JD’s Big Play for Low Cost China (Tech Strategy – Podcast 177)


This week’s podcast is about some big moves at JD.com – especially their big strategic move to go after the low-cost market of China. Here’s my breakdown on what it means.

You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.

If you’re interested in talking digital strategy and transformation for your business, contact us at TechMoat Consulting.


Related articles:

From the Concept Library, concepts for this article are:

  • Marketplace Platforms
  • Digital Physical Hybrid

From the Company Library, companies for this article are:

  • JD.com

——–transcription below

Welcome, welcome everybody. My name is Jeff Towson and this is the Tech Strategy Podcast where we analyze the best digital businesses of the US, China and Asia. And the topic for today, JD’s big play for low cost China. Now this is kind of a big deal. I’ve been following JD, I don’t know how long, 10, 15 years, God it must be 15 years. Back before they were called JD, they used to be called 360 by. And my old boss the Saudi Prince was actually one of the big investors in the long before it went private and before it became Sort of JD.com. So I’ve been following this for a long time very interesting company and they’ve been making some big Pretty big moves in the last seven or eight months And I think this is mostly driven by sort of the return of the founder Richard Leo Who’s really come back in a major way refocusing the company on kind of its core values and core strategy. So that’s going to be the topic for today and I think the biggest thing they’re doing is they’re going after low-cost China, which is a space that Pinduoduo opened up. Fourth and fifth tier cities, smaller ticket prices, different merchants and in response Taobao really move down market as well. And now JD, which has a bigger strategic question around this, because it’s always been sort of more of a quality focused e-commerce company, they’ve made the call. So they’re moving into that market. Anyways, I’m going to talk about what that means. I think it’s kind of a big deal. Okay, so that will be the topic for today. Housekeeping stuff. We have the China retail tech tour coming up at the end of this year, late November. If that is something you’re interested in, either individually or for your company, give us a call. You can just contact me on LinkedIn or go over to techmoconsulting.com. You’ll see all the details of the tour there. It’s gonna be pretty awesome. Gonna focus much more on retail. So it’s good for e-commerce, it’s good for retail, it’s good for CPG companies, merchants and brands. And China really is the frontier of that stuff. It’s a good five years ahead of everywhere now. So there’s a lot of cool insights to do, to learn about. So anyways, that’ll be the end of the year. Other stuff, Tecmo Consulting, boutique consulting firm. We focus on digital strategy questions, digital transformation, and avoiding digital disruption, which is a big deal. If your company is thinking about this, looking for a second opinion or to talk it over, just give us a call and we’ll get on the phone and chat it. There’s no money involved in that. Just give us a call and we’ll see what’s up and if we can be of help. Anyways, that’s all for also on techmoconsulting.com. All right, let’s see, standard disclaimer, nothing in this podcast or my writing or website is investment advice. The numbers and information from me and any guests may be incorrect. The views and opinions expressed may no longer be relevant or accurate. Overall, investing is risky. This is not investment, legal or tax advice. Do your own research. And with that, let’s get into the topic. Now, as always, we sort of start with some key concepts to think about. Nothing earth shattering today. I mean, this is a e-commerce company. So, you know, the two concepts I think are important would just be a marketplace platform, which we’ve talked about lots and lots of times, and, you know, a digital physical hybrid, which is JD. I’ve always kind of pointed to JD as the example of this, the idea that yes, have very good economics. They’re mostly built on intangible assets. I’ve done kind of a lot of talking about the four categories of intangible assets that you really do build when you go digital as a digital native or a company that’s traditional going digital. Really four types of intangible assets that you have to build. The same way 100 years ago, you would build factories, and stores, and power plants. Now you’re building four intangible slash digital assets. However, the best business model tends to be a mix of digital and physical assets, where you get the benefits of digital, but you get the protection of physical, because it’s hard to replicate physical assets very quickly. Most digital intangible assets, absent patents, can be replicated unless you’ve got some major network effects or stuff like that. So anyways, digital physical hybrids, if you’ve read any of my books on this, I almost always point to JD as my favorite example of that. Anyway, so those are the two concepts for today. I’ve talked about these a lot before. They’re under the concept library on jefftausen.com. I think kind of the point of today is, yes, you can have a good understanding of all the key concepts. There’s like 30 to 50 of them. But when you start getting into the details of companies, you realize there are a lot of variations and subtleties. And that’s kind of what we’re going to talk about today. We’re going to go the next level down and say, look, JD is actually very different than Alibaba and what they’re doing is fairly subtle strategically, but it’s important. So you know, the concepts are cool, but that’s kind of the beginning of the story. And then you kind of go into the details and you’ll see there’s a lot of variation. Okay, so let’s talk about JD really had a couple big announcements this year. For those of you who are subscribers. I don’t know how many JD articles I’ve sent you this week. Maybe five? Five in the last day? Yeah, I kinda went JD crazy. This’ll be the end of that. I’m going on to, I think I sent out TikTok last night. We’re gonna go into Lazada, TikTok, and some other things. But yeah, I know I’ve been a little JD crazy. Oh, for those of you who aren’t subscribers, I kind of haven’t really been talking about subscription. If you’re interested in being a subscriber, give me an email. It’s pretty hard to find the sign up otherwise at this point. But if you’re interested, give me a note on LinkedIn or something. Anyway, so JD, I’ve given you a lot on that. I’ll try and cool out a little bit. But two sort of big announcements this year. The first was, it was basically their 20 year anniversary. Now depends when you start it. I mean that kind of assumes they were launched in 2023, 2024, which is when they went online. But the truth is, you know, it started as physical stores in Zhongguancun, which is sort of northwest Beijing. Audio visual equipment, quality focus, I’ve talked about that before. It wasn’t until, you know, sort of the SARS and the pandemic where they moved online for the first time. And that’s so hence today is this year’s kind of the 20 year depending how you kind of cut and slice it. Okay, so they’ve been talking about this. They had their big event in June. And from that, they kind of announced their next 20-year plan. And the plan, which, you know the funny thing about JD is, they always have sort of hard to remember names for things. They always like name things like retail as a service and, you know, physical, like… PhysiDigital, they come up with these names. They’re not really easy to remember. I don’t know who comes up with them. Anyways, their vision is 37511, which, again, not the easiest thing to remember. But it basically, so JD’s new vision for the next 20 years is 37511, which basically stands for a bunch of financial milestones. The three, which is the first number, obviously, stands for, they want to establish three businesses that have over one trillion renminbi in revenue, and about 70 billion renminbi in profit. So three really big businesses that have over 150 billion to $200 per year in revenue, and are making about a 7% net profit ratio. Okay, those are the big, I would have used different language. this, you know, for those of you who’ve been listening for a while, this is the core engine, right? This is your growth engine. This is, you know, Bain and Co., you know, I think it’s Chris Zuck. What is your sustainable long-term growth engine that must grow and adapt over time? Really good thinking on this stuff. This is the three that they’re trying to build. Very good idea to have your core engines identified. We kind of know what one is already, which is domestic e-commerce. In theory, if this was Alibaba, they would say the other two are Logistics and Cloud, which they’ve pretty much said. Cloud is a little bit more speculative because the revenue, I’m sorry, not Cloud, Logistics is a little bit less clear because the revenue business model is not as clear as Cloud. It’s not as proven as E-commerce and Cloud where we know the model. But anyways, they’re going for three core engines. one trillion renminbi in revenue. I think we know what they are, at least one or two of them. They are much, obviously e-commerce is one. Logistics at JD is far ahead of Tsai Niao at Alibaba as a separate business unit. It’s already got like 50 plus percent of its revenue is not coming from JD. You know, at Tsai Niao that is not, I mean it’s like 95% of their revenue is still coming from sort of e-commerce service. So it’s clearer, but the business model is less clear. Alibaba Cloud, they’re farther ahead, and we know the business model. JD Cloud, not so clear. Anyways, we can kind of see where it’s likely going to end up, unless they come up with something really clever. JD Logistics is also going international. That’s another one of their big initiatives this year. So we can kind of see at least two of the engines where they’re going. All right, so that’s the three in 35711. The five stands for having five JD businesses on the Fortune Global 500 list. Okay, I don’t know if the three are in the five, I assume they are. Anyways, it’s another category business they wanna build. And the seven stands for having seven publicly listed businesses that started from zero and reached a market value of 100 billion rem and B. So, you know, 15 to 20. billion US dollars of market cap. OK, fine. That’s three, the five, and the seven. The 11 is about taxes and jobs created and such. I’m not going to focus on that. Fine. I wouldn’t have described it this way. I would have said something like, we are going to grow our two core engines to 1 trillion renminbi. What are those? Domestic e-commerce, global logistics. and they’re already going in on that all the way. Create one additional one trillion Rem and B core engine, not totally sure where that’s gonna come from. And then explore and exploit to create five medium-sized businesses. The idea that we’re gonna seed a lot of little companies, we’re gonna grow them, we’re gonna explore options, and if they grow, we’re gonna fuel them up. That’s how you get to the five medium businesses. I don’t think you need the seven at all. And that could be their new retail projects. That could be stuff like JD Finance, JD Health. I like their new retail stuff, which is they have a partnership with Walmart China. They have a partnership with Sam’s Club. They’ve got their seven fresh stores. They’ve got a lot going on there that’s actually kind of interesting. Anyways, I would have described it a little bit different. but it’s more or less the same. Okay, fine. What I take out of their big 20-year announcement, here’s our plan. They’re putting the pedal to the metal on domestic e-commerce. They’re putting the pedal to the metal on international, not domestic, logistics. And I’m gonna sort of talk about the first one, the second one, I’ll probably write about in the next week or so, a little bit. I’ll try and stay off JD. Underneath all of this is the return of Richard Lio. He was there, obviously, he’s the big founder, he’s always been the driving force. The company, in many ways, is much more centralized to him than other companies, say like Alibaba. And when he did sort of, he didn’t step out, step out, but he did sort of move out of daily operations a bit over the last couple years. Well, he’s come back. Sandy Shue is the CEO now, but they’ve basically said, at their celebratory event, this is from Sandy Shue, They’re focused on three areas. The development of lower tier markets, the advancements of technologies and services, and the expansion of international business. Now to me, that reads like, we’re going after the lower tier markets, that’s the domestic e-commerce business’ big initiative. We’re going international expansion of business, that to me is logistics. And then there’s this third one, advancements in technologies and services. I’m not really sure what’s under that bucket at this point. Okay, so that’s kind of how I read what they’re doing. The international business is pretty cool actually in logistics. All right, so those of you who are subscribers, I sent you a note on the low cost markets ideas. I don’t think I was, I think I was off. I’ve spoken with some folks at JD in the last week and I think I kind of I think it was 60% right I don’t think I was totally on the mark. I basically argued speculated that You know in 2015 something big happened in China e-commerce, which was Pinduoduo got founded by Colin Huang young dude very smart like you know involved in multiple startups over a good eight to ten years before he launched Pinduoduo. And he did something we hadn’t seen before. He broke into an e-commerce business that everyone kind of thought was JD and Alibaba. And he broke in and created a new business model entirely. He went after fourth and fifth tier cities which hadn’t really been targeted so much. And he created a new e-commerce giant in China. really shocked people. And this is the same guy that launched Tmoo 10 months ago as sort of a copy of Xi’an and just rocking and rolling in the United States, like really doing spectacularly well. So, you know, serious management team over at Pinduoduo. And the story goes, which is probably not totally true, but the story goes, you know, there’s traditionally been about 600 Like if you look at JD, they’ll say we have 588 million monthly active users. And it’s about the same, right, with Alibaba. But when you look at, say, how many people are on WeChat, it’s a billion. And how many people are on Alipay, it’s a billion. So it’s like, well, if 600 million people are on e-commerce, but a billion people are on their smartphones in China doing chatting, what are those other 400 million people doing? And that’s what Colin went after, is that other 400 million. So he embedded Pinduoduo as an e-commerce site originally, really within WeChat. And he had, you know, and those 400 million people, where are they from? They’re in fourth and fifth tier cities, which these distinctions you’ll hear all the time, first tier, second tier, nobody really knows what those means. There’s no actual definitions, but when you’re talking fifth tier, you’re talking a village. And you’re talking… auxin in the fields and you know very low income relative to Shanghai Beijing the provincial capitals So he built an e-commerce site tailored to these markets where everything was low price and it wasn’t low price like Playing games or stuff. It was like tissue paper toilet paper basic household necessities for three dollars five dollars and if you did group buying which he was doing within WeChat, you could buy as a group and get a bigger discount. Now, WeChat doesn’t actually allow that unless you’re a strategic partner, which Pinduoduo was. So when people talk about Pinduoduo versus, say, Alibaba, keep in mind it’s really Pinduoduo plus 10 cent versus Alibaba. They’re strategic partners and they could do stuff others weren’t allowed to do. Anyways, but the net of all of that was, opened up these fourth and fifth tier cities with have hundreds of millions of people and their collective spending, their individual spending is quite small. Your GDP per capita when you go into these cities is not the $13,000 to $14,000 per year like it is in most provincial capitals. That’s your middle class. You go to Shanghai, Beijing, it’s higher. You’re down at $6,000 and $8,000 GDP per capita in these cities. This is like China in 1990. where there is no extra money. People are very frugal. Most of these people have never had a passport, which is a lot of what China was like 1990, 1995, 2000. Most people were like this before people got a lot wealthier and started buying lattes and stuff. Back then it was like, give me a really good deal on my one air conditioner. Give me a really good deal on my one refrigerator. Give me deals on my daily household items like toilet paper. detergent. It’s that type of China. We call that value-based China or frugal China. Anyway, so that’s what it was focused on and embedding it in WeChat was very helpful and it was all structured for that. Okay, that got a lot of people’s attention. Taobao moved pretty aggressively down market after the same space in response to Pinduoduo. Pinduoduo began sort of moving up market. They built their base in the fourth and fifth tier cities and then they started to go for the third and the second. So there’s this interesting fight in the middle. And we see this all the time in China actually. We see like people who do well in the wealthier cities and then they have the difficult strategic question as Samsung or iPhone, do we go down market by offering a budget version of the iPhone? And Apple has said no. Does Starbucks, which does well in the second and first tier cities, do they move down market to the fourth and fifth tier cities with a discount version? Starbucks in China is as expensive as New York City. Starbucks’ answer to that was no, we’re not moving down market. Other companies like Dove Chocolate, they went the opposite. They decided, if you’re gonna do the Starbucks and Apple Play, basically what you’re doing is you’re sitting up at the top of the market and you’re waiting for that customer base to rise in wealth to reach your level and start buying iPhones. It doesn’t risk your brand to do that, but it does risk a competitor going down market, locking those people up and rising with them. It’s an interesting strategy question. Dove chocolate famously, it’s very good chocolate in China. They went down market. You can get the cheapest chocolate in the world. Walk into any 7-Eleven, Howda store in China, and you will get Dove chocolate for like 80 cents. They went down market with low-cost chocolate, and it’s very good. And they’re capturing that lower market, and then they’re gonna rise with them, and upsell them to their better stuff over time. So there’s a different strategy. We see it all the time. If you don’t move down market, you have a risk of someone from up market moving up. They offer a lot of cheap stuff and then they offer premium brand. So it’s a good strategy question, we see it all the time. Taobao definitely went down market. Pinduoduo is trying to move up market. And JD hasn’t really moved down market because they have always been more strongly associated with quality. If you move down market, you start to get stuff like fraudulent goods. You start to get counterfeits. If you’re gonna move down market, you have to bring in a whole new class of merchants who sell at that level. These are no longer the L’Oreal’s of the world. These are two dudes in a warehouse in Changsha or college students or farmers who are now selling on your site and offering, you know, whatever, avocados, tomatoes. Kleenex at a very, very low price. It’s harder to control quality, and that creates a risk for a company like JD, which is strongly associated with quality. Right, you go and ask anyone in China, if you wanna buy really, you know, the quality, more expensive makeup from Japan, or a real Samsung phone, where are you gonna buy it? They all say JD, because they know it’ll never be fake. It’ll never have issues. If it does have issues, there’s good returns. You can call their customer service. Very good service. You’re on Taobao, that’s not really the way things work. I mean, it’s a little bit more of a wild west. One is like a shopping mall. One is like a local bazaar. Anyways, so moving down market for JD was a really kind of interesting strategic question. Okay, that was kind of my take on this when I first thought about this, and I got a little bit corrected by the people at JD. Yes, the fourth and fifth tier markets are a big opportunity. True. And if you’re going to try and grow your domestic e-commerce business, you have to go after it. That’s the big opportunity. Hundreds of millions of people. And if you don’t go after it, you do risk a player like Pinduoduo coming up market and going for premium and quality. That is true. However, there’s more to the story than that. JD has always been focused on being the lowest price available. Always. Yes, it’s quality, but you can’t find anything cheaper than JD, generally speaking. And when they rose up, you know, they were not the leader in 2008-2009. They really were, you know, they were on the, in the list, but they weren’t number one by any stretch. They fought themselves to the top of the mountain. I mean, they’re a really scrappy competitor. and they launched all these price wars against Suning. I mean, it’s famous, like 2012, 2013, 2004, JD was in these constant price wars against, you know, and things like home appliances, which Suning did very well at. And, you know, JD would come in and just be lower price, lower price, lower price. So, you know, they’ve always been sort of, yes, we’re quality, but you’ll never find a cheaper price on certain items. Now, They are not the place you’d get the lowest priced tissue. But you would get a washing machine that’s quality with no risk and you would not find another price that’s cheaper. So in their categories, which is like computers, mobile phones, home appliances, washing machines, refrigerators, their direct online retail business, their 1P business, they were always the low price. In fact, they were a very scrappy competitor. So… What I got wrong in my earlier thinking was it’s not all about growth. It’s also about refocusing the company back to basics that maybe they have lost focus a bit. Maybe their market share has been trending down, which it is. And Richard has come back in and says, we need to get back to basics. We are the low price competitor in this market. Nobody gets under us. In our core products. didn’t really involve tissue, paper, and such before. And that’s true. When this was pointed out to me, I’m like, yeah, I knew that. Damn, I kind of messed that up. Because I remember watching their price wars in these core categories. So there’s two things going on with their focus on their low price strategy. One, they’re going after this big opportunity. We need to get a couple hundred million more users. That’s your growth strategy. We also need to get back to basics. and shore up our foundations, which is we are the low price player in our core product categories, which is what they’re doing. Okay, so the way I’ve heard this described to me is, you know, absolute low price versus relative low price. And in their core categories, like iPhones, they are the absolute low price. You will get a quality real iPhone and nobody will be cheaper. you know, we get some good deals, there’s flash sales, there might be group buying, we might have promotions on this, fine, it comes and goes. But in certain categories, they wanna be absolute low price. And that’s usually the business where they do it as an online retailer themselves, where they’re not using a marketplace model. So that would be their core categories. And that’s kind of a… So when they start to move down market, the key question is, they’re going to do that differently in their core business where they operate as the online retailer versus their marketplace model in other categories which aren’t core. So that might be the tissue paper, the household detergent. They’ll do that through the marketplace. That’s how they’ll go down market. But in their core businesses, like their refrigerators and all that, they’ll do it themselves. going down market. The distinction there is important because when they do that, they’ll use a different operating model. If it’s in their core business, I mean, what cuts across all of this is, is really two to three, in practice, the strategy means two to three things. The first thing is they have to bring on a whole new category of merchants. on their marketplace. If you’re gonna offer a lot of low cost, i.e. affordable products in non-core areas, not the washing machines, you need to bring on a whole new class of merchants. You need to bring on, you know, and they basically run at least two initiatives in the last six months to attract new types of merchants. They had a Spring-Dawn initiative, which was basically, if you wanted to be a merchant on JD, the rules were pretty stringent. They have hundreds of thousands of merchants, but they don’t have millions. They have far fewer than Alibaba and others. They have made it easier for startups, self-employed businesses, and smaller enterprises to launch on their marketplace platform. So. Think college students, think a couple of entrepreneurs in an office building, think farmers, think designers. In the first quarter of 2023, the number of new merchants on their platform jumped 240% compared to the same period last year, so first quarter 2022. So they’re significantly increasing the diversity of products they have and the diversity of merchants they have. And that’s how they’re going for these more price sensitive consumers on their marketplace. Okay so that’s one. One big move is they have to bring on the new merchants. And they have to do it in a way that doesn’t risk their brand. If those merchants come on and start selling counterfeit goods, which happens on Taobao, like you can find fake copies of my books on Taobao every day of the week. and I know the people that run Taobao and I will email them every now and then, you know, all my books have counterfeits on your website again and they’ll disappear for a week and then they’re back, right? So, and Pinduoduo is famous for this, right? It was a big issue. So how do you reconcile that given that they have a quality brand? Well, they still have their zero tolerance policy for JD. If you have any counterfeit goods, you’re done, you’re out. They’re very sort of strict on that. So number one move to go down market, you have to bring on new merchants, you have to bring on lots and lots of new products. That’s mostly in the non-core category, that’s on the marketplace, and then you gotta worry about your brand. Within their core business, their washing machines, their appliances, their computers, they’re gonna go down market themselves. which means it’s probably not gonna be as dramatic of a change. I’m kinda curious how they’re gonna do that. So that’s sort of change number one, is the merchant mix. Change number two, they’re gonna use a lot of big data and AI, so that when you log into JD from a fourth or fifth tier city, you’re gonna see somewhat of a different experience than if you’ve been logging in and buying things in Beijing. So they’re gonna start to segment their customers much more because what they don’t wanna do is if you’re logging in from Beijing, like you have been for years, they don’t wanna maybe start showing you a bunch of low priced items that are more appropriate for a village. So the product selection you’re gonna see, whether you’re scrolling or whether you’re searching, they have to curate that pretty aggressively to match the consumer type. So if number one move is to bring on the new merchants, number two move is to ramp up their big data and AI capabilities to segment the experiences and make it appropriate for each user group. That’s kind of a big deal. And the third bit they’re doing, this is in my opinion, I’m not speaking for anyone, is how do you do the logistics for those different groups? Now in their… one P business, their online retailer, they’re still gonna use their 1,600 warehouses that they own and operate themselves, and that’s been a big part of their service offering forever is we give you quality goods at a good price, and we can give it to you same day or next day. Well, they can guarantee same day or next day because they have the 600 self-operated warehouses, plus their cloud warehouses. They’re gonna keep using that for their core categories. However, outside of that, for these smaller merchants, they can use any delivery agent. You don’t have to use JD. And that’s an interesting trade-off, because if you’re selling low-cost, let’s say detergent or toilet paper or something, they don’t necessarily, people are more willing to make the trade-off, hey, that’s a really good price, I’m willing to wait five days for that, as opposed to I want it tomorrow. So the customer expectations are gonna be different when you move into this low-cost segment. So it doesn’t appear that they’re, they’re gonna kind of give everyone a choice. of what type of delivery they can use. And there’s multiple services you can choose from. So we can kind of see this playing out in those three dimensions. And then maybe cutting across this whole thing, there’s an interesting level of competition where JD as an online retailer themselves is gonna face direct competition from these merchants, which is probably healthy. It’s gonna keep them a little more aggressive. It’s gonna put the pressure on them. That’s probably a useful thing. So anyways, that’s kind of how I’m seeing this right now It’s an interesting move I Do think it’s one of these things like we’ll know the numbers probably in the next couple months Let’s say next quarter or two Are the user numbers going up significantly? Are we seeing the growth? Is the low cost strategy protecting their current market share as well? I mean there’s the growth story and the protection story. Are we seeing any impact on the brand? Because that’s the big risk everyone’s pointing to. I think we’ll see it, but if it works, and then on top of this the fact that look, is management going to be more focused and driven than they have been let’s say in the last couple years? Now they’ve been pretty driven. I’m not saying they’re not, especially during COVID. They were kind of amazing. But Richard is a dominant personality and he’s really there more than he has been. So I think we’ll see it in the next six months, whether this is gonna change performance. We could see it. It wouldn’t surprise me. The fact that they’re bringing on so many new merchants is really interesting. Anyways, that’s kind of where I am on that. And yeah, the two concepts for today are, Basically marketplace and when you have an online retailer model plus a marketplace model, you really have to dig into the details of how those work together because it is actually kind of complicated. I think JD is a really good example of that. And then the other concept for today, the digital physical hybrid, you can kind of see when they roll out to new merchants, it’s all about the AI and data and the warehouses. So it’s that digital physical hybrid again. Anyways, that is it for the content for today. It’s a really cool story. There’s a lot going on in China e-commerce. Like Alibaba’s making big moves with their new reorganization. JD is making bigger moves than we’ve seen in the last several years. So there’s kind of a lot. And then Pinduo Duo is going international with Tmoo. There’s kind of a lot of action happening right now. It’s pretty cool, actually. It’s more interesting than it’s been, at least for me, for a couple years. Anyways, that’s it for the content for today. As for me, it’s been a pretty awesome week and a half. It’s pretty great actually. I was down in Singapore for the Lazada brand, the big brand future forum event, which is when all the major brands that sell in Lazada come in, there’s a lot of awards and stuff. And on stage I interviewed the… the Chief Technology Officer Howard Wong, really interesting guy. I mean, doing a lot of cool stuff. And then I did an interview with James Dong, the CEO of Lazada. I’ll write that up this week and talk about that. It’s, yeah, really interesting what’s going on in Southeast Asia, pretty dynamic. I think it’s probably number two in my book. When I look for sort of like where e-commerce is really moving, I mean China is number one by a long distance. US is okay. It doesn’t move. Nothing ever changes really. I’d probably put Southeast Asia second in terms of like there is just a lot of building going on. It’s pretty much following what’s happened in China, but it’s years behind. But there’s also some interesting variations happening because the markets are… You know, people kind of put it all together Southeast Asia. It’s really not one market. It’s really six to seven different markets that you have to kind of understand separately. So, I’ll be talking about that. That was a lot of fun. Interesting, interesting stuff. So that was it. And then I bounced over to Phuket, just sort of relaxing for a handful of days. I haven’t been to Phuket really since COVID ended. I came down here during COVID and it was really kind of fun because it was Like there were no tourists. It was all Thai families hanging out on the beach. It’s like Phuket, probably what it was 30 years ago. It’s kind of, well, that’s all over. Not only are the tourists back in huge numbers, but there’s a huge number of Russians that are in Phuket because it’s one of the, you know, when all the political war stuff happened, you know, it was very hard to travel as a Russian, but China was not, I mean, sorry. Thailand didn’t change the rules. So a lot of people came to Thailand and specifically Phuket. Huge numbers, I mean, hundreds and hundreds of thousands of them are here in Phuket. I usually just bounce around Rewai which is in the south, that’s kind of my favorite place. Anyways, that’s been my week, pretty awesome. And then heading back into China. So yeah, pretty good. No real recommendations. I think I recommended Mass Girl last week which was just the coolest. Like… Netflix show I had seen. I’ve been watching Battle Royale, you know sort of the famous Japanese movie from 1999 I think 2000 where you know they basically take a bunch of high school kids and they in their uniforms and put them on an island They all have to kill each other It’s like I only heard about this years ago because Quentin Tarantino said it was his favorite movie ever Was a Battle Royale, so I watched that recently. That’s pretty awesome It’s really gruesome, but it’s pretty awesome. Anyways, that is it for me. I hope everyone was doing well. I hope this has been helpful, and I will talk to you next week. Bye bye.


I write, speak and consult about how to win (and not lose) in digital strategy and transformation.

I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.

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