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! ⚡️

Real Names Required 🗣

* The Chinese government has created a new regulation that will require anyone playing a video game to log in with their real name, part of a state-run authentication system that will be ready by September. Tencent and Netease have already put in advanced verification programs, including facial recognition technology. In 2019, the Chinese government put restrictions on minors, limiting how much time and money people under 18 can spend on video games. There are also regulations on the level of violence and controversial content allowed in video game content. Despite these new actions by the government, I’m sure there will be loopholes or ways kids can get around the rules. There are many well-documented tactics that Chinese gamer kids already use — like fake ids, using parent’s accounts, and impersonating grandparents.

* The way your identity is represented on online platforms directly impacts your behaviour. Using a pseudonym on a platform like Reddit or Discord vs. your real name on a platform like Facebook can change user authenticity, civility of discourse, and more. Generally speaking, having people use their real names encourages more positive behaviour. Back in 2012, Youtube started to encourage users to use their real names to improve behaviour on the platform, especially within the often toxic comments section of a video. So even if minors can get around this new Chinese regulation, an added consequence of real names might be a more positive social environment for gamers.

Southeast Asian Startup Funding 💰

* Despite challenges from the coronavirus, startups in Southeast Asia saw an increase in funding in Q2 between April to June. DealStreetAsia compiled data showing that the total value of startup fundraising deals has gone up 91% this year to $2.7 Billion. The number of transactions is also up year-on-year from 116 in Q2 2019 to 184 in Q2 2020. The biggest three startup verticals to receive funding were e-commerce, logistics, and fintech and the biggest deal was $500 Million invested into Indonesian e-commerce startup Tokopedia.

* This should paint an optimistic picture for startups in Southeast Asia. It’s been a tough year for everyone, and I’ve spoken to several founders across the US, Europe, and Asia who have struggled to fundraise in the current environment. Some of these successful fundraises in Southeast Asia could also be attributed to deals that were already being discussed before Covid. You can also see where people are betting on growth because of the coronavirus: e-commerce, logistics and fintech. This latest data from DealStreetAsia is encouraging, but there’s still a lot of economic uncertainty and pain we will likely experience in Q3/Q4.

The Story of Secretlab 🕹

* In case you missed my interview with Andrew Baisley of Tech in Asia Studios, he mentioned an interesting Singaporean startup called Secretlab. This KrAsia profile explains their incredible story. Ian Ang and Alaric Choo were both professional e-sports athletes and became close friends after playing many games together like Starcraft. In 2014, they founded Secretlab to scratch their own itch. As professional gamers, they spent hours sitting in a chair playing games and never found appropriate ergonomic support. So they decided to build their own high-quality chair for professional gamers.

* Since then, their chair has been used in some of the world’s biggest gaming championships, their partners include Warner Bros, HBO, and Blizzard, and their company is worth over $200 Million. They manufacture over 500,000 chairs a year and over 50% of their sales comes from North America. With coronavirus forcing a larger percentage of the world’s population to work from home, Secretlab also saw a huge increase in demand for their chairs. It’s a great Singaporean success story that has found international success.

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! ⚡️

TikTok’s Latest Buyer…Microsoft 🤝

* The buzz around TikTok has been the world’s most dramatic technology story over the past few months. As I have written before, it’s one of the most visible examples of a metaphorical East West Hurricane, with Chinese-owned TikTok facing major challenges with doing business in the West. I don’t want to write about it everyday but the TikTok news over the last few days is worth bringing up.

* Microsoft has released official statements about their intention to acquire TikTok, with the goal to complete acquisition discussions no later than September 15, 2020. This includes TikTok’s operations in several Western countries including the US, Canada, Australia, and New Zealand. Microsoft is primarily a B2B company that makes money by selling enterprise software. They own B2C products like Xbox and Minecraft, but acquiring TikTok would be the biggest, most drastic move to own something consumer-facing.

* Donald Trump will have some level of involvement in these talks, which could influence everything from the sale price to conditions of the deal. There is still a chance that major events could change TikTok’s future over the coming weeks. Tech M&A can be very slippery. In 2014, Tencent was about to acquire WhatsApp but Facebook swooped in while Tencent’s CEO Pony Ma was having back surgery. Mark Zuckerberg doubled Tencent’s offer and acquired WhatsApp for $19 Billion. I think TikTok does have a future in the West, but many more details need to be worked out.

Korean Reality TV for Gamers 🏅

* There is a new show coming out on Korean TV called “LoL The Next.” LoL refers to League of Legends, one of the world’s biggest video games used in e-sports competitions. Last year, the League of Legends World Championship reached 100 million viewers, the biggest broadcast ever for any e-sports event. This new TV series is a creative, e-sports spin on musical audition franchises like the X-Factor, Got Talent, and Idol series. The program serves as an audition show for aspiring e-sports athletes to break into a professional League of Legends team.

* This is the first show of its kind in the world, and it makes sense that it comes from Korea as the country has historically been the global leader in e-sports. I remember going to Seoul on vacation back in 2009. Our hotel had a TV channel completely dedicated to gaming that would broadcast shows like competitive Starcraft matches. As e-sports (and gaming more broadly) continues to grow, more adjacent product and content categories will be created, like e-sports reality TV shows.

The Asian Market for Luxury 👜

* I have written previously about the importance of the Chinese market to the global Luxury industry. Chinese consumers make up one-third of all luxury sales and are growing. In the time of coronavirus and worldwide economic downturn, however, buying luxury goods is probably not your number one priority. Several luxury fashion brands like LVMH, Prada, and Hermès recently reported their earnings and overall revenue fell by double-digits for every single brand.

* Was there any silver lining to these results? Yes—China. Despite the fact that overall revenue is down, sales in Mainland China are recovering at a much faster pace than the rest of the world. Prada’s net revenue has fallen 40 percent year-on-year, but China sales have had grown at high double-digits over the last three months. The situation is similar for LVMH, Hermès, and Burberry who have also found growth in other Asian markets like South Korea. The state of the overall global luxury industry is still dire, but economic bright spots in China might be a trend for all international retail 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

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! ⚡️

TikTok’s Latest Moves 👀

* TikTok’s executive leadership and investors are exploring many options to deal with the intense scrutiny they are facing. To avoid the most damaging scenario of being completely banned from the US, a group of US investors are looking into acquiring a stake in TikTok to make the company more ‘American-owned’. This should hopefully satisfy the Committee on Foreign Investment in the United States (CFIUS), which reviews business deals that pose potential national security risks involving foreign entities.

* Reuters reports that TikTok is looking to be sold at a price that values the company at $50 Billion. This places TikTok as significantly more valuable than Snap, which is a publicly traded company currently at a $33 Billion market cap. Twitter has a market cap of $28 Billion and Pinterest has a market cap of $15 Billion. As a reminder, TikTok is owned by the Chinese tech holding company Bytedance. Several major US investors like Sequoia and General Atlantic already own major shares in Bytedance.

* Satisfying the US Government should also satisfy other governments, as TikTok is also facing a potential ban in Japan. Kevin Mayer, the new American CEO of TikTok, has been making more public announcements defending TikTok, revealing more transparency around the algorithm, and encouraging more dialogue. As a public relations strategy, it’s important for Kevin Mayer to become more friendly with Western legislators who have the power to ban TikTok. Right now, Bytedance’s Chinese CEO Zhang Yiming is a less familiar person to Western media, which makes him and the company an easier target.

Huawei is the World’s Number One ☝️

* For the first time ever, Huawei has been named the number one smartphone maker in the world, measured by number of smartphones shipped in Q2 2020. For the last nine years, Samsung and Apple have dominated that number one spot. Many analysts point to China’s strong domestic market for smartphones as the reason behind Huawei’s success. While the coronavirus has hit Samsung and Apple’s revenue, Huawei has benefitted from China’s economy recovering at a faster pace than most other countries in the world. Compared to Samsung and Apple, 70% of Huawei’s sales are concentrated in the Chinese market.

* Whatever your thoughts on the company, this is still very impressive considering all the recent controversy surrounding Huawei, including recently getting banned from the UK and US. You could think of Huawei’s struggles and success as a metaphor for Chinese resilience and inevitable growth in spite of major challenges. To me, it’s also a crazy reminder that the Chinese market is literally so damn big that you could only serve Chinese customers and still be the best-selling brand in the world. Fun fact—another example of this is Kweichow Moutai, which is the word’s biggest alcohol brand and does less than 10% of sales outside of China.

International Students ‘Go Local’ 🎓

* A couple of weeks ago, the US government revoked an order that would have forced international students to leave the country if their school hosted only virtual classes because of the coronavirus. While this allowed many international students to breathe a sigh of relief, they still have to deal with travel restrictions that create a potentially downgraded university experience.

* New York University (NYU) has created a new ‘Go Local’ program that allows students to attend classes at NYU’s satellite campuses in either Abu Dhabi or Shanghai. Thousands of students who would otherwise be at NYU’s campus in New York will now have to change their plans and decide whether the Go Local option works for them. Or alternatively, students can still take virtual classes from the main NYU campus.

* Other big schools like Duke, Cornell, Rutgers and Tulane are creating similar programs with their own respective Chinese partner universities. Some Chinese students at smaller schools like Bates and Mount Holyoke have petitioned to create these kinds of programs but the school administration has been unwilling (or maybe unable) to make this happen. It’s too early to tell the long-term effects on international student enrolment in American universities, but these early experiments should provide us with real data very soon.

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 Listings and Delistings 💵

* Earlier this year, the US government proposed legislation on new auditing standards for publicly listed foreign firms, which was largely aimed at delisting Chinese companies from the NYSE and Nasdaq. While this was just one part of a broader US-China trade war, the last few months have been full of announcements of Chinese companies either planning to delist in the US or have a separate listing on the Hong Kong Stock Exchange.

* A few weeks ago, Chinese news and social media firm Sina publicly discussed a potential delisting after 20 years of trading on the Nasdaq. Sina is best known for creating Weibo, which is roughly the Chinese equivalent of Twitter. Sina was exploring an acquisition offer that valued the company at $2.7 Billion and moving the company to a new legal structure outside the US.

* This week, another major Chinese company Ctrip announced similar plans to delist from the Nasdaq and take in new investment. Ctrip is the largest online travel company in China, kind of like a Chinese version of Booking.com, and owns major European travel company Skyscanner. Ctrip has been listed on the Nasdaq since 2003 and will likely be exploring a listing on the Hong Kong Stock Exchange.

* And finally, China’s second-largest search engine Sogou has received a buyout proposal from Tencent that would take the company off the New York Stock Exchange. The delistings keep on coming.

India Explores More Bans of Foreign Entities 🛑

* The Indian government banned 59 Chinese mobile apps a couple of weeks ago. Now the government is exploring a new list of 275 Chinese apps that may potentially violate user privacy or national security. While the recent ban of 59 mobile apps included some very high profile companies like TikTok, there are still many other major Chinese companies that could be victims of this new potential ban.

* Some companies are of Chinese origin (AliExpress) and others have major Chinese ownership stakes (PUBG), which leaves a relatively wide definition of country that fits under the potential ban. Whether this next round of banning goes ahead or not, operating under this level of uncertainty provides huge challenges for any Chinese company in India.

Victoria Beckham Looks to China 🇨🇳

* Victoria Beckham is the latest Western celebrity to dive into Chinese e-commerce. Victoria Beckham is a former member of the 1990s pop group the Spice Girls and is married to world famous football player David Beckham. She is best known today as a fashion designer and recently launched a new brand called Victoria Beckham Beauty.

* Victoria Beckham Beauty just launched on Alibaba’s Tmall Global e-commerce site. Victoria Beckham hosted a launch event that included a livestream with Viya, one of China’s biggest livestreamers, and a set of specific skincare products exclusive to the Chinese market. This market entry playbook should work well for any Western celebrity with clout and a brand to sell. Dive into Tmall, partner with a local Chinese KOL for a livestream, and invest in managing your online community of Chinese fans.

“It’s an amazing, blow-your-mind trend. The livestreaming phenomenon is indicative of the pace of development and innovation coming out of China. It’s absolutely brilliant. On the practical side, it promotes education and gives brands a way to inform consumers about products. At the same time, it’s riveting entertainment that creates a great deal of engagement and excitement about products.” - Sarah Creal, CEO of Victoria Beckham Beauty

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! ⚡️

Convenience Stores in South East Asia 🏪

* South East Asia (SEA) is an incredibly exciting and dynamic part of Asia. But when it comes to convenience stores, they are behind their counterparts in places like China and Japan, as outlined in this KrAsia article. In China, convenience stores widely accept digital payments (through Alipay and WeChat Pay), are incorporating more automation, and use sophisticated algorithms to deal with inventory. Some of these new concepts, like the three-year-old Chinese automated convenience store chain Bianlifeng and JD.com’s X-Mart, are a striking contrast to SEA.

* In SEA, 47% of people don’t have a bank account and a recent Nielsen study found that SEA countries do not associate online shopping and digital payments with convenience as much as people in other Asian countries. It’s hard to have digital payments when so much of society still relies on cash. Some specific countries are seeing increases in mobile payments, as Vietnamese consumers using mobile payments went from 37% to 69% in 2019. JD.com is trialing their first X-Mart outside of China by opening an automated retail concept store in Jakarta. There is also a cashless offline store startup in Indonesia called Blibli who have launched something similar. It’s important to realise how different regions in Asia approach retail based on both technology infrastructure and local culture.

Food Delivery Companies Cope With New Reality 🍳

* Food delivery companies are figuring out new ways to deal with the constantly evolving coronavirus situation, both in terms of what their customers want and what the law permits. In Hong Kong, the government has announced the banning of dine-in service at restaurants from July 29. Food delivery company Deliveroo has responded by allowing customers to order breakfast, expanding the selection of available delivery and pickup food locations, and introducing new customer discounts to encourage purchases.

* One of Deliveroo’s rivals is GrabFood—which is part of the ride hailing company Grab. GrabFood launched a new cashback program this week. When users place orders from their favourite restaurants, they will receive an 8% cashback if they are new users or a 2% cashback if they are existing users. This should encourage more usage of Grabfood, especially in an economically turbulent time where people are looking for value and discounts in anything they purchase.

Apple’s New iPhone Assembly in India 🇮🇳

* While operating in a country that has just banned dozens of Chinese apps, Apple is doing a good job of demonstrating added value to India. Foxconn, Apple’s iPhone manufacturer, has started assembling iPhone 11s at a plant in Chennai, India. Historically, iPhones have been almost exclusively assembled in China, while Apple’s other smartphone rivals like Xiaomi, Samsung, and Oppo are already assembling phones locally in India.

* Tim Cook, Apple CEO, has also said that Apple plans to open up their first retail store in India next year. Part of the reason behind these developments is also to navigate India’s already complex regulation regarding foreign companies, whether Chinese or otherwise. Under current Indian regulation, foreign direct investment in retail must include a percentage of products locally produced in India. So by assembling iPhones in India, Apple is able to avoid a 20% import duty on imported electronics and qualify to open Apple retail stores.

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! ⚡️

Trends in the Male Beauty Industry 💆‍♂️

* The Male Beauty industry is getting more and more prominent every year, with some reporting that the men’s personal care market will reach $166 Billion globally by 2022. China is one of the world’s leaders in male beauty and actually is the biggest market in the world for men’s facial moisturiser use, with 65% of consumers using the product regularly. 96% of Chinese men have purchased cosmetics over the previous year and sales volume of men’s skincare products have doubled over the same time period.

* Classic stereotypes around what beauty means for men and women is changing. Many Chinese brands have adjusted their marketing to break traditional cultural taboos about male personal care and several startup brands have carved out market share in the male beauty niche. On social media like Weibo, Douyin, and Kuaishou, male beauty tutorials and videos about skincare routines are becoming more popular. This growing consumer category in China is following other Asian countries like South Korea and Japan, where male beauty products are an even bigger part of society.

The Latest Developments from Huawei India 📱

* Huawei is one of the many Chinese companies that will suffer from the recent tensions between China and India. This week, Huawei announced that they would be laying off 60-70% of their staff in India and cutting their 2020 revenue targets by 50%. Their revenue projection is going from $700-800 Million this year to $350-500 Million. Huawei’s peak revenue in India was $1.2 Billion in 2017.

* This situation is relevant to the other Chinese smartphone makers who are also heavily invested in India such as Oppo, Vivo, and Xiaomi. They are also suffering from the China-India political tensions and this leaves room for other companies to capture market share, like Samsung or Ericsson. The Indian government has also banned both Huawei and ZTE from supplying telecoms infrastructure for the country. ZTE has also announced a series of recent layoffs. While this isn’t the first time Chinese companies have had to deal with political tension, it still might be the most dire situation for them if you include additional consequences from the coronavirus.

Amazon Showcases Contribution to Indian Exports 🇮🇳

* Amazon India launched its export business in 2015 to allow SMEs to sell e-commerce exports, with the goal to reach $10 Billion in export revenue by 2025. A lot of these sales come from major sales holidays in the US like Black Friday or Cyber Monday. Given the current political climate, it’s in the best interests of any foreign company to emphasise all the contributions they are making to the Indian economy.

* While India actually showed negative growth in exports in Q1 of this year, many government officials are describing e-commerce marketplaces as a way to boost India’s ability to export goods globally. The export business has also been a priority for Flipkart, Amazon’s primary rival in India. Last week, Amazon said that their export program has allowed 60,000 Indian exporters to sell $2 Billion worth of Indian products to international customers over the previous two years. And I’m sure they will be highlighting even more progress as time goes on.

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! ⚡️

Kuaishou and Tencent are Latest Livestreaming Darlings 👾

* Kuaishou, the Chinese short-form mobile video app, has revealed their latest data around active users and engagement. They announced that they gained 70 Million more daily active users in the first half of 2020. At the end of last year, Kauishou only had 100 Million users, meaning the company has grown 70% over six months. One of the main reasons people use Kuaishou is for livestreaming, which furthers the narrative that livestreaming is truly exploding this year because of the coronavirus. Kuaishou’s biggest rival is likely Douyin, the Chinese equivalent of TikTok owned by same parent company Bytedance. Douyin and other rivals like Douyu, Huya, and Joyy also experienced strong growth this year.

* Tencent, the Chinese tech giant that is technically the world’s largest gaming company, has been beta testing a gaming livestreaming platform called Trovo Live. This is seen as a direct competitor to the Amazon-owned livestreaming platform Twitch. Trovo also announced a $30 Million partnership fund this month to help support creators on their platform. It’s an interesting investment for Tencent, as they are also investors in Douyu and Huya. In recent weeks, Microsoft has shut down their gaming livestreaming platform Mixer and Twitch has been hit by several sexual harassment allegations. Facebook Gaming has benefitted the most from these developments with creators migrating to their platform instead. So Livestreaming, whether for e-commerce, gaming or anything else, continues to grow.

Premier League Matches Taken Down in China ⚽️

* The final match of the English Premier League on July 22 between Liverpool and Chelsea was taken off CCTV, China’s largest state-run broadcaster. The match was demoted to a lesser known channel and it’s unclear whether future Premier League matches will still be shown on CCTV. This likely results from the UK government’s recent decision to ban Huawei from building 5G infrastructure as part of the ongoing trade war.

* In terms of media rights, China is the Premier League’s second largest international market and a major strategic priority. The deal between the Premier League and their Chinese broadcast partner is worth $700 Million over a three-year period. There is a lot of hype for all sports leagues, especially European football leagues, to see China as their most valuable, under-tapped market. While foreign leagues can put together detailed and ambitious plans for China, political machination always have to be considered. Just ask the NBA.

The Opportunity for Indian Family Offices 🏦

* After the Indian government’s recent bans of Chinese apps and new regulations on foreign investment, many Chinese investors are unsure how to proceed in the Indian market. In this vacuum, Indian family offices will play a key role. A report found that India had 150,000 ultra-high net worth (UHNW) families in 2018 with a cumulative net worth of $2 Trillion. That number is expected to rise to 400,000 families with a cumulative net worth of $5 Trillion by 2025. Family offices are usually professionally run investment funds set up to manage a family’s wealth.

* Across the world, family offices have been getting more interested in tech startup investments and this KrAsia article interviews several Indian investors for their first hand perspective on the topic. Family offices have historically stuck to more traditional investments like real estate until a 2012 regulation allowed Indian private equity and venture capital to raise funds more easily from Indian investors. This paired with the maturing Indian tech ecosystem and now the tensions with China leaves a major opportunity for family offices to make more direct investments into the new high-risk/high-reward ‘asset class’ of tech startups. No matter where the money is coming from, this is good news for any Indian startup knowing that their pool of potential investors is increasing.

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

Earlier this week, my friend Simon Andrews and I hosted a webinar on how brands should be approaching TikTok as a marketing channel.

We were fortunate to have David Hoctor (Brand Partnerships EMEA, TikTok) and Pankaj Duhan (Marketing Director, RB South Asia) join us and provide their perspective on TikTok.

Pankaj was responsible for orchestrating the biggest ever TikTok ad campaign, a multi-market campaign across Asia by the disinfectant/cleaning supply brand Dettol. Pankaj spent a lot of time telling us how they came up with the big idea and how he was very satisfied with the campaign results.

Dettol worked with a handful of local TikTok creators to do a ‘branded hashtag challenge,’ which was a song and dance routine that encouraged healthy hand washing behaviour. The TikTok creators first did their own videos of the #HandWashChallenge and then encouraged users to create and share their own versions.

Even though the campaign happened in March, you can still look up the #HandWashChallenge page on TikTok and see that the challenge has accumulated 124 Billion Views.

Can you please say that to yourself out loud? 124 BILLION views. The scale is insane.

While many of us on the webinar were reflecting in awe at the results, what happened next completely changed the tone of the discussion.

Inevitably, someone then asked David about the “Chinese elephant in the room;” TikTok being banned in India and what might happen in other markets like the US.

If this was a real-life workshop and not a Zoom webinar, I’m sure the attendees would have heard my heart start beating faster and my palms begin to sweat. The last thing I wanted to do was create an unnecessarily political discussion or make anyone attending the webinar feel uncomfortable.

Thankfully, all my fears were assuaged by what happened next…

David answered the question with exceptional professionalism. His answer was incredibly comprehensive, pragmatic and in my opinion very impressive.

The underlying message we all understood was that whatever happens next is in the hands of government and no one in our webinar could change that.

Pre-emptive disclosure: David (from TikTok) and I actually used to work together on the same team at Facebook.

Putting aside politically-driven decisions around technology, it’s important to point out that this example of TikTok creative excellence came from Asia. We’ve come to a point where Asia is the place to see not only some of the most innovative technology (like TikTok/Bytedance) but some of the most forward-thinking marketing.

When I worked at Facebook, I managed relationships with clients at a global level. A large part of my job was assessing which countries did the best or worst job for the global brand. For example, when my client was Heineken I would run data analysis, create reports, and present to global executives on how well each country was doing.

Was Heineken Mexico selling more beers through Facebook ads versus Heineken Nigeria? Which Heineken country in Europe had the most creative, award-winning ads over the last quarter? How well was each country around the world using the quantifiable best practices around how to buy and optimise Facebook ads?

One major insight from my five years doing this job was that innovation comes from the most unlikely places.

It usually wasn’t Heineken USA that was most creative, it was a market like Vietnam. When my client was Ford Motor Company, the most creative European markets were usually smaller ones like Portugal or Belgium. When I worked with Procter & Gamble, we looked to markets in Asia-Pacific as having the most sophisticated marketing.

And when Simon and I scoured through dozens of TikTok case studies, we found Dettol’s multi-market campaign across Asia as the perfect example.

So whatever happens to TikTok or any tech platform, the people in Asia like RB’s Pankaj Duhan will be the ones who ensure Asia remains at the frontier of marketing.

Most popular East West Hurricane post this week:

* Update #32 - Pakistan’s Bans, NBA’s Masks, and China’s Luxury Market

Good media I have consumed recently:

* CNBC is reporting that TikTok is poaching many Facebook and Google employees. To me, that’s one of the most important signs related to the future health of a company. A mass exodus of Google employees to start working at Facebook preceded one of the company’s greatest periods of growth.

* Scott Galloway’s latest No Mercy/No Malice article ‘Fire & Fawning’ has him posing hypothetical questions to the CEOs of Amazon, Apple, Google, and Facebook who are set to testify in front of US House Judiciary Antitrust Subcommittee. The questions are tough and some of the best framing I’ve ever heard for tech executives.

* TikTok launches 200 million dollar fund for US creators and US investors allegedly looking to buy TikTok - both are strong examples of TikTok playing offence and defence against the recent scrutiny.

* Lauren Hallanan, an American former livestreamer in China, shares her experiences with Chinese livestreaming and if/how it could work in the West.

* My friend Simon Andrews’ newsletter is Mobile Fix. I’ve read so many tech newsletters and can honestly say this is one of the best and most underrated.

* P.S. If you are interested in watching our full TikTok webinar, you can find it here at this link. *Please do not share this widely and please reach out first if you would like to play this for any public audience.*

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 Launches New Blockchain Solution 🐜

* Ant Group, the company that runs the online payments platform for e-commerce giant Alibaba, announced the creation of a new blockchain solution this week. The product and brand is called AntChain, which is the overarching name for their blockchain software, programs, and a new workstation. The company says that over 100 million digital assets such as transaction records, copyright certificates, and property certificates are uploaded onto AntChain every day. Ant’s blockchain is an innovative decentralised, distributed database that should be able to “support digital transactions” and “reduce costs,” as per the words of Li Jieli, general manager of blockchain solutions at Ant.

* I got pretty deep into blockchain startups in 2018, perhaps too deep. While it’s fair to think that the blockchain industry has been overhyped in the last two years, the technology and benefits are real. China has the third biggest number of blockchain patents of any country in the world, behind only the U.S. and South Korea. Alipay, which is owned by Alibaba, has the most blockchain patents out of any Chinese company and the second most out of any country. So this latest AntChain initiative helps confirm that China’s blockchain industry is still making progress and still very bullish on the technology.

The New Report on China’s Movie Market 🎬

* Maoyan and iQiyi, two of China’s biggest entertainment companies in ticketing, streaming, film and more, have worked together with social media app Weibo to release a report on the state of China’s Movie Market in 2020. Their findings shed light on what has probably been the toughest six months in the history of China’s movie industry. I wrote about this struggle in an update last month, as 13,000 Chinese film and TV companies have gone out of business this year.

* This Maoyan-iQiyi-Weibo report reflects the new Chinese consumer behaviour. The percentage of people who said they are eager to return to physical cinemas has increased from 54% in February to 88% in May. More than 60% of respondents said they are willing to pay to watch movies online. Something interesting I haven’t seen before — the monthly active users (MAUs) of every online streaming service increased during Covid, but then went down in May as people in China resumed more normal working lives.

* These trends will likely be the new realities for any entertainment company, whether in the East or West. People will eventually return to cinemas and likely decrease streaming consumption from Covid-level heights, but not at the same levels pre-Covid. And this research data is specific to China, which has gone back to more ‘normal’ working life faster than most other countries in the world.

Alibaba’s New Influencer Strategy = Europe 🇪🇺

* Chinese e-commerce giant Alibaba has a specific unit called Ali Express that is targeted for international buyers and sellers. The Financial Times reports that Ali Express’s latest goal is to recruit 100,000 new content creators for e-commerce livestreaming by April of next year. The company is specifically looking to recruit people outside of China as they plan to expand their international business, especially in Europe. Right now, international sales make up only 7% of Alibaba’s total revenue and founder Jack Ma has set a goal to have international sales make up half of Alibaba’s total revenue by 2025.

* While e-commerce livestreaming has seen an unprecedented explosion of growth in China over the last year and especially during Covid, the Western world has not really embraced this new sales & marketing channel at the same level. Amazon has tried some live shopping and Instagram has created new live shopping features, so there is at least burgeoning enthusiasm from US tech companies.

* In China’s super competitive e-commerce market, Alibaba faces off against rivals like JD, Pinduoduo, Kuaishou, and Douyin for e-commerce livestreaming. If Alibaba can successfully recruit that critical mass of 100,000 foreign livestreamers, the company would be more geographically diversified than their competitors. And maybe they would bring more livestreaming to the West.

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

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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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Missfresh Raises Record-Breaking $495 Million 🛒

* Missfresh, a Chinese grocery delivery startup, has just announced a fundraising round of $495 Million, which is the single largest fundraise in China’s grocery delivery industry. The company was founded in 2014 and had received $1 Billion in funding prior to this latest round. Missfresh has 1,500 warehouses across China and 25 Million monthly active customers. They have also managed to survive a very competitive industry, with many of their also well-funded competitors collapsing over the last couple of years.

* Online groceries are one of the biggest beneficiaries of the coronavirus-enabled changes in consumer behaviour. Grocery delivery companies all around the world are benefitting from more sales with people being confined to their homes. While the funding landscape has tightened for some startups, this news demonstrates that grocery startups might now be one of the hottest targets for investors.

Cracks in Chinese E-Commerce Livestreaming 😧

* If you have been following this newsletter for a little while, you will know that I’m a big fan of e-commerce livestreaming in China. I’ve been consistently impressed by the scale of livestreaming (see examples from Austin Li and Viya) and the breadth of livestreamers (see examples from rural farmers). That’s why it’s refreshing to see new examples of livestreaming that have been considered failures.

* The Chinese celebrity Angelababy has 40 Million followers on Douyin and 103 Million followers on Weibo. She hosted her very first livestream last week on Douyin for five hours, reaching 26 Million viewers and managing around $1.8 Million in product sales. This was actually considered a failure and an embarrassment for Angelababy because the numbers were so small. Another celebrity, Xiao Shenyang collaborated with a baiju company for a livestream that only sold twenty bottles of alcohol, sixteen of which were returned the next day. Famous author Wu Xiaobo was also embarrassed by a lackluster attempt at livestreaming milk powder.

* The reality is that things are complicated. You can’t just assume success whenever trying a livestream because you have a celebrity involved. It’s still a very new concept and we don’t have years of data and best practices. When I worked at Facebook, we always used to get frustrated by clients who said ‘Facebook doesn’t work.’ Usually, the clients or their agencies weren’t running Facebook ads properly and needed more time to learn. With e-commerce livestreaming, like any new marketing channel, being an early adopter requires an agile mind, a willingness to experiment, and an acceptance that not everything will work well all the time.

Asian Fashion Weeks Plan to Return Later This Year 👗

* After many fashion industry events were postponed or cancelled over the last few months, the upcoming fashion weeks in Shanghai, Tokyo, Seoul and Beijing plan to go ahead as fully physical, real-life events. With the earliest out of those four events being Shanghai Fashion Week on October 8, the organisers feel confident enough right now to confirm the event. Attendees will still be required to go through temperature checks, wear masks, and comply with new features like lower attendance levels at the venue.

* Earlier this March, Shanghai hosted the world’s first completely online fashion week, which was done in partnership with Alibaba’s Tmall and relied heavily on livestreaming. While this event wasn’t necessarily an outstanding success, I’m sure future fashion shows will feel more comfortable integrating a mixture of physical and virtual experiences. The same can be said for major events in the West—Cannes Film Festival was completely virtual last month and San Diego Comic Con is happening virtually right now.

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