1) Let's talk about Meituan and its founder Wang Xing. The poster child of the Copy-to-China model. They beat out 5000+ other companies to win the group buying wars and catapulted Neil Shen of Sequoia China to the front of the Midas list.

Also pissed off Jack Ma on the way

2) Our story starts in 2004 when Wang Xing dropped out of his PhD program in University of Delaware to come back to China. Wang was the embodiment of Softbank's Time Machine theory, creating one US clone after the other https://twitter.com/lillianmli/status/1308426990836428802

3) First it was Duoduoyou (Friendster) which died a quick death, then Xiaonei (Facebook) which fared better. The story goes that when Wang and his co-founders went to pitch Sequoia on this, they lost their prepared business plan in the taxi over.

4) They had to make do with a hasty draw set of notes as they waited for their meeting.

In their follow up meeting, Wang's beloved Linux system wouldn't connect to the projector, and he had to orally present in front of an empty screen.

They didn't get the Sequoia investment

5) Xiaonei struggled eventurally got brought out, it eventually becaome Renren and has been struggling ever since. And Wang started his next company Fanfou which was a copy of Twitter. In 2009, Fanfou got paused by the government for content issues and Weibo took over

6) In Wang's next venture, he finally settled on a Chinese version of Groupon which was Meituan.

When he went to Sequoia to pitch, he was fully prepared. However, he hardly got a word in edgeways as Neil Shen decided to fund their $20 million series A right in the meeting.

7) It was a great call, at their HK IPO in 2018, Meituan returned Sequoia a cool 510x on their initial investment, firmly placing Neil Shen on the top of the Midas list.

8) However, copy cat firms were springing up everyday. The battle royale of group buying had began and every tech firm wanted in.

At its peak, over 5000 companies were running around China in the group buying wars(I said 100 in my substack but have been informed it was crazier)

9) Meituan won out in 2012 from a mixture of focusing on field sales rather than marketing, good hiring and the incompetence of their competitors.

At this point, Wang got a new friend in the form of Alibaba, who had ploughed in money for Meituan's B to C rounds.

10) In the late stage of 2014, Dian-Ping (Yelp of China) pivoted into group buying, flushed with cash and traffic + support from Tenpay from Tencent. It became the new nemsis for Meituan.

Wang initially wanted support from Alibaba + Ant to help with the Tencent and Dianping duo

11) But was rebuffed by the Alibaba team. They had a dominate position in payment at the time and didn't need to subsidise traffic and usage as much as Tencent did.

The experience left Wang bitter as he realised he was just a pawn in the shadow wars between Alibaba and Tencent

12) Wang decided to start working with Tenpay and started to pivot towards food delivery as a new vertical.

Lots more drama happens and Meituan and Dianping merges. Which also gives Tencent a strong investment position in Meituan through Dianping

13)Meituan switched to Tencent's side and Alibaba was pissed.

Alibaba started to sell their shares in Meituan at half their cost on the private secondary market. And started to look for a new horse to back in the food delivery and offline space.

14) They acquired Elema and a new war for food delivery started.

But that's a tangent from Meituan. If you're interested in what happened in that war, let me know. But general context on Chinese startup wars https://lillianli.substack.com/p/the-shadow-war-between-alibaba-and

15) Meituan has become a super app along the way, now you can buy tickets to films, local attractions as well as for trains and flights on there. They've moved into hotels and payments (another jab at Alipay) and most recently Community Group Buying.

16) In the process, they've made enemies out of everyone. Wang's outspoken ways with the media hasn't helped. He's the go-to guy anytime anyone needs a quote on how terrible Jack Ma is.

17) That being said, Meituan's one of the most sticky apps on most Chinese consumer's phone. Their stock has 3x during 2020's lockdown as food delivery and then revenge tourism became must dos for most consumers.

Let me know if you found this interesting, if I get like 200 likes or something I'll write a deep-dive on Meituan.

I'll be writing threads like this for the rest of Jan, follow me if you want these to spam your TL.