Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. Last week, we looked at how Alibaba and Tencent fared in the last quarter; the talk in Silicon Valley and Beijing this week is on Y Combinator’s sudden retreat from China. We will also discuss the enduring food delivery war in the country later.
The storied Silicon Valley accelerator Y Combinator announced the closure of its China unit just a little over a year after it entered the country. In a vague statement posted on its official blog, the organization said the decision came amid a change in leadership. Sam Altman, its former president who hired legendary artificial intelligence scientist Lu Qi to initiate the China operation, recently left his high-profile role to join research outfit OpenAI. With that, YC has since refocused its energy to support “local and international startups from our headquarters in Silicon Valley.”
What was untold is the insurmountable challenge that multinationals face in their attempt to win in a wildly different market. Lu Qi, who wore management hats at Baidu and Microsoft before joining YC, was clearly aware of the obstacles when he said in an interview (in Chinese) in May that “multinational corporations in China have almost been wiped out. They almost never successfully land in China.” The prescription, he believes, is to build a local team that’s given full autonomy to make decisions around products, operations, and the business.
A former executive at an American company’s China branch, who asked to remain anonymous, argued that Lu Qi’s one-man effort can’t be enough to beat the curse of multinationals’ path in China. “All I can say is: Lu has taken a detour. Going independent is the best decision. When it comes to whether Chinese startups are suited for mentorship, or whether incubators bring value to China, these are separate questions.”
What’s curious is that YC China seemed to have been given a meaningful level of freedom before the split. “Thanks to Sam Altman and the U.S. team, who agreed with my view and supported with much preparation, YC China is not only able to enjoy key resources from YC U.S. but can also operate at a completely independent capacity,” Lu said in the May interview.
Moving on, the old YC China team will join Lu Qi to fund new companies under a newly minted program, MiraclePlus, announced YC China via a Wechat post (in Chinese). The initiative has set up its own fund, team, entity and operational team. The deep ties that Lu has fostered with YC will continue to benefit his new portfolio, which will receive “support” from the YC headquarters, though neither party elaborated on what that means.
The food delivery war in China is still dragging on two years after the major consolidation that left the market with two major players. Meituan, the local services company backed by Tencent, has managed to attain an expanding share against Alibaba-owned Ele.me. According to third-party data (in Chinese) provided by Trustdata, Meituan accounted for 65.1% of China’s overall food delivery orders during the second quarter, steadily rising from just under 60% a year ago. Ele.me, on the other hand, has lost nearly 10% of the market, slumping to 27.4% from 36% a year ago.
In terms of monetization, Meituan generated 15.6 billion yuan ($2.2 billion) in revenue from its food delivery segment in the quarter ended September 30. That dwarfs Ele.me, which racked up 6.8 billion yuan ($970 million) during the same period. Both are growing north of 30% year-over-year.
This may not be all that surprising given Alibaba has arguably more imminent battles to fight. The e-commerce leader has been consumed by the rise of Pinduoduo, which has launched an assault on China’s low-tier cities with its ultra-cheap products and social-driven online shopping experience. Meituan, on the other hand, is fixated on beefing up its main turf of on-demand neighborhood services after divesting its costly bike-sharing endeavor.
When both contestants have the capital to burn through — as they have demonstrated through heavily subsidizing customers and restaurants — the race comes down to which has greater control of user traffic. Meituan holds a competitive edge thanks to its merger with Dianping, a leading restaurant review app akin to Yelp, back in 2015. Dianping today operates as a standalone brand but its food app is deeply integrated with Meituan’s delivery services. For example, hundreds of millions of users are able to place Meituan-powered food delivery orders straight from Dianping.
Alibaba and Meituan used to be on more friendly terms just a few years ago. In 2011, the e-commerce giant participated in Meituan’s $50 million Series B financing. Before long, the two clashed over control of the company. Alibaba is known to impose a heavy hand on its portfolio companies by taking up majority stakes and reshuffling the company with new executives. That’s because Alibaba believes that “only when you operate can you generate synergies and really create exponential value,” said vice chairman Joe Tsai in an interview. “Whereas if you just make a financial investment, you’re counting an internal rate of return. You’re not creating real value.”
Ele.me lived through that transformation. As of September, Alibaba has reportedly (in Chinese) completed replacing Ele.me’s management with its pool of appointed personnel. Ele.me’s founder Zhang Xuhao left the company with billions of yuan in cash and joined a venture capital firm (in Chinese).
Meituan’s founder Wang Xing had more unfettered pursuits. In a later financing round, he refused to accept Alibaba’s condition for portfolio companies to eschew Tencent investments, a strategy of the giant to hobble its archrival. That botched the partnership and Alibaba has since been gradually offloading its Meituan shares but still held onto small amounts, according to Wang in 2017, “to create trouble” for Meituan going forward.
Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. The earnings season is here. This week, long-time archrivals in the Chinese internet battlefield — Alibaba and Tencent — made some big revelations about their future. First off, let’s look at Alibaba’s long-awaited secondary listing and annual shopping bonanza.
It’s that time of year. On November 11, Alibaba announced it generated $38.4 billion worth of gross merchandise value during the annual Single’s Day shopping festival, otherwise known as Double 11. It smashed the record and grabbed local headlines again, but the event means little other than a big publicity win for the company and showcasing the art of drumming up sales.
GMV is often used interchangeably with sales in e-commerce. That’s problematic because the number takes into account all transactions, including refunded items, and it’s by no means reflective of a company’s actual revenue. There are numerous ways to juice the figure, too, as I wrote last year. Presales began days in advance, incentives were doled out to spur last-minute orders and no refunds could be processed until November 12.
Don’t be fooled by the big numbers (yes, $38B GMV is BIG), the major growth times are over for Alibaba’s Singles’ Day
Today it functions as a massive marketing/user-acquisition event with generous subsidies — in other words: loss-making not profitable pic.twitter.com/S4Wzmudgkz
— Jon Russell (@jonrussell) November 12, 2019
Even Jiang Fan, the boss of Alibaba’s e-commerce business and the youngest among Alibaba’s 38 most important decision-makers, downplayed the number: “I never worry about transaction volumes. Numbers don’t matter. What’s most important is making Single’s Day fun and turning it into a real festival.”
Indeed, Alibaba put together another year of what’s equivalent to the Super Bowl halftime show. Taylor Swift and other international big names graced the stage as the evening gala was live-streamed and watched by millions across the globe.
.@taylorswift13 performing at the 11.11 Global Shopping Festival Countdown Gala last night in Shanghai. The gala was produced by Youku, Alibaba’s video streaming platform. For more coverage on 11.11, check out our dedicated #Double11 page: https://t.co/VeupwMr5WT pic.twitter.com/suLvCd4Y3m
Alibaba is going ahead with its secondary listing in Hong Kong on the heels of reports that it could delay the sale due to ongoing political unrest in the city-state. The company is cash-rich, but listing closer to its customers can potentially ease some of the pressure arising from a new era of volatile U.S.-China relationships.
Alibaba is issuing 500 million new shares with an additional over-allotment option of 75 million shares for international underwriters, it said in a company blog. Reports have put the size of its offering between $10 billion and $15 billion, down from the earlier rumored $20 billion.
The giant has long expressed it intends to come home. In 2014, the e-commerce behemoth missed out on Hong Kong because the local exchange didn’t allow dual-class structures, a type of organization common in technology companies that grants different voting rights for different stocks. The giant instead went public in New York and raised the largest initial public offering in history at $25 billion.
“When Alibaba Group went public in 2014, we missed out on Hong Kong with regret. Hong Kong is one of the world’s most important financial centers. Over the last few years, there have been many encouraging reforms in Hong Kong’s capital market. During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright. We hope we can contribute, in our small way, and participate in the future of Hong Kong,” said chairman and chief executive Daniel Zhang in a statement.
Missing out on Alibaba had also been a source of remorse for the Stock Exchange of Hong Kong. Charles Li, chief executive of the HKEX, admitted that losing Alibaba to New York had compelled the bourse to reform. The HKEX has since added dual-class shares and attracted Chinese tech upstarts such as smartphone maker Xiaomi and local services platform Meituan Dianping.
Content and social networks have been the major revenue drivers for Tencent since its early years, but new initiatives are starting to gain ground. In the third quarter ended September 30, Tencent’s “fintech and business services” unit, which includes its payments and cloud services, became the firm’s second-largest sales avenue trailing the long-time cash cow of value-added services, essentially virtual items sold in games and social networks.
Payments, in particular, accounted for much of the quarterly growth thanks to increased daily active consumers and number of transactions per user. That’s good news for the company, which said back in 2016 that financial services would be its new focus (in Chinese) alongside content and social. The need to diversify became more salient in recent times as Tencent faces stricter government controls over the gaming sector and intense rivalry from ByteDance, the new darling of advertisers and owner of TikTok and Douyin.
Tencent also broke out revenue for cloud services for the first time. The unit grew 80% year-on-year to rake in 4.7 billion yuan ($670 million) and received a great push as the company pivoted to serve more industrial players and enterprises. Alibaba’s cloud business still leads the Chinese market by a huge margin, with revenue topping $1.3 billion during the September quarter.
Luckin Coffee, the Chinese startup that began as a Starbucks challenger, is starting to look more like a convenient store chain with delivery capacities as it continues to increase store density (a combination of seated cafes, pickup stands and delivery kitchens) and widen product offerings to include a growing snack selection. Though bottom-line loss continued in the quarter, store-level operating profit swung to $26.1 million from a loss in the prior-year quarter. 30 million customers have purchased from Luckin, marking an increase of 413.4% from 6 million a year ago.
Minecraft is on the brink of 300 million registered users in China, its local publisher Netease announced at an event this week. That’s a lot of players, but not totally unreasonable given the game is free-to-play in the country with in-game purchases, so users can easily own multiple accounts. Outside China, the game has sold over 180 million paid copies, according to gaming analyst Daniel Ahmed from Niko Partners.
Xiaomi founder Lei Jun is returning a huge favor by backing a long-time friend. Xpeng Motors, the Chinese electric vehicle startup financed by Alibaba and Foxconn, has received $400 million in capital from a group of backers who weren’t identified except Xiaomi, which became its strategic investor. The marriage would allow Xpeng cars to tap Xiaomi’s growing ecosystem of smart devices, but the relationship dates further back. Lei was an early investor in UCWeb, a browser company founded by He and acquired by Alibaba in 2014. A day after Xiaomi’s began trading in Hong Kong in mid-2018, He wrote on his WeChat feed that he had bought $100 million worth of Xiaomi shares (in Chinese) in support of his old friend.
XPeng Motors, the Chinese electric vehicle startup backed by Alibaba and Foxconn, has raised a fresh injection of $400 million in capital and has taken on Xiaomi as a strategic investor, the company announced.
The Series C includes an unidentified group of strategic and institutional investors. XPeng Motors chairman and CEO He Xiaopeng, who also participated in the Series C, said they received strong support from many of its current shareholders. Xiaomi founder and CEO Lei Jun previously invested in the company.
“Xiaomi Corporation and Xpeng Motors have achieved significant progress through in-depth collaboration in developing technologies connecting smart phones and smart cars,” Xiaomi’s Jun said in a statement. “We believe that this strategic investment will further deepen our partnership with Xpeng in advancing innovation for intelligent hardware and the Internet of Things.”
The company didn’t disclose what its post-money valuation is now. However, a source familiar with the deal said it is “better” than the 25 billion yuan valuation it had in its last round in August 2018.
The announcement confirms an earlier report from Reuters that cited anonymous sources.
XPeng also said it has garnered “several billions” in Chinese yuan of unsecured credit lines from institutions such as China Merchants Bank, China CITIC Bank and HSBC. XPeng didn’t elaborate when asked what “several billions” means.
Brian Gu, XPeng Motors vice chairman and president, added that the company has been able to hit most of its business and financing targets despite economic headwinds, uncertainties in the global markets and government policy changes that have had direct impact on overall auto sales in China.
The round comes as XPeng prepares to launch its electric P7 sedan in spring 2020. Deliveries of the P7 are expected to begin in the second quarter of 2020.
XPeng began deliveries of its first production model, the G3 2019 SUV, in December, and shipped 10,000 models by mid-June. The company has since released an enhanced version of the G3 with a 520 km NEDC driving range.
XPeng has said it wants to IPO, but it’s unclear when the company might file to become a public company. No specific IPO timetable has been set and a spokesperson said the company is monitoring market conditions closely, but its current focus is on building core businesses.
Alibaba is doubling down on its logistics affiliate Cainiao, two years after acquiring a majority stake in the firm. The Chinese giant said today it would invest an additional 23.3 billion yuan (about $3.33 billion) to raise its equity in Cainiao to 63% (from 51%).
In a statement, Alibaba said it will subscribe newly issued Cainiao shares in its latest financing round and also purchase equity interest from a certain, unnamed Cainiao shareholder.
Cainiao was co-founded by Alibaba in 2013 to bring organization in Chinese logistics, particularly around e-commerce deliveries. And it has delivered: Today Cainiao powers a significant volume of Alibaba’s logistics needs in the nation.
The affiliate, which reported $680 million revenue in the quarter that ended in September, matches riders, deliveries and warehouses, underpinning the logistics side of e-commerce platforms Taobao and Tmall in the same way Alipay underpins the payments side, analysts say.
Department store owner Intime Group, conglomerate Fosun Group and a number of other logistics firms also own stakes in Cainiao.
In 2017, Alibaba bumped its stake in Cainiao to 51% from 47%, and at the time committed to spend more than 100 billion yuan ($14.3 billion) to expand the logistics business over five years.
The Chinese technology group has tightened its grip on the logistics sector in the nation in recent years. Earlier this year, the company purchased nearly 15% stake of STO Express. As of earlier this year, Alibaba also owned about 10% of ZTO, 11% of YTO and 27.9% of Best Logistics.
Express delivery and logistics companies are crucial for e-commerce firms, Alibaba said last year. According to the firm, more than 50.7 billion parcels were distributed by e-commerce companies in the nation last year.
Twiga, a B2B food distribution company, will use its funds to set up a distribution center in Nairobi and deepen its conversion to offering supply chain services for both agricultural and FMCG products.
The startup is also targeting Pan-African expansion to French speaking West Africa by third quarter 2020, CEO Peter Njonjo told TechCrunch.
The venture has moved quickly on diversifying its supply-chain product mix. “We’re not just doing fruits and vegetables…I’d say we’re at 50/50 now between FMCG and fresh,” said Njonjo.
Twiga doesn’t plan to move toward entering or supplying B2C e-commerce, where it could become a competitor to other online retailers, such as Jumia.
But the company has factored for advantages in the B2C e-commerce space. “If you’re able to serve Nairobi’s 180,000 retailers, it means that the furthest customer would be less than two kilometers away from any shop. That’s the power of building a B2C business on top of a B2B platform. So definitely, the potential is there,” said Njonjo.
China is known for its relationship with Africa based on trade and infrastructure, but not so much for tech. That’s changing with a number of Chinese actors increasing the country’s digital influence across the continent’s tech markets.
This includes Africa focused mobile phone Transsion’s IPO and planned expansion in Africa and recent moves on the continent by Alibaba and Chinese owned Opera.
In an ExtraCrunch feature, TechCrunch detailed China’s growing tech ties with Africa and what they could mean for the continent’s innovation ecosystem and Africa’s relationship with China overall.
In two stories in Ocotober, TechCrunch followed Jumia’s IPO lockup expiry and volatile share-price ahead of the Jumia’s November third-quarter earnings call.
The Africa focused e-commerce company — with online verticals in 14 countries — has had a bumpy ride since becoming the first tech venture operating in Africa to list on a major exchange. Jumia saw its opening share price of $14.50 jump 70% after its NYSE IPO in April.
Then in May, Jumia’s stock tumbled when it came under assault from a short-seller, Andrew Left, who accused the company of fraud in its SEC filings.
In August, Jumia’s 2nd quarter earnings showed upside and downside: revenue growth still with big losses. Much of it may have been overshadowed by Jumia’s own admission of a fraud perpetrated by some employees and agents of its JForce sales program.
Jumia’s core investors appeared to show continued confidence in the company in October, when there wasn’t a big sell-off after the IPO lockup period expired.
It appears that what Jumia disclosed does not validate the claims in Citron Research’s May report. But the markets still seem wary of the company’s stock, which now stands at roughly half its opening IPO price.
Jumia will have a chance to clear up any lingering confusion and showcase its latest numbers on its third-quarter earnings call November 12.
TechCrunch reported additional details to two big African tech market events that happened over the last year. First, Naspers Foundry’s new leader, Phuthi Mahanyele-Dabengwa, confirmed the 1.4 billion rand (≈$100 million) VC arm of South Africa’s Naspers is accepting pitches.
Announced in late 2018, Naspers Foundry will make equity investments in various amounts, primarily from Series A up to Series B in South African ventures. Founders from other parts of Africa with startup operations in South Africa can be considered for funding, Mahanyele-Dabengwa clarified.
CcHub and iHub CEO Bosun Tijani revealed more detail about the recent merger of both names. CcHub – iHub will pursue more operating revenue from consulting and VC investing, vs. grants, according to Tijani. The new Nigeria and Kenya based innovation network will also look to bring an Africa startup tour to the U.S. and is considering opening an office in San Francisco, he said.
More Africa-related stories @TechCrunch
At the recent TechCrunch Disrupt SF, Senegalese VC investor Marieme Diop suggested that Silicon Valley’s unicorn IPO model might not be right for African startups. The is largely because the …
African tech around the ‘net
Hello and welcome back to TechCrunch’s China Roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world. It’s been a very busy last week of October for China’s tech bosses, but first, let’s take a look at what some of them are doing in the neck of your woods.
The challenge facing TikTok, a burgeoning Chinese video-sharing app, continues to deepen in the U.S. Lawmakers have recently called for an investigation into the social network, which is operated by Beijing-based internet upstart ByteDance, over concerns that it could censor politically sensitive content and be compelled to turn American users’ data over to the Chinese government.
TikTok is arguably the first Chinese consumer app to have achieved international scale — more than 1 billion installs by February. It’s done so with a community of creators good at churning out snappy, light-hearted videos, highly localized operations and its acquisition of rival Musical.ly, which took American teens by storm. In contrast, WeChat has struggled to build up a significant overseas presence and Alibaba’s fintech affiliate Ant Financial has mostly ventured abroad through savvy investments.
TikTok denied the American lawmakers’ allegations in a statement last week, claiming that it stores all U.S. user data locally with backup redundancy in Singapore and that none of its data is subject to Chinese law. Shortly after, on November 1, Reuters reported citing sources that the U.S. government has begun to probe into ByteDance’s acquisition of Musical.ly and is in talks with the firm about measures it could take to avoid selling Musical.ly . ByteDance had no further comment to add beyond the issued statement when contacted by TechCrunch.
The new media company must have seen the heat coming as U.S.-China tensions escalate in recent times. In the long term, TikTok might have better luck expanding in developing countries along China’s Belt and Road Initiative, Beijing’s ambitious global infrastructure and investment strategy. The app already has a footprint in some 150 countries with a concentration in Asia. India accounted for 44% of its total installs as of September, followed by the U.S. at 8%, according to data analytics firm Sensor Tower.
ByteDance is also hedging its bets by introducing a Slack-like workplace app and is reportedly marketing it to enterprises in the U.S. and other foreign countries. The question is, will ByteDance continue its heavy ad spending for TikTok in the U.S., which amounted to as much as $3 million a day according to a Wall Street Journal report, or will it throttle back as it’s said to go public anytime soon? Or rather, will it bow to U.S. pressure, much like Chinese internet firm Kunlun selling LGBTQ dating app Grindr (Kunlun confirmed this in a May filing), to offload Musical.ly?
The other Chinese company that’s been taking the heat around the world appears to be faring better. Huawei clung on to the second spot in global smartphone shipments during the third quarter and recorded the highest annual growth out of the top-5 players at 29%, according to market analytics firm Canalys. Samsung, which came in first, rose 11%. Apple, in third place, fell 7%. Despite a U.S. ban on Huawei’s use of Android, the phone maker’s Q3 shipments consisted mostly of models already in development before the restriction was instated, said Canalys. It remains to be seen how distributors around the world will respond to Huawei’s post-ban smartphones.
Another interesting snippet of Huawei handset news is that it’s teamed up with a Beijing-based startup named ACRCloud to add audio recognition capabilities to its native music app. It’s a reminder that the company not only builds devices but has also been beefing up software development. Huawei Music has a content licensing deal with Tencent’s music arm and claims some 150 million monthly active users, both free and paid subscribers.
China’s modern-day nomads want flexible and cost-saving housing as much as their American counterparts do. The demand has given rise to apartment-rental services like Danke, which is sometimes compared to WeLive, a residential offering from the now besieged WeWork that provides fully-furnished, shared apartments on a flexible schedule.
Four-year-old Danke has filed with the U.S. Securities and Exchange Commission and listed its offering size at $100 million, typically a placeholder to calculate registration fees. Backed by Jack Ma-controlled Ant Financial, the loss-making startup is now leasing in 13 Chinese cities, aggressively growing the number of apartments it operated to 406,746 since 2015. Its smaller rival Qingke has also filed to go public in the U.S. this week. Also operating in the red, Qingke has expanded its available rental units to 91,234 since 2012.
Apartment rental is a capital-intensive game. Services like Danke don’t normally own property but instead lease from third-party apartment owners. That means they are tied to paying rents to the landlords irrespective of whether the apartments are ultimately subleased. They also bear large overhead costs from renovation and maintenance. Ultimately, it comes down to which player can arrange the most favorable terms with landlords and retain tenants by offering quality service and competitive rent.
Global retail e-commerce is expected to be a $25 trillion business this year, and today one of the companies that has built a set of tools to help larger enterprises to sell to consumers online has raised a large growth round to meet that demand. Commercetools, a German startup that provides a set of APIs that power e-commerce sales and related functions for large businesses, has raised $145 million (€130 million) in a growth round of funding led by Insight Partners, at a valuation that we understand from a close source is around $300 million.
The funding comes at the same time that commercetools is getting spun out by REWE, a German retail and tourist services giant that acquired the startup in 2015 for an undisclosed amount.
The route the company took after that is a not-totally-uncommon one for tech startups acquired by non-tech companies: commercetools had been acquired by REWE as part of a strategy to take some of its own e-commerce tech in-house, but commercetools had always continued to work with outside clients and has been growing at about 110% annually, CEO and co-founder Dirk Hoerig said in an interview.
Current companies include Audi, Bang & Olufsen, Carhartt, Yamaha and some very big names in retail products and services (including major telco/media brands in the USA that you will definitely know). Ultimately, the decision was taken to bring in outside funding and spin out the businesses as an independent startup once again to supercharge that growth. REWE will remain a significant shareholder with this deal.
Hoerig said that commercetools had raised only around $30 million in outside funding when it was a startup ahead of getting acquired.
Although e-commerce has grown over the last couple of years with slightly less momentum than in previous years given wider economic uncertainty, it continues to expand, and in that growth, we’ve seen a swing back to individual retail brands looking for ways of connecting more directly with customers outside of the third-party marketplaces (like Amazon) that have come to dominate how people spending money online.
That is giving a boost to those providing essentially non-tech businesses the tools to build e-commerce activity by offering “headless” tools that are attached to front-end systems designed by others.
Shopify — coincidentally, also backed by Insight when it was still a private company — focuses more on providing e-commerce tools by way of APIs to medium and smaller customers, and it has ballooned to some 800,000 customers. Commercetools, in contrast, focuses more on companies that typically generate revenues in excess of $100 million annually, Hoerig said.
Commercetools has no plans to expand to smaller companies — “We have no plan to compete against Shopify,” Hoerig said. Nor is there any strategy in place to extend into logistics, another important component of e-commerce services.
That’s not to say that commercetools doesn’t have a crowded field when it comes to competition, though. Hoerig noted that companies like SAP, Oracle and IBM are typical competitors and are more often already the incumbent provider to large enterprises. Then, there are others like Microsoft, in hot competition with Amazon for cloud customers, also expanding their commerce services for business. Companies typically make the change to replace them with something like commercetools, he said, when they decide they need a “more modern” approach.
In all (if that list alone wasn’t a strong enough hint), the wider market for e-commerce tools is very fragmented.
“Even SAP has only something like a 2% share,” he added.
Today, commercetools offers a range of services, starting at APIs to power the basics of webshops and mobile sites, along with IoT services (“machines buying from machines,” Hoerig noted), powering chatbots, the architecture for running marketplaces, social commerce services (for example, powering selling through Instagram), and augmented reality. It currently integrates with Adobe, Frontastic, Bloomreach and Magnolia.
Commercetools plans to use the funding to continue expanding its business in North America and other parts of the world, as well as to continue building up its B2B2B offering — that is, tools for businesses to sell to other businesses. This is an area that companies like Alibaba are very strong in (and Amazon has been also growing its business), and the idea is to provide tools to let companies sell on their own sites either as a complement to, or to replace, third-party marketplaces.
Another area where it will continue to figure where it can play better is in the development of better online-to-offline technology.
Richard Wells and Matt Gatto of Insight are both joining the board with this deal.
“With a strong track record of investing in retail software leaders, we are excited to have the opportunity to invest in commercetools and help them scale up internationally,” said Wells in a statement. “In our opinion commercetools represents the next wave of enterprise commerce software and has the potential to unlock powerful innovation and growth within the e-commerce sector.”
Smartphone maker Vivo, broadcaster CCTV, and internet giant Tencent said today they are suspending all cooperation with the National Basketball Association, becoming the latest Chinese firms to cut ties with the league after a tweet from a Houston Rockets executive supporting Hong Kong’s pro-democracy protesters offended many in the world’s most populous nation.
Vivo, which is a key sponsor for the upcoming exhibition games to be played in Shanghai and Shenzhen this week, said in a statement on Chinese social networking platform Weibo, that it was “dissatisfied” with Rockets General Manager Daryl Morey’s views on Hong Kong.
In a tweet over the weekend, Morey voiced his support for protesters in Hong Kong. He said, “Fight for freedom, stand with Hong Kong.” Even as he quickly moved to delete the tweet and the NBA attempted to smoothen the dialogue, Morey’s views had offended many in China, which maintains a low tolerance for criticism of its political system.
In a statement, the NBA said it was “regrettable” that Morey’s views had “deeply offended many of our friends and fans in China.” This stance from the NBA, which has grown accustomed to seeing its star players speak freely and criticize anyone they wish including the U.S. president Donald Trump, in turn, offended many.
— Ted Cruz (@tedcruz) October 7, 2019
Earlier today, Chinese state broadcaster CCTV said it was also suspending broadcasts of the league’s games to be played in China.
In a statement today, NBA Commissioner Adam Silver tried to steer the league from the controversy. “It is inevitable that people around the world — including from America and China — will have different viewpoints over different issues. It is not the role of the NBA to adjudicate those differences. However, the NBA will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way,” he said.
China remains a key strategic nation for the NBA. According to official figures, more than 600 million viewers in China watched the NBA content during the 2017-18 season. The league’s five-year partnership with Chinese tech giant Tencent for digital streaming rights of matches is reported to be worth $1.5 billion.
In a statement issued today, Tencent Sports said it was “temporarily suspending” the pre-season broadcast arrangements. Over the weekend, Chinese sportswear maker Li-Ning Company and Shanghai Pudong Development Bank suspended their cooperation with Houston Rockets team.
Users on Twitter reported today that e-commerce giants Alibaba and JD.com appear to have taken a stand, too. Searches in Chinese for “Houston Rockets” and “Rockets”, which previously surfaced NBA franchise products, now return no results.
In an unrelated event, several Chinese services banned an episode of satirical animated show “South Park” last week. In the episode, titled “Band in China”, the show criticized China’s policies on free speech and U.S. corporates’ efforts to bow down to the world’s most population nation to avoid any repercussions.
In a statement on Monday, South Park creators issued a mock apology. They said, “like the NBA, we welcome the Chinese censors into our homes and into our hearts. We too love money more than freedom. Long live the Great Communist Party of China! May this autumn’s sorghum harvest be bountiful! We good now China?”
Annoy a communist. Watch South Park.
— Ted Cruz (@tedcruz) October 7, 2019
There’s been a heap of China in Africa coverage over the last decade, but very little of it is focused on tech. In part, because the country’s engagement with African startups is light compared to its deal-making on infrastructure and commodities. Now, that all looks to be shifting.
TechCrunch has tracked moves by a number of Chinese actors in Africa’s tech sector over the past year. This could signal the next chapter in China’s influence in Africa — one more digital than bricks and mortar.
To the former, the government of China has designated Africa a strategic priority in its foreign relations and has pursued policies and programs accordingly.
Ma will continue serving on Alibaba’s board until its annual general shareholders’ meeting next year. He also remains a lifetime partner of Alibaba Partnership, a group drawn from the senior management ranks of Alibaba Group companies and affiliates that has the right to nominate (and in some situations, appoint) up to simple majority of its board.
Ma said in last year’s announcement that he plans for his departure from Alibaba Group to be very gradual: “The one thing I can promise everyone is this: Alibaba was never about Jack Ma, but Jack Ma will forever belong to Alibaba.”
Ma left Alibaba’s CEO position in 2013 and was succeeded first by Jonathan Lu. In 2015 Lu was replaced by Zhang, the company’s former COO. As its CEO and now its chairman, Zhang has taken Alibaba’s reins as it copes with a slowdown in China’s e-commerce market after a decade of explosive growth. The online retail landscape also now includes new players like Pinduoduo, which have gained an advantage by focusing on smaller cities, important growth markets for Internet companies.
One interesting fact about the day Ma chose for his retirement as chairman is that it is Teachers’ Day in China. Ma is a former English teacher who is still nicknamed “Teacher Ma” and has said that he plans to devote time to education philanthropy.
The global smart speaker market grew 55.4% in the second quarter to reach 26.1 million shipments, according to a new report from Canalys. Amazon continued to lead the race, accounting for 6.6 million units shipped in the quarter. Google, however, fell to the third spot as China’s Baidu surged ahead. Baidu in Q2 grew a sizable 3,700% to reach 4.5 million units, overtaking Google’s 4.3 million units shipped.
China’s market overall doubled its quarterly shipments to 12.6 million units, or more than twice the U.S.’s 6.1 million total. The latter represents a slight (2.4%) decline since the prior quarter.
Baidu’s growth in the quarter was attributed to aggressive marketing and go-to-market campaigns. It was particularly successful in terms of smart displays, which accounted for 45% of the products it shipped.
“Local network operator’s interests on the [smart display] device category soared recently. This bodes well for Baidu as it faces little competition in the smart display category, allowing the company to dominate in the operator channel,” noted Canalys Research Analyst Cynthia Chen.
Meanwhile, Google was challenged by the Nest rebranding in Q2, the analyst firm said.
The report also suggested that Google should to introduce a revamped smart speaker portfolio to rekindle consumer interest. The Google Home device hasn’t been updated since launch — still sporting the air freshener-style looks it had back in 2016. And the Google Home mini hasn’t received much more than a color change.
Amazon, by comparison, has updated its Echo line of speakers several times while expanding Alexa to devices with screens like the Echo Spot and Show, and to those without like the Echo Plus, Echo Dot, Echo Auto, and others — even clocks and microwaves, as sort of public experiments in voice computing.
That said, both Amazon and Google turned their attention to non-U.S. markets in Q2, the report found. 50% of Amazon’s smart speaker shipments were outside the U.S. in Q2, up from 32% in Q2 last year. And 55% of Google’s shipments were outside the U.S., up from 42% in Q2 2018.
Beyond the top 3 — Amazon, Baidu and now No. 3 Google — the remaining top 5 included Alibaba and Xiaomi, with 4.1 million and 2.8 million units shipped in Q2, respectively.
The rest of the market, which would also include Apple’s HomePod, totaled 3.7 million units.