Chinese technology groups such as ByteDance and Alibaba are boosting their presence in Singapore as they vie with US rivals for dominance in south-east Asia.
Artificial intelligence start-up SenseTime, online travel platform Ctrip, social network site YY and telecoms provider China Telecom are also among those that have either increased their office footprint or plan to raise their headcount, according to multiple people involved in the discussions.
The trend comes against a backdrop of souring US-China relations and as companies from the world’s two biggest economies compete for regional influence in cutting-edge technologies.
“South-east Asia has been a big focus in the past 18 to 24 months for Chinese companies and now Singapore has become a battleground between Chinese tech and US tech who both see it as a springboard for the region,” said Ashley Swan, a Singapore-based executive director at property group Savills.
ByteDance, the owner of popular video streaming app TikTok, will expand from a shared office to much larger premises at One Raffles Quay in Singapore’s central business district this year. In November, Huawei opened a cloud and AI innovation lab in the city.
In perhaps the most eye-catching deal, Alibaba in May bought half of a $1.2bn skyscraper in Singapore’s central business district. It marked the tech group’s first international property purchase and the building will eventually become its headquarters outside of mainland China.
But they are still playing catch-up with the likes of Facebook, Google, Microsoft and Amazon, which have been in the region for much longer and are still growing.
South-east Asia is one of the few places where US and Chinese companies openly compete for influence in areas such as cloud computing. The region of 650m people is rapidly moving online and provides a potentially huge customer base with markets such as Indonesia, Mr Swan added.
Facebook is building a $1bn data centre, its first in Asia, after moving to a new regional headquarters in Singapore in 2018. Twitter this year said it would set up its first Asia-Pacific engineering centre in the city.
US-China tensions may have “played a part” in Chinese technology companies raising their headcount but, more importantly, being in Singapore will help them expand their products and services into the region “in a big way” in the next few years, said Benjamin Cheong, a partner at law firm Rajah & Tann.
They also have a lot of confidence in Singapore in terms of its political stability and strong legal framework despite the higher costs of rental and salaries, he said.
The region has been a big focus for Alibaba, founded by billionaire Jack Ma, with the acquisitions of ecommerce businesses Lazada and Redmart. It has also invested in Tokopedia, a highly valued Indonesian online shopping unicorn.
Mainland Chinese venture capital companies are among those that have been most active in the city as they increase their investments in south-east Asian start-ups.
Along with Silicon Valley, Singapore is home to the largest number of Chinese technology companies outside of mainland China, according to property company JLL.
Chinese technology groups have steadily increased their presence since arriving in the city-state about five years ago, said Regina Lim, head of capital markets research for JLL’s Asia-Pacific business.
“They feel like it is China 15 years ago and if they made so much money as Chinese internet penetration and ecommerce grew, so too can it happen in places like Indonesia and Thailand,” said Ms Lim.
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June 01, 2020 at 06:04AM
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Chinese tech groups boost Singapore presence in south-east Asia push - Financial Times
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