Ever wonder why Chinese tech cos are really attentive to creators & constantly lowering barriers to creation?
Simple. Being newer to self expression, there were way less creators on a % basis in China (even now, if u ask operators), so this is / was a necessity for survival.
I remember long ago attending a talk by a Chinese Tumblr clone founder (bonus if you know what this was), and he went through the economics of the biz on the creator acquisition side, and it was unsustainably expensive.
Co died, it's a hard prob to figure out in a short time.
So you can't just MAKE ppl creative, but u can make it easier for them to create.
A few ways:
Make tools (ie Capcut from ByteDance, TikTok filters, duet feature) to make it physically easier.
Platform dynamics (campaigns, hashtags)
Seed content (ie Douyin gesture dances)
And here I append what ByteDance Kelly Zhang has said was one of the first big viral hits of Douyin, the shower dance.
It's mind-numbingly simple, since you just sit there and move your hands:
Anyway, lack of creators is in part why the tumblr clone failed, but Weibo survived, bc the barrier to creation was much lower.
Also why Youku the YouTube clone was much too early & basically became Hulu. There wasn't the masses of UGC creators to support that length of content.
But here's the actual takeaway. Kudos if u read this far. What this means is that Chinese cos are creator & content obsessed. The product is just one part of it.
You need to extend it (creator tools) but also maintain & grow it (creator ecosystem). You need to run “operations."
You need a lot of manual tweaking, ecosystem building, observing and reacting to what is super dynamic, on product and content level.
ie China had surprise hit movie "Hi Mom" over Lunar New Year, Douyin had filters & campaigns out IMMEDIATELY.
So headcount wise u see a ton of "operations" staff, much more than tech. Yes the tech needs to work, it needs to be great, but when you're dealing w live social content, you need operations & you need to respect operations. It drives success equally or even more than product.
If you talk to Chinese entrepreneurs, most of them are still very enamored with Western products. (Various reasons I can give in another thread.) But most of them don't think the West understands operations. & so will really struggle in live social.
OK, now tell me ur thoughts.
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Finally got around to listening to the Meituan podcast by @AcquiredFM from 3/10! It's a pretty entertaining walk through the third largest Chinese internet company by market cap, ~$250Bn. The CEO Wang Xing has a Twitter @wangxing_mt. (Well, it's a bot.*)
A few things to add:
1/ The breakup btwn Meituan & Alibaba is such a pivotal moment. Wang Xing was originally a big Jack Ma fan. He wanted both Tencent & Alibaba as partners, BABA wanted exclusivity, whereas Tencent was like whatever. Now Wang Xing hates Alibaba's guts. The feud is still ongoing.
1a/ But what it shows is that BABA's requirement of ultimate loyalty and exclusivity is unlikely to fly with the best entrepreneurs. If you want folks like Wang Xing you don't get him by telling him to work for your interests above his own company's.
Here's a summary of how a famous Chinese "product philosopher" (entrepreneur, lecturer) Ms. LIANG Ning thinks about Pinduoduo $PDD. It's from 2018 but I think it mostly stands. At the very least, it gives proper context.
Here we go 👇👇👇
1/ Most ppl in China are not very rich. After Taobao got rid of a lot of counterfeit (see Jan. 2015 drama w Mofcom, June action, and JD closed down Paipai for same reason). Where are the suppliers of lowend goods supposed to go? The customers are still there.
2/ At least as of 2018, user graphs show that $PDD demographics pretty identical to $VIPS. A bit more rural than Taobao. But obviously they weren't the only ones to see the opp, since we already know the much older $VIPS also did, so what made the difference?
Prediction:
Out of Chinese Big Tech, either Meituan or Didi will win the Community Group Buying war.
Why? 👇👇👇
Because Pinduoduo says what they're doing is not CGB (it's next-day grocery) and Alibaba says the same, we are not CGB, we are "hyperlocal e-commerce." 😆😆😆 So removing them yeah that kinda leaves just Meituan, Didi who have made serious moves & call it CGB 😂
OK but joking aside, Alibaba finally got its act together 3/1 and has re-orged a new group called Maimaicai (MMC) to do this. But before that happened, take a guess how many disparate groups were working on a version of CGB in 2020 inside of Alibaba. (Quiz time!)
Tired of takes that talk abt Meituan & Pinduoduo & frankly any Livestreaming Ecommerce without mentioning the huge impact of LOW PRICES.
Now how you get those low prices is the interesting part. Demand aggregation / C2M? Subsidies? But seriously, don’t just take the company PR.
Even the PR is around low prices, this one popular blogger wrote a piece recently “thanking PDD PR for all the ad revenue.” It’s got an aggressive sponsored content strategy. (Common.) Very loose rules ... you just gotta mention the Billion $ subsidies.
If you miss the supreme importance of pricing for most goods then you simply don’t understand what you’re looking at. #1 reason for livestream shopping, low prices. Why does Meituan have 2x eleme market share? Low prices. Saving money is a sport in China, a skill to be mastered.
I had just written on the crazy growth of J&T Express a logistics firm (close partner of $PDD Pinduoduo) for @TechBuzzChina Insider community last month and here they are being rumored to be considering $1Bn IPO. bloomberg.com/news/articles/…
It is an Indonesian company yes, but it's founded by Chinese founders, the J&T stand for Jet & Tony, both formerly of OPPO, the Chinese smartphone brand affiliated with Pinduoduo's angel, billionaire investor & philanthropist Duan Yongping, who pops up everywhere, honestly.
It's done this interesting thing where it grew really well abroad but then expanded into China recently (in 2019!). And it's growing like a weed in China now. Franchising fast for growth but also investing for real to build up capacity.