Last week, Chinese e-commerce giant Pinduoduo was again under fire for deleting pictures from a user’s smartphone photo album without consent. Luckin opens itself to franchises as the embattled Chinese coffee chain tries to restart its offline expansion in lower-tier cities. E-commerce giants led by Alibaba are gearing up for the upcoming Spring Festival shopping season.
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. 14 – 20.
Pinduoduo backlash, again
The Shanghai-based e-commerce platform was denounced on Chinese social media for infringing on data privacy after a user accused the app of remotely deleting screenshots in his smartphone photo album without consent.
The user saved screenshots as evidence to support a complaint he made about the company. In a marketing campaign, Pinduoduo had promised a RMB 100 ($16) cash reward to users who invite a friend to the app. The user only received a small voucher after doing so.
Pinduoduo responded in a statement (in Chinese) that it deletes the original picture in its app if it is edited, causing an erroneous command to delete related photos in the user’s smartphone album. The firm pledged that it will no longer delete users’ original photos once they are edited. (Liehuw, in Chinese)
- On Jan. 12, Pinduoduo launched Duo Duo Maicai in Shanghai, highlighting the e-commerce giant’s big bet on expanding its community group-buying business into the more competitive markets in major metropolises. (21st Century Business Herald, in Chinese)
Luckin the franchise
Luckin Coffee announced a partner recruitment program on Monday, inviting franchisees in 22 provinces and autonomous regions, including Sichuan, Shanxi, Heilongjiang, and Jilin to join the coffee chain. The firm has continued its offline expansion efforts, especially to lower-tier cities, despite its management tumult.
Cities where Luckin already had a solid presence, such as Beijing, Shanghai, and most of China’s provincial capitals, are excluded from the program.
The company will not collect franchisee fees from the partners, but becoming a Luckin franchisee requires an upfront investment between RMB 35,000 to RMB 37,000 for storefront decoration, equipment, and deposit. (Luckin, in Chinese)
Upcoming Spring Festival
- Short video app Douyin has taken over from Pinduoduo as the sole red packet sponsor for this year’s CCTV Spring Festival gala in February, local media reported Friday. The Shanghai-based firm is facing a wave of negative media coverage after two employee deaths which many attribute to its compulsory overtime work schedule. (KrAsia)
- Alibaba’s Tmall kicked off on Wednesday the shopping season for Spring Festival holiday, which falls on Feb. 12 this year. Alibaba’s logistics arm Cainiao is setting aside RMB 200 million for delivery staff incentive pay for working during the holiday. (Ebrun, in Chinese)
WeChat levels up in e-commerce
- The gross merchandise value of WeChat mini program commodity transactions doubled in 2020, reaching around RMB 1.6 trillion in 2020 based on the RMB 800 billion GMV figure the company disclosed for 2019. (TechNode)