EP169 - GGV Capital Principal Robin Li Robin Li is a principal at GVV Capital, a global venture capital firm that focuses on seed-to-growth stage investments across Consumer/New Retail, Social/Digital & Internet, Enterprise/Cloud and Frontier Tech sectors. The firm was founded in 2000 and manages $6.2 billion in capital across 13 funds. Past and present portfolio companies include Affirm, Airbnb, Alibaba, Peloton, Poshmark, Slack, Square, Wish, and many others. In this interview, we cover a wide range of topics around the hot trends in retail and consumer in North America, and we deep dive in what’s going on with retail, social and e-commerce in China well. Don't forget to like our facebook page, and if you enjoyed this episode please write us a review on itunes. Episode 169 of the Jason & Scot show was recorded on Wednesday, February 20, 2019 from the eTail West tradeshow in Palm Desert, CA. http://jasonandscot.com Join your hosts Jason "Retailgeek" Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of GetSpiffy and Founder and Executive Chairman of Channel Advisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing. Transcript Jason: [0:24] Welcome to the Jason and Scott show this episode is being recorded on Wednesday February 20th 2019 live from the etail West Trade Show here in relatively Sunny Palm Desert, I'm your host Jason retailgeek Goldberg and unfortunately due to travel issues Scott couldn't be here for this show so we'll have to try to Soldier on without him. [0:46] His longtime listeners will know two of the most common questions we get on the Jason and Scott show are what are the hottest Trends in consumer retail companies and what's going on with retail social and e-commerce in China so we're really excited to have on the show one of only a handful of people that can answer both of those questions please welcome to this week's show Robin Lee Robbins a principal at ggv Capital welcome to the show Robin. Robin: [1:12] Thank you so much for happy having me. Jason: [1:14] We are thrilled to have you running really like to start the show by running a little bit about the background of our guests can you tell us a little bit about how you came to the PC World. Robin: [1:25] Yeah sure so before I was Adventure I was actually an educator so I spent three years and Teach for America teaching special education at Middle School pretty much all subjects, then I went on to go into business school I really didn't have a hundred percent Clear Vision of what I wanted to do, but I did a lot of volunteer work in the local Chicago Community especially at startup accelerators and Teach for America is entrepreneur program which is why I really learned a lot more around, answer when I was in business business school I took a chance and apply to this job opportunity to intern at shemane which turned out to be a top PC found in China, and I actually never lived in China I was born in Hong Kong but I was like hey this is awesome and I'm very curious to learn so I ended up. Applying and that's up to me and that's where I'm at hahnstown managing partner now at UCB Capital little that I know. He was actually on the Forbes Midas list as one of the top PCS in the entire world and so after meeting Hans might not work really crew he's an amazing mentor, I was briefly have Flex has a venture capitalist but then after I finished business school I returned ggv capital and I've been here since ever since it's been almost five years. Jason: [2:37] That's awesome so you are basically followed like Jack Ma's career trajectory sort of starting as a teacher and then going on a diamond 80. Robin: [2:44] He is definitely my role model. Jason: [2:45] I think he's a lot of my real mom so that is awesome and I love the Chicago connection I'm also a chicagoan and until recently I I work right next to 1871 everyday so. Robin: [2:57] Well and that is what I want to do. Jason: [2:59] Yeah perfect so you probably walked by my office at razorfish all the time. Back in the day so let's dig into ggv just a little bit can you tell us a little bit about the firm. Robin: [3:11] Of course I'm ggv capital is 6.2 billion dollar of global Venture Capital firm I mean Bastin entrepreneurs globally in the US and Asia and other emerging economies, it's always actually been doing this for the past 18 years we have offices across Silicon Valley which is Menlo Park in San Francisco, we have Beijing Shanghai most recently Singapore and I am based in New York as a team we live by a few Simple Rules great impact the local and then global. So in terms of stages we're actually stage agnostic and so we can do anything from investing in a c Stage Company to very late Stage pre-ipo Company so that means we can buy checks as small as a hundred K to 11:50 million dollars, I would say that we are very sector-specific we focus on four main particles consumer internet and Arbonne Tech which is what I cover, Enterprise SAS and detect and so we. Adventure capitalist we are believers behind the Billy verse we look for a very globally-minded entrepreneurs and Founders that are changing the world that we live in. Jason: [4:16] That's awesome and you were smart enough to pick the best of the sectors that GB covers to sew. Robin: [4:21] That is very exciting and very relatable. Jason: [4:23] I like it and I know it's a famous whistle I already know the answer to the question I'm going to ask but can you share a couple of the companies that you guys either LED or been involved with. Robin: [4:36] Yeah of course in so I mean given that we already tell whether I'm going to focus on some of our e-commerce before you we love and nothing in the sector and e-commerce ecosystem and so we're actually early investors in Alibaba back in 2003, which really helped to shape our Global Commerce strategy, and if you ask me back a lot of companies in Market places such as wish house Poshmark offer up, do even direct to Consumer Brands like Peloton Lively when key locks function of beauty and even each other's like boxed wholesale and yammy buy and sell. We invest a lot in e-commerce enablers and so you could think of these as, Payment Solutions such a square and a firm to Bigcommerce to power a lot of the merchant shop. Jason: [5:22] That is totally awesome and congratulations on all that success I'm going to assume there were some that weren't as successful that we didn't answer. Robin: [5:34] Thank you we try. Jason: [5:36] Yeah and I hope we will get a chance to dive into a few of those but you were here in detail West to talk about a pant to participate in a panel about what's hot in, internet in retail so I want to steal all the Thunder from that panel what what are some of the things that you're you're singing excited about. Robin: [5:57] So in terms of what we're excited about we we look a lot into these e-commerce enabler is an ecosystem partners, and so for us we could we could be in a box brands and at Marketplace is and what not but we we do see that there's been an emerging Global trend, and so whether it's next-gen retail across the world or enabling Global Commerce Solutions weather on the payment side or actually on the cross-border shipping Logistics I that's something that we're diving deep into. Jason: [6:28] And it is interesting cuz you guys have a big International footprint and obviously a lot of successful North American brands as well. And you're one of the three conversations we have here is. Like us there things that seem like they're wildly successful for like particular in China like social commerce Arch at Commerce or different things that we. Maybe haven't quite gotten his quick adoption in the US when you take a global investment strategy I could imagine that's even harder because you're investing in a company that may excel in one market and and. I have a more difficult time getting Traction in the in some other mark. Robin: [7:09] Yeah that's right I'm but we actually looked at both markets for a lot of inspiration I mean, you know before China Look to You a signed copy. A lot of the models they're right but now the US looks to China and so we actually take a lot of lessons learned and help each size scale, we also see this happen a lot in Emerging Markets which actually look very similar to China on so we recently made some investments in Latin America as well as Southeast Asia. Jason: [7:37] Nice. I sometimes have an iPod hypothesis that there are experiences and consumer value products that get launched in China sooner. Eventually get Traction in the Uso it's white and sometimes sometimes I feel like you can use China as a little bit of a time machine sometime to predict things that may may come to pass year if you like are you able to do that at all or. Robin: [8:04] Yeah for sure and so we we see a lot of Trends in China particularly because China have leapfrogged and many different Industries and so you could say you know what, China has LeapFrog in the mobile side of leapfrogging a payment side and so that's really exciting for us to take a while to look into and next-generation Retail from offline to all mine is a, very fake friend in China that we take a lot of inspiration from. Jason: [8:32] Yeah for sure and it's like. The thing that comes up by for me obviously there's great Mobile payment Solutions in China and I feel like that's a foundational thing that enables a bunch of great customer experience as they are, in people go ho maybe American consumers don't want to do social commerce or something like that and my premises that they probably do we just don't have the great Universal. Digital wallets to enable those transactions like we like they do in China and so in my mind, we may see more of those does Asian experiences come here once some of the enabling foundational things like like mobile payments are in place. Robin: [9:13] Yeah actually you know Instagram has doing a lot of these interesting selling features and it hides a lot into social commerce in the lessons that we see, I in China and so this has been like a huge area and opportunity for us and we started investing in this in this a couple years back, we made an investment call Little Red Book or red for sure, it was founded in late 2013 now it's growing to about a hundred sixty million users in China and is the number one lifestyle sharing community in China, and if you want to think about read it a try to like an Instagram memes Pinterest me to Amazon, nothing is that users there are on the platform are young predominantly female Urban I'm very trendy and so they not work with each other through a lot of this content on the platform. [10:01] And so we see this as, a chance that are in China right and they shape a lot of the Next Generation consumption behaviors and what we call like social commerce and so what they do is they buy something whether it's in China or overseas come back post about it, how do you know if your show off to your friends but also collect items right and see what's trending in a which category and so, I'm making a career trip next week I want to know what's the best selling beauty products, what are the top snacks in Japan that I should bring home and so they actually have about a hundred thousand years are generated content post per day amassing billions, Impressions I so given that they know a shiny at any given time, they actually can Source by while I'm building Marketplace and this is exactly what they've done so they now have this incredible e-commerce business and a Marketplace on that platform, how to cut a tire back to the us a few months ago they even started helping Brands like kkw Kim Kardashian's Beauty brand launch in China. And so we definitely see that you don't answer damn is definitely Berry global, and are starting to take a lot of lessons and enables social commerce to work and I'm very excited to see what what what. Jason: [11:15] That for sure in so going back earlier Point could you see that becoming popular in the US as well like, obviously you know you mentioned the Instagram's new shopping features I feel like a lot of their predecessors have tried shopping features and didn't get good adoption until you could go. You know poo poo that but you against your for your point you got to China and like man the level of Engagement with, the social Platforms in WeChat and pick a dude in red and all these platforms you go man if if so many consumers are doing that there it's hard to imagine that they don't want to do that here as well. Robin: [11:51] Yeah I definitely think that you know if anyone can make it work it's probably going to be Instagram I think it's a little too late for for Pinterest to make that type of pivot but, yeah I definitely think that especially with Logistics getting easier or payments becoming faster and I'm working at 4. Consumers estate it's definitely possible. Jason: [12:12] A bunch of the companies in your portfolio are direct to Consumer Brands and we've been spending a ton of time talking about sort of the evolution of the market and it's interesting. I frequently point out to my like water just have us retail clients that there. They're really only has been one new wholesaler launched in the last 10 years and nobody can name them by the way they're your company it's boxed but in general like all the new companies aren't. Traditional wholesale retailers there direct to Consumer brands that make their own stuff. The challenge has been it seems like they all get to some threshold level of sales and then like seemingly plateau and so you know once you hit that plateau. We see them sell themselves to bigger establish brands or making huge investments in customer acquisition that maybe, seem crazy and unsustainable and I'm thinking about Jad or blue apron or some of those those bad examples examples. Or they start to look at other channels to grow like partnering with traditional wholesale retailers are opening their own stores are those kinds of things is is that just growing pains of the Sea Market and are you confident that these Adidas e companies. Are are going to be able to like hit the kind of scales that give you a good return on investment or is that a challenge in that space. Robin: [13:40] Yeah I mean that as you can imagine this is a Hot Topic Mojave sees the decency and Landscape is changing faster than ever and I think that. What we seen is that there's just been honest and amazing increasing amount of new players launching pretty much every day I want these Innovative strategies that can reach customers that have never been, been able to be done before writing and in the US and this has really been powered by Facebook and Instagram has made it possible it and in China like you said it's really WeChat WeChat mini programs right, just to give some perspective we've now seen 820,000 merchants on Shopify alone that sell pretty much decency. Most of which aren't even venture-backed but have built huge businesses, Amazon has 136 private label Brands and Amazon's pretty much start to Consumer and these are what to taking over what traditional. Department stores and grocery stores have done 383 exclusive Ranch House on the Amazon platform alone and I think that you know if he's he's going to play in the space I think we have to take a look at hey it's been so easy to start these Brands what is it that I can really distinguish up from the other is it a very unique supply chain we look for a Founder that has an incredible story ambition and and something that can give them a very tough and competitive. Definitely somebody who wants to go global. [15:08] Because I think today if you only create a brand just for certain group of audience you actually missing out on billions of other smartphone users around the world and we're very bullish on cross-border e-commerce. Jason: [15:19] Yeah and that that feels like another interesting evolution of me is like you go back in time traditionally brick-and-mortar retail has not. Expanded geographically very well like there's a few examples but like you look at some of the most successful retailers in the world and they kill it in their home market and they really struggle to get. Global adoption in other markets in this this new DLC model. You know seems like it thrives globally and jumps borders much much easier in with lower risk frankly. Without all those costs I'mma start a big believer in the DTC Market to talk a lot about how like I feel like the future is. You know one or more big aggregator marketplaces in every market and then every other retailer will essentially be d2c and the. All those retailers in the middle that are mainly trying to sell other people's stuff are the ones that are most at risk and what's interesting is people. We've met so you think Walmart and Target are going away because they're wholesalers. And what's interesting is there. They're becoming DTC companies too and you look at Target in Hugo man they've launched five new brands like things I can and Jack. Are selling two billion dollars a year in some ways those are the most successful new consumer brands that have been launched in the mark. Robin: [16:40] I mean Walmart and Target have always had private label right and it's only been kind of resurfaced lately and I would packaged in a different way. Jason: [16:48] Yeah and I think I think the difference is now they're treating it like a brand instead of a. A cheaper value proposition to a national thing they're putting marketing behind it and said to me that. A hugely interesting trend is like Kroger has this wildly successful private label brand called Simple Truth. They're selling simple truth on tmall in China by Kroger is in a retailer in China. And I feel like that that's an interesting Trend that you guys are sort of on the, the right side of it the moment Scott would be very angry at me and I didn't ask about on demand Services as you may know he he's started up another one of those as we speak. So he's obviously bullish that is that like you see a good future for the on-demand type Services as well. Robin: [17:37] Oh yeah this is a segment that we love to invest in especially because it is a crossover between both e-commerce and orbitec and so you know we we actually started to see this take off and then you ask me for China, but what China is done is another Emerging Markets is is that it's taken off because it's driven off by them by micro Mobility I saw when you look at on demand services in the US you can always remember. All the different silos that is touch like GrubHub doordash ubereats really just go after food. [18:10] And then you have instacart going at the grocery and your Postmates going on these various goods and, and then you have some very select on demand for massages or what not. But I think that you know that the issue or kind of the challenges that this can provide is that. You have to acquire users again and again and it say it gets really expensive and maintaining even operational fleets on your own is something that requires a lot of capital and it's very very intense of an illusion all four, Founders as of what we've seen in China emerge I need mega platforms are so-called super apps so very sample maid swan. [18:50] It's a rising super app in China it's kind of like an Amazon for services, that's all you have fresh. Reviews Yelp delivery local Services booking, movie tickets groceries even you can't even book travel and vacations on there and let alone ride-hailing and I'm bike sharing is so it's pretty much everything, and they leverage the micro Mobility solutions that they have to power all the deliveries and every category that you can find an you know that actually last year they are. And it's now 40 billion dollar market cap company, we actually, take this lesson from China we don't think that is exactly representative what can happen in the us but we see it in happening in Emerging Markets like southeast Asia and in Latin America particularly Brazil Mexico and what not and so. [19:40] Even the new Emerging Markets are improving upon that model which is so exciting and they're adding like Payment Solutions on top of it, and so we are very bullish on On Demand. Jason: [19:51] Very cool and then the other one, has a lot of Buzz lately is that last Mile and like new innovative solutions for retailers and Brands to do the delivery is that a space that you think also has legs or is that played like. Robin: [20:06] Yeah I I think it's still very much TV. Does does a retail Outsource a ride or do you do it in-house I think Walmart has try to do it in-house where they they make their own employees going to take something home along the way but obviously house callable but you know you know I should you be wavy we've invested in a lot of these last-mile Solutions and so you you don't like Didi in China hello bike which is number one bike sharing in China in from just having, you know on your own the Lorraine on your own kind of using the service as a as a bike sharing but actually leveraging get to become the delivery and that becoming a vehicle right we have five in Southeast Asia with lime and that you asked for scooter sharing bike sharing and even yellow who now recently merged with rain to become grow in Latin America. Jason: [20:59] Yeah it I mean obviously the direct the home delivery gets like a lot of the buzz and that's what people think about in last-mile you early on you a little to the Soto experience are you out of working grocery space and I I really feel like. Pick up is going to be the high volume last Last Mile there and you you will get you know things like I think they just change their name at what used to be all about him and now I think it's. Blue hippo maybe is that. Robin: [21:27] That's just the English translation. Jason: [21:29] Titian but yeah I know but it feels like they've officially shifted to the English like I think they're putting hippo on the side. Robin: [21:37] Actually seen them I recently had enough and the Big Show. Jason: [21:41] Yeah which is interesting that they're exhibiting at us trade shows I think the US retailers are having a lot of success with that to like Walmart with online grocery pick-up and, and that is interesting that feels like there's even a bunch of new startups in The Last Mile space that are focusing on helping retailers with that. Pick up experience as well so that's going to be interesting when we get asked about a lot is voice comers what is that like a fat or do you think Boy Scout. A big opportunity. Robin: [22:13] I think it's still a little bit too early to tell me and you have these huge numbers around 86 million units shipped worldwide last year and and 60 million households around the world have these devices but you're acting like, literally consumer consumption Behavior to change and like how do you actually educate a customer to do that and having, having even enough accountant and Payment Solutions and stuff like that enabled and I think it's still a few years away. Jason: [22:42] Yeah. I think their categories where it could really work but I'm not sure people are going to order things with a lot of complicated attributes in Brands specific language for the first time the invoice Commerce. Robin: [22:57] People are so sensitive right everybody wants a good deal. Jason: [23:00] Yeah for sure that's always at the top of the decision tree no matter what else happens is. I always always is a big factor so we talked a little bit about some of the successes and unique companies in China but like are there any Big Mac Road friends that you're saying in China that that wasn't should know about. Robin: [23:19] Yeah I think, you know we talked a lot about the continuity of social commerce right the influential live streaming as is huge industry and producing a lot of e-commerce growth in China and so that will actually you know Legion, maybe 4 billion in Revenue this year and just sit with influencers live streaming to almost like 450 million viewers, which of the lot at 9 so I think that that's really exciting to watch you still haven't seen that take off here yet, new search engines are in China and so instead of like the Google in the by do, a model by you people are actually now searching directly on the super apps and WeChat mini programs and so instead of starting off I'm just, figuring out what you want you're actually inside a platform that your messaging or your transaction or transacting already and spending a lot of your time. Alaska think you know Chinese platforms are starting to go Global we just talked about Alibaba all right, but that's how much does one part of what they have in you have fight dance in Tik Tok and, some of these digital platforms are just just massive and then lastly alipay and WeChat pay will continue to expand across borders. Jason: [24:30] Yeah it's funny when I get a tourist destination now it feels like the one that's had the most Traction in the u.s. is Ali pay for Chinese tourist so like you can use all your pay that to pay for your taxi in Las Vegas now all right like beginning makes perfect sense. Robin: [24:44] Oh yeah I think that you know you definitely see Ali Baba and other players, really focusing on the China outbound market right it is a very valuable demographic you have only pay has 600 million active users in China they have you know, but they have a lot of focus on these outbound outbound Travelers last year there was about 130 million outbound trips just out of town all alone and so 25% of that was actually to North America, and so in order to service them who kind of, use alipay at home every day and they're spending like $4,005 in dollars per trip abroad how could you not. You know Market to that consumer base and so I think that you know that's definitely something that you'll see more and more of in terms of Partnerships around the world. Jason: [25:36] Yeah I know that makes perfect sense we talked a little bit about Alibaba one thing I'm curious about is. Is China a winner-take-all model like it feels like Alibaba is so huge and is, doing so well and everything in all their categories and obviously we chat seems like they're huge and yet there are still new Mega platforms it's seemed like they emerge and it seems like they're getting traction like that. Robin: [26:00] Yeah and I think our accounts you just the percentage of e-commerce as a percentage of retail Ryan and sell in the US has 10% and in China that's what money per side so it's still a lot of room to grow that said Ali Baba still accounts for 60 to 70% of that market and in terms of volume and so I think that they are incredibly smart and very strategic, so instead of just looking at you know influence our side and partnering with red.for example on fasting and in these cases they actually have time now which is it is amazing with just a, not working very efficient wealth domestically and operationally international as well, I am so impressed by that platform at this this Consortium just to get some background. [26:48] Play Alibaba committed to the smart China Logistics Network to provide had a 24-hour delivery of any product anywhere in China. And I actually spent about 43 billion dollars she just even kick start this project and so they, they want to do this in terms of like shipping domestically in China and even 72 hours globally, I am so as taobao in China has transformed in entire generation shopping Behavior I think that time now from Alibaba can actually transform the traditional Logistics ecosystem, and so they have this incredible brain behind data intelligence domestic fulfillment cross-border Network, Urban Last Mile and even tapping into the rural Villages of China which tons of opportunity may think we we care a lot about you know Beijing and Shanghai all the time but you know the real opportunity in I'm just dumb, the bulk of the people are actually living in your 2 tier 3 tier 4 City and so. I think that like it's it's very smart that you know Alibaba is investing heavily in the logistic space, I'm just as Amazon is doing so here in the US and globally as well. Jason: [27:58] That's funny I I've been any Commerce long enough to remember when people used to think e-commerce was going to be a capital light like the numbers that they're throwing out in terms of infrastructure Investments are like hard to get your brain around. Robin: [28:12] Oh yeah and I mean I think that you know when you think about shipping that's a necessary necessity for any reason we are a merchant not just shipping to the consumer but even like, how do you handle returns I had an end kind of how do you make a faster but also more cost-effective and I think that sucker is still. Still early, Amazon is as pushing the envelope right into the bar is that a higher and higher for the customer everyday and so you actually see we see this a lot of startups popping up in very specific Niche Solutions right or just one product Solutions hey shipping labels or where how they ignore talk stores are handling returns and I think that it's definitely a very promising and as Avicii where it were looking a lot into the space cuz I think the last few years, we talked about TTC it's a lot of investment and how do you how do you prove to find an experience and now you know, baby toddlers And and companies are really investing into retail automation back and how do you improve the inefficient sees that you have and that's something that they're learning a lot from overseas as well because China really leads and logistic. Jason: [29:23] For sure and it you know you mentioned the reverse Logistics that feels like. There's so much room still to improve that and it's so important for the economic the unit economics by. In us the apparel industry you know he's usually moving e-commerce but returns are like an enormous piece and cost of that thing that seems like it's not sustainable. Robin: [29:45] Oh yeah and a lot of times you could be even 40 to 70% are recharged much higher than what you would see offline. Jason: [29:52] So you can imagine there's some small vendor here that you and I haven't met yet that is figured out at help mitigate that returns problem for retailers and that could be a great, Great Neck story for for growth and then e-commerce face. So I know we're running out of time I'd love to get your perspective about where you think all this is going like you know if we jump in that time machine and go forward 5 or 10 years how do you see the the markets of. Robin: [30:18] What I definitely look alive for to Global platforms I'm being with a shop a very easily all across the world, what no matter where you are in the US and China what not then second and is I look a lot into a eye and intelligence, so how do you make a more efficient last waste Mendes trickles into other categories not just an apparel or Commerce right but you have, you know from anybody from univ restaurants to coffee shops and and whatnot and lastly. Sustainability and kind of CSR right and I think that, you know what I shop a lot on mind mapping Chopper have a box that coming almost every day but it appeases me to think about how many trees that like I'm actually cutting down and and even though we recycle, how much of that really gets reused a memory package and it's a really looking forward to somebody solving the sustainability problem for sure. Jason: [31:18] Got no I got those are going to be interesting I'm looking for to find them as well and that's going to be a great place to leave it because it's happen again we've used up all our allotted time, as always if folks have a comment or question feel free to jump on Facebook and will, continue the dialogue there if you enjoyed this episode we love that five star review on iTunes but Robin if listeners want to learn more about ggv or they've got the next grade, Innovation and I need your help finding it like what's the best way to get in touch with you. Robin: [31:48] Find me a LinkedIn I leave my email there and you can message me at anytime. Jason: [31:53] That's awesome we will put that in the show note so no need to try to write it down while you're driving or anything with that Robin is it's been a real pleasure to chat with you and thanks very much for being on the show. Robin: [32:04] Thank you it was a lot of fun. Jason: [32:05] Until next time happy commercing.