29/01/2016 Asia Business Report


29/01/2016

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Now on BBC News all the latest business news live from Singapore.

:00:00.:00:16.

Alibaba reports better-than-expected earnings despite the slowdown in the

:00:17.:00:23.

Chinese economy. And we find out why Asian companies are spending

:00:24.:00:25.

millions of dollars to sponsor big sporting events.

:00:26.:00:36.

Glad you could join us for this Friday edition of Asia Business

:00:37.:00:42.

Report. China's biggest online retailer, Alibaba, is feeling the

:00:43.:00:47.

effects of the slowdown in the country's economy. Their GMB rose 3%

:00:48.:01:01.

to $147 billion. Revenues were better than expected but the volume

:01:02.:01:07.

of growth was not. Earlier I spoke with an analyst to say another

:01:08.:01:11.

factor was rising competition. I would think that overall the

:01:12.:01:18.

economy's slowdown would have some impact on Alibaba but the truth is

:01:19.:01:22.

that there is a move from off-line shopping patterns to online. So the

:01:23.:01:27.

impact will be less. It is more from the competition because the

:01:28.:01:30.

competition is actually getting more varied, and that is interesting. I

:01:31.:01:41.

want to see how the competition will perform later in the year. How do

:01:42.:01:47.

you think they will be able to remain competitive and keep their

:01:48.:01:51.

competitors on the sidelines? Will they continue to grow organically or

:01:52.:01:56.

will they make more acquisitions? I think the expansion of the roadmap

:01:57.:02:11.

from business to consumer was done well, but now they're looking at

:02:12.:02:15.

acquiring online financial business and moving into healthcare. The

:02:16.:02:20.

different industries they need to tap into, they will need to consider

:02:21.:02:25.

building up their business model. Another thing they need to look at

:02:26.:02:37.

is business-to-business, they use cloud computing and that is the

:02:38.:02:44.

focus. They also need to stay within sight of China, but also to conquer

:02:45.:02:50.

international markets. These will be the major roadmaps that Alibaba need

:02:51.:03:00.

to tap into. Shares of Amazon have tumbled 14% in after-hours US trade

:03:01.:03:06.

as investors were spooked by a sharp spike in operating expenses even

:03:07.:03:11.

though the online giant posted its third straight quarter profit with

:03:12.:03:16.

sales rising by 22% to $36 billion in the final three months of the

:03:17.:03:20.

year, pushing its overall sales past the first time. Taiwan's economy is

:03:21.:03:29.

expanding at its slowest pace since the global financial crisis with its

:03:30.:03:36.

GDP expanding by just .85% in 2015, dragged down by the slowdown in

:03:37.:03:39.

China which is its biggest export market. Based on recent data, some

:03:40.:03:45.

economists now believe Taiwan has fallen into a recession. Japan may

:03:46.:03:47.

name and you economy minister today. The past minister resigned on

:03:48.:03:59.

Friday over claims that he had received bribes from a construction

:04:00.:04:04.

company. He admitted meeting the company's decorative and accepting

:04:05.:04:07.

cash and gifts as political donations. To major sporting events

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are taking place in Asia this week, tennis stars are in Melbourne for

:04:13.:04:16.

the Australian Open which is sponsored by Korean automaker Kia,

:04:17.:04:22.

and another is taking place in Japan. What influences these

:04:23.:04:31.

companies to sponsor the sporting events? I asked a ahead of business

:04:32.:04:37.

consultancy in Asia. The real risk in sponsoring these events is the

:04:38.:04:41.

return on investment. It is very hard to track any kind of return

:04:42.:04:47.

from a very large multimillion dollar investment. Reports last year

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show that only a third of these companies tracked at all. Some of

:04:53.:04:57.

them had a negative return. What about the return for their

:04:58.:05:01.

sponsorships? Do they see concrete results? They see more brand

:05:02.:05:09.

awareness. But there is a long difference between that and purchase

:05:10.:05:14.

power. Just knowing about something doesn't mean you like it. Over the

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past couple of years we have seen the slowdown in the global economy

:05:19.:05:24.

and it is impacting Asia. Has this affected corporate enthusiasm for

:05:25.:05:28.

supporting sporting events? One of the first things that gets

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jettisoned when a country goes through financial crisis is sporting

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events, it gets seen as an indulgence and Asian brands and

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companies are much less likely to indulge those practices and are more

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likely to put their money towards things that actually benefit the

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customer, service, packaging, in-store experience a new product.

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It also doesn't help that you have controversies hounding some major

:05:56.:06:00.

sporting events. Corruption issues, match fixing, drugs. Does this

:06:01.:06:05.

impact the appeal of sport? Absolutely. The brands want their

:06:06.:06:13.

messages reflected and they want the great Halo effect. All of these

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things damage the brand and with instant access through the Internet,

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everything is going on to tarnish that appeal. What about diamond in

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the rough sporting events that sponsors haven't been looking into?

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Where do potential -- what are the potential sports? In Korea, millions

:06:34.:06:40.

of people go online to watch a video gaming. It is one of the biggest

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viewing sports in Asia now. You look at Indonesia and badminton is huge.

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China has table tennis and Drome racing that is very exciting. --

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drone. Now we're talking about the traditional Indonesian wedding

:07:06.:07:11.

outfit, prices start off very high. We're looking at how the process of

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making address works. Beautiful, glamorous and expensive. This

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traditional Indonesian dress for women has been modernized and is

:07:27.:07:31.

mostly born by Indonesian elites. In order to get a dazzling dress like

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this, one needs to order months in advance. In addition to patients,

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customers also need to have deep pockets because the dress like this

:07:42.:07:47.

costs around 5000 US dollars. It is out of reach for the average

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Indonesian but the designer herself has a very good reason for the high

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price point. One dress is made by around 25 workers. TRANSLATION: I

:07:56.:08:03.

don't need to explain further why I have put a certain price point on my

:08:04.:08:07.

dresses, because even the ugliest dress has a market value and it is

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proven even though many have imitated my dresses from Western

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Asia to East Indonesia. I still have customers. At her workshop in

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central Java, an hour from the capital of Jakarta, she is also

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training women to become designers and is giving lessons for free.

:08:28.:08:32.

Those who don't have any experiences in design will be given a monthly

:08:33.:08:37.

salary after training of around $70. It is less than the average salary

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of around $140 at the salary will increase as their skills improve.

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She never attended fashion school. She picked up her skills from her

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mother, also a fashion designer. Her big breakthrough came when her dress

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was worn by Ms. Indonesia in 1996. The fame also came with critics who

:09:00.:09:03.

have judged her designs as being too modern and some have accused the

:09:04.:09:06.

fashion designer of the training the Indonesian culture. TRANSLATION: I

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felt really sad when I heard that. But I know I have to be strong and

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make my mother proud. That pushed her to devote her talent and

:09:19.:09:21.

financial resources to children. She said that this organisation to treat

:09:22.:09:30.

children with medical conditions in 2012. Over the years come of the

:09:31.:09:35.

foundation has provided medical treatment for over 1000 children and

:09:36.:09:38.

they come from all over the country. She's also working on

:09:39.:09:44.

pursuing her big dream. To set up a hospital in the near future. And

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before we go, here is a look at the markets and Asia is currently

:09:53.:09:57.

lackluster, moving sideways in early Friday trade despite gains overnight

:09:58.:10:04.

as Facebook's earnings drove market higher. Was also a bounce back in

:10:05.:10:13.

all will prices because industrial output was lower than expected in

:10:14.:10:21.

the month of December. On Wall Street, the Dow Jones and the NASDAQ

:10:22.:10:25.

finished almost 1% higher. Amazon shares plunged 14% and Microsoft

:10:26.:10:30.

beat expectations. Thank you for investing your time with us, goodbye

:10:31.:10:32.

for now. Rebellion in Myanmar

:10:33.:10:36.

in the new political era, the BBC's exclusive report on

:10:37.:10:41.

the militia groups still persecuted The World Health organisation says

:10:42.:10:49.

there could be 4 million cases of

:10:50.:10:53.

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