The Dilemma of Monopoly and Invisible Monopoly
The article cites several interesting cases:
One is Didi, which nearly unified the Chinese market but still hasn’t achieved profitability. Any move toward profit attracts new competitors, leaving it in a strange equilibrium where it doesn’t lack the ability to compete, but simply refuses to.
Another is Taobao’s proactive blocking of Baidu search, which built its own internal search advertising revenue and successfully generated the 100 billion yuan in ad revenue it enjoys today. This case prompted other companies to follow suit, resulting in a landscape where China has super apps but no open internet. (Control of ranking is control of the internet.)
In 2019, the average customer acquisition cost for medical aesthetics clinics ranged from 3,000 to 5,000 RMB. Promotion and marketing expenses accounted for an average of 21.9% of revenue in the medical aesthetics sector. So for every 10,000 yuan you spend on a cosmetic procedure, about 2,000 yuan goes directly to advertising costs.
China Tower Corporation, an invisible monopoly giant, is the foundational base station provider for China’s four major telecom operators (Broadcasting, Telecom, Unicom, and Mobile). It averages 80 billion yuan in annual revenue and boasts a market cap exceeding 200 billion yuan.
How fast does Shein compete? Its two-month new product launch volume matches that of mature brands across their entire catalogs. The average order-to-delivery speed is just eight days (from supplier receipt to arrival at Shein’s warehouse). Suppliers have a minimum production batch of just 100 pieces, reflecting a classic “test fast, scale hard” model: launch many items, experiment with low costs, and then mass-produce whatever succeeds.
Tuya Smart, another invisible champion, provides smart home product solutions for well-known traditional appliance manufacturers, generating an average annual revenue of $200 million.