Abandoning Hong Kong as a regional hub for operations and knowledge storage just isn’t a simple determination for western tech teams. Silicon Valley giants reminiscent of Fb, Twitter and Google are reviewing their operations in response to Beijing’s sweeping new controls, however haven’t but pulled out. Entry to the mainland Chinese language market could also be too huge to disregard. For Asian tech teams, nonetheless, the sooner the higher with regards to making the decision.
South Korean Google rival Naver has give up Hong Kong — making it the primary massive international tech group to take motion in response to China’s new safety legal guidelines. It has relocated its knowledge back-up centre — which has been in Hong Kong since 2016 — to Singapore.
It’s a good transfer. The results of leaving Hong Kong and risking Beijing’s ire are few. Most — about two-thirds — of Naver’s revenues are made in its residence market. The US and Japan account for the remaining.
Messaging platforms together with Japan-based WhatsApp competitor Line — majority owned by Naver — are a big contributor to revenues, accounting for greater than a 3rd of complete gross sales. China blocked Line messenger six years in the past.
An outbreak-induced surge in native ecommerce transactions has boosted gross sales. Analysts count on second-quarter working revenue to rise greater than 70 per cent. That additionally means extra private knowledge — all the pieces from shoe sizes to bank card numbers — go by means of their knowledge centres. Addressing customers’ privateness issues shortly will assist keep that progress.
Protecting its operations in Hong Kong could have additionally led to troubles down the road. The US market has proved a surprisingly sturdy supply of progress. Webtoons, or web-based comics, have garnered unprecedented curiosity amid lockdowns. Almost a fifth of all Naver’s webtoon viewers at the moment are within the US.
Shares of Naver have greater than doubled previously yr on expectations this development will proceed. Naver’s good transfer ought to assist guarantee shares stay on an upwards trajectory.
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