The Great Firechat: Recent Episodes
Kevin and Adeh
After a several month hiatus Adeh and Kevin are back with season 2!
This week we delve deep into ElonMusk's Twit-tastrophe and examine the odds of his success, and the success of other superapps. Then we segue to the China gaming market which is finally on the thaw.
1) Twitter to Superapp - What Musk needs to do to turn it into a Superapp, and can he do it?
Douyin making smart Superapp plays
2) Gaming:
Blizzard and Netease end partnership after 15 years
Tencent gets first gaming license after freeze
Tencent to expand Honor of the Kings into it's own metaverse
Today we chat with Duco van Breeman.
Just looking at what Duco has done – starts his first company (of many) at 11 years old, spends a decade in China doing government relations and supporting start-ups, moves to Australia and becomes CEO of a major coworking space and incubator in the heart of Sydney's Chinatown, then ends up doing one of the biggest NFT events in the country – the guy sounds like a business monster.
But listening to him, I think you'll find him quite human and humble.
Enjoy!
Links:
- Duco is CEO of Haymarket HQ https://www.haymarkethq.com/
- Duco's brilliant and hilarious NFT project "The Kimmies" https://www.thekimmies.com/
- Duco's co-organized event with Aussie street artist E.L.K. https://whatson.cityofsydney.nsw.gov.au/events/edge-of-chaos
Adeh and Kevin sit down with Robby Wade, CEO and Co-founder of Thisapp, "an all-in-one chat platform that makes it easy to connect with anyone and organize anything". We explore everything superapps from their success factors, determining their viability in the West to Elon Musk pulling out of the Twitter deal.
Claim your Thisapp username at https://www.thisapp.com/
"The First Superapp" book: https://www.kevinshimota.com/
This week we are all about how to front-run the opportunity:
Bytedance is making an Instagram copy in China to compete with RED, but does the West need a RED copy?
With a mess of review platforms in the West, we think it’s time for a review revolution!
Didi's year-long data debacle seems to finally be at an end with one big last fine. Chinese gaming companies increasingly look overseas, while Chinese look for new ways to play games, like LARPing, which has apparently become big enough to cause some problems. Enjoy!
1) Bytedance to launch KeSong 可颂 'criossant' - Instagram-copy to compete with Xiaohongshu in China
2) The jury is out - Didi fined USD 1Billion
3) Netease opens new gaming studio in Seattle focused on first-person narrative action
4) China’s Communist Party cracks down on larping
5) Kevin explains Suprapps to the Wall Street Journal
BONUS
- translation of a chinese article on the birth of Douyin/TikTok
- Original Article in Chinese
Write-up:
This week we talk about China's big tech to give NFTs a new name in a tech rebranding to attempt to revitalize the industry in the gov's eyes, which is needed because companies like Alibaba are suffering small but telling 'burns' from the government. China's livestreaming could use some rethinking as they're hit with more content restrictions and Tencent closes their "WeGame" mobile app showing a failure to consolidate their gaming empire in China.
1) China tech is rebranding NFTs
2) Alibaba gets a 'sick burn' from Hangzhou metro
3) China's livestreaming is now 'wholesome-content only'
4) Tencent closes "WeGame", a Steam-like mobile game portal
BONUS Article: Inside Didi's 60 billion dollar crash by Bloomberg
Bit of a monstruous episode this week, we normally try to stick to 4 stories, and we ended up going into about 10. We chat out the electric vehicle market, examine data security concerns from the national and corporate level, get an update from gaming criss-crossing the Pacific, and lastly, provide you with an authentic China-experience by selling you a product while teaching you Chinese - I dub this 'educational informercials' and I think we're just seeing the beginning of this new China-fad.
1) BYD becomes third-largest car company by market cap
2) After a year of probing, Didi is back online
3) speaking of probing for data security, Tiktok 'lied' about user data (or did they?) ; and an NYT article on the same topic.
3.5) Bytedance's foray into VR ; and Tencent opens a BD on 'extended reality'
4）Tencent and Netease bring games to Msft's Xbox ; and, after another freeze, Beijing is approving more games
(4.5) speaking of Tencent, they invested $250mn in Flipkart (indian eCommerce)
5) New Oriental finds surprising success by innovatively combining eCommerce livestreaming and English education - or what I dub, "the educational infomercial"
Bonus: Elon Musk holds town hall meeting with 5k Twitter employees and says he wants to turn Twitter into WeChat-style superapp
This week we delve into ecommerce boom of short-video apps in China Douyin and Kuaishou then look at how ecommerce is and will evolve outside of China. Can Facebook and Instagram create a similar ecommerce pivot with their social media platforms?
Meanwhile, India is creating a new centralized digital commerce platform, which accomplishes something similar to China's recent regulation on the fintech: creating a level playing field and breaking down monopolistic barriers in the digital realm.
1) Douyin’s ecommerce sales more than tripled over the past year
2) Alibaba-backed smart-vending machine Ubox to IPO in HK
3) Apple moving more production to Vietnam
4) India making ecommerce a public good with Open Network for Digital Commerce
5) SouthEast Asia Tech is cooling off
Honorable mentions: www.stratechery.com by Ben Thompson
This week we delve into the big slowdown of Tencent, and greather big tech in China, and look at how these companies are looking overseas markets for revenue potential, especially in games.
We then talk a bit about WeChat; "private traffic" is a major trend in China driving business decision and it pairs with influencer and live-streaming economy yet it's not well understood outside of China. Similarly, Elon Musk in an interview this week, explains that WeChat is "really an excellent app" and his Twitter product road map would be to make a WeChat-style superapp.
1) Tencent stops growing, down $500bn since 2021 peak
2) Chinese mobile game companies set eyes on US, Europe and overseas markets
3) "Private traffic" trend in China 私域流量
4) Elon Musk wants the West to make a WeChat-style Superapp
Bonus article: Wired on Shein
This week Adeh and Kevin team up with Fabian Gems and Lisa-Maria Stöger from GIN (Global Incubator Network) as we chat about the metaverse, how China's metaverse will look similar and different from the rest of the world, and a few fun digressions. Enjoy!
(no cool links to sources this week as this was more a live, adlib convo)
With Elon Musk acquiring Twitter and upending the status quo of the Western tech, Kevin and Adeh analyze and foretell the impact of the EU's two new upcoming tech regulation policies by examining China's tech crackdown as precedence.
They end on a more optimistic note by looking at how parts of China's tech is continuuing to flourish and the crackdown beginning to ease.
1) Musk bought Twitter, a $44 bn deal
2) EU tech crackdown: EU approves Digital Markets Act and Digital Services Act
3) China tech crackdown: $1 tn tech stock value loss during crackdown, venture cap funding down 77% yoy
4) Shein valued at $100 bn USD, more than H&M and Zara combined
5) China hands out game licenses after 9 month freeze
5b) Tencent didn't get a license but still rolling in the dough
This week we talk about how China's big tech are coping with new regulations on recommendation algorithms; they are simply allowing users to 'turn them off'.
Meanwhile, a Shanghai's games developer "Genshin Impact" becomes the first major Chinese game to go global. This marks a major milestone in China's gaming industry, and some of the most valuable IP content (Intellectual Property) to be created in Greater China since the likes of Crouching Tiger Hidden Dragon or Bruce Lee movies.
1) Douyin, Baidu, Taobao, and WeChat now offer an option that allows users to turn off their recommendation algorithms
2) Shanghai game "Genshin Impact" focuses on Japan and US markets, earns $2bn USD in first year
3) Chinese authorities are considering requiring Tencent Holdings Ltd. to include WeChat Pay in a newly created financial holding company
BONUS Content
- Douban is seeking a public apology from Weibo and demanding a symbolic RMB 1 ($0.15) indemnity and the litigation fees from the case.
- Podcast interview with author of Cashless, all about China's CBDC (Central Bank Digital Coin)
This week Adeh and Kevin cover the latest Chinese government directive from the “Two Meetings”, as they predict the tech crackdown is finally consolidating and bottoming out. I mean... we can only go up from here, right? Also, we look at how East Asia is finally starting to reject their smartphone addictions.
How is smartphone addiction perceived in your country? Are you and/or your friends beginning to reject smartphones, or maybe taper smartphone their addictions? We'd love to hear from you!
1) Beijing's Two Sessions illustrates gov direction
2) Tencent potential big fine for violating anti-money laundering regulations
3) Tencent firing around 20% of employees, Alibaba about 30%
4) Businesses boom to help kick smartphone addition
This week's theme was 'continuity' – Adeh and Kevin are becoming real podcasters as they revisit previous topics. They recap the impacts of the crackdown on China's tutoring and gaming industry's, notice that another EV company is jumping into smartphones, and examine new policies on food-delivery platforms as Beijing's crackdown on tech continues.
1) 90% of tutoring companies have closed since July after gov crackdown
1b) First edtech company to IPO since crackdown "FenBi"; going for $300 mn USD
2) Nio hires former president of Meitu's smartphone unit
3) Netease looking to be more global as gov crackdown on gaming continues
4) New gov policy to limits merchant fees on food-delivery platforms, and Meituan's stock falls 15%, losing $25 bn market value
After nearly a decade of domination of social tech products, a cute metaverse avatar app seems to be challenging WeChat/Tencent. Adeh and Kevin delve deeper into the metaverse as they talk about tech issues on both sides of the Pacific.
1) A year of China tech layoffs
2) Metaverse social app flies past WeChat then crashes
3) Meta, Metamates, and Me
Bonus links:
- Mentioned podcast episode on Bored Ape YC
- Bored Ape Yacht Club official website
Kevin and Adeh go through a variety of topics which depicting shifting trends in China tech. China's tech is maturing and getting more business savvy, Electric vehicles are still booming with Geely getting more tech savvy, and China's gov is getting more savvy on the VC industry and on blockchain. We hope you savor this savvy episode.
Happy Chinese New Year!
- The Great Firechat Team
1) Geely to buy Meizu
2) Youzan laying off 30% of employee
3) Upcoming regulations could dampen China's VC industry
4) China moves to create an 'approved' NFT industry or "Digital collectibles" industry
Kevin and Adeh do a deep dive into platform's algorithms and Beijing's upcoming regulations on them. These regulations are aimed at moving responsibility and risk to companies and their algorithms. How can an algorithm be responsible for anything? What would that even look like? Adeh presents some great examples which help things finally click for Kevin.
We then end on a less complex note with the booming electric vehicle market and new smart helmets that help make zoomie food-couriers safer.
Links:
1) new regulations; Data security (Feb 15), Algorithm March 1
- Beijing’s new algorithm rules shift responsibility — and risk — onto companies, not creators.
- ENG translation of the law
2) NYTimes explains the TikTok algorithm
3) BYD reports 232% year-on-year increase in passenger EV deliveries
4) Ele.me smart helmets - take order, bright lights, call ambulance, etc.
BONUS) College majors for "social influencers"
As Tencent and the rest of big China tech continues to suffer from the gov crackdown, Bytedance revenue soars. However, Tencent may just be lying low and contemplating their next move as the company seems surprisingly well equipped for the metaverse and future of tech.
1) Bytedance still growing strong with 60% revenue growth
2a) Gov crackdown begins to traverse time into the past
2b) Big China tech struggling to play nice and open up
3) Tencent is lying low - quarterly revenues lowest since 2004
4) Into the metaverse - Tencent has been doing this for two decades
This week we talk about more Western tech companies pulling out of China, this time a big and successful one; Microsoft's LinkedIn.
We go deep into the real industry of fake virtual celebrities, talk about Alibaba's waning eCommerce dominance, and end with impending regulation to open up content for search engines which would be a great boon to Baidu, the once massive Google-like search engine which has struggled to remain relevant the past half decade.
1) MSFT pulls the plug on LinkedIn China
2) The growing synthetic media business (like the 2013 movie "The Congress")
- https://www.36kr.com/p/1456252888033415
- Porsche invests in iMaker
- Virtual human start-up Next Gen raises $5 million in round A
- More on the industry in China
- Lil Maquela
- Extra: Deep fakes of celebs
3) $BABA is losing e-comm market share - and it's not just regulations
4) Beijing may force tech companies to share data for search
This week your co-hosts discuss Meituan's anti-trust fine, JD.com's foray into elevator ads and pets, and then go a little deep on the responsibility platforms have for their algorithms.
This is especially timely as Facebook's whistleblower cries foul in the US, while China implements policy holding products responsible for their algorithms.
1 Meituan's anti-monopoly probe ends with a USD534M fine
2 JD and Baidu jointly invest $400mn in elevator ads biz now worth >$2bn.
3 JD.com make Internet Hospital for Pets
4 Algorithm rules get more clear
This week Kevin and Adeh delve deep into China's tech crackdown. The crackdown has wiped hundreds of billions off the value of China's tech companies - is this the end or the beginning?
Your hosts review the crackdown to date, examine how companies are mitigating the current risks, and grapple with convoluted metaphors to predict how this will all play out.
- China has over a billion internet users
China's tech crackdown
- Summary of Tech Crackdown
- Ali and Tencent agree to work together
- Walls are coming down
- Beijing to break up Alipay, separate Loans app
- Ant's spinoff will share data with Gov
- Alibaba feelin' the squeeze from the crackdown
- China orders Alipay and WeChat Pay to disclose IPOs, new products and int.l partnerships
- What's next? Li Guangman's opinion piece
Games:
- No new games! (or 'slow' new games!)
- Tencent gaming global investments sevenfold increase
- NetEase invests $120M in global gaming hub 'Kepler'
As Beijing releases unprecedented restrictions on gaming in China, Adeh and Kevin chat with their friend "Pidou" from one of China's biggest gaming companies.
Your co-hosts get the inside story of how this and other recent changes are affecting the industry. They also examine a few clues and guess at which industry will be impacted next.
- China bans minors from video games for more than 3 hours per week
- Shares of Tencent and NetEase fell last month after release of Chinese state media article calling online gaming “opium.”
- China gov releases guidelines to control addictive algorithms
- China tech world's infamous 996 work schedule becomes illegal
This week Kevin and Adeh discuss Tencent's continued domination of mobile games, and then delve deep into the Chinese governments newest policies and actions, all of which aim to rein in China's tech sector.
China's newest personal data privacy law is a good step for the people of China, and begs the question; now that the EU, China, and the state of California all have basic data privacy laws, when will the United States as a nation get one?
- Tencent's PUB-G and Honor of the Kings are top two grossing mobile games globally
- Chinese Gov takes 1% stake in Bytedance
- China's new personal data privacy security law
- More on new policy around data infrastructure
- Tim Hortons China making separate China entity to go public
This week your co-hosts analyze China's tech world's new norm; strong government regulation. There hasn't been too much in the news, why? Tech in China is all going quiet. IPOs are being cancelled, partnerships on hold, and more. When uncertainty abounds, China prefers to lay-low until the dust settles.
Also, Kevin has a chat with JinYao Desandies, Adeh's 14-year old son. JinYao has a great balanced perspective because he speaks eloquently in English, but spends most of his days speaking Mandarin with his local friends. Jinyao provides his views on the private education crackdown, and what kids in China are thinking about in regards to tech.
- Meituan fined 1 billion
- Tencent Sued
- It's not over yet...
- Douyin food delivery function
- Education - VIPkid to stop offering "foreign-based" tutoring courses
- Bytedance slashes ed tech headcount
This week we discuss the directorate that has upended China's private education sector. For decades, private tutoring sector had been a hotbed for investment, since the pandemic began it has become one of the fastest growing sectors in China.
The new directorate dumps all of investment heat into a big bucket of ice cold water. It's not game-changing, it's game-ending. This is woeful news for investors, but likely welcome news for parents and kids across China.
We also touch on the latest from China's digital yuan and answer some listener questions about Huawei and China's cloud.
Links:
- New directorate upturns private education sector
- e-CNY hits 5.3B in transaction volume
- e-CNY whitepaper (Chinese)
- Alibaba / Tencent face the e-CNY
This week your co-hosts delve deep into the anti-monopoly crackdown which continues in both China and the US. Each side's government commonly say they are helping the 'little guys', but is this actually good for start-ups? Is it good for the respective nations as a whole? What will be the repercussions?
Then we touch on the interesting other US-China affair of Chinese companies listing on US stock markets. Lastly we end on XiaoMi - the 'little' start-up is back and bigger than ever.
The anti-monopoly end game:
- Alibaba and Tencent opening up walled gardens
- Alibaba, Tencent, Bytedance and 33 others sign anti-trust self discipline agreement
US IPO? No, no, no.
- China tightens cybersecurity review process on overseas IPOs
- XiaoHongShu (RED) suspends US IPO thoughts
XiaoMi is a buy!
- XiaoMi becomes second largest seller globally of smartphones
Last week, Adeh and Kevin guessed that the end was nigh for China tech's notorious 996 work schedule, they just didn't realize how quickly it would happen.
Their guesses were a little less accurate with Didi. Beijing continues to increase scrutiny of overseas investment and Didi is caught in an awkward place as competitors start to swoop in to take advantage of the situation.
Lastly Beijing blocks a Tencent-backed merger in live-stream gaming and a quirky Microsoft AI spin-off in China is taking off.
- Bytedance ending 996 work schedule
- Meituan ends weekend work
- China tightens security on overseas IPOs after Didi
- Bytedance shelves IPO ambitions
- Meituan relaunches ride-hailing app amid Didi investigation
- China gov blocks Tencent-backed merger of video-game live streaming platforms Huyu and Douyu
- XiaoIce closes series A above $1bn mkt value
This week your co-hosts go for the Didi hatrick as the car-hailing company finds itself in the middle of a geo-political tik-tok match. Adeh explains the nuance of the term 内卷 neijuan, or involution, and Kevin tells us what went on during those long long hours working at WeChat.
- Didi gets pulled from App stores as Beijing probes their security practices.
- Two other recent US IPOs, Full Truck Alliance and BOSS Zhipin get hit in the same way.
- And now shareholders are filing lawsuits against Didi - putting them between a rock and a hard place.
- Big tech is also dealing with their workforce pushing back against the 996 culture.
- Today's graduates are becoming increasingly disillusioned about the future.
- BONUS: China's Glassdoor
This week Adeh and Kevin discuss Ant Financials' talks to share data for credit-scores with state-owned banks, and how this reflects trends we're seeing globally. They also talk about Didi's IPO which was not as big as expected, and the latest tea craze as tea brands score an increasing amount of investment and consumer interest.
- Ant Financial (Alibaba) to share data with banks (and gov)
- Didi lackluster IPO at $62 billion, but still a big player
- Tea mania in China!
- HeyTea new round of funding at $9.27 Billion USD
- Tea brand 椿风 pre-A funding at tens of millions RMB
- Tea brand CHALI茶里 latest funding round hundreds of millions RMB, led by GGV
This week your co-hosts deep dive into the Didi IPO. What can we expect? Will Didi outshine Uber? What sets Didi and Uber apart? In any case, Adeh is ready to welcome our robotaxi overlords, and Kevin wants to serenade them.
- Didi looking to raise up to 10 billion USD in a US IPO
- China's rover takes a selfie on mars
- BONUS: A startup already stole Kevin's idea to democratize pre-IPO investing
This week your hosts Adeh and Kevin discuss the impact (or lack there of) of the 3-child policy, then delve into the latest in AI, Huawei's herculean effort to develop a new operating system, and Bytedance and Tencent's squabbles.
They also examine the competitive industry of 3rd-party server infrastructure which has become more like 'castles in the sky' rather than 'the cloud'.
- China sets 3 child policy
- Chinese AI researchers release a new multi-modal that's even bigger than PanGu
- Tencent and Bytedance squabble; Bytedance's big post on WeChat, and Tencent calls short-videos "pig feed"
- Alibaba Cloud investing 1$ billion USD in APAC (mostly SEA)
- Huawei making moves; aims to unroll HarmonyOS on hundreds of millions of phones by end of this year
This week your co-hosts dip back into current 5-year guideline to make sure we have a clear picture what's coming next in China. Then we take a look at Meituan's latest quarter, find holes in the great firewall, and talk about Kevin's misadventures in ed-tech. Listen now and join the conversation.
- The government's crackdown on Big Tech is a lever to get them to invest into the 5-year guidelines.
- Meituan's revenue jumps 120%, while the stock is down 40%.
- More anti-trust / anti-monopoly fines for the comminuty group buy grocery market.
- Alibaba and Tencent both have "internet accellerators" to help students access information from outside the GFW.
- New regulations in ed-tech attempt to reign in a fast growing sector
- Extra: Startups, join this global competition for funding and connections to China's hopping startup scene: HICOOL.
Today your co-hosts are joined by Leon Du, CEO of tech company Beansmile, to discuss the 14th 5 year plan and what it means for anyone looking to work in or with China. We all learn a lot about the history, the impact, and the mechanics behind one of China's major tools of government. We also learn a lot about what it means to be open, to be honest with yourself - and how to be a lovely human.
Tencent is clearly establishing itself as a world class technology company with $7.6 billion in profit for the quarter. Facebook reported $9.4B, Alibaba $1.6B (without fine).
- https://www.scmp.com/tech/big-tech/article/3134177/tencent-posts-65-cent-rise-first-quarter-profit-amid-tightening
The full text of the 14th 5 year plan, in Chinese.
- http://politics.people.com.cn/n1/2021/0313/c1001-32050444.html
Selected translations
- https://pekingnology.substack.com/p/select-translations-of-the-14th-fyp
A brief summary from the Chinese press, in English
- https://news.cgtn.com/news/2020-11-07/What-is-China-s-14th-Five-Year-Plan-all-about--VdWpPn4CqI/index.html
A piece from the New York Times
- https://www.nytimes.com/2021/03/10/business/china-us-tech-rivalry.html
BONUS: Current ongoing US legislation which is clearly a pointed response to Beijing's 5-year plan
- https://www.cnbc.com/2021/05/25/chip-shortage-democrats-gop-team-up-to-target-china.html
We'd also like to thank our wonderful guest, Leon Du, for sharing his time and his knowledge. His excellent company builds e-commerce tools and payment solutions to support the goal of "dual circulation". He can be found at http://beansmile.com.
This week your co-hosts dive into Alibaba's first operating loss since becoming a public company, but they're not too worried. They talk about Tencent's potential partnership with Xbox and the increasing value of IP (content). Kevin talks about how a beef-jerky company copies Apple, and Adeh tries to explain the implications of our AI future. Listen now and join the conversation!
This week's Chinese proverb: 当局者迷，旁观者清 - "The player is muddled, while the onlooker sees clearly"
Alibaba posts it's first operating loss, but it doesn't look all that bad
- https://www.cnbc.com/2021/05/13/alibaba-earnings-q4-net-loss-after-2point8-billion-antitrust-fine.html
Tencent Games is in talks with XBox, we're both excited
- https://techcrunch.com/2021/05/13/tencent-timi-xbox/
Beijing punishes apps that gather too much data, when will this happen to Facebook?
- https://www.scmp.com/tech/policy/article/3133493/beijing-removes-90-apps-crackdown-information-collection-flexing-new
Kevin's favorite "spicy gluten stick" maker has filed for and IPO
- https://www.dealstreetasia.com/stories/weilong-hong-kong-ipo-240563/
- And highlighting their incredible Apple-spoof design: https://lyceum18.wordpress.com/2016/11/17/cheap-chinese-snack-brand-spoofs-apples-design-the-people-love-it/
Chinese AI researchers release a competitor to GPT-3, sealing our future as batteries for the machines
- https://arxiv.org/abs/2104.12369
Zhang Yiming takes a bow, following in the footsteps of Colin Huang ($PDD) and Jack Ma ($BABA) - but is it the right time?
- ByteDance co-founder Zhang Yiming to step down as CEO
BONUS#1 - A well crafted look into what GPT-3 offes, which informs how Pangu might be utilized
- https://pudding.cool/2021/03/love-and-ai/
BONUS#2 - A look at the Chinese term 内卷 neijuan, or involution, and how the pressure of grades, work, and the economy shapes the outlook of China's working middle class.
- https://www.sixthtone.com/news/1006391/how-one-obscure-word-captures-urban-chinas-unhappiness
This week your co-hosts touch on a range of topics from the NFT craze to China's fitness boom. Adeh is vindicated, and Kevin ponders parties and late-night beer runs. Join the conversation and let us know what you think!
What are NFTs and how will they fit into the digital future
- http://www.sixthtone.com/news/1007240/how-nfts-are-transforming-chinas-art-market
Meme girl makes 500k from selling an NFT
- https://www.abc.net.au/news/2021-04-30/disaster-girl-meme-sells-for-500-000/100106366
Xiaomi wins lawsuit, american's can trade shares again
- https://www.bloomberg.com/news/articles/2021-05-12/xiaomi-u-s-government-agree-to-drop-firm-from-blacklist
Hello Bike set to go public
- https://technode.com/2021/05/01/hello-inc-becomes-first-chinese-bike-rental-firm-to-file-for-us-ipo/
Fitness chain rides the growing middle class to a 1+ billion valuation
- https://www.dealstreetasia.com/stories/supermonkey-unicorn-status-239876/
BONUS - How China is already using NFTs to cut down on red tape
- https://www.caixinglobal.com/2019-08-12/shenzhens-pilot-blockchain-based-invoice-system-a-roaring-success-tax-bureau-says-101449785.html
This week your co-hosts talk about Tesla in China, the recent PR debacle and how this all sounds too familiar. Then Adeh and Kevin do a deep dive into Meituan (whose market cap peaked at $341 bn USD earlier this year) as they consider who is next to be hit by Beijing's crackdown on tech in China. Your duo ends on an optimistic note - envisioning a bright future which embraces diversity - as they purview BlueCity Inc, a rising star Chinese LGBTQ+ tech platform.
Tesla has a China problem
https://technode.com/2021/04/22/chinese-authorities-demand-tesla-brake-data-following-protest/
Tencent and Meituan rumored next for Anti-monopoly probe:
- Meituan https://www.techinasia.com/alibaba-chinese-regulator-launches-antimonopoly-probe-meituan
- Tencent https://www.techinasia.com/sources-tencent-next-in-line-face-chinese-antitrust-regulators
More on Pony Ma / Tencent's $7.8 bn USD social responsibility fund https://pandaily.com/tencent-announces-50-billion-yuan-investment-in-sustainable-innovation/
Despite gov crackdown on tech, Meituan raises $10 bn USD cash to invest in hot community group-buy grocery and tech (autonomous driving)
- https://www.bloomberg.com/news/articles/2021-04-19/meituan-seeks-about-10-billion-in-stock-offering-convertibles
- https://www.bloomberg.com/news/articles/2021-04-20/meituan-ceo-who-bested-jack-ma-snags-10-billion-for-next-fight
Meituan founder Wang Xing's prolific start-up background
- https://en.wikipedia.org/wiki/Wang_Xing
BlueCity, Chinese LGBTQ+ ecosystem company, obtains Internet hospital license
- https://pandaily.com/owner-of-chinese-gay-dating-app-blued-obtains-internet-hospital-license-to-offer-mens-health-services/
Self-rectification, emotional aptitude and optics. Touchy-feely baloney or critical business issues which could decide the life or death of a company?
Kevin and Adeh get introspective themselves and explore these concepts in the context of Chinese society and big China tech of today.
- Big tech falls in line behind the example set by Alibaba https://www.bloomberg.com/news/articles/2021-04-13/china-orders-34-tech-firms-to-curb-excesses-in-antitrust-review
- Tencent CEO pledges $7.7 billion to china's rural areas in efforts to appease the government https://www.bloomberg.com/news/articles/2021-04-19/tencent-s-ma-dangles-billions-in-aid-as-antitrust-scrutiny-grows
- Anti-monopoly law strikes against the big and small https://technode.com/2021/04/12/sherpas-fined-over-monopoly-on-delivering-food-in-english-in-shanghai/
- Ant Financial gets it's marching orders to re-organize https://www.ft.com/content/5c14c1d1-bd9e-4654-9a12-93c4ac46792d
- Didi preps for IPO at $100 billion valuation (compare Uber at $107B) https://www.bloomberg.com/news/articles/2021-04-09/didi-chuxing-is-said-to-have-filed-confidentially-for-u-s-ipo-knaqvotf
- JD Backed Aihuishou 爱回收 plans to list at a valuation of $4 billion China’s used electronics trading platform Aihuishou 爱回收 eyes up to $1b in US IPO
- BONUS - How Amazon uses it's market power to maintain control https://www.wsj.com/articles/amazon-strong-arms-partners-across-multiple-businesses-11618410439
This week your co-hosts take on China's 996 work culture, then jump into the frenzied pundit waters churned up by the announcement that Alibaba was fined 2.8 billion USD for using its monopoly power to harm competitors. Later, Adeh tries to convince Kevin that the digital yuan may take over the world!
What do you think? Give it a listen and send us your thoughts.
- A recent trending post critical of 996 culture in Chinese tech companies https://www.sohu.com/a/457730317_113767
- Alibaba gets fined 2.8B USD for monopolistic behavior https://www.wsj.com/articles/alibaba-hit-with-record-2-8-billion-antitrust-fine-by-chinas-market-regulator-11618018830
- 100 start-ups have pulled plans to IPO in Shanghai after Ant Financial's 'failed' IPO and tightened scrutiny https://www.reuters.com/article/us-china-tech-exchanges-analysis/analysis-chinese-tech-start-ups-pull-ipo-plans-as-beijing-tightens-scrutiny-idUSKBN2BY0UL
- US starts to take notice of the digital yuan, and what it could mean for the future https://www.scmp.com/economy/china-economy/article/3129161/china-digital-currency-biden-administration-steps-scrutiny-e
This week your co-hosts explore conflicting reports of Bytedance's valuation and pontificate on why that valuation is justified against the backdrop of China's tech landscape. They discuss more upcoming IPOs, including Xiaohong Shu and Xiaomi's big announcement.
Bytedance
- Some say the TikTok parent company is worth USD 250 billion https://www.bloomberg.com/news/articles/2021-03-30/bytedance-is-said-valued-at-250-billion-in-private-trades
- Or is it more? https://www.scmp.com/tech/big-tech/article/3128002/value-tiktok-maker-bytedance-approaches-us400-billion-new-investors
- What are they doing with this? Buying gaming companies to compete directly with Tencent https://www.reuters.com/article/us-bytedance-videogames-mooton-idUSKBN2BE0ES
IPOs
- Tencent-backed WeDoctor to IPO for $3bn USD in HK
https://kr-asia.com/key-stat-tencent-backed-online-hospital-wedoctor-files-for-ipo
- Xiaohong Shu, the sleeper review/e-commerce/social media app prepares for IPO
https://technode.com/2021/03/26/social-commerce-app-xiaohongshu-hires-cfo-ahead-of-us-ipo/
Electric Cars
- Xiaomi announces plans to start producing EVs https://technode.com/2021/03/31/xiaomi-invests-1-5-billion-in-fully-owned-ev-business/
- And invest 10 billion over the next 10 years https://www.cnbc.com/2021/03/30/chinas-xiaomi-to-launch-electric-car-business-and-invest-10-billion.html
- Lei Jun's open letter https://kr-asia.com/a-letter-from-lei-jun-starting-over-one-last-time
- China plans to phase out fossil fuel cars by 2035 https://www.weforum.org/agenda/2020/11/china-bans-fossil-fuel-vehicles-electric/#:~:text=By%202035%2C%20all%20new%20vehicles,remaining%2050%25%2C%20hybrid%20vehicles.
This week your co-hosts discuss Tencent's business success and cancel culture with Chinese characteristics. We end up with Kevin singing patriotic songs as Adeh comes to grips with an existential crisis:
Tencent
- Tencent has a blowout quarter with 9.1B in profit (compare Apple 28B, FB 11B, goog 15B) https://www.scmp.com/tech/big-tech/article/3126771/tencent-posts-175-cent-rise-fourth-quarter-profit-it-faces-tighter
- At the same time, the company is bracing for what's coming from the central government https://technode.com/2021/03/24/china-probes-tencent-for-antitrust-practices-report/
- Much of their revenue increase was due to games, and we saw PUBG hit 1 billion downloads worldwide https://www.theverge.com/2021/3/25/22350782/pubg-mobile-one-billion-downloads-tencent
- Scrutiny of US listed Chinese companies tightens, leading to Tencent Music losing a third of its value and then declaring a $1B USD of stock buyback https://www.reuters.com/article/us-tencent-music-buyback/tencent-music-announces-biggest-ever-1-billion-share-buyback-idUSKBN2BL06X
- Tencent's full annual report: https://static.www.tencent.com/uploads/2021/03/24/b83f5784d0579b51cf8515cf560b4256.pdf
Cancel Culture, China Style
- H&M has been scrubbed from the Chinese internet due to a remark posted on their website over a year ago https://techcrunch.com/2021/03/24/h-m-censored-xinjiang-cotton/
- Other western brands taking a stand face an increasing backlash and threats of boycott https://www.cnbc.com/2021/03/25/backlash-on-nike-hm-in-china-over-comments-on-xinjiang-cotton.html
- "Retailers may be caught between nationalistic Chinese consumers and conscientious ones at home" https://www.economist.com/business/2021/03/27/china-boycotts-western-clothes-brands-over-xinjiang-cotton
Xiaomi overtakes Huawei in global sales
- Xiaomi becomes the third largest smartphone seller, taking advatage of Huawei's troubles in overseas markets https://www.scmp.com/tech/big-tech/article/3126993/xiaomi-moves-past-struggling-huawei-no-1-chinese-smartphone-vendor
- And they are looking to thhe future as they make a move into Electric Vehicles https://www.reuters.com/article/us-xiaomi-electric-great-wall-motor-excl-idUSKBN2BI05P
Draft 5 year plan:
- https://www.nytimes.com/2021/03/10/business/china-us-tech-wecrivalry.html
WSJ is following us…
- Tencent as an investment powerhouse: https://www.wsj.com/articles/chinas-tencent-becomes-an-investment-powerhouse-using-deals-to-expand-its-empire-11614769545
- Wall Street finally picks up on what we’ve seen as inevitable for months -> Tencent valuation drops by $62B on news that they are next to be hit by gov anti-trust crackdown in fintech: https://www.bloomberg.com/news/articles/2021-03-15/tencent-loses-62-billion-wiping-out-value-of-fintech-business
ANTITRUST - A bunch of companies get fined
https://technode.com/2021/03/12/chinese-regulator-fines-alibaba-tencent-didi-for-antitrust-violations/
PRIVACY - New rules limit how much information apps can collect, limit to "necessary", specifically prohibit "bundled consent"
- https://www.scmp.com/tech/policy/article/3126483/data-privacy-china-defines-first-time-necessary-information-apps-can
- Also from a Western news source: https://techcrunch.com/2021/03/22/china-regulation-data-collection-may-starts
ALIBABA app to get on WECHAT
- Previously anything Alibaba had been blocked out of the app by WeChat/Tencent - https://www.bloomberg.com/news/articles/2021-03-17/alibaba-to-open-up-deals-app-in-concession-to-antitrust-campaign
PinDuoDuo
- PDD becomes the biggest ecommerce company by userbase: https://techcrunch.com/2021/03/17/pinduoduo-surpasses-alibaba/
- Founder Colin Huang to step down and focus on Foodtech: https://www.scmp.com/tech/big-tech/article/3126018/pinduoduo-founder-colin-huang-says-he-stepping-down-chairman-focus
Last few months we've been talking about Chinese government cracking down on big tech monopolies. We've also been talking about how the group-buy grocery market which has become China's most recent capital investment battleground. This week, these two topics converge as five of the major group-buy grocery companies are fined by China's government for pricing their products too low.
As the crackdown on big tech monopolies continues, Pony Ma plans a trip to Beijing to advocate for more government control of the Internet. We then talk more about 5-year plans and other government plans, particularly China's ambitious carbon emission reduction goals which are already having a significant impact - such as stopping all crypto mining in Inner Mongolia.
EDIT: The final version of China's 2021-2025 five-year plan has not yet been released, drafts and plans have been circulating since December 2020.
- Grocery buying companies hit with fines for pricing too low
- https://technode.com/2021/03/03/china-fines-five-community-group-buy-firms-for-irregular-pricing/
- More info on grocery buying and personal stories of group-leaders on these platforms https://technode.com/2021/01/27/friendly-neighbors-are-key-to-chinas-group-buying-craze/
- Pinduoduo double's revenue in 'agricultural goods' https://kr-asia.com/key-stat-pinduoduo-says-agricultural-gmv-hit-record-high-ahead-of-annual-earnings-release
- 14th five year plan draft analysis - https://crsreports.congress.gov/product/pdf/IF/IF11684
- Inner Mongolia halting crypto mining to reduce energy usage - https://pandaily.com/inner-mongolia-to-end-crypto-mining-by-april-in-bid-to-reduce-energy-consumption/
This was a fun one. You've probably heard and seen 'Deep Fakes' - incredible and uncanny filters which changes a person's appearance in a video to appear like a different person. People can become Tom Cruise, except unlike in Mission Impossible, there are no need for masks anymore. Thus far, this has been more of an online gimmick, the hacker's party trick, with no real application.
A 3-month old start-up in China is providing a real-world application. SMB eCommerce businesses can make their models look like anyone they want - not real people because their likeliness is protected IP, but any race, gender, or general 'look'. See it for yourself and be prepared for a deep dive into the uncanny valley, link below.
Once we shook off our goosebumps, we went on to discuss BiliBili. This video platform has been around for a decade and has shown steady growth with a very loyal user base. Next we discussed Clubhouse copies and how XiaoMi is going to reenter the fray. Lastly, we talked about Tencent getting into cloud gaming to bring their best games to low-cost smartphones, and therein, a wider audience.
"Surreal" - Synthetic content (deep fake or 'filter' start-up)
- https://www.surreal.la - it's in Chinese but just scroll down for a 1 min intro video with English.
- Article on Surreal in English https://techcrunch.com/2021/03/01/surreal-profile/
- Article on Surreal in Chinese) https://36kr.com/p/1109621217175561
Clubhouse copies
- Clubhouse clones removed from app store https://www.scmp.com/tech/tech-trends/article/3122818/clubhouse-clone-duihuaba-removed-app-stores-two-weeks-after-launch
- XiaoMi's MiLiao to become more like Clubhouse - https://www.scmp.com/tech/big-tech/article/3123630/wechat-clubhouse-xiaomi-turns-messaging-app-social-audio-platform
Bili Bili video platform shows solid growth
- https://kr-asia.com/bilibili-reports-revenue-increase-of-91-in-q4-but-widens-loss
Other mentions in episode
- Kev's fav BiliBili video (Chinese): https://www.bilibili.com/video/BV1NC4y1Y7vv/?spm_id_from=333.788.videocard.0
- Descript www.descript.com
Happy Chinese New Year - I hope everyone had a good holiday OR, if you're in the West, have enjoyed seeing things besides China in the headlines while the country was away on holiday.
Today we talk about continued anti-trust movement in China. The government is enacting increasingly strong policies to break-up big tech monopolies in China - namely, Tencent and Alibaba - and smaller players like Bytedance and a Chinese JV (Joint Venture) with GM are cashing in. Bytedance and the JV have both submitted monopoly complaints against Tencent.
Community group-buy of grocery continuues to boom in China. What seems to be the the biggest player, the two-year old XingSheng YouXuan, is now worth a whopping 8 billion USD!
ANTI-TRUST - Formal rules against big tech
- https://technode.com/2021/02/08/china-formalizes-antitrust-rules-targeting-tech-giants/
STANDARDS - WSJ picks up on the story we broke a few weeks ago on China taking up technology standards as a national imperative.
- https://www.wsj.com/articles/from-lightbulbs-to-5g-china-battles-west-for-control-of-vital-technology-standards-11612722698
GROCERIES - Kevin's fav topic 兴盛优选 raises 2 BILLION USD
- https://www.reuters.com/article/xingsheng-youxuan-fundraising-idUSL1N2KP0HH
- https://kr-asia.com/greengrocer-xingsheng-youxuan-to-bag-usd-3-billion-from-sequoia-tencent-others
XIAOMI is reportedly making a move into electric vehicles
- https://technode.com/2021/02/20/xiaomi-reportedly-plotting-electric-car-play/
SUPPORTING A START-UP!
Support your physical and mental health! Join Kara Wurtze's movement which she began in Guangzhou, China, now 100% online https://www.k2fitchallenge.com/
See Kara on TedxGuangzhou https://www.youtube.com/watch?v=QkHXwg2PcfA
(Fun side note: Adeh and I are both fitness coaches as a hobby)
The newest social media phenomenon Clubhouse hits China and provides a unique avenue for free speech - update after recording last night, Clubhouse is now banned in China.
Bytedance doubles revenue and is suing Tencent for monopolistic behavior (which we essentially predicted two episodes ago). And then we talk more about Clubhouse because we’re both passionate about social media platforms, this industry needs disruption, and the app just seems really cool.
LINKS:
- Intro to Clubhouse (and how it is now banned in China): https://www.cnbc.com/2021/02/08/clubhouse-appears-to-have-been-blocked-in-china.html
- Bytedance doubles revenue: https://www.techinasia.com/bytedances-revenue-doubled-37b-2020-sources
- Bytedance sues Tencent for monopolistic behavior: https://technode.com/2021/02/03/bytedances-douyin-sues-tencent-for-unfair-competition/
WeChat turns 10 years old. China’s beloved communications app, and Kevin’s old job, did well in 2020. GMV (Gross Merchandise Volume) on WeChat’s Mini Programs doubled compared to the previous year to a whopping $250 billion USD.
Meanwhile the Chinese government expand on their anti-trust efforts and actually provide a definition for monopoly in the digital payments sector. Under the new definition Ant Financial’s AliPay is TWICE considered to have a monopoly of the market.
Lastly, Douyin (TikTok in China), has added their own payment capabilities with Douyin Pay
LINKS:
WECHAT TURNS 10: https://techcrunch.com/2021/01/19/wechat-2020/
NEW FINTECH RULES: https://technode.com/2021/01/21/new-digital-payment-rules-likely-to-hit-ant-tencent/
DOUYIN PAY: https://techcrunch.com/2021/01/19/douyin-e-wallet/
FREE AD FOR A START-UP: A friend's "AI-powered note-taking" start-up in HK is hiring, especially interested in China-focused tech talents, if you're interested: https://www.goodnotes.com/
This week we talk about Trump's latest (and hopefully last) executive order hitting Chinese tech firm Xiaomi causing the company's stock to plummet 14%. Adeh, an investor in Xiaomi, is sad about this for more reasons than just losing money, but Kevin is able to cheer him up by buying him a new microphone!
The new mic should also cheer up our dear listeners who've had to put up with poor audio quality in an age of Spotify and increasingly spoiled ears.
Links:
https://technode.com/2021/01/15/xiaomi-shares-plunge-after-us-investment-ban/
https://www.ft.com/content/46505ee0-fb3d-4cf0-a3df-64e9661e839f
https://kr-asia.com/key-stat-alibabas-workplace-messaging-app-reaches-400-million-users
Bonus Read:
http://en.people.cn/n3/2021/0111/c90000-9808007.html
We go into more details on why Chinese gov is cracking down on Alibaba and evidence that Jack Ma is still alive, and speaking of cracking, we talk about plant-based eggs having big launches into China. We also talk about multi-billionaire dollar online educational platforms and the world's first technical standards for robotaxis.
Today we do a deep dive into one specific topic, Alibaba's Ant Group and how it's being crushed by Chinese gov and recent regulations. What was supposed to be the world's biggest IPO was put off, but the story didn't stop there. China's gov has initiated a monopolistic probe into Alibaba's Ant Group, and begun to mandate the company to divest, furthermore China's gov is tightening regulations on their loans and other fintech activities.
All this and a little more on the background of Ant Group and why it was so valuable in the first place.
3 - big tech of East and West are being challenged by government. China's gov sees the value of tech standards where US doesn't appreciate how good its got it. Lastly following the hottest investment trends from car-sharing to bike sharing, and now eCommerce grocery.
We made it to episode 2! This week we tackle some massive topics - China Gov's foray into digital currency, investment in micro-chips, and enhancing user data protection. After incubating China's tech sector in a competitive and legal vacuum, the gov seems to be taking the reins. Plus, we talk a bit more about group-buy groceries, the little understood, nearly trillion-dollar, market opportunity. Enjoy!
Hi! A great beginning to a new good thing. This week we introduced ourselves and why we are doing this podcast. Then we go into our six key topics based on recent events in China tech.
Below are the topics and links for more learning
1) Apple seems to be lobbying against a new US law which counters forced labor overseas
2) Group-buy grocery chains are taking off in China. Alibaba backed Nice Tuan bags another $196 mill USD in funding.
3) Race for space: China's successfully lands on the moon.
4) A healthy boom in China. JD Health valued around $29 bn USD in HK market IPO, raises $3.5 bn USD.
5) China's autonomous vehicle tech is accelerating: AutoX removes safety drivers.
6) Personal data protection in China is tightening up. The 'wild days' of China's loose data control are ending.