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… the company doubled the marketing budget for TikTok compared with Q3 2018.
This was justified by the hefty price of acquiring new users. In the US, the cost for each new member was USD 10. ByteDance wasn’t focusing on how long it might take to recoup that cost. Instead, the company’s priority was the potential average revenue that each daily active user could provide. By analyzing data that led to insights about Facebook’s average revenue per user in more than 100 markets, the team at TikTok was able to formulate a spending plan in various countries and regions.
And spend it did. TikTok burned cash, including USD 1 billion just for ads on Facebook. At the time, Facebook’s annual revenue in China was roughly USD 5 billion, according to a person with knowledge of the matter. The ad splash didn’t give Facebook pause—TikTok’s user retention rate was still low.
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Soon after, TikTok’s short video format paired with rapid delivery made it one of the most popular apps in the world. A clip uploaded by a user in the US could be watched by users anywhere in the world, leading to revenue generation all around the world. Even if revenue figures from one region failed to impress, TikTok’s global revenue consistently dropped jaws.
In the first half of 2019, ByteDance began to diversify its user acquisition channels. It placed ads on Google and Snapchat, just in case costs to use Facebook increased. Facebook’s allocation in TikTok’s budget went from 20% to 10%.
It wouldn’t take long for Facebook to notice the threat that TikTok posed. By mid-2019, the short video app’s global DAUs surpassed 100 million. Facebook quickly developed its own contender that mimicked TikTok—called Lasso—which was released in the US and Mexico. Lasso shut down the following year.
<h3>Continuing the momentum</h3>
After Musical.ly was acquired by ByteDance, it took some time for Zhang Yiming to recognize the vital work of Alex Zhu.
At first, Zhang was not accustomed to Zhu’s operational style, which resembled that of a foreign enterprise. Eventually, Zhu reported to <a href="https://kr-asia.com/kelly-zhang-is-bytedances-2-how-did-she-get-there" target="_blank" rel="noopener noreferrer">Kelly Zhang</a> (Zhang Nan), one of the key figures behind the creation of Douyin, while Kelly Zhang oversaw both of ByteDance’s short video apps. In June 2019, Zhu took charge of Douyin for a short period of time, while Kelly Zhang was responsible for ByteDance’s overseas operations.
Throughout those developments, Zhang Yiming was unsatisfied by the trajectory of TikTok.
<figure id="attachment_115055" aria-describedby="caption-attachment-115055" style="width: 1024px" class="wp-caption aligncenter"><img class="size-large wp-image-115055" src="https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-1024x683.jpg" alt="" width="1024" height="683" srcset="https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-1024x683.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-300x200.jpg 300w, https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-768x512.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-1536x1024.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2021/03/Kelly-Zhang-2048x1365.jpg 2048w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption id="caption-attachment-115055" class="wp-caption-text">Kelly Zhang is now CEO of ByteDance China. Photo courtesy of ByteDance.</figcaption></figure>
In the hallways and meeting rooms of ByteDance’s headquarters, Zhu stood out. He kept his hair long, loved poetry, and was often found with a light scarf adorning his neck. He commuted using the subway, which was uncommon for high-level executives in major tech companies. Zhu spoke good English and could navigate the cultural nuances of other countries owing to his many years spent abroad. All in all, he was well liked by ByteDance staff members.
As a company goes global, cultural conflicts are inevitable. Zhu downplayed these frictions by focusing on defining TikTok’s mission, vision, and values. He framed this by saying that “TikTok is a canvas, a window, and a bridge.”
By the beginning of 2020, TikTok’s had nearly 250 million DAUs. The COVID-19 pandemic was beginning to spread around the world—this would have profound consequences for the app.
In February that year, TikTok’s senior management were made aware that Facebook COO Sheryl Sandberg had spoken about TikTok’s rapid growth during an interview. This rattled TikTok’s team, as they were now in Facebook’s crosshairs. Zhu called for an emergency meeting to discuss the ramifications of removing TikTok’s Facebook SDK, which lets TikTok users log in to Facebook using their credentials on the short video app. They decided to pull up the drawbridge.
While Zhu continued to lead TikTok’s expansion outside of China, Yang, his co-founder at Musical.ly, was operating in the education space for ByteDance. He developed a <a href="https://kr-asia.com/bytedance-launches-new-brand-to-reignite-its-education-business" target="_blank" rel="noopener noreferrer">smart lamp</a> that helps students do their homework.
Meanwhile, the pandemic cemented TikTok’s status as one of the world’s most significant consumer apps.
This article was adapted based on portions of a <a href="https://36kr.com/p/1713881951823622" target="_blank" rel="noopener noreferrer">feature</a> originally written by <a href="https://www.linkedin.com/in/%E5%B0%8F%E7%8F%BA-%E5%BC%A0-5a932523a/" target="_blank" rel="noopener noreferrer">Zhang Jun</a> (WeChat ID: <a href="https://mp.weixin.qq.com/s/1Dv17rDRto_1i_LdHEVARA" target="_blank" rel="noopener noreferrer">benita-story</a>) and edited by Gao Yulei. KrASIA is authorized to translate, adapt, and publish its contents.

From Douyin clone to global sensation: How TikTok took the world by storm

Bytedance

Tiktok

Short Video

Content

… href="https://www.bangkokpost.com/thailand/pr/2175307/stashaway-launches-in-thailand-to-make-overseas-investment-easy" target="_blank" rel="noopener noreferrer">launched in Thailand</a> eight months later. Meanwhile, Endowus has SGD 1.5 billion (USD 1.1 billion) in AUM to date.
In July 2021, Member of Parliament Desmond Choo, spoke about the adoption rate of micro-investment products, including fintech platforms that utilize robo-advisors. Although “the current take-up of micro-investments among Singapore investors remains fairly low,” he believed that there was “growing interest.” In response, MAS has rolled out awareness initiatives through MoneySense, a national financial education program, to cultivate stronger financial literacy among Singaporeans.
Despite the slow uptake, robo-advisors may be able to automate some of the simpler aspects of wealth management. Although more sophisticated investors will likely still depend on financial advisors, investors with more modest objectives may utilize robo-advisors to take advantage of their low fees and convenience.

Wealth management in your pocket: The rise of robo-advisors in Singapore

Fintech

… battery capacity. Whoever can make good products and serve the market well will enlarge the market."
This article first appeared on <a href="https://asia.nikkei.com/Spotlight/Electric-cars-in-China/State-backed-battery-maker-gives-competitive-jolt-to-China-s-CATL" target="_blank" rel="nofollow noopener noreferrer" data-type="external">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" target="_blank" rel="nofollow noopener noreferrer" data-type="external">partnership with Nikkei</a>.

State-backed battery maker gives competitive jolt to China's CATL

Battery

Every few months, there’s news that ByteDance might go public. Or maybe it’s Douyin. Perhaps just TikTok. New appointments and reorganization fuel this speculation, with new guesses about the company’s valuation.
That conjecture was renewed one month ago when Julie Gao, a veteran corporate attorney and rainmaker for Chinese companies eyeing IPOs in the US, was appointed as ByteDance’s CFO. History rhymes—when Shou Zi Chew was appointed to the same post in March 2021, people drew similar conclusions.
Gao stepped into her new position with an existing working relationship with ByteDance. She was a legal advisor for two of the company’s significant acquisitions—short video service Musical.ly in 2017 and game studio Moonton Technology in 2021.
Gao has participated in interviews in the past, but a commencement speech that she gave at Peking University Law School in 2018 may be most revealing about her work ethic. Gao said that she hasn’t ever spent more than 24 hours away from her laptop and Blackberry, even when she was on maternity leave.
One of our recent entries in KrASIA Connection dives into the background of Julie Gao. Check it out <a href="https://click.mlsend.com/link/c/YT0xOTU2OTM4OTIwMzQ4MzU4NTI0JmM9YjZqNiZlPTY0MTI5Njc0JmI9OTczMDkzMjIzJmQ9cDlhN3E5aA==.hBgJCN__ZGgYyQx9sUEbsaL1OIEo1gkMf9qxXjAUmvg" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU2OTM4OTIwMzQ4MzU4NTI0JmM9YjZqNiZlPTY0MTI5Njc0JmI9OTczMDkzMjIzJmQ9cDlhN3E5aA%3D%3D.hBgJCN__ZGgYyQx9sUEbsaL1OIEo1gkMf9qxXjAUmvg&amp;source=gmail&amp;ust=1653439006600000&amp;usg=AOvVaw29HghK9IMvoCzoOxEqyxzh">here</a>.
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<h3>Recent Posts</h3>
Didi shareholders <a href="https://kr-asia.com/didi-shareholders-back-us-delisting-shares-fall-4" target="_blank" rel="noopener noreferrer">back US delisting</a>, shares fall 4%.
Singapore's Grab to <a href="https://click.mlsend.com/link/c/YT0xOTU2OTM4OTIwMzQ4MzU4NTI0JmM9YjZqNiZlPTY0MTI5Njc0JmI9OTczMDkzMjI3JmQ9YzluNXA0ZQ==.I5cCZKe6-0MXWxCcy2OiJoBtnD3QN-WyKsm0VCMsSAU" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU2OTM4OTIwMzQ4MzU4NTI0JmM9YjZqNiZlPTY0MTI5Njc0JmI9OTczMDkzMjI3JmQ9YzluNXA0ZQ%3D%3D.I5cCZKe6-0MXWxCcy2OiJoBtnD3QN-WyKsm0VCMsSAU&amp;source=gmail&amp;ust=1653439006600000&amp;usg=AOvVaw1ZBbKjmOFCkI0O8jhsSqwA">“taper” incentives</a> in drive for profitability.

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Shares of Chinese ride-hailing company Didi Global fell 4.00% on Monday after shareholders voted in favor of the plan to delist from the New York Stock Exchange "as soon as practicable."
The shares in premarket trading had surged more than 11%.
The move is intended to "better cooperate with [China's] cybersecurity review and rectification measures," and Didi's shares will not be listed on any other exchange before the delisting is completed, the company said in a filing to the US Securities and Exchange Commission.
Shareholders cast 781,060,684 votes in favor of the resolution and 30,374,766 votes against, according to the filing.
Didi said it plans to file a Form 25 with the US Securities and Exchange Commission on or after June 2 in order to delist from the NYSE, which is expected to occur ten days thereafter upon the effectiveness of the form.
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Didi, which posted a loss of RMB 49.3 billion (USD 7.37 billion) last year, has faced troubles from Beijing since it proceeded with a USD 4.4 billion initial public offering in New York on the eve of the Chinese Communist Party's July 1 centenary despite official misgivings that the listing might allow American regulators to access sensitive domestic data.
Beijing has barred Didi from signing up new customers and evicted its 26 apps from local app stores, requiring it to complete regulatory reviews.
Since Didi's IPO, Beijing has promulgated new laws and regulations on cybersecurity, data security, personal privacy, and overseas listings, requiring internet companies holding the data of more than 1 million users to undergo a cybersecurity review before listing overseas.
Didi said it has conducted a series of "rectification measures" since the company became subject to the cybersecurity review. These include improving internal management mechanisms in terms of data security and storage, algorithm transparency, and users' right of free choice, disclosing to users its rules regarding personal information collection, and conducting necessary cleanups of some data it had collected.
But it is unclear when Didi will pass the regulatory review and to what extent the authorities will be pleased with its "rectification."
Didi’s domestic market share had dropped from 90% to roughly 70% by January, Chinese media outlet LatePost reported, as unrestrained rivals like Meituan and T3 Chuxing snatched customers with special offers and aggressive pricing.
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Didi's quarterly financial reports showed that just three months after its apps were removed from stores, revenue from the company's domestic division fell by 30% on the year and continued to drop through the end of 2021. Transactions from its domestic segment declined to 2.3 billion in the fourth quarter, from 2.4 billion in the third quarter and 2.6 billion in the second.
Didi's overseas business has also struggled, despite operating in 15 countries outside China. In the June, September, and December quarters, its international segment's adjusted loss before interest, tax, and amortization climbed to RMB 1.19 billion, RMB 1.79 billion, and RMB 1.8 billion, respectively.
As of December 31, SoftBank Vision Fund held a 20% interest in Didi, while US ride-hailing group Uber Technologies owned 11.9% and Tencent held a 6.5% stake.
This article first appeared on <a href="https://asia.nikkei.com/Business/China-tech/Didi-shares-fall-4-as-shareholders-back-U.S.-delisting" target="_blank" rel="nofollow noopener noreferrer" data-type="external">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" target="_blank" rel="nofollow noopener noreferrer" data-type="external">partnership with Nikkei</a>.

Didi shareholders back US delisting, shares fall 4%

Didi

Ride-hailing

Mobility

Sunwah Group began as a seafood processing business in Hong Kong in 1957. Over the years, it has grown into a conglomerate with a diverse portfolio of companies operating in various industries, including real estate, financial services, media, and healthcare. Today, Sunwah has business operations around the world, spanning mainland China, ASEAN nations, and countries in North America and Europe.
In recent years, the group has branched out into the innovation economy. Since 2018, the company has set up innovation centers across Asia, including Chinese cities such as Tianjin and Beijing, Phnom Penh in Cambodia, as well as Hanoi and Ho Chi Minh City in Vietnam.
These facilities offer workspaces for entrepreneurs and startups to access resources for building and growing their businesses under one roof. At the same time, through partnerships established with universities and industry stakeholders, the innovation hubs aim to nurture an ecosystem of startups to produce cutting-edge solutions, as well as foster fresh talent.
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“Seeking new business models has always been a top priority for us,” explained Jesse Choi, regional director of Sunwah Southeast Asia and CEO of Sunwah Innovations.
The idea of tapping startups to drive innovation is a strategy employed by the company to adapt to market changes. “It is critical to deploy and use technologies effectively in order to strengthen enterprises’ capabilities, particularly their ability to manage and organize.”
In December 2020, to mark Sunwah Group’s 50th anniversary of business operations in Vietnam, the company established the new <a href="https://swinno.com.vn/en/" target="_blank" rel="noopener noreferrer">Sunwah Innovation Center Ho Chi Minh City</a>. The center was launched to incubate Vietnamese early-stage startups with leading-edge ideas, priming them for international expansion. “We focus on empowering the ‘going global’ ambition and capability of the startups, and leveling up Vietnam on the global startup map,” said Choi.
At the same time, the innovation center doubles as a gateway to the Vietnam market for foreign investors. “For international startups, our innovation center in Ho Chi Minh City is a place for them to showcase their innovative solutions to the local community and potential buyers. We will also select some foreign startups to help them build ‘go-to-market’ strategies and approaches.”
<figure id="attachment_140209" aria-describedby="caption-attachment-140209" style="width: 550px" class="wp-caption aligncenter"><img class=" wp-image-140209" src="https://console.kr-asia.com/wp-content/uploads/2022/05/Sunwah_Innovations_Jesse_Choi-768x1024.jpg" alt="" width="550" height="733" srcset="https://console.kr-asia.com/wp-content/uploads/2022/05/Sunwah_Innovations_Jesse_Choi-768x1024.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2022/05/Sunwah_Innovations_Jesse_Choi-225x300.jpg 225w, https://console.kr-asia.com/wp-content/uploads/2022/05/Sunwah_Innovations_Jesse_Choi-1152x1536.jpg 1152w, https://console.kr-asia.com/wp-content/uploads/2022/05/Sunwah_Innovations_Jesse_Choi.jpg 1512w" sizes="(max-width: 550px) 100vw, 550px" /><figcaption id="caption-attachment-140209" class="wp-caption-text">Sunwah Southeast Asia regional director and Sunwah Innovations CEO, Jesse Choi. Photo courtesy of Sunwah Innovations.</figcaption></figure>
To streamline the flow of information across the group’s facilities across Asia, the Sunwah International Innovation Network, or SWIIP, was formed to enable centers to work more closely together, especially in terms of developing cross-border innovation.
“Companies create communities; communities become economies. With knowledge learned and technology adopted from overseas, an economy can be empowered to do better, go faster, and become stronger,” said Choi.
One promising startup supported by Sunwah Innovation Center HCMC is Vietnamese proptech enterprise, CyFeer, whose smart home app, CyHome, placed among the top ten in the Hong Kong-based Elevator Pitch Competition in 2018.
Another is Green Hydrogel, a green tech project that developed an innovative biodegradable packaging material to reduce plastic waste. Synthesized from natural polymers of agricultural by-products, the sustainable packaging solution was created by researchers from the VNU University of Science, who pitched the idea at the VNU Startup and Innovation Ideas Competition 2021, which was co-organized by Sunwah Innovation Center HCMC.
“The project is now under pilot production and testing for the company to build a complete chain of green hydrogel products for each specific application area. So far, four companies have committed to ordering over 20 tons of the finished materials per year,” said Choi.
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Moving forward, Sunwah Innovations will collaborate with research institutes in areas such as environmental sciences, digitalized manufacturing technologies, and biotechnology. Major projects in the pipeline include forestry carbon sequestration and photovoltaic power plants in the city of Pu’er, Yunnan Province, as well as a 66-sq km Sunwah wine town in the Ningxia Hui Autonomous Region.
Sunwah Innovation Center HCMC also plans to deepen its strategic partnerships in the Guangdong–Hong Kong–Macau Greater Bay Area (GBA), including the development of an environmental R&amp;D facility in the region. China’s GBA, which is an emerging technology and innovation hub, presents untapped potential and huge opportunities for Vietnamese startups to grow and expand.
Choi is optimistic about Vietnam’s thriving startup ecosystem. “Young Vietnamese startups are full of disruptive ideas and passion to scale beyond borders, but lack experience and support to succeed. Therefore, direct connection and learning from major technology hubs around the world, such as China, is an excellent opportunity for these fledgling businesses to grow,” he said.
Sunwah Innovation Center Ho Chi Minh City is a partner for the <a href="https://kr-asia.com/apply-to-take-part-in-the-next-alibaba-cloud-x-krasia-global-startup-accelerator-vietnam-demo-day" target="_blank" rel="noopener noreferrer">Alibaba Cloud x KrASIA Global Startup Accelerator Vietnam Demo Day</a> to be held on May 25, 2022.

‘Companies create communities, communities create economies’: Sunwah Innovations CEO Jesse Choi

Investment

Didi Global shareholders appeared set on Monday to back the company's plan to delist from the New York Stock Exchange, less than a year after the Chinese ride-hailing company's USD 4.4 billion ill-starred debut.
Didi warned investors last week that they may have trouble trading the shares after the delisting. But analysts believe many shareholders, especially those who invested in the company before its initial public offering, are braced to hold onto the shares until the company manages to placate Beijing regulators and secure a place on the Hong Kong Stock Exchange.
They "are likely willing to play the long game and wait to exit," said Global Equity Research analyst Arun George, who publishes on the SmartKarma investment platform.
Didi, which will convene its shareholders' meeting in the Chinese capital on Monday evening, has been under intense pressure from Beijing <a href="https://asia.nikkei.com/Business/Companies/Didi-raises-4bn-in-US-IPO-but-fails-to-match-Uber-valuation">since it pushed ahead</a> with its NYSE IPO last June on the eve of the Chinese Communist Party's centenary despite official concerns that the move might give U.S. regulators access to sensitive data.
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In the aftermath, regulators barred Didi from signing up new customers and had its 26 apps removed from local app stores. New restrictions were then imposed on overseas listings by Chinese companies.
Amid the pressure, Didi posted a 49.3 billion yuan (USD 7.4 billion) loss for 2021. Its shares, which listed at USD 14, closed Friday at USD 1.50.
When it announced plans to delist from New York in December, Didi had hoped to quickly secure a new listing elsewhere so that shareholders would be able to directly convert their holdings. But that proved infeasible after Beijing signaled to Didi that it would not lift operational restrictions on the company until after the U.S. delisting.
Didi's once overwhelming market share has slipped over the past year as unrestrained rivals have grabbed away consumers with promotional offers and aggressive pricing.
After exiting the NYSE, Didi shares may still be able to trade over the counter in New York on what are known as Pink Sheets.
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"It is not the end of the world for a company to be delisted as they could still be traded on Pink Sheets, which is mostly done by appointment," said Travis Lundy, an analyst at Quiddity Advisors who also publishes on SmartKarma.
Tencent Holdings, China's most valuable company by market capitalization, trades in New York only in this form. Tencent held a 6.5% stake in Didi as of Dec. 31, while SoftBank Vision Fund had a 20% interest, and U.S. ride-hailing group Uber Technologies held 11.9%.
Two weeks ago, Didi was added to a U.S. provisional list of more than 100 Chinese companies that face delisting by 2024 if they fail to give American regulators access to auditing records.
This article first appeared on <a href="https://asia.nikkei.com/Business/Transportation/Didi-shareholders-expected-to-back-U.S.-delisting-plan" target="_blank" rel="nofollow noopener noreferrer" data-type="external">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" target="_blank" rel="nofollow noopener noreferrer" data-type="external">partnership with Nikkei</a>.

Didi shareholders expected to back U.S. delisting plan

ByteDance is frequently framed as the originator of TikTok, but it’s so much more. The app factory's many creations have made ByteDance one of the most competitive tech companies to ever be founded in China. Naturally, its leaders had eyes on replicating that success abroad.
The road was rocky. App after app failed, their algorithms lifted from platforms that had six-figure DAU counts in China didn't produce the same results elsewhere. There were leadership changes for the company’s international business unit and lawsuits related to misused intellectual property.
User acquisition only generated losses, because ByteDance’s playbook in China was no longer valid overseas. More importantly, before the emergence of TikTok, ByteDance was unable to crack the near-duopoly of Facebook and Google in online ads.
For years, ByteDance’s quest to establish itself as a multinational company was an uphill battle. Check out <a href="https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjMxJmQ9ajd2M2s0cg==.dLGQaQG3va9j3KtG9Wq2cCH20JK7Ze7IVBaT7bo0BT0" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjMxJmQ9ajd2M2s0cg%3D%3D.dLGQaQG3va9j3KtG9Wq2cCH20JK7Ze7IVBaT7bo0BT0&amp;source=gmail&amp;ust=1653100703535000&amp;usg=AOvVaw3-KMeI3ZO-Nf1o0vu5WQDO">part one</a> in a series that charts the company’s path to becoming the first truly global Chinese tech firm.
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<h3>Recent Posts</h3>
“In the past ten years, my computer and BlackBerry have never left my side”: ByteDance’s new CFO <a href="https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjMzJmQ9bjhxNXIxdA==.4G2z7U4HzCICqyY2-CdcJJ4zfJyn6AHECRBfw6JTQYg" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjMzJmQ9bjhxNXIxdA%3D%3D.4G2z7U4HzCICqyY2-CdcJJ4zfJyn6AHECRBfw6JTQYg&amp;source=gmail&amp;ust=1653100703535000&amp;usg=AOvVaw1qvvUuv55vNvk5ac9n7l_c">Julie Gao</a>.
When unicorns lose their magic: Royole shows <a href="https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjM1JmQ9dzBlOXI5eQ==.t5f2TImLcUdemWPocJHvAblM3kHS9W2JmbBVWSAtg-8" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjM1JmQ9dzBlOXI5eQ%3D%3D.t5f2TImLcUdemWPocJHvAblM3kHS9W2JmbBVWSAtg-8&amp;source=gmail&amp;ust=1653100703535000&amp;usg=AOvVaw0OqRzKCVljhKa9Jw50HqIN">steep path for China IPOs</a>.
China lockdowns a “<a href="https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjM3JmQ9cTFmOXg2dA==.u90Ab5-QVCQ10DqMOpeRhpZRPKB6LZgRk31d-PFOvKk" target="_blank" rel="noopener noreferrer" data-saferedirecturl="https://www.google.com/url?q=https://click.mlsend.com/link/c/YT0xOTU0MTAyMTk1OTI2MzQxNDY3JmM9eDByOCZlPTY0MTI5Njc0JmI9OTcxNzE3MjM3JmQ9cTFmOXg2dA%3D%3D.u90Ab5-QVCQ10DqMOpeRhpZRPKB6LZgRk31d-PFOvKk&amp;source=gmail&amp;ust=1653100703535000&amp;usg=AOvVaw20orY9cfZ_kXr06cXIdaMS">double killer</a>” of online, offline businesses, says JD.com CEO.

The Uptake | Thinking Different

Super app operator Grab will begin "tapering" incentives for drivers in the second half of this year as the supply of drivers stabilizes, the Singaporean company said Thursday, looking to achieve profitability after years of heavy spending to retain market share.
"We are laser-focused on meeting our profitability targets and growing sustainably," CEO Anthony Tan said in an earnings call. Through "disciplined cost management," Grab aims to break even for deliveries on adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) by the end of 2023.
The move comes as investors shift away from high-growth, unprofitable companies amid rising interest rates and inflation. Grab went public in December as one of the most anticipated listings of Southeast Asian startups, but has since shed more than 70% of its value.
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Southeast Asia's largest ride-hailing and delivery company reported a loss of USD 435 million for the three months to March, narrowing from a USD 666 million loss in the same period a year ago.
Revenue totaled USD 228 million, up 6% from a year earlier, as Southeast Asian economies gradually returned from pandemic restrictions. Delivery sales rose 70% to USD 91 million, but mobility revenue dipped 22% to USD 112 million.
Grab's revenue is presented net of incentives for drivers, merchants and consumers. The decline for its mobility business shows that Grab spent heavily on incentives, partly to attract drivers returning from lockdown. Consumer incentives rose 85% to USD 344 million, while partner incentives climbed 55% to USD 216 million.
For Grab, controlling such incentives is vital for achieving profitability. Last year, the company spent over USD 1 billion on incentives. These heavy investments resulted in the annual loss ballooning to USD 3.5 billion, from USD 2.7 billion a year before.
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Even as Grab retains its leadership position, competition could affect its plan to reach profitability. Indonesia's GoTo—a merger between ride-hailer Gojek and e-commerce company Tokopedia—went public in April, while Singaporean tech giant Sea is also expanding its food delivery business.
As for Indonesia's food delivery market last year, Grab controlled about 49% while Gojek took 43%, according to venture and reports company Momentum Works.
Tan said inflationary pressure has not affected demand.
"We have not seen headwinds in demand from higher inflation rates," he said. "What is more evident and observable are the higher fuel prices." Grab noted slight increases in prices and surcharges in Singapore and Vietnam, but said it had "yet to see a material impact on mobility demand."
This article first appeared on <a href="https://asia.nikkei.com/Business/Startups/Singapore-s-Grab-to-taper-incentives-in-drive-for-profitability" target="_blank" rel="nofollow noopener noreferrer" data-type="external">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" target="_blank" rel="nofollow noopener noreferrer" data-type="external">partnership with Nikkei</a>.

Singapore's Grab to 'taper' incentives in drive for profitability

Grab