Alibaba cancels hotly-anticipated cloud business spinoff
Not OpenAI levels of drama, but Alibaba shareholders may also feel blindsided
Welcome back,
Talk of the week is very much on OpenAI, which had a crazy Friday in which CEO Sam Altman appeared to be pushed out by the board. This weekend, however, news suggests he may return following pressure from Microsoft and other investors who were blindsided.
We don’t have that level of drama from Asia this week (thankfully!) but Grab did lose a key executive, and Alibaba’s retail investors may feel blindsided after the e-commerce giant cancelled plans to give its fast-growing cloud business a spinout and future IPO.
Elsewhere, ByteDance’s revenue is zooming—past even its more established Chinese rivals—and it might offload its gaming unit, while Thailand is expecting billions in investment from cloud firms; and Singapore is taking strides to regulate and roll out stablecoins.
See you next time,
Jon
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News in focus
Alibaba cancels hotly-anticipated cloud business spinoff
Alibaba’s cloud business has long been one of the most promising within the company, growing at breakneck speed for years as its e-commerce units hit saturation, struggled to grow overseas or weathered tough competition. But a proposed spinoff, and subsequent IPO, have been put on hold.
That’s because of the impact of the current tension between the US and China on the business. The Biden administration has placed restrictions on the export of advanced chips to China, which will impact Alibaba Cloud’s ability to compete and gain customers, even without the current challenge from the geopolitical tension.
Instead, Alibaba will keep its cloud division in house. That has seen $20B shaved off its market value, but Alibaba is countering with plans to pay a first-ever annual dividend, to the sum of $2.5B, in lieu of a payout to investors for the cloud business listing.
The cloud listing was one of standout expectations from Alibaba’s aggressive restructuring plan, announced in April, which split the business into six units to give key business divisions the autonomy to compete more nimbly against rivals. This new development may explain why former CEO Daniel Zhang, who led the cloud division, exited Alibaba entirely in June.
Grab loses another high-profile exec
Hot on the heels of Grab co-founder Hooi Ling Tan stepping down from the company in March, a second prominent executive has left after President Ming Ma called time on the ride-hailing firm.
Ma’s appointment in 2016 was a big deal at the time. He joined from SoftBank, a Grab investor, and was widely seen as important for injecting savvy, financial know-how into the business. Ma was as influential, if not more influential than CEO Anthony Tan, when it came to running the business and of course keeping the line open with SoftBank and other investors.
But with Grab now a public company, Ma’s mission was finished some time ago so it isn’t a huge surprise to see him move on. If anything, it could have come a while ago.
China e-commerce earnings
China’s top three online sales firms reported earnings last week, here’s what you need to know:
Tencent reported a 9% drop in profit (a third consecutive profit drop) though sales continued to grow link
Alibaba beat estimates as revenue grew 9% but GMV growth was sluggish for core services Tmall and Tobao link
JD.com saw its Q3 profit jump 33% year-on-year link (but it removed its retail CEO after brutal Singles’ Day price war link)
How an obscure Indian startup became a hard-hitting cyberespionage firm
Appin was a leading Indian cyberespionage firm that few people even knew existed. A Reuters investigation found that the company grew from an educational startup to a hack-for-hire powerhouse that stole secrets from executives, politicians, military officials and wealthy elites around the globe. Appin alumni went on to form other firms that are still active.
China
ByteDance is closing the revenue gap with Meta as it generates more sales from advertising and e-commerce—revenue surged more than 40% to $29B in Q2 link
Elsewhere, ByteDance is discussing the sale of its gaming unit Moonton Technology with potential buyers, two years after it acquired the Shanghai-based studio in a deal that valued it at $4B link
And: ByteDance is said to be testing content paywall on Douyin, the Chinese version of TikTok link
China has laid a new internet backbone that’s capable of 1.2 terabit per second—making it the world’s fastest internet which can send the equivalent of 150 films per second, three times faster than nearest rival in the US and two years earlier than industry forecasts link
Rest of World has a multi-story feature on “How China became the world’s shopping cart” link
Shein’s revenue reportedly surged more than 40% year-on-year reaching $24B between January-September—its sights are now set on Amazon with an expansion beyond fast fashion and into other goods like appliances and electronics. link
Transsion is the smartphone maker you’ve never heard of, but it joined the top five phone maker ranks this year and shipments grew a further 35% year-on-year in Q3—Africa and South Asia are its biggest markets but it is expanding as it closes in on Oppo’s market share link
India
India’s game streaming companies—including Loco and Rooter—are looking to take on YouTube and Twitch overseas link
Loco, which is backed by investors like South Korean gaming giant Krafton and Indian gaming-focused venture firm Lumikai, quietly started testing its Arabic app in multiple West Asian countries and is eyeing Latin America
India’s central bank has enforced several measures to cool down high growth in consumer credit in a move that will impact consumer spending and many startups in the South Asian market, according to industry executives said link
Amazon is targeting merchandise exports worth $20B from India by 2025 by adding thousands of small sellers to its e-commerce platform link
India grants incentives for Dell, HP and Foxconn to make IT hardware locally link
Southeast Asia
Meituan has held talks with Delivery Hero about buying Southeast Asian operations that run under the Foodpanda brand—Grab was previously linked with a potential acquisition link
Alibaba is reportedly taking a minority stake in Vietnamese cosmetics and beauty firm Hasaki link
Used-car marketplace Carsome is cutting hundreds of jobs to reduce costs as it works to reach profitability ahead of a potential stock-market listing—Indonesia and Thailand are said to be the hardest hit link
A new trend is seeing moped taxi drivers in Indonesia keen to ditch EVs because they’re poorly designed and not welcomed by passengers link
Sea swung back to a loss in the third quarter due to flagging consumption and intensifying competition from Alibaba and TikTok on its Shopee e-commerce business link
Thailand says cloud providers AWS, Google and Microsoft plan to cumulatively invest $8.5B into the country through new data centers, hiring and other initiatives link
The Monetary Authority of Singapore announced it will pilot a live central bank digital currency for wholesale interbank settlement next year link
This pilot will not be simulated, but will involve the use of a live wholesale CBDC to settle payments between commercial banks. Thursday's announcement added that future pilots could include the use of a wholesale CBDC for the settlement of cross-border securities trade.
Singapore awarded a batch of in-principle licence approvals to stablecoin issuers—approvals for Paxos Digital and StraitsX could mean each entity issues a regulated token link
South Korea
South Korea’s memory-chip exports increased in October for the first time in 16 months, offering more evidence for the revival of demand for the country’s most important products. link
Sapeon, an artificial intelligence chip startup backed by South Korea's telecom-to-chip conglomerate SK Group, launched its latest chip for data centres link
Samsung boss Jay Y. Lee denied wrongdoing as South Korea prosecutors seek jail term over an $8B merger between Samsung affiliates in 2015 link
South Korea’s national pension fund has bought $19.9M of Coinbase shares link
LG Technology Ventures, LG Group’s corporate venture capital arm, has created a 400B won ($309M) fund to invest in global startups in AI, batteries and mobility link
Taiwan
Foxconn booked a surprise quarterly profit jump, but it maintains a conservative outlook for 2024 link
Foxconn says it has contingency plans in case the company faces repercussions in China over its founder’s bid for the Taiwan presidency link
Japan
Japan will make app store operators like Apple and Google responsible for paying consumption taxes on content sold by foreign developers, to more effectively recover levies collected by small companies with no physical presence in Japan link
Japanese lunar technology company ispace will make its second attempt at putting a lander on the moon in the fourth quarter of 2024, just about two years after it launched its first failed mission link
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