Weekly Business Roundup June 23

News from Tencent, Huawei, Apple, Sequoia China, Meituan, WuXi Biologics, Alibaba, JD

Monday, June 17

• Neil Shen, founding and managing partner of Sequoia China, retired as non-executive director at Meituan after nine years due to other work arrangements, the Chinese food delivery giant announced on June 14. Shen holds 1.9% of Meituan, having reduced his stake several times in the past.

Tuesday, June 18

• WuXi Biologics has suspended its factory expansion in Massachusetts as part of normal business adjustments, according to the company. The halt may be related to the US Biosecure Act, which aims to exclude the firm from US pharmaceutical supply chains.

• In May, Chinese express delivery firms handled a record 14.78 billion parcels, a 23.8% increase from last year, according to the State Post Bureau. The industry generated CNY 116 billion (USD 16.3 billion) in revenue, up 15.6% year-on-year.

Wednesday, June 19

• China’s 618 shopping festival recorded its first-ever sales drop, with e-commerce sales falling 7.0% from last year. Despite this, Alibaba achieved a record in 88VIP loyalty membership sign-ups, and JD set new records for transaction volume and orders.

• Tencent will ban virtual influencers from livestreaming on its Video Accounts platform to encourage real live hosts who can interact with viewers in real-time. Rival platforms have largely allowed AI-powered anchors. According to draft rules on “low-quality content,” the platform will ban AI or plugin-powered avatars from livestreaming and selling, with penalties for offenders based on severity.

• Amid tightening domestic IPO regulations, the number of Chinese mainland companies listing shares offshore has surged this year. As of yesterday, 34 firms have gone public on offshore markets, a 40% increase from last year, according to stock tracking app Straight Flush. Twenty-three firms, including Youji Holdings, listed in Hong Kong, with the rest in New York.

Thursday, June 20

• Tencent’s mobile game, Honor of Kings, is now available in over 160 countries. Level Infinite, Tencent Games’ overseas distribution arm, announced the global launch, including markets in Japan, South Korea, North America, and Europe.

• Tencent announced on Wednesday that its mobile game Dungeon and Fighter (DNF) will no longer be available on certain Android platforms from June 20 due to its contract expiring. Reason is that listing on domestic Android channels (app stores) means losing half our revenue.

• JD has announced the launch of JD.Vision, a native Apple Vision Pro app that offers an immersive shopping experience using spatial computing.

• New versions of several Tencent apps, including WeChat, are being developed for Huawei’s HarmonyOS. HarmonyOS had 17% market share during the first quarter ahead of Apple’s iOS with 16%. Google’s Android is still by far the most popular mobile OS, with a 68% share.

• Policy guidance and market enthusiasm are creating a strategic opportunity for index investing in China, according to the Shanghai Stock Exchange (SSE). Following the State Council’s Nine-Point Guideline action plan, index investing, especially through exchange-traded funds (ETFs), is gaining momentum. China’s index funds grew 20% to CNY 3.4 trillion, with ETFs accounting for CNY 2.45 trillion.

Friday, June 21

• Alibaba-owned workplace management app DingTalk is planning global expansion after a small-scale pilot with hundreds of Chinese enterprises operating overseas. By the end of 2023, DingTalk had over 700 million users and served 25 million corporates and educational institutions, with 120,000 paying customers.

Kuaishou’s Kling large model has launched a major update, enabling image-to-video conversion. Users can now transform static images into 5-second videos with motion control via text prompts.

Here is one example I created: (the bad resolution is more a substack problem. The original looks impressive. You can see it on my twitter account.

• China plans to guide photovoltaic industry expansion and prevent unnecessary investments, the NEA announced. They aim to avoid low-end capacity duplication and support the market amid manufacturers’ concerns over surplus and profit margins. The NEA will release timely industry data, promote PV technology innovation, and support the development of large and distributed solar power plants.

• Alibaba’s gaming arm, Lingxi Games, recently underwent an organizational reshuffle, appointing a younger management team, many in their 30s.