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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 Latest Buyer…Microsoft 🤝
The buzz around TikTok has been the world’s most dramatic technology story over the past few months. As I have written before, it’s one of the most visible examples of a metaphorical East West Hurricane, with Chinese-owned TikTok facing major challenges with doing business in the West. I don’t want to write about it everyday but the TikTok news over the last few days is worth bringing up.
Microsoft has released official statements about their intention to acquire TikTok, with the goal to complete acquisition discussions no later than September 15, 2020. This includes TikTok’s operations in several Western countries including the US, Canada, Australia, and New Zealand. Microsoft is primarily a B2B company that makes money by selling enterprise software. They own B2C products like Xbox and Minecraft, but acquiring TikTok would be the biggest, most drastic move to own something consumer-facing.
Donald Trump will have some level of involvement in these talks, which could influence everything from the sale price to conditions of the deal. There is still a chance that major events could change TikTok’s future over the coming weeks. Tech M&A can be very slippery. In 2014, Tencent was about to acquire WhatsApp but Facebook swooped in while Tencent’s CEO Pony Ma was having back surgery. Mark Zuckerberg doubled Tencent’s offer and acquired WhatsApp for $19 Billion. I think TikTok does have a future in the West, but many more details need to be worked out.
Korean Reality TV for Gamers 🏅
There is a new show coming out on Korean TV called “LoL The Next.” LoL refers to League of Legends, one of the world’s biggest video games used in e-sports competitions. Last year, the League of Legends World Championship reached 100 million viewers, the biggest broadcast ever for any e-sports event. This new TV series is a creative, e-sports spin on musical audition franchises like the X-Factor, Got Talent, and Idol series. The program serves as an audition show for aspiring e-sports athletes to break into a professional League of Legends team.
This is the first show of its kind in the world, and it makes sense that it comes from Korea as the country has historically been the global leader in e-sports. I remember going to Seoul on vacation back in 2009. Our hotel had a TV channel completely dedicated to gaming that would broadcast shows like competitive Starcraft matches. As e-sports (and gaming more broadly) continues to grow, more adjacent product and content categories will be created, like e-sports reality TV shows.
I have written previously about the importance of the Chinese market to the global Luxury industry. Chinese consumers make up one-third of all luxury sales and are growing. In the time of coronavirus and worldwide economic downturn, however, buying luxury goods is probably not your number one priority. Several luxury fashion brands like LVMH, Prada, and Hermès recently reported their earnings and overall revenue fell by double-digits for every single brand.
Was there any silver lining to these results? Yes—China. Despite the fact that overall revenue is down, sales in Mainland China are recovering at a much faster pace than the rest of the world. Prada’s net revenue has fallen 40 percent year-on-year, but China sales have had grown at high double-digits over the last three months. The situation is similar for LVMH, Hermès, and Burberry who have also found growth in other Asian markets like South Korea. The state of the overall global luxury industry is still dire, but economic bright spots in China might be a trend for all international retail brands.
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