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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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TikTok’s executive leadership and investors are exploring many options to deal with the intense scrutiny they are facing. To avoid the most damaging scenario of being completely banned from the US, a group of US investors are looking into acquiring a stake in TikTok to make the company more ‘American-owned’. This should hopefully satisfy the Committee on Foreign Investment in the United States (CFIUS), which reviews business deals that pose potential national security risks involving foreign entities.
Reuters reports that TikTok is looking to be sold at a price that values the company at $50 Billion. This places TikTok as significantly more valuable than Snap, which is a publicly traded company currently at a $33 Billion market cap. Twitter has a market cap of $28 Billion and Pinterest has a market cap of $15 Billion. As a reminder, TikTok is owned by the Chinese tech holding company Bytedance. Several major US investors like Sequoia and General Atlantic already own major shares in Bytedance.
Satisfying the US Government should also satisfy other governments, as TikTok is also facing a potential ban in Japan. Kevin Mayer, the new American CEO of TikTok, has been making more public announcements defending TikTok, revealing more transparency around the algorithm, and encouraging more dialogue. As a public relations strategy, it’s important for Kevin Mayer to become more friendly with Western legislators who have the power to ban TikTok. Right now, Bytedance’s Chinese CEO Zhang Yiming is a less familiar person to Western media, which makes him and the company an easier target.
Huawei is the World’s Number One ☝️
For the first time ever, Huawei has been named the number one smartphone maker in the world, measured by number of smartphones shipped in Q2 2020. For the last nine years, Samsung and Apple have dominated that number one spot. Many analysts point to China’s strong domestic market for smartphones as the reason behind Huawei’s success. While the coronavirus has hit Samsung and Apple’s revenue, Huawei has benefitted from China’s economy recovering at a faster pace than most other countries in the world. Compared to Samsung and Apple, 70% of Huawei’s sales are concentrated in the Chinese market.
Whatever your thoughts on the company, this is still very impressive considering all the recent controversy surrounding Huawei, including recently getting banned from the UK and US. You could think of Huawei’s struggles and success as a metaphor for Chinese resilience and inevitable growth in spite of major challenges. To me, it’s also a crazy reminder that the Chinese market is literally so damn big that you could only serve Chinese customers and still be the best-selling brand in the world. Fun fact—another example of this is Kweichow Moutai, which is the word’s biggest alcohol brand and does less than 10% of sales outside of China.
International Students ‘Go Local’ 🎓
A couple of weeks ago, the US government revoked an order that would have forced international students to leave the country if their school hosted only virtual classes because of the coronavirus. While this allowed many international students to breathe a sigh of relief, they still have to deal with travel restrictions that create a potentially downgraded university experience.
New York University (NYU) has created a new ‘Go Local’ program that allows students to attend classes at NYU’s satellite campuses in either Abu Dhabi or Shanghai. Thousands of students who would otherwise be at NYU’s campus in New York will now have to change their plans and decide whether the Go Local option works for them. Or alternatively, students can still take virtual classes from the main NYU campus.
Other big schools like Duke, Cornell, Rutgers and Tulane are creating similar programs with their own respective Chinese partner universities. Some Chinese students at smaller schools like Bates and Mount Holyoke have petitioned to create these kinds of programs but the school administration has been unwilling (or maybe unable) to make this happen. It’s too early to tell the long-term effects on international student enrolment in American universities, but these early experiments should provide us with real data very soon.
Update #39 - TikTok, Huawei, and Study Abroad