Colin Huang, the 41-year-old founder of budget e-commerce platform Pinduoduo, has stepped down as chairman. Alibaba is said to be planning to launch Taobao Deals, a Pinduoduo rival, as a WeChat mini program. JD.com will invest $800 million in the on-demand delivery platform Dada Nexus. An online poll showed that Chinese users plan to abandon power bank rentals in the case of a fee increase.
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 March 18 – 25.
End of an era for Pinduoduo
- The billionaire founder of Pinduoduo, Colin Huang, stepped down as board chairman just as the e-commerce giant overtook its rival Alibaba as China’s largest online selling platform by user size. (TechNode)
- Chen Lei, Pinduoduo CEO and chairman, told the Wall Street Journal that the company will “keep plowing revenue back into subsidies” until it “supplants Alibaba as the default shopping platform for perhaps a billion Chinese consumers.” The firm plans to boost ad income to earn a profit while keeping the hefty subsidy program going. Despite its huge user base, Pinduoduo’s $324 average annual spend per active buyer in 2020 was less than a quarter of Alibaba’s average annual spend per user during the same time period. (Wall Street Journal)
- Alibaba Group plans to launch Taobao Deals as a mini program on Tencent’s mega chatting app WeChat, according to a Bloomberg source. Taobao Deals is Alibaba’s response to rival Pinduoduo. Cooperation between Alibaba and Tencent—two of China’s most exclusive technological ecosystems—is a clear indication that Beijing’s anti-monopoly efforts are taking effect. (Bloomberg)
- JD.com said it will invest $800 million in Dada Nexus, giving the Chinese online retailer a total 51% stake in the on-demand delivery company by combining its existing shares. (TechNode)
Power bank rentals
- An online poll conducted by Chinese business newspaper 21st Century Business Herald showed that around 80% of the users said they would stop renting power banks if fees were hiked again. The most recent price increase raised the average per-hour rental fee to RMB 4 ($0.6), up from RMB 1 charged when the service first took off in 2017. Rental fees for devices at high traffic locations like cinemas, tourist spots, and airports are as high as RMB 6 per hour. A Weibo hashtag titled “Power bank rental fee increase from RMB 1 to RMB 4” had attracted 260 million views as of Tuesday morning. In China, a power bank can be purchased for around RMB 50. (21st Century Business Herald）
- One week after filing for a US IPO, Chinese power bank rental firm Energy Monster announced Friday a partnership with food delivery platform Ele.me to cooperate on channel operation resources, merchants, and membership services. Starting April, Ele.me will add Energy Monster’s services to its app. Users will also be able to call Ele.me drivers to pick up the power banks they forget to return. (Tencent Tech)
- In the coming year, microblogging platform Weibo plans to support the growth of 10 million merchants who use high-quality content to sell by dedicating RMB 100 million worth of traffic and cash incentives. (Sina Tech, in Chinese)
- Weibo reported net revenue of $513.4 million in the fourth quarter of last year, a 10% year-over-year increase. Advertising and marketing revenues accounted for 88% of total revenue. The company’s monthly active users reached 521 million in December, a net addition of approximately 5 million on a year-over-year basis. (Weibo)
- Sina, operator of the Sina news portal and Weibo’s controlling shareholder, announced the completion of its merger through which the Nasdaq-listed company had planned to go private. The company has filed with SEC for delisting of its shares. (Sina statement)