china-unit-economics

Purpose

Analyze A-shares and China Market Unit Economics Model — per-unit economics, customer economics, and cohort analysis for portfolio companies.

Key Metrics

Core Framework (Same as Global)

Metric	Formula	Target
LTV (Customer Lifetime Value)	ARPU × Lifetime × Gross Margin	>3x CAC
CAC (Customer Acquisition Cost)	Sales & Marketing / New Customers	<12-month payback
LTV/CAC	LTV / CAC	>3.0x
CAC Payback (months)	CAC / (ARPU × Gross Margin %)	<12 months
NRR (Net Revenue Retention)	(Start + Expansion - Churn) / Start	>100%
GRR (Gross Revenue Retention)	(Start - Churn) / Start	>85%
ARR	Annual Recurring Revenue	Growing
Churn Rate	Lost customers / Total	<5% monthly

China-Specific Metrics

Metric	Description	China Context
Customer Acquisition Cost	CAC in Chinese context	Online advertising + offline channels
Customer Lifetime Value	LTV for Chinese consumers	Higher for tier-1
Repurchase Rate	Repeat purchase rate	Critical for DTC brands
Average Order Value	Average order value	Price-sensitive market
Channel Cost	Channel economics	Distributors vs DTC
Subsidy Dependence	Subsidy / discount dependence	Common in China

Data Sources

Primary: iFind MCP (Tier-1 paid) / AkShare MCP (Tier-2 free alternative)

# For public companies, extract proxies
get_financials(ticker, "income")    → Revenue, opex
get_financials(ticker, "balance")   → Customer-related assets
get_financials(ticker, "cashflow")  → Cash flow

Secondary Sources

CNINFO — company filings with segment data
Management guidance — management guidance
Brokerage research reports — unit economics estimates
Industry data — industry benchmarks

Workflow

Step 1: Define Unit Economics Model

Business model identification:

Business Model	Unit Definition	Revenue Model
Consumer goods	Per order / per user	Transaction
SaaS	Per customer (annual)	Subscription
E-commerce	Per order / per user	Transaction
Manufacturing	Per unit / per ton	Unit sales
Platform	Per GMV / per transaction	Take rate
Advertising	Per impression / per click	CPM / CPC

Step 2: Build Unit Economics Model

Standard model:

# Unit economics calculation
Unit_Price = XX元
Unit_Cost = XX元 (COGS)
Unit_Contribution = Unit_Price - Unit_Cost

# Customer economics (for subscription/DTC)
CAC = XX元 (acquisition cost per customer)
ARPU = XX元/年 (average revenue per user)
Gross_Margin = XX%
Customer_Lifetime = X年 (or 1/churn rate)
LTV = ARPU × Lifetime × Gross_Margin
LTV_CAC = LTV / CAC
Payback_Months = CAC / (ARPU × Gross_Margin / 12)

Step 3: Cohort Analysis

Cohort table (retention):

Cohort	Month 0	Month 1	Month 2	Month 3	Month 6	Month 12
Jan	100%	XX%	XX%	XX%	XX%	XX%
Feb	100%	XX%	XX%	XX%	XX%	XX%
Mar	100%	XX%	XX%	XX%	XX%	XX%

Cohort revenue:

Cohort	Month 0	Month 1	Month 2	Month 3	Month 6	Month 12
Jan	¥X	¥X	¥X	¥X	¥X	¥X
Feb	¥X	¥X	¥X	¥X	¥X	¥X

Step 4: Benchmarking

China-specific benchmarks by industry:

Industry	CAC Payback	LTV/CAC	Typical ARPU
Consumer brands	6-12 months	3-5x	¥200-500
SaaS (ToB)	12-18 months	3-5x	¥5,000-50,000
E-commerce	1-3 months	2-4x	¥100-300
Gaming	1-2 months	4-10x	¥50-200
Online education	3-6 months	2-4x	¥1,000-5,000
Fintech	6-12 months	3-5x	¥500-2,000

Step 5: Sensitivity Analysis

Key sensitivities:

Variable	-20%	-10%	Base	+10%	+20%
ARPU
Gross margin
Customer lifetime
CAC

Step 6: Recommendations

Based on unit economics:

LTV/CAC	Assessment	Recommendation
>5x	Excellent	Scale aggressively
3-5x	Good	Scale with monitoring
2-3x	Acceptable	Optimize CAC/margin
1-2x	Poor	Fix model before scaling
<1x	Broken	Fundamental rethink

China-Specific Considerations

Customer Acquisition in China

Channel	CAC	Quality	Notes
Online ads (Online ads)	Medium	Variable	Douyin, Xiaohongshu, Baidu
Social referral (Social referral)	Low	Medium	Pinduoduo model
Distribution (Distribution)	Low	Depends	Channel penetration to lower-tier markets
Offline stores (Offline stores)	High	High	Premium experience
Livestream (Livestream)	Medium	Variable	Douyin, Taobao Live
Private traffic (Private traffic)	Low	High	WeChat ecosystem

China Consumer Behavior

Behavior	Impact on Unit Economics
Price-sensitive	Lower ARPU, higher churn on price increases
Social-driven	Viral referral reduces CAC
Brand loyalty	Higher LTV for established brands
Channel preference	Multi-channel complexity
Promotion dependence	Revenue quality concerns

E-commerce Unit Economics

Key metrics for China e-commerce:

Metric	Formula	Benchmark
GMV	Gross merchandise value	Top-line
Take rate	Revenue / GMV	3-10%
Customer acquisition	CAC / order	¥20-200
Return rate	Returns / orders	5-20% (sector varies)
AOV	Revenue / orders	¥50-500
Fulfillment cost	Logistics / order	¥5-30

Quality Checks

Before delivering:

Unit defined clearly
Revenue model correct
CAC/LTV calculated correctly
Cohort data (if available) incorporated
Benchmarking relevant
Sensitivities run
Recommendations actionable

Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference.

ifind-only (strict): Use iFind only, error if unavailable

ifind-fallback (default): iFind preferred, fallback to AkShare

akshare-only, wind-only (Wind only), wind-fallback (Wind first, fallback to iFind → AkShare): Skip iFind, use AkShare only