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… The app, equipped with real-time cube state recognition and automated timing, recorded Jiang’s victory in the first round. The second round unfolded in a similar fashion—Jiang completed the cube in another ten seconds, leaving his opponent still twisting, and the match ended decisively after two consecutive wins.
The interactive, internet-connected cube in Jiang’s hand was one of Gancube’s smart cubes, a significant product innovation introduced over the past five years. Jiang believes smart cubes tackle several pain points for Rubik’s Cube enthusiasts, particularly by lowering the learning curve.
Lowering the learning barrier is a critical step. Although the Rubik’s Cube has been promoted worldwide as a puzzle toy, its high entry threshold can be discouraging for beginners. Without deliberate study and practice, most people give up shortly after starting.
When Gancube was first established, Jiang meticulously refined the instruction manual for its products. He once posted an early draft on Weibo, inviting netizens to spot errors, and gave away 100 cubes as rewards. He included the algorithms he had personally compiled and practiced for solving the cube in the manual. “If adults carefully read the manual, they can learn to solve a Rubik’s Cube in three to four hours,” Jiang said.
However, given the countless possible scrambled states of the cube, even with instructional videos or manuals, mastering the solution isn’t easy.
To address this, Gancube’s smart cubes integrate with an app that provides real-time, step-by-step guidance. The app corrects mistakes instantly, allowing users to focus on learning with minimal fuss. According to company data, smart cubes can increase the success rate of solving a Rubik’s Cube from less than 5% to around 30%.
Smart cubes operate using intelligent sensors that digitize the cube’s physical movements, creating a digital twin representation of the object. “We can represent a real object in a digital space. This is a capability of digital twin technology and a core strength of ours,” Jiang explained. This integration of hardware and software allows users to record practice sessions, receive performance feedback, and refine their solving speed.
The smart cube also supports real-time competitions. Its internet connectivity automates timing and eliminates the need for manual start-and-stop mechanisms, streamlining competitive events for greater convenience and accuracy.
The technology developed for smart cubes has been applied to other Gancube products. Features like auto-alignment, powered by over 100 embedded magnets that snap the cube into place with minimal effort, are now standard across Gancube’s lineup.
Despite their premium pricing—some models costing up to RMB 600 (USD 84)—smart cubes currently contribute less than 20% of Gancube’s revenue. To cater to a broad user base, Gancube also offers magnetic cubes, lightweight models, and cube-solving robots, ranging from beginner-friendly designs to advanced competitive tools.
<figure id="attachment_151405" aria-describedby="caption-attachment-151405" style="width: 1024px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-large wp-image-151405" src="https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt-1024x683.jpg" alt="Photo capturing a Gancube solve in progress." width="1024" height="683" srcset="https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt-1024x683.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt-300x200.jpg 300w, https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt-768x512.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt-1536x1024.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2024/12/Gancube-Attempt.jpg 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption id="caption-attachment-151405" class="wp-caption-text">Photo capturing a Gancube solve in progress.</figcaption></figure>
Jiang emphasizes technical refinement as central to Gancube’s product philosophy. Customizable components, including corner block magnets, axle distances, and tension systems, allow players to fine-tune cubes for optimal performance.
Jiang’s perspective is rooted in the growing recognition of the Rubik’s Cube as a competitive sport. “If it were just a toy, it only needs to be visually appealing and safe. The improvements we’ve made wouldn’t matter to consumers. But as a competitive sport, our technology enables professional players to improve, even if only by 0.5 seconds. That’s critical,” he said.
Although the Rubik’s Cube isn’t a major category in the toy industry, it enjoys a dedicated following as a competitive sport. The World Cube Association (WCA), which organizes biennial speedcubing championships, has been instrumental in fostering the cube’s competitive ecosystem. Numerous local and international competitions, including provincial and university-level tournaments in China, further cement its status as a sport.
Rubik’s Cube manufacturers actively sponsor tournaments, form teams, and sign players. As a competitive sport, the Rubik’s Cube gives manufacturers room to improve product performance and price ranges while building brand influence.
According to WCA data, eight of the world’s top ten players (based on average rankings for 3×3 cube-solving) are signed with Gancube. Before launching new products, Gancube collaborates closely with these elite players, providing prototypes for feedback and fine-tuning. Jiang also maintains regular communication with top players to understand their evolving needs.
Jiang attributes Gancube’s rapid growth—from annual revenues of less than RMB 1 million (USD 140,000) at its founding in 2014 to RMB 70–80 million (USD 9.8–11.2 million) by 2019—to the increasing popularity of competitive Rubik’s Cube sports worldwide. The pandemic further accelerated this trend, as home confinement led to a surge in cube enthusiasts.
“The entire market is growing. Even if we did nothing, we’d still see 40% growth. But we put a lot of effort into our products, treating them as competitive gear,” Jiang said.
China’s manufacturing hubs, long known for producing low-cost toys, are now navigating a critical phase of transformation. Gancube’s premium, high-value strategy in the Rubik’s Cube niche serves as a compelling blueprint for other toy manufacturers seeking to break free from price wars and embrace innovation-driven, higher-value product offerings.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3060304686507396">article</a> was written by Leslie Zhang for 36Kr.

Gancube’s premium puzzle: How a champion turned his passion for the Rubik’s Cube into a global business

Entertainment

Creative

China

Advanced robots and artificial intelligence-powered drones will be two of the next key drivers for growth and innovation in the tech industry, according to C C Wei, chairman and CEO of Taiwan Semiconductor Manufacturing Company (TSMC).
Speaking at Taiwan's flagship tech conference on December 16, C C Wei highlighted the increasing need for the integration of hardware and software to power the next generation of AI devices.
"One area I would point out is multifunctional robots, which is the critical direction for the future," Wei said. "I just spoke to the richest man in the world a few days ago, and he told me that multifunctional robots are the most critical area and that he is dedicating great efforts to it, rather than to cars."
The "richest man" comment likely refers to Tesla founder Elon Musk, with whom Wei spoke recently. Tesla is a key TSMC client, as are all the major chip giants, from Nvidia and Apple to Amazon and Qualcomm. Musk and Tesla are developing Optimus, a humanoid robot designed to interact with its surroundings using two arms, hands and legs.
Wei said he and this person had discussed chips and that he told the other man: "If you are willing to pay us, then please don't worry too much. I will make sure you get the chips."
Developing robots that are not only precise but also more flexible like humans requires sophisticated chip designs integrated with software, he said. This is an area where Taiwan has the capability, environment and talent, he added, though further improvements are needed.
Wei said he was sharing his feedback about the industry based on discussions with top TSMC clients over the past two months. One topic that these customers always touched on, he said, was "AI and AI applications."
The TSMC chairman said that Taiwan also has an edge in drones.
"Drones are a sector we have a good advantage in, and we have to focus on how to integrate precision machinery and software in this," Wei said. "It is a very critical area and has a wide range of applications to help people in the future do various measurements, conduct various services and carry products."
The third crucial area he highlighted is the use of AI to develop advanced energy technologies and optimize water and electricity usage. "At TSMC, we've successfully implemented AI to boost production efficiency, saving billions of dollars. This potential is immense, and all industries, including the government, should harness the power of AI," Wei said.
"Taiwan has a lot of good chip design capabilities. We have a good chip manufacturing and packaging sector, and we have lots of companies that have technologies for building AI servers," he noted. "All of these can help Taiwan play a critical role in the next AI era."
The chairman's remarks came at Taiwan's National Science and Technology Conference, which is held every four years and brings together government officials, industry leaders, and academics to discuss the future of technology.
This article first appeared on <a tabindex="0" href="https://asia.nikkei.com/Business/Tech/Semiconductors/TSMC-chief-says-robots-and-AI-drones-to-drive-tech-innovation" rel="noopener noreferrer" data-token-index="1">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing <a tabindex="0" href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/" rel="noopener noreferrer" data-token-index="3">partnership with Nikkei</a>.

TSMC chief says robots and AI drones to drive tech innovation

TSMC

Artificial Intelligence

Deep Tech

Drones

… further validated by industry data. According to Frost &amp; Sullivan, MGP was the only Chinese company among the top ten high-end beauty groups in China in 2022, commanding a 1.2% market share. By 2023, its presence expanded to account for 6% of the domestic cosmetics market, ranking it second among Chinese brands.
As the Chinese beauty industry matures, competition in the premium segment has intensified. Rivals such as Yatsen Holding have made significant moves, acquiring the French luxury skincare brand Galenic in October 2020. Other domestic heavyweights, including Proya and Botanee, have also launched premium product lines priced at RMB 400–1,000 (USD 56–140), directly challenging MGP’s dominance.
For MGP, sustaining its premium position requires addressing critical challenges, particularly in research and development (R&amp;D). From 2021 to 2023, the company’s R&amp;D expenditures were RMB 13.703 million (USD 1.9 million), RMB 14.548 million (USD 2 million), and RMB 23.975 million (USD 3.4 million), representing ratios of just 0.87%, 0.8%, and 0.83% of revenue, respectively. By the first half of 2024, R&amp;D investments reached RMB 15.267 million (USD 2.1 million), but the ratio fell further to 0.77%. This lags significantly behind international luxury brands like L’Oreal, which maintain R&amp;D ratios exceeding 3%, and even domestic competitors such as Yatsen (4%), Proya, and Shanghai Jahwa (around 2%).
Another pressing concern is MGP’s reliance on its flagship brand. Between 2021 and the first half of 2024, its main brand accounted for more than 96% of the company’s total revenue, reaching 99.3% in 2024. Meanwhile, the budget-friendly sub-brand, Love For Keeps, has struggled, contributing just 0.7% of total revenue in the same period. This heavy dependence raises questions about long-term stability and growth potential.
Recognizing these vulnerabilities, MGP has initiated measures to diversify its product portfolio and enhance technical capabilities. In April 2023, the company began constructing an R&amp;D factory in Hangzhou, scheduled to be operational within two years. Furthermore, in early 2024, MGP launched a cosmetics technology company in Hangzhou with a registered capital of RMB 500 million (USD 70 million).
These efforts signal a proactive approach to mitigating risk and driving sustainable growth. However, MGP’s journey is far from complete. To solidify its standing in the competitive premium beauty market, the company needs to expand its R&amp;D investments, diversify its revenue streams, and reduce reliance on a single brand.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3095284923431048">article</a> was written by Chen Sizhu for 36Kr.

After its dazzling IPO, Mao Geping Cosmetics must now deliver

Retail

Consumer Services

Hong Kong

Multimodality, hardware, and coding are among the most prominent artificial intelligence trends shaping the latter half of 2024. The first two areas may be familiar to many, given the strides made by various industry players. However, AI coding—virtually unheard of last year—has swiftly gained traction, emerging as a new narrative in the application layer of AI.
The latest development in this space is the resignation of Chen Zhijie, TikTok’s algorithm lead, who is reportedly planning to launch his own venture centered on AI coding.
Before joining ByteDance, Chen served as chief technical architect at Baidu from 2010 to 2019, where he was primarily responsible for advertising algorithms. After joining ByteDance in 2020, he led algorithm development for domestic platforms like Douyin, Toutiao, and Xigua Video. By 2022, he had risen to the role of TikTok’s algorithm lead, overseeing recommendation systems and data science teams to support video, live streaming, e-commerce, and content distribution.
2024 witnessed the rise of AI coding products such as Devin, Cursor, and OpenAI o1, which garnered global traction and renewed attention for this niche within AI applications. Baidu CEO Robin Li spotlighted AI coding as a promising avenue during the company’s Q3 director-level meeting, while Alibaba Cloud and ByteDance introduced their own offerings—Tongyi Lingma and MarsCode, respectively.
“Coding stands out due to its low susceptibility to 'hallucination' compared to long-text generation,” an algorithm engineer at Moonshot AI told 36Kr. This reliability has driven commercial use cases, such as Kimi’s assisted programming, which received internal approval.
Startups are also flourishing. Su Wen, a former investor at China Growth Capital, founded AIGCode in January 2024 and secured two funding rounds. Meanwhile, Ming Chaoping, previously a product lead at Moonshot AI, launched Xinyan Yima, valued at USD 50 million in its angel funding round—comparable to early valuations of leading Chinese AI unicorns.
Despite varied strategies, many AI coding startups aim to go global. “Coding is free from cultural or linguistic constraints, unlike language-based applications, which require significant regional adjustments,” an investor told 36Kr. “AI coding products are inherently standardizable, reducing barriers to scaling.”
The path to success in AI coding hinges on two factors: model capabilities and customer willingness to pay. Overseas markets, where top coding models like OpenAI’s o1 and Claude excel in handling complex natural language inputs, offer fertile ground. In contrast, many domestic models struggle with long-sequence processing and require auxiliary systems like retrieval-augmented generation (RAG) for stability.
Claude’s integration into StackBlitz’s Bolt illustrates this potential. Within four weeks, Bolt achieved USD 4 million in annual recurring revenue (ARR) and attracted over 100,000 weekly users. “Claude 3.5 Sonnet is the enabling technology that made this product possible,” said Eric Simons, Bolt’s co-founder and CEO.
The surge in AI coding startups and investments stems from its position as one of the few monetizable AI applications today. With algorithm engineers indispensable across industries, the productivity gains enabled by large models in coding are undeniable. A <a href="https://menlovc.com/2024-the-state-of-generative-ai-in-the-enterprise">2024 survey</a> by Menlo Ventures revealed that AI coding products achieved the highest adoption rate among major AI application scenarios, reaching 51%.
This growing demand has transformed AI coding into a multimillion-dollar revenue generator. In December 2024, The Information reported a tenfold increase in annualized revenue for Anthropic’s software development and code generation business over just three months. Similarly, Microsoft disclosed in its July financial report that GitHub Copilot’s annual recurring revenue (ARR) hit USD 300 million, contributing 40% of GitHub’s overall revenue growth.
Cursor, however, has showcased even steeper growth. Research firm <a href="https://sacra.com/c/cursor/">Sacra</a> estimated Cursor’s ARR in November 2024 at USD 65 million, marking a staggering year-on-year increase of 6,400%.
Aspiring to replicate such growth trajectories, many AI coding startups are entering a market recognized for its vast opportunities, numerous niche scenarios, and relatively low competition. Yet, some industry professionals argue that the ultimate differentiator for these startups will not be their model sophistication but their ability to productize.
Currently, most players aim to emulate Cursor by developing copilot-style products that facilitate natural language dialogue. The success of these tools hinges on their seamless integration with integrated development environments (IDEs) and their capacity to blend smoothly into developers’ workflows.
“Productization is a core strength of many Chinese AI startups with visibility overseas,” an industry expert told 36Kr. “This is also why investors see significant potential for Chinese AI coding ventures to succeed globally.”
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3091485505304966">article</a> was written by Zhou Xinyu for 36Kr.

AI coding takes the cake as startups and giants dive in

TikTok

Artificial intelligence

… class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-large wp-image-151385" src="https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot-1024x683.jpg" alt="Photo of the MagicBot humanoid robot, currently in development by MagicLab." width="1024" height="683" srcset="https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot-1024x683.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot-300x200.jpg 300w, https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot-768x512.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot-1536x1024.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2024/12/MagicBot.jpg 1920w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption id="caption-attachment-151385" class="wp-caption-text">Photo of the MagicBot humanoid robot, currently in development by MagicLab. Photo source: MagicLab via 36Kr.</figcaption></figure>
whereRelatedArticle
<h3>Bolttech, Catcha Digital, Pixelbloom, and more made recent headlines:</h3>
<ul>
<li aria-level="1">Bolttech, a Singapore-headquartered insurtech firm, raised over USD 100 million in a Series C funding round led by Dragon Fund, with additional backing from Baillie Gifford and Generali.</li>
<li aria-level="1">Catcha Digital, an internet and digital media investment company, agreed to acquire a 70% stake in Tastefully, a leading food expo organizer in Malaysia, for MYR 7.6 million (USD 1.7 million). Catcha is also aiming to acquire a 60% stake in Drive 2 Digital (D2D) for MYR 16.2 million (USD 3.6 million).</li>
<li aria-level="1">PixelBloom, an AI-generated content (AIGC) company, secured an undisclosed amount of funding in a Series B2 round led by the Beijing Artificial Intelligence Industry Investment Fund, with support from other investors.</li>
</ul>
If there are any news or updates you'd like us to feature, get in touch with us at: <a href="mailto:hello@kr-asia.com">hello@kr-asia.com</a>.
<style>.addcaption{font-size:14px!important;line-height:20px!important;color:inherit;padding-top:8px;border-top:1px solid #e8e8e8}.entry-content blockquote p{font-size:22px;line-height:33px}@media only screen and (max-width:767px){.entry-content blockquote p{font-size:20px;line-height:32px}.entry-content h3{font-size:24px;line-height:32px}}</style>

Deals in brief: Kickstart Ventures backs Lydia AI, Alibaba unveils USD 150 million AI fund, CATL confirms interest in Hong Kong listing, and more

Venture Capital

Private Equity

Investment

Merger &amp; Acquisition

Thailand

Philippines

Saudi Arabia

Southeast Asia

Middle East

… significant market buzz.
Amid this rapid growth, price-based competition has become the norm. Southern Metropolis Daily reported that, this summer, sugar-free teas—initially priced at over RMB 5 (USD 0.7)—were heavily discounted, with some dropping to as low as RMB 3 (USD 0.4). Visits to convenience stores in Beijing revealed even more aggressive promotions, with certain brands offering deals like “buy a second bottle for RMB 1.”
In contrast, Inikin markets itself as a convenience-driven product, offering consumers freshly brewed tea in a bottle with just a twist of the cap—a feature enabled by its innovative technology. Retailing at RMB 6–6.5 (USD 0.8–0.9) per 455-milliliter bottle, Inikin faces an uphill battle in the crowded sugar-free tea segment and may eventually find itself drawn into the price wars.
Visits to convenience stores and supermarkets in Beijing by 36Kr revealed that tea beverage shelves are dominated by products from Uni-President, Nongfu Spring, and Suntory. Cross-industry brands, including those launched by dairy companies, remain far less prominent in comparison.
Dairy industry analyst Song Liang noted that, while Yili has made frequent cross-industry moves, it has maintained a cautious approach to market entry. According to Song, Yili’s bottled water and sugar-free tea businesses remain in the exploratory phase.
However, as a legacy dairy brand, Yili benefits from robust distribution capabilities. The company has previously stated that its bottled water products will leverage its existing liquid milk distribution network while experimenting with hybrid distribution models specifically tailored for the bottled water segment.
“Can Yili and other dairy companies carve out a share of the tea market? The answer is yes, but the size of that share remains to be seen,” Song said. He further emphasized the importance of diversifying into functional beverages and health foods, as well as leveraging overseas markets to unlock additional growth opportunities.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3080922804696704">article</a> was written by Chen Sizhu for 36Kr.

Yili pours innovation into bottled tea to offset dairy market slowdown

… experienced workers with new hires to instill a sense of belonging and shared purpose. This approach has been integral to Xiaocaiyuan’s long-term stability and employee retention.
In addition to its focus on operational efficiency, Xiaocaiyuan is expanding into new areas, including delivery and retail. By 2024, delivery accounted for 37% of the company’s revenue, up significantly from 15.5% in 2021. Xiaocaiyuan is also exploring growth opportunities in selling premium food ingredients, further diversifying its revenue streams and broadening its market reach.
Xiaocaiyuan’s success lies in its ability to balance passion with method. Unlike earlier Chinese dining IPOs, which often faltered due to insufficient modernization, Xiaocaiyuan has embraced standardization, technological innovation, and a people-centric approach. The result is a blueprint for future Chinese dining enterprises.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3090912828225668">article</a> was written by 36Kr VClub.

Xiaocaiyuan's affordable dining model shines in IPO spotlight

… home improvement, pets, medications, and health checkups, as well as features like joint memberships, unlimited free shipping, and online returns and exchanges, to meet increasingly refined consumer needs.
<h3>Super users as the backbone of platforms</h3>
Ultimately, the essence of paid memberships is identifying a platform’s "super users."
In the long run, every industry follows the Pareto principle: a small number of core users with high spending power and engagement contribute a disproportionately large share of consumption. These super users form the foundation of an e-commerce platform’s revenue.
For instance, Alibaba’s 88VIP currently boasts 46 million members—a relatively small subset of the platform’s total active user base. Yet, during this year’s Singles’ Day presale, 88VIP members made 60% more purchases than last year. Their average spending also increased by over 30%, and their visits rose by 50%. Over half of the sales of Tmall’s top brands came from 88VIP members.
Vipshop’s SVIP is another relevant example. By offering extensive benefits like an additional 5% discount on sale items, exclusive limited-time offers, unlimited free shipping on self-operated goods, offline discounts, voucher packages, and private online and offline sales, Vipshop has cultivated a highly loyal group of super users. In Q3 this year, the number of active SVIP users grew by 11% year-on-year to approximately 7.5 million, contributing 49% of Vipshop’s online sales.
By segmenting consumers and targeting paid members with tailored services and benefits, platforms can significantly enhance user loyalty and engagement. This creates a stable foundation for consistent GMV growth and recurring revenue while fostering a mutually beneficial relationship between platforms and super users. Furthermore, this cycle naturally attracts high-quality merchants to join, contributing to a sustainable e-commerce ecosystem.
In today’s competitive environment, this strategy strengthens a platform’s resilience and defines its long-term performance ceiling.
For example, ordinary users who join JD.com’s Plus membership see their annual spending and purchase frequency increase by more than 150% and 120%, respectively, within a year. Similarly, according to a 2024 report by CBN Research Institute on paid e-commerce memberships, 88VIP members were found to be the most loyal in the industry, with an 83% renewal rate. Alibaba’s official data shows that, during this year’s Singles’ Day, the scale of Tmall brands partnering with 88VIP grew by over 300%, driving new growth for brand sales.
As the mobile internet enters its later stages, the significance of membership-based economies is becoming increasingly evident. The quest to acquire, nurture, and retain members may hold the key to sustainable growth in this fiercely competitive landscape.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3065799731553664">article</a> was written by 36Kr Caijing.

In China’s e-commerce battle, memberships are the new loyalty currency

On-demand Services

E-commerce

Consumer Economy

… zones.</li>
</ol>
Energy costs and tax benefits are highly favorable for Chinese businesses. In KEZAD’s free zone, for example, industries can enjoy zero taxes. The UAE has no personal income tax and a value-added tax (VAT) rate of 5%, but KEZAD’s industrial sector is VAT-exempt, along with customs duties. Although businesses with over AED 375,000 (USD 102,100) in revenue must pay 9% corporate income tax, many industries are tax-exempt, such as manufacturing in KEZAD.
Labor-intensive industries may encounter efficiency issues, but high-tech and automated enterprises have a distinct advantage.
<figure id="attachment_146046" aria-describedby="caption-attachment-146046" style="width: 1024px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-large wp-image-146046" src="https://console.kr-asia.com/wp-content/uploads/2023/10/Pony.ai-Neom-1024x768.jpg" alt="Photo of James Peng (third from left), co-founder and CEO of Pony.ai, shaking hands with Majid Mufti (third from right), CEO of Neom Investment Fund, alongside representatives from both organizations." width="1024" height="768" srcset="https://console.kr-asia.com/wp-content/uploads/2023/10/Pony.ai-Neom-1024x768.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2023/10/Pony.ai-Neom-300x225.jpg 300w, https://console.kr-asia.com/wp-content/uploads/2023/10/Pony.ai-Neom-768x576.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2023/10/Pony.ai-Neom.jpg 1280w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption id="caption-attachment-146046" class="wp-caption-text">Pony.ai, a Chinese autonomous driving technology company, is among the notable Chinese firms to secure investment and partnerships with Saudi investors. In October 2023, it <a href="https://kr-asia.com/pony-ai-secures-usd-100-million-from-saudi-arabia-amidst-rising-middle-eastern-interest">raised USD 100 million in Series D2 financing</a> from the Neom Investment Fund, the investment arm of Saudi Arabia’s Neom future city project. Photo of James Peng (third from left), co-founder and CEO of Pony.ai, shaking hands with Majid Mufti (third from right), CEO of Neom Investment Fund, alongside representatives from both organizations. Photo from KrASIA’s archive.</figcaption></figure>
<h3>36Kr: Saudi Arabia has grown rapidly in recent years. How does its infrastructure compare to the UAE’s in attracting investment?</h3>
YL: I’m not sure about other areas, but KEZAD provides fully developed infrastructure. Land is leveled, electricity and water are connected to the doorstep, and roads are built to the entrance. Rainwater and sewage systems are also completed underground before land is handed over to Chinese businesses, with no extra costs.
<h3>36Kr: Can you give a specific example? Would the cost of building a factory in the Middle East be higher than in China?</h3>
YL: I think the costs are actually lower. Take for example a modern agriculture company I helped introduce into KEZAD: land is very cheap after subsidies, electricity costs are half of those in China, and since operations require significant cooling, the savings are substantial. Taxes are minimal, and once the business grows to a certain scale, costs become very manageable. Labor needs are limited, but product prices in the Middle East are 3–4 times higher.
whereRelatedArticle
<h3>36Kr: The Middle East has always been unstable, with events like the Israeli-Palestinian conflict and the <a href="https://kr-asia.com/red-sea-crisis-shipping-costs-skyrocket-dealing-setback-to-cross-border-sellers">Red Sea crisis</a>. In your opinion, does geopolitical risk affect the Gulf markets, and how can Chinese businesses mitigate such risks?</h3>
YL: This is a geopolitical issue, so I’ll keep my response brief. Looking at the UAE’s diplomatic behavior in recent years—such as hosting the presidents of China, the US, and Russia—it’s clear that the UAE does not take sides. The nation values freedom and openness, aiming to become the “Singapore of the Middle East,” with a fundamentally neutral stance.
Interestingly, many wealthy Russians have moved to the UAE in recent years, bypassing Singapore.
<h3>36Kr: How have Saudi Arabia and the UAE’s attitudes toward Chinese businesses changed in recent years?</h3>
YL: They are undoubtedly more welcoming toward China.
First, as the world’s largest energy consumer, China is an ideal customer.
Second, Saudi Arabia made significant purchases at the recent China International Aviation and Aerospace Exhibition, including Chinese weapons.
Third, the region’s massive demand for infrastructure aligns with the strengths of Chinese companies, which are capable, cost-effective, and often willing to provide financing—making collaboration particularly appealing.
These factors collectively foster stable relationships, creating favorable conditions for Chinese businesses to expand into the Middle East.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3082382424078724">article</a> was written by Leslie Zhang for 36Kr.

Why are Chinese companies flocking to the Middle East (again)?