Hi there, it’s Robin.
After spending about two weeks in Beijing, I experienced first-hand how technology has made the lives of the Chinese extremely convenient. Getting a local mobile number literally unlocks the key to many on-demand services available in China from food delivery, ride-hailing, bike-sharing etc. Scanning QR codes to order food at traditional brick-and-mortar stores have also become a common scene. These are examples of the extent by which the proliferation of all kinds of mobile apps has revolutionized the lives of the Chinese. They also serve as illustrations of the ultimate result after a decade of China’s internet wave.
However, stellar and strong growth just cannot go on incessantly. 2018 was the turning point. Market saturation, falling market caps of giant Chinese tech companies, fearful investors and the Sino-US trade war have started to plague China’s internet scene. Dark clouds are looming and fundings seem to be drying up. This makes it extremely difficult for new startups to compete for fundings, as they have no proven track record as opposed to more established Chinese tech companies. Unicorns, on the other hand, do have some buffer during trying times.
Tencent, Meituan, and Didi Chuxing are some examples of the tech unicorns who are making major restructuring changes amidst their own unique set of challenges. Given their size and unicorn status, they are better equipped to navigate unchartered waters, but it still remains to be seen how successful these new strategies will be.
That said, there are still new opportunities that could abound. B2B enterprise tech solutions have proved itself by being a hit in the Western world. Examples include Salesforce, Slack etc. And this can be replicated in China where there are comparatively lesser B2B enterprise tech solutions to drive future growth for China’s tech economy.
Another interesting area worth highlighting is China’s merger & acquisition (M&A) space. Up until now, Chinese tech economy, similar to Israel, is largely driven by venture capital funds. As the Chinese tech economy matures, with more Chinese tech unicorns becoming public entities, such investments might become more common going forward. So far, there have been around 10 prominent Chinese M&A companies to date, according to Marc Frappier, Head of Eurazeo Capital, hinting that now is the right time to venture in whilst it is still early.
As for Southeast Asia’s technology space, it’s getting really exciting in Indonesia.
Tokopedia, for instance, is making huge strides at becoming a super app in its own right. Often dubbed as the “Taobao of Indonesia”, this C2C online marketplace has recently closed a SoftBank Vision Fund-led US$1 billion funding round. It now offers a wide range of services on its app that ranges from digital goods, financial services, payment functions to shopping etc.
Perhaps the super app race in this region is really more than just Grab and Go-Jek, and we will only be seeing more convergence amongst all these big tech players there.
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 [email protected] and we are looking forward to hearing from you.
Here are some stories you shouldn’t miss.
Rest of Asia