Sign up to myFT Daily Digest to be the first to know about Technology news.
This article is an on-site version of our #techAsia newsletter. Sign up here to get the newsletter sent straight to your inbox every Wednesday
Welcome back everyone, Mercedes here from Singapore. How has Facebook balanced fast growth against rising censorship in Asia, a region rife with illiberal governments? Not very well, according to a deep dive by Nikkei Asia. How the US social media group manages this conundrum will have a direct impact on its future growth: in the past five years, Facebook’s monthly active users in the region have more than doubled to 1.2bn, compared with an increase of about 17 per cent in the US. Elsewhere, check out surging iPhone sales in China and what billionaires Richard Li and Peter Thiel are up to in south-east Asia. Catch you next week!
The Big Story
Facebook is walking a tightrope in Asia. On one side is its stance in favour of free speech and on the other its willingness to aid in censorship to stay in promising markets, an investigation by Nikkei Asia has found.
In the past five years, Facebook’s monthly active users in the region have more than doubled to 1.2bn, compared with an increase of about 17 per cent in North America to 259m.
Key developments: In India, Facebook allowed a network of fake accounts connected to a politician from the ruling party, the BJP, to continue operating for almost half a year, said Sophie Zhang, a former Facebook data scientist who was fired last year. Facebook said Zhang’s accusation that the company failed to act on pro-BJP fake accounts was “inaccurate.”
In Vietnam, activists said Facebook has turned against them, censoring dissent in response to government threats to block the platform. “[W]e do restrict some content in Vietnam to ensure our services remain available for millions of people who rely on them every day,” Facebook said.
Other incidents are reported in the Philippines and Indonesia.
Upshot: Facebook faces a trade-off between maintaining its credibility and driving growth in a region peppered with illiberal governments. How it manages will have a big bearing on its future growth.
Mercedes’ top 10
Make it rain! China plans to cover 60 per cent of its landmass with a programme that uses drones to make rain by 2025. (Nikkei Asia)
SoftBank’s Vision Fund is down $4bn on its Didi Chuxing investment after Beijing punished the ride-hailing company. (FT)
Taiwan’s TSMC, the world’s largest contract chipmaker, is considering building its first European semiconductor plant in Germany. (Nikkei Asia)
Global investment banks are racing to redirect Chinese tech share offerings towards Hong Kong following the Didi debacle. (FT)
Hong Kong is taking action against “doxing” on platforms such as Facebook, Twitter and Google in a move that threatens civil liberties. (FT)
What a difference a new iPhone makes. Apple’s latest quarterly results showed a surge in smartphone sales in China. (Nikkei Asia)
Philippine fintech player Mynt, which is backed by China’s Ant Group, aims to more than double its valuation to $2bn in a fundraising. (Nikkei Asia)
Ant Group director Fred Hu claims it “won’t be long” before the company’s IPO, despite the risks facing Chinese tech companies. (Nikkei Asia)
A terrific Big Read on Tiger Global, the tech investor that has made bold bets on India. Can it continue to make money with its fast-paced model? (FT)
Again and again, Silicon Valley has tried to convince us to wear cameras. Tim Bradshaw argues rather than the timing being wrong, maybe it is the idea itself. (FT)
Bukalapak’s share offering is a transformational moment for Indonesia’s tech scene. The ecommerce marketplace, whose name means “open a stall”, is set to go public on the Indonesia Stock Exchange next week in a listing that could value the company at more than $6bn. It could be the country’s biggest IPO ever.
Bukalapak will need the money. The company, which is not even one of the top two ecommerce players in Indonesia, is going public just as the country’s tech battle steps into high gear. The lure of a 270m-strong population means rivals including Tencent-backed Shopee, Alibaba-owned Loop and local player Tokopedia are striking partnerships, raising capital and expanding further into Bukalapak’s turf.
As with most of its ecommerce peers, the online shopping group is not profitable. That has not stopped record investor demand. The deal has been upsized dramatically. Bukalapak had initially aimed to raise about $300m. Then it became $800m and now it is targeting $1.5bn. It has priced shares at the top end of its range, according to DealStreetAsia.
The demand is an indicator of the huge investor interest in Indonesian tech companies. But the battle to win in Indonesia is expensive, especially as more local unicorns tap public markets for capital. Shopee parent Sea raised almost $3bn at the end of last year, while Tokopedia is set to go public this year after merging with gojek, another Indonesian tech champion. Investors in Bukalapak will find themselves funding an expensive tech fight for dominance.
“Virtually uninvestable.” That was the damning take from one big global investment bank after China’s regulatory crackdown ensnared the education technology sector this week. Shares in US-listed groups including New Oriental Education, TAL Education and Gaotu Techedu, formerly named GSX, plummeted.
Analysts at Goldman Sachs forecast the size of China’s tutoring market would collapse 76 per cent, to $24bn. JPMorgan said: “It’s unclear what level of restructuring the companies should undergo with a new regime and, in our view, this makes these stocks virtually uninvestable.”
Jun Seki is aiming high. The president and chief executive of Nidec, a Japanese motor maker, is spearheading an expansion phase that foresees a nineteen-fold increase in sales to ¥10tn ($91bn) by 2030.
The company will also deepen ties with Taiwan’s Foxconn — the world’s largest contract electronics manufacturer — and is planning to spend $9bn on acquisitions over the next five years to increase sales of electric vehicle motors.
The initiative with Foxconn is to set up a Taiwan-based joint venture next year to build motors for electric vehicles.
“Currently, the majority of our [automotive] clients are carmakers. But in addition to those who have traditionally been selling cars, we are now seeing loads of new entrants from other sectors,” said Seki, a former Nissan executive who was appointed Nidec’s chief executive this year.
Art of the deal
Hari Krishnan has some powerful new best friends. The chief executive of south-east Asian online realty group PropertyGuru has agreed to go public through a merger with a blank-cheque company backed by billionaires Richard Li and Peter Thiel.
The deal with Bridgetown 2, a special purpose acquisition company, is expected to fetch proceeds of $431m and value the company at $1.78bn. The move means PropertyGuru will soon rank as one of the few south-east Asian companies listed in the US. With Chinese tech companies falling out of favour (see Smart Data), south-east Asia’s popularity is up.
For Krishnan, who has been with the 14-year-old business since 2015, it is a second run at going public. PropertyGuru had planned to list in Australia in October 2019 but the listing was pulled. The company attributed the move to uncertain market conditions at the time.
Recommended newsletters for you
#techFT — The latest on the most pressing issues in the tech sector. Sign up here
#fintechFT — The latest on the most pressing issues in the tech sector. Sign up here