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This week China’s e-commerce sector welcomed another public list. Chinese online discounter platform Pinduoduo (PDD) surges above the top-end offer price ($19 apiece) to close at $26.79 per share on its initial public offering (IPO), a roaring start that signals investors’ growing confidence for the firm, despite earlier news of a New York lawsuit.
Surpassing JD.com, the second largest e-tailer in China, in terms of the number of daily active users (DAUs) in 2018, PDD is one of the fastest growing Chinese startups these years.
The overwhelming response, unlike Xiaomi’s trading debut, can instill confidence back into the many other Chinese TMT startups that are still in the pipeline for impending IPOs, amidst the ongoing US-China trade war. Some examples of the others in the pipeline include the likes of Douyu, Meilishuo, and Meituan-Dianping.
And guess who is the largest beneficiary behind all those IPOs.
China’s social media giant Tencent is the backer of Douyu, Meilishuo, Meituan-Dianping, and PDD.
Tencent’s archrival Alibaba, on the other hand, is vying for an investment into Douyin (a formidable short video app rival of Tencent’s Weishi) and backing Ele.me in its battle with Meituan in the food delivery sector. It is also exploring further into the fields of artificial intelligence.
However, despite the fierce competition between these giants Alibaba & Tencent, they are actually looking to jointly acquire a stake in the world’s largest advertising media firm WPP’s Chinese unit, signalling their common appreciation of value in digital advertising.
Thus, all of these seemed to suggest that Tencent & Alibaba are doing literally the same thing – expanding into the traditional turfs of others in order to grow and build their own ecosystem. The truth is – they might soon not be the only one.
Meituan-Dianping, for example, has expanded from just Groupon-like services into food delivery, ride-hailing and hotel booking amongst others.
Southeast Asia has seen a few parallels this week with the tech scene in China, especially in the area of P2P lending, 5G network & education technology.
While China’s smartphone maker Xiaomi is currently caught in the wave of P2P online lending defaults, in an odd similarity, Indonesia also started to order unregistered P2P startups to close down – all within the same week. More regulations against indiscriminate online lending platforms can be expected both in China & SEA, given the latest events.
As for the race to become a leader of 5G network of the future, both China & Southeast Asia have taken steps in the similar direction. China’s Huawei is set on raising at least $15 billion to boost its R&D budget in its push into the 5G technology. Singtel, Singapore’s main telco, is also putting a 5G network on trial with drones and autonomous vehicles in the fourth quarter of 2018.
The booming Chinese education technology sector, with startups like Liulishuo, Hujiang, & Koolearn.com heading to the public markets has also started to cause ripple effects in the SEA region.
In Indonesia, for instance, Novistiar Rustandi, the CEO of edtech startup HarukaEdu, is pretty bullish on Indonesia’s education technology scene, due to the efficiency of education technology startups that can be attributed to low customer acquisition cost and the ability to maintain customers for the long-term, unlike other sectors.
Another example would be Teach-n-Learn, a Singapore-based education technology startup, with more than 500 students on-board (within the age group of 10-18-years old). The firm is also planning further expansions into Malaysia and Indonesia.
The competition amongst education tech firms looks set to steepen, just like the case in China.
Read on to find out more interesting stories from last week, and feel free to tip us if you have news clue or you just want to talk with us, email us at firstname.lastname@example.org and we’re looking forward to hearing from you.
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