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China Digital Digest Weekly: Exploring the Chinese Digital Landscape

Hi folks, we are back with our weekly edition of China’s Digital Digest, wherein we would bring you weekly updates on China’s digital space. The report takes a quick glance at China’s complex and rapidly evolving social media landscape by providing updates on the latest happenings across the social media industry. Here are the major highlights of the report.


1. Tencent Posts 11 Percent Rise In First-Quarter Revenue



Tencent Holdings, operator of China’s biggest social media app and the world’s largest video gaming business by revenue, reported an 11 percent jump in revenue for the first quarter of 2023, driven by growth in advertising and game sales amid a gradual rebound in the domestic economy.



Total revenue for the Hong Kong-listed internet giant reached 150 billion yuan (US$21.4 billion) in the three months ended March 31, up from 135.5 billion yuan a year ago. That was better than the consensus estimates of 146.32 billion yuan, according to analysts polled by Bloomberg.


2. ByteDance to ‘Vigorously’ Fight Allegations From Former US Exec



ByteDance, the Chinese company that owns TikTok, said it would fight allegations that it fired an executive for sounding the alarm over what he called the company’s “culture of lawlessness”.



Yu Yintao has sued ByteDance in a San Francisco court as political pressure has been growing in the US to ban TikTok. Critics say the popular platform allows Beijing to covertly collect users’ data and influence their opinions – something the company denies.


In his suit, which was filed this month, Yu said that he discovered shortly after being hired in 2017 that ByteDance “was stealing” videos published on rival sites like Instagram and Snapchat and presenting them as its own. Yu, who was ByteDance’s US head of engineering, said he notified company leaders about the problem, but the “intellectual property infringement continued unabated”.


3. Tencent Replaces Chairman At Game Live-Streamer Huya Amid Increased Competition



Tencent Holdings, operator of the world’s largest video gaming business by revenue, has appointed a new head for its popular game live-streaming platform Huya amid regulatory pressure and fierce competition in this market.



Lin Songtao, who serves as a vice president at Shenzhen-based Tencent, was named Huya’s new chairman effective immediately, replacing Huang Lingdong who had held that post since April 2020, according to a statement from the New York-listed live-streaming service.


4. Delete Encrypted Messaging Apps From Kids’ Phones, Police In China Tell Parents



Police in China have urged parents to delete encrypted messaging apps from their children’s smartphones to prevent youngsters from inadvertently becoming “accomplices” to fraud.



The social media accounts of local police forces around the country have been circulating messages warning against children using instant messaging apps like the long-blocked Telegram and domestically founded BatChat. Online fraud on “foreign encrypted messaging apps” or “in-country non-mainstream apps” involved an “extremely” complex process that made the investigation difficult, the Nanjing city public security bureau said in one of the earliest postings. The police force in the eastern city is one of about a dozen countrywide found by the Post to have issued such warnings.


5. TikTok Sues Montana After US State Moves to Ban The App



TikTok has filed a lawsuit challenging the state of Montana’s new ban on the use of the Chinese-owned short-video app. TikTok argues the ban, which would take effect on January 1, violates the First Amendment rights of the company and users.



The lawsuit, filed in US District Court in Montana, also argues the ban is pre-empted by federal law because it intrudes upon matters of exclusive federal concern and violates the Commerce Clause of the US Constitution, which limits the authority of states to enact legislation that unduly burdens interstate and foreign commerce.


6. Tencent Launches Palm Scans for WeChat Pay



Chinese social media giant Tencent Holdings is allowing Beijing metro passengers to pay for rides using only their palms in a new service launched in China’s capital city through its WeChat Pay service, referred to as Weixin Pay domestically.



Users who enroll in the palm-recognition service can pay for rides on the Daxing Airport Express Line by holding their hands over a scanner at metro station turnstiles. Recognition of a unique palm print triggers an automatic payment through the user’s WeChat account.


7. Amazon Closes China App Store After 12 Years Amid Difficult Market



Amazon.com will close its official app store in China in July, the latest retreat from the Chinese market by the US tech giant following last year’s announcement that its Kindle e-book service would also shut. The app store service will shut down on July 17, according to Chinese media The Paper, citing an email from Amazon Appstore sent to users, which did not elaborate on the reasons for quitting the market.



An Amazon representative said the Amazon Appstore, launched in 2011 as an alternative to Google for Android phone users to install apps and games, will be “discontinued”. However, its official shopping site Amazon.cn will remain operational, as will other services such as Amazon Global Selling, Amazon Global Store, and cloud unit Amazon Web Services (AWS).


8. Fast-fashion Giant Shein Plans Mexico Factory In Shift Away From China



Online fashion giant Shein is exploring plans to build a factory in Mexico, as one of its manufacturing hubs outside China, sources familiar with the matter told Reuters.



The factory, which will produce Shein items and is part of the retailer’s push to localize production, could shorten shipping time and cut distribution costs for Shein customers in Latin America. It follows its announcement that it will build a manufacturing network in Brazil to serve as a global customer base.


9. Douyin Sees 80 Percent Annual Growth In GMV For E-Commerce



Douyin, the Chinese version of TikTok that has been aggressively pushing online shopping as a way to convert eyeballs into revenues, said its gross merchandise volume (GMV) on the platform grew 80 percent last year.



Douyin’s owner, Beijing-based ByteDance, set up a dedicated e-commerce unit in 2020 but has never publicly released the total GMV figure. US news media The Information reported in January that the GMV last year was 1.41 trillion yuan (US$202.3 billion), citing two sources.


10. Coca-Cola & Riot Games’ First Limited Edition Gaming Concept Debuts In China



Coca-Cola has teamed up with renowned global game developer Riot Games to launch their first gaming-inspired limited-edition product, “Hero’s Arrival” (英雄登场 yīng xióng dēng chǎng). The Chinese name for the product draws inspiration from the ultimate ability name of the famous champion “Galio” in League of Legends, one of the world’s most popular video games that has drawn in over 100 million players in China.



The collaboration, therefore, shows Coca-Cola’s ambition to wow gamers in the country, where video games have gradually evolved into a significant cultural phenomenon. It would also allow the brand to resonate with those players, who are mainly of the post-90s and post-00s generation by celebrating the gaming culture and their identities as gamers.


11. MINISO Becomes The First Chinese Brand to Land In Times Square



The Chinese lifestyle goods store MINISO is taking its global expansion to the next level with a flagship store in New York City’s Times Square.



MINISO Times Square opened on May 19 welcoming in throngs of Gen Zers, many of whom were overseas Chinese familiar with the beloved brand. The store boasts 400 square meters and 10 distinct product zones covering all the MINISO classics, including blind box collectibles, plushies, snacks, electronics, and stationery.


Wrapping Up

The vast and diverse nature of the Chinese Social Media space makes it incredibly challenging to keep a tab on the rapid developments taking place. However, China’s Digital Digest brings you all the latest updates from there to keep you abreast of all the evolving trends.


To delve deeper into the findings of the May report, click here.


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