China’s new tech soft power


Foreigners are tapping Chinese innovation to network and build businesses
International market: Foreign visitors to an expo in Nanning, the Guangxi Zhuang autonomous
region, evince interest in forestry by-products and pay for them using WeChat Pay. [Photo by Peng Huan / for China Daily]

China’s innovations impress foreigners, change startup game, boost confidence

The consumption power of more than 1 million foreigners working or studying in China is disproportionately bigger than their tiny share (0.07 percent) of the total population – and whizzes of the country’s homegrown tech ecosystem are sitting up and taking notice, as the economy transitions from export and investment-led growth to a consumption-driven model.

Manufacturers of gadgets, providers of technology-enabled services, and developers of intellectual property like innovative technologies are all vying to make life easier for the relatively small but monetarily significant foreigner community in China.

French engineer Sebastien Bernard, 37, will probably agree. He came to work and live in Beijing four months ago. The first thing he was asked to do by his friends and colleagues was to download and install WeChat, the all-in-one killer app, on his smartphone.

He complied, and his life is much the better for it, he said. As it transpired, Bernard was e-invited to join a WeChat group.

Initially, 15 foreigners chatted with each other and shared their life experiences on the e-group. Gradually, the group grew to a 200-member community of sorts that shared not just useful information like job links or party invitations but, wait for it, e-commerce discount coupons and weekend getaway packages.

Friendly advice sensitized Bernard to other treasures on WeChat. Among many other things, he learned to use the app to order food, book a taxi ride, buy movie tickets, and make digital payments for e-commerce.

Using Chinese apps, some of his friends even play online games, and borrow or lend money using e-credit channels that are redefining inclusive finance.

According to a WeChat report, by May 2017, foreigners in China sent 60 percent more WeChat messages than Chinese users on average per month. They also use WeChat audio calls 42 percent more than Chinese users.

Notably, foreigners in China are good at using different functions or features of WeChat. On average, they use emojis 45 percent more than Chinese users per day. Typically, a foreigner sends 10″red packets” – cash e-gifts – per month. Nearly 65 percent of foreigners who use WeChat use the app’s digital payment tool WeChat Pay.

“Here in China, having WeChat and Alipay accounts is like being plugged into the world. The apps include almost every conceivable service that can help make modern life easy,” said Bernard.

Agreed Yang Qiguang, 26, a researcher from Columbia University’s Tow Center who is pursuing PhD at the Renmin University of China in Beijing.  

“Chinese companies are creating a tech ecosystem that helps everyone, including foreigners, to work and live in a more convenient way.”

Forming social networks using e-tools has become integral to modern life, particularly in urban areas – and China’s tech ecosystem perhaps performs this function better than any other, by bundling consumption-related conveniences, he said.

“The tech ecosystem here facilitates people, including foreigners, to spend more. It is also boosting the confidence of both domestic and foreign companies operating in China. They know they now have powerful and reliable e-tools like apps to drive sales in a humongous market with more than 1 billion consumers,” he said.

That’s not all. Yang said China’s tech ecosystem is fostering entrepreneurialism. Even foreigners living in China are beginning to use Chinese apps to start up in a variety of fields, including technology, education and entertainment. All this business activity is a long-term positive effect for the Chinese economy, he said.

Yang could well have been speaking about David Collier, 52, a Briton who has founded four startups so far, respectively in the United States, the United Kingdom and China.

Rikai Labs, his WeChat-based e-learning business in China, helps Chinese users to master the English language through proprietary automated software. Collier said every seven years, a big platform shift comes along – from web to mobile apps; from apps to messaging platforms – that creates huge opportunities.

“We chose to base our business on WeChat because it provides a great platform for a knowledge service. You have to build your business where people are spending their time, and the biggest messaging platform of all is WeChat,” he said.

“Also, we can use WeChat payment for instant payment, QR codes for marketing purposes and to track user acquisition channels. Now with WeChat’s mini programs, we can add interactive games and other features.”

There’s more. Links to Rikai Labs and related content can be shared socially online. “It provides a very compelling platform with real-time features, social distribution, marketing hooks and monetization,” Collier said.

But risks abound too, he said. Platforms such as WeChat have become extremely competitive for startups. “If you don’t move at high speed, riding with WeChat is like taking the maglev.”

Data, however, suggest that foreigners appear to have an edge over Chinese users in exploiting the local tech ecosystem for small businesses and online social networking, which actually helps businesses directly or indirectly.

A case in point is Baopals, a startup founded by three expatriates. Call it the English Taobao, if you will. Baopals is anchored in Taobao and Tmall, the online shopping platforms owned by Alibaba Group, China’s tech giant.

Foreign visitors to an expo in Nanning, the Guangxi Zhuang autonomous region, evince interest in forestry by-products and pay for them using WeChat Pay. [Photo by Peng Huan / for China Daily]

In July 2015, Charlie Erickson, Jay Thornhill and Tyler McNew, all US citizens in their late 20s and early 30s, developed Baopals, a website that helps translate product information on the Chinese Taobao and Tmall into English. In one stroke, the trio thus opened up the astonishing world of Chinese e-commerce, or 800 million products, to non-Chinese consumers in China.

Baopals already boasts 40,000 registered users, with 16,000 of them joining last year alone, doubling the user count in 2017. A Baopals user buys 58 items on average per year, and spends about 2,500 yuan ($368) to 3,500 yuan annually.

In addition to English, the website has Korean and Russian versions, making e-shopping simpler for foreigners in China.

The website is going from strength to strength on the back of the trio’s innovations. It has introduced attractive sections like “The Cool, The Cheap& The Crazy”. It accepts Alipay, WeChat Wallet and China UnionPay for payments.

Although e-commerce destinations are dime a dozen in China, most of them are in Chinese, and cater to Chinese consumers, so Baopals stands out, said Thornhill.

“Even on Amazon China, the default language is Chinese. When you switch to English, you still see lots of content in Chinese. They just haven’t made the effort to serve China’s expat population properly,” he said.

That gap should spell business opportunities for those looking to start up, he said. “We are also changing the stereotype that Chinese goods are cheap products with low quality,” he said, adding that several products including Xiaomi air purifiers and Huawei products are very popular among foreigners.

According to Thornhill, Baopals’ revenue comes from service fee paid by shoppers. It charges a service fee of 5 percent of each item’s price, plus a small fixed fee based on the item’s price – 2 yuan for items priced below 30 yuan, and 8 yuan for items priced above 90 yuan. More than 2.3 million products had been sold by Jan 17 this year, a huge increase from the same period last year.

Given the experience in China, it is clear that homegrown technologies can succeed outside the mainland, he said. “This year is going to be a big year for Baopals, as we’ll be launching our global service. Expats leaving China can continue buying things they love here, and foreigners everywhere can discover the treasures of China’s online shopping.”

Agreed Yang from the Tow Center. China’s tech ecosystem, he said, provides foreigners on the mainland with well-rounded platforms to do business not only in China but across the world.

“It may take years for foreigners to build such infrastructure themselves. The time and energy saved during the process can be used for bolstering their own products and business.”

It’s not just small players such as Baopals that are drawing confidence from their success in China. Even e-payment giants such as WeChat Pay and Alipay, emboldened by their rapid adoption among foreigners in China, are confident of replicating their success worldwide.

Alipay has introduced its payment services, including departure tax refunds, at 10 major international airports in Japan, Thailand and New Zealand. Although the initial goal is to serve Chinese tourists traveling overseas, the larger plan is to roll out Chinese technologies worldwide and gain a global visibility and footprint.

So, it has struck cooperation agreements with local banks and companies in foreign markets, to provide e-payment services. For instance, its partners in Japan are Hida Credit Union and Kyoto Shinkin Bank, which helps attract Japanese users as well. Using such strategies, Alipay has accumulated more than 1 billion users in all, including 300 million outside China.

Sources:  China Daily/Asian News Network

Related posts:

 

Reuters pic. The term 5G stands for a
fifth generation — to succeed the current fourth generation of mobile
connectivity that has made…

 

 

Don’t blame China for global economic jitters; China contributed >25% global growth

 

China battles US for AI and robotic space: Who’s ahead?

G20 summit recognizes China’s success, a historic starting point for the world, expert said

Advertisements

Why Huawei’s 5G technology is seen as a threat by the US


Reuters pic.

The term 5G stands for a fifth generation — to succeed the current fourth generation of mobile connectivity that has made video sharing and movie streaming commonplace.

The new technology will require an overhaul of telecommunication infrastructure.

The 5G will do more than make mobile phones faster — it will link billions of devices, revolutionising transportation, manufacturing and even medicine. It will also create a multitude of potential openings for bad actors to exploit.

The vulnerability helps explain the rising tension between the US and Huawei Technologies Co, China’s largest technology company.

Huawei is pushing for a global leadership role in 5G, but American officials suspect that could help Beijing spy on Western governments and companies.

“Huawei’s significant presence in 5G creates a new vector for possible cyber-espionage and malware,” Michael Wessel, a commissioner on the US-China Economic and Security Review Commission that advises Congress, said in an interview.

By connecting whole new classes of products, 5G “creates new vulnerabilities”.

The technology holds great promise. Forests of gadgets will communicate instantly via millions of antennas. Cars will talk to each other to avert lethal crashes, factory foremen will monitor parts supplies and doctors can perform remote surgery as video, sound and data flow without delay.

Connections will be 10 to 100 times faster than current standards — quick enough to download an entire movie in seconds.

Yet, US national security officials see billions of opportunities for spies, hackers and cyber-thieves to steal trade secrets, sabotage machinery and even order cars to crash.

Citing security threats, the US has been pushing allies to block Huawei from telecommunication networks. The US Congress has banned government agencies from buying the company’s gear.

Why is the United States intent on killing Huawei? Look at the data below:

Huawei employs more than 10,000 Phd degree holders as well as many talented Russian mathematicians.

Do you know how many Huawei employees earn more than 1 million yuan (RM603,280) a year? More than 10,000 people.

Do you know how many Huawei employees earn more than five million yuan a year? More than 1,000 people!

In China alone, Huawei’s research and development expenditure is 89.6 billion yuan.

Among the Big Three, Alibaba employs 30,000 people, Baidu 50,000, Tencent about 30,000, leading to a total of 110,000; but Huawei’s global employees total 170,000.

Alibaba’s profit is 23.4 billion yuan, Tencent’s 24.2 billion yuan, Baidu’s 10.5 billion yuan, and their profits total 58 billion yuan, but 70% is taken away by foreigners. Since 2000, Huawei has earned 1.39 trillion yuan from abroad.

In taxes, Tencent pays more than seven billion yuan a year, Alibaba 10.9 billion yuan, and Baidu 2.2 billion. Huawei pays 33.7 billion yuan, which is more than the total of the earlier three firms.

Huawei is a high-tech company, and technology represents the true strength of a country.

In China, many companies can’t last long because there are always other companies ready to replace them, but Huawei is irreplaceable.

Huawei is a 100% Chinese company that has not been listed and does not intend to go public because of the susceptibility to be controlled by capital (which the United States can simply print money to do).

Huawei is the first private technology company in China ever to join the league of the world’s top 100. The Chinese should be proud of Huawei.
FMT NewsKoon Yew Yin is a retired chartered civil engineer and one of the founders of IJM Corporation Bhd and Gamuda Bhd.

The views expressed by the writer do not necessarily reflect those of FMT.

Related:

Yang Jiechi defends Huawei at the Munich Security Conference

 

Race for 5G / China-U.S. trade talks

Winner, loser in hi-tech race for 5G

 

 

World’s first port operated by 5G network appears in eastern China


Related posts:

Huawei unveils server chipset as China cuts reliance on imports

 

 

Huawei’s founder Ren Zhengfei breaks years of silence amid continued US attacks on Chinese tech giant


Ren
Zhengfei, founder and chief executive officer of Huawei Technologies
Co., speaks during an interview at the company’s headquarters in
Shenzhen, China, on Tuesday, Jan. 15, 2019. Ren, the billionaire telecom
mogul, broke a years-long silence as his technology empire faces its
biggest crisis over three decades of existence. Photographer: Qilai
Shen/Bloomberg

Ren Zhengfei, the billionaire founder of Huawei Technologies, broke years of silence on Tuesday as his business empire faces its biggest crisis in more than three decades amid continued pressure from the US that its networking gear may pose a security threat.
The telecoms mogul called Donald Trump “a great president” and said he would take a wait-and-see approach to whether the US leader will intervene in the case of his eldest daughter and Huawei finance chief Meng Wanzhou.
Meng is in Canada facing extradition to the US, where authorities have accused her of fraudulently  representing Huawei to evade US sanctions on Iran. She has denied any wrongdoing and said that she will contest the allegations if surrendered to the US.
The emergence of the reclusive Ren, who last spoke with foreign media in 2015, underscores the depth of the attacks on Huawei, the largest symbol of China’s growing technological might.
“I love my country, I support the Communist Party. But I will not do anything to harm the world,” the 74-year-old Ren told a select round table briefing, only his third formal chat with foreign reporters. “I don’t see a close connection between my personal political beliefs and the businesses of Huawei.”
The US has banned government use of Huawei’s technology products and services because of security concerns. US security experts have warned of a range of potential security risks, including but not limited to the capacity to control telecommunications infrastructure and even conduct undetected espionage. It has pressed its
allies to follow suit.
Japan has excluded Huawei from public procurement and Australia and New Zealand have effectively blocked Huawei from the roll-out of their 5G network infrastructure. The UK and Canada are also weighing the possible security risks posed by Huawei — along with a growing list of other European countries.
Huawei has consistently denied any connections with the military, saying that it is a private company part-owned by its employees and that governments need to ensure there is an objective basis for choosing  technology vendors.


“Ren Zhengfei doesn’t give many interviews, but his decision to speak publicly seems like a smart move,”
said Brock Silvers, Shanghai-based managing director of Kaiyuan Capital. “The threat to Huawei’s European business is real and it is understandably responding to it. Ren’s public comments today show how seriously he
views the situation.”

Ren, who joined the Communist Party after leaving the People’s Liberation Army, stressed the potential for
cooperation with the US. He played down Huawei’s role in current trade tensions between Washington and Beijing, which have rattled investors and corporations worldwide.
“Huawei is only a sesame seed in the trade conflict between China and the US,” Ren said from the company’s newest campus in the industrial city of Dongguan.
“Trump is a great president. He dares to massively cut tax, which will benefit the business. But you have to
treat well the companies and countries so that they will be willing to invest in the US and the government will be able to collect enough tax.”
Meanwhile, China’s Foreign Ministry on Tuesday urged Canada to release Meng immediately, saying the case was an abuse of legal procedure. Ministry spokeswoman Hua Chunying made the comment
at a daily news briefing in Beijing.

 

Meng was released on bail five weeks ago and is living under restrictions in her multimillion-dollar Vancouver home while awaiting extradition proceedings.

 

The arrest in Poland last week of a sales executive accused of spying may have helped prompt Ren to personally marshal Huawei’s global response. The employee in Poland was subsequently fired by Huawei, which said the individual had brought the company into disrepute.
Ren expressed hope that Huawei could find a way forward with the US.  Huawei is not a public company, we don’t need a beautiful earnings report,” Ren said. “If they don’t want Huawei to be in some markets, we can scale down a bit. As long as we can survive and feed our employees, there’s a future for us.”

 

Ren is a legendary figure in China’s business world and moves in the highest government circles. The self-made
billionaire is the son of schoolteachers and grew up in a mountainous town in China’s poorest province, Guizhou.

Huawei founder and CEO Ren Zhengfei survived a famine, but can he weather President Trump?

 

A survivor of China’s great famine between 1958 and 1961, Ren graduated from the Chongqing Institute of Civil
Engineering and Architecture. He worked in the civil engineering industry until 1974 when he joined the PLA as an engineer – a connection that still provokes questions in the West about Huawei’s ties to the Chinese army and government.

 

SC to regulate digital assets


Good move: Lim says many people have bypassed Malaysia because the policy was not clear about digital assets

Move seen to spur growth in digital currency sector

Regulatory oversight of digital currencies and tokens, which kicks in from today, offers timely clarity and transparency to various players in the fledgling industry.

Omni Capital Partners Sdn Bhd managing director Scott Lim said everything would be above board with the regulation and governance under the Securities Commission (SC).

“Digital assets in Malaysia have been underwhelmed mostly. A lot of people have been bypassing Malaysia because the policy was not clear about it.

“Certainly, now that this is regulated by the SC, it’ll be good. We shall wait for the guidelines,” he said.

Celebrus Advisory co-founder Edmund Yong said the regulation is very much welcomed and one which is needed, as it would spur growth in the industry.

Celebrus is a compliance-first blockchain consultancy firm.

He added that the statement by the Finance Ministry was very accommodative with the intention to use tokens and the recognition of it as a fund-raising tool.

“In fact, it can be an indirect source of foreign direct investment, a borderless method to raise funds.

“But from now until March 31, there will be a twilight period. Many activities will be stopped in their tracks because they don’t know where they stand.

“Some would possibly even move offshore because of the draconian RM10mil and 10-year imprisonment punishment,” said Yong.

He said digital tokens could also be for points in computer games or reward points, and it too would be quite draconian if it is all painted with the same brush.

The Capital Markets and Services (Prescription of Securities) (Digital Currency and Digital Token) Order 2019 kicks in today and any person operating unauthorised initial coin offerings (ICOs) or digital asset exchanges faces up to a 10-year jail term and up to a RM10mil fine.

Digital currencies and digital tokens are collectively known as digital assets, which will now be prescribed as securities.

The SC is putting in place relevant regulatory requirements for the issuance of ICOs and the trading of digital assets at digital asset exchanges in the country.

This is expected to be launched by the end of the first quarter this year.

Finance Minister Lim Guan Eng said the offering of such instruments, as well as its associated activities, would require authorisation from the SC and needed to comply with relevant securities law and regulations.

“The Finance Ministry views digital assets as well as its underlying blockchain technologies as having the potential to bring about innovation in both old and new industries.

“In particular, we believe digital assets have a role to play as an alternative fund-raising avenue for entrepreneurs and new businesses, and as an alternative asset class for investors,” he said in a statement yesterday.

Any person offering an ICO or operating a digital asset exchange without the SC’s approval will face an imprisonment term not exceeding 10 years and a fine not exceeding RM10mil.

Federal Territories Minister Khalid Samad mooted the idea of the Harapan Coin last year, which would be the world’s first political fund-raising platform using blockchain and cryptocurrency technology.

In November last year, shareholders of Country Heights Holdings Bhd approved the company’s plan to conduct an ICO to issue its own cryptocurrency, called “horse currency”.

Country Heights founder and chairman Tan Sri Lee Kim Yew had said that the company would like to be the first to launch cryptocurrency in the country when the regulations are ready.

The company’s plan is to eventually issue one billion horse currencies backed by RM2bil worth of physical assets held by the holding company, with an initial 300 million open to the public for circulation.

StarBizBy ROYCE TAN roycetan@thestar.com.my

Related:

 

Guan Eng: SC to regulate digital currencies starting tomorrow 

 


Securities Commission to regulate offering and trading of digital assets ..

 



SC to Regulate Offer & Trade of Digital Asset | Focus Malaysia

 


SC to regulate cryptocurrencies from tomorrow | Free Malaysia Today


 

BNM, SC say drawing up rules on digital assets | Money | Malay Mail

 

 Related posts:

 

 
(From left) World of Sharing business
development manager Ice Wong, EUNEX (Asia) marketing director Kyan Lee,
MBAEX chief executive o…

BLOCKCHAIN beyond Bitcoin

Bitcoin, digital currencies rally, caution prevails; virtual currency in property

Bitcoins As Digital Currency's Rally Crushed Every Other Currency in 2016

Bitcoin falls after exchange is hacked, US$72 mil stolen from Bitfinex exchange in HK

Securing the bitcoin trading platform has proved elusive.

 

Startup opportunities abound


Band together: Entrepreneurs are urged to build strong communities to have a bigger voice that will enable them to affect policy that is beneficial to the industry.
Local startup sector gaining ground with stronger investor interest

THE past few years have seen an increase of entrepreneurs in the local tech startup sector. With better access to funding, there is ample opportunity for new business ideas to take off.

But while the number of startups in Malaysia has increased, industry observers say we are merely scratching the surface of where the industry could be.

According to Yusuf Jaffar, programme manager of Global Accelerator Programme from Malaysian Global Innovation & Creativity Centre (MaGIC), there is an estimate of 3,000 startups in Malaysia. Compared to the over 1 million registered enterprises here, startups make up only 0.25% of total companies registered.

In contrast, Singapore has 42,000 startups, making up some 8.88% of companies in the island state.

In the region, South Korea has an estimated 30,000 startups, while Indonesia and India has over 4,700 and 7,700 respectively.

Although the numbers in Indonesia and India look low, Yusuf points out that they have a vibrant startup ecosystem.

“India has 1,200 new startups every year, and this does not include the ones that are failing. These are the ones that are surviving or thriving. This shows vibrancy of ecosystem.

Getting there: Hall says Malaysia’s startup ecosystem is rapidly maturing. 
Getting there: Hall says Malaysia’s startup ecosystem is rapidly maturing.

“For Malaysia’s ecosystem to grow, we need to rapidly increase our number of startups. We need more entrepreneurs here and we need more ideas,” he says.

He names four components that are needed for the industry to grow – more startups, capital, markets and talent.

In terms of capital, Yusuf notes that venture capital (VC) penetration in Malaysia is relatively high with 110 VC firms. Statistically, he says, there are a lot of funds available in Malaysia with US$1.75bil in VC funding for the local ecosystem, of which, only 50% has been spent to-date.

However, most of these funds go into funding Series A (US$1mil-US$3mil) and B (US$3mil-US$10mil) rounds, whereby the startups have grown sizably.

According to statistics, only 0.89% of VC capital went into early-stage investment, which amounted to about eight investments last year. In Singapore, 67% of VC funding goes to the early stage.

It is crucial to have adequate funding for early stage investment to ensure that entrepreneurs can tap these funds to grow their ideas.

“We are investing late,” says Yusuf.

In Malaysia, he estimates that the success rate for startups is 20%.

He adds that 90% of the current 242 unicorns – startup company valued at over US$1bil – in the world received VC funding from the get-go, underscoring the importance of VCs in making high-growth companies.

Additionally, the frequency of investments in the local market is low. In 2017, there were only 77 investments made by VCs, or only 2.57% of startups received VC investment. Considering that there are 110 VC firms here, it is small wonder that entrepreneurs feel that there is a lack of funding available in the local market.

Stacking up regionally

Malaysia has often been cited as a country with great potential. We have a fairly well-educated population, infrastructure and a strong economy.

However, the other countries in the region have somehow garnered more interest from investors. Singapore and Indonesia, in particular, have been receiving sizeable investments from VCs. The Indochina region has also been getting a lot of attention in recent times.

And not many from the industry will forget that Malaysia-founded Grab eventually moved to Singapore given the more vibrant ecosystem across the straits.

But Justin Hall, partner at Singapore-based Golden Gate Ventures, says that Malaysia’s startup ecosystem is rapidly maturing.

“As we’re starting to see in other regional countries, Malaysian entrepreneurs are actively seeking to build out platforms and products that appeal to the entire South-East Asia, and not simply the domestic Malaysian market.

“Regional funds are actively looking for and investing in Malaysian-born startups, and I see this trend accelerating as investors look out from Indonesia and Singapore,” says Hall.

Last November, Golden Gate launched its Malaysian office in Kuala Lumpur to solidify its presence here. The firm had already utilised a quarter of its Fund II to invest in early-stage tech companies that are based or operating in Malaysia. It is planning to invest a further RM75mil in Malaysia-based startups.

 Smart capital: Ganesh notes that VCs can now pick and choose their investments because there are more startups around. — Bernama
Smart capital: Ganesh notes that VCs can now pick and choose their investments because there are more startups around. — Bernama 

He notes that Malaysia also has a large digital consumer market.

“It bears some striking similarities to other South-East Asian countries in terms of consumptive behaviour such as regulatory bottlenecks in certain industries, and regulatory, infrastructure, and logistical constraints. This means that products and services that resonate with Malaysian consumers and businesses might be easier to localise into other regional markets than, say, companies that specifically appeal to Singaporeans,” he adds.

Hall opines that Malaysian companies are undervalued compared to Indonesia and Singapore, largely due to the sheer amount of capital being invested in the later markets. There were previously also some gaps in founder experience and capability between the markets, but that gap is rapidly closing.

According to Hall, logistics and supply-chain focused startups will come into focus in 2019 as the e-commerce boom starts sizing up in the region.

“We are really only scratching the surface of scalable, efficient, inter-country logistics and supply-chain platforms. We hope to continue finding and investing in the best, most talented entrepreneurs in South-East Asia this year,” he says.

However, Commerce DotAsia Ventures Sdn Bhd executive chairman Ganesh Kumar Bangah notes that the startup frenzy in the region seen a few years ago has cooled off.

“Valuations were very high three to four years ago. I think it has cooled off. There are still some startups who ask for crazy valuations, but they don’t get funded. VCs can now pick and choose because there are so many startups. They don’t compete with each other as much as before.

“It is not like three or four years ago, where a startup can say, ‘if you don’t give me this value, the next guy who comes in will offer me that’. Today, there’s realism in the game.

“There is still a lot of money in the region for the right companies. People are less willing to overpay for them,” he says.

Building the ecosystem

Governments play an important role in developing the startup ecosystem and in creating new markets for the ecosystem.

Yusuf says favourable policy can mobilise funds and help grow the industry.

He cites the example of Singapore, which has allocated S$5bil in matching grants for startups, effectively pouring in S$10bil for the sector. In the US, some US$84bil is invested into VCs annually, with the bulk of these funds coming from pension funds.

Obviously, the funding ecosystem in Malaysia has a long way to go. But developments in the local market such as equity crowdfunding and Leap Market have opened up more funding avenues for startups looking to tap new money. Additionally, more people have shown interest in becoming angel investors, which would help fill the gap in the early-stage financing.

“It is not that there is not enough money in the ecosystem. The case is, there’s not enough intelligent capital at the early stage here. Intelligent money means that these investors have the knowledge to value the startups, and have the ability to give them the add-ons to help them grow.

“We don’t lack capital, we lack intelligent capital at the early stage. We’ve got a lot of people with money and a lot of them want to invest in technology but don’t know how,” notes Ganesh.

Yusuf concurs. The Malaysian ecosystem lacks specialist talents who can run funds. Most of the local VCs are managed by generalists who may not be able to discern startup-specific issues and challenges.

 Paving the way: Governments can play an effective role in creating new markets for the ecosystem.
Paving the way: Governments can play an effective role in creating new markets for the ecosystem. 

Thus, there is a need to attract more foreign funding and talent to close the gap in the local market.

“Governments also play a big role in market creation. The government needs to put in real money into these specific markets.

“A good example is the “buy social” campaign in the UK where all government procurement contracts have to go to social enterprises. That has led to the UK becoming the epicentre of social enterprises in the world, because the government made that effort and made that pledge.

“So it’s not just about identifying a market, but creating real value in the market. There’s no way an entrepreneur can grow unless the market is created,” says Yusuf.

He notes that 5% of the UK’s GDP now comes from social enterprises.

Yusuf also urges entrepreneurs themselves to be part of the effort in building the local startup ecosystem by creating communities that will enable them to work outside their silos. By working within communities, entrepreneurs will be able to share ideas and collaborate to form better solutions and business models.

“We need to have clusters, where you can get matching of skillset and vision. And these clusters should be connected to other clusters to see how you can build the ecosystem and move the ecosystem forward.

“So build the community. And the importance of building a bigger community is so that you can affect policy in a way that will benefit the industry,” he says.

By joy lee Starbiz

Related



Local enterprises need to advance

 

Related posts:

The ugly side of the digital economy



Building the startup ecosystem

Successful entrepreneurs join forces to fund and support businesses Malaysia has seen quite a number of successful entrepreneurs coming i…




OOI Boon Sheng, founder and chief executive officer of Web Bytes Sdn Bhd, was fortunate to have found a goo
Endeavouring to give back to startups – part 8
Successful entrepreneurs join forces to fund and support businesses

  Startups rising from failure – part 9

Dec 10, 2014 This is the ninth article in a 10-part tie-up between Metrobiz and the Malaysian Global Innovation & Creative Centre (MaGIC) to explore startup …

Dec 17, 2014 This is the final article in a 10-part tie-up between Metrobiz and the Malaysian Global Innovation & Creative Centre (MaGIC) to explore startup …

Tech-Dome Penang project to be ready by 2015; Skilled Staff in Demand in Penan

Pushing blockchain revolution


(From left) World of Sharing business development manager Ice Wong, EUNEX (Asia) marketing director Kyan Lee, MBAEX chief executive officer Sebastian Ionut Diaconu, Lim, International Blockchain Research Club vice-president Sunny Chao and blockchain technology company Milletique OTO Distribution senior manager Jasmond Ng posing at Fintech Blockchain Summit in Kulim, Kedah

OVER 2,000 blockchain enthusiasts and leaders shared the latest ideas at Fintech Blockchain Summit which was held in Kulim, Kedah.

The summit themed ‘Blockchain Era, Connecting Future’ explored the potential of blockchain technology in various economic fields.

Delegates discussed blockchain trends and evolution to various platforms and digital assets.

Held at MBI Desaku Multi-function Convention Centre, the summit was jointly organised by World Crypto Organisation, Makefamous Creative Hub Sdn Bhd, Milletique OTO Distribution Sdn Bhd, Mightficent Global Sdn Bhd, Menbridges Academy Sdn Bhd and Macsintec Social Media Sdn Bhd.

Among those attending the summit was Super Minor Community vice-president Nicholas Lim who is also Chainverses magazine chief editor.

“Various groups joined us at the summit to contribute to the progression of financial technology through discussions and sharing sessions.

“We hope this summit will open up greater opportunities for development,” Lim said.

Lim opined that blockchain had good concepts and ideas.

However, he said the biggest resistance in the current blockchain development was the lack of economic support in terms of adoption.

“To overcome this, we need teamwork, good practical solutions and support from the community to push the adoption of blockchain in the country forward,” he added.

During the summit, four groups signed an MoU, including International Financial Technology Academy, Linton University College, Milletique Technology and Menbridges Academy.

The MoU aimed to promote blockchain financial technology through education with the hope of cultivating more blockchain experts in the future.

By emilia ismail The Star


Related posts:

Blockchain Festival & Conference Week, Kuala Lumpur 26~27 Sept 2018

 

Jack Ma Embraces Blockchain for Ant But Warns of Bitcoin Bubble

 

Bitcoin, digital currencies rally, caution prevails; virtual currency in property

 

BLOCKCHAIN beyond Bitcoin

 

 

What is Blockchain Technology, its uses and applications?

 

Bitcoin must not in your retirement financial planning portfolio

 
 
 

 

 

 

From Industrial 4.0 to Finance 4.0

 

Huawei unveils server chipset as China cuts reliance on imports


New chip: A Kunpeng 920 chip is displayed during an unveiling ceremony in Shenzhen. Huawei is seeking growth avenues in cloud computing and enterprise services. — AP

HONG KONG: Huawei Technologies Co Ltd has launched a new chipset for use in servers, at a time when China is pushing to enhance its chip-making capabilities and reduce its heavy reliance on imports, especially from the United States.

Huawei, which gets the bulk of its revenue from the sale of telecommunications equipment and smartphones, is seeking growth avenues in cloud computing and enterprise services as its equipment business comes under increased scrutiny in the West amid worries about Chinese government influence over the firm.

Huawei has repeatedly denied any such influence.

Chinese firms are also seeking to minimise the impact of a trade dispute that has seen China and the United States slap tariffs on each other’s technology imports.

For Huawei, the launch of the chipset – called the Kunpeng 920 and designed by subsidiary HiSilicon – boosts its credentials as a semiconductor designer, although the company said it had no intention of becoming solely a chip firm.

“It is part of our system solution and cloud servicing for clients. We will never make our chipset business a standalone business,” said Ai Wei, who is in charge of strategic planning for Huawei’s chipsets and hardware technology.

The Shenzhen-based company already makes the Kirin series of smartphone chips used in its high-end phones, and the Ascend series of chipsets for artificial intelligence computing launched in October.

It said its latest seven nanometre, 64-core central processing unit (CPU) would provide much higher computing performance for data centres and slash power consumption.

It is based on the architecture of British chip design firm ARM – owned by Japan’s SoftBank Group Corp – which is seeking to challenge the dominance in server CPUs of US maker Intel Corp.

Huawei aims to drive the development of the ARM ecosystem, said chief marketing officer William Xu. He said the chip has “unique advantages in performance and power consumption”.

Xu also said Huawei would continue its “long-term strategic partnership” with Intel.

Huawei’s new ARM-based CPU is not a competitor to the US company’s x86 CPUs and servers, but complementary, Xu added. Redfox Qiu, president of the intelligent computing business department at Huawei, said the company shipped 900,000 units of servers in 2018, versus 77,000 in 2012 when it started.

Huawei was seeing “good momentum for the server business in Europe and Asia Pacific” and expects the contribution from its international business to continue to rise, Qiu added.

Huawei also released its TaiShan series of servers powered by the new chipset, built for big data, distributed storage and ARM native applications.

The firm founded chip designer HiSilicon in 2004 to help reduce its reliance on imports.

In modem chips, Huawei internally sources 54% of those in its own devices, with 22% coming from Qualcomm Inc and the remainder from elsewhere, evidence presented at an antitrust trial for Qualcomm showed. — Reuters

Related:

Huawei’s revenue growth rebounds despite `storm-tossed’ 2018

%d bloggers like this: