In the first weekly review of the year, we start with how & why UC browser from Alibaba Group is eating Google’s Chrome lunch and why Ant Financial’s acquisition of MoneyGram collapsed with our perspectives on these issues.
Here are the interesting news for the past week dated 1 Jan 2018 in the start of the new year:
A Browser You’ve Never Heard of Is Dethroning Google in Asia by Newley Purnell in Wall Street Journal
Summary: Alibaba’s UC Browser is dominating in emerging markets with lower-end smartphones.
My Perspective: As discovery is becoming increasingly difficult whether you are in the iOS or Android world, pre-loading via the telcos are back in fashion. In the early days, pre-loading of apps are essential to how an app becomes popular quickly but was destroyed with the emergence of the app stores. The strategy to pay for market share to telcos is not new, and the question becomes whether it’s sustainable as time goes on.
Inside the Eccentric, Relentless Deal-Making of Masayoshi Son by Peter Elstrom, Pavel Alpeyev and Lulu Yilun Chen in Bloomberg
Summary: The Japanese billionaire has changed the startup game with his aggressive investing and enormous checkbook. Does he know what he’s doing?
My Perspective: Masayoshi Son will continue to be the most influential investor not just for Asia but the global startup ecosystem. With investments in all the major players within the ride sharing transportation category, the question will be, “How will the investors get their return?” Unless one of the four (Uber, Didi, Grab and Ola) are able to find a competitive advantage against the others, they will either have to exit through public markets or face pressures to consolidate by Masa’s persuasion at some point. The game theoretic approach adopted by Masayoshi to force these founders into taking money is unprecedented as well, because if your startup do not perform, they can fund your competitors unlike the venture capitalists who have adopted the creed of not funding the competitors of their portfolio companies. But things might just change given SoftBank’s vision fund has completely turned them on its head.
Making China Great Again by Evan Osnos, The New Yorker
Summary: As Donald Trump surrenders America’s global commitments, Xi Jinping is learning to pick up the pieces.
My Perspective: Very little has been covered in the Western media on China’s ambitious Belt and Road initiative. One interesting quote from Evan in the article clearly explains why China is embarking on building the new Silk Road in the 21st century, “One realm in which the effects are visible is technology, where Chinese and American companies are competing not simply for profits but also to shape the rules concerning privacy, fairness, and censorship.” If you want an Asian perspective on Belt and Road, listen to our discussion with Rob Koepp from the Economist.
Why the MoneyGram Merger was a Threat by Christopher Balding from Bloomberg
Summary: Consumer data, increasingly, is a national-security concern.
My Perspective: The intention behind Ant Financial’s (under the Alibaba Group) acquisition of MoneyGram with US$1.2B was to go global with Alipay and other financial products such as Sesame Credit. If the acquisition has been successful, Western Union will be the most threatened. The US government is returning the same treatment to Chinese companies but in a subtle fashion, given that China was making it difficult for US companies to operate in China. It is very likely that most US companies might find it difficult to exit to Chinese companies this year. Other interesting references which I want to refer on this deal, “Why Alibaba’s Jack Ma can’t seem to win over the US” by Liza Lin & Chuin-Wei Yap from Wall Street Journal (requires subscription) and an analysis entitled “Time for Jack Ma to step up” by Tim Culpan from Bloomberg Gadfly (who accurately called out earlier in 2017 that the deal will fall apart).