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! ⚡️

Reliance Courting Even More Investors and Customers 💰

* Indian technology conglomerate Reliance has been on a fundraising spree all throughout 2020 and has raised over $20 Billion from investors over the last few months. These investors have included Facebook, Google, KRR, Qualcomm, and Intel, all of whom are likely thinking that a bet on Reliance is a bet on the Indian growth story. With this illustrious group of investors, what I’m about to say next may not come as a surprise. It has been reported that Reliance is offering to sell a $20 Billion stake in its retail business to Amazon.

* Currently, Amazon competes against Reliance in the Indian e-commerce industry. If this deal goes through, the two rivals will turn into allies overnight. Reliance is currently the most valuable company in India and has also announced plans to deliver 100 Million low-cost smartphones by December, built on Google’s Android operating system. Regardless of whether or not the deal with Amazon happens, Reliance’s continued growth signals the growth of increasingly powerful Indian technology companies who are able to court some of the world’s biggest Western companies as investors.

TikTok’s Acquisition Saga Act IV: The Buyer is…Oracle? ⚖️

* Ever since President Donald Trump declared that TikTok had to be sold to an American company, there has been huge speculation on who would end up as the final buyer. While it seemed that Microsoft would be the winner, on Monday Treasury Secretary Steve Mnuchin confirmed that the US Government received an official bid from Oracle to buy TikTok’s US operations. We should receive a decision later this week from the Committee on Foreign Investment in the US on whether the deal will go ahead.

* No one knows the exact details of the deal, but Bytedance (TikTok’s parent company) has referred to Oracle as its “trusted tech partner” and most people speculate that this is not an outright sale, but Oracle becoming the owner of TikTok’s US operations and the host of TikTok user data. Some people have accused Trump of favoritism, as Oracle is owned by Larry Ellison, one of Trump’s biggest political supporters. Considering China’s new export controls on technology, this Oracle deal leaves out TikTok’s actual source code and algorithms. There are many complicated pieces of this puzzle and this will not be the last technology conflict between China and the US. This evolving, half-political drama, half-business case study is truly an East West hurricane.

Korea’s Kakao Games IPO Makes Waves Around the World 🔥

* South Korea’s Kakao Games became a publicly listed company last week, beginning the day trading at $20 a share and then ending the day at $52 a share. The $323 Million IPO broke records in Korea for being one of the most oversubscribed stocks in Korean history. Kakao Games is the gaming unit of the broader Kakao group, which owns Korea’s biggest messaging platform.

* Kakao is the third big Korean IPO of this year, with the other two being SK Biopharmaceuticals and Big Hit Entertainment. The success of Kakao Games speaks to the broader growth of the gaming industry, which has seen huge success across the world as people spend more time gaming because of the coronavirus. With such major Korean business success stories this year, this should also inspire confidence in Korea’s growth story.

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 Anup Dhalwani, one of the sharpest product minds I know in Silicon Valley. Anup is originally from India, and has spent over a decade working both at high growth startups and some of the world’s most important tech companies like Facebook, Uber, and Snap. Having lived and work in both India and the US, Anup has true East West perspective and I’m happy to share our conversation.

You can find Anup on Twitter —> @__anoop and here’s an introduction from Anup…

I’ve created technology products from the ground up as an entrepreneur starting with Ospinet, a consumer healthcare product many years ago. The last few years I’ve invested time in shipping products in the consumer space at Facebook, Uber, Snap and other companies. As a startup advisor I help about 2-3 startups at any point in time scale their offerings or find product-market fit. I came to the US in 2008 as an engineer and have built startups and worked in tech my whole career, except a couple of years at McKinsey & Co. after business school. 

Over my many years shipping products I’ve developed a sense for what makes successful tech companies in the Valley tick and what features separate the winners from everyone else. The other area I’ve gained a lot of insight on is what makes a consumer product successful. There are some higher order features that are a must but then there is always some secret sauce. I love spending time with my family, watching foreign language movies, and generally building products and helping other entrepreneurs build and ship successful products.

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

* Many come to mind but a couple standout: 1) Innovating from Asia for a global market and 2) Adapting a global trend for the Asian market. Both of these are meta-trends but I feel capture the key trends in a Mutually Exclusive Collectively Exhaustive (MECE) way.

* On 1) I think the single best example is Postman [which was founded in Bangalore]. If you’ve ever dealt with startups that have an API layer, you’ve seen this be a key part of their API strategy. Postman recently raised a massive private round and I think it serves as great proof and inspiration for an entirely new crop of startups from Asia building for a global market. Postman used many of the best practices that’ve made Silicon Valley SaaS type companies successful, including the classic ‘Freemium Model.’

* On 2) We see the other end of the spectrum. Taking a concept like Instacart and making an Asian version of it successfully. My friend Albinder started Grofers in India and it’s a massive hit because he and his co-founder could tailor it for the Indian market. This is an example of the second key trend I am seeing. I anticipate both of these trends to continue and fork over time, spawning new models.

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

* It’s an understatement to say there has been a massive impact of the virus on all industries. Within consumer tech though, it’s a different story. It’s been a boon for many of the core consumer companies. The reason is simple. As people are staying at home and are not able to spend time with friends and family in real life, they’ve had to expand their use of social media (which was already quite high) and similarly we’ve seen people start using Robinhood for trading in record numbers. So the companies that were well poised to benefit from a pandemic did just that.

* There is another crop of companies that got hit hard though, especially in the travel space. From AirBnB to TripActions to expense reimbursement cards and others. Not to mention WeWork, which was already in a tough spot. So it's a case of haves and have nots even within the consumer technology space.

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

* The number one thing would be how upwardly mobile the region is. People, especially the younger ones, are very focused on increasing their standard of living and until the pandemic hit, they were executing quite well on that. Now the employment picture has become a bit bleak. However, I am confident this will be a short term hit and the region will come roaring back.

* The other thing people might misunderstand is that building technology products for the Asian market isn’t as easy as it is in the USA. The reason is the amount of diversity from language to local regulations is quite a lot. While many might know about the amount of diversity in the region, its impact on shipping products might go unnoticed. For example, alcohol and age related laws are different state to state within the same country sometimes, and if you are a food delivery app for example, you’d need to account for that diversity.

* What are some companies you admire in Asia?

* In technology, Flipkart, Oyo, Grofers are some of the modern ones but there are a lot of companies from the 90s and 00’s that laid the foundations albeit from a services standpoint, like Infosys.

* Outside of technology, I think there is a vast range of companies and industries I admire. One example is Sula Wines in India. They’ve done an amazing job of fusing the wine business with lifestyle and culture. There are many, many such examples I feel aren’t as known outside.

* 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?

* Borrowing from Taleb, the one thing I’d say is try to be antifragile. The world is only going to get more volatile in the coming years and simply being robust won’t help you thrive. If your startup’s business model isn’t one that will benefit disproportionately with volatility, it’ll be hard to thrive. More and more it seems the world is living in the ‘tails’ of a distribution where Black Swan events come from and have driven almost all of the outcomes in human history. We’ve already seen this with the pandemic (which isn’t even a Black Swan as it was predictable and predicted) and even there we saw companies like DocuSign benefit and those like AirBnB get hit (the antifragile vs fragile model).

Quickfire Questions…

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

* I’ve seen some recently uploaded old Steve Jobs clips from the 80s and 90s, which to this day are some of the most outstanding marketing examples I’ve seen.

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

* I’ve been spending a lot of time exploring the art world and there's a bunch of really great art podcasts I’ve been discovering. There isn’t one specific channel or podcast but rather a collection I’ve been curating and thats’ been a lot of fun.

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

* The Biggest Bluff, it’s a great book about Poker and how it applies in life. And then, Kings of Crypto on Audible.

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! ⚡️

PUBG Finds Distance Away from Chinese Ownership 👋

* The hugely popular video game PUBG was one of the hundreds of Chinese mobile apps banned by the Indian government last week. A few days after the ban went into effect, PUBG has removed Chinese company Tencent Games as their official game publisher and distributor. PUBG is created by a Korean company, but Tencent Games officially distributes the game in India. The hope is that this new change should allow PUBG to satisfy the Indian government enough to revoke the ban.

* PUBG had 40 Million users in India before the ban, many of whom were emotionally devastated by having the game banned. If this allows PUBG to continue operating in India, maybe this is an option for other companies with tenuous connections to China. Moving forward, it’s going to be hard to figure out what level of Chinese connection a company will need to have in order to satisfy the Indian government. Most Indian tech companies have already received money from Chinese investors. On the other hand, completely native Chinese companies, headquartered in China and with majority Chinese ownership, may struggle to operate in India while political tensions are high. Since PUBG is technically Korean, they have a unique-ish loophole.

English Premier League Pulls Chinese Broadcast Deal ⚽️

* The English Premier League has just cancelled their $665 Million agreement with PPTV, the company that was supposed to be their broadcast partner in China until 2022. Allegedly, Suning Holdings (the owner of PPTV) failed to make a payment of $210 Million to the Premier League that was due earlier this year and therefore this was considered a breach of contract. While that’s the official messaging, many people speculate that the increasing political tensions between the UK and China have played a role in this decision. To be clear, there was definitely disagreement between the Premier League and PPTV over whether broadcast fees should have been paid earlier this year. Considering Covid’s effect on football matches, you could argue that the value of the product of the Premier League broadcast rights has decreased. The Premier League has given $438 Million worth of rebates to broadcast partners for the three-month pause in games, but PPTV was not included.

* The Premier League, like all sports leagues, has lost a lot of money due to covid and the path forward for commercial sports is unclear. What’s next? Right now, it looks like they will be looking for another Chinese partner to broadcast games in the country. Much like how Indian PUBG fans consider it a tragedy that the game was banned from their country, I’m sure Chinese football fans are upset that it’s now harder to watch games of their favourite teams. While sometimes it feels trivial, sport is an important part of culture. Surely, the rights to broadcast the Premier League are a valuable asset to many Chinese companies.

Netflix to Release Their First K-pop Documentary 🇰🇷

* If you want to know one of the hottest global music trends, you need to know K-Pop. K-Pop refers to popular music coming from Korea. With K-pop group BTS currently #1 on the US Billboard Hot 100, the worldwide level of K-pop interest is at an all-time high. Streaming platform Netflix will be launching their very first K-pop documentary on October 14. The new documentary focuses on the female K-pop group Black Pink and is called ‘Black Pink: Look Up The Sky.’ Netflix, like most other Western platforms, has been increasing their investment in international content, most notably in Asia.

* Earlier this year in June, Black Pink’s music video for the single ‘How You Like That’ broke the world record for number of Youtube views in 24 hours. Fittingly, their record was broken by fellow K-pop band BTS’s song ‘Dynamite,’ which was released last month. Last year, Black Pink became the very first K-Pop group to perform at Coachella, arguably the biggest music festival in America. The key takeaway is that K-Pop is a growing global phenomenon that has reached yet another pop culture milestone.

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! ⚡️

The Chinese Bottled Water Billionaire You Haven’t Heard Of 💦

* Chinese company Nongfu Spring made its debut on the Hong Kong Stock Exchange earlier this week, surging 85% higher than their IPO price. Nongfu Spring is a company headquartered in the city of Hangzhou that makes bottled water. The company was founded by Zhong Shanshan, who briefly became the third richest man in China with the share price at its peak, giving him a temporary net worth of $50 Billion.

* Nongfu Spring was founded in 1996 at Qiandao Lake in Zhejiang province, an area known for its natural beauty. Over the years, the company has built a strong brand around building ‘natural products,’ primarily focused on bottled water but also extending into tea, coffee, and other beverages. The investor interest in the company seems to be based on the new post-Covid trend of Chinese consumers placing importance on their health and wellness. With a market cap of around $48 Billio, Nongfu still has lots of room to grow and capitalise on what is becoming a global trend of increased demand for products perceived to be healthy and natural.

India’s Film Industry Targeted by Western Streamers 🇮🇳

* While the Indian film industry has been struggling due to the coronavirus, Western streaming companies like Netflix, Disney, and Amazon have been acquiring several Bollywood films to host on their platforms. Struggling Bollywood studios have sold blockbuster films that were originally intended to receive a theatrical release. Since India is a huge priority market, now these Western platforms can provide better Indian content for their customers.

* India is a huge entertainment market - the country produces more films and sells more movie tickets than any other country in the world. The tough situation for Bollywood studios is similar to other markets around the world, such as the US and China. In the film industry, there has been this concept of the theatrical window—usually several weeks or months where a new film is distributed through theaters and is not allowed to be broadcasted on any other platform, like an online streaming platform. In China, the US, and now India, the theatrical window has been shattered by the coronavirus, as companies like Disney are now taking blockbuster films directly onto streaming platforms. And across all three of these countries, movie theater companies are angry at the ‘violation’ of the theatrical window on top of their own coronavirus-related closures. Disruption in the entertainment industry is a global phenomenon, and the stakes are very high in Asian countries like China and India.

Surveys and Data on American Business in China 📊

* The South China Morning Post reported on data released by the American Chamber of Commerce in Shanghai, who creates an annual survey for American businesses operating in China. In this world of increased political and economic tension, it’s fascinating to parse through the data in order to understand how American businesses in China have been affected. 92% of the respondents say that they have no plans to leave China and 5% say that they do plan to leave the country. 85% of the respondents are companies who have operated in China for over a decade. One major concern brought up by American companies—if President Trump actually bans WeChat and this applies to American businesses in China, this could be a huge problem. Another concern reflected in the survey—many Chinese workers have less of a desire to work for an American company, given the current relationship between the two countries.

* You have to wonder what’s going through the heads of people running American companies in China. The biggest source of fear must be the lack of certainty around what’s going to happen next in the US-China relationship. Also, right now China’s economy is one of the world’s healthiest and fastest growing in a post-covid situation. Companies who have a long-term strategy in China seem willing to ride out these short-term fluctuations. The way I see it—no matter what happens over the coming months, China’s mid- to long-term importance will continue to increase. And every international business should keep that in mind.

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! ⚡️

Korea’s Big K-Pop Export is Worth Billions 🎤

* The Korean government released a report saying that the new #1 single ‘Dynamite’ from K-pop band BTS will generate $1.4 Billion for the Korean economy. It’s an estimated amount (I wonder how many holes you can poke in the methodology), but South Korea’s Ministry of Culture, Sports and Tourism factored in new economic activity and 8,000 new jobs created by the song. The report claims that the song’s popularity also leads to sales of Korean cosmetics, food and beverage, and more. In 2018, the Korean government estimated that BTS’s contribution to the economy that year was $3.5 Billion.

* Whatever the exact economic activity generated by BTS, K-Pop definitely increases Korea’s brand awareness and increases tourism. This can trickle down into a micro-level, with increased demand for Korean goods, Korean cuisine, and so on. I wrote last week how ‘Dynamite’ is the first song from an Asian act to get a #1 single on the US Billboard Hot 100 since 1963. Previously, Korean musician Psy got to #2 on the Billboard charts in 2012 with his song ‘Gangnam Style.’ BTS’s musical career probably has more longevity and already has more appeal than Psy. The Korean Wave keeps on coming!

Alibaba Starts B2B Sales of Livestreaming Tech 🎥

* Alibaba will now start selling their livestream technology to other companies. Alibaba’s e-commerce platform Taobao has livestreaming functionality called Taobao Live, which is the most widely used livestreaming e-commerce platform in China. The Taobao livestreaming product was first released in April 2016 and now the overall Chinese livestreaming industry is expected to reach $129 Billion by the end of this year. Alibaba has set a 2020 goal to achieve $73 Billion in gross transaction volume for e-commerce livestreaming by end of the year. As I mentioned in a previous article this week, other platforms like Kuaishou and Douyin are also setting aggressive targets for their livestreams.

* Livestreaming is THE big new trend for e-commerce in China and Alibaba owns one of the main livestreaming platforms with Taobao Live. With this new business decision, Alibaba has basically spun out a B2B SaaS product, which means they are selling livestreaming technology as a service to other enterprises. It’s hard to really comprehend this in the West, because the livestreaming behaviour is so tiny compared to China. One way to picture this—imagine Alibaba has created video technology like Zoom, but it’s primarily used by people hosting livestreams where they sell products. And now they’ve put that in a bundle together to sell to enterprise clients. It’s a pretty good idea, and it’s a pretty huge opportunity.

China’s Post-Covid Boom in Autonomous Retail

* While many shops in China are ‘back to normal’ after the worst parts of the coronavirus, we need to start examining what normal really means. One big trend in China right now, especially Post-Covid, is ‘autonomous retail.’ Autonomous retail refers to stores that use technology to directly replace typical staff you would find in retail experiences—which often involves vending machines, no cashiers, and unstaffed shelves. Most of these experiences still include some small group of staff, but the development of technology decreases the need for human staff over time.

* One example of this is the F5 Future Store in Guangzhou, which uses robotic arms to serve food to customers who place their orders from electric ordering terminals. Over the last four years, the Chinese autonomous retail category has doubled and the total number of autonomous retail customers is expected to go from 91 Million this year to 245 Million in 2022. It’s interesting to read about these new retail experiences happening in Asia, and I wish I could see it myself in person. There are so many non-obvious changes to our daily life that have been accelerated by Covid, and autonomous retail might be one that becomes ‘normal’ more quickly than we realise.

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! ⚡️

Chinese Audiences Reflect on New Mulan Film 🇨🇳

* To people in my generation, we remember watching the animated Disney film Mulan back in 1998. I was too young to realise that the film was not well received in China at the time. So far, it seems like Disney’s Mulan remake has touched on a similar nerve for many Chinese viewers. The new $200 Million live-action version of Mulan came out on Disney+ a few days ago after much anticipation. Despite some controversy around lead actress Liu Yifei posting about the Hong Kong protests last year, Disney expected this new Mulan to do well in China.

* While the film will officially be released in Chinese theaters on September 11, pirated online versions have already appeared on the Chinese internet and tens of thousands of people have already written reviews on Chinese ratings site Douban. Right now, the film has a 4.7 out of 10 rating. Chinese reviewers have complained about the film’s Western writers generally misunderstanding Chinese culture. The problem of Hollywood whitewashing ‘Asian’ films has been perceived to be improving against the backdrop of successes like Parasite and Crazy Rich Asians. There’s still a chance that the film will do well when it comes out in Chinese theaters in three days on Friday. Whether Disney misses on Mulan or not, they can’t ignore the huge Chinese film market.

China’s Millennials Riding Solo 🕴

* In traditional Chinese culture and throughout most of Asia, people are expected to marry and start families at a young age. The first thing my relatives in the Philippines ask me is if I have a girlfriend and when I’m getting married. But today, this trend is starting to shift as young people do these things later in life and increasingly pursue a single life living in big cities. The number of single people in China reached 200 Million last year, and the number of single people living alone is expected to reach 90 Million by 2021. Another country that has seen this happen more quickly is Japan, where the government has even provided subsidies to encourage dating.

* Chinese companies are capitalising on this new consumer class of young, single working professionals, which would have been a smaller group in previous generations. Chinese hot pot restaurant chain Haidilao has started putting teddy bears in empty chairs as companions for solo diners and other restaurants have started building dining booths for individuals. ‘Solo dining’ is becoming a popular content category on social media and appliance companies are starting to create mini-appliances for people living alone. It’s interesting to see how business adapts to changing consumer demand. From a cultural perspective, I’m most happy with the fact that being young and single is now seen as less negative in Chinese society.

An Indian Funeral for PUBG Mobile ⚰️

* To you, it might just be a silly video game. But for millions of Indian gamers, PUBG Mobile was an immersive, social entertainment experience that played a meaningful role in their lives. So when the Indian government banned PUBG last week, it hit harder than the hundreds of other banned Chinese mobile apps. Arguably, losing access to PUBG could be considered even more impactful than India banning TikTok, since many gamers (especially young men) spend more time playing video games than they do consuming social media.

* A group of young gamers went viral in India this week for recording a video of themselves holding a pretend funeral procession for PUBG.

* On a more serious note, I think this highlights the disparity between public policy and popular culture. While the political conflict between India and China continues, people will suffer in many ways. If things like media and entertainment need to become regionalised, it could lead to interesting new developments for companies that understand popular culture. In the meantime, fans of PUBG will continue to suffer. All they wanted was a video game to play with their friends.

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! ⚡️

Disney Launches New Indonesian Streaming Platform 🕹

* This last weekend, Disney launched their own streaming service specifically for the Indonesian market called Disney Plus Hotstar. The ‘Hotstar’ refers to the Indian streaming company that Disney acquired in order to roll out across Asian markets. This new service will feature tons of local Indonesian content and also includes a partnership with Indonesian telco Telkomsel.

* Indonesia is the biggest market in Southeast Asia and has always been an attractive country for Western multinationals looking to expand across Asia. The timing of this launch should be positive—as overall streaming consumption has increased because of the coronavirus. Two local rivals, Hooq and iFlix, have recently shut down, which allows more room for Disney. Indonesia’s population is still price sensitive to paying for premium content, so the initial pricing strategy is really important. In partnership with Telkomsel, Indonesian consumers can purchase data and content bundles from Disney at different levels and over a set of options around subscription length.

SoftBank + Unacademy = Growing Indian EdTech Scene 🎓

* The investment firm SoftBank has just injected $150 Million into Indian online education platform Unacademy, with the startup now valued at $1.45 Billion. Unacademy is a five year old company whose valuation has now tripled over the last six months. As a fund with the ability to write some of the biggest checks in the world, SoftBank’s latest investment is an encouraging sign for the hot Indian EdTech Scene.

* Online education is booming around the world because of the coronavirus, and India is one of the largest countries to witness this. Unacademy works by connecting teachers with students through a subscription service that includes live video lectures and exams. The company has 30 Million users and 350,000 paying subscribers, which is a 4x increase since February of this year. Overall funding raised by Indian ed tech startups in 2020 has increased seven times since the same time period one year ago. In an age of many winners and losers because of Covid, online education continues to be one of the biggest winners.

Kuaishou’s E-Commerce Plans 🎥

* Chinese mobile video app Kuaishou is one of several competitors in the Chinese digital media market. In an attempt to both differentiate and grow, Kuaishou recently announced ambitious new plans for expansion. They plan to incubate 100,000 businesses and help them achieve $146,000 in annual sales this year. They also have a goal to build 100 industrial bases, train 100,000 new livestreamers, and host 1,000,000 e-commerce livestream sessions over the coming year.

* What’s the motivation behind these plans? Growth, timing, and opportunity. Across the board, all Chinese companies engaged in e-commerce have seen booms in usage because of the coronavirus, and livestreaming has become the most popular e-commerce subcategory. One of Kuaishou’s biggest rivals, the Bytedance-owned Douyin, has similar plans to expand their livestreaming capability. Many Chinese companies realise the power of livestreaming and they need to move quickly to get an advantage against their competitors.

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! ⚡️

K-pop’s Big Hit Entertainment Plans an IPO 🎤

* Big Hit Entertainment is one of the world’s largest K-pop agencies and this week they announced their intention to go public. Big Hit Entertainment plans to raise $812 Million in an IPO that would be the biggest Korean IPO of the last three years. Big Hit manages the absurdly popular K-pop group BTS, who has become one of the world’s most popular music groups and grossed $170 Million from live events in 2019, which made them the fifth largest live music act in the world.

* BTS’s latest single ‘Dynamite’ just reached #1 on the US Billboard Hot 100, which is the first time an Asian act has done this since 1963. K-pop’s popularity has increased massively over the last few years, which contributes to the growing wave of Korean influence in global pop culture. This Korean cultural wave also includes the major film success of Parasite and the growing popularity of K-drama. I’m super bullish on the continuing influence of Korean culture on the world stage. It’s all part of this increasing relevance of Asia that East West Hurricane was built to witness and document.

India Issues New Ban That Includes PUBG Mobile

* On Wednesday, the Indian government announced a new list of 118 Chinese mobile apps that are now banned in the country. This comes after the government banned 59 apps just over a month ago, including TikTok. The big news from this round is that one of these apps is PUBG Mobile, which was one of the most popular games in India. For PUBG, India was their largest market with 175 Million downloads and 24% of their total downloads globally.

* As per the previous group of banned Chinese apps, the Indian government is citing security reasons as the reason for the ban. First TikTok, and now PUBG? Brendan Ahern, who writes the newsletter China Last Night, described it best when he called this situation an “Indian Teenagers’ Worst Nightmare.” The Global Times, a Chinese publication, has described the move essentially as a way for the Indian Prime Minister to deflect away from domestic failures, especially related to Covid. Whatever the truth behind the decision, it seems like we could start seeing more regional technology - where legislation makes internet services like social media and gaming different on a country by country basis.

Bilibili’s New Content Acquisition 🎥

* Bilibili is kind of like ‘the Youtube of China,’ with over 170 Million users and a particular focus on ACG, which stands for Anime, Comics, and Gaming. As the platform grows, their strategy is increasingly to expand outside of the initial ACG niche. On Monday, Bilibili announced a $66 Million strategic investment in Huanxi Media, one of China’s largest media production companies. This gives Bilibili exclusive broadcasting rights to a large part of Huanxi’s TV and Film productions. The two companies also agreed on other partnership revenue opportunities like joint merchandise, film production, and shared ad revenue.

* A Western equivalent of this would be like Youtube investing into a major film studio like Paramount Pictures in order to have exclusive rights to broadcast their content on Youtube. As I’ve written about previously, Bilibili is an interesting company that has made tons of progress recently, including a listing on the Nasdaq in 2018 and continued growth over the last two years. They also received a $400 Million investment from Sony in May. Keep your eye on Bilibili, because another priority for them is international expansion.

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.

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Sea Group Gets Bigger and Bigger 🎯

* Sea Group has been one of Southeast Asia’s biggest tech success stories. The eleven-year-old company owns Shopee (E-Commerce), Garena (Gaming), SeaMoney (Fintech) and their share price has increased 880% over the last 18 months. This KrAsia article makes the bull case for Sea potentially becoming the dominant Southeast Asian tech company, similar to a combination of Chinese Alibaba and Tencent. Shopee is currently the most popular e-commerce platform in Southeast Asia and Garena is the biggest games publisher in Southeast Asia.

* Relatively speaking, there is more white space for technology companies in Southeast Asia vs. China. The technology startup scenes are currently less developed in Southeast Asia when compared to China. While not all parts of Sea Group are profitable, their performance is formidable and they continue to grow. I remember when Andrew Baisley mentioned Sea in our interview last month. Considering their incredible accomplishments, they are relatively unknown in the West and I look forward to keeping a closer eye on Sea.

Pinduoduo’s New Goal for Farm Produce 🍑

* The massively impressive Chinese interactive e-commerce platform Pinduoduo has just set yet another ambitious goal. Pinduoduo aims to sell $145 Billion worth of agricultural goods by 2025. The company already sells tons of produce. Based of their official Q2 results, Pinduoduo sold $58 Billion worth of agricultural goods in 2019. 38% of Pinduoduo’s users made purchases within the fruit and vegetables category on the platform.

* Currently, 2.5% of China’s agricultural goods are sold online and the structure of agriculture and produce is much more fragmented vs. the West. The US has much more industrial farming while China has a larger number of small farms. Compared to their rivals like Alibaba and JD.com, Pinduoduo has placed special emphasis on agriculture. If they are able to succeed, they might inadvertently create the most forward thinking agriculture e-commerce in the world.

The Digital Sports Platforms in China ⚽️

* For several years, growing the local sports industry has been a key priority of the Chinese government. With such a large population, this presents huge opportunities for companies looking at sports fans. There are currently 213 Million people in China streaming sports online, which will likely continue to grow in the aftermath of Covid. This article highlights the top five sports news and streaming platforms: Tencent Sports, PP Sports, Sina Sports, CCTV-5, and Alisports.

* Out of all the popular sports in China, two in particular stick out—Basketball and Football. The NBA is the most popular foreign sports league and the Chinese Super League is the most popular local sports league (CSL). For Western leagues, tapping into China is generally their biggest international opportunity. These sports platforms are growing off the back of increasing Chinese sport interest, which makes the sports industry one of the hottest to watch over the coming years.

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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 Rule Has Potential to Affect TikTok Sale ✋

* On Friday, China’s Ministry of Commerce and Ministry of Technology changed a rule that would ban the export of technologies related to “artificial intelligence” and “personalized information push service based on data analysis.” Any Chinese company selling that technology to a foreign buyer now has to go through new layers of scrutiny. And both of those quoted technologies are key components of TikTok, the Chinese company currently being forced to sell its US operations. On Sunday, Bytedance, TikTok’s parent company, issued a statement saying they would “strictly comply” with any new Chinese regulation.

* At this point, TikTok’s acquisition is imminent and its unclear how this new rule will affect the deal. It was expected that the official TikTok announcement of an acquisition would happen sometime this week but the Wall Street Journal is reporting that talks slowed down this past weekend after the new Chinese rule change. I still think the deal will go through, but this shows how important of a political football TikTok has become for both the US and Chinese government.

New Access to Financial Services for Filipinos 🇵🇭

* In the midst of Covid, 27 Million people in the Philippines are unemployed. It’s estimated that only 2 out of 10 Filipinos have a bank account and even fewer have credit cards. At the same time, 7 out of 10 Filipinos are mobile internet users and more people have digital wallets rather than credit cards. Against this backdrop, several fintech startups are beginning to see big opportunities in the Philippines.

* The Philippines is a huge country with a population of 106 Million. Companies like Hong-Kong based fintech Cashalo entered the market in 2018 and have offered products like ‘buy now pay later’ credit schemes and personal loans. Since there is not a strong credit scoring system in the country, extending credit to Filipinos can be risky for startups. Regardless, companies like Cashalo, BillEase, and Home Credit have seen millions of app downloads and are still bullish.

The Potential Weakness of Western Celebrity Beauty in China 💄

* Nearly half of all global beauty industry growth is expected to come from China over the next five years, an increase in sales representing $38 Billion. This article from Jing Daily highlights the changing consumer preferences of young Chinese consumers. Several Western celebrities like Victoria Beckham, Kim Kardashian, Miranda Kerr, and Rihanna have launched their own beauty brands but success is not always guaranteed from a Western brand name. Local Chinese beauty brands, known as c-beauty, are increasingly more relevant products for local Chinese buyers and are also more affordable than Western celebrity beauty brands.

* While the article doesn’t necessarily mean Western celebrities are struggling to launch beauty brands in China, I think it says a lot about Chinese consumers. Modern Chinese consumers are more proud of their national identity and correspondingly have stronger support for local brands. Twenty years ago, it would have been sufficient to launch a foreign brand in China and people would buy your product because it’s foreign. Today, there are much higher standards for Chinese market entry and there is more support for local brands.

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