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Rui Ma

@ruima

Aug 11

🧵Takeaways from WAIC and Company Visits in Shanghai

The @TechBuzzChina AI Trip began as a personal mission to get a clearer view of what is really happening in China’s AI sector. When I mentioned it to a few other investors, the interest was immediate, and the group filled up so quickly that we now have enough demand for a second edition next month, which will focus more broadly on deep tech. It was my first time at the World AI Conference (WAIC), and also the first time in its eight-year history that the event had sold out. Tens of thousands of people showed up, the halls were packed, and for a few days it felt like WAIC had taken over the city. Friends in Shanghai joked that it was the only thing happening that week.

We spent about 5 hours walking the conference floor but most of the remainder of the 5 days in smaller, more in-depth meetings hosted by companies, partners, and VCs. We met with companies ranging from Baidu, Alibaba, and Tencent (BAT) to unicorns, as well as young startups founded less than a year ago. Almost all of these companies sell to enterprises, though a few were consumer-facing. Here are some of the clearest themes that stood out from the week:

1/ Robotics is a major highlight. It’s clear that in China, AI and robotics are seen as part of the same conversation. The embodied intelligence approach is not niche but central. This trip didn’t allow for a deep dive into robotics supply chains, but we will do so in the future, and cover the entire robotics ecosystem in more detail, including the growing number of component manufacturers that are both interesting from a technology perspective and increasingly available for public market investment due to growing government support.

Some of the technology seemed very impressive. One company we met was an electronic skin maker claiming 80% domestic market share for humanoid robots — still a small market, but their sensors can detect as little as one gram of weight, which is critical for making truly useful humanoids and has applications in robotic arms as well. That said, multiple VCs commented on rising valuations in robotics, calling them irrational and inflated compared to just a year or two ago.

2/ Enterprise AI is strong, but monetization is hard. Many companies we met serve enterprise customers and have technically advanced offerings. The challenge is not capability but revenue: willingness to pay in the domestic market is low, which pushes some founders to consider overseas markets early — especially Japan. This time we also met several organizations that actively facilitate such expansions. Monetization challenges can also be structural. One founder described a problem where their product was so effective that Chinese clients, being cheap, decided that they would only order every few years, making renewals difficult and forcing a rethink of the business model.

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Rui Ma

@ruima

Dec 10, 2024

One of the hottest trends in Chinese consumer internet this year …

Revenue from short video dramas 短剧 — serialized stories of 1-2 minute episodes typically totaling 60-120 minutes, designed for vertical viewing on phones—has surpassed movie box office.

Operators compare them to “mini games” rather than traditional long-form media.

Creators attribute their addictiveness to the fact that they cram “2-3 movies’ worth of drama into one series” and the “3-7-21 rule,” where every 21 seconds must evoke a new emotion to maintain engagement. I forgot what the 3 & 7 stand for though 😂

Hongguo app from ByteDance has broken out to be a category leader with many predicting it to be the next 100mm DAU app. (It was at 30mm in October and many think it’s about 50mm now). It was also the fastest growing app this year in China.

Exact breakdowns are hard to find, but it appears the 45+ age group has the highest ARPU in this category. Surprisingly, surveys, including one from JD, reveal a counterintuitive trend: younger people (under 35) are highest in health-related spending, while older adults are increasingly driving online entertainment spending.

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Rui Ma

@ruima

Nov 5, 2023

Fascinating thoughts from a Chinese-American founder who’s working on AI in global markets re: disruptive power of this new tech:

“996, labor-intense, low salary companies might be a concept of the past, when you pay only $50,000 for an engineer …

… which is very decent a price tag in most part of the world, you are not going to spend another $10,000 for training, tools, etc.”

His point is that in the US where labor is so much more expensive it’s much easier to justify buying AI training and tools for the workforce

And that these will yield much more interesting, unpredictable and scalable benefits over time.

“when i presented thses AI new trends in HR, finance, etc … they don't give a sh*t, especially in Singapore”

To be fair, it’s hard to find people who give a sh*t anywhere …

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Rui Ma

@ruima

Jun 8, 2023

Should I invest in Mexico??

1/ Tesla is mobilizing Chinese suppliers to establish factories in Mexico, aiming to replicate the success of its Shanghai factory. This move comes as Tesla seeks to expand its production capacity and maintain its competitive edge.

2/ Several Tesla suppliers have already announced plans to build factories in Mexico. For instance, Sunrise Group announced in March that it would invest up to $276 million in a production base in Mexico, which is expected to commence operations in July or August next year.

3/ Tesla's fifth super factory will be located in Monterrey, the capital of Nuevo León in Mexico. This factory, with a planned capacity of 1 million vehicles, will be a key player in Tesla's next production leap.

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Rui Ma

@ruima

Jun 7, 2023

1/ Are you seeing extra discounts on Amazon? Chinese media & sellers are speculating it's due to Temu. Amazon sellers have noticed an unanticipated 20% reduction on their product listings, impacting entire categories. This is a development they did not initiate.

2/ Moreover, this reduction extends to both third-party sellers and Amazon's own products, irrespective of whether they are new or old. Sellers are anxious, as this unexpected 20% decrease could lead to losses, esp for those who had already implemented discounts of 20-30%."

3/ The rationale behind Amazon's strategy is a topic of speculation among sellers. They conjecture that it's a strategic response to the growing influence of Temu on Amazon's market share. Additionally, it serves as an effective precursor to the forthcoming Prime Day.

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Rui Ma

@ruima

Jun 7, 2023

The accelerator fka YC China now called MiraclePlus had their Spring 2023 Demo Day recently. Of the 60 cos who presented, 41 were AI, 39 related to LLMs, 23 enterprise software, 11 robotics.

Average age of the founders is 29, with 78% holding a master's degree or above, 67% having an overseas background, and 32% of the projects having female founders. Below are descriptions of 10:

1. PrimeAI: Provides one-stop chip customization and IP authorization services.
2. HiBug: Uses AI to solve programming bugs.
3. Aura: Creates AI-driven interactive network experiences.
4. Ruoshen Robots: Develops modular, cost-effective rehabilitation robots.

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