Go-Jek buys fintech startup Coins.ph for $72M ahead of Philippines expansion

Ride-hailing startup Go-Jek’s expansion into the Philippines ran into problems earlier this month over its ownership structure, but that isn’t deterring the Indonesian company from investing into the market. Today, Go-Jek announced that it has acquired local fintech company Coins.ph through “substantial investment” which gives it a majority stake in the business. The deal is officially […]

Ride-hailing startup Go-Jek’s expansion into the Philippines ran into problems earlier this month over its ownership structure, but that isn’t deterring the Indonesian company from investing into the market.

Today, Go-Jek announced that it has acquired local fintech company Coins.ph through “substantial investment” which gives it a majority stake in the business. The deal is officially undisclosed, but TechCrunch understands from two industry sources that Go-Jek paid $72 million.

The startup claims five million registered users in the Philippines, where it offers a mobile wallet that covers payments, phone top-up, bill payment, public transport rides and more. Post-deal, the company will continue to run as usual but while tapping into Go-Jek’s resources and experience.

Ron Hose, CEO and co-founder, told TechCrunch that Coins.ph was in the process of raising a new round of funding when the Go-Jek opportunity presented itself.

“We had to make a decision on how we want to continue growing our business, and we felt like ultimately together with Go-Jjek we could build something that is overall bigger and better for our customers,” he said in a phone interview.

Coins.ph started out offering crypto exchange services, but it pivoted to a broader focus on fintech including mobile payments and financial services in recent times. The company has raised $10 million from two investments and it counts Naspers, Global Brain, Wavemaker, Beenext and Pantera Capital among its backers.

The Coins.ph team

The acquisition is clearly a strategic one for Go-Jek, which is reportedly valued at around the $9 billion mark.

Last year, it expanded beyond Indonesia — where it claims to be the dominant player — for the first time. Its overseas moves saw it enter Vietnam, Thailand and Singapore, with the Philippines named as another proposed destination, although it has taken longer than planned with no launch yet.

Fintech doesn’t sound like an obvious point of entry for a ride-hailing company, but, in Southeast Asia, ride-hailing and fintech area peas in a pod. Part of Go-Jek’s success in Indonesia was the rise of its GoPay service, which enables money transfers, offline payment and even insurance and micro-loans. The company said half of the transactions on its network in Indonesia are made via the payment service.

That approach has been copied by Grab, Go-Jek’s arch-rival, which is rolling out its Grab Pay service across Southeast Asia’s biggest six countries with plans to enter areas like loans, remittance and insurance with partners such as Chinese digital insurer ZhongAn.

In that spirit, Go-Jek said today that Coins.ph will work closely with GoPay to “to encourage a cashless
society and enhance access to financial services in the Philippines.”

Coins.th, the company less developed business in Thailand, is likely to continue to operate as it currently is now, Hose said. That Thai entity has fewer locations than the Philippines business so it is likely less appealing to Go-Jek, despite its expansion to Thailand.

The GoPay collaboration is likely to mean the rollout of services such as insurance, loans and other financial services as well as, of course, deepening Coin.ph’s userbase in the Philippines, a country with a population of over 105 million people.

“With the second largest population and a strong domestic economy, the Philippines is one of the most exciting markets in Southeast Asia and through this partnership with Coins.ph, we are humbled to take part in the country’s digital payments transformation,” Go-Jek CEO Nadiem Makarim said in a statement

“Today’s announcement marks the start of our long-term commitment to the Philippines and a continuation of our mission to use technology to improve everyday lives and create a positive social impact,” he added.

There’s plenty of competition on that front, though.

Grab is readying its GrabPay entry and well-funded Oriente is present, but already Alibaba has invested in payment and fintech company Mynt while Tencent, China’s other internet superpower and a Go-Jek investor, backed rival service Voyager through a $215 million deal. Now Go-Jek, which is readying a $2 billion investment round of its own, is entering the fray. This year promises to be an interesting one for fintech in the Philippines.

Past Go-Jek acquisitions have included offline payment firm Kartuku, payment gateway Midtrans, payment and lending network Mapan — announced all in one go. India, it has gone after engineering talent with acquihire deals for startups C42, CodeIgnition and Piant, which have helped create its Bangalore-based tech hub.

Indonesian e-commerce unicorn Bukalapak raises $50M

The chances are you may be familiar with Tokopedia, especially after it commanded a $7 billion valuation last November when it raised $1.1 billion from investors like Alibaba and SoftBank’s Vision Fund, but fewer people outside of Indonesia are aware of another sizable local online retail unicorn: Bukalapak. Smaller than Tokopedia in size, the company is […]

The chances are you may be familiar with Tokopedia, especially after it commanded a $7 billion valuation last November when it raised $1.1 billion from investors like Alibaba and SoftBank’s Vision Fund, but fewer people outside of Indonesia are aware of another sizable local online retail unicorn: Bukalapak.

Smaller than Tokopedia in size, the company is valued at $1 billion — it became Indonesia’s fourth unicorn one year ago. The country, which is Southeast Asia’s largest economy and has a population of over 260 million, also counts Tokopedia, Go-Jek and Traveloka in the billion-dollar club.

Founded in 2010, Bukalapak claims an impressive two million orders per day and 50 million registered users. On the seller side, it said its core e-commerce business covers products from four million SMEs, 500,000 kiosk vendors and 700,000 ‘independent’ micro-businesses in Indonesia. Bukalapak means ‘open a stall’ in Indonesia’s Bahasa language, and anyone can open a shopfront on the platform.

This week, Bukalapak landed another notable funding milestone after it raised $50 million Series D round from the Mirae Asset-Naver Asia Growth Fund, a joint vehicle operated by Korean mutual fund Mirae Asset and Naver, the firm whose businesses include popular messaging service Line. This is the first time Bukalapak has disclosed the size of an investment in its business, although it did not give an updated valuation. The startup counts Alibaba’s Ant Financial, Indonesia telco Emtek, Sequoia India and Singaporean sovereign fund GIC among its existing backers.

Bukalapak is one of Indonesia’s leading online commerce platforms with four million registered users, a claimed two million daily transactions and a valuation of more than $1 billion

Bukalapak said it plans to use its new funds to grow opportunities for its SME retail partners and build out its tech platform, that’s likely to mean digital services such as insurance and a mobile wallet.

The company made a major push last year to partner with local ‘warung’ kiosk store retailers — who sell items much like street vendors — in a bit to differentiate itself from Tokopedia, which is much like Alibaba’s Taobao service for Indonesia, and develop an offering for consumers.

Beyond its e-commerce marketplace, Bukalapak also offers streaming and fintech products.

New policy puts revenue squeeze on China’s payments giants

The era that saw China’s mobile payments providers making handsome interest returns on client money has officially ended. Starting this week, non-bank payments companies must place 100 percent of their customer deposit funds under centralized, interest-free accounts as Beijing moves to rein in financial risks. In the past, third-party payments firms were allowed to hold […]

The era that saw China’s mobile payments providers making handsome interest returns on client money has officially ended.

Starting this week, non-bank payments companies must place 100 percent of their customer deposit funds under centralized, interest-free accounts as Beijing moves to rein in financial risks. In the past, third-party payments firms were allowed to hold pre-paid sums from buyers for a short period of time before transferring the money to merchants. This layout allowed companies like Alibaba’s payments affiliate Ant Financial and Tencent to earn interest by depositing customer money into bank accounts.

Exactly how much money Ant and Tencent derived from these deposits is unclear. Both companies declined to comment on the policy’s revenue implications but said they have complied with the rules and finished transferring all customer reserve funds to a centralized clearing system.

Here are some numbers to help grasp the scale of the lucrative practice. The central bank gave a two-year window for all payments firms to complete the transition as it gradually raised the reserve funds ratio, which climbed to 85 percent in November. By then, total customer funds deposited by non-bank payments companies into central custodians hit 1.24 trillion yuan ($180 billion), while another estimated 260 billion yuan was yet to come under regulated control, shows data published by the People’s Bank of China.

Collectively, the giants account for more than 90 percent of China’s third-party mobile payments and 34 percent of all third-party, internet-based payments (which include both PC and mobile transactions), according to research firm Analysys.

While the regulatory control surely has measurable revenue implication on payments firms, some experts point to another adverse consequence. “Now that payments companies are no longer putting deposits into their [partnering] banks, they lose bargaining power with these banks that charge commissions for handling their mobile payments,” an employee from a major payments firm told TechCrunch on the condition of anonymity.

Tencent doesn’t break down how much it makes from payments but the unit has grown rapidly over the past years while its major income source — video games — took a hit last year. Meanwhile Ant Financial has been diversifying its business to go beyond financial services. It has earnestly marketed itself as a “technology” company by opening its proprietary technologies to a growing list of traditional institutions like banks and insurance companies. Reuters reported earlier that technology services will make up 65 percent of Ant’s revenue in about four years, up from an estimated 34 percent in 2017.

EVs and online marketplaces thrive despite slump in Chinese car sales

China’s massive auto market hit the brakes last year as trade tensions and a softening economy dampened consumer confidence, but one segment soared on account of increasing internet penetration — used car sales. New passenger car sales fell to 23.7 million last year, representing a 4.1 year-over-year drop according to a new report by China’s Association of […]

China’s massive auto market hit the brakes last year as trade tensions and a softening economy dampened consumer confidence, but one segment soared on account of increasing internet penetration — used car sales.

New passenger car sales fell to 23.7 million last year, representing a 4.1 year-over-year drop according to a new report by China’s Association of Automobile Manufacturers, the country’s top auto association. That marks the very first annual decline in the world’s biggest car market since the 1990s.

A few factors were at play. For one, the tit-for-tat U.S.-China trade war has led to a slew of tariffs on U.S. car imports and weighed on consumers. The standoff prompted Tesla to cut prices for Model 3 in China and Jaguar Land Rover to temporarily close a factory after sales plummeted in the country. Internally, China is coping with a cooling economy that has undermined consumer demand across a spectrum of sectors. Regulators have also rolled back a tax-cut scheme on smaller cars that began in 2017.

Despite the overall industry slowdown, electric and hybrid vehicles continued to enjoy a healthy growth rate at 61.7 percent to clock sales of 1.26 million new units. That comes as expected as China is aiming to cut carbon footprints and lead in the global alternative energy revolution by splurging on subsidies for both consumers and manufacturers. But stumbling blocks remain for the budding industry, such as a lack of charging stations. Beijing is also mulling subsidy cuts on EVs to temper overcapacity in the long term.

As consumers tighten their purse strings amid the economic downturn, cheaper secondhand cars become more appealing. China’s Automobile Dealers Association shows that secondhand car sales reached 12.6 million for the first 11 months of 2018, marking a 13 percent growth.

The sector is only half the size of new cars, but a string of e-commerce channels are fueling the industry in a country where in-person transactions were still the norm just a few years ago. For one thing, online marketplaces inject honesty to the car-buying process by claiming to provide more price transparency for customers. A major turning point came in 2017 when China lifted constraints on cross-provincial used car deals, which means customers in less developed regions — many of whom never owned a car before — now have access to a greater variety of models compared to what’s available in their hinterland homelands.

Some of the top players in the space include Didi Chuxing-backed Renrenche, Tencent-backed Guazi and Uxin, which floated on the Nasdaq last year and recently entered a strategic partnership with Alibaba. In 2017, e-commerce transactions accounted for 17.6 percent of overall car sales in the country, a study from Uxin’s research institute found.

“Over the past few years, consumers have become increasingly receptive to buying used cars as a cost-effective alternative to new vehicles. This is particularly the case for consumers in lower-tier cities,” said Kun Dai, founder and chief executive officer of Uxin . “With extremely limited used car selection in most cities, there is a rapidly growing demand for an online platform that expands access to used cars from across the country.”

TikTok is giving China a video chat alternative to WeChat

ByteDance, the world’s most-valued startup, just launched a new social media product under its Douyin brand in what many people see as a serious attempt to challenge WeChat. Tencent has long dominated China’s social networking space with WeChat and QQ. WeChat claims to have one billion monthly active users worldwide, most of whom are in China. […]

ByteDance, the world’s most-valued startup, just launched a new social media product under its Douyin brand in what many people see as a serious attempt to challenge WeChat.

Tencent has long dominated China’s social networking space with WeChat and QQ. WeChat claims to have one billion monthly active users worldwide, most of whom are in China. Its older sibling QQ managed to survive the country’s transition from PC to mobile and still have a good chunk of 800 million MAUs at last count.

Over the years Tencent has drawn contenders from all fronts. Ecommerce behemoth Alibaba was one, whose app “Laiwang” to take on WeChat later pivoted to a Slack-like product for enterprise communication.

Now ByteDance is in the spotlight with its new brainchild, Duoshan. The app comes as a mix of TikTok, which is called Douyin in China, and Snap, to bet on a 5G-powered future in which new generations prefer using ephemeral videos to communicate.

Unlike TikTok, which incentivizes users to follow celebrities and strangers, Duoshan is built for private messaging. It offers a dazzling selection of special effects and filters as most other short-video apps do these days. The twist is that videos disappear after 72 hours to provide stress-free, off-the-cuff sharing, a need that WeChat also noticed and prompted the giant to come up with its own Snap-like Stories feature recently.

Screenshots of Duoshan. Image: ByteDance

“We are seeing more and more Douyin users share their videos through other social media platforms and channels,” Douyin’s president Zhang Nan said in a statement. “With the launch of Duoshan, we are creating our first video-based social messaging app to allow users to share their creativity and interact directly with their family and friends.”

You may not know ByteDance, but its suite of media apps are turning heads all over the world thanks to millions of dollars spent on advertising. TikTok, which swallowed up Musical.ly last year, claims to have more than 250 million daily active users with MAUs reaching 500 million. That solid user base will surely help Duoshan during its initial user acquisition as the app allows easy login for existing Douyin users.

While TikTok is not a direct threat to WeChat — for it’s built for media consumption and WeChat is more of a tool for communication and a platform to run daily errands — Tencent did respond with a dozen of video apps over the past year to play catch-up. Now, Duoshan appears to be going after WeChat’s core — instant messaging.

“We hope WeChat doesn’t see [Duoshan] as a competitor. What they do in essence is to build an ‘infrastructure’. We, on the other hand, is only going after people who are closest to you,” Chen Lin, the newly appointed chief operating officer of ByteDance’s news app Jinri Toutiao said at a press event today.

Two other high-profile entrepreneurs are joining ByteDance to roll out their own social apps today. Smartisan, who backed a WeChat rival that turned out to be a blip, is announcing the product tonight in China. The other challenger is Wang Xin, a pioneer in China’s online video-streaming space who was sentenced to jail in 2016 after being charged with providing easy access to pornography. His take on social media — Matong — is already live and is greeted with such warm reception that its server went down.

Duoshan has got many people excited. Some of the top trending words on Weibo, China’s closest answer to Twitter, today are linked to ByteDance’s move, such as “social”, “waging a war” and “Zhang Yiming,” who founded ByteDance in 2012.

WeChat is quietly ranking user behavior to play catch-up with Alibaba

Over one billion people leave behind trails of information on WeChat every day as they use the messenger to chat, read, shop, hail rides, rent umbrellas and run many other errands. And the Tencent app has quietly started using this type of signal to determine whether a user is worthy of perks such as deposit-free […]

Over one billion people leave behind trails of information on WeChat every day as they use the messenger to chat, read, shop, hail rides, rent umbrellas and run many other errands. And the Tencent app has quietly started using this type of signal to determine whether a user is worthy of perks such as deposit-free renting services.

The rating system, which the company calls the “WeChat Payments Score” in Chinese, soft-launched last November across eight cities and has been piloting on a small number of apps. Among them is the Tencent-backed power bank rental service Xiaodian, which waives deposits for users if their points hit a certain benchmark. It’s easy to imagine how the rewards mechanism can help nudge customers to try out WeChat’s panoply of in-house and third-party offerings down the road.

Exactly how WeChat calculates these points is unclear, but a test done by TechCrunch shows it factors in one’s shopping and contract-fulfilling records. We’ve reached out to Tencent for more details and will update the article when more information becomes available.

Alibaba’s affiliate Ant Financial — WeChat’s biggest contender in online payments — has been running a similar assessment engine called the “Sesame Credit” since 2015. Like WeChat’s, it measures several dimensions of user data including purchase behavior and capability to fulfil contracts. People with higher scores enjoy perks like deposit waivers when staying at a hotel, incentives that could keep customers in the house. Sesame points are available through Ant’s Alipay digital wallet that recently claimed to have crossed one billion users worldwide.

The WeChat payments score is reminiscent of Tencent’s short-lived credit-rating scheme. Indeed, digital footprints can also help China’s fledgeling financial system predict creditworthiness among millions of people without financial records. That’s why Beijing enlisted tech companies including Tencent and Ant in 2015 to come up with their own “social credit” scores under state-approved pilot projects.

Over time, regulators became wary of the mounting personal information used by online lending companies and moved to assert greater control over the whole credit-rating matter. In early 2018, it changed tack to crack down on private efforts — including a Tencent-run trial. Beijing subsequently set up Baihang Credit, the only market-based personal credit agency approved by China’s central bank. The government holds a 36 percent stake in Baihang. Ant, Tencnet and several other private firms also got to be part of the initiative, though they play complementary roles and hold 8 percent shares each.

While most countries use credit rating mainly as a financial credibility indicator, China has taken things a few steps further. By 2020, China aims to enrol everyone in a national database that incorporates not only financial but also social and moral history, a program that has raised concerns about privacy and surveillance.

Alibaba taps Kabbage to loan up to $150K to SMBs after it quietly acquired OpenSky to ramp in North America

Alibaba’s long-term ambition to grow its business in the US is taking another step forward. To increase sales to US small businesses, the company has partnered with Kabbage, the Softbank-backed unicorn that provides loans to SMBs using big data and machine learning to determine eligibility faster than a traditional bank lender, to provide up to $150,000 […]

Alibaba’s long-term ambition to grow its business in the US is taking another step forward. To increase sales to US small businesses, the company has partnered with Kabbage, the Softbank-backed unicorn that provides loans to SMBs using big data and machine learning to determine eligibility faster than a traditional bank lender, to provide up to $150,000 of financing at the point of sale on Alibaba.com as part of a new program called Pay Later.

The move comes on the heels of an interesting, if slightly older, piece of news: Alibaba quietly made an acquisition in the US last year to further its interests in the country as it continues to face-off with homegrown competition, with Amazon leading the charge.

In September 2018, with very little fanfare, Alibaba acquired a startup called OpenSky for an undisclosed amount to build out its business in North America.

Alibaba had originally taken a stake in OpenSky in 2015 as a part of a deal it struck for the startup to take over several sites it had tried to establish in the US, without much success.

Now, OpenSky runs Alibaba’s B2B business in North America (branded as Alibaba B2B and headed up by John Caplan, who had been the founder of OpenSky), and it is also the company’s main consumer face in the US, under the OpenSky brand, operating as a marketplace for various third-party merchants, and controlling a selection of the brands that Alibaba had offloaded back in 2015.

“Quietly” is the operative word with this acquisition. It seems the only announcement of the M&A was a post on LinkedIn, with the only media coverage being an edited version of the release on a small publishing blog. Meanwhile, there appears to be no reference whatsoever on OpenSky.com indicating Alibaba’s ownership of it.

While Alibaba is the undisputed king of commerce in Asia, its decision to work with Kabbage for financing in the US — despite loans giant Ant Financial being an affiliate of Alibaba’s — underscores the giant’s current softly, softly approach in North America in the wake of some setbacks.

After failing to create much of a stir — and then offloading — its group of US consumer-focused sites, in 2017 company made a big effort, led by CEO Jack Ma, to woo US businesses to do more on Alibaba, starting with a big event in Detroit and a promise to President Trump that doing business on his site would lead to 1 million new jobs.

Now Ma says that won’t be possible because of the ongoing trade war between the US and China. Meanwhile, its affiliate Alipay’s attempted acquisition of Dallas-based MoneyGram for $1.2 billion got blocked by the US government, citing national security concerns. And its ambitions to go head to head with AWS by way of Alibaba Cloud have also been scaled back.

But while the US has remained an elusive market, it’s nonetheless a huge one where Alibaba wants to be. Considering both the Kabbage deal and the OpenSky acquisition, it seems that Alibaba has decided to take a less direct approach to growth in the US, tapping US-built businesses to do it.

For Alibaba, offering a way to finance purchases is an essential component of courting small and medium businesses, who may not always have a large amount of working capital at hand to reinvest in equipment and other business services. The high $150,000 limit is a signal that this is not about buying small office supplies but making larger purchasing commitments.

“We recognized an opportunity to give our customers a convenient financing solution that allows them to improve their cash flow at competitive rates, so they can have the cash they need to grow their businesses,” said Caplan in a statement. “We are delighted to be partnering with Kabbage to empower our SMB customers to source at greater volumes, or improve their cash flow to invest in other areas of their businesses.”

On the part of Kabbage, appearing as a option at the point of sale is an obvious next step for a loans company, as it helps Kabbage connect directly with businesses looking access to cash (one of the key reasons for loans being to buy goods for a business to run). The loans are constructed to be repaid over six months with interest rates starting at 1.25 percent.

Point of sale financing services like Pay Later aim to compete against other options that SMBs have when they are making larger purchases. In the case of Alibaba, other options include paying by credit cards, money transfers, and e-checking. Pay Later will be the only one of these that is free to use (in that Alibaba itself won’t charge a transaction fee) after March of this year. It’s also potentially one of the faster options for completing the transaction if you don’t have immediate access to cash.

“When you are at the point of sale, you’re not going to stick around 48 hours waiting for a loan approval,” said Kabbage CEO and co-founder Rob Frohwein about the service.

Frohwein added that it had been working on a pilot of the service since the middle of last year and that Kabbage is Alibaba’s only partner for the service.

We asked and he confirmed Alibaba has not invested in Kabbage as part of the deal — both have a common investor in the form of Softbank — and that they are not disclosing any financial terms of the arrangement. He also confirmed that Kabbage is likely to seek further equity funding in the near future.

Apple HomePod comes to China at $400 amid iPhone sales woes

Apple is finally launching HomePod in China, but the timing is tricky as the premium device will have to wrestle with local competitors and a slowing economy. The firm said over the weekend that its smart speaker will be available in Mainland China and Hong Kong starting January 18, adding to a list of countries where […]

Apple is finally launching HomePod in China, but the timing is tricky as the premium device will have to wrestle with local competitors and a slowing economy. The firm said over the weekend that its smart speaker will be available in Mainland China and Hong Kong starting January 18, adding to a list of countries where it has entered including US, UK, Australia, Canada, France, Germany, Mexico and Spain.

The Amazon Echo competitor, which launched in mid-2017, is already available to Chinese buyers through third-party channels like “daigou”, or shopping agents who bring overseas products into China. What separates the new model is that it supports Mandarin, the official language on Mainland China and Cantonese, which is spoken in Hong Kong and China’s most populated province Guangdong. Previously, Chinese-speaking users would have to converse with HomePod in English.

A main selling point of HomePod is its focus on music, so the China version comes with Airplay support of a range of local music streaming apps like Tencent’s QQ Music for Mainland users and JOOX which is more popular in Hong Kong.

In its home market, HomePod remains an underdog with 5 percent market share while Amazon Echo and Google Home command 66 percent and 29 percent, respectively.

The question is how many Chinese shoppers are willing to shell out 2799 yuan, or $414, for the Siri-controlled speaker. A host of much cheaper options from local giants are available, such as Alibaba’s Tmall Genie, Xiaomi’s Mi AI and several models from Baidu.

Analysts have cited relatively high price — on top of a softening economy — as a major culprit for iPhones’ low sales in China, which have prompted Apple to lower its quarterly revenue forecast for the first time in over a decade and Chinese retailers to slash iPhone prices. It remains to see how Chinese shoppers react to HomePod, which is already about 17 percent higher than its normal $349 price in the US.

World’s most valuable AI startup SenseTime unveils self-driving center in Japan

The world’s highest-valued artificial intelligence startup SenseTime has set foot in Japan. The Beijing-based firm announced on Friday that it just opened a self-driving facility in Joso, a historic city 50 kilometers away from Tokyo where it plans to conduct R&D and road test driverless vehicles. The initiative follows its agreement with Japanese auto giant Honda in […]

The world’s highest-valued artificial intelligence startup SenseTime has set foot in Japan. The Beijing-based firm announced on Friday that it just opened a self-driving facility in Joso, a historic city 50 kilometers away from Tokyo where it plans to conduct R&D and road test driverless vehicles.

The initiative follows its agreement with Japanese auto giant Honda in 2017 to jointly work on autonomous driving technology. SenseTime, which is backed by Alibaba and last valued at more than $4.5 billion, is best known for object recognition technologies that have been deployed in China widely across retail, healthcare and public security. Bloomberg reported this week that the AI upstart is raising $2 billion in fresh funding,

Four-year-old SenseTime isn’t the only Chinese AI company finding opportunities in Japan. China’s biggest search engine provider Baidu is also bringing autonomous vehicles to its neighboring country, a move made possible through a partnership with SoftBank’s smart bus project SB Drive and Chinese automaker King Long.

Japan has in recent years made a big investment push in AI and autonomous driving, which could help it cope with an aging and declining workfoce. The government aims to put driverless cars on Tokyo’s public roads by 2020 when the Olympics takes place. The capital city said it already successfully trialled autonomous taxis last August.

SenseTime’s test park, which is situated near Japan’s famed innovation hub Tsukuba Science City, will be open to local residents who could check out the vehicles slated to transport them in a few years.

“We are glad to have the company setting up an R&D center for autonomous driving in our city,” said Mayor of Joso Takeshi Kandatsu in a statement. “I believe autonomous driving vehicles will bring not only revolutionary changes to our traffic system, but also solutions to regional traffic problems. With the help of SenseTime, I look forward to seeing autonomous cars running on the roads of Joso. We will give full support to make it happen.”

The next phase of WeChat

Thousands of people gathered Wednesday night in a southern Chinese city for Zhang Xiaolong, Tencent’s low-key executive who built WeChat eight years ago. It’s no longer adequate to call the app a messenger, for it now enables myriads of functions that infiltrate Chinese people’s private and public lives. It wasn’t just the tech circles tuning […]

Thousands of people gathered Wednesday night in a southern Chinese city for Zhang Xiaolong, Tencent’s low-key executive who built WeChat eight years ago. It’s no longer adequate to call the app a messenger, for it now enables myriads of functions that infiltrate Chinese people’s private and public lives.

It wasn’t just the tech circles tuning into the event. Civil servants, real-estate agents, salon owners, fruit vendors, teachers, artists — anyone who use WeChat to facilitate daily work — watched attentively for news and tips that came out of the annual conference.

Zhang, nickname Allen, is by nature a hardcore product manager. He went to great lengths during his 4-hour speech telling people productivity is WeChat’s holy grail, and that he wants to make user sessions “short and efficient.” He called out apps obsessed with keeping users on, which many may agree include ByteDance’s video app TikTok and news aggregator Jinri Toutiao.

That’s a tough sell, though, for WeChat is anything but a disposable tool. The app now boasts over 1 billion daily users. 750 million of them open WeChat Moments, a scrolling feed of friends’ updates, each day during which they check it more than 10 times. User growth is cooling, but that’s expected given the super app’s enormous base. In addition to being a social network, the juggernaut has also devised a host of new features that may generate more eyeball time — and help it maintain meaningful growth.

An app universe

Two years ago, WeChat made a move that would speed up its evolution from a simple app into an all-in-one platform. It rolled out so-called mini programs, which are stripped-down versions of native apps with only core features in exchange for smaller size and quicker access. To date, there are over 1 million such lite-apps and 200 million people access them every day, an achievement that inspired other tech giants to follow suit.

Zhang said from the outset that mini apps weren’t meant to replace regular apps, for the latter provide a more complete user journey. In effect, mini apps are getting more powerful as they further integrate with chats and gain new capabilities, such as an upcoming Siri-like voice assistant. Mini programs are also making inroads into the offline world, facilitating transactions like scan-to-pay at subway turnstiles, all without the fuss of app downloads.

There’s no mini-program “store” at the moment, but a less conspicuous infrastructure is taking shape. Users can already look mini apps up on WeChat’s internal search engine and may soon be able to rate them, according to Zhang. WeChat will in turn factor those reviews into search results, akin to how the App Store works.

The public space

Whether mini programs threaten the existing app ecosystem is disputed, but one thing is certain: They have a strong appeal to those without the capacity or need to build full-size apps, like a teacher who wants a tool to broadcast announcements to parents. There may be only a few dozen users, so a lightweight, easy-to-build app makes more economic sense.

wechat

WeChat’s annual company conference in Guangzhou, China. Photo: Tencent

Governments have also warmly embraced WeChat as part of a national effort to streamline public services. Anyone who’s lived in China would dread its red tape. Mini programs are digitizing many tasks that traditionally required numerous visits to government offices, such as renewing one’s social security card.

While public services may not be a big revenue driver, they do boost users’ dependence on WeChat. Alibaba’s digital wallet Alipay also offers a plethora of public services, though many are limited to payments. “After all, WeChat has more use cases, from social networking to payments, so local governments find it closer to people’s lives,” a third-party mini program developer for government services told TechCrunch, asking not to be named because the person wasn’t allowed to discuss the matter publicly.

New growth fuel

The world is watching when China’s most used app will hit its wall on user growth. WeChat hasn’t seen much momentum overseas except among Chinese expats and outbound tourists. Back home, senior users are fueling its growth. 65 million of WeChat’s monthly users are now over the age of 55, the app’s fastest growing cohort. Many of them turn out to love mini games, which are part of the mini-program universe. These games, which tend to be casual and easier to play than PC or mobile app games. have surpassed 400 million monthly users. For some context, China reached an estimated 700-million mobile game population in 2018, according to market research firm iResearch.

Curiously, WeChat hasn’t pushed monetization aggressively despite commanding a gigantic user base. Zhang has reiterated that monetization isn’t his priority, but changes are underway. WeChat is planning to add more advertising inventories to mini apps in 2019, executive of WeChat open platforms Du Jiahui said during the event. Tencent earnings show that lite-apps and Moments are already driving advertising revenues for the company over the last few months. Tencent is also under pressure to find alternative monetizing channels as its core revenue driver — video games — took a hit amid an industry shakeup last year, prompting the firm to place more focus on enterprise-facing businesses.