10/28 Tech Buzz China Insider Digest
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Insider Digest 10/28/21: BigOne Update on Alibaba, Meituan Reorgs, Beyond the $3Bn Single's Day Live Shopping Headlines, PingCAP (Open Source Databases)
Housekeeping / Announcements:
Thanks everyone who attended the BigOne session on Alibaba! We have more 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:
[Insider Sharing] Fri. 10/29 8AM PST / 11AM EST / 11PM Asia Time: Anton Malkin, TBC Insider on Semiconductor Industry, followed by weekly chat
[Insider Sharing] Fri. 11/4, time TBD: Michael & Rui, TBC Insiders, Sharing our ByteDance Financial Model, followed by weekly chat
[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!
Our livecast with Raymond on live shopping was just published, please check it out:
We talked about why the 24x7 supply chain throughout China is essential to the rapid growth of livestreaming eCommerce, the difference between QVC and live shopping, etc.
Here are our articles for the week!
10/27/21 BigOne Lab Update on Alibaba & ECommerce
Thanks everyone who attended our session on Alibaba today with BigOne Lab. As always, if you are interested in their alternative data services, you can email them at more@bigonelab.com. If you wanted to watch the presentation, we have uploaded it to YouTube at this location. It is unlisted and we ask that you please don't share it with others since this was for Insider and DJY Research subscribers only.
Alibaba's threat is not really from PDD but mostly from players like Douyin going after its core commerce (Tmall). As we can see from the notes below, Douyin has grown significantly (+134%) from 9/2020 to 9/2021. The LTM GMV (which is net of returns and unpaid items) is 386Bn RMB or $60Bn. The current run rate is $74Bn. It is about one quarter of JD's net GMV and 30% of Alibaba's. Most importantly, it doesn't seem to rely on festivals to juice GMV, whereas the other platforms do. (Not to say that there isn't some seasonality, just that it's not dependent on the festivals.) Note that Douyin GMV presented below do not include transactions completed on other platforms from Douyin ads. They are strictly Douyin e-commerce and livestreaming e-commerce, the latter of which is all completed on Douyin as of Fall 2020.
Douyin's GMV is becoming more diversified versus before when it was more reliant on clothing. Growth has slowed down a bit since August - new data security rules could be a factor. Alibaba is holding its ground. Nonetheless, we can see that for certain categories, Douyin is posing some fierce competition: it is ~70% of Tmall GMV for bags & accessories, and ~50% for clothing.
Douyin ASPs are very competitive with Tmall's, it is important to understand that these are very comparable platforms in terms of what they're selling for the most part, very different from PDD's offerings.
For the rest of the presentation, click through or watch the YouTube video (but please don’t share!).
10/27/21 Meituan Reorgs, A Bit Too Much Attrition?
What is it about Chinese Big Tech and their frequent reorganizations? Well, we already know Alibaba does it quite frequently (annually at minimum, and I've written about a few major ones already this year, such as this CGB one, this more general one, and this Taobao Live one). But Meituan's latest reorganization seems to be one brought about by attrition. Late Post reported this today, and I confirmed it with a friend inside of the company. (Late Post is close with many companies, of which Meituan is definitely one.) So, first things first, there have been 8 senior members who have left the company in the last two and a half years (since Jan. 2019), including 3 SVPs / "S-team" members (Meituan's highest management circle), one of whom was a co-founder, Wang Huiwen, one of the most admired product strategists in China tech. The latest (not yet officially announced) is Guo Qing, who was the head of the mobility unit.
10/27/21 Is Live Shopping Just Austin and Viya?
Austin, the perpetual #2, finally broke through and claimed the throne from Viya with a stunning $1.9Bn in presales. Viya wasn't too shabby clocking in at $1.3Bn, meaning that yes, just the two alone generated $3Bn of GMV in less than 15 hours, more than, as the Chinese media liked to put it, the annual sales of over 4500 publicly listed companies in China. Their audience is supposedly between 200 and 240mm. Of course, viewers didn't stay the entire length of the marathon show.
PingCap: $3Bn Open Source Database Unicorn
PingCAP is an open-source software developer best known for the NewSQL (Structured Query Language) database TiDB.
Founding & Funding:
Founded in 2015 and headquartered in Beijing. In November 2020, it raised $270mm dollars of funding in its Series E round from GGV, 5Y, Access Technology and Jeneration Capital. The company has raised over $340mm so far.
The 3 co-founders including CEO Liu Qi (刘奇), CTO Huang Dongxu (黄东旭) and Cui Qiu (崔秋) all previously worked at Wandoujia, one of China's earlier popular Android appstores.Products & Services:
TiDB: An open-source, cloud-native, distributed SQL database for elastic scale and real-time analytics.
TiDB Cloud: TiDB databases in a fully managed service e.g. data migration, lightning, backup & restore etc. This was launched in June 2020.
Have any comments or questions? See you on the Discord server!
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