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! ⚡️

Ant Group’s Relationship with Paytm

* Ant Group, the fintech company that was spun out of Chinese e-commerce giant Alibaba, is on track to have the largest IPO of the year, with a planned $200 Billion public offering in both Hong Kong and Shanghai. In their recent filing documents, Ant revealed that they have a 30% stake in One97 Communications, which is the owner of Paytm, India’s largest digital payments company and most valuable startup. This matters because it adds a new layer of risk for both Ant and Paytm, given the currently strained and complicated relationships between China and India.

* The Indian government has recently imposed new restrictions on foreign investment that has especially affected Chinese investors in Indian companies. Earlier this year, Indian startup Zomato had $100 Million of investment coming from Ant that was temporarily blocked by the Indian government. The truth is that more than half of the top 25 biggest Indian tech companies have at least one Chinese investor. Until political tensions or legislation changes, Paytm will be making sure to distance themselves from their relationship with Ant.

China’s Valentine’s Day Sales Festival

* Last week was China’s Qixi Festival, one of the biggest sales holidays of the year that is often compared to Valentine’s Day. This festival is especially important for beauty and luxury brands. This year, we saw more of the same record breaking post-Covid e-commerce growth that China experienced during the 618 Festival in June. Of course, many European luxury fashion brands like Salvatore Ferragamo and Estée Lauder paired with Chinese KOLs to do livestreams. The early data from the Qixi Festival indicate strong year-on-year growth across categories.

* JD.com released a report saying that luxury goods saw a 20-30% increase in sales. Gold, silver, and jewellery sales increased over 100% and intercity flower orders increased 33%, perhaps indicating more long-distance relationships in the time of Covid. It’s still amazing to me that Chinese e-commerce sales festivals keep breaking records. Part of this might be pent-up demand from a restricted lockdown Covid period, but it also indicates the sheer size and scale of Chinese buyers coming online.

Facebook Threatens to Sue Thai Government Over Censorship

* The Thai Government recently ordered Facebook to shut down a Facebook group that contained over one million members critical of the Thai monarchy. The group was shut down but now Facebook is threatening to file a lawsuit against the Thai government to challenge the order. There are certain laws in Thailand that prohibit defamation of the monarchy and the most harsh sentences for breaking the law include extended jail time.

* As a former Facebook employee, I still feel a strong connection to the company that was such an important part of my life. I can understand the difficulty in balancing respect for local laws while also fighting for certain principles and ideas the company values. For several years, I thought that Facebook was not putting sufficient investment into their government and public policy teams. Given all the scandals, government scrutiny and new regulation over the last three years, I’m sure Facebook has reevaluated the importance of public policy. It will be interesting to see how the situation plays out in Thailand. In some countries (like Pakistan, India, and Vietnam), Facebook has actually been temporarily banned by the government for violating local laws.

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! ⚡️

Pinduoduo Joins Nasdaq-100 as Fastest in History 📈

* Chinese e-commerce platform Pinduoduo just became the quickest company in history to reach the Nasdaq 100, which is an index of the top 100 largest companies on the Nasdaq stock exchange by market cap. This means that Pinduoduo has reached a new level of success that places them in the same list as Apple, Microsoft, and Alphabet. Don’t forget—Pinduoduo is only five years old and was founded in 2015.

* As I’ve written before, Pinduoduo has one of the most impressive growth stories in Chinese tech. They are one of the very few Chinese companies on the Nasdaq 100. Others include Pinduoduo’s rival JD.com and China’s largest search engine Baidu. Given tensions between the US and China, JD has opened a secondary listing on the Hong Kong Stock Exchange and Baidu has considered delisting from the Nasdaq. Whatever happens with Pinduoduo’s listing in the future, we should still take note of this world class achievement.

Douyin to Cut Off Third Party Sellers 🎩

* Douyin is a short mobile video platform sometimes known as the TikTok of China, as it is owned by the same parent company Bytedance. Compared to TikTok, Douyin has a lot more advanced e-commerce features that plug directly into the user experience. One way people can buy products off Douyin is by clicking on a link during a livestream that directs them to e-commerce platforms like Taobao and JD.com. As of August 26, however, users will no longer see third party seller options like Taobao and JD.

* With 500 Million monthly active users, Douyin is looking to sell products directly on their platform and cut out third party middle men. By selling directly from Douyin’s shop, they take a larger percentage of the sale. This is similar to a situation if Amazon were to kick out third party sellers from their platform. Many people look to Douyin as a future signal for TikTok’s product roadmap. Regardless of how TikTok’s sale proceeds over the coming weeks, we can expect deeper shopping and commerce integrations within the app, just like how things are already happening on Douyin.

Tokopedia Launches New Lending Platform 💳

* Tokopedia, one of Indonesia’s largest e-commerce companies, has just released a peer-to-peer lending platform called Dhanapala. This allows small businesses around Indonesia to access loans and a set of different financial services to support their enterprise. This shift from e-commerce to financial services makes a lot of sense, but what’s interesting about the timing is that Tokopedia is currently being investigated by the Indonesian government about a security breach earlier in May that exposed the information of 15 Million users.

* In the midst of this scandal, you can imagine that Tokopedia’s reputation for trust and safety will be at risk and might harm the success of Dhanapala. While it’s generally perceived that people in Southeast Asia have fewer privacy concerns compared to people in the West, especially in Europe, recent scandals like this one from Tokopedia are making privacy a more important issue to Asians. In a situation like this, the next step might be new government regulation around privacy and data security.

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

In my ongoing quest to better understand Chinese pop culture, I made the decision to watch this show called Fourtry.

Fourtry is a Chinese reality TV Show where a group of five celebrities go to Japan and try opening up a successful fashion boutique in the middle of Tokyo.

Fourtry was created by iQiyi, a Chinese video streaming platform with over 500 Million monthly active users, one of the many ‘Netflixes of China.’ The first episode became the number one trending reality show on Chinese platform Weibo, reaching 19.8 million viewers.

The celebrities in the show are some of the biggest in China:

Kris Wu is a Canadian-Chinese pop idol with 49 Million followers on Weibo. He got his start as part of the K-pop band EXO and has gone on to become a major film star, singer, and model for fashion brands like Burberry.

Angelababy is a Chinese model, actress, and entrepreneur with over 100 Million followers on Weibo. She has recently starred in Hollywood films like Independence Day: Resurgence and also set up her own venture capital fund AB Capital.

Rounding out the five main characters is singer Wilber Pan, actress Jinmai Zhao, and rapper Fox.

The show explores their trials and tribulations with selling clothes in the trendiest part of Tokyo. Kris Wu was also the host of the super famous show Rap of China and is sometimes referred to as “China’s King of Streetwear.” Fourtry attempts to capitalise on the emerging Chinese street culture trend.

Compared to Western reality TV shows, I noticed a few differences in Fourtry.

Editing

The editing was out of this world. Special effects, while crude, were heavily emphasised in almost every situation to accentuate the emotions felt by each cast member in that particular moment.

Product Placement

The show was sponsored by Vivo, along with other major brands like Pepsi, Mazda, and Ikea. The Vivo product placement was incredibly blatant in certain scenes and a Vivo logo would frequently appear in the bottom right hand corner of the video.

Sometimes the camera would awkwardly pan to a sponsor’s product shot without much relation to the conversations between the cast.

I thought this explicit acknowledgement of sponsors actually made things feel more natural. Rather than hiding the sponsorship, it was front and center.

Another show I’ve watched recently is J-Style Trip on Netflix. It’s a reality TV series with a similar format. Taiwanese pop star Jay Chou travels around different cities around the globe with a group of friends and their adventures are recorded on camera. While the sponsorship seemed less blatant compared to Fourtry, the editing was similarly wild and vivid.

I’m beginning to think this over-the-top editing in media is a Chinese characteristic that is also reflected in the design of mobile apps.

Compared to the UX of Western mobile apps, Chinese mobile apps are a lot busier. To Western eyes, Chinese apps might look crowded and confusing.

Here’s an example of bullet comments, a common way for people to leave comments on video platforms such as Bilibili.

Admittedly, this is an extreme example above, but bullet comments are used very often across several apps. These features might be overwhelming to Westerners, much like how Fourtry’s editing seemed crazy to me.

Why does Fourtry exist? Because the creators of the show recognised the opportunity to capitalise on a recent Chinese consumer trend of street fashion, especially among younger audiences.

iQiyi collaborated with dozens of fashion brands to allow people to buy the specific clothes they saw in the show directly on e-commerce channels. iQiyi also hosted a Fourtry Popup in Shanghai. So iQiyi made money not only by advertising on the show, but also by selling products after the show.

As much as some people might consider reality TV a lowbrow genre, it’s one of the truest reflections of our popular culture. Fourtry, as with all popular Chinese media, can tell us a lot about culture and consumer preferences.

I’m not yet an expert, but I have to admit that Chinese reality TV is quickly become my guilty pleasure to watch at night. Depending on how deep I go down this rabbit hole, I can always shift careers to become a reviewer of Chinese TV shows.

This Week’s Most Popular Update:

* Update #55 - Hong Kong Stock Exchange, SEA Luxury, and Fake Universities

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! ⚡️

Triller Partnership With India’s Reliance 🎥

* Triller is one of the biggest competitors to TikTok globally. It’s a US-based short-video mobile app that was released in 2015 and is very very similar to TikTok. Since the controversy around TikTok has increased over the past year, Triller has seen a huge increase in user numbers, with now 250 million total downloads globally. This week, Triller announced a partnership with JioSaavn, the Indian music streaming platform owned by Indian conglomerate Reliance. Users will be able to create Triller videos directly on the JioSaavn app.

* JioSaavn has over 100 million monthly active users and provides services in India similar to Spotify. As I’ve written about before, Reliance is one of the biggest and most influential companies in India. They have received billions of dollars in new funding from companies like Facebook and Google over the last few months and are best placed to capitalise on India’s digital transformation. Last week, it was reported that Reliance was looking to potentially acquire TikTok. It looks like those talks may have fallen through as this partnership with Triller would be directly competitive against TikTok. With this new relationship, Triller now has a powerful ally with Reliance and even more chances of success in India.

Didi Expands to Russia and More 🇷🇺

* This week, Chinese ride-hailing company Didi Chuxing announced that they have expanded their service to Russia. It’s focused on the specific region of the Tatarstan Republic, with operations in the city of Kazan. Didi has also been expanding in South America over the last few years and has set the goal of achieving 800 million active users globally. CEO Cheng Wei announced earlier this year that Didi has reached the milestone of 1 billion rides outside of China.

* Didi is basically the Uber of China. In 2015, Uber had actually launched in China and became a major competitor to Didi. The fierce battles between the two companies resulted in Didi eventually acquiring Uber China in 2016. Ride-hailing has become one of the biggest tech industries and there are strong rivals in many different countries, like Uber, Careem, GoJek, and Grab. Watching where Didi plans to expand says a lot about their specific strategy. Didi expanding in places like Russia and South America also means they are not expanding in the competitive Southeast Asian markets, where ride-hailing is dominated by companies like GoJek and Grab.

Who Wants TikTok, Who Is Leaving TikTok ⏰

* It’s wild how a single Chinese video app has created a geopolitical storm and one of the most contentious tech acquisitions in recent history. Ever since President Trump issued an executive order requiring TikTok to be sold by next month, several major US companies have been reported as potential buyers. At first, the obvious frontrunner appeared to be Microsoft. Now there has been talk about Oracle, Netflix, and most recently Walmart interested in buying TikTok. Most of these actual acquisition conversations happen behind closed doors, so we really won’t know the truth until things become official.

* At the same time, Kevin Mayer, TikTok’s American CEO who joined the company four months ago, has just resigned from his new role. One can imagine that being TikTok’s CEO right now is probably one of the world’s toughest jobs. Again, we will never know the full story as major executive departures like this are usually the result of several internal factors unknown to the public. I am still bullish on TikTok. Amidst all the commotion and drama, the underlying product and audience are still unprecedented successes and that won’t die easily.

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 Autonomous Cargo Drones Fill the Skies ⛅️

* If you happened to be standing in a field in northwest rural China last Friday and looked up into the sky, you would have seen China’s largest delivery company SF Holdings complete its very first autonomous cargo drone flight. This was a major milestone in unmanned air drones operating with major capacity. The SF Holdings cargo drone was said to be able to fly with a payload of up to 1.5 tonnes. The target markets for these new drones are rural areas in China that struggle to receive deliveries given their geography.

* In the US, Amazon has presented their own delivery drones that have the ability to transport packages weighing 2 kilograms across a distance up to 24 kilometres. Other major drone companies in the US include Sabrewing, Nautilus, and Wing, a subsidiary of Alphabet. Drone technology will likely become a major part of logistics and supply chains for countries across the world and the potential market size is pretty huge. There’s enough room for many big drone companies, but the leading technology will likely come from China and America.

Hong Kong Businesses Explore Virtual Solutions 💡

* Tourism, Restaurants, and Retail are some of the industries most affected by Covid. In the first half of 2020, visitor arrivals to Hong Kong were down 90% from the previous year. To survive and hopefully thrive through this time period, many of these tourism-related businesses realise that they need to explore digital business models. Cosmetics brand Sasa started livestreaming to Mainland Chinese customers in order to sell their products online instead of relying on tourists visiting from Mainland China. As another example, health and food company AbouThai started hosting online livestreams to sell their products.

* Shifting your traditionally physical business online isn’t easy for everyone. For some people, this requires completely new skillsets that might not currently exist amongst their employees. Businesses that understand how to sell their products online will have a competitive advantage in a difficult economy. And for the labour market, digital marketing skills should become even more valuable.

China Opens Doors to More Europeans ✈️

* China has eased their travel restrictions on visitors coming from 36 European countries. Earlier this year, almost all foreigners were restricted from entering China, even if they had work permits and family in the country. Travellers to China still have to go through a 14-day quarantine and take mandatory Covid tests and to be specific, it’s Europeans with a valid residence permit who can now apply for a visa to enter China. So there is still a long way to go before travel is normalised.

* This incremental step in the direction of progress indicates China’s slow, but steady confidence in the country’s recovery. The idea of easing travel restrictions on a country-by-country basis is something we will start seeing more often. Here in New Zealand, the government is discussing the idea of soon creating travel bubbles — allowing people from specific, low Covid-risk countries to eventually travel to New Zealand. For China, I’m sure the government is making very deliberate steps to decide which countries to open up travel bubbles with. The health of your country will become a more important factor in your ability to travel around the world.

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! ⚡️

Ant Group Makes It Official, Time For An IPO 📈

* This week, Ant Group filed for its initial public offerings (IPOs) in Hong Kong and Shanghai, with a goal to raise $20 Billion and an estimated company valuation of over $200 Billion. This will make Ant the biggest IPO of the year and likely the biggest IPO of all time. Ant Group owns Alipay, a fintech and digital payments platform that has over one billion users, $15 Trillion in transactions processed last year, and $10 Billion in revenue throughout H1 2020. It’s pretty much the premier fintech company of China and possibly the whole world.

* Funnily enough, the previous record holder for ‘world’s biggest IPO’ was Alibaba, the company founded by Jack Ma that also spun out Ant Group. Unlike Alibaba however, Ant has decided not to list on a US Stock Exchange. Ant is a prime example of a company that is literally one of the world’s biggest and influential, but most people in the West are unaware of what the company does. This cultural blindspot places Ant in a position to take advantage of the world’s fastest growing emerging markets, which are in places like Asia.

Chinese Reality TV Returns Post-Covid 🥤

* A popular type of program in China is Reality TV shows. While the regular TV season was delayed because of the coronavirus, things are now relatively back to normal. With this reopening comes new opportunity for brands sponsoring these TV shows. International beverage brands (alcoholic and non-alcoholic) are the most popular sponsors of Chinese reality TV, including Pepsi, Coca-Cola and Absolut Vodka. Major luxury automotive brands like Mercedes-Benz and BMW are also sponsoring China’s biggest reality TV shows.

* I’m currently watching Fourtry, which is a popular Chinese reality TV show about celebrities who try to create a fashion boutique in Tokyo. Compared to Western reality TV shows, Fourtry strikes me as more in-your-face with the sponsorship, video production, and commercialisation. Having worked in marketing, advertising, and media across several continents, I have noticed the cultural differences in how customers respond to advertising. In China, brand partnerships and sponsorships seem more direct and explicitly selling.

China Mobile’s Strategy for Gen-Z 🗼

* China Mobile is one of China’s largest telco companies and their new product M-Zone is geared towards Gen Z audiences. To appeal to this target audience, M-Zone has been promoting their 5G services and AI by partnering with streaming platform Mango TV to celebrate youth culture through interactive content. M-Zone worked with popular Chinese influencers, used virtual reality/augmented reality (VR/AR), and created tons of content they streamed across several digital platforms.

* All companies targeting younger audiences next to adjust their marketing strategy. Whether in the East or West, reaching younger audiences requires your brand to understand the latest technology, influencers, and interactivity. China Mobile’s latest campaign for M-Zone is very futuristic and embraces some of these cutting-edge trends for the sake of relating to younger audiences. It’s pretty forward thinking and I don’t see this type of marketing from Western telcos.

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 Purchase Potential of Female Consumers in China 👚

* There’s a term in China called “Little Sisters,” which refers to Chinese women between the ages of 20 and 40, a key group of consumer spending. For companies looking to advertise to Chinese consumers, the ‘Little Sister’ target audience is becoming even more important. In Mainland China, women make three out of four purchases. There have been several hundred-million dollar mergers and acquisitions in China over the last few months in industries such as personal care, baby care, and health care. The people behind these deals were all targeting female Chinese consumers.

* As a sub-segment of the ‘sheconomy,’ the Chinese cosmetics industry has become the second largest in the world after the United States. In Q2 2020, cosmetic sales in China increased 16 percent year-on-year. The recovery of cosmetics post-Covid has been very rapid compared to other industries. In the West, consumer goods companies put a lot of effort into positioning their marketing towards female consumers. The same thing is now happening in China as we see the rise of ‘Little Sisters.’

Rise of the East Asia Super League 🏀

* The East Asia Super League (EASL) is a new professional basketball league that will feature teams from countries across Asia, including China, Japan, Korea and the Philippines. The inaugural season will begin in October 2021 and the league has a ten-year agreement with the International Basketball Federation (FIBA). The first season will have eight teams and the plan is to increase to sixteen teams by 2023.

* Asia is the biggest untapped market for Western sports leagues. With over two billion potential sports fans in Asia, pretty much every sports league from European football to American basketball makes Asia their main international priority. While it’s interesting to look at what the Premier League and NBA are doing in Asia, some of the most exciting developments are sports leagues native to Asia. Another example apart from the EASL is One Championship, which has become one of the fastest growing and biggest sports properties in the world. One Championship is an eight-year-old mixed martial arts sports organisation based in Singapore and operating across several Asian countries. While you could call One Championship something like ‘the UFC of Asia,’ One has actually overtaken the UFC in global online viewership numbers.

The Best Performing Stock Market in Asia 🇵🇰

* What is currently the best performing stock market in Asia? Right now, that title belongs to Pakistan, whose KSE-100 Index has rebounded with a 36% increase since March. While the country is still suffering many covid-related effects in its economy and the overall health of society, there are a few investment funds from places like Sweden and Dubai who have made early, contrarian bets on Pakistan. It’s too early to draw long-term conclusions from this, but Pakistan’s rebounding stock market should bring at least a moment of positivity and pride.

* I’ve personally visited Pakistan three times and worked with organisations there ranging from small startups to universities to multinational conglomerates. For years I have been saying that Pakistan is the most underrated emerging market and perhaps most misunderstood country in the world. Over the last couple of years, the country has made both critical progress and large missteps. In the time of covid, I’m cautiously short-term optimistic and definitely long-term bullish.

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! ⚡️

Hong Kong Stock Exchange Is Looking for More 🏦

* Given Hong Kong’s reputation as a global financial center, the Hong Kong Stock Exchange is one of the world’s most important stock exchanges. In terms of total IPO fundraising size, Hong Kong has been world’s biggest stock exchange six out of the last ten years, capitalising on China’s growth. For mainland Chinese companies, listing on the Hong Kong Stock Exchange is an attractive, obvious option.

* This KrAsia interview with Christina Bao, Head of Global Issuer Services at HKEX (Hong Kong Exchanges and Clearing Limited), highlights some of the hot topics being discussed regarding the role of the Hong Kong Stock Exchange. Because of US-China political tension, many Chinese companies are choosing to delist from the US and instead list in Hong Kong. On top of that, HKEX is making major marketing efforts to attract Southeast Asian companies to list in Hong Kong. The next generation of Southeast Asian tech companies will be an attractive target for all stock exchanges around the world, and the Hong Kong Stock Exchange might have the best chance of being the home of their new listings.

Luxury Consumption in Post-Covid Southeast Asia 💅

* Many Southeast Asian countries continue to suffer from the coronavirus, but there’s a surprising new trend around the demand for luxury goods in this region. A recent study by iPrice Group has recorded significant increases in the amount of Google Searches across Southeast Asia for luxury brands like Chanel and Louis Vuitton. Increases in search volume have also been recorded for luxury watches like Rolex and sportswear brands like Adidas/Yeezy. This study doesn’t explain why, but that leaves us with some interesting hypotheses.

* Are people searching for more luxury goods to take advantage of Covid-related sales and discounts? Are people searching because more overall commerce is happening online? Another concept people are describing is “revenge spending,” when people decide to spend even more money after a significant period of deprived demand because of the coronavirus. Considering the current boom in sales in China as the economy reopens, you can definitely see examples of revenge spending. Whatever the reason behind these increases in luxury search volume in Southeast Asia, this makes it even more important for your brand to have a high-quality online presence. Your ‘virtual’ storefront might matter more than your physical storefront.

Alibaba Clamps Down on Fake University Admission Letters 🎓

* Before getting shut down by Alibaba’s security team, merchants on Alibaba’s online marketplace Taobao were selling faked university admission letters for as low as $28. The results of the Gaokao, China’s national college admission exam, were released recently—essentially deciding where millions of high school students around the country would be attending university. There was a high profile case in local news describing a high school student who got caught with a fake admissions letter to prestigious Tsinghua University.

* Taobao is huge, with 874 Million monthly active users. On such a big marketplace, you can expect that there will be a certain percentage of fake, counterfeit, or illegal goods. There is an entire category of ‘informal services’ people can trade on the platform, and these fake university degrees are just one example out of many. With new demand for new industries resulting from the coronavirus, I’m sure there will be many new hustles people will sell as an informal service on Taobao. Overall, Alibaba is still thriving despite the coronavirus, with increased revenue and user engagement.

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 spent the last week in the city of Napier, here in New Zealand.

New Zealand is in this surreal, dreamlike situation. On August 9, the Ministry of Health declared 100 consecutive days without local coronavirus cases. The only cases in the country came from people traveling into New Zealand from other countries.

However, a new cluster of cases was discovered a week ago and the city of Auckland went into lockdown with a Level 3 alert. The rest of the country is on Level 2, which means that most places are still open—schools, businesses, restaurants, and hotels.

While staying at my hotel in Napier, a hotel employee told me that things were understandably slower because of the coronavirus. Typically, there would be busloads of Chinese tourists coming to stay at the hotel but now there are none.

Tourism is New Zealand’s biggest export industry, contributing to 20% of total exports. The biggest source of New Zealand tourists come from Australia, followed by China, followed by the US.

To deal with this gap in tourists because of the coronavirus, New Zealand’s travel industry had tried using technology to solve their challenges.

In June, Tourism New Zealand hosted a two-hour livestream of penguins hanging around the Christchurch International Antarctic Centre. The livestream was hosted on Chinese app Weibo and 1.6 Million viewers tuned in to see the penguins.

Two professional travel influencers Xiaomo and Ahou have partnered with Tourism New Zealand on a series of New Zealand-themed livestreams on Weibo. Travel companies all around the world are experimenting with livestreaming.

The purpose of these livestreams is to entertainment, inform, and hopefully make a sale. You could reach more Chinese people virtually vs. physically. So could you also make more money virtually vs. physically?

Last year, New Zealand Tourism partnered with Viya, China’s biggest livestreamer, who flew to Auckland to showcase a host of local goods. Within a four hour livestream where she reached 10 Million Chinese viewers, Viya sold $30 Million worth of New Zealand products including skin cream, honey, and cereal.

And China is New Zealand’s largest trade partner. In 2008, New Zealand became the first OECD country to sign a free trade agreement with China, which still exists today. On top of tourism, China receives goods from New Zealand in industries such as dairy, wood, and meat.

The interests of this small island nation may not create earthquakes on the global stage, but it can carve out a profitable niche for buyers and tourists from China. While New Zealand can’t welcome Chinese tourists, the internet still allows you to connect with Chinese buyers.

In the meantime, hotels around the country will have to rely on domestic tourism.

This Week’s Most Popular Update:

* Update #52 - Unicorns, Joyy, and Disney Indonesia

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! ⚡️

Sea Group is Booming 📈

* As a combination of e-commerce, gaming, and financial services, Sea Group is one of the best positioned companies in Asia to benefit from the coronavirus. They just reported their Q2 earnings, where they experienced 93% year-on-year revenue growth. Free Fire, one of their mobile games, reached 100 Million monthly active users and became the highest grossing mobile game in Latin America and Southeast Asia.

* Their e-commerce app Shopee competes directly with Alibaba/Rocket Internet backed Lazada and is in a strong position right now. Shopee was the number one ranked app in Southeast Asia on Android, in terms of downloads, monthly active users, and time spent. In Indonesia, Shopee’s largest market, Shopee experienced 130% year-on-year revenue growth. SeaMoney, Sea’s digital payments arm, added five million new users over the last quarter. Sea’s areas of focus (gaming, e-commerce, and financial services), are quite literally some of the best bets you could make in a post-covid world. From their Q2 results, it shows.

Bigo Moves From Hong Kong to Singapore 🇸🇬

* Joyy Group, a competitor to TikTok in the social/video/mobile app space, operates a group of apps including livestreaming app Bigo Live and short video app Likee. Both of these apps were part of the recent Indian ban of several Chinese mobile apps. While the scrutiny being faced by Joyy is a lot less than TikTok/Bytedance, this Chinese tech company still realises the importance of optics and positioning in the current business environment.

* Joyy has recently moved its servers from Hong Kong to Singapore, in an attempt to distance themselves from Chinese association. Bigo was originally founded in Singapore before being bought by the Chinese Joyy Group, and 91% of their 460 Million monthly active users are in international markets outside of China. Considering their revenue and user base is so heavily weighted internationally, it’s critical that Joyy keeps governments happy. Otherwise, they could start facing similar threats as TikTok.

Chinese Electric Scooters, With the Help of Vin Diesel 🏍

* Yadea Group Holdings is a Chinese electric scooter company currently worth around $22 Billion. Due to the coronavirus, demand for electric scooters has been increasing and Yadea has seen 91% year-on-year growth in H1 revenue. The company sells 162 electric scooter models and exports around the world. American actor Vin Diesel, best known for his roles in the Fast & Furious film series, is one of the main faces behind the Yadea brand.

* 90% of Yadea’s revenue still comes from Mainland China, so employing an international Western star like Vin Diesel might help increase their brand’s appeal outside of China. Electric vehicles, and in this specific case the subsegment of electric scooters, is a rapidly growing market. 30% of mopeds, scooters, and motorcycles were electric in 2019, and that number is expected to reach 77% by 2040. Consumer behaviour in China, which soon may translate around the world, has influenced people to turn to electric scooters for economic, environmental, and safety reasons.

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