6/6 TBC Insider Digest
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Insider Digest 6/4/21: 3-Child Rule & Education, AiHuishou IPO, HarmonyOS, China Cloud Market
Apologies this digest is coming late … we somehow managed to get banned by MailChimp’s AI and so could not send out emails until the ban was reversed after a human review just now.
Housekeeping: We have an Insider-only Zoom chat with Ray Hu of Blue Lake Capital coming up, focused on SaaS & automation for 5-6PM PST THURS 6/10 (8-9AM Asia time FRI 6/11). The current plan is to have these on Zoom, open to Insiders to ask questions, and then simulcast on Twitter Spaces for the public (who can only listen in). Blue Lake was seeded by Hillhouse and is a research-focused venture fund, and Ray previously worked at GGV before founding Blue Lake. For those of you who act as LPs in China VC, he’s also fundraising for a new fund and I would highly recommend him as someone you should diligence! Please RSVP with me so I can send you a calendar invite. I’ll also remind you in the WhatsApp group.
There’ll be another one with Raymond Huang, Chief Strategy Officer of MOGU, focused on ecommerce livestreaming coming up.
One other thing, we are pleased to welcome Freya Zhang as our Marketing and Community Manager! Freya previously co-founded a startup in China and is now living in Germany. We have known each other many years and she also knows a lot about China tech! Her email is team@techbuzzchina.com and she’s also in the WhatsApp group. If you have any questions or concerns, you can also contact her!
For those who are new, feel free to join our WhatsApp group if you want real time communications with the rest of the community! It’s pretty low volume and always on topic!
6/1/21 China's New 3-Child Rule & EdTech Crackdown
I didn’t repeat the education regulations (previously covered them when they were just rumored) but explain here why they’re all tied in with the efforts to increase fertility.
“By now you've probably heard of that poll on Weibo that showed 90% of respondents as not considering a 3rd child at all, 5% as wavering, and just 4.5% as wanting one. What you might not have known is that the cost of education is cited as the #1 reason for not considering a third child (75.6%), edging out "economic burden" at 74.8%, and above the third factor: the burden of taking care of multiple generations -- parents and children (69.8%). Having no one to take care of the children? A distant fourth at 57%.
But what actually goes into the cost of education?”
“Behold AiHuiShou, the leading secondhand consumer electronics platform in China! And also, what a great couple of weeks for Richard Liu! Because this company is Team JD (35% ownership)
Resale of consumer electronics
Highly fragmented market where first place Aihuishou accounts for just 6.6% of GMV and is greater than the next five players combined
Aihuishou is pretty much what it sounds like -- a place where you can get paid for selling your old, unwanted electronics, or trade in for a newer model
You can get a courier to pick up your item for free or go to one of the 755 stores & 1500 self-service stations in 172 Chinese cities
There is also Paipai Marketplace, JD's secondhand selling platform, which merged with Aihuishou in 2019 (and which it acquired in 2014 in an effort to fight against Alibaba's Xianyu and 58's Zhuanzhuan). Paipai, by the way, is still branded as "a JD subsidiary" on its front page.”
Thanks to John Dawson who asked great questions about the secondhand market given Etsy’s $1.6Bn purchase of vintage site Depop announced this month.
6/3/21 Huawei's HarmonyOS 2.0 Release Breaks The Chinese Internet
By the end of 2021, Huawei plans to install HarmonyOS 2.0 in over 300 million devices: smartphones, tablets, smart wearables, IoT devices, and devices from third-party product manufacturers
The chief differentiating factor seems to be that HarmonyOS is an operating system that can work on IoT (anything with 128Kb or more of RAM, as opposed to the minimum 512Kb needed to run Android 11), not just smartphones / tablets / PCs, etc. unlike Google and Apple
This is important because Huawei has repeatedly said it does not want to replace Android, because it is in fact not Android. Android is a "centralized" system, and so cannot in fact be on all the devices that the "decentralized" HarmonyOS can / will be on.
Thanks to Anton who has spent significant amount of time studying Huawei for his response!
China 2020 Cloud Report from iResearch
The newest iResearch report on China cloud came out and I translated (as well as converted to USD based on today's exchange rates) all the key graphs. I don't think there's anything too surprising here. Growth rates for IaaS & PaaS broken out below, PaaS to remain a fraction of IaaS (something like 25% by 2024, lower now), but expected to grow faster.
Many more graphics follow and I suggest you click through to read further!
Other Posts
AGW wants to know more about Biden’s restrictions on the 59 Chinese companies
Carlo and Desmond have a debate going on for 5/26/21 NetEase Music IPO
Welcome to our new members:
One Last Reminder …
We did just finally launch the RSS feed of our livecast! This is different from our regular podcast in that these are live conversations, like the ones that are upcoming with Ray and Raymond that I wrote about at the very beginning of this email. Please subscribe if you’re interested in hearing from industry folks firsthand!
That’s it! Please check the forums for amazing contributions from our members and join the WhatsApp group!
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