30 Comments
Aug 11, 2020Liked by Turner Novak

I thoroughly enjoyed this from start to finish. I personally believe that when ever any market is going thru that consumption shift/upgrade, the huge opportunity lies at the bottom of the pyramid. We are witnessing this in India now and last month for the first time, data users in rural India surpassed the numbers in Urban India. I am trying to address that in an edtech venture by enabling the small tutors and institutions to compete with unicorns and large competitors. These small educators understand the pulse of consumers at the lower end of market and can fill the newly acquired aspirations.

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Agreed. Incumbents usually overlook the low-end of the market until its too late. To your point, sounds like something similar could be happening in edtech in India.

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Excellent work. I started a social shopping company a LONG time ago (maybe 10 years too early) and I wish I had implemented the lower-priced buy with friends option BEFORE you found your friends. Brilliant!

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Turner, this essay was GREAT. Thanks for the thorough lesson!

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Sep 3, 2020Liked by Turner Novak

Amazing write-up, the experience became even more amazing with proper supplemented links and images. Hats Off for the effort!

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Aug 12, 2020Liked by Turner Novak

Great job, Turner! First time reader, will definitely keep coming back here.

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Aug 10, 2020Liked by Turner Novak

Brillant one!! Loved it. Do you think something similar can be done on lending too?

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Lending is a little outside my circle of competence, but there's often opportunities to start at the bottom of a market and move up. I think we're seeing companies like Square do that with consumer lending right now.

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Aug 10, 2020Liked by Turner Novak

Great writeup! Do you think something like PDD could exist in the US?

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Aug 10, 2020Liked by Turner Novak

Sounds like they used group buying as a viral growth mechanic while subsidizing the price of fruit for buyers. They grew super fast but raised tons, despite the negative working capital dynamics. Do you know how the unit economics changed over time?

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author

I'm not 100% sure, but I'd assume the move from fruit into household goods, electronics, etc increased the contribution margin / unit economics on each order.

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Aug 10, 2020Liked by Turner Novak

Awesome writeup btw!

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Aug 9, 2020Liked by Turner Novak

Great article. Thanks for putting this much effort and gathering all the pieces together. Learnt a lot about PDD which was insightful.

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Great work. Got to learn a lot about PDD, social ecommerce and Chinese ecosystem. Keep it up Novak!

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Thanks Rajandeep!!

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Aug 8, 2020Liked by Turner Novak

One of the best things I've read this month, thank you so much for the piece! Great to have it delivered right to my inbox too (I'm one of your subscribers :))

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Thanks Becca, glad you enjoyed!

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Aug 7, 2020Liked by Turner Novak

Amazing work

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Aug 7, 2020Liked by Turner Novak

HOLY. It took me a good 30-60 minutes to read this in several chunks and still worth it. The note from Citi was also quite useful.

I like the colourful storytelling with due emphasis on role of games, C2M, "fruits as entry" and focus on supplier relationships (echoed again towards the end).

100/100 Turner!

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Thank you Nirant!!

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Very interesting and informative essay! Learned a ton about China's commerce ecosystem (Seems you saved all the juicy criticisms for the conclusion though)

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Haha of course - don't want to ruin a good story!

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Aug 6, 2020Liked by Turner Novak

Great writeup!

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Thanks!

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this is an amazingly long write up on an obvious fraud. no it is not "fairly common" for a $100bn company to not have a CFO. That kind of thing should raise red flags, not be hand-waived. PDD is a money laundering operation and not much else. The wirecard of China. GMV, revenues, expenses, cash, all of it is fake. https://www.ft.com/content/e669a621-b40b-45b0-abc0-9648d10cdd1b

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