What's driving the tech crackdown in Asia?

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](.  ---------------------------------------------------------------  Written by Simon Huang  Journalist  Hello {NAME} Last week, a colleague brought up a story I wrote a couple of years back, and I actually forgot that I had written it. But the one I won’t forget is a [story]( I did on the tightening regulatory landscape faced by tech giants in Southeast Asia. It was the third piece I had ever written for Tech in Asia. Shortly after it was published in October 2020 - time really does fly - Ant Group’s IPO was suspended, ushering in an era of crackdowns on big Chinese tech companies by the country’s regulators. This week’s featured story can be viewed as a sequel to that 2020 piece. It looks at what has happened in the ecosystem since then, with other Asian countries such as India and Indonesia upping the ante. More importantly, it looks at why this enhanced regulatory scrutiny is happening and what the implications are. The rise of new technologies like genAI will cause even greater disruptions to society, and lawmakers in the European Union [passed new rules]( to regulate AI just last week. Fast-moving tech founders may view regulation as a hassle or, worse, an impediment to their plans. However, if they fail to ride the tide, they may find their companies subject to value-destroying penalties. -- Simon  ---------------------------------------------------------------  THE BIG STORY [Asian tech feels the chill as regulators blow cold]( In China, domestic and external challenges have reordered national priorities, with politics trumping the economy. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Next stop: IPO: Used-car marketplaces Carsome and Carro are both preparing to go public. The former has [hired Eric Chan]( formerly a senior executive from car distributor Jardine Cycle & Carriage (C07, SGX), to serve as its group president and COO. Meanwhile, Malaysia’s MyTukar has recently [rebranded to Carro]( naming itself after its parent company. Carro co-founder and CEO Aaron Tan said that the group is “IPO-ready and in a position to list…as soon as it becomes realistically possible.” Things seem to be looking up for the sector. For example, US-listed Carvana Co (CVNA, NYSE) has seen its shares rise by over 10x over the last year, having recovered from the brink of bankruptcy. However, its shares are still down by 79% from their August 2021 peak. 2️⃣ Game on, Ali: Chinese tech giant Alibaba (BABA, NYSE) is making a [US$1.1 billion bet on South Korea]( over the next three years, building out a logistics network in the country to provide speedy deliveries. The move will bring it into direct competition with local champion Coupang (CPNG, NYSE), which has proved that it can run a profitable ecommerce platform in South Korea. In 2023, Coupang’s adjusted net income for the year was [US$465 million]( after adjusting for a non-cash tax benefit. While Alibaba certainly has the resources to mount a challenge, its record outside of China has been mixed. In Southeast Asia, its subsidiary Lazada squandered an early lead and is now playing catch-up to Sea Group’s (SE, NYSE) Shopee. The Korean market is fairly concentrated, with the top two players (Coupang and Naver Shopping) having a [65% share](. There’s always a chance that Alibaba can be a disruptor, but we’re not holding our breath. 3️⃣ Toppan breaks ground: Toppan Holdings (7911, TYO), the global printing company, doesn’t seem like a business we’d typically cover. However, it also produces substrates used in the manufacturing of semiconductors, which are all the rage due to the rise of cutting-edge tech like genAI that has fueled huge demand for chips. Toppan is [building]( a factory in Singapore to produce semiconductor packaging materials. It will begin operations in 2026 and is anticipated to create hundreds of new jobs. This is its first investment in a plant outside of Japan that can produce these substrates. Chip manufacturer Broadcom (AVGO, NDAQ), which is one of Toppan’s top customers, may provide [financial support]( for future expansions. With Toppan’s major clients and partners located in Singapore, building the plant in the city-state made sense and shows how powerful network effects can be.  2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [US$100 million]( The amount Mumbai-listed Nazara Technologies Limited (NAZARA, NSE) has earmarked for global expansion over the next two years. - [3.9%]( The stake South Korea’s JB Financial Group (175330, KRX) is securing in Infina, a Vietnam-based retail investing app. THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. You’ve been warned: Indonesia’s Ministry of Communication and Information [warned]( six foreign-owned online travel agents to register with the ministry or risk punitive measures including being blocked. As of March 14, only Agoda and Airbnb (ABNB, NDAQ) have done so. The other four - Booking.com (BKNG, NDAQ), Expedia (EXPE, NDAQ), Klook, and Trivago - have not. This move comes as the Indonesian government has tightened its oversight of foreign tech companies operating in the country - the requirement for electronic system providers in the private sector to register was [issued in July 2022](. Ultimately, this seems like a small price to pay to access the world’s fourth-biggest population.  That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894