06/02/2017 Asia Business Report


06/02/2017

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Not for hire. After pulling out of Taiwan we find out what's next for

:00:15.:00:21.

Uber. And it's the Holy Grail of

:00:22.:00:25.

prime-time advertising, the Super Bowl, but is the $5 million pricetag

:00:26.:00:27.

worth it? Hello and welcome to Asia Business

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Report, I'm Sharanjit Leyl. Uber will exit Taiwan this week. The

:00:40.:00:44.

car booking company is calling it quits after a lengthy battle with

:00:45.:00:48.

the government there. Uber faced massive fines, which reportedly

:00:49.:00:54.

totalled 35 in US dollars after Taiwanese authorities raised fines

:00:55.:00:58.

for drivers caught working for unlicensed transportation services.

:00:59.:01:03.

In Taiwan, Uber is registered as an information services company.

:01:04.:01:07.

Earlier I spoke with the general manager for Uber in Taiwan and he

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said the fine was among the highest imposed.

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We haven't received any new fines today but I can confirm the fines

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right now are the highest in the world, which leaves very little room

:01:21.:01:25.

for innovation going forward. The focus for us is really now that the

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bill has passed, what is the right regulation framework looking like?

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We believe there should be a pattern and we need to sit down with

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government to do that. Have you got a meeting scheduled with the

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government? We are very eager to meet with the government and we're

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doing everything we can in our power to make those arrangements happen.

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The key question now is the government supportive of the concept

:01:51.:01:54.

of ride sharing in Taiwan? Interesting you mention whether the

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government is supporting the concept because according to the Taiwanese

:01:58.:02:02.

transport authority they say Uber is registered as an information

:02:03.:02:06.

services provider. But what you're doing is providing transportation.

:02:07.:02:09.

Does the government do you think have a point?

:02:10.:02:14.

Uber is a ride sharing company, we like to be registered as such. I

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think the issue is there's no regulations for right sharing in

:02:20.:02:22.

Taiwan because the concept itself has come around only in the past six

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or seven years when right sharing companies like ourselves started.

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The question now is if the government does believe in the

:02:31.:02:33.

concept of ride sharing, we're more than happy to work with them in

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terms of finding the right types of regulation for companies like

:02:38.:02:42.

ourselves. Briefly, getting out of Taiwan, short-term or permanent?

:02:43.:02:48.

I think we certainly hope we can resume operations as soon as the. I

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think this pause is something we feel will alleviate pressure but we

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do believe that the president has a mandate to improve technology and

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economic development and we think ride sharing fits in well with that.

:03:01.:03:06.

The biggest sporting event in the United States is under way. We are

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of course talking about the Super Bowl, the Championship game in

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American football which, last year, attracted 111 million viewers. I can

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tell you that today we are still seeing the Falcons, the underdogs,

:03:20.:03:24.

they are beating the New England Patriots at the moment. It's a big

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eel, the Super Bowl, because advertisers are spending an average

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of $5 million for a 32nd commercial -- big deal. Some of Asia's most

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recognisable brands are getting into the game and here's a sneak peek of

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the highly anticipated Super Bowl commercials.

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I'm just curious... Puyol services still apply if I'm not technically

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on a road or land -- do your services.

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Machines don't have emotions. But the rare few can inspire them.

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Some of the commercials that Super Bowl viewers will get to watch.

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Earlier I spoke with James Walton, who manages the sports business

:04:20.:04:24.

group at Deloitte and I asked him if companies splurging on the Super

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Bowl ads will be getting their money back? The actual cost is even higher

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than $5 million because $5 million just buys you space on TV. On top of

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that you have to pay for the production of a world-class advert,

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which is around $1 million, and in this day and age you also have to

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put out on social media and build other advertising spend as round two

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well. Recent studies suggest the cost of a Super Bowl campaign is

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closer to $10 million. For that you're getting access to the largest

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TV audience of the year in the US. In fact the last seven Super bowls

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have been the seven highest TV programmes of all time, you're

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getting 110 million viewers also. There's still a feeling that perhaps

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it has peaked now because this year they were still selling some of

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these advertising slots as recently as last week, which is the first

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time that's ever happened. Fascinating you have these big Asian

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names taking part, the likes of Nintendo with their new Switch games

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console, Toyota, Lexus and Kia as well. Why is it so crucial for the

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Asian and co is to be there? Most of these Asian companies have been

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there before. Nintendo is the is the only one for the first time, Hyundai

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went all the back, way back to the 1980s and is a sponsor of the NFL at

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the moment. They see this TV audience represents a big

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opportunity for them. Last year Toyota pushed hard on their previous

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hybrid and they ended up selling over 3.5 million units as a result

:06:03.:06:09.

of the campaign. They feel this is clearly an opportunity. The one time

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of the year when people actually watch the adverts and everyone

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gathers around the TV, this is your one chance to make a big impression.

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You mentioned social media, everyone thought TV advertising is more or

:06:22.:06:26.

less dead because this is the other big opportunity for lots of

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advertisers. Tell us about the scourge of social media, will it

:06:31.:06:34.

obliterate TV advertising in the future? It is definitely affecting

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because companies only have a certain amount of marketing spend

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and you have to decide where you're going to put that and social media

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is another channel to take that but the best companies at the moment are

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the ones working out how to use traditional and modern media in

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tandem. There's a lot of drumbeat campaigns even around the Super Bowl

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where companies are releasing their adverts early, doing teaser

:06:58.:07:01.

trailers, buying up a lot of advertising space on social media

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around the time of their TV advert and combining the two pieces

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together for the whole experience. On a day like today, it is estimated

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around 60 million people will talk about the Super Bowl on Facebook as

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well as watch it, so that represents an opportunity as well. James Walton

:07:18.:07:22.

from Deloitte. Were into the third week of President Trump the's

:07:23.:07:26.

administration and so far we've heard tough talk on trade and

:07:27.:07:30.

threats of import taxes against the auto sector. Research house, less

:07:31.:07:35.

says if the president goes ahead with his campaign promise of

:07:36.:07:39.

imposing higher tariffs on Chinese products they could make it tough

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for Chinese mobile handset makers to do business in the US.

:07:44.:07:50.

We understand that it is already very hardfought Petronius Marveaux

:07:51.:07:59.

business to get into the US. It's a very complicated market and you need

:08:00.:08:02.

strong relationships with the carriers like the horizon or AT --

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hard for Chinese handset makers. -- the horizon. With Donald Trump you

:08:10.:08:13.

have the possibility of higher tariffs. With that thread on Chinese

:08:14.:08:19.

products, it could create a problem for them because their products are

:08:20.:08:23.

more expensive and what is happening is will people want to buy more

:08:24.:08:28.

expensive products? No. Obviously it will make it hard for them but is

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the US market even worth it? We know it is an incredibly saturated

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market, you've got huge leaders like Apple with the iPhone and Samsung.

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So why bother? The key to the US market is that it is not a market of

:08:44.:08:49.

volume like India or China itself, the US market is the crown jewels of

:08:50.:08:53.

all smartphone markets as we know it. It's the market of high-value.

:08:54.:09:00.

That is worth it for the smart phone vendors to go into the US, to

:09:01.:09:07.

displace Apple, to displace Samsung and gain market share from them to

:09:08.:09:08.

gain a very high-value market. The Chinese capital, Beijing, aims

:09:09.:09:17.

to cut the use of coal by 30% this year to battle against air

:09:18.:09:21.

pollution. According to the state news agency the government will get

:09:22.:09:25.

more aggressive this year and help residents of 700 villages make use

:09:26.:09:30.

of clean energy. Large parts of northern and central China have been

:09:31.:09:35.

covered in fix for this winter disrupting flight and port

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operations and schools -- thick smoke. There's been a glut of sell

:09:40.:09:44.

orders this morning on reports the airbag manufacturer has selected

:09:45.:09:53.

key... -- thick smog. A Japanese firm has been looking for support to

:09:54.:09:58.

deal with billions of dollars of recall costs related to millions of

:09:59.:10:02.

potentially defective airbags. Let's look that the markets before we go

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because as you can see they are all higher, taking their cues from Wall

:10:07.:10:11.

Street's record close on Friday. We saw the NASDAQ at a record high. I

:10:12.:10:16.

should say we are having some impact from the fact that the Chinese

:10:17.:10:20.

central bank actually raised short-term interest rates on Friday.

:10:21.:10:25.

We saw a fairly good US jobs report as well, better than expected

:10:26.:10:31.

numbers, fuelling the rise. That's it for this edition of

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