In this class, we discuss Didi, Luckin and Mobike and how to predict if they will be profitable.
Exercise for this class:
- For Mobike, Luckin or Didi, think about the following two aspects.
- Consumer view: What do they care about? What is their journey for buying and using?
- Competitor: Could a well-funded, well-run competitor take 10-20% of their business? Five forces and competitive advantage are useful here.
- Digital economics: Do any of the following really change their business? Or your answers to the above?
- Zero marginal cost of production
- Non-rival goods. Can be used by multiple customers simultaneously.
- Durable vs. consumed as a product or service.
- Low or zero distribution costs. Does it have global reach?
- Now make a decision: Will this business be profitable? Will the unit economics be positive eventually?
- Write 3 paragraphs with your answer. Do it on your smartphone. Or a PC. Or a piece of paper (take a picture and save it).
Articles cited in this class:
- An Introduction to the Sexy but Dangerous Economics of Digital
- From Didi to Mobike to Luckin: How Money and Hype Are Distorting Digital China
Concepts for this class:
- Money Wars
- Blitzscaling vs. Fastscaling
- Irrational Competition
- Digital and Information Economics
Companies for this class:
- Luckin Coffee
I write and speak about digital China and Asia’s latest tech trends.
- This online class offers:
- A weekly lecture you can listen to as a podcast at the gym or in the car or wherever.
- A weekly article with more in-depth material.
- 2-3 weekly updates on what’s happening digital China / Asia.
- This class requires only 90 minutes per week which can be done mostly via a podcast available at iTunes and Himalaya.