06/10/2016 Asia Business Report


06/10/2016

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Chickening out. The owner of KFC prepares to spin off its China

:00:15.:00:21.

business as it disappoints with a fall in sales. Sex on the sly. An

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Indian start up helps young couples escape disapproving eyes. Good

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morning, Asia and hello world. It is Thursday. Glad you could join us for

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this edition of Asia Business Report. We begin with Young Brands

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and the company has missed its mark for third-quarter results. The

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protest in China against Western brands. The owner of KFC, Taco Bell

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and Pizza Hut will be spinning off its China business in a few weeks

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time. It is not the one making big changes. McDonald's is also

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reportedly planning to convert more than 2000 stores into a franchise

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business. Why are fast food companies switching things up? I

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earlier spoke to somebody for a reaction to the earning results from

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Yum Brands. It is a backlash against the dispute in the South China Sea

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and what they did was not deliberately boycott but I think

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mentally sort of try boycott these are Western brands. That hurt

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Kentucky fried chicken. It is spinning off the chiding business,

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is that the right way for Yum Brands or for McDonald's which is going for

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a franchising strategy? It is the right time, but also for McDonald's.

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Western brands can sell in China and they have made tremendous amount of

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money from this. Consequently what they are saying is that the next

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stage of growth had been plucked all of the low hanging growth, they now

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want to expand into the rest of China. In the case of Yum Brands

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they want to triple the number of stores that they have. They say now

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that they have done all they can, and now it is up to the Chinese

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market. They will be licking their fingers all the way to the bank.

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Even though they spin off the China business, David, it still has the

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Western brand. So will the new or owner also feel political backlash?

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This is the stupidity of it all. What they are damaging is

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themselves. Yum Brands China will be owned by the company that is of Ali

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Babar. It is now a Chinese company, not a Western company. I think the

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boycott will be short lived. A smart move for McDonald's because when you

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have this franchising strategy you have royalties every year and you

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have a recurrent income at Hull on the other hand this could also

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impact the quality of McDonald's because franchise also often have a

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difficult time maintaining quality of food. In the case of Yum Brands

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and in the case of McDonald's it will be a franchise and they will be

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earning a revenue from this. In the case of Yum Brands they will get 3%

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of sales. And they will be getting that for doing absolutely nothing

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except providing the brand. In other business news, Samsung Electronics

:03:50.:04:01.

is acquiring Viv Labs. With this acquisition Samsung plans to

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integrate the AI platform into its range of Galaxy smart phones.

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Staying with Samsung, a Southwest Airlines flight departing in

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Kentucky was evacuated after a passenger's Galaxy Note 7 smart

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phone started emitting smoke. That model is on a global recall and

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Samsung cannot confirm if that incident is caused by a new and

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replaced phone. The bank of Australia are under watch this week.

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There is a parliamentary enquiry into their activities. The manager

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of ANZ has already apologised for not meeting proper standards. We

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heard from ANZ, one of the biggest banks here, accepting that there had

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been problems, some blunders, money played into wrong accounts. The

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chief executive saying there was not a blokey culture within banking in

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Australia. Likewise we are hearing from the head of the NAD bank and

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the biggest business banker in Australia. He denies that there is

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systemic failure within the banking system. There was detailed their on

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rogue financial planners. 43 have been suspended by the bank. He

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accepted that no senior manager had lost their job, however. The

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questioning was fierce by the MPC in Australia who feel that customers

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are being wronged and problems need to be faced. So the

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parliamentarians, are they satisfied with this apology and the lip

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service or do they want some major changes within the internal culture

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of the banking industry? Everyone says they want change, the question

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is what change will they get? Already this week the government of

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Malcolm Turnbull has assembled legislation on rate reading. That is

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significant because three of the banks appearing this week, NAD, ANZ

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and Westpac have been accused of market manipulation by the regulator

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here in Australia. People want more action. There is talk of a tribunal

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system for aggrieved customers which would mean they would not have to go

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through a lengthy court case. But the opposition party here in

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Australia say that this process so far has been a whitewash. They have

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been too soft. What they want is a royal commission that would look at

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granular detail of some of the problems. But you must remember that

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the banks here in the regulatory system is credited with stopping

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Australia going into recession when many of the markets in the world

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failed. While there are clearly problems being exposed, overall,

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people here argue that the banking system in Australia is still in

:06:55.:07:00.

robust health. Now there are plenty of companies out there aiming to

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make breathing easier. In particular in India it can be difficult. Many

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of the young people live with large and disapproving families in small

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houses with little privacy. Enter by's uncle. It helps young couples

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book hotel rooms for half a day. Stealing a few moments alone.

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Couples in Mumbai have few places to go if they want to sneak a kiss all

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hold hands stop in India, public displays of affection can be seen as

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a moral and premarital sex is still taboo. This is one of the so-called

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lovers points. Couples come here every day to spend some time alone.

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But it is not ideal. Open Era and right by the road. And, importantly,

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a high chance of being seen by somebody known to the family. What

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are the alternatives? When you go to a hotel you know, you know by the

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way that people look at you. It makes you feel disgusting about

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yourself. This young woman did not want to reveal her identity. But she

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is exactly the kind of customer a new start up is targeting. Stay

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uncle helps young couples or could discreetly by helping them find a

:08:26.:08:31.

place to stay that will accept them. It is not legal but convincing

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hotels to signup has not been easy. There has been almost seven months

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now. We still face difficulties in actually, you know, asking hotels to

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accept couples. There are only two or three hotels on board at the

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moment. This is the kind of moral policing we are talking about. Last

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year Mumbai police evicted couples from hotels. For the businesses are

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willing to take the risks it is already proving to be profitable.

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The rooms are offered 14 hours each at 60% of the normal rate making it

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possible to rent one room out twice in a day. She had to face it. If

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they are doing it by the law, it is OK. Ultimately we will say yes. We

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have a hotel and it is profitable. It is worth doing. The conservative

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attitudes of India towards love and intimacy are a struggle for some

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couples. But fought start-ups like Stay Uncle and its hotel partners,

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there is an opportunity to make money. Here is a quick look at the

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marker before we go. A positive day for Asian stocks as you can see.

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They are all on the plus. This is after US shares gained overnight,

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led by petroleum companies due to high oil prices large banks and

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expectations that the Federal bank will assume the cost of borrowing

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for the end of the year. The All Ordinaries index, because of

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the rising price of commodities, is up by 15 points. Those are the

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markets. Thank you for investing your time with us. Sport Today is

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coming up next. Our top stories this hour, at least

:10:28.:10:46.

three people have been killed by Typhoon Chaba in South

:10:47.:10:48.

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