Last week, Chinese food delivery giants were again the target of public ire. Meanwhile, Dianping’s symbolic surrender to Meituan is made official and Tencent Weibo gives a final curtain call. Venture capitalist interest in e-commerce platforms wanes despite booming consumer demand.
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 Sept. 7-16.
Work hazards for delivery drivers
- In response to public condemnation revived by a viral post about food delivery driver hardships, Eleme and Meituan rolled out an option for users to grant couriers five- or 10-minute buffers on delivery times. However, the option elicited criticism of the platforms from state media and industry experts. They believe the companies, rather than the consumers, should shoulder the burden for pushing couriers to take dangerous risks to meet stringent deadlines set by platform algorithms. (TechNode)
Online winners and losers
- Meituan Dianping, the Chinese local lifestyle service giant created through a 2015 merger between two arch rivals, will simplify its name to Meituan, according to a filing on Sept. 11. Merged as equals five years ago, the Dianping review app still widely used, but is minimized in strategic decisions. As market consolidation continues, China has witnessed many mergers between leading verticals. Similarly, Baidu Waimai, once China’s third-largest food delivery business, lost its brand after merging with Alibaba-backed Eleme, and later rebranded as Star Ele. (HKSE)
- Tencent Weibo, once a close competitor of Sina Weibo, is going to suspend its services and operations starting Sept. 28. The platform is one of the Wechat and QQ parent company Tencent’s few stumbles in social networking. (Tencent News, in Chinese)
Investors overlooking e-commerce
- In August, China’s e-commerce sector drew a total of RMB 11.7 billion ($1.72 billion) in funding, down 45.3% from RMB 21.38 billion in the same period last year, according to data from E-commerce Research Center. The funds went to 33 companies, including JD Health and fresh grocery sites Yipin Shengxian and Xiaotu Maicai. Local lifestyle e-commerce was the most popular sub-category, accounting for RMB 8.58 billion in investment during the month. The drop in China’s e-commerce venture capital aligns with the global market, where e-commerce investment in 2020 is also languishing. (Jiemian, in Chinese)
Leadership departures at Alibaba affiliates
- Chen Lei, manager of Alibaba’s second-hand shopping app Idle Fish, or Xianyu, has left Alibaba, the company confirmed to local media on Sept. 10. No details about the reason for departure were provided, but it was reportedly due to an extramarital affair. Formerly a central figure in the development of Taobao’s virtual coin system and Taobao Live, Chen was appointed as head of Idle Fish in July 2019, reporting directly to Tmall president Jiang Fan. Jiang himself was demoted in April due to alleged affair with a Chinese social media influencer. Second-hand goods selling has been picking up momentum in China. (Hupu, in Chinese)
- Eleme chief technology officer Zhang Xuefeng stepped down from his position after five years with the food delivery platform. Zhang, who told local media he would be spending more time with his family and on hobbies, is one of the executives from Eleme’s founding team before it was fully acquired by Alibaba in 2018. Zhang’s leave comes as Alibaba is drumming up its push in local lifestyle services against Meituan. (Sina News, in Chinese)