Page 64 - How China Is Winning the Tech Race

from Amazon.com, which today derives about one-third of its revenues from
selling electronics, videos, software, and other merchandise online.
“Someone is going to be the Amazon of China, and it’s most likely going
to be Dangdang,” says David Chao, cofounder and a general partner of the
venture firm DCM, which is an investor in Dangdang.com. “Peggy and her
team put their heads down, humbled themselves, and focused on the nuts and
bolts of the business.”

Amazon-busting strategy

In Beijing, I interview YuYu. Her office is in the city’s Central Business
District, which to Beijing is what midtown Manhattan is to the Big Apple.
Dangdang’s headquarters reflect the threadbare publishing business, a
throwback to the shabby New Yorker magazine offices on Madison Avenue.
YuYu, dressed casually in beige slacks and a silk floral blouse, comes out to
greet me at the reception desk.
As we face each other in worn leather chairs in her office, I flash back to
a phone call I had a few weeks earlier with Ruby Lu, a partner at DCM,
which is YuYu’s main backer. After Lu tracked the start-up for several years,
she cornered YuYu at a Chinese New Year reception in January 2006. Lu, one
of the few native Chinese females in the clubby male-dominated venture
capital world and a former Goldman Sachs vice president, parked herself in
YuYu’s office and refused to accept no for an answer. She beat hordes of con-
tenders to seal her firm’s $15 million investment and joined the board at
Dangdang.com in July 2006.
Lu gave me some valuable advice. She told me that I should let YuYu
know that I live and work in New York City. I take that approach and also
compliment YuYu for being the Chinese female entrepreneur who has figured
out how to one-up Amazon’s Bezos. It works. Soon we’re deep into a long
conversation during which she tells me what trade secrets she has used to beat
Amazon at its own game.
With nearly perfect English thanks to her undergraduate degree in
English literature from the Beijing Foreign Language Institute and a decade in
the United States, YuYu is the public voice of the company with foreigners
like me. Her husband, a sociology graduate from Beijing University and an
equal partner in the start-up, does not make an appearance.

38 SILICON DRAGON