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By Me and a Colleague Wed.: Alibaba to Invest $1 billion in Southeast Asia-Focused E-Commerce Startup Lazada

2016-04-15lazada

The story begins:

Chinese Internet giant Alibaba Group Holding Ltd., in its biggest overseas acquisition to date, said Tuesday it would pay about $1 billion for a controlling stake in Singapore e-commerce startup Lazada Group, betting on growth in populous Southeast Asia.

The acquisition of Lazada—which sells everything from rice cookers to smartphones and operates e-commerce platforms throughout Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam—comes as Alibaba has been using its $3.7 billion in free cash flow to expand into e-commerce, logistics and media, as well as entertainment both at home and abroad.

You may recall back in 2014 I wrote about Lazada’s operations in Indonesia, Southeast Asia’s largest market. (I snapped the image above at a Lazada warehouse outside Jakarta.) The nut graf:

Challenges are par for the course at Lazada Indonesia, founded in Jakarta in 2012 and partly funded by Rocket Internet AG, a Berlin-based tech incubator that went public last month. Indonesia’s e-commerce market is still small, and Lazada had to build a lot of what it needed from scratch. But the company is plowing ahead so it can get a head start in the country over international giants like Amazon.com Inc., Alibaba Group Holding Ltd. and eBay Inc.

Lazada already gets more visitors than any other business-to-consumer site in Indonesia, according to data from research firm SimilarWeb. Lazada’s site saw 6.6 million visitors a month, compared with 3.9 million for Alibaba’s marketplace website AliExpress.com and 2.2 million for eBay, according to the most recent data available from brokerage UBS.

 

By Me and a Colleague Yesterday: Blackstone Buying HP Enterprise’s Stake in Indian Outsourcing Firm Mphasis for $825 million

The story begins:

Hewlett Packard Enterprise Co. said on Monday it planned to sell its majority stake in Indian outsourcing firm Mphasis Ltd. for about $825 million to Blackstone Group LP, as the U.S. technology company seeks to shore up capital following a recent decline in revenue.

Blackstone will purchase at least 84% of HP Enterprise’s majority stake in Mphasis for 430 rupees ($6.49) a share, showing the private-equity firm’s optimism in Mphasis’s prospects even as the industry faces technological challenges.

Besides buying HP Enterprise’s stake, Blackstone said Indian takeover laws require it to buy 26% of Mphasis’s shares via a mandatory tender offer to the company’s public shareholders. Depending on the demand for that offer, the private-equity firm said it could end up spending as much as $1.1 billion on its investments in Mphasis.

HP Enterprise said its decision to sell its position in Bangalore, India-based Mphasis aligns with the company’s capital allocation priorities, which it has said include directing investments toward developing new products and services. The company also has said it would pursue more mergers and acquisitions.

By Me Last Week: Tech Talent is Returning to India

2016-03-02RETURNEES

I had a story Wednesday on the front page of our Business & Tech section. You can see it in this image, under the headline “India Welcomes Home Tech Talent.”

It’s about Indian-born entreprenuers who are increasingly returning to their home country to build startups.

The piece, available online here, begins:

BANGALORE, India—Last year, Abhinandan Balasubramanian quit his job at a London-based financial-technology company. The startup scene in his native India was booming, and he wanted in.

The 25-year-old Mr. Balasubramanian moved to Mumbai and in December launched his own business there: Altflo, a global online marketplace for assets such as real estate and shares in investment funds.

Basing Altflo in India was an easy decision, Mr. Balasubramanian said. “The cost of scaling the company is much lower in India,” he said. Office space and talent are “multiples cheaper than in the U.K.”

Lured by a flood of venture-capital funding, relatively inexpensive labor and the size of the potential market in the world’s second-most-populous country, entrepreneurs and technology workers with Indian roots have been coming home in increasing numbers.

My Recent A-hed on James McGowan, the Globe-Trotting McDonald’s Obsessive

2016 02 20 ahedNP

Those of you who follow me on Twitter and/or subscribe to my email newsletter know that the week before last, my first A-hed* ran on the front page of The WSJ.

(In the image above, showing the paper, below the fold, it’s on the bottom right.)

The story — accessible to all online here — is about James McGowan, a guy in Bangkok whose passion is traveling the world, sampling and blogging about regional variations of McDonald’s items. It begins:

SINGAPORE—When James McGowan walked into a McDonald’s Corp. restaurant in downtown Singapore one recent evening, he wasn’t interested in a Big Mac. Instead, he placed an order for a limited-edition hamburger with caramelized onions and cheddar cheese, truffle-flavored french fries and a special red velvet McFlurry frozen drink.

On a scale of one to five, “I’ll probably give a 3 for the burger,” said Mr. McGowan, noting that it lacked sufficient onions. “The fries are better than I expected. They might be a 3.5 or 4.”

Mr. McGowan may well be the chain’s toughest customer. For the past four years, the 28-year-old has crisscrossed the globe to indulge his passion: Sampling and blogging about the various national iterations of McDonald’s dishes. Thus far, he says he has visited about 53 countries, penning 340 detailed reviews.

The story generated a lot of traffic on our site, which I expected. But I was not prepared, I must say, for McGowan to become a global sensation.

After our story ran, his quest was picked up by outlets as wide ranging as Business Insider, The Straits Times, the Toronto Sun, TODAY.com, and Slate in French.

Papers in the UK, especially, gobbled up the story: The Independent, The Mirror, and even The Daily Mail wrote about McGowan.

Other corporate and tech-focused stories I’ve written have been picked up far and wide before, but this was the first time a feature of this kind has received so much attention. Fun stuff, indeed.

*A-heds are WSJ the often humorous, off-beat stories that run at the bottom of our front pages. Here’s more on the history of A-heds; there’s even a book about them.

By Me Last Week: Twitter Outshines Facebook — in Japan

The story begins:

Twitter Inc. is now bigger than its rival Facebook — in Japan, at least.

A week after quarterly earnings fueled investors’ concerns that Twitter’s user growth has stalled, the company for the first time Thursday broke out its user numbers for a country outside the U.S., saying it had 35 million monthly active users in the world’s third-largest economy as of the end of last year.

Facebook, a major competitor for advertising dollars, had 25 million monthly active users in Japan as of the end of 2015, a Facebook spokeswoman said Thursday.

Twitter’s user base has long been compared to Facebook’s, which is much larger globally. Twitter last week said 320 million users signed into the platform at least once a month in the fourth quarter, the same as in the previous three months. Facebook, by comparison, said it had 1.59 billion monthly active users as of the end of last year, up 3% from the previous three months.

It was the first time Twitter’s closely watched user growth flatlined from the previous three-month period. More troubling: the number of users in the U.S. fell to 65 million from 66 million.

Click through to read the rest.

By Me Last Week: GrabTaxi Is Becoming Grab

2016 02 01 grab

The story begins:

Uber Technologies Inc.’s main rival in Southeast Asia wants people to know that it—like the San Francisco, Calif. startup—offers not just taxis, but private cars.

Singapore-based GrabTaxi Holdings Pte. Ltd. said Thursday it is shortening its name to simply Grab. The goal: to highlight that in addition to allowing users to book taxis in 28 cities across Singapore, Indonesia, Malaysia, Thailand, the Philippines and Vietnam, it also offers newer services like private cars—not to mention car pooling and even motorbike rides.

The re-branding comes as competition heats up for new users in the populous region. The U.S.’s Lyft Inc. in December said it was teaming up with GrabTaxi — er, make that Grab — and ANI Technologies Pvt. Ltd.’s Ola in India to permit users of each app to hail rides from drivers of the other apps while traveling abroad. That gives the alliance more leverage to compete against Uber, a global titan that has expanded its ride sharing platform, which includes private cars and taxis in some markets, to more than 370 cities across 68 countries since launching in the U.S. in 2010.

Like ‘Making a Murderer’? Read This New Yorker Story

2016-01-28MAM

I’ve Tweeted about this and mentioned it in this week’s Newley’s Notes, and wanted to highlight it here, as well.

The Netflix documentary series “Making a Murderer” has been a smash hit, setting the Internet on fire, bringing renewed fame to the subject’s defense attorneys, and inspiring amateur sleuths the world over.

I have watched it. It is highly compelling.

The most imformative story I have read on the series is this Kathryn Schulz New Yorker piece.

In short, she points out that as a documentary, “Making a Murderer” falls short because it argues, rather than investigates:

Instead, the documentary consistently leads its viewers to the conclusion that Avery was framed by the Manitowoc County Sheriff’s Department, and it contains striking elisions that bolster that theory. The filmmakers minimize or leave out many aspects of Avery’s less than savory past, including multiple alleged incidents of physical and sexual violence. They also omit important evidence against him, including the fact that Brendan Dassey confessed to helping Avery move Halbach’s S.U.V. into his junk yard, where Avery lifted the hood and removed the battery cable. Investigators subsequently found DNA from Avery’s perspiration on the hood latch—evidence that would be nearly impossible to plant.

Perhaps because they are dodging inconvenient facts, Ricciardi and Demos are never able to present a coherent account of Halbach’s death, let alone multiple competing ones. Although “Making a Murderer” is structured chronologically, it fails to provide a clear time line of events, and it never answers such basic questions as when, where, and how Halbach died. Potentially critical issues are raised and summarily dropped; we hear about suspicious calls to and messages on Halbach’s cell phone, but these are never explored or even raised again. In the end, despite ten hours of running time, the story at the heart of “Making a Murderer” remains a muddle. Granted, real life is often a muddle, too, especially where crime is involved—but good reporters delineate the facts rather than contribute to the confusion.

Worth a read.

By Me Last Week: How Apple’s Trying to Win India

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An ad for Apple’s iPhone 6S in the Bangalore, India airport

I was in India recently working on a story about Apple’s strategy to win over consumers in the world’s second-most-populous country.

The piece, which ran last week, begins:

NEW DELHI—Amid concerns that China’s slowing economic growth could sap demand for iPhones, Apple Inc. is increasingly turning its attention to one of the last big countries it has yet to conquer: India.

The Cupertino, Calif., company has been quietly building market share in the world’s second-most-populous nation by boosting advertising, bulking up its distribution network, arranging interest-free phone loans and lowering prices.

On Wednesday, Apple said it has sought the Indian government’s approval to open its own retail stores and sell products online. Apple currently sells its products in India through a network of Indian-owned distribution companies and retailers.

“India has huge potential” for Apple, said Rushabh Doshi, an analyst at research firm Canalys in Singapore.

Click through to read the rest.

With Apple yesterday saying in its quarterly results that iPhone sales have been growing at the slowest pace since the device was introduced in 2007, emerging markets are increasingly important for the tech titan.

That’s because hundreds of millions of people, many of them young, are upgrading smartphones or buying them for the first time in countries like India, Indonesia and Brazil — while at the same time some larger markets, like China, may be getting saturated.

(Price, of course, is an issue in India: The annual GDP per capita is $1500, and Apple is trying to sell phones that cost upwards of $1000 there, though some models also cost less than half that. But as I wrote in the story, Apple offers payment plans, and still sells older, less expensive models like the iPhone 4S and 5S in the country.)

In the conference call for Apple’s earnings, CEO Tim Cook had this to say about India:

  • Cook also mentions India, saying the demographics looks good for Apple. The population is young, and Apple is putting a lot of resources into building there.

And:

To TimmyG: Cook spent a long time talking about India — longer than I was able to keep up with. But his point was yours: that this big and growing nation is made up of a young population.

Indeed. Stay tuned to see how Apple fares in the quarters and years ahead.

By Me and a Colleague: Islamic State Using Telegram Messaging App to Communicate with Radicals in Indonesia, Malaysia

The story begins:

Communications app Telegram Messenger is in the spotlight after the deadly terrorist attacks in Jakarta last week, with experts in Indonesia and Malaysia saying Islamic State radicals in Syria have used the platform to recruit members from Southeast Asia.

The revelations underscore both the apparent popularity of the Berlin-based app among members of the terror organization and the challenges it poses to authorities in tracking its private, encrypted chats.

Malaysian police on Saturday said its counterterrorism unit last week arrested four suspects, three of whom were recruited to join Islamic State in Syria by a Malaysian national via Telegram and Facebook Inc.’s social-networking platform.

Telegram, which in November said it blocked 78 of its public channels across 12 languages related to Islamic State, was one of the first apps to explicitly cater to privacy enthusiasts after reports in 2013 alleging widespread surveillance by U.S. intelligence.

Islamic State has used Telegram, a free platform that can be accessed via mobile devices and desktop computers, to disseminate public statements, such as its claim of responsibility for the November attacks in Paris.

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