Tech Insider: China Literature’s Animation Acquisition, TikTok’s Indonesia E-Commerce Deal
Battery-maker Gotion rebuked for late regulatory disclosure, Turkey moves to counter rising tide of Chinese EV imports
China Literature has agreed to buy Tencent’s animation and comics business from its former parent for 600 million yuan. Photo: VCG
China Literature to buy Tencent’s cartoon business
China Literature Ltd., one of the country’s largest online publishing and e-book companies, agreed to buy Tencent Holdings Ltd.’s animation and comics business from its former parent for 600 million yuan ($83.9 million).
Tencent Animation and Comics has been losing money for the past two years, reporting losses of 190 million yuan in 2021 and 111 million yuan in 2022. As of Sept. 30, the unit’s assets had a book value of 442 million yuan.
The company already collaborates closely with China Literature, which was spun off from Tencent in 2017. About 50% of Tencent Animation and Comics’ top 30 best-selling titles originate from China Literature’s intellectual property, China Literature CEO Hou Xiaonan said.
Tencent held a 57% stake in China Literature at the end of 2022.
TikTok to take over GoTo’s Indonesia e-commerce shop
ByteDance Ltd.’s TikTok agreed to invest $1.5 billion to take a controlling interest in a joint venture with Indonesia’s GoTo Group, part of a pact that lets the Chinese company restart its shopping app in its biggest online-retail market.
The social media giant will combine its Indonesian TikTok Shop business with GoTo’s e-commerce unit Tokopedia, the companies said Monday. TikTok gets a 75% stake in that venture, which will run the shopping features of TikTok’s social media app in Indonesia.
The deal will effectively give ByteDance control over a prominent local online-commerce player in a major overseas market. The agreement, under which GoTo becomes a passive backer of the Tokopedia operation, allows ByteDance to restart its Indonesian business and comply with regulations introduced to halt its online-retail service there.
Battery-maker Gotion rebuked for late regulatory disclosure
Gotion High-tech Co. Ltd. has received a wag of the finger from China’s securities regulator for taking too long to disclose information about a battery factory it plans to build in the U.S.
The Shenzhen-listed company will suffer no penalty beyond a black mark on its corporate compliance record, according to a Wednesday notice from the China Securities Regulatory Commission’s Anhui province branch.
The regulator’s issues stemmed from a deal that Gotion made to receive a local incentive package as part of its plans to build an electric vehicle (EV) battery plant in the U.S. state of Illinois. The company signed the deal on Sept. 7, but violated Chinese disclosure rules when it didn’t disclose relevant information on the deal until Oct. 12, according to the notice.
Turkey moves to counter rising tide of Chinese EV imports
Turkey is cracking down on Chinese electric vehicle imports, the latest country to do so after the European Union launched its own probe into the Asian country’s EV subsidies.
Companies importing EVs to Turkey must have at least 140 authorized service stations spread evenly across the country and open a call center for each brand, according to a Trade Ministry decree published last month.
The onerous requirement is widely seen as targeting Chinese vehicles. Imports from the EU and countries that have free-trade agreements with Turkey are exempt. Importers have only until the end of the month to comply, a next-to-impossible task.
The sudden shift marks a setback for companies involved in the sale of Chinese cars in Turkey, Europe’s sixth-biggest auto market.
China’s internet content kings struggle to keep users paying
China’s internet content industry has finally cultivated its first group of paying customers following years of heavy spending and heated competition. The challenge now is to retain them and expand the subscriber base.
Tencent Holdings Ltd.’s music streaming unit claimed more than 100 million paying subscribers in June following a seven-year campaign. For video streaming platform iQiyi, hitting the 100 million mark took four years and more than 60 billion yuan ($8.5 billion) of investment in content. And it took until the end of 2022 for Tencent’s 12-year-old video streaming unit and Alibaba’s 17-year-old rival Youku to become profitable.
Maintaining that momentum, however, will be a tall order. The user base in China is already saturated as hundreds of millions of people already use streaming services every month. Most still rely on advertising-supported free content, and those who subscribe generally do so only a month at a time, making retention a huge challenge. And now, providers of long-video content face a significant threat from cheaper mini programs that last just a few minutes.
China, U.S. lead world in championing AI
Nearly half of the world's artificial intelligence (AI) companies are based in either the U.S. or China, as the two largest economies race to foster leadership in the revolutionary technology, according to a recent study.
By the end of June, a total of 36,000 AI companies were in operation worldwide. The U.S. hosts 33.6%, or 13,000, of them, while China is home to 5,734, or 16%, according to an AI industry report jointly released by KPMG International Ltd. and China’s ZGC Industry Institute.
The total number of unicorn startups — companies with a valuation over $1 billion — in the global AI sector reached 291 by the end of June. Among them, 131 were based in the U.S. and 108 in China, according to the report.
Nio gears up to make EVs all on its own
Electric-vehicle (EV) startup Nio Inc. looks set to begin building its cars independently, announcing plans to acquire two manufacturing assets shortly after a subsidiary was added to a government database for companies approved to produce vehicles.
Nio on Tuesday entered into “definitive agreements” to buy equipment and assets from two “advanced manufacturing” bases from state-owned automaker Anhui Jianghuai Automobile Group Corp. Ltd. (JAC), according to an exchange filing.
JAC has been producing all of Nio’s cars on a contract basis since 2018.
The assets will be acquired by subsidiary Nio Technology (Anhui) Co. Ltd., according to a Tuesday filing by JAC. The same entity was added to a government credit information management system for vehicle manufacturing enterprises.
Self-driving truck startup TuSimple puts U.S. in rearview mirror
Autonomous trucking startup TuSimple Holdings Inc. announced plans to cut 75% of its workforce in the U.S. as the company moves to wind down its American operations and focus on Asia.
Nasdaq-listed TuSimple said the layoffs would bring its global workforce down to 700 full-time employees, about half the size of its workforce last year, according to a regulatory filing dated Monday.
TuSimple estimated costs related to the layoffs and restructuring will be $7 million to $8 million, which are expected to be reflected in the company’s fourth-quarter results.
Backed by Chinese social media firm Sina Corp., TuSimple operates about 100 advanced autonomous trucks, mostly in the U.S. and China, according to the company.
Chinese rocket startup resumes launches after first ever failure
One of China’s leading space startups launched two satellites into orbit, putting the company’s ambitious plans back on track after its first ever rocket failure in September.
A Ceres-1 rocket from Galactic Energy Aerospace Technology Co. Ltd. took off from the Jiuquan Satellite Launch Center on Tuesday, the company said.
The launch comes during a busy month for Chinese rocket startups, which are boosting efforts to emerge as local champions capable of competing with foreign rivals such as Elon Musk’s SpaceX.
The Beijing-based startup began the year with the fifth launch of the Ceres-1 and had hopes to launch as many as 10 in 2023. That plan suffered a major setback on Sept. 21, when its rocket failed about a minute after takeoff.