For many Chinese tech watchers, the year 2021 can be divided into two distinct periods: before and after Didi’s cybersecurity review.
Prior to news of the investigation into the ride-hailing giant, observers followed a broad range of topics: Luckin’s unlikely comeback, ByteDance’s moves to address US concerns, and a looming crackdown on crypto mining among them.
After the Didi announcement, regulatory changes became the dominant thing to watch. As authorities unleashed an avalanche of new rules and regulations, companies were frightened into inaction on a range of important activities: pursuing overseas IPOs, raising funds for edtech companies, or buying up peers to maintain competitiveness in the market.
Chinese tech companies will feel the impact of these events for years to come. As China goes on holiday for the Lunar New Year, or Spring Festival, for the week of Jan. 31 to Feb. 6, TechNode looks back at an eventful year and brings you a round-up of the stories that you read the most.
Luckin lives on
The Big Sell | Luckin is not dead
After admitting to financial fraud in April 2020, Chinese coffee chain Luckin delisted from Nasdaq, taking time to stay low and address multiple class-action lawsuits from shareholders. But Luckin is still very much alive: despite some closures, its stores are still a ubiquitous presence in Chinese office districts. Even more surprisingly, reports in early 2022 suggested Luckin may look to relist in the US, although the company subsequently denied this.
Luckin founder’s new noodle shop is no Luckin
Lu Zhengyao, the founder of Luckin Coffee who was forced out of the company following a 2020 admission that as much as half of the coffee chain’s sales were fictitious, is back in the retail game. This time, he’s running a noodle shop. But is it any good?
Didi’s IPO changes everything
How did Didi get in trouble with data regulators?
On July 2, three days after Didi went public in New York, authorities at the Cyberspace Administration of China said that they had launched a “cybersecurity review” of Didi to “guard against risks to national data security” and “protect the public interest.” They also ordered operators to pull Didi’s app from all app stores. The review is still ongoing – and the aftershocks still being felt.
Insights | State investors place their bets as rivals close in on crippled Didi
China’s state-owned investors are pouring millions of dollars into promising new ride-hailers as the market leader Didi loses momentum following the suspension of its app in the wake of the suddenly-announced “cybersecurity review”. T3 was close to raising funds of $600 million, while Cao Cao Mobility raised $590 million.
ByteDance moves
TikTok moves off Alibaba Cloud: report
ByteDance decided to stop hosting TikTok and other overseas apps on Alibaba Cloud in May, a heavy blow to the e-commerce giant’s cloud-computing branch. TikTok has an estimated 700 million monthly active users worldwide. Alibaba saw a significantly slower quarterly revenue growth rate in the first quarter of 2021 due to ByteDance’s decision.
ByteDance to end weekend work
ByteDance became one of the first Chinese internet companies to say it was attempting to curb overworking culture. It announced on July 9 that it would cancel weekend work days at the beginning of August. The controversial weekend schedule was known as “big and small weeks,” requiring staff to work every other Sunday.
Lark, ByteDance’s Slack-like app, eyes $1 billion global revenue in five years
ByteDance plans to accelerate the overseas commercialization of its workplace communication app Lark this year. The company is aiming for global revenue of RMB 6 billion ($940 million) in the next five years. Lark, known as Feishu in the Chinese market, is ByteDance’s bet on the enterprise-facing services sector.
Semiconductor strategizing
SILICON | Can Arm fend off Allen Wu’s latest autonomy moves?
The board of Arm China voted overwhelmingly to remove CEO Allen Wu in June 2020 after an investigation found he had failed to disclose conflicts of interest. But Wu’s supporters within Arm China soon refuted the findings and refused to replace him. In practice, Wu remains the chairman and CEO of Arm China. TechNode contributor Stewart Randall calls the situation “a red flag for any foreign tech company considering a joint venture in China.”
Where China is investing in semiconductors, in charts
As China realizes its heavy dependency on foreign imported chips poses major risks, the country has quickly dialed up investments in semiconductors. In 2020, China saw a whopping 407% increase in investment in China’s semiconductor firms.
The great mining migration
Crypto miners start move to North America as China vows crackdown
In May, major Chinese crypto mining companies began moving their operations to North America in anticipation of a renewed crackdown on the industry in China. Texas in the US and Alberta in Canada are two top destinations for Chinese mining companies looking to move overseas. The moves proved to be prescient – the latter half of 2021 saw sweeping crackdowns on crypto mining across China.