China is already gearing up for Singles Day, the largest shopping extravaganza in the country even though Nov. 11, the anti-Valentine’s Day from which the festival takes its name, is still three weeks away. Meanwhile, Yuanfudao and Zuoyebang, two of China’s largest ed-tech firms, reportedly nabbed hundreds of millions of dollars each as Covid-19 accelerated demand for online education. Taobao Taiwan bids farewell to the island after just a year of operation.
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 Oct. 14 – 21.
Early start for Singles Day
Singles Day this year, normally a one-day shopping festival held on Nov. 11, will have two sales windows, Alibaba said in statement sent to TechNode on Tuesday. The first will take place Nov. 1 – 3 in addition to the actual day. Pre-sales for its first sales window starts Wednesday, marking the onset of the shopping festival for the year. Pre-sales require users to pay a deposit beforehand in order to enjoy discounted prices when the formal sale begins.
China’s shopping festivals are expanding both in number and duration, especially at a time when the state is investing heavily to drive domestic consumption for post-coronavirus recovery.
Livestreaming, which surged during last year’s event, is expected to take the center stage this year. Li Jiaqi, the “Lipstick King” with 33 million followers on Taobao Live, drew more than 160 million viewers in a seven-hour livestream session on Tuesday evening, mainly hawking cosmetics.
Ed tech unicorns grab big bucks
Chinese online education unicorn Yuanfudao reportedly raised a $1 billion Series G2 led by DST Global with participation from seven to eight other investment capital firms, Chinese media outlet Late Post reported. The round follows a G round of the same size raised in April. The round reportedly valued the company at $15.5 billion, almost doubling its $7.8 billion valuation from six months ago.
Late Post also reported that Yuanfudao rival Zuoyebang is closing a $700 million to $800 million round, citing people with knowledge of the matter. Investors for the reported round include Fountainvest Partners, Softbank, Sequoia Capital China, and Tiger Global Management. Similarly, the round comes on heels of a hefty $750 million Series E received in June this year.
Investors flocked to China’s online education market, especially the more lucrative K-12 education sector, when the coronavirus pandemic forced to students to study from home during lockdown. (Late Post, in Chinese)
Taobao Taiwan shuts down
Taobao Taiwan, the e-commerce platform run by Claddagh Venture Investment, will be shut down by the end of 2020 after the UK-registered operator refused to re-register as a China-backed entity.
Claddagh said it made the decision due to “multiple uncertainties in the market.” The platform stopped taking orders on Oct. 15, and will gradually wind down support services like payment and delivery. The company pledged to help merchants deliver existing orders to buyers.
The Taiwanese authorities declared that Claddagh was in fact controlled by mainland Chinese tech giant Alibaba and issued an ultimatum to the company in August, requiring it to either re-register as Chinese-backed or leave the island.
Claddagh works with Alibaba, which holds a 28.8% stake in the investment firm, through brand authorization. Alibaba’s share in Claddagh is lower than the 30% criteria for any company operating in Taiwan to be deemed a Chinese investment-backed business. The local authorities still viewd the company as a Chinese investment, saying that the UK firm relies heavily on Alibaba to run Taobao Taiwan.
Chinese tech firms are increasingly feeling the weight of political tensions between the straits and beyond. Sales of video-streaming services operated by Chinese companies like Iqiyi and Tencent were barred in August. (The Paper, in Chinese)