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Weekly Review #0000004: Follow the Money

In our review #0000004 this week, we discussed the e-wallet wars between Alibaba and Tencent in Southeast Asia, Ninja Van’s recording US$87M funding news, Uber’s potential exit from Southeast Asia and the property wars between PropertyGuru and 99.co in Indonesia.

For the full newsletter, you can read it directly here with our host’s main commentary on how to look for signals from Chinese technology companies such as Alibaba and Tencent by following the money with SoftBank, Temasek and Naspers and if you are new to our newsletter, you can subscribe here.

Here are the interesting news for the past week dated 22 Jan 2018:

CEO Profile: For Uniqlo’s Yanai, Victoria’s Secret was a real eye-opener in Nikkei Asia Review (requires subscription)
Summary:  Japan’s retail giant reveals his business philosophy and youthful lessons
My Perspective: Tadashi Yanai’s “9 Defeats and 1 Win” book is a must read but unfortunately, it is only written in two languages: Japanese and Chinese. It is also the book which described the lessons learnt in building Fast Retailing (aka Uniqlo) to its present. What a lot of people do not know, he’s also a board member of SoftBank too. If you want another profile of Yanai, thisFast Company piece is worth a read too.

Tencent, Alibaba take e-wallet wars to Southeast Asia in Nikkei Asia Review (requires subscription)
Summary:  WeChat pay to launch Malaysian currency service, Alipay partners locals brands. 
My Perspective: A great summary of the partnerships which both Tencent and Alibaba are engaging in the payments and e-wallets front in Southeast Asia, but strangely missed out Singapore where NETS used to be the partner for Alipay but that will change to Tencent. What is missing in the whole payment wars, is data so far. I have been checking around for data on payment transactions across the market for Alipay and Wechat pay but not much has popped up since.

Singapore logistics firm Ninja Van raises over $87m in record-breaking funding by Terence Lee & Tech In Asia
Summary: Its revenue more than doubled from the previous year while its losses tripled.
My Perspective: What it really means from the press release is that the logistics company has another US$87M to burn and get market share. The DPDGroup is a subsidiary of La Poste (French Post). If Ninja Van is still doing last mile delivery without significant advantage in technology, the only reality is to burn money and gain market share. Logistics is a highly commoditised market and price wars don’t lead to a good end. Ta-Q-bin tried to do that in Singapore but ended up burning so much cash that they have to change course, given how well funded the Yamato Group in Japan is. 

SoftBank funding may spur Uber to re-think tough Southeast Asian market by Aradhana Aravindan & Miyoung Kim from Reuters
Summary: SoftBank Group’s multi-billion dollar investment in Uber Technologies Inc opens up the possibility of combining it with other ride-hailing assets the Japanese group owns in a consolidation of a rapidly growing business across Asia, industry sources say.
My Perspective: If Uber sells their assets in Southeast Asia to Grab, the whole battle will go between two players: Grab and Go-Jek. Grab has the backing of SoftBank and Didi, and is likely to be an acquisition target for Didi. If Grab decides against consolidation and go for independence, then they have to win Indonesia, where their road will be blocked to Go-Jek emboldened by Tencent. By no means, the Southeast Asia war ends with Grab buying Uber’s assets and take the lead. If there’s something to be learned, even Didi in China is still challenged by new entrants after Uber’s retreat from China. 

99.co acquires UrbanIndo, an Indonesian property portal (e27,Tech In Asia) 
Summary: Can 99.co overcome PropertyGuru in the long run with their Indonesia acquisition?  
My Perspective: Indonesia is no doubt, the largest market in Southeast Asia, and has the propensity to be important after China and India. Oftentimes, I wonder, “What does it mean to be successful in Southeast Asia?” Most of the upstarts whether it’s Grab, PropertyGuru or Sea, all started in Singapore and then expand into Indonesia. We are starting to see Indonesia’s own champions rise from within and venture capitalists such as Ong Peng Tsin moving to Indonesia and directly invest there. The longer term question, is how immersed that one should be in Indonesia in order to be successful, similar to how one can do the same in China and India.

Articles of Interest which I have curated and you should take a look too:

Tim Culpan’s “Apple Largess Comes With Caveats
Andy Mukherjee’s “Bonus Time. Fret About MiFID Later, Asia
Matt Pressberg’s “Why Hollywood Movies Are Losing Market Share in China” (requires subscription)
Bloomberg, “China’s JD prepares to take on Amazon on its home turf
Shai Oster and Yunan Zhang, Waymo faces roadblock in China(requires subscription)

By |2018-01-30T11:16:29+00:00January 30th, 2018|Featured, Reviews|

About the Author:

A pragmatic idealist in technology, media & entrepreneurship.