Fours lenses for looking at China consumer internet companies
Getting down more to the nitty-gritty, if you’re evaluating a sector or a company, get your lenses right to get the details right..
- Stonehorn’s Sam Le Cornu gives a good example of this in a Bloomberg interview.
Talking about how he looks at China’s internet commerce companies he says: ‘I see things in terms of four quadrants, you've got':
- ‘Fair competition and anti-trust regulations’
- ‘Social wellbeing reforms - labor protections and welfare rights, and the like’
- ‘Data protection and privacy, and national security’
- ‘Common prosperity, which is about middle-class on issues like income inequality and affordability.’
(I made the chart above to capture Mr. Le Cornu’s points.)
‘You've got to divorce each of them and look at them through each of the lenses.’
- ‘Don’t mix up, for example, what's happening with the anti-trust monopoly issues with what's happening in terms of national security and data protection.’
'Take DiDI. It's not about, say, the VIE structures. It's about national security and data protection - the cyberspace administration that made that very, very clear.'
- 'On the other side of the coin, you've got Tencent, Baidu, AliBaba, and others - they ran afoul of anti-monopoly regulations but have been working hard to comply with regulators demands.'
You and I might choose different lenses for this or other areas.
- But the point of taking a step back and parsing out the specific policies and regulations that are having an impact on a sector or set of companies is that with a little deeper look you can work out a lot of the details in the implementation of the priorities.