Josh Horwitz from Quartz joins us in a discussion on Apple’s recent decision to invest in China’s largest ride hailing app, Didi Chuxing and the implications for Uber in their plans to conquer China and the rest of the world. We move beyond the obvious reasons, such as managing their diplomatic relations with the Chinese government, and dive into Apple’s preparation for their entrance into China similar to other automotive makers. In this episode, Josh also takes us through the intricacies of the Chinese government’s regulations of the transportation industry. Last but not least, we also discuss the power players behind Didi and Grab and how traditional “old” money are boiling into technology startups in Asia.
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Analyse Asia with Bernard Leong is a weekly podcast dedicated to the pulse of technology, business & media in Asia. They interview thought leaders and leading industry players and gain their insights to how we perceive and understand the market. Analyse Asia is a content partner of TechNode.
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Notes:
- Josh Horwitz, Writer from Quartz
- What interesting news has Josh been covering in Asia recently? [1:12]
- Alibaba is buying not building its way into Southeast Asia
- Netflix faces rivals in India and Southeast Asia that are better adapted to local realities.
- A brief history of Chinese accounting shenanigans in America.
- What interesting news has Josh been covering in Asia recently? [1:12]
- The On-Demand Transportation Wars [2:09]
- Since our last conversation, what’s the status of the industry’s dominant players? (Uber, Didi, Ola and Grab/Go-Jek) [2:28]
- Grab and Go-Jek founders share a common story [3:30]
- Uber vs Google Waze: What happened when self-driving cars met on-demand transportation? [4:38]
- Apple’s US$1B investment into Didi and Didi vs. Uber in China [8:34]
- Why did the deal happen? What are the possible reasons? [8:58]
- Is Apple’s investment in Didi really an investment into its own future?
- Does Didi need Apple? [13:22]
- A symbolic appeasement with the Chinese government or a way to buy “guanxi”?
- The Chinese government has regulated the automotive industry since the 1980s and places strict restrictions on automotive OEMs with a 50:50 joint venture. [15:30]
- Example of 50:50 joint ventures in China’s automotive industries: car companies with state owned enterprises in China. For example, Ford has a joint venture with Changan [17:00]
- How Apple plans to enter China by leveraging a partnership
- What does Apple gain from investing in Didi? Counter example: Tesla is facing problems in China without a partner to sell their electric cars. [19:11]
- Didi used a varied interest company (VIE) business structure similar to Alibaba – how does that affect its partnership with Apple? [20:00]
- What does this mean for Uber in the online transportation wars? [24:20]
- The power players behind Didi vs. Uber and Grab [27:14]
- Didi: Who is Jean Liu who did the deal with Tim Cook from Apple and Wei Zheng, founder and CEO of Didi? (she’s the daughter of the Lenovo founder, Liu Chuanzhi).
- Uber China: Liu Zhen, director of strategy, is Jean Liu’s cousin.
- Grab’s Anthony Tan is the grandson of the founder of Tan Chong Motors, which owns the exclusive distribution to Nissan, a Japanese automotive company.
- Jerry Yang is an adviser to Uber and did the deal with Alibaba when he was the CEO of Yahoo! [28:50]
- Uber and leasing out cars and controlling the supply chain [29:51]
- Is Grab doing the same thing as Uber in controlling the supply chain with their competitive advantage with Nissan through Tan Chong Motors?
- Does Didi need Apple? [13:22]