China’s Globalization Startups are a Boon for US Giants
The cloud market has been growing quickly, but now it’s slowing down. This is because businesses are trying to stop losing money on the cloud, and because of the economy. At the start of the new year, AWS showed its growth in the mid-teens; Industry-wide, the market slowed to 22% growth from 36.7% a year earlier.
However, there is good news – US cloud giants are getting business from Chinese Internet companies that want to set up overseas. Chinese tech companies have been developing overseas for decades, but many feel a new need to branch out amid growing competition and compliance risks at home.
TikTok’s meteoric rise to global dominance is an inspiration for China’s legion of Chuhai startups. This term means startups “going to the sea” and describes those who manage and grow overseas businesses. eMarketer predicts that TikTok will have one billion users by 2025. This is third behind Facebook and Instagram. But its challenges in the West — about its data security, credibility, and relationship with Beijing — also have its customers wary.
The West mistrusts companies with Chinese ties, no matter who they are or where they’re from. There is a major country like the US or even a neutral country like Singapore.
In its June 2022 earnings report, Alibaba said its cloud segment suffered from losing a key client as Internet users stopped using overseas cloud services. It’s an international business due to non-product-related requirements. Supposedly, this major Internet user was TikTok, which moved from the Alibaba Cloud due to geopolitical tensions.
A Rising Tiger Economy for Startups
Singapore has a Global Investor Program (GIP). This program grants Singapore Permanent Resident (PR) status to eligible global investors who plan to grow their businesses and investments in Singapore. It is a fact that there is great interest in immigration and investments in this country.
People were rushing to Singapore from nearby countries like China. Hence, the influx of rich Chinese nationals into the country rose, and with it, the opportunity to raise funding for startups created in Singapore.
In 2023, Singapore seems to have many beneficial attributes for regional startups: government funding, infrastructure, and now global investors are flocking to set up their regional hubs. Many Big Tech companies have regional hubs like Google, Amazon, Facebook, Salesforce, Stripe, and Grab.
This focus on Singapore and its startups is increasing. Investors are looking to Singapore as a new tech hub as they focus on technology development in these areas.
