Meitu’s phone business link
Nio recalled nearly 5,000 cars over a potential fire risk link
Nissan and Dongfeng are reportedly planning to develop a fleet management venture alongside Didi Chuxing link
JD has been giving its business units independence, and its logitics arm just raised $220M link
Buying luxury brands has changed in China – now they are all available via apps like WeChat link
China’s ‘new retail’ battle took an unexpected turn when Suning, a former Alibaba ally, bought Carrefour’s local business link
Laiye, a company uses automation to offload repetitive tasks, raised $35M link
India
The government is considering developing its own chat app for state communication
The WSJ went into depth on OYO and its overseas expansion plans, noting that it is unproven/struggling in parts of the US link
Meanwhile, OYO reportedly laid off 2,000 staff in China link
Amazon Prime membership doubled in India thanks to growth in rural areas link
But the Indian government is reportedly warning e-commerce companies about their use of discounts link
Naspers reportedly called out its efforts to invest in/buy Capital Float link
The cricket World Cup has been huge for streaming in India link
Neo bank Open raised $30M link
Meesho, which just raised from Facebook, is said to be in talks with Naspers over a $120M round link
Japan
Line announced a batch of new services inspired by international tech giants
Apple is reportedly helped bail out Japan Display, one of its key manufacturing partners, via a $100M investment link
Toyota is investing $2 billion to develop electric cars in Indonesia link
South Korea
Nexon has apparently shelved plans to sell its business after all link
Southeast Asia
Warburg Pincus announces new $4.25 billion fund for China and Southeast Asia
A fascinating look at the development of Vietnam’s Vingroup – a corporation that started out making instant noodles and is now heading into cars and other tech link
Indonesia may give tax breaks to unicorns link
Singapore wants to create 10,000 new tech jobs in the next 3 years link
Grab raised $300M more from Invesco – this is part of a new $2 billion investment tranche it is working on now… that Series H could reach a massive $6.5B (I still remember when Grab raising money felt like a big deal) link
MAS is going to grant digital banking licenses to up to five non-banks – expect Grab and Go-Jek to be among the contenders link
Indonesia is the latest government wanting to listen in on WhatsApp conversations — something that, of course, can’t be done link
Trax, which just became a billion-dollar company, acquired rewards app Shopback link
Razer teamed up with Visa for its fintech push link
Coffee startup Kopi Kenangan raised $20M for expansion in SE Asia link
Authorities cut access to the internet in Myanmar’s Rakhine and Chin provinces due “disturbances of peace and use of internet activities to coordinate illegal activities” link
Outside of Asia Tech
Colour me unsurprised: Apple News isn’t the saviour that some publishers hoped it would be link
I looked at Splyt, a startup hoping to make international ride-hailing roaming a reality – it raised a Series A from investors that include Grab. Interestingly, it also works with non-transportation apps such as Alipay to allow users to hail rides when overseas link
The US risks handing Africa’s e-commerce sector to China link
Photo of the week
Matthew Brennan
The new way to pay in China. No card, no phone, just look at the camera #facialRecognition https://t.co/Vy4RPMVixU
5:47 PM - 30 Jun 2019
Thanks Peerasak for sharing this inside the ATR Telegram 🙂
Upcoming events
  • Wild Digital: 3-4 July in Kuala Lumpur, Malaysia link
  • Rise: July 8-11 in Hong Kong link
  • Deal Street Asia’s PE-VC Summit: 17-18 September in Singapore link
  • Tech In Asia Conference: 8-9 October in Jakarta, Indonesia link
  • TechCrunch Shenzhen: 9-12 November in Shenzhen, China link
If you run a tech event not listed here or want to recommend an addition, please email me
That's all for now, see you next week!
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