5 Lessons from China's Internet Companies

Tencent, Bilibili, and Kuaishou all rely heavily on “value-added services”—things like micropayments and subscriptions and virtual currencies. More Western companies will turn to VAS, particularly if Apple and Google reduce the 30% tax they take on every digital economy. Already, Discord and Clubhouse have eschewed ads and Facebook, Snap, and Amazo... See more

Digital advertising isn’t going anywhere; massive businesses have been build on its back. Google revenue grew faster last quarter than it has in a decade.

One through-line that cuts through all of the above is business model innovation. U.S. consumer internet has long been reliant on digital advertising. Partly because it matured on mobile—at a time when mobile advertising was less proven and mature—the Chinese consumer internet pioneered more creative and diversified revenue streams. Take Facebook a... See more

-Livestream commerce is nascent in the U.S., but it’s beginning to take hold. As in non-livestream social commerce, vertical platforms have the most traction. Whatnot, a livestream shopping site for collectibles, is the largest today.

-For years, people have touted the rise of social commerce in the West but we haven’t seen any players break through...The exception to this may be in vertical opportunities within social commerce. Within food, for instance, Snackpass describes itself as “food meets friends” and lets you gift your friends food. It’s creative and unlike anything els... See more

-Xiaohongshu—which means “Little Red Book”—is like Instagram if Instagram had introduced Instagram Shop years earlier and made it its premier feature. Xiaohongshu has always been more commerce-centric than Instagram, focused on discovery-driven and serendipitous shopping—the digital equivalent of browsing the mall. It’s the counterpart to more sear... See more

Social Commerce & Livestreaming

-Despite China’s crackdown—another proofpoint of how challenging it’s become to do business in the country—the West can learn from Chinese tutoring marketplaces. Edtech in the U.S. and Europe remains solitary—some form of Zoom school and individual assignments. It’s telling that America’s most valuable education startups are MOOCs (massive open onl... See more

-Chinese tutoring companies are among the largest, as 43% of urban Chinese household income goes toward supplemental education. In the U.S., it’s closer to 2%.