The week in Connected Asia

Here is a quick round-up of stories from a busy week in Connected Asia.

1. China has the highest number of fast-growing tech companies.

With 128 companies ranked in Deloitte’s Technology Fast 500 Asia-Pacific, China has emerged as the country with the highest number of fast-growing tech companies. China Communications Media Group, which is one of the largest mobile software platforms in China, was the fastest growing of them all. It has grown revenues by a staggering 266 times over the last three years. Taiwan, Australia and India were the other “stand-out” performers, although the tech sector across the region appears to be in fairly good health, despite the slowdown in China and sluggish economic growth in other parts of the world.

2. Amazon is said to be testing a cash-on-delivery business model in India.

The Amazon drones made the headlines but the reported move by Amazon to test a “cash-on-delivery” model is one to watch in the e-commerce space in Asia. Consumers in India, particularly in more rural areas, are notoriously reluctant to make up-front payments via e-commerce platforms and this is a major challenge. Cash-on-delivery is far from a perfect solution though, for logistical, financial and legal reasons. First, it raises logistical issues (not least in collecting cash and dealing with rejected goods) that will need to be addressed by Amazon’s local delivery partner, India Post. Second, cash-on-delivery locks up working capital and exposes merchants to the obvious risk of “time-wasting” purchases that are ultimately rejected (although that risk does still exist to some extent with “cooling-off” periods in an up-front payment model). The shortcomings of the cash-on-delivery model are acknowledged but the hope is that it will build trust in e-commerce and that eventually consumers will move towards up-front payments. The fact that ever-innovative Amazon seems to be looking at the model suggests that it could be a long time before up-front replaces on-delivery in India.

3. Singapore’s “Do Not Call” register opens for business.

The Asian data shake-up continues apace. On Sunday, Singapore’s new data regulator, the Personal Data Protection Commission, announced the opening of the “Do Not Call” registry. The “Do Not Call” rules under Singapore’s Personal Data Protection Act, which come into effect in January 2014, require businesses to verify with the registry that numbers are not listed there before engaging in direct marketing activities (voice calls, text or fax messages). Around 67,000 unique telephone numbers had been listed on the registry within 24 hours. From January, “Do Not Call” will be a new compliance burden for organisations to address. The remaining rules of Singapore’s Personal Data Protection Act (which impose obligations when it comes to the collection and handling of personal data) come into effect in July 2014.

4. China regulates Bitcoin.

The People’s Bank of China and four other ministries announced a new prohibition: financial institutions and payment institutions must not deal with Bitcoin. The announcement stated that Bitcoin should not have the same legal status as currency. The announcement also imposed other measures, including a requirement that websites providing Bitcoin-related services get a registration with a telco regulatory agency and carry out AML checks. Shortly after the announcement, Baidu (China’s major search engine) announced that it would not longer accept Bitcoin. Meanwhile, Chinese police detained individuals suspected of setting up a fraudulent Bitcoin platform that closed abruptly in October, taking USD $4 million of investors’ money. Despite the announcement in China and  ongoing questions about whether virtual currencies are more illusion than reality, Bitcoin remains a hot topic and one expects that it will continue to make headlines well into 2014.

5. A major Japanese games publisher took steps to limit spending by minors.

Japanese games publisher Tecmo Koei has announced limits on how much can be spent on its games by minors. Under the new policy, minors aged 15 and under will be limited to USD $50 per month, whilst those aged 16 to 19 will be limited to USD $200 per month. A games publisher taking a voluntary step like this is interesting given regulatory interest in the subject of in-game purchases around the world, although clearly questions will be asked about how the limits were calculated and how they will be enforced.

6. Apple reportedly closed a deal with China Mobile, giving it access to 700m potential customers.

Reports suggest that Apple might have finally succeeded in its efforts to do a deal with China Mobile. Why is this big news? Well, China Mobile has around 700 million subscribers. That is more than twice the population of the United States. China is already Apple’s third largest market by revenue, and a deal with China Mobile could bring in as many as 20 million new iPhone sales for Apple. The deal hasn’t yet been formerly announced, so watch this space.

Matt Pollins

Author: Matt Pollins

Matt is an international technology, media and telecoms lawyer and Head of Commercial and TMT at CMS in Singapore. He supports clients across Asia-Pacific. You can contact Matt via the "Contact" page. Views expressed on Connected Asia are those of the author. Nothing here constitutes legal advice or creates a lawyer-client relationship.

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