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TikTok: success for those who dare to go against the majority



Facebook CEO Mark Zuckerberg could not find a way to turn the attack on TikTok. He said that TikTok is a threat to America’s values and technology position.

TikTok doesn’t share the same commitment as Facebook does about freedom of speech, he said, repeating this message in meetings with US students, legislators and the US President.

TikTok was banned by former US President Donald Trump in September 2020 after executive orders targeting Chinese technology companies were issued. ByteDance, the parent company of TikTok at that time, was on the verge of being torn apart by American tech giants. Microsoft and Oracle emerged as the potential buyers in the deal.

Finally, despite luck in escaping, ByteDance understood that it had fallen into the ‘impregnable’ land of Big Tech, because ByteDance’s TikTok is holding a huge user data store of the generation that will control the world in the future, Gen Z.

The one who awakens giants

TikTok: success for those who dare to go against the majority

ByteDance was founded by young engineer Zhang Yiming in 2012. At that time, the company was still struggling to find a way through the launch of many applications. Until Douyin was launched in China in late 2016, ByteDance had gained its first success with 100 million users after one year of operation.

Douyin’s initial success helped ByteDance receive a huge amount of investment capital and Zhang Yiming then made a bold decision to enter the foreign market, something only Chinese tech giants like Tencent or Alibaba dare to think of doing.

And so then came TikTok when ByteDance spent $1 billion to acquire Musically, to immediately have 200 million foreign users. The rest is history.

After just four years, TikTok has 1.1 billion monthly active users (MAU) compared to 2.3 billion MAUs and 2.6 billion MAUs for YouTube and Facebook, respectively.

Numbers don’t lie. Moreover, TikTok has created trends, social networking phenomena and attracted the majority of Gen Z users, or young people born in the late 90s and later.

Facebook or YouTube have set standards for social network design, and video length for other applications to imitate. But TikTok chose the opposite path.

It is not the first innovative platform, but TikTok knows how to create market demand and teach users. Young people today are often plugged into smartphones and have had very little time to monitor something. So TikTok has shortened the video length to just under 15 seconds.

TikTok forces users to either watch or skip, and not fast forward. Combined with recommended algorithms, the video matrix of TikTok makes it impossible for viewers to take their eyes off the short videos that are actually combined to be endlessly long.

If TikTok’s format is not special, Instagram and YouTube wouldn’t have to rush to launch an imitation. The giants sleeping in victory hastily woke up, but it may be too late as TikTok brought in $34.3 billion for ByteDance in 2020.

Although it has not been able to perform initial public offering (IPO) in the US due to pressure from Beijing, ByteDance is valued for not less than $300 billion, at least three times higher than that of Uber.

In Vietnam, TikTok used to spend a lot of advertising money to entice users and has gained about 10 million real users.

But few people know that, before TikTok appeared, there was a Vietnamese application that emerged in attracting young people called Muvik. This application also went in the direction of sharing music videos, focusing on lipsync tracks so that ordinary people can lip sync along with famous singers. However, focusing on only one genre, Muvik failed even when TikTok was not so popular in Vietnam.

After all, startups still need algorithms, tools, and artificial intelligence (AI) to analyze user behavior, suggest and recommend content before thinking about who and where the market is. Failing to do this, startups will only change from imitating Facebook to imitating TikTok.

Huu Phuong



Vietnam edtech firm Vuihoc bags $6m in TNB Aura-led round

Increased internet accessibility, coupled with ICT advancements and the rise in smartphone users, is driving the growth of online learning in the country.



Vietnam’s e-learning market is expected to hit US$3 billion in value by the end of the year.

In a bid to capitalize on this demand, local edtech firm Vuihoc has raised US$6 million in its series A funding round led by TNB Aura. The fresh funds will be used to improve the company’s product offerings and invest in AI to offer personalized learning experiences for students.

Founded by Lam Do and Thu Do in 2019, Vuihoc has amassed over 1.1 million users, primarily from Tier 2 and Tier 3 cities. The platform offers educational content, including video lectures and quizzes, and has an inventory of over half a million resources.

The firm also offers live classes that enable students to learn in private or in small groups and where they can get instant feedback.

“We believe that the support of technology will bring the best possible education to all students, especially those outside of big cities, giving them better opportunities for the future,” Do said in a statement.

Before its series A round, the company most recently raised US$2 million in a bridge round led by Bace Capital, an investment firm backed by Ant Group.

Source: Tech in Asia


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SPAC IPOs plummet in a pile of fire sales and bankruptcies

Numerous businesses in the electric vehicle industry that went public through mergers with “blank-check” companies have filed bankruptcies.



Lordstown Motors has filed for bankruptcy in the court of the state of Delaware, USA. This is one of the electric vehicle startups that chose to list shares on the stock exchange by merging with “blank-check” companies.

Currently, Lordstown Motors is almost out of cash, while accusing Foxconn of fraud by failing to fulfill a series of investment promises under the agreement to inject capital up to $170 million. Foxconn alleged that Lordstown violated the investment agreement by letting it share price fall below $1.

Founded in 2018 but in October 2020, this EV startup merged with a SPAC (special purpose acquisition company) called DiamondPeak Holdings Corp. At the time, the transaction was valued at about $1.6 billion. Following in the footsteps of Lordstown Motors, the SPAC listing movement of electric vehicle startups has flourished as this listing promises quick access to capital.

“Bitter fruits” of the EV industry

Other EV manufacturers such as Lucid, Nikola, Fisker, and Canoo have also conducted IPOs through SPAC. At the present time, the majority of these companies are trading at or below their valuations.

Lordstown is an example. The automaker was valued at $1.6 billion at the time of the merger, but in less than 24 months, the company’s value dropped to $69 million.

In July 2021, Lucid Motors merged with Churchill Capital Corp. to list on Nasdaq. The deal was initially valued at around $24 billion and became one of the largest SPAC deals at the time. After the merger, shares of Lucid Motors traded at $7.16. Market capitalization fell more than 30%, to $16.3 billion as of July 13, 2023.

Nikola was also in a similar situation. In June 2020, the hydrogen and electric vehicle maker merged with VectoIQ Acquisition Corp. to conduct transactions on Nasdaq. After the merger, Nikola is valued at about $3.3 billion.

However, after the transaction, the electric car company faced accusations of fraud, causing the company’s share price to plummet and investor confidence to decline. By July 13, 2023, Nikola’s stock price dropped to $1.38, with a market capitalization of $985 million. The company has lost almost 70% of its value.

Emerging on Wall Street since 2020, the form of listing shares through SPAC is being seen as an alternative to the traditional IPO. Favorable market conditions such as low interest rates and high liquidity make investors pay special attention to this type of listing.

SPAC IPOs plummet

Over the years, many companies have chosen to IPO through “blank-check” companies. The US stock market used to record more than 600 registrations for listing under this form, so the quality of appraisal during the consolidation process of companies was seriously reduced. As a result, investors suffer losses and are negatively impacted.

This type of IPO is falling out of favor and decreasing in popularity. According to Statista’s data, in 2020 there are 248 companies conducting IPO through SPAC in the US. This number increased to 613 the following year, by 2022, the market will only have 86 listed companies in this form. In the first 5 months of 2023, only 14 companies chose to list through SPAC.

In addition to the electric car companies mentioned above, many merger companies failed. Some SPAC mergers did not meet expectations, leading to poor performance of post-merger groups. Since then, investors’ confidence in the quality of startups has weakened.

SPACs are also regularly scrutinized by the U.S. Securities and Exchange Commission, focusing on issues such as incomplete disclosures, potential conflicts of interest, and misleading statements. The market went down and the SPAC was affected by the overall decline of the market as well as the change in investor attitudes.

In fact, many businesses in the US have suffered from failure when choosing to list through SPAC. It is even harder for foreign businesses to want to go this route. The question is “Is the method of initial public offering by merging with another enterprise suitable for an emerging market like Vietnam?”

Admittedly IPO through SPAC also has certain advantages, as this is the shortest path for private enterprises to become public companies to attract investors who are looking for investment opportunities at an early stage.

However, as mentioned above, SPAC companies are often criticized for not disclosing sufficient information, potential conflicts of interest, and poor post-merger performance. To maintain investor protection and market integrity, regulators such as the US Securities and Exchange Commission have increased their oversight of SPACs.

By careful assessment, emerging companies can minimize risks and maximize the benefits of SPAC mergers. Thorough investigation, use of skilled consultants, and strict adherence to regulatory compliance are all necessary for a successful and mutually beneficial merger.

In addition, the listed company needs to determine whether the investment strategy of the SPAC company is in line with its long-term goals and growth plans, ensuring that the merger will provide the right resources, knowledge, and market access.

Listed companies also need to explore strategies for obtaining additional financing beyond SPAC mergers to address possible acquisition deficits. Engaging with institutional investors, and venture capital firms, or researching debt financing options will help fill any funding shortfalls.

* Sam Van is Senior Vice President and Head of Advisory Services at Freedom US Markets. He used to work for New York Stock Exchange as Former Director of International Listing Dept.


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Mobile phone, QR code payments soar in popularity

Electronic and cashless payments saw significant increases in Vietnam in the first half of this year, with internet transactions growing by 76% in volume and 1.79% in value.



Mobile phone payments also surged by 65% in volume and 77% in value while QR code transactions rose by 152% and 301%, respectively. Meanwhile, transactions made through ATMs decreased by 4% in volume and 6% in value.

The Government has issued the National Digital Transformation Programme till 2025 with a vision to 2030. The State Bank has also released a digital transformation plan of the banking industry till 2025 with a vision to 2030. This provides an opportunity for banks to renovate their business models, improve financial services, and adapt to the changing landscape by offering diverse products and services that meet customer needs.

At the “Finovate Innovation Day: When Innovation Meets Sustainability” workshop organised by the National Innovation Centre and JobHopin, Deputy Chairman and Secretary General of the Vietnam Banks Association Nguyen Quoc Hung revealed that 96 banks and credit institutions in Vietnam are actively building digital transformation strategies. Moreover, 92% of the banks have developed internet and mobile apps to improve their services.

He added that these figures reflect a strong trend towards electronic payments. Banks and payment intermediaries are connected in real-time transactions, with an average daily value reaching approximately 900,000 trillion VND (40 billion USD), encompassing over 8 million transactions per day.

Additionally, over 70% of adults in Vietnam have a bank account through digital channels. The cost-to-revenue ratio for banks has decreased by around 30%, resulting in significant cost savings.

According to a 2023 survey on digital transformation by DBS financial services group, Vietnam ranks second among the 10 Southeast Asian countries in the degree of digital transformation for enhancing customer experience and engagement in the financial sector, behind only Singapore.

Source: Nhân Dân


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