YouSaid · the spoken record

M. R. Rangaswami

lines on the record: 25
first: 2019-02-04
most recent: 2019-02-04
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“To see whether that'll take over. But clearly with the success of some of the games in the West, those business models are beginning to look more like the business models that have proven to be very successful in China. And the game I'm referring to in particular is Fortnite.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“We always like to point to what we see in entertainment and gaming. That's one. It's the online entertainment or the living in a virtual world description that we've talked about in the past that matters a lot. I'm not sure whether the rest of the world has the same unique demographic structure as we see in China because of the unique household size, household structure that you have in China. virtual world ends up becoming as real as the real world in a manner who is speaking, which is why your gaming experience, your time spent online, and that could be on your messaging app, that could be on social networks, that could be on short-form video, long-form video. There's so many different areas of that time spent. That gets to be so different. Now, the jury is out on whether the rest of the world will become as engaged in their virtual world and their virtual identity potentially as China has become.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“There's no track record today of anyone really gaining scale from the outside so far. Is there anything you feel may not be on people's radar today that you think will get a lot of traction over the next few years, any trends you're seeing?”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“The scale of investments that we're seeing in the VC space is now much larger in China than we're seeing in North America. That's a first. Second, as we see this space continue to evolve, we think the business models are unique and they will continue to evolve in that manner. And third, we're at that stage where, let's say, hypothetically speaking, if we're China to open up, then we'll see the battle lines being redrawn. But given how competitive the Chinese companies are at this stage, given how they've penetrated their respective markets, there are better understanding of their consumer base in particular, give them a tremendous advantage over anyone else that tries to come into their home market.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“So, I'm not 100% sure you would say that the model has gone one way or the other because both of it adopted two certain conditions that just happened to be similar in that. Both were able to get into the cloud business and the entertainment side. So we're just waiting to see how this evolves. But the fintech side of China is very interesting. It's early stages there in terms of how we've seen that asset evolve where they've been able to leverage high frequency transactions across different platforms. First, it was in the online world, then it moved to the offline world. And then if you can leverage the information you're able to assimilate and use that to make lending decisions to both the SME customer base or the consumer base, then you start to see a business model that's unique. Now, can that business model be replicated in a similar manner elsewhere? Well, that depends largely.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“The influence of Chinese companies on a global basis, it's very early days to point out whether Chinese business models are getting adopted. You might argue that the way Amazon runs is similar to the business models that we see in China. Amazon has gone into cloud very, very effectively, and it did something that clearly no other company had done in the”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“So you talked a little bit earlier about how it's yet to be proven how these companies will evolve overseas outside of China. Do we now see innovation in Asia or China specifically influencing how other companies are evolving globally, or is it still uncertain how much pure innovation there is in Asia and China versus Silicon Valley?”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Goods that are produced in rural China and selling them to the rest of the country. Now, whether the model can take it to one level forward, which is to be able to facilitate the sale of what's made in China to other parts of the world is something that's in its early stage. Of course, that was the genesis of Baba back in time, but we could take that to the next step, and that might again ameliorate some of the excess capacity as it builds in China.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Where the companies are run, it's slightly different. The focus tends to be on making sure that you're not disrupting too many in the economy. We wrote a piece recently in Alibaba where we pointed out that Alibaba goes to the extent of ensuring that six million small shopkeepers are not displaced by the surge in e-commerce as we're seeing today as more than 20% of the economy goes online. This is from a physical goods sales standpoint. So as that happens, the fear is that some of the smaller merchants might get displaced, sorry smaller shopkeepers might get displaced. I think the company makes an attempt to make sure they are protected first. Second, if you look at the scale of these platforms, Alibaba's marketplace has around 10 million merchants, which is a very large number. And this will expand as they go rural in rural China. The focus is for the two-way economic development, both in terms of selling goods to those in rural parts of China as well as tech.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“United States, often the debate around technology companies is they tend themselves to have very small employee bases and they've disrupted larger industries that had more employment. But here it's fostering small business and more innovation. When you say 17 million jobs or a number like that, it's not as though I like Bob is employing 17 million people. They've just created an ecosystem around themselves. So it's a different kind of business model maybe than we've seen in the US.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Move away from capital intensive industries where China, you would argue, had excess capacity has happened and has been facilitated by some of the companies that we're looking at today. For example, Alibaba is key in creating employment at this point of time. Historically, they used to talk about generating 17 to 20 million jobs. Some of them will be at the low end, but a lot of them will be at a different stage, at a different leg. So that the overall employment in a country tends to not get impacted. So you will continue to see some of the bricks and mortar businesses in China get impacted because, as you scale down capacity in some of the older businesses, and that's necessary change that the economy will go through. And then it's companies like, again, Alibaba or Maituan that tend to change the landscape, generate much more efficiencies, encourage consumer spending to take place, and all of that should continue to lead.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“The Chinese government's put a big emphasis over the past decade or so about shifting from a capital intensive industrialization and infrastructure-led economy to a more consumer-based economy. And this is an important part of that evolution. When you think more broadly about how the tech industry has evolved, how do you think we got where we are today?”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Business models are always ahead of regulation, so that's the problem you always face. You're looking at business models that get created, then regulations have to catch up. So that's intuitively the problem you face. If it's a private company, then there's less of a worry there. But if it's a publicly listed company, which oftentimes is the case, then you have to wait to see how the landscape will evolve and how the company will be able to manage the new regulatory structure. So those are the issues that you have to deal with every time you see a new set of regulations being put in place. There is a certain purpose behind it. We think that if you go through different sectors, there's an ultimate purpose here. And all of it is without doubt in our mind constructive in terms of where the industry will evolve. And it's all about having checks and balances in place that are necessary in our view.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“But the government likes to see investment that takes place that is value creating and is not just about growing the GDP, but it's about creating employment in a manner that is sustainable. So that's the overall goal that we see. And the investments have been continuing in that area. So we think that that focus will continue. From a regulatory perspective, very specifically, we've seen certain changes that have been put in place in the last one year, which have caused a little bit of panic amongst the market, at least from a stock market perspective. It remains to be seen where these regulations end up, but our view remains that these will be constructive. We will see controls being put in place in several areas which will lead to sustainable growth in these companies over the medium term. The need for venture capital will remain, and we will continue to see new business models emerge that will help China grow in the future.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“You note in the report that China government policies played a role and that the investment landscape could be in part attributed to reforms that were implemented by the government. Talk a little bit about how the government has made it easier for the venture capital landscape to thrive.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Let's say if you look at the areas where we started to see investments sort of ebb, those have been in traditional media. Traditional media was recently dominated by companies like Aichi, where the need for funding was so they can create more content. So that was the scarcity at that point in time. And the companies were spending up to 19% of their revenue on creating content. We moved away from there to investing in areas such as fintech, one of the largest capital raising exercises in the second quarter was ant financial's $14 billion capital raise, which valued Ann Financial at $154 billion. Clearly, that's the largest Fintech company in the world as far as we can see it. So those have been areas that have been able to attract a lot of money. The business models will continue to evolve and there'll be assets that have gone public recently, such as Pinn.O that are now sitting on Generation 3 assets, General 3 assets assets like WeChat.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Existing assets. Pendodo is one that was leveraging social e-commerce in a manner that we've never seen before. It was really team shopping on a social platform that was very different from the models that were adopted in the past. And to our surprise, it was very successful. And when I say surprise,”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“To sell across offline and online on a concurrent basis. So those are the transformations that we think were at the midsoft. We think this will prove to be effective and beneficial for companies. So that's one on the e-commerce front. On the entertainment side, and by entertainment I include games, what we started to see is that game broadcasting has become a big event. It's like Twitch in the US, except that in China, I suspect it's bigger given the breadth of game broadcast that we see on single platforms such as Huya. So entertainment is changing and we're setting whether gaming will be like it used to be in the past, whether people will spend as much time gaming, online gaming that is versus the past. So entertainment will continue to evolve in our view. The third would be with regards how we look at specific businesses. We started to see companies that leverage”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“On the e commerce side, we've now crossed or approaching levels of penetration of 20%. These aren't precedented levels of penetration of physical goods that are sold online. The question always is going to be where does this get to? So that's probably the first question. Now, you might say this was the question a couple of years ago also with where the industry was, but in our view, this will remain an issue. But what the companies have done is changed the business model in a manner of speaking by targeting all of the sales of everything else that's offline and bringing those online. And that includes services and also transforming the nature of some of the sales that takes place in the offline by integrating offline and online. What that does is it encourages the merchants to then be able to leverage the inventory that they have both for offline sales and online sales and run that concurrently. So we think we're at that stage where you should start to see companies and department stores benefit from the ability to”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“They infest across the horizontal sometimes sometimes across the vertical, but what it means is that the capital raising tends to get concentrated around the larger companies, and it's not the case of us looking at ten companies that might be successful in a certain vertical in the US and all ten then fighting for the ability to raise capital, and then that space will narrow. That's the way the model has evolved traditionally with ventures in the US market, in the Western market. In China, so much of that tends to concentrate around the abilities of these four companies or five companies to be able to fund ventures in China. And that's what makes it so different. What has now started to happen is we've started to see the Chinese expand outside their home market and enter into Southeast Asia and South Asia with business models that are sometimes similar, but they're looking for investments that are broadly areas of their own expertise. But that's brought a lot of money.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“What's very different in the venture capital landscape is there's a lot more corporate VC spending than there is in the US where it tends to be led by sort of traditional Silicon Valley VC firms and because it's corporate is there a different shape to it? Are they investing very in adjacencies or are they investing across the whole landscape?”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“Because they felt that if these businesses would not result in a positive return over the medium term, the company would have the discipline to be able to eject these businesses, which is exactly what Tencent did. So it grew out of this thought process. It drew out of historical view that traditional business borders do not apply. You might say it was the old conglomerate models that we've seen, but those have worked fairly successful because the ability to leverage existing assets and a talent pool at these companies.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“It may not have been the design from the beginning, but these business models have evolved, you might say that they are like a conglomerate approach to businesses, but it's also the fact that these businesses do not believe in traditional borders to where their businesses are, so this is not like a business school case that you would be studying where they would believe in what they call competence was and wouldn't touch other areas. So it's a slightly different model that they've adopted. The Chinese businesses have generally been fairly successful. They know their limits. They will always reach out. But it's the discipline around capital allocation that we've seen with some of these companies that has been positive from an investor perspective. I'll give you an example. It was about five years ago that Tencent was investing in five different businesses over and above their core business. And they were spending roughly 100 million US dollars per business, which is a large sum of money. But the markets...”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“As nearer and newer companies get created and the raising of capital gets consolidated around certain companies in China, B is, of course, Baidu. That's the Google of China. It's the search engine that has dominated the market for a while. It was launched in 2006 from an IPO perspective investment perspective. Alibaba is the e-commerce giant that has expanded across the horizontal and the vertical, both in China and internationally. And T is 10 cent, which started out uniquely in messaging and QQ messaging in a PC error and then has evolved to becoming the world's largest gaming company. So if you look at assets like Fortnite, Tencent has 40% ownership of that asset via its 40% ownership of Epic Games. They also own some of the largest games in the rest of the world, including honor of Kings in China. And, of course, League of Legends. So all of that is sitting under the Tenth Cent umbrella.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT
“We've been writing pieces on VC and VC investing globally, and what we realized in the second quarter is for the first time, we've had China exceed North America in terms of total VC investment. So that's a big, big thing for us. And it does prove to us that the Chinese business models are reaching a stage and attaining a scale that makes them something that the entire world needs to pay attention to. And that's been transformative in our minds. So the total numbers we're talking about are spending or investments of about $31, $32 billion in the second quarter versus North America that is now at about $28 billion or so for a total investment globally of $70 billion plus. So the scale in China has gone up a lot. You asked about what BATJ is about, by the way, that's now expanded with us initiating on MeTuan this morning. So it's B-A-T-J, and there are a couple of others that get thrown in.”
2019-02-04 · Goldman Sachs Exchanges · The Scene from China: VC and Tech Reach New Scale · IDENTIFIED FROM THE TRANSCRIPT