ByteDance Ltd., a China-based internet technology provider that owns a popular video-sharing application TikTok, is planning to invest several billion dollars in Singapore in the coming three years, according to a Bloomberg report on Thursday, September 11, 2020. As sources reported, the investment of ByteDance could be part of its global expansion and goal to set the city-state as its regional base for the rest of Asia.
As of May 2020, the eight-year-old Chinese company is reportedly worth over USD 100 billion and considered to be one of the world’s most valued startups worldwide due to the wide penetration of its business operations to markets across the globe. Nevertheless, the Beijing-based company is currently facing hardship because of the recent decision taken by the governments from countries especially the United States (US) and India to ban the TikTok operation in their respective countries.
Considering the existing market opportunities in Southeast Asia, Singapore has emerged as a global destination for both Western and Chinese companies because of its developed financial and legal system. According to analysts, the city-state, because of its neutral position, became an attractive business destination amid growing tension between Washington and Beijing.
Focus on Singapore
ByteDance’s focus on Singapore is a strategic step to cover up its operations since it sought plans to sell TikTok’s US operation and is currently in talks with bidders including Microsoft Corp. (Microsoft) and Oracle Corp. (Oracle). The Trump administration put a ban on the Chinese company on the issues related to security concerns and violations of the privacy rights of users, which was persistently denied by the company.
Moreover, the company is not new to the market of Singapore as it has started its business operations in the city-state with the support of about 400 employees who are working on the technology, sales, and marketing. The latest investment also includes for the recruitment of more than 200 employees for the company’s business operations ranging from payment to e-commerce services and it has already applied for a license to operate a digital bank in Singapore.
Bloomberg Intelligence analyst Vey-Sern Ling said, “Singapore is highly attractive to tech firms looking for a hub to address the Southeast Asian markets due to geographic proximity,” adding that, “The workforce is highly educated, tech-savvy and multilingual.”
Likely to Miss US Deadline
The Trump administration has given September 20 as the deadline for ByteDance to sell its TikTok operation in the US and Trump said on Thursday, September 10, 2020, that he would not extend the date for the deal. Reflecting on the new Chinese regulations, the sale deal for ByteDance’s assets in the US becomes more complicated and analysts suggest that the company is likely to miss the deadline set by the US government.
Despite some analysts’ belief that the deadline would be extended due to the existing complexity of the deal, Trump said Thursday, “We’ll see what happens. It’ll either be closed up or they’ll sell it.”
Following the US warning against the Chinese company, several European governments including the United Kingdom (UK) and France have taken measures and put their business operation under scrutiny. ByteDane is currently under the investigation by French data security watchdog CNIL to evaluate if it violates market regulations and is a threat to its “national security” concerns.