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Alibaba makes big changes to catch younger rivals
Plus: TikTok doubles down, Byju's in crisis and layoffs at Grab
This week we have a bumper edition for you—which may explain why you’re reading this on a Tuesday rather than the usual Monday.
We look at TikTok’s huge push to get deeper into retail and to dominate Southeast Asia; there’s a crisis simmering away at Byju’s, as the world’s most valuable education startup sees board members and its auditors run from its business.
In China, Alibaba has made big moves at the top as co-founder Joe Tsai takes a more operational role and there’s a new CEO. And, last but not least, Grab CEO and founder Antony Tan finally made layoffs (1,000 roles) with an uncharacteristically off-tone message to staff.
All that and much more, of course.
See you again next week,
News in focus
It was a huge week for Alibaba, which made a major management shuffle:
Brought back Joseph Tsai as chairman to help turn the business around link
Announced Eddie Wu would succeed Daniel Zhang as CEO—Zhang will lead the cloud computing business, which is headed for an IPO link
Jack Ma issued a rallying call, urging top executives to ‘go back to Taobao’ to fend off upstart rivals in e-commerce link
The FT looks at how Wu is preparing to run the Alibaba empire he built with mentor Jack Ma link
Tiktok makes more moves
Why is Alibaba making drastic change. One reason is TikTok, which is expanding its online retail offerings, with ByteDance selling products through the app as it prepares to challenge Shein and Amazon in the US link
In recent weeks, UK users have begun to see a new shopping feature within the TikTok app called “Trendy Beat”, a section offering items that have proven popular on videos, such as tools to extract ear wax or brush off pet hair from clothing
Trendy Beat’s shopping page links it to a company called Seitu, registered at an address in Singapore. Three people familiar with Project S said Seitu was owned by ByteDance, and TikTok confirmed it was a subsidiary.
TikTok is also turning to Southeast Asia for new growth link
Far away from the tough scrutiny he faced in Washington DC, TikTok chief executive Shou Zi Chew was milking the crowd as he was feted at an event in Indonesia this month. Dressed in a traditional batik shirt, the Singaporean embraced an enthusiastic audience in the capital Jakarta. Amid flashing disco lights and upbeat music, he declared to applause from government officials and fans that TikTok would “invest billions” in south-east Asia. Indonesia specifically would receive $10bn in investment from TikTok over the next five years, he said.
And in the US it signed logistics deals to ensure that the products people buy on its app arrive smoothly at their front doors link
Byju’s in crisis
The world’s highest-valued edtech startup has had a tough year or so, but now a number of its squabbles have slipped into public view.
Byju's auditor Deloitte and three board members sever ties as Byju’s escalating legal battle with its lenders and its plummeting valuation in the eyes of some investors. Deloitte, which was slated to audit Byju's until 2025, quit with "immediate effect" mid-term due to "long-delayed" financial statements by the company.
The government ordered an investigation into Byju’s days before the auditor and board members resigned, one report says.
As you’d expect, this rattling has seen morale wane among employees. We can likely expect more turbulence.
Grab finally makes layoffs
Somehow, Grab made it this far without laying off staff. Not now. It finally conducted its first layoff, letting go of 1,000 staff—that’s around 10% of total headcount. CEO Anthony Tan offered generous benefits to those impacted but his memo to staff didn’t read like a heartfelt message:
“As a result, our bottom line has improved every quarter since Q1 2022. With or without this exercise, we’re on track to hit Group Adjusted EBITDA breakeven this year.”
As many have pointed out, what on earth is “Group Adjusted EBITDA breakeven.” Tan also said he wasn’t making layoffs to be profitable:
“The primary goal of this exercise is to strategically reorganise ourselves, so that we can move faster, work smarter, and rebalance our resources across our portfolio in line with our longer term strategies.”
This week in geopolitics
The WSJ reports that US tracked Huawei and ZTE workers at suspected Chinese spy sites in Cuba link
China’s cloud computing firms are raising concern for the US government with the Biden administration exploring whether it can mount a campaign against Chinese tech giants like Alibaba and Huawei link
Shein is trying to shed its Chinese image to maintain its position as a favourite of young American consumers—efforts to reshape its public image include addressing American lawmakers’ concerns about the origins of its cotton link
ASML, the world’s most valuable chip equipment maker, says decoupling its chip supply chain so cut out China and other countries would be “extremely difficult and expensive” if not impossible link
Ant Group is developing Zhen Yi, a large-language model technology that it says will power ChatGPT-style services link
China’s 618 shopping festival is losing its shine as Alibaba and JD avoid sales figures for more flattering data link
Reuters looks inside China's underground market for high-end Nvidia AI chips, which are under US trade sanctions link
Crypto giant Animoca Brands landed an undisclosed, strategic investment from Japanese conglomerate Mitsui link
French broadcaster Canal+ is buying 26% of Hong Kong-based streaming service Viu for $300 million—the deal gives it an option to take majority control link
Shein will re-enter India after a 3-year absence with strict licensing rules, which will see the retail arm of Reliance fully own the domestic business. Singapore-headquartered Shein will offer production support and training to over 25,000 small and mid-sized local suppliers so they can produce for Shein-branded products globally link
Google is following Apple's India playbook as it scouts for suppliers to assemble Pixel smartphones locally link
Space tech startup Digantara raised $10M led by Peak XV Partners as it plans to kick off commercial space operations and satellite traffic management link
India approved US chipmaker Micron Technology's $2.7B plan for a new semiconductor testing and packaging unit—which will see Micron invest up to $825M link
Elon Musk says he is looking to bring Tesla and Starlink to India after meeting with PM Modi link
India’s publicly-listed consumer tech companies are seeing their share prices rebound thanks to a new focus on profitability link
Blume Ventures makes first close of $25B for new opportunity fund link
Following a meeting with Modi, Amazon plans to invest a further $6.5B in India, which will take its total investment in the country to $26B by 2030—meanwhile Google, which also met PM Modi, will invest $10B in India’s digitisation fund and open a global fintech operation centre in Gujarat link
Ripple secured a Singapore licence to offer regulated digital payment token products and services in the city state link
Indonesia and SpaceX launch the country's largest telecommunication satellite from the United States, in a $540 million project intended to link up remote corners of the archipelago to the internet. link
iPhone shipments and sales are increasing in Southeast Asia link
Malaysia will take legal action against Meta for failing to remove "undesirable" posts, the strongest measure the country has taken to date over such content link
Meta is also under pressure from Vietnam's government to censor dissent on Facebook link
Singapore’s MAS proposed a digital money system, following which Amazon and Grab are initiating pilot trials link
Go-Ventures, the VC arm previously helmed by Gojek, closed its $240M second fund and rebranded as Argor Capital link
In Borneo, Indigenous communities are using mapping tech to claim their land rights and fight the expansion of oil palm plantations link
Masayoshi Son ended his seven-month silence to make a case for SoftBank’s future link
Son says SoftBank will go on the “counteroffensive” after nearly three years of asset sales and hoarding cash to resume the technology group’s investments in artificial intelligence—he included a bizarre set of anecdotes around his conversations with ChatGPT, which included sharing a lot of new business ideas. You’d love to see the transcript! link
YouTube will launch a world-first official shopping channel for live commerce in South Korea later this month link
Netflix has outlined its $2.5B bet on K-Drama, which will see a four-year push with local organisations to groom talent and global shows link
Taiwan and South Korea, once tech industry rivals, are joining forces under geopolitical pressure link
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