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From the Concept Library, concepts for this article are:

• Economies of Scale: Fixed Costs
• Economies of Scale: Geographic Density
• Logistics

From the Company Library, companies for this article are:

• Cainiao

——–transcript below

Episode 229 – Cainiao win.1

Jeffrey Towson: [00:00:00] Welcome, welcome everybody. My name is Jeff Towson and this is the Tech Strategy Podcast from TechMoat Consulting. And the topic for today, how Cainiao will win in smart logistics everywhere, more or less. I’m actually in Shanghai one of my favorite cities, maybe top one or top two. Visiting a bunch of tech companies and was out at Cainiao headquarters a couple days ago.

Had a really good time, actually having a pretty spectacular time across the board. I’ll, I’ll write up and talk about a lot of the visits. A lot of new company visits, well, new for me in person, so that’s fun. But anyways, I was out at the Cainiao headquarters Really interesting and I mean, yeah, they’re making big moves.

In fact, a lot of these companies here are making fairly significant moves internationally [00:01:00] where, and you actually hear the same playbook over and over about how they’re going to win, you know, in Europe, in Southeast Asia, in Latin America, and, and Cainiao’s version of that, because they’re trying to win pretty much everywhere, but definitely they’re going after Europe and Southeast Asia right now.

Yeah, I think it’s going to work. I’m, I’m pretty convinced it’s going to work. So, I’ll give you my simple explanation for what they’re doing and, and why I think it will work. And that will be the topic for today. This will be a bit of a short one. I’m I got to run out. I got a bunch more visits today.

So, anyways, it’s going to be fun. Okay, let me get into the topic. Ooh, I got to do my disclaimer here. Nothing in this podcast or my writing or website is investment advice. The numbers and information for 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. [00:02:00] Now, there are a couple digital concepts. Well, actually, not even digital. A couple business concepts that explain most of Cainiao. Really, just three. I mean, oh. For those of you who aren’t familiar, this is the, you know, the logistics arm of Alibaba, serves its e commerce business, but also serves, you know, other businesses beyond that, but that’s the biggest part of it.

In theory, they were going to split out as a separate business unit when Alibaba did a reorganization. A year or so ago, this was one of the six, which would mean they would carry their own P& L, they would raise outside capital, all of that. Most of that looks like it didn’t happen. They mostly look like an enabling capability for the e commerce business.

Now in addition, they’re doing some other things, but you don’t hear people about talking about them raising capital and do other, other things. So, and this is not unusual for, for this situation. Amazon has pretty much the same discussion [00:03:00] ongoing. You know, should logistics be its own business? Should it be the new FedEx?

Or is it mostly, you know, the way you think about it is like. Okay, where does the, where does the profit end up? Does it end up on the balance sheet of Tsai Ngao, or does it end up on Taobao? Well, if it’s a profit center, it should be trying to make it there. Or do they kind of split the difference? Is it a friendly negotiation?

Anyways, so that’s what they’re doing. What matters in that business in terms of its structure is really just a couple things. It’s really three businesses. They have their express delivery network. You know, FedEx. They’re, I mean, basically they’re express delivery service. So, you send a small package, anytime.

But they can go all the way up into other types of logistics like large furniture, bulky items, cold chain. They have a supply chain business which obviously merchants use in particular, so [00:04:00] B2B. And then they have additional services they layer on top of that. So, a couple networks they’re building.

Their main asset is basically a physical network. You know, you go back and look at FedEx in 1985. You know, they built a physical network which is lots of warehouses, lots of trucks that are going back and forth between the main warehouses, lots of planes going back between the network. Those hubs. So, it’s hubs and spokes.

Last mile delivery, delivery within a city, tends to be a different thing. And really, when you break down the strategy, the power is not sending a package halfway across Shanghai. It’s not within a city, it’s between cities. It’s that backbone core network that you build that gives you all your competitive strength.

I’ll go into why that is, but [00:05:00] you know, and historically this whole network was Pretty manual. There’s a lot of trucks, a lot of dudes carrying stuff, a lot of warehouses, a lot of boxes. Well, it’s increasingly becoming digital, it’s increasingly becoming smart, it’s increasingly becoming automated.

Robots instead of dudes, autonomous vehicles instead of regular vehicles, and so on. So, it’s been sort of evolving and the two business models I keep in mind, well I’m not. You can see different variations of this, which is, if you want to build a logistics network quickly, you sort of do a franchise model, where you build the software that connects everything, the routing systems, the waybills, the scanners, all of that, but you don’t own the buildings.

You, you know, you lease them from someone else and you basically make it sort of an asset light version where someone else, an external company, owns a warehouse, you lease it from them, and you just plug and play, [00:06:00] and you put it, you’re sort of the digital nervous system, but you’re not every warehouse.

That’s a quick growing model, a lot of companies in China have used that. The other version which is more like Cainiao and SF Express is they do most of that network in house themselves. So, the core will be run, owned, and managed by them, but then there might be an external network which they will call a cloud network or cloud warehouses on top of that.

So, the plug and play version is on top, but the core, they own it. And the reason for that is when you start to automate that core network and build one seamless end to end system, you can capture a lot of efficiencies. When you’re just sort of connecting other people’s assets, you lose a lot of those efficiencies.

So, you see different versions of those models. Most You know, most of the smart players that I like, [00:07:00] JD Logistics, Cainiao, they own their core network. And then on top of that, they have a cloud, warehouses, and sort of a franchise network. But some, a lot of the China players who popped up very quickly, they were completely franchised.

Anyways, okay, so that’s the basic. The concepts that matter here, economies of scale, three of them really. Physical networks. Economies of scale based on fixed cost and economies of scale based on geographic density. Those are the three. If you understand those three things, you can see why they’re going to win.

Okay, last point on this and then I’ll get into Cainiao is there’s not a lot of dimensions by which you can compete on in this business. It’s kind of a utility. It’s cost, speed, and number of locations. Thank you very much. That’s pretty much it, and pretty much everyone is competing against who’s faster and who’s cheaper. [00:08:00]

Now if you want to be cheaper, okay, you deliver slower. Or you deliver, you know, if you want to be faster, maybe it costs more money. And then network range. Can you only deliver in China? Can you only deliver in Asia? Generally speaking, unless you’re in a massive geography like China or the U. S. or Europe, it’s very hard to build sort of an express delivery network that’s only domestic.

You can in those markets, so China for a long time was just the China network. And then it had a couple external points that were, you know, international shipping in and out points and those were typically handled by FedEx and DHL and then the domestic players did all the domestic business. But yeah, there’s not a lot of dimensions to compete on this, so everyone’s always talking about cost and speed and size of your network.

Okay, now, [00:09:00] Why is Cainiao going to win? They have a pretty simple, not simple, logical strategy which they’ve been doing, which I’ve wrote about, I’ve put some links in there of articles I’ve written about what they’re doing. You know, every year they just keep building, I’m going to talk about the express network for this talk, not the supply chain and the other stuff.

They keep building their express delivery network. Every single year they keep making it bigger. As they do this, they appear to mostly be piggybacking certain growth drivers. You know, it’s easier to build when you’re against a growing source of demand. Usually that is e commerce. So, it’s e commerce growing its penetration within country after country.

And then the third bit is with their larger network or more automated and smarter network, they try to offer a differentiated service that [00:10:00] FedEx and DHL cannot match. That’s kind of it. You’ll see it over and over. Build the network. Try to capture a growth wave or a tailwind. Offer something that’s differentiated based on your capabilities that others really can’t match.

Maybe everyone can’t match it, maybe most people can’t match it. So have that. And that’s pretty much it. So, what have they been doing? The China network, they’re very successful. Number one, number two, large network. They are then using that to build a cross border network. So, China to Europe, China to Southeast Asia.

That would be sort of part of what we would call the global-to-global network. So, they have a local-to-local network in China, the China network. You ship from Shanghai to Beijing. They have global to global network. but that is mostly [00:11:00] China to Europe, China to Brazil, and then inbound as well. So, merchants in Europe or Brazil selling to Chinese consumers.

And when you look at global to global, which could be any two places on the globe, you know, the biggest piece of that pretty much is the China inbound and outbound cross border. So that’s where they’re starting, but they’re building on top of that. Within their cross-border play, Europe seems to be the big target this year.

A lot of movement in Spain, France, Poland. But in addition, if you look at their press releases, you’ll see them making regular announcements about adding new charter flights between China and Brazil. You know, a new e hub, a new warehouse in Malaysia. They’re always making these announcements. Okay, so for this year, it looks like Europe is the biggest target.

The growth trend they’re piggybacking is e commerce. and the point of [00:12:00] differentiation they’re making is affordability. So cheaper, we’re cheaper. For cross border, if you look at their stuff, what they will say, and for cross border I’m mostly talking from China, so you’re in Spain and you go on AliExpress or you go on some other app and you buy a good coming from China, their pitch is It will get there in five days for 10.

That’s the pitch. Now in addition that you can get 10 days for 5. That’s their main pitch and the $10 in five days offering. They keep adding that to more countries. So right now, it’s about 14 countries and the $5 for 10 days, that’s, and I think about a hundred countries. But they’re going to keep adding and adding and adding to that.

And their main point is we’re cheaper. Well cheaper than who FedEx. [00:13:00] You ever try and send something in FedEx in 3, 4, 5 days? $60, $80, $50? Even just an envelope from like Southeast Asia to the U. S. which I send a lot, you know, 60, 50. So the fact that they’re coming in with 5, or sorry, 10, that’s a big lever.

Now, they can do that because most networks can’t pull that off. Their network is of a size and technological sophistication that they can offer prices that most people can’t or don’t want to, you know, match. So, you’ll see that all over the place. If you look at how AliExpress had such great numbers If you look at the Alibaba earnings calls this last week or two, and then the previous quarter, really the past two years almost, the biggest source of growth year over year was AliExpress, [00:14:00] which is the cross-border arm of Alibaba, B2C.

You know, 29 percent growth. And we’ve seen, you know, we’ve seen similar growth in Sheehan and T Moat. But then if you look at how AliExpress is doing that, well, it’s AliExpress Choice. What is AliExpress Choice? It’s their Basically a 5-day guaranteed delivery service. It’s the 5-day thing. That’s the lever.

So, that’s kind of their playbook. And it’s a very good point of differentiation. Now, how do you think about that in terms of strategy? Well, this is where we get into economies of scale. So, this is concept number one for today. Now keep in mind when we’re talking about physical networks like this, there really aren’t network effects.

Not really. A network effect is when you have a superior scale on the demand side [00:15:00] and to make, it makes the service better. This is all about the supply side, pretty much. Well, I mean, you could say you’re getting more volume, but when other people ship on FedEx or Cainiao, it doesn’t make my Cainiao a better service directly.

Now, it enables them to get larger and build more warehouses, and that becomes better, but it’s, it’s secondary. So, this is mostly supply side. This is about a physical network asset with a really good service on top of it. Not a platform business model with a network effect. Okay. Economies of scale in fixed cost.

And when you think about fixed costs, it’s, it’s, it’s People always look at the income statement. Okay, here’s your percentage of revenue being spent on logistics. Here’s the percentage of revenue on R& D. Here’s the percentage of revenue in marketing, whatever.

You got to also put into that maintenance capex. So, if you [00:16:00] build a big physical network, warehouses, trucks, all of that, you’ll look at the yearly logistics spending as a fixed cost, as a percent of revenue, which is significant, but you also need to add in the maintenance capex, not the growth capex, you know, the new warehouses, not the upgraded technology.

That would be growth, but the Maintenance of the existing assets. You put the maintenance capex plus the fixed expenditures. That gets you overall fixed cost spending as a percent. And you know that’s where they crush their competitors because if you are doing bigger volume, a million packages versus 500, 000, your cost per package is half.

Okay, now it gets a little interesting when you take this apart, but we’re Everything I just said, we’re talking about the warehouses, we’re talking about the planes, we’re talking about the trains, we’re not talking about last mile delivery. The little stations and the [00:17:00] dudes on scooters and the trucks.

Kind of look at that, that’s a different thing. But imagine two networks, let’s say in Europe, that are the exact same size and they are offering the same speed. So, let’s say 25 warehouses, 35 routes that connect them by trucks mostly and planes. Let’s say we have two companies, they’re the exact same size and they’re offering the same service five days, eight days, but one of them has significantly lower volume.

Well, that means your trucks are half as empty, your warehouses are half as empty, your per unit shipping cost per kilometer is higher. Fine, that’s fixed costs. Now, you can get around that problem by saying, well, we’ll have fewer trucks. [00:18:00] We have the same number of warehouses, but we will have smaller warehouses.

Now, in that case, the, you know, the per unit cost should drop. But, unfortunately, that, you give it up in speed. If you have fewer trucks and you don’t have one leaving every 30 minutes that the package comes up on, you got to wait three hours. Okay, now you’ve, you’ve solved the cost problem, but now you’re slower.

So maybe you’re now, you know, 10, but you can’t do five days, you can do eight days. So, there’s always a tradeoff there with volume versus speed. So, what happens is the larger network with Let’s say the same size network, same speed, but with more packages moving every day by orders. They’re cheaper.

What do they do? Well, because they’re cheaper, they’re making more money, they probably start to take part of your market share. So, they get a little [00:19:00] bigger than you. They were already bigger, now they’re a little bit bigger. So, then they can Basically open another warehouse, buy more trucks, and add more routes and more hubs.

Now when they do that, usually that makes you cheaper and faster as well. Suddenly to get to City C, you don’t have to go from City A to City B and then to City C. You can go right from A to C, because you have a hub there now. So, as you add more hubs, points of destination, you can add more routes between them, That, again, makes you cheaper.

So, you can kind of be cheaper by two ways. You can have, you can either have more volume in the same number of hubs, or you can have more hubs. And they just keep adding hubs, and that’s what Alibaba is doing with Tiny Owl. Every year, they’re bigger than their competitors. They keep taking that money, getting more market share, and adding more hubs, and adding more routes.

And you can hear these press releases [00:20:00] all the time. Okay, so that’s the basics of sort of a physical network, and this is not unique to them. You can look at this with pipelines and all sorts of businesses like this. Canals, railroads. Airlines are a little bit different because they don’t have to take a fixed route.

You know, they can fly in different ways. Trains are the most fixed because the rail has to be laid. You can’t really reroute very easily. Trucks are not bad. You can move them. So, you can play some games there. Anyway, so that’s sort of concept number one. And then concept number two would be economies of scale in R& D and tech.

As you have a scale differential with your rival, you are making more money. You outspend them in R& D. that starts to get your warehouses automated. That starts to get you internet of things, scanners and [00:21:00] devices and automated batching and routing and a little bit of autonomous robots within there. But you can use that to basically get smarter and more automated and you’ll start to capture other efficiencies.

One of the areas you capture efficiencies is the obvious one is in a warehouse instead of a lot of dudes moving pallets, you just have robots zipping around. And most of these e hub warehouses are about half automated. The process when the trucks arrive and you take stuff off the trucks and you put them into the right bins, you know, these massive spaces with just cubicles full of stuff.

That’s kind of manual, but once it’s tagged in place in the right location, then the robots are pretty good at going retrieving it, mixing it with an order, putting it in a batch together, and then putting it in the truck. The first step tends to be pretty manual, [00:22:00] so robots, automation, but the other efficiencies, which is where machine learning comes in, are more interesting, where you start batching differently.

Where we look at the entire network, and only AI can do this. Humans can’t do it. You look at all the items moving within the whole network and you decide the optimal situation for every item within a truck. And these items should go on these trucks, but these items should go on that truck, and you predict demand tomorrow, because where those trucks end up, they have to be filled again at that point.

So, you have to sort of look at the shipping orders today, optimize how to get them where they need to be, the quickest and most efficient, but then you also have to think of where those trucks will end up tomorrow, because I need to predict the demand for tomorrow and have it set up for that. So, you might be moving certain items in certain trucks and having them in certain [00:23:00] warehouses that are closer to the customer.

Generally, the simple version of that is if you want to make things cheaper and faster, push the right items as close to the end consumer as possible. Right? The more you can put FMCG, Cokes, and things that people buy quickly and frequently, into locations close to the consumers or the end users, you’ll make it cheaper.

So, you push everything that way. But that requires predicting demand with a lot of sophistication in a massive global network. Because a lot of these items are coming from China and wherever. So, machine learning how you are managing where the items are day to day, how you are managing the roots.

And then the other thing is batching. that especially when you start to talk about delivery, which I’ll talk about in a sec, you know, what you put in each person’s, [00:24:00] each driver, each moped guy, what you put in each one of their packages when they leave, and then you send them, because you might handle multiple orders with one guy, and so you start to batch orders, and there’s a lot of power in that.

I’ll talk about that. Anyways, so that whole second bit is a lot of what Cainiao, Amazon, JD are investing heavily in is that smart aspect. And it turns out artificial intelligence is really good at this and it turns out blockchain can be really great for tracking stuff in this system. Okay, so that’s kind of point two.

The last point is the other concept which is economies of scale based on geographic density. Now this is a really cool idea which I’ve talked about before. If you read my articles about Grab, they talk about this all the time. And it’s another economy of scale type, which means you know, if you’re bigger than your rival, you’re going to be cheaper or [00:25:00] faster or something like that because you have a scale differential.

Now this is about when you are doing more orders within a specific geography. And so, that’s all the Grab Scooter dudes in Singapore going between restaurants, etc. Picking up orders and taking them to people’s houses. Now, the more orders you have within a geographic area, you can start to capture efficiencies.

The simplest version is, one scooter guy goes to one restaurant, Whichever one has a new order coming up, he waits there for a while, he finally gets his one order, he puts it in his thing, he drives to someone’s house, he drops it off, then he looks up, okay, where’s the next order, he goes to another restaurant, he waits there.

That’s the simple version. As you get more and more density, you can start to cut down the times that they wait at restaurants because you have so [00:26:00] many orders coming in quickly the wait time drops so that’s faster. When they go to a particular restaurant they take it, they didn’t wait, they pick it up, they take it to someone’s house.

Because you have more restaurants taking orders in the area when you go to your next restaurant to pick up your next order it’s not nearly as far because there’s so many of them nearby. So, it’s closer. Then you can go to that restaurant and they don’t just give you one person’s orders, they give you four people’s orders because you’re starting to batch the orders because you have so many coming in.

And then the AI will optimize the route that’s the most efficient because on a scooter you can take lots of roads and they will route you down certain streets to drop off order A, drop off order B, maybe along the way you’ll stop at a restaurant. Pick up order C, and then you’ll drop off orders. So, as you get more density with an area of lots of orders, lots of restaurants [00:27:00] you can start to really capture some nice efficiencies.

Now, it’s not as big as economies of scale for fixed costs. It’s a smaller gun. But if you ever read the Grab the Grab investor presentations, not the annual reports, the presentations, they’re really smart and the thing they talk about all the time is they call it like data enabled cost efficiencies, where they’re really talking about this and the more orders they get, the more they can lever their AI and machine learning and data into batching and route optimization.

And so, you can capture some pretty good savings now. Now that said, when you look at why these bigger logistics companies like Cainiao and you know, JD and Amazon, their biggest problem life is the cost of last [00:28:00] mile. That has been the most difficult thing to knock down. Most of their power, their cost efficiencies against rivals and just making things cheaper in this world has been in the core warehouse and trunk network, not in last mile.

So, people are really working on that. It’s a problem. Okay. Those are the two concepts. Now, how is JD, I’m sorry, how is tiny out winning? Okay. So, if it’s all about scale, both of those things are scale versus rivals. Well, how do they win in Europe? Well, that’s cross border logistics express delivery. They piggyback that system on top of their massive China network that already exists.

So, yes, they’re building warehouses in Spain and France, but they already have a massive network in China. So, they’re sitting on top of that to begin with. [00:29:00] Now a pure cross border player, let’s say between, I don’t know the Philippines and Europe can’t match it because they have a massive scale disadvantage.

So, they’re piggybacking cross border e commerce on top of their already big China network in terms of scale. So that’s half of the warehouses because all the warehouses are already in place in China, and that’s what funds their massive R& D spending. So, when they open a warehouse in Spain, it’s already got tech that is way above everybody, and it’s already got a cost per delivery in cross border that others can’t match.

That’s how they can do five dollars, or ten dollars in five days, and others can’t. That’s how they pull it off. That will get them more and more into cross border, into Europe, into Southeast Asia. Those seem to be their big focus, foci right now. [00:30:00] As they get bigger and bigger in China, cross border, inbound, outbound, they will then lever that big piece into global to global everywhere.

So, they’re using their China scale to win cross border. They will then use their China plus cross border scale to win global to global. And that’s sort of starting to happen, but they’re mostly focused on the core. Basically, they’re doing both of those right now. They’re focused on cross border. That’s the five-day guarantee.

And then they’re increasingly doing global to global in other trunks, like Southeast Asia to China. And then you can expect them to see Southeast Asia to Europe, right? They’ll start to connect those two without the China piece. So that’s fine. Last point. And I expect them to win. I think what they’re doing is going to be very difficult to beat. [00:31:00]

Now there’s one other big opportunity that’s on the horizon that they’re going for. If you’re going to add shippers, Receivers, Network Locations. You’ve got to sort of go local to local. So, they’re starting to go after local to local within Europe. So, this is, they’re taking shipments from France to Spain.

There’s no international component at all. And they basically talked to some numbers on this already. If you look at, you know, how much it costs to go, let’s say, between within France, you know, you’re talking six euros, seven euros, kind of expensive. I think they can come in at about four euros. for the same time frame.

So again, it’s the same playbook. We’re going to do local to local, but we’re going to use our existing scale, which they are now building cross border into that [00:32:00] location, to launch a local service that is also at a price others can’t match. And I think within Europe it’s like eight euros and they’re going to come in at six.

Same playbook. I’m convinced it will work in the cross-border situation. I’m convinced it will work in other global to global and I think within certain markets it will work local to local. I don’t think it would work in Southeast Asia because Southeast Asia is already really, really cheap. There’s just not a margin to target.

But express delivery in Europe is really expensive. So, there’s a big fat target to hit and to come into that market of doing France to Spain shipments, France to France, at 20 30 percent lower than the local players. So, there’s an opportunity to strike there and differentiate. I’m not convinced you will find that.

shipping within Malaysia. [00:33:00] Things are already really cheap. And they already have pretty good digital players that are automating their warehouses. So, anyways, that’s kind of the play. It’s pretty cool. Some other things they’ve done that got my attention is, typically when they were doing this business they would say go into Europe they would open e hubs They’re warehouses.

They would do truck routing and they do plane flights. That’s the core network. And then they would contract with express last mile delivery people. And that’s pretty common. Alibaba likes to be asset light. They have actually gone directly into last mile themselves in Spain in the last year. So, they now have their own delivery service there.

So, they’re sort of complementing using the external parties with their own internal team for delivering door to door. Now I think the reason they’re doing that is they can’t get the service levels they need to do their [00:34:00] guarantees. If you’re going to guarantee five days delivery from China into Spain and you’re sort of dependent on express delivery that’s not as tech focused or not as at your level, you probably have to bring some of that in house.

So, I think they’ve done that in Spain. I suspect they will do that in a couple other places, but yeah, watch for those press releases. Anyways, that is it for this pretty cool subject. I think it’s really interesting what they’re doing. I was looking for a lot at the tech they’re rolling out. If you look at who’s spending money on next generation smart technology for logistics.

You know, it’s Amazon, it’s Alibaba, and it’s JD. Now, FedEx is kind of doing the same, DHL is kind of doing the same, but like, when you’re talking about advanced machine learning, they’re How many super powered AI guys do you think take jobs at FedEx? No. [00:35:00] Alibaba has them, right? Because they have Alibaba Cloud and they have Alibaba eCommerce.

So, when they lever their brainpower into smart logistics, you know, the world to me looks a lot like Alibaba, Amazon, and JD. You know. And they’ve also got, you know, such profits coming out of their e commerce business and increasingly their cloud business, that they can invest into logistics based on that money as opposed to we can only invest the money we make in logistics which would be FedEx.

So, you’re dealing with a much smaller pool of capital to deploy. They can act more strategically with these investments instead of just taking 10 to 15 percent of whatever money they made in logistics last year. No, they can take their economy. I mean, Alibaba cloud can just flood money into smart tech for logistics or Alibaba or Amazon, you know, [00:36:00] that’s kind of why I started by saying, look, are they doing this logistic business?

to make money as a standalone business unit? Or are they doing it to make their e commerce business untouchable? It looks to me like Amazon when they offer things like free delivery Amazon Prime which consumers absolutely love. You know, they’re doing that to juice their e commerce business, not to make money as in a logistics business.

And it turns out it’s true. What do people love most about e commerce? Fast or free delivery is a big lever. Just is. People really, you know, two, two options. Buy it on site A, buy it on site B. One of them delivers free and one of them cost me four dollars. Even if you’re baking the cost into somewhere else, but it looks free.

Everybody chooses the free one. Yeah, people really care about that. Okay, that is it for content for today. It’s about 7 a. [00:37:00] m. Here in Shanghai. I had to get up early We’re running out to do a bunch of business stuff. So, it’s kind of fun to do this in the morning. Anyways, pretty spectacular having a good time Flying out to Hong Kong tomorrow going to be bouncing around that part of China for a couple days Anyways, really enjoyable, and I hope this is helpful, and lots of information coming in the next week or so.

Well, probably two weeks, but I got like tons of notes. I’ll tell you the companies we’ve been visiting. It’s a whole new batch of companies. Some of the regulars, but some new ones. Pretty awesome. Anyways, that is it for me. Hope everyone’s doing well. Bye bye.

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