Uber turns to India, Africa and Middle East as losses mount

Uber CEO Dara Khosrowshahi speaks to the media at an event in New Delhi, India, October 22, 2019. (Reuters)
Updated 22 October 2019

Uber turns to India, Africa and Middle East as losses mount

  • Khosrowshahi brushed aside fears the stock price could fall further after the expiration of a lock-up period in November
  • Uber has exited several markets — including China and Southeast Asia — to pare back losses

NEW DELHI: The head of Uber said Tuesday that the global ride services firm was counting on India, Africa and the Middle East for future growth amid investor fears about mounting losses and a slump in its share price.
Uber has exited several markets — including China and Southeast Asia — to pare back losses, and is in fierce competition with rival Ola in India, a market estimated to be worth $7 billion a year.
Since its public offering in May, Uber’s share price has tumbled some 30 percent, while the company lost $5.2 billion in the second quarter.
“India is a fundamental part of Uber’s growth going forward... it’s a top 10 market for us,” chief executive Dara Khosrowshahi told reporters in New Delhi.
“The profitability characteristics of our business here are improving. If I look at Uber’s growth over the next 10 years, it’s... going to be defined by India, Africa and the Middle East, more so than the developed markets.”
Khosrowshahi brushed aside fears the stock price could fall further after the expiration of a lock-up period in November, after which company employees and early investors can sell their shares.
The chief executive, who was in Delhi to unveil an updated version of Uber’s app linking the Delhi Metro public transport system with its services, said he was focused on long-term prospects.
The revamped app is part of a global campaign to attract more users.
While India is one of Uber’s biggest markets — with 12 percent of its global rides — the firm still lags behind Ola in the nation of over 1.3 billion people.
It has also struggled to keep up with the two largest online food-delivery players Zomato and Swiggy.
The company laid off some staff in India as part of global job cuts as it tries to map a route to profitability.
But chief product officer Manik Gupta told AFP that Uber would double its technology team to 1,000 as proof of its commitment to Asia’s third-largest economy.
“We definitely want to show our commitment to India,” Gupta said.
Uber’s third-quarter results will be released in two weeks.


Alibaba confirms huge Hong Kong public listing worth at least $13bn

Updated 15 November 2019

Alibaba confirms huge Hong Kong public listing worth at least $13bn

  • Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade
  • Alibaba Chief Executive Officer said the group wanted to participate in Hong Kong’s future

HONG KONG: Chinese technology giant Alibaba on Friday confirmed plans to list in Hong Kong in what it called a $13 billion vote of confidence in the turbulent city’s markets and a step forward in its plans to go global.
The enormous IPO, which Hong Kong had lobbied for, will come as a boost for authorities wrestling with pro-democracy protests that have tarnished the financial hub’s image for order and security and hammered its stock market.
Alibaba will offer 500 million shares at a maximum of HK$188 apiece to retail investors, the company said. The number eight is considered auspicious in China.
Over-allocation options could take the total value to more than $13 billion, making it one of the biggest IPOs in Hong Kong for a decade after insurance giant AIA raised $20.5 billion in 2010.
Alibaba had planned to list in the summer but called it off owing to the city’s long-running pro-democracy protests and the China-US trade war. The US and China are now working on sealing a partial trade deal.
Daniel Zhang, Alibaba Chief Executive Officer, said the group wanted to “contribute, in our small way, and participate in the future of Hong Kong.”
“During this time of ongoing change, we continue to believe that the future of Hong Kong remains bright,” he said.
The firm’s shares are already traded in New York. A second listing in Hong Kong is expected to curry favor with Beijing, which has sought to encourage its current and future big tech firms to list nearer to home after the loss of companies such as Baidu to Wall Street.
In the statement, Zhang said that when Alibaba went public in 2014 it “missed out on Hong Kong with regret.”
Mainland authorities have also stepped up moves to attract such listings, including launching a new technology board in Shanghai in July.
The listing comes after the city’s exchange tweaked the rules to allow double listings, while Chief Executive Carrie Lam had also been pushing Alibaba’s billionaire founder Jack Ma to sell shares in the city.
“The listing in Hong Kong will allow more of the company’s users and stakeholders in the Alibaba digital economy across Asia to invest and participate in Alibaba’s growth,” the company said.
It has long been expected to launch a multibillion-dollar stock listing in Hong Kong but appeared to postpone the offering because of political and economic turmoil.
Hong Kong’s key Hang Seng Index rose 0.48 percent in morning trading following the announcement
Chinese shoppers set new records for spending on Monday’s annual 24-hour “Singles’ Day” buying spree, despite an economic slowdown in the country and the worries over the US trade war.
It said consumers spent $38.3 billion on its platforms over that stretch, up 26 percent from the previous all-time high mark set last year.
Alibaba also said it saw record amounts of cross-border sales, underlining its plans to expand globally.
“Globalization is the future of Alibaba Group. We firmly believe the marriage of digital technology and commerce will bring about unprecedented change that will not be limited by borders,” Zhang said.