Jing Liu × Feng Li: In the Future, What Kinds of Companies Will Thrive? | Feng Li Column
Always look at the other side of the coin.
Not long ago, Feng Shu (Li Feng) joined Liu Run's "Evolver" livestream. Over the course of two-plus hours, they started with the hit TV series Blossoms Shanghai that took China by storm earlier this year, then moved into reflections on macro cycles, eras, and the individual. They explored opportunities in China across consumer and service industries, technology, and the white-hot AI race. Toward the end, Feng Shu shared something that's benefited him greatly in recent years: do everything you can to look at the other side of the coin — to see things you may not necessarily like or agree with. The following content comes from Liu Run's WeChat account. We hope it offers you a different angle for thinking. And we welcome you to keep the conversation going with us.
Through an investor's eyes, what does today's world look like? Source / Liu Run's WeChat account Perspectives / Li Feng Lead writer / Jing Jiu Editor / Er Man Layout / Huang Jing
/ Introduction /
I'm a business consultant. When companies come to me, it usually means they're in trouble. After seeing enough companies in deep water, it's hard not to grow more pessimistic in your outlook, which can cloud judgment. What to do? If consulting firms are like the ICU — saving companies, treating their illnesses — then investment firms are like the delivery room, helping companies be born and grow. So I often seek out investors, using their optimism to calibrate my consultant's pessimism. This time, our "Evolver" livestream invited Li Feng.
Li Feng is among China's most prominent young-veteran investors. He's founding partner of FreeS Fund, with sixteen years in early-stage investing, focused on technology, consumer, and healthcare. His portfolio includes notable names like Saturnbird Coffee (三顿半), QingTao Energy, XtalPi, Yanming Biotech, Bilibili, CreditEase, and Coinbase. He's been named to the Forbes China Top 100 Venture Capitalists for five consecutive years. Even among investors, Li Feng's ability to think through phenomena and discern patterns is rare.
So — through an investor's eyes, what does today's world look like? Let's start with that hit TV series from earlier this year, Blossoms Shanghai.
/ 01 / We may be living through a similar cycle today
Have you watched Blossoms Shanghai? Remember the character "Miss Wang" (汪小姐)?
Her entrepreneurial story in the series is fascinating. Shanghai, 1990s. Initially, Miss Wang works as a foreign trade specialist at a state-owned enterprise. Framed by a colleague, she's transferred to warehouse duty. Though later reinstated, she can't swallow the indignity and quits to start her own business. But entrepreneurship is never that simple. At the SOE, she'd handled foreign trade quotas — everyone called her "Miss Wang" with respect. Now, nobody cared. She finally lands a big order for Walmart jeans, only to find her competitor has contacted manufacturers across the Jiangsu-Zhejiang-Shanghai region, and none will take her order.
Waiting and waiting, with the deadline looming, she considers going to Shenzhen to find factories. At the ticket counter, she discovers her rival has bought up all the Shenzhen flights too. No choice — Miss Wang drives herself, enduring countless hardships to reach Shenzhen. The factory she'd contacted is already committed to someone else's order. Forced to offer a premium, she finally secures production and fulfills the order.
But with costs spiraling out of control, she'd lose money, right? Yet Miss Wang didn't lose — she profited. Made her name in one deal. Why? Currency unification. What does that mean? Li Feng explains:
Before 1994, China had a dual exchange rate system. There was an official rate, and a "black market" rate. For example, at Beijing's Friendship Store, you could buy premium goods, but only with foreign exchange certificates.
Miss Wang's deal happened to coincide with the new policy of exchange rate unification. The official and "black market" rates merged into one. The RMB was adjusted from roughly 5-plus yuan per US dollar to 8-plus yuan per dollar. The dollar became "more valuable." Miss Wang's Walmart deal should have lost money. But because of rate unification, settling in dollars, she squeezed profit from the exchange differential.
Of course, Miss Wang's story may be fictional. But that 1990s era was a special, real existence. In that reality, China faced serious challenges. The Asian financial crisis hit exports hard, creating overcapacity. SOE restructuring put massive numbers of workers out of jobs. The Ministry of Finance issued ultra-long special treasury bonds for the first time, borrowing from ordinary citizens. Many said it was cold. Bitterly cold.
But behind the cold lay enormous opportunity. The gradual opening of foreign trade rights enabled new B2B platforms to develop — Alibaba, for instance. The end of welfare housing allocation and promotion of commercial housing laid groundwork for real estate's later boom.
Like, perhaps, these past few years. Li Feng says:
We may be living through a similar cycle today.
The economic environment of the past two years seems cold, but signals from certain policies may conceal considerable opportunity. From late last year to this year, China opened two rounds of unilateral visa-free country lists. Restrictions on foreign investment in finance, energy, and telecommunications have been progressively loosened. The pilot program for service industry opening was placed in the capital, Beijing — notably with finance as the centerpiece, as Beijing continues expanding financial sector reform and opening.
Sometimes, looking at the past from different dimensions can help you better understand today's situation, and even find future opportunities.
/ 02 / From white-hot to rational, from pleasing others to pleasing oneself
So what is today's situation? Take consumption as an example.
Compared to the past, have your spending habits changed? I suspect they have.
Stockpiling? Let's not. Use what you have. Don't buy what you don't need. Either buy less but spend more for durability, or go straight for the lowest price and use it till it breaks. Before buying, search across platforms, compare prices, confirm you're not being a "sucker."
Our consumption is growing more rational. And this has considerably affected the investment side — everyone's grown more cautious.
But remember? The last "white-hot" consumption cycle wasn't that long ago: 2020–2021.
Those years, freeze-dried coffee, fruit granola, blind boxes, low-ABV alcohol… increasingly unfamiliar terms kept appearing before us. Perfect Diary, Pop Mart, Genki Forest, Saturnbird Coffee — numerous consumer brands broke out overnight, becoming household names.
Why? How did consumption go from "white-hot" to "rational" in just a few short years?
Li Feng says:
Looking back, the biggest change was on the traffic side.
Simply put: at that time, consumer time and attention spent on media exploded. Short video emerged rapidly as a new format. The traffic dividends from short video platforms, combined with pandemic stay-at-home stockpiling — these factors together created the traffic-side shift. Whoever could master short video as a media form and influence user decisions could achieve growth.
So riding the红利 of new media and new channels, a wave of new consumer brands rose quickly.
But today, things have changed. New channel红利 has nearly peaked. Expectations have shifted; consumption philosophy is completely different.
In Li Feng's two words to describe current mainstream consumption philosophy: rational, self-pleasing (悦己).
If the purpose of past consumption was letting others see what you ate, used, and experienced, today's purpose is making yourself feel happy, feel it's worthwhile.
So you see many interesting phenomena. The travel boom. Concert crowds swelling. Even luxury sales growing while secondhand luxury transactions decline.
From pleasing others, to pleasing oneself.
So once a brand today fails to answer "why do you charge this price" and "why should I choose you," it gets eliminated.
This is today's situation.
So what about the future?
/ 03 / Tech-enabled, new-demand-facing, globally developed
Yes — the future? In the future, what kinds of companies will thrive? What kinds will have more opportunity?
Li Feng offered three keywords:
Tech-enabled, new-demand-facing, globally oriented.
For example.
Have you ever dreamed of flying? Like an eagle, soaring freely through the air — mountains, white clouds, lakes, grasslands passing before your eyes… idyllic just to imagine.
But how could humans fly? At best, a dream. Yet one company truly helped people realize this dream. It's called: Insta360.
In 2017, it released a panoramic video, strapping its product to an eagle's back. In the video, you could clearly see the 360° scenery surrounding the eagle in flight.
The dream of flight, realized. The video instantly broke through to mainstream audiences.
Later, with product iterations, Insta360 would periodically send its latest cameras flying with eagles again, bringing viewers updated footage.
▲ Image from Bilibili, screenshot of video posted on Insta360's account
The earliest camera strapped to the eagle was Insta360's first hit product — Nano.
It was the world's smallest 360° panoramic camera at the time, usable standalone or plugged into a phone, extremely convenient. Within weeks of launch, it became a favorite among outdoor enthusiasts and travel influencers. Developing multiple product lines around keywords like "sports," "panoramic," and "VR," Insta360 rapidly became a first-tier player in panoramic action imaging. In 2022, Insta360's revenue exceeded 2 billion yuan. And it was the first panoramic camera product to enter Apple's retail stores.
Insta360 is a textbook example of a company matching Li Feng's three keywords.
First, it's not just a consumer company but a tech company. Hardware-software integration — on one side capturing action imagery, on the other rapidly stitching and editing images.
Meanwhile, it chose the outdoor sports scene, already booming in recent years, entering the niche category of "panoramic action cameras."
Additionally, Insta360 has a distinctive trait: it entered foreign markets right from the start. Many consumer brands first prove themselves domestically before going abroad.
Similar examples abound.
For instance, smart musical instruments. Can you imagine a drum kit that's just a pair of drumsticks and a foot pedal? You raise the sticks, step on the pedal, pair with an app or speaker, and simulate drumming in mid-air — it produces corresponding drum sounds. (Extended reading: Why Are There Still Many Opportunities in Tech Consumer Products? The Smart Musical Instrument Industry as Example | FreeS VC Dialogue)
Or smart fitness equipment. Using motor resistance to mimic weight gravity, precisely controlling load. When you can't lift anymore, it automatically reduces resistance, preventing injury. (Extended reading: Consumer Innovation Never Sleeps: How to Create New Categories Through Interdisciplinary Approaches? | FreeS VC Dialogue)
Tech-enabled, new-demand-facing, globally developed. Companies with these three characteristics may have greater development opportunities in the future.
Especially global development. Because when a country's economy reaches a certain scale, when production capacity rises to a certain level, going global becomes almost inevitable to reach the next level.
And speaking of globalization, we probably have to mention two countries often used as "reference points."
The US. Japan.
/ 04 / There will always be opportunities that appear before you
First, the US.
When it comes to the US, cooperation and competition are two eternal themes. But within these themes, especially in new technology competition, do we have advantages?
Of course.
The US currently faces a challenge: industrial hollowing-out. In the process of US globalization, massive amounts of mid-to-low-end manufacturing, labor-intensive industries, were transferred overseas. This creates a problem: when new technologies emerge, it's hard to find industrial and manufacturing application scenarios domestically.
For example, not-even-that-new internet technology. Li Feng says:
Internet applications in the US mainly improved efficiency in three directions: finance, entertainment, and media.
So today, many wireless internet applications — mobile payments, for instance — the US still lags behind China. The reason: relatively lacking application scenarios.
Or AI, exploding in popularity these years:
The longer and more complete the industrial chain, the higher the digitalization degree, the greater the possibility for computing and algorithmic capabilities to find applications in industry.
For AI to apply across industries, it needs vast amounts of data. And data accumulation depends on industrial digitalization. If an industry's chain is too long, not only is relevant scenario data hard to collect, but even replacing a component can be extremely troublesome.
Take new energy vehicles and intelligent robots. In international markets, supply chains are distant; changing a motor might require back-and-forth shipping, taking one to two months with no guarantee. But in China, you go to the Yangtze River Delta or Pearl River Delta region, and it's done in a day or two.
This is an important advantage for China in applying new technologies.
Now, Japan.
Many say Japan today may be China twenty years from now. Especially with China's own aging and declining birth rates, many worry whether China will see its economy affected like Japan's.
But is this really so?
In Li Feng's view, a crucial external factor behind Japan's relatively stagnant economic development was the 1985 Plaza Accord.
Why? An example.
If today, the RMB were confirmed to double in value next year, what would you do?
I imagine many, upon learning this, would immediately speculate on foreign exchange. Find ways to convert all their money to RMB, or buy "RMB-denominated assets." For instance, rush to buy a Shanghai apartment. After RMB appreciation, sell it to people wanting to settle in Shanghai.
This is speculative behavior based on predictable currency appreciation幅度.
The Plaza Accord's most direct result: from 1985 to 1987, the yen appreciated sharply against the dollar. This similarly caused massive speculative behavior driven by currency appreciation.
And speculative behavior eventually exits, causing bubbles to burst. Because its purpose is short-term profit.
So sudden currency appreciation isn't all good. While in the short term, a stronger currency means greater purchasing power, the downsides are reduced foreign trade competitiveness and bubble bursts caused by speculation.
China currently doesn't face the problem of被动大幅currency appreciation.
So as long as the economy keeps growing, it won't enter Japan's current state.
Then where will growth come from?
Two directions.
One: make good use of long industrial chains and the enormous domestic consumer market, and execute well on globalization.
One: expand the service sector's share during economic structural transformation.
Don't worry that services contribute limited economic value. Because with technology and digitalization加持, services will also carry higher added value.
So although today's Chinese economic situation is extraordinarily complex — complex beyond imagination.
There will always be opportunities that appear before you.
Except this door of opportunity opens before those who discern business essence, and closes before those charging forward with eyes shut.
/ 05 / Closing words
Thanks to Li Feng for sharing from an investor's perspective.
I saw so many technological changes, so many possible futures, and gained tremendous confidence.
Near the end, one thing Li Feng said struck me deeply. He said:
For someone optimistic like me, the biggest challenge is always having to flip to the pessimistic side.
Because there may be reasons others have thought of that you haven't. And behind those reasons and causes may lie crucially important information.
Indeed. In this era, big data is powerful.
What media pushes to you is all content you want to see, but it may not be useful to you, or even real.
Yet to洞察 the truth behind complexity, to capture even a sliver of possible opportunity, multi-angle thinking may be essential.
So you still must do everything possible to break information cocoons. To see things you don't necessarily like, don't necessarily agree with.
For instance, look at what happened in the past from a historical perspective. Or try looking at the entire economy's development, rather than being confined to a single industry.
The world is complex.
Economic structures, financial disturbances, even wars and regional conflicts — these factors layer additional fog onto an already complex era.
But precisely because of this complexity, those who can discern it have more opportunity.
Let's keep at it together.
2. From 315, Looking at 2024 China Consumer Trends
3. 2020: The Trillion-Yuan Mobile Feast of Guochao New Consumption
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Global Market Share Exceeds 40%, How Does Insta360 "Boldly Create" Overseas https://zhuanlan.zhihu.com/p/644290795
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Insta360 7th Anniversary: Think Bold, Charge Forward https://news.insta360.com/ying-shi-7zhou-nian-think-bold-fang-dan-xiang-qian-2/
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People's Republic of China 2023 National Economic and Social Development Statistical Bulletin https://www.stats.gov.cn/sj/zxfb/202402/t20240228_1947915.html
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The Beginning and End of Japan's Housing Price Decline, Was the Plaza Accord Really a Conspiracy? https://zhuanlan.zhihu.com/p/188405224
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Financial Observation: Lessons and Experiences from Japan's Response to the Plaza Accord http://www.xinhuanet.com/world/2018-08/17/c_1123285026.htm
Interactive福利 Standing at the intersection of history and future, what do you think is the most promising commercial赛道 in 2024? Welcome to share your thoughts in the comments.
By 17:00 on June 7, the 5 readers with the most thoughtful comments will receive a copy of The Eternal River (《万古江河》).
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