Wednesday Tech Briefing: JD.com, Didi, 5G
BIG TECH COMPANIES
1. Minneapolis Police Reveal JD.com CEO Was Suspected of Rape
What: “The arrest of a Chinese billionaire in Minnesota over the weekend was for suspicion of rape, according to local police, increasing the seriousness of the potential legal charges against one of the country’s most prominent and wealthy businessmen,” Bloomberg reported.
Why it’s important: Richard Liu, who leads China’s second-largest e-commerce company, “was taken into custody Friday evening and released just more than 16 hours later on an accusation of what was originally disclosed only as ‘criminal sexual conduct,’ according to county records.” (Source: Bloomberg)
2. JD.com Shares Drop Sharply in First Trading Since Sex Scandal Allegations
What: Shares of e-commerce giant JD.com Inc. went down 5.97% on Tuesday, in its first trading day since founder and CEO Richard Liu was detained in the U.S. on allegations of sexual misconduct.
Why it’s important: JD.com is the second-largest player in China’s booming e-commerce market, even though the company has consistently lost money in the four years since its New York IPO. JD.com’s 45-year-old founder was detained last Friday in the U.S. state of Minnesota on sexual misconduct allegations, but was later released.
Liu, who is married, has since returned to Beijing, where JD.com is based. (Source: Caixin)
3. Didi to Suspend Late-Night Ride-Hailing Services for One Week
What: China’s largest ride-hailing platform, Didi Chuxing, announced Tuesday that it will suspend its late-night ride-hailing business for seven days in response to the deaths of two passengers who were killed by their respective drivers.
The suspension will begin Saturday on the Chinese mainland and stay in effect daily from 11 p.m. to 5 a.m., Didi said in a statement.
Why it’s important: Didi came under fire late last month after a second Didi user was killed by her driver in three months while using the company’s popular Hitch car-pooling service. Didi has since suspended the service indefinitely.
Big picture: The incident has raised questions about Didi’s ability to protect its users. Didi currently boasts a user base of 550 million, mostly in China, with daily ridership hitting over 30 million, according to a previous company statement. The firm’s investors include SoftBank Group Corp. and Apple Inc., and in July it raised $500 million from U.S. travel firm Booking Holdings Inc. Didi is currently valued at $56 billion. (Source: Caixin)
4. Gaming Addiction Under Spotlight in China as Regulators Tighten Control on Industry
What: China’s official Xinhua News Agency published a commentary calling online games a “huge hazard” and warned against allowing “gaming companies to hunt for wealth by inducing teens to get addicted.”
Why it’s important: “A section in that document said the State Administration of Press and Publications — a newly formed gaming regulator — will restrict the number of new online video games, limit the amount of time minors spend on games and establish an age-appropriate reminder system for games,” the South China Morning Post reported.
Big picture: “Rising concern over video games addiction looks to raise the stakes for some of the industry’s biggest companies operating in China, which is estimated by research firm Newzoo to be the world’s single largest gaming market in terms of size and revenue.
China’s gaming industry is suffering its slowest growth in a decade amid a months-long halt on government approval of new games.” (Source: South China Morning Post)
4. Xiaomi Plans to Launch 5G Phones Next Year
What: China's phone maker Xiaomi announced its successful testing of next-generation 5G data connections on Xiaomi phones on Tuesday. This is a significant step toward the official launch of 5G phones next year, Xiaomi said.
Why it’s important: China’s top phone-makers are racing each other to launch 5G-enabled devices. Last week, Xiaomi competitor Oppo said it had successfully connected commercial mobile phones to 5G signals, and that it planned to release 5G products next year.
Big picture: 5G technology produces mobile internet connections that are faster and more reliable than existing 4G connections. The technology can fully support virtual reality, the internet of things and autonomous driving. (Source: Company press release)
DEALS AND FUNDRAISING
5. China’s iQiyi Sports Secures Investment From Sequoia China, CMC
What: Chinese online sports video streaming platform iQiyi Sports has secured an unspecified amount of funding from China Jianteng Sports Capital, which was established in 2017 by Sequoia China and China Media Capital (CMC).
Why it’s important: iQiyi Sports is a joint venture formed in late July by iQiyi — a major video-streaming platform backed by search engine Baidu Inc. — and Super Sports Media, a broadcast company known for livestreaming popular sports events such as the English Premier League. (Source: Caixin, link in Chinese)
Compiled by Ye Zhanqi
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