Following the crackdowns by China regulators on foreign listings, Pinduoduo Inc. founder Colin Huang saw the biggest hit to his fortune when the e-commerce platform’s shares dove by almost 70%, a whopping US$42.9 billion.

Didi Global Inc. founder Cheng Wei saw his company’s value shoot up in the weeks before its June listing in the U.S., hitting a valuation of US$95 billion for the ride-hailing company, leaving Cheng with a stake valued at US$6.7 billion.

However, Chinese regulators cracked down on the variable interest entity structure and raised concerns about data privacy as well as vague cybersecurity. This resulted in Didi not only delisting by request of Chinese officials but also saw its shares plummeting over 60% after an investigation was declared.

This marks the latest effect of China’s continuing crackdown on its tech sector, as part of its bid to enforce censorship on the internet usage of its citizens. However, the delisting of all these China tech moguls leaves investors with a sudden lack of investment opportunities, especially since it has gotten even harder for a Chinese firm to list outside of China.

A loss for China tech moguls, a gain for Indian unicorns?

Enter the Indian startup scene, which has drawn to itself the attention and interest of investors with its large pool of well-educated entrepreneurs looking at new ways in which many businesses work using a fast-developing digital infrastructure.

This, in turn, has led to the doubling in the number of unicorns India has seen in 2021 alone, with 44 startups joining the prestigious club even as the country faced its fiercest battles against COVID-19.

Some of the investors drawn into this surge in numbers, that saw US$39 billion raised, included Japan’s Softbank, and America’s Tiger Global, and Alpha Wave Global.

This surge has also caused a bit of a gold rush, as backers who are traditionally warier have also taken to the scene with gusto as a response to the aggressive funding from their peers.

Interestingly enough, among the backers that have put funds into India are China tech moguls. Jack Ma of Alibaba fame is noted as an investor, despite looking at a US$13 billion net worth loss following the regulatory crackdown by China officials. Another is Tencent, which saw trimmed valuations after the same regulatory crackdown.

Unfortunately, as much as there are those who believe the bullish movements of investors in India’s startup scene will persist into 2022, there are critics who believe that many of these firms may be grossly overvalued.

One noted example was Paytm, the biggest IPO of the year. The fintech player is yet to make a profit, and its share price is down 40% from its IPO valuation within two days of its weak stock market debut.

The post China tech moguls crackdown may just be India’s gain appeared first on Tech Wire Asia.

This comes as the chief executive announced the tech giant’s long-term plan to quintuple GMV to US$100 billion across their Lazada e-Commerce platforms.

Complementing this ambition for industry growth and dominance, Alibaba is pledging to achieve carbon neutrality across its operations by 2030, the group said in a statement.

In their Alibaba Group Carbon Neutrality Report 2021, the organization has introduced a “Scope 3+” target, claiming it is a pioneering initiative aimed at facilitating 1.5 gigatons of decarbonization by 2035. 

“We aspire to be a force for positive, innovative change in society. Our ESG strategy is predicated on our mission to be a good company that will live for 102 years and it is a vital foundation for Alibaba’s future development,” said Daniel Zhang, Chairman, and CEO of Alibaba Group. 

On Alibaba’s Scope 3+ and carbon neutrality 

Developed by the United States Environmental Protection Agency (US EPA), the Scope inventories are a set of tools and guidelines for organizations to develop action plans to lower carbon emissions. 

The inventories provide tools and practices to deal with different sources of emissions, which are categorized under Scope 1, 2, or 3.  

According to Alibaba, “Scope 3+,” refers to the emissions generated by a broader range of participants in the platform’s ecosystem, currently outside of Scopes 1, 2, and 3.  

Definition of Corporate GHG Emissions Scopes 1, 2, and 3, adapted from Greenhouse Gas Protocol: Corporate Accounting and Reporting Standard. (IMG/Alibaba Group)

Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by an organization, whereas Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling.

Scope 3 emissions are the result of activities from assets not owned or controlled by the reporting organization, but where the organization indirectly impacts its value chain.

Alibaba Group’s green roadmap 

The group is committed to carbon neutrality for Scope 1 and 2 emissions by 2030 and has set a 50% carbon intensity reduction target for Scope 3 by 2030 using 2020 levels as a baseline. 

Alibaba Cloud will bear responsibility for a higher Scope 3 target and aims to achieve carbon neutrality by 2030 in all three scopes.

Greenhouse Gas emissions by Alibaba in 2020 (IMG/Alibaba Group)

Alibaba Group has also committed to joining the Science Based Targets initiative (SBTi) and has aligned its decarbonization measures and strategy with the “Business Ambition for 1.5°C” pledge, a critical target to ameliorate the catastrophic impacts of climate change as outlined by the 2015 Paris Agreement.

The company will adopt a “systematic and science-based approach” to plan and manage decarbonization initiatives. 

These include leveraging energy-saving and efficiency-improving technologies to reduce emissions; actively transforming the energy structure with progressive use of renewables; and exploration of carbon removal initiatives. 

“We believe the use of digital platforms can play a significant role in empowering a low carbon circular economic model that can lead to achieving the 1.5-degree target of the Paris Agreement.

“The concept of ‘Scope 3+’ is based on the potential of leveraging our digital platforms to influence and advocate for low carbon products, services, and behavior among a wider group of stakeholders in our ecosystem. 

Highlights of Alibaba’s Decarbonization efforts (IMG/Alibaba Group)

“This is in addition to sharing our energy-efficient technologies and innovative business tools with customers and business partners to reduce the carbon footprint together,” said Dr. Chen Long, Vice President of Alibaba Group and Chair of Alibaba’s Sustainability Steering Committee.

As a general principle, the company prioritizes carbon reduction over removal, and removal over offset.

Alibaba will continue to improve its carbon reduction measurement and metrics in Scope 3+ by working and partnering with leading expert organizations globally. 

Dedicated ESG Governance Body

The group also announced a new three-tier ESG governance framework to oversee, enable and support the achievement of its carbon neutrality targets and broader ESG goals. 

Chaired by independent director Jerry Yang, the board-level Sustainability Steering Committee will be responsible for strategic planning, goal setting, and management of Alibaba’s carbon neutrality efforts. 

An ESG cross-business action group comprising representatives from each business unit at the working level will be responsible for coordination and execution.

BANKS IN ASIA ARE GOING GREEN TO REDUCE THEIR CARBON FOOTPRINT

Aaron Raj | 12 October, 2021

Meanwhile, Alibaba aims to continue to improve its information and data disclosure and reporting mechanism. 

Starting 2022, the firm “aims to release its ESG report annually”, in which concrete and specific annual progress will be included. 

All reports will adhere to the most reputable metrics laid out in domestic and international standards and will be verified by accredited auditors, said the statement.

Alibaba fintech arm pledged carbon neutrality too

In March this year, Ant Group, the fintech affiliate of Alibaba Group first detailed a roadmap to achieve carbon neutrality by 2030.

The fintech giant aims to neutralize direct and indirect emissions associated with the purchase of electricity from this year and seeks to fully cancel out carbon emissions generated from external sources it does not own or control by 2030. 

APAC BANKS NOW PRIORITIZING CLIMATE CHANGE IMPACT FOR RISK MANAGEMENT

Jamilah Lim | 10 September, 2021

This includes emissions within its supply chain and business travel. It also set up a carbon neutrality fund to support the research and development of renewable energy and other green technologies, as well as work with industry partners to promote green finance. 

The Asia-Pacific, comprising 60% of the world’s population, consumes half the world’s power supply. China is Asia’s leader in the production, procurement, and utilization of sustainable and renewable energy. 

However, nearly 60% of the Chinese economy is powered by coal, which has spurred President Xi to pledge carbon neutrality by 2060.

The post Alibaba Group pledges carbon neutrality by 2030 appeared first on Tech Wire Asia.

Alibaba, one of the world’s largest e-commerce companies, have lately been doing all it takes to navigate a new regulatory environment amid Beijing’s crackdown on the country’s tech sector. It started with a recent biggest reshuffle and now the company is looking at accelerating its overseas expansion, targeting a long-term goal of quintupling gross merchandise value (GMV).

During the Alibaba Investor Day conference call last week, the company’s CEO Zhang Yong shared that the e-commerce giant is targeting a long-term goal of quintupling GMV, the sum of transactions across Lazada’s platforms, to US$100 billion. Alibaba is eyeing for Lazada to serve more than 300 million users eventually, according to a slideshow posted on its website.

Zhang also said that the company’s three strategies including domestic demand, globalization and advanced technology have progressed. To recall, based on the earnings report released by the company on November 18, Alibaba’s global business volume grew 41%, with extensive coverage in approximately 200 countries and regions around the world. 

To recall, Alibaba took over Singapore-based Lazada in 2016 and have ever since been the Chinese corporation’s main e-commerce business in the booming Southeast Asian market. Based on a Bloomberg report, Lazada has grown its GMV to about US$21 billion over the past 12 months, after enlarging its active consumer base by 1.8 times to 130 million from March 2020 through September this year.

ALIBABA RISKS DOMINANCE IN CHINA AS SHOPPERS EVOLVE

Dashveenjit Kaur | 9 November, 2021

Lazada’s Zhang is optimistic and sees a “huge potential in the international markets” going forwards. “In Southeast Asia, ecommerce penetration is only 11%, and Lazada’s annual consumers have reached only 34% of regional Internet users. There’s tremendous potential in both the overall market size and our penetration,” he added.

Lazada, however, has been losing out to Sea Ltd. ‘s Shopee, which also operates in Southeast Asia and Taiwan over the last few years. For context, Shopee reported more than US$56 billion of transactions over the four quarters to the end of September. 

Alibaba’s incoming chief financial officer Toby Xu said during the presentation last week that its China commerce segment has faced “near-term challenges of a slowing macro-environment and a heightened level of competition.” That, he said, has resulted in slower GMV and the revenue growth in the most recent quarter, Xu said. “But we also see opportunities to tap into new addressable markets to grow new users that will position us well for the long term.”

The post Alibaba targets US$100 billion SEA e-commerce business appeared first on Tech Wire Asia.

Chinese e-commerce giant Alibaba Group Holding Ltd has been facing intensified competition that has been eating into its market share. The pandemic and evolution in the way consumers shop has even widened the difference in revenue growth of Alibaba and its peers. Having its position in the industry challenged, Alibaba realized it needs to do what it takes to have its e-commerce business especially to stay relevant.

For starters, the company announced that it will be reorganizing its international and domestic e-commerce businesses and have its CFO replaced. According to the company’s statement on Monday, the changes come “as the tech giant grapples with an onslaught of competition, a slowing economy, and a regulatory crackdown.”

To recall, the company was fined a record 18 billion yuan (US$2.8 billion) in April for abusing its dominant market position. Alibaba broke the country’s antimonopoly law by preventing merchants from selling their goods on other shopping platforms.

How will Alibaba and its e-commerce unit be structured then?

The reorganizing of its e-commerce unit will begin with the formation of two new units — international digital commerce and China digital commerce which the company said was part of efforts to become more agile and accelerate growth. In Alibaba’s last quarterly earnings, the company announced its annual active consumers (AAC) overseas reached 285 million and reiterated its ambitious goal of serving 2 billion consumers globally.

Apparently, the international digital commerce unit will include AliExpress which sells to retail buyers particularly in Europe and South America, its Southeast Asian e-commerce business Lazada and Alibaba.com which is more focused on selling to overseas business customers. The newly-formed International Digital Commerce will be led by Jiang Fan while Alibaba veteran Trudy Dai will lead the new China Digital Commerce that combines Alibaba’s China consumer-facing and wholesale marketplaces. 

HERE’S HOW THIS YEAR’S SINGLES DAY SALES PLAYED OUT FOR ALIBABA, JD.COM

Dashveenjit Kaur | 16 November, 2021

Toby Xu will also be succeeding Maggie Wu as CFO from April 1,next year. In a letter to employees outlining his strategy and leadership changes, Alibaba Group Chairman and CEO Daniel Zhang said “We will continue to focus on becoming a truly globalized company, and we believe that overseas markets present many exciting potential and opportunities for us to capture. We have confidence in our local teams, and we are charting a path forward with a holistic strategic blueprint and organizational stability for winning our overseas markets.”

Strengthening its domestic presence

As with its international commerce integration, Alibaba will also be combining all domestic commerce businesses to foster more collaboration and synergy across business units to serve its consumers and customers better. For this, the company appointed Alibaba veteran Trudy Dai to lead the new China Digital Commerce.

“An Alibaba founding member and partner, Dai has served various leadership roles within the company over the years. She has strong expertise across the China consumption sector, a keen understanding of consumer needs, and deep knowledge of the Alibaba ecosystem,” the blog posting reads.

The new structure for domestic e-commerce will put Dai in charge of all China retail marketplaces, including Taocaicai — its community e-commerce service; Taobao Deals, as well as Lingshoutong, a retail management platform for mom and pop stores, according to 86research.com analyst Xiaoyan Wang.

Competition and hefty fines have not been the only dilemma faced by the tech giant. The company was affected by weaker growth and fierce competition from a plethora of rivals.

Conditions have even led Alibaba to slash its forecast for annual revenue growth to its slowest pace since its 2014 stock market debut. To make it worse, Alibaba’s sale during this year’s Singles Day — the company’s own banner event — grew at the slowest rate.

The post Alibaba reshuffles e-commerce arm, replaces CFO appeared first on Tech Wire Asia.

Tiger Brokers, together with China-based Futu, recently announced plans to launch cryptocurrency trading services to offshore clients and skip the Chinese market entirely. An understandable decision by these NASDAQ-listed e-brokers, considering how China is waging war on cryptocurrency activities on the mainland.

At the time of writing, Tiger Brokers claim they are applying for “relevant licenses” from regulators to trade crypto, though details of these remain unclear, reports SCMP. 

Tiger Brokers far from going broke

According to the Xiaomi-backed online brokerage, Q1 2021 performance for Tiger Brokers parent company UP Fintech Holding Ltd saw revenues of US$81.3 million, a whopping 255.5% increase from the previous year. During this period, the firm saw almost triple trading volume, in excess of USD$ 123.8 billion, over the same period last year. 

This comes hot on the heels of their collaboration with digital giant Alibaba Cloud to boost performance power on their online trading platform, Tiger Trade. With the increase in investors on their mobile platform, the infusion of Alibaba Cloud’s solutions will go towards optimizing data flow speed on the app, as well as provide valuable insights into investor behavior with their big data offerings. 

Alibaba Cloud and Chinese aggression

Alibaba Cloud has been zealously targeting the ASEAN region in recent times with its comprehensive cloud offerings, posing a substantial threat to stalwart rivals Amazon, Microsoft, and Google. Their recent moves have pushed them to overtake enterprise giant IBM on the global cloud leaderboard, even.

As the largest cloud service provider in Asia, Alibaba Cloud has enjoyed the ease of entry to emerging markets in SEA such as the Philippines, Indonesia, and Malaysia. Their strategic investment of over 2 billion yuan (USD$ 283 million) in 2020 aims to position them as a global leader in cloud services, especially given the opportunities presented by Covid-19. 

The rise of Asian digital giants

Online brokerages such as Tiger Brokers and Futu have seen massive growth in recent years, paving the way for more Asian digital finance platforms to tap into the lucrative crypto market, although it would put them in direct competition with crypto industry exchanges like Robinhood and eToro. 

The prognosis for cryptocurrencies as sustainable alternative assets have been looking up, with even traditional finance giant Goldman Sachs recently u-turning on its previously negative sentiment on cryptocurrencies as a viable asset class.

The potential for transformative digital growth in Asia is large, especially since it comprises a large part of the Asia Pacific (APAC) market which is categorized as emerging. This positions the region to become the fastest-growing cloud computing market in the world. In addition, India and Indonesia are rapidly rising to become Asia’s largest digital economies, alongside China. 

THIS IS WHAT YOU ARE COMPETING AGAINST IN CHINA

Tech Wire Asia | 11 July, 2018

Whilst many in Western markets are nervous about the overall presence of China in global markets, Asia has been especially receptive to big players from the mainland, such as Tencent and Alibaba. Not all is bright and cheery for Alibaba, however.

Arch technology nemesis Tencent has been gearing up to rival Alibaba’s cloud offerings in Asia. To up the ante, China’s AI and cloud provider Huawei closed its shutters just a year after opening, upping the intensity of the rivalry between the two Chinese digital giants.

Tencent, with its deep pockets, has set its sights on challenging US competitors in the hypercompetitive cloud market with a 5 billion yuan (US$70 billion) injection over the next five years. 

The Covid-19 factor

A massive 33% surge in demand for cloud services is due to the wildcard Covid-19, forcing most of the globe’s workforces into utilizing digital and cloud services as businesses scramble to get staff working from home. 

From healthcare to travel, cloud and digital services have seen a boom in demand – not just in Asia, but globally as well. As countries adapt and get comfortable with the ‘new normal’ in a landscape where physical distancing has become a mainstay, the demand for cloud and digital services is not likely to die out any time soon.

The post Tiger Brokers bypasses China for crypto but leverages Alibaba Cloud for DX appeared first on Tech Wire Asia.

In December last year, Chinese fintech giant Ant Group was told to undergo a major restructuring that will put it under much tighter regulatory controls. It came after Beijing abruptly halted the company’s US$37 billion IPO—which would have been the world’s largest public listing — over concerns about the growth of unregulated financial-technology services in the country and the growing power of China’s tech sector more broadly.

Under the restructuring plan, Ant, which operates the ubiquitous mobile payments platform Alipay, will place all of its financial-related activities in a holding company overseen by Beijing-based watchdog agencies – including its credit origination platform, its investment technology unit, and its budding insurance operations. It will also create a licensed personal credit reporting company as part of its efforts to strengthen the protection of users’ data.

The overhaul also came two days after e-commerce giant Alibaba Group Holding Ltd of which Ant is an affiliate, was hit with a US$2.75 billion antitrust penalty, as China tightens controls on the “platform economy”.

Notably, one of the most astonishing things about Ant is that it took just 16 years for a payments app invented by the Alibaba e-commerce platform to develop separately into one of the world’s most dynamic digital finance companies. Yet, whatever happened has also shown how even a billionaire businessman as influential as Jack Ma, the founder of Alibaba and Ant’s biggest shareholder, remains subject to the dictates of the Chinese Communist Party.

What happens now?

The new regulation requires fintech platforms to own 30% of all the loans that they co-lend with banks. Brokerage firm Jefferies calculated that Ant will need 13.4-20.1 billion yuan (approximately US$2-US$3 billion) of capital to meet the minimum capital adequacy ratio for consumer finance companies. Around a third to a half of Ant’s 1.7 trillion yuan consumer loans are within the co-lending model, Jefferies estimates.

However, according to reports, it will be tough for Ant to inject more capital into its consumer finance company of which it owns only 50%, brokerage Macquarie has said. Also, Reuters reported that Ant will have to convince other shareholders to come up with more capital to maintain shareholding percentages. If that is not possible, any potential shareholding change will require negotiations on the company’s valuation which Ant might not want to get to, the analyst added.

SARS HELPED ALIBABA BECOME A $470B TITAN – NOW IT’S GIVING BACK

Joe Devanesan | 8 June, 2020

It is also unclear how Ant Group will separate its payments business from its credit products Jiebei and Huabei. Jiebei and Huabei are currently embedded within Alipay, and rely on the mobile payment app for user traffic. Any de-linking would reduce users of the credit products, and potentially affect Ant’s loan quality if access to Alipay data was somehow limited or affected.

Since Ant Group has said it will set up a personal credit reporting company and apply for a personal credit reporting license, Macquarie analysts believe the People’s Bank of China may not grant Ant a license for its own credit company, while Jefferies said Ant may have to partner with a state-owned company to set up the agency. Ant, for now, is already a shareholder in Baihang Credit, one of the only two credit agencies licensed by the central bank.

The post What’s next for Jack Ma’s Ant Group revamp? appeared first on Tech Wire Asia.

China’s antitrust watchdog has come out to warn its internet giants to steer clear of monopolistic practices this week, shortly after slapping fines on both Alibaba Group and Tencent Holdings over not properly reporting some past acquisitions for regulatory oversight.

The State Administration of Market Regulation (SAMR) announced that it would fine Alibaba, Tencent-backed China Literature, and Shenzhen Hive Box 500,000 yuan (approximately US$76,464) each, the maximum under China’s 2008 anti-monopoly law.

The SAMR is reviewing the merger of DouYu International Holdings Ltd. with Huya Inc. which, if successful, will create a Chinese game streaming giant comparable to Amazon’s Twitch. Alibaba on the other hand was fined for failing to seek approval before increasing its stake in department store chain Intime Retail Group to 73.79% back in 2017, while China Literature, the e-books business spun off by Tencent, was also censured over a previous deal, according to a statement.

“The internet industry is not outside the oversight of anti-monopoly law,” the SAMR intoned in a different statement. “The fines of the three cases are a signal to society that anti-monopoly supervision in the Internet field will be strengthened.”

In addition, the SAMR said it will review and investigate other deals based on tip-offs that some firms had cornered a lot of operating power in certain sectors – a process it expects will be lengthy and involve a large number of companies, sending off warning signals to big tech firms in the country who are in the midst of mergers, acquisitions, and other deals involving companies in a similar industry.

Anti-trust, around the world

The firm stance by China’s antitrust governing body comes just a week after 48 US states and the US Federal Trade Commission (FTC) leveled antitrust lawsuits against social media giant Facebook in the US. The suits focused particularly on Facebook’s acquisitions of Instagram and WhatsApp to become the monopoly it is today, giving it the leverage to crush competitors it does not acquire.

It appears the two biggest economies in the world, the US and China, have decided to belatedly tighten oversight on internet industry deals, which is still a developing sector with products and platforms that are often in flux, as the technology enables for products to transition into different forms or be integrated with different services.

Often, big tech companies might acquire a competitor for its product knowledge, proprietary patents, and technology, or the industry expertise of its leadership team – using its size and market value to both obtain the assets it wants, and to prevent a rising competitor from gaining market share.

ENOUGH’S ENOUGH — CHINA LOOKS TO REIN IN TECH GIANTS

Dashveenjit Kaur | 13 November, 2020

Beijing in November unveiled draft regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals, and subsidizing services at below cost to eliminate competitors.

“Investment and takeovers are important means for development and growth of internet companies,” the regulator said in the statement. “The above-mentioned companies have a large influence in the industry, carry out many investments and takeovers, have specialized legal teams, and should be familiar with the regulations governing M&A [mergers and acquisitions]. Their failure to actively declare has a relatively severe impact.”

The post After Facebook, China cracks down on big tech under antitrust laws appeared first on Tech Wire Asia.

In October, China unveiled its draft personal information protection law, a significant move to regulate the collection and usage of personal data. The draft said organizations who violate the law would face a fine of up to 50 million yuan or 5% of annual company revenue. 

The new rules are part of regulators’ attempts to redefine and rethink fintech, amid concerns that technology has usurped the fundamentals of finance, creating potential systemic risks in the world’s second-largest economy.

Once the law is passed, fintech companies will have to figure out how to access enough data to improve their model while at the same time, protecting consumer privacy. The reason why antitrust officials stepped in is largely due to China’s tech giants’ expertise in using data and then analyze that information with algorithms to continue innovating and improving the customer experience.

All that just to build a much more accurate picture of a user’s credit profile by using a range of online data as opposed to traditional credit scoring. In fact, Chinese tech giants have a secret recipe that can improve one’s buying journey giving some of the players the leverage to fetch a bigger share of the consumer finance market.

According to a report by South China Morning Post (SCMP), the consumer finance market is an industry that has always been on hand to fund impulse buys or bigger ticket items that people want to buy now and pay for later.

It is important to note that China is the world’s largest fintech market, where physical cash is hardly used in daily life and cashless mobile payments topped US$14 trillion in the fourth quarter of 2019, according to the People’s Bank of China (PBOC). These “big tech” firms include the likes of JD Digits, Lufax, and Ant Group, an affiliate of Alibaba Group Holding.

China’s tech giants and their data play

The country’s tech giants including Alibaba and Tencent Holdings have built an entire ecosystem around data. For example, the recommendation system on Alibaba’s e-commerce platform Taobao will recommend products to consumers based on their personal preferences, then a user can buy via Ant’s Alipay payment platform.

Should the customer have insufficient free cash, they can use Ant’s Huabei, which works like a virtual credit card. The AI model of Ant Group, an affiliate of Chinese e-commerce giant Alibaba Group Holding, whose mega IPO was recently put on hold by the country’s regulators, is such that it crunches a range of data points on a customer to better gauge risk for lenders, automatically setting credit scores for millions of users.

SCMP also noted that before the pandemic hit, Ant has facilitated about 1.7 trillion yuan (US$258.4 billion) in consumer loans with an average 30-day delinquency rate of around 1% to 2%, which is very competitive against the average delinquency rate at China’s big four banks.

The delinquency rate refers to the percentage of loans that are past due, indicating the quality of a lending company’s loan portfolio. Ant’s 30-day delinquency rate on consumer loans increased to 2.97% in July this year, compared to 1.76% in January at the outset of the pandemic, according to data from its prospectus.

The terms of the loan for Ant will be largely determined by the group’s Zhima Credit, a credit-scoring system based on a user’s digital footprint, including records from payment systems and even whether he or she returned a shared power bank on time. If a consumer is willing to offer more personal information, such as their record of house purchases or even details of their professional LinkedIn profile, he or she can potentially get a higher score at Zhima Credit.

Meanwhile, Tencent, which owns China’s popular social messaging app WeChat, also offers WeChat Pay for its 1.2 billion monthly daily active app users and is a major shareholder in internet bank WeBank. In March, Tencent rolled out “Fen Fu” – an embedded credit feature that also allows WeChat users to “buy now and pay later”.

Simply put, as small companies’ credit history is not good enough, most traditional banks are unwilling to do business but if those companies go to WeBank, and they have used WeChat Pay to transact in the past and their record is good, WeBank will approve the loan.

ENOUGH’S ENOUGH — CHINA LOOKS TO REIN IN TECH GIANTS

Dashveenjit Kaur | 13 November, 2020

With internet giants and online lenders such as 360 Digitech, Lexin, and Yiren Digital account for a much larger piece of China’s consumer loans, regulators are increasingly unnerved by their cozy relationship with banks in the trillions of yuan of loans extended to borrowers. Their combined share may grow to a third of China’s 11.8 trillion yuan (US$1.8 trillion) consumer loan market this year, from 17% in 2017, according to an April research note by China Renaissance.

Hence, the proposed rules in fintech, which would require lenders like Ant to pony up the equivalent of 30% of their loans book in the capital, may substantially change their business model of co-lending alongside banks.

The post Will regulators pop Chinese tech’s fintech bubble? appeared first on Tech Wire Asia.

While the US and the EU are working to reduce the growing power of internet giants, China’s Xi Jinping’s government is also preparing to roll out a raft of new anti-monopoly regulations. The proposed new regulations are aimed at curbing the power of its biggest internet companies such as Alibaba, Ant Group, and Tencent, as well as the food delivery platform Meituan.

The draft proposal, which is spread over 22 pages, was published by the State Market Regulation Committee (SAMR). This is the first attempt to outline antitrust rules in the technology sector. The new rules will work to prevent companies from sharing sensitive information about consumers, cooperating to overcome smaller rivals, and selling products at a loss to eliminate competition. The rules will also work against exclusivity agreements that platforms require businesses to sign.

The regulations will also take aim at companies that treat customers differently based on their data and spending habits. The SAMR is seeking reviews and feedback from the public on the antitrust guidelines until the end of the month.

The ecosystem

China’s internet ecosystem has long been protected from encroaching competition from the likes of global internet giants Google and Facebook. It is currently dominated by two companies — Alibaba and Tencent — through a complex investment network that encompasses the vast majority of the country’s startups in arenas from AI (SenseTime, Megvii) to fresh vegetable deliveries (Meicai) and digital finance (Ant Group).

Their patronage has also groomed a new generation of titans including food and travel giant Meituan and Didi Chuxing (China’s Uber) as well as those that prosper outside their aura, which is TikTok-owner ByteDance.

Alibaba and JD.com dominate the online retail market in China, together accounting for roughly three-quarters of Chinese e-commerce. As of September, Alibaba boasted 881 million mobile monthly active users — more than half of China’s population.

A hint of the Chinese government’s intentions could be seen as early as last week when the planned IPO of Ant Group – the fintech giant controlled by Jack Ma’s Alibaba – which was expected to be the largest in the world was canceled. The cancellation came after Chinese regulators expressed concern that the company’s growing power would affect the entire financial system. Ant has about 1.3 billion users, most of them in China, where it runs Alipay, the country’s dominant digital payment system. 

Tencent, which has a competing payment system and is also the world’s largest gaming company, could also come under scrutiny. Tencent’s WeChat had over 1.2 billion monthly active users as of quarter two this year. 

Implications

The immediate impact saw US$290 billion wiped off the value of China’s biggest internet companies following two days of frenetic selling. Shares in Alibaba, a Chinese version of Amazon, dropped by 9.8% on Wednesday, while rivals Tencent and JD.com fell by 7.4% and 9.2% respectively.

Foreign exchange company Oanda’s senior market analyst for the Asia Pacific, Jeffrey Halley said: “Despite initial data from yesterday’s Single’s Day suggesting that Alibaba had doubled sales from 2019, China big-tech remains in a funk, weighed down by impending Chinese government regulations to limit their power and open up the domestic market to new competitors.”

According to a report, the Chinese administration last week summoned 27 internet platforms to discuss regulating the online economy. The platforms called to appear included Alibaba, Bytedance, Tencent, Pinduoduo, Baidu, and JD.com.

IS CAMBODIA INTRODUCING A BLOCKCHAIN-BASED DIGITAL CURRENCY?

Joe Devanesan | 1 July, 2020

Morgan Stanley analysts said in a note on Wednesday: “We believe the potential implementation of the new antitrust regulations has negative implications for major Internet companies with dominant positions across segments.”

Analysts also said the competition has already intensified in recent years, with ‘incumbents’ (e.g., Alibaba, Tencent) losing market share to ‘disruptors’ (e.g. Pinduoduo, Bytedance). “So the consequences will likely be less meaningful given reduced dominance across segments compared to a few years ago.”

The post Enough’s enough — China looks to rein in tech giants appeared first on Tech Wire Asia.

The region’s biggest online shopping extravaganza did not begin as a shopping event. Instead, it all started out as a day to celebrate singlehood by a group of students at China’s Nanjing University in 1993.

The date picked — November 11, or 11.11 — represents four singles. Soon enough, the celebration caught on among the general public, then retailers, and it’s now become a stalwart in the retail calendar — the biggest reason to splurge at the end of the year.

To put it in perspective, 1.9 billion products by Alibaba were ordered and delivered last year with sales hitting US$38.4 billion, an increase of 26% from the previous year. The gross merchandise value reached more than 210 billion yuan (US$31 billion), double that of Black Friday and Cyber Monday combined, with sales hitting US$1 billion in a little over one minute of trading. For context, US online retail sales on Thanksgiving, Black Friday, Small Business Saturday, and Cyber Monday combined last year totaled US$24.6 billion.  

This year, by 12:30, am on Wednesday, consumers had already spent US$56.42 billion on Alibaba’s Taobao and Tmall e-commerce platforms since the company kicked off the shopping festival on Nov 1 — with the number of orders peaking at 583,000 orders per second.

JD.com, Alibaba’s biggest rival, said transaction volume on its platform was 200 billion yuan as of 12:09 am Beijing time on Wednesday. Again, that is a total from Nov 1.

Many of us have been enjoying some retail therapy today, at the comfort of our home given that some of the biggest e-commerce platforms have been putting on a show since the beginning of the month.

New records, thanks to the pandemic

Ahead of the world’s biggest online sale this year, Alibaba has deployed three million workers, assisted by 4,000 planes and ships. Today features some 250,000 brands from all over the world to an estimated 800 million Chinese consumers in a 24-hour period.

A report by BBC stated that Cainiao, the logistics arm of Alibaba, will be using more than 3,000 chartered flights and long-haul cargo ships to bring goods into China. This is on top of the three million people across Cainiao and its partners which are involved in logistics globally at warehouses and ports.

Cainiao will also be using more than 10,000 mobile lockers to allow customers to pick-up parcels without human contact and operate more than 700 chartered flights to deliver parcels outside China.

Consumers had already spent US$56.3 billion on Alibaba’s Taobao and Tmall e-commerce platforms. Source: Shutterstock

Analysts are factoring in ‘revenge spending’ as cashed-up Chinese consumers unable to travel internationally due to the coronavirus pandemic spend more on imported products and foreign luxury brands than before.

Hence why Alibaba this year, expanded the concept from ‘single’ to ‘double’, enabling merchants to double up on promoting their products to consumers across China not just once, but twice. A new sales window was added between Nov 1 to Nov 3, ahead of today.

Alibaba said this year’s event will have the largest international presence since it was founded in 2009. AliExpress now sells to more than 200 countries and regions worldwide.

Lazada was the first to bring the shopping festival concept to Southeast Asia across six markets: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Shopping festivals such as 11.11 have also become one of the key industry growth drivers as local small and medium businesses participate in this biggest event alongside LazMall, the region’s largest online mall with more than 18,000 local and international brands. 

The post 3m workers, 4000 planes and cargo ships — 11.11 sales in figures appeared first on Tech Wire Asia.