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Lillian Li

3 May, 12 tweets, 3 min read

1) Let's talk about Tencent Music ($TME) which at a market cap of $29.5bn is the largest music platform in China.
Its strategies for success, positioning and where its future is.

2) Tencent Music today is a consolidated entity between three big music brands QQ music, KuGuo and Kuwo (and a few smaller brands).
Each of these brands has a different positioning from its legacy user base. Though an inorganic evolution, this is great brand strategy

3)
- KuGuo - blue-collar, 25-30 year old
- QQ music - White-collar professionals, students
- Kuwo - Married 30-40 year olds typically has kids

Each of these groups has different purchasing capacity, interests and music interests. Having sub-brands allows more precise targeting

4) Tencent Music's consolidation needs and ultimate winning strategy versus its thousands of competitors is similar to the paths take by Spotify versus Grooveshark and Kazaa.
They focused on acquiring music license rights before users

5) Back in the early 2010s, copyright laws in China weren't respected nor enforced and thousands of music platforms were floating around. Tencent and Kuguo music were focused on doing things by the book from the beginning (helped that Kuguo's founder was an ex-lawyer).

6) Both of them slowly amassed large catalogue rights and when better copyright laws came into place in China. Flooded the competition with lawsuits (or pointed music studios in the right direction).

Take the moats where you can get them.

7) In the end it made more sense to join forces rather than fight it out as two entities - so Tencent and Kuguo merged. Netease Music in second position ( MAU is 25% of TME) as Baidu and Ali (with their Shrimp music) slowly ceded the stage as celebrities all signed to TME.

8) The biggest boon was undoubtedly Jay Chou moving to TME in 2018. Jay Chou's star power can not be understated in China. He is the post 90 and 80s Chinese generation's Taylor Swift. Today his monosyllabic mug still grace the ads up and down Shanghai's streets

9) While TME has a strong market position, user growth is slowing down across the music industry. As such they are looking for the next avenues of growth in the form of livestreaming tipping, online karaoke and offline performances

10) So who's TME's biggest competitor? I think not Netease, but really Douyin / Tiktok and Kuaishou. Once you move into entertainment you are in competition with all other forms of entertainment. Also these other forms of entertainment are free and bit-sized

11) I'm also personally thinking TME could be next on the anti-monopoly regulation list, having that much market share is a concern. Netease music has been suitable noises in this direction

Writing these Chinese tech threads for the rest of May, follow me to get these spams on your TL.

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More from @lillianmli

Lillian Li

@lillianmli

4 May

1) Let's talk about how Taobao (of Alibaba) approaches selling apparel in different way to Amazon (and why I think its better).

It's a mix of product design which mirrors the shopping experience, sophisticated AI recommendations and superior customer service (even to Amazon)

2) Amazon has a product philosophy of selling based around SKUs and high intent search. When I open the app and search for items, I often wouldn't see the same item twice. As the sellers are all aggregated around the same product SKUs.

The platform is geared towards utility.

3) Taobao's designs reflect an understanding that apparel (especially non-basic clothing) is around mimetic desire.

Their search pages will often show the very similar items sold by different shops in lifestyle photo spreads. It's also highly tailored to your previous browsing

Read 14 tweets

Lillian Li

@lillianmli

1 May

1) Let's kick off May Chinese tech threads.

In 2017, Ctrip was the undisputed OTA market leader with ~50% of China's online hotel bookings. They quashed competitors and lead a consolidation of the OTA market.

By 2018, they had lost all of that to Meituan.

Wtf happened?

2) The one KPI that rules Chinese consumer super apps - Meituan's secret sauce and their reason for all in on Community Group Buying (CGB)

It's not DAU, it's not AOV, it's not GMV

It's the frequency of use per day

3) I've said this many times, relative to western consumer tech companies, who tend to focus on “serving a function” as their core mission, Chinese companies tend to focus on “owning the user” as their core mission.

Read 17 tweets

Lillian Li

@lillianmli

29 Apr

1) State of Chinese Cloud - Part II

I propose a theory of digital transformation journey called Digitalisation-Cloud-Automation journey (DCA journey for short) and argue that each stage of the DCA journey enabled subsequent stages to occur for the West.

2) The journey is sequential as each step unlocks new business models and technology needs that would be unfeasible or unwanted at an earlier stage.

3) This development sequence is the assumed path for cloud adoption and growth of SaaS, but not so for China. China is undergoing all three stages of digitalisation, cloud adoption and automation concurrently rather than sequentially.

Read 5 tweets

Lillian Li

@lillianmli

3 Apr

1) Prediction: China domestic brands and design will enter into a golden age in the coming 5 years, with at least one DTC brand breaking the $100bn market cap.

This is from a combination of growing demand and supply of innovative brand storytelling and design.

2) On the demand side, the rise of Gen Z heralds a new generation of brand-agnostic consumers who doesn't implicitly hold western brands in high regards. They are focused on expressing individuality and control the spending power of 2 generations from parents to grandparents

3)Western brands are not only too mainstream but also tainted with political allegiances given geopolitical tension.
These brands' haven't been able to provide hyper-local zeitgeist products. Chinese traditional embroidery is table-stakes. Where's the hanfu, lolita and JK stuff?

Read 11 tweets

Lillian Li

@lillianmli

23 Mar

1) Chinese e-commerce homepage UX analysis.

I took screenshots of Taobao, Pinduoduo and JD’s homepage and ran them through a translation layer so it’s not perfect. But I’ll explain what they are

Let’s go through each of them in turn. Taobao first:

2)With super apps, the landing page should be thought of a the control panel.
As such top two rows are leading to other Alibaba products - these include Tmall (more upscale Taobao), Tmall international (overseas goods), Tmall supermarket, Flying pig (travel booking) and grocery

3) There’s also functions like voucher, gold coins (loyalty points) and categories.

You also the see the prompt message at the top, which always highlight the deals of the week for you to browse.

There’s also the live-streaming portal, which is TikTok like.

Read 14 tweets

Lillian Li

@lillianmli

18 Mar

1) I want to talk about something that deviates from my normal tweets. I've been hesitant about expressing this since I am not an Asian American.

But I want to talk about Chinese culture's implicit acceptance of pain in exchange for survival. And how that makes us silent.

2) A recent article came out about Viya (China's most success livestreamer who can command 37m viewers per stream). She sleeps 4-5 hours every day and spends the rest of that time working, rarely has time for her kids or a break. She's getting surgery for her vocal cords rn.

3) The article stresses the tough lives these livestreamers live and in fact, the tough lives everyone lives in China. Eating bitterness is taken as given. The cost of not just doing business but surviving.

Read 9 tweets

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