East West Hurricane

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

China’s Vow to Go Carbon Neutral by 2060 ☁️

* Last week at the UN General Assembly, Chinese President Xi Jinping declared China’s new public plan to go carbon neutral by 2060. As the world’s biggest climate polluter, China’s announcement was a major step forward in the human battle against climate change. Making this statement is one thing, but actually marshalling the resources and regulations to make this happen is a different story. This requires the replacement of pretty much China’s entire current energy system.

* It was a bold move for Xi Jinping that many people did not expect. This should also prompt a response from the US, the world’s second biggest carbon emitter. President Donald Trump has not set any specific targets for the US and actually plans to pull out of the Paris Climate Agreement in November. There are political undertones to the conversation around climate change, which is now opening as another front in the tensions between the US and China. With this new declaration by Xi Jinping at the UN, China wants to increase its soft power as China comes across as a forthcoming team player.

Virtual Events and Experiences in Indonesia 💻

* The events industry, like many other industries, has had to pivot their model because of the coronavirus, shifting many of their events from offline to online. You have seen this across the East and West. And in Indonesia, it’s a similar story where local tech companies are responding to more online demand by creating new virtual products, such as KiosTix and Gojek. KiosTix is a ticketing management company that launched an online event hosting platform in April called KiosLive. This new platform focuses on providing a space for musicians to host live concerts online and also has interesting features like allowing people to simultaneously order food delivery while watching an online event.

* Gojek is the multi-billion dollar Indonesian tech company best known for their ride-hailing app. Gojek has been expanding into other areas in a quest to become more like a SuperApp, and they launched GoPlay Live in July. This is a new on-demand live video platform for people to host large events. In September, Gojek launched a similar product called Loket Live Studio, which is focused more on helping content creators host online events. Gojek has also integrated features like live shopping and virtual donations into these platforms. Whether these companies succeed or new startups come into the picture, the commercial opportunity of online events is huge in a country like Indonesia, which has a population of 260 Million people.

Hiding Your Chinese Apps in India 🕶

* Since the Indian government banned hundreds of major Chinese mobile apps a couple of months ago, some Chinese companies have been trying to figure out workarounds to get back into the Indian market. One common tactic is sneaky rebranding. For example, Chinese company Kuaishou had an app banned earlier this year called Kwai. However, Kuaishou has just launched Snack Video in India, which is very similar to the banned Kwai app. It’s a game of cat and mouse, and there are always going to be ways to get around the rules.

* Some have reported Chinese developers now teaming up with Indian developers to be seen as an Indian company. Other Chinese companies are registering as new companies with a Southeast Asian headquarters. And technically, one could argue that if the Indian government bans a specific app then a thinly veiled clone app should be allowed…until the new clone app is banned. The Indian government has actually followed up with more ban lists that specifically target these new clone apps. Either way, India is so big that many Chinese companies can’t afford to lose access to the market. Or at the very least, they will do everything in their power to stay connected to Indian consumers.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

Apple Opens First Online Store in India - It’s Just The Beginning 🇮🇳

* On September 23, Apple launched its first online store in India. What does that mean? Now, Indians can go online to order Apple products and services directly. You might be surprised to learn that this is the first time this has ever been possible in India. In the past, you could only purchase Apple products through authorised local partners offline. It has also been hard for Apple to open a retail store in India considering local government regulations. These regulations are being relaxed and Apple plans to open their first offline retail store in India sometime next year. The Indian government has also offered billions of dollars in incentives for smartphone makers to move more of their operations to the country.

* Apple started manufacturing iPhones in India two years ago, which now allows Apple to sell more affordable phones for the market. This is the 38th country in the world where Apple has launched an online store. But as you know, India is the 2nd biggest country in the world by population. Opening an online store (and eventually offline retail) indicates just the beginning of Apple increasing their marketing investment within the country. India is becoming a more important market for Apple and we should start seeing more investment soon.

Japan Wants More Foreign Entrepreneurs - Are You In? 🗾

* The Japanese government will now start offering a two-year entrepreneurship visa for foreign students graduating from a Japanese university who want to open up a business in the country. Previously, it was a lot more difficult to stay in Japan after your graduation. These sorts of programs usually come with lots of hidden details, but at the very least it signals that the Japanese government is taking an interest in attracting more foreign entrepreneurs to the country.

* At least within my world of friends, colleagues, and influences, Japan has a really strong, positive brand. These ‘country brands’ will matter more in the increasing world of remote work. And I’m personally predicting mass significant global migrations in both students and workers in the aftermath of the coronavirus. As a country, there are a lot of things you can’t control about what makes you attractive. But laws and regulations around visas play a big role in the decision-making to attract more people and you can definitely affect that. Let’s see how seriously the Japanese government wants to invest in this and let’s see how many people—especially entrepreneurs—end up moving to Japan over the next years.

Even More Investing in Asia from KKR and SPACs 🌏

* KKR, one of the world’s biggest private equity funds, has just finished raising a new $11 Billion dollar fund to focus on investments in Asia. This is the biggest Asian-focused private equity fund ever raised. In related news, Hong Kong-based Pacific Century has combined with the investment fund of Silicon Valley tech billionaire Peter Thiel to create a new $625 Million SPAC focused on Asia. SPAC stands for Special Purpose Acquisition Company, which is a new financial tool to help private companies go public through an acquisition.

* This new Asia-focused SPAC is called Bridgetown Holdings and is specifically targeting companies in Southeast Asia within sectors like tech, financial services, and media. For small startups or bigger companies across Asia, this means that there are more foreign investors and potential acquirers. You can usually interpret a trail of money as a leading indicator for economic growth. These new Western investment vehicles focusing on Asia show us that the global investment community is looking even more to Asia’s fast-growing companies.

*BONUS* TikTok Marketing & Advertising 101

At the urging of some readers, I wanted to share something else I’m working on outside of East West Hurricane. If you are a company struggling to achieve the marketing results you really want, I would highly recommend you looking into TikTok. I fully believe it’s currently the world’s most underrated marketing channel. I’ve put together a crash course on TikTok, which you can check it out here.!

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

It was December 2018 and I had just walked into an office building. I escaped from the hot, sweaty outdoors into the cool air conditioning inside.

I took the elevator to the eleventh floor and soon found myself in a conference room sitting across the table from the CEO of an artificial intelligence (AI) startup.

But I wasn’t in San Francisco or New York or London. I was in Karachi, Pakistan.

The founder/CEO of this startup had received his master’s degree in AI from Stanford University and was blowing my mind describing his company’s product. A few minutes into our meeting, his COO walked into the room and apologised for being late. This COO had received his MBA from the University of Michigan.

Both the CEO and the COO were born and raised in Pakistan, and went to the US for school. After years of academic and professional achievement at the highest levels in America, they decided to come back to Pakistan.

Their stories are indicative of a broader trend in the country’s development.

In 2005, the city of Karachi was a lot more dangerous. The country of Pakistan was in a lot more turmoil. If you were a young, ambitious high school student with the means to afford it, your likely choice was to get a one-way ticket to a university in the West.

And when you went to school in a Western country, your goal was to stay in that country after you graduate, get a job, and eventually walk the path to citizenship.

While that’s still a common path, the tides are slowly shifting. Part of that is because Pakistan provides better opportunities now vs. fifteen years ago.

I asked the two startup founders sitting in front of me, “Why did you decide to come back to Pakistan?”

They replied telling me that the Pakistan they grew up in is completely different from the Pakistan of today.

The country is now safer and more stable. The opportunities are bigger and more untapped. And considering their Western pedigree, they would have a huge competitive advantage in Pakistani business.

And part of them really wanted to help contribute to improving their home country.

Twenty years ago, that romantic notion of helping your country would be considered a lot more foolish and futile for Pakistanis. In 2020, it’s becoming more common for the younger generation.

But the altruism is combined with a very rational assessment of Pakistan’s commercial opportunities.

Pakistan is a country of 212 Million people, the fifth most populous in the world. 65% of Pakistan’s population is under the age of 30. Pakistan is one of the fastest growing emerging markets.

You can see the obvious billion dollar opportunities - in e-commerce, fintech/digital banking, edtech, and much more. Whether it’s next year, in five years or in ten years, we’re going to start seeing more Pakistani tech unicorns, startups with a valuation over $1 Billion. Currently, there are none.

It’s playbook that you can see play out as countries become wealthier. The biggest e-commerce and fintech companies in Southeast Asia are worth billions of dollars and are continuing to ride the Asian wave of growth over the last decades.

As much as you feel love for America as an international student (which I personally experienced), you always have some sort of connection with your family, friends, and the identity of your home country.

If your home country is struggling, then you’re less likely to want to go back after you graduate.

What we see today is that when emerging markets are growing, people from those emerging markets are more likely to go back after university.

My previous interview guest Rashi said the same thing about Indian international students in the West increasingly returning to India for job opportunities.

She said, “Another misunderstanding is that people just assume all Indians aspire to come to the West. That may have been true twenty years ago but not now, when opportunities are more attractive in India. I don’t think all people in India look to the US and say ‘that’s where I want to be’ or ‘that place is miles ahead.’”

The story of growth, optimism, and hope I heard from these two Pakistani founders is something I would like to see in every country around the world.

After our meeting, I walked out of the building with a smile. Pakistan is a great country with huge opportunities and good people.

That AI startup in Karachi, founded by two Western-educated Pakistanis, is the kind of company I’m interested in hearing about. Most Western tech reporters won’t bother covering them. But that’s one of the reasons why I have created East West Hurricane, to share stories like this.

And these two founders I met in Pakistan are the tip of the iceberg. There are going to be many more people from Asia who get educated in the West, and return to Asia to start their entrepreneurial journey.

There’s already a phrase for this in China = ‘Sea Turtles.’ This is the term given to young Chinese who may have studied and worked overseas, but have now come back to China to pursue their career and startup companies.

And it’s not just China. Here are some notable examples from around Asia:

* Colin Huang - Founder of Pinduoduo, China’s largest social commerce company currently worth $89 Billion; masters degree from University of Wisconsin.

* Nadiem Makarim - Founded Indonesian tech startup Gojek in 2010, now valued at $10 Billion; undergrad at Brown University and MBA from Harvard Business School.

* Chatri Sityodtong - Founded One Championship in 2011, Asia’s biggest MMA promotion; undergrad at Tufts University and MBA from Harvard Business School.

Whether it’s Chinese Sea Turtles or Pakistani Sea Turtles or Indonesian Sea Turtles, more people are swimming back to Asia.

Because they can see that Asia’s future is brighter than its past.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

Indian Tech Unicorn Flipkart Decides On an IPO 🛒

* Flipkart is India’s biggest e-commerce company and one of the country’s most successful tech startups. In India, Flipkart aggressively competes (and wins) against Amazon! In July, Flipkart raised another $1.2 Billion from Walmart and other investors including Tencent, Tiger Global, and Microsoft. This puts Flipkart in a comfortable place to deal with the coronavirus. Indian e-commerce is supposed to be worth $99 Billion by 2024 and Flipkart is poised to play a leading role in that growth.

* Amidst their recent success, Flipkart has announced that they plan to take the company public sometime next year with a target valuation of $50 Billion. Flipkart is incorporated in Singapore but it might make sense to go public in the US, considering their connection with American retailer Walmart. In 2018, Walmart spent around $16 Billion to acquire a majority stake in Flipkart, which is still the single largest foreign direct investment in India. Walmart now owns about 80% of the company. If they can pull of an IPO in 2021, Flipkart will reach new levels of giant success.

Developing Verdicts on China’s Economic Outlook 🇨🇳

* Chinese society continues to progress at a different pace from the rest of the world. The OECD (Organisation of Economic Cooperation and Development) has revised their latest growth forecast for China, reporting that China will be the only G20 country to see positive economic growth this year. Goldman Sachs expects the Chinese Yuan currency to strengthen over the next year. If China’s recovery is similar to the recovery the rest of the world will eventually experience, we can learn some things from China.

* In China, online grocery and food delivery peaked during the coronavirus but has now stabilised as a more permanent habit for many people. E-commerce (and specifically livestreaming) has increased massively, which still remains at all time high levels of behaviours. At this point, cinemas are reopening in China and displaying a promising (though not amazing) recovery. If looking at China is looking into the future of post-Covid consumer behaviour, we will all be ordering online and going back to movie theaters. And maybe we can start looking even more to China as a place of the future.

China’s Very First Virtual Idol Talent Show 🤖

* Speaking of futuristic China, the streaming platform iQiyi has announced the launch of a new ‘virtual idol variety show.’ This is a new talent show consisting entirely of 30 virtual CGI-created influencers ‘competing’ in different tasks to be crowned the winner. This will be called Dimension Nova, and the judges will be actual people who are popular idols—Esther Yu, Wang Linkai, and Angelababy. iQiyi is the same network behind Rap of China and The Big Band, two of China’s biggest talent shows.

* Trying to digest the concept of a ‘virtual idol variety show,’ I’ve got so many questions and points I need to clarify, but overall I’m really excited to see how exactly this works. I’ve written about virtual influencers before and it’s a fascinating new take on marketing. The world’s first virtual influencer is considered to be Hatsune Miku, who was created in Japan in 2007. Since then, Japan and China have been the two countries who have most passionately embraced the virtual influencer concept. If this show takes off in China, maybe the rest of the world will eventually start creating virtual idol variety shows. Think about that.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

European Fintech Companies Strive for Success in Southeast Asia 💳

* As you may have noticed from my previous articles, fintech in Southeast Asia is one of the biggest business opportunities in the region. The quality of financial services in Southeast Asian countries is quite poor; mobile penetration is high; and the coronavirus is pushing even more consumer behaviour online. This article from Sifted highlights how Asia is the main priority for European fintech companies thinking about international expansion.

* Companies like Revolut, Thought Machine, and Transfer Wise see Asia as their biggest opportunity and have made recent moves to establish a presence in the region. They face competition from local Southeast Asian players and Chinese players, on top of government regulation on topics like digital banking licenses. The articles notes how many European fintechs are prioritising expansion in Asia over any other region, including North America. In the global fintech world, it seems that Asia is increasingly becoming seen as the ultimate prize.

Kuaishou’s Next Step in Growth Leads to IPO 📽

* Kuaishou, the Chinese short-form video app that serves as primary rival to Douyin (the Chinese TikTok), has had a stellar year. Much like Douyin, TikTok, and most other mobile entertainment apps, Kuaishou’s growing user numbers and engagement have also led to major increases in revenue. To cap off their success in 2020, Kuaishou has announced that they plan to go public in Hong Kong early next year.

* Kuaishou’s latest valuation is $28 Billion, which makes them one of the top 20 most valuable tech startups in the world. The company was founded in Beijing nine years ago and has around 300 Million daily active users. This year, the e-commerce livestreaming behaviour has exploded on the app, with 170 Million people doing daily livestreams. While TikTok might go public in the US next year (depending on the latest news in the acquisition saga), Kuaishou is purposely choosing the Hong Kong Stock Exchange, which is at least partially impacted by the difficult state of US-China relations.

Pinduoduo’s Moving Even Deeper into Groceries

* Pinduoduo is China’s premier social commerce app, a publicly traded company on the Nasdaq worth $93 Billion dollars that is only five years old. They set very ambitious goals and usually achieve them. One of the next priorities for Pinduoduo is selling groceries and helping the Chinese agricultural industry. Pinduoduo has just announced a strategic partnership with China Post, which is basically China’s national postal system, like the US Postal Service of China.

* Right now, the China Post has the ability to deliver products anywhere in the country. With a Pinduoduo partnership, this expands the levels of access for both sellers and buyers on the e-commerce platform. Now even more remote farmers can sell their produce more easily on the platform and buyers can receive their goods more quickly through China Post. Fresh produce is one of the most commonly sold items on Pinduoduo, and one of the main sales methods comes through livestreaming. This should help take China’s agricultural industry into the future, even just by one further step.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

Indian Unicorn Zomato Plans to Go Public Next Year 👇

* Zomato, the Indian food delivery company, has just raised $250 Million and described their plans to go public in the first half of next year. As previous interview guest Rashi has said, Zomato is a prime example of an inspiring Indian tech startup that has found global success. The 12-year-old company is currently worth $3 Billion and this new fundraising round was partly to provide more cash reserves in the time of the coronavirus.

* While Zomato has struggled a bit because of the coronavirus, their latest announcements are optimistic for the future. Another Indian competitor in food delivery Swiggy has eliminated hundreds of jobs this year. At a global level, food delivery companies are benefitting from the coronavirus as eating at home becomes a forced, newer behaviour. If Zomato can hold on and succeed with this new investment, they should be able to have a large IPO next year. That would be a major success story for Indian tech.

Tencent Wins Contract to Broadcast Premier League in China

* After the Premier League cancelled their $665 Million agreement with PPTV earlier this month, it was unclear how Chinese fans would be able to watch matches from England’s biggest football league. Last week, the Premier League announced the signing of a one-year broadcast deal with Chinese tech giant Tencent. Tencent will have the exclusive rights to play Premier League games in China, hosted on their platforms including WeChat, QQ, and Tencent Video.

* The TV rights to England’s Premier League are some of the most sought after in the world. And China has hundreds of millions of football fans eager to watch the games. For the Premier League, China is their most lucrative emerging international market and TV rights is the biggest revenue driver for the league, as with most sports leagues. However, the sports industry is in a precarious position considering that full stadium attendance is currently impossible, and sponsors/advertisers might want to renegotiate their deals in light of Covid. In the situation of Tencent and the Premier League, right now the Premier League needs Tencent more than Tencent needs the Premier League. Before Covid, it was the other way around.

Youtube Shorts Launches in India 🎥

* With TikTok still banned in India, many companies are trying to fill the TikTok-sized consumer hole with their own mobile apps. This includes local startups, but also American companies like Triller, who have partnered with India’s JioSaavn, part of Reliance group. Another example is Youtube, who have just launched YouTube Shorts in India.

* YouTube Shorts is basically a short-form (less than 15 seconds) video app that gives people different creative tools to upload a video with background music. Much like Instagram Reels, this is a blatantly opportunistic move to capitalise on the short-video trend that has been best captured by TikTok. While YouTube Shorts has been launched first in India and then will expand globally, India is the one market where YouTube Shorts won’t have to compete with TikTok. So long as TikTok is banned in India, the country is now the world’s biggest market ‘up for grabs’ for any short-form mobile video app. And that’s a very big opportunity.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

I had the great pleasure of interviewing Ryan Molloy, CEO of RedFern Digital. RedFern Digital is a full-service marketing agency based in Shanghai that helps international brands succeed in China, with a particular focus on e-commerce. Their clients have included Burger King, Fireball Whisky, and Panasonic. Ryan is originally from the UK, but grew up in Suzhou and has been living in China for most of his life. Prior to RedFern, Ryan worked in market research and consulting.

Having lived and worked in both China and the UK, Ryan has a great East West perspective that you’ll see in this interview!

* What are the most exciting trends you are seeing in China today?

* There are two main angles to trends in China. You’ve got platforms and you’ve got consumers. And we’re constantly trying to find our balance between the two.

* Chinese platforms are so dynamic. Douyin changed their commission structure this week. Little Red Book changed their commission structure the previous week. These little changes have major and immediate impact on both our strategy and profitability. Although I hate it, it keeps me on my toes. Our digital strategy for brands last November is completely different than the strategy today. A client might say to us ‘Well this isn’t what you told us six months ago.’ and we’ll reply, ‘Well things have dramatically changed over the last six months and some platforms we don’t even use anymore!’

* The other angle is consumer trends, because China is very young in the way people react to products. Consumer trends in China will just hit all at once. For example, I was talking to a friend who works in the Japanese hair dye industry. I was telling him how hair dye is this insane recent trend in China. Everyone in our office has multi-colored hair now. One year, everyone had these little stems and flowers in their hair. And each time, I kept asking myself, ‘Where did this start?’ You talk about trends in the West and they’re more vague, larger concepts. In China, they’re right in front of you.

* In China, modernisation is still pretty new and Chinese people want to add their own spice to modern trends. When consumers come up with something new, it’s always very different. We had plant-based food become a hit recently. Within the first week of this trend, there were 10 million searches on Baidu. All of these trends suddenly appear and we have to jump on them quickly. Part of our job is go out and help these brands in the West realise the opportunity. As an example, we are working with a Western plant-based meat company right now. Based on what we’re seeing in market, we might approach them and say, ‘You guys have to come to China.’ We had a similar case with Sara Lee cheesecakes. Who would’ve thought that cheesecakes would become a big thing in China? In the West, cheesecake is something we’ve always had. We’ve seen the category change a little bit and maybe there are new flavors like chocolate cheesecake, but the category hasn’t dramatically changed. But in China, the category is born overnight. I like that.

* How has the coronavirus affected your business and other businesses in your industry?

* Our business is up a lot. We’re likely going to double this year. We were struggling in the first four months of 2020 and then things started turning around in April or May. I think a lot of global brands are looking to China since it’s now been open for so long relative to other countries. But at the same time, I definitely see the overall industry struggling. I interviewed six applicants for a role at our company yesterday. All of them had come from advertising agencies that had gone out of business because of Covid.

* We work in the young, digital e-commerce space and lots of brands now have to put their product online. So e-commerce is a necessary channel for your brand. On other hand—events, traditional media, traditional advertising agencies or anything considered not 100% essential for your business are the first things a major brand will cut this year.

* What is one thing people outside of China misunderstand about the region?

* People misunderstand how difficult it is. That is the number one thing. Brands might sell in the US and UK by dropping off a few containers that find their way to a supermarket. You can do a large campaign on Facebook or Instagram and you’ll get traction if your product is good. In China, offline retail is so segmented. The top 100 chain stores are the same size as Tmall. In the US, CostCo and Wal-Mart will take something like 20% of the market but in China you have this situation where there are so many offline stores, it’s hard to break in. For brands doing e-commerce in the West, there’s pretty much Amazon. In China, there are like seven main e-commerce platforms. You need to decide which ones to choose, how to work with them, etc.

* Western brands are also very overconfident. People believe that in China a product will just sell itself, since the purchasing power of China is growing. That doesn’t easily happen because there’s a lot of competition. People also underestimate the scale of China. I was speaking to a client the other day and there were clearly misaligned expectations on how many people you can reach with a certain ad budget. If you come into China with a $50,000 ad budget, you’ll be able to reach one suburb in Shanghai. You won’t hit the entire East Coast of China.

* What are some companies you admire in Asia?

* One that’s really, really impressive is Pinduoduo. We haven’t worked with them personally, since all of our brands are premium. That said, all of your products end up getting sold on Pinduoduo, whether you like it or not. We have a set distribution price, but Pinduoduo usually picks it up, makes a tiny margin, and has the investment to bring in a huge number of users. I think their user base might be bigger than Tmall now. All of the e-commerce companies in China are extremely impressive. In comparison to Amazon, the number of tools that Chinese e-commerce companies have to drive more purchases are really insane.

* In terms of Western companies, the most successful ones really understand what Chinese consumers are looking for. They understand the power of e-commerce. They grow as many channels as possible, using marketing with direct channel relevance rather than just making this big, loud noise everywhere. They make the packaging simple. They make their brand story simple. Some Western brands can have tiny market share in places like the UK while having a much more dominant market position in China.

* One good example is the milk brand A2. They do fresh milk, powdered milk, and more. They told a story from Australia, managed to own their IP in China, and are now making billions of dollars here. They did a great job and followed the playbook we usually suggest to clients—they started with small, direct activations. As they got bigger, their marketing budget grew and now they’ve got some of the most famous Chinese celebrities in their campaigns. They were also investing in Chinese marketing within Australia, like targeting Chinese tourists and Chinese students in Australia.

* What is the single most important piece of advice you would give to someone trying to get their business to thrive in this time period?

* Go online. If you look at the sales of retail in the West, they’re not necessarily down. We know that certain categories and clients in the West have had an increase in sales during Covid. People still need to eat food and still want to buy things. If you don’t have an online offering, then people can’t access your products.

* The second thing - brands need to be faster in their adaptability. The geopolitical situation has now meant that we can’t just make decisions over six months. Brands need to change their business quickly in order to match things like Covid. We’ve worked with some large food and beverage companies who don’t know what to do right now. I kept thinking to myself, ‘You guys have the ingredients. You should make a retail product. Why not?’ Brands need to move more quickly. We’ve seen smaller brands be very agile, increase their budgets and do well in China this year. Although at the same time, a lot of brands have suffered.

Quickfire Questions…

A - What’s the best thing you have watched recently? (Film, TV Show, Ted Talk, Youtube Video, etc.)

* I watched a really good British movie yesterday. It’s called Tyrannosaur. It’s not about dinosaurs. It has Olivia Coleman and is a great story, though quite depressing. It shows the power of circumstances people find themselves in that although they might appear to be bad people, they aren’t necessarily bad people.  

B - What’s the best thing you have read recently? (Book, Article, Research Report, Tweetstorm, etc.)

* I read Shoe Dog a few months ago. I’m not really into business books but thought that was a good balance between life lessons and business lessons. 

C - What’s the best thing you have listened to recently? (Song, Album, Artist, Podcast, Audiobook, etc.)

* ‘Postcards from Italy’ by Beirut. I was listening to that song this morning.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

‘Brain drain’ refers to the concept of smart, ambitious people migrating somewhere away from their home country in order to find a better life.

One common example of this refers to people from poorer countries in places like Asia moving to places like the US for school and job opportunities. The classic story you might hear is the earnest, ambitious kid who left their home from somewhere in India or China in order to seek a better life in America.

Well let me tell you, the world has changed and especially right now, East West ‘brain drain’ is turning into East West ‘brain gain.’

One of my good friends is from Korea. He went to high school in Seoul and then ended up studying at one of the top universities in the US for his undergraduate degree. Afterwards, he worked in finance in New York and was accepted into Wharton for an MBA earlier this year.

He was really looking forward to attending, but uncertainties around the coronavirus have changed everything. And because of the confusing situation around both student and work visas for international students in the US, he has decided to defer his MBA by a year. He may end up not attending business school at all.

When he told me this story, I started thinking about what could have been. If he ended up going to Wharton, he probably would’ve stayed in the US, gotten a job there, eventually got a green card, bought property, paid taxes, and lived out his life as a high-functioning, productive member of the United States of America.

But now, he’s working in Hong Kong. This is a loss for the US, and a win for Asia.

My friend’s story is emblematic of a broader shift in human capital across the world. People are moving because of the coronavirus, and that changes the makeup of the globe.

There are hundreds of thousands of Asian international students around the world right now in a similar situation to my friend. Several of my previous posts have dealt with Indian, Chinese, and Korean students (the three biggest international student populations for the US) increasingly deciding to not go to the US for education.

The US is expecting a major drop in international student enrolment. This is partly because of the coronavirus, partly because of changing visa regulation and partly because of geo-political tension between the US and China.

It’s a topic very close to me, as I was an international student myself who studied in the US for both high school and college.

Similar changes are happening in other countries. This year, Australian universities have experienced a decline in international student applications from Asian countries. The Australian Department of Home Affairs saw a 46% decline from India and 20% decline from China compared to the previous year.

Countries like the UK and Canada seem to be suffering less, but there’s an existential crisis going through the heads of every international student office at a Western university.

For many Western universities, seeing a decline in international students is like a big retail store seeing a decline in their most profitable customer segment.

But for the international students’ countries of origin, this results in a positive ‘brain gain.’ Tons of Asian students looking to stay closer to home for the foreseeable future could make a huge impact on Asian economies.

I moved from London to New Zealand two months ago, which was never part of my plan.

There are close to 50,000 New Zealanders who have come back to the country since the beginning of the year, and it’s expected that the number will significantly increase depending on the coronavirus.

For a country of 5 Million people, that’s a sizeable chunk and represents close to 10% of the overseas New Zealand population.

This ‘brain gain’ of some of the most internationally minded, ambitious New Zealanders is a hot topic in the country right now.

Little stories like mine and like my Korean friend’s will all add up and reshape the way the world works.

Just like the saying ‘one man’s trash is another man’s treasure,’ I believe that one country’s loss is another country’s gain. And right now, the biggest losses in human capital are in the West and the biggest gains are in the East.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

Amidst Political Tension, More Chinese Companies Look to Singapore 🇸🇬

* Bytedance, the Chinese company who currently owns TikTok, plans to invest billions of dollars into their Singapore office that will serve as their greater Asia headquarters. The plans include the creation of a new data center and hundreds of new jobs. In addition to Bytedance, both Alibaba and Tencent have announced that they are opening new regional headquarters in Singapore. In the middle of a trade war between the US and China, these Chinese tech companies see Singapore as a place to invest their resources.

* TikTok is on the verge of getting sold to Oracle in the US. Hundreds of major Chinese apps have been banned from India. Hong Kong is experiencing controversy over new Beijing-imposed security laws. Amidst all the geopolitical drama, Singapore is seeming like an increasingly attractive place to be if you want to do business in Asia. These companies doubling down on Singapore strengthen the importance of the city as a global tech hub. The wave of Chinese tech companies is the 21st Century’s biggest shift in global economic power. Singapore might end up becoming one of the biggest beneficiaries of this.

The Underrated Love of Chinese Hip Hop Fans 🎧

* When you think hip hop, you probably don’t think of China. Well, one of the biggest Chinese TV shows of the last five years is the hip hop reality audition show called Rap of China, which achieved billions of views online and turned aspiring rappers into household names. And this summer, there are new Chinese shows that aim to capitalise on the hip hop trend. In addition to the latest season of Rap of China, there’s also Rap Star on Mango TV and Rap for Youth on Bilibili.

* Rap of China debuted in 2017 as the original Chinese hip hop show and in a short four year period, the hip hop industry has evolved significantly. 2020 brings the fourth season of Rap of China, and one of the judges is GAI, the winner of the show’s first season. As these new shows like Rap Star and Rap for Youth have started coming out, rappers associated with each show have actually began referencing each other in diss tracks. As this beef between rappers should make clear to you, hip hop is becoming a staple of modern Chinese pop culture.

Indian Companies Might Have New Options To Go Public 🏦

* ‘Going Public’ is an important milestone in the lifecycle of a company, oftentimes signalling that a company has reached a new stage of growth and maturity. Right now, Indian companies are not allowed to go public on a major foreign stock exchange (like the Nasdaq or NYSE) until they first go public in India. This has caused some problems in the past. The $1.84 Billion Indian startup MakeMyTrip decided to leave India and incorporate in Mauritius so they could list on the Nasdaq. It’s not good for India if their most promising businesses don’t want to incorporate in the country.

* So the Indian Ministry of Cultural Affairs has recently been working on a way to change the current laws. A new government proposal should allow Indian companies to list on foreign exchanges without needing to list in India first. It’s still a work in progress, but it’s directionally moving towards that outcome. Doing this should encourage more Indian startups to stay in India and also attract more global investors to invest in Indian companies. If the government can pass this law, it will help the country capitalise on its growing role in the world of technology and business.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com

Welcome to East West Hurricane! 🌪

We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.

Follow us on Twitter and Instagram! ⚡️

New Chinese Report Fuels Controversy Around Delivery Drivers 🏍

* Last week, an investigative report on the conditions of food delivery drivers went viral in China. The report outlined the working conditions of drivers for food delivery companies like Meituan and Eleme. Drivers are required to deliver food within a certain time frame, and otherwise will have their pay cut by failing to meet that standard. Drivers are often overworked, easily penalised for delays out of their control, and have to deal with hazardous job conditions.

* In response to this report, Meituan and Eleme announced new flexibility around drivers’ delivery time and pledged to review driver conditions. The PR fallout won’t be easy to fix, however. We live in a world where the gig economy has created all new types of issues around modern working conditions, both in the East and West. Last month, a court in California blocked an order to enforce a new law AB5, which would require ride sharing companies like Uber and Lyft to classify drivers as employees rather than independent contractors. These two companies were granted a temporary stay to submit appeals, but there’s still a chance AB5 will be enforced and both companies have publicly considered shutting down their services in California. While AB5 doesn’t exist in China, I’m sure that both Meituan and Eleme are keeping an eye on the precarious relationship between their companies and their ‘gig worker’ delivery drivers.

A Profile of SEA Group - Singapore’s First Unicorn 🦄

* This KrAsia article profiles the story of the founding of Sea Group, the Singaporean tech company now worth $65 Billion. Sea owns Garena (the biggest gaming publisher in Southeast Asia), Shopee (the biggest e-commerce company in Southeast Asia), and Sea Money, a digital payments platform. Sea has been a publicly traded company since 2017 and has been one of the world’s best performing stocks over the last year, significantly outperforming even the most hyped companies like Tesla.

* I have a few observations from this article. All of the three Singaporean founders are originally from China, and you can see the influence of Chinese tech in their company. Their first success was in the gaming industry through Garena, and their game Free Fire is still the highest grossing mobile game in Southeast Asia and Latin America. They used the profits from Garena to launch SeaMoney and Shopee, which was basically inspired as a Southeast Asian version of China’s Taobao. I admire the ambition to branch out into three different, large tech companies, and I don’t see that level of tech diversification apart from companies like Tencent and Alibaba. Another learning, Garena didn’t necessarily reinvent the wheel with their products. My impression of their story is as triumph of execution rather than innovation. And it’s incredibly impressive.

Telegram Becomes Go-To App for Pirated Content in India 😲

* Telegram is a popular private messaging app that provides end-to-end encryption for people chatting and interacting with each other securely. For a while, Telegram was infamously known as the company that raised over $1 Billion worth of cryptocurrency in an initial coin offering (ICO). Today in India, Telegram has become well known as a platform for sharing pirated content like films, TV series, and games. Some of the most popular Indian media properties have been frustrated by piracy on Telegram, and a Hindi newspaper even filed charges against Telegram when it discovered PDFs of the newspaper were being distributed on the platform. By 2022, it’s expected that OTT players will lose $3 Billion in revenue from India due to piracy.

* Pirating content is a behaviour that happens all over the world, but in India’s fast-growing, huge economy, the country is on track to potentially become the world’s biggest consumer of pirated entertainment. Telegram has 40 Million users in India and is the largest single market for the messaging app. Technology will never be able to completely prevent piracy, but the Telegram situation outlines an interesting tradeoff of privacy with piracy. The more secure a messaging app, the easier it is to share pirated content. Telegram also benefits from laws around the legal provision ‘Safe Harbour.’ Like Youtube and other digital platforms, Telegram itself isn’t directly responsible or legally liable for illegal content since they are an ‘intermediary’ and don’t create the content themselves. So this will remain a problem for India’s entertainment industry.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit eastwesthurricane.substack.com