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India edtech startup Genius Teacher raises USD 2 million

Indian education technology startup Genius Teacher has raised USD 2 million from Whiteboard Capital, and VKG Venture, along with 50 other angel investors including  Abhijit Bose (Whatsapp CEO, India), Kunal Shah (CEO, Cred), Sandeep Tandon (Co-Founder, Freecharge), Dhruv Agarwal (CEO, Proptiger), Justin Sway (CEO, Mmone online), Dan Lapus (Co-Founder, Cvent), Nimish Kampani (President, Let’s Venture), Gaurav Gupta (ex-VP, Snapdeal), Bikram Bedi (ex-MD AWS India) and Farooq Adam (Co-Founder, Fynd). The fresh capital will be used for production development and onboarding new students.

Largely focused on the K-12 segment, Genius Teacher offers students a quiz-based learning platform, with the aim of making education and learning more engaging and interesting. The startup has developed more than 5,000 quizzes and nearly 10,000 interest-based personalized videos.

India’s edtech sector has witnessed a boom in venture capital funds with a spate of edtech-related fundraisings announced this year, attracting the likes of global venture capital investors including Silver Lake, Tiger Global, General Atlantic, Blackrock, and Qatar Investment Authority to name a few. India’s biggest corporation by market capitalization Reliance Industries also jumped into the arena with an investment of nearly INR 6 billion in AI-based edtech startup Embibe in return for a majority stake.

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China Briefings: Tencent buys 10% stake in Universal Music Group, taking total stake to 20%

21 Dec 2020

A consortium led by tech giant Tencent (HKG:0700) will exercise its option to acquire a further 10% stake in Universal Music Group (UMG), based on an enterprise valye of EUR 30 billion. The transaction raises the consortium’s holding to 20%.

“The consortium comprises the same members as that for the initial 10% investment in UMG, Tencent Music Entertainment Group (NYSE:TME) and other financial co-investors,” Tencent said.

The transaction is expected to close in the first half of 2021.

Data centre startup AirTrunk opens first data centre in Hong Kong

10 Dec 2020

Australian data centre startup AirTrunk opened its first data centre in Hong Kong yesterday, along with its first data centre in Singapore as well.  AirTrunk’s 20+ MW HKG1 data centre is strategically located in a key hub for international connectivity. AirTrunk converted an eight-storey industrial building into a world-class hyperscale data centre in record time to support cloud customers ramping up in the region.

Xiaomi to double engineer headcount in Japanese R&D center

10 Dec 2020

Chinese smartphone maker Xiaomi (HKG:1810) is reportedly doubling its engineer workforce at its Japanese research and development center next year, in an effort to expand its market share in consumer electronics.

Baidu gets approval for fully driverless road tests in Beijing

07 Dec 2020

Chinese search giant Baidu (NASDAQ:BIDU) said that it had obtained China’s first permit for fully driverless road tests in Beijing. The approval, granted on Dec 04, makes Baidu the first and only company to have been given the green light to conduct driverless tests on public roads in China’s capital city of Beijing.

China manufacturing activity expands at fastest pace since September 2017

01 Dec 2020

China’s official manufacturing Purchasing Manager’s Index (PMI) rose to 52.1 in November from 51.4 in October according to data from the National Bureau of Statistics. This is the highest PMI reading since September 2017.

Xiaomi posts record high quarterly revenue of CNY 72.2 billion in Q3 2020

26 Nov 2020

Chinese smartphone maker Xiaomi (HKG:1810) has posted a record high quarterly revenue of CNY 72.2 billion in Q3 2020, according to unaudited financial results.  Xiaomi’s smartphone business posted strong growth during the quarter with revenue jumping 47.5% year-on-year (YoY) to CNY 47.6 billion, driven by smartphone shipments which grew 45.3% to 46.6 million units.

Strong smartphone shipments helped Xiaomi emerge as the third biggest smartphone company in Q3 2020 according research firm Canalys.

Huawei sells budget phone brand Honor amid US sanctions

17 Nov 2020

Huawei Technologies Co Ltd announced that it is selling its budget smartphone brand – Honor – to a consortium of over 30 agents and dealers, in a move aimed at ensuring its survival, as well the survival of its supply chain. Huawei will not hold any shares in the new Honor company – Shenzhen Zhixin New Information Technology Co., Ltd, or be involved in any decision-making after the sale. Financial terms were not disclosed.

Founded in 2013, the Honor brand focused on the youth market with phones targeted at the low to mid-end price range. The budget phone brand ships over 70 million units annually according to Huawei.

Tencent Q3 2020 net profit jumps 89% YoY

13 Nov 2020

Chinese tech giant Tencent reported an 89% year-on-year (YoY) jump in Q3 2020 net profit to CNY 38.54 billion, while revenues rose 29% YoY CNY 125.5 billion.  Tencent’s biggest segment by revenue – Value Added Services (VAS) (which includes its highly successful gaming unit) reported a 37.8% YoY growth in revenue to CNY 69.8 billion. Fintech and Business Services which includes revenues from its mobile wallet WeChat Pay – Tencent’s second biggest segment by  revenue – reported a 24% YoY increase in revenue which reached USD 21.35 billion during the quarter. The company’s Online Advertising segment which includes revenues from online advertisements and Mini Program advertisements rose 16% YoY to CNY 21.35 billion.

Alibaba and Richemont invest a combined USD 1.1 billion into Farfetch

06 Nov 2020

Chinese e-commerce giant Alibaba (NYSE:BABA) (HKG:9988) along with luxury goods holding company Richemont (SWX:CFR) are investing a combined USD 1.1 billion into UK-based online luxury and fashion retailer Farfetch (NYSE:FTCH). Alibaba and Richemont will each invest USD 300 million into private convertible notes issued by Farfetch. They will also invest an additional USD 250 million each into Farfetch China – a new joint venture – in return for a 25% stake.

As part of the deal, Farfetch will launch luxury shopping channels on Alibaba’s e-commerce including Tmall Luxury Pavilion, Luxury Soho, and Tmall Global.

Pinduoduo signs MOU with Denmark to promote Danish products to Chinese shoppers

06 Nov 2020

Pinduoduo (NASDAQ:PDD) has signed a memorandum of understanding with the Royal Danish  Consulate General in Shanghai to introduce high-quality Danish products to Chinese shoppers, and at the same time introduce Pinduoduo’s merchant platform to  Danish businesses.

Tencent Games partners with British fashion house Burberry

05 Nov 2020

Tencent Games, the gaming business of Chinese tech giant Tencent Holdings (HKG:0700), has partnered with British luxury fashion house Burberry (LON:BRBY) to integrate and promote Burberry products in Tencent Games’ popular mobile game Honor of Kings. Financial terms of the deal were not disclosed. Tencent and Burberry said that they were targeting China’s “fashion-forward, digital-first customers” with this new effort.

VC firm Bits x Bites raises USD 30 million for foodtech fund

05 Nov 2020

Chinese venture capital firm Bits x Bites has raised USD 30 million in the first close of its USD 70 million foodtech fund. Investors who participated in the round include Singapore investment firm Temasek,  Nissin CEO Henry Soesanto, and other unnamed conglomerates and family offices.

Bits x Bites  is targeting early stage Chinese and international business in the agrifood technology space. Areas of focus include precision agriculture, crop and animal health, alternative proteins, and nutrition.

Alibaba-owned food delivery startup Ele.me teams up with Beijing Daxing International Airport

05 Nov 2020

Alibaba-owned food delivery startup Ele.me has forged a partnership with one-year old airport, Beijing Daxing International Airport, to offer passengers the ability to have their food delivered to the departure gate.

Hong Kong PE firm Alta Capital seeking to raise USD 50 million for hospitality fund

04 Nov 2020

Hong Kong private equity firm Alta Capital is looking to raise USD 50 million from global investors for its first hospitality fund – the Alta Hospitality Fund Asia – which promises to deliver a return of between 15% and 25% over six years. The opportunistic fund aims to raise all the capital by October next year, with the first round closing by the end of January 2021. The funds will be used to acquire hotel assets in Asia Pacific which are showing signs of distress as a result of the Covid pandemic which has devastated the travel and tourism sectors worldwide. Countries of interest include Thailand, Vietnam, Indonesia, Sri Lanka, Malaysia, South Korea, and Japan.

Alta Capital has already identified a couple of assets namely a prime hilltop greenfield development in Galle, Sri Lanka, and a 2.5-star, 90-room boutique hotel in Bali.

Tencent’s Honor of Kings crosses 100 million daily users

02 Nov 2020

Chinese tech giant Tencent’s (HKG:0700) mobile game Honor of Kings has crossed 100 million daily active users, a new world record according to the company.

Xiaomi overtakes Apple as world’s No.3 smartphone maker

30 Oct 2020

Chinese smartphone brand Xiaomi (HKG:1810) has overtaken Apple (NASDAQ:AAPL) as the world’s third biggest smartphone maker by shipments in the quarter ended 30 September 2020.  This is Xiaomi’s first time in the top three ranking and is the first time in 10 years for Apple out of the global top three ranking according to data from three data providers Canalys, IDC, and Counterpoint Research. South Korean smartphone giant Samsung reclaimed its number one position during the quarter.

Counterpoint research said Xiaomi saw a 46% YoY increase in smartphone shipments amounting to 46.2 million units in the July-September quarter. Apple in contrast saw a 7% YoY drop in shipments to 41.7 million units during the same period.

Canalys figures revealed that Xiaomi shipments jumped 45% YoY while Apple’s declined 1% YoY during the same period.

IDC said that Xiaomi shipments rose 42% YoY while Apple shipments dropped more than 10% during the same period.

China Q3 smartphone shipments down 8% QoQ

30 Oct 2020

Smartphone shipments in China, the world’s biggest smartphone market fell 8% quarter-on-quarter (QoQ), and 15% year-on-year (YoY) according to data from Canalys. The decline was led by homegrown smartphone giant Huawei which was forced to curtail smartphone shipments following US sanctions imposed on August 17. Huawei fell 18% YoY in Mainland China, while Vivo and Oppo fell 13% and 18% respectively. Xiaomi rose 19% YoY.

Chinese biotech startup Genecast raises USD 149 million Series E funding

27 Oct 2020

Chinese biotech startup Genecast Biotechnology has raised USD 149 million in its Series E funding round led by China Structural Reform Fund. Taikang Asset Management, CCB Private Equity Investment Management, Hillhouse Capital’s venture capital unit GL Ventures and China Renaissance, participated. The fresh capital will be used to develop new diagnostics products for tumors, accelerate development of in vitro diagnostic devices as well as for market expansion.

Chinese robotic startup Fourier Intelligence raises CNY 100 million Series C

26 Oct 2020

Chinese robotic startup Fourier Intelligence has raised CNY 100 million in its Series C funding round from Vision Plus Capital, and existing investor Qianhai Fund of Funds.

Chinese electronics startup VanTop raises CNY 300 million Series A from Sequoia China

26 Oct 2020

Chinese consumer electronics startup VanTop has raised CNY 300 million from Sequoia China in Series A funding. Founded in 2017, VanTop designs, and develops consumer electronics such as dash cameras, action cameras and smart home devices.

E-sports startup VSPN raises USD 100 million Series B led by Tencent Holdings

26 Oct 2020

Chinese e-sports solutions provider Versus Programming Network (VSPN) has raised USD 100 million in its Series B funding round led by Chinese tech giant Tencent Holdings (HKG: 0700). Video-sharing startup Kuaishou, Shenzhen-headquartered venture capital firm Tiantu Capital, and Susquehanna International Group (SIG) participated in the round. The new funds will be used to further develop its e-sports products and for market expansion. 

“We look forward to building an esports research institute, an esports culture park, and further expanding globally

VSPN CEO Dino Ying

There has been growing Investor interest in e-sports amid the pandemic with expectations the sector will continue growing in the foreseeable future. Canadian e-sports startup GoodGamer raised USD 2.5 million in seed funding last week. About a fortnight ago (mid October), Singaporean e-sports startup EVOS raised USD 12 million in Series B funding, led by Korea Investment Partners. Just last month German e-sports data provider Bayes Holding raised USD 6 million and Indian e-sports platform Mobile Premier League raised USD 90 million in Series C funding.

Wealth management startup Magnum Research closes USD 30 million financing round

23 Oct 2020

Wealth management startup Magnum Research, the owner and operator of digital wealth management app Aqumon, has raised USD 30 million in a follow-on of its pre-Series B round. The round was lead by Zheng He Capital Management while Lenovo Capital, Alibaba Hong Kong Entrepreneurs Fund, Wing Lung Family Office, and government-backed Cyberport participated. 

The fresh capital will be used for market expansion, and for R&D into areas such as software engineering and AI. Magnum Research is licensed by the Securities and Futures Commission (SFC) of Hong Kong.

Aqumon has grown 300% YoY in 2020 amid the pandemic, thanks o a spike in demand for is digital wealth management solutions as the pandemic inflicted demand drops in the offline businesses of insurance companies, banks, and security houses. In addition, financial institutions are increasingly warming up to cloud-based solutions to an effort to reduce costs. Aqumon has partnered with more than 70 financial institutions across the region, covering more than 10 million end users. Major institutional clients include CMB Wing Lung Bank, AIA Hong Kong, Bank of China International, Gaungzhou Rural Commercial Bank, China Resources Bank, and ChinaAMC.

Ayumon offers access to low cost exchange-traded funds (ETFs).

Chinese on-demand drug-delivery startup Dingdang Kuaiyao raises CNY 1 billion Series B+ funding

21 Oct 2020

Chinese on-demand drug-delivery startup Dingdang Kuaiyao has raised CNY 1 billion Series B+ funding from a clutch of investors including Taikang Asset, Haier Biomedical, and Beijing Zhongguancun Longmen Investment Company Limited, SB China Capital (SoftBank’s VC unit in China), and CMB International (China Merchants Bank’s investment vehicle).
The startup operates its own chain of pharmacies, was one of the earliest players to offer drug delivery within 28 minutes, helping it gain popularity among users who often needed urgent drugs at night when traditional pharmacies were closed. Currently serving millions of users in around 10 big cities, the company intends to use the fresh funds to expand to another 10 cities in China by the end of the year, as part of a bigger plan to open 10,000 new pharmacies in 1,000 cities including smaller cities.

Chinese search engine giant Baidu launches in-app shopping channel

20 Oct 2020

Chinese search engine giant Baidu has launched an in-app shopping channel, a strategic move to carve its own share of China’s blossoming e-commerce market. The shopping channel enables its 204 million daily active users to search for products and make purchases directly in its Baidu app. Baidu’s move is somewhat akin to Google’s Google Shopping channel in that a search term for a certain product will reveal product search results from shopping platforms and websites such as Alibaba, JD.com, or other independent brand websites.

Indonesian government launches national online store on e-commerce platform Pinduoduo

19 Oct 2020

The Indonesian government has launched a national online store on rising e-commerce platform Pinduoduo (NASDAQ:PDD) in a move aimed at boosting trade with China.

The Consul General of the Republic of Indonesia in Shanghai, Deny W. Kurnia, livestreamed on Pinduoduo on Saturday, promoting various products including packaged food, bird’s nest supplements, and cotton and silk garments known as Indonesian batik, according to Chinese media outlet huanqiu.com. The livestreaming session lasted from 5:00 p.m. Beijing time to 10:00 p.m. and attracted 450,000 viewers in total, and saw more than 10,000 Indomie Mi goreng instant noodles sold. The store stocks 500 products made by different companies, with over 100,000 items sold since the launch two days ago, data from the Pinduoduo app shows.

BBC Studios signs strategic agreement with Chinese video platform Bilibili

19 Oct 2020

BBC Studios and Chinese online video platform Bilibili (NASDAQ:BILI) have signed a strategic cooperation agreement to generate more China-inspired content and bring more BBC premium shows to China. The BBC-Bilibili partnership will also give Bilibili greater access to BBC Studios’ premium content.

Nasdaq-listed Bilibili, which competes against  online video behemoths Tencent Video (HKG:0700) and iQiyi (NASDAQ:IQ) has been on a tear, recording a 70% YoY growth in monthly active users (MAUs) which reached 172 million in the first quarter of 2020.  By comparison Tencent Video had a MAU of 112 million while iQiyi had nearly 119 million. Unlike its two rivals however, Bilibi is largely reliant on user generated content similar to that of Youtube (NASDAQ:GOOGL), whereas Tencent Video and iQiyi offer video collections of professionally-produced content, similar to that of Netflix (NASDAQ:NFLX). Bilibili however does appear to be making moves towards building its library of professionally-produced content and the partnership looks to be a step in that direction. Bilibili’s content library currently contains more than 3,000 documentaries, including titles it produced and others it co-produced.

Bilibili, which is backed by Chinese tech giants Alibaba (HKG:9988), and Tencent, is hugely popular among “Generation Z” which reportedly accounts for 80% of its users according to QuestMobile.

Alibaba to increase Sun Art Retail stake to 72%

19 Oct 2020

CHinese tech giant Alibaba Holdings (HKG:9988) (NYSE:BABA) said it will invest USD 3.6 billion to increase its stake in Sun Art Retail Group Ltd., one of China’s largest supermarket operators. Following the transaction, Alibaba’s stake in Sun Art will increase to approximately 72%. This new investment in Sun Art will be made by acquiring 70.94% of equity interest in A-RT Retail Holdings Ltd., which holds approximately 51% of the equity interest in Sun Art.

Alibaba first invested in Sun Art back in 2017, when it splashed out about USD 2.88 billion to acquire a 36.16% share in the supermarket chain, as part of Alibaba’s New Retail strategy.

Tencent and Burberry team up to launch interactive WeChat store

26 Aug 2020

Chinese tech giant Tencent (HKG:0700) has partnered with British luxury fashion house Burberry to launch Burberry’s first social retail store in Shenzhen. The interactive, social retail store uses Tencent’s WeChat app (China’s most popular social media app) to enable shoppers to interact and engage with the Burberry store, for instance by interacting with the window display, book fitting rooms, pre-select the clothes to try on, and play their own music in the fitting rooms while trying on those clothes.

TikTok parent ByteDance sets up new e-commerce division

18 Jun 2020

Video sharing platform TikTok’s parent company ByteDance has set up a new e-commerce division signaling intent to develop its own e-commerce business. ByteDance’s revenues currently are mainly from advertising. ByteDance is unlikely to challenge domestic e-commerce leader Alibaba who is one of key advertisers among e-commerce platforms that make up a key portion of TikTok’s core ad revenue. However, there is potential to tap into e-commerce markets overseas, which leverages on TikTok’s strength as a highly popular video sharing platform worldwide. The number of international TikTok users have surged in recent years. TikTok was downloaded 104 million times from the global App Store and Google Play store in January 2020, making it the world’s most downloaded mobile app according to Sensor Tower.

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Singapore Briefings: India’s Gulf Oil to acquire several assets of Hin Leong shipping arm

10 Dec 2020

India’s Hinduja Group-owned Gulf Oil International, has inked an agreement to acquire a lubricant blending plant with wharf access, a storage farm, and a terminal facility located in Singapore’s Tuas region on the western tip, from Singapore’s Ocean Tankers Pte Ltd, the shipping arm of Singaporean oil trader Hin Leong which has been rocked by a financial scandal. Ocean Tankers, one of the biggest tankers in the world has been placed under judicial management following parent company Hin Leong’s financial fraud allegations.

Australian data center startup AirTrunk opens first Singapore data centre

10 Dec 2020

Australian data center operator AirTrunk opened the initial stage of its Singapore data center facility yesterday. In Loyang Singapore, the 60+ MW SGP1 data centre is set on 1.5 hectares, close to the Changi North Cable Landing Station for strong international interconnection. With over 20,000 square metres of data hall area, the scalable campus is designed for hyperscale customers, supporting their rapid growth in Singapore and throughout South East Asia. The campus opens today with its first 30 MW phase and will soon be followed by a second phase that is already under construction to cater for strong customer demand.

The same day, AirTrunk also announced the opened a data centre in Hong Kong.

Hin Leong bunkering arm Ocean Bunkering Services to be liquidated

07 Dec 2020

Ocean Bunkering Services, formerly Singapore’s largest bunker supplier will be liquidated following parent company Hin Leong’s financial scandal. Leow Quek Shiong and Gary Log Weng Fatt of BDO Advisory Pte Ltd have been appointed provisional liquidators.

Singapore, Tianjin ink MOU to deepen cooperation in trade, development

02 Dec 2020

Singapore and China’s northern port city of Tianjin signed a memorandum of understanding (MOU) to deepen cooperation in sustainable and smart development, trade and investment, and people-to-people exchanges.

CapitaLand divests three malls in Japan, office building in South Korea, ventures into logistics

02 Dec 2020

CapitaLand (CGX:C31) has divested three malls in Japan and an office building in South Korea for SGD 448.7 million as part of the company’s portfolio reconstitution strategy, it announced in a stock exchange filing.

The company also made its first foray into Japan’s logistics sector through a joint venture with Mitsui & Co Real Estate Ltd to develop and operate a logistics project in Greater Tokyo.

“The divestment of these mature malls … is part of CapitaLand’s capital recycling strategy to unlock value by reinvesting the capital into new growth opportunities such as the logistics sector in Japan,” said Jason Leow, president, Singapore & International, at CapitaLand Group. “By paring down our exposure in Japan’s retail sector and leveraging our logistics experience in markets such as Singapore, Australia and the UK to expand into the new economy sector in Japan, we are responding swiftly to shifting market trends and consumer behaviors, positioning CapitaLand for future growth,” he added.

German chipmaker Infineon to make Singapore its first global artificial intelligence hub

01 Dec 2020

German semiconductor company Infineon Technologies will spend SGD 27 million over the next three years to make Singapore its first global hub that will see artificial intelligence (AI) embedded in all job functions.

According to Mr Chua Chee Seong, president and managing director of Infineon Technologies Asia Pacific, the plan includes the upskilling of more than 1,000 of its 2,200 employees in Singapore and the deployment of about 25 unique AI projects covering the entire value chain of activities by 2023. Singapore is already home to Infineon’s Asia-Pacific headquarters.

Keppel Land divests remaining 30% stake in Dong Nai Waterfront City (DNWC)

01 Dec 2020

Keppel Corp’s (SGX:BN4) real estate subsidiary Keppel Land is divesting its remaining 30% stake in Dong Nai waterfront City (DNWC) for about VND 1.95 trillion. Keppel Land had divested its 70% stake in DNWC earlier in 2019 to Nam Long Investment Corporation (NLG). NLG is also the buyer of Keppel Land’s remaining 30% stake in DNWC. The deal is expected to be complete in the first half of 2021. With the divestment of its remaining 30% interest, Keppel Land expects to recognize a gain on disposal of about SGD 52.5 million.

“The divestment of Dong Nai Waterfront City is in line with Keppel’s plan to monetize identified assets and apply the balance sheet space that is released for new growth opportunities under its Vision 2030,” said Mr. Joseph Low, general director of Keppel Land (Vietnam)

Singapore mental health startup reaches one million users within six months after launch

01 Dec 2020

Singapore mental health startup Intellect has reached more than 1 million users within just six months after launch. The startup’s consumer app – Intellect – was also selected by Google as one its best personal growth apps for 2020.

Non-banks to be granted access to real-time payment rails

30 Nov 2020

Eligible Non-Bank Financial Institutions (NFIs) will soon be granted direct access to Singapore’s coveted real-time payment networks FAST and PayNow starting February 2021, according to a statement by Singapore’s central bank -the Monetary Authority of Singapore.

PayNow, and FAST enable people to transfer funds between banks and digital wallets. “Direct access by NFIs to FAST and PayNow closes the last-mile gap in Singapore’s ePayment journey. Consumers who may not have ready access to debit or credit cards to fund their eWallets will now have the option to do so directly through their bank accounts,” said Ravi Menon, managing director, MAS.

According to MAS, more than 12.5 million FAST transactions were processed per month in the quarter ended September 2020, more than half of which were handled via PayNow.

Dyson to build new manufacturing hub in Singapore

27 Nov 2020

British household appliances company Dyson is planning to build a new advanced manufacturing hub in Singapore. The plan is part of Dyson’s GBP 2.75 billion worth of investments across Singapore, UK, and the Philippines.

Luxury watch retailer Cortina Holdings proposes to buy Sincere Watches

18 Nov 2020

Luxury watch retailer Cortina Holdings (SGX:C41) which carries well-known watch brands such as Rolex and Patek Philippe has proposed to acquire privately-held rival luxury watch retailer Sincere Watches for SGD 84.5 million in cash according to an exchange filing.

Cortina said the proposed acquisition will provide it with exclusive distributorship rights to the Franck Muller brand in 12 countries within the Asia-Pacific. The acquisition will also give Cortina access to Sincere Watch’s portfolio of brands which includes luxury brands such as Omega, Panerai, Tudor, A. Lange
& Söhne, Franck Muller, IWC, Jaeger-LeCoultre, Vacheron, Constatin and Audemars Piguet. Sincere Watch runs multi-brand retail under the Sincere brand in Singapore and Malaysia, and under the Pendulum brand in Thailand. In addition, it runs mono-brand boutiques for Franck Muller in Singapore and Australia, A. Lange & Söhne in Malaysia, as well as A. Lange & Söhne, Breitling and IWC in Thailand.

New private home sales dive 51.7% MoM in October after latest curbs

16 Nov 2020

New private home sales in Singapore plunged 51.7% to just 642 units in October from a more than two-year high of 1,329 units in September. Compared to last year, October new private home sales were down 31.1% YoY from the 932 units sold by developers in October last year according to figures by the  Urban Redevelopment Authority (URA). The October decline put the brakes on a five-month growth momentum.  The decline is likely to have stemmed from new rules imposed by the URA on September 28, which restricted developers from re-issuing Options to Purchase (OTPs) to the same buyer of the same unit within 12 months after the expiry of the earlier OTP.  Developers are also restricted from providing upfront agreements to buyers to re-issue OTPs.

Digital wealth management startup StashAway expands to UAE

16 Nov 2020

Singaporean digital wealth management startup StashAway has launched in the Dubai International Financial Centre (DIFC), making it the first digital wealth manager get an asset management license from the Dubai Financial Services Authority (DFSA) with retail endorsement.

Singapore Airlines posts record 1H FY 2021 loss of SGD 3.46 billion

07 Nov 2020

Singapore’s flagship airline Singapore Airlines (SIA) posted a record loss of SGD 3.46 billion for the six months ended September 2020, as global air travel came to abrupt halt as a result of the Covid pandemic. The loss is a reversal from the SGD 205.6 million profit earned in the same period last year.

Passenger volume amounted to 155,000 during the 1H FY 2021, a 99.1% decline from the same period last year, when passenger volumes amounted to 19.1 million. Revenue fell 80.4% year-on-year (YoY) to SGD 1.63 billion during 1H FY 2021, from SGD 8.33 billion a year earlier.

The sharp decline in 1H FY 2021 profit was also driven by impairments for older generation aircraft (SGD 1.33 billion impairment), goodwill impairment (SGD 170.4 million impairment of the goodwill from SIA’s Tiger Airways acquisition in October 2014), and  retrenchment cost (SGD 41.7 million). Furthermore, SIA recognized mark-to-market losses of SGD 563 million from fuel hedges during H1. Fuel hedging activities have been paused since March.

US-Singapore Hustle Fund raises USD 30 million

05 Nov 2020

US and Singapore-based pre-seed venture capital investment firm Hustle Fund has raised USD 30 million the first close of its second fund. The fund, which started fundraising in May 2019, will focus on making investments in pre-seed software startups in Southeast Asia, US, and Canada.

GIC-backed data center provider SpaceDC opens new data center in Indonesia

04 Nov 2020

GIC-backed data center provider SpaceDC has opened its inaugural data center facility, JAK2, in Jakarta, Indonesia, in an effort to tap into the country’s rapidly growing digital market. Indonesia is Southeast Asia’s largest digital economy.

September bank lending falls for 7th straight month

31 Oct 2020

Singapore bank lending fell 0.05% month-on-month (MoM) to SGD 677.46 billion from in September, from SGD 677.86 billion in August, marking the seventh consecutive month of decline driven by falling business loans which more than offset rising consumer loans according to preliminary data from the Monetary Authority of Singapore (MAS). Compared to September last year, total bank lending was down 1% year-on-year (YoY) in September.

Business loans fell 0.3% MoM to SGD 421.28 billion in September from SGD 422.54 billion in August. Loans to financial institutions were down 1.9% MoM to SGD 99.38 billion, the second straight month of decline. Loans to building and construction businesses – which account for the biggest share of business lending – rose 0.7% MoM in September to SGD 150.91 billion.

Compared to September last year, business loans were down 0.2% YoY.

Consumer loans inched up 0.3% MoM to SGD 256.28 billion in September, driven by housing loans and share financing. Housing loans, which account for three-quarters of consumer loans rose for the first time since January, up 0.1% MoM to SGD 199.09 billion in September. Housing loans are likely to have benefited from greater buying activity after the end of the circuit breaker period, which helped pushed Singapore’s new private home sales to a two-year high in September. 

Share financing loans rose 6.9% MoM to SGD 1.87 billion from SGD 1.75 billion in August.

Compared to September last year, consumer loans were down 2.5% YoY.

Department store Robinsons closes doors for good

30 Oct 2020

One of Singapore’s oldest department store operators Robinsons is shutting down for good after 162 years in the country, as the Covid pandemic dealt a double whammy amid the ongoing struggles faced by department store operators worldwide to adapt to changing consumer behaviors as a result of rising e-commerce.  Robinsons said that it had begun the liquidation process for its last two stores in Singapore – one located at The Heeren, and the other at Raffles City Shopping Centre. Australian advisory firm KordaMentha are the appointed liquidators.

Robinsons plans to do its best to transfer its 175 employees to other brands owned by its parent company, Dubai-based Al-Futtaim Group, which owns franchises such as Marks & Spencer and Zara.

Advanced materials startup gush raises SGD 4.65 million pre-Series A

26 Oct 2020

Singaporean advanced materials startup gush has raised SGD 4.65 million in its pre-Series A funding round led by TNB Aura. Existing backer Fidelium Group and strategic investors RSP Architects, SEEDS Capital, TRIREC and several unnamed individuals participated in the round. 

Private home prices up 0.8% QoQ in Q3 2020

24 Oct 2020

Private home prices in Singapore rose 0.8% quarter-on-quarter (QoQ) amid the pandemic-induced recession, accelerating from the  0.3% rise in Q2 2020, and a 1% drop in Q1 2020 according to data from the Urban Redevelopment Authority (URA). With the third quarter increase, Singapore’s private home prices are up 0.1% for the first nine months of 2020.

The increase was driven by landed homes and increased buying activity in the city fringes and suburbs after the nationwide two month circuit breaker ended in on June 1. For the nine months ended September 2020, nearly 80% of private home buyers were Singaporean, the highest proportion since 2010. However, the number of foreign buyers of Singapore private homes nearly doubled to 225 in Q3 2020, from 119 in Q2, possibly due to more foreigners setting up operations in Singapore and record low interest rates. Bulk of the foreign buyers were China, while buyers from Malaysia, India, USA, and Indonesia accounting for the rest.

Singtel’s NCS acquires digital services startup 2359 Media

22 Oct 2020

Singaporean telecom giant Singapore Telecommunications’s (SGX:Z74) ICT subsidiary NCS has acquired a digital services consultancy startup 2359 Media for an undisclosed sum. 2359 Media will be part of NCS’ NEXT digital arm, and the acquisition will offer NCS clients an expanded range of digital services such as  design thinking, rapid prototyping, cloud native application development, and creation of innovative digital solutions.

Plant-based food startup Eat Just plans to build first Asia factory in Singapore

21 Oct 2020

American plant based food startup Eat Just has launched a new Asian subsidiary in partnership with Proterra Investment Partners Asia. The partnership will involve the construction and operation of Eat Just’s first  factory in Asia, which will be in Singapore. As part of the deal, Proterra will invest USD 100 million while Eat Just will invest a maximum USD 20 million for the plant. The completed factory will have the capacity to manufacture “thousands of metric tons of protein”. The partnership will  also focus on building the supply chain for their flagship product, a liquid vegan egg product made from mung beans.

65% rise in Industry 4.0-related projects in Singapore

19 Oct 2020

The Covid pandemic has served as a catalyst for Industry 4.0 in Singapore, with companies in the country’s manufacturing sector embarking on more than 1,300 Industry 4.0-related projects to digitize and transform their businesses with assistance from Enterprise Singapore during the eight months to August 2020. This represents a rise of about 65% compared to the same period last year.  Projects were mainly focused on technology deployment and automation, process redesign, and implementation of digitalization solutions such as  human resource systems.

Manufacturing is a key part of Singapore’s economy, with the sector contributing about 20% to the country’s GDP.

Pie chart showing Singapore's nominal GDP by industry in 2019. Singapore's manufacturing sector was the largest contributor to GDP was a 20.9% share followed by wholesale and retail trade with a 17.3% share, business services with a 14.8% share, finance and insurance with a 13.9% share, other services Industries 11.3% share, transportation and storage with a 6.7% share, information and Communications with a 4.3% share, ownership and dwellings with a 3.8% share, construction with a 3.7% share, accommodation and Food Services with a 2.1% share, and utilities with a 1.2%. Data from the department of Statistics Singapore.
Amid the Covid-induced economic slowdown, manufacturing has emerged as a bright spot in Singapore’s economy. Singapore’s Q3 2020 GDP contracted 7% YoY, a drastic improvement from the previous quarter when the country’s economic output shrank 13.2% YoY in, largely driven by the manufacturing sector which rose 2% in Q3 2020, reversing from the 0.8% YoY decline the previous quarter. By comparison the country’s construction sector shrank 44.7% YoY in Q3 2020 while the services sector tumbled 8% YoY.

September new private home sales hit 2-year high

15 Sep 2020

New private home sales reached 1,329 units in September, a 5.6% increase month-on-month (MoM) from August when new private home sales amounted to 1,258 and a 4.65% increase YoY when new private home sales amounted to 1,270 in September 2019 according to data from the Urban Redevelopment Authority. September’s new private home sales volume was the highest since July 2018, when 1,724 units were  transacted. The figures exclude executive condominiums which are a public-private housing hybrid.

Malaysia budget airline AirAsia’s fintech venture BigPay expands into Singapore

28 Sep 2020

Malaysia’s AirAsia’s fintech venture, BigPay, is expanding into Singapore. BigPay also plans to launch new business lines such as loans, insurance and wealth management in the coming months, as well as expand to other South East Asian markets in early 2021.

Singapore’s total population drops for the first time in 17 years

25 Sep 2020

Singapore’s total population has fallen for the first time in since 2003, falling 0.3% to 5.69 million as of June from a year ago largely due to a reduction in foreign employment in the services sector, according to Singapore’s annual population report. Total population, which include citizens, permanent residents, foreign workers and students, last fell in 2003 to 4.11 million from 4.18 million the year before. The non-resident population was 1.64 million as of June 2020, a decrease of 2.1 per cent from June 2019 and the lowest since 2015. By visa type, work permit holders saw the largest decrease. “These trends were largely due to Covid-19 related challenges, brought about by weak demand and travel restrictions,” according to the report.

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India Briefings: India smartphone usage up 25% since April this year

21 Dec 2020

According to a study conducted by Chinese smartphone brand Vivo in collaboration with market research firm Cybermedia Research, Indians’ daily average use of smartphones is estimated to have increased by 25% since April this year to 6.9 hours a day. This is an acceleration from March 2020 when Indians’ average daily time spent rose 11% to 5.5 hours compared with 4.9 hours in March 2019.

The report found that Indians spent most time on work from home activities (75% increase since April), followed by voice and video calling (63% usage growth since April), a 59% increase in time spent on OTT platforms, a 55% increase in time spent on social media apps, and a 45% increase in time spent on mobile games.  

Moneyboxx Finance raises INR 100 million debt funding

21 Dec 2020

SME-focused finance company Moneyboxx Finance (BOM:538446) has raised INR 100 million in debt funding from Blacksoil Capital,  Caspian Impact Investments and Ashv Finance. The funding will be used to support the company’s its disbursement target of INR 800 – INR 850 million in the current fiscal, which equates to about 2.5 times of its lending in during FY 2019/20.

“We at Moneyboxx Finance have created a robust system to support micro-businesses and entrepreneurs and the fact that leading lenders such as BlackSoil, Caspian and Ashv Finance have reposed faith in us is a validation of our business model and we are indeed grateful to them for their support. The funds will help us to further our cause of supporting the deserving micro enterprises and create a positive impact in this segment,” said Deepak Aggarwal, Co-CEO& CFO of Moneyboxx Finance. “Our collection efficiency of 95 percent during moratorium and over 99 percent from September onwards despite CoVID-19 challenges is testimony to the fact that if underwriting and collection processes are robust, it is possible to create same or even better quality of book along with a sustainable and profitable business model in the unsecured lending segment,”he added. 

Food delivery unicorn Zomato closes USD 660 million round

20 Dec 2020

Homegrown food delivery and restaurant aggregator startup Zomato has closed a USD 600 million financing round at a post-money valuation of USD 3.9 billion. 10 new investors joined the round including Tiger Global, Kora, Luxor, Fidelity (FMR), D1 Capital, Baillie Gifford, Mirae Asset and Steadview Capital.

Flipkart sees 35% increase in merchants on its platform 

19 Dec 2020

Walmart-backed (NYSAE:WMT) homegrown e-commerce company Flipkart announced that is has seen a 35% increase in the number of sellers on its platform, most of whom were from Tie 2 and Tier 3 regions such as Tirupur, Howrah, Zirakpur, Hisar, Saharanpur, Panipat and Rajkot. 

Tata Group submits bid for Air India

16 Dec 2020

Indian conglomerate Tata Group has reportedly submitted its bid to acquire beleaguered state-run airline Air India, an acquisition that could make it one of the biggest players in India’s growing aviation sector. Tata Group currently owns two airlines – AirAsia India and Vistara -which currently command a market share of 7.1% and 6.4% respectively of India’s domestic traffic market making them the fifth and sixth biggest players in the market.  Air India with a 9.4% market share makes it the third biggest player in India’s domestic traffic market after Spicejet (NSE:SPICEJET) which owns 13.4% of India’s domestic air traffic, and market leader Indigo with 55.5%

Air India originated as Tata Air Services which was subsequently renamed to Tata Airlines in 1932 by Tata founder J.R.D. Tata.  It was subsequently converted into a public company in 1946 and renamed Air India when it was acquired by the government in 1953.

Edtech startup upGrad acquires recruitment platform Rekrut India

15 Dec 2020

Online learning and higher education startup upGrad has acquired homegrown recruitment platform Rekrut India. The acquisition offers upGrad students access to Rekrut’s hiring network. 

Jet Airways 2.0 could resume operations by summer of 2021

07 Dec 2020

Jet Airways 1.0 which had been grounded in April 2019 after struggling with a debt burden of more than INR 85 billion, is expected to resume operations as Jet Airways 2.0 by the summer of 2021 if all everything goes according to plan. The announcement was made by Murai Lal Jalan, and Kalrock Capital, which had been approved by Jet Airways creditors to revive the airline. 

G-Pay India profit soars 6.5 times in FY 2020

07 Dec 2020

G-Pay India – the Indian digital wallet owned by internet giant Google (NASDAQ:GOOG) saw profits soar 6.5 times to INR 330 million for the financial year 2020 from INR 61 million a year earlier according to a report by Entrackr. The company’s EBITDA margin also improved to 5.02% this year from 3.49% last year. However, while the company’s revenues grew 34.2% YoY to INR 15.05 billion in FY 2020 from INR 10.1 billion in FY 2019, 80.5% of this (about INR 11.73 billion) were actually reimbursements received from holding entity Google Asia Pacific.

G-Pay India is India’s second largest UPI payment platform with a 39.5% market share.  

Walmart eyes Flipkart IPO overseas

07 Dec 2020

Retail giant Walmart (NYSE:WMT) is preparing to sell around 25%  of its stake in Flipkart to raise USD 10 billion which if successful will double Flipkart’s valuation to USD 40 billion since Walmart’s acquisition of the homegrown e-commerce company. Goldman Sachs has been hired to assist with the listing. 

FreshToHome to receive incentives from Abu Dhabi Investment Office (ADIO)

07 Dec 2020

Fresh produce online marketplace FreshToHome has announced that it will receive financial and non-financial incentives from the Abu Dhabi Investment Office (ADIO) to develop projects to develop the emirate’s desert agriculture and aquaculture technologies. 

Flipkart to partially spin-off digital payments arm PhonePe

03 Dec 2020

Walmart-backed (NYSE:WMT) homegrown e-commerce behemoth Flipkart has announced a partial spin-off of its digital payments platform PhonePe. As part of the spin-off process, PhonePe has raised USD 700 million in new financing led by Walmart wit the participation of existing investors. The new funding round valued PhonePe at USD 5.5 billion post-money.

The partial spin-off will see Flipkart paring its stake in PhonePe from 100% to 87%.

Payment gateway BillDesk FY2020 profit up 53% YoY

28 Nov 2020

Visa-backed (NYSE:V) homegrown payment gateway BillDesk reported a 53% year-on-year (YoY) growth in consolidated profit which reached INR 2.112 billion in FY2020 from INR 1.38 billion a year earlier. Total consolidated income rose 30% YoY to INR 19.06 billion from INR 14.07 billion in FY2019. Expenses for the year amounted to INR 16.19 billion up 30.9% YoY from INR 12.36 billion the previous year. Bank fees and service charges paid on transactions remained the biggest cost which accounted for 84.6% of total expenses incurred during the period. 

Revenues from “BillDesk and other technology related services” which constitute the the company’s core payment gateway operations generated INR 11.94 billion, representing  63% of revenues. Its loyalty business offering meanwhile generated INR 4.18 billion, or 22% of revenues. Compared to FY2019, these segments saw revenue growth of 19.8% and 33% respectively.

The consolidated financials of the company include four subsidiaries – Loyalty Rewards Management Pvt LTD, Hatio Innovations Pvt Ltd, Jocata Financial Advisory and Jocata Corporation respectively.

BillDesk is reportedly in the market again for buyers, after an unsuccessful attempt two years ago.

Zetwerk revenue surges 20-fold to INR 3.2 billion in FY2020

28 Nov 2020

Accel Partners-backed B2B marketplace for custom manufacturing, Zetwerk, has reported a 20-fold jump in revenues to INR 3.2 billion in FY2020 from INR 164.5 million a year earlier.  89% of the company’s revenues were generated from the manufacturing of fabricated or machined metal products and tools while the remaining rest 11% was generated through the construction and maintenance of water canals, reservoirs including irrigation systems.

Amazon Pay, Paytm, PhonePE, and 26 others become NCPI shareholders

27 Nov 2020

India’s National Payments Corporation of India (NCPI) disclosed that is has expanded its shareholder base, through a private placement of 4.63% of its equity shares worth INR 816.4 million, which valued the entity at INR 17.63 billion.  The 19 new shareholders include mobile wallet operators Amazon Pay, Paytm  Payments Bank, PhonePe, Mobikwik, Pine Labs, and PayU. Banking entities include Standard Chartered Bank, Dhanlaxmi Bank Ltd. and IDFC Bank were also onboarded as shareholders. The latest private placement brings NCPI’s total shareholder count to 67. 

According to the shareholder list disclosed by NCPI, Union Bank of India, Bank of Baroda and Punjab National Bank hold the highest stake with 9.15%, whereas Canara Bank holds 8.14% share. Lenders including State Bank of India, Bank of India, ICICI Bank, HDFC Bank, HSBC and Citibank, each, hold a 7.12% stake. 

India enters technical recession for the first time since gaining independence in 1947 

27 Nov 2020

India’s GDP contracted 7.5% year-on-year (YoY) in Q3 2020, the worst performance among major advanced and technical economies. Although Q3 2020 was better than Q2 2020 when the economy shrank 23.9% YoY, the two consecutive quarters of economic contraction mean Asia’s third biggest economy has entered a technical recession for the first time since 1947.

India extends ban on international flights until December 31

27 Nov 2020

India’s civil aviation ministry has extended the suspension of international flights until December 31, 2020. 

AirAsia India Q3 2020 revenue plunges 62% YoY 

24 Nov 2020

Budget airline AirAsia India said revenues dropped 69% year on year to INR 2.21 billion during the quarter ended September 2020 from INR 7.24 billion a year earlier, as the pandemic hit the air travel industry. The budget airline is a joint venture between Malaysia budget carrier AriAsia Bhd (KLSE:AIRASIA) which owns a 49% stake and Indian conglomerate Tata Sons Ltd which holds the remaining 51%. AirAsia India said its capacity shrank 64% YoY during the July – September quarter. “Average fare also saw an increase of 12% to INR 3,143 as compared to 3Q 2019. Average load factor was 62% with AAI (AirAsia India) operating 65% of its fleet,” AirAsia Bhd said in its exchange filing. 

Bharti Airtel overtakes Jio in August 2020 subscriber growth

17 Nov 2020

According to figures by the Telecom Regulatory Authority of India (TRAI), Bharti Airtel (NSE:BHARTIARTL) added about 2.9 million users in August 2020, compared to 1.8 million for Reliance Jio – currently India’s biggest telecom operator. This represents a 0.91% monthly growth for Bharti Airtel compared with 0.47% for Reliance Jio.

Except for state-run Bharat Sanchar Nigam Limited (BSNL) which added 214,000 users in August, all other mobile operators saw falling subscriber numbers according to the data. VI (previously Vodafone Idea), which was the biggest telecom operator until October 2019, lost 1.2 million users in August. Anil Ambani’s Reliance Communications lost 290 users, while state-run Mahanagar Telephone Nigam Limited (MTNL) lost 6,081 wireless subscribers.

SBICap Ventures raises USD 25 million from European Investment Bank (EIB)

13 Nov 2020

The State Bank of India’s venture capital arm SBICap Ventures has raised USD 25 million from Luxembourg-based, publicly owned European Investment Bank (EIB) for its Neev II Fund. SBICap Ventures is aiming to raise USD 118 mill;ion for the fund from global and domestic investors. The fund’s current backers include SBI, Small Industries Development Bank of India (SIDBI) and the UK Government’s Department for International Development (DFID). 

SBICap Ventures is looking to invest in eight low-income and developing states, namely Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Odisha, Rajasthan, Uttar Pradesh and West Bengal. Areas of focus include infrastructure sub-sectors such as renewable energy, agricultural supply chain, healthcare, education, urban infrastructure and roads.  

POS company Mswipe’s losses grow 155% 

13 Nov 2020

Indian point of sales company Mswipe, reported losses of INR 1.481 billion for financial year (FY) 2020, a 155% increase from the previous year’s loss of INR 581 million. The company’s expanding losses comes despite a 34.6% rise in operating revenue to INR 3.48 billion from INR 2.585 billion in FY 2019. 

Whatsapp gets NCPI nod to expand payments system

06 Nov 2020

The National Payments Corporation of India (NCPI) has given approval for Whatsapp to ‘Go Live’ on UPI in the multi-bank model. The Indian payments authority’s approval allows Facebook to expand its UPI userbase in a graded manner starting with a maximum registered userbase of 20 million in UPI. 

Facebook first began testing its payment method two years ago. However, expansion efforts have been hampered by a slew of lawsuits over privacy concerns and its inability to meet the Indian government’s data localization requirements. This prevented the social media giant from launching its payment system beyond its beta version which is currently being used by around 1 million users in India. 

Amazon to invest INR 2.76 billion to build second data center region in India

06 Nov 2020

Amazon Web Services, the cloud arm of tech giant Amazon, is investing INR 2.76 billion to build a new AWS Cloud Region in the city of Hyderabad, in the southern state of Telangana, India, by 2022. In a press release, Amazon said, the new Amazon Web Services Asia Region will be Amazon’s second Infrastructure region in India and will enable even more developers, enterprises, and start-ups along with government, education, and non-profit organizations to run their applications and serve customers from data centers situated in India.

Flipkart acquires social gaming startup Mech Mocha

04 Nov 2020

Walmart-backed e-commerce giant Flipkart has acquired multiplayer social-gaming startup Mech Mocha for an undisclosed amount. With the acquisition, Flippkart aims to expand and retain its userbase by offering games to users of its mobile app. 

Hyperlocal search engine Justdial’s net profits drop 43.2% QoQ

01 Nov 2020

Homegrown hyperlocal search engine Justdial has reported net profits of INR 473 million for the quarter ended September 30, a 43.2% quarter-on-quarter (QoQ) drop compared to the previous quarter when the company reported net profits of INR 833 million. The company’s profit margins followed a similar trend falling 51.3% QoQ, and 28.26% year-on-year (YoY). 

Revenues fell 30.9% YoY to INR 1.67 billion from INR 2.42 billion the same quarter a year earlier.  

UPI transaction value up 17.3% MoM in October

01 Nov 2020

India’s national payment system – United Payments Interface (UPI) – recorded 2.07 billion transactions (the highest ever since its  founding in 2016) worth INR 3.86 trillion in October according to data released by the National Payments Corporation of India (NCPI). October transactions were up 15% by volume and up 17.3% by value compared to September. 

Reliance Industries FY 2021 Q2 revenue up 27.2% QoQ

01 Nov 2020

India’s biggest company by market capitalization Reliance Industries posted revenues of INR 1.28 trillion in revenues for Q2 of financial year 2020-21, a 27.2% quarter-on-quarter (QoQ) increase, driven by solid performance from its digital venture – Reliance Jio Platforms –  and its retail venture – Reliance Retail. Net profit for the quarter was up 28% QoQ, reaching INR 106 billion. 

Reliance Jio generated revenue of INR 210.7 billion, for the quarter, up 7.1% QoQ. Net profit reached INR 30 billion up 19.8% QoQ.  

Reliance Retail generated revenue of INR 410 billion for the quarter, up 30% QoQ. Net profit surged 125.8% QoQ to INR 9.73 billion. 

Reliance’s fibre-optic business bags USD 1.01 billion investment from Saudi Arabia’s PIF and Abu Dhabi Investment Authority (ADIA)

30 Oct 20020

India’s most valuable company by market capitalization – Reliance Industries – has announced that Abu Dhabi Investment Authority (ADIA) and Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) will invest USD 1.01 billion into Reliance’s “critical asset” Digital Fibre Infrastructure Trust, which holds Reliance Industries’ fibre-optic assets.

Amazon Prime subscribers doubled during August Prime Day sales

30  Oct 2020

E-commerce giant Amazon’s video streaming platform Amazon Prime said is subscriber base doubled during August’s Prime Day sales, compared to last year.

Indian army launches Whatsapp-like encrypted messaging app

30  Oct 2020

The Indian army has launched its own messaging app – an indigenous end-to-end encrypted voice, text, and video calling app for Android smartphones. Called the Security Application for the Internet (SAI), the app was launched in an effort to prevent any sensitive information from reaching intelligence agencies. 

Proctor & Gamble sets up INR 4 billion ‘India Growth Fund’

30  Oct 2020

Global FMCG giant Proctor & Gamble has set up an INR 4 billion ‘India Growth Fund’ to identify, and collaborate with startups, businesses, and individuals offering innovative solutions to localize the manufacturing of finished goods, procurement of raw materials, and packaging.  The new fund is part of P&G’s ‘vGrow’ program.  

P&G claims that 95% of its products sold in India are manufactured locally. P&G also exports locally manufactured finished goods to more than 120 countries.  and the program aims to further localize manufacturing of finished products, procurement of raw materials and packaging materials, as well  adopt innovative solutions that enhance the company’s go-to-market technologies to better serve their customers in India. 

Online fresh fish, vegetables, and meat retailer FreshToHome raises USD 121 million, largest ever Series C funding in India

27  Oct 2020

Indian online fresh fish, vegetables, and meat retailer FreshToHome has raised a record-setting USD 121 million in Series C funding from the Investment Corporation of Dubai (the principal investment arm of the government of Dubai), Investcopr, Ascent Capital, the U.S. government’s development finance institution (DFC), and the Allana Group. This is reportedly the largest Series C funding to date for an Indian startup. 

The fresh capital will be used to accelerate expansion through India, as well as the Middle East. Banking on a rising demand for food safety, FreshToHome’s patent-pending AI-powered supply chain technology and its state-of-the-art cold chain enables sellers to source fresh fish, vegetables and meat directly from fishermen and farmers, cutting out layers of middlemen, and helping the company offer customers a safety guarantee of “100% Fresh and 0% Chemicals”.

Reliance-Future Group deal stalled, temporary relief for Amazon

25  Oct 2020

A Singapore-based arbitration panel has ruled that Reliance Retail and Future Group should not proceed with the deal, until it hears the matter. The ruling from the Singapore International Arbitration Centre (SAIC) is a a win for Amazon who owns an indirect stake in Future Group and claims that Future Group violated the terms of the agreement between the two companies. In August last year, Amazon acquired a 49% stake in Future Coupons which owns a 7.3% stake in Future Retail. Amazon also had the rights to buy into Future Retail after a period between 3 and 10 years as part of the  deal. The contract signed between to the two firms contains a non-compete clause that bars Future Group from selling the business to rivals without Amazon’s approval.

Reliance Retail, the retail arm of India’s biggest company by market capitalization – Reliance Industries – has been moving aggressively  to grab market share in India’s booming e-commerce market, and is expected to emerge as a formidable force in Indian e-commerce, disrupting it similar to the manner in which Reliance Jio disrupted India’s telecom market to emerge as India’s biggest mobile operator by market share. For more insights on Indian e-commerce click here

Supply chain financing startup CredAble raises INR 181.4 million

24  Oct 2020

India supply chain financing startup CredAble has raised INR 181.4 million in funding led by V’Ocean investment. A group of other individual investors participated in the round.

CredAble aims disrupt the supply chain financing in Asia. The startup’s solution combines financing, deep learning, analytics to create innovative financial products dynamically. 

Flipkart acquires stake in Aditya Birla Fashion and Retail

23 Oct 2020

Indian e-commerce giant Flipkart has invested INR 15 billion to acquire a 7.8% stake in Aditya Birla Fashion and Retail. The acquisition looks to be a step towards solidifying Walmart-owned (NYSE:WMT) Flipkart’s position in India’s fashion e-commerce market which is seeing growing competition from Amazon Fashion (NASDAQ:AMZN) and newcomer JioMart which having disrupted the online grocery space, announced its entry into fashion in early October this year.

Flipkart’s fashion business Flipkart Fashion, together with its fashion e-commerce subsidiary Myntra lead India’s fashion e-commerce, with a market share of roughly 38.3% as of 2018 according to S&P data.  

For more insights on Indian e-commerce, click here

India Q3 2020 smartphone shipments reach all time highs

22 Oct 2020

About 50 million smartphones shipped in India during Q3 2020 according to a report by Canalys, hitting a quarterly record in the world’s second largest smartphone market. This is nearly three times the 17.3 million shipped in Q2 2020 (during which time the country was under lockdown for two months). and about 50% higher than the 33.5 million  shipped in Q1 2020. 

Chinese smartphone makers dominate India’s smartphone market accounting for three of the top four brands; Xiaomi lead the way with a 26.1% market share followed by Samsung (20.4%), Vivo (17.6%), and Realme (17.4%). 

RBI bans payment firms from issuing new proprietary QR codes

22 Oct 2020

The Reserve Bank of India (RBI) has banned payment system operators from issuing new proprietary QR codes and released norms that would move towards making QR codes interoperable. The RBI has said that payment firms that use more than one proprietary QR code must shift to one or more interoperable QR codes by March 31, 2021. According to the RBI there are currently two interoperable QR codes in existence –  the United Payments Interface (UPI), and Bharat QR. The RBI’s new norms will enable the use of one QR code through which all payments can be made, and thereby remove the need for users to maintain different apps.

JioMart forays into electronics

22 Oct 2020

Already the largest online grocer, a feat achieved less than half a year after launch, JioMart, the fledgling e-commerce arm owned by Reliance Retail has reportedly started selling electronics, as it works its way to becoming a full fledged e-tailer. The pilot project on starting October 21, will see electronic products such as kitchen appliances, and home appliances such as vaccum cleaners, and air purifiers, and personal care products such as electronic shavers, trimmers, and consumer electronics such as power banks, and electronic gadgets such as bluetooth headphones, and speakers from brands including Apple, Samsung, Sony, JBL, Philips, Bajaj, and SanDisk being offered to JioMart shoppers in Navi Mumbai.

Reliance Jio Platforms launches JioPages – a ‘Made in India’ web browser

22 Oct 2020

India’s youngest startup unicorn Reliance Jio Platforms has launched JioPages – a web browser based on Chromium Blink – an open-source browser engine developed by Google as part of the Chromium project. The new browser from the digital arm of India’s largest company by market capitalization – Reliance Industries – offers support for features such as encrypted connections, and support for eight Indian languages (Hindi, Marathi, Tamil, Gujarati, Telugu, Malayalam, Kannada, and Bengali).

Currently only available in Google Play, the browser has already racked up more than 10 million downloads as of 23 October 2020.

Edtech startup Ahaguru raises Series A funding

22 Oct 2020

Indian edtech startup Ahaguru has raised an undisclosed amount in Series A funding from an investment firm managed by Anand Mahindra’s family office. The funds will be used for teacher recruitment, technology and product development, and increase its student base across in India and the Middle East.

Popular among students for its science and math courses, Ahaguru is making investments in artificial intelligence to offer personalized learning experiences to students to better understand student learning patterns and make suggestions to enhance their knowledge and increase their chances of success.

AI-powered fintech startup Signzy raises USD 5.4 million

21 Oct 2020

Indian AI-powered fintech startup Signzy has raised USD 5.4 million in a funding round led by Arkam Ventures, and Mastercard (NYSE:MA). Existing investors Kalaari Capital and Stellaris Venture Partners participated. The fresh capital will be used for AI-related research and development, and sales, in an effort to capitalize on the heightened demand witnessed during the pandemic.

Signzy offers digital onboarding and identity verification solutions (such as customer onboarding and video KYC) for banks, NBFCs, and other financial institutions.  The startup’s solutions are used by major Indian banks and financial institutions such as ICICI Bank (NSE:ICICIBANK), Aditya Birla Financial Services (NSE:ABCAPITAL) and the State Bank of India.

Atlassian Ventures launches USD 50 million fund for Indian startups

21 Oct 2020

Australian software company Atlassian Corporation has announced the launch of its USD 50 million venture fund Atlassian Ventures which will invest in emerging startups as well as established players in the software space that are developing products within Atlassian ecosystem. The focus of Atlassian Ventures will be on early stage startups that are building apps as part of Atlassian’s cloud products; larger, established product partners looking to scale their business; and existing sales channel partners looking to expand their cloud offerings and create new products.

Indian extra-curricular startup Hobspace raises seed funding

21 Oct 2020

Indian extra curricular startup Hobspace has raised seed funding led by Artha Venture Funds. Other investors that participated in the round include crowdfunding platform AngelList India, venture capital firm Upsparks, and Icebreaker Tech LLP along with angel investors Abhinav Ashokkumar Daga and Siddharth Bhaskar Shah (Ascent Health).

Indian SaaS sales and marketing intelligence startup Slintel raises USD 4.2 million

21 Oct 2020

Indian SaaS sales and marketing intelligence startup Slintel has raised USD 4.2 million in a funding round led by American venture capital firm Accel. Sequoia Capital India and existing investor Stellaris Venture Partners participated. The startup’s intent-powered software processes billions of data points to identify high-intent prospects, thereby helping companies generate leads, and grow revenue. With more than 100 customers across North America, South America, Europe, and Asia-Pacific regions, Slintel has reportedly grown 800% over the past year, and is growing its market share in the sales intelligence space. The fresh funds will be used for product enhancement, market expansion.

Restaurant directory startup Zomato ceases Indonesia business

20 Oct 2020

Indian restaurant directory startup Zomato has ceased all operations in Indonesia. Moving forward, users in the country can still access the restaurant directory however maintenance and development will be carried out from Zomato’s headquarters in India.
The move is likely a direct result of the Covid pandemic which negatively impacted the food service sector as consumers were compelled to stay indoors and minimize outdoor activities in an effort curb the spread of the virus. The drop in demand hurt top lines of players in the sector while squeezing bottom lines as expenses such as salaries and other overheads continued to drain cash.

Blackstone To Acquire Prestige Estates’ India Assets

18 Oct 2020

US private equity company Blackstone Inc. (NYSE:BX) has signed an agreement with Indian property developer Prestige Estate (NSE:PRESTIGE) to acquire some of the latter’s real estate assets in India. The deal will include certain commercial offices, retail, and hotel properties, mall management, and identified maintenance businesses.

Blackstone which has the biggest portfolio of office assets in India, has been aggressively investing in Indian real estate over the past decade, much of its attention focused on commercial real estate. Lately however, Blackstone has been making moves in industrial real estate which has been garnering considerable attention from global investors as the country’s e-commerce market booms triggering demand for warehouse space. In January this year Blackstone invested INR 3.8 billion to acquire a majority stake in Indian logistics behemoth Allcargo Logistics. The previous month, Blackstone formed a joint venture with Greenbase, a Hiranandani Group subsidiary to develop warehousing and logistics parks across the country.

JioMart forays into fashion

04 Oct 2020

Having disrupted the online grocery space within a few months of its launch, JioMart, the e-commerce arm of Reliance Retail is now venturing into fashion. The move will intensify competition in India’s burgeoning fashion e-commerce market which is dominated by Flipkart’s Myntra, Flipkart which is owned by US retail giant Walmart (NYSE:WMT), and global e-commerce behemoth Amazon (NASDAQ:AMZN).  

Reliance Jio, Qualcomm partner to fast track 5G network infrastructure in India

01 Oct 2020

Reliance Jio – the telecom arm of Reliance Industries – has teamed up with US semiconductor company Qualcomm (NASDAQ:QCOM) to accelerate the development and deployment of 5G network infrastructure and services in India. Qualcomm and Jio announced that they have achieved over a 1 gigabyte (GB) per second milestone during trials on the Jio 5GNR solution, leveraging Qualcomm’s 5G RAN platforms.

Indian government 118 mobile apps with Chinese links including PUBG, Alipay, and Baidu

04 Sep 2020

The Indian government has blocked 118 mobile apps with Chinese links, including popular mobile game PUBG, Alibaba-owned e-wallet Alipay, and Chinese search engine giant Baidu’s mobile app citing data privacy concerns, and a threat to national security. Other apps include Baidu Express Edition, Tencent Watchlist, FaceU, WeChat reading, Government WeChat, Tencent Weiyun, APUS Launcher Pro, APUS Security, Cut Cut, ShareSave by Xiaomi, CamCard, PUBG Mobile, and PUBG Mobile Lite.

The government ban takes the total count of Chinese-linked mobile apps banned by India to 224. 

Homegrown online travel agency Yatra partners with Amazon Business to cater to hospitality partners

19 Aug 2020

Homegrown online travel agency (OTA) Yatra (NASDAQ:YTRA) has struck a partnership with e-commerce behemoth Amazon to offer Yatra hospitality partners access to a wide range of products across a wide spectrum of hospitality-related categories such as commercial grade kitchen appliances, kitchen storage solutions, linen, etc. 

Online travel agency Yatra diversifies into edtech; partners with upGrad

14 Jul 2020

Homegrown online travel agency Yatra has announced an alliance with Mumbai-based edtech startup upGrad as part of Yatra’s efforts to diversify beyond travel.

Homegrown payment gateway BillDesk in the market for buyers

05 Jul 2020

Visa-backed (NYSE:V) Mumbai-based payment gateway BillDesk is in the market again for buyers, after an unsuccessful attempt two years ago. This time, BillDesk is open to selling off the entire business, an effort reportedly driven by increasing competition in India’s digital payments space as e-commerce firms up their digital payments game amid a thriving domestic e-commerce sector. 

BillDesk’s payment gateway is largely aimed at business clients, with BillDesk reportedly handling as much as 50%-60% of billing transactions. Despite this stronghold in India’s business digital payments space, there is a growing sense that BillDesk’s inability to offer an end-to-end, integrated payment system will see it fall behind the competition. BillDesk currently functions purely as a payment gateway company enabling banking and merchant website transactions. However, the rise in e-commerce is driving demand for digital payment platforms bundled with e-commerce capabilities, an area where BillDesk lags. Furthermore, private equity firms such as General Atlantic (BillDesk’s biggest shareholder) are showing greater preference for companies that offer more customer-facing digital payment and e-commerce services.

Yatra terminates merger agreement with Ebix

06 Jun 2020

Homegrown online travel agency Yatra (NASDAQ:YTRA) has announced that it has terminated a pending merger agreement with Atlanta-based insurance software company Ebix (NASDAQ:EBIX) and has reportedly filed a litigation against Ebix seeking damages for alleged breach of terms. In July last year, Ebix signed an agreement to acquire Yatra, India’s second largest online travel agency, at an enterprise value of USD 337.8 million.  

 

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International Briefings: Apple, Huawei, Samsung, lead smartwatch shipments in Q3 2020

10 Dec 2020

According to figures from Counterpoint Research, global smartwatch shipments rose 6% YoY during the quarter ended September 2020 with Apple, Huawei, and Samsung leading the charge with market shares of 28%, 15%, and 10% respectively. Apple’s market share rose 2% compared to the same period a year earlier while Huawei’s share jumped 5% and Samsung’s share  rose 2%. 

TikTok edges out Facebook to emerge as top downloaded app worldwide in 2020

09 Dec 2020

Chinese video sharing app TikTok beat out Facebook (NASDAQ:FB) to emerge as the top app worldwide by downloads in 2020 according to data from mobile app analytics firm App Annie’s annual report on mobile trends for 2020. The figures combine both downloads for iOS and Android downloads. App Annie’s annual report noted:

“TikTok’s tidal wave continued throughout 2020 — particularly as content-hungry consumers flocked to the app to create, socialize and stay entertained — even increasing its cross-app usage with major video streaming players like Netflix, indicating that TikTok is not only blurring the lines between social and streaming but is a force to be reckoned with in the streaming world in its own right and is set to break into the 1 billion monthly active user club in 2021.”

Global smartphone shipments drop 5.7% YoY in Q3 2020

01 Dec 2020

Global smartphone shipments fell 5.7% year-on-year (YOY) to 366 million units in Q3 2020 according to figures from Gartner. Overall global mobile phone sales droped 8.7% YoY totaled 401 million units during the period.

Except for Samsung and Xiaomi, other top five smartphone vendors continued to see market share declines in the third quarter of 2020. Xiaomi grew 34.9% in the quarter ended September 2020 reaching a market share of 12.1%, overtaking Apple to emerge as the third biggest smartphone vendor in the world.  

Worldwide smartphone shipments drop 1% YoY in Q3 2020

29 Oct 2020

Worldwide smartphone shipments reached 348.0 million units, a 1% year-on-year (YoY) decline, but a 22% quarter-on-quarter (QoQ) increase during Q3 2020 according to figures from Canalys. Samsung regained the lead with shipments up 2% 80.2 million units. Huawei dropped to second place with a 23% fall to 51.7 million units. Xiaomi (HKG:1810) took third place for the first time with shipments surging 45% to reach 47.1 million units. Apple (NASDAQ:AAPL) saw shipments drop 1% to 43.2 million while Vivo rounded out the top 5 with shipments of 31.8 million units. 

Oppo came in sixth with 31.3 million units while sister brand Realme took seventh place, its highest ever position with shipments of 15.1 million units. Lenovo reported shipments of 10.2 million units while Chinese smartphone brand Transsition shipped 8.4 million units. 

Healthcare startups globally raised USD 21.8 billion in Q3 2020

27 Oct 2020

Healthcare startups worldwide raised a record USD 21.8 billion in Q3 2020, as a surge in health technology solutions amid the pandemic led to heightened investor interest according to data from CB Insights. Healthcare-related investments surged 18% quarter-on-quarter (QoQ) from USD 18.4 billion, while deal volume also jumped 18% to 1,539 deals from 1,299.

Central Banks Turn Gold Net Sellers In August

17 Oct 2020

In August, central banks switched from net buyers to net sellers for the first time in around a year and a half according to figures from the World Gold Council. Global central banks sold a net 12.3 tonnes (t) in August largely due to sales from Uzbekistan which reduced its gold reserves by almost 32 tonnes, outweighing the purchases by regular buyers Kyrgyz Republic (5 tonnes), India (4 tonnes), Turkey (3.9 tonnes), UAE (2.4 tonnes), Qatar (1.6 tonnes), Mongolia (1.3 tonnes), and Kazakhstan (1.3 tonnes). Uzbekistan’s sales brought its gold reserves to slightly less than 300 tonnes (54% of total reserves).

Line chart showing world official gold reserves

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Thailand Briefings: Thailand beats Singapore again as top IPO market in Southeast Asia

27 Nov 2020

Thailand beat Singapore for the second consecutive year as the top initial public offering (IPO) market in Southeast Asia by value of funds raised according to figures from Deloitte.

Singapore had eight listings that raised a total of USD 852 million (SGD 1.14 billion) during the first 10 1/2 months of the year compared with 23 IPOs in Thailand which raised USD 3.9 billion during the same period.

Compared with last year, Thailand, Southeast Asia’s second-biggest economy beat Singapore by a far stretch this year. Last year, Thailand raised USD 3 billion from 34 IPOs compared with 11 IPOs in Singapore which raised USD 2.26 billion.

Thailand Q3 2020 GDP down 6.4% YoY

16 Nov 2020

Thailand’s GDP fell 6.4% YoY during the quarter ended September 2020 according to data from the National Economic and Social Development Council.

Charoen Pokphand Group gets antitrust approval to acquire Tesco’s Thailand business

06 Nov 2020

Thai conglomerate Charoen Pokphand Group (CP Group), one of Thailand’s largest private companies – has received approval from Thailand’s antitrust agency to acquire British retailer Tesco PLC’s retail business in Thailand, subject to certain conditions including a condition that bars the group from  any further modern-retailing mergers (excluding e-commerce) for the next three years. The deal will result in “increased market power but not a monopoly,” the agency said in a statement. “The deal may significantly lower competition but won’t create major damage to economy nor consumers’ benefits.”

The USD 11 billion acquisition will give CP Group a retail store network of around 2,000 hypermarket and grocery stores across Thailand, helping CP Group further solidify its position as Thailand’s largest retailer.

Dot Property acquires property listing startup Hipflat

27 Oct 2020

Thailand headquartered property-focused digital media firm Dot Property has acquired property listing startup Hipflat for an undisclosed amount. Dot Property currently owns and operates 10 property listing portals across Southeast Asia, and the acquisition bolsters Dot Property’s presence in the region. Hipflat reportedly has more than 200,000 listings from all over Thailand.

Siam Commercial Bank ventures into food delivery

26 Oct 2020

One of Thailand’s largest commercial banks – Siam Commercial Bank – has ventured into the country’s highly competitive food delivery market with the launch of its food delivery app – Robinhood.

E-commerce fulfillment startup MyCloudFulfillment raises US$ 2 million Series A

16 Oct 2020

Thai e-commerce fulfilment startup MyCloudFulfillment (MCF) has raised US$ 2 million in Series A funding from local private equity firm ECG-Research, Gobi Partners, Bangkok-based alternative investment firm NVest Venture, and SCB 10X, a holding company of Siam Commercial Bank. The fresh capital will be used for product development, build a data-centric organization, and leverage its data to drive e-commerce growth in its home market, Thailand.

As its name suggests, MCF provides e-commerce fulfilment services such as storage, packing, shipping, sales channel integration, and data analytics for e-commerce and omnichannel businesses.

Like many of its Southeast Asian neighbors, Thailand’s logistics market is on a growth path, driven by a growing number of online shoppers. With an average annual online spend of US$ 1,746.20, Thais rank among the highest spending online shoppers in Southeast Asia according to an article by J.P. Morgan. 

Huawei Thailand is investing TB 475 million to establish a 5G innovation center in Bangkok

22 Sep 2020

Huawei Thailand is investing TB 475 million to establish a 5G ecosystem innovation centre at the Digital Economy Promotion Agency’s (DEPA) headquarters in Bangkok, with the aim to accelerate 5G innovation through ecosystem collaboration and boost the digital economy. The center will serve as a sandbox for the development of digital innovations for 5G applications and services across various industries in Thailand. These innovations will create new business opportunities for SMEs, startups and educational institutions, enabling Thailand to become a digital hub of the ASEAN region.

Thailand car sales drop 12.1% YoY in August

18 Sep 2020

Domestic car sales in Thailand fell 12.1% to 68,883 units in August, marking the 15th consecutive month of falling sales albeit an improvement from July when sales fell 24.8% YoY according to the Federation of Thai Industries (FTI). Falling sales are attributed to weak demand due to the Covid outbreak. In fact, August sales rose 16.1% MoM driven by the easing of lockdown restrictions.

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India E-Commerce: Trends And Notable Players

Column chart showing GDP per capita (PPP) growth, 4 selected countries. In 2016 GDP per capita rose 8.26% in Bangladesh, 4.58% in China, 6.86% in India, 0.85% in Pakistan, 5.77% in Sri Lanka, 3% in Malaysia, 2.77 percent in Singapore, 7.71% in Vietnam, and 2.41% in Indonesia. In 2017 GDP per capita rose 8.11% in Bangladesh, 5.69% in China, 5.93% in India, 3.66% in Pakistan, 2.94%, 4.46% in Malaysia, 6.21% in Singapore, 8.86% in Vietnam, and 4.2% in Indonesia. In 2018 GDP per capita rose 9.26% in Bangladesh, 8.77% in China, 7.5% in India, 6.13% in Pakistan, 4.64% in Sri Lanka, 5.63% in Malaysia, 5.38% in Singapore, 8.52% in Vietnam, and 6.44% in Indonesia. In 2019, GDP per capita 8.9% in Bangladesh, 7.57% in China, 5.78% in India, 0.69% in Pakistan, 3.43% in Sri Lanka, 4.75% in Malaysia, 1.32% in Singapore, 7.84% in Vietnam, and 5.69% in Indonesia. Data from The World Bank and LD Investments analysis.

India’s e-commerce market has been booming but the story is just beginning. Out of India’s 1.3 billion population (the world’s second largest after China), an estimated 574 million are active internet users according to consulting company Kantar representing an internet penetration rate of about 44%. That is bigger than the entire population of the United States. This makes India the second largest online market after China which has 904 million internet users as of March 2020 according to CNNIC.

There is still tremendous opportunity for internet users to grow in number. Kantar estimates an 11% growth rate for 2020, with India’s internet users reaching 639 million. As India’s online population grows propelling to country’s digital economy, e-commerce is poised to grow as well. With about 100-110 million online shoppers as of 2019 according to data from a report by Bain & Co, about 17% of India’s internet users shop online.

By comparison, representing 78.6% of China’s internet population, China has 710 million online shoppers as of March 2020,. That is about seven-times that of India’s online shopper population, suggesting an enormous growth opportunity in India. As Indian incomes grow and consumption increases, consumers will seek greater product variety, and quality, at competitive prices. E-commerce can help unlock consumer spending as incomes rise. India’s GDP per capita growth has exceeded 5% since 2016.

Column chart showing GDP per capita (PPP) growth, 4 selected countries. In 2016 GDP per capita rose 8.26% in Bangladesh, 4.58% in China, 6.86% in India, 0.85% in Pakistan, 5.77% in Sri Lanka, 3% in Malaysia, 2.77 percent in Singapore, 7.71% in Vietnam, and 2.41% in Indonesia. In 2017 GDP per capita  rose 8.11% in Bangladesh, 5.69% in China, 5.93% in India, 3.66% in Pakistan, 2.94%, 4.46% in Malaysia,  6.21% in Singapore, 8.86% in Vietnam, and 4.2% in Indonesia. In 2018 GDP per capita rose 9.26% in Bangladesh, 8.77% in China, 7.5% in India, 6.13% in Pakistan, 4.64% in Sri Lanka, 5.63% in Malaysia, 5.38% in Singapore, 8.52% in Vietnam, and 6.44% in Indonesia. In 2019, GDP per capita 8.9% in Bangladesh, 7.57% in China, 5.78% in India, 0.69% in Pakistan, 3.43% in Sri Lanka, 4.75% in Malaysia, 1.32% in Singapore, 7.84% in Vietnam, and 5.69% in Indonesia. Data from The World Bank and LD Investments analysis.

India’s youthful population bodes well for e-commerce growth; as of 2020, 43.82% of India’s population was aged 24 years and below according to data from the CIA World Factbook. As they enter the workforce they will continue to be a major driving force for Indian e-commerce in the long term. India’s e-commerce market is expected to quadruple from US$ 48.5 billion in 2018 to US$ 200 billion by 2026 according to the International Trade Administration representing a CAGR of 19.37%.

Trends and notable players

Social commerce

Riding on India’s vast user base of social media users, social commerce is on the cusp of growth. India had the biggest rise in social media users in 2019, seeing 130 million new users (a 48% YoY) according to Hootsuite. Yet, at just 29% of the total population as at January 2020, India’s social media penetration is lower than the world average of 49% indicating ample room for growth. As more Indians get social, social commerce is poised to flourish.

Bar chart showing social media penetration for selected countries as of January 2020. The worldwide social media penetration at 49%. Social media penetration was 99% in the UAE, 88% in Taiwan, 87% in South Korea, 81% in Malaysia, 79% in Singapore, 78% in Hong Kong, 75% in Thailand, 72% in China, 70% in the United States, 67% in Vietnam, 67% in Philippines, 65% in Japan, 59% in Indonesia, and 29% in India. Data from Hootsuite.

Considered to be the second wave of e-commerce in the country notable Indian social commerce players looking to capitalize on this vast and growing userbase include Meesho, Bikayi, and JioMart. While first wave e-commerce giants such as Walmart-owned (NYSE:WMT) Flipkart, Amazon (NASDAQ:AMZN) and Snapdeal offer the opportunity to open an online store on their marketplace platforms, Meesho, Bikayi and JioMart leverage on social media platforms to offer businesses and individuals a chance to sell online, somewhat similar to WeChat’s mini-programs which enabled businesses to open stores within the WeChat app. China’s third biggest e-commerce player Pinduoduo for instance was born out of a WeChat’s mini-program.

Whatsapp is the number one messaging app in India with more than 400 million Whatsapp users, making India the country with the world’s biggest Whatsapp user population. Not surprisingly, Whatsapp is a popular social media platform for social e-commerce. Y Combinator-backed Bikayi’s app enables businesses to create a Whatsapp-integrated e-commerce store in a few minutes. The startup reportedly has more than 100,000 businesses using its app. For micro and small SMEs with little capital for a full-fledged e-commerce store, Bikayi’s app is an ideal solution for them to offer their catalogs online. From a consumer point of view, Bikayi is an ideal solution for a mobile-first market like India where 97% of internet users are mobile internet users.

Bikayi’s larger rival Meesho, also enables businesses to open a social media store but its app supports not just Whatsapp, but several other popular social media platforms as well such as Facebook (NASDAQ:FB), Twitter (NYSE:TWTR) and Instagram. There are more than 260 million Facebook users in India, making it the leading country in terms of Facebook users.

New social commerce startup Bulbul meanwhile has attracted investor interest with Bulbul raising USD 14.7 million from Sequoia Capital this year. 

The elephant in the room however is JioMart, the online grocery arm owned by petrochemicals behemoth Reliance Industries (NSE:RELIANCE) which has also jumped into social commerce arena; already available to shoppers via app or e-commerce website, JioMart recently piloted a Whatsapp-based grocery ordering platform that allows shoppers to order essentials through Whatsapp. The order is then routed to one of the 1,000+ mom-pop ‘kirana’ stores nearby the customer to fulfill the order.

The social commerce opportunity is driven not just through rising social media penetration but also from a growing number of online shoppers in rural India where internet penetration is less than 30% but growing considerably faster than urban India. According to data from the Telecom Regulatory Authority of India (TRAI), urban internet users grew 1.54% during the quarter ended march 2020 while rural internet users grew 6.53% during the same period.

For these new online shoppers, there is a general lack of trust for the millions of unknown online merchants on e-commerce marketplaces such as Flipkart. Social commerce on the other hand enables merchants to interact with first time online shoppers, clear their doubts and essentially provide a ‘face’ to the online store, helping bridge the trust deficit. Meesho for instance generates about three-quarters of its business from outside the top six cities.

Vertical e-commerce

While Amazon, Walmart’s Flipkart, and homegrown newcomer Reliance JioMart focus on the horizontal e-commerce marketplace arena which is crowded with other rivals such as Snapdeal, and ShopClues to name a few, India is increasingly seeing a growing number of vertical e-commerce marketplaces the e-commerce landscape. Flipkart’s fashion marketplace Myntra, Reliance Industries’ fashion marketplace Ajio, beauty e-commerce marketplace Nykaa, and furniture e-commerce marketplaces Pepperfry, and Urban Ladder are some notable established vertical e-commerce marketplaces. As they increasingly gain popularity along with growing e-commerce popularity in India, the number of specialized vertical e-commerce marketplaces is anticipated to continue an upward march in the coming years.

A report by research firm Redseer expects vertical e-commerce marketplaces to grow their share of India’s online retail Gross Merchandise Value (GMV) from 20% in 2019 to 30% by 2022. Marketplaces in industry verticals that have a strong advantage against horizontal e-commerce marketplaces highlighted in the report include pharmaceuticals, furniture, mom and baby care, and beauty and personal care, owing to their differentiated supply chain, and non-standard product which leads to consumer expectations of greater variety, quality and specialized service.

Mom and baby care e-commerce marketplace FirstCry achieved unicorn status this year with a valuation of US$ 1.2 billion, after Softbank committed to investing US$ 400 million in February.

Homegrown startup Livspace, an interior design marketplace connecting homeowners with trusted interior designers, vendors, and customers, currently serves 9 metro areas in India (Bengaluru, Chennai, Hyderabad, Delhi, Gurugram, Noida, Mumbai, Thane and Pune) and plans to expand locally and overseas (its only overseas market is Singapore currently) having raised US$ 90 million in September this year in Series D equity funding, and Indian Rupees 300 million in debt funding in October. Livspace is expected to generate US$ 500 million within the next 24-30 months.

Indian agriculture marketplace DeHaat meanwhile, raised US$ 12 million from Sequoia Capital this year,  after raising US$ 4 million in Series A funding in March last year, bringing the total amount raised to US$ 16 million to date.

Direct-to-consumer (D2C) e-commerce

India’s vast retail market features numerous local brands, and with e-commerce gaining popularity in the country, there been a trend of these brands going directly to consumers, essentially eliminating ‘online middlemen’ e-commerce marketplaces.

According to a report by e-commerce-focused SaaS company Unicommerce, there was a 65% increase in brands developing their own websites in June 2020. Meanwhile, an increasing number of online shoppers too appear to be going direct to brand websites, bypassing marketplaces. According to the Unicommerce report, brand websites reportedly saw an 88% increase in order growth compared with 32% for marketplace platforms during India’s lockdown period in June 2020 which led to an increase in self-shipped orders. Given the many advantages of a brand going direct to the consumer, such as greater control over brand perception, and direct interaction with consumers, it is likely that brand e-commerce popularity will continue growing in the years ahead.

The rise of D2C e-commerce in India looks set to follow a path similar to that of China, where rising brand e-commerce has led to the birth of brand e-commerce SaaS (Software as a Solution) companies such as Baozun (NASDAQ:BZUN). India too, has its own homegrown brand e-commerce SaaS solutions companies, notable ones include Zoho and Zepo.

Last year, Indian SaaS major Zoho Corp which has millions of users in more than 180 countries, launched an e-commerce solution enabling small retailers to set up their own e-commerce sites. Unlike other solutions that charge users on a per transaction basis, Zoho will charge a flat monthly fee for stores earning up to US$ 1,000 monthly after which a transaction fee of 1.5% is imposed (for its most basic plan). Zoho is a very established SaaS player offering a plethora of SaaS applications including productivity tools, CRM, and cloud solutions for finance and HR to name a few. This extensive suite of SaaS solutions and an existing customer base gives Zoho ample cross-selling opportunities for its new e-commerce SaaS solution which puts the company in great position to capitalize on India’s rising brand e-commerce market.

Homegrown e-commerce enabler Zepo which raised INR 31.9 million in August 2017 in funding from angel investors Kunal Shah (co-founder FreeCharge), Anupam Mittal and Hetal Sonpal, has its own advantages in the brand e-commerce race. The company offers merchants an integrated platform that enables them to manage their own e-commerce website, as well as manage orders from their online stores on marketplace platforms such as Amazon and Flipkart. For merchants wanting to maintain official marketplace stores while running their own e-commerce website, Zepo could be the player with the ideal solution.

Shopify (NYSE:SHOP), one of the world’s most popular e-commerce SaaS solution providers is another notable player in this space. Having begun operations in India in 2014, Shopify now has thousands of Indian merchants on its platform including Blue Tokai Coffee, apparel company Raymond Group, clothing brand NUSH by Anushka Sharma, John Jacobs Eyewear to name a few. Shopify said the number of merchants in India using their platform grew 44% in 2019 and GMV grew 59%. Shopify supports ten languages in India which is an advantage as more non-English or Hindi speaking Indians increasingly shop online (according to the latest census data from The Office of the Registrar General and Census Commissioner of India, Hindi was spoken by 43.63% of the population which means more than 56% of India’s population speak other languages).

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The Technology Trends Powering China’s Agrifood Sector

Column chart showing crop yields in China vs United States for selected crops during crop year 2018/19. During crop year 2018/19, coarse grain yields in the United States stood at 10.44 metric tons per hectare compared with 5.95 metric tons per hectare in China. Wheat yields were 3.2 metric tons per hectare in the United States and 5.42 metric tons per hectare in China. Corn yields were 6.11 metric tons per hectare in China and 11.07 metric tons per hectare in the United States. Barley yields were 3.64 metric tons per hectare in China and 4.17 metric tons per hectare in the United States. Oats yields were 1.15 metric tons per hectare in China and 2.33 metric tons per hectare in the United States. Sorghum yields were 4.79 metric tons per hectare in China and 4.53 metric tons per hectare in the United States. Rice yields were 7.03 metric tons per hectare in China and 8.62 metric tons per hectare in the United States. Soybean yields were 1.9 metric tons per hectare in China and 3.4 metric tons per hectare in the United States. Cottonseed yields were 3.11 metric tons per hectare in China and 1.26 metric tons per hectare in the United States. Peanut yields were 3.75 metric tons per hectare in China and 4.48 metric tons per hectare in the United States. Sunflower seed yields were 2.71 metric tons per hectare in China and 1.94 metric tons per hectare in the United States. Rapeseed yields were 2.03 metric tons per hectare in China and 2.09 metric tons per hectare in the United States.

China is one of the world’s largest food producers. With the country’s middle class expanding along with growing incomes, food demand in China has been on a steady growth path. China is the world’s largest wheat consumer, largest fruit consumer, largest egg consumer, and largest meat consumer. China is the world’s biggest importer of soybeans, is the world’s largest tea market, and is the world’s largest market for alternative meat. China is expected to be the world’s largest dairy market by 2022, and the country is expected to overtake the United States to become the world’s largest grocery market as well.

With Chinese per capita incomes standing at less than one-third of the United States, there is tremendous potential for growth in China’s agrifood sector as per capita food consumption grows along with rising prosperity opening interesting opportunities. While China has attracted much attention due to some high profile outbound agri-food acquisitions such as ChemChina’s of Swiss seed giant Syngenta, and China Mengniu Dairy’s (HKG:2319) acquisition of Australian dairy company Bellamy’s Australia, business optimism is strong on the domestic front as well. Listed agrifood companies such as New Hope Liuhe Co Ltd (SHE:00876), and Muyuan Foods Co Ltd (SHE:002714) have seen share prices jump over the past five years; Muyuan Foods Co Ltd saw its share price jump more than ten-fold during the five years until August 2020 while New Hope Liuhe’s share price quintupled during the same period. Hong Kong-listed China Mengniu Dairy’s share price also quintupled during the same period. On the startup front, China remains the world’s second largest market for agrifood tech startup investing by total deal number and amount invested after the US according to AgFunder.

Much of investor attention is currently on China’s booming eGrocery market, which raked in 60% of agrifood startup investment in 2019 according to data from Agfunder. However, there are numerous other sectors worth watching particularly in agri-tech which has strong government support. This year, the Chinese government released the “Digital Agriculture and Rural Area Development Plan 2019-2025” which aims to have digital agriculture account for 15% of China’s agricultural value-add.

Precision farming

Precision farming is a growth industry and the opportunity is no different in China, one of the world’s largest agricultural producers. China is upgrading is agriculture infrastructure to precision farming. The vast majority of China’s farms are small scale farms with basic machinery. Agriculture 4.0 technologies such as precision and smart farming accounts for just 1% of the nation’s total agricultural production. For instance according to a 2018 article by a Chinese economist HE Fan, agricultural drone penetration is about 65% in the U.S. but just 2% in China. Innovation and advancement in areas such as AI, IoT, remote sensing, and 5G will spur greater adoption.

The regulatory environment is favorable too, with the Chinese government stepping up efforts to boost domestic agricultural yields and production in an effort to reduce reliance on food imports from the U.S.

Column chart showing crop yields in China vs United States for selected crops during crop year 2018/19. During crop year 2018/19, coarse grain yields in the United States stood at 10.44 metric tons per hectare compared with 5.95 metric tons per hectare in China. Wheat yields were 3.2 metric tons per hectare in the United States and 5.42 metric tons per hectare in China. Corn yields were 6.11 metric tons per hectare in China and 11.07 metric tons per hectare in the United States. Barley yields were 3.64 metric tons per hectare in China and 4.17 metric tons per hectare in the United States. Oats yields were 1.15 metric tons per hectare in China and 2.33 metric tons per hectare in the United States. Sorghum yields were 4.79 metric tons per hectare in China and 4.53 metric tons per hectare in the United States. Rice yields were 7.03 metric tons per hectare in China and 8.62 metric tons per hectare in the United States. Soybean yields were 1.9 metric tons per hectare in China and 3.4 metric tons per hectare in the United States. Cottonseed yields were 3.11 metric tons per hectare in China and 1.26 metric tons per hectare in the United States. Peanut yields were 3.75 metric tons per hectare in China and 4.48 metric tons per hectare in the United States. Sunflower seed yields were 2.71 metric tons per hectare in China and 1.94 metric tons per hectare in the United States. Rapeseed yields were 2.03 metric tons per hectare in China and 2.09 metric tons per hectare in the United States.

One such area where precision farming holds tremendous potential in China is pesticide use. China feeds about 19% of the world’s population with just 7% of the world’s arable land. While this is commendable, the country also uses about 47% of the world’s pesticides, making it the world’s largest user of agricultural chemicals. China’s heavy pesticide use despite the country’s relatively minute cropland share, is a national concern. In an effort to improve food safety, and minimize environmental damage caused by pesticide overuse and thereby improve the sustainability of Chinese agriculture, the Chinese government has been phasing out highly toxic pesticides from use over the past few years.

Chinese agritech drone startups such as XAG, and McFly are well placed to emerge as solution providers to tackle China’s pesticide issue. XAG is a leader in China’s smart agriculture field, with more than 40,000 of its agricultural drones operating in China. Baidu-backed McFly, which raised US$ 14 million in 2019 is a relatively new player. Both develop AI-powered remote sensing agriculture-focused aviation equipment to help farmers reduce farm pesticide use. For instance McFly’s precision pesticide spray is able to detect with 97% accuracy the presence of pests on specific areas of a farm land and spray pesticide accordingly.

This precise use of pesticides eliminates the need for the current practice of completely spraying an entire farmland with pesticide since more often than not, pest distribution occurs in parts of the farm, not throughout the farm. The benefits are clear; consumers have safer food while farmers benefit from reduced farm input costs.

The growth story is just beginning. Farmers need large sized farms to justify the investment in expensive agricultural drones. In McFly’s case for instance, farmers need reportedly a little more than 13 hectares to justify the investment in McFly’s commercial services. However, unlike in the United States, very few Chinese farmers have farmland of that size. McFly worked around this limitation by offering a group-buying model to make the services more affordable, which has been successful. However, McFly’s bottom margins may be better off dealing with large-scale individual customers as opposed to millions of small scale users. This will likely materialize in the years ahead. 

For centuries, millions of small-scale farms have been dominating China’s rural areas, and these are often managed by farming families themselves. Apart from the cost disadvantage of small scale farming due to their inability to benefit from of economies of scale, it has also been found that agricultural chemicals are often used inefficiently on small farms according to a research study conducted a team of researchers from the Universities of Melbourne, Zhejiang, Fudan, Wuhan and Stanford.

The inefficiencies of small-scale farming along with China’s growing problem of ageing farmers has prompted the Chinese government to clear the path for private investment in large-scale commercial farming, through rural land reform which will allow family farmland owners to collectively rent out their land to large-scale farmers to cultivate the land on a large scale.  Much like the gradual disappearance of America’s small family farms in the in the mid 20th century, China too appears to be on the path towards farm consolidation where small family farms will gradually give way to modernized, large scale commercial farms which suggests good for McFly.

Agricultural e-commerce

According to government data, e-commerce sales of agricultural produce reached CNY 554.2 billion in 2018, representing 9.8% of total agricultural sales. There is still ample room for growth. Under China’s “Digital Agriculture and Rural Area Development Plan 2019-2025” the Chinese government is aiming to boost the proportion of agricultural products sold online to reach 15% by 2025 which suggests bright prospects for agri-marketplaces in China. The competitor landscape however is crowded with players. Pinduoduo (NASDAQ:PDD) is perhaps one of the biggest names in the game having shot up to becoming China’s third largest marketplace after Alibaba and JD.com, by capitalizing on the growth of rural e-commerce. Their strategy was largely based on agriculture e-commerce and their popularity as a platform for rural farmers to sell their wares to city folk hungry to buy fresh agricultural produce straight from farmers continues to this day. Pinduoduo’s group-buying model enabled shoppers to team up with other interested buyers to collectively make a purchase of farm produce. Shoppers earn discounts for the relatively large purchase while farmers get to sell their produce at higher prices (since there is no middleman involved) and in relatively large order sizes thus saving them the hassle of fulfilling a large number of small orders.

Valued at US$ 7 billion,  agri-marketplace unicorn Meicai took a different route, connecting farmers with restaurants and hotel chains instead who also make relatively large purchases (for instance, the minimum order quantity is 5kilograms for vegetables). Meicai started off as an online retailer, directly sourcing and selling the fresh produce themselves. Starting 2017 however, the platform was opened to third party merchants as well.

The company in-house cold chain logistics network which was built with an investment of more than RMB 2 billion. This supply chain advantage is a significant competitive strength, with the company boasting more than 74 cold storage centers scattered in 52 cities with a warehouse area of approximately 800,000 square meters. Meicai has a fleet of more than 17,000 delivery vehicles and the company has a daily parcel handling capacity of more than 5.2 million. Meicai’s sales are expected to exceed RMB 14 billion in 2019 and although the company is currently loss-making, it is cash flow positive and is expected to turn in a profit by 2020.

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China’s Centuries-Old Plant Based Meat Industry Set For Growth

Bar chart showing the top five vegetarian markets in the world by vegetarian population. India was the biggest with a vegetarian population of 390 million followed by Indonesia with 66.9 million vegetarians, Nigeria with 58.1 million vegetarians, China with 51.9 million vegetarians, and Pakistan with 33.2 million vegetarians.

According to Euromonitor China’s “free from meat” market which includes plant-based meat products has grown 33.5% since 2014 to reach US$ 9.7 billion in 2019. The industry is forecast to reach US$ 11.9 billion by 2023. Already the world’s largest market for alternative meats, the Covid pandemic could serve as a catalyst to encourage greater numbers of non-vegetarian Chinese to adopt alternative meats as consumers, wary of potential sickness from animal protein increasingly turn to plant-based proteins such as plant-based meat and plant-based eggs. For instance, Just Egg, a plant-based egg alternative reportedly saw sales jump 30% on e-commerce platforms JD.com (HKG:9618) (NASDAQ:JD) and Alibaba’s Tmall since the Covid outbreak.

The potential is enormous; protein demand in China is on a structural uptrend, driven by a growing middle class, rising incomes, and living standards. China is the world’s largest meat consumer, the world’s largest meat importer, the world’s largest meat producer, and the world’s largest soybean importer (demand for which is largely driven by its livestock industry which uses soybean meal as animal food). China’s soybean imports by value are more than 10 times bigger than second-placed European Union.

Bar chart showing top five soybean imports by volume, 2018. China was the world’s largest soybean importer having imported 85.47 million metric tonnes in 2018, followed by the EU-27 + UK with imports of 17.29 million metric tonnes, Argentina with 6.78 million metric tonnes, Mexico with 5.15 million metric tonnes, and Egypt with 3.51 million metric tonnes. Data from UN Trade Data.

Yet, there is still room for growth. Although China has caught up with Asian neighbors such as South Korea in terms of average protein supply, China still falls short when compared with Western countries such as the United States and Germany.

Column chart showing average protein supply (in grams per capita per day) (three year average) in China, South Korea, United States, and Germany. In 2008-2010, average protein supply was 91.7 in South Korea, 92.4 in China, 101.3 in Germany, 110.7 in the United States. In 2009-2011, average protein supply was 93 in South Korea, 93.7 in China, 102 in Germany, 109.3 in the United States. In 2010-2012, average protein supply was 94.3 in South Korea, 95.3 in China, 101.7 in Germany, 109 in the United States. In 2011-2013, average protein supply was 96 in South Korea, 96.7 in China, 101.7 in Germany, 108.7 in the United States. Data from the Food and Agriculture Organization of the United Nations.

However, satisfying this expected protein demand may prove an uphill challenge due to scarce resources; home to 19% of the world’s population but owning just 7% of the world’s arable land, China has very limited arable land. At just 0.086 hectares per person, China’s arable land per capita is lower than India, the United States, the European Union, and Russia.

Bar chart showing arable land per capita for selected countries as a 2016. In 2016, arable land per capita reached 1.904 hectares per person in Australia, 0.853 hectares per person in Russia, 0.471 hectares per person in the United States, 0.2 to 3 hectares per person in the European Union, 0.118 hectares per person in India, and 0.086 hectares per person in China. Data from the World Bank.

And with the livestock industry producing just 18% of the world’s calories and 37% of total protein despite occupying 77% of the world’s agricultural land according to figures from Our World in Data, it is clear that animal protein is far more resource intensive than plant-based protein, and so China, already the world’s largest meat producer, likely has very little room for further land expansion for livestock which makes the case for plant-based meats in China is very compelling.

Furthermore, the industry is bound to benefit from support from the Chinese government which reportedly aims to cut down meat consumption by 50% to reduce greenhouse gas emissions. Plant-based meats are an answer to this and the climate-friendly narrative of plant-based meats is a major draw factor, particularly among China’s sustainability-conscious millennial generation. China has about 400 million millenials, compared with about 80 million in the United States.

The opportunity has not gone unnoticed. Global alternative protein players such as Beyond Meat (NASDAQ:BYND), and Impossible Foods have stepped up marketing efforts in China while food and beverage players such as Starbucks, and Yum! Brands’ (NYSE:YUM) KFC, Pizza Hut and Taco Bell have launched plant-based menus. KFC’s plant-based chicken will be supplied by agri-business giant Cargill, while Stabucks’ plant-based menu will see faux meats supplied by Beyond Meat.

Beyond Meat also partnered with Alibaba’s (HKG:9988) (NYSE:BABA) grocery retailer Hema to bring its plant-based packaged meat to supermarket shelves in China.

Competitive landscape: China’s mock meat industry is centuries old, and the country’s has well established players offering a wide variety of plant-based meat products

Imitation meat originated in China, and restaurants in Buddhist temples throughout the country have been serving fake meat as far back as the Song dynasty which lasted until the 13th century. A key pillar of Buddhist principles is respect for all life i.e., all living creatures and hence vegetarianism is commonly practiced among Buddhists. To accommodate the diets of patrons and guests, these temple kitchens mastered the art of preparing mock meats, a tradition which continues to this day in numerous Chinese Buddhist temples not only throughout China but also around the world from Malaysia, to the United States. Over the centuries, restaurants sprung up throughout the Middle Kingdom offering faux meat menus to cater to vegetarian Buddhists. According to China Daily there are more than 300 restaurants offering fake meat in Beijing alone.

Chinese entrepreneurs and merchants brought their expertise with them during their overseas travels and hence countries with a significant ethnic Chinese population such as Malaysia, also have their share of mock meat restaurants and mock meat manufacturers. Notable Malaysian players such as Ahimsa (which literally means “non-violence” in Sanskrit) for instance have been in the business for decades. X% of Malaysian vegetarian meat companies in the LD Investments database are more than 10 years old.

Thus, China has a very long history of manufacturing plant-based protein and the country has several players producing mock meat products out of a variety of plant-based foods such as tofu skin (known as yuba), soybeans, wheat gluten (sometimes called seitan), mushrooms, peanuts, and vegetables such as potatoes and carrots.

These well established players offer much more than just burghers and sausages, with their product range covering a wide breadth of faux meat and seafood products from ordinary staples such as beef, pork, lamb, chicken, crab meat, roast duck, and cuttlefish, to exotic meats such as eels, puffer fish, shark’s fin, and abalone.

It has been noted however that a number of these companies’ products are targeted at China’s vegetarian population, and the products often do not mimic the taste, texture, and color of authentic meat very well. Hence, while they satisfactorily serve the needs of China’s vegetarian population, the products may need some tinkering before China’s mammoth non-vegetarian population will be sufficiently persuaded to make the switch and consume plant-based meats on a regular basis. Impossible Foods’ burgher for instance uses a patent-protected lab-grown heme which makes its vegetarian burgher look, taste, and “bleed” like the real thing, and thereby differentiates itself from competing burghers.

This probably explains why despite having a centuries-old and well-established mock meat industry, Chinese still favor animal meat over plant-based options and animal meat’s popularity has only grown along with the country’s affluence-driven protein demand. China’s vegetarian population is just about 3.8% of the total population.

Bar chart showing vegetarians as a percentage of the population for selected countries. With vegetarians accounting for 29.8% of the country’s population, India’s vegetarian population had the highest percentage, followed by Indonesia where vegetarians accounted for 25.4% of the country’s population, and Pakistan at 16.8%. China’s vegetarian population made up just 3.8% of the country’ s total population.

And in absolute terms, China’s vegetarian population is dwarfed by Asian neighbors India, and Indonesia.

Bar chart showing the top five vegetarian markets in the world by vegetarian population. India was the biggest with a vegetarian population of 390 million followed by Indonesia with 66.9 million vegetarians, Nigeria with 58.1 million vegetarians, China with 51.9 million vegetarians, and Pakistan with 33.2 million vegetarians.

Nevertheless, these established players will seek to expand beyond their traditional target market of vegetarian Buddhists, which suggests competition will be fierce.

Overseas players will be up against local upstarts and established domestic players

Overseas companies Beyond Meat, JUST, and Impossible Foods will be up against local upstarts such as Zhenmeat (often touted as China’s answer to Beyond Meat), and OmniPork who are also beefing up their businesses to carve out their slice of the market.

While Beyond Meat and Impossible Foods’ product offering is heavily skewed towards the western palate with products such as burghers and sausages, China’s domestic players are heavily focused on Chinese taste buds with a focus on pork rather than beef (given that pork is China’s most popular meat) and with a product range covering local delicacies such as dumplings, mooncakes, and meatballs.

Zhenmeat for instance offers local delicacies such as plant-based meat mooncakes, and konjac-based crayfish. Hong Kong-based OmniPork offers a line of pork products tailored to Chinese taste buds such as pork buns and pork strips. Pork makes up 80% of China’s meat market, and China is the world’s largest pork consumer accounting for nearly half of global pork consumption.

Pie chart showing pork consumption by country in 2018. Accounting for 49.3% of global pork consumption, China was the world’s biggest pork consumer followed by the European Union with 19%, and the United States at 8.7%. Other countries accounted for the balance 23.1%. Data from the United States Department of Agriculture, Foreign Agricultural Service, and LD Investments analysis.

With domestic demand outstripping domestic supply, China has also held the position as the world’s largest pork importer for a few years, before being overtaken by Japan in 2018 but expected to regain the leading position in 2019 according to data from the United States Department of Agriculture (USDA) as the African Swine Fever (ASF) disease reduced China’s domestic pig herd by at least 40%, leading to a spike in imported pork from all China; China’s pork imports by dollar value jumped 117.4% in 2019.

The ASSF outbreak has also pushed up meat prices such as pork helping further push interest towards plant-based pork. The current conditions prevailing in China’s pork market suggest apt timing for OmniPork to capture its share of China’s alternative protein market.

Established domestic mock meat players to watch include Whole Perfect Food and Godly. Founded in 1993, Whole Perfect Food has been in the industry for decades selling faux meat to Chinese consumers shunning meat for religious reasons. Now they are looking to expand that market and the company could emerge as a strong contender armed with a product range of more than 300 vegetarian/plant-based meat and meat product alternatives including vegetarian versions of oyster sauce, tailored to the Chinese palate.

Founded in 1922, Godly 功德林is considered to be one of the pioneers of plant-based meats. And like Whole Perfect Food offers a plethora of faux meat products from mock meat chicken, duck, ham and traditional meats such as vegetarian dried intestines, to local delicacies such as mock meat buns, dumplings, traditional Chinese cakes, and mooncakes. Their official store on JD.com has over 200 reviews, most of which are positive.

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World Wheat Trade, Supply, And Demand Outlook

Column chart showing world, flour, and products, export share by country. Russia's share of world wheat, flour, and products exports grew from 7.7% in calendar year 2012/13 to 18% in calendar year 2019/20 while The European Union's 15.5% in calendar year 2012/13 to 20% in calendar year 2019/20, the United States' share dropped from 18.8% in calendar year 2012/13 to 13.8% in calendar year 2019/20, Ukraine's share grew from 4.9% in calendar year 2012/13 to 11.1% in calendar year 2019/20, Canada's share dropped slightly from 12.6% in calendar year 2012/13 to 12.2% in calendar year 2019/20, and Australia's share dropped from 14.4% in calendar year 2012/13 to 5.3% in calendar year 2019/20.

Wheat flour saw a spike in demand early this year in the United States, as a Coronavirus baking boom and widespread stay at home orders triggered demand from retail consumers for family flour (used for home baking),and wheat-based prepared and processed food stuffs such as pasta, breads, and wheat-based snack products. America’s number one flour brand – King Arthur Flour – saw flour sales spike 2,000% in March alone, and U.S. wheat flour production during the first three months of calendar year 2020 increased more than 4% according to data from the United States Department of Agriculture.

Demand

China is the world’s largest consumer of wheat, followed by the European Union and India.

Bar chart showing world wheat consumption by country calendar year 2019/20. At 126 million metric tons, China was the biggest consumer of wheat followed by the European Union at 122 million metric tons, India at 96.11 million metric tons, Russia at 40 million metric tons, the United States at 29.82 million metric tons, Pakistan at 25.4 million metric tons, Egypt at 20.6 million metric tons, Turkey at 19.9 million metric tons, Iran at 16.6 million metric tons, Brazil at 12.1 million metric tons, Algeria at 10.85 million metric tons, Morocco at 10.8 million metric tons, Indonesia at 10.5 million metric tons, Canada at 10.4 million metric tons, Uzbekistan at 9.5 million metric tons, and Ukraine at 9.1 million metric tons. All other countries consumed 173 million metric tons.

The world’s three largest wheat consumers are also the world’s leading wheat producers.

Bar chart showing world wheat production by country during calendar year 2019/20.At 154.94 million metric tons, the European Union was the world’s largest wheat producer followed by China at 133.59 million metric tons, India at 103.6 million metric tons, Russia at 73.61 million metric tons, United States at 52.26 million metric tons, Canada at 32.35 million metric tons, Ukraine at 29.17 million metric tons, Pakistan at 24.3 million metric tons, and Argentina at 19.74 million metric tons.

Although domestic wheat production satisfies the vast majority of all three countries’ wheat consumption requirements, for China and the European Union, domestic demand is outstripped by supply and hence both countries appear in the ranks of the world’s biggest wheat importers. China accounts for 2.8% of global wheat imports and the European Union accounts for 2.6% as of calendar year 2019/20 according to data from the United States Department of Agriculture.

Bar chart showing world wheat, flour, and products Imports by country during calendar 2019/20. At 13.3 million metric tonnes Egypt emerged as the world's biggest importer, followed by Turkey at 10.95 million metric tonnes, Indonesia at 10.8 million metric tonnes, Philippines at 7.2 million metric tonnes, Brazil at 7.18 million metric tonnes, Algeria at 6.8 million metric tonnes, Bangladesh at 6.7 million metric tonnes, Japan at 5.68 million metric tonnes, China at 5.38 million metric tonnes, Mexico at 5.2 million metric tonnes, Nigeria at 5.2 million metric tonnes, and European Union at 4.9 million metric tonnes.

China

China’s wheat consumption has been generally flat over the past several years with wheat consumption hovering around 125 million metric tons to 112 million metric tons during calendar years 2012/13 to 2019/20 according to data from the United States Department of Agriculture. 90% of China’s wheat demand is met from domestic production and about 10% is met through imports. China has a 95% self-sufficiency target for key staples rice, wheat and corn consumption and allows a certain amount of imports through a tariff rate quota (TRQ) system. China sets annual corn quotas at 7.2 million ton every year, wheat quotas at 9.64 million tons, and rice at 5.32 million tons.

Looking ahead, there is little room for China to grow domestic wheat production to replace imports. China’s wheat yields are among the highest in the world.

Bar chart showing wheat yields by country during calendar year 2019/20. At 6.4 metric tonnes per hectare Egypt has the highest wheat yields in the world, followed by Mexico at 5.56 metric tonnes per hectare, China at 5.42 metric tonnes per hectare, the European Union at 5.36 metric tonnes per hectare, Serbia at 4.92 metric tonnes per hectare, Uzbekistan at 4.29 metric tonnes per hectare, Ukraine at 3.73 metric tons per hectare, Uruguay at 3.68 metric tonnes per hectare, India at 3.37 metric tonnes per hectare, Canada at 3.26 metric tonnes per hectare, Argentina at 3.22 metric tonnes per hectare, United States at 3.2 metric tonnes per hectare.

And with China being home to about 19% of the world’s population, but having about 7% of the world’s arable land, China’s arable land availability is tight; China’s arable land per capita stood at 0.086 hectares per capita in 2016, compared with 0.118 hectares per capita in India, 0.223 hectares per capita in the European Union, and 0.471 hectares per capita in the United States, the same year according to data from the World Bank.

Bar chart showing arable land per capita for selected countries as a 2016. In 2016, arable land per capita reached 1.904 hectares per person in Australia, 0.853 hectares per person in Russia, 0.471 hectares per person in the United States, 0.2 to 3 hectares per person in the European Union, 0.118 hectares per person in India, and 0.086 hectares per person in China. Data from the World Bank.

This suggests that trade policy reasons aside, China will continue to appear in the ranks of the world’s largest wheat importers in the years ahead.

China-U.S. trade tensions saw China imposing a 25% retaliatory tariff on U.S. wheat which saw China-bound wheat exports dive 84% from 2017 figures. However, as part of the Phase 1 Trade deal negotiated between the two countries early this year, China reportedly may increase wheat imports from the U.S. The relief to U.S. wheat farmers may be short-lived however; with China-U.S. relations on showing limited improvement and becoming increasingly fragile, the trade deal may fall apart.

Egypt

Egypt is one of the few countries worldwide where wheat consumption has been consistently growing, albeit at a very slow rate. And with domestic production outstripped by domestic consumption, Egypt, the world’s largest wheat importer for several years, has been seeing its share of global wheat imports steadily grow from 5.7% in 2012/13 to 7% in 2019/20.

Column chart showing world wheat, flour, and products Imports by share for selected countries. Egypt's share of world wheat, flour, and products grew from 5.7% in calendar year 2012/13 to 7% in calendar year 2019/20 while Japan's share dropped from 4.5% in calendar year 2012/13 to 3% in calendar year 2019/20, Algeria's dropped from 4.4% in calendar year 2012/13 to 3.6% in calendar year 2019/20, Brazil's share dropped from 5.1% in calendar year 2012/13 to 3.8% in calendar year 2019/20, Indonesia's share grew from 4.9% in calendar year 2012/13 to 5.7% in calendar year 2019/20, Turkey's share grew from 2.2% in calendar year 2012/13 to 5.8% in calendar year 2019/20, Philippines' share grew from 2.5% in calendar year 2012/13 to 3.8% in calendar year 2019/20.

Although the Egyptian government has made efforts to make the country self-sufficient in wheat, plans have so far yielded little results. While Egypt’s wheat demand has grown from 18.7 million metric tons in 2012/13 to 20.6 million metric tons, representing a CAGR of 1.39%, the country’s production has grown from 8.5% million metric tons in 2012/13 to 8.77 million metric tons in 2019/20 representing a CAGR of 0.45%. The result has been a steady increase import’s share of Egypt’s wheat consumption which grew from 45% in 2012/13 to 64.6% in 2019/20 according to LD Investments analysis of figures from the United States Department of Agriculture.

Wheat production growth in Egypt will likely be driven from area gains rather than yields as Egypt already has the highest wheat yields in the world. Given that imports account for more than 60% of Egypt’s annual wheat consumption, in order to achieve self-sufficiency, Egypt will have to increase wheat acreage nearly two-fold, a highly unlikely possibility in the foreseeable future. And with Egypt’s population growing at 2.28% annually, ranking it 31st among 237 countries according to figures from the Central Intelligence Agency, Egypt appears to be a far way off from achieving wheat self-sufficiency and is therefore likely to continue being a major importer in the near future. 

Turkey

Turkey’s wheat consumption has grown from 17 million metric tons in 2012/13 to 19.9 million metric tons in 2019/20 partly the result of an influx of Syrian refugees who are highly dependent on staples such as bread. With domestic wheat production hovering between 16 million metric tons to 21 million metric tons during the period, Turkey has been nearly self-sufficient in wheat production in the past, but a surge in exports of Turkish-made pasta and flour has driven demand for wheat imports, which in turn has propelled Turkey to emerge as the world’s second-biggest importer of wheat accounting for 5.8% of global wheat imports. Over the past two decades, Turkey’s flour exports have doubled and pasta exports have jumped six-fold helping propel the country to become the world’s largest exporter of flour, semolina and the world’s second-largest exporter of pasta.

Supply

Russia

Over the past two decades, Russia moved from being a net wheat importer to a net wheat exporter and the country accounted for about 18% of global wheat exports during the calendar year 2019/20, up from just 7.7% in 2012/13.

Column chart showing world, flour, and products, export share by country. Russia's share of world wheat, flour, and products exports grew from 7.7% in calendar year 2012/13 to 18% in calendar year 2019/20 while The European Union's 15.5% in calendar year 2012/13 to 20% in calendar year 2019/20, the United States' share dropped from 18.8% in calendar year 2012/13 to 13.8% in calendar year 2019/20, Ukraine's share grew from 4.9% in calendar year 2012/13 to 11.1% in calendar year 2019/20, Canada's share dropped slightly from 12.6% in calendar year 2012/13 to 12.2% in calendar year 2019/20, and Australia's share dropped from 14.4% in calendar year 2012/13 to 5.3% in calendar year 2019/20.

There is tremendous potential for continued production growth in Russia driven by area gains and yield improvements. At 2.39 metric tons per hectare, Russia’s wheat yields are just about half that of China. And the export market opportunity for Russian wheat is significant. Apart from being one of the biggest wheat suppliers to growth markets Turkey and Egypt, Russia is also well placed to increase its share of Chin’s wheat imports in the long term, following a path similar to Russian soybeans which have seen exports to China grow 51 times between 2013/14 to 2018/19; China is increasingly diversifying its wheat sources away from the United States in the face of growing China-U.S. tensions, and Russia could be a beneficiary of this move which suggests sunny days ahead for Russian wheat farmers and more business for Russian grain traders such as Russia’s state-owned United Grain Company (UGC) who is emerging as a formidable contender in global grain trade, which is currently dominated by international merchants such as Cargill Inc, ADM (NYSE:ADM), Glencore (LON:GLEN), and Louis Dreyfus.