I found a big part missing is about Wechat’s Mini App and Mini Game may end up disrupt App store. Wechat and Apple came to a settlement on in-app donation where user wanna donate to a Wechat blog writer but Apple insisted on 30% cut like all other in-app purchase. In the end, Apple backed down due to Wechat’s dominant position in China.
Mini App and especially Mini Game are HTML 5 apps that run within WeChat and can be OS agnostic. Google tried with Chrome app and it didn’t work. It would be interesting when WeChat gain more popularity in the West or when Facebook comes up with similar idea to bypass Apple’s control over distribution channel, how Apple would respond to that threat?
Reason I think this is because Tencent has such strong social network: QQ for games, Wechat for chatting. To build strong social games, shouldn’t you control some social network to remain competitive?
Just a wild thought, how about acquiring/strategic investment in gamer network such as Discord to solidify its connection with gamers and perform massive AI on gamers’ conversation to understand their tastes to build better game?
To answer the first question. The CEO feels that building a very strong monopoly on every dealer’s workflow can be a strong moat in long run. Right now they already have 60%+ penetration among all dealers and 90%+ for big dealers. So he believes that more value can be created in data or financing service than SaaS subscription or taking a cut from transaction (Chinese dealers are super sensitive about margin and cost).
I think most 4S store only offer 3-4 year leasing program cause their biz model making 1 year leasing extremely expensive. 4S store usually have straight line loan payment plan for 3-4 years with 0 or some downpayment. Because they only get returned car on 3rd or 4th year, the significant depreciation in first year is not a big problem.
The threat of disintermediation hasn’t come yet. You can argue the same thing for new car sales where manufacture can sell vehicle on Alibaba directly without 4S store. But still 4S store is absolutely necessary for selling and servicing new cars. I feel purchasing a car is a big decision and people wanna complete transcation offline.
Since TanGeChe is leasing (it feels more like a rental service than buying a large depreciating asset) and the downpayment is only 10% (typical financing probably needs much higher), people may feel more comfortable ordering such service online directly. Used car dealer is highly fragmented and unlike 4S store, used car dealer may carry inventories of various brands. I feel the disintermediation between the supplier and dealerships may come much later.
As a final note, Souche is raising a new round now. Talk to me offline and I can give you more information on profits and revenues. It might be a good investment to pitch to Capital G lol.
Xiaomi actually has the largest smart appliances product line in the world, including air purifier, water filter, vacuum robot, tv set-top, etc. All of them are internet connected and can be controlled using app or their smart speaker. I think their phone will be their revenue generator in future but their smart appliances will be the profit generator. There is a strong network effect in the home IoT and appliances world.