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Heading out and heading west

The traffic is increasingly two-way. While European and American firms continue to invest in Asia, homegrown companies from the region are expanding aggressively into the developed world.

This may seem surprising at a time when globalisation appears in retreat and Chinese firms, in particular, are having acquisitions in the US (and even Europe) scrutinised and blocked. 

But it is very much happening. Take Oyo, the Indian hotel chain, which announced recently that it was earmarking $300m for expansion into the US. The Indian group, backed by Softbank and Airbnb, already claims to be the world's sixth-largest hotel operator and has already established a big presence in several Asian markets. Tellingly, the US investment comes at the same time that Oyo has decided to cut 1,000 jobs in China, its previous target market, following poor results there. If that is not confidence, I don't know what is.

Meanwhile, south-east Asian unicorns, from Grabtaxi to Tokopedia to Gojek are stepping up acquisitions both at home (such as in Indonesia) as well as in the west. Trax, a Singaporean online retailing start-up , bought California's Shopkick this week - an app that popularises shopping rewards. Grab has invested in a UK firm that will allow users to use its ride-hailing app internationally, thus massively expanding its reach into countries and regions where it currently has no presence.

Are Asia's tech companies overpaying? Probably. But mostly they are paying in their own overvalued stock, or at least with cash raised cheaply in hugely inflated funding rounds of their own. That makes these investments very different from previous episodes when the Japanese and Chinese splurged hard-earned money on western real estate, hotels, art and Hollywood studios...and soon regretted it. 

This generation of Asian big spenders also appear to be mostly focused on geographical expansion of their core businesses, rather than going into a new market and a new business at the same time, as so often in the past. Obviously, keeping it as simple as possible raises the chances of success of any investment.

***On a largely unrelated matter, here is a visualisation of all of China's large technology companies, made to look like a city. Very cool.

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