"By creating the concept that data is a factor of production, China Inc. has formalised and legislated the stance that data itself is valuable rather than the algorithms it helps train.

1) Let's talk about the question of 'how should we think about Chinese tech'

What do we talk about when we talk about Chinese tech? Who is 'we' here? How do you pronounce Elema?

I've hit 10k in followers and it's time to earn my stripes as a thinkboi.

2) Chinese tech is a loaded term. The very fact that we have to say 'Chinese' tech rather than tech demotes its otherness.

So what does a place of origin signify? The different market conditions, political context and imo most importantly, the development stage of the country.

3) I think @benedictevans and @ToniCowanBrown's podcast on 'How to think about Chinese tech when you know fa about China' (my title, not theirs), lays some of the groundwork here.

China's different market conditions and political context often means a parallel tech world

4) This means a fundamental rethinking of first principals that's hard to stomach for most Western tech folks
- Copy is not wrong, in fact, it shows you've picked a de-risked business model
- There are no unscalable resources, esp when labour is

5) But I think the most important factor that gets overlooked is that China tech demotes something very particular. It is coming from a developing country. The life stage of a country is different from its cultural context.

What happens when a developing country is innovating?

1) Let's talk about Tesla's China strategy. There's a few questions here - why did the Chinese government actively encourage them to set up in Shanghai? What's in it for Tesla? Why is Tesla continously discounting their cars?

Spoiler alert: $TSLA go brrr

2) Our story starts all the way back in 2013, when smog was so bad Beijing didn't see any blue sky for months. Policy pivots were in order, and new energy bills with specific support for electric vehicles (EV) were introduced.

3) Over the next few years subsidies from the government were handed out to any car companies that said they were going electric. A single EV could get up to $22k worth of subsidies (provided they could drive for 250 km).

Sales increased and the EV market steady grew

4) However at the end of 2017, there was no standout Chinese EV company. Far too much of the subsidies went to fraudsters and the Chinese EV market was lagging behind the EU market.

Chinese government hardened their resolve.

Similar to Baidu, complacency was a killer.

5) The aim was to have a thriving worldclass EV market in the long term.

Similar to how introducing Apple and Samsung brought up Xiaomi, One Plus and Oppo, they decided to introduce foreign competition from the best EV brand there was - Tesla.

1) Let's talk about my favourite video platform Bilibili. What is it, what it isn't and and how it makes money. It's been called the Chinese YouTube that that framing lacks imaginary.

The $bili stock also 5x in 2020 - who knew weebs could be so lucrative

2) Grossly simplified, it's the Chinese equivalent of Youtube. Except it's not. It's like if Youtube, Twitch, Steam, Patreon, TokyoPop and Netflix had a CRISPR-baby, and that baby was a weeb, but that weeb is also super down with Chinese Gen Z

3) Bilibili was founded in 2010 by avid Anime, Gaming and Comics (AGC) fan Yi Xu from a frustration that the mainstay Chinese anime platform kept crashing with no consistent access to his beloved vocaloid Miku

4) Serial entrepreneur Rui Chen went from an angel investor to CEO, having obtained Yi Xu's trust by correctly identified the origin of Bilibili as from the anime "A Certain Scientific Railgun". Anime knowledge is life.

5) Currently it's the biggest mainstream portal for the Chinese Gen Z with user-generated video sharing, live streaming, mobile gaming, online comics and event ticketing. It’s also diversified its content coverage with coverage on beauty, e-sports, pop culture and many others.

1) Let's talk about how Alibaba has achieved the holy grail of big data - a holistic view of the consumer - through a plethora of product offerings and investment.

This is their overarching moat. And Amazon's got nothing on them.

2) To the outsider, Alibaba's product range is confusing af. It's all over the place and there seems to be no core competency they are focusing on.

A few divisions - Taobao (B2C marketplace), Tmall (High-end B2C marketplace), Alibaba (B2B marketplace, Cainiu(logistics)..

3) ...Elema (Food delivery), Autonavi (maps), Youku (streaming) and Feizhu(travel booking)

Also the promotional strategy is weird, In the lead-up to singles day, half the time they were promoting some cat rearing in-app mini game.

Wtf?

4) When we view Alibaba's strategy as working to create a full view of a consumer's life, including their preferences, social network and spending capacity (and ability). Then everything starts to make sense.

4) Whether a consumer buys on Tmall or Taobao tells Ali about their preferences and budget, delivery address for packages and food lets Ali know where they live and where they work (also cross-referenced with property data to infer wealth level + occupation).

1) Let's talk about social-commerce, limitations of growth for a community and why there is no good Chinese Instagram equivalent.

In modern China, XiaoHungShu aka Little Red Book aka RED is no longer the Mao manifesto, but rather a shopping app.

2) XHS was founded by friends Miranda Qu and Charlwin Mao in 2014. Initially, it was conceived as a travel app, the founders wanted something that let them know what spots were cool and what goods to get when they're abroad

3) For context, I would say shopping abroad has been a major Chinese middle-class hobby due to:
1) Perception that foreign goods are of higher quality
2) Cheaper prices for equivalent goods relative to China as no import tax
3) Verified authenticity

4) XHS tapped into this desire by creating an online community where people can share details of what they brought and where. In elaborate posts with multiple accompanying pictures. Showing off your lavish life while being helpful is fun.

5) After building up a robust and lively community among mostly affluent young women, XHS moved into cross-border commerce in 2015. Now rather than just looking at the pretty items from France, you can buy them.

$DADA and $JD

$DADA's goal is to empower stores to have the ability to deliver everything to their customers within an hour on-demand. $JD owns 51% of $DADA. Here is a thread on the things you need to know as a $DADA or $JD investor.

Let's get started 👇👇

1. The Chinese E-commerce Market – Growth
The China E-commerce market has grown rapidly over the past decade and is poised to continue to grow for the coming decades.

2. China E-commerce as a % of total sales
Despite strong growth, Chinese E-commerce share has only taken up 24.9% of the total retail sales in consumer goods in 2020. There is still great potential in the coming 5-10 years in Chinese E-commerce.

3. The 3 phrases of E-commerce in China
The first phrase of E-commerce is when products are delivered in days, the second phrase delivered under 24 hours, and the third phrase, ‘on-demand’, products are being delivered within an hour. China is currently entering the third phase.

4. On-Demand Delivery Orders
China has experienced rapid growth in total on-demand delivery orders over the past couple years. As of 2019, there are more than 18 billion total on-demand orders delivered, a growth of 36.93%.

@MadConX There seems to be a lot of short-term pain coming $BABA's way: lower consumption due to the lock-downs, another wave of regulation in the fintech sphere, cloud as a matter of national security and an increased focus on state-owned cloud providers.

Decreased growth and margins have likely led to multiple contraction. Furthermore, in a developing market like China, stocks tend to be highly volatile. Then there's the "China image" problem in the eyes of a western investor.

But *despite* all these headwinds, $BABA has been increasing it's free cash flow, has been quickly adapting to the changing regulatory environment and - my favorite - has a spawner's mentality.

Shirt-term trends look bad and some threats will stay long-term (CCP, the image, competition). The environment has been and will be challenging.

Yet $BABA is adapting and compounding. This says a lot about the culture they have and it makes me really confident about the future.

In 2021, $BABA increased their cloud infrastructure market share to ~38%, stealing market share from $TCEHY & Huawei who have ~17% share each.

The cloud industry in China is forecasted to grow at >30% CAGR into 2025.

@21stCentValue Bingo

1/

$BABA in their most recent investor presentation reported the China cloud market size in 2020 at $32B of which they have a market share of ~30% which equated to $11B in revenues FY21.

Now here’s where it gets pretty crazy …

2/

They estimate the China cloud market size in 2025 to be $154B which is a 37% CAGR.

If $BABA maintain ~30% market share that will be $46B in revenues from the cloud business in FY25. Over 4x the current revenue for Alibaba cloud.

3/

Western cloud businesses like AWS and Azure are valued at ~15x sales or more by most analysts.

An equivalent multiple to $BABA cloud in 2025 would give a value of $693b which is over double the current market cap for Alibaba.

4/

If we put a 50% discount on the cloud business in FY25 for regulatory concerns and use a 7x sales multiple .. we still get to the current market cap in value.

Cloud is only ~9% of LTM revenues for $BABA, yet the FY25 value of cloud is potentially equal to the market cap.