Category Archives: CNN

The 10 hottest startups in Asia right now (CNN – Vitual think tank 26.9.2014)

By Peter Shadbolt, for CNN

September 26, 2014 — Updated 1024 GMT (1824 HKT)

CNN Asia Startup article

STORY HIGHLIGHTS
  • Startups in emerging markets are designed by and aimed at a young population
  • Investors are making significant outlays in startups in emerging economies
  • Rocket Internet has a large presence in frontier markets such as Myanmar
  • Emerging economies are more likely to develop ideas that overcome specific problems

Virtual Think Tank is a digital series focusing on the emerging markets, covering their startups, the power of the middle classes on their economies and the macro environment.

(CNN) – If just one thing could define emerging economies it’s a young population — and no other place reflects this more directly than in the world of tech startups.

“If you look at Vietnam or Cambodia or Myanmar, they don’t suffer from the up-ended triangle that we all suffer from in the West of too many old people and too few young people,” said Napoleon Biggs, a Hong Kong-based digital media specialist.

Venture capitalists and startup funds are now circling South East Asia looking for ideas to invest in.

He said groups like Rocket Internet from Germany were very good at identifying “clones,” or emerging market copies of internet ideas that have originated elsewhere.

“They raise significant amounts of money and they’re not embarrassed about cloning because they say it’s all about execution, which it is.” 

Frontier markets are where these investors are seeing the greatest returns.

“They’ve gone into places like Myanmar with a vengeance,” Biggs said. “They are bringing western business savvy and they find a local partner to make it happen.”

One recurring feature of emerging market startups is that they are often aimed at solving specific problems in a country.

“In the West, the internet is often slagged off as a place where people waste their time,” said Biggs. “In emerging economies, it’s more likely to be specifically engineered to overcome an existing problem.”

Click through the gallery above to see some of Asia’s most innovative companies chosen by Napoleon Biggs, angel investor Simon Squibb, analyst Xiafeng Wang of Forrester and Ping Wong of the Hong Kong Internet Society.

Original article was published on《CNN – Virtual think tank》on 26 Sep 2014

Can Alibaba topple the Silicon Valley giants? (CNN – Vitual think tank 19.9.2014)

Can Alibaba topple the Silicon Valley giants?
By Ping Wong, Special to CNN

Editor’s note: Ping Wong is an information technology and communications professional with more than 10 years’ experience, specializing in business development and marketing in Hong Kong. She is currently Secretary-General of Internet Society Hong Kong. The opinions expressed in this commentary are solely those of Ping Wong.

(CNN) – Internet giant Alibaba secured its place in history Thursday as the largest U.S.-listed initial public offering (IPO) of all time.

Alibaba, which achieved more than $240 billion in gross merchandise volume last year – more than that of Amazon and eBay combined — has become one of the largest technology companies in the world.

That Alibaba is a Chinese company has important implications and begs the question: Will China become the next Silicon Valley, a breeding ground for the next generation of technology giants?

Silicon Valley has long led the world in the quality, quantity and diversity of technology startups it incubates. Companies like Google, Facebook, Twitter and WhatsApp have flourished under Silicon Valley’s mature and complete startup ecosystem, with its open and free market and culture and innovative environment.

The picture is quite different in Asia where thus far, only a few large technology companies have emerged. Alibaba,Tencent and Xiaomi were not nurtured in a Silicon Valley type environment, but they are successful examples from the unique Chinese market.

Opportunities

With more than 1.3 billion people, China is not only the world’s largest country, but also its biggest consumer market. Home to a huge number of factories, manufacturers, suppliers and customers, China is also called the “World’s Factory.” This unique demand and supply environment helps reduce businesses’ transaction costs and, indirectly, retail prices, creating a world of opportunities for entrepreneurs from China and abroad.

Often called the “Amazon of China,” Alibaba’s business model is in fact completely different from that of the online retail giant. Alibaba’s Taobao is not in itself an online shop but an open eCommerce platform where millions of small businesses and suppliers can sell directly to individual or business customers.

Unlike Amazon, which charges commissions on transactions, Alibaba does not incur administrative charges on sellers or buyers; instead, it offers sellers paid advertising opportunities that will allow their products to stand out among the thousands of others on the platform. Alibaba’s success stems from its huge traffic and competitive retail prices.

This competitive weapon piggybacks on another factor: Chinese customers are the most active online shoppers in the world, shopping an average of 8.4 times online each month, far outpacing American customers, who shop 5.2 times.

Repeated transactions by these customers contribute significantly to a steady sales volume and to Alibaba’s success in China.

Everything to know about Alibaba

Challenges

Opportunities come with challenges. The greatest challenge for entrepreneurs in China is the protection of intellectual property. Taobao is flooded with defective and counterfeit products: 82% of products labeled with the Columbia brand on Taobao are fakes, and the brand has had to get up to 3,000 listings taken down a month.

This is a rather unique problem in China, unlikely to be found in other parts of the world.

China is a separate world where one can thrive only with a good knowledge about the rules of the game.

Without a strong legal system, copyright infringement is becoming a natural tendency. Unless a product is very difficult to duplicate, it is likely to be copied in China. These skillful and efficient perpetrators make such convincing cloned products that they often surpass the original on many levels. In a way, this is stifling creativity and innovation — innovations are being copied, rather than respected and protected.

In addition, government policies such as taxation and embargoes may be changed or imposed at anytime, without reasonable explanation and without channels or methods of reverting the decision. Any such unexpected policy changes may have significant impact on businesses, and are interpreted as one of the biggest risk factors of doing business in China.

Despite adequate talent and capital, the closed market prevents local businesses from competing globally. Business owners who are not Chinese or do not have local connections face a much greater risk of failure.

Because of the reasons above, I don’t believe it is realistic to compare China to Silicon Valley. Rather, it can be described as “a separate world” where one can thrive only with a good knowledge about the rules of the game.

Alibaba is an example of a company that has achieved a “cultural fit” in China. But whether Alibaba or other homegrown Chinese technology companies can hold their place in the competitive global market, or surpass the Silicon Valley-bred giants, remains to be seen.

Original article was published on《CNN – Virtual think tank》on 19 Sep 2014