Steady Revenue Growth Amid a Competitive Landscape

In the three months ending September 30, JD.com achieved net revenues of RMB 260.4 billion (USD 37.1 billion), marking a year-on-year increase of 5.1%. The growth was fueled by a resurgence in electronics and home appliances, alongside sustained momentum in general merchandise categories.

JD.com’s Chief Executive Officer Sandy Xu attributed this performance to the company’s ability to adapt to shifting consumer demands.

“In the third quarter, we played a crucial role in China’s government-backed trade-in programs, leveraging our advanced supply chain capabilities. This, coupled with robust user response to our Singles Day promotions, has strengthened our market position and laid the groundwork for sustainable growth,” Xu remarked.

Profits and Margins Reflect Operational Strength

JD.com recorded a significant boost in profitability. Net income attributable to shareholders surged by 47.8% year-over-year to RMB 11.7 billion (USD 1.7 billion), while operating income rose by 29.5% to RMB 12 billion (USD 1.7 billion). The company’s operating margin improved to 4.6%, compared to 3.8% during the same period last year.

This profitability was driven by efficiency gains across its extensive logistics network and economies of scale, which helped offset increased marketing and fulfillment expenses.

Strategic Business Initiatives Drive Engagement

JD.com’s Q3 performance was underpinned by several key initiatives that highlight its commitment to innovation and expansion across diverse sectors:

1. Government Trade-In Program: The company emerged as a pivotal player in China’s trade-in initiatives, operational in over 20 provinces. By integrating its logistics expertise, JD.com enabled customers to seamlessly trade in old appliances and electronics while benefiting from government subsidies. This program has been well-received by users and showcases the company’s ability to adapt to policy-driven market opportunities.
2. Fashion Expansion: Demonstrating its commitment to capturing the high-value fashion segment, JD.com welcomed flagship stores from luxury brands such as Balenciaga and Saint Laurent. This move not only expands JD.com’s product portfolio but also enhances its appeal to fashion-conscious consumers, fostering a new wave of growth in apparel and accessories.
3. Supermarket Milestone: Marking its 10th anniversary, JD Supermarket has become a cornerstone of the company’s retail strategy. With a focus on supply chain efficiency and competitive pricing, JD Supermarket continues to strengthen its partnerships with key brands, ensuring high-quality offerings for consumers.
4. Healthcare Advancements: JD Health made strides in enabling online payments through individual medical insurance accounts, now available in 12 cities. This innovation broadens access to healthcare services for millions, further embedding JD.com into the daily lives of its users.
5. Logistics Integration with Taobao and Tmall: In a notable development, JD Logistics reached a significant agreement with Alibaba’s Taobao and Tmall platforms. This integration allows merchants and consumers to track JD shipments directly within Taobao and Tmall apps, showcasing JD.com’s leadership in logistics excellence.

Commitment to ESG and Shareholder Returns

JD.com has maintained a strong focus on sustainability, achieving higher scores in the 2024 S&P Global Corporate Sustainability Assessment. The company’s efforts span governance improvements, employee development, and supplier management, positioning it as a global leader in retail ESG practices.

In terms of shareholder value, JD.com completed its USD 3 billion share repurchase program, reducing outstanding shares by 8.1% as of September 30, 2024. The company has now launched a new USD 5 billion share buyback initiative, reflecting its confidence in long-term growth.

Looking Ahead

Ian Su Shan, Chief Financial Officer of JD.com, expressed optimism about the company’s trajectory. “This quarter’s results highlight our commitment to delivering value through efficiency and innovation. Our expanding ecosystem and competitive pricing strategies will ensure continued growth and engagement with users and partners alike.”

JD.com’s Q3 results underscore its resilience in a challenging economic environment. As the company continues to innovate and scale its operations, it remains a key player in shaping the future of China’s e-commerce and logistics sectors.

JD.com Reports Significant Profit Growth in Q2

JD.com reported its unaudited financial results for the second quarter of 2024, showcasing a solid performance in its core business areas.

Despite a modest 1.2% year-on-year increase in net revenues, the company demonstrated significant profitability improvements and strategic business growth, particularly in its retail, health, and logistics segments.

In the second quarter, JD Retail strengthened its market position by entering into strategic partnerships with prominent brands like Xiaomi, Lenovo, OPPO, and luxury fashion houses including MONCLER and alexanderwang.

These collaborations focused on smart devices, intelligent supply chain management, and AI integration, underscoring JD.com’s commitment to enhancing user experience and expanding its platform ecosystem.

JD Health continued to innovate by partnering with major pharmaceutical companies to debut new and specialty drugs online, such as the Alzheimer’s treatment drug Leqembi®. These efforts highlight JD Health’s advanced omni-channel supply chain and service capabilities.

JD Logistics, another key segment, saw a significant improvement in profitability due to continued optimization of its network layout, algorithm-based vehicle scheduling, and product structure. These enhancements contributed to cost reductions and efficiency gains, further solidifying JD.com’s leadership in China’s logistics industry.

Financial Highlights

JD.com reported a net revenue of RMB291.4 billion (US$40.1 billion) for the second quarter of 2024, a slight increase from RMB287.9 billion in the same period last year.

Despite the modest revenue growth, the company achieved significant improvements in profitability metrics. Cost of revenues slightly decreased by 0.4% to RMB245.5 billion, contributing to a gross margin increase of 137 basis points year-on-year to 15.8%.

Operating income for the quarter rose by 27.0% to RMB10.5 billion (US$1.4 billion), with an operating margin of 3.6%, up from 2.9% in Q2 2023. On a non-GAAP basis, operating income increased by 33.7% to RMB11.6 billion (US$1.6 billion), with a non-GAAP operating margin of 4.0%.

Net income attributable to JD.com’s ordinary shareholders saw a remarkable 92.1% year-on-year increase, reaching RMB12.6 billion (US$1.7 billion), while non-GAAP net income attributable to shareholders rose by 69.0% to RMB14.5 billion (US$2.0 billion).

This strong profit growth was reflected in the diluted net income per ADS, which nearly doubled, increasing by 97.3% to RMB8.19 (US$1.13).

JD.com also reported robust cash flow figures, with operating cash flow for the twelve months ended June 30, 2024, increasing by 40.9% to RMB74.0 billion (US$10.2 billion). Free cash flow, excluding the impact from consumer financing receivables, surged by 66.2% to RMB55.6 billion (US$7.7 billion).

Additionally, the company’s ongoing share repurchase program resulted in the buyback of approximately 224.3 million Class A ordinary shares during the first half of 2024, representing around 7.1% of its outstanding shares as of December 31, 2023. This move, coupled with JD.com’s record-high operating and net profits, underscores the company’s commitment to delivering long-term value to its shareholders.

Q1 2024

JD.com reported its unaudited financial results for Q1 2024, alongside significant operational developments.

Strategic and Operational Highlights

CEO Sandy Xu emphasized JD.com’s focus on improving user experience, leading to significant growth in active users and engagement. The company continues to provide a superior combination of selection, speed, quality, and price, resonating with consumers nationwide.

AI in Livestreaming

On April 16, 2024, JD.com introduced an AI digital representative of founder Richard Qiangdong Liu for its livestreaming rooms. This innovation attracted over 20 million views within the first hour, marking a significant milestone in AI integration within e-commerce.

Healthcare Expansion

JD Health partnered with pharmaceutical giants like Pfizer and Sanofi to debut new drugs online, enhancing accessibility and upgrading its one-stop medicine retailing and healthcare services through collaborations with Shanghai Pharmaceuticals and Daiichi Sankyo.

Logistics Growth

JD Logistics expanded its support for Chinese brands globally. In Q1 2024, it provided integrated supply chain services to MINISO stores in Australia and Malaysia, showcasing JD’s international warehousing and fulfillment capabilities.

Financial Highlights

• Revenue: Net revenues for Q1 2024 were RMB260.0 billion (US$36.0 billion), a 7.0% increase from Q1 2023.
• Income from Operations: Reached RMB7.7 billion (US$1.1 billion), up 19.8% from Q1 2023.
• Net Income: Net income attributable to ordinary shareholders was RMB7.1 billion (US$1.0 billion), up 13.9% from Q1 2023.
• Earnings per Share: Diluted net income per ADS was RMB4.53 (US$0.63), a 15.3% increase from Q1 2023.

Between January 1 and May 15, 2024, JD.com repurchased 98.3 million Class A ordinary shares (49.2 million ADSs) for US$1.3 billion, representing 3.1% of its outstanding shares as of December 31, 2023.

Financial Highlights

• Revenue: Reached RMB236.5 billion (USD33.7 billion), marking a 5% year-over-year increase.
• Net Income: Surged 63% year-over-year to RMB43.5 billion (USD6.2 billion), driven by equity investment gains and operational efficiency improvements.
• Adjusted EBITA: Decreased 5% year-over-year to RMB40.6 billion (USD5.8 billion), reflecting Alibaba’s strategic investments in e-commerce and technology.
• Free Cash Flow: Declined 70% to RMB13.7 billion (USD1.96 billion), attributed to increased investments in cloud infrastructure and strategic refunds to merchants.

E-Commerce Growth: Strengthening Core Operations

The Taobao and Tmall Group remained central to Alibaba’s business:

• Revenue: Grew modestly to RMB93 billion (USD13.3 billion), supported by double-digit order growth and increased customer management service revenues.
• 88VIP Membership: Increased by double digits to 46 million, underscoring its role in driving loyalty and higher purchase frequencies.

Strategic changes, including the elimination of Tmall’s annual service fees and the introduction of transaction-based software service fees, were pivotal in enhancing the platform’s competitive edge.

Read more on Double 11 performance, China’s largest annual shopping festival.

Cloud Intelligence Group: AI-Driven Expansion

• Revenue: Grew 7% year-over-year to RMB29.6 billion (USD4.2 billion).
• AI Leadership: Achieved triple-digit growth in AI-related revenues for the fifth consecutive quarter. The Qwen large model family, including its open-source Qwen 2.5 series, positioned Alibaba as a leader in China’s public cloud and AI infrastructure sectors.
• Operational Enhancements: Introduced cost-efficient AI services and upgraded infrastructure to support scalability and performance.

Global Commerce Expansion

The Alibaba International Digital Commerce Group achieved a robust 29% revenue increase year-over-year to RMB31.7 billion (USD4.5 billion):

• AliExpress and Trendyol: Continued to gain traction in Europe and the Gulf region, leveraging local inventory and cross-border logistics efficiencies.
• Cross-Border Focus: The AliExpressDirect model improved fulfillment speeds and customer satisfaction, strengthening its competitive positioning.

Cainiao Logistics and Local Services Growth

Cainiao Smart Logistics Network delivered 8% revenue growth to RMB24.6 billion (USD3.5 billion), supported by enhanced cross-border fulfillment capabilities.

Local Services Group reported:

• Revenue: Increased by 14% to RMB17.7 billion (USD2.5 billion).
• Operational Efficiency: Losses narrowed significantly, benefiting from scaled operations and marketing service growth.

Strategic Share Repurchase Program

Alibaba repurchased shares worth USD4.1 billion during the quarter, reducing its outstanding shares by 2.1% since June 2024. This initiative reflects Alibaba’s commitment to shareholder value, with USD22 billion remaining in its repurchase authorization through March 2027.

Alibaba Group highlights for Q2 2024

Alibaba Group released its financial results for the quarter ending June 30, 2024, showcasing both growth in strategic areas and challenges in maintaining profitability. The company continues to focus on its core businesses, particularly cloud computing and international expansion, while navigating a complex economic landscape.

Business Overview

Cloud Intelligence Group Sees Strategic Expansion Alibaba’s Cloud Intelligence Group reported notable year-on-year growth, driven by increasing demand for cloud services across sectors such as finance, retail, and logistics.

The expansion of AI-powered solutions and cloud infrastructure remains a cornerstone of Alibaba’s strategy to diversify its revenue streams and position itself as a leader in the global cloud market.

The international digital commerce segment recorded solid performance, underpinned by Alibaba’s strategic investments in key markets.

The company’s international operations, including platforms like Lazada and AliExpress, demonstrated strong user growth and increased transaction volumes, particularly in Southeast Asia and Europe. These regions are becoming increasingly significant as Alibaba seeks to reduce its reliance on the domestic Chinese market.

During the quarter, Alibaba continued to invest heavily in technological innovation, focusing on enhancing its AI, machine learning, and data analytics capabilities.

These investments are aimed at driving long-term growth and improving operational efficiency across all business units. Additionally, Alibaba’s commitment to building a robust technological infrastructure reflects its strategy to maintain a competitive edge in the rapidly evolving digital economy.

Financial Highlights

In the June quarter of 2024, Alibaba Group reported a revenue of RMB243.2 billion, a 4% year-on-year increase. While this growth reflects the company’s strong positioning in cloud computing and international commerce, the overall revenue expansion was moderate, indicating potential challenges in its core domestic market.

Net income for the quarter declined to RMB34.3 billion, reflecting a significant impact from increased spending on technology development and international market expansion. This decline suggests that while Alibaba invests for future growth, these investments weigh on current profitability.

Alibaba’s adjusted EBITDA stood at RMB52.8 billion, showing resilience in operational efficiency despite broader market challenges. Free cash flow was robust at RMB31.9 billion, underscoring the company’s strong cash-generating ability and providing a buffer for continued investment in growth initiatives.

Alibaba’s Strategic Investments Yield Mixed Results in Q1 2024

Alibaba Group Holding Limited reported a robust performance for the quarter ending March 31, 2024, showcasing a strategic rebound and growth across its diverse business segments.

The e-commerce giant’s focus on enhancing customer experience and strategic investments has resulted in notable year-over-year growth, despite challenging market conditions.

Strategic Initiatives and Business Review

Alibaba’s strategic initiatives have significantly impacted key sectors, including e-commerce, cloud computing, digital media, and logistics. The company’s focus on improving user experience, technological advancements, and expanding international commerce has paid off.

• E-commerce: Alibaba’s Taobao and Tmall Group saw a 4% year-over-year revenue growth, reaching RMB 93.2 billion, driven by a 5% increase in customer management revenue. The group also reported double-digit growth in online GMV and orders.
• Cloud Computing: The Cloud Intelligence Group reported a 3% revenue increase, reaching RMB 25.6 billion, with a notable 45% rise in adjusted EBITA. This growth was driven by higher adoption of public cloud services and AI products.
• International Commerce: The Alibaba International Digital Commerce Group experienced a 45% revenue increase to RMB 27.4 billion, thanks to strong performance in cross-border e-commerce, particularly from AliExpress.
• Logistics: Cainiao Smart Logistics Network’s revenue surged by 30% to RMB 24.6 billion, primarily due to increased demand for cross-border fulfillment services.
• Local Services Group: Reported a 19% revenue increase to RMB 14.6 billion, driven by Ele.me and Amap’s strong order growth.
• Digital Media and Entertainment Group: Revenue slightly decreased by 1% to RMB 4.9 billion, despite growth in Alibaba Pictures and Damai.

Financial Highlights

Alibaba’s financial results for the March quarter demonstrated resilience and strategic growth:

• Revenue: The company reported a 7% year-over-year increase in revenue, totaling RMB 221.9 billion (US$30.7 billion).
• Income from Operations: Despite a 3% decline, income from operations stood at RMB 14.8 billion (US$2.0 billion).
• Net Income: Net income attributable to ordinary shareholders decreased by 96% to RMB 919 million (US$127 million), mainly due to investment losses.
• Adjusted EBITA: Non-GAAP adjusted EBITA decreased by 5% to RMB 24.4 billion (US$3.3 billion).
• Share Repurchases and Dividends: Alibaba repurchased US$12.5 billion worth of shares in fiscal 2024 and announced a US$4.0 billion dividend.

Alibaba’s Q1 2024 results highlight the success of its strategic initiatives and investments in enhancing customer experience and technological infrastructure. The company’s focus on e-commerce, cloud computing, and international expansion positions it well for future growth. As Alibaba continues to innovate and adapt, it remains committed to delivering value to shareholders and capturing new market opportunities.

On September 30, JD.com announced its latest move in Hong Kong, committing an initial investment of RMB 1.5 billion (approx. USD 205 million) with no upper limit set for future funding. The investment will focus on price subsidies, logistics subsidies, and service enhancements.

According to JD.com, Hong Kong users can now enjoy free shipping for self-operated products with purchases over RMB 299, covering categories such as electronics, home appliances, fashion, and beauty products, with delivery as fast as the next day. This marks a significant expansion of JD’s services in the Hong Kong region.

Meanwhile, Alibaba, JD’s long-time rival, has also made strategic moves in Hong Kong. Recently, Alibaba announced that Taobao would invest RMB 1 billion (USD 137 million) to make Hong Kong a free shipping zone. In August, Taobao started piloting free shipping for apparel in the region, and this recent development expands free shipping across all product categories.

The Battle for the Hong Kong Market

In recent years, JD.com and Alibaba have continually funneled large amounts of resources into their Hong Kong operations, aiming to capture a market that is growing at a much faster rate than the mainland’s e-commerce sector. Hong Kong’s e-commerce market has been expanding rapidly, with the Hong Kong Special Administrative Region government reporting that online sales accounted for nearly 10% of total retail sales in 2022, an increase of 21% year-on-year.

The allure of this fast-growing market is undeniable for both platforms, but the Hong Kong market also serves as a crucial stepping stone for their broader international business ambitions. For JD.com and Alibaba, the success of their logistics and e-commerce operations in Hong Kong will pave the way for further expansion into global markets.

Logistics: The Backbone of E-commerce Expansion

JD.com’s recent RMB 1.5 billion investment in Hong Kong will be channeled primarily into improving logistics infrastructure and service offerings. This includes subsidies for product prices and shipping costs, as well as optimizing delivery services.

As part of its Hong Kong expansion, JD.com has introduced free shipping services for various categories, with no time or product restrictions. The company has also launched a special “One-Item Free Shipping” section, offering free delivery on selected products such as small home appliances and fast-moving consumer goods.

In June 2023, JD Logistics established its first supply chain industrial base in Hong Kong. This supply chain hub allows JD.com to provide flexible storage solutions, including temperature-controlled warehouses for different product categories. The new facility has significantly boosted order volumes, with shipments from JD’s self-operated warehouses in Hong Kong rising more than 10-fold compared to last year.

Alibaba, on the other hand, has also made logistics a priority. In late September, the company announced a RMB 1 billion investment to expand its “Free Shipping to Hong Kong” initiative, which covers all product categories. As part of this initiative, consumers can enjoy free shipping on purchases over RMB 99, with delivery times reduced to just 3-4 days.

Both companies are addressing long-standing logistical challenges in Hong Kong, such as the high cost of land and labor for last-mile delivery services. By focusing on building a robust logistics network, JD.com and Alibaba are positioning themselves to handle the growing demands of the local market while laying the groundwork for future international expansions.

Hong Kong as a Gateway to Global Expansion

As growth in mainland China’s internet sector slows and user acquisition plateaus, expanding internationally has become more urgent for Chinese tech giants. Platforms like JD.com and Alibaba are now turning their attention to overseas markets, where they aim to replicate their domestic successes.

Hong Kong serves as an essential testing ground for these expansion plans. For instance, Meituan’s food delivery service, Keeta, quickly became the leading food delivery platform in Hong Kong, capturing 44% of the market within months of its launch. Meituan has since used its Hong Kong success to explore opportunities in regions such as the Middle East.

Similarly, Alibaba and JD.com are leveraging their Hong Kong operations as a blueprint for broader international growth. Alibaba’s “Taobao Tmall Overseas Growth Plan” has been expanded beyond apparel to include merchants from all industries, supported by Alibaba International’s logistics and user operations teams. The company has also committed to subsidizing shipping costs for overseas buyers.

JD.com’s focus on logistics infrastructure, particularly in Hong Kong, mirrors its ambitions to build a global supply chain network. The company has made significant investments in its cross-border delivery services, enabling faster shipping from Hong Kong to mainland China and other regions.

The Stakes Are High

The push into Hong Kong is not only about tapping into a lucrative local market but also about gaining experience and building infrastructure for a much larger global play. As companies like Alibaba and JD.com accelerate their overseas expansions, a successful Hong Kong strategy is crucial.

With both companies competing fiercely to capture market share in Hong Kong ahead of the Double 11 shopping festival, this market is becoming a crucial battleground for their international ambitions.

According to data from Alibaba Group’s e-commerce and travel platforms, the game’s impact has been felt far beyond the virtual world.

Video Game Sales Skyrocket

On the day of its release, “Black Myth: Wukong” caused a significant increase in video game-related purchases on Alibaba’s Taobao platform, a major C2C e-commerce site in China, according to Alibaba’s blog Alizila.

Video game sales on Taobao surged by 130% compared to the previous week, while searches for the game title spiked nearly 14 times. The game has captured the attention of Chinese gamers with its immersive graphics and engaging storyline based on the classic Chinese novel “Journey to the West”.

The demand for gaming consoles also saw a notable increase, with PlayStation 5 (PS5) sales doubling year-on-year in the week leading up to the game’s release.

The console maintained the top spot in Tmall’s video game equipment rankings for four consecutive days, reflecting the growing enthusiasm for high-quality gaming experiences among Chinese consumers.

Tmall’s game consoles category reported an 80% year-on-year increase in sales, further underscoring the game’s influence on the market.

Additionally, Alibaba’s second-hand trading platform Xianyu experienced a 300% increase in searches for PS5 consoles in August, highlighting the widespread interest in gaming hardware.

Tourism Boom in Shanxi Province

Beyond the gaming sector, “Black Myth: Wukong” has also reignited interest in China’s rich cultural heritage, particularly in Shanxi province.

The game’s stunning visuals, inspired by Shanxi’s ancient temples, carved grottoes, and rugged mountains, have captivated players and spurred a tourism boom in the region. On Fliggy, Alibaba’s online travel platform, searches for Shanxi locations and accommodations doubled month-on-month on the day of the game’s release.

The province, home to three UNESCO World Heritage Sites and the only remaining structures from the Tang dynasty, has seen a 70% year-on-year increase in tourism bookings this summer, according to Fliggy.

This surge includes ticket orders and car rentals, indicating a broad interest in exploring the historical and cultural sites depicted in the game.

Many netizens from Beijing, as well as residents from Shanghai, Zhejiang, and Henan, have been driving searches for Shanxi destinations on Fliggy, eager to experience the real-life locations that inspired the game’s enchanting world.

Broader Implications for China’s Gaming and Tourism Sectors

The success of “Black Myth: Wukong” is a testament to the growing intersection between digital entertainment and cultural tourism in China.

As a single-player game that allows players to explore a richly detailed version of ancient China, it has not only set a new benchmark for gaming experiences but also sparked renewed interest in the country’s cultural heritage.

The game’s impact on both the gaming and tourism sectors demonstrates the potential for digital media to drive real-world economic activity.

According to a survey by gaming industry consultancy Niko Partners, 62% of PC gamers in China reported spending more in the first quarter of 2024 compared to the same period last year, reflecting a broader trend of increased investment in gaming.

As “Black Myth: Wukong” continues to captivate players around the world, its influence on consumer behavior in China is likely to grow, offering a unique example of how digital entertainment can transcend screens and inspire real-world exploration and spending.

This trend could lead to further integration of cultural themes in video games and potentially more collaborations between the gaming industry and tourism sectors to leverage the storytelling power of games to promote travel and cultural appreciation.

Key Developments in China’s AI Industry

According to the “2024 World Artificial Intelligence Legal Blue Book” released at the conference, China’s core AI industry reached a scale of 578.4 billion RMB in 2023, a year-on-year growth of 13.9% according to TMT Post.

Despite a decrease in the number of investment and financing events by 18.2% compared to 2022, the total financing amount surged by 51%, totaling 263.1 billion RMB.

China’s AI industry has seen a significant number of investments, primarily from industrial investors such as Qiming Venture Partners, Sequoia Capital, Shunwei Capital, Alibaba, Tencent, and Baidu.

As of December 14, 2023, the Chinese AI industry recorded 10,110 investment events with a total financing amount of 377.62 billion RMB. The primary investment areas include enterprise services, advanced manufacturing, and automotive transportation.

Global AI Landscape

Globally, there are approximately 30,000 AI enterprises, with the US accounting for 34% and China 15%, totaling over 4,500 companies in China. The period from 2023 to the first quarter of 2024 saw 234 AI unicorns globally, with the US hosting 120 and China 71.

The report indicates that there are currently 1,328 AI large models worldwide, with the US leading at 44% and China at 36%. This positions China as a significant player in the AI domain, with a robust development trajectory.

Expert Insights and Predictions

At the WAIC 2024, several experts provided their insights into the future of AI.

Tao Mei, a foreign academician of the Canadian Academy of Engineering and founder and CEO of Zhixiang Future, emphasized the rapid growth of the AI industry.

Mei predicted that generative AI would contribute to a 14% increase in global GDP, with 74% of the world’s economic output being impacted by AI technology. He also forecasted that 26% of China’s GDP growth would be related to generative AI.

Mei likened generative AI to fundamental infrastructure like water and electricity, suggesting that it will revolutionize human-computer interaction and various sectors, including AIGC and the metaverse.

The Emergence of AI Super Apps

Li Xuexia, co-founder and CEO of Wu Wenxin, described AI large models as “super models” and AI-native applications as “super apps.”

The discussion at the conference highlighted the growing anticipation for AI super apps akin to WeChat, TikTok, and Toutiao. However, industry leaders urged patience, noting that the development of such applications involves multiple factors beyond just technological advancements.

Zhang Peng, CEO of Zhipu AI, emphasized the importance of taking action rather than merely anticipating the arrival of super apps. He pointed out that the maturity of technology, market readiness, and demand discovery are all crucial elements in the emergence of these applications.

Jun Jie, founder and CEO of MiniMax, projected that it would take at least three years for AI super apps to become mainstream, underscoring the need for a step-by-step approach to achieving this goal.

The Future of Generative AI

Zhou Zhifeng, managing partner at Qiming Venture Partners, shared his expectations for the future of generative AI at the forum. He predicted that within three years, AI video generation technology would see widespread adoption, transforming industries such as film, animation, and short videos.

Other key forecasts included:

• The gradual fusion of GPT and diffusion models, unlocking new capabilities.
• Significant improvements in high-quality data acquisition and organization, with synthetic data playing a larger role in pre-training.
• Advances in multi-agent technology enhancing the efficiency and effectiveness of generative AI.
• The emergence of unified continuous representation of images and text, leading to more powerful multi-modal models.
• A five-fold increase in the compression rate of image and video latent space representation, accelerating generation speed.
• The rise of super multi-modal large models incorporating diverse modalities like text, images, voice, music, 3D, and sensor data.
• A reduction in the cost of commanding machines to complete complex tasks, driven by AI’s ability to bridge human and machine languages.
• Significant growth in edge-side inference, propelled by advances in inference optimization algorithms, edge-side inference chips, and large models.

Zhou concluded by emphasizing the transformative potential of AI in various industries, advocating for patience as the world anticipates the advent of AI super apps.

Conclusion

China’s AI industry is on a trajectory of significant growth and innovation. With substantial funding and strategic investments, the sector is poised to make transformative impacts across various fields.

As experts predict the emergence of AI super apps and advancements in generative AI, the global AI landscape will continue to evolve, driven by technological breakthroughs and strategic foresight. The future of AI promises to be a dynamic and integral part of economic and technological development.

This mid-year retail bonanza, initially started by JD.com, has evolved into a crucial battleground for e-commerce dominance.

Strategic Overhaul: Eliminating Pre-Sales

For the first time, both Alibaba and JD.com have abolished the pre-sale mechanisms that have been a staple of past 618 festivals.

The pre-sale model, while beneficial for brands in securing early sales, often led to consumer frustration due to complicated purchasing processes and prolonged delivery times.

The cancellation aims to simplify the shopping experience and enhance satisfaction by emphasizing immediate availability and competitive pricing.

Content-Driven Commerce and Live Streaming

In a bid to capture consumer attention and drive sales, platforms are heavily investing in content-driven commerce in recent years.

Livestreaming has emerged as a pivotal tool, with platforms like Taobao Live and JD Live featuring high-profile celebrities and influencers to attract millions of viewers.

This strategy is bolstered by the success of Douyin (TikTok) and Kuaishou, which have integrated more robust e-commerce functionalities to leverage their vast user bases.

Broad Product Range and Competitive Pricing

This year’s 618 festival has seen a surge in sales across diverse categories, from electronics to beauty products and new energy vehicles (NEVs).

For instance, Xiaomi reported 1 billion yuan in sales within the first 13 minutes of the event, underscoring the high demand for tech products.

Concurrently, JD.com and Taobao have introduced aggressive pricing strategies to lure price-sensitive consumers, including substantial discounts and subsidy programs aimed at undercutting rivals like Pinduoduo.

Enhanced Customer Service Initiatives

Improving customer service has been a focal point for these platforms. JD.com has rolled out services such as “Free At-Home Return” and expanded support for large-item returns, aiming to streamline the shopping experience.

Both JD.com and Taobao have also refined their policies on delayed shipments and customer service responsiveness, ensuring a smoother and more satisfying shopping experience for users.

Integration of Online and Offline Channels

The integration of online and offline shopping experiences is another notable trend. Platforms like Meituan and JD.com have expanded their reach to include offline retail, enhancing convenience and immediacy for consumers.

This hybrid approach aims to offer a seamless shopping journey, bridging the gap between digital and physical retail spaces.

618 Shopping Festival in 2024

The perception of the “618” shopping festival among consumers has been gradually declining as e-commerce platforms continuously roll out “billion-dollar subsidies.” This year, major platforms like Tmall and JD.com announced the cancellation of the pre-sale model during “618,” impacting both consumers and merchants.

For consumers, this means quicker access to desired products without the wait. For merchants, the shift to immediate sales is expected to boost the end-market performance in May but may lead to a decline in June.

Different consumer groups also exhibit distinct preferences for purchase channels. “Taste connoisseurs” and “prudent and respectable” consumers tend to purchase products offline, correlating with the distribution of high-end sales channels. The “thrifty and conformist” group values the reliability and low prices of online platforms, while “savvy and independent” users balance both online and offline channels, leveraging their ability to gather information and select optimal purchasing opportunities.

AI-Powered “618” Sales Surge

The growing influence of AI technology has penetrated daily life, with consumer demand for AI smart terminals increasing. During “618,” manufacturers have actively promoted AI terminal products.

Various brands launched new products and participated in platform promotions to meet consumer demand and expand the AI product market. Notable launches included Lenovo’s ThinkPad, Yoga, and Xiaoxin series; ASUS’s new Wuwei series; Huawei’s MateBook X Pro series; and HP’s Star Book, all performing well during “618.”

Xiaomi’s performance during “618” was particularly impressive, with cumulative sales across all channels reaching 26.3 billion yuan, setting a new record. Xiaomi led in mobile phone sales across platforms like JD.com, Tmall, Pinduoduo, Douyin, and Kuaishou, securing top positions in various price segments.

Retail Innovations and Performance Highlights

The “618” festival has also seen significant innovations and performance improvements across the retail sector:

• JD.com: Reported record transaction volumes and order numbers, with JD Live order volume increasing by over 200% year-over-year. Major brands like P&G, Vivo, Midea, iQOO, Deschmann, Haier, Feihe, Aptamil, Gree, and SK-II were the most popular during JD Live broadcasts.
• Xiaomi: Achieved outstanding sales across its ecosystem, with strong performance in home appliances and smart devices. Products like Xiaomi TVs, air conditioners, washing machines, and AIoT devices topped sales charts on multiple platforms.
• Tmall: Simplified shopping mechanics, eliminated pre-sales, enhanced 88VIP member benefits, and offered significant promotions, resulting in over 190,000 small and medium-sized merchants doubling their sales year-over-year.
• Red (Xiaohongshu): Emerged as a strong contender in the e-commerce space, with live streaming orders increasing 5.4 times compared to the previous year, driven by both buyer and store broadcasts.

The “618” shopping festival of 2024 highlighted significant shifts in consumer behavior and market trends. The integration of online and offline channels, the proliferation of AI-powered products, and innovative sales strategies have driven substantial growth and transformation in the retail sector.

As the market continues to evolve, consumers can look forward to enhanced shopping experiences, while companies can capitalize on new opportunities to stay competitive.

Unified Branding and New Releases

One of the most notable changes is the rebranding of ByteDance’s AI models. The previously known “Lark” models are now unified under the “Doubao Model Family” name.

This family includes nine models, streamlined into two primary categories: general-purpose models and seven specialized models tailored for various functions, including role-playing, speech recognition, speech synthesis, voice cloning, and text-to-image generation.

The Doubao general-purpose models are available in two versions: Pro and Lite, catering to different user needs. This approach contrasts with competitors’ broad, all-encompassing models, highlighting Doubao’s more focused strategy.

Impressive Performance Metrics

In terms of performance, Doubao models are impressive, according to data shared at the conference.

Currently, these models process an average of 120 billion tokens of text and generate 30 million images daily.

The Doubao App, a major AI application built on these models, leads the domestic AI-generated content (AIGC) market, topping download charts on both the Apple App Store and major Android platforms in China.

According to Zhu Jun, ByteDance’s Vice President of Products and Strategy, the app has seen the creation of over 8 million intelligent entities and boasts 26 million monthly active users.

Competitive Pricing Strategy

Volcano Engine also announced a groundbreaking pricing strategy, setting the cost at 0.0008 yuan per thousand tokens. This is significantly lower than competitors, such as OpenAI’s GPT-4o, which charges approximately 0.035 yuan per thousand tokens for input and 0.1 yuan per thousand tokens for output.

In comparison, domestic large model providers average around 0.12 yuan per thousand tokens.

This substantial price reduction is attributed to several factors, including optimization in model structure and the adoption of distributed inference methods, which enhance computing efficiency.

Volcano Engine’s head, Tan Dai, emphasized that this pricing strategy is not intended as a price war but follows a sustainable business logic aimed at fostering long-term commercial cooperation.

AI Market and Future Developments

Despite the advancements, the AI application market is still in its early stages.

According to QuestMobile, the AIGC industry had 73.8 million users as of March 2024, a significant increase from the previous year but still only 6% of the total mobile internet users.

The competitive landscape is gradually intensifying, with companies like Alibaba Cloud and Tencent Cloud also announcing price cuts, although primarily for CPU-based general computing power rather than AI-specific GPU computing power.

ByteDance’s aggressive pricing for AI capabilities is a strategic move to lower the barrier for AI adoption and expand market reach.

This strategy is expected to continue throughout the year as foundational model prices further decline, driven by technological advancements and increased market competition.

Human-like AI and Accelerated B2B Adoption

The trend towards more human-like AI is evident in this year’s major tech releases. OpenAI’s GPT-4o and Google’s Project Astra have set new standards for interactive AI, with real-time conversational capabilities and emotional intelligence.

Similarly, ByteDance’s Doubao App aims to provide a more human-like interaction experience, with enhanced ASR (Automatic Speech Recognition) and TTS (Text-to-Speech) technologies, making AI interactions feel more natural and intuitive.

In the B2B sector, ByteDance’s AI ecosystem is rapidly taking shape. Volcano Engine is building a robust developer ecosystem and AI services platform, supporting a wide range of applications from mobile phones to smart vehicles.

Strategic partnerships with major automakers like Geely, Great Wall Motors, and Seres, along with integration into smartphones from Oppo, Honor, and Xiaomi, highlight ByteDance’s comprehensive approach to AI adoption.

Volcano Engine has also launched the enterprise version of its low-code AI development platform, “Coze” (Kouzi), offering high flexibility and various integration options for developers.

This platform is already being utilized by leading enterprises such as China Merchants Bank, Haidilao Hot Pot, and Super Monkey fitness centers to build intelligent assistants and personalized services.

In 2023, China’s internet medical sector enjoyed a wave of favorable policies, significant revenue growth, and accelerated application of digital technologies, showcasing an overall positive development trend.

Strong policy guidance played a crucial role in March, with the issuance of “Opinions on Further Improving the Healthcare Service System” by the General Office of the Communist Party of China Central Committee and the General Office of the State Council.

These policies stressed leveraging information technology to develop “Internet + Healthcare” initiatives, construct smart platforms for the medical field, and fast-track the application of the internet, blockchain, and IoT in healthcare, thereby enhancing the provision of high-quality medical services.

Revenue growth for internet medical enterprises was notably significant. The service coverage of these companies expanded continuously, driving substantial revenue increases.

In the first half of the year, JD Health extended its reach to over 400 cities nationwide, covering more than 100,000 stores, which propelled a 34.0% year-on-year revenue increase.

From March to September, Alibaba Health’s income and profit grew by 12.7% and 172.2%, respectively, with the number of merchants on its Tmall Health platform exceeding 32,000, an increase of more than 4,000 compared to the previous year.

The deployment of digital technologies also saw rapid progress. The deep integration of digital technologies like artificial intelligence and cloud computing with the medical industry led to the preliminary formation of AI medical models and smart medical information platforms.

In July, SenseTime launched the “SenseCare Smart Hospital” comprehensive solution, focusing on smart diagnosis and treatment, medical research, and other scenarios. This solution provides hospitals with one-stop services to improve treatment outcomes, optimize patient experiences, and support the smart transformation of hospitals.

China Internet Overview

CIW Annual and Premium plan subscribers can download the related but much more comprehensive China Digital Landscape report here.

The internet penetration rate was 77.5%, up by 1.9 percentage points. Of these, 1.091 billion accessed the internet via mobile phones, accounting for 99.9% of internet users. Rural internet users constituted 29.8% of the total, amounting to 326 million, while urban users made up 70.2%, totaling 766 million.

The usage of mobile phones for internet access remained dominant at 99.9%, with desktop computers, laptops, televisions, and tablets being used by 33.9%, 30.3%, 22.5%, and 26.6% of the internet population, respectively.

The user bases for ride-hailing, online travel booking, online shopping, live streaming, and internet medical services grew by 90.57 million, 86.29 million, 69.67 million, 65.01 million, and 51.39 million respectively compared to 2022, with growth rates of 20.7%, 20.4%, 8.2%, 8.7%, and 14.2% respectively.

Following are the specific user demographics and their growth in various internet services as of December 2023:

• 📺 Video streaming users: 1.067 billion (up by 36.13 million, 97.7%)
• 📱 Short video users: 1.053 billion (up by 41.45 million, 96.4%)
• 💬 Instant messaging users: 1.060 billion (up by 21.55 million, 97.0%)
• 🏛️ Online government services users: 973 million (up by 47.01 million, 89.1%)
• 💳 Online payment users: 954 million (up by 42.43 million, 87.3%)
• 🛒 E-commerce users: 915 million (up by 69.67 million, 83.8%)
• 🔍 Search engine users: 827 million (up by 25.04 million, 75.7%)
• 🎥 Live streaming users: 816 million (up by 65.01 million, 74.7%)
• 🎵 Online music users: 715 million (up by 30.44 million, 65.4%)
• 🍔 Online food delivery users: 545 million (up by 23.38 million, 49.9%)
• 🚖 Ride-hailing users: 528 million (up by 90.57 million, 48.3%)
• 📚 Online literature users: 520 million (up by 27.83 million, 47.6%)
• ✈️ Online travel booking users: 509 million (up by 86.29 million, 46.6%)
• 🩺 Internet healthcare users: 414 million (up by 51.39 million, 37.9%)

Instant Messaging

By December 2023, China’s instant messaging user base reached 1.06 billion people, an increase of 21.55 million from December 2022, accounting for 97.0% of netizens.

In 2023, the development momentum of China’s instant messaging services was strong, with accelerated technology innovation and steady industry growth, contributing to the construction of a powerful internet nation.

This includes significant growth in internet advertising revenues, such as Tencent’s over 13 billion yuan increase in the first three quarters of 2023, a 23.5% growth rate. New areas like short video content within apps like WeChat and QQ saw rapid development, with WeChat Video Account’s total views and user watch time increasing by over 50% and nearly 100% year-on-year, respectively.

Alibaba’s business messaging app DingTalk integrates the “Tongyi Qianwen” large language model into its core functions such as group chats and video conferences, enabling users to activate artificial intelligence services through conversational interactions.

Meanwhile, ByteDance’s Feishu has launched a new product, “Feishu Intelligent Companion,” which offers innovative services such as smart translation and automatic Q&A in multiple scenarios, including content creation, data analysis, and system construction, effectively enhancing the level of intelligence in instant messaging products.

Search Engines

By December 2023, China’s search engine user base reached 827 million, an increase of 25.04 million from December 2022, accounting for 75.7% of Chinese netizens.

In 2023, the intelligent level of search engine products in China continued to improve, with applications becoming more enriched in both personal and business contexts.

China’s search engine companies are driving the integration of LLMs with the industrial sector, gradually enhancing the level of manufacturing intelligence and continuously enriching and expanding new application scenarios.

For example, Baidu’s “Kaiwu” platform, which is upgraded based on LLMs, currently serves 220,000 enterprises and has developed over 40,000 industrial models. It covers areas such as safe production, smart logistics, and smart quality inspection, helping enterprises reduce costs and increase efficiency.

Collaboration & Communication

By December 2023, China’s Collaboration and Communication Software user base reached 537 million people, accounting for 49.2% of China internet users.

The sector in China continued to introduce emerging technologies, achieving positive progress in enhancing product intelligence levels and user interaction experience.

Firstly, the level of product intelligence has been enhanced.

By incorporating artificial intelligence technology, the intelligence level of online office products has been effectively improved, aiding users in boosting their work efficiency.

For example, Kingsoft Office’s smart application “WPS AI” can generate texts such as weekly reports and job postings, and it can also create PowerPoint presentations with one click. DingTalk has transformed more than 20 product lines and over 80 scenarios with AI, promoting its application in over 700,000 enterprises.

Secondly, the interactive experience is continuously upgraded.

By introducing technologies such as naked-eye 3D and Augmented Reality (AR), online office products can help users view designs and manufacturing processes more intuitively and accurately, improving the interactive experience.

For instance, Tencent Meeting launched a naked-eye 3D video conferencing feature, allowing users to see three-dimensional content from different perspectives by moving left and right, offering a more realistic experience.

The domestic AR glasses company Rokid released the “Rokid AR Studio,” which enables immersive office scene interactions through gestures, voice, and other interaction modes.

Find out more (subscriber-only content):

• Demographic Dynamics and Clustering in China’s Mobile Internet Sphere
• New Trends among Chinese Mobile Users: Thriftiness, Health, and Experience Take Center Stage
• Digital Entertainment (online video, music, live streaming, literature)
• Ride-hailing
• Transactional Application Trends (online payments, shopping, delivery services, and travel booking)

Financial Highlights: A Glimpse into Growth

Tencent’s fiscal narrative for 2023 is one of notable achievements, underscored by a 10% year-over-year growth in total revenues, reaching an impressive RMB609.0 billion (USD86.0 billion).

This expansion is further emphasized by a 23% increase in gross profit, showcasing the company’s enhanced profitability in a fiercely competitive digital marketplace. Furthermore, the non-IFRS profit attributable to equity holders witnessed a substantial 36% increase from the previous year, indicating strong core earnings performance .

The final quarter of 2023 continued this trend, with revenues escalating by 7% year-over-year to RMB155.2 billion (USD21.9 billion), and gross profit and non-IFRS profit attributable to equity holders of the company experiencing significant increases of 25% and 44% respectively.

In 2023, Tencent’s revenue breakdown highlighted the diversity of its business portfolio, with significant contributions from various segments.

The FinTech and Business Services sector emerged as the largest revenue source, representing 31% of the total revenue and amounting to RMB189.0 billion. This segment’s leading position underscores Tencent’s stronghold in the FinTech industry and its successful foray into comprehensive business services.

Following the FinTech and Business Services sector, the Online Games segment was the second-largest contributor to Tencent’s revenue, accounting for 29% and totaling RMB177.0 billion. This demonstrates the continued vitality of online gaming within Tencent’s business model.

The fastest-growing segment in 2023 was Tencent’s Cloud Computing business, which experienced a remarkable 30% year-over-year revenue increase, reaching RMB109.0 billion. This growth outpaced the other segments, notably the Social Networks segment, and underscored Tencent’s effective strategy and execution in the competitive cloud services market.

Overall, Tencent’s 2023 financial performance showcased the strength of its FinTech and Business Services as the leading revenue generator, with the Cloud Computing segment leading in growth, reflecting the company’s adaptability and strategic positioning in China’s evolving digital landscape.

Strategic Endeavors and Innovation

2023 saw Tencent advance through strategic milestones:

Enhancing User Experience: Tencent’s WeChat Video Accounts doubled in user time spent, thanks to improved algorithms and creator support. Additionally, the Mini Games platform’s gross receipts soared by over 50%, reinforcing Tencent’s leadership in China’s casual gaming sphere .

Pioneering in AI: The launch of Tencent Hunyuan, an AI model of a trillion-parameter scale, marks a leap in Tencent’s technological prowess, solidifying its commitment to spearheading digital innovation .

Commitment to Society and Environment: Tencent’s digital philanthropy platform set a new record with RMB3.8 billion raised during the 99 Giving Day campaign, while its New Cornerstone Investigator Program supported 104 scientists, promoting scientific research .

As of the end of 2023, Tencent Music Entertainment Group (TME) reported a notable increase in its music subscribers. The total number of online music paying subscribers reached 90 million, marking an 18% year-over-year growth.

Market Engagement and User Dynamics

Tencent’s operational statistics reveal evolving trends in user engagement:

• The MAUs of Weixin and WeChat stood at 1,343 million by December 2023, a 2% increase year-over-year, highlighting the platforms’ expanding influence in social media .
• Despite a marginal decline in VAS revenues, Tencent’s strategic emphasis on content diversity and innovative services positions it for sustained growth amidst market challenges .

Tencent’s 2023 saga is one of strategic brilliance and financial vigor, positioning it at the forefront of China’s digital transformation. With its commitment to innovation, user-centricity, and societal impact, Tencent is poised to continue shaping the contours of China’s digital future.

Mobile reach in China: Tencent, Alibaba, Baidu, ByteDance, vs. Kuaishou

CIW Dossier China Digital Insights (DCDI) is compiled to provide statistical information about China digital insights on the internet economy, digital trends, online users, mobile apps, and e-commerce. Click here to download.

Archive

E-commerce Market

Jul 2021

CIW Dossier “China E-Commerce” is compiled to provide statistical information about China’s e-commerce market including online retail, cross-border e-commerce, e-commerce users, and mobile shopping apps. If you need an overall insight into China’s e-commerce market, this is what you should read.

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China 618 Shopping Festival

Jun 2021

CIW Dossier “China 618 Shopping Festival” provides a perspective of the merchants regarding the performance, advertising budget, and sales expectations from the top e-commerce platforms for 618 shopping festival.

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China Social E-Commerce

Apr 2021

CIW Dossier “China Social E-Commerce” is compiled to provide four business models and statistical information about China’s social e-commerce market. Four social e-commerce models: group buying, membership, community-based, content-driven.

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China Pets Retail Market

Jan 2021

CIW Dossier on China Pets Market provides an overview of China’s pet retail market as long as the characteristics of internet users in the corresponding segment.

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Double 11 (Singles Day)

Nov 2020

CIW Dossier Double 11 is compiled to provide statistical information about China’s largest shopping festival led by Alibaba Tmall platform including pre-sale data, top retailers’ performance by GMV, and top brands on Double 11 by categories, etc.

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Payment

Oct 2020

CIW Dossier Payment is compiled to provide statistical information about China’s payment market on online payment, mobile payment, third-party mobile payment, and users’ preference for payment method in different usage scenarios. If you need an overall insight on China’s payment market, this is what you should read.

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Top Mobile Apps

Jun 2020

China’s mobile apps market, including mobile internet overview, mobile apps market, top mobile apps, select mobile apps, and mini programs.

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Taobao Live

Apr 2020

CIW Dossier Taobao Live – is compiled to provide statistical information about Alibaba’s live streaming platform.

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China Outbound Tourism

Nov 2019

Statistical information about China’s outbound travel market.

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China Online Travel Market

Nov 2019

CIW Dossier China Online Travel Market is compiled to provide statistical information about China’s online travel market including market overview, online air ticket booking, online accommodation booking, online vacation booking, outbound travel, and high-end travel.

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China Media Ad Spending

Feb 2019

China’s overall media advertising market growth and the top advertisers in China in 2018.

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Luckin

June 2019

Luckin is China’s second largest and fastest-growing coffee network, in terms of the number of stores and cups of coffee sold, according to the Frost & Sullivan Report. While operating three types of stores, Luckin strategically focus on pick-up stores, which accounted for 91.3% of their total stores as of March 31, 2019.

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China Internet Users in Tier-3 to Tier-5 Cities

Jun 2019

Quick view of China’s internet users’ time usage and expenditure in lower-tier cities (tier-3, 4, 5).

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WeChat Official Account

July 2019

CIW Dossier “WeChat Official Account” is compiled to provide a quick view of Tencent’s WeChat content ecosystem Official Account.

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Cross-border E-Commerce Female Shoppers

Jan 2019

Statistical overview of China’s female shoppers purchasing overseas consumers goods.

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China Advertising Market

Dec 2018

Statistical information about China’s advertising market on traditional advertising market, online advertising market, invalid traffic of digital ads, and mobile e-commerce ads. If you need an overall insight on China’s advertising market, this is what you should read.

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China Smartphone

Dec 2018

CIW Dossier China Smartphones is compiled to provide statistical information about China’s smartphone market including smartphone shipments, sales, and market share information as well as top smartphone brands and user profiles.

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Weibo Online Shoppers

Nov 2018

CIW Dossier Weibo Online Shoppers is compiled to provide statistical information about Weibo users who are interested in online shopping. If you need an overall insight on the demographics, purchasing behavior, and engagement, etc. of Weibo online shoppers, this is what you should read.

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China’s High-end Travelers

Aug 2018

CIW Dossier “China’s High-end Travelers” is compiled to provide an overview of China’s high-end travelers, including their travel choices, demographics, and travel habits.

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WeChat Intro

July 2018

CIW Dossier on WeChat is compiled to provide an introduction of this digital ecosystem and statistical information about China’s top mobile social application. It provides insights on WeChat Official Accounts, WeChat Pay, Mini-Programs, and advertising channels.

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Online video market

Sep 2018

CIW Dossier China Online Videos is compiled to provide statistical information about China’s online video market including online video apps, mobile video users, paid video users, short video apps, and live streaming apps. If you need an overall insight on China’s online video market, this is what you should read.

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Pinduoduo (PDD)

Sep 2018

CIW Dossier Pinduoduo is compiled to provide statistical information about Pinduoduo on group purchase model, app ranking, financial performances, user profile, IPO, and counterfeit problems.

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Golden Week Tourism

Oct 2018

CIW Dossier Golden Week (National Day) Tourism is compiled to provide statistical information about China’s tourism market for the peak travel period – Golden Week / China’s National Day holidays.

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Sports & Fitness Mobile Apps

Nov 2018

CIW Dossier China Mobile Fitness & Sports Apps is compiled to provide statistical information about China’s sports & fitness mobile app market.

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A recent unveiling at the “2024 WeChat Open Class PRO” has shone a light on its video account e-commerce business, demonstrating a nearly threefold increase in Gross Merchandise Value (GMV) in 2023. This growth is complemented by a more than 244% rise in order volume and an approximately 300% increase in product offerings.

Industry insiders estimate that live commerce via WeChat’s video accounts generated a GMV between 40 to 50 billion yuan in 2022. Following the reported threefold growth, the 2023 figures are projected to hit between 120 and 150 billion yuan.

Li Chengdong, an e-commerce analyst and founder of Dolphin Think Tank, acknowledges the impressive growth rates of video account e-commerce in 2023. However, he notes the sector’s scale remains modest compared to giants like Alibaba, JD.com, and Pinduoduo, whose GMVs have breached the trillion yuan mark, alongside emerging live commerce platforms like Douyin and Kuaishou.

A significant development is Tencent’s integration of video account e-commerce with its WeChat advertising system, allowing for video account livestreams to be promoted within Moments. This new feature opens up fresh avenues for traffic acquisition, potentially boosting conversion rates by shortening the consumer journey from ad click to purchase.

The integration extends beyond advertising, as various e-commerce formats within the WeChat ecosystem, such as social commerce and mini-program commerce, are linking up with video account e-commerce. This strategic move positions video accounts as a foundational infrastructure within WeChat e-commerce, facilitating a seamless flow of both public and private domain traffic within the social network.

WeChat’s new social e-commerce platform integrates Shopping Accounts

Launched in 2020 as a counter to Douyin and Kuaishou, WeChat’s video accounts rapidly developed a comprehensive suite of short video functionalities. By integrating with other WeChat services like Official Accounts, Search, and Mini Programs, video accounts have become a crucial part of the ecosystem.

The platform’s commercial exploration, especially in live commerce, started in earnest around the first half of 2021. According to Yu Haijun, founder and general manager of Guangzhou Zhi Ling Network Science and Technology Co., Ltd., early adopters included notable brands drawn by the platform’s promise of a refined operational framework focusing on user experience.

Tencent’s Q3 2023 earnings report highlighted a more than 50% year-on-year increase in total video account views, with WeChat’s video account content ecosystem and creator base continuing to expand. Partnering platforms like Weimob reported a 47.6% increase in video account merchants and a 50.5% increase in their GMV in the first half of 2023, further underscoring the growing importance of video accounts in the e-commerce landscape.

Despite these advances, some insiders express dissatisfaction with the growth rate, pointing to a relatively low ad load rate in video content compared to other platforms. This limitation suggests a need for increased user engagement and refined recommendation algorithms to boost traffic and conversion rates.

The integration of WeChat Moments ads with video account commerce represents a deepening of video accounts’ role within Tencent’s ecosystem, offering merchants enhanced promotional opportunities and streamlined customer purchase pathways. However, achieving a significant uplift in conversion rates through this integration will require meticulous data alignment and robust cross-departmental collaboration.

As Tencent doubles down on its investment in video account and live commerce, the future of WeChat e-commerce hinges on the harmonious fusion of advertising and transactional capabilities, underscoring the platform’s commitment to enriching its commercial ecosystem.

WeChat expanding e-commerce reach with mini program integration on JD, Xiaohongshu

This achievement signifies DingTalk’s dominance in the communication platform sector and reflects China’s accelerating digital transformation.

The platform’s president, Ye Jun, announced this milestone, emphasizing DingTalk’s commitment to enhancing workplace productivity through cutting-edge technological integration.

The recent introduction of an AI agent, powered by Alibaba Cloud’s Tongyi Qianwen, into the platform, is a testament to this commitment. This AI agent, designed to serve as a versatile workplace assistant, can perform various tasks ranging from drafting documents to facilitating business trip bookings on external platforms.

DingTalk’s customer demographics reveal a diverse clientele, with small and micro enterprises forming 58%, medium-sized businesses at 30%, and large corporations at 12%.

As of March 2023, DingTalk had already garnered over 100,000 businesses subscribing to its paid software services, highlighting its expansive reach across various business sizes and sectors.

Integrating AI into DingTalk marks a significant shift in the platform’s capabilities.

Users, both individuals and enterprises, can now customize their AI assistants to perform tasks tailored to their specific workplace needs. This level of customization allows for a more efficient and personalized user experience.

For instance, corporations can leverage AI agents for intricate tasks like recruitment and financial analysis, whereas individual users can utilize them for routine tasks.

Furthermore, DingTalk’s expansion of its corporate user base to 25 million, with 28 million daily active paid users and 120,000 paying enterprises, indicates its growing influence in the digital workspace sector.

The platform’s strategic focus on generative AI and the planned launch of a marketplace for AI agents, expected to grow to over 10 million in the next three years, positions DingTalk at the forefront of AI integration in business communications.

DingTalk also boasts a low-code platform, enabling the rapid development of custom applications for various industries. This feature has proven especially beneficial for sectors like education and large-scale event management.

For instance, schools and universities have adopted DingTalk for online assignment distribution and grading tasks. The platform has also been customized for major events like the 19th Asian Games in Hangzhou, streamlining communication and task management for the organizing committee and participants.

DingTalk’s recent achievements and ongoing innovations firmly establish it as a pivotal player in China’s digital landscape, setting new standards for workplace communication platforms worldwide.

Alibaba’s DingTalk user profile

The fourth quarter of 2021 saw a year-on-year increase of 33% to US$7.7 billion. Canalys predicts that by 2026, the scale of the cloud infrastructure market in the mainland will reach US$85 billion, and the five-year compound annual growth rate will be 25%.

Visit here for AI Cloud market share.

Alibaba Cloud remains the leader with a 37% market share, ranking first in the cloud market in 2021, Huawei Cloud and Tencent Cloud second and third respectively, and Baidu AI cloud fourth. In 2021, the four cloud providers jointly accounted for 80% of the market share.

Huawei Cloud reached an 18% market share in 2021, with an annual growth of 67%. The rapid growth has widened the gap between Huawei cloud and Tencent Cloud, ranking second in the market.

Tencent cloud, the third-largest provider, accounted for 16% of the market share, an increase of 55%. Tencent Cloud grew steadily as a whole in 2021, with diversified growth in multiple sectors.

Baidu AI Cloud, the fourth-largest vendor, accounted for 9% of the market share, an increase of 55%.

Top 10 forecasts for China cloud computing market 2021-2024

China’s Public Cloud Services Market to Grow to 10.5% of global share by 2024

In 2020, the overall market size of global public cloud services (IAAs/PAAS/SaaS) reached US$312.42 billion, with a year-on-year growth of 24.1%, according to IDC.

The overall market size of China’s public cloud services reached US$19.38 billion, with a year-on-year growth of 49.7%, with the highest growth rate in all regions of the world. IDC predicts that the global share of China’s public cloud service market will increase from 6.5% in 2020 to more than 10.5% by 2024.

Check out market share of IaaS and PaaS markets in China here.

CIW Subscribers (Annual) can download the chart here to see the comparison of the cloud platforms in China.

Download China Internet Overview whitepaper here.

Taobao emerged as a defensive strategy against potential C2C competition from eBay’s Chinese platform, Eachnet​. Taobao’s innovative strategies, such as introducing Alipay to ensure secure transactions, helped it secure a substantial market share.

On the 20th anniversary of its founding, Taobao is set to host the most significant 618 Shopping Festival to date. The festival’s evolution mirrors the transformative growth of e-commerce, driven by platforms like Taobao, which have revolutionized how people shop and interact with retailers.

For 2023, Taobao’s strategy for the 618 Shopping Festival revolves around transforming consumers into creators.

In an era where user-generated content has become integral to online engagement, Taobao aims to elevate the shopping experience beyond a simple transaction. This shift aligns with the broader trend in e-commerce, which has been accelerated by the global pandemic, towards more interactive and personalized shopping experiences.

Regarding impact on China’s economy, the 618 Shopping Festival’s contribution to Alibaba’s total revenue is significant​.

The event has grown exponentially since its inception, reflecting the rapid growth of China’s e-commerce sector. The 2023 edition of the festival is expected to further boost this growth trajectory, given the increased scale and novel consumer engagement strategies planned for this year.

The allure of low prices has always been a critical characteristic of online shopping festivals. However, in recent years, the price war has extended from festival periods to daily transactions, with short-term subsidies transitioning into long-term ones.

This shift has led to debates around the necessity of these online shopping festivals, especially as low prices have become somewhat of a norm in the aftermath of the pandemic.

Yet, low prices often come with certain preconditions or basic requirements. For instance, JD.com’s low prices have traditionally been established on multi-item discounts.

However, this year’s 618 Shopping Festival may improve the quality of service (such as half-day delivery service by Cainiao) and lower the threshold for discounted prices based on purchase quantity.

This approach focuses on the keyword “low price,” enhances service quality, and broadens the customer base. Despite low prices becoming a norm, festival periods offer an upgraded shopping experience compared to ordinary days.

In the current environment, improving the return on investment (ROI) for marketing communications remains a significant challenge for the entire industry. This challenge is primarily due to the broader economic environment, which has led to a trend of consumption downgrade.

The biggest dilemma is identifying target customers and stimulating consumer enthusiasm in challenging circumstances. The difficulties in content creation for product promotion and fulfillment of product promises play a significant role.

While merchants have adopted live streaming and digital marketing, attracting traffic in a fiercely competitive market using forms the audience enjoys is a major challenge.

Another concern is maintaining operations after traffic conversion, such as improving the customer experience (product quality and fulfillment, after-sales service, etc.). The entire process involves a long chain of stages, each demanding high professionalism and the ability to respond flexibly to market changes.

As the 618 Shopping Festival approaches, how should merchants prepare in advance? It is crucial to ensure sufficient preparation for product stock and transport capacity. For product inventory, merchants should rely heavily on data-driven predictions to stock up sufficiently in advance.

This preparation should not only be adequate in terms of quantity but also detailed in terms of warehouse distribution and logistics delivery.

At the end of 2022, during the Double 12 shopping festival, some users received their goods only after a month, leaving a bitter taste about the “express” delivery.

Most major platforms have deployed highly automated and intelligent warehouse logistics systems in key consumer markets. Barring uncontrollable factors such as adverse weather, delivery delays should be less frequent.

The issue during the 2022 Double 12 festival was partly due to the widespread transmission of the pandemic. Given the current state of pandemic transmission, a similar situation is unlikely to occur.

Nevertheless, express delivery companies should prepare and plan equipment maintenance, debugging, and personnel deployment. Platforms and merchants should prepare and plan sufficiently for sales predictions and stock-up.

618 Sales

This year no specific GMV or sales data are released from any major e-commerce platforms in China.

Alibaba Group’s Taobao and Tmall Business Group recorded an unprecedented level of merchant participation in China’s mid-year shopping festival, the 6.18, held from May 26 to June 20, spotlighting positive signs of Chinese consumers’ post-pandemic spending prowess.

Data released by Taobao & Tmall on Monday exhibited a paradigm shift in consumer behavior, particularly a surge in livestreaming viewership and short video consumption.

During the 6.18 festival, the daily average of short video views on Taobao, a consumer-to-consumer marketplace, increased by 113% from the previous year. Daily short-form video releases from influencers and Taobao merchants have increased by 200% and 55%, respectively, year over year.

Moreover, the festival witnessed a 139% year-over-year increase in content creators initiating livestreaming on Taobao. Consumers’ viewing time on the app doubled, demonstrating the growing influence of digital content in the e-commerce landscape.

The Gross Merchandise Value (GMV) of merchants reportedly swelled two to three-fold year-over-year. A total of 305 brands achieved sales above RMB 100 million ($13.99 million) just after the stroke of midnight on June 18.

Additionally, over 2.56 million small- and medium-sized enterprises (SMEs) outperformed last year’s festival, with 1.18 million SMEs each surpassing a GMV of RMB 10,000.

The festival also shed light on new consumer trends, with items like watersports shoes, suitcases, and sunscreen masks being the hot favorites. Around 180,000 customers purchased watersports shoes, while suitcases and sunscreen masks were snapped up by 1.65 million and 930,000 people, respectively.

Apple, which held a rare livestream and offered discounts on its products, including the iPhone 14 Pro and Apple Watch Series 8, saw their broadcast attract 1.3 million viewers and collect 300,000 likes within the first hour.

In this year’s 6.18 shopping festival, video-sharing platform Bilibili saw a surge in its e-commerce advertising revenue, which jumped by more than 400% year-on-year.

Product promotion is becoming a new revenue growth engine for both Bilibili and its content creators, with the number of promoters more than tripling compared to last year’s 6.18.

As the consumption and transaction ecosystem thrives, the number of promotional videos on the site has increased nearly eightfold year-on-year, while the number of promotional livestreams has grown almost 7.5 times over the same period.

During the 6.18 period on Bilibili, the number of content creators who received orders from advertisers through Huahuo increased by over 40% year-on-year.

According to data from the “Spark Program,” which is linked to the Taobao Union (Taobao’s affiliate program), in industries such as home decor and cosmetics, Bilibili accounted for more than 70% of new customers for merchant shops.

Zhihu, a Chinese question-and-answer website, saw a 155.1% year-on-year increase in queries related to “how to choose products.” By the end of May, the volume of content related to “618” on Zhihu had increased by 272% month-on-month, while search volume had risen by 240% over the same period.

From the IaaS + PaaS market perspective, the first half of 2021 increased by 43% (vs. 48.6% in H1) year-on-year, down 6% from the first half of 2021, but still maintained the highest growth rate in the world.

In the next five years, China’s public cloud market will continue to grow at a compound growth rate of 30.9%. By 2026, the market is expected to reach US$105.76 billion, and the global share of China’s public cloud service market will increase from 6.7% in 2021 to 9.9%.

The competition in China’s cloud computing extends from focusing on infrastructure to the competition of comprehensive cloud platform capabilities. In addition to increasing investment in infrastructure construction at the IaaS layer, cloud vendors also continue to strengthen chip self-research capability, improve PaaS capability (data processing capability, cloud-native, low code development, etc.), build leading, fast, and perfect solution service capability and implementation and delivery ecology and develop a more comprehensive cloud platform.

The digital transformation of government and enterprises has fully entered the cloud era.

In the first half of 2021, the State Council put forward decisions on deepening the integrated development of new-generation information technology and manufacturing industry and creating new advantages of the digital economy.

Also read: the latest on China’s public cloud market

Local governments and regulators have issued relevant technical specifications and application standards of cloud computing platforms, actively promoted the all-around and in-depth integration of digital technology and social development, and accelerated the application and implementation of digital technology in various industries.

Cloud computing has become the basis and hub of digital transformation. Under this background, there is a huge demand and market space for cloud services in the field of government and enterprises.

Cloud vendors have released their own cloud-native strategies to seize the opportunity from the aspects of products, partners, standard-setting, talent cultivation, and so on.

Industry digitization and low-carbon development have become the mainstream trend. In terms of themselves, cloud vendors continue to improve product energy efficiency and promote the low-carbon development of the cloud industry by investing in innovative energy-saving technologies.

In terms of industry empowerment, cloud manufacturers invest in power electronics technology and integration and innovation with digital technology, promote the development of clean energy and the digitization of traditional energy, bring digital technology to each industry, and support all walks of life to promote low-carbon development through digitization.

In both IaaS and Iaas+PaaS markets, the competition is tight. The leading vendors Alibaba Cloud, Huawei Cloud, and Tencent Cloud have firmly taken the top three positions and jointly have 60% of the market share.

Cloud vendors in the network operator camp grew rapidly, with independent research and development and cloud network integration as their keywords.

The fourth ranked China Telecom Tianyi Cloud formed a full-stack cloud product system by the end of 2020, further deepened to the vertical industry and territory in 2021, sank the resource and service team to the local city, and the local cloud business grew rapidly, creating a new growth level for Tianyi Cloud.

Pricing only the 2nd most important in China for choosing cloud vendors

Domestic tourism revenue was RMB 26.517 billion, a year-on-year increase of 4.0% and a comparable recovery of 35.1% compared to the same period in the 2019 New Year’s Day holiday.

“Cold escape” is still the first choice for Chinese travelers. Traveling to warmer climes is a favorite. Southern China’s mild winter weather attracts many tourists at home and abroad to escape from the cold. Tourism in rural areas of Guangdong cities such as Meizhou, Qingyuan, and Shantou was a particular bright spot.

According to Alibaba’s OTA platform Fliggy, the amount of tourism bookings in Hainan destinations increased by more than 50% compared with 2022.

At the same time, during New Year’s Day, the number of tourist merchandise bookings, including keywords such as “seascape”, “island”, and “surfing” increased by more than 60% year on year.

The orders for cross-provincial and trans-city tours accounted for nearly 80%, reaching the peak in nearly a year. More than 70% of the post-90s and post-00s young users became the main force during this holiday.

Double 11 started as China’s largest online shopping promotion campaign in November and has now expanded to offline and various industries.

The selling period is divided into two waves: the first wave is from 8:00 p.m. on October 31 to November 3, and the second wave is from 8:00 p.m. on November 10 to November 11. The discount is 50 yuan less for every 300 yuan orders across stores, which is the biggest discount in recent years.

In 2021, Alibaba’s Tmall Double 11 shopping festival achieved a new record of US$84.54 billion in gross merchandise volume.

This year, Alibaba equipped merchants with tools and solutions to grow their brand loyalty membership programs and unveil products.

Over 40 brands on Tmall have loyalty membership programs that have surpassed 10 million members and 600 brands have loyalty membership programs with over 1 million members.

This year we saw two check-out windows on Tmall. The first began at 8 pm on October 31 and end on November 3 while the second window lasted from 8 pm on November 10 to November 11.

JD Double 11

JD.com unveiled its Singles’ Day Grand Promotion with a press conference on October 24 in Beijing. Under the theme of “A More Solid Life”, this year’s shopping festival promises stronger incentives on prices, products, and services for customers.

JD’s pre-sales phase of the Double 11 shopping festival started at 8 p.m. on October 20. The official sales event will kick off at 8 p.m. on October 31, and is expected to culminate on the night of the 10th through the end of the 11th.

An RMB 50 yuan discount is offered for every RMB 299 yuan spent on JD.com across all categories during the promotion period. JD PLUS members are entitled to extra subsidies. Cell phone shoppers will enjoy a 1.2 times price guarantee and so forth.

According to JD.com, in the past five years, the number of users participating JDs’ Singles Day Grand Promotion increased by nearly 90 percent, total merchants up by 65 percent, while types of products grew by 83% and new brands by 40%.

In the first half of 2022, the average transaction volume of stores on JD.com reached 2.2 times that of the same period in 2019, and more than 25,000 stores achieved over 100 percent sales growth year over year.

Double 11 Sales

During this year’s Double 11 festival, 1,009 Tmall Global brands’ GMV more than doubled year-on-year.

More than 300 million people have tuned into Taobao Live, China’s premier livestreaming commerce channel, since Oct. 24 to watch virtual and real-life hosts hawk products.

According to Tmall, the transaction scale of this year’s Tmall Double 11 is about the same as last year. Jingdong said that this year surpassed the industry growth rate and created a new record. But neither disclosed the total transaction value.

According to data from Syntun, a data provider monitoring Double 11 sales data for years, from 20:00 on October 31st to 23:59 on November 11th, the cumulative sales of integrated e-commerce platforms and live broadcast platforms were 1,115.4 billion yuan.

• The total sales on the comprehensive e-commerce platforms were 934 billion yuan, a year-on-year increase of 2.9%, and Tmall ranked first in sales, followed by JD and Pinduoduo
• The sales of live streaming e-commerce were 181.4 billion yuan, up 146.1%, and Douyin is still ahead of Diantao
• New retail sales reached 21.8 billion yuan, a year-on-year increase of 10.8%.
• Community group-buying sales totaled 13.5 billion yuan, a year-on-year increase of 1.1%.

China e-commerce market 2022: top mobile apps and users

Energy Expert provides actionable insights and energy-saving recommendations to help customers accelerate their sustainability journeys. It helps customers automate the carbon accounting and reporting process at a corporate and product level, and obtain real-time sustainability impact statistics for them to make informed decisions.

It enables companies to identify the sources of the carbon emissions from their daily business activities as well as the full life cycle of their products, based on the PAS 2060 and ISO 14064 standards on carbon neutrality.

Customers can also quantify their carbon footprint through a prebuilt calculation model leveraging public emission factors datasets and Energy Expert’s proprietary datasets.

It provides visibility into their real-time carbon emission patterns and the progress of their sustainability performance through visualizations on dashboards and online reports. In addition, Energy Expert provides analytics on energy efficiency and emission forecasts through deep learning-based AI models hosted on Alibaba Cloud.

To help customers minimize their overall environmental impact, Energy Expert also offers actionable optimization plans with recommendations that balance business growth and environmental impacts. These can include increasing the use of clean energy, reducing excessive electricity consumption during peak times, and optimizing the supply chain ranging from sourcing materials to shipping products.

It has served over 2,000 companies in China since its deployment in February 2022, generating energy savings of over 2 million kilowatt-hours per day, or a reduction of 400,000 tons of carbon dioxide emissions, according to Alibaba.

Top 10 forecasts for China cloud computing market 2021-2024

Among them, the top 3 in sales are Apple, Haier, and Midea. Apple’s sales have even exceeded 5 billion yuan, opening a large gap with other brands.

JD reported over 10% growth in this year’s total 618 GMV while Alibaba and Pinduoduo didn’t disclose too much data on this year’s 618 sales.

CIW annual subscribers can download Top 10 Best-selling Brands in Tmall/Taobao 618 2022 here.

Alibaba Tmall 618 2022

In the May presale period, Tmall merchants will receive roughly RMB10 billion ($1.5 billion) in deposits made by consumers to secure their orders. Once shipping starts between June 1 and June 30, the remaining balance of up to RMB100 billion will be sent to businesses.

For cross-border merchants, international B2C marketplace Tmall Global is freeing up to RMB4 billion to their payment accounts as soon as parcels leave warehouses between June 1 and June 30.

Presale

Tmall 618 2022 pre-sale officially opened at 8 p.m. on May 26. The first wave of rush buying started at 8 p.m. on May 31 and the second wave starts at 8 p.m. on June 15.

This year, Taobao increased the pre-sale time during the 618 event, making the official pre-sale an increment for businesses to make a good start. The platform will provide the official pre-sale atmosphere, the official pre-sale venue, and search for recommended resources.

On June 18 this year, Taobao simplified the preferential rules and marketing complexity. The discount for cross store full sales was reduced by 20 yuan or 50 for every 199 or 1000 yuan spend.

Alibaba’s Taobao and Tmall are not the only e-commerce platforms for 618 shopping festival promotions. Many retailers and major online platforms, such as JD, Pinduoduo, Kuaishou, etc., have promotions to push up their sales.

Tmall 618 Sale

Alibaba didn’t share much this year’s 618 shopping festival sales data.

Among the 35 categories counted in a third-party research company Nint’s report, there were 6 brands with sales exceeding 1 billion yuan in a single category sales; and, 108 brands had sales exceeding 1 billion yuan each.

Among them, Apple, Midea, Haier, Xiaomi, and L’Oreal ranked among the top 5 in overall sales. With sales of 15 billion, Apple is the only brand with sales of more than 10 billion yuan (US$2.23 billion), and has become the biggest winner.

JD 618 2022

Instead of getting different coupons, Jingdong 618 platform offers an immediate RMB 50 yuan discount for every qualified RMB 299-yuan purchase, making the shopping process even simpler this time.

Presales

During the pre-order phase of this year’s 618 Grand Promotion from 8 p.m. on May 23 to midnight on the 29, sales of a number of top brands exceeded RMB 100 million yuan, such as Xiaomi, Haier, Lenovo, Huawei, Midea and more.

The official 618 Grand Promotion sales phase started at 8 p.m. on May 31 and lasts until June 20, during which JD’s customers can purchase their pre-ordered products to enjoy discounts and worry-free shopping services including same or next-day delivery service.

JD’s data during the past six days revealed that the “post-95” generation showed rising spending power with pre-order sales up 75 percent YoY. Meanwhile, the product variety offered on JD.com during this year’s shopping festival increased by 20 percent and a robust demand is seen from China’s sixth-tier cities with over 100 percent growth YoY.

Sales of the home appliances category as a whole rose by 200 percent YoY, while order volume of new products tripled. Sales of tablets, home use printers, and mechanical keyboards increased 100, 170, and 400 percent respectively.

In the healthcare category, the overall order volume on JD Health grew by 186 percent YoY.

The number of products joining the pre-order period increased by 219 percent. Deposits for body fat measurers increased 576 percent YoY, and that of Bio Island’s DHA for kids grew 10 times, becoming the biggest “dark horse” during JD Health’s pre-order period.

More and more customers are getting used to online ordering for offline services.

Orders of automobile products with installation services on JD.com increased 240 percent YoY, among which tire-changing service orders is up by 135 percent; furniture with installation service orders increased 127 percent, and travel orders are up by 110 percent on JD.com.

JD’s latest omni-channel store, the J Shop, attracted 50 percent more merchants to participate in this year’s shopping festival, who together brought double the amount of products in the fashion and lifestyle categories.

During the pre-order phase, the J Shop channel presented over a hundred best-sellers from an array of big brands from home and abroad, such as SK-II gift boxes, Arman Men’s T-shirts, and Lancôme’s anti-aging serum, just to name a few.

More than 20 brands under JD Luxury reached over 100 percent sales growth month over month, including Tory Burch, MCM, Chopard, and more. BVLGARI’s daily sales on JD Luxury during the past six days quadrupled its average amount. The top 3 Swiss watches are from Longines, Tissot, and MIDO, with Longines’ sales increasing by 160 percent YoY.

618 Sales

The 19th JD 618 Grand Promotion officially kicked off at 8 p.m. on May 31 after an eight-day pre-order phase.

In the first 10 minutes of the mid-year shopping festival, the sales of a number of brands exceeded RMB 100 million yuan, including Xiaomi, Midea, Haier, Lenovo, Apple, HONOR, Huawei, SONY, Asus, Siemens and more.

Smartphones, air conditioners, Chinese sticky rice dumplings for Dragon Boat Festival (which falls on June 3 this year), baby formula, and toys were the hottest search keywords in those first 10 minutes, according to JD’s data.

Over a hundred home brands on JD.com reached double sales growth in the first 10 minutes.

Electronics products such as tablets, home use printers and projectors, ready-to-cook products, kitchenware, and home workout products such as smart mirrors and massage guns, are among the popular categories during this shopping festival.

JD Worldwide offers cross-border imports to Chinese customers. Nearly 150 overseas brands saw more than 200 percent sales growth in the first 10 minutes. Sales of nearly 100 sub-categories exceeded 100 percent growth YoY. The top 3 brands in sales are Nintendo, Swarovski and a2 milk powder.

As of 23:59 on June 18th Beijing time, JD.com reported a total transaction volume of RMB 379.3 billion yuan (US$56.7 billion) for JD 618 Grand Promotion 2022, which exceeded last year’s RMB 343.8 billion yuan.

In JD 618 this year, 26 stores exceeded 1 billion yuan sales orders, the number of new product sales increased by more than 20% year-on-year, and the turnover of more than 30 trending categories increased by more than 10 times year-on-year.

TikTok 618

During 618 last year, Douyin (Tiktok in China) e-commerce saw a total of 28.52 million hours of live streaming. This year, it reached 40.45 million hours from June 1 to June 18, an increase of more than 40% over the same period last year.

Short videos embedded with shopping carts were played 115.1 billion times.

The “search” function made an amazing contribution during this 618 event. Douyin mall led to a year-on-year sales increase of 514%, search scene led to a year-on-year increase of 293%, and the number of merchants participating in the activity increased by 159%.