Alibaba increased its stake in courier YTO Express, raising its bet in the logistics industry. China’s coffee war continues to brew. Douyin owner Bytedance added a crucial piece to its e-commerce puzzle, while rival Kuaishou is also setting ambiguous goals for its e-commerce push.
China’s e-commerce and retail market offers a fire hose of products, choices, business models, rapidly changing content, and more. Here’s what you need to know about China’s online retail market for the week of August 31-September 9.
- Alibaba further increased its stake in Chinese logistics giant YTO Express by 12% to 22.5%. Alibaba rival JD.com had reportedly suspended its support for YTO Express in September. Alibaba has been deepening its relationships with logistic firms through cross-shareholding. It holds stakes in major delivery companies like ZTO Express, STO Express, Yunda, and Best. Alibaba also holds a 63% stake in its affiliate Cainiao Smart logistics, which these major couriers also hold shares of. (SSE filing, in Chinese)
Buzz from China’s beverage industry
- The Luckin power struggle continues as founder Charles Lu loses control of the troubled coffee chain. Sean Shao, chairman of the special committee responsible for Luckin’s internal investigation and a major opponent to Lu, was named an independent director in a board meeting held on Sept. 2, two months after he was removed from the same position. (Sina Tech, in Chinese)
- Coca-Cola-backed coffee chain Costa is closing around 10% of its stores in mainland China across cities like Qingdao and Shenzhen. The Starbucks rival will operate nearly 400 offline stores after the downsizing, far fewer than Starbucks’ 4,400 stores. A Costa representative told local media that the company is still confident about growth potential in the China market, where it is still looking to open new stores. (National Business Daily, in Chinese)
- Coffee Box, the struggling Chinese coffee chain the subject of shutdown rumors during the coronavirus outbreak, made a major comeback last week. In a Sept. 3 statement, the company, which began reducing its store count last year, said it would be expanding to more cities as well as improving delivery times for customers on various online and offline platforms including Tmall, convenience stores, and gas stations. Local media suggested new funding was fueling the move. The company did not mention a capital injection in its statement. (Coffee Box WeChat Official Account, in Chinese)
- Heytea and Naixue’s Tea, two top bubble tea chains in China, are reportedly planning for Hong Kong listings in 2021. Naixue’s Tea was reportedly aiming to float shares in the US earlier this year. As beverage categories blur in China, bubble tea chains are competing head-on with coffee chains. (iFeng, in Chinese)
Short video apps shift into e-commerce
- Tiktok owner Bytedance obtained a license for running third-party payment services by acquiring a Wuhan-based fintech company, local media reported on Sept. 3. The move would smooth its path to expanding into e-commerce, where payment is a crucial link. This is the Chinese tech giant’s fourth fintech license. It already holds licenses to operate online insurance, online brokerage, and online microcredit businesses. The company applied for five financial licenses in Hong Kong in August. (Yicai, in Chinese)
- Short video app Kuaishou will launch an “incubation project” which aims to help more than 100,000 new businesses reach annual sales of RMB 1 million ($146,000) on its platform. The Tiktok rival pledged to build more than 100 industrial bases across China and train upwards of 10,000 livestreamers during the period. (Caixin Global)