Weekly Business Roundup #8

News from Shein, Kuaishou, Zhihu, JD, Apple, Xiaomi, Alibaba, Li Auto, Tencent , Douyu, Tuniu, NetEase, Kweichow Moutai, BMW, Audi

Monday, June 3:

• Shein plans to file for a London IPO in the coming days due to stalled progress on its US listing. The IPO is expected to value Shein at around £50 billion, lower than its $66 billion valuation from last year’s funding round. Filing a prospectus with UK regulators does not guarantee a successful listing. Despite preferring a US IPO, Shein is considering alternatives due to ongoing uncertainty.

• Chinese book publisher Motie Group has halted book shipments to JD.com amid a dispute over low-priced promotional books during the 618 shopping festival. Motie founder Shen Haobo urged JD to remove and return all Motie-published books. The conflict arose from JD’s pricing model, which allows it to set any price, leaving publishers without control.

Tuesday, June 4:

• JD’s “buy 9.9, enjoy free shipping” channel saw over 100 times more shoppers in the first hour of the 618 shopping festival, with 75% from third-tier and lower cities. Big brands like Apple and Xiaomi quickly exceeded RMB 100 million ($13.8 million) in transaction value.
  
  Alibaba reported that 185 brands, including Apple and Xiaomi, surpassed RMB 100 million on Tmall by 9 p.m. on May 31.
  
  Be careful, different timelines and ambiguous data from retailers have complicated year-to-year performance comparisons.

• Li Auto, the first Chinese EV startup to make a profit, is launching large-scale layoffs, implementing price cuts, and reducing sales targets after the failure of its first pure electric model, the Li Mega multi-purpose vehicle, according to employees from various divisions, Yicai reported. The coffin is dead :).

Wednesday, June 5:

• China’s National Press and Publication Administration (NPPA) approved the third batch of imported game licenses this year, including 11 mobile games, one PC game, and three console games. Notably, Tencent Games acquired approvals for Black Desert, Daemon X Machina, and Valorant. Tencent, a major shareholder of Riot Games, plans to release the mobile version of Valorant soon.

• Douyu announced its unaudited financial results for Q1 2024, reporting revenue of RMB10.397 billion, a 29.9% decrease from the same period in 2023.

• Tuniu, a Chinese online travel agency, reported a net profit of CNY13.9 million (USD1.9 million) in Q1, reversing a net loss of CNY7 million (USD966,000) from the previous year. Revenue increased by 71% to CNY108 million (USD14.9 million).

Thursday, June 6:

• World of Warcraft announced on Weibo that a deletion-based technical test for the Chinese server will start on June 11, preparing for the Wrath of the Lich King expansion launch later in June. This follows NetEase Games’ announcement of a deal to secure Blizzard’s return to China. Chinese gamers are eagerly following these updates.

• Kweichow Moutai has introduced a new ice cream in five flavors: milk, melon, blueberry, strawberry, and grape. The five-flavor box set is currently priced at 49.9 yuan after a discount on the e-commerce platform’s flagship store.

• Foreign luxury automakers like Cadillac, BMW, and Audi are offering steep discounts in China to compete with domestic brands like BYD. The BMW i3 is discounted 51% to CNY175,000 (USD24,000) at a Beijing dealership, requiring car financing. Other models, like the BMW i5, have price cuts over CNY100,000, while fuel-powered vehicle discounts are smaller.

• Li Dahai, CEO of Model Best, resigned as CTO of Zhihu to focus on the AI startup. Zhihu appointed iQiyi’s ex-VP Sun Bin as the new CTO to replace him. Li will remain a director at Zhihu.

Friday, June 7:

• Kuaishou introduced a text-to-video model, “Kling,” which can generate up to two minutes of 1080p high-definition video. In a demo, Kling created a video of a cat driving a car through a busy street from simple text prompts. Kuaishou highlights Kling’s ability to produce videos with realistic motions, including making people dance from full-body photos. Developed by Kuaishou’s LLM team, Kling is available for invitation testing on the Kuaiying app (however need Chinese phone number).

• Xiaomi Auto is urgently hiring employees to work 10-11 hours a day, six days a week, for CNY130,000 (USD17,900) annually, according to Sina Tech. The company aims to deliver 120,000 units this year.