David Rosenthal: belief

Transcript context

…Over the course of the next several sections, all these analysis sections, I think the question that we have to keep in the back of our minds is what are the things you have to believe about their future growth and about their future profitability in order to justify the value of this company right now? I can't think of any better way to do that than heading into our narrative section. For folks who are new to the show, this section, we try to paint the media narratives over the last few months for the bull case and the bear case of why you should be excited about this company or why you should run from it at all costs and the market has certainly spoken. But David, what was the biggest bull narrative surrounding the company? The bull narrative, I think we've told a lot of it along the way here, and I at least mostly subscribe to it is they have just like Meituan seems to have done in China, they have accomplished the dream or in the process of accomplishing the dream and taking a market like this, a highly competitive local network effect market, and tipped it in their favor such that there's no viable competition. They have a wide berth to run, both to keep growing in the sector that they're in right now with food delivery, to add other products and services into it, and become the dominant. Meituan, as we’ll get into now, is not really just food delivery anymore. That's a small part of what they do. They are a super app just like Tencent and WeChat is the super digital app. Meituan in China is the super physical app. Friend of the show Rita Yang over at GGV has a really great YouTube walk through that we'll link to in our sources of what it's like to use Meituan in China. You want to book a massage? You book a massage. You want to order food? You order food. You want to order flowers? You order flowers. You want to make a restaurant reservation? Great, you order your food from restaurants. You also make restaurant reservations in the app and you're opening it all the time and it's how you interact with your physical world and local businesses around you. I think that's probably the bull case to me. Yeah, it's boiled down to, they are the last mile near real time logistics company, like their the local on demand FedEx to get anything to you. Then you just have to let your mind wander on what are all the things that you could want at your door in a moment's notice and that really starts to shift your mindset to like oh, so they're actually a competitor of Amazon Prime now less so a food delivery company.…

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