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By Denise Jia / Jun 02, 2020 05:38 AM / Business & Tech

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JD.com-backed grocery delivery operation Dada Nexus Ltd. updated its prospectus Monday for a U.S. initial public offering of as much as $280.5 million, moving a step toward becoming the first Chinese company to list in the U.S. after new legislation passed the Senate last month that would make such listings more difficult.

The Shanghai-based company plans to offer 16.5 million American Depositary Shares (ADSs) at $15 to $17 each, according to a prospectus filed with the Securities and Exchange Commission. The Senate bill cracking down on Chinese listings hasn’t cleared the House of Representatives.

The offering would value the company at $3.5 billion to $4 billion. The company plans to list on the Nasdaq under the symbol DADA. Goldman Sachs, BofA Securities and Jefferies are joint bookrunners on the deal.

Dada said existing investors JD.com and Walmart Inc. have expressed interest in becoming cornerstone investors. JD.com may subscribe as much as $60 million and Walmart as much as $30 million of ADSs. After the offering, JD.com will hold a 45.3% stake and Walmart 9.5%, Dada said.

Founded in 2014, Dada began as a logistics specialist offering short-haul intra-city delivery services. In 2016, it acquired JD.com’s JD Daojia, one of China’s early grocery delivery units.

Increasing smartphone penetration and the growing popularity of delivery services in China have helped Dada’s revenue surge over the past few years from 1.2 billion yuan in 2017 to 3.1 billion yuan in 2019. Revenue more than doubled in the first quarter of 2020, according to the updated prospectus.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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By Denise Jia / Jun 02, 2020 05:35 AM / Business & Tech

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Chinese online gaming company NetEase kicked off its secondary listing in Hong Kong to raise about $2.6 billion, based on a term sheet seen by Caixin.

This would be the biggest stock offering in Hong Kong so far this year, but it is likely to be overtaken by Chinese online shopping service JD.com Inc.’s planned $3 billion sale a week later.

According to the term sheet, NetEase plans to sell 171.48 million ordinary shares at a maximum offer price of HK$126 ($16.25) per share. The company’s American Depositary Shares (ADS) are currently listed in New York. Each ADS represent 25 ordinary shares.

NetEase plans to price the offering Friday with the shares set to start trading June 11. The proceeds are earmarked mainly for global expansion as well as pursuing innovation and general corporate purposes.

The U.S. Senate last month approved a bill that could force Chinese companies to delist from American stock markets if they fail to comply with the country’s regulatory audits for three consecutive years. The measure hasn’t cleared the House of Representatives.

Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bobsimison@caixin.com)

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By Ding Yi / Jun 01, 2020 05:41 PM / Business & Tech

Photo: VCG

Photo: VCG

Despite a steep revenue drop in the first quarter of 2020, Chinese fashion e-commerce platform Mogu saw robust growth in sales linked to live video broadcasts as the country’s brick-and-mortar stores were closed during the Covid-19 lockdown.

In its latest earnings report released Friday, New York-listed Mogu said that about 65% of its total first-quarter gross merchandise value came from livestreaming-related sales, which grew 54.1% year-on-year to 1.58 billion yuan ($223.2 million). While livestreaming-related sales increased, the total gross merchandise value of sales for the period was 2.42 billion yuan, representing a year-on-year decrease of 33.8%.

As of the end of March, the number of active buyers of goods sold through livestreaming increased to 3.6 million, Mogu said.

Mogu bet big on livestreaming more than a year ago, when the company kicked off a reorganization plan, a key part of which was to scrap some businesses unrelated to its core livestreaming e-commerce business.

Mogu also announced plans to recruit more livestreaming hosts with a promise to provide them with more incentives, a move that has triggered some analysts’ concerns over a potential increase in operating cost.

In the quarter through March 31, Mogu’s total revenue declined 45.3% year-on-year to 119 million yuan, while its net loss was roughly unchanged at 142 million yuan versus 140.8 million yuan a year ago, according to the earnings report. It attributed the weak results mainly to the coronavirus outbreak, which led to disruptions to apparel supply chains, merchant operations and logistics.

Yuan Ruiyang contributed reporting.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Gree Boss Sells $44 Million Worth of Goods in Single E-Commerce Livestream


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By Ding Yi / Jun 01, 2020 12:22 PM / World

Photo: Visual China

Photo: Visual China

Four Chinese firms made up India’s top five smartphone vendors in the first quarter of 2020, according to research firm CyberMedia Research (CMR). Although Xiaomi maintained its top spot, other Chinese companies showed signs of catching up, with Realme more than doubling its market share.

Despite increasing its shipments by only 3% year-on-year, Xiaomi continued to be the largest smartphone seller in India in the quarter with a market share of 30%, flat from the same period of last year, according to the report, which attributed the growth to the popularity of Xiaomi’s Redmi Note 8 phones.

Chinese firm Vivo claimed second place with a 17% share of the market, while South Korean giant Samsung was third with 16%.

Two-year old Chinese brand Realme increased its shipments by nearly 150% year-on-year during the period, a performance that put it in fourth position with a market share of 14%, up from just 6% a year earlier. Another Chinese player, Oppo, ranked fifth with 11%.

Vivo, Realme and Oppo are all under the control of Guangdong-based conglomerate BBK Electronics, meaning that the trio held a combined market share of 42% in India.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Xiaomi Still Top Dog in Indian Smartphone Market in Fourth Quarter 2019


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By Ding Yi / May 29, 2020 06:23 PM / Business & Tech

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Photo: VCG

Chinese ride-hailing giant Didi Chuxing’s autonomous driving subsidiary has raised more than $500 million in its first funding round led by SoftBank Vision Fund 2, Didi said Friday.

The external investment is the largest ever for China’s autonomous driving sector, Didi added in its statement on the matter.

Beijing-based Didi began testing self-driving cars in 2016 before spinning off its autonomous driving division into an independent company in 2019.

Last month, Didi rolled out a development plan, with self-driving vehicles as one of its main focuses over the next three years. The company said that it had obtained licenses to test self-driving cars in the Chinese cities of Beijing, Shanghai and Suzhou as well as California.

The investment comes as China moves to increase investment in infrastructure that supports technology and science based work.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Didi Steers Towards More Trips, Self-Driving in Three-Year Plan


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By Ding Yi / May 29, 2020 06:04 PM / Finance

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Photo: VCG

Thursday was a big day for China tech, with online travel giant Trip.com, Tesla challenger Nio and social networking app Momo, all announcing first-quarter results. All three took a hit from the Covid-19 pandemic, which kept most Chinese at home for much of the quarter.

Trip.com reported revenue of 4.7 billion yuan ($669 million) for the quarter, down 42% year-on-year, with its four major businesses of hotel reservations, transportation ticketing, packaged tours and corporate travel all falling, according to its latest earnings report. Net losses amounted to 5.4 billion yuan in the quarter, compared with net profits of 4.6 billion yuan in the same period of last year.

The online travel firm attributed the results mainly to the coronavirus pandemic which “drove a significant decline in travel demand resulting in reservation cancellations and reduced new orders.” And despite many of the restrictions associated with the pandemic being lifted domestically, Trip.com still expects its second-quarter revenue to decrease by between 67% and 77%, due to continued fallout from the pandemic, which shows little signs of leveling off in places outside of China.

The outbreak also took a toll on Nio in the first quarter, when the young electric carmaker saw its revenue drop 51.8% year-on-year to 1.37 billion yuan, according to its latest financial report. But there was also good news for Nio as its net loss narrowed by 40.9% year-on-year to 1.69 billion yuan.

The first quarter has seen rapid growth in traffic to apps favored by people under lockdown. However, social networking app Momo failed to capitalize on the trend and saw its revenue drop 3.5% year-on-year to 3.59 billion yuan during the quarter, while its monthly active users decreased to 108 million in March 2020 from 114.4 million in March 2019. But its net profit increased to 537.7 million yuan from 286.6 million yuan in the same quarter of last year, according to the company’s quarterly earnings report.

Contact reporter Ding Yi (yiding@caixin.com)


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By Ding Yi / May 29, 2020 12:40 PM / Business & Tech

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Photo: VCG

EHang, a drone operator that has pioneered the use of self-driving “air taxis” for sightseeing trips in China, is seeking to move into air cargo transportation.

The Guangzhou-based company has obtained approval from the Civil Aviation Administration of China (CAAC) to use its autonomous aerial vehicles in a commercial pilot program for heavy-lift air logistics, according to a company statement released Wednesday.

The trial will be conducted in the city of Taizhou in eastern China’s Zhejiang province, using EHang 216 passenger-grade autonomous aerial vehicles. Those drones will be authorized to transport up to 150 kilograms of goods per flight “between ground and hilltop and between shore and islands”, the statement said.

EHang said that the approval is based on the Pilot Operation Rules (Interim) for Specific Unmanned Aircraft introduced by the CAAC in 2019, when the company was also allowed by the government agency to pilot programs aimed at exploring the country’s airworthiness standards and management systems for autonomous aerial vehicles.

The Nasdaq-listed company is also planning to gradually expand the air logistics pilot project to other parts of China after it collects enough operational data, the statement added.

EHang’s foray into air logistics comes a month after it announced plans to build an “airport” in a southern Chinese city popular among tourists for its karst topography. Construction of the facility is set to be completed by the end of this year, when some 20 EHang 216 two-seat autonomous aerial vehicles will take tourists for sightseeing trips, the company said.

EHang reported a net loss of 200,000 yuan ($28,000) in last year’s final quarter, which narrowed from 30.7 million yuan a year earlier. The company said that the global urban air mobility market will reach $1.5 trillion by 2040, with air logistics likely to become a key revenue source, citing Morgan Stanley.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Air Taxi Maker EHang Eyes Scenic Guangxi for World’s First ‘Airport’ for Self-Flying Vehicles


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By Ding Yi / May 28, 2020 04:02 PM / Business & Tech

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Photo: VCG

New York-listed Chinese video streaming platform Bilibili has announced plans to raise $650 million through the sale of convertible senior notes, as the company seeks more cash to expand its user base.

The notes will mature on June 15, 2027, and can be converted into Bilibili’s American depositary shares (ADS), the company said in a statement published Wednesday.

Bilibili will use the proceeds to enrich content offerings, research and development and other general corporate purposes, the statement said.

The bond sale comes less than two weeks after Bilibili said its net loss widened 175% to 538.6 million yuan ($76.1 million) in the first quarter of 2020. Bilibili attributed the expanded loss to the growth of its marketing, branding and employment budgets.

However, Bilibili saw explosive growth in its user base during the same quarter, when monthly active users jumped 70% year-on-year to 172.4 million while the number of monthly paying users more than doubled to 13.4 million.

Bilibili is striving to change the entrenched notion that its platform is only a paradise for animation lovers, as gaming has emerged as one of its major revenue streams.

Last month, the Shanghai-based company was the recipient of a $400 million equity investment from Japan’s entertainment giant Sony, expanding the roster of its big financial backers that also include Tencent and Alibaba.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Sony Invests $400 Million in Streaming Site Bilibili


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By Ding Yi / May 28, 2020 12:52 PM / Economy

Photo: VCG

Photo: VCG

Revenue growth and R&D spending slowed sharply at China’s major internet companies in the first four months of 2020, even as the coronavirus-induced lockdown increased demand for some internet-driven services like telecommuting, online education and digital entertainment.

Between January and April, the Chinese internet sector and related services generated combined revenue of 344.6 billion yuan ($48.1 billion), up 4.9% year-on-year, according to statistics released Wednesday by the Ministry of Industry and Information Technology (MIIT). R&D spending rose 5.3% to 17.3 billion yuan. All firms surveyed had annual revenue of more than 5 billion yuan in the previous year.

The revenue growth rate was 15.3 percentage points lower than the same period of last year, while the R&D investment growth was down by 16.1 percentage points.

During the January-April period, revenue derived from information services, including streaming music and video, online games and digital news, totaled 215.2 billion yuan, accounting for nearly 62% of the total, the MIIT said. The ministry added that the country’s major internet companies earned 4.9 billion yuan by providing internet data services in the period, fueled by demand for cloud and big data services.

During the period, profit earned by the surveyed internet companies reached 32.7 billion yuan, up 4.8% from a year ago. But that growth rate was 29.1 percentage points lower than the same period of last year.

As of the end of April, the number of apps available on app stores in China reached 3.59 million, with game-related apps taking the biggest share of 24.6%, the statistics showed.

Beijing, Shanghai and the provinces of Guangdong, Zhejiang and Fujian accounted for 88.8% of the country’s total internet-related revenue, with Zhejiang posting the biggest year-on-year internet-related revenue growth of 30.9%, according to the statistics.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Chinese Internet Companies’ Revenue Topped 1 Trillion Yuan in 2019


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By Ding Yi / May 28, 2020 09:10 AM / Business & Tech

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Photo: VCG

Chinese tech giant Tencent plans to invest 500 billion yuan ($70 billion) in digital infrastructure over the next five years in response to a government call to energize the world’s second-largest economy with investment in “new infrastructure”.

“New infrastructure” is broadly defined as infrastructure that supports technology and science based projects.

The massive investment by Tencent will focus on areas ranging from cloud computing, artificial intelligence (AI), blockchain and Internet of Things (IoT) to 5G networks, quantum computing and supercomputer centers, according to a company statement published Tuesday.

Tencent did not provide further details about the investment plan, but underscored the progress it has made in boosting its cloud computing capabilities. The company has built a network of data centers housing more than 1 million servers, the statement said.

In the fourth quarter of 2019, Tencent controlled 18% of China’s cloud infrastructure service market, far behind market leader Alibaba, which grabbed 46.4%. Alibaba has announced plans to spend $28 billion on its cloud infrastructure over the next three years in a bid to help businesses embrace digitalization.

Tencent will also deepen partnerships with scientific research experts, laboratories and top universities to cultivate talents, tackle scientific problems and formulate industry standards, the statement added.

Tencent’s announcement comes days after Chinese premier Li Keqiang highlighted the role of “new infrastructure” in China’s push to accelerate the tech-driven structural upgrade of its economy in his government work report delivered to the National People’s Congress (NPC), the country’s top legislature.

Last month, China’s National Development and Reform Commission (NDRC), the country’s top economic planner, divided “new infrastructure” into three areas: information-based infrastructure such as 5G and IoT; converged infrastructure supported by the application of the internet, big data and AI; and innovative infrastructure that supports scientific research, technology development and product development.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Alibaba Now Controls Nearly Half of China’s Cloud Service Market, Research Says


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By Ding Yi / May 27, 2020 04:43 PM / Business & Tech

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Photo: VCG

Chinese electric carmaker BYD has brought in a group of 14 strategic investors to charge up its newly reorganized semiconductor subsidiary with a major cash injection in exchange for a share of the company.

BYD said the investors will collectively inject 1.9 billion yuan ($266 million) into BYD Semiconductor, putting the company’s value at 7.5 billion yuan, according to a statement released Tuesday.

In exchange for their money, the investors will get 20.2% of BYD Semiconductor, while the remainder will be held by BYD, according to the statement.

The investors include Shenzhen Sequoia Hanchen Equity Investment Partnership, Zhongjin Pucheng Investment and Advanced Manufacturing Industry Investment Fund, according to the statement.

BYD Semiconductor will use the funds to supplement working capital, fuel research and development and hire employees.

Following the announcement, BYD’s Hong Kong-listed shares dropped by 2.9% as of 3 p.m. Wednesday.

In April, BYD, whose backers include billionaire investor Warren Buffett, reorganized its wholly owned subsidiary BYD Microelectronics and rebranded it BYD Semiconductor, whose major businesses involve developing, producing and selling power semiconductors, intelligent control integrated circuits and smart sensors.

BYD is also reportedly mulling plans to separately list BYD Semiconductor in due course.

Contact reporter Ding Yi (yiding@caixin.com)

Related: BYD Spins Off Semiconductor Business for Planned Share Listing


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By Yang Ge / May 27, 2020 01:27 PM / World

Photo: VCG

Photo: VCG

The skies over the major Asian hubs of Hong Kong and Singapore are about to get just a little friendlier, at least if you’re an international traveler.

The two cities have both announced they’ll reopen their airports to transiting travelers come June, with Hong Kong taking the step first next Monday followed by Singapore a day later.

Both had rolled up their red carpets for such travelers during the height of their local outbreaks in a bid to stop infections coming in from other countries. The move had a chilling effect on passenger flights to Hong Kong, with flights from non-mainland China destinations dropping from 100 per day in March to less than 30 in April and May.

The move to reopen Hong Kong for transit travel was met with cheers on the Chinese mainland, as it opened a new channel for thousands of Chinese nationals stranded abroad to finally return home.

After Hong Kong’s announcement on Tuesday, queries involving Hong Kong rose by more than seven times between 4 p.m. and 5 p.m. from the same time a day earlier on online booking platform Qunar, while actual bookings rose by nearly 10 times. On the Fliggy travel platform operated by e-commerce giant Alibaba, the number of search queries on transiting through Hong Kong increased nearly seven times.

Among international carriers, Air Canada and Qatar Airways are planning to resume flights to Hong Kong in June. Meantime, Singapore discount airline Scoot has announced plans to resume some flights in June to Guangzhou in China, as well as to the Malaysian cities of Penang, Ipoh and Kuching.

Contact reporter Yang Ge (geyang@caixin.com)

Related: Washington Pressures China to Let U.S. Airlines Come Back


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By Ding Yi / May 27, 2020 12:54 PM / Economy

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Photo: VCG

China has reportedly crafted a general technical plan for the country’s first long-haul, wide-body jetliner, a key aircraft designer said Tuesday, as Beijing steps up its efforts to challenge the duopoly of Airbus and Boeing.

Wu Guanghui, who helped design China’s first homegrown airliner, the C919, told state-owned newspaper the Beijing Youth Daily that the new plane, known as the CR929, will be able to carry 280 passengers on journeys of up to 12,000 kilometers and is expected to start commercial flights sometime between 2025 and 2028.

The CR929 is co-developed by the state-owned aircraft-maker Commercial Aircraft Corporation of China (COMAC) and Russian aerospace conglomerate United Aircraft Corp., the report said.

Wu, who made the remarks Tuesday on the sidelines of the ongoing annual session of the National People’s Congress (NPC), China’s top legislature, added that the CR929 aircraft’s development is still in the preliminary design phase and gave no further details.

He also shared further details of the development of China’s first homegrown single-aisle aircraft, the C919, saying that the program’s six prototype airplanes have conducted test flights needed for obtaining related flight certificates in four Chinese cities last year.

The C919 is a narrow-body airliner launched by COMAC in 2008. The organization has so far received 815 orders for the C919 from 28 domestic and foreign customers, the Beijing Youth Daily reported Wu as saying.

Contact reporter Ding Yi (yiding@caixin.com)

Related: China’s Homegrown Jetliner Completes New Test Flight


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By Ding Yi / May 26, 2020 05:38 PM / Business & Tech

Photo: VCG

Photo: VCG

Tencent-backed game-centric livestreamer DouYu reported staggering profit growth in the first quarter of 2020, as its paying user base expanded significantly during the Covid-19 outbreak.

For the three months through March, DouYu’s revenue grew 53% year-on-year to 2.28 billion yuan ($321 million), more than 90% of which came from its livestreaming business. Its net profits skyrocketed to 254.5 million yuan from 18.2 million yuan a year earlier, according to the company’s latest earnings report released Tuesday.

The Nasdaq-listed company attributed the results mainly to its efficient operational strategy and strong growth in paying users.

During the period, the average number of paying users increased 26.2% year-on-year to 7.6 million, DouYu said.

In the earnings report, DouYu also projected that its second-quarter net revenue will reach between 2.36 billion yuan and 2.41 billion yuan, representing more modest year-on-year growth of between 26% and 28.7%.

Tencent is also a major financial backer and the biggest shareholder of DouYu’s domestic rival Huya, which is listed on the New York Stock Exchange.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Tencent Becomes Majority Shareholder in Chinese Game Live-Streamer Huya


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By Ding Yi / May 26, 2020 05:03 PM / World

Tencent has reportedly agreed to invest 7 billion yen ($65 million) for a 20% stake in Japanese video game developer Marvelous, the latest sign that the Chinese tech giant is further expanding its video gaming empire overseas.

The purchase, which will be made through Tencent’s subsidiary Image Frame Investment, will mean the Chinese company will become the largest shareholder in Marvelous that is known for its farming simulation game “Story of Seasons,” according to a report by Bloomberg.

The Japanese company will use the funds to bolster its existing game franchises and launch new ones over the next three years. It also plans to deepen ties with Tencent around game development and global expansion, the report said.

In 2019, Marvelous signed a licensing agreement with Tencent authorizing the Chinese company to develop, distribute and operate the mobile version of “Story of Seasons.”

Apart from Marvelous, Tencent has also taken stakes in U.S.-based Epic Games and South Korea’s Bluehole.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Tencent Teams Up With U.S. Chipmaker Nvidia on Cloud Gaming


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By Ding Yi / May 26, 2020 12:26 PM / Economy

China’s smart speaker market contracted in the first four months of 2020, as sales consolidated around products manufactured by the trio of Alibaba, Baidu and Xiaomi, according to statistics from market research firm IDC.

For the four months through April, about 10.56 million smart speakers were shipped in China, representing a year-on-year decline of 14.7%, the statistics released Monday showed. IDC largely attributed the drop to the coronavirus pandemic, but said that sales have turned around as brick-and-mortar stores have gradually reopened in March and April.

Alibaba claimed the top spot with shipments of 3.71 million Tmall Genie smart speakers during the period, giving it a market share of 35.2%. Last week, the Hangzhou-based e-commerce giant announced plans to invest 10 billion yuan ($1.41 billion) to develop artificial intelligence-powered smart speakers in a move that could help it retain its dominance in the emerging and competitive market.

Baidu came in second with a market share of 30.9%, a performance IDC said was largely attributable to sales of its touch-screen smart speakers. Xiaomi was third with a market share of 30.4%, meaning the three top players collectively accounted for more than 96% of the market.

IDC predicts that smart speaker makers will double down on boosting their products’ AI capabilities like speech recognition and developing apps that can be compatible with smart speakers.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Baidu Unveils Budget Touch-Screen Smart Speaker with Focus on Child Safety


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By Bloomberg / May 26, 2020 10:44 AM / Business & Tech

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Photo: VCG

ByteDance Ltd.’s millennial sensation TikTok and its Chinese twin app Douyin ranked top in the world among mobile apps for April revenue, according to Sensor Tower data that excludes games and advertising.

Focusing narrowly on in-app purchases, TikTok and Douyin’s numbers for the month showed a tenfold increase to $78 million, propelling them ahead of more established names like YouTube, Tinder and Netflix, which rely more on existing subscriptions.

The Chinese market, served by Douyin, contributed 86.6% of the app income, followed by the U.S. with 8.2%. In either version of the video-streaming app filled with dance videos and memes, users can purchase virtual currency to spend on supporting their favorite creators.

Like many social media platforms, ByteDance is testing the waters of online commerce, even while it continues to rely on advertising as its main source of income. Emarketer expects that more than 75 million US social-network users aged 14 and older will make at least one purchase from a social channel in 2020, up 17.3% from 2019.

In 2020’s first quarter, TikTok and Douyin generated 315 million downloads globally, up from 187 million a year earlier, said Sensor Tower, noting the positive influence of Covid-19 on the video-sharing apps’ popularity.

Related: Inside ByteDance, the $75 Billion Unicorn Behind TikTok


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By Bloomberg / May 26, 2020 03:26 AM / Business & Tech

Meituan Dianping reported a smaller-than-expected 13% slide in revenue during China’s nationwide Covid-19 lockdown and warned that the fallout from the pandemic will continue to affect the world’s largest meal delivery business over the rest of 2020.

Sales fell 12.6% to 16.8 billion yuan ($2.4 billion) in the three months ended in March, beating the 15.6 billion yuan average of analysts’ estimates. It also reported a lower-than-projected net loss of 1.58 billion yuan. Meituan shares rose 6% in Hong Kong before earnings were announced. It’s gained roughly $40 billion in market value since China began to return to normal in mid-March.

Backed by Tencent Holdings Ltd., Meituan’s sprawling services from food delivery to in-store dining and hotel booking were among the most vulnerable during China’s Covid-19 shutdowns.

“Our food delivery business was facing significant challenges on both the supply side and demand side for the first quarter of 2020,” the company said in its exchange filing. “Moving on to the remainder of 2020, we expect that factors including the ongoing pandemic precautions, consumers’ insufficient confidence in offline consumption activities and the risk of merchants’ closure would continue to have a potential impact on our business performance.”

Before the outbreak, the internet services giant made an aggressive push into arenas from online travel to ride-hailing. While the business that encompass hotels and travel posted a 31% plunge in March-quarter revenue, Meituan’s much smaller new initiatives segment — which includes bike- and car-hailing — actually grew sales 4.9%, aided by the launch of a new grocery delivery service.

While Meituan is expanding offerings to sell things like handsets and farm produce, rivals including Ant Financial and SF Express, both backed by Alibaba Group Holding Ltd., are elbowing their way into Meituan’s core takeout business. Alibaba’s food-delivery arm Ele.me is also engaging in a subsidy battle for market leadership.

Longer term, Meituan will also have to grapple with China’s worsening economy, which may further dent consumer spending.

Meituan may signal some business recovery in the second quarter as China reopens its economy, but it could take some time for consumer confidence to fully recover, especially for its travel business, wrote Bloomberg Intelligence analysts Ver-Sern Ling and Tiffany Tam in a research note.

Related: Courier SF Express Takes on Alibaba, Meituan With Trial Takeout Service

 

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By Ding Yi / May 25, 2020 05:58 PM / Business & Tech

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Photo: VCG

Electronics giant Xiaomi has agreed to invest $102.84 million for an additional 27.44% stake in Zimi International, a Chinese firm that develops Internet-of-Things (IoT)-based products, smart hardware and mobile accessories. The investment is part of ongoing efforts by Xiaomi to create an ecosystem of interconnected products and services supplied by itself and smaller tech firms.

Xiaomi will pay $25.78 million in cash and pay the rest through the allotment of 54.4 million shares for the deal, which will increase its total stakes in Zimi to 49.91%, according to a filing to the Hong Kong Stock Exchange on Thursday.

Zimi’s power-related technology can be applied to Xiaomi’s smartphones and other IoT-based products for “higher competitiveness, standardization of power-supply of our products to reach cost saving,” Xiaomi said.

It added that Zimi’s research and development capability, industry resources, and operating experience in power-related products, cameras, speakers and other products will “facilitate and improve the competitiveness of the company’s future ecosystem products.”

In January, Xiaomi founder and CEO Lei Jun said that the company will invest at least 50 billion yuan ($7.2 billion) on 5G, artificial intelligence and IoT over the next five years, which are an essential part of the company’s new strategy.

Contact reporter Ding Yi (yiding@caixin.com)

Related: Xiaomi Says It Will Restart India Production by June


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By Ding Yi / May 25, 2020 04:46 PM / Environment

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Photo: VCG

Amazon has announced its first renewable energy project in China as part of ongoing efforts to reduce its carbon emissions.

The U.S. ecommerce giant’s China project will be a 100 megawatt (MW) solar power farm in the eastern province of Shandong, which is expected to generate 128,000 megawatt hours of clean energy every year, according to a company statement released last week.

Apart from the China project, Amazon also said that it will build a 105 MW solar farm in New South Wales, Australia, and three in the United States, of which two will be located in Ohio with respective capacities of 200 MW and 80 MW. There will also be a facility based in Virginia with 130 MW of capacity.

Once operational, the five solar power facilities will supply nearly 1.2 million megawatt hours of renewable energy to the company’s fulfillment networks and Amazon Web Services (AWS) data centers, the statement said, without providing details on when the construction will be completed.

In September 2019, Amazon announced a massive commitment to combat climate change officially named The Climate Pledge, under which the company aims to reduce its carbon emissions with the ultimate target of becoming carbon-neutral by 2040.

So far, Amazon has unveiled 31 utility-scale wind and solar renewable energy projects and 60 solar rooftops on its fulfilment and sorting centers globally. U.S. tech giant Apple has also previously announced plans to invest in solar and wind power production in China.

Contact reporter Ding Yi (dingyi@caixin.com)

Related: Alibaba Cloud Consolidates Market Share But Struggles Against Western Peers


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