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. ByteDance Offers More Generous Employee Share Buy-Back
Social media giant ByteDance, owner of hit short video platforms TikTok and Douyin, has initiated a new round of share buy-backs for employees that price the equity nearly 6 percent higher than in the previous round.
The latest repurchase program, which is initially open to employees based in the United States, priced the vested restricted stock units (RSUs) at U$181 per share, up almost 6 percent from US$171 during the round held in spring this year, according to a person familiar with the matter. For former employees, the buy-back rate has been pegged at US$154 per share, 5.5 percent higher than US$146 in the previous round. The more generous buy-back plan suggests that the company’s valuation is growing in the private market, along with its revenue and the popularity of its apps.
2. ByteDance Reportedly Seeking a $9.5 Billion Loan
The overseas operations of social media giant ByteDance, owner of hit short video platforms TikTok and Douyin, are expected to receive a boost from its reported plan to borrow US$9.5 billion from banks.
That loan would represent the biggest dollar-denominated corporate facility in Asia, excluding Japan. Citigroup, Goldman Sachs, and JPMorgan are the coordinators of the latest financing, which carries a tenor of three years and can be extended to a maturity of up to five years. The proceeds will be partly used to refinance a US$5 billion dual-tranche facility the group had raised in 2021 and for working capital purposes.
3. Alibaba to Allow Tencent’s WeChat Pay for Taobao and Tmall Purchases in Landmark Deal
Alibaba Group Holding has announced that China’s largest online marketplaces, Taobao and Tmall, will soon accept Tencent Holdings’ WeChat Pay for purchases in a landmark cooperation deal that had long separated the ecosystems of the country’s biggest technology firms.
Alibaba’s Taobao and Tmall issued notices on their platforms on Wednesday to solicit feedback from merchants about accepting WeChat Pay, known as Weixin Pay in China, as an additional payment method, paving the way for Chinese consumers to use the country’s second-largest mobile payment system on the popular e-commerce sites, in addition to Alipay, the system run by Alibaba fintech affiliate Ant Group. The announcement, which marks the biggest move yet in tearing down the walls between the two companies’ platforms, comes days after China’s market regulator ended its antitrust review of Alibaba, giving it full recognition years after its US$2.8 billion fine in 2021.
4. Alibaba.Com Launches Credit Card For Use On Wholesale Marketplace
Alibaba.com, a business-to-business cross-border e-commerce platform run by Alibaba Group Holding, has launched a credit card targeting buyers in the United States, as the e-commerce giant seeks to attract customers and boost sales there.
The Alibaba.com Business Edge Credit Card rewards small businesses for sourcing from suppliers on the platform. The card, the first of its kind for Alibaba.com, was introduced in partnership with Mastercard and Cardless, a San Francisco-based fintech agency that develops co-branded credit cards. The move is part of broader efforts by the Hangzhou-based company to expand its international e-commerce footprint and bring in new users from overseas markets amid slow business growth at home.
5. Alibaba Sets Up New ‘Digital Technology’ Firm Under Taobao and Tmall Group
Alibaba Group Holding has set up a new “digital technology” company under its main e-commerce unit, Taobao and Tmall Group (TTG), with a registered capital base of 10 million yuan (US$1.4 million), according to Chinese business registry platform Tianyancha.
Established on August 23, the new firm called “Hangzhou Taobao and Tmall Digital Technology Co” will be involved in a wide range of businesses, including the import and export of goods; sales of food, daily groceries, outdoor products, and household appliances; and technology-related services such as software development and tech transfer. While those may cover the typical scope of operations for an e-commerce company registered on the mainland, the new outfit appears to reflect how TTG could pursue further business expansion or sharpen its focus on certain activities.
6. Pinduoduo Updates Rules to Kick Out Sellers of Shoddy Products
Chinese e-commerce platform Pinduoduo will start removing sellers of counterfeit products from its multi-billion yuan subsidy program, as its operator – Temu owner PDD Holdings – and major rivals make operational changes in response to Beijing’s “anti-involution” call.
Pinduoduo has updated its rules for merchants taking part in its subsidy program, stating that the platform would take punitive measures, including permanent bans, on those selling “fake products” or other goods that fail to meet quality standards. Pinduoduo rolled out its multibillion-yuan subsidy program in mid-2019, a move that has helped the latecomer solidify its position in China’s small towns, where consumers tend to be more price-sensitive.
The latest change appears to target so-called white-label products – extremely cheap products of poor quality – which the platform has been relying on to quickly gain market share amid a trend of consumption downgrading over the past few years.
7. PDD Returns Some Service Fees to Sellers After a US$1.4 Bln Pledge
Chinese budget e-commerce platform Pinduoduo, run by Temu owner PDD Holdings, is offering partial refunds of service fees to merchants, after company executives promised to waive 10 billion yuan (US$1.4 billion) in charges.
The main point of contention arose over so-called technical service fees, which are essentially sales commissions charged by Pinduoduo for merchants to use the platform. Sellers were displeased that the fees were non-refundable even when customers canceled an order and requested a refund. After a recent policy change, Pinduoduo has begun to return some service fees to merchants who took part in certain promotional campaigns, they said. The platform has also adjusted the fee structure so that sellers are charged the same rates whether a customer paid outright or opted to “buy now, pay later”.
8. Shanghai Bets On The Live-Streaming Economy to Boost Consumption
The Shanghai municipal government has said it plans to boost the city’s live-streaming sector, targeting nearly US$85 million in online sales by 2026, as the Chinese financial hub looks to raise consumer spending in a lackluster national economy.
Under the “Three-Year Action Plan for High-Quality Development of Shanghai’s Live-Streaming Economy (2024-2026)”, the local sector by 2026 should generate an annual gross merchandise value of 600 billion yuan (US$84.6 million), establish 10 top-tier live-streaming platforms, foster a batch of multichannel networks (MCNs) and brands, and come up with a hundred “distinctive scenarios” for live-streaming. The new three-year plan, which builds on the previous 2021-2023 program, highlighted the role of the live-streaming industry in encouraging consumer spending and promoting Shanghai’s image.
9. JD.Com Initiates Global Expansion, Launches “Global Sales” in Four Countries
According to a report from China’s Caijing magazine, JD.com‘s global sales business has newly launched in the United States, Japan, Singapore, and Malaysia, with the performance requirement being to break even.
JD.com is hoping for an increase in orders from “Black Friday”. The business plans to continue expanding into markets such as Europe, North America, and Oceania. In August 2024, JD.com established a new “Global Sales Business Department” under its “Overseas Business Department”, responsible for this business. The Overseas Business Department BU (Business Unit) is directly under JD.com Group and is parallel to JD Retail, JD Logistics, JD Technology, and other BGs (Business Groups), and currently has no head. The head of the Global Sales Business Department is Li Yayun. Li Yayun joined JD.com in 2007 and has served as the head of JD.com‘s legal team and the group’s Chief Compliance Officer.
10. ByteDance Raises Up to $600 Million in Funding For Its Subsidiary Dongchedi
According to reports citing informed sources, ByteDance is raising up to $600 million in funds for its automotive information and transaction platform ‘Dongchedi’.
According to sources, General Atlantic, HongShan China, KKR & Co., and Gaorong Capital are the joint investors in this round of financing; the valuation of Dongchedi is close to $3 billion. ByteDance initiated the plan to spin off Dongchedi less than a year ago. In January this year, it was reported that ByteDance would spin off Dongchedi to become an independent company. In June, it was said that ByteDance plans to raise $700 million to $800 million for Dongchedi in preparation for an IPO of that part of the business.
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.
"China Digital Digest Weekly: Exploring the Chinese Digital Landscape" offers insightful updates on the rapidly evolving digital scene in China. From advancements in e-commerce to breakthroughs in AI technology, this digest provides a comprehensive overview of the latest trends shaping the industry. Stay informed about innovations, policies, and market movements driving China's digital growth. Whether you're studying these trends or seeking assignment help Australia, this resource is a must-read for understanding China's digital transformation.