Update #51 - Xiaomi Livestreams, iQiyi Accused and Reliance TikTok
Update #51 - Xiaomi Livestreams, iQiyi Accused and Reliance TikTok
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Xiaomi CEO Puts on Massive Livestreaming Event 🎤
Last Sunday, Lei Jun, the founder and CEO of Xiaomi, hosted his very first livestream sales event on Douyin, the mobile video platform owned by Bytedance. Over the course of the two-hour livestream show, Lei Jun pitched several Xiaomi products like the Mi TV and the flagship smartphone Mi 10 Ultra. The livestream reached 50 million people and Lei Jun successfully sold $30 Million worth of Xiaomi products.
Xiaomi is one of China’s largest smartphone makers, so Lei Jun already had a decently large following going into the livestream. Xiaomi has around 10% of the global market share in smartphones and hasn’t been too hurt by the coronavirus. Lei Jun founded Xiaomi in 2010 and is probably the world’s best salesman for the company. Over the last few months, several major Chinese tech CEOs have hosted livestreams to pitch their company.
The US Investigates iQiyi for Financial Fraud 🔍
US regulators are currently investigating iQiyi, the Chinese video-streaming platform, for potential financial fraud. Specifically, a report was released earlier this year claiming that iQiyi inflated 2019 revenue and overstated user numbers. iQiyi has publicly said that they are cooperating with US authorities for the investigation and also that the report contains numerous errors, unsubstantiated statements and misleading claims. iQiyi is a publicly traded stock on the Nasdaq with a market cap of around $14 Billion. Shares went down 19% last week when this report was revealed.
Of course, it’s too early to tell what will result from this investigation. The allegations have been made by short sellers Wolfpack Research and Muddy Waters, both of whom were major voices in revealing the fraud of Chinese company Luckin Coffee. Right now, it’s a tough time to be a Chinese company operating in the West—several factors increase the pressure you face. The major fraud operation of Luckin Coffee earlier this year has made most US investors weary of Chinese companies, and the US-China trade war, potential TikTok banning and overall political tension add even more scrutiny.
TikTok’s New India Strategy: Get Bought by Reliance? 🇮🇳
Since June 29, TikTok has been banned from India, which was previously their biggest market outside of China with 200 Million users. Along with dozens of other Chinese apps, TikTok is now uncertain about their fate in the critically important Indian market. However, recent reports reveal that Reliance, India’s largest publicly traded company and owned by the richest man in Asia Mukesh Ambani, is exploring options to acquire TikTok. Being acquired by Reliance might allow TikTok to reopen in India. This would make a lot of sense for Reliance, as their Jio platform has 400 Million users and they are probably the best placed company to own TikTok in India.
Reliance is a fascinating company that I’ve written about before—they have the opportunity to become India’s most significant tech company and have raised billions of dollars over the last few months from some of the world’s most famous companies (Facebook, Google, KKR). This is actually a pretty similar situation to what TikTok is facing in the US. TikTok selling to Microsoft in the US is like TikTok selling to Reliance in India. Whether justified or not, the perceived Chinese threat that TikTok posed in two of the world’s biggest countries was so strong that the company is literally being forced to sell. While I can’t predict the future, I expect we will look back on this as a historical moment in the marriage of geopolitics and technology. And either way, this keeps me bullish about the future of TikTok, regardless of who actually owns the company.
