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doctors' advice and went to Spain. Now on BBC News, all the latest | :00:00. | :00:10. | |
business news live from Singapore. Going global. From start`up to | :00:11. | :00:17. | |
worldwide giant, Alibaba get set to list in the US stock market. But can | :00:18. | :00:24. | |
it take on its American rivals? How one tiny island in the Indian | :00:25. | :00:28. | |
Ocean has made it a successful financial hub. Thank you for joining | :00:29. | :00:36. | |
us for this edition of Asia Business Report on BBC World News, I am Rico | :00:37. | :00:38. | |
Hizon. It is a big week for Alibaba as | :00:39. | :00:47. | |
shares go on sale on the New York Stock Exchange at the end of the | :00:48. | :00:50. | |
week. Early estimates indicate it could raise $20 billion. The Chinese | :00:51. | :00:57. | |
juggernaut has bought up companies (the right, centre and generates | :00:58. | :01:02. | |
more revenue than American online retailers Amazon and eBay combined | :01:03. | :01:06. | |
`` left and right. Richard Taylor reports on how much of a threat | :01:07. | :01:16. | |
Alibaba poses to its peers. Ride sharing San Francisco style. | :01:17. | :01:20. | |
These are the hallmark of Lift, the hallmark of this smartphone app. | :01:21. | :01:30. | |
Since its launch, the start`up has been on quite a journey, recently on | :01:31. | :01:34. | |
Alibaba's journey, a key investor in the $200 million funding round | :01:35. | :01:38. | |
earlier this year. That was just the latest in a spending spree. | :01:39. | :01:45. | |
Alibaba's venture in mobile spreading way behind transport into | :01:46. | :01:47. | |
areas as diverse as communications, gaming, and app search. So what is | :01:48. | :01:52. | |
driving these investments? This Silicon Valley venture capitalist | :01:53. | :01:54. | |
himself invested in Alibaba a decade ago. Jack is very astute, an | :01:55. | :02:03. | |
operator and investor. I think they are trying to learn as much as they | :02:04. | :02:06. | |
came, understanding that they are Chinese, they are trying to learn as | :02:07. | :02:10. | |
much as they can about the US market. The tech market type economy | :02:11. | :02:23. | |
in general. And obviously many of them have a strategic aspect, where | :02:24. | :02:28. | |
they are trying to bring back into China and using them here as a | :02:29. | :02:30. | |
beachhead to expand here in the US. And those potentially expansionist | :02:31. | :02:32. | |
intentions are getting some in Silicon Valley concerned. Right now | :02:33. | :02:34. | |
Alibaba's e`commerce presence is subtle or stop its retail outlet | :02:35. | :02:38. | |
doesn't so much as carry any Alibaba ranting. `` branding. Some of | :02:39. | :02:40. | |
observers say it e`commerce ambitions could eventually pose a | :02:41. | :02:42. | |
real threat to established companies like eBay. Alibaba knows they can't | :02:43. | :02:51. | |
come to the US and drop. They want some of their services in the US and | :02:52. | :02:56. | |
they expect it to work. They will take a long`term approach and try to | :02:57. | :02:59. | |
introduce other services slowly but surely into the US. But they have a | :03:00. | :03:03. | |
ton money and experience and you can never discount Alibaba. | :03:04. | :03:10. | |
But for start`ups needing investment in their quest to become the next | :03:11. | :03:12. | |
big thing, Alibaba's investment positively welcome. Chinese funding | :03:13. | :03:16. | |
these days is seen as a badge of credibility. | :03:17. | :03:17. | |
It is clear that Alibaba's presence here in Silicon Valley is not a | :03:18. | :03:24. | |
1`way street. Many established US firms may fear what they see as the | :03:25. | :03:27. | |
encroachment by the Chinese Internet giant on US soil. But for | :03:28. | :03:29. | |
others it is a gateway into China itself. Not just in new market, but | :03:30. | :03:36. | |
the world's guest. `` world's biggest. | :03:37. | :03:41. | |
Alibaba might be a household name in China, but this is not necessarily | :03:42. | :03:46. | |
the case beyond its borders. In part of his ambition, the CEO's wants to | :03:47. | :03:54. | |
raise awareness of the company among consumers in North America and | :03:55. | :03:57. | |
Europe. I spoke to a representative from advertising giant McCann, who | :03:58. | :03:59. | |
shared his insights into what Alibaba needs | :04:00. | :04:00. | |
consumers in these markets. It is known for the best | :04:01. | :04:05. | |
transaction. That is what it does. One site has it all. The reality is | :04:06. | :04:09. | |
it will have to make some changes if it wants to build within those two | :04:10. | :04:12. | |
geographic locations. Do you think that Alibaba has what it takes to be | :04:13. | :04:15. | |
able to break into the American market and give American consumers | :04:16. | :04:26. | |
that sense of experience? I would never underestimate the CEO. He has | :04:27. | :04:29. | |
proved to be an incredible businessman and an incredible show | :04:30. | :04:34. | |
man. He knows what it takes to find the consumer. The question is | :04:35. | :04:38. | |
whether he wants to do that. He seems to believe that the best | :04:39. | :04:40. | |
marketplace is one which is very successful. Today looking at the | :04:41. | :04:50. | |
results in China, ears right. The question is whether he will have to | :04:51. | :04:53. | |
adapt for the United States. I think in the long`term if you want a | :04:54. | :04:57. | |
significant part of the market you will have to make changes. If he | :04:58. | :05:01. | |
makes that adoption? What if he adapt to what the US consumers want? | :05:02. | :05:05. | |
Can he beat the Amazon and the eBay is? `` eBays? He is not just looking | :05:06. | :05:10. | |
to see whether he can eat those companies, he is in a race against | :05:11. | :05:13. | |
Walmart, against a lot of individually oriented brands who | :05:14. | :05:15. | |
have good consumer presence right now on the web and to have managed | :05:16. | :05:19. | |
to find a way for consumers to find their goods. `` who have. Many | :05:20. | :05:22. | |
consumers still prefer shopping with those companies. He is a | :05:23. | :05:25. | |
marketplace, they are brand specific areas. I think this is a race with | :05:26. | :05:31. | |
which still has a lot to be run. `` that still has. | :05:32. | :05:35. | |
Can Alibaba educate American consumers with a transaction | :05:36. | :05:39. | |
oriented philosophy? Without a doubt, he can bring some things | :05:40. | :05:42. | |
which right now are not necessarily the same as in the United States. | :05:43. | :05:47. | |
I'm not sure he can educate them, but he can make some of the things | :05:48. | :05:51. | |
that Alibaba is doing more appealing for an American audience. There is | :05:52. | :05:55. | |
no doubt that he can do that. He still has to then figure out is | :05:56. | :05:58. | |
whether it is a sensory, wholesome experience. Do I get the | :05:59. | :06:01. | |
experiential satisfaction I get in these other places? Can Asian | :06:02. | :06:04. | |
e`commerce sites succeed in the US with their existing business models? | :06:05. | :06:12. | |
No, I think they still need to do more about the security of data, | :06:13. | :06:15. | |
they still have to engender more confidence about privacy, they still | :06:16. | :06:18. | |
need to be more knowledgeable about American consumer experience. Those | :06:19. | :06:20. | |
elements which the Asian business sites will have to adapt to. In | :06:21. | :06:32. | |
other business is making headlines, China has released fresh numbers | :06:33. | :06:34. | |
showing its weakest growth in industrial output in more than five | :06:35. | :06:40. | |
years. China's state`owned oil giant China Petroleum and Chemical | :06:41. | :06:43. | |
Corporation is set to sell a whopping $17.5 billion stake in its | :06:44. | :06:46. | |
retail businesses. Its retail side includes tens of thousands of fuel | :06:47. | :06:48. | |
stations and convenience stores. The sale comes as china's government | :06:49. | :06:51. | |
looks to restructure and boost productivity in its major | :06:52. | :07:00. | |
state`owned companies. Shares are trading lower in morning trade. | :07:01. | :07:07. | |
Staying with China, they have released numbers revealing weak | :07:08. | :07:14. | |
growth in more than five years. The industrial debt measures output at | :07:15. | :07:17. | |
mines, factories and workshops. The numbers released over the weekend | :07:18. | :07:19. | |
also revealed slowing growth in retail sales and weaker than | :07:20. | :07:21. | |
expected investment in infrastructure. | :07:22. | :07:23. | |
Analysts say the new numbers are raising concern over China's current | :07:24. | :07:29. | |
economic strength. South Korean conglomerates Samsung | :07:30. | :07:34. | |
and LG are in the midst of a strange dispute. Samsung accuses some LG | :07:35. | :07:36. | |
employees of deliberately destroying washing machines in stores in | :07:37. | :07:40. | |
Germany. Samsung says the vandalism took place earlier this month ahead | :07:41. | :07:46. | |
of a major trade fair in Berlin. LG alleges that two machines were | :07:47. | :07:49. | |
damaged, but said it was done accidentally. The case is now being | :07:50. | :07:58. | |
investigated. Mauritius is a tiny island in the | :07:59. | :08:01. | |
Indian Ocean but it is firmly on the map as an offshore financial centre. | :08:02. | :08:06. | |
Even so it is thousands of miles from India, the low tax regime makes | :08:07. | :08:12. | |
it an attractive gateway for companies investing from there. | :08:13. | :08:17. | |
Our correspondent has more from the Mauritius capital. | :08:18. | :08:23. | |
It is a tropical paradise with white sand beaches and sugarcane | :08:24. | :08:28. | |
plantations, but Mauritius is also a working island, home to a thriving | :08:29. | :08:33. | |
financial sector. Billed as an investment gateway to India and | :08:34. | :08:39. | |
Africa now, banks have set up shop and businesses have flocked to set | :08:40. | :08:47. | |
up companies here. This is the heart of Mauritius' financial sector and | :08:48. | :08:51. | |
accounts for 10% of the country's GDP. It is a major employer of the | :08:52. | :08:57. | |
island's professionals. It is such an important pillar of the economy, | :08:58. | :09:02. | |
yet offshore finance has become the centre of a row with India over | :09:03. | :09:10. | |
taxes. Despite its small 1.2 million population and GDP of just over $10 | :09:11. | :09:15. | |
billion, curiously, this tiny island was the top stores of FDI into India | :09:16. | :09:24. | |
between 2000 and 2013, accounting for more than one third of inflows. | :09:25. | :09:30. | |
Wolf it's more than 4000 kilometres away `` although it is more than | :09:31. | :09:34. | |
4000 kilometres away, Huntony 's have rooted investment into India | :09:35. | :09:38. | |
through Mauritius `based holding company is to benefit from the low | :09:39. | :09:44. | |
tax regime. `` companies. Mauritius has a double taxation avoidance | :09:45. | :09:48. | |
agreement dating back to the 1980s. Some worry India is losing out. | :09:49. | :09:56. | |
Mauritius has strict rules in terms of Indian investing in the | :09:57. | :10:00. | |
Mauritius. I would think that a lot of it has to do with the sheer tax | :10:01. | :10:06. | |
advantage that the Mauritius `India Treaty offers to any foreign | :10:07. | :10:08. | |
investor looking to invest in India. Mauritius' finance industry | :10:09. | :10:15. | |
is a major pillar of its economy. The tax advantages it offers on | :10:16. | :10:19. | |
something `` is something they aren't willing to give up. As for | :10:20. | :10:23. | |
India's new administration, it will have to find a balance between tax | :10:24. | :10:26. | |
policies that shore up revenues and don't deter business investment. Not | :10:27. | :10:33. | |
for Mauritius or from elsewhere. Thank you for joining us. I am Rico | :10:34. | :10:43. | |
Hizon. Goodbye for now. Hello. You are watching BBC News. | :10:44. | :10:47. | |
The top stories this hour: Britain's Prime Minister David Cameron says | :10:48. | :10:50. | |
the UK will hunt down the killers of the aid worker David Haines, whom he | :10:51. | :10:53. | |
called a British hero. Queen Elizabeth has made her first | :10:54. | :10:56. | |
public comments on the Scottish referendum on independence from the | :10:57. | :10:59. | |
United Kingdom. She said she hoped people would think very carefully | :11:00. | :11:01. | |
about the future | :11:02. | :11:02. |