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Melissa Zhu

Good morning, this is Melissa Zhu from SCMP’s tech desk in Hong Kong rounding up some of our most important stories this week.
India’s pushback on Chinese tech – following a deadly border clash and amid recriminations over the Covid-19 pandemic – has created opportunities for US firms to fill the void, according to analysts.
US firms, which already have a strong foundation in India, are among the most well-positioned to benefit from the backlash against Chinese technology.
Following Google’s announcement last Monday that it would set up a US$10 billion fund to invest in India’s digital services over the next five to seven years, the company revealed its first deal two days later: a US$4.5 billion investment in telecom firm Jio Platforms. Google’s move came less than four months after Facebook said it was pumping US$5.7 billion into Jio Platforms.


Analysts say US firms’ big expansion into the Indian market was bound to happen anyway, with the Google and Facebook investments in Jio Platforms just two recent examples of that trend.
The fact that India’s policymakers became wary of Chinese tech and gravitated towards the US did not come as a surprise to some analysts. “A lot of Chinese thinking is around the fact that India is going to move towards the US anyway,” said Dev Lewis, a fellow at Hong Kong-based think tank Digital Asia Hub.
“When you look at the last few months, it's very clear that the Indian tech ecosystem is a natural partner with the US. And no matter how much Chinese investment has come in so far, that's not going to change that dynamic,” he added.
However, some analysts said Chinese venture capitalists tend to understand the challenges of developing market economies better than US capital – so some Indian start-ups may still prefer working with Chinese investors.
Read the analysis by Josh Ye:
China tech’s setbacks in India create opportunities for US firms
Chinese smartphones still top
While India has banned 59 Chinese apps including TikTok and WeChat, Chinese smartphone brands are still dominating the market, at least for now.
In the second quarter, Chinese smartphone maker Xiaomi led the market with 5.3 million shipments, despite this being a 48 per cent decrease in annual growth, according to a Canalys report published last week.
Overall, Covid-19 has hit the Indian smartphone market hard: shipments fell 48 per cent to 17.3 million units in the second quarter of 2020 amid an unprecedented shutdown of the economy from March to mid-May.


The other vendors in the top five – Vivo, Samsung, Oppo and Realme, an independent brand spun off from Oppo – also saw their shipments decline, with the annual growth of each company falling at least 27 per cent in the quarter, according to the report.
Canalys research analyst Adwait Mardikar said local vendors are driving a “Made in India” message to consumers and eager to position their brands as “India-first”.
However, he added: “Despite the sentiment, the effect on Xiaomi, Oppo, Vivo and Realme is likely to be minimal, as alternatives by Samsung, Nokia, or even Apple are hardly price-competitive.”
The full story, by Jane Zhang:
India smartphone market shrinks by nearly 50 per cent amid pandemic
TikTok courting US creators
Despite the political headwinds it is facing both in India and other countries, short video app TikTok on Thursday introduced a US$200 million fund to reward creators on its hugely popular platform.
The fund, open to applications from US creators above 18 starting in August, will initially target influencers such as teachers and livestreamers and help all video makers collaborate on paid campaigns with brands, the company said Thursday.
The US is TikTok’s third-largest market, contributing 8.2 per cent of new installations from January to June, after India and Brazil, which accounted for 27.6 and 9.6 per cent respectively, according to Sensor Tower.


TikTok has long been accused of lacking in rewards for content creators. Unlike YouTube which allows creators to monetise content from ads on the platform, TikTok influencers only receive tips during live streams, which is a very small part of the video content.
The new fund aims to “realise additional earnings” for creators and “encourage those who dream of using their voices and creativity to spark inspirational careers,” TikTok’s US general manager Vanessa Pappas wrote in a post on its website.
Coco Feng has more:
TikTok offers US creators a US$200 million fund amid political backlash



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China technology

Inside China Tech: who wins from India’s pushback on Chinese technology?

Commuters walk past an advertising board of Reliance Jio, a digital platform owned by Indian businessman Mukesh Ambani's Reliance Industries, in Mumbai on June 19, 2020. Photo: AFP

US urges India to ‘reduce its reliance’ on China for telecoms, medical supplies

US Secretary of State Mike Pompeo at a press conference in Denmark on Wednesday. Photo: EPA

The Chinese flag flies outside of the Chinese consulate in Houston after the US State Department ordered China to close the consulate in Houston, Texas, July 22, 2020. - US-Chinese tensions, already rising because of the coronavirus pandemic and crackdown in Hong Kong, ratcheted up another notch on Wednesday as the US ordered the closure of the Chinese consulate in Houston within 72 hours. China reacted angrily to the US move, which came a day after the unveiling of a US indictment of two Chinese nationals for allegedly hacking hundreds of companies worldwide. (Photo by Mark Felix / AFP)

FILE - In this June 17, 2020, file photo, Indians stamp on the Chinese national flag during a protest against the Chinese government in Jammu, India. China and India made progress in their latest talks on a long-running border dispute that turned deadly last month, a Chinese spokesperson said Wednesday, July 16, 2020. (AP Photo/Channi Anand, File)

US Secretary of State Mike Pompeo said India should reduce its reliance on Chinese companies. Photo: EPA

Why India and China’s latest dispute could cost both sides greatly

Protesters in Ahmedabad call for a boycott of Chinese goods. Photo: AFP

People stand outside a shop selling mobile phones from Chinese electronics company Xiaomi of which the front name is covered with a tarp, as calls for a boycott of Chinese goods gather pace following a border clash that killed 20 Indian soldiers, in Mumbai on June 25, 2020. - Indian fighter jets roared over a flashpoint Himalayan region on June 24 as part of a show of strength following what military sources say has been a Chinese takeover of contested territory. Chinese forces have held onto a chunk of land covering several square kilometres (miles) at the mouth of the Galwan valley following a deadly brawl there on June 15, the Indian military sources told AFP. (Photo by INDRANIL MUKHERJEE / AFP)

Members of the Tibetan Youth Congress burn a cutout of Chinese President Xi Jinping during a street protest calling for the boycott Chinese goods in Dharmsala, India, Friday, July 10, 2020. (AP Photo/Ashwini Bhatia)

India’s app ban raises the stakes for China’s global tech ambitions amid rising geopolitical tensions

A member of the group Working Journalists of India holds a placard calling for the boycott of Chinese products during a protest in New Delhi on June 30. Photo: AP

Members of the Working Journalists of India hold placards urging citizens to remove Chinese apps and stop using Chinese products during a protest in New Delhi on June 30. Photo: Photo: Agence France-Presse

After India bans China’s TikTok, border row ‘could weaponise phones and pharma’

India has banned Chinese-owned video-sharing app TikTok, and mobile phones could be targeted next. Photo: AFP

As China and India quarrel, stranded families get caught in between

Mischka, Mehul and Dipika Kantharia (left to right) at their apartment complex in Shenzhen, China. Photo: Handout

Naresh, Naisha and Dimple Subnani in Keqiao, Shaoxing city, Zhejiang province. Photo: Handout / Rajni George

Dipika Kantharia (right) has not seen her husband Mehul for months. Photo: Handout

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Analysts say a backlash against China tech in India has created opportunities for US firms to fill the void
Chinese smartphone brands are still dominating the market, at least for now, although shipments on the whole have suffered due to Covid-19



Analysts say a backlash against China tech in India has created opportunities for US firms to fill the void, but Chinese smartphone brands are still dominating the market, at least for now.
