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Here’s what you should know today.

1. Financial comparison site Moneysmart raises $10m series B to grow into new markets

Singapore-based financial products and services comparison site Moneysmart has raised US$10 million for its series B round.

The round is led by Japanese web group Kakaku, which operates a number of consumer websites in sectors like shopping, travel, lifestyle, and real estate.

Moneysmart helps users compare 17 different personal finance products including credit cards, insurance, and loans. Site visitors can also read about various financial topics on the accompanying blog, maintained by full-time staff.

The startup competes with fellow Singaporean company GoBear, which also offers insurance, credit card, and loan comparison, and is present in six markets in Southeast Asia. Kakaku, a prominent Japanese online brand, sees Moneysmart as an opportunity to tap into consumer markets in Southeast Asia. “Our missions are very similar – help with people’s decision-making,” says Genta Sugihara, senior executive officer for Kakaku’s corporate development division.

Read the rest of the story here.

 

2. For retailers, Amazon is a true frenemy

“They buy from us, but they want to sell advertising to us as well,” said one brand marketer. “When you talk to them, you don’t know what their interest is.”

Amazon could be poised, according to Forrester analyst Collin Colburn, who published research on this in January, to take over search — a market Google almost wholly controls.

As consumer behavior shifts to be more specific, people will start searching on Amazon for specific needs. Amazon has created product display ads and other types of search products already.

At the same time, if brands want to be Amazon for the purpose of using only its marketing (which buyers and brands both say is good), then they also have to be on its marketplace. “Amazon is two-way relationship,” said one marketer.

Read the rest of the story here.

 

3. Recommended Reading: Why Bike-Sharing (Ofo, MoBike) Is Nothing Like Didi and Uber (i.e., Ride-Sharing)

Basically, bike-sharing is nothing like Didi, Grab, Ola, Uber, AirBnb and the others. Its economics are far more like an on-demand rental business or a vending machine business (at this point. It could evolve).

But much of the current excitement seems to be because people think this business is like Didi. It’s just not. It’s a different thing.

Bike sharing is basically a traditional, vertically integrated b2c rental service. It is a traditional merchant business. Being bigger helps somewhat but it is still fairly easy for a new entrant to enter. All you would need is about 30,000 bicycles. That would cost about $2.5M. So this is a cheap and fairly easy business to enter, which will probably limit long-term profitability.

However, in the short-term companies like Ofo and Mobike should do really well. They are offering an innovative new service and are first-movers in a wide-open and massive market.

Read the rest of the story here.

Here’s what you should know today.

1. Lazada TV goes live in Malaysia

Lazada TV, which made its debut on 19 May will instead, be home to live and pre-recorded shows on home improvement, make up and fashion tips, cooking shows and more.

Lazada TV uses Facebook Live as its platform, leveraging the country’s appetite for social media channels. By rolling out this new channel, the ecommerce platform will be able to reach new and existing consumers through a different medium. This should be an interesting way to present different products, from cooking equipment to cosmetics, and consumers can check the schedules on Lazada’s website.

Read the rest of the story here.

 

2. Singapore’s StashAway raises $2.15 million to help users make investment decisions

StashAway is a software you can subscribe to for a monthly fee, a so-called robo-advisor – designed to help you make smarter investment decisions without having to pay an expensive consultant.

StashAway was founded by Michele Ferrario, former CEO of the Zalora Group, Freddy Lim, former managing director and global head of derivatives at Nomura, and Nino Ulsamer, who has previously managed software companies.

Closing this round means StashAway has enough cash to be eligible for a retail fund management license. The Monetary Authority of Singapore’s minimum capital requirement for this is S$1 million, according to StashAway.

The funds will be put towards its launch in Singapore, set to go live next month.

Read the rest of the story here.

 

3. SoftBank’s Vision Fund raises $93 billion in its first close

This makes it the largest tech fund in history.

The Japanese telecom giant revealed that its VisionFund has closed an initial commitment of $93 billion from a bevy of high profile backers. They include Apple, Qualcomm, UAE-based Mubadala Investment Company, Saudi Arabia’s PID public fund, Foxconn, and Foxconn-owned Sharp.

The fund is committing to a minimum of $100 million deal checks, with a focus on both minority and majority deals with companies that are either private or public.

In terms of specific areas, SoftBank said its areas of focus include internet-of-things, AI, robotics, infrastructure, telecoms, bio tech, fintech, mobile apps and more.

Given the credentials of the companies backing it and its sheer size, the Vision Fund is unprecedented in tech venture capital and it’ll be truly interesting to watch how it is deployed.

Recent deals include Indian fintech unicorn Paytm, virtual reality Improbable Worlds, China’s Uber killer Didi Chuxing, and global connectivity company OneWeb.

Read the rest of the story here.

 

4. Recommended Reading: How to build a beauty brand in the digital age

Welcome to the lightning-paced modern-day beauty world, where the customer is not just always right, but intimately involved.

A brand’s distinct point of difference and most basic reason for being are its most precious commodities.

Vision, authority and aspiration are still everything — what have we got without them? — but the role of the consumer has fundamentally changed. Instead of passively waiting to be told what she wants and what to do, and then obediently showing up with her wallet, she is now part of the initial, and ongoing, conversation. She has a say.

Read the rest of the story here.

Here’s what you should know today.

1. SoftBank nears tech fund closure with $95 Billion in funding

Chief Executive Officer Masayoshi Son’s investment pool has attracted interest from Saudi Arabia’s sovereign wealth fund, which said it would consider putting in as much as $45 billion, as well as technology giants such as Apple Inc. and Qualcomm Inc., which have also said they’ll participate.

SoftBank plans to contribute at least $25 billion of its own capital in the next five years, as well.

In the earnings announcement, SoftBank also disclosed that it contributed $5 billion to last month’s record $5.5 billion fundraising by Chinese ride-hailing giant Didi Chuxing.

Read the rest of the story here.

 

2. Coach buys Kate Spade for $2.4 billion

Coach Inc. will acquire Kate Spade & Co. for $2.4 billion or $18.50 per share.

Kate Spade in February said it was exploring “strategic alternatives,” following pressure in November from activist firm Caerus Investors, which urged it to consider a sale. Coach and rival Michael Kors have reportedly been eyeing separate bids on Kate Spade since January.

The acquisition is another step in Coach’s strategy to broaden its appeal to a younger, trendier customer base, Mickey Chadha, Moody’s vice president, said in a statement emailed to Retail Dive Monday. “The acquisition gives Coach additional product lines and expansion opportunities.

Coach is in a stronger position in the marketplace. Despite its pullback from department stores and discounts, Coach reported in January that second quarter fiscal 2017 net sales rose 3.8% to $1.32 billion from $1.27 billion in the year-ago period.

Read the rest of the story here.

 

3. Yoox Net-A-Porter reports fastest Q1 growth in Asia Pacific

Luxury and fashion e-commerce group Yoox Net-A-Porter reported a 15.4 percent increase in net revenue during the first quarter of 2017, according to a financial statement.

The report confirmed that there’s strong momentum in the Asia Pacific market, especially in mainland China and Hong Kong.

The luxury ecommerce group first entered the Chinese market in early 2012 after acquiring a local online shopping site “Shuke”. In 2015, Net-A-Porter’s merger with the Italian luxury online retailer Yoox, which further spelled opportunities for the site to expand into the Chinese market.

The latest financial report from Yoox Net-A-Porter also indicated a general pick-up of consumer sentiment across its major markets. The number of visits to the site reached 200 million, with a jump in both active customers and orders.

However, the online shopping site also has a lot of work to do in terms of localizing their offerings. For example, the Chinese website still does not offer UnionPay or Alipay payment solutions despite it being an issue brought up years ago.

Read the rest of the story here.

In his seminal presentation at DLD15, NYU professor and serial entrepreneur Scott Galloway coined the term “The Four Horsemen” to describe the four most dominant companies in digital that have a combined market cap of $1.3 trillion (2014). These companies are Amazon, Apple, Facebook and Google.

 

Galloway’s Four Horsemen theory assumes a Western-centric view; the moment we move east, we start to see different pockets of power, most notably in China, and increasingly in Southeast Asia – the following are these differences.

Romance of the Three Kingdoms

China’s version of the Four Horsemen is called BAT, representing the three kingdoms in China – Baidu, Alibaba and Tencent.

Baidu: The Search Giant

Often considered the “Google of China”, the bulk of Baidu’s revenues come from search advertising. Unlike Google, Baidu has struggled to stay relevant in an environment that has rapidly shifted towards mobile and ecommerce. Discovery on mobile is increasingly favoring apps over search – ask yourself, do you find yourself searching less on mobile than on desktop?

And then there’s ecommerce. With the dominance of Alibaba, product searches are moving away from Baidu and straight onto Alibaba properties like Taobao and Tmall. The very same is happening to Google with over 55% of product searches now starting on Amazon and this is not even accounting for the damage Alexa aka Amazon’s next trojan horse may inflict on Google.

Alibaba: Ecommerce & More

Alibaba is the king of ecommerce, responsible for over 80% of online sales in China (B2C and C2C combined). Over the last 20 years, Jack Ma’s empire has grown into one that puts even Jeff Bezos to shame.

With expansion and investments in areas like advertising, health, entertainment and transportation, Alibaba is more than ecommerce nowadays. Its digital advertising business last year surpassed Baidu to become the number one in China in terms of net digital ad revenue share (28.9% vs. 21.3%), and is estimated to reach 33.7% by 2018 (vs. Baidu’s 17.6%).

Tencent: Gaming & WeChat

Tencent, the biggest among the BATs in terms of market cap – $300 billion vs. Alibaba’s $288 and Baidu’s $60 billion, 2017 – is best known for its popular messaging app WeChat. Its main revenue sources are gaming and value added services like virtual goods, etc.

The company has dabbled in ecommerce since the early 2000’s until it gave up on organic growth and took an investment in Alibaba’s competitor JD. Today, Tencent is JD’s biggest shareholder with 21.25% ownership, surpassing the 16.2% stake of JD Founder and CEO Richard Liu Qiangdong.

Three Kingdoms become Four Horsemen

With the global rise of on-demand and ride-sharing, China’s Didi Chuxing has cemented itself as the fourth horseman in China. The company is the result of a civil war between Didi Dache (backed by Tencent) and Kuaidi Dache (backed by Alibaba) and the newly merged entity subsequently assimilated Uber China to become the third most valuable private company globally, only trailing Uber ($68 billion) and Ant Financial ($60 billion).

Didi’s recent funding round of $5.5 billion values the company at $50 billion and gives it the ammunition needed to expand internationally and invest in self-driving technology.

With Baidu at risk of becoming the next Yahoo, many have looked at news reading app Toutiao to become one of the Four Horsemen in China. Launched in 2011, the company has benefited from the mobile and vertical media wave in China to become one of the most prominent digital media properties in the country.

Valued at $11 billion based on its recent $1 billion funding round, Toutiao is said to have 78 million daily active users and 175 million monthly active users with users spending an average 76 minutes on the app per day.

Southeast Asia: A Proxy War for Chinese Horsemen

The Southeast Asian tech space, despite being very nascent, has provided plenty of promising local successes to root for. There’s Tokopedia and Go-Jek in Indonesia and of course Grab, Garena (which owns Shopee) and Lazada regionally.

However, if we look beneath the surface, we’re seeing signs of a looming proxy war between Chinese tech giants, with expected local casualties through collateral damage.

Alibaba made its big entry into Southeast Asia through its Lazada purchase, Jack Ma’s biggest international acquisition to date. Its ongoing tour-de-force has led many local ecommerce players to join forces (e.g. Orami) or throw in the towel (e.g. Ascend Group).

JD entered Indonesia organically in 2015 to test the waters and it is now said to be in talks to invest millions into Tokopedia. All this follows the news of Tencent, JD’s biggest shareholder, leading the recent $1.2 billion investment into Indonesia’s Go-Jek, valuing the on-demand motorbike startup at a massive $3 billion.

Then there’s Didi Chuxing, who, through its acquisition of Uber China, “participation” in the anti-Uber alliance, and a crisp $350 million investment in Grab should know quite a lot by now about operating in international markets and Southeast Asia in particular.

Fresh off a massive $5.5 billion round, Didi may be going after its “allies” in Southeast Asia. What’s that phrase again? Keep your friends close and your enemies closer…

With an Alibaba camp (Lazada), a Tencent fraction (potentially Tokopedia, Go-Jek, and Shopee), and Didi Chuxing, there’s room for one more Horseman in Southeast Asia.

But it won’t be a Chinese company, the fourth Horseman in Southeast Asia is either going to be Facebook or Google, with my bets on the social media giant.

The whole Facebook vs. Google story in Southeast Asia deserves an entire article by itself but it basically boils down to:

  1. Google’s assets are narrowed down to search-only due to the lack of long-tail publisher inventory in Southeast Asia, which is required for a thriving display ad ecosystem to compete with Facebook;
  2. Southeast Asia is already mobile-first or, in some cases like Myanmar, mobile-only and less people are searching on mobile (same issue Baidu faced in China); and,
  3. The rise of ecommerce in Southeast Asia is eating into Google’s lucrative product searches. Post-Alibaba acquisition, Lazada is set to replicate Tmall’s ad monetization strategy. It has already started recruiting for its Marketing Solutions team as seen from job postings on its site. Survey data from ecommerceIQ for Indonesia shows 57% of users start their online shopping journeys with product searches on marketplaces like Lazada and Tokopedia, bypassing the Google tollgates.

Why Southeast Asia? Not for the obvious reasons.

Why all this sudden interest in Southeast Asia from our Chinese neighbors? The obvious, often reported, reasons:

  • Geographically close to China;
  • Huge, untapped market with 600 million people and a growing middle class;
  • China’s economy is slowing down and the BATs are sitting on piles of cash to spend on (overseas) growth;
  • Cultural affinity: Southeast Asia is home to the largest community of overseas Chinese (over 25 million across the region)

However, the main reason is that Southeast Asia–and with Southeast Asia I mean emerging Southeast Asia (i.e. Thailand, Indonesia, and Vietnam)–is very similar to China about 10 years ago. This is especially true when we look at aspects like prevalent business models, digital advertising landscape, and mobile adoption.

Primary Business Model: Ad-Driven vs. Commerce-Driven

Whereas US companies’ de facto way of monetization is advertising, Chinese firms have historically looked at ecommerce and transactions as a way to generate revenues. The poster child for this is of course Tencent. In 2016, only 18% of Tencent’s revenues came from advertising, up from 9.5% a decade earlier.

71% of Tencent revenues came from value added services (VAS), driven by online gaming, virtual goods sales and digital music downloads. Compare this to Facebook, who generated 98% of its revenues from advertising in 2016.

Another more recent example is Quora, the unicorn Q&A app now worth $1.8 billion after its latest $80 million funding round. After 8 years, the best Quora could come up with are intrusive, text-based contextual ads that were pioneered by Google in 2003.

On the other side of the world, Fenda, a Chinese Quora/Reddit hybrid, has gone beyond advertising and built a $100 million business by monetizing transactions. Technode explains how this model works:

“Users who are knowledgeable about a particular topic can set a price, usually between 1-500 RMB for their answers and get paid for answering questions from others. If they don’t reply within 48 hours, the money will be reimbursed to those who raised the questions.

In addition to connecting questioners and respondents in the Q&A chat interface, Fenda has an eavesdropping feature to engage more listeners. Anyone who is curious about the dialogue can listen to the reply for 1 RMB, which is split between the user who asked the question and the user who answered. After the completion of dialogue, Fenda will take 10% from the overall income from both parties.”

Non-Existent Long-Tail Publisher Ecosystem

At the very root of the ad-driven vs. commerce-driven dichotomy between US and China (and increasingly Southeast Asia) is an immature online advertising environment, perpetuated by a “chicken-and-egg” problem of supply and demand issues:

Supply-Side Issues

Internet adoption in China and emerging Southeast Asian countries didn’t reach critical mass until the mid-2000’s. These markets skipped most of the Web 1.0 and “Web 1.5” booms and jumped straight into Web 2.0, resulting in digital content creation happening mainly on closed social media platforms like Facebook or on vertically-integrated portals like Sina and Sanook.

Unlike in the US, there aren’t millions of long-tail websites and blogs that form the basis for the many ad networks and programmatic advertising. To make things worse, closed platforms like Facebook and portals like Sina sell most (if not all) of their ad inventory direct to consumer, bypassing exchanges for higher margins. We call this phenomenon a “No-Tail” ecosystem.

Demand-Side Issues

Aforementioned lack of quality ad inventory has led advertisers to buy directly on big portals and closed systems like Facebook. As a result, the lack of demand for ad networks like Google Display Network in Southeast Asia has suppressed RPM rates (revenue per 1,000 impressions) for local ad networks, providing little incentive for content creators.

In turn, content creators have found other ways to monetize. In Southeast Asia, peddling merchandise to your Facebook and Instagram audience has been one of the most popular and lucrative ways to make money. In Thailand, this has led to estimates of 33% of ecommerce GMV coming from social commerce.

In China, content creators are leveraging WeChat and increasingly live video apps to sell merchandise and generate revenue off virtual goods transactions. Meanwhile in the US, the de facto ways for bloggers to make money is still to create content and monetize through AdSense and affiliate marketing.

Mobile-First, Mobile-Only

The other striking similarity between China and emerging Southeast Asia is that both are mobile-first and in some areas mobile-only. Granted, some coastal areas in China developed pre-mobile era but given the size of China, many people are still coming online and these are mobile-first or mobile-only.

Unlike in the US, new startups in China are frequently building for the mobile user first then later expanding to desktop users. Fenda started out on WeChat followed by its own apps and website while Toutiao started out as an app.

In Southeast Asia, ecommerce players like Lazada already see over half of their orders coming from mobile. Indonesia’s BaBe, the country’s leading news aggregator app backed by China’s Toutiao, followed a similar path to its majority investor by taking a mobile-first approach.

Learning From Past Mistakes

All of these ecosystem similarities mean that Chinese companies entering Southeast Asia will have a higher chance to succeed.

It’s not the first time that Chinese BATs have ventured abroad, winding up with mixed results. Baidu announced its international expansion plans as early as 2006, launched in Japan with Baidu.jp in 2007 then later shut it down in 2015 after lack of traction.

This time around, Alibaba, Tencent and perhaps Didi Chuxing are hopefully smarter and are more confident playing on familiar grounds – Southeast Asia.

Here’s what you should know today.

1. Airwallex raises $13M led by Tencent

Australia-based cross-border payments startup Airwallex has closed a $13 million Series A round to expand its reach across Asia Pacific and into Europe. The deal was led by Chinese internet giant Tencent.

Airwallex was founded last year to tackle the issue of cross-border transactions at scale. Unlike predominantly consumer-focused services such as TransferWise — which actually opened an Asia Pacific HQ last week.

Airwallex targets businesses, allowing them to make and receive international payments at scale at both a lower cost and with less hassle.

Already it is working with Tencent to help lower backend costs for its WeChat Pay service overseas — which is seen to have potential to grow alongside the emergence of outbound tourism from China.

Read the rest of the story here.

 

2. Didi’s master plan to win over local Chinese governments with data

Didi Chuxing, China’s largest ride-hailing company, has virtually no competitors left in the domestic ride-hailing industry, especially after its game changing funding round. According to CNIT Research figures from Q3 2016, the Beijing-based company controls 94.6 percent of the market.

Having all but conquered the domestic market, the Beijing-based unicorn is now turning its focus inward, towards the terabytes of data generated through its app everyday.

Didi’s new device could potentially collect a wealth of data about driver behavior.

Didi’s move to develop its own monitoring device is part of a larger push to analyze as much data as it can about transportation in China. Starting last year, the company has been tracking GPS information from drivers’ smartphones in an effort to curb speeding, sudden acceleration, and other risky behavior.

Read the rest of the story here.

 

3. Recommended Reading: Amid brick-and-mortar travails, a tipping point for Amazon in apparel

Amazon is exploring the possibility of selling custom-fit clothing, tailored to the more precise measurements of customers, and it has considered acquiring clothing manufacturers to further expand its presence in the category.

If there are tipping points in retail — moments when shopping behavior swings decisively in one direction — there’s a strong case to be made that apparel is reaching one now, with broad implications for jobs, malls and shopping districts.

“I do think this year is the year apparel e-commerce takes off,” said Cooper Smith, an analyst at L2.

Still, Amazon faces hurdles in its apparel business. Some apparel makers have been frustrated by the prevalence of counterfeit versions of their products on Amazon, peddled by independent merchants.

One idea Amazon is considering to lubricate apparel shopping: custom-fit clothing. The company’s apparel team is exploring the possibility of offering “on-demand” clothing that would be made only after a customer submitted an order, using the customer’s precise measurements.

Read the rest of the story here.

Here’s what you should know today.

1. Didi Chuxing, the Uber of China, confirms $5.5B raise for global and AI push

The company confirmed fundraising rumors today; it has raised a fresh $5.5 billion to continue global expansion and to invest deeper into emerging areas like artificial intelligence to bring more advanced systems to its transportation service.

The company didn’t close valuation but sources very close to the company confirm to us that it is over $50 billion, with new investors Silver Lake Kraftwerk joining previous investors.

Didi has also launched a lab in Silicon Valley.

As a global technology leader, DiDi is striving to advance the transformation of transportation and automotive industries through active internationalization plans.

What’s interesting also to contemplate is whether DiDi will finally be expanding its footprint outside of China. To date, the company has done so only in the form of partnerships, intended to make for a more seamless experience to travellers as they go outside their home market but want to continue to use the same app and payment system as before.

Read the rest of the story here.

 

2. Silicon Valley innovation builder Singularity U launches Singapore chapter

Technology and innovation builder Singularity University (SU) officially launched its Singapore chapter this week.

Silicon Valley-based SU is described as a community of thinkers and innovators that apply “exponential technologies to address humanity’s grand challenges.” It’s a lofty mission statement.

One of the areas of focus will be better ways to deliver healthcare tools and services to people in Asia, says Lee Chon Cheng, a member of the Singapore chapter’s leadership team. That’s why SU Singapore collaborated with global medical technology company BD for this challenge.

The global outlook is key to SU’s mission to solve world problems.

Read the rest of the story here.

 

3. Recommended Reading: Banks are loosening up internally so they can work with startups

As banks and financial technology startups collaborate more closely, banks are beginning to pull apart the image of their institutions as segmented bureaucratic machines that can’t innovate quickly.

With public confidence in them in the U.S. below 50 percent across the political spectrum, banks have a branding problem — one that gets even more problematic when they have to work with those outside the industry.

Wells Fargo is one of the banks that has taken active interest in facilitating dialogues with startups. While most most major banks have accelerator programs, Wells Fargo said one of the focuses of its startup program is helping banks understand startup culture and vice versa.

Read more about how banks in the US are re-branding themselves here.