Falsified data scandals involving Chinese online celebrities shined light on the legitimacy of livestream metrics. Reports that Chinese online housing companies are nearing insolvency are on the rise. Chinese e-commerce giants meanwhile have expanded the Singles Day promotion across their ecosystems to include local services and online travel.
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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 Nov. 12 – 18.
Boosting livestream data
Real-time data from a Singles Day livestream session showed that 3.1 million people tuned in to the event which featured several online celebrities including the popular stand-up comedian Li Xueqin. However, a Chinese media outlet reported that only 11,000 were actual viewers while the rest were generated by “brushing,” or “click farming,” where sales, order, or viewership figures are inflated to spur buzz.
Livestreams are hosted on e-commerce platforms, which entrust media operations firms to execute the event. The latter then outsources viewership and livestream interaction metrics to a click farm company, a person who works on a livestream event team told local media.
The report cited an employee from a software company focused on statistics inflation, who said that the company’s “brushing” machines were running on full capacity during the whole Singles Day season.
Chinese regulators are stepping up control on the livestream industry, which has seen a big boom since the beginning of this year. (Tencent Tech, in Chinese)
In the meantime, Wang Han, a well-known show host in China, made headlines this week for a possible data inflation snafu during a livestream session held on Nov. 6. Local media reported on Tuesday that the event resulted in a massive 76.% refund rate, possibly as a result of order brushing. A reported 1,012 out of the total 1,323 orders for products ranging from vacuum cleaners, televisions, and water purifiers were returned for refunds, ostensibly as a result of boosted false orders. (The Paper, in Chinese）
Mixed signals from proptech
- Chinese online housing firm Beike posted better-than-expected results for the third quarter, the company’s first quarterly results after raising $2 billion in a New York listing in August. The company earned net revenues of RMB 20.5 billion ($3.0 billion) in Q3, an increase of 70.9% year on year, beating the market consensus estimate of $2.59 billion. The company forecasted Q4 total net revenues will jump approximately 33.5% to 40.5% year on year to between RMB 19.2 billion and RMB 20.2 billion. (Beike)
- Shares of online housing platform Danke surged 75% in US trading after Chinese media reported that real estate broker firm Woaiwojia may acquire the cash-strapped company. Amid rising complaints from tenants and landlords, Danke had reportedly been planning to file for bankruptcy, less than a year after going public in January. The company denied the claims in a post on Chinese microblogging service Weibo. (Tencent News, in Chinese)
- A new wave of negative press broke over online rental platform Ziroom for exploiting landlords. Apartment owners who signed contracts with the “second landlord” platform were required to either “voluntarily” lower 20% of rents while rental fees for tenants were not lowered, local media reported. Those who refused to lower rents could exit the contract but were required to pay a hefty fee to the platform for remodeling. Reports of Danke’s potential bankruptcy raised concern about Ziroom, which runs under a very similar model. Ziroom responded to a user on Quora-like platform Zhihu, saying that the company’s services, like moving, cleaning, and maintenance are operating normally with more than 95% of customers satisfied with their services. (China Economic Weekly, in Chinese)
READ MORE: INSIGHTS | ‘Second landlord’ platforms get tenants in debt to fund growth
Beyond Singles Day
- JD-backed on-demand services platform JD Daojia more than doubled its sales during the Singles Day promotion on Nov. 11 compared with last year. The average delivery time shortened by eight minutes compared to last year. According to the platform’s data, product assortment is constantly expanding, from supermarket groceries and fresh produce to medicine, pet supplies, cosmetics, apparel, and mobile phones. (JDDJ statement)
- Online travel, a sector among the worst hit during the pandemic, leveraged the shopping festival to aid recovery. Hotel reservation orders on Alibaba’s travel arm Fliggy more than doubled during the 11-day campaign. The 11 airlines taking part in the promotion collectively sold more than 100,000 fly-as-you-wish packages on the platform. (Travel Daily, in Chinese)