10/21 Tech Buzz China Insider Digest
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Insider Digest 10/21/21: Opening up Walled Gardens to Search, Update on Digital Advertising, Xi's Common Prosperity Essay, Mogulinker (AIoT SaaS)
Housekeeping / Announcements:
We have exclusive Insider Events every week for the next few weeks! Please sign up via the Calendly links below (where confirmed) so that you get the reminder email and calendar invite:
[External Expert] Wed. 10/27 8AM PST / 11 AM EST / 11PM Asia time: BigOne Lab on Alibaba & Ecommerce Data
[Insider Sharing] Fri. 10/29 8AM PST / 11AM EST / 11PM Asia Time: Anton Malkin, TBC Insider on Semiconductor Industry
[Insider Sharing] Fri. 11/4, time TBD: Michael & Rui, TBC Insiders, Sharing our ByteDance Financial Model
[Insider Sharing] 11/11, time TBD: Zak Dychtwald, TBC Insider & Founder of Young China Group, on Understanding Chinese Gen Z
[External Expert] Thurs. 11/18 5PM PST / 8PM EST / Next day 8AM Asia time: Greg Pilarowski on Chinese gaming industry & regulations
If you are interested in sharing what you’re working on with the community, provided that it’s about China tech / investing, please do reach out!
Meanwhile, in light of the flurry of events coming up, our Discord chat for tomorrow is cancelled.
Our livecast with Raymond on live shopping will be published next week for those of you who missed it. Meanwhile, in case you missed it, Single’s Day officially started, and the top two streamers Viya & Austin sold (or I should say, pre-sold) over $3Bn worth of items in just one day (well, technically, 12-14 hours).
Here are our articles for the week!
10/19/21 Short Update on Digital Advertising: ByteDance Dominates, Pinduoduo Spends
First, App Growing ranked the top platforms in China based on revenues for August 2021. This is based on the firm's proprietary dataset, and so may deviate a bit from reality, but the notable thing is that ByteDance dominates the top 4 spots (Douyin, Toutiao, Huoshan and Xigua, in that order), with Baidu Mobile coming in 5th. Even Pipixia, ByteDance's jokes app (and replacement for Neihanduanzi, which was permanently banned in 2018), comes in at #10 ahead of Kuaishou at #13. Either this dataset is very skewed, or ByteDance really is that dominant. (WeChat is #7 and Weibo is #8, and Alibaba platforms are not included.) On a per hour basis, Kuaishou makes only 1/5 the revenue of Douyin, per estimates from Zhejiang Securities.
10/18/21 Xi's Essay on Common Prosperity
In case you missed it, Xi Jinping's essay "Solidly Promoting Common Prosperity" was the centerpiece of the latest issue of the Communist Party's official magazine, Qiushi. (The website, which I've mentioned before, does have an English section too, although this particular essay is not yet translated.) The essay isn't very long at all, but just in case you missed the main point, here is another article that only highlights the "4 Principles." Anyway, there is really nothing surprising in the least about what was said, but here are the 6 major points and their potential business impacts. I think the business opportunities are clear: skilled manufacturing and agricultural industrialization. What are your thoughts?
Mogulinker: AIoT SaaS, Example of Where China VC is Headed
Anything that contributes to automating the manufacturing sector is on fire in China these days. Some folks call this the industrial internet sector. We wanted to give you more examples of what that looks like. (The first one we wrote about was Baibu, although we've since learned that the company isn't nearly as high tech as its PR suggests.)
Mogulinker 蘑菇物联, a Series B+ company in the AI Internet of Things Software as a Service space, seems a bit more promising on the tech front.
What it does: Provides order management, remote maintenance, whole factory or particular production line renovation services that improve efficiency / reduce costs using AI and IoT. The company claims that its suite of products can decrease operating & maintenance costs by 10-30%, management time by 50%, and lower electricity usage by 5-30%.
10/21/21 Opening up Walled Gardens to Search
As widely expected and as Bloomberg reported on October 18, MIIT is apparently pressuring Tencent, ByteDance et al. to open up their content to other search providers, such as Baidu, which seems to have caused a mini surge of ~5% in the stock. I’m not convinced this is that big of an impact to any of the businesses and go through my logic. What do you think?
“The problem is, WeChat and ByteDance already dominate the content part! It's not that people are searching in WeChat for content, it's that people are in WeChat consuming content, and then happen to want to search for more ... content or commerce or whatever it is. Having more content be discoverable is not the problem, having the user behavior of content consumption is the problem.”
Highlights from the Discord server (please click through below to the exact message that you missed):
DavidE - Long thread on reconciling NBS online retail sales data to GMV for Alibaba modeling
Freya: Aero urban transport startup raises $500mm USD Series A
Please join us there, I think you’ll enjoy it, as it’s quickly become the most active part of TBCI!
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