Hello from Singapore, which this week began slowly opening up from its coronavirus lockdown. Some companies aren’t letting the health crisis stand in the way of dealmaking in the region, as Facebook demonstrated on Wednesday by unveiling its stake in Gojek, Indonesia’s largest unicorn. The deal comes just weeks after Facebook’s $5.7bn investment in India’s Jio. The advance of US Big Tech in south-east Asia and India is a recurring theme for us at Tech Scroll Asia, as companies from Facebook to Google and Amazon compete for influence with Chinese rivals Alibaba and Tencent. 

Speaking of rivalry between the world’s two biggest economies, the great homecoming of US-listed Chinese companies is set to continue with a $3bn secondary listing of gaming company NetEase in Hong Kong (see In the spotlight). But China is experiencing a similar problem with Taiwan companies, which are retreating back across the strait (Mercedes’ top 10). Don’t miss the Nikkei Asian Review breakdown of China’s five-year high-tech infrastructure plan (top 10), and news of an unlikely partnership between Korea’s Samsung and the indomitable Winklevoss twins (Art of the deal). Enjoy the rest of the week and take care.

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The big story

Facebook is doubling down on Asia. Just weeks after making a $5.7bn investment in India’s Reliance Jio, the US social media giant is backing Gojek, Indonesia’s largest unicorn.

Facebook did not disclose the size of its investment, which is focused on GoPay, the start-up’s payments arm, but people with knowledge of the matter said it was in the low hundred million dollars and takes Gojek’s current fundraising round to more than $3bn. PayPal, the US payments giant, which is also seeking to grow in Asia, also invested in the round.

Key implications: This is a fintech play. India and Indonesia were among the four markets in which Facebook chief executive Mark Zuckerberg said the company would launch a payments option for its WhatsApp messaging service. Facebook is seeking to monetise the rapidly growing number of customers and businesses moving online in the region as growth in its western markets slows.

Upshot: As in the Jio deal, local partner Gojek brings plenty to the table. The start-up — which is valued at more than $10bn and counts Google and Tencent among its other prominent backers — operates ride-hailing services in more than 200 cities across Indonesia while GoPay is used across 370 cities. The deal also gives Gojek a boost in its battle with rival Grab, which is backed by SoftBank. The two companies compete fiercely in Indonesia.

Mercedes’ top 10

  1. India-based OneTouch AppLabs’ newest product speaks for itself: Remove China Apps. The app hit 4.7m downloads between May 27 and June 1. Its popularity comes after unease over the influx of Chinese tech companies in India.

  2. “In turbulent times, some people hoard dried food or stash bullets. I collect VPN servers.” FT deputy Beijing bureau chief Yuan Yang explains why the new national security law from China threatens Hong Kong’s digital freedoms.

  3. IT company FPT is not wasting any post-pandemic time. Two weeks after lockdown was lifted, it broke ground on what will be the Vietnam’s largest data centre, in Ho Chi Minh City. The group’s chairman spoke to the Nikkei Asian Review about why it expects data demand to increase.

  4. Alibaba wants to help a million influencers bloom with a matchmaking service that pairs them with merchants. The goal: to market products on AliExpress, the company’s online marketplace for shoppers outside China, to users in Europe.

  5. Shenzhen is encouraging entrepreneurs to go for broke. China’s Silicon Valley is drafting the country’s first personal bankruptcy legal framework to help ease the financial burden on innovators.

  6. Taiwan is enjoying a tech investment homecoming to the tune of $25bn, as US-China tensions push manufacturers to retreat back across the strait, according to this analysis by Kensaku Ihara in the Nikkei Asian Review.

  7. Chinese search engine Baidu has built what it says is the world’s largest R&D centre for autonomous vehicles. The park, located in Beijing, covers 13,500 sq metres.

  8. Chinese tech groups including ByteDance, Alibaba and AI start-up SenseTime are boosting their presence in Singapore to challenge their US rivals for market share in south-east Asia, I reported.

  9. China’s announcement of a new national security law for Hong Kong stole the spotlight at the National People’s Congress, but an annual work report also laid out a $2tn, five-year high-tech infrastructure plan, including ambitious targets in 5G and AI. Nikkei Asian Review breaks it down.

  10. What pandemic? The PlayStation 5 is “on track” for a global launch later this year, according to the head of Sony’s video-gaming division, despite fears that supply chain disruption would delay production.

When sages speak

  • Europe’s best chance at competing with China on technology is not to pursue self-reliance — and with that potential isolationism — but to align itself with other tech-leading democracies, argue Rebecca Arcesati and Martijn Rasser in the MERICS blog European Voices on China. “In a paradox, the best way for Europe to ensure its tech independence is through collaboration with allies.”

  • Much of the US-China great power rivalry will play out in the digital realm, where competing models of open data and “cyber sovereignty” will govern global trade. Perhaps it’s time for a Bretton Woods-style conference on digital data, writes Sam duPont in CSIS. “Who writes these rules . . . will have an outsized impact on power and governance in the 21st century.”

Art of the deal

  • SoftBank is back at it, leading an eye-catching $500m funding round in Chinese ride-hailing company Didi Chuxing. In case you missed it, the Financial Times wrote about Didi’s problems in March.

  • Chinese ecommerce group JD.com, which is pursuing a secondary listing in Hong Kong, is spending $100m in a tie-up with appliance store operator Gome Retail to expand its physical presence.

  • SMIC plans to raise $2.8bn on the mainland’s Nasdaq-rival Star Market — another flotation resulting from the US crackdown on Chinese tech listings. The chipmaker withdrew receipts from the New York Stock Exchange a year ago.

  • Samsung, the Winklevoss twins and a blockchain wallet partnership. Need we say more?

  • The Wall Street Journal had a scoop that Tencent is in talks to buy a stake in Warner Music as part of the record company’s IPO. The Chinese company already has stakes in Universal Music and Spotify. ($)

In the spotlight

NetEase, developer of Fantasy Westward Journey and other titles, is gearing up for its own journey back east. The video game company, which is listed on Nasdaq, is bringing its “established brand back to China”, according to chief executive William Ding, with a $3bn secondary listing in Hong Kong.

Ding founded NetEase in Guangzhou in 1997 and the company listed on the Nasdaq in 2000, growing rapidly thanks to its investments first in search engines and microblogging, and then video games. Ding become one of China’s first internet and gaming billionaires, and was responsible for bringing titles such as World of Warcraft and Marvel Comics to the mainland. The profitable company reported a coronavirus-led bounce in the first quarter of 2020 thanks to the millions stuck at home playing video games. Shares are up more than 20 per cent since January.

The move by NetEase is in line with similar decisions by other Chinese companies currently listed in the US, such as ecommerce business JD.com, and follows Alibaba’s secondary listing in the Chinese territory last year.

Smart data

India’s Jio wants to be the next great dominant digital platform

Mukesh Ambani’s Reliance Jio platforms have received more than $10bn in foreign investment during the coronavirus pandemic from the likes of Facebook, Vista Equity Partners, KKR and Silver Lake. Jio aspires to be an internet titan in India, expanding its digital services from ecommerce to payments as it competes with rivals Alibaba and Amazon. This chart from Indian think-tank Gateway House shows the local challenger is catching up.



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