Saudi Arabia-backed SoftBank fund to invest $333m in Uber

Updated 21 April 2019

Saudi Arabia-backed SoftBank fund to invest $333m in Uber

  • Toyota has already invested $500 million in Uber as the firm races a host of other companies to develop self-driving vehicles
  • Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street

TOKYO: Japanese car giant Toyota and the Saudi Arabia-backed investment fund SoftBank Vision Fund on Friday unveiled an investment of $1 billion in US company Uber to drive forward the development of driverless ridesharing services.
Toyota has already invested $500 million in Uber as the firm races Google-owned Waymo and a host of other companies, including major automakers, to develop self-driving vehicles.
The latest investment, which also involves Japanese parts maker DENSO, will go to Uber’s Advanced Technologies Group in a bid to “accelerate the development and commercialization of automated ridesharing,” the firms said in a statement.
Toyota and DENSO are stumping up $667 million and SoftBank Vision Fund, the investment arm of Japanese tycoon Masayoshi Son’s SoftBank, will pour $333 million into the venture.
Uber chief executive Dara Khosrowshahi said driverless cars would “transform transportation as we know it, making our streets safer and our cities more liveable.”

 

His firm is aiming to go beyond car rides to becoming the “Amazon of transportation” in a future where people share, instead of own, vehicles.
If all goes to plan, commuters could ride an e-scooter to a transit station, take a train, then grab an e-bike, share a ride or take an e-scooter at the arriving station to complete a journey — all using an Uber app on a smartphone.
Uber is also seeing growing success with an “Eats” service that lets drivers make money delivering meals ordered from restaurants.

The latest cash injection came a week after Uber filed official documents for its much-anticipated public share offering that is expected to be the largest in the tech sector for years.
Uber’s filing with the Securities and Exchange Commission said it operates on six continents with some 14 million trips per day and has totalled more than 10 billion rides since it was founded in 2010.
The filing contained a “placeholder” amount of $1 billion to be raised but that figure is expected to increase ahead of the initial public offering (IPO) expected in May.
The Wall Street Journal said earlier this month that Uber was seeking to raise $10 billion in what would be the largest stock offering of the year.
Media reports said the ride-hailing giant was likely to seek a market value of close to $100 billion.
Uber is the largest of the “unicorns” or venture-backed firms worth at least $1 billion to list on Wall Street, and is one of the key companies in the “sharing economy” based on offering services to replace ownership of cars, homes and other commodities.
Its revenue grew 42 percent last year to $11.2 billion but it continued to lose money from its operations. A net profit was reported for the year from a large asset sale, but operational losses were more than $3 billion.
And some analysts have voiced caution over the forthcoming IPO given a relative lacklustre debut for Lyft, the main US rival.
Khosrowshahi has promised greater transparency as he seeks to restore confidence in the global ridesharing leader hit by a wave of misconduct scandals.

 

FASTFACTS

$100bn

Size of the SoftBank Vision Fund, of which Saudi Arabia has pledged to contribute some $45 billion.


Saudi consumers give online retailer AliExpress boost in Middle East market

Updated 13 November 2019

Saudi consumers give online retailer AliExpress boost in Middle East market

  • AliExpress currently delivers to more than 200 countries and can be used in 18 languages
  • Around 60 percent of the consumers are below the age of 35, with 51 percent being female

DUBAI: Due to the increasing amount of purchases from the region, the Chinese e-commerce AliExpress has started offering several new services.
The growing demand came specifically from Saudi Arabia and the UAE, where the retailer started offering consolidation of orders for cheaper delivery and cash on delivery as a payment option.
These services were tailored to consumers from the region, as the company knew “cash on delivery is very popular in Saudi and UAE,” according to AliExpress’s Middle East head, Matt Zhang.
The retailer, which is under the Chinese Alibaba multinational conglomerate, is also trying to expand its provided local services.
“We have an overseas warehouse in Dubai. We are trying to open a warehouse in Saudi. We are in the process of all the legal and facility planning,” Zhang said.
Sellers will have the chance to use this facility, which is usually stocked with high-demand items, to decrease delivery times.
They also use the local delivery company Aramex in Saudi Arabia and the UAE to decrease the amount of time required for orders to reach consumers.
“Cainiao works with local partners” to enhance the buying experience, Zhang added. Cainiao is a technological company and the logistics arm of Alibaba group, providing the various businesses under the conglomerate with a variety of solutions locally and globally.
All of these additions follow AliExpress’s main strategy to expand in the region, which is to provide “a good selection, more competitive price and good service,” Zhang said.
The e-commerce company has been working with a marketing agency for the region as well, as they believe they need “more local insights,” he added.
For consumers in Saudi Arabia, their top three categories for shopping are consumer electronics, home and garden, and phones and accessories.
One of the reasons why consumers choose to buy such items from AliExpress is the value for money they get in exchange.
Buyers and sellers are now able to skip the tedious process of export and import through warehouses and distribution centers, which shortens the whole value chain and provides the same goods for a smaller amount of money.
Another interesting defining factor of consumer behavior in Saudi Arabia is the tendency to explore more options under each category compared to other countries.
The top three categories make up less than 40 percent of the ordered products, leaving the remaining more than 60 percent scattered over a long list of sub-categories.
On top of AliExpress, Alibaba is penetrating the regional market in other ways too.
If you have noticed the recent 11.11 sales and offers, they have been inspired by a decade-long shopping festival in China.
Although 11.11 is just starting to bloom in the region, it is a long-established event in China featuring a variety of entertainment and shopping events.
The famous US singer, Taylor Swift, performed at Shanghai’s Mercedes-Benz Arena during this year’s gala event for the shopping festival.
Several local retailers offered discounted items, ranging from baby care products, to groceries, to electronics and clothes.
At the end of the 24-hour shopping festival, Alibaba’s gross merchandise value (GMV) surpassed $38 billion, according to the company.
Alibaba reported that over 215 leading international brands, like Lancome and Shiseido, debuted one million new products, with over 240 11.11 themed items, during the 2019 festival.
The conglomerate is currently focusing on new retail in China, or as they have explained, an offline and online shopping experience. Tmall customers can view products online, and either buy them through delivery of find the nearest outlet to check the items in real life.
They are also undertaking new ventures in the country, such as the Flyzoo hotel in Hangzhou, which is fully automated and is operated by robots.
AliExpress currently delivers to more than 200 countries and can be used in 18 languages. Around 60 percent of the consumers are below the age of 35, with 51 percent being female.
Currently, the countries with the highest GMV are Russia, Spain, France, Poland and Brazil.
The retailer is also working on offering more international businesses to operate on their website and sell products. The service has already been launched in Russia and Turkey.