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We update you on the most essential news from Asia in tech, media, and business—the things you need to know that you probably haven’t heard in Western media.
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Luckin Coffee’s Chairman is Out ☕️
Luckin Coffee was previously one of the hottest companies in China. The coffee brand was considered a serious competitor to Starbucks and completed an initial public offering on the NASDAQ in 2019. The rosy picture came crashing down when a $300 Million accounting fraud was revealed in April of this year.
Charles Lu, the current chairman of Luckin, survived a vote of no confidence last week. Despite this victory for Lu, it was announced today that he was ousted from the board in another emergency board meeting that happened on Sunday that also removed three other board members. And there is still significant speculation that he will soon be facing serious criminal charges, including seizure of his family’s assets. Luckin is the most high profile case of fraud in public Chinese business over the last year, and has hurt the levels of trust investors have in Chinese companies.
Chinese Film Studios Look to More Online Releases 🎬
Earlier this year, many Chinese production companies began releasing their films directly on digital platforms because physical movie theaters had shut down due to the coronavirus. I wrote an article about Bytedance being one of the main players involved by hosting the Chinese film ‘Lost in Russia’ a few months ago, and since then many other major films have been released through Bytedance.
This has angered many Chinese movie theater chains, whose entire financial model is put in jeopardy by direct-to-digital releases on top of the coronavirus. But since the very first experiments at the beginning of the year, the film studios are seeing even more financial benefits to this approach. Tencent, iQiyi, Xigua, and other video-streaming platforms have released dozens of Chinese films and a recent report by Endata has shown huge increases in users and time spent.
This trend has been replicated in the West, most notably with Disney releasing major films direct to Disney+ and Universal Pictures releasing films like “Trolls World Tour” direct to digital download. Pretty much the same scenario played out in both China and the US. It just happened earlier in China by a few months because of the coronavirus.
Korean Students Leaving the US ✈
This article in the Korean Herald talks about the dilemma faced by many Korean students who have to make decisions about studying abroad in the time of coronavirus. Given the current financial, health, and visa challenges in higher education, especially in countries like the US, some Korean students are opting to come back home to Korea to pursue their studies. This has also affected local businesses in Korea that provide related services like US college admission prep companies and study abroad agencies.
Behind China and India, South Korea is the country that sends the largest number of foreign students to universities in the United States, making 6.5% of all foreign enrolment in the US. A few days ago, I wrote about the effect new US work visa restrictions will have on the Indian labour market. With fewer Indians and Koreans able to either study or work in the US, it’s likely that these countries (like many other countries around Asia) will have a more full, but competitive labour market in the short term. Flows of human capital are changing.
Update #20 - Luckin's Chairman, Chinese Films, and Korean Students