The rise of BYD, China’s answer to Tesla that's powered by $2.6B in government help
Plus AI boyfriends in China, Masa Son wants his own Nvidia and more
Welcome back,
This week we’re looking at BYD (Build Your Dreams), the Chinese giant that dominates EV sales in China and is increasingly growing overseas too, anecdotally its vehicles seem to pop up in Bangkok and across Southeast Asia for me personally.
Elsewhere we have Alibaba’s continued struggle and efforts to rebuild, Masa Son’s desire to build his own Nvidia and South Korea’s u-turn on a bill to limit major internet firms. AI boyfriends are apparently getting popular in China (!), India’s UPI payment system is already impressively global, once-hyped e-commerce firm Wish now has a Singapore-based owner and Paytm might salvage its QR payment business but its bank looks cooked.
All of that and more in this week’s (delayed) issue!
That’s all for this week—have a great one,
Jon
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News in focus
The rise of BYD
The New York Times has a fascinating feature on how China built EV firm BYD—”its Tesla killer” which began life as a battery manufacturer that launched its first vehicle to much ridicule in 2007.
Today, though, BYD is arguably the up-and-coming global EV leader with sales growing by 1M per year. While 80% of sales are in China, it is growing rapidly branching out:
The company passed Tesla in worldwide sales of fully electric cars late last year. BYD is building assembly lines in Brazil, Hungary, Thailand and Uzbekistan and preparing to do so in Indonesia and Mexico. It is rapidly expanding exports to Europe. And the company is on the cusp of passing Volkswagen Group, which includes Audi, as the market leader in China.
How did it get here? The company recently revealed it had received $2.6B in “government assistance” between 2008 and 2022, while local policies—such as taxi firms buying its vehicles—have assisted while investment from Warren Buffet put it on the global map. In China, a price war means its entry level vehicle retails for just over $10,000.
BYD’s newest focus is autonomous driving and it has pledged to spend $14B developing the technology. There’s lots more interesting information—including details of BYD’s walled campus—in this piece.
Alibaba faces up to painful change
It’s all change at Alibaba, the e-commerce giant that has lost its way and fallen behind fast commerce and social-focused rivals like Temu, Shein and TikTok Shop.
Rural communities once eulogised Jack Ma—naming streets after him such was Alibaba’s economic impact—but are now selling goods across all platforms, including Pinduoduo, JD.com, Douyin and others because Alibaba’s business simply can’t guarantee sales like they used to. Factories which produce goods like cabinets and coffee tables experienced a second wind under Alibaba’s e-commerce growth but they’re now exploring other avenues for online sales too such is Alibaba’s struggle.
Alibaba is also rethinking its ‘new retail’ strategy to merge online and offline selling—which influenced companies across the world.
On its recent quarterly earnings call, Alibaba’s chairman Joe Tsai revealed that the firm has formed a capital management committee to work on divesting “non-core” assets, including several physical retail businesses.
“[It] makes sense for us to exit these businesses, but this will take time given the challenging market conditions, but we’ll continue to work on it,” said Tsai on the call.
Right before Alibaba posted its earnings, Reuters reported that the e-commerce company was looking to sell its tech-powered grocery brand Freshippo and RT-Mart, a 26-year-old supermarket chain. Nine months into Alibaba’s 2024 fiscal year, the firm has exited $1.7 billion worth of non-core investments, according to Tsai.
Masa Son lost out on Nvidia—now he wants to build his own Nvidia
SoftBank may have sold its Nvidia stake early, as noted last week, but now Masayoshi Son is building his own AI-focused chip rival—code-named Izanagi—and he is seeking as much as $100B to bankroll it.
According to Bloomberg, Son envisions creating a company that can complement chip design unit Arm and allow the billionaire to build an AI chip powerhouse. In one scenario being considered, SoftBank would provide $30B of its own money with the remaining $70B coming from institutions in the Middle East.
South Korea u-turns on plan to limit dominant internet platforms
The South Korean government has made initiatives and plans to protect local online platforms from global marketplace giants like Alphabet, Apple and Meta using a playbook similar to the European Union, but now there’s a backlash.
The Korea Fair Trade Commission, backed by President Yoon Suk Yeol, planned a law that would limit the ability of so-called “dominant platforms” to expand into new areas and thus take advantage of their existing online clout. But critics rounded on the bill because it would stifle local companies, perhaps more than global ones. Naver, for example, dominates search, Kakao leads ride-hailing and messaging, while it is Coupang, not Amazon, that is Korea’s top e-commerce platform. The bill would, it was argued, create new mega platforms that would then need to be regulated in new cycles. Smaller businesses, meanwhile, would be hit hardest.
It was announced last week that the bill would be delayed to solicit further feedback. It may well be scrapped.
China
Saudi Arabia is mandating that leading Chinese technology companies invest in the Gulf kingdom in return for huge deals, as it leverages its petrodollar wealth to boost its domestic tech industry—Alibaba and SenseTime are among the top Chinese groups to have secured deals worth hundreds of millions of dollars link
Apple's reversal to take on RCS (Rich Communication Services) wasn't forced by the EU, but likely by China, which began codifying in 2023 a requirement for new 5G devices to support RCS link
Young Chinese women are reportedly turning to AI boyfriends because they are “better than men” link
A chatbot called “Glow”, an artificial intelligence platform created by Shanghai start-up MiniMax is part of a blossoming industry in China offering friendly—even romantic—human-robot relations
Suspected Chinese hackers are stealing facial recognition data and using it to access bank accounts in Southeast Asia, according to a report link
Temu has adopted tough tactics to secure suppliers in its battle with Shein as it prepares for an IPO link
Meanwhile, Marco Rubio has urged the SEC to block the Shein IPO unless China operating risk is disclosed link
JD.com considers takeover bid for UK electronics retailer Currys as China’s e-commerce giants look overseas link
EU opens formal probe of TikTok under Digital Services Act, citing child safety, risk management and other concerns link
India
UPI isn’t just big in India, it has expanded to seven Asia countries and even allows Indian tourists to buy tickets at the Eiffel Tower among other places link
Tata is reportedly pushing to partner Uber and bring its services into its super app, which has received some $2B in investment but has struggled to really take off link
Proton says it has received a notice of a “possible block” of Proton Mail in India after the service was used in sending bomb threats to schools in the Southern Indian state of Tamil Nadu link
State of venture investments in India: Lightspeed India Partners examine right-sizing VC funds in India, spectrum of startup investing and the country's prospects in the global AI race. link
Oyo may back out of its earlier IPO plan, and instead opt for a private raise—OYO has denied the report link
Taiwan’s Acer and Asustek step up ‘Make in India’ plans link
India is facing a quandary in enforcing long-delayed rules to curb the dominance of PhonePe and Google Pay in the country’s ubiquitous UPI payments network, which processes over 10 billion transactions monthly link
Meanwhile the Indian IT ministry fears losing out to China and Vietnam in the smartphone exports race link
Following Apple’s planned adoption of RCS, Google is pushing it as an alternate mobile phone messaging system that it believes could disrupt the growing use of WhatsApp by enterprises for communicating with customers link
Paytm latest: Payments Bank looks cooked but QR services may live on
Paytm is pushing hard to show things haven’t changed, taking out full front page advertising…
BUT there’s no reprieve in sight: India’s central bank extended the deadline for some of the restrictions on Paytm’s Payments Bank to March 15 in “larger public interest,” but that’s not likely to be significant enough to enable the payments make to rebound link
Its payment bank may be hobbled but Paytm says its popular QR code payment services (and other non-banking services) will continue to function for users and merchants after it partnered with Axis Bank for settlement link
Analyst Macquarie cuts its Paytm target share price by over 50% due to the ‘serious risk of exodus of customers’—the company’s share price has already fallen by 50% since its payments bank was severely reprimanded and banned from offering core services link
Let’s just enjoy this fantastic retort from Pine Labs:
Southeast Asia
ContextLogic, the parent of once-hyped discount online retailer Wish, has agreed to sell its assets and liabilities for $173M to Singaporean e-commerce company Qoo10—Wish was worth $14B when it went public in 2020 link
Momentum Works has insight on the Wish deal and Qoo10 itself, which has bought other distressed assets before including fallen Indian startup ShopClues and was once owned by eBay link
Workforce management platform Rippling opened its Asia-Pacific HQ in Australia following a regional expansion into Europe link
Singapore-based Ultiverse, a blockchain gaming startup developing “AI-powered” games, raised $4M led by IDG Capital at a valuation of $150M link
Vietnam dangles chip incentives to draw foreign companies link
Japan
NEC spurned private equity offers before selling a discounted stake in its iPhone supplier, sources say link
Chipmaker Renesas to buy software company Altium for $5.9B link
Japan’s financial regulator encourages stronger monitoring of ‘unlawful’ crypto transfers link
But the country wants to allow certain VCs to invest directly in crypto and Web3 startups link
Across the rest of Asia
After decades in California, YouTube co-founder Steve Chen returns to Taiwan to tap tech talent and link the island with Silicon Valley—his first major plan is an accelerator program link
South Korea’s major video gaming companies bet big on China’s continued openness to franchises with proven track record overseas link
TSMC gained $42B in value as investors bet that the company, which provides chips to Apple, Nvidia and others, will soar based on an incoming AI boom link
TechTaka, a South Korean online shopping fulfilment startup that provides third-party logistics services for e-commerce sellers, raised $9.5M link
North Korean cyber criminals are turning to artificial intelligence to help Pyongyang steal cutting-edge technologies and secure funds for its illicit nuclear weapons programme. link
California-based blogger and VC Om Malik’s travel notes on visiting Delhi link