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Facebook can never really leave China, though it isn’t there
Zuck wants to make even more bucks from the Mainland thanks to VR
Happy Diwali to those who celebrated—with so many folks off, we are coming at you on a Tuesday, again.
There’s a lot of fun stuff in today’s weekly recap, lots of existential questions… is Facebook still in China?? (yes, kinda); is Grab profitable?? (not really); is Xiaomi an Apple copycat?? (nah)
Quick shoutout and thanks to our podcasting friends at Brave Southeast Asia for the mention of ATR’s reporting on the SPH-Tech In Asia deal. Check out their episode for insightful thoughts on media in Southeast Asia.
Thanks again for reading and catch you next week, if not sooner…
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News in focus
Facebook can never really leave China, though it isn’t there
Facebook and China aren’t two words you see together often—unless accompanied by a third, censorship-related term. But this week we have not one, but two examples of why Zuckerberg and his empire is still very much reliant on China despite its core products being shut out of the country for nearly 15 years.
Firstly, Meta Platforms has secured a deal with Tencent to sell a new, lower-priced version of its VR headset in China.
That could be significant. Earlier this year, we wrote how ByteDance’s Pico VR unit was leading the overall market thanks to its position in China. Facebook is unapologetically targeting quantity with its VR products—think Android over iOS—unlike Apple, say, which is focused on the premium segment for now at least.
Tencent is as good a partner as you can get. And that despite Beijing state media blasting Zuckerberg back in July for his past criticisms of China. At the time, that was seen as casting doubt over Meta’s potential to bring its VR gear to China.
But there’s more. Facebook is still very much active in China where it picks up advertisers, as Rest of World explains:
That fact was front and center in Meta’s latest earnings call, which attributed much of the recent growth to Chinese ad sales. You can’t advertise to anyone in China, of course, but there are lots of Chinese businesses trying to sell to foreign customers, whether they’re Shein-adjacent e-commerce sellers or part of China’s surging mobile gaming industry. For both kinds of business, Facebook turns out to be a pretty good way to reach their customers.
“In North America, we saw [ad revenue] accelerate by seven points, due primarily to strong demand from China advertisers,” said Meta’s chief financial officer, Susan Li. “Brazil was a strong contributor … due in part to increased demand from China advertisers targeting users in Brazil.”
Interestingly, Meta has resumed including warnings over its China revenue in its corporate filings, where it cautions that the Chinese or US governments could take actions that impact it.
So you might yet get to see more iconic pics of a masked-up Zuck jogging in Beijing smog.
Grab is kinda, maybe, not-quite profitable—but making progress
I’m all about learning. And if you are anything like me, you should tune into ride-hailing companies’ earning calls to get first-world of new financial terms.
Last week, a flurry of people messaged me to let me know that Grab “is now profitable.”
Not quite. The devil is in the details, of course. Grab announced that group adjusted EBITDA for the recent quarter was $29M. For clarity, that’s adjusted earnings before interest, taxes, depreciation. I also saw it summarised as “adjusted core profit.”
Now, I’m not being a hater but that isn’t profitability, at least as I understand it. I’m happy to be educated on this if I’m wrong. The market certainly saw the upside, as Grab shares went up 6% in the aftermath of the results.
On a serious note: this topic deserves a deeper dive from us here at ATR towers. For now, I’m happy to see Grab making progress to become a sustainable business.
On the subject of financial narratives, SoftBank has nowhere to hide from this WeWork shaped catastrophe. WeWork bankruptcy looks set to cost $11.5B, and “his credibility” in the words of Bloomberg (!). The bankruptcy timing was pretty rough on the Japanese tech giant, which posted a $6.2B quarterly (yes, quarterly) loss thanks primarily to WeWork. Ouch.
The good news? Well, the non-negative news is that WeWork’s global businesses are unaffected. But you’d expect some changes and rebrandings at a minimum.
Is Xiaomi really an Apple copycat?
A great essay from ex-Verge gadget-head Sam Byford. Show some love and sign up for his Substack.
There’s already a dearth of reliable media, especially in Asia, so it was sad to see 'The China Project' media company close due to funding link
Nepal says it is banning TikTok over hate content link
Fast fashion e-commerce firm Shein is reportedly targeting a valuation of up to $90B for its impending US IPO—despite frosty US-China relations, you’d imagine Shein NEEDS US public markets to have any shot at going public at such a huge valuation link
Shein beware, ByteDance—which has long wanted a massive IPO—is offering to buy back shares from its employees outside the US for $160; that price values the company at $223.5B, or 26% lower than a year earlier link
Xiaomi is on the comeback trail after a new device and foray into EVs have added $20B to its market cap in Hong Kong, as its share price rose 60% since June link
Chen Shaojie, the founder and CEO of Tencent-backed game streaming platform DouYu, is the latest high-profile Chinese business figure to go missing—he’s apparently been held “incommunicado” by Chinese authorities for weeks after online censors allegedly uncovered pornographic content on the platform link
ByteDance-owned VR arm Pico is to cut jobs and undertake the biggest overhaul since it was acquired 2 years ago link
Chinese venture capital firms are quietly investing in American AI startups, undeterred by growing concerns from U.S. officials about Chinese involvement in local technology firms link
The company behind enterprise-software product Citrix is ceasing business transactions in China link
China Big Tech firms are experimenting with personalised chatbots amid push to monetise generative AI technologies link
Didi announced a profitable Q3 and it has plans to buy back $1B in shares link
Lending startup InCred looks like becoming India’s next unicorn through an impending $140M round although details of the investors have not been released link
Government-backed hackers tried to plant spyware made by NSO Group on the iPhone of an Indian journalist working for the Organized Crime and Corruption Reporting Project (OCCRP) in August, the organization claimed link
A look at conglomerate Tata’s takeover of Apple supplier’s Wistron’s business in a $750M deal link
Snap finally get serious about India, co-founder Evan Spiegel sees room to grow its 200M users link
Online advertising is set to become one of the fastest-growing segments of India’s rapidly expanding digital economy, according to forecasts by technology research company Omdia link.
Perhaps in response, India has proposed a new law with self-certification for broadcasters and streaming giants link
Ontario Teachers’ fund—an institutional investor known for backing startups worldwide—jumped into logistics unicorn Xpressbees’ new $80M round link
Quick commerce startup Zepto raised $31M in fresh funding link
Bob Iger says Disney would like to stay in India amid talk sale talk and a Hotstar subscriber dip link
India commerce minister is set to meet Tesla's Elon Musk amid market entry talks, while Musk’s Starlink is also set to get a licence for satellite comms link
Intel has shelved a planned chip operation expansion in Vietnam, according to reports link
But Apple supplier Luxshare is set to invest $330M more to beef up its capabilities in northern Vietnam link
A Singapore-based edtech startup called EduFi raised $6.1M link
TikTok is holding talks with Indonesian e-commerce companies about possible partnerships link
Philippines-based e-commerce enabler etaily raised a $17.8M Series A link
SK Telecom partnered with Aptos, a blockchain business that emerged from Facebook, and Atomrigs Lab to develop crypto wallet link
Samsung unveils a ChatGPT alternative called Samsung Gauss that can generate text, code and images link
Samsung is also planning ‘Galaxy AI’ and a feature that can translate phone calls in real time link
Coupang’s share price slid after it missed Q3 estimates, that despite 21% revenue growth beating estimates and the firm announcing record active customer numbers—net revenue came in at $6.2B ahead of $5.9B estimates link
Rest of Asia
Taiwan's land squeeze pits advanced chips against ancestral temples link
North Korean ‘BlueNoroff’ group is targeting financial institutions with macOS malware. BlueNoroff is believed to be affiliated with the notorious Lazarus hacking group and has targeted cryptocurrency exchanges, venture capital firms and banks with malware link
Japan will allocate $13B for chip industry support in extra budget link
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