Chinese food delivery giant Ele.me was criticized for its low compensation for the family of a deliveryman who died while on the job. The US is considering banning American investors from Alibaba and Tencent. A number of US-listed Chinese firms seek out alternatives to the country’s stock market. Luckin Coffee endures a new round of its ongoing power struggle.
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 Jan. 7 – 13.
Big tech’s labor practices under fire
- Netizens denounced Alibaba-backed Ele.me for its response to the sudden death of a 43-year-old deliveryman who worked for the platform via its on-demand logistics service Fengniao. In an initial response to the driver’s death at work, the company said “There is no direct labor relations between the rider and the platform” (our translation) and it would only provide a RMB 2,000 (around $308) compensation out of “humanitarianism.” Relenting to public criticism of its first response, Ele.me said in a Friday statement that it will raise the insurance payment for the worker’s family to RMB 600,000 (SCMP)
- A one-minute video showing a Chinese food delivery driver setting himself on fire in front of a Fengniao delivery station in the eastern Chinese city of Taizhou went viral on Chinese social media on Tuesday. (TechNode)
- A video posted by a former Pinduoduo employee detailing poor working conditions at the company went viral amid renewed discussions of compulsory overtime work schedules at Chinese tech companies. The video from the disgruntled former employee follows two recent deaths of Pinduoduo employees. (TechNode)
US-listed Chinese firms feel the squeeze
- E-commerce giant Alibaba, along with rival Tencent, may be cut off from US capital. (The Wall Street Journal)
- In response to the US forcing Chinese companies from its stock market, Chinese online retailer Vipshop, livestreaming platform Joyy, and Tencent Music are reportedly seeking secondary listings in Hong Kong. (Dealstreet Asia)
- Secoo, the Nasdaq-listed luxury retailer, has launched a privatization plan, joining a growing list of US-listed Chinese companies fleeing the American stock market amid worsening trade tensions. (Caixin Global)
Red-hot tea market
- Management at beverage chain Luckin Coffee has demanded the removal of Guo Jinyi, who was named its CEO in July after the company’s April financial fraud scandal, citing cronyism and incompetence. They also asked to launch an independent investigation into Guo’s conduct. (Caixin Global)
- Beijing-based tea beverage brand Willcha raised an eight-digit funding round from angel investors, which it said will be put toward offline expansion. China’s tea beverage market has drawn more than RMB 3 billion investment between 2010 to 2020, data (in Chinese) from corporate intelligence service Qichacha showed. The market has surged over the past decade with number of registered merchants increasing more than tenfold to 87,000 in the first 11 months of 2020 from 7,410 in 2010. Venture capital invested in the sector reached a historical high of RMB 104 million in 2020. Bubble tea brand Naixue’s Tea reportedly received more than $100 million in January at a nearly $2 billion valuation. (TechNode Cn, in Chinese)