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Speaker 1: Alright, let's get serious now and join our guests Kevin Simoda,

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Speaker 1: author of the first super app, to help preview tenh

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Speaker 1: cent earnings. And we should mention that Kevin was formerly

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Speaker 1: an executive at we Chat, which is of course owned

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Speaker 1: by a ten Cent, So quite extraordinary here, Kevin. We

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Speaker 1: are expecting to see the first quarterly fall in terms

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Speaker 1: of revenue for ten cents, so the first quarter of

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Speaker 1: negative revenue growth. When you look at third quarter twenty

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Speaker 1: I mean we saw twenty nine percent growth there. It's

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Speaker 1: gone down substantially during the pandemic, and we know that

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Speaker 1: ten cents advertising segments have been impacted by China's COVID

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Speaker 1: zero policies. What are you expecting here? And I guess

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Speaker 1: how does ten Cent turn things around? Well? Juliet, first off,

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Speaker 1: thanks for having me. I won't share my favorite Elvis song,

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Speaker 1: but I've been listening to a lot of their music recently,

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Speaker 1: so thanks for having me. Um, I expect I expect

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Speaker 1: Tensive to be lying low and be happy to have

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Speaker 1: one of their first quarters of negative revenues and negative earnings. UM.

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Speaker 1: I think ten said what they've always done well is

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Speaker 1: government relations, and right now the government crackdown is nearing

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Speaker 1: an end, but I wouldn't. But ten Cent is all

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Speaker 1: about lying low, staying out of the limelight um and

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Speaker 1: trying not to attract any ire from the Chinese government.

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Speaker 1: So I expect them to continue to lie low and

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Speaker 1: be be working on things like the metaverse um and

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Speaker 1: where social interactions will be in the future. But I

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Speaker 1: think they're going to be kind of happily lying low

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Speaker 1: during all of this, I guess, like the pandemic, government

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Speaker 1: crackdown and new government relations, government policies which are pretty

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Speaker 1: unclear still. We've been reporting about the potential divestment of

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Speaker 1: ten cents steak in may Juan and Morgan Stanley saying

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Speaker 1: that could help perhaps it to unlock some hidden investment value.

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Speaker 1: We've got ten Cent currently holding around seventeen percent of

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Speaker 1: may Juan, the value of its steak worth about twenty

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Speaker 1: four billion dollars. Is that a fair assessment if we

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Speaker 1: do see ten Cents selled down that steak, Yeah, I

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Speaker 1: think I think I could see. I could see them

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Speaker 1: kind of. I've seen them slashing hires. I see them

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Speaker 1: doing a lot of cost cutting, so taking removing the

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Speaker 1: fat from all of their industries and trying to reduce

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Speaker 1: where especially UH in places like ads or gaming for

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Speaker 1: the domestic market, and even we chat their golden kind

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Speaker 1: of product for a long time. They're they're doing firings

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Speaker 1: and they're cutting costs everywhere they can. I could see

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Speaker 1: them divesting from matoin, especially as um antitrust regulations continue

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Speaker 1: to increase and they have their fingers in a few

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Speaker 1: too many pies, uh, and maybe they'll be divesting from

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Speaker 1: that as China's market is kind of cooling off in

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Speaker 1: favor of more investments overseas, UM and other gaming companies overseas,

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Speaker 1: I could see something like that happening, or in favor

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Speaker 1: of more investments in things like the metaverse or immersive

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Speaker 1: reality immersive experiences. So, just speaking of expansion and trying

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Speaker 1: to expand globally, why do you think ten Cent perhaps

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Speaker 1: doesn't hasn't done as well as perhaps many analysts had

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Speaker 1: expected it would on a global stage. Yeah, great question. Um.

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Speaker 1: After working there for four years and being on the inside,

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Speaker 1: I'm fluent in Mandarin, and Tencent is a very Chinese

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Speaker 1: company and there they know China very well, they know

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Speaker 1: Chinese consumers very well, but they're very humble and how

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Speaker 1: much they understand the global consumer um and they're not

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Speaker 1: very confident in in addressing users overseas and seeing too

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Speaker 1: seeing to the needs of overseas users. And Tenson strategy

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Speaker 1: has always been pretty clear. They invest globally and they

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Speaker 1: launch locally. So what they'll do is they'll buy a

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Speaker 1: game overseas like Riot Games, U, League of Legends, Valeriant,

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Speaker 1: very successful game studio. They just let them do whatever

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Speaker 1: they're doing globally, which works, and then they go, We're

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Speaker 1: going to launch your game in China and publish in China.

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Speaker 1: That's kind of been this secret to success PRETENSI. They

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Speaker 1: kind of own the China market, but they're very humble

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Speaker 1: in their global ambitions that I'm gonna I see them

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Speaker 1: continue to do that, all right, I don't. I wanted

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Speaker 1: to ask as well some of the research that you've

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Speaker 1: been done been doing, excuse me, Kevin, in terms of

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Speaker 1: some of the other big I guess apps that we follow,

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Speaker 1: the likes of TikTok owned by Bye Dance she In,

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Speaker 1: which is huge here I have to say in Southeast Asia.

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Speaker 1: You say these are examples of apps that of integrat

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Speaker 1: the best of the East and the West. What products

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Speaker 1: kind of come next here and do we see a

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Speaker 1: super up in the West? Oh, perfect question to that's

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Speaker 1: that is the that is the crux of my whole book,

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Speaker 1: all the first super app. Well, I guess what I

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Speaker 1: kind of see is the next generation of apps just

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Speaker 1: kind of like you're saying, is going to be ones

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Speaker 1: that combine the best of the East and the West,

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Speaker 1: the best of China and global. China has developed their

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Speaker 1: own Internet with its own unique aspects, its own consumer

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Speaker 1: uh standards um. And when you make an app in China,

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Speaker 1: it's different than when you make an app design for

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Speaker 1: the West. And that's why Tenson struggles to go global

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Speaker 1: because they get China, but they don't get the West. Now,

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Speaker 1: what by Dance and Sheen has done is amazing. They

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Speaker 1: have talent that kind of they are able to be

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Speaker 1: on both sides of the Great Firewall of China. They're

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Speaker 1: able to make an app that utilizes these best practices

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Speaker 1: of these super aps and combining all these services into

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Speaker 1: one and making it still very user friendly despite being

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Speaker 1: so huge, and then being able to launch that and

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Speaker 1: make it uh localized and applicable two users overseas. And

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Speaker 1: now we see by then we see TikTok and Sheen

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Speaker 1: going global and just taking the world by storm. I

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Speaker 1: see super apps going going to happen internationally, whether that's

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Speaker 1: going to be a Western company kind of emulating and

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Speaker 1: copying what we has done, or a Chinese company going

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Speaker 1: global with some of these standards that we has set.

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Speaker 1: All right, Kevin, great to get your insights. Thank you

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Speaker 1: so much for joining us. That is Kevin Shimoja, author

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Speaker 1: of the first super app, joining us from Sydney here

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Speaker 1: on Bloomberg Daybreak. Asian