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  1. Frank Huang

    January 25, 2020 at 11:32am

    Allen in his video speech gives out his thoughts on how people’s life is shaped by information and the latest developments on wechat. Jeff gave comparisons between wechat and facebook. He has better opinions of wechat. However, I have to say as a social network platform, there is no big difference between wechat and facebook in terms of addictiveness, intrusion of privacy,bragging and showoff. Maybe Allen invented the wechat for people to get conneted and communicate, but his boss Tony Ma has different idea.

  2. Kanat Rattnaniyompan

    August 31, 2020 at 7:37am

    Waiting for part 2. Love the content. It seems not easy for PDD to pivot from customer attention to spending. Chinese E-Commerce is far more advance than any country in the world.

  3. Ruangwith Viwathanatepa

    December 4, 2020 at 5:02am

    I will try to write something about this. The moat can not be view in isolation and needs to be compared to the moat of other competitors and the paramount objective of E-commerce is to gain market share.

    one of the point I’m skeptical about is regarding JD logistical advantage. I do not understand why Cainiao network which has a larger market cap (the last time I checked) than JD logistic can be much less competitive than JD.

  4. Wanlapa Rerkkriangkrai

    January 27, 2021 at 1:02pm

    I’m new subscriber. May I ask what are 9 questions you forced yourself to answer before making investment decision? You mentioned it in the podcast

    • jtowson

      January 27, 2021 at 1:52pm

      Hey. Thanks for subscribing. I’ll send out my 9 questions in the next update. Cheers, jeff

  5. Wanlapa Rerkkriangkrai

    February 8, 2021 at 4:06am

    What abour LX (lexin fintech holdings)? They also run platform lending business.

  6. John Leonard

    March 15, 2021 at 6:01pm

    Jeff thanks, informative as always. Sounds like you’d need a mongoose to live at Rawai!
    Can you pls provide a link to the Danish podcast you were on?

  7. Fu Ming

    July 4, 2021 at 8:30am

    Hi Jeff, I’m a new subscriber. Really enjoyed the content so far.

    Good analysis on Zhihu. You are sharp in calling out its disproportionate Sales and Marketing spend. The situation, however, reminds me of another of your favorites, PDD. It seems to have also relied heavily on S&M. As a matter of fact, its astronomical spend in this area has stubbornly kept its profit in the red despite the meteorite topline growth. ( 2019: RMB27B S&M vs RMB30B Revenue; 2020:RMB41B vs RMB59M Revenue). What’s your take on PDD’s Marketing spend? Is it different from Zhihu’s? One of PDD’s key competitive advantages is its value for money. The question is without the heavy promos, will this value proposition stand on its own?



    • jtowson

      July 6, 2021 at 12:56am

      Hey. I worry about the big marketing spend. I find it hard to tell smart big spending for growth vs. desperate spending to keep up the usage.

  8. Fu Ming

    July 6, 2021 at 6:50am

    Nice illustration of a set of competitive tactics. I like the distinction between these short-term tactics and the marathon operational advantages.

    Regarding the TikTok saga in 2020, I’m not sure it was “dirty tricks” by the US Tech companies. It felt more of a move by the US government in a political war out of ideological differences. Another example of dirty tricks could be Microsoft Bing copying Google Search results.

    • jtowson

      July 6, 2021 at 1:53pm

      I’m just guessing on the Facebook TikTok thing. But it was a surprising company to focus on.

  9. Fu Ming

    July 17, 2021 at 10:32am

    I think your five questions are right on the mark.
    In terms of sustainability, Dingdong smells more like Mobike than Meituan. Meituan achieved profitability through expanding to the adjacent service of OTA, which has much better enomonics; Amazon did so by expanding to Clound. DDL needs to find something like that soon.

    • jtowson

      July 18, 2021 at 4:17am

      yeah. Agree. I also think meituan was just much more agile. They jump into different things all the time.

  10. LI Ma

    July 19, 2021 at 5:56pm

    Great sharing. But just wondering can all podcast have a written version which might be more time saving? Thanks

  11. Fu Ming

    July 20, 2021 at 11:31am

    Very informative. I had never heard of Philip Fisher, the exact name, until this article, while I had heard of “growth investment.”

    Besides Tencent, Google is perhaps another example of the type 1 innovation company, just like Tencent? In that sense, perhaps the key difference between type 1 and type 2 is really software vs hardware, where the former allows real-time continuous innovation and the latter requires quantum-like cadence?

    And if we try to go back to “first principles,” where do the four distinguishing characteristics of growth companies, ie, excellent management, sustained innovation, outstanding sales and rigorous cost controls, come from? I suppose people? Especially the founders?

    Speaking of Buffet vs Fisher (proxy for Value vs Growth), I wonder which one produced higher annualized returns over their investment lives? 🙂

    • jtowson

      July 20, 2021 at 10:23pm

      I think the problem with Fisher is there just aren’t that many of these companies. he found like 1-2 every decade. Buffett has a much bigger pool of companies.

      • Fu Ming

        July 21, 2021 at 4:33am

        all the more powerful? just imagine if one had put all his/her investment in Tencent or Netflix over the last 3 decades.
        Diversification or Diworsefication? To borrow a term from Peter Lynch. 🙂

  12. Fu Ming

    July 24, 2021 at 10:17am

    Interesting angle. At the same time, Logistics is by nature very labor and capital intensive and low margin. Now with JD Logistics spun out and listed separately, will it be worthwhile to have a look at it on its own merits?

  13. Fu Ming

    July 25, 2021 at 5:45am

    Nice series on JDL and smart logistics in general. A very interesting place to watch.

    A couple of questions
    – JDL vs Cainiao: My understanding is that JDL actually performs the physical movement of the parcels while Cainiao performs the planning and controlling and leaves the actual movement of the parcels to its partners. The difference in the approaches is akin to the differences in their approaches to ecommerce: retailer vs a marketplace. Cainiao provides certain DCs to facilitate the movements but it largely wants to play the “Logistic Tech” role, at least in China. I could be wrong.

    – DHL smart logistics: question in my mind is whether there will be any Financial returns from the investments requirement. Smart Logistics sounds like something right up the alley of the startups backed by VCs. But for a mature company like DHL, with thin profit margins, I wonder if this is financially a good idea. Since DHL is doing it, someone there must have done the business case. But I wonder if it will turn out to be one of those Vanity projects in the corporate world. The ROI question is also my central question in my mind regarding this space.

    • jtowson

      July 26, 2021 at 1:06am

      yeah. I agree with that. I’ve never been in a Cainiao facility so I’m not sure. But it’s what I’ve heard from them. They want to be the nervous system but stay asset and operationally lite.

      • Dan Kong

        September 2, 2021 at 7:52am

        Well, Cainiao has been moving from initial asset-light model to a more hybrid one: their Capex on hub-level warehouses and last-mile network construction (Cainiao Post, smart lockers etc.) has been increasing in the last few years. I think their strategy is to control the key nodes of the network that will decided the overall delivery effiency while leave the more commoditized services like line-haul transportation and sorting to its partners.

        • jtowson

          September 2, 2021 at 9:03am

          Agree. They are doing the same with new retail. They are now owning and operating the core infrastructure and then extending it to partners with digital tools.

  14. Fu Ming

    July 25, 2021 at 5:48am

    BTW, I really think this space belongs to the Highly Unpredictable and Highly Malleable quadrant in the BCG Terrain framework, you introduced nicely.

      • Fu Ming

        July 29, 2021 at 4:11am

        does the predictability dimension refer to the short-term predictability (e.g., in fashion) or the long-term predictability of the end state (e.g, Fin Tech) ? If it’s the former I agree smart logistics is predictable. That is, after all it’s moving stuff from point A to point B. If it’s the latter, it seems rather hard to predict how the different pieces will fit together in the space.

        • jtowson

          July 31, 2021 at 4:32am

          I think we can see the next 3-5 years in right now. the autonomous mobility part is not clear to me.

  15. Fu Ming

    August 21, 2021 at 7:43am

    Thanks so much for introducing another Investment giant and his approach. Super interesting.

    What Tom Rusou said was so true even for China to probably 5 years ago, when some domestic brands only started to challenge the dominance by the foreign brands. Brands that came to mind are Nike, P&G, and Starbucks. While Nike and P&G have been challenged now, Starbucks is still pretty much the only game in town.

    • jtowson

      September 1, 2021 at 9:15am

      Tom Russo has a significant position in Alibaba. He wrote about it in the recent investor letter.

  16. Fu Ming

    September 15, 2021 at 12:18pm

    Thanks for the timely and insightful piece. I was just looking at this Company a few days ago.

    If we think of PDD broke through by being “Disney + Costco” for China’s countryside consumers, we may be able to think of BZ as 51Job + TikTok for China’s blue collar workers. I see this as the entry point for BZ but definitely not the end point. What’s particularly impressive is BZ has reported Non-GAAP profit (excluding Stock Based Compensation) in its recent 2021Q2 earnings. It appears the model has a lot of legs, potentially another truly China-bred innovation.

    • jtowson

      September 15, 2021 at 3:02pm

      I think this it is mostly about AI-driven matching as superior to search. it works in video. Or at least it complements it. I’m not totally sure it works with recruiting. But i do know that most recruiting websites suck. Uploading resumes. Searching for qualifications – instead of by personality and cultural fit. So if what they are doing works, it could make a big difference. I’m not sure how well it does yet.

  17. Fu Ming

    September 16, 2021 at 12:42am

    Good point. I think that’s perhaps why they picked SME + Blue Collar jobs as the entry point, where personality and cultural fit arguably play a smaller role in matching. Incidentally that’s 50% of China’s total recruiting market, according to the company. From that they can train their algorithms and move up the ladder. Of course, as you said, there is no guarantee the algo trained on blue collar jobs will work well on white collar jobs.

    • jtowson

      September 16, 2021 at 1:35am

      yeah. they also said that blue collar change jobs more frequently. platforms and network effects require standardization. So you can scale up. The more complicated the service, the harder it is to do that.

  18. Alex So

    October 5, 2021 at 7:17am

    Thanks for the objective analysis. A WeChat Official Account article (in Chinese) about Ding Dong giving a unique cultural perspective, regardless of the could-be promotional purpose. Some business strategy highlights resonate with your points.



  19. HacheM

    October 13, 2021 at 1:07pm

    Hi Jeff, I really liked this framework to review future success. Thank you. I have been thinking for some time on Meli (Mercado Libre). They are the e-commerce leader in Latin America; they have been copying from China players some key strategies/tactics. They copied the QR technology as they implemented their payment system. As well, now they are moving into providing loans to both merchants and consumers and want to become a bank.
    Currently they are ramping up their logistics with large spend. To me the Latin America market resembles the SEAsian market in the sense that it is formed by a large number of countries all with their own cultural nuances, degrees of infrastructure development and, very importantly, Legal frameworks. One difference though is that all countries where Meli operates are are Spanish speaking, the one outlier being Brazil where Portuguese is spoken and it is a HUGE market (perhaps resembling China? … just a thought) .

    Anyways, wanting to get your thoughts as far as how can MELI compete against the strong attacks of Amazon in Brazil and Mexico and potentially in all other countries where Meli operates. Also, do you see fit for a large player such as Alibaba to acquire Meli? thanks!

    • jtowson

      October 14, 2021 at 1:02am

      Hey. Latam is interesting. Local players vs. amazon and now versus Shopee. I think Alibaba could buy Mercadolibre any day. Wouldn’t surprise me at all.
      I think it will probably come down to management. Owners who are invested (Meli, Shopee) vs. hired staff (Amazon) will probably matter.

  20. W Tansantisuk

    October 24, 2021 at 4:07am

    Hi, please sign me up for the Zoom meetings. Thank you.

  21. Fu Ming

    February 5, 2022 at 9:12am

    Thanks for this thought-provoking piece. Love it that you are applying your strategy framework to make predictions, just like in Science. It’s truly rubber meeting the road.

    My touchstone to any blockchain based business idea is asking the question: how will it work better than on the traditional (centralized) platform? The vast majority of the ideas out there can’t produce a convincing answer. On that point it would be helpful to delve a bit deeper to FTX to explain why it works better than the conventional financial platform.

    Secondly I agree with you DeFi has the potential to become one of the first truly successful use case of Web 3.0, arguably, mostly thanks to Finance’s numeric nature.

    At the same time I also think the NFT space has the potential to contend for that prize, for two reasons: 1) it’s native to Web 3.0. 2) The global art market has been so opaque for so long it lends itself for disruption and web 3.0 might just be that magic pill.

    • jtowson

      February 5, 2022 at 12:34pm

      I think for most products it has to have a better solution that a platform. Which it doesn’t.
      But for institutions doing trading on SFX they just want another way to make money. It doesn’t have to be better. Just profitable.
      NFT’s don’t make that much sense to me. But neither does the art world.
      I think speculation is driving both as well.

  22. Stefan Conquist

    February 18, 2022 at 1:55am

    Another great pod, Jeff. Since you’re in Brazil, I have to ask whether you’ll be sharing any more insights into Nubank. I enjoyed your 2 recent articles on it. You apparently like the setup a lot. Do you think their management team can execute your Ant-type big vision? Assuming that they see it the same way. I’d also like to know whether you’ll be commenting on VTEX. These LATAM fintech companies have attractive entry prices right now.

    • jtowson

      February 18, 2022 at 11:05am

      thanks. I’ve been asking around Brazil, who are the best management teams in tech? cause I’m not really in a position to assess that here (in Asia I am). The two names I keep getting told are Nubank and Mercado Libre.

      I was looking next at Mercado Libre (which i’ve followed for years) and Magazine Luiza. But I’ll put Vtex on the list.

    • jtowson

      February 18, 2022 at 11:01am

      yeah. I kind of skipped over the wallet part. I think the exchange is clear but the custodial wallet is interesting. I thought it was similar to a checking account, just a service. But now I’m not sure what it is. Reading more about coinbase right now.

  23. Stefan Conquist

    March 20, 2022 at 4:02am

    Jeff, thanks. You have previously observed that a big reason for SEA’s success over Lazada in SE Asia has been their ability to localize so well (better jockey”). And Shopee so far has apparently been able to succeed despite not having Lazada’s “faster horse” infrastructure advantage. During your visit to Brazil have you seen any evidence that they can pull this off in LATAM where MELI is the faster horse but with a proven jockey? When you say it will be expensive, I presume it means paying big money to either create their own infrastructure or to buy fulfillment services. I don’t like this prospect either. However I think SEA’s management has shown themselves to be pretty capable and it’s hard to see how they wouldn’t have considered this. Although “considering it” and “pulling it off” are 2 different things. And the whole thing still depends on the crazy ongoing success of Free Fire and its ability to cross-engage users with Shopee. Amazing. I guess we’ll have to wait and see whether this is “the little engine that could” or whether it’s a runaway train.

    • jtowson

      March 20, 2022 at 3:48pm

      Good point on Free Fire. I didn’t think about cross-selling there. That could help.

      I just think it is a much harder and more expensive play. MELI and Amazon are going to respond. Especially MELI as it has no fall back market. They’ll ramp up their marketing spend. Infrastructure spend. Discounts. etc. They’ll aggressively defend.

  24. Stefan Conquist

    April 5, 2022 at 5:31am

    Great to hear that you are thinking of expanding to a more global look at successful digital business strategies!
    The best SAAS companies are doing your 7 DOB’s well.
    DOB4: “Coordination with complementary external services”?

    • jtowson

      April 7, 2022 at 12:08pm

      Thanks. I’m thinking if I focus on just the best of the best it’s doable. Can’t cover all sectors well.

  25. Stefan Conquist

    April 14, 2022 at 12:08am

    “Winning Tech Strategy” is fine for a new title. Short and direct.
    For GoTo to dominate Indonesia, is Shopee not a significant obstacle?

    • jtowson

      April 14, 2022 at 2:35am

      Yep. Shopee vs. Toko in products. Grab vs. Gojek in services. the question is: Does Gojek+Toko change the dynamic? My argument is not yet.

    • jtowson

      April 14, 2022 at 2:40am

      Thanks. It’s kind of hard to say “winning”.

      I need a shorter word. “Great Tech Strategy”.
      Maybe something that starts with a T. Total Tech Strategy.

  26. Stefan Conquist

    April 25, 2022 at 8:46pm

    Jeff. Enjoyed your pod on Amazon.
    Regarding a different word for Winning (Tech Strategy), some ideas:

    Captivating, Engaging, Innovative, Progressive, Cutting-Edge
    Are any of those better? I don’t know. You can be those things and not necessarily win.

    I like Disruptive Tech Strategy. Because that’s mostly what tech winners do.

    • jtowson

      April 26, 2022 at 1:32am

      Hey. I just changed it to US-Asia Tech Strategy. couldn’t think of anything clever, so made it simple.

  27. Gregory Speicher

    May 27, 2022 at 2:54pm

    Very interesting article and pod. Jeff, I would love to have your analysis of Prime Video not as a standalone streaming video service (as you do in this pod) but as a part of the Prime Bundle. If this is its aim, then Prime Video should be evaluated in more of a “jobs to be done” framework, i.e. is it serving to grow and retain Prime subscribers? Jeff Bezos wants Prime to be so valuable that it would be irresponsible to not be a member. Of course, this also raises other questions for Amazon such as: what is the appropriate level of spending and how do you measure effectiveness?. This seems particularly pertinent as the market shifts focus to cash flows in light of rising interest rates.

    To the degree that Prime Video exists to serve the Amazon bundle, it would seem to be a further problem for Netflix in that Prime’s fixed costs can be evaluated against eCommerce spending rather than subscribers per se.

    As a parting thought and related to substitutes, the pending arrival of the new Warner/Discovery streaming bundle with must-see HBO shows and endless hours of low cost Discovery programs seems to only up the pressure on Netflix. This is on top of YouTube with very low/no cost production and gaming, which Hastings has already correctly identified as a substitute.

    • jtowson

      May 29, 2022 at 5:51am

      yeah. Amazon prime is interesting. For ecommerce, we can view it as a B2C switching cost. it locks in consumers. A competitive advantage (level 2).

      But bundling ecommerce plus video, I consider that a soft advantage, which is Level 3. Weaker but still valuable. For bundles, i think about whether they are integrated or not. integrated bundles (like Adobe), where the functionality improves with more bundled services are more powerful. The video and prime bundle are not really integrated. So weaker.
      I think we are going to see a lot of innovation in OTT bundles. Netflix is a basic tons of content for cheap bundle. I think there are lots of other plays for content bundles (small volume, high quality?)

  28. suneeporn owapakorn

    June 17, 2023 at 1:06pm

    I remember there was an article you wrote :
    Q : When I ask JD and Alibaba where they are focusing their AI efforts.
    A : they both answer the same thing: Logistics.

    So, recently Shopify announced to sale of their logistics business,
    That’s Not Good idea in your opinion, Isn’t it ?

    I would love to hear your comments on this case. ?

    • Prof Jeff

      June 18, 2023 at 1:42am

      Hey. That’s a good point. Plus it’s cool you remembered my statement 🙂

      I view smart logistics as mostly a strategic capability. It’s something that enables services that others can’t match. And it’s hard to replicate.

      But I’m not sure it’s profitable as a business. JD is trying to turn it into a profit center. And the numbers looked good in 2022. But Alibaba is still using it 90% as a capability that supports their ecommerce biz.

      The other thing is FedEx, which would be a scary competitior in the USA.

  29. suneeporn owapakorn

    June 19, 2023 at 8:36am

    Thank you very much for your reply ka.🙏
    Logistic buz is hard to generate operational cash flow as a stand-alone service. (As one of your articles)
    However, Shopify ecosystem should have logistics.
    But when Shopify announced to sale of their logistics buz,
    Investors are very happy. (It puzzles me)
    But, uh… that might be a good thing in the short term.
    But in the long run, logistics should be one of Shopify’s ecosystems.
    That’s what I think as studying many of your valuable articles.

    PS : and thank you for your link (J&T) 6xx page.. 😮

  30. suneeporn owapakorn

    August 13, 2023 at 5:22am

    Thank you very much for your article.
    FYI: The Chinese people only have almost single-digit of their own passports.
    The TAM is so huge.