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! ⚡️

Pakistan Bans Bigo Live and PUBG, Warns TikTok 🇵🇰

* The increasingly tense relationship between politics and technology is revealing itself in other countries. Pakistan, a country of over 200 Million people that borders India, China, Afghanistan, and Iran, has recently banned the Singapore-based mobile video livestreaming app Bigo Live. The Pakistani government has accused Bigo Live of hosting “immoral, obscene, and vulgar content” on their app that could have “extremely negative effects on the society in general and youth in particular.” For similar reasons, the Pakistani government has also banned Player Unknown’s Battle Grounds, better known as PUBG, which is one of the most popular games in the world. These moves have faced criticism from internet rights groups in Pakistan.

* Before getting banned, Bigo Live was developing a strong following with Pakistan’s youth. Over 60% of Pakistan’s population is under the age of 30, which makes issues of youth content consumption a priority for the country. The Pakistani government has also publicly mentioned that TikTok is another mobile app they are considering banning for offensive content. In 2016, Pakistan’s parliament passed the Pakistan Electronic Crimes Act (PECA) and has since banned hundreds of thousands of websites in the country, including YouTube.

Branded NBA Masks Sold Across Asia 🎭

* When the coronavirus started spreading, there was a huge move to manufacture more face masks and other types of personal protective equipment (PPE). Dozens of manufacturers sprung up overnight, especially in Asia, which caused many governments to quickly set up new regulations to deal with these fly-by-night manufacturers. As the global market for face masks has stabilised over the last couple of months, you are starting to see everyone from small startup brands to designer face masks from luxury fashion brands. The sports industry has also started creating their own branded masks.

* The NBA has recently launched their officially licensed branded team face masks for the Asia-Pacific region. All proceeds from mask sales will be going to charitable organisations supporting Covid relief efforts. Asia is the fastest growing region for the NBA and is also the region that has the most cultural acceptance of face masks. If the NBA can double down on selling face masks in Asia, their most important international region, it could lead to the expansion of new Asia-specific product lines and initiatives.

‘Trapped’ Chinese Luxury Buyers 💎

* Chinese buyers make up around one third of the global luxury market, spending $111 Billion a year on luxury goods. Nearly two-thirds of that luxury shopping happens overseas, however, when Chinese buyers are visiting other countries. So with the coronavirus preventing millions of Chinese people from traveling, not only does the travel industry suffer, but the global luxury industry suffers.

* As an alternative, the second-hand luxury market in China has been increasing, while also coping with challenges around counterfeit goods. At their annual 618 sales festival this year, JD.com saw a 138% increase in year-over-year second-hand luxury sales.

* Big luxury brands are also planning to expand their range of domestic physical stores in China. Bain & Co. estimates that the percentage of Chinese luxury buying that happens domestically will increase from 30% in 2019 to 50% in 2025. Another trend has also been spotted by the luxury industry - brands like Louis Vuitton, Prada, and Balenciaga are leveraging the rise of Chinese e-commerce livestreaming and creating their own virtual storefronts and first ever livestreams this year. While the coronavirus is forcing retail to move from offline to online, perhaps luxury buying around Asia will be forced to move from international to domestic.

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’s Latest Adventures in Livestreaming, Real Estate 🏘

* E-Commerce livestreaming in China is a wild beast that has been growing steadily over the past couple of years and accelerating because of the coronavirus. Many people don’t realise that the realm of products that are sold over livestreams in China is incredibly broad. Let’s take a look at some of the latest things sold on Chinese social commerce platform Pinduoduo.

* On July 13, 600 apartments in the Chinese city of Zhongshan were sold over a four hour livestream, marking Pinduoduo’s first venture into selling real estate on their e-commerce platform. The event got 720,000 views and featured special discounts that viewers could claim if they made the purchase during the livestream. Viewers were able to place refundable deposits and then have two weeks after the livestream to visit the apartments in person. Real estate agents and property developers have been using Chinese livestreaming platforms to sell apartments since the beginning of this year and this will likely continue.

Indian Fantasy Sports Startup Dream11 Restarts $200 Million Fundraise 🏏

* Dream 11, an Indian Fantasy Sports Startup, has announced their intention to raise $200 Million on a $2 Billion valuation. The company had initially suspended the fundraise for a few weeks due to the coronavirus but has now found a new set of investors to reach their target. Dream11 is in the final stages of their restarted talks with the original investors and a set of new investors, including US private equity firm TPG, Indian private equity firm Kedaara Capital, and James Murdoch’s Lupa Systems.

* Many people are speculating how the coronavirus will change the startup funding landscape in both the short and medium term. This latest investment, after a period of pause, should inspire more confidence in the startups currently looking for investors. Also—fantasy sports, compared to many other verticals, is something that will benefit from the changes in consumer behaviour thanks to the coronavirus. The Indian online gaming industry, under which fantasy sports would be categorised, is expected to nearly triple in size over the next four years.

Positive Updates for China’s Film Industry 🎬

* The film industry has been hit pretty hard by the coronavirus. As I wrote in a previous update, 13,000 Chinese film and TV companies have gone out of business this year. Cinemas were briefly reopened in March, but then shut down again when cases started rising. There may be a silver lining, however. The China Film Association has just announced that cinemas in “low-risk” areas could now begin reopening as of this week.

* Under the “low-risk” definition, the vast majority of cities in China would qualify as fitting within this criteria. There are additional requirements to the reopening, as theatres can only operate at around 30% seating capacity. Customers will have their temperatures taken before entering and wearing masks will be mandatory for anyone in the theatre. Perhaps the most devastating new rule is that food and drink is not allowed to be served.

* Charging people for concessions is the highest margin, most profitable part of a theatre. It’s not an exaggeration to say that this would drastically change the entire business model of a movie theatre. We should look out to see how Chinese cinemas are able to adapt and figure out other ways to monetise their customer base. What the Chinese cinemas experiment with may end up being adopted by other traditional theatre chains across 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! ⚡️

Liquor Brand Kweichow Moutai Hurt by Corruption 🍶

* A few weeks ago, I wrote about how Chinese liquor brand Kweichow Moutai has become the most valuable alcohol company in the world with a market cap of $260 Billion. The company experienced significant growth in the first half of 2020 and served as a good illustration of the size of the Chinese market!

* Since that article, Kweichow Moutai has not been doing so well. Last week, the company lost $25 Billion in market cap after Chinese state publication People’s Daily wrote an article accusing Moutai of benefitting from corruption.

* The article referenced comments from Moutai’s former chairman Yuan Renguo, who acknowledged that liquor sales related to corruption are part of business. Yuan was since removed as chairman in May 2018 and arrested on corruption charges. In the past few weeks, several senior executives have also faced investigations relating to corruption. Moutai is still one of the top ten biggest companies in China, making this a major issue for the business community.

AirAsia Rehires Workers For Agriculture E-Commerce 🌽

* AirAsia is one of the most successful low-cost carriers in Asia, owned by famous Malaysian entrepreneur Tony Fernandes. The Kuala Lumpur-headquartered company laid off 300 employees in June due to coronavirus-related financial difficulties. While this has been a rough situation for the company, AirAsia has been both creative and compassionate with their recently laid off employees.

* AirAsia has also launched an agriculture e-commerce platform called Ourfarm delivering fresh produce to Food & Beverage businesses. Many of the new employees at Ourfarm were former AirAsia employees who have now been rehired. This is an interesting pivot for an airline to get into agriculture e-commerce, which is definitely an industry growing more than airlines right now.

* AirAsia also benefits from being part of the Tune Group, the broader holding company founded by Tony Fernandes. Whether this new agri-business works for AirAsia or not, it required true determination and creativity.

New Regulation for Young Online Fans 🚸

* The Cyberspace Administration of China is launching a new campaign to monitor the online activity of minors in China. This includes prohibitions against pornography, violence, and “inappropriate cartoons.” The campaign also targets young fans of virtual idols and influencers from engaging in certain behaviours.

* Internet culture in China can have some pretty intense, passionate young fans. Huge groups of fans under the age of 18 often purchase mass quantities of merchandise without having their own stable income or with aggressive influence from fan groups. Social media platform Weibo has started implementing new rules around fan management, after controversial examples of exploitation such as the fanbase of actor/singer Xiao Zhan using high-pressure sales tactics to mass purchase products and encourage users to file complaints.

* If you understand internet culture, you might see some parallels with the West. Internet watchdogs, especially in Europe, are looking at ways to regulate the behaviour of young people on the internet, who are often vulnerable to things like buying loot boxes for video games. No matter the regulation, people will always be able to influence, young impressionable internet users.

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! ⚡️

WeChat’s New E-Commerce Feature 🛍

* WeChat has launched new features that allow individuals and brands to open up their own online stores. WeChat is primarily a messaging app, but also has many other features including payments, 3rd-party ticketing, and a social media newsfeed equivalent. With the new e-store feature however, this is an upgrade of their current mini-program functionality and is WeChat’s biggest and clearest move into e-commerce.

* This new online store product includes features like payments, livestreaming, translation, order management and more. All business are able to test this new product, and there will be a full rollout for all users at a later date. This makes WeChat compete more directly with other Chinese tech companies like Pinduoduo, Douyin, Kuaishou, who are social commerce apps that use features like livestreaming to directly sell products in-app.

* With all the varied functionality and scale (over 1 billion users), Wechat is already considered the prime example of what’s known as a “SuperApp.” This new e-commerce feature is an important product development because it’s like the first step in creating a ‘Shopify’ within WeChat. This means that users can increasingly have the tools to sell products within WeChat, not other apps.

JD Creates Augmented Reality Shoe Offering 👟

* Footwear is a very big industry in China and Sneakers are especially hot for younger demographics. The Chinese sneaker market is expected to reach $10 Billion by 2025. JD.com, China’s second largest e-commerce platform, is adding more fire to the market with their introduction of augmented reality (AR) shoe-fitting.

* JD will soon be launching an app that allows customers to use AR to take their shoe measurements using their phone. This was created in partnership with Sony, using their Time of Flight distance measuring technology. Nike created something similar last year, adding AR functionality to their app that measures a person’s shoe size within a certain margin of error. With our lives becoming more digital and our shopping experiences becoming more virtual, a mobile app using AR to measure foot size seems like the logical next step in the wild world of e-commerce.

iQiyi’s Latest Announcements at iJoy Conference 📺

* iQiyi is one of China’s largest video streaming platforms and they hosted their annual conference in Shanghai last week. Much like major conferences hosted by tech companies like Apple or Facebook, or media companies like the major TV channels in the US, iQiyi’s iJoy Conference was their opportunity to announce their next steps in online entertainment.

* iQiyi focused on 60 new drama series and variety shows they will be launching over the coming months. The company also wants to nurture new young idols and create what they call “celebrity/KOL + settings + brand incubator.” Reading between the corporate buzzwords, iQiyi wants to create their own IP, better utilise influencers (known in China as KOLs), and create both online and offline brand experiences to monetise their audience. iQiyi also announced the launch of a brand called BKStore, a sort of street culture hub that focuses on collaborations between brands and graffiti artists, musicians, and designers. They’ll also create Fourtry Space, which is an actual offline store based on the reality show “Fourtry,” where these celebrities were supposed to create a trendy fashion boutique in Tokyo. Another really successful Chinese reality show was “The Rap of China,” kind of like a Chinese Hip-Hop talent show.

* If you contrast this with supposed Western streaming equivalents like Netflix, iQiyi seems to take a more vertically integrated approach to content. For iQiyi, it’s not just about creating intellectual property and acquiring content. It’s also about investing in young talent/influencers, and actively creating partnerships with the right brands to sell more products.

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! ⚡️

US Reverses Policy on International Student Visas 🔀

* The US government has now revoked an order that would have forced international students to leave the country if their school hosted only virtual classes because of the coronavirus. The order was initially announced last week on July 6, so the reversal announced earlier this week has come very quickly. The new law would have affected over one million international students currently studying in the US.

* Harvard and MIT were joined by several other universities in filing a lawsuit in Boston federal court seeking to prevent US Immigration and Customs Enforcement (ICE) from enforcing the law and they have now come to a settlement. The lawsuit also received widespread support from many major US tech companies.

* For many international students, you really can’t imagine the level of psychological relief they must feel after a two-week emotional rollercoaster. While many students and universities might now worry less about ICE, there are still many open questions around the logistics, costs, and implications of universities going completely virtual for the upcoming semester.

Indonesia Introduces New Tax for Tech Companies 💰

* Indonesia has just announced a new 10% value-added tax (VAT) on sales by tech firms like Amazon, Netflix, Google, and Spotify. With the coronavirus having an impact on government revenue, Indonesia is expected to triple its 2020 budget deficit. Many people are pointing to the government’s financial situation as motivating this tax on the highest earning foreign tech companies. The new VAT rule applies to any foreign company selling digital products in Indonesia above a certain revenue threshold or with a certain number of active users in the country.

* Out of South East Asia, Indonesia has usually been the most attractive country for Western tech companies. Indonesia has a population of 260 million and the most mature startup ecosystem apart from Singapore. If the pandemic causes governments in South East Asia to increase taxes on foreign businesses, the cost of doing business will increase for Western companies. While Indonesia is such a big and important market that this likely won’t change the plans of foreign firms, a 10% sales tax in other smaller countries in SEA might cause western companies to consider alternatives.

E-Commerce in India Reaches Pre-Covid Levels 🛒

* In April, only essential goods in India were allowed to be sold online, and there was an 80-90% fall in overall online retail. However, the most recent data indicate that now Indian consumers are buying online at volumes even higher than pre-Covid levels. Daily shipment volumes are back to 3 million per day and e-commerce companies like Amazon India and Flipkart are seeing ~120% growth. Amazon has reported a 50% increase in new sellers since Covid began and almost all online retailers are hiring new staff to keep up with increased consumer demand.

* This new data from India is similar to data in China, where new online sales records are being broken in a post-Covid world. The e-commerce data we’re seeing across many Asian countries also indicates a decrease in customer acquisition costs, increase in overall online penetration, and more online shopping from older age groups. It often sounds obvious, but the vast majority of shopping still occurs offline. Even in China, the world’s largest e-commerce market, online shopping made up only 20% of total retail in 2019. With Covid, that percentage of online retail in every Asian country will dramatically increase.

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! ⚡️

Singapore Now In Recession, Q2 GDP Dips 41% 📉

* The Singapore Ministry of Trade and Industry released some important data earlier this week. Singapore’s Gross Domestic Product (GDP) is down 41% between April to June on a quarter-on-quarter annualised basis. Many economists predicted the decline would be 37.4%, so it’s turned out to be slightly worse than expected. And now Singapore is officially in a recession. The reported numbers also indicate that construction is the country’s hardest hit industry, which faced a 95% quarter-on-quarter decrease. Other hard hit industries include services and tourism. More data will be coming out next month and the government expects full-year GDP to contract between 7% to 4%.

* This is an example of how the coronavirus has affected a major economy. Singapore is a small country and very reliant on trade, but Singapore is also a historically strong economy, has a strong social safety net, and has above average success in containing the coronavirus vs. other developed nations. Singapore was able to provide a recent $72 Billion stimulus and expects Q3 2021 to be the quarter when the economy reaches pre-Covid levels. Let’s wait and see how other countries begin reporting their own macroeconomic data, as many economists predict that similar GDP declines will occur around the world.

India’s Paytm Expands to Mini-Programs 🛍

* Paytm is currently the largest fintech company in India. 7 Million merchants across the country use Paytm to process digital payments, connect with 140 million monthly active users, and explore a host of other financial services. They just announced the creation of Paytm mini-programs, which gives businesses a deep integration to connect their currently existing mobile websites or web apps into Paytm. So a small business can then track payments, review analytics, issue refunds from their Paytm app. By subscribing to a Paytm mini-program offered by a retailer, users can also receive push notifications. This all takes huge inspiration from WeChat’s mini-programs in China.

* In China, a major innovation from WeChat’s product comes from mini-programs. Companies can build mini-programs to have more immersive, interactive experiences with their customers. They are not fully fledged apps but more light-weight mini-apps that are built on top of the WeChat platform. It worked really well for WeChat, with users spending $119 Billion through mini-programs in 2019. With this move, PayTM is evolving into more of a platform, which increases the future revenue potential of the company.

Alibaba’s New Growth Market = Russia 🇷🇺

* Alibaba is looking to Russia as a market that will drive $10 Billion in annual revenue by 2022-2023. Alibaba currently operates in Russia under a joint venture with local Russian partners called AliExpress Russia. Russia’s e-commerce market is worth $28 Billion and around 90% of foreign shipments to Russia come from China. During the coronavirus, AliExpress Russia has seen significant growth and even lowered their transaction commissions to incentivise more merchants onto the platform.

* For Alibaba, Russia is turning out to be one of their strongest markets, and the AliExpress Russia CEO Dmitry Sergeev has publicly said that the company could consider an IPO in three to four years. Russia is a huge market with a population of 144 Million. Noticeably, e-commerce giant Amazon does not have a presence in Russia. Instead, there is a local equivalent called Ozon, who has been the rumoured acquisition target of SoftBank and Amazon. If Alibaba continues to press their advantage in Russia, the company could develop a competitive moat.

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! ⚡️

UK Bans Huawei 5G Technology 🗼

* The British government has now banned Chinese company Huawei from participating in building equipment for the UK’s 5G networks. Without a doubt, part of this decision will have direct influence from the UK’s political allies in the United States, who already have a hard-line policy of banning Huawei from the US. In the UK, Huawei currently has over 1,600 employees and sponsors research at universities around the country.

* 5G is critical communications infrastructure for every country in the world. There are high stakes in governments deciding who can work on 5G for security reasons, but there are also major considerations in ensuring the high technological quality of 5G networks. Without Huawei, who has already built part of the UK’s 3G and 4G infrastructure, the UK will have to look elsewhere.

* Prior to Boris Johnson, former Prime Minister David Cameron was considered one of the most ‘China-friendly’ leaders in the West, encouraging major increases in both bilateral trade and diplomatic relations. With this latest move by Prime Minister Johnson, the relationship between China and the UK will enter a new phase. Whether it’s right or wrong, Boris Johnson has made the assessment that the UK’s current relationship with China needs to change.

Bilibili Launches Matchmaking Platform For Influencers ✨

* Bilibili is the Chinese video platform similar(ish) to Youtube, focused on a younger audience and the ACG sub-culture (Anime, Comics, Gaming). They just announced the new launch of a matchmaking platform for brands and content creators called Sparkle. Bilibili has 1.8 million active creators and the number of content creators with 10,000 fans or more has doubled over the last year.

* Rival platforms such as Douyin (the TikTok of China) already have a similar platform to Sparkle and TikTok has their own equivalent called Creator Marketplace. Linking creators with brands is a critical business model for all stakeholders, including the platform hosting the content.

* Bilibili is a publicly listed company with around 170 Million monthly active users and ad revenue coming from brands makes up around 10% of their total revenue. Sparkle should help increase Bilibili’s ad revenue by making it easier for brands to connect with creators and access data on creator engagement, reach, and other metrics. In a broader context, Bilibili is also looking at a secondary listing on the Hong Kong Stock Exchange. Currently the company is listed on the Nasdaq with a market cap around $16 Billion.

Jio’s Latest Investor, Google 🚀

* Over the last few days, Google announced both a $10 Billion investment in India and a potential $4 Billion investment in Indian company Jio. Jio is owned by Reliance, which is one of India’s largest companies and owned by the richest man in Asia, Mukesh Ambani. When I wrote about Jio on June 10, the company had received $13 Billion in investment from Facebook, Paypal, private equity firms, and sovereign wealth funds. Since then, the company has also received $600 Million from TPG, $250 Million from L Catterton, $1.5 Billion from Saudi Arabia’s PIF, $253 Million from Intel, and $97 Million from Qualcomm.

* It seems that Jio has become the default beneficiary of the Chinese-US trade war. Jio is a 13-year-old company and has received more investment in a shorter time period than any other company in the world. Jio’s telecommunications/digital services have 388 Million subscribers, providing a gateway to Indian consumers. That is an attractive investment to all international companies, with the latest being Google. And considering what has happened over the last few weeks, Google surely will not be the last. There’s likely more to come.

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! ⚡️

AI Influencers Open Up World Artificial Intelligence Conference 🤖

* Last week, the World Artificial Intelligence Conference began in Shanghai on July 9. The two and a half hour opening ceremony included features from Elon Musk, Jack Ma, Pony Ma, and more. There was also a special performance by four AI-generated virtual influencers: Xiaoice from Microsoft, DuerOS by Baidu, Mi Ai from Mi, and Lingyuan from Bilibili.

* For each of these companies who created virtual idols, the WAIC opening ceremony was a chance to showcase their level of AI expertise. Microsoft’s Xiaoci’s learned music with input from human students at the Shanghai Conservatory of Music. Bilibili’s virtual idols Lingyuan and Yousa are just two examples of the company’s own virtual idol business division. The technology behind the development of virtual influencers has been progressing over the years and the challenges posed by the coronavirus will accelerate their adoption as marketing tools.

Pinduoduo Helps Embassies Increase Tourism 🗺

* Pinduoduo, the premier Chinese social commerce platform home to over 600 million customers, has been partnering with foreign embassies and consulates to help promote their country’s products. By using tools like livestreaming, Pinduoduo is helping these countries sell their unique national products to the huge Chinese market.

* As an example, on June 23 the Thai Consulate based in Beijing hosted a four-hour livestream showcasing Thai fruit products like durians, coconuts, and mangosteens. More than 330,000 viewers watched the event and it was directly endorsed by Thailand’s Consul General. Thailand’s durian exports have increased 26% year-over-year and 67% of those go directly to China.

* Other embassies have also done live broadcasts on Pinduoduo across the month of June, including Serbia, Poland, Hungary, and Bulgaria. In another example, the Danish Embassy hosted a livestream on June 20 promoting a Danish cookie brand, jewellery maker, and outdoor clothing brand.

* This is a brilliant marketing tactic by the countries who have embraced this, as livestreaming is probably the single best way to reach China’s customers today and the demand for international goods is increasing. Pinduoduo reported that the “global purchase” merchandise category has grown 470% year-over-year during last month’s shopping festival.

Indian E-Commerce Companies Face New Labelling Regulation 💌

* By August 1st, every single Indian e-commerce company will have to specify ‘country of origin’ for their products. With this new rule, all products listed online will have to now include this information. Prior to this regulation, e-commerce companies like Flipkart, Amazon, and Jio had no obligation to state where their products came from. Now they are aiming to extend the deadline by a few months to deal with the logistical challenges of applying this to their entire product catalog, which can often amount to tens of millions of different items.

* This is part of a broader economic decoupling encouraged by the Indian government, who wants to decrease imports and increase locally produced goods. Given the recent political and economic tensions between India and China, this move by the Indian Ministry of Trade is in line with Prime Minister Narendra’s Modi’s movement towards building a more self-sufficient nation. People have also been calling for boycotts of Chinese products, so these new labels will likely decrease the amount of Chinese goods bought by Indians. And yet, things could always go even further with restrictions on trade and commerce.

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 Hits $3 Billion Revenue Milestone 🎯

* Player Unknown’s Battle Grounds (PUBG) was released in 2017 and has been one of the most successful mobile games in the world, a direct peer to Fortnite, another huge gaming success. It was created by South Korean company Bluehole, which is partially owned by Chinese tech giant Tencent. Over the last seven months, the game has doubled its lifetime revenue to reach $3 Billion.

* A recent report from Sensor Tower outlined some of the game’s key stats, including the data point that PUBG made $270 Million in month of March alone. PUBG’s success is a good temperature check for the overall gaming market, which is doing really well in the time of coronavirus. Like most gaming apps, PUBG makes most of its money from players making in-app purchases.

South East Asia’s Streaming Platforms 📺

* South East Asia (SEA) is a complicated region, composed of eleven countries that make up a combined population of 680 Million people. Between January to April, online viewing time has increased by 150% across the largest South East Asian countries. In SEA, the market for online streaming platforms is complex, with both global players like Netflix and local players like iFlix.

* Malaysia’s iFlix has 25 Million active users across SEA and was bought out by Tencent after financial troubles earlier this year. A rival platform, Singapore-based Hooq had 80 million active users but shut down in April after struggling to overcome their massive losses. The coronavirus has caused ad revenue to drop, and the model of a streaming platform paying lots of money to acquire content upfront has been challenging in South East Asia where customers usually have free alternatives. Hong Kong’s Viu uses a freemium model where their content is free but their 41 Million users can pay to remove ads.

* There are also many new entrants into the market. China’s Tencent is using their iFlix acquisition as a cornerstone for their SEA strategy. China’s iQiyi is also planning to launch their streaming service in the region. Disney+ announced recently that they are opening a Singapore office this year and likely launching very soon. And ride-hailing app Gojek, Indonesia’s first unicorn, is also launching their own video service called GoPlay.

Ant Financial Plans IPO 🐜

* Ant Financial is the fintech spin-off of Chinese e-commerce giant Alibaba. Ant has become on its own one of the world’s biggest companies and is planning to float on the Hong Kong Stock Exchange later this year, at a potential valuation of $200 Billion. Depending on your definition, this would make Ant Financial the biggest privately-held startup unicorn in the world and the biggest public stock listing of the year.

* Ant Financial is not always a well known player on the world tech scene, but it’s likely one of the most underrated. Alibaba spun out Ant Financial in 2014, initially created as the payment processing system for Taobao, Alibaba’s e-commerce platform. Alipay, which is the primary product of Ant Financial, is the world’s mobile and online payments platform. On top of mobile payments, Ant Financial runs the world’s largest money-market fund and offers a diverse set of financial services. Alipay currently has 1.2 Billion users globally and Alibaba still holds a 33% ownership stake in Ant Financial.

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 Strength of Indian-Chinese Business Relationships 🤝

* We are all wondering how business will continue in the aftermath of India’s banning of 59 Chinese mobile apps last week, including TikTok, and the new restrictions on foreign investment targeted primarily at China. While some Indian video apps are thriving because of the ban, several TikTok clones actually scamming users have also appeared, and other Western tech companies like Facebook and Youtube are also stepping up their efforts. It’s a battleground for India, home to 1.3 Billion people.

* This KrAsia article outlines the many many ways that India and China are linked to each other through interdependent business relationships. Chinese investors allocated $4.1 Billion in funds to Indian companies in 2019, an increase from only $300 Million in 2018. The US is still the largest provider of foreign direct investment in India, allocating $46 Billion in 2019. For many Chinese mobile apps, like TikTok, India is often their biggest international market. Chinese smartphone companies make up 70% of the total Indian smartphone market and employ tens of thousands of Indian employees. China is India’s largest trade partner behind the US, providing 12% of raw materials, commodities, and components. Whatever the next steps for the Indian government, economic decoupling from China, if that’s even the desired end goal, will be a long and complicated process.

China’s 2020 Internet Report 📊

* For the last three years, The South China Morning Post has released a detailed document outlining the major trends in China’s technological transformation. This is like a Chinese version of Mary Meeker’s Internet Trends, which is probably the most famous annual report of data & insights for the global tech industry. The 2020 version came out earlier this week and is packed with great content on post-Covid China, startups, 5G, livestreaming and more.

* It’s honestly worth reading through the whole (free) report yourself but here are some great takeaways compiled by a mixture of SCMP reporters. Overall time spent online is up by 30% year-on-year, with the biggest growth from audiences over 40. Online education is expected to grow 62 percent this year to have 420 million online students. Chinese smartphones like Xiaomi and Oppo are gaining global market share. China is aggressively building out 5G infrastructure this year to encourage mass adoption of the technology. And livestreaming is entering a new phase of ubiquity where traditional industries such as luxury goods, real estate, and automotive are now using livestreaming as a standard marketing channel. These data represent already existing trends that the coronavirus has accelerated.

The Death of Stanley Ho, Asia’s Gambling Tycoon 🎲

* This week, over 100 politicians and celebrities will be attending the Hong Kong funeral of Stanley Ho, a billionaire gambling tycoon who owned the biggest gaming empire in Asia. Stanley passed away in May at the age of 98 and was largely responsible for turning Macau into the world’s largest gambling destination through his company SJM Holdings, which currently owns nineteen Macau casinos.

* Stanley Ho has left a huge legacy. Stanley fled Hong Kong when the Japanese invaded in 1941 and ended up in Macau, which at the time was under Portuguese rule. In 1962, he won the rights to to run a government-granted monopoly of all of Macau’s gambling operations until 2001. He branched out into a set of diversified investments across Asia including real estate, tourism, shipping, banking, and more. After several years of inheritance disputes around Stanley’s fortune, his numerous children are now in leadership roles scattered around the family’s Macau casinos and assorted businesses.

What is something interesting you have read about Asia recently? Let me know in the comments or reply directly to this e-mail!

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