alibaba

Alibaba will let you find restaurants and order food with voice in a car

Posted by | alibaba, alibaba group, alipay, Android, Asia, automotive, AutoNavi, Baidu, Beijing, China, Emerging-Technologies, in-car apps, online marketplaces, operating system, operating systems, order food, shanghai, taobao, Tencent, Transportation | No Comments

Competition in the Chinese internet has for years been about who controls your mobile apps. These days, giants are increasingly turning to offline scenarios, including what’s going on behind the dashboard in your car.

On Tuesday, Alibaba announced at the annual Shanghai Auto Show that it’s developing apps for connected cars that will let drivers find restaurants, queue up and make reservations at restaurants, order food and eventually complete a plethora of other tasks using voice, motion or touch control. Third-party developers are invited to make their in-car apps, which will run on Alibaba’s operating system AliOS.

Rather than working as standalone apps, these in-car services come in the form of “mini apps,” which are smaller than regular ones in exchange for faster access and smaller file sizes, in Alibaba’s all-in-one digital wallet Alipay . Alibaba has other so-called “super apps” in its ecosystem, such as marketplace Taobao and navigation service AutoNavi, but the payments solution clearly makes more economic sense if Alibaba wants people to spend more while sitting in a four-wheeler.

There’s no timeline for when Alibaba will officially roll out in-car mini apps, but it’s already planning for a launch, a company spokesperson told TechCrunch.

Making lite apps has been a popular strategy for China’s internet giants operating super apps that host outside apps, or “mini-apps”; that way users rarely need to leave their ecosystems. These lite apps are known to be easier and cheaper to build than a native app, although developers have to make concessions, like giving their hosts a certain level of access to user data and obeying rules as they would with Apple’s App Store. For in-car services, Alibaba says there will be “specific review criteria for safety and control” tailored to the auto industry.

alios cars alibaba

Photo source: Alibaba

Alibaba’s move is indicative of a heightened competition to control the operating system in next-gen connected cars. For those who wonder whether the e-commerce behemoth will make its own cars given it has aggressively infiltrated the physical space, like opening its own supermarket chain Hema, the company’s solution to vehicles appears to be on the software front, at least for now.

In 2017, Alibaba rebranded its operating system with a deep focus to put AliOS into car partners. To achieve this goal, Alibaba also set up a joint venture called Banma Network with state-owned automaker SAIC Motor and Dongfeng Peugeot Citroen, which is the French car company’s China venture, that would hawk and integrate AliOS-powered solutions with car clients. As of last August, 700,000 AliOS-powered SAIC vehicles had been sold.

Alibaba competitors Tencent and Baidu have also driven into the auto field, although through slightly different routes. Baidu began by betting on autonomous driving and built an Android-like developer platform for car manufacturers. While the futuristic plan is far from bearing significant commercial fruit, it has gained a strong foothold in self-driving with the most mileage driven in Beijing, a pivotal hub to test autonomous cars. Tencent’s car initiatives seem more nebulous. Like Baidu, it’s testing self-driving and like Alibaba, it’s partnered with industry veterans to make cars, but it’s unclear where the advantage lies for the social media and gaming giant in the auto space.

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Snap is channeling Asia’s messaging giants with its move into gaming

Posted by | alibaba, Apps, Asia, Australia, Bitmoji, Canada, China, computing, e-commerce, epic games, Evan Spiegel, Facebook, food, France, game developers, Gaming, instagram, Instant Messaging, Japan, josh constine, Kakao, Los Angeles, messaging apps, Messenger, nhn japan, Nintendo, operating systems, player, Snap, Snapchat, Social, social media, social network, Software, Southeast Asia, Startups, Tencent, United Kingdom, United States, WeChat, WhatsApp | No Comments

Snap is taking a leaf out of the Asian messaging app playbook as its social messaging service enters a new era.

The company unveiled a series of new strategies that are aimed at breathing fresh life into the service that has been ruthlessly cloned by Facebook across Instagram, WhatsApp and even its primary social network. The result? Snap has consistently lost users since going public in 2017. It managed to stop the rot with a flat Q4, but resting on its laurels isn’t going to bring back the good times.

Snap has taken a three-pronged approach: extending its stories feature (and ads) into third-party apps and building out its camera play with an AR platform, but it is the launch of social games that is the most intriguing. The other moves are logical, and they fall in line with existing Snap strategies, but games is an entirely new category for the company.

It isn’t hard to see where Snap found inspiration for social games — Asian messaging companies have long twinned games and chat — but the U.S. company is applying its own twist to the genre.

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Tencent Q4 profit disappoints, but cloud and payments gain ground

Posted by | alibaba, alibaba group, alipay, Asia, Baidu, China, cloud computing, e-commerce, Earnings, games publisher, Gaming, iQiyi, online payments, Snap, Tencent, WeChat, weixin | No Comments

China’s Tencent reported disappointing profits in the fourth quarter on the back of surging costs but saw emerging businesses pick up steam as it plots to diversify amid slackening gaming revenues.

Net profit for the quarter slid 32 percent to 14.2 billion yuan ($2.1 billion), behind analysts’ forecast of 18.3 billion yuan. The decrease was due to one-off expenses related to its portfolio companies and investments in non-gaming segments like video content and financial technology.

Excluding non-cash items and M&A deals, Tencent’s net profit from the period rose 13 percent to 19.7 billion yuan ($2.88 billion). The company has to date invested in more than 700 companies, 100 of which are valued over $1 billion each and 60 of which have gone public.

Quarterly revenue edged up 28 percent to 84.9 billion yuan ($12.4 billion) beating expectations.

tencent revenue

The Hong Kong-listed company is best known for its billion-user WeChat messenger but had for years relied heavily on a high-margin gaming business. That was until a months-long freeze on games approvals last year that delayed monetization for new titles, spurring a major reorg in the firm to put more focus on enterprise services, including cloud computing and financial technology.

Tencent has received approvals for eight games since China resumed the licensing process, although its blockbusters PlayerUnknown Battlegrounds and Fortnite have yet to get the green light. The firm also warned of a “sizeable backlog” for license applications in the industry, which means its “scheduled game releases will initially be slower than in some prior years.”

Video games for the quarter contributed 28.5 percent of Tencent’s total revenues, compared to 36.7 percent in the year-earlier period. Despite the domestic fiasco, Tencent remains as the world’s largest games publisher by revenue, according to data compiled by NewZoo. The firm has also gotten more aggressive in taking its titles global.

Social network revenues rose 25 percent on account of growth in live streaming and video subscriptions. The segment made up 22.9 percent of total revenues. Tencent has in recent years spent heavily on making original content and licensing programs as it competes with Baidu’s iQiyi video streaming site. Tencent claimed 89 million subscribers in the latest quarter, compared with iQiyi’s 87.4 million.

Tencent has been relatively slow to monetize WeChat in contrast to its western counterpart Facebook, though it’s under more pressure to step up its game. Tencent’s advertising revenue from the quarter grew 38 percent thanks to expanding advertising inventory on WeChat. Ads accounted for 20 percent of the firm’s quarterly revenues.

All told, WeChat and its local version Weixin reached nearly 1.1 billion monthly active users; 750 million of them checked their friends’ WeChat feeds, and Tencent recently introduced a Snap Story-like feature to lock users in as it vies for eyeball time with challenger TikTok.

The “others” category, composed of financial technology and cloud computing, grew 71.8 percent to generate 28.5 percent of total revenues. WeChat’s e-wallet, which is going neck-and-neck with Alibaba affiliate Alipay, saw daily transaction volume exceed 1 billion last year. During the fourth quarter, merchants who used WeChat Pay monthly grew more than 80 percent year-over-year.

Meanwhile, cloud revenues doubled to 9.1 billion yuan in 2018, thanks to Tencent’s dominance in the gaming sector as its cloud infrastructure now powers over half of the China-based games companies and is following these clients overseas. Tencent meets Alibaba head-on again in the cloud sector. For comparison, Alibaba’s most recent quarterly cloud revenue was 6.6 billion yuan. Just yesterday, the e-commerce leader claimed that its cloud business is larger than the second to eight players in China combined.

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NetEase is the latest Chinese tech giant to lay off a big chunk of its staff

Posted by | alibaba, Amazon, Asia, business, China, Didi Chuxing, e-commerce, eCommerce, Gaming, JD.com, layoff, netease, public relations, Southeast Asia, Tencent | No Comments

NetEase, China’s second-biggest online games publisher with a growing ecommerce segment, is laying off a significant number of its employees, adding to a list of Chinese tech giants that have shed staff following the Lunar New Year.

A NetEase employee who was recently let go confirmed with TechCrunch that the company had fired a large number of people spanning multiple departments, including ecommerce, education, agriculture (yes, founder and executive officer Ding Lei has a thing for organic farming) and public relations, although downsizing at Yanxuan, its ecommerce brand that sells private-label goods online and offline, had started before the Lunar New Year holiday.

Multiple Chinese media outlets covered the layoff on Wednesday. According to a report from Caijing Magazine, Yanxuan fired 30-40 percent of its staff; the agricultural brand Weiyang got a 50 percent cut; the education unit downsized from 300 to 200 employees; and 40 percent of NetEase’s public relations staff was gone.

A spokesperson from NetEase evaded TechCrunch’s questions about the layoff but said the company is “indeed undergoing a structural optimization to narrow its focus.” The goal, according to the person, is to “boost innovation and organizational efficiency so NetEase can fully play to its own strengths and adapt to market competition in the longer term.”

NetEase CEO Ding Lei pictured picking Longjing tea leaves in Hangzhou. Photo: NetEase Yanxuan via Weibo

Oddly, ecommerce and education appear to be some of NetEase’s brighter spots. The company singled them out alongside music streaming during its latest earnings call as the three sectors that saw “strong profit growth potential” and “will be the focus of [the company’s] next phase of strategic growth.” The staff cuts, then, may represent an urgency to tighten the purse strings for even NetEase’s rosiest businesses.

The shakeup fits into market speculation about company staff cuts to save costs as China copes with a weakening domestic economy. JD.com, a rival to Alibaba, is firing 10 percent of its senior management to cut costs, Caixin reported last week. Ride-hailing giant Didi Chuxing plans to let go 15 percent of its staff this year as part of a reorganization to boost internal efficiency, though it’s adding new members to focus on more promising segments.

Alibaba took an unexpected turn, announcing last week that it will continue to hire new talent in 2019. “We are poised to provide more resources to our platforms to help businesses navigate current environment and create more job opportunities overall,” the firm said in a statement.

2018 was a tough year for China’s games companies of all sorts. The industry took a hit after regulators froze all licensing approvals to go through a reshuffle, dragging down stock prices of big players like Tencent and NetEase. These companies continue to feel the chill even after approvals resumed, as the newly minted regulatory body imposes stricter checks on games, slowing down the application process altogether and delaying companies’ plans to monetize lucrative new titles.

That bleak domestic outlook compelled NetEase to take what Ding dubs a “two-legged” approach to game publishing, with one foot set in China and the other extending abroad. Tencent, too, has been finding new channels for its games through regional partners like Sea’s Garena in Southeast Asia.

NetEase started in 1997 and earned its name by making PC games and providing email services in the early years of the Chinese internet. More recently the company has intended to diversify its business by incubating projects across the board. It has so far enjoyed growth in segments like music streaming and ecommerce (which is reportedly swallowing up Amazon China’s import-led service) while stepping back from others such as comics publishing, an asset it is selling to youth-focused video streaming site Bilibili.

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Apple is offering interest-free financing to boost iPhone sales in China

Posted by | alibaba, alibaba group, Android, Ant Financial, Apple, apple inc, apple store, Asia, China, india, iOS, iPhone, iphone 6s, mobile phones, product red, Xiaomi | No Comments

Apple is looking to get over its sales woes in China by offering prospective customers interest-free financing with a little help from Alibaba.

Apple’s China website now offers financing packages for iPhones that include zero percent interest packages provided in association with several banks and Huabei, a consumer credit company operated by Alibaba’s Ant Financial unit, as first noted by Reuters.

The Reuters report further explains the packages on offer:

On its China website, Apple is promoting the new scheme, under which customers can pay 271 yuan ($40.31) each month to purchase an iPhone XR, and 362 yuan each month for an iPhone XS. Customers trading in old models can get cheaper installments.

Users buying products worth a minimum of 4,000 yuan worth from Apple would qualify for interest-free financing that can be paid over three, six, nine, 12 or 24 months, the website shows.

Apple is also offering discounts for customers who trade in devices from the likes of Huawei, Xiaomi and others.

The deals are an interesting development that comes just weeks after Apple cut revenue guidance for its upcoming Q1 earnings. The firm trimmed its revenue from the $89 billion-$93 billion range to $84 billion on account of unexpected “economic deceleration, particularly in Greater China.”

Offering attractive packages may convince some consumers to buy an iPhone, but there’s a lingering sense that Apple’s current design isn’t sparking interest from Chinese consumers. Traditionally, it has seen a sales uptick around the launch of iPhones that offer a fresh design, and the current iPhone XR, XS and XS Max line-up bears a strong resemblance to the one-year-old iPhone X.

The first quarter of a new product launch results in a sales spike in China, but Q2 sales — the quarter after the launch — are where devices can underwhelm.

It’ll be interesting to see if Apple offers similar financing in India, where it saw sales drop by 40 percent in 2018 according to The Wall Street Journal. Apple’s market share, which has never been significant, is said to have halved from two percent to one percent over the year.

Finance is a huge issue for consumers in India, where aggressively priced but capable phones from Chinese companies like Xiaomi or OnePlus dominate the market in terms of sales volume. With the iPhone costing multiples more than top Android phones, flexible financing could help unlock more sales in India.

China, however, has long been a key revenue market for Apple, so it figures that this strategy is happening there first.

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Amazon, Western Union debut PayCode to sell goods in emerging markets and let shoppers pay in cash

Posted by | alibaba, Amazon, Asia, developing markets, eCommerce, emerging markets, Finance, Mobile, payments, qr code, TC, western union | No Comments

While Amazon has been methodical (read: a little slow) in launching local versions of its site for various global markets, it has now embarked on a secondary track to snag more business outside the 14 countries where it has built out full operations.

Amazon has partnered with Western Union to set up a service called PayCode, which lets people shop and pay for Amazon items using local currencies that would not have been accepted on the site before, starting with services in 10 countries: Chile, Columbia, Hong Kong, Indonesia, Kenya, Malaysia, Peru, Philippines, Taiwan and Thailand.

Specifically, shoppers in these markets will now be able to go into Western Union outposts and pay for their Amazon purchases in cash, which also means that payment cards or other virtual payment methods will also not be required to buy from Amazon — one of the barriers to expanding the service up to now into more emerging economies, where card and bank account penetration is much lower than in developed markets like the U.S. and Europe.

“Amazon is committed to enabling customers anywhere in the world to shop on Amazon.com, and a big part of that is to allow customers to pay for their cross-border online purchases in a way that is most convenient for them,” said Ben Volk, director, Payment Acceptance and Experience at Amazon, in a statement. “Amazon PayCode leverages the reach of Western Union to make cross-border online shopping a reliable and convenient experience for customers who do not have access to international credit cards, or prefer to pay in cash.”

In terms of what they will be able to buy, people can shop across the breadth of the Amazon marketplace, but Amazon notes that they will only be able to use PayCode if it’s offered as an option at checkout (which will only happen in the markets where PayCode is supported); if the item that is chosen is “export eligible,” and if the item’s value “exceeds the maximum value allowed for use on this payment type” — although Amazon doesn’t appear to specify what that maximum value is. Once you complete the purchase online (or possibly more likely, on mobile), you get a “PayCode” QR code that you will have 48 hours to take to a Western Union to pay for the goods; otherwise your order gets cancelled.

The deal between Amazon and Western Union was initially announced last October, with very little detail and fanfare. The PayCode name then appeared to leak out a month later around what appeared to be a test in India (where it has not launched… yet). Today was the first time that the companies unveiled the first launch countries.

PayCode is a significant advance for Amazon as it seeks to step up to the next level of being a global e-commerce powerhouse to compete against the likes of Alibaba.

The latter company has made a lot of inroads to work in a wider array of markets beyond its home base of China, specifically tapping into a long tail of supply from its home market and demand for those goods abroad. Alibaba is also taking care of business when it comes to making more seamless transactions related to those trades. Just today, its financial services affiliate Ant Financial announced that it would acquire U.K.’s WorldFirst, which provides foreign money transfer for businesses and individuals, for a price that we heard from sources was in the region of $700 million.

Amazon currently operates 15 Amazon websites globally: in the U.S., U.K., Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Spain and Turkey. (It appears also to have a Prime-only site in Singapore.) Up to now, these would have been the only countries where Amazon would offer goods in local currencies.

Adding a new tranche of countries using PayCode will potentially massively expand how many people can shop on Amazon without Amazon going through the steps of setting up full-fledged operations in those countries to serve those consumers and sellers. (Or, this being Amazon, this would be a key way for the company to start testing the waters to figure out which market might do best with a full-fledged store.) Over time, you might imagine that Amazon might extend PayCode to markets where it has sites, too, to give shoppers more flexibility in how they pay for goods for themselves or that they are buying for others.

It’s a big market opportunity. Amazon cites estimates from Forrester Research that say cross-border shopping will represent 20 percent of e-commerce by 2022, accounting for $630 billion.

For Western Union, this is a potentially big partnership, too.

Today, PayCode allows people to use Western Union to act as a physical pay station for their Amazon goods, giving Western Union a small cut on those transactions. But you might imagine how this could evolve over time, where remittances sent from family members abroad via Western Union — a very common use of remittance networks — might immediately get redeemed to cover purchases on Amazon.

Similarly, Western Union is working closer with MPesa, the African mobile wallet service that lets people essentially use their phone top-up account as a payment account, and you could imagine how this too could get incorporated into the PayCode experience to facilitate buying and paying on devices, without having to go into Western Union shops and use actual cash.

“We’re helping to unlock access to Amazon.com for customers who need and want items that can only be found online in many parts of the world,” said Khalid Fellahi, SVP and General Manager of Western Union Digital, in a statement. “This is a great example of two global brands innovating and collaborating to bring customers more convenience and choice. In a world where cross-border buyers and sellers are often located on different continents and in completely different financial ecosystems, our platform is ideally suited to solving the complexity of collecting local currency and converting it into whatever currency merchants need on the other end.”

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First China, now Starbucks gets an ambitious VC-funded rival in Indonesia

Posted by | alibaba, alibaba group, Android, Apps, Asia, carsharing, China, East Ventures, funding, Fundings & Exits, go-jek, Google, grab, Indonesia, Insignia Ventures Partners, internet access, Jakarta, JD.com, managing partner, mcdonalds, online food ordering, online marketplaces, pizza hut, Singapore, Southeast Asia, starbucks, temasek, Tencent, United States, WeWork | No Comments

Asia’s venture capital-backed startups are gunning for Starbucks .

In China, the U.S. coffee giant is being pushed by Luckin Coffee, a $2.2 billion challenger surfing China’s on-demand wave, and on the real estate side, where WeWork China has just unveiled an on-demand product that could tempt people who go to Starbucks to work or kill time.

That trend is picking up in Indonesia, the world’s fourth largest country and Southeast Asia’s largest economy, where an on-demand challenger named Fore Coffee has fueled up for a fight after it raised $8.5 million.

Fore was started in August 2018 when associates at East Ventures, a prolific early-stage investor in Indonesia, decided to test how robust the country’s new digital infrastructure can be. That means it taps into unicorn companies like Grab, Go-Jek and Traveloka and their army of scooter-based delivery people to get a hot brew out to customers. Incidentally, the name “Fore” comes from “forest” — “we aim to grow fast, strong, tall and bring life to our surrounding” — rather than in front of… or a shout heard on the golf course.

The company has adopted a similar hybrid approach to Luckin, and Starbucks thanks to its alliance with Alibaba. Fore operates 15 outlets in Jakarta, which range from “grab and go” kiosks for workers in a hurry, to shops with space to sit and delivery-only locations, Fore co-founder Elisa Suteja told TechCrunch. On the digital side, it offers its own app (delivery is handled via Go-Jek’s Go-Send service) and is available via Go-Jek and Grab’s apps.

So far, Fore has jumped to 100,000 deliveries per month and its app is top of the F&B category for iOS and Android in Indonesia — ahead of Starbucks, McDonald’s and Pizza Hut .

It’s early times for the venture — which is not a touch on Starbuck’s $85 billion business; it does break out figures for Indonesia — but it is a sign of where consumption is moving to Indonesia, which has become a coveted beachhead for global companies, and especially Chinese, moving into Southeast Asia. Chinese trio Tencent, Alibaba and JD.com and Singapore’s Grab are among the outsiders who have each spent hundreds of millions to build or invest in services that tap growing internet access among Indonesia’s population of more than 260 million.

There’s a lot at stake. A recent Google-Temasek report forecast that Indonesia alone will account for over 40 percent of Southeast Asia’s digital economy by 2025, which is predicted to triple to reach $240 billion.

As one founder recently told TechCrunch anonymously: “There is no such thing as winning Southeast Asia but losing Indonesia. The number one priority for any Southeast Asian business must be to win Indonesia.”

Forecasts from a recent Google-Temasek report suggest that Indonesia is the key market in Southeast Asia

This new money comes from East Ventures — which incubated the project — SMDV, Pavilion Capital, Agaeti Venture Capital and Insignia Ventures Partners, with participation from undisclosed angel backers. The plan is to continue to invest in growing the business.

“Fore is our model for ‘super-SME’ — SME done right in leveraging technology and digital ecosystem,” Willson Cuaca, a managing partner at East Ventures, said in a statement.

There’s clearly a long way to go before Fore reaches the size of Luckin, which has said it lost 850 million yuan, or $124 million, inside the first nine months in 2018.

The Chinese coffee challenger recently declared that money is no object for its strategy to dethrone Starbucks. The U.S. firm is currently the largest player in China’s coffee market, with 3,300 stores as of last May and a goal of topping 6,000 outlets by 2022, but Luckin said it will more than double its locations to more than 4,500 by the end of this year.

By comparison, Indonesia’s coffee battle is only just getting started.

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Foxconn pulls back on its $10 billion factory commitment

Posted by | alibaba, Amazon, Asia, China, Foxconn, Gaming, Government, india, Kakao, korea, Media, nexon, Policy, wisconsin | No Comments

Well that didn’t last long.

In 2017, Foxconn announced the largest investment of a foreign company in the United States when it selected Mount Pleasant, Wisconsin for a new manufacturing facility. Buttressed by huge economic development grants from Wisconsin, an endorsement from President Trump, and Foxconn CEO Terry Gou’s vision of a maker America, the plant was designed to turn a small town and its environs into the futuristic “Wisconn Valley.”

Now, those dreams are coming apart faster than you can say “Made in America.”

In an interview with Reuters, a special assistant to Gou says that those plans are being remarkably scaled back. Originally designed to be an advanced LCD factory, the new Foxconn facility will instead be a much more modest (but still needed!) research center for engineers.

It’s a huge loss for Wisconsin, but the greater shock may be just how obvious all of this was. I wrote about the boondoggle just a few weeks ago, as had Bruce Murphy at The Verge a few weeks before that. Sruthi Pinnamaneni produced an excellent podcast on Reply All about how much the economic development of Mount Pleasant tore the small town asunder.

The story in short: the economics of the factory never made sense, and economics was always going to win over the hopes and dreams of politicians like Wisconsin governor Scott Walker, who championed the deal. Despite bells and whistles, televisions are a commodity product (unlike, say, airfoils), and thus the cost structure is much more compatible with efficient Asian supply chains than with American expensive labor.

Yet, that wasn’t the only part of the project that never made any sense. Foxconn was building in what was essentially the middle of nowhere, without the sort of dense ecosystem of suppliers and sub-suppliers required for making a major factory hum. (Plus, as a native of Minnesota, I can also attest that Wisconsin is a pile of garbage).

Those suppliers are everything for manufacturers. Just this past weekend, Jack Nicas at the New York Times observed that Apple’s advanced manufacturing facility in Austin, Texas struggled to find the right parts it needed to assemble its top-of-the-line computer, the Mac Pro:

But when Apple began making the $3,000 computer in Austin, Tex., it struggled to find enough screws, according to three people who worked on the project and spoke on the condition of anonymity because of confidentiality agreements.

In China, Apple relied on factories that can produce vast quantities of custom screws on short notice. In Texas, where they say everything is bigger, it turned out the screw suppliers were not.

There are of course huge manufacturing ecosystems in the United States — everything from cars in Detroit, to planes in Washington, to advanced medical devices in several major bio-hubs. But consumer electronics is one that has for the most part been lost to Singapore, Taiwan, Korea, and of course, China.

Geopolitically, Foxconn’s factory made a modicum of sense. With the increasing protectionism emanating from Western capitals, Foxconn could have used some geographical diversity in the event of a tariff fight. The company is Taiwanese, but manufacturers many of its products on the mainland.

And of course, a research center is still an enormous gain for a region of Wisconsin that could absolutely use high-income, professional jobs. Maybe the process of rolling out a next-generation manufacturing ecosystem will take more time than originally anticipated, but nothing is stopping further expansion in the future.

Yet, one can’t help but gaze at the remarkable naïveté of Wisconsin politicians who offered billions only to find that even massive subsidies aren’t enough. It’s a competitive world out there, and the United States has little experience in these fights.

India may put friction on foreign firms to protect domestic startups

Indian Prime Minister Narendra Modi. (MONEY SHARMA/AFP/Getty Images)

One of the major battles for tech supremacy is over the future of the Indian IT market, which is rapidly bringing more than a billion people onto the internet and giving them robust software services. I’ve talked a bit about data sovereignty, which mandates that Indian data be stored in Indian data centers by Indian companies, pushing out foreign companies like Amazon, Google, and Alibaba.

Now, it looks like India is taking a page from the Asian tiger-school of development, and is going to increasingly favor domestic firms over foreign ones in key industries. Newley Purnell and Rajesh Roy report in the WSJ:

The secretary of India’s Telecommunications Department, Aruna Sundararajan, last week told a gathering of Indian startups in a closed-door meeting in the tech hub of Bangalore that the government will introduce a “national champion” policy “very soon” to encourage the rise of Indian companies, according to a person familiar with the matter. She said Indian policy makers had noted the success of China’s internet giants, Alibaba Group Holding Ltd. and Tencent Holdings Ltd. , the person said. She didn’t immediately respond to a request for more details on the program or its timing.

The idea of national champions is simple. Unlike the innovation world of Silicon Valley, there are obvious sectors in an economy that need to be fulfilled. Food and clothes have to be sold, deliveries made, all kinds of industrial goods need to be built. Rather than creating a competitive market that requires high levels of duplicate capital investment, the government can designate a few companies to take the lead in each market to ensure that they can invest for growth rather than in, say, marketing costs.

If done well, such policies can rapidly industrialize a country’s economic base. When done poorly, the lack of competition can create lethargy among entrepreneurs, who have already won their markets without even trying.

The linchpin is whether the government pushes companies to excel and sets aggressive growth targets. In Korea and China, the central governments actively monitored corporate growth during their catch-up years, and transferred businesses to new entrepreneurs if business leaders failed to perform. Can India push its companies as hard without market forces?

As the technology industry matures in the West, entrepreneurs will look for overseas as their future growth hubs. The challenge is whether they will be let in at all.

Video game geopolitics

Nexon’s MapleStory2 game is one of its most profitable (Screenshot from Nexon) .

Korea and Japan are two of the epicenters of the video game industry, and now one of its top companies is on the auction block, raising tough questions about media ownership.

Nexon founder Kim Jung Ju announced a few weeks ago that he was intending to sell all of his controlling $9 billion stake in the leading video game company. The company has since executed something of a multi-stage auction process to determine who should buy those shares. One leading candidate we’ve learned is Kakao, the leading internet portal and chatting app in Korea.

The other leading candidate is China-based Tencent, which owns exclusive distribution rights in China of some of Nexon’s most important titles.

Tencent has been increasingly under the sway of China’s government, which froze video game licensing last year as it worked to increase content regulation over the industry. Now the question is whether it will be politically palatable to sell a leading star of Korea’s video game industry to its economic rival.

From the Financial Times:

Mr Wi added that Nexon would be an attractive target for Tencent, which pays about Won1tn in annual royalties to the South Korean game developer. But selling the company to Tencent would be “politically burdensome” for Mr Kim, given unfavourable public opinion in South Korea towards such a sale, he cautioned.

“Political risks are high for the deal. Being criticised for selling the company to a foreign rival, especially a Chinese one, would be the last thing that Mr Kim wants,” said Mr Wi.

Such concerns around Chinese media ownership have become acute throughout the world, but we haven’t seen these concerns as much in the video game industry. Clearly, times have changed.

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China’s Baidu says its answer to Alexa is now on 200M devices

Posted by | Alexa, alibaba, alibaba group, Android, apollo, artificial intelligence, Asia, AutoNavi, Baidu, China, Ford, Microsoft, search engine, smart home devices, smartphones, Transportation, voice assistant, volvo, Weibo | No Comments

A Chinese voice assistant has been rapidly gaining ground in recent months. DuerOS, Baidu’s answer to Amazon’s Alexa, reached over 200 million devices, China’s top search engine announced on its Weibo official account last Friday.

To put that number into context, more than 100 million devices pre-installed with Alexa have been sold, Amazon recently said. Google just announced it expected Assitant to be on 1 billion devices by the end of this month.

Voice interaction technology is part of Baidu’s strategy to reposition itself from a heavy reliance on search businesses towards artificial intelligence. The grand plan took a hit when the world-renown scientist Lu Qi stepped down as Baidu’s chief operating officer, though the segment appears to have scored healthy growth lately, with DuerOS more than doubling from a base of 90 million installs since last June.

When it comes to how many devices actually use DuerOS regularly, the number is much less significant: 35 million machines a month at the time Baidu’s general manager for smart home devices announced the figure last November.

Like Alexa, which has made its way into both Amazon-built Echo speakers and OEMs, DuerOS also takes a platform play to power both Baidu-built and third-party devices.

Interestingly, DuerOS has achieved all that with fewer capabilities and a narrower partnership network than its American counterpart. By the end of 2018, Alexa could perform more than 56,000 skills. Devices from over 4,500 brands can now be controlled with Alexa, says Amazon. By comparison, Baidu’s voice assistant had 800 different skills, its chief architect Zhong Lei revealed at the company’s November event. It was compatible with 85 brands at the time.

This may well imply that DuerOS’s allies include heavy-hitters with outsize user bases. Baidu itself could be one as it owns one of China’s biggest navigation app, which is second to Alibaba’s AutoNavi in terms of number of installs, according to data from iResearch. Baidu said in October that at least 140 million people had activated the voice assistant of its Maps service.

Furthermore, Baidu speakers have managed to crack a previously duopolistic market. A report from Canalys shows that Baidu clocked in a skyrocketing 711 percent quarter-to-quarter growth to become China’s third-biggest vendor of smart speakers during Q3 last year. Top players Alibaba and Xiaomi, on the other hand, both had a sluggish season.

While Baidu deploys DuerOS to get home appliances talking, it has doubled down on smart vehicles with Apollo . The system, which the company calls the Android for autonomous driving, counted 130 OEMs, parts suppliers and other forms of partners as of last October. It’s attracted global automakers Volvo and Ford who want a foothold in China’s self-driving movement. Outside China, Apollo has looked to Microsoft Azure Cloud as it hunts for international partnerships.

Baidu has yet to prove commercial success for its young AI segment, but its conversational data trove holds potential for a lucrative future. Baidu became China’s top advertising business in part by harnessing what people search on its engine. Down the road, its AI-focused incarnation could apply the same data-crunching process to what people say to their machines.

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Chinese app developers have invaded India

Posted by | alibaba, Android, Apps, Asia, bytedance, China, Flash, food delivery, india, oppo, Paytm, sensor tower, SnapDeal, Tencent, tiktok, WeChat, Xiaomi | No Comments

If you’ve conquered China, then India — the world’s second-largest country based on population — is the obvious next port of call, and that’s exactly what has happened in the world of consumer apps.

Following the lead of Chinese smartphone makers like Xiaomi and Oppo, which have dominated mobile sales in India for some time, the content behind the touchscreen glass in India is increasingly now from China, too. That’s according to a report from FactorDaily, which found that 44 of the top 100 Android apps in India were developed by Chinese companies, up from just 18 one year prior. (The focus is on Android because it is the overwhelming choice of operating system among India’s estimated 500 million internet users.)

The list of top Chinese apps includes major names like ByteDance, the world’s highest-valued startup, which offers TikTok and local language news app Helo in India, and Alibaba’s UCbrowser, as well as lesser-known quantities like Tencent-backed NewsDog and quiet-yet-prolific streaming app maker Bigo.

Citing data from Sensor Tower, the report found that five of the top 10 Android apps in India are from China, up from just two at the end of 2017.

For anyone who has been watching the Indian technology scene in recent years, this “Chinese app store invasion” will be of little surprise, although the speed of change has been unexpected.

China’s two biggest companies, Alibaba and Tencent, have poured significant amounts into promising Indian startups in recent years, setting the stage for others to follow suit and move into India in search of growth.

Alibaba bought into Snapdeal and Paytm via multi-hundred-million-dollar investments in 2015, and the pace has only quickened since then. In 2017, Tencent invested in Gaana (music streaming) and Swiggy (food delivery) in major deals, having backed Byju’s (education) and Ola (ride-hailing) the year prior. The pair also launched local cloud computing services inside India last year.

Beyond those two, Xiaomi has gone beyond selling phones to back local companies and develop local services for its customers.

That local approach appears to have been the key for those app makers which have found success in India. Rather than taking a very rigid approach like Chinese messaging app WeChat — owned by Tencent, which failed in India — the likes of ByteDance have developed local teams and, in some cases, entirely local apps dedicated to India. With the next hundreds of millions of internet users in India tipped to come from more rural parts of the country, vernacular languages, local content and voice-enabled tech are some of the key strategies that, like their phone-making cousins, Chinese app developers will need to focus on to ensure that they aren’t just a flash in the pan in India.

You can read more at FactorDaily.

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