13/11/2017 Asia Business Report

in her breasts and has been

seen by a specialist.

Now on BBC News: All the latest

business news live from Singapore.

More new passenger on board. Riot

hailing firm Uber strikes and

investment deal with Japan's Soft

Bank. Alibaba smashes its own record

with another bonanza on Singles Day.

Welcome to Asia Business Report.

Uber has confirmed to the BBC that

it has entered an agreement with

Japan's Soft Bank over potential

investment. Speculation had been

swirling that the ridesharing

company would strike a deal worth

billions of dollars. Our business

report is here with the latest. What

can you tell us about this?

Well, we

just got confirmation from Uber, and

I will review the last line of this.

It says on closing the investment it

will help fuel our investments in

technology and our continued

expansion at home and abroad while

strengthening our corporate

governance. Let's be clear. We don't

know the terms of this deal, they

call it potential investment, but

what we understand so far, focusing

on that last word, corporate

governance. This is a company, Uber,

that has had some bumps along the

way. Its CEO stepped down in June, a

series of sexual harassment

allegations within the company. They

are looking to clean up their act.

Corporate governance might be

involved in that in terms of

expanding the number of seats on the

board, potentially SoftBank having

some of their own seats to be able

to control the direction of the

company as it wants. That is

corporate governance. And Uber needs

cash to fend off some of the

competition it is facing from Lyft,

and to expand its operation and

clear the path for a public listing.

It wants an IPO, when it does list

it will be one of the hottest in

that year, 2019.

You mention one of

the issues being competition. How

will that impact competition in this

industry?

With the cash, it is

incumbent on Lyft, its main

competitor, to be able to counter

that both in terms of driver

incentives and lower prices. That is

where you and I come in. We like

lower prices, so more competition,

we might benefit.

All right, looking

forward to that, certainly. As we

have been reporting, US President

Donald Trump is in the Philippines

today for the final leg of his Asian

tour. He will be attending a summit

held by Asean, where Asian leaders

will discuss the future of trade

liberalisation. One US business in

favour of fewer barriers to trade is

transportation and logistics giant

FedEx. Our business correspondent

spoke to its president and CEO,

David Cunningham, and started by

asking about growth projections for

this year.

We are preparing for a

record peak this year, holiday

season, and we expect him to move

between 380 million and 400 million

shipments between the Thanksgiving

holiday and the Christmas holiday.

That is up 26% over two years ago,

and represents a substantial

increase over the day to day.

There

has been a significant rise in

protectionism and anti- free trade

rhetoric. How does that affect your

business?

There have been a lot of

protectionist activities, but I

think we have to keep in mind the

main thing, which is that trade is

the glue that lifts people out of

poverty and offers tremendous

amounts of opportunity, in the main.

At FedEx we think that everyone of

our jobs that we have operating

around the globe, they are all trade

jobs. They are facilitating trade.

And do you think that is the message

that Donald Trump is bringing with

him when he meets the heads of other

Asian governments, trade partners?

Well, I can tell you that from our

perspective trade is a net positive

to the global economy, it is a net

positive. And what we really ought

to be trying to do is figuring out

how to have more trade agreements,

more access, and from the US

perspective, create more exports,

which is where the US can benefit

the most, not putting in tariffs.

David Cunningham from FedEx. The

numbers are in from the world's

biggest online shopping events,

Singles Day. Chinese internet giant

Alibaba has raked in a whopping $25

billion on November the 11th. Last

year the sales record hit $18

billion in just 24 hours, which was

the equivalent of the entire

economic output of Cambodia. But

Alibaba's fortunes are not confined

to China. It is looking to take on

Amazon globally and is a large part

of that strategy it involves taking

control of south-east Asian retailer

which launched its own shopping

event at the weekend. I spoke to the

company's co-founder and asked him

how it all went.

Record-breaking for

us as well. The whole team is very

proud. We achieved over $120 million

gross merchandising value and 6.5

million items on the day. For us it

is also very important to look at

the engagement of our consumers and

our sellers during that day, because

the real essence of Singles Day is

really to bring together the

ecosystem, and to focus around the

power of online shopping and the

internet as a medium to change the

way that people shop.

Since being

taken over by Alibaba, how has

Lazada's approach to business

changed? Have you benefited at all

from some of these strategies that

Alibaba is using?

Absolutely, we are

obviously inspired very much by

Alibaba when we launched our online

revolution, which starts on Singles

Day, as a means really to bring the

market together, and we have been

working closely with them to drive

our consumer engagement through

personalisation and other means. But

we also have worked with Alibaba on

all encompassing projects which have

seen how best products being listed

on Lazada and supported by our

logistics and know-how in the

region.

Some clothing brands have

gone bankrupt since the start of

this year, and that is mainly due to

falling sales of their physical

retail stores stores.

The decline in

for traffic is translating into good

business for the Global Fashion

Group, one of the biggest e-commerce

companies. Founded in 2011, it rakes

in more than $1 billion in annual

revenue and has about 10 million

active customers across five

platforms, including in Asia and the

Middle East. Our correspondent spoke

to the GFG chief executive, who told

her about the secret to their

success.

It appears to us that the

emerging market presents an amazing

opportunity. When you talk about

business size we are looking at 300

billion euros of fashion market, and

right now the penetration only

covers 4%. And in those 4% we have

the largest part. One of the

challenges we have at GFG when I

joined two years ago was a very

strong business, very high growth,

but we were losing a lot of money.

-40% on our profitability, and a big

focus of the team and myself in the

last two years has been to make sure

that we were structuring the group

so that not only we can retain

leadership but we can do it in a

profitable manner.

Is e-commerce

having a big say in how it fashion

is done, or vice-versa?

It is both,

fashion brands are sensitive to how

they are presented to the customer.

They invest a lot in their marketing

and product design. One of the great

examples of what a brand can do with

GFG and the power GFG can bring to

the brand is Arcadia. We will bring

them to 24 markets in one go, and

were able to roll out all the rant

in a record six months' time, so

from one season to another, in most

of our markets, some of them did not

have an online presence, some did

not have an offline presence. It is

a very good example of how a brand

can grab the e-commerce opportunity

and invest in territories where the

brand is not yet present.

What does

this mean for Rick and mortar shops?

You mentioned Top Man and Top Shop.

In Australia we have seen those

brands go into administration.

I

think there is a shift from offline

to online, and I think brands need

to address that new normal, I would

say. And I can totally envisioned

that for some brands which are

integrated, like Top Man, Top Shop,

it is a mix of flagship stores to at

the brand and attract customers in

main cities and e-commerce to make

sure that you have people able to

shop around the entire city. I think

it is a question of finding the

right mix for those brands. In this

market, it is a very different play,

because most of the time the offline

retailing is still in its infancy.

That was the chief executive of the

GFG group. There is a lot going on

this week. Looking at our calendar,

on Wednesday Chinese internet gaming

giant Tencent releases its latest

results. Its 4-wood guidance will be

closely watched following a $2

billion investment in Snapchat and

the following day we have

Australia's latest jobs data and how

younger generations are really

struggling to find employment

despite a strong economy there --

forward guidance. And on Friday, a

big focus on China's push into the

electric car market at the Guangzhou

motor show. We are seeing Asian

markets trading lower, including the

Nikkei, there are a lot of worries

about the tax plan in the US and how

quickly tax reform can be hammered

out. That is it for this edition of

Asia Business