China Digital Digest Weekly: Exploring the Chinese Digital Landscape

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. China’s Internet Users Near 1.1 Billion, Driven By Short Videos

https://www.bangkokpost.com/life/tech/2856536/chinas-internet-users-near-1-1-billion-driven-by-short-videos-and-mobile-payments

China’s internet users approached 1.1 billion at the end of June, up 7.42 million from December, as a plethora of online entertainment options lured the young and old into joining the world’s largest online population, the latest government figures showed.

Around 78 percent of mainland Chinese citizens were connected to the Internet as of June, according to a report released on Thursday by the China Internet Network Information Centre (CNNIC), a state agency. Over 37 percent of new internet users were drawn to short video apps, the report said. Entertainment and social needs were the main drivers of internet usage in China. Some 95 percent of web users in the country had viewed short videos, which are available on popular platforms, including ByteDance’s Douyin, its rival Kuaishou, as well as Tencent Holdings’ multipurpose app WeChat.

2. Baidu Blocks Google And Bing From Scraping Content Amid Demand for AI Data

https://www.artificialintelligence-news.com/news/baidu-restricts-google-bing-from-scraping-content-ai-training/

Chinese internet search giant Baidu appears to have started blocking the online search engines of Alphabet’s Google and Microsoft’s Bing from scraping content derived out of the mainland firm’s Wikipedia-style service, a Post survey found.

A recent update of Baidu Baike’s robots.txt – a file that tells search engine crawlers which uniform resource locators, commonly known as web addresses, can be accessed from a site – has outright blocked the ability of the Googlebot and Bingbot crawlers to index content from the Chinese platform. That update appears to have been made sometime on August 8, according to records on the internet archive service the Wayback Machine. It also showed that earlier on the same day Baidu Baike still allowed Google and Bing to browse and index its online repository of nearly 30 million entries, with only part of its website designated as off-limits.

3. ByteDance’s CapCut, Doubao Top Global AI App Downloads, Outpacing ChatGPT

https://www.livarava.com/finance/p/5339581

Social media giant ByteDance’s CapCut and Doubao led global artificial intelligence (AI) app downloads in July, according to industry research firm Unique Capital, in a sign that the TikTok owner’s generative AI (GenAI) push is paying off.

Video-editing app CapCut recorded 38.42 million downloads in July, while chatbot Doubao achieved 27.45 million downloads to outperform OpenAI’s ChatGPT, which had 19.81 million in the same period. Known as JianYing in mainland China, CapCut – an editing software with GenAI features widely adopted by TikTok, Douyin, and Instagram users – had 323 million monthly active users (MAUs) in July, the report said. Doubao, launched in August last year, had 30.42 million MAUs in July, compared to ChatGPT’s 172 million in the same period.

4. JD.Com Lures Overseas Chinese Shoppers With Faster Shipping

https://jdcorporateblog.com/jd-com-expands-global-sales-with-enhanced-shipping-options-and-free-delivery-in-the-us-japan-and-singapore/

JD.com is launching five-day international shipments for customers in the US, Japan and Singapore, as the Chinese e-commerce giant fights against rivals like Alibaba Group Holding, Shein, and Temu for a bigger slice of the overseas online shopping market.

Customers in those countries, who order from branded shops run directly by JD.com on its platforms, can now receive their purchases in as little as five days, while base shipping fees in the US have been slashed by half to 58 yuan (US$8.14). JD.com’s overseas shopping services target mainly Chinese users living abroad. The move comes as the world’s second-largest economy struggles with souring consumer sentiment.

As domestic shoppers keep their purse strings tight, Chinese platforms – from PDD Holdings’ budget shopping site Temu to Alibaba’s global marketplace AliExpress – have turned their focus internationally, following in the footsteps of China-originated fast-fashion app Shein.

5. PDD’s Stock Sinks 25% After Profit Warning Despite Record Revenue in June Quarter

https://www.theglobeandmail.com/investing/markets/stocks/PDD-Q/pressreleases/28289078/pdd-stock-sinks-on-revenue-warning-should-investors-buy-the-dip/

PDD Holdings’ stock plunged 25 percent last week after it warned of uncertainty ahead and downward pressure on profits amid increasing competition, despite reporting record revenue for the second quarter.

The parent company of domestic online e-commerce platform Pinduoduo and cross-border retailer platform Temu saw its revenue reach a record 97 billion yuan (US$13.6 billion) in the June quarter, up 86 percent year on year, but lower than the consensus analysts’ forecast of 99.9 billion yuan compiled by Bloomberg. Net profit soared 144 percent to 32 billion yuan, beating the forecast of 27.5 billion yuan. PDD chairman and co-CEO Chen Lei said on the earnings call that the company has no plans to buy back shares or make dividend payments to shareholders in coming years as it has to save the cash for investments, dampening investor appetite for the stock.

6. ByteDance Establishes a Large Model Research Institute

https://www.aibase.com/news/11306

According to local Chinese media reports, ByteDance is secretly preparing to establish a large model research institute and is actively recruiting talent.

Insiders reveal that several AI experts from outside the company have already joined the large model research institute and report directly to Zhang Yiming. Starting from last year, ByteDance has gradually disclosed its progress on large model work. In the past, the talent for ByteDance’s large model team primarily came from within the company’s business lines, including search, Douyin, Xigua, TikTok, etc. It was rare for the company to recruit top-tier talent externally. However, the talent strategy of the large model research institute differs from the past, as it is making significant efforts to recruit talent from outside the company.

7. UK Ecommerce Platform Fruugo Opens for Chinese Sellers

https://pandaily.com/uk-e-commerce-platform-fruugo-opens-for-chinese-sellers/

UK-based e-commerce platform has Fruugo announced that it will hold its first seller conference to relaunch the Chinese market on September 12 this year, and will officially restart its recruitment of sellers at the conference. It is worth mentioning that as early as 2019, Fruugo had opened its platform to Chinese sellers, but it was not until 2023 that Fruugo started to pay attention to the Chinese market.

However, it is worth noting that Fruugo launched a policy in September 2023 to limit the initial upload of SKUs for new accounts, which poses a significant challenge for sellers who deal with a large number of products. At the same time, since Fruugo’s main source of traffic is Google Shopping, the Google Merchant Center is also a website that Fruugo sellers must pay close attention to.

8. Douyin Launches Its Fourth Search App

https://pandaily.com/douyin-launches-its-fourth-search-app/

TikTok owner ByteDance has launched a stand-alone app in China to search for short video content published on Douyin, bringing it into closer competition with internet search giant Baidu.

Douyin Search, which draws on the popularity of the Chinese version of TikTok, became available for download on various domestic Android app stores. The app’s homepage has a search bar at the top, followed by a few trending topics. Developed by Beijing Douyin Technology, the app markets itself as “real and reliable”, offering “strong search and accurate recommendations” from the short video platform Douyin. The app is also powered by ByteDance’s artificial intelligence (AI)-based recommendation system.

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.