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Rui Ma 马睿

Follow @ruima

29 Jul, 10 tweets, 2 min read

The takes that Chinese tech cos now going into manufacturing upgrade / industrial internet / B2B bc you know, the govt said so, are so damn ignorant.

I remember giving interviews to Chinese tech media on B2B prospects in 2015 and saying "maybe this is finally the year."

Actually, just go google, 2015 widely considered first year in China that cloud, B2B platforms, supply chain finance, smart manufacturing, etc. you know, all the things that go into this "industrial internet" concept, became a thing. Numerous funds were raised on this concept.

And now, as folks have been working on these biz and investing in them for like SIX YRS (at least, it just wasn't as popular pre 2015), just cuz now it's in the English news, doesn't mean it's NEW. Doesn't mean everyone's coerced to by the govt. Ridiculous take.

And no, quoting some joke trending hashtag from Weibo or your WeChat Moments doesn't make it true. Right, the average netizen must know a lot about the development of industrial internet or any aspect of tech at all ... why not ask people actually working on it?

What IS a takeaway is that the govt is making an even BIGGER deal out of it than before (when it was already a big deal, check out all the themed conferences on this stuff dating back to 2014) and in many ways, the infrastructure is ready for a leap in growth (possibly).

Will you see an uptick in activity in this space? It's already been happening for a long time, but if policy is super favorable, yeah, even more than current. But that's kinda how it works in China? Isn't that what foreign cos complain abt, govt assistance, subsidies, other 🥕s?

As for B2C declining, again, try the Google, and see what 2015 reports said. It's been declining bc there was almost NO B2B before, does that look like a sustainable ecosystem to you? Also, check out platform CACs, yes, starting in 2015, while you're at it.

A VC I recently interviewed: we stopped investing in B2C platforms in 2016, it was uneconomical.

SaaS VC interview I just did: we almost all SaaS & B2B since 2016, bc that's when cloud got cheap enough and it became super attractive.

podcasts.apple.com/us/podcast/ray…

Sorry, I'm just mad on my friends' behalf, that they've been toiling away at this opp for a while, bc it's actually *obvious* if you understand literally ANYTHING about the ecosystem, and people are going to attribute it to govt mandate? No. It's good business / common sense.

Finally, Chinese govt must have been doing a ton of time traveling last wk bc:

Alibaba starts industrial internet projects in 2015
Tencent literally re-orgs (which it does rarely) around industrial internet in 2018
Xiaomi, Huawei, I don't even think you can pinpoint a start date

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More from @ruima

Rui Ma 马睿

@ruima

28 Jul

Alibaba CEO letter today wrote about it becoming "consumer + industrial internet" together. You probably recognize "industrial internet" from Tencent, who's made this a big direction since 2018, even wrote a book on it in 2020. But what is industrial internet?

Apparently it was coined by Frost & Sullivan in 2000. In 2014 ish I notice it's starting to be a popular word but mostly referring to IoT (sometimes still does). It becomes REALLY popular by 2017, and of course by 2019 it's pretty much ubiquitous. It includes a lot of things:

- B2B marketplaces, not just of goods but also info
- credit & financing platforms for businesses
- any kind of smart manufacturing / agriculture
- I see folks include logistics, payments too
Honestly, kinda broad, but basically tech "connecting sector value chains," so non B2C🤷‍♀️

Read 7 tweets

Rui Ma 马睿

@ruima

27 Jul

China wants to be a manufacturing-based superpower, not a financialized one (like the US).

Very few understand this.
(Which is bizarre, since it's all the gov't talks about.)

Really weird that people can be triggered by this, this is just a fact that this is China's strategy, you can disagree if you want, but if stating this fact bothers you, then you have some problems engaging with reality.

Today I learned that people love it when you tell them that the sky is blue.

Read 8 tweets

Rui Ma 马睿

@ruima

26 Jul

"In the next 100 years, education will still exist, but New Oriental might not. Education is not the same as New Oriental."
-- Jack Ma in 2016

The above was from a conversation where Yu Minhong, founder of New Oriental $EDU & Jack Ma were arguing whose business would stick around for 100 years.
Tbf, Jack didn't think it was necessarily a given Alibaba would be around either. He said the co could be gone in 3 years.😆

"Very few internet companies last more than 3 years“ & "there are only two long-lasting realms in human society, religion and education." -- also Jack Ma in same conversation 🙃

Read 4 tweets

Rui Ma 马睿

@ruima

26 Jul

I think the confusion over “China tech” is due to lack of specificity:
1. consumer tech platforms & brands
2. service biz tech / B2B
3. tech for supply chain / mfg
4. chokepoint tech (China doesn’t have it, can be sanctioned)
5. frontier tech
5a. Climate / carbon reduction tech

1. Consumer tech platforms were too lightly regulated before with respect to antitrust. But many provide digital infrastructure on which domestic consumption (dua circulation!) relies. So the biz *practices* are curbed, the biz itself is not problematic. Brands are doing v well.

2. Basically SaaS / enterprise software. Huge area of upgrade for the economy, easy to unleash a lot more productivity. VCs already all over this for past few years. A great overview on it here:

podcasts.apple.com/us/podcast/tec…

Read 11 tweets

Rui Ma 马睿

@ruima

25 Jul

1/ So I've been talking a lot abt the surge in D2C (direct to consumer) brand investing in China. I spoke to & wrote abt one of the most visible cos of this trend, Genki Forest, a bottled beverage co, aiming to become IMO not just the Coca-Cola of China, but the next $KO period.

2/ Genki is 5 yrs old, $6Bn valuation, ~$450mm rev last year, targeting $1.2Bn this yr. It sells sugarfree sodas, milk teas, energy drinks, etc. So what's special about it? Well, first, let me tell you what's diff abt the Chinese ecosystem.

3/ Chinese e-commerce ecosystem, in case you forgot:
- Highly concentrated: Just 2 players (Alibaba & JD) have 80%+ mkt share
- New digital platforms enable new formats: mini programs & short videos, even faster now to build a brand
- Very cheap logistics
- Advanced supply chain

Read 10 tweets

Rui Ma 马睿

@ruima

25 Jul

What is China thinking when it comes to regulating its consumer internet companies? 2 main things:
1) must not go against national strategic objectives
2) sustainable / real profit or social benefit, not just capital gains

Pretty simple.

National strategic objectives:
Mitigate / solve demographic crisis
Keep manufacturing onshore & continue to upgrade as this is a matter of national security
Stable economic growth

Basically, balance for long term over maximizing short term

Real benefits over gains from playing games with capital:
Monopolies are bad. Throwing capital at a sector to get to monopoly status is very bad (ie crazy subsidies). Using other shady methods also very bad.

Read 15 tweets

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