cloud network hunting note: GGV managing director who recently in the United States plusyoou innovation BBS usc keynote speech, this paper introduces the enterprise’s core business model innovation in China, such as e-commerce and virtual items, it also become a mock object of many overseas companies.
I was living in Los Angeles for six years and is almost equivalent to a local, and my mother still live in Los Angeles. Later I went to Stanford university. Between 2005 and 2013 the eight years I was in China, last year I moved to the bay area.
now I will be back to Beijing once a month, in fact, I will get to the airport to Beijing after the speech. Many people think that the vc is localized, but I think in the future 10 years, a lot of start-ups and venture capital institutions will be global. Have a lot of the early immigration, now will return to China to conduct their business.
in the same way, these changes in China took place in India, Brazil and other countries. For example, I know some people who live in Hong Kong and dubai will frequently will fly to San Francisco and Beijing to conduct their business. So now we can see more and more people in the travel, because the mobile Internet makes it all possible. It is interesting to note that our GMIC conference heard last week in San Francisco, on the earth, the use of mobile phones will far beyond the use of a toothbrush. This is a very interesting thing, to know the phone much more expensive than a toothbrush.
I think a lot of people are benefiting from jobs’s Phone. In 7, 8 years in the past, apple in the field of electronics, has created a nearly $400 billion in assets. We now don’t discuss companies such as nokia, but in 2006, these companies are leaders in this field. Change always soon high-tech fields. Now for most people, if left the mobile phone, tablet to life, it will be a very difficult thing. It is interesting to note in the seven years ago, we are aware of this.
China and the United States, a total of 50% of the global technology market. In 2005, the company is Google, the world’s largest network technology with the market capitalisation of $100 billion, while alibaba was only $5 billion in market value. When I moved to China in 2005, Google is the world’s first place in the field of Internet, there are hundreds of billions of assets. At that time in the top ten in the field of Internet company is none from China. If we look at this year, a total of 3 billion of the world’s Internet users, and is still Google ranked first, with $400 billion in market value.
however, this year in the United States listed on alibaba has grown to become $300 billion Internet companies, is 60 times that of 2005. Google’s four times the growth and 60 times the alibaba growth, contrast is obvious. The world according to the market value of the top ten Internet companies, there are four are from China, baidu, tencent, alibaba and jingdong. As you can see, great changes have taken place in the world, so what’s going on?
excuse me, how many people are present is to use micro letter? The vast majority. If you previously unused WeChat, Line, Kakao Talk, you can try to use the, the APP led the whole mobile phone APP opens the revolutionary innovation. The innovation not only in China, but took place in the world. In micro the letter you can use a variety of closely integrated with our way of life of service, even to pay function, it is not on Whatsapp.
in the past eight years, Chinese Internet companies through advertising to earn income compared with the us Internet company is very few. Therefore Chinese Internet companies have to consider how to through the user traffic to create more business value. Whereby the produced two innovative things, one is the electronic commerce, if you can get a lot of the network order, you can start charging into charge merchants advertising to consumers. Another is a virtual items. You can provide your customers with some entertaining virtual items, to make them compete in the virtual world entertainment, role play with each other, some of the user, in order to obtain more virtual value, payment of the money. let users to spend money to buy things in the United States or Europe is very difficult, but Chinese entrepreneur has found a very good business model allows users to pay. This business model is to provide users with free products in order to obtain more users as far as possible, then encourage consumption part of the user.
in China, entrepreneurs will be the Freemium model to an extreme.
today, tencent’s revenue has more than Facebook, alibaba has more than amazon and eBay combined income. In 2005, eBay development situation is good, it is likely to be laughed at alibaba should provide free trading platform, and eBay to each platform testers extract ten percent commission looks wise. EBay don’t know, however, and alibaba founder jack ma and his team are know: if you provide free platform, more consumer will be attracted to, and then more consumers will be attracted to. When you have established a large enough to attract a lot of consumer consumption of ecological system, you can begin to charge of some of the users, at that time than the start charging can create more value.
the revenue growth for India, Indonesia, Brazil is on the rise of e-commerce market has very important reference value. India now has 200 million Internet users. These emerging market for cheap high quality mobile device is very eager to, so, which companies make a profit? Of course, apple, samsung will receive limit because of relative price is too high. My prediction is that some domestic brands such as lenovo, huawei, millet will occupy a large market share. Moreover, some of the domestic brands also rise. like mobile phone, I boldly predicted many now forming in China’s business model will be “exports to India.
I still remember in 2011, in my office in Beijing, there are two weeks, we are all in with India in the field of Internet veteran investor meetings, they constantly ask me “how that work?” “How happy net work?” “Millet how?” They on the depth of studies conducted by these companies, more than we’ve seen all the investors in the United States. Not only do they visit our investment company, also visited many of the other investment companies in China. These indians consider very comprehensive detailed, you can see them for what kind of product can be a good product to do a lot of research.
from my perspective, I found that there are a lot of outstanding entrepreneurs in the United States, they tend to be the first generation of immigrants, has a global business perspective, can be in a rising market competitive advantage. You can choose to be a small market, ten years to grow four times, you can also choose to a global market, 60 times as many as 10 years. Choice is: how do you really want to create business.
what makes mobile Internet company’s globalization is more and more easily? Is globalisation in various social media platforms such as Facebook, Twitter, sets, Pinterest, LinkedIn. Most of the social media platforms are currently advertising oriented business profit model is adopted, they do not do e-commerce. This gives a lot of electronic commerce, game company provides quick promotion, enter the global market platform.
my first in GGV capital investment company is called a Wish, it is a mobile Internet based e-commerce applications. When I investment, they have 100000 kinds of products, most products from China. 12 months after the number was 30 million. This very big growth. When I saw some startup, they have to use the native American resources business model, and has a good user interface, algorithm, I will be very excited. Because the company’s growth will be very significant.
we are seeing, especially in the United States and China, there are a lot of common ground between innovation things. We invest in the house, the car. When we open the mobile phone software, we will find Uber fire in the United States, the same in China drops a taxi, and also is very popular in China. In these places, mobile phone software users are many, all of these will affect our economic development.
yesterday, I watched a program, ma and a retail boss made a bet: 10 years from 2012 to 2022, in China, if e-commerce revenue is up to 50% of the retail revenue, the boss will pay for ma 100 million yuan. If not achieve them, ma will pay 100 million yuan. Alibaba after this year, the host asked Mr. Ma: “what do you think you have a chance to win?” Ma said: “I will never lose money bet.” For those who don’t believe in people with such a large potential of e-commerce, they obviously haven’t really feel the influence of the Internet.
in my life can not lack of Uber. Living in a parking lot is extremely difficult to search for a city, Uber like completely liberated me and I can do more things at once. I can rest, can check email and answer the phone, Uber let me work at high efficiency a lot. No Uber X, Uber will not become so big company today. Uber Black Car to travel is as simple as just a scratch card.
I would like to emphasize here is that in any market, if you can have a mass-market consumer products (we call this group of Volkswagen group in China “prick silk user”), they are your products free of advertising. They will be on social media hype your products, make your product into the eyes of the public “beacon”. You can have a very cool business idea, such as Uber, or you can have a meet users “the dream silk” the public products, such as millet mobile phone. If prices can provide consumers with high quality and cheap products, you will likely greatly products and enterprises bigger and stronger.
in the field of venture capital, we have a fun. If you could create a platform company, valuation is $1 billion. You can also create a company like alibaba ecosystem, the valuation may reach $100 billion. Alibaba is the establishment of their ecosystem, millet is also committed to become the next establish ecological system of the company, so everyone can benefit from your company’s growth. How to make an e-commerce company or platform for growth in demand huge market, this is a Chinese Internet company development need ways of thinking. It is also a special ways to the growth of China’s e-commerce enterprises gain, we haven’t seen in other international markets, in a similar fashion. In the next ten years, in India, Brazil, Indonesia, Africa, Europe, we are likely to see a similar growth mode. So we believe that mobile phones in China has a great opportunity. Alibaba to the present market share has reached 300 billion, 95% of the deals are in China.
but we believe that the next ten years, when the international market income account for 20% or even 30% of the total ali, ali express will be ali group is an important part of income growth. Ali will be very few have trillions of market value of the company. Today is 300 billion, will become the trillions of income level, ali only need to strengthen the development of the international market in the future. American ali may not be easy to enter the international market, but in Indonesia, Brazil, India, Africa, Europe, these markets it is very easy and possible.
in China, if you are able to create products for the broad market, you are likely to succeed, it will also have the ability to do more things. This is exactly is that I just mentioned these successful Chinese companies do.
we are very interested in for the innovation of the combination of hardware and software. We believe that the Connected devices (Connected devices) will be a huge market. Now wearable device look very concise, small. nullnullnullnullnullnullnullnullnullnullnullnullnullnullnull