Hello and welcome back to TechCrunch’s China roundup, a digest of recent events shaping the Chinese tech landscape and what they mean to people in the rest of the world.
China’s anti-competition tech crackdown continues to redefine the dynamics among the country’s internet giants, leading to collaboration between Alibaba and Tencent in the payments race. In the meantime, China’s tech giants are expanding fearlessly around the world. TikTok became the first internet firm from China to have topped 1 billion overseas users, and Tesla’s battery supplier CATL is on course to buy a Canadian lithium company to lock up critical battery components.
Lithium race
China’s battery-making giant Contemporary Amperex Technology, known as CATL, has made some big moves to shore up its lithium supply that is critical for electric car production. The firm has agreed to acquire Vancouver, Canada-based Millennial Lithium in an all-stock cash deal valued at CAD$377 million, or $297 million, according to an announcement made by Millennial Lithium on Wednesday.
The deal is set to secure the critical metal lithium for CATL, one of the world’s largest automotive battery makers. Millennial Lithium’s main exploration activity takes place in Argentina, which, along with Chile and Bolivia, forms the “lithium triangle” that holds most of the world’s lithium resources.
CATL has been riding the EV boom in recent years, with its revenues spiking from 5.7 billion yuan ($880 million) in 2015 to over 50 billion yuan in 2020. It struck a major partnership with Tesla earlier this year to supply lithium-ion batteries to the American EV maker from 2022 to 2025, which will no doubt further boost its revenues.
The Millennial investment is just one piece of CATL’s gigantic investment empire. A few weeks ago, news came that it had bought 8.5% in Australian lithium miner Pilbara Minerals. It also holds an 8% stake in another Canadian lithium firm, Neo Lithium.
TikTok tops 1 billion monthly users
This is a remarkable milestone for ByteDance, and really, China’s tech industry overall. Up until TikTok, no social media platforms from China had been able to rival the global reach of Western giants like Facebook and Instagram.
TikTok had a series of hurdles to overcome as it rose in dominance around the world, from PR crises around child safety concerns to threats by the Trump administration to ban the app over national security concerns. These deterrents haven’t seemed to kneecap TikTok’s growth in the West, though the app did lose a major market, India, after it was banned by the local government. It’s not a surprise that ByteDance is the fourth-largest lobbying spender in the U.S. only after Amazon, Facebook and Alphabet.
The question now is how TikTok can optimize monetization from its 1 billion monthly users. In China, ads and e-commerce are already major revenue drivers for TikTok’s sister short video app Douyin. TikTok is trying to beef up its content commerce business, for instance, by joining hands with Shopify to let its “business” creators easily showcase products on their in-app mini-stores.
TikTok’s shopping endeavors, if successful, will also be a boon to China’s millions of small and medium e-commerce exporters. Many Chinese sellers on Amazon are diversifying sales channels amid the platform’s wave of crackdowns on black hat tactics, though they understand that in the foreseeable future, no other marketplace can match the Seattle-based behemoth’s scale.
Further integration
The Chinese government has been pressuring the country’s tech titans to dissolve their “walled gardens” and make their services more interchangeable. We wrote two weeks ago that WeChat began allowing external web links, including those from Douyin and Alibaba, to be viewed inside the messenger after the government urged apps to open up.
Over the past few days, users noticed that apps affiliated with Alibaba, like food delivery platform Ele.me and video streaming site Youku, have added WeChat Pay as an alternative payments option to Alibaba’s affiliate Alipay. But Alibaba has yet to allow its rival’s payment system to enter its flagship marketplace Taobao.
Some of the collaborative efforts between the giants seem reluctant. For example, users can’t easily make purchases when viewing a Taobao link on WeChat, which defies the purpose of sharing content between apps. Inevitably, internet giants will find new ways to keep users on their platforms under the new and strict regulatory environment.
Source Link China roundup: Tesla supplier CATL to buy Canada’s Millennial Lithium
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