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. WeChat and TikTok Secure Malaysia Operating Licenses
The Malaysian Communications and Multimedia Commission (MCMC) announced that WeChat and TikTok had obtained operating licenses before the deadline on December 31st.
In July, the commission said social media platforms with more than eight million users must obtain a licence to operate in the country by January 1, 2025. The commission argues that this is necessary to combat cybercrimes, including scams, cyberbullying, and sexual offences against children, citing platform operators’ lackadaisical attitude towards such content. However, it has not specified penalties for non-compliance.
2. Meituan Ditches Delivery Penalty Amid China’s Algorithm Crackdown
Chinese food delivery giant Meituan will phase out a late delivery penalty in 2025 amid a crack down by regulators on internet platforms’ misuse of algorithms.
The Beijing-based company said it would continuously optimise its management practice and explore fairer and more human-centric incentive mechanisms after it abolishes the fine, according to a notice published on its website. The move aims to incentivise food delivery riders for on-time deliveries instead of penalising them, the statement added.
The policy shift was announced as part of a raft of changes to the company’s overarching algorithms that determine a series of operational procedures for its army of couriers, from the sequence of picking up orders to the routes they take, to ensure speedy delivery.
3. China’s Short Video Market May Have Peaked as User Numbers Fall for First Time
China’s short video market appears to have peaked, as the number of users – on apps led by ByteDance-owned Douyin, Kuaishou Technology and Tencent Holdings’ WeChat – shrunk for the first time, according to an industry report.
The overall number of short video app users in China reached 1.05 billion at the end of June, about 300 million fewer than the total in December 2023, according to a report by broadcasting regulator the National Radio and Television Administration and the short video and film committee under the China Federation of Video and Television Associations.
That data reflects a significant slide in the short video market, which saw a steady increase in users over the past few years – from 648 million in 2018 to more than 1 billion in 2023 – that enabled platforms led by Douyin, the Chinese sibling of TikTok, to generate hefty revenue through targeted advertising, live streaming and e-commerce.
4. Alibaba Sells Retailer Sun Art for US$1.7 Billion to Refocus on Ecommerce
Alibaba Group Holding agreed to sell its entire stake in Sun Art Retail Group, China’s largest hypermarket operator, for HK$13.1 billion (US$1.7 billion), as the e-commerce giant scales back its bricks-and-mortar presence.
The deal between Alibaba and Chinese private-equity firm DCP Capital was reached on the last day of 2024, involving the disposal of the Hangzhou-based company’s interest in Sun Art at HK$1.75 per share, according to a New Year’s Day filing to the Hong Kong stock exchange. Alibaba is expected to book a 13-billion yuan (US$1.8 billion) loss attributable to its shareholders when the sale is completed.
5. Alibaba’s Freshippo Records 9 Straight Months of Profit, CEO Says
Freshippo, Alibaba Group Holding’s grocery chain known as Hema in its home market, was profitable for nine straight months in 2024, the unit’s chief executive Yan Xiaolei said in an internal letter.
The supermarket opened 72 new stores across China in the past year, averaging one every five days, the most in five years, according to Yan, who assumed the CEO role in March. The additions brought the total number of Freshippo outlets to 400, spanning 50 cities, Yan said in the letter, which was seen by the Post and confirmed by employees. A third of the new stores were located in non-first-tier cities, according to a report from Chinese media Jiemian.
6. Amazon Asks Chinese Sellers Not to Offer Cheaper Prices on Temu
Amazon has asked some Chinese cross-border merchants to stop offering goods at a cheaper price on rival platform Temu, according to several sellers, amid intensifying competition from the aggressive budget retailer owned by mainland e-commerce giant PDD Holdings.
The local office of US-based Amazon recently informed the managers of some top-selling Chinese brands that they should not list identical items at a lower price on Temu, merchants said. It comes after the US retailer started tracking product pricing on Temu. Sellers whose Amazon listings were found to be more expensive were kicked out of the Amazon Featured Offer programme, according to a merchant who sells furniture on both platforms and declined to be identified for fear of reprisal.
7. Alipay Launches A New Generation of AI Visual Search Product ‘Explore’
Alipay has launched a new generation of AI visual search product “Explore”, based on self-developed multimodal large model technology, which can “explore everything with the eye of AI” and provide generative search services.
It is reported that this product can facilitate users to identify flowers, plants, pets and trendy toys through the camera, provide on-the-go travel explanations, check product and drug details, as well as offer fun interpretations of cute pet photos and baby photos without worrying about captions. Currently, this product has been launched on Alipay. It can also be quickly accessed in the Zhi Xiaobao App.
Since 2024, Alipay has successively released independent AI applications such as “Zhi Xiaobao” and intelligent body development platforms. This time, focusing on the AI visual multimodal track to launch “Explore”, marks that Ant Group’s AI strategy centered on Alipay is accelerating continuously.
8. Xiaohongshu Launches AI Search Product ‘Dian Dian’
Chinese social media platform Xiaohongshu has launched a new AI search tool named “Dian Dian,” now available on various app stores.
The tool serves as a vertical AI search assistant, focused on lifestyle topics like food, shopping, travel and entertainment. Users can ask questions using photos, and Dian Dian delivers video responses with summary results from the internet. It also offers location-based recommendations for travel and dining.
9. Xiaomi Is Building A GPU Cluster and Will Heavily Invest in AI Large Models
Xiaomi is currently building its own GPU cluster and will heavily invest in AI large models. Xiaomi‘s large model team already has 6,500 GPU resources at the time of establishment.
According to a source, the plan has been implemented for several months, with Lei Jun playing an important leadership role. ‘In terms of AI hardware, the most crucial aspect is smartphones rather than glasses. It is impossible for Xiaomi not to go all-in in this field.’ Xiaomi‘s emphasis on AI large models had shown signals earlier.
10. Ant Group Announces Organizational Restructuring
The current President of Ant Group, Han Xinyi, has sent out a company-wide letter announcing a new round of organizational changes within Ant Group.
In the announced restructuring plan, Ant Group has set up two major business groups: the Digital Payment Group and the Alipay Business Group, continuing to implement Alipay’s two major business segments, namely digital payments and digital connectivity, and AIFirst strategies. These groups will operate under a rotating presidency system, with each president serving for six months. The first rotating presidents, appointed until June 30, 2025, are Qin Yi for the Digital Payment Business Group and Pu Tian for the Alipay Business Group.
Previously, it was officially confirmed that Han Xinyi would take on the role of CEO of Ant Group starting from March 1, 2025. This reorganization marks the first significant move made by Han Xinyi since the announcement of his upcoming CEO position.
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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