The hashtag #TikTokRefugee has already garnered over 78 million views and 2 million discussions on Xiaohongshu, with many new users describing the platform as a mix of Instagram and TikTok.

In just a few days, Xiaohongshu surged to the top of the U.S. App Store’s free apps chart and secured leading positions in Australia, the UK, and the Netherlands.

However, the sudden influx of users has highlighted Xiaohongshu’s recent pivot toward short videos. The platform replaced its “Shopping” tab with a single-column video feed reminiscent of TikTok.

Despite pushback from some Chinese users—who lament the shift toward “Xiao Douyin” (Little Douyin, referring to TikTok’s Chinese counterpart)—Xiaohongshu has embraced the change as part of a broader strategy to enhance its e-commerce capabilities.

A Push Toward Video-Driven E-Commerce

Xiaohongshu’s shift toward short videos isn’t just about appealing to TikTok users; it’s a deliberate move to strengthen its e-commerce ecosystem.

COO Conan Cheng emphasized in late 2024 that Xiaohongshu aims to position itself as a “lifestyle e-commerce” platform. To achieve this, the company has been integrating its community, content, and commerce algorithms to optimize for user engagement and revenue generation.

The transition to short video and livestreaming is critical for fostering consumer habits like livestream shopping, which relies on an instant influx of viewers to drive sales.

The single-column video format reduces user choice compared to the traditional dual-column layout, improving the flow of traffic to livestreams and increasing e-commerce conversion rates.

Xiaohongshu has also been proactive in courting manufacturers and businesses from China’s industrial hubs, such as Guangdong and Fujian, to expand its product offerings.

Unlike its earlier focus on high-end, niche items, Xiaohongshu is now embracing affordable products and mass-market appeal. For example, livestreams featuring low-cost winter boots and casual apparel have gained traction, mirroring the sales tactics popular on platforms like Taobao and Douyin.

Scaling E-Commerce Amid Intense Competition

Despite these efforts, Xiaohongshu faces significant challenges in scaling its e-commerce business. Competition from giants like Taobao, JD.com, and Douyin is fierce, with each platform investing heavily in supporting small businesses and industrial suppliers.

Xiaohongshu has also begun aggressive user acquisition campaigns, targeting not only urban millennials but also older and rural demographics.

Recent initiatives, such as partnering with local governments and offering referral bonuses for new users, have expanded its reach. In addition, the platform’s collaboration with China’s national Spring Festival Gala for a second consecutive year underscores its ambition to become a household name.

However, scaling without diluting the platform’s community-driven ethos will be a delicate balancing act. While Xiaohongshu’s core users value its curated aesthetic and high-quality content, expanding into broader demographics may risk alienating this base.

The Road Ahead for Xiaohongshu

The influx of TikTok refugees may boost Xiaohongshu’s global visibility, but retaining these users poses a challenge.

Many new users are driven by frustration with U.S. tech giants or geopolitical concerns rather than a deep connection to the platform. Cultural differences and regulatory hurdles could further complicate Xiaohongshu’s efforts to sustain its overseas user base.

Moreover, Xiaohongshu’s reliance on livestream shopping to drive e-commerce growth will require substantial investment in infrastructure and partnerships.

Competing with established players like Douyin and Taobao, which already dominate livestream e-commerce, will require Xiaohongshu to refine its value proposition, improve merchant tools, and lower barriers to entry for small businesses.

While TikTok’s turmoil presents an opportunity for Xiaohongshu to capture new markets, the real test lies in whether it can replicate Douyin’s success and build a sustainable e-commerce ecosystem.

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.

The user base has exceeded 200 million, with daily API calls also surpassing 200 million. The service now caters to 85,000 customers and has more than 190,000 AI-native applications developed using the Qianfan platform.

Robin Li also noted that one doesn’t need to know coding to create certain applications; it’s possible to develop smartphone apps without programming. AI is fostering a wave of creative energy. “The future of application development will be as simple as making a short video; everyone will be a developer,” Li stated.

After officially announcing the open access to “Ernie Bot” in August last year, Baidu has on one hand used large models to rebuild client-side products for consumers and integrated AI features across multiple Baidu products. On the other hand, in the business sector, it has launched the enterprise-level one-stop large model platform “Qianfan Large Model Platform” through its cloud business.

Baidu’s GenAI App Offers Digital Twin Creation

In early 2024, Baidu has announced an innovative feature within its Wenxin Yiyan app (its GenAI product; a.k.a. Ernie Bot) that allows users to create digital twins with unprecedented ease. Both iOS and Android users can access this feature for free upon updating to the latest version of the app.

The new function simplifies the creation of a digital twin to just a photo and three voice recordings. Users can customize their digital counterpart with a unique name, voice, and even MBTI personality type. This flexibility extends to the choice of making their digital twin public or keeping it private, catering to various needs such as companionship, knowledge exploration, and entertainment.

Traditionally, creating a digital twin involved complex processes like 3D scanning to create a model, texturing through rendering technologies, and integrating motion capture and voice synthesis. Baidu’s latest update significantly reduces the complexity and time required to create a digital persona.

Baidu also teased upcoming themes for digital twins, including various New Year backgrounds and exclusive digital personas for a “mysterious national idol,” AI God of Wealth, and AI family portraits among other activities.

Recently at the tenth Wave Summit, a biannual deep learning developer conference hosted by Baidu, the Chinese AI giant unveiled remarkable achievements in artificial intelligence.

Ernie Bot has reached a new milestone, surpassing 100 million users as of Dec 2023.

ERNIE Bot: A Versatile AI Tool

Since its public release on August 31, 2023, ERNIE Bot has rapidly become an indispensable tool for users across diverse fields. It has generated 3.7 billion words of text in workplace environments, aiding over 2 million users, according to information CIW received from Baidu.

ERNIE Bot’s versatility is further highlighted by its ability to write 300 million lines of code and process 400 million words of contracts, showcasing its utility in technical and legal domains. Additionally, it has created 5 million travel itineraries and drafted 10.83 million messages of care and support, reflecting its wide-ranging applications in personal and emotional contexts.

The popularity of ERNIE Bot is also reflected in the user feedback, with 20 million likes and appreciations, signifying high satisfaction and reliance on this AI tool.

Technical Innovation and Industry Empowerment

The Wave Summit also shed light on Baidu’s commitment to technical innovation and industry empowerment through its PaddlePaddle platform. Dr. Haifeng Wang, Chief Technology Officer of Baidu, revealed that PaddlePaddle has been instrumental in supporting over 10.7 million developers and 235,000 enterprises.

A staggering 860,000 models were created using the platform as of December 2023, indicating the platform’s significant impact on AI development and application.

The Future of ERNIE Bot and Baidu’s AI Initiatives

The continuous improvement of the ERNIE Foundation Model, which saw a 32% overall performance enhancement in just two months, clearly indicates Baidu’s dedication to advancing AI technology.

ERNIE Bot’s growing popularity and increasing user inquiries highlight the potential and demand for advanced AI solutions in various industries.

Baidu’s achievements with ERNIE Bot and the PaddlePaddle platform underscore the company’s position as a leader in China’s AI innovation. As Baidu continues to break new ground in AI technology, the global community eagerly anticipates further advancements and applications that will transform industries and everyday life.

originality.ai’s founder and CEO, Jonathan Gillham, recently wrote an in-depth analysis article discussing Baidu’s ERNIE Bot and its latest model- ERNIE 4.0, which you can find here.

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)

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

Douyin live commerce platform is a service platform provided by Douyin for local lifestyle service businesses. It aims to help businesses market and sell their products and services on Douyin.

Short videos were the most popular type of content on the platform, accounting for 83% of total transaction volume. Short video uploads grew nearly 1.4 times, while text content uploads grew 2.68 times.

Douyin Live streaming was also a major growth driver, with transaction volume growing 5.7 times. The number of live streams that generated transactions increased fourfold, and the coverage rate of merchant self-broadcasting reached 59%, with self-broadcasting transaction volume growing 4.45 times.

Daily search volume grew 1.57 times, and transaction volume driven by search grew 2.6 times. The most popular live-streaming content categories were:

• Food: Hot/unique dishes, fast food, hot pot, regional dishes, and bakery and desserts
• Services: Massage and bathing, beauty and fitness, hairdressing, car services, and nail and eyelash art
• Travel: Travel agencies, hotels and guesthouses, theme parks, attractions, and zoos

TikTok also saw significant growth in the number of new service providers and group-buying influencers on its platform. The number of new service providers increased 1.79 times, the number of businesses working with service providers increased nearly two times, and service provider transaction volume grew nearly eight times.

The number of group-buying influencers increased 2.89 times, and over 580,000 influencers earned income from the platform. The total transaction volume of influencers grew more than 2 times, and influencer discovery shopping generated 946 billion yuan in revenue.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

Consumer Behavior: A Rational Return

Gone are the days of impulsive “buy, buy, buy” mantras.

Today’s consumers are more discerning, seeking value for money, and brand credibility over the lure of influencers and livestream promotions. The impact of livestreams has waned, with only 22% of consumers citing it as a key purchasing factor, a decline from 32% in 2021.

Market Trends: The Price Wars

E-commerce platforms are intensifying their competition on pricing, with aggressive strategies like price matching and guarantees of the lowest prices on the web. This year’s theme for JD.com’s Double 11 is “Real Cheap,” reflecting a market shift back to core retail principles: value for money.

The Rise of Domestic Brands

Chinese local brands are set to be the biggest winners of Double 11 this year.

A significant 66% of consumers plan to increase their spending on domestic brands, turning away from international products.

This trend is driven by a deepened trust in the quality and safety of local brands, with young consumers actively seeking local alternatives to overseas brands, especially in apparel and accessories.

The Silver Economy

With over 280 million people aged 60 and above, China hosts the world’s largest “silver” consumer group, many of whom are proficient in using the internet and smart devices.

They represent a vital yet understated market segment, with a buying motivation split between seeking discounts and enhancing the quality of later life. The influence of family and friends plays a significant role in their purchasing decisions, indicating that reputation and word of mouth are paramount within this demographic.

For Double 11 in 2023, expect the following:

• A market driven by rational consumer choices, with less emphasis on influencer marketing and more on product quality and brand reputation.
• A surge in domestic brand loyalty, as consumers prioritize local products over international offerings.
• An emphasis on pricing strategies, with platforms offering various subsidies, price guarantees, and direct discounts to capture market share.
• A need for tailored marketing strategies to cater to the growing silver economy, which seeks quality, usability, and trustworthy recommendations.

The Double 11 Shopping Festival of 2023 is shaping up to be a battleground for price and value, a showcase for national brands, and a testament to the discerning power of the silver economy. As consumer behavior becomes more rational, e-commerce platforms and brands must adapt to these evolving trends to captivate the Chinese market.

Overall Performance

The 2023 Double 11 event showcased a total online retail sales volume of 515.56 billion yuan during the peak sale period (October 31st to November 3rd), marking a 9.5% year-on-year increase. This growth signifies robust overall performance amidst an evolving e-commerce landscape​​.

According to data from Xingtu, the total GMV on comprehensive e-commerce platforms totaled 277.7 billion yuan from 8pm 10 November till the end of 11 November. 60% from Tmall, JD.com about 28%, Pinduoduo 7%. Cross-border import e-commerce accounted for 34.1 billion yuan.

Strategic Shifts and Platform Performances

A noticeable shift this year was the focus on low pricing strategies across platforms. Major e-commerce giants like JD.com, Tmall-Taobao, Douyin, Kuaishou, and Pinduoduo emphasized offering the lowest prices, with individual approaches to discounts and subsidies​​.

The sales distribution among platforms was quite varied. Tmall led with a 35.4% share, followed by JD.com (21.6%), Douyin (9.6%), Taobao (8.6%), and Pinduoduo (6.7%). The combined Tmall and Taobao, forming the Taobao-Tmall group, dominated with a 44% sales share​​.

Douyin’s rise to the third position highlights the increasing acceptance of its e-commerce model, which integrates interest-based shopping, short video content, and live-streaming​​.

Consumer Trends

The 2023 festival saw more diversified and personalized consumption. There was a notable acceleration in high-quality, experiential, and interest-driven consumption. Products catering to unique hobbies like rock climbing, surfing, and camping gained popularity, along with smart products like open-ear headphones and electric adjustable desks​​.

Health management and beauty products also saw a surge in demand. The trend towards “home-based healthcare” led to increased sales of oxygen concentrators, blood oxygen monitors, hearing aids, and electric wheelchairs. The anti-aging segment, particularly home beauty devices, witnessed explosive growth​​.

Individual Platform Highlights

JD.com: Achieved record-breaking sales, orders, and user numbers. Over 60 brands surpassed 1 billion yuan in sales, and nearly 20,000 brands saw a more than threefold increase in transaction volume compared to last year. The platform also reported significant growth in live broadcasting viewership, with a total of over 380 million views​​​​.

Tmall: Reported 402 brands exceeding 1 billion yuan in sales, with national brands making up a significant portion. The platform witnessed a historic peak in user visits and continued to expand its market share, especially in lower-tier markets​​​​.

Douyin: Experienced significant growth in GMV, with daily GMV of certain products exceeding one million yuan. The platform’s “official discount” strategy played a key role in this success, highlighting social commerce’s and live streaming’s power in driving sales​​​​.

These insights reflect the robust nature of China’s e-commerce ecosystem and underscore the changing consumer preferences and strategic shifts among the leading online shopping platforms. The Double 11 festival continues to evolve, setting new trends and benchmarks in the global e-commerce landscape.

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.

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

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%.

There are some new “situations” in this year’s 618 festival.

On the one hand, 618 has become an important opportunity for online shopping of high value and large commodities; on the other hand, it’s also a good time for families to stock up, including the sales of home appliances, 3C, food, beauty products, and etc, which will reach the peak in the first half of the year during 618.

At the same time, many big brands lead the promotion activities, and the promotion discounts also attract many new consumers.

Smart and high-quality differentiated products have become the hot spots trends in the field of home appliances, driven by promotions from both home appliance brands and major e-commerce platforms.

Get an introduction of 618 Shopping Festival here.

80% of the enterprises, surveyed by Chinese media Yibang, participated in Tmall 618, more than half of them invested more than 30% of the 618 budget in Tmall, and 40% of the enterprises surveyed expected that more than half of the 618 sales would come from Tmall.

50% of the enterprises interviewed said that in the past year, Tmall had the highest conversion among all platforms.

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

Update (21 June 2021): During this year’s “618” (June 1-20), the State Post Bureau observed more than 6.59 billion pieces of parcels, a year-on-year increase of 24.24%, and an increase of 84.16% compared with the same period in 2019.

China’s total 618 sales in 2021 reached 578.48 billion yuan, an increase of 26.5% YoY, according to data from Syntun. Top 3 channels by total sales are Tmall, JD, and Pinduoduo. Download CIW Dossier: 618 Shopping Festival to get more sales insights.

Alibaba Tmall 618

Over 67% consider Tmall as the top platform for 618.

Among the enterprises surveyed, 51% invested more than 30% of their budgets in tmall. Among them, 10.6% of enterprises allocate more than 80% of the ad budget on the Tmall platform; most allocate 30% to 50% of their total 618 budget on Tmall.

Tmall is giving away RMB10 billion (US$1.57 billion) in consumer coupons and subsidies to help further stimulate post-Covid consumption during Tmall 618 Festival 2021.

According to the official introduction of Tmall, huge discounts will be launched from June 1 to June 20. The specific activities are as follows:

• 20 yuan off every 300 yuan purchase with a total subsidy of 10 billion yuan
• 88vip members will receive additional 520 yuan
• Beauty products at flagship stores are cheaper than duty-free stores

A total of 250,000 brands participate in this year’s Tmall 618, which is 2.5 times that of last year. A total of 13 million products participate in offering discounts, of which 1.4 million are new products.

Tmall merchants almost all started the official live streaming for this year’s 618 shopping festival. About 100 celebrities have locked in Taobao Live to interact with fans. More than 500 CEOs have already made time for Tmall 618 in the agenda to face consumers and offer more brand discounts.

For more established brands, this year’s 618 festival is all about membership engagement. Shoppers who have signed up their favorite brands’ membership on Tmall can expect more additional benefits.

Tmall 618 sales

Millions of loyalty-program members on Tmall helped drive sales for 25 brands, which had each exceeded RMB100 million in transactions on June 1.

As of June 16, brand merchants have acquired nearly 60 million new members during Tmall 618, and some saw more than 50% of the transactions come from members. On June 1 alone, the first day of Tmall 618, there were 25 brands with a turnover of over 100 million yuan from members.

Since the beginning of this year, Tmall has strengthened its membership operation. The exclusive rights and benefits of brand members will be revealed many times in the search results and commodity display pagse, and various tools such as exclusive rights and benefits of members and member interaction are also provided for merchants.

About 20 brand merchants exceeded 10 million member milestone on Tmall. Alibaba didn’t disclose detailed sales value this year.

Tmall Hey Box: Alibaba’s best seller incubator for top brands

JD.com 618

Jingdong announced it will focus on live streaming, short videos, graphics, and quiz to enrich its content marketing for the ongoing 618 Grand Promotion at a kick-off event on May 20 in Beijing.

JD.com will invite more than 300 celebrities, and executives from nearly 600 brand partners to participate in various promotions through live streaming during the promotion.

The company will also invite KOLs and celebrities to create short videos to assist promotion. More than 1,000 professional buyers or KOLs from different categories will be invited to share their favorite products to drive more traffic to JD.com.

JD will hold two galas through live streaming inviting celebrities to bring consumers the festive atmosphere of 618. Leveraging JD and WeChat’s strength, JD will offer live streaming through 10 WeChat accounts.

Over 30,000 new brands and stores were launched during 618 on JD Super, JD’s online supermarket, with over 2.4 million new products.

Shoppers in Nanjing, Jiangsu province are the most active, taking the crown for the largest order volume.

Group buying is most used in Harbin. The average amount per group buy order in the chilly capital of Heilongjiang province in Northeast China this year exceeds RMB 1,000 yuan.

Other top competitors for 618 include Kuaishou, Douyin (TikTok), Pinduoduo, and Meituan.

JD & Douyin (TikTok)

JD signed a 20 billion yuan collaboration agreement with Douyin (TikTok). And, JD’s products are integrated on Douyin in this year’s 618 festival and users can buy JD products on Douyin directly without being redirected to an external page.

JD 618 Sales

In the first three minutes on Jun. 18, JD Super, JD’s online supermarket, saw sales increase 10 times, and in the first two minutes, packaged foods exceeded RMB 300 million yuan while the maternal and baby category exceeded RMB 200 million yuan.

In the first hour on Jun. 18, JD Fresh saw sales increase 70% YOY. Looking at sub-categories, seafood, meat, eggs and poultry, and fruit and vegetables increased 160%, 105% and 80% respectively. Sales of food which require little effort to prepare increased 160%.

JD.com reported a total transaction of over RMB 343.8 billion yuan for its 18-day 618 shopping festival 2021, representing a growth of 27.7% YoY from the same period in 2020 (RMB 269.2 billion yuan).

The pet category has boomed. Post-90s consumers spent an average of RMB 507 yuan per month on pet products in 2021. During 618, smart pet products increased 47% YOY.

Luxury products. Sales of Ferragamo, TOD’s, and BALLY increased 150%, 232% and 600% respectively. In addition, over 20 designer brands saw sales increase over 15 times YoY on JD platform. Consumers continue to embrace the convenience of buying luxury products online.

Sales of imported gaming phones on JD Worldwide increased by nearly three times. Imported dry cat food increased by 108%.

During the 18-day promotion, sales of JD’s online real estate business increased 230% YOY. Sales of housekeeping and cleaning services increased 6.3 times while the order number of car maintenance increased 285%.

Genetic testing service sales increased 23 times, making it the fastest-growing category of healthcare services on Jingdong. Oral health product sales increased 447%.

The top five international brands are Aptamil from Germany, Estee Lauder from the U.S., A2 from Australia, Nintendo from Japan, and Sulwhasoo from Korea. In the fresh food category, 5 million Zespri kiwis and 260,000 durians from Thailand were sold during the 18-day sale.

Social e-commerce Pinduoduo’s road to brand upgrade

618 Sales performance of other brands and platforms

Xiaomi 618

From June 1 to 18, the total GMV across all Xiaomi’s platforms exceeded 19 billion yuan (US$29.37 bn), with a year-on-year growth of 90%.

Its sales volume of smartphones ranked first among all Android phones, the TV category won first place in the sales volume / sales values. Xiaomi 11 Pro is the best selling model on both JD and Tmall.

Xiaomi’s offline sales channels saw 123% YoY increase in total transaction values. Live streaming delivered 1.34 billion yuan in total sales, an 92% growth YoY.

Douyin (TikTok) 618

Douyin 618 started on June 1st and ended at 8 a.m. on June 19th. The top 5 best-selling brands are:

1. Chuchu (new brand)
2. WHOO
3. China Gold
4. Shepinhui
5. Huawei

Apple ranks sixth overall or second after Huawei under “3C electronics” category.

The top five are expected to have sales of more than 100 million yuan. Unfortunately, Apple, Adidas, Nike, and other international brands are not expected to exceed 100 million yuan in sales on Douyin, according to Chinese media Yibang Dongli.

Douyin saw the largest new user growth of over 392% YoY among post-00s, followed by post-90s (+225.9% YoY).

This is Apple’s second year of participation in 618 and saw a sales increase of 16% YoY, according to data from Counterpoint Research.

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Social e-commerce Pinduoduo’s road to brand upgrade

83.0% of its average MAUs was attributed to Tencent-based platforms with the majority of the traffic coming from WeChat Pay portal and the dropdown list of users’ favorite or most frequently used mini-programs.

The average MPUs increased by 84.5% year-to-year from 14.8 million in the same period of 2020 to 27.3 million, mainly attributable to its stable traffic on WeChat channels. Read our WeChat Mini Programs Insights 2021.

Paying users for the 12-month period ended March 31, 2021, increased by 12.9% year-on-year from 149.9 million in the same twelve-month period of 2020 to 169.3 million. And, Tongcheng Elong’s paying ratio recovered to 11.7% for Q1 2021.

Revenues increased by 60.6% year-to-year to RMB1,613.8 million from RMB1,005.1 million in the same period of 2020.

Compared with Q1 2019, it has achieved 45.0% growth in its domestic room nights sold, with more than 70.0% growth in lower-tier cities, around 20.0% increase in domestic air ticketing volume, and nearly 150.0% increase in bus ticketing volume.

Its total GMV increased by 83.0% year-on-year to RMB33.3 billion.

The adjusted EBITDA increased by 162.7% year-to-year to RMB417.4 million from RMB158.9 million in the same period of 2020. Adjusted EBITDA margin increased from 15.8% in the same period of 2020 to 25.9%.

The adjusted profit for the period increased by 279.5% year-to-year to RMB296.3 million from RMB78.1 million in the same period of 2020. The adjusted net margin increased from 7.8% in the same period of 2020 to 18.4%.

Tongcheng-Elong cooperated with short video platforms to promote its hotel and tourist attraction products. Besides, it has commenced cooperation with a leading e-commerce platform in China by providing its travel-related products and services on the platform, to explore new traffic sources and further penetrate into lower-tier cities market.

It also cooperated with hotels to set up QR code scanning function to convert traffic from offline to its WeChat mini-program.

Mini Program platforms 2021: WeChat vs. Alibaba vs. Baidu

Kuaishou started to lead the short video market by reaching over 200 million MAU in November 2017.

Tik Top, part of Toutiao, saw astonishing growth in MAU from September 2017. In February 2018, Kuaishou continued to dominate this market with DAU of exceeding 100 million, followed by Tik Tok.

Read our online entertainment market briefing to understand the latest about short video segment, Douyin, and Kuaishou.

Top traffic driver compared: TikTok/Douyin vs. Kuaishou vs. Bilibili vs. RED

The majority of China’s short-video users (over 70%) is between 18 and 35 years-old and more are located in tier-3 and tier-4 cities than the top tier cities.

The DAU/MAU ratio of Kuaishou and Tik Tok both reached 0.45, which means each user equally launch Kuaishou/Tik Tok app almost every other day.

15 seconds short video is Tik Tok’s main product, which meets users’ need for fragmentation of the network transmission. Tik Tok users have a longer duration of the engagement. Around 30 million users opened Tik Tok at 9:00 and don’t turn it off until 23:00 at late night. It seems that only after they fell asleep did they stopped watching short videos.

In particular, after a meal and before sleep are peak periods for browsing Kuaishou and Tik Tok.

In February 2018, Tik Tok users aged 24-35 accounted for 46.71% of the total users on Tik Tok. Compared with users aged under 24 who were the majority in July 2017, they have higher income and consumption power. Moreover, users live in super tier 1 and tier 1 cities accounted for 63.87% of the total. Hence, it becomes easier for Tik Tok to achieve traffic monetization.

Female young users aged under 24 represent the majority of Kuaishou/Tik Tok users. Kuaishou had higher penetration rate than Tik Tok in fourth-tier cities or below while Tik Tok performed better in first and second tier cities than Kuaishou.

The number of users with a bachelor degree or above of Tik Tok was 10% more than that of Kuaishou. However, the income levels of the two short-video mobile apps were almost the same.

The most attractive elements of Kuaishou lie in its interesting and down-to-earth, versus fun, cool, and young elements of Tik Tok.

57% users of both apps follow interesting ordinary people; and, 53.3% users follow the talented. Currently, both Kuaishou and Tik Tok tend to offer more support and exposure to the interesting ordinary people.

After seeing other users’ interesting videos, 77.8% of Tik Tok users would try to imitate the video by themselves compared with 50.9% Kuaishou users. The motivation of recording life on short video drives 59% Tik Tok users and 49.1% Kuaishou users to post a video.

For users who had used both Kuaishou and Tik Tok, 15% of them uninstalled both of them. For users who have used both apps but eventually keep at least one of them, 4.4% of them choose Kuaishou while 31.5% of them choose Tik Tok.

Both Kuaishou and Tik Tok saw higher user churn rate in female users than male ones, higher in the second- and fourth-tier cities or below than the first- and third-tier cities. Kuaishou loses most users in the second-tier cities compared with Tik Tok in fourth-tier cities or below.

Compared with Tik Tok, users are more likely to leave Kuaishou for boring content or application design not hitting the spot.

Users spend more time on Tik Tok.

Chinese influencer platforms: Weibo, Douyin, Kuaishou, Xiaohongshu

From January to November, China’s online retail sales reached 10,537.4 billion yuan, a year-on-year increase of 11.5%, 0.6 percentage point higher than that of January to October.

Among them, the online retail sales of physical goods reached 8,779.2 billion yuan, an increase of 15.7%, accounting for 25% of the total retail sales of social consumer goods; among the online retail sales of physical goods, the sales of food, clothing and consumer goods increased by 32.9%, 5.9% and 17.1% respectively.

Top 100 Chinese brands in 2020

The Top 100 Chinese brands increased their worth by $106.8 billion to reach $996.4 billion, demonstrating the resilience of strong brands and their ability to build and sustain value in the most difficult of years.

Alibaba remains China’s most valuable brand for the second year, growing +9% to $153.3 billion, followed by Tencent with +9% growth to $151.0 billion.

China Cloud Market

Alibaba Cloud continued to lead the Chinese market with 41% market share in Q3, where cloud computing is a key part of the government’s development plans. It is also the overall leader in the Asia Pacific region. Alibaba Cloud accounted for 6% of the worldwide market.

China Smartphone Shipments

China’s 5G smartphone shipment is about to reach 140 million units in 2020, and all new models released by major manufacturers in the Chinese market will be 5G mobile phones. In Q3 2020, worldwide smartphone shipments reached 348.0 million units, at a 1% decline year on year (but up 22% in Q2).

Samsung regained the lead, up 2% to 80.2 million units. Huawei slipped into second place with a 23% fall to 51.7 million units. Xiaomi took third place for the first time, reaching 47.1 million units with 45% growth.

Top Mobile Apps & Platforms in China 2020

The top mobile apps by MAU growth are QQ Browser, Taobao, Pinduoduo, DingTalk, and TikTok Lite in September 2020. The top lifestyle mobile platforms are led by Meituan, Meituan Delivery, and Alibaba’s Ele.me including mobile apps and mini programs.

Mini Program platforms: WeChat vs. Alibaba vs. Baidu

Mini Programs (MP) are light applications designed to run on top of a specific mobile app. Top technology companies in China have designed and run their own mini-program framework; and, the most popular ones include WeChat platform, Alibaba (Alipay platform; Taobao platform), Baidu Smart Program, and QuickApp.

Mobile reach in 2020: Tencent, Alibaba, Baidu, ByteDance

Tencent has the highest reach of 96.3% of China mobile internet users in Sept 2020. Alibaba and Baidu reach 95.3% and 91.0% mobile internet users respectively while ByteDance follows closely with over 67% reach.

The most innovative Chinese companies in 2020

Huawei has ranked the top Chinese company in Boston Consulting Group’s Most Innovative Companies 2020 list, or the sixth globally, followed by Alibaba, Tencent, Xiaomi, and JD.

Of the 162 companies that have been on BCG’s top 50 “most innovative companies” list over the past 14 years, nearly 30% appeared just once—and 57% appeared three times or fewer. Only 8 companies have made the list every year: Alphabet, Amazon, Apple, HP, IBM, Microsoft, Samsung, and Toyota.

Short video market trends in China for 2020

Online video has a penetration of 94.5% in China internet users as of the first half of 2020, reaching over 888 million users. Short video market saw fast growth in the first half of 2020 with almost 818 million users and a penetration rate of 87%.

China online advertising market overview in 2020

China’s online advertising market saw the largest growth from short video ads (107.7%) and social ads (62.5%) in Q3 2020 while e-commerce ads had an increase of 14.9%.

The short video platforms with the largest advertising revenue growth are Kwai (Kuaishou), Xigua (owned by ByteDance), and Haokan (owned by Baidu).