HONG KONG: China’s technology champions have little choice but double down on Southeast Asia. As Washington and New Delhi close their doors to Chinese apps, fast-growing markets like Indonesia and Vietnam have gained importance for mainland firms seeking to grow overseas.
Early movers like Alibaba found limited traction in the region, but the latest entrants look more nimble.
The US$140 bil (RM590.87 bil) ByteDance is the latest to be caught up in geopolitical crossfire. Its crown jewel, TikTok, has been blocked in its largest market, India, on national security concerns alongside dozens of Chinese apps, and Japanese legislators are mulling something similar.
Founder Zhang Yiming is now wrangling over a deal with Microsoft to sell parts of the viral video app after US President Donald Trump threatened a similar ban. The European Union is getting suspicious, too.
That’s a huge blow to the global ambitions of Zhang and fellow entrepreneurs. Even so, Southeast Asia remains a bright spot. The region boasts 360 million web users who are among the most active on social media globally.
A joint report by Google, Temasek and Bain & Company last year predicted Southeast Asia’s internet economy will more than triple over the next five years to US$300 bil. That could be conservative: Covid-19 has accelerated growth in e-commerce, mobile payments, cloud computing and more.
Chinese web outfits have a mixed track record. E-commerce colossus Alibaba muscled into the region in 2016 when it took a controlling stake in online retailer Lazada.
But culture clashes and employee turnover damaged the venture. It has gone through three chief executives in three years while losing market share, according to a report.
In contrast, nemesis Tencent has taken a more passive role by quietly backing the region’s emerging giants, in particular Sea, Singapore’s US$64 bil video-games to e-commerce giant.
Different strategies, like teaming up with local partners, are being tested. Ping An Good Doctor, for example, is offering its online health services through a joint venture with Singapore super-app Grab.
Even ByteDance and Alibaba are ramping up their presence in the city-state. The pragmatic middle ground could be a profitable place. – Aug 5, 2020, Reuters
