Last few months we've been talking about Chinese government cracking down on big tech monopolies. We've also been talking about how the group-buy grocery market which has become China's most recent capital investment battleground. This week, these two topics converge as five of the major group-buy grocery companies are fined by China's government for pricing their products too low.

As the crackdown on big tech monopolies continues, Pony Ma plans a trip to Beijing to advocate for more government control of the Internet. We then talk more about 5-year plans and other government plans, particularly China's ambitious carbon emission reduction goals which are already having a significant impact - such as stopping all crypto mining in Inner Mongolia.

EDIT: The final version of China's 2021-2025 five-year plan has not yet been released, drafts and plans have been circulating since December 2020.

• Grocery buying companies hit with fines for pricing too low
  • https://technode.com/2021/03/03/china-fines-five-community-group-buy-firms-for-irregular-pricing/
  • More info on grocery buying and personal stories of group-leaders on these platforms https://technode.com/2021/01/27/friendly-neighbors-are-key-to-chinas-group-buying-craze/
• Pinduoduo double's revenue in 'agricultural goods' https://kr-asia.com/key-stat-pinduoduo-says-agricultural-gmv-hit-record-high-ahead-of-annual-earnings-release
• 14th five year plan draft analysis - https://crsreports.congress.gov/product/pdf/IF/IF11684
• Inner Mongolia halting crypto mining to reduce energy usage - https://pandaily.com/inner-mongolia-to-end-crypto-mining-by-april-in-bid-to-reduce-energy-consumption/

This was a fun one. You've probably heard and seen 'Deep Fakes' - incredible and uncanny filters which changes a person's appearance in a video to appear like a different person. People can become Tom Cruise, except unlike in Mission Impossible, there are no need for masks anymore. Thus far, this has been more of an online gimmick, the hacker's party trick, with no real application.

A 3-month old start-up in China is providing a real-world application. SMB eCommerce businesses can make their models look like anyone they want - not real people because their likeliness is protected IP, but any race, gender, or general 'look'. See it for yourself and be prepared for a deep dive into the uncanny valley, link below.

Once we shook off our goosebumps, we went on to discuss BiliBili. This video platform has been around for a decade and has shown steady growth with a very loyal user base. Next we discussed Clubhouse copies and how XiaoMi is going to reenter the fray. Lastly, we talked about Tencent getting into cloud gaming to bring their best games to low-cost smartphones, and therein, a wider audience. 

"Surreal" - Synthetic content (deep fake or 'filter' start-up) 

• https://www.surreal.la - it's in Chinese but just scroll down for a 1 min intro video with English.
• Article on Surreal in English https://techcrunch.com/2021/03/01/surreal-profile/
• Article on Surreal in Chinese) https://36kr.com/p/1109621217175561

Clubhouse copies

• Clubhouse clones removed from app store https://www.scmp.com/tech/tech-trends/article/3122818/clubhouse-clone-duihuaba-removed-app-stores-two-weeks-after-launch
• XiaoMi's MiLiao to become more like Clubhouse - https://www.scmp.com/tech/big-tech/article/3123630/wechat-clubhouse-xiaomi-turns-messaging-app-social-audio-platform

Bili Bili video platform shows solid growth

• https://kr-asia.com/bilibili-reports-revenue-increase-of-91-in-q4-but-widens-loss

Other mentions in episode

• Kev's fav BiliBili video (Chinese): https://www.bilibili.com/video/BV1NC4y1Y7vv/?spm_id_from=333.788.videocard.0
• Descript www.descript.com

Happy Chinese New Year - I hope everyone had a good holiday OR, if you're in the West, have enjoyed seeing things besides China in the headlines while the country was away on holiday.

Today we talk about continued anti-trust movement in China. The government is enacting increasingly strong policies to break-up big tech monopolies in China - namely, Tencent and Alibaba - and smaller players like Bytedance and a Chinese JV (Joint Venture) with GM are cashing in. Bytedance and the JV have both submitted monopoly complaints against Tencent.

Community group-buy of grocery continuues to boom in China. What seems to be the the biggest player, the two-year old XingSheng YouXuan, is now worth a whopping 8 billion USD! 

ANTI-TRUST - Formal rules against big tech 

• https://technode.com/2021/02/08/china-formalizes-antitrust-rules-targeting-tech-giants/

STANDARDS - WSJ picks up on the story we broke a few weeks ago on China taking up technology standards as a national imperative.

• https://www.wsj.com/articles/from-lightbulbs-to-5g-china-battles-west-for-control-of-vital-technology-standards-11612722698

GROCERIES - Kevin's fav topic 兴盛优选 raises 2 BILLION USD

• https://www.reuters.com/article/xingsheng-youxuan-fundraising-idUSL1N2KP0HH
• https://kr-asia.com/greengrocer-xingsheng-youxuan-to-bag-usd-3-billion-from-sequoia-tencent-others

XIAOMI is reportedly making a move into electric vehicles

• https://technode.com/2021/02/20/xiaomi-reportedly-plotting-electric-car-play/

SUPPORTING A START-UP!
Support your physical and mental health! Join Kara Wurtze's movement which she began in Guangzhou, China, now 100% online https://www.k2fitchallenge.com/

See Kara on TedxGuangzhou https://www.youtube.com/watch?v=QkHXwg2PcfA

(Fun side note: Adeh and I are both fitness coaches as a hobby)

The newest social media phenomenon Clubhouse hits China and provides a unique avenue for free speech - update after recording last night, Clubhouse is now banned in China.

Bytedance doubles revenue and is suing Tencent for monopolistic behavior (which we essentially predicted two episodes ago). And then we talk more about Clubhouse because we’re both passionate about social media platforms, this industry needs disruption, and the app just seems really cool.

LINKS:

• Intro to Clubhouse (and how it is now banned in China): https://www.cnbc.com/2021/02/08/clubhouse-appears-to-have-been-blocked-in-china.html
• Bytedance doubles revenue: https://www.techinasia.com/bytedances-revenue-doubled-37b-2020-sources
• Bytedance sues Tencent for monopolistic behavior: https://technode.com/2021/02/03/bytedances-douyin-sues-tencent-for-unfair-competition/

WeChat turns 10 years old. China’s beloved communications app, and Kevin’s old job, did well in 2020. GMV (Gross Merchandise Volume) on WeChat’s Mini Programs doubled compared to the previous year to a whopping $250 billion USD.

Meanwhile the Chinese government expand on their anti-trust efforts and actually provide a definition for monopoly in the digital payments sector. Under the new definition Ant Financial’s AliPay is TWICE considered to have a monopoly of the market.

Lastly, Douyin (TikTok in China), has added their own payment capabilities with Douyin Pay

LINKS:
WECHAT TURNS 10: https://techcrunch.com/2021/01/19/wechat-2020/

NEW FINTECH RULES: https://technode.com/2021/01/21/new-digital-payment-rules-likely-to-hit-ant-tencent/

DOUYIN PAY:  https://techcrunch.com/2021/01/19/douyin-e-wallet/

FREE AD FOR A START-UP: A friend's "AI-powered note-taking" start-up in HK is hiring, especially interested in China-focused tech talents, if you're interested: https://www.goodnotes.com/

This week we talk about Trump's latest (and hopefully last) executive order hitting Chinese tech firm Xiaomi causing the company's stock to plummet 14%. Adeh, an investor in Xiaomi, is sad about this for more reasons than just losing money, but Kevin is able to cheer him up by buying him a new microphone!

The new mic should also cheer up our dear listeners who've had to put up with poor audio quality in an age of Spotify and increasingly spoiled ears.

Links:
https://technode.com/2021/01/15/xiaomi-shares-plunge-after-us-investment-ban/
https://www.ft.com/content/46505ee0-fb3d-4cf0-a3df-64e9661e839f
https://kr-asia.com/key-stat-alibabas-workplace-messaging-app-reaches-400-million-users

Bonus Read:
http://en.people.cn/n3/2021/0111/c90000-9808007.html 

We go into more details on why Chinese gov is cracking down on Alibaba and evidence that Jack Ma is still alive, and speaking of cracking, we talk about plant-based eggs having big launches into China. We also talk about multi-billionaire dollar online educational platforms and the world's first technical standards for robotaxis.

Today we do a deep dive into one specific topic, Alibaba's Ant Group and how it's being crushed by Chinese gov and recent regulations. What was supposed to be the world's biggest IPO was put off, but the story didn't stop there. China's gov has initiated a monopolistic probe into Alibaba's Ant Group, and begun to mandate the company to divest, furthermore China's gov is tightening regulations on their loans and other fintech activities.

All this and a little more on the background of Ant Group and why it was so valuable in the first place.

#3 - big tech of East and West are being challenged by government. China's gov sees the value of tech standards where US doesn't appreciate how good its got it. Lastly following the hottest investment trends from car-sharing to bike sharing, and now eCommerce grocery.

We made it to episode 2! This week we tackle some massive topics - China Gov's foray into digital currency, investment in micro-chips, and enhancing user data protection. After incubating China's tech sector in a competitive and legal vacuum, the gov seems to be taking the reins. Plus, we talk a bit more about group-buy groceries, the little understood, nearly trillion-dollar, market opportunity. Enjoy!