Hi folks, we are back with our weekly edition of China’s Digital Digest, wherein we bring you weekly updates on China’s digital space. The report takes a quick glance at China’s complex and rapidly evolving social media landscape by providing updates on the latest happenings across the social media industry. Here are the major highlights of the report.
1. Alibaba, JD.Com Battle It Out In Hong Kong As Mainland China Market Matures
Hong Kong has become the new battleground for Chinese e-commerce giants Alibaba Group Holding and JD.com, as they search for new growth opportunities amid stiff competition on the mainland.
Both companies recently announced heavy investments into the Hong Kong market, waiving delivery fees for certain orders and boosting related services such as local product returns. Alibaba, for instance, said it will invest 1 billion yuan (US$142 million) to boost its online retail platform Taobao’s offerings in Hong Kong, as part of a campaign to ship orders above 99 yuan for free to one of the more than 800 self pickup stations in the city.
Separately, JD.com announced that it will spend 1.5 billion yuan to roll out new services in Hong Kong, including free door-to-door deliveries for certain orders above 299 yuan. The two companies’ ramped up competition in Hong Kong come as the e-commerce market in China matures, while the city still offers growth opportunities.
2. Chinese Tech Giants From ByteDance to Meituan See Rise In ‘Golden Week’ Spending
Chinese tech giants providing dining and travel-booking services saw consumer spending surge on their platforms during the “golden week” National Day holiday, according to data released by on-demand local services firms including Meituan and ByteDance-owned Douyin, the Chinese version of TikTok.
During the first five days of the annual break, which ran this year from October 1 through October 7, spending on in-restaurant dining booked via Meituan grew 41.2 percent over last year, according to Chinese media reports that cited data from the Beijing-based company. Chinese consumers also splurged on hotel reservations, overseas trips and holiday packages via popular online travel agencies (OTAs) that include Trip.com and Alibaba Group Holding travel-booking platform Fliggy.
3. Tencent Says Wechat Payments Jumped By 20% During China’s ‘Golden Week’
Tencent Holdings’ WeChat Pay, one of China’s dominant digital payment platforms, saw a jump in transactions during the “golden week” national holiday, as consumer spending shows signs of recovery after Beijing rolled out its biggest stimulus package since the pandemic.
Known as Weixin Pay on the mainland, the digital wallet recorded a 20 per cent year-on-year surge in transaction numbers during the week-long break, which ended on 8th October, according to the company. Tourism-related transactions nearly doubled from the week before the holiday, with cross-border payment volume growing over 70 per cent, WeChat Pay said. In Hong Kong and Macau, cross-border transactions more than doubled from the previous week, suggesting that those cities were especially popular among mainland tourists.
4. Indonesia Bans Temu Over Fears Chinese Shopping Giant Will ‘Destroy’ Local SMEs
Indonesia has banned Chinese online marketplace giant Temu to protect its micro, small and medium-sized enterprises from getting “destroyed” and prevent cheap products from flooding the country.
Temu, owned by PDD Holdings, directly connects factories in China with consumers in more than 50 countries, such as Malaysia, Thailand and the United States. Indonesian authorities have said the platform’s business model eliminates local stakeholders like resellers and shippers in the supply chain, allowing overseas companies to keep prices low that could squeeze small traders in Indonesia. The ban in Indonesia is the latest in a string of setbacks for Temu, which has also faced a regulatory crackdown in the US.
5. Tencent, Guillemot Family Said to Eye Buyout of French Video Gaming Firm Ubisoft
Tencent Holdings and Ubisoft Entertainment’s founding Guillemot family are considering options, including a potential buyout of the French video gaming company, after it lost more than half its market value this year, according to people familiar with the matter.
The Chinese internet giant and Guillemot Brothers have been speaking with advisers to help explore ways to stabilise Ubisoft and bolster its value, according to the people, who asked not to be identified discussing a private matter. One of the possibilities being discussed would involve teaming up to take the company private.
Shares of Ubisoft have fallen about 40 percent this year, giving the company a market capitalisation of about €1.8 billion (US$2 billion). Tencent owned 9.2 percent of Ubisoft’s net voting rights at the end of April, while the Guillemot family held about 20.5 per cent, according to the firm’s latest annual report.
6. Shein Doubles Profits in UK After Sales Leap 40% to £1.5bn
Shein, the online fast-fashion retailer founded in China, doubled profits at its UK arm last year as sales jumped by nearly 40% to £1.5bn – making it about the same size as its rival Boohoo.
The company, which is considering a £50bn float on the London Stock Exchange, said pre-tax profits at Shein Distribution UK rose to £24.4m, on which it paid £5.7m in income tax, according to accounts filed at Companies House. The rapid rise of Shein, which bought the Missguided online brand from Mike Ashley’s Frasers Group last year, has piled pressure on UK online fashion retailers including Asos and Boohoo. The new competitor is gaining ground just as British online fashion retailers face a squeeze on demand after the pandemic boom.
Wrapping Up
The vast and diverse nature of the Chinese Social Media space makes it incredibly challenging to keep a tab on the rapid developments taking place. However, China’s Digital Digest brings you all the latest updates from there to keep you abreast of all the evolving trends.
To delve deeper into the findings of our latest report, click here.
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