Tech layoffs put the spotlight on outsourcing

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 Shravanth Vijayakumar Journalist Hello {NAME} Mass job cuts in the tech sector have been going on for some time now. In fact, Tech in Asia first spotted the trend in April last year and began keeping tabs on layoff figures across Asia’s startup ecosystem through [our tracker](. Since we started compiling the data, more than 152,000 pink slips have been handed out in the region. That provides for quite a grim reading, even against the backdrop of high inflation, rising interest rates, and an uncertain macroeconomic climate. However, one person's loss is another’s gain: Singapore-headquartered TDCX (TDCX, NYSE) is keen to make the most of the abundance of top tech talent currently in the labor market. Freed from the intense competition of luring top-tier workers against deep-pocketed rivals, the business process-outsourcing (BPO) firm has grown its workforce by over 33% between Q3 2021 and Q3 2022. It has thrived by prioritizing customers from the “new economy,” which refers to high-growth tech firms with an “employee-lite, nimble business model,” and by placing an emphasis on revenue-generating functions such as customer experience and digital marketing. Further, the profit-making company expects up to a 21% rise in annual revenue. In today’s featured piece, my colleague, Melissa, sits down with Laurent Junique, founder and CEO of TDCX, to uncover how the firm has flourished amid market chaos by providing multilingual support across various sales touchpoints and to discuss why Malaysia – TDCX’s largest revenue contributor – has been a "powerhouse" for outsourcing. Further, the premium story explores potential M&A opportunities for TDCX and the challenges it faced last year, while also touching on why Southeast Asia and Asia Pacific will remain central to the long-term growth of the BPO. -- Shravanth  ---------------------------------------------------------------  THE BIG STORY [Amid tech layoffs, NYSE-listed TDCX eyes outsourcing opportunity]( As tech companies face a reckoning, will the Singapore-based BPO firm’s bet on the “new economy” pay off? ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, activist investor pressure and more. 1️⃣ Different industries, similar results: It's perhaps an indicator that all is not well in the macro environment that firms in different pockets of the tech space are not only laying off workers but also downsizing entire operations. Coinbase (COIN, NDAQ), the largest crypto exchange in the US by trading volume, is conducting a review of its business in Japan after [halting]( its operations in the country. Meanwhile, ​​JD.id, a joint venture by China’s JD.com (JD, NDAQ) and Provident Capital, [has shut]( its logistics arm, JDL Express Indonesia, entirely. Sea Group (SE, NYSE) has been taking aggressive measures to rein in costs and is now reportedly looking [to sell]( indie games developer Phoenix Labs. Further, Shopee, its ecommerce unit, [has shuttered]( its platform in Poland.  See also: [Shopee’s success in Brazil justifies global expansion]( However, it’s not all doom and gloom for Sea as Shopee [edged out]( other competitors as the most preferred liveselling platform among Ninja Van’s ecommerce sellers in Southeast Asia. 2️⃣ Uncovering Grab’s (GRAB, NDAQ) secrets: The Singapore-based behemoth has [extended]( its lead in Southeast Asia’s food delivery market, according to a report from Momentum Works. Grab accounted for 54%, or US$8.8 billion, of Southeast Asia’s food delivery gross merchandise value in 2022 – a 16% jump from in 2021. Having contributed 19% to the food delivery GMV in the region, Foodpanda, a unit of Delivery Hero (DHER, ETR), ranked a relatively distant second. Grab’s lead is not without merit as [this Tech in Asia video]( explains: The firm manages a complex juggling act with 5 million drivers and delivery partners on its payroll across Southeast Asia to serve over 33 million customers. Further, Tech in Asia also [lays bare the subtle secrets]( of Grab’s design and how it leverages a cultural lens to help invoke a memorable emotional experience for its users. Not one to rest on its laurels, Grab has also been ramping up efforts in its other businesses recently. For its ride-hailing service, the company is [offering cash advances]( of up to about US$7,600 to its driver partners, while its financial services are likely to receive a boost from the firm’s [expanded partnership]( with Malaysia’s GHL as it extends the super app’s buy now, pay later solution for offline merchants. 3️⃣ Blibli (BELI, IDX) goes where rivals won’t: While the online-to-offline model for Indonesia’s ecommerce firms has been mainly through a “Mitra” service, where the platform sells wholesale items and digital goods to roadside mom-and-pop stores via a dedicated app, Blibli is [charting its own path]( to omnichannel supremacy. The Djarum-backed marketplace has carved itself a niche among affluent consumers in Indonesia’s cutthroat ecommerce space. That’s a major reason why the ecommerce firm bagging the status of Apple authorized reseller generated quite a buzz in Southeast Asia's largest economy. With the other five retailers in Indonesia with this status primarily operating offline, there is potentially a lucrative opportunity at play here for Blibli, given the archipelago is the world’s fourth-largest smartphone market. While incumbents such as Erajaya (ERAA, IDX) and Mitra Adiperkasa (MAPI, IDX) will probably have a say from an offline-retailing perspective, one firm that won’t be is Apple (AAPL, NDAQ) itself, as the world’s largest company doesn’t have an Apple Store in Indonesia. However, the same can’t be said about Apple’s [plans in Malaysia](. The iPhone maker has started recruiting staff such as store managers, store leaders, and technical specialists in Malaysia, making the nation the third Southeast Asian market where Apple will have an offline retail presence. 2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [4x]( That’s how much more Capital A (CAPI, KLSE) CEO Tony Fernandes believes his sprawling airline-to-super-app empire will be worth by the end of 2023. Despite the CEO’s optimism, Capital A has hit several roadblocks as it looks to shed its legacy in aviation to pursue tech hegemony, and plenty of questions remain as the bears begin to circle the ambitious firm.  - [1.8 million]( That is the number of new subscribers from the Asia Pacific that Netflix (NFLX, NDAQ) added in Q4 2022. Despite posting a revenue of US$7.8 billion in the quarter - exceeding its initial projections - the streaming titan’s average revenue per membership in the region dipped 17% to US$7.69 in for FYE 2022. THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. C-suite changes, and smuggling onions Finance may not be the sexiest subject, but its practitioners are currently hot property in the job market, according to executive-search firm Spencer Stuart. CFOs are [in demand]( as the era of easy money ended with high inflation and rising interest rates. Perhaps then it shouldn’t come as a surprise to learn of P Ganesh’s latest industry switch. The finance chief of agricultural machinery firm Tractors and Farm Equipment has recently [been named]( CFO of Indian beauty marketplace Nykaa (FSNE, NSE). Meanwhile Gojek, a unit of GoTo Group (GOTO, IDX), will be hoping fifth time's the charm after [appointing]( Sumit Rathor as its new head in Vietnam, marking the latest change to the same post within just four years. In perhaps the biggest C-suite shuffle of the week, Toyota (7203, TYO), the world’s largest car manufacturer, will see its chief executive Akio Toyoda [step down]( as head of the company, which his grandfather founded, and hand over the reins to Koji Sato, the leader of its Lexus luxury brand. Lastly, we’ll leave you with [a story]( that highlights how uncontrolled inflation leads to crazy things such as the rise of thriving onion smuggling rackets as the staple becomes a luxury in the Philippines. 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 © 2023 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894