TikTok turned against its former cooperation partner Universal Music Group (UMG) overnight after the world’s largest music copyright owner threatened to remove all of the music it owns from the video-sharing platform, which lambasted UMG’s “self-serving actions” and characterized them as putting their interests above those of artists, songwriters, and fans. 

Why it matters: The dispute would reportedly also affect TikTok sibling Douyin, potentially causing both platforms to have to remove Universal songs from the huge number of videos using them as background music. The falling out with UMG may also lead to a similar response from other music companies. 

Details: The collapse of the deal would likely remove the pop songs that myriad TikTok videos use as background music, affecting tracks by Universal artists including Taylor Swift and Billie Eilish, as well as Chinese language singers Stefanie Sun and Eason Chan.

• In an open letter, Universal said the success of TikTok has been largely rooted in the music created by “our artists and songwriters,” but revenue from the Chinese-owned company only accounts for about 1% of Universal’s income, which the letter claimed was a poor rate of compensation.
• According to media outlet Caixin, the three-year authorization contract between both sides signed in February 2021 was also applied to TikTok sister app Douyin in China, meaning Douyin users are no longer allowed to create videos using copyright-protected music from UMG starting from Thursday, unless the two parties reach a new deal addressing Universal’s concerns over higher pay for artists, AI creation, and user protection.
• In response, TikTok claimed Universal’s statement formed a “false narrative and rhetoric,” and blamed the music firm for leaving a platform that had served as a “free promotional and discovery vehicle for their talent.”

Context: This is not the first dispute involving a major tech platform and Universal-signed artists. In 2014, Taylor Swift decided to remove her entire discography from Spotify due to issues around royalty payments, with her boycott of the streaming service lasting three years.

Chinese AR (augmented reality) glasses manufacturer XREAL has recently secured a new round of strategic financing valued at $60 million, bringing its total funding to $300 million, according to an exclusive report by Chinese media outlet 36Kr. The report asserted that XREAL’s current valuation has surpassed $1 billion, as indicated by industry analysts.

Why it matters: As a major player in the global AR device sector, XREAL’s devices are considered potential competitors to Apple’s Vision Pro and Meta’s Quest 3. This strategic financing empowers XREAL to pursue vital growth initiatives, such as expanding its AR glasses production.

Details: The new financing, which is dedicated to product R&D (research and development) and the expansion of the firm’s optical production base, will enable XREAL’s AR glasses production to reach two million units per year by 2025, the 36Kr report said.

• XREAL has not disclosed the specific investors behind the new $60 million financing. Previous major investors in XREAL have included Alibaba, Kuaishou, NIO Capital, Yunfeng Capital, Sequoia China, Gentle Monster, Hillhouse Group, Hongtai Aplus, CICCcapital, Shanghai GP Capital, Shunwei Capital, CPE Asset Management, China Growth Capital, and iQiyi.
• XREAL’s Founder and CEO, Xu Chi, has declared that the company aims to deliver wearable augmented reality displays to global audiences, as AR has revolutionized user experiences in gaming, movies, TV, in-car entertainment, displays, and work.
• From Jan. 9 to Jan. 12, XREAL exhibited its latest XREAL Air 2 Ultra glasses during the 2024 CES (Consumer Electronics Show) in Las Vegas, featuring six degrees of freedom (6DoF) via dual 3D environment sensors with computer vision capabilities. 
• The global release of the Air 2 Ultra glasses is scheduled for March, with a starting price of $699, and pre-orders are already available. Despite the increased cost compared to the previous Air headset, which was priced below 500 dollars, the Air 2 Ultra glasses still present a more budget-friendly option than Apple’s Vision Pro, which is priced at $3,499.

Context: The XREAL Air series of products are compatible with a variety of mainstream gaming and streaming entertainment devices, including Microsoft Xbox, Sony PlayStation, Nintendo Switch, Valve Steam Deck, ASUS ROG Ally, iOS, Android, Windows, and Mac.

• On Jan. 4, XREAL announced a total shipment of 350,000 AR glasses since its establishment in 2017. The company claimed to currently hold a 45% share of the global AR market, a statement that came after market intelligence firm IDC confirmed XREAL secured a 51% market share in the global AR segment during the third quarter of 2023.

The past year has seen Tencent’s TikTok-like short video service “deliver the expected results,” chairman and chief executive Pony Ma said at the tech titan’s annual staff meeting on Monday, while reaffirming his confidence in the company’s long-term development despite the sluggish general market.

Why it matters: In contrast to his sharp-tongued speech a year ago, where the emphasis was on cost-cutting, Ma’s more positive comments this year signal that he seems to think the company has overcome its challenging times.

Details: A year after Ma positioned WeChat Channels as Tencent’s major hope for the future, he said that the short video-sharing function has brought “lots of surprises” and committed to fully supporting livestreaming-based commerce in 2024. 

• In a half-hour speech that struck a positive tone, Ma mentioned recent news of Tencent buying land in the Haidian district of Beijing at RMB 6.42 billion as a “careful and calculated decision” due to the steady growth of the firm’s businesses. 
• Boasting 1.3 billion monthly active users, WeChat stands as the most powerful messaging app in China and comes with a flurry of social connecting features, but the app’s 12-year-old history gives Ma “great pressure,” especially as QQ, Tencent’s once-popular platform, undergoes a crucial transformation after 12 years in operation. Ma has called for WeChat, “the old tree”, to “sprout new shoots”.
• Ma also stated that Tencent’s current holding of the title of the world’s largest game vendor feels like “relying on the credit of our [previous] successes.” This sentiment comes amidst challenges from peers releasing new titles and the company’s relatively underwhelming offerings when it comes to fresh games, according to local media outlet Jiemian.

Context: Tencent shares have suffered in the past year but have not seen as big a slump as those of its Chinese internet peers, with the firm seeing a 16% decline in the value of its Hong Kong-listed shares. The company’s largest shareholder, South Africa-headquartered Naspers, added to the downward trend by cutting its stake in Tencent to less than 25% through frequent share selling in 2023.

CATL and Didi said on Jan. 28 that they have signed a partnership to build battery swap stations for commercial fleets to recharge their electric vehicles, in a sign of China’s urgent need to set up a gold standard for EV infrastructure.

Why it matters: The news reflects how major players are rushing to build alliances and expand their presence in the hope of getting a larger say as the Chinese central government is pushing for industry-wide standards to drive EV adoption and reduce the strain on the grid. 

• Xin Guobin, a vice minister of industry and information technology, in June said Beijing will back businesses’ efforts to jointly set standards for battery specifications and swap techniques. 
• Meanwhile, the central government recently set a goal to begin operating large facilities for bi-directional charging in the next two years, which would allow EV batteries to charge during off-peak hours and return surplus energy to the grid when demand is high.

Details: CATL and Didi will set up a joint venture for a fast and large-scale roll-out of a battery-swapping network for ride-hailing services in China, according to a joint announcement, which did not reveal detailed plans for the swap network or the size and structure of the JV. 

• The two companies will also promote the adoption of EVs with swappable batteries while exploring collaboration on other areas such as storage-integrated EV charging facilities, the statement said.
• CATL expects such efforts to enhance its reputation since public infrastructure could help promote it as a purveyor of better quality and longer service life, people close to the company told Caixin.

Context: NIO is for now the dominant player in the field, operating more than 2,300 battery swap stations in China as of December. The EV maker plans to add at least 1,000 more this year and has partnered with big names including Geely, Changan, and Chery. 

• China reported a significant 81% annual increase for its battery swap infrastructure network with a total of 3,567 swap stations as of December, according to data compiled by the Electric Vehicle Charging Infrastructure Promotion Alliance (EVCIPA).

The National Press and Publication Administration (NPPA) of China released its first batch of domestic game licenses for 2024 in the early hours of this morning, with its approval of 115 games sparking hope for a stable and positive regulatory environment in the industry this year.

Why it matters: Over the last two years, the average monthly issuance of domestic game licenses was around 80, with January 2023 only reaching 88. Today’s approvals represent the highest number of monthly licenses granted for two years. 

Details: The batch of 115 approved games includes 100 mobile games, eight dual-end (PC and mobile) games, four PC games, one PS game, and one web-page game.

• The main gaming titles are Need for Speed by Tencent Games, Etheria: Restart by X.D.Network, My Three Body: 2277 by YOOZOO Interactive, Call of Dragons by Lilith Games, Wait a Minute by 37 Interactive Entertainment, Anno: Mutationem by Leiting Games, and Youxing Continent by Bingchuan Network.
• The Three-Body Problem is an international award-winning science fiction novel written by Liu Cixin, widely acclaimed for its profound ideas, captivating storyline, and scientific precision. As the first officially licensed Three-Body Problem game, the turn-based strategy title My Three Body: 2277 has consistently garnered attention in China. In October 2023, details of the gameplay were unveiled, accompanied by the opening of online pre-registration, and the game is scheduled for a launch for both mobile and PC platforms in the first half of this year, according to Cailian Press.
• Launched globally in March 2023, Call of Dragons, developed by LEGOU Games and distributed by Lilith Games, is available for overseas markets on Android, iOS platforms, and PC. Call of Dragons is a multiplayer Western-style fantasy strategy game with 3D modeling, initially positioned for international audiences. Currently, the game has gained between 5 million and 10 million downloads on the Google Play Store in the global market, according to market intelligence firm SensorTower. However, it remains to be seen whether the game will find similar success with Chinese audiences.
• Additionally, the NPPA approved a number of previously-licensed games on new platforms for 2024. NetEase’s card collection role-playing game Harry Potter: Magic Awakening and Perfect World’s turn-based role-playing game Persona 5: The Phantom X have both added a PC version, while X.D.Network introduced the Nintendo Switch version for its puzzle adventure game Moncage.

Context: In 2023, the NPPA released 977 domestic game licenses, representing a year-on-year growth of 108.76%. 

• In December 2023, an industry report from The China Game Industry indicated that the revenue of the domestic gaming market reached RMB 3,029.64 billion ($426.83 billion) in 2023, a year-on-year growth of 13.95% and the first time that China’s gaming market has surpassed three trillion RMB. The user base also reached a historic high of 668 million.

BYD and FAW Group are aiming to invest in DJI’s automotive business unit – one of the few Chinese companies capable of developing partially automated driving software – as part of the latest effort by traditional automakers to catch up with rivals such as Tesla, local media has reported. 

Why it matters: The news comes at a time when a growing number of automakers and suppliers are expanding their alliances in hopes of accelerating progress in and sharing the cost of making partially automated driving passenger cars. In China, the technology is being popularized by the likes of Tesla, Huawei, and Xpeng Motors. 

• It is also the latest example of Chinese auto majors taking steps to turn their business partnerships with tech companies into deeper capital relationships. Changan Automobile recently announced it will invest in a new venture set to absorb Huawei’s car business unit. 

Details: BYD and FAW, a manufacturing partner of Volkswagen and Toyota in China, recently conveyed their message to DJI Automotive, the car business unit of the namesake drone maker, 36Kr first reported on Wednesday (in Chinese). Citing people with knowledge of the matter, the report did not put a figure on the planned investment.

• BYD is planning to roll out partially automated driving functions for future affordable models priced at RMB 200,000 ($27,920) or below in 2025 with assistance from DJI, a person close to the company told TechNode on Thursday. 
• DJI is appealing to original equipment manufacturers (OEMs) for its low-cost advanced driver assistance system, as they have been struggling to lower costs and repeatedly cut prices of their cars, another source with direct knowledge of the matter told TechNode. 
• DJI, China’s biggest drone maker, stated that its technology suite, including an affordable computing chip from Texas Instruments (TI) with only a few cameras, could enable cars with automatic lane changing and on-ramp to off-ramp functionalities on Chinese expressways. 
• Some EV makers, including NIO and Li Auto, have developed similar functions based on Nvidia’s more expensive DRIVE Orin processors, with each offering 254 trillion operations per second (or TOPS), compared with the 32 TOPS offered by a top-end TDA4 chip from TI. 
• “While BYD is not the forerunner in autonomous driving, it has the ability to be a fast follower which will likely meet the needs for the majority of Chinese consumers,” Bernstein analysts wrote in a Jan. 22 note, citing economies of scale, which allows it to collect more data for software training from its large fleet, as one of the reasons.
• BYD and DJI did not respond to TechNode’s requests for comment. 

Context: Shenzhen-headquartered DJI separated its car business into an independent company in late 2022 and became open to external funding with a target valuation of $1.5 billion, Chinese media outlet Leiphone reported in August. 

• The drone giant has worked with SAIC-GM-Wuling (SGMW), a General Motors China joint venture, since 2019, with the first model integrated with its automated driving technology, the Baojun Kiwi EV, going on sale with a price tag of RMB 102,800 in September 2022. 
• BYD showcased a Yangwang luxury off-roader that integrates an unmanned aircraft on the car’s roof in a collaboration with DJI during a press event on Jan. 16. It also announced plans to release at least 10 new models this year featuring advanced driving technology.

READ MORE:  BYD’s Denza launches cheaper driver assistance system with Nvidia amid rising competition

Last week’s global launch of Papergames’ Love and Deepspace, a title touted as the first otome game to feature 3D modeling, has sparked a battle over the female-focused romance games market, with China’s major gaming companies weighing in with a raft of special offers and promotional events.

Otome games are typically targeted towards female players, with the Japanese term translating to maiden or young lady. The games often involve a female protagonist who interacts with male characters, and the gameplay focuses on developing romantic relationships with one or more of these characters.

Why it matters: Having previously found success with otome game Mr. Love: Queen’s Choice, Papergames’s new title aims to provide players with a more realistic interactive experience through its iterative improvements in 3D character modeling. The release has sparked intense competition in the sector.

Details: On January 18, the day Love and Deepspace launched, China’s major domestic gaming companies all unveiled new promotional activities within their respective otome games. Light and Night from Tencent Games, HoYoverse’s Tears of Themis, and For All Time by NetEase Games are among the genre’s most popular titles, alongside Papergames’ Mr. Love: Queen’s Choice.

• On the day of the Love and Deepspace’s release, a trending hashtag #0118决战国乙之巅# (Battle for the Peak of Chinese Otome Games on January 18) appeared on China’s Twitter-like platform Weibo. Posts under the hashtag listed the various promotional activities and benefits of domestic otome games, as Chinese players expressed their excitement over the developments.
• In order to compete for potential new players, NetEase’s new otome game Beyond the World, originally scheduled for a public beta release on January 26, announced on January 16 that it would bring its open testing period forward to January 18. NetEase also offered various in-game promotional events and benefits that were similar to those available in Love and Deepspace.
• Also coinciding with the Love and Deepspace’s launch, Tencent Games held its largest celebration event for the Light and Night since its launch in 2022, showering players with free benefits. Players can even receive animated video calls from game characters as part of the new offerings. Furthermore, Light and Night announced an ancient-style gacha event, a gameplay mechanic where players spend in-game currency to obtain random rare virtual characters. 
• Love and Deepspace had already received over 14 million pre-registrations before its official release, according to Papergames. At time of writing, the game is in the top ten iOS free-download games in the Chinese region. The game’s estimated revenue from iOS on the first day reached RMB 5.27 million ($740,000), while iOS downloads amounted to 890,000 during the same period, according to market intelligence firm DataEye.

Context: Otome games are popular in Asia due to culturally resonant narratives, attractive character designs, and targeted marketing towards female players. They align with animated gaming trends in the region, providing escapism through romantic fantasy scenarios.

• According to Qimai Data, Mr. Love: Queen’s Choice, generated a revenue of RMB 760 million ($108 million) in 2023.
• In September 2023, SensorTower released its State of Mobile Games Preferred by Women insights report (in Chinese), stating that the annual revenue for 2023 from female players was expected to exceed $16 billion.

Alibaba’s secondhand trading app Xianyu is on track to open an offline marketplace in the Gongshu district of Hangzhou, the resale operation’s latest eye-catching move after the platform was anointed one of Alibaba’s four “strategic-level innovation businesses” last November.

Why it matters: Alibaba is giving Xianyu three years to prove its value and operate as an independent subsidiary, with this attempt at a physical store seen as the first major step.

Details: The bricks-and-mortar flea market, scheduled to open this Sunday, will see local customers sell their used items and purchase items from other secondhand sellers directly, the platform said in a post on its official WeChat account.

• Xianyu says individuals can also list services such as running errands for others and walking dogs to earn extra money.
• The opening of the store aims to simplify communication between buyers and sellers, with sellers able to receive immediate payments via Alipay once their items are sold, unlike online where the process relies on a buyer clicking the “Received Goods” button for payment to proceed.
• Xianyu says the marketplace will accommodate digital products, outdoor sporting goods, clothing, and shoes, as well as luxury goods. However, trading in food and health products, pets, plants, and jewelry will be strictly prohibited.

Context: The popularity of Xianyu has been overshadowed by e-commerce retailers Taobao and JD in recent years as consumers have tended to seek brand-new goods, but, when it comes to collectible toys or cards, the platform has become a popular destination, especially for young people. This status has meant that Gen Z users, born between 1995 and 2010, account for more than 60% of Xianyu’s 500 million account holders, the company’s latest figures show.

• Alibaba CEO Eddie Wu in November identified Xianyu, along with 1688, DingTalk, and Quark as the company’s most promising businesses, saying he saw the potential for China’s largest secondhand trading platform to “become a lifestyle platform for consumers’ hobbies and interests.”

Huawei and Dongfeng Motor, a Chinese manufacturing partner of Stellantis, are in an ongoing collaboration to develop smart electric vehicles, the companies have announced. This adds to a string of such deals by technology giant Huawei as it accelerates its entry into the auto market. 

The partnership could help Voyah, a subsidiary of state-owned automaker Dongfeng, increase sales and expand its presence in the red-hot EV market where a wave of consolidation and reshuffling is underway, according to David Zhang, a visiting professor at Huanghe Science and Technology University. 

Why it matters: The alliance is the latest example of Huawei’s multifold endeavor to expand into EVs. It has pushed two initiatives to enhance cooperation with carmakers in particular. 

• One is the so-called “Huawei Inside (HI)” business model, signifying that cars will feature Huawei’s full-stack technologies such as automated driving software and infotainment systems. Changan Automobile and Mercedes’ Chinese partner BAIC are among its partners. 
• The other is “Smart Selection,” in which Huawei not only provides technologies but also sales channels while gaining control over vehicle development. Aito has been the biggest success story under this approach, followed by the recent launch of Luxeed between Huawei and Chery. 

Details: According to Zhang, Huawei will adopt the HI approach with Dongfeng, mainly selling the carmaker components and software, and will probably not go into as much depth as it did with Seres. 

• This would allow Dongfeng, controlled by the State-owned Assets Supervision and Administration Commission, China’s state asset regulator, to maintain control of its premium EV brand, Zhang said. 
• As more EVs embrace cutting-edge technologies, an automated driving system powered by Huawei could be a big selling point for Voyah, elevating it above other brands. The tie-up could see the companies share development and marketing costs, Zhang added. 
• In a Monday announcement (in Chinese), Huawei and Dongfeng said they will move forward with the large-scale adoption of intelligent technologies with the joint development of new cars, without giving further details. 

Context: Huawei has been working on the spin-off of its automotive business unit for several months. The company in November announced plans to establish a joint venture with Changan, stating that other existing partners such as Seres have been invited to invest in the new entity. 

• Voyah posted significant growth in sales last year with deliveries of 50,552 vehicles, compared to less than 20,000 units sold a year earlier. The automaker in August launched a revamped version of its Free mainstream luxury crossover with a starting price of RMB 266,900 ($36,532) featuring Baidu’s automated driving assistance system.

On Thursday, Huawei announced open applications for its developer preview version of HarmonyOS NEXT, with plans to release a more feature-complete developer beta version in the second quarter and a commercial version by the fourth quarter of 2024 as it looks to cut its ties with Android.

Why it matters: While all previous consumer versions of Huawei HarmonyOS have been compatible with Android, HarmonyOS NEXT will break away from Android architecture, establishing itself as a truly independent operating system.

Details: Huawei began the development of HarmonyOS in 2015 and subsequently released different versions from HarmonyOS 1.0 to 4.0. HarmonyOS NEXT will be the Chinese tech giant’s first OS not to accommodate Android applications and will not support the opening of APK files (Android application packages), according to statements made at Huawei’s launch event. Huawei opened recruitment for the HarmonyOS NEXT developer preview version on Monday, allowing users of its Huawei Mate 60, Mate 60 Pro, and Mate X5 phones to sign up.

• Huawei plans to partner with enterprises, universities, and institutions to train over 100,000 HarmonyOS developers each month. The company is introducing the Yaoxing Plan, with an investment exceeding 7 billion RMB ($9.84 billion), to incentivize innovation in the HarmonyOS ecosystem, including native applications and SDKs (software development kits).
• At the time of writing, more than 200 software companies have initiated the development of native HarmonyOS applications, making up 90% of the leading applications in the domestic sector, according to Huawei. Huawei aims to achieve a short-term goal of reaching 5,000 collaborative apps by the end of this year, and anticipates exceeding 500,000 applications to join the native HarmonyOS ecosystem in the long term.
• Huawei’s Consumer BG CEO, Yu Chengdong, mentioned at the event that HarmonyOS has made breakthroughs in core technologies, including AI frameworks, large-scale models, design systems, programming frameworks, programming languages, and compilers.
• Huawei first introduced HarmonyOS to address user experience issues arising from US sanctions. However, the company is now seeking to break free from the constraints of the existing Android framework, and create an integrated architecture that combines software, hardware, and cloud services, according to the president of Huawei Consumer BG software department Gong Ti.

Context: In June 2023, according to local media outlet Zaker, Huawei stated that a 16% market share in the operating system is a critical threshold for success, based on the developmental history of the PC and mobile industries.

• Due to Huawei’s current inability to integrate GMS (Google Mobile Services), the 16% goal primarily refers to the Chinese market, where HarmonyOS has already captured a 13% share, as reported by CounterPoint Research.

China’s SAIC Motor Corp will spend $1.4 billion building 12 fossil liquefied natural gas (LNG)-powered ships to export cars, as Chinese electric vehicles spread overseas and the European Union tightens its climate and trading policies to reduce greenhouse gas emissions.

Why it matters: The move is the latest example of how EU regulations are pushing Chinese automakers to make changes to the way they operate, and adds to the challenges they face in expanding to overseas markets with their EVs.

Details: China’s biggest automaker said on Wednesday that the SAIC Anji Sincerity has begun its maiden trade voyage from Shanghai to Europe. The ship spans 200 meters (656 feet) in length and boasts capacity for 7,600 cars, making it the world’s largest ro-ro vehicle transport vessel partly powered by sustainable fuel. 

• The container carrier is powered by both diesel and LNG, a form of natural gas that has been cooled to a liquid for easier storage and transportation, providing as much as a 30% reduction in carbon dioxide (CO2) emissions compared to similar-sized, diesel-only vessels, according to an announcement on China’s Twitter-like platform Weibo. 
• SAIC expects to spend RMB 10 billion ($1.4 billion) on building 12 LNG carriers and lease two more for the next three years. The biggest of them will be able to carry as many as 9,000 cars, Zhao Aimin, vice president of SAIC Motor International, told financial media outlet Caixin (in Chinese). 
• Volkswagen’s Chinese manufacturing partner expects its carriers to have a total combined capacity of 1.8 million cars per year by 2026. Its wholly-owned subsidiary Anji Logistics currently operates a fleet of 31 carriers on seven routes to Europe, Southeast Asia, and Latin America, and works with automakers Dongfeng and Great Wall Motor among others. 
• Zhao also mentioned SAIC’s goal to sell 1.35 million cars overseas in 2024, which would mark a growth of more than 11% from the 1.2 million units it achieved last year. That number could be further increased to 1.5 million in 2025, with at least 14 new energy vehicles, including plug-in hybrids and all-electrics, set to go on sale globally over the next two years. 

Context: SAIC is not the only Chinese carmaker to build its own fleet and set its sights on going global. Its move takes place as China recorded exports of 5.2 million cars last year, meaning a 57.4% annual growth rate, and is set to dethrone Japan to become the world’s largest car exporter. 

• BYD’s first roll-on, roll-off, chartered vehicle carrier, named BYD Explorer No. 1, set sail towards Germany and the Netherlands from its base city of Shenzhen on Monday. Carrying more than 5,000 EVs, the vessel is reportedly managed by London-based Zodiac Maritime Ltd. and is being rented to BYD. 
• The EU began mandating shipping companies, among other businesses, to buy CO2 permits for 40% of the CO2 generated by their fleets from January, a percentage that will grow to 70% and 100% over two years from 2025, Reuters reported. 
• Meanwhile, the European Commission launched an anti-subsidy investigation of China-made EVs last October.

In a brief letter to Kuaishou staff from CEO Cheng Yixiao on Tuesday, the short video platform operator announced it had achieved its first yearly profitability since listing, and was offering staff vouchers of up to RMB 2,866 valid for purchases on Kuaishou as an expression of gratitude for employees’ efforts.

Why it matters: The rival to ByteDance’s Douyin (China’s TikTok sibling) accelerated its monetization efforts in real estate and short dramas after achieving its first quarterly profitability in the second quarter of 2023. Rapid growth of these sectors in turn appears to have boosted the Beijing-based company’s further attainment of quarterly profits.

Details: China’s second-largest short video platform, Kuaishou deepened its focus on the real estate industry in a recent restructuring following impressive sales results.

• The platform’s real estate operations saw housing agents and professional property influencers engage potential homebuyers via videos and livestreaming sessions, following up with on-site property viewings, and in some cases, remote contract signings resulting in the postal delivery of keys for their new house or apartment.
• According to data revealed by Kuaishou, during a one-month campaign in September, more than 5,500 properties were sold on the platform, valued at more than RMB 6.9 billion in total. In 2022, over 100 million users on Kuaishou watched real estate sales livestreams or related videos; total sales of the sector for that year surpassed RMB 10 billion.
• Mini web dramas, meanwhile, have served as another business sector with growth potential for Kuaishou. As widely popular short video platforms have reshaped user preferences for content delivering quick fire stimulation, short and cheap to make series with episodes lasting little more than five minutes, have gained favor with large Chinese audiences. 
• Kuaishou said last week that daily active viewers of its short dramas reached 270 million by the end of 2023, with 94 million people watching more than 10 episodes per day.

Context: In the first nine months of 2023, Kuaishou reported a net profit of RMB 2.79 billion compared with a loss of RMB 12.15 billion in the same period of the year before. 

BYD has signed an agreement with Spain’s Grenergy to provide renewable energy power facilities using its blade-shaped batteries for a $1.4 billion energy storage operation in Chile’s Atacama Desert, which the companies claim to be the largest of its kind globally. 

Why it matters: The deal is the latest in BYD’s efforts to scale up its energy storage business and lead in areas beyond electric vehicles, venturing into the booming renewable energy sector, as global EV sales are reportedly poised for slower growth due to lower state subsidies this year. 

Details: BYD will provide Grenergy with a total of 2,136 large-scale energy storage systems powered by 1.1 gigawatt-hours (GWh) worth of its so-called blade battery, which boasts efficient space utilization and high thermal stability in a thin and lengthy form, according to a statement. 

• Grenergy will incorporate them in the first two phases of the Oasis de Atacama project in northern Chile, set for full operation within two years, and with a total capacity of 4.1 GWh and 1 gigawatt (GW) of solar installations. 
• The Spanish renewable energy group said it expects to complete construction of the largest energy storage project worldwide within three years. The project consists of five phases with a total investment of $1.4 billion.

Context: BYD had captured around 11.5% of the global energy storage system market with shipments of 14 GWh worth of batteries in 2022, industry tracker SNE Research said in an annual summary dated March 2, 2023. This places it ahead of South Korea’s LG Energy Solution and Samsung SDI, but significantly behind leader CATL, which controlled more than 40% of the market. 

• Having facilitated several solar power and battery storage facilities in the US, CATL said last March that it would supply 450 megawatt-hours (MWh) of lithium-ion batteries for a Texan storage project. A single GW is equal to 1,000 megawatts.
• Tesla is also reportedly doubling down on its energy business with the April announcement that it was setting up a new facility in Shanghai capable of annually making 10,000 large-scale, energy-storage battery systems. It deployed 6.5 GWh of energy storage in 2022.
• The US automaker estimates that to fully convert the world to sustainable energy will require a total capacity of 2,310 GWh per year of electric-chemical battery storage systems. Chinese battery maker Svolt expects that, in the best case scenario, that number could be achieved in 2030. 

On Jan. 13, Tencent announced that its hit game Honor of Kings would resume livestreaming on Douyin (China’s TikTok sibling) five years after it was banned following a copyright infringement case. In 2016, Tencent sued ByteDance for livestreaming the online game on its subsidiary video platform Xigua. In 2019, a court ruling in Guangzhou stated that ByteDance platforms were prohibited from livestreaming Honor of Kings without Tencent’s permission.

Why it matters: The return of Honor of Kings to Douyin signifies a further thawing of the relationship between Tencent and ByteDance. Tencent has been gradually lifting restrictions on ByteDance, as its competitor has begun scaling back its gaming interests in recent months.

Details: Tencent’s Honor of Kings is expected to start livestreaming on Douyin on Jan. 21, with game streamers invited to participate in the splashy return, as announced on the game’s page on China’s Twitter-like platform Weibo.

• Tencent Games plans to conduct testing of Honor of Kings on Douyin from Jan. 14 to Jan. 17, aimed at avoiding technical issues that may arise during the first live broadcast. From Jan. 18 to Jan. 20, Honor of Kings will host various game-themed activities on Douyin, with invited gaming influencers heading livestream sessions and handing out in-game benefits.
• A gaming industry insider said Tencent’s efforts to reconcile with Douyin stem from a noticeable slowdown in Tencent’s gaming revenue growth since 2022, according to Sina. New player growth and revenue for Honor of Kings have been weaker than in previous years, leading to immense pressure on Tencent’s gaming team, the insider said. 
• Another of Tencent’s hit games, PUBG Mobile, has also seen a decline in users, but there are currently no other new hit games to make up for the loss, the same insider added. In December 2023, Tencent released DreamStar, a new party game with the potential to challenge its domestic rival NetEase’s Eggy Party. At this stage it remains uncertain if it will emerge as the firm’s next hit game.
• Both parties may seek further collaboration in the future, as ByteDance has the potential to work with Tencent in areas including joint operations and distribution partnerships, according to the same Sina report. Douyin currently plays a crucial role in the gaming industry in China as a major channel for advertising and new player acquisition, and Tencent cannot afford to ignore it, the Sina report said.

Context: On Jan. 9, TikTok owner ByteDance said it was engaged in discussions with various potential buyers, including Tencent Games, for its gaming assets, according to Reuters. The two giants are discussing a deal involving major games published by ByteDance’s gaming unit Nuverse, as the TikTok owner looks to step back from the gaming industry.

• In November 2023, ByteDance unveiled plans to scale down its Nuverse gaming unit and sell related gaming assets in a strategic shift away from the gaming industry.
• Honor of Kings, a hit multiplayer online battle arena (MOBA) game, generated nearly $1.48 billion in 2023 for Tencent, but saw a notable decline compared to the $1.8 billion achieved in 2022, according to market intelligence AppMagic.

On Tuesday, the world’s largest and most influential consumer electronics show CES 2024 kicked off in Las Vegas. Generative AI, AI-powered PCs, AI chips, emerging display technologies, XR, robots, wearable devices, and smart driving software are among the highlights of this year’s four-day exhibition. There are over 4,000 participating companies at CES 2024, with more than a quarter coming from China, according to CES.

Why it matters: Chinese companies at CES gain global exposure, connecting with international partners and potential investors to showcase their products and expand markets. The premier tech event, which enhances Chinese brand visibility and provides insights into the global innovation ecosystem, fosters a healthy global competitiveness.

Details: Here are some of the most influential Chinese exhibitors and their products:

• Of the Chinese corporations attending, TCL has the largest exhibition space of nearly 1,700 square meters, showcasing the world’s largest 115-inch QD-Mini LED high-end TV as its centerpiece. The technical challenge of the TV lies in its massive screen, which still achieves a high display brightness of up to 5,000 nits. TCL has also introduced a self-developed Mini LED image quality enhancement chip called AiPQ ULTRA, which is expected to enter mass production later this year.
• Lenovo has unveiled more than 10 PC models equipped with AI capabilities, including the ThinkPad X1 Carbon business laptop that features built-in CPU, GPU, and NPU engines. Another notable product is the ThinkBook Plus Gen 5 Hybrid, which switches fluidly between Windows and Android systems. On the software front, Lenovo has also unveiled AI Now, a PC assistant developed on Alibaba’s answer to ChatGPT TongYi QianWen, which the company says enables natural language interaction in scenarios related to work, study, and device management. AI Now is expected to launch in the first half of 2024 and will be integrated into the latest ThinkPad products.
• ASUS launched the 2024 edition of the Zenbook S 13 OLED laptop (UX5304), featuring Intel Core Ultra 5/7 chips and claimed as the world’s thinnest 13.3-inch laptop as part of the show. Thinner than the MacBook Air M2 at 11.3mm, the ASUS Zenbook S 13 OLED laptop is extremely lightweight at just 1kg.
• Asus Republic of Gamers (ROG) also announced its latest gaming smartphone, the ROG Phone 8 series, featuring a Snapdragon 8 Gen 3 processor and AI functions. Its AI Grabber feature can directly extract text from games, while its Semantic Search enables contextual searches within the user’s photo album on their device using keywords.
• Dreame used CES 2024 to release the Robotic-mower A1, a lawn mower that can assess its surroundings and intelligently identify objects it encounters. The A1 saves homeowners hours of time, the company says, and features patented high-precision 3D laser sensor technology, an OmniSense 3D ultra-sensing system, and a U-Path mowing plan program. With centimeter-level positioning, the company claims effective mowing is guaranteed.
• BOE is showcasing its game-changing automotive display technologies, such as the oxide TFT, flexible OLED, 8K, Mini LED, and BD Cell, at the fair. In terms of oxide TFT (thin-film-transistor) technology, the company debuted the world’s first 45-inch 9K oxide TFT Mini LED display. Another innovation is the 14.6-inch 2.5K oxide TFT display, which boasts high transmittance, high contrast ratios, a wide color gamut, slim bezels, and high cost-effectiveness.
• Ecovacs, a robot vacuum company, is presenting a diverse range of products at CES 2024. These include the Winbot W2 Omn (a robot window cleaner), the Deebot X2 Combo (a wireless handheld stick vacuum designed for the Deebot X2 Omni), and a robotic lawn mower. The Deebot X2 Combo comes with upgraded hands-free capabilities and precision for cleaning floors, drapes, ceilings, and more, according to the company, which adds that their products enable users to “enjoy a fully automated era of whole-house cleaning.”

Context: In January last year, 493 Chinese companies took part in CES 2023, less than half the number from three years earlier, according to South China Morning Post. The absence of leading Chinese companies at the time was attributed to geopolitical tensions and pandemic-related travel restrictions.

After a more than $80 billion market value wipeout since last January, Meituan on Wednesday spent $51 million (HK$399 million) on its first share buyback since it listed in Hong Kong, in a bid to support investor confidence in the company’s resilience amid fierce competition in a local life sector replete with fresh entrants.

Why it matters: Meituan’s first share buyback since going public more than five years ago comes after executives warned of a slowdown in its main takeaway business in the fourth quarter and as Douyin, China’s TikTok sibling, swoops into its business segments. 

Details: The food delivery service provider bought back a total of 5.63 million Class B shares, costing an average of HK$71.07 each, according to its latest filings. Meituan’s stock price responded by rising 5.4% today in Hong Kong.

• Meituan announced in late November that it planned to repurchase shares on the open market beginning Dec. 1, anticipating a total buyback of up to $1 billion in the near future.
• Last year, the firm’s Hong Kong-listed stock slumped by more than half and dropped 82% from its 2021 peak. The trading price is unlikely to return to this peak in the short term as investors worry about ever tighter competition from ByteDance-owned Douyin.
• CEO Wang Xing, however, said in the firm’s latest earnings call that he believed Meituan was “undervalued at the current share price,” expressing confidence about the business he co-founded’s “long-term growth and value.”
• As of Sept. 30, Meituan held cash and cash equivalents of RMB 25.1 billion, its quarterly results showed.
• Meituan has yet to achieve consistent quarterly profitability, but like other Chinese tech companies, it is also seeking to expand business outside of mainland China, an endeavor which is still at the “investment stage,” according to Wang. Meituan’s sister app KeeTa has risen to become the second-largest food delivery platform in Hong Kong since its launch in May.

Context: Besides Meituan, China’s most valuable tech firms including Alibaba and Tencent have exhibited a downward trend in share price that has lost them hundreds of billions of dollars since their peak around 2021. Alibaba and Tencent conducted record buybacks last year, with e-commerce giant Alibaba repurchasing $9.5 billion of ordinary shares, and WeChat owner Tencent spending a total of HK$48.429 billion on buybacks in the same period, meaning the latter topped the Hong Kong stock market’s repurchase list.

Just as German majors once did in the gasoline-powered vehicle segment, Chinese carmakers are beginning to jointly build a reputation for luxury in the electric vehicle segment in their home country, according to Paul Gong, head of China autos research at UBS.

Why it matters: The comments point to a dramatic shake-up in the world’s biggest auto market as once-dominant foreign car brands lose ground while Chinese counterparts such as BYD and Li Auto have risen over the past year, often in step with each other. 

• Notably, Chinese status-conscious buyers are coveting local luxury-styled cars which have enjoyed a medium-to-high single-digit increase in average selling prices each year over the last decade, Gong told reporters in Shanghai on Tuesday. 

Details: China’s new cohort of EV makers have tended to sell pricier than average cars packed with high-tech features, inspiring their more established counterparts to improve their offerings and resulting in a positive net effect on all of the companies’ profiles, Gong said, pointing to “synergies” similar to those of the German majors in the fossil-fuel car era. 

• The “glass ceiling” of China-made car prices is being shattered, according to the Swiss bank, as Chinese EV models have gained popularity, especially models in the price range between RMB 200,000 and RMB 300,000 ($27,880-$41,820).
• However, it remains challenging for them to go further upscale into the super-premium segment where a car could be priced at RMB 1 million ($140,000), Gong added, citing a lack of confidence in luxury Chinese brands among older Chinese consumers.
• UBS projected that Chinese automakers will account for close to two-thirds of China’s passenger car sales in 2024, up from 56% a year ago, while absorbing 41% of the overall profit pool, compared with 17% in 2022, boosted by higher selling prices. 
• Gong envisioned China could be big enough to allow 10-12 domestic carmakers to sell significant volumes with different success stories by 2030 in the best-case scenario, rather than just three to five as some had previously expected.
• Tesla, Volkswagen, General Motors, and BMW were the only international car makers last month to record sales of more than 10,000 new energy vehicles, mainly all-electrics and plug-in hybrids, according to figures from the China Passenger Car Association on Tuesday.

Context: Having struggled to cope with the ferocious competition of repeated price cuts, Chinese car brands such as the established BYD and new entrant Xiaomi have sometimes turned to collaborations to generate buzz and support on social media. 

• BYD showcased a dozen Chinese-branded EV models, including those of rival Li Auto, in a show of solidarity at its headquarters in Shenzhen last August, TechNode reported. Meanwhile, a video clip posted by BYD has racked up nearly 24 million views on Twitter-like platform Weibo, which looked back at the developments of major domestic carmakers. 
• Xiaomi launched an advertising campaign on several digital outdoor billboards in China’s four top-tier cities to show its respect to competitors including BYD, Huawei, and Xpeng Motors, before the pre-launch event of its first EV model last month. In a post on his Weibo account, chief executive Lei Jun called his rivals “pioneers of China’s new energy vehicle industry.”

On Monday, Oppo launched its Find X7 and Find X7 Ultra flagship smartphones in China, emphasizing their innovative camera features. The Find X7 Ultra stands out as the world’s first device to feature dual periscope zoom cameras with a 1-inch Sony LYT-900 sensor, and claims to have the largest telephoto sensor ever integrated in a smartphone. With the Find X7 Ultra, Oppo also becomes only the second domestic brand after Huawei to offer a satellite phone function.

Why it matters: Oppo is hoping to capitalize on consumer excitement for new technology at the dawn of 2024, seeking a competitive edge by introducing hi-spec innovations at a time when China’s mobile phone market is increasingly saturated.

Details: The Find X7 Ultra debuts Oppo’s quad main camera and advanced 1-inch Sony LYT-900 sensor, combining breakthroughs in camera hardware with its HyperTone camera system and pro-grade Hasselblad tuning.

• The Find X7 Ultra packs in four 50MP main cameras, including two equipped with a periscope zoom lens, bridging the zoom gap between optical focal lengths. The 50MP 3x periscope zoom camera features a 1/1.56” Sony IMX890 sensor, an f/2.6 aperture, and a 65mm focal length. This sensor is approximately three times the size of cameras found in major competitors’ phone systems, with Oppo claiming it as the largest telephoto sensor in any smartphone currently on the market.
• The wide camera features an advanced second-generation Sony LYT-900 1-inch sensor, touted as having improved power efficiency compared to its predecessor. With a customized lens with an f/1.8 aperture and optical image stabilization (OIS), it also promises a 50% reduction in reflection, all at a versatile 23mm optical focal length.
• When users need to zoom out, the ultra-wide camera comes into play with its 50MP Sony LYT-600 sensor. This camera delivers expansive and detailed shots at a focal distance of as near as 4cm, thanks to its large size focal length and fast f/2.0 aperture, according to Oppo.
• The Find X7 Ultra also includes software additions like the HyperTone Image Engine, giving users advanced computational photography options and features for high-quality photos.
• The flagship is equipped with Qualcomm’s Snapdragon 8 Gen 3 processor, featuring a large 5,000mAh battery capable of fast 100W wired charging and 50W wireless charging. Its 6.82-inch display offers a 1440p resolution, a maximum refresh rate of 120Hz, and a peak brightness reaching 4500 nits for HDR content.
• The Find X7 Ultra will be available in three colors: black, blue, and brown. Currently, the phone remains exclusive to the Chinese market, with no release planned for Europe or the US. Prices start at RMB 5,999 ($845) for a model with 12GB of RAM and 256GB of storage, going up to RMB 6,999 ($986) for 16GB of RAM and 512GB of storage.

Context: In the third quarter of 2023, the global smartphone market fell 1% year-on-year, to 299.8 million units sold, according to research firm Counterpoint. Today’s top five global phone brands are Samsung (with a 20% market share), Apple (16%), Oppo (14%), Xiaomi (14%), and Vivo (7%).

Geely on Jan. 5 launched the first battery electric sedan under its mainstream luxury marque Galaxy, which the Chinese automaker hopes will take the crown from the likes of the BYD Han to become China’s best-selling model in the mainstream sedan segment. 

“We are aiming to see the Galaxy E8 take pole position as a top-seller against the backdrop of increasing competition in the Chinese mainstream car segment,” Jerry Gan, chief executive of Geely Automobile Group, said in an interview after the launch event (our translation). The company did not provide specific sales targets, citing fluctuations in the market. 

Volvo’s parent is looking to carve out a significant piece of China’s increasingly crowded medium-to high-end car segment. Approximately 65% of the new EV models debuted at November’s Guangzhou Auto show were priced between RMB 200,000 and RMB 300,000, including the Galaxy E8, its sibling Zeekr 007, and BYD’s Sea Lion, Jefferies analysts wrote in a research note dated Nov. 28. 

BYD’s Han was 2023’s most popular electric sedan in the price segment with sales of more than 200,000 units. Geely posted sales of 83,497 vehicles under its Galaxy marque as of December, after deliveries began last June. It began deliveries of the E8 on Jan. 5 and has two other plug-in hybrid models for sale in the lineup, the L7 crossover and the L6 sedan, priced from RMB 138,700 and RMB 115,800, respectively. 

Below are five key factors that Geely hopes will carry the Galaxy E8 sedan to success:

Pricing: The Galaxy E8, a five-meter-long flagship sedan, starts at RMB 175,800 ($24,612), which is RMB 34,000 below the base price of the BYD Han EV, and RMB 6,000 lower than the smaller, hybrid Toyota Camry. Its all-wheel drive version is priced at RMB 228,800 and additionally features an 800-volt system for fast charging and acceleration from 0 to 100 km/h (62 mph) in 3.49 seconds. 

Smart cabin: Like its homegrown rivals, Geely has packed the luxury-styled but affordably priced sedan with technologies such as Qualcomm’s latest five-nanometer cockpit processor 8295, as well as a massive 45-inch wide 8K dashboard screen made by Chinese display manufacturer BOE. This makes the E8 probably the cheapest model that enables users to play hit gaming titles such as Asphalt in-car. By comparison, the 2025 Toyota Camry hybrid, which started pre-sales at RMB 181,800 in China on Jan. 1, is powered by Qualcomm’s previous 8155P processor. 

Performance: The single-motor E8 has a power output of 200 kW and is equipped with a 62-kilowatt-hour battery pack, offering a driving range of 550 kilometers (342 miles), while the entry-level BYD Han is fitted with a 60.5 kWh battery and a 150 kW motor. The top-end version of the E8 boasts 800-volt fast charging that potentially adds 180 km on a five-minute charge; for comparison, all the variants of the more premium Zeekr 007 offer an additional 610 km from a 15-minute fast charging session. 

Exterior: The capacious midsize sedan comes with a “ripples of light” design element, featuring an aesthetic front end with a 1.1 square foot illuminated graphics area comprising 158 micro-lights that can be programmed to display “over 100 different light shows,” according to Geely. It also has an aerodynamic design with frameless doors and concealed door handles, on  a 2,925-millimeter-long wheelbase, making it slightly larger than the BYD Han.

Satellite assistance: The E8 is one of the incoming models that could provide satellite call services in areas with no cellular or WiFi signal. Geely said it will launch a further 11 telecommunication satellites into low orbit in February, following the successful launch of its first nine satellites more than a year ago, geared towards offering high-precision navigation for its self-driving cars, reported Reuters.

TikTok is seeking to significantly expand its e-commerce business in the US, with plans to achieve a tenfold increase in merchandise sales in the world’s largest economy this year, a target of $17.5 billion, Bloomberg reported on Thursday, citing unnamed sources.

Why it matters: TikTok’s ambitious goal will see it push harder to redirect users’ attention from short videos to in-app shopping in a potential threat to established US e-commerce giant Amazon. The move also signals that the ByteDance-owned short video app, which has 150 million users in the US, will compete more directly with its Chinese counterparts Temu and Shein in 2024.

Details: The global value of goods sold on TikTok was expected to reach around $20 billion last year, according to Bloomberg, with its Southeast Asian platforms contributing the bulk of these sales. Singapore-based research company Momentum Works projected in mid-2023 that TikTok Shop was poised to capture a 13.2% share of the Southeast Asian e-commerce market by the year’s end.

• The highest selling products on TikTok Shop are mainly those that more easily lend themselves to promotion by video, such as clothing and beauty items, while its competitors offer a broader range, from kitchen utensils to digital products.
• Shortly after TikTok Shop went live in the US in September, the hit social media platform experienced early success at its first Black Friday and Cyber Monday events, with the major shopping days seeing more than 5 million new customers from the US make purchases on TikTok.
• Meanwhile, TikTok announced this week that transaction fees for merchants in most product categories will increase to 6% of each sale starting in April, and by July, these will rise again to 8%. TikTok Shop currently charges a commission of 2% plus 30 cents per transaction. The change is likely to have an impact on profit margins for store operators.

Context: Since its initial trial in 2021, TikTok’s foray into e-commerce has sought to replicate the proven path taken by its Chinese counterpart Douyin in the online retail field, guiding loyal users previously attracted by viral short videos to engage in shopping on the platform. 

• Indonesia, the first country in which TikTok Shop launched, banned online shopping on social platforms in September, pointing to the protection of small businesses and user data, and forcing TikTok Shop to suspend operations. Despite this setback, TikTok quickly made a comeback in Southeast Asia’s most populous nation through a deal with local company GoTo backed by a $1.5 billion investment.

US chip giant Nvidia is gearing up to mass produce a range of AI chips including its H20 model for China in the second quarter of 2024, with Taiwanese electronics manufacturer Wistron picked as the major supplier of these GPU (graphics processing unit) substrate orders, according to US media outlet Wccftech.

Why it matters: Despite the US government’s ban on high-performance AI chip exports, Nvidia has developed modified AI chips for the Chinese market and is ready to ship limited sales of less powerful AI chips to China as long as they adhere to regulatory standards.

Details: Nvidia is modifying its latest AI chips specifically for the Chinese market, including the HGX H20, L20 PCle, and L2 PCle. The three chips are based on the Nvidia H100, but allow the company to comply with the latest US export control policies announced last October.

• Nvidia originally planned to start selling a modified version of these AI chips by the end of 2023, but postponed the launch to early 2024 as the China-US chip war escalated, the Wccftech report said. 
• Since then, the US government has adopted a softer stance on commercial sales in China, and Nvidia has assured the government that their chips will fully meet compliance guidelines established by US trade and commerce authorities. Last week, Nvidia launched its China-exclusive GeForce RTX 4090D, a less powerful version of the flagship RTX 4090 GPU it sells elsewhere.
• The H20 AI chip is a scaled-down version of the H100 GPU, equipped with 96 GB memory capacities that operate at speeds of up to 4.0 Tb/s, according to Nvidia. It offers computing power of 296 TFLOPs and a performance density of 2.9 TFLOPs/die, in contrast to the H100’s 1,979 TFLOPs and 19.4 TFLOPs/die.

Context: Last October, the US government issued a new ban, further restricting the export of high-performance AI chips by Nvidia. Subsequently, the chip giant announced an immediate halt to the shipment of its A100, A800, H100, H800, and L40S products.

• In December 2023, during an interview with Reuters, US Secretary of Commerce Gina Raimondo stated that the government was in discussions with Nvidia about allowing the chip firm to sell AI chips to China under certain conditions. Raimondo emphasized that the government would stop Nvidia from exporting its most complex and powerful AI chips, but would not curb its chip sales to China altogether. 

China’s two largest bubble tea chains Mixue and GoodMe both filed prospectuses for Hong Kong listings on Tuesday, with the aim of broadening the companies’ financing access through share sales, providing vital support for the new-style tea brands to navigate an extremely competitive industry.

Why it matters: Three China-founded beverage retailers have now lined up to apply for IPOs in Hong Kong in less than five months, incluing fruit tea chain ChaBaiDao submitted its application last August, signaling that the industry leaders are betting big on store expansion and tea consumption in China’s delayed post-Covid economic recovery.

Details: Mixue, which also sells ice cream for RMB 2 (less than $0.3) per cup, generated RMB 15.4 billion ($2.17 billion) in revenue and recorded a net profit of RMB 2.5 billion in the first nine months of last year. Mixue’s numbers are nearly triple those of rival GoodMe on both metrics.

• With an eye-catching snowman logo, Mixue boasted 32,180 stores across China as of September 30, 2023, with over 55% of those stores in third-tier and below cities. GoodMe, a 13-year-old brand selling bubble tea mainly in second-tier and below cities, had opened a total of 9,001 stores by the end of 2023.
• The primary revenue streams for Mixue and GoodMe are driven by the sales of raw materials and equipment to franchisees; the former has derived over 98% of its income from this strategy in the past three years.
• According to GoodMe’s prospectus, revenue from directly operated stores in the first three quarters of 2023 accounted for only 0.1% of its total, while the income from selling goods to franchisees made up as much as 75%.

Context: Mixue shifted to exploring a Hong Kong IPO instead of a mainland China listing due to a lack of progress following a proposed RMB 6.5 billion Shenzhen IPO filing back in 2022. The tea chain’s decision to put its mainland listing on hold is widely seen as a sign that Chinese regulators have imposed strict rules discouraging companies that rely heavily on franchise business models from listing.

Top Chinese automakers BYD and Geely on Monday reported record sales of electric vehicles in 2023 on the back of year-end momentum from their home turf and strong shipments to overseas markets, as China’s booming industry ramped up its push for global expansion.

Why it matters: The latest sales figures come at a time when China is set to surpass Japan to become the world’s largest car exporter, according to estimates by the China Association of Automobile Manufacturers (CAAM)  as reported by Nikkei, buoyed by a growing demand for green energy vehicles worldwide.

• Exports of new energy vehicles, mainly all-electrics and plug-in hybrids, grew 83.5% year-on-year to almost 1.1 million from January to November, while internal combustion engine vehicles remain the major export commodity, accounting for 75% of China’s total car shipments abroad, according to CAAM.

Details: BYD posted record sales at more than 3.02 million EVs in 2023, marking 62% growth from a year ago and putting the Chinese carmaker in pole position to retain its title of the biggest-selling EV brand in the country. In particular, exports surged 334% to 242,765 units compared with the previous year, with the company now having established its footprint in more than 70 countries.

• Sales of SAIC-GM-Wuling, General Motors’ minicar joint venture in China, also reached a record high of 1.4 million units, of which 211,512 were overseas exports, representing a 9% year-on-year growth. The automaker currently sells its budget models including Mini EVs in Southeast Asian countries such as Thailand, Vietnam, and Indonesia. 
• Geely said its EV sales rose 48% year-on-year and were also record-breaking last year, at 487,461 units, including 274,101 gas-powered and green energy vehicles abroad. Its premium EV brand Zeekr delivered 118,685 units over the year, up 65% year-on-year but missing its delivery goal of 140,000 units set earlier this year. 
• GAC’s EV unit Aion was also around 20,000 units short of its annual delivery target of 500,000 EVs, closely followed by Changan Automobile at more than 470,000 units. Huawei’s manufacturing partner said overseas shipments grew 35.4% to roughly 230,000 units, as construction of its overseas production base started in Thailand last month. 
• Li Auto maintained its solid momentum throughout the year as it reported deliveries of 50,353 plug-in hybrid crossovers in December, bringing the company’s total deliveries for the year to 376,030. Young EV makers such as NIO and Xpeng Motors are catching up with annual deliveries of 160,038 and 141,601, respectively. 
• SAIC-Volkswagen, the joint venture of the Wolfsburg-based automaker and China’s state-owned automaker, said it became the most visible player among its peers with sales of almost 110,000 units of its China-made ID family electric models. The German automaker in July reportedly cut the price of its ID.3 hatchback by more than 20% to RMB 125,900 ($17,500).

Context: CAAM expected car sales in China to reach the threshold of 30 million units for the first time in 2023 and that number will be further increased to 31 million in 2024, Caixin reported. NEV sales are set to total 9.4 million units in 2023, up 37% from a year earlier. The growth rate could slow to 22% in 2024, however, as the domestic EV market is maturing.

Xiaomi held its most significant media event of the year in Beijing on Thursday: the debut of its first electric car. With a size comparable to the BMW 5 Series and a shape similar to the Porsche Taycan, the four-door sedan boasts some of the Chinese car market’s highest specifications, as cut-throat competition from maturing rivals rises.

The sleek, gadget-full all-electric sedan is aiming to become a top choice for China’s increasingly tech-savvy consumers, and certainly aroused widespread curiosity judging by the more than 46 million people who logged on for the three-hour-long unveiling on the country’s Twitter-like site Weibo. Yet from journalists and insiders alike, the reaction was mixed. 

From the event, TechNode has selected some of the car’s highlights. 

Main specs

The high-performance SU7 can sprint from 0 to 100 km/h (62 mph) in 2.78 seconds, as it climbs to a top speed of 265 km/h. It is claimed to be the world’s most aerodynamic production car with a drag coefficient (Cd) of 0.195. By comparison, the Taycan Turo can hit 260 km/h and Tesla’s Model S has a Cd of 0.208. It also comes just a month after rival Huawei launched the Luxeed S7 sedan at 0.203Cd. 

Xiaomi said it uses two 9,100-ton mega casting press machines to produce the front and rear underbody pieces, giving the car a torsional stiffness of 51,000 Nm/degree, nearly twice the number of the Ford F-150 Raptor and higher than any other car on the road. The technology, first adopted by Tesla, has since been embraced by Chinese EV makers from Geely-affiliated Zeekr to Huawei-backed Aito.

Vehicle autonomy

Xiaomi’s chief executive Lei Jun presented aspects of the company’s self-driving initiative for public viewing, highlighting that the premium version of the SU7 will incorporate two Nvidia Drive Orin processing chips plus a laser sensor unit on the car’s roof to carry out certain partially autonomous driving functions. Xiaomi also showed a short video of the car drawing into a tight garage space autonomously.

The Chinese tech company has set a goal for its advanced driver assistance software to be available to drivers in 100 major Chinese cities by the end of the next year, according to Lei. Huawei and Xpeng Motors are for now the leaders of this booming market, with established carmakers from BYD to Great Wall Motor trying to catch up.

Smart cabin

The SU7 will be the latest Chinese car model powered by Qualcomm’s smart cockpit computing platform SA8295, after the Zeekr 001 FR and its sibling Jiyue 01, and its infotainment system will turn on in just 1.5 seconds. It is also integrated seamlessly into the Xiaomi ecosystem with the adoption of the company’s self-developed operating system, the HyperOS, which takes only 30 minutes or so to carry out important updates, according to the company. 

CEO Lei said the SU7 would create the same smooth experience that anybody with a Mi Phone is used to, as various apps are pushed from their phones to a 16.1-inch in-car dashboard once they sit in the car. Other devices, from tablets to home appliances, also seamlessly work with the vehicle, an integration trend led by auto and tech majors such as Huawei, Geely, and NIO.

Conclusion

Xiaomi will have to pick an appropriate price tag, given it starts with a somewhat broad, unclear positioning, said You Xi, a seasoned economic and financial writer and co-founder of Chinese online media platform Communication Planet. “It remains challenging for the company to extend its brand into EVs,” You added, citing similar offerings from multiple competitors among his reasons (our translation).

The smartphone giant plans to introduce two variants of the SU7 to “contemporary elites with taste in lifestyle and technology” in China over the next few months, said Lei. Some experts have predicted the premium version of the car, with an estimated driving range of 800 kilometers (497 miles), could cost consumers at least RMB 300,000 ($41,124).

China imported 42 lithography systems (chip-making equipment) with a total value of $8.168 billion in November, mostly from the Netherlands and Japan, according to South China Morning Post. Included among them were 16 lithography machines imported from the Netherlands valued at $7.627 billion, representing a year-on-year increase of 1,050% in value of such equipment from the European chip machinery powerhouse.

Why it matters: Lithography machines are a core type of equipment in chip manufacturing, with advanced models available only at extremely high cost. The Chinese demand for lithography machines is increasing rapidly as the domestic semiconductor industry is being boosted in an effort to offset the impact of tighter US chip export controls. At the high end, only a few companies worldwide are capable of producing them.

Details: China aims to stock as much advanced lithography equipment as possible before the Netherlands’ export restrictions come into full effect in January 2024. 

• Among the 42 lithography machines imported by China in November, 16 are from the Netherlands’ ASML, the world’s largest lithography machine manufacturer, as reported by SCMP. 15 machines are from Japan’s Canon and Nikon, while the remaining 11 are reported to have come from second-hand equipment dealers in other countries.
• Although the quantity of lithography machines imported from the Netherlands in October was higher at 21 units, the total value was only $672.5 million, significantly lower than the total value of $7.627 billion for the 16 lithography machines imported in November, an average 46% more.
• The monthly unit price difference suggests that Chinese companies are continuing to acquire more advanced chip-making systems despite the US’s attempts to limit such purchases, according to SCMP. 
• Most of the equipment shipped in November obtained approval from the Dutch government by the end of 2022 or early 2023, said Jan-Peter Kleinhans, director of technology and geopolitics at Stiftung Neue Verantwortung, a German non-profit think tank based in Berlin. ASML’s lead time in 2023 was around 18 months, indicating that equipment shipped in the fourth quarter of 2023 would have been ordered in either the second or third quarter of 2022, he added.

Context: In June this year, the Netherlands announced export controls, placing restrictions on the shipment of ASML’s chip-making machines to China. Starting from September 1, ASML has been required to acquire a license for the export of its deep ultraviolet (DUV) lithography systems to China.

• Following the new rules, ASML announced that its existing licenses allowed it to continue shipping DUV lithography machines to China until the end of 2023, despite export restrictions in the Netherlands taking effect from September. 
• ASML’s export licenses necessary for shipping these systems to Chinese customers will become invalid from January 1, 2024, and are unlikely to be renewed.
• As of 2021, domestically manufactured lithography systems made up less than 5% of those used in Chinese fabs, according to SCMP’s report.

Alibaba’s China-focused online shopping platform Taobao is streamlining its refund process, in a move that mirrors rival Pinduoduo’s strategy for retaining customers.

The new rules for handling refund issues took effect on Tuesday, allowing the platform to use big data analysis of store quality and complaint frequency to handle returns and refunds directly when buyers make after-sales requests that meet certain conditions.

Why it matters: This update brings Taobao’s after-sales mechanism closer to that of rival Pinduoduo, with the company emphasizing a commitment to consumer rights and cutting the influence of merchants in the refund process. 

Details: Pinduoduo’s “Refund only” strategy has met with controversy in recent years. The approach, coupled with Pinduoduo’s consistent low-price strategy, has attracted a large number of price-sensitive consumers. Merchants on the other hand have come to find the platform’s rules too strict, generating widespread dissatisfaction.

• According to Taobao’s new rules, if a seller exceeds the agreed-upon delivery time or sends goods without the buyer’s consent, the system will allow the buyer to request a refund automatically. The platform also lets buyers apply for a refund if they refuse to sign for a delivery on arrival. Previously, refunds had to be processed via the seller.
• Taobao is providing a quick appeals channel for merchants however, permitting them to appeal refunds within a 30-day period.
• One merchant who sells on multiple platforms told local outlet Jiemian that shoppers have upped their expectations of e-commerce platforms since experiencing how simple it was to apply for a “refund only” on Pinduoduo, the domestic sibling of runaway e-commerce success Temu.

Context: In recent weeks, Alibaba executed an executive level overhaul at Taobao, its most-profitable Chinese e-commerce group. Alibaba CEO Eddie Wu tapped six young leaders to take charge of key operations at twin e-commerce sites Taobao and Tmall, after he took the reins of the business on Dec. 20.

• The flurry of adjustments follow publication of an employee memo by founder Jack Ma in which he wrote “I firmly believe Alibaba will change and reform.” 

The US game developer Activision Blizzard, which has recently been in discussions with several domestic game companies regarding the revival of its Chinese service after a one-year absence, has decided to re-establish collaboration with Chinese game publisher NetEase, as reported exclusively by local media outlet 36Kr.

Why it matters: The split between NetEase and Blizzard was a major event in the gaming industry this year. On Jan. 24, 2023, the Chinese servers of Blizzard’s gaming platform were shut down, ending the World of Warcraft publisher’s 15-year partnership with NetEase in China. On Monday, most domestic gamers were shocked to hear about the potential revival of cooperation between the two gaming giants, especially after their previous relationship ultimately ended in acrimony.

Details: The relaunch of Blizzard’s games in China may have to wait for at least six months, as NetEase and Blizzard need to rebuild their domestic operations team and test the new servers after once any new deal is confirmed, according to 36Kr. 

• The return of Blizzard suggests a full restoration of gaming titles under its brand in mainland China, including World of Warcraft, Hearthstone, Warcraft III: Reforged, Overwatch, the StarCraft series, Diablo III, and Heroes of the Storm.
• News of Blizzard’s return instantly topped the trending topics chart on Twitter-like platform Weibo on Monday, with Chinese players expressing their shock at the quick reunion. NetEase declined to comment on the story, while Blizzard China stated that the company currently does not have any information or updates to share, according to Sina Tech.
• NetEase Dashen, a gaming community app, has begun to gradually update with new content on World of Warcraft since Dec. 20, as reported by Southern Metropolis Daily. Additionally, the app no longer displays previous news items regarding NetEase’s discontinuing of the operation of World of Warcraft.
• Blizzard has also been in contact with several other major Chinese gaming companies this year, including Tencent, ByteDance, and Bilibili, regarding the takeover of its domestic service, according to Cailianpress. Tencent denied the possibility of a deal, while ByteDance is currently preparing to sell its entire gaming sector, making a move highly unlikely. As for Bilibili, the performance of its games business is not very satisfactory at present, the report claimed.

Context: Blizzard announced in November 2022 that it would suspend its game services in China due to the expiration of its licensing agreements with NetEase. However, Microsoft’s acquisition of Blizzard this year and the upcoming resignation of Blizzard’s CEO have brought about a turning point in the relationship between Blizzard and NetEase.

• Bobby Kotick, the CEO of Blizzard, will resign from his position as the leader of the video game company On Dec. 29, as communicated in an internal memo from Phil Spencer, the CEO of Microsoft Gaming. The leadership transition was expected after Microsoft’s completion of the $69 billion acquisition of Blizzard in October, as reported by CNBC.

Chinese EV maker NIO on Dec. 23 unveiled a long-wheelbase executive sedan model, the ET9,  with a price range of $112,160. The model boasts its own self-driving chip, marking the first utilization of the five nanometer process technology in China’s auto industry. 

The four-door executive flagship, equipped with proprietary technologies such as a sophisticated yet lightweight chassis system and a superfast-charging battery pack, reflects NIO’s commitment to redefining the upper premium vehicle market, William Li, the company’s founder, chairman, and chief executive, told press at the annual NIO Day event on Dec. 23. Li further referred to the target segment as ”a spiritual home base“ for international luxury carmakers (our translation). 

With a pre-sale starting price of roughly RMB 800,000 ($112,160), NIO’s answer to the Porsche Panamera could serve as a low-volume halo car and is scheduled for delivery in the first quarter of 2025. Larger rivals from BYD to Geely have also launched similarly-priced offerings, indicating their aspirations to upscale and grab a slice of the luxury market.

Here are some of the key specifications of the ET9 presented by NIO at the company’s annual gathering held in the northwestern Chinese city of Xi’an. 

Design highlights: Different from old-money cars that Western brands typically offer, the NIO ET9 features a sleek and contemporary look with high ground clearance, large 23-inch wheels, and cutting-edge gadgets such as laser sensors on the roof and sides for an all-round view of the car’s surroundings. 

• The interior boasts a modern design language. The car features an almost two-meter (six-feet) console that extends through the length of the cabin and is integrated with equipment such as a 10L fridge and folding tables, offering passengers first-class-style seats and comfort.
• The grand tourer measures 5.3 meters in length and 1.6 meters in height with a wheelbase of nearly 3.3 meters, making it longer than the Bentley Flying Spur and almost as tall as a regular off-roader. The back seats can be reclined as much as 45° and come with full-body massage programs. 

Autonomous driving: The ET9 will be powered by NIO’s first self-developed system on chip (SoC), the Shenji NX9031, for partially automated driving. NIO stated it will be the first Chinese automaker to use chips with five-nanometer process technology, providing its vehicles a computing power comparable to the combined total of that created by four industry-leading processors. 

• By comparison, NIO’s existing lineups are equipped with four Nvidia DRIVE Orin chips that handle up to 1,016 TOPS on seven nanometers. The purpose-built chip is a strategic move as it could improve processing efficiency and machine learning algorithm coupling for autonomous driving, Jefferies analysts said on Monday. 
• Li declined to provide further details about the semiconductor. Tesla has reportedly turned to Taiwan’s TSMC to produce its next-generation full self-driving (FSD) computer on 4/5 nm processes. Homegrown rivals Li Auto and Xpeng Motors are also developing their own chips for vehicle intelligence. 

Large cylindrical battery: The ET9 will incorporate NIO’s in-house developed, 46105-type cylindrical lithium-ion battery cells. This implies a size of 46 millimeters in diameter and 105 mm in length with a cylindrical shape, a technology also embraced by Tesla in the hopes of increasing ranges and lowering costs. 

• NIO asserts that its new batteries have a cell-level energy density of 292 watt-hours per kilogram (Wh/kg), and a 120 kWh pack can provide a range of 255 kilometers (159 miles) after five minutes of charging at a 5C rate, facilitated by a 900-volt electrical system. By comparison, CATL’s latest Qilin battery would allow Li Auto’s Mega van to cover 500 km on a 12-minute charge at a 5C rate. 
• NIO did not reveal many further details, except for Li’s comments to investors during a Dec. 5 earnings call stating plans to outsource battery manufacturing for reduced investment and improved margins. The EV maker is reportedly in talks with Great Wall Motor-backed Svolt to set up a joint venture for making batteries in its car manufacturing base of Anhui. 

Smart chassis: NIO also launched an intelligent chassis suspension system which the company claimed would provide a refined driving experience featuring a steer-by-wire system, rear-wheel steering, and adjustable suspension altogether for the first time in a mass-produced consumer car.

•  NIO said the so-called SkyRide Intelligent Chassis System, in combination with hydraulic components, could be raised or lowered by 50 millimeters in one second to help passengers in and out of the car. In April, BYD introduced a similar offering that could automatically adjust to different road conditions and driving styles.
• In a 50-second video clip presented by NIO on Dec. 23, an ET9 prototype offered an apparently smooth ride when driving over multiple speed bumps and showcased a four-tier tower of Champagne glasses on the front body panel which remained in place despite the road surface. The flagship sedan is also highly maneuverable with a turning radius as low as 5.45 meters, a record also achieved by Xpeng with its upcoming X9 van.

Huawei is doubling down on electric vehicles with plans to run as many as 800 showrooms in China next year dedicated to the joint car brands that it has launched with manufacturing partners, aiming to become a more visible player in the world’s biggest auto market. 

Why it matters: The new shops, expected to present a broader portfolio with larger spaces compared to Huawei’s current policy of showcasing vehicles in its regular appliance stores, will allow Huawei to display models and arrange test drives for more potential buyers. They will also be part of a branding overhaul to enhance Huawei’s brand image as a major car tech company. 

• Huawei began selling EVs powered by its technologies and manufactured by partners via its sales network for smartphones in early 2021 under its “Smart Selection” approach, in which Huawei reportedly provides sales channels and has more control over vehicle development.

Details: In what could be the tech giant’s fastest period of growth in its history, Huawei is planning to operate 800 car showrooms next year and increase that number to 1,000 in 2025, people familiar with the matter told Chinese media outlet 36Kr. 

• Those new shops will feature a new brand called the Harmony Intelligent Mobility Alliance (HIMA), a collaborative initiative for carmakers and a rebranding of Smart Selection based on Huawei’s proprietary Harmony operating system. 
• Some of the smaller locations could start from 2,500 square meters, allowing six cars to be displayed in-store while also doubling as a delivery center with another six for-sale vehicles in parking spaces outside, according to a franchise disclosure document obtained by 36Kr. 
• Huawei’s preferred flagship stores require a wider area of 8,000 square meters or more, and the company is renovating some existing retail shops to showcase the new HIMA brand with improved layouts, according to the report. 
• Some existing locations do not showcase the newly launched Luxeed S7 due to limited space, the report said. Huawei currently has three models on sale in partnership with Chongqing-based manufacturer Seres and state-owned carmaker Chery. 
• Huawei did not respond to TechNode’s request for comment. 

Context: Sources added that a retail and distribution network of 800 shops next year will be comparable to that of Huawei’s major rival Li Auto, which operates nearly 400 direct-sales stores and 320 maintenance centers as of November. 

• Huawei is quickly expanding its EV lineup in collaborations with existing partners, which also include Changan and JAC. It is set to launch the M9, a full-size sports utility vehicle, with Seres at a price range of between RMB 500,000 and RMB 600,000 ($69,972-$83,966) on Dec. 26. 
• Aito, an EV brand set up by Huawei and Seres in December 2021, delivered nearly 19,000 vehicles in November on the back of strong order volume for its redesigned M7 crossover. It operated a network of 1,000 retail locations and service centers in 230 Chinese cities as of June. 
• Meanwhile, long-time rival Xiaomi is on track to launch its first EV model, the SU7, and is reportedly preparing showrooms for car sales with the first batch of display models expected to arrive early next year.

In the recently released 2023 EU Industrial Research and Development (R&D) Investment Scoreboard put together by the European Commission, Chinese tech giant Huawei has maintained its position among the top five global companies that made the highest R&D investments in 2022.

Why it matters: Huawei has been increasing R&D investment to strengthen its technological self-reliance in the face of US sanctions. This strategic move allows the telecoms behemoth to mitigate the impact of sanctions while preparing itself for long-term development amid geopolitical challenges.

Details: The European Commission’s report provides statistics on research and development (R&D) investment for the top 2,500 ranked companies. It indicates that these enterprises collectively increased their R&D expenditure by 12.8% in 2022 compared to 2021, reaching a record-breaking total of 1,249.9 billion euros. Although Huawei dropped one spot compared to the 2021 list but still secured fifth position, with an investment of 20.925 billion euros.

• In 2022, Huawei, TSMC (Taiwan Semiconductor Manufacturing Company), and CATL (Contemporary Amperex Technology Co. Limited) secured positions among the top ten in R&D investment within the Information and Communication Technology (ICT) sector. The ICT sector covers computing services, semiconductors, telecommunications, and multimedia.
• In 2022, Huawei invested 20.925 billion euros, with a year-on-year growth of 11%, while TSMC invested 4.985 billion euros, demonstrating a significant year-on-year growth of 31%. Meanwhile, CATL invested 3.072 billion euros, an explosive year-on-year increase of 110%.
• The top three countries represented on the list are the US, China, and Japan. The US leads with 827 companies on the list, investing a substantial 526.5 billion euros, while China follows closely with 679 companies who have allocated a total of 222 billion euros to R&D endeavors. Japan boasts 229 companies on the list, with a total R&D expenditure of 116.2 billion euros.
• In terms of distribution of R&D investment across regions, the US, China, and the European Union occupied the top three positions, securing shares of 42.1%, 17.8%, and 17.5%, respectively.

Context: The Chinese Academy of Engineering issued its list of 2023 Global Top Ten Engineering Achievements on Wednesday, with Huawei’s self-developed operating system HarmonyOS being recognized among them. The other nine selected achievements were ChatGPT, the Chinese space station, AMD’s Frontier (a supercomputer capable of 100 billion x billion calculations per second), the Baihetan hydropower station, the double-asteroid redirection test, the RTS,S/AS01 malaria vaccine, Spot & Atlas robots, lithium-ion power batteries, and unmanned aerial vehicles.

• In August 2023, Huawei released HarmonyOS 4.0 as a public beta version, in an effort to compete with Android and iOS. Currently, there are over 400 partners participating in co-building on and sharing of the technical foundation of HarmonyOS, according to Huawei. 
• Huawei plans to commence construction of its first European factory in France in 2024, as reported on Dec. 11. The facility is expected to focus on 4G and 5G equipment production, reinforcing Huawei’s presence in Europe.

Xiaomi said on Tuesday that it had sacked three employees for “spreading rumors” about plans for its electric vehicle business, as the company also said it was planning legal action over photos of its first car model leaked online by two media outlets. For months, multiple reports have circulated on Chinese social media featuring unauthorized confidential information about the smartphone maker’s EV business.

Why it matters: The news comes as Xiaomi, known for its low-cost pricing advantage in the smartphone market, has captured growing attention from Chinese netizens due to speculation of an imminent launch of its inaugural EV model, potentially heightening competition in the already low-margin sector. 

Details: The three employees were found by the company to have spread inaccurate information without permission during conferences hosted by brokerages and investment firms, severely misleading the markets and disrupting operations at Xiaomi’s EV division, the company said in a post on the Chinese Twitter-like platform Weibo. 

• Xiaomi is taking legal action against the trio, who have been dismissed for breaching the company’s code of conduct. 
• In addition, the smartphone maker is taking legal measures against two Chinese media outlets over allegations that their employees leaked images of its upcoming EV and violated their non-disclosure agreements with Xiaomi. 
• The Beijing-headquartered tech giant said it will continue to take action to ascertain liability for the alleged wrongdoings, including leaks and rumor-spreading. 

Context: A research note recently circulated on the Chinese internet and obtained by financial news agency Jiemian published what it said was “key information” regarding Xiaomi’s first EV, naming some of the suppliers for components such as the head-up display. 

• Xiaomi is also rumored to be set to debut the car at a press conference on Dec. 28, an influencer with the handle “Dianwankeji” wrote earlier this month on social e-commerce app Xiaohongshu. The company later said (in Chinese) that it has not decided yet on the event date.
• On Nov. 15, images of Xiaomi’s first consumer car along with key specifications were posted online for public review, as required by China’s Ministry of Industry and Information Technology, TechNode has reported. 
• More information revealed by China’s industry ministry last week showed that the premium version of the SU7 sedan will have a driving range of 800 kilometers, powered by a 101 kilowatt-hour (kWh) battery pack sourced from CATL. 

Shares of Gaotu, a Chinese online education firm, slumped nearly 20% on Monday as a previous influx of livestreaming viewers returned to rival East Buy’s Douyin channel after a recent screenplay dispute at the latter, which had driven users to seek alternative platforms, came to an end.

Why it matters: The 58% surge in New York-listed Gaotu’s share price last week has now been halved with the previous surge seemingly an exception that does not accurately reflect the sustainable growth prospects of Gaotu’s e-commerce business at present.

Details: China’s Gaotu was once a provider of after-school tutoring courses, but transitioned to the live commerce sector a year ago, in a similar move to East Buy, which found viral success after blending online language lessons with e-commerce. Gaotu witnessed eightfold growth in followers on Douyin in the last two weeks, taking it to almost 2.5 million followers on the TikTok sibling platform.

• The East Buy exodus began as a protest over a controversy surrounding Dong Yuhui, the most influential host on the platform. His fans were dissatisfied with the company’s Douyin account operator attributing a Jilin province screenplay read by Dong during a livestream to the collaborative efforts of the team. Fans insisted that Dong was the sole author and should be accredited as such.
• In the following days, Dong failed to appear on East Buy’s livestreams, prompting a large number of fans to flood rival Gaotu’s platform as a way of expressing their dissatisfaction with East Buy’s treatment of their live commerce idol. One user even stated, “I will only go back if Dong continues to appear in East Buy’s livestreams.”
• However, the week-long infighting came to an end on Monday night when East Buy CEO Michael Yu announced his decision to promote Dong to the position of senior partner in the company while committing to the establishment of a separate studio for the top influencer. That evening there were wildly contrasting figures for the two rivals: East Buy’s livestream featuring Yu and Dong saw them sell goods worth RMB 1 billion and hit a peak of 3.8 million simultaneous viewers; at the same time, Gaotu’s livestream had fewer than 5,000 viewers.

Context: Gaotu’s current stock price is still nearly 97% lower than its peak in 2021, when the Chinese government introduced a policy known as “double reduction” that dealt an unprecedented blow to private for-profit educational companies, and prompted them to seek rapid transformation to stay afloat. East Buy, a subsidiary of New Oriental, found unexpected success with a livestream last June as a host, who was once a tutor, taught English and simultaneously sold products, gaining significant attention on the internet.

• In November 2022, Gaotu was warned by the New York Stock Exchange as its stock price remained below $1 for 30 consecutive trading days. A month later, the company initiated its first livestream on Douyin under the name Gaotu Jiapin, mainly selling agricultural products and snacks. Its revenues for the third quarter were down by nearly 60% compared to 2020.

Unitop Fitness, a Chinese fitness equipment maker, unveiled the U-trainer Plus in September, at a price of $649. Our team was given a fortnight to review the home gym. 

The U-trainer Plus enables users to exercise on their own schedule with real-time performance tracking and built-in workouts. It eliminates the need for gym memberships and, despite this meaning the lack of a supportive fitness community, the personalized nature of the smart equipment enhances individualized training. 

Assembly at home

The difficulty of assembling home fitness equipment can vary widely depending on the type of equipment, the manufacturer’s instructions, and your own level of experience and comfort with assembling items.

The U-trainer Plus arrives in two relatively large, heavy  boxes.

The entire assembly process, including unpacking, reading the instructions, watching the assembly video, and manually assembling the equipment, took four hours. Although the fitness equipment includes installation tools, the tester, with limited assembly experience, still found the process somewhat challenging. For added convenience, it is recommended to have two people to work on the assembly together, especially since some parts of the equipment are quite heavy.

It’s also worth noting that the equipment takes up a sizable space in the home. Here are some of its basic specifications:

Packaging size: 1,445 x 490 x 275mm
Folded: 702 x 992 x 2,105mm
Expanded: 1,450 x 992 x 2,105mm
Net weight (main parts): 47kg
Gross weight (including accessories): 58kg
Resistance level: 100 levels
Maximum resistance: 50kg on each side
Resistance range: 2-50kg
Maximum weight capacity: 110kg

Customized app for home workouts

The U-trainer Plus comes with an app called Unitop, which features built-in programs and the option to customize workouts according to individual fitness levels and goals.

Through the app, users can establish a Bluetooth connection between their equipment and their chosen device, enabling them to choose from various training programs and set up personalized training plans. 

Different combinations of exercises, repetition rates, and the resistance weight of the equipment are all customizable. Each training exercise in the app comes with instructional videos and detailed explanations, providing assistance for beginners and alleviating concerns about confusion during workouts.

The equipment includes a barbell rod, wrist straps, handles, deltoid ropes, and a waist belt. Users have the flexibility to choose to use the appropriate accessories based on their individual training goals. However, some functions in the app require paid membership, and the one-year membership fee is an additional expense not included with purchase of the equipment.

Motivational partner mode

The U-trainer Plus offers adjustable resistance on both sides, enabling users to exercise together with friends or family members. Although this function was not tested during our two week trial, it is an interesting option for home fitness. Typically, exercising with friends or family is more motivating than working out alone.

Dual electromagnetic motors

The U-trainer Plus is equipped with dual electromagnetic motors, ensuring a friction-free workout experience without any physical wear and tear. It allows independent adjustment for each side, with the motors supporting 100 levels of resistance weight increments, precisely adjustable at 0.5kg per level. This enables users to train with a maximum resistance weight of 50kg on each side, totaling 100kg.

Workout at home with ease

The U-trainer Plus suits individuals who are seeking privacy, convenience, and a focused exercise environment at home. It enables users to engage in personalized workouts without the distractions or potential discomfort associated with public gyms. 

The equipment set seamlessly transitions between different functions, serving as a cable machine, a rowing machine, or a boxing machine. This provides users with the opportunity to engage in a comprehensive, low-impact workout that effectively targets a wide range of muscle groups throughout the body.

While home workouts offer convenience and flexibility, they may lack the social element found in traditional gym settings, which can serve as a significant source of motivation for some individuals. 

Therefore, the potential impact and value for money of this fitness equipment varies completely based on an individual’s personality, as some people may lack the motivation to exercise at home. While it provides virtual coaching and tutorials, it may not be a substitute for in-person guidance from a certified fitness professional, especially for beginners who need more personalized instruction and support.

Conclusion

The choice between using smart fitness equipment at home or going to a traditional gym depends on individual preferences, lifestyle, and fitness goals. It is essential to weigh the advantages and disadvantages to determine the best fit for an individual’s needs.

But the U-trainer Plus is suitable for fitness enthusiasts with a basic level of exercise awareness who enjoy working out at home. Beginners or those who prefer the atmosphere of a gym should carefully consider their purchase.

Pros:

Convenient and flexible at home option
Individualized training to fit different fitness levels
Customized app with built-in programs
Motivational partner mode
Dual electromagnetic motors
Comprehensive workouts targeting all muscle groups

Cons:

Assembly may be challenging for one person
Extra charges for certain features in the app
Lack of social element compared with traditional gyms
Challenging for beginners who need in-person guidance

Chinese EV brand Zeekr on Thursday announced the launch of a fast-charging, affordable, lithium iron phosphate (LFP) battery capable of running 500 kilometers (310 miles) on a 10-minute charge, becoming the latest automaker to seek more self-reliance and better cost control over the critical EV component.

Claiming to be the world’s first LFP battery with an 800-volt electrical system for fast charging, the so-called Gold Brick battery features a faster recharging speed than some of the most advanced offerings from established battery suppliers such as CATL and BYD. CATL’s latest Shenxing battery adds 400 km on a 10-minute charge. 

The decision by Zeekr to make its own EV batteries is one of the clearest examples of the Geely-owned brand’s determination to have greater control over its EVs’ core technologies, Chief Executive Andy An told a press conference in the eastern city of Quzhou on Thursday. 

Here’s what Zeekr’s management said about the battery and its production plan: 

Gold Brick battery: The blade-shaped LFP battery will be first equipped for the entry-level version of the Zeekr 007, the brand’s first battery electric sedan with a pre-sale price of RMB 224,900 ($31,059), offering a driving range of 688 km on a single charge. 

• Zeekr’s new batteries have a cell-level energy density of 250 watt-hours per kilogram (Wh/kg) and reach 128 Wh/kg at a system level. The company said it can fit more battery cells into a given space, which enables more energy density and requires fewer connection components. 
• For comparison, CATL’s other most recent battery, Qilin – which is packed with more expensive nickel and cobalt-based cells – reaches 255 Wh/kg at a system level and can power an EV for 1,000 km. The next-generation Qilin will give 500 km of range after 12 minutes of charge. 
• In what An described as a “very important” strategic partnership (our translation), Zeekr continues to source batteries from CATL. The long-range 007 sedan, offering a driving range of 870 km, will be powered by CATL’s nickel-manganese-cobalt (NMC) batteries.

Quzhou production base: The Quzhou factory, which also produces NMC batteries for other Geely-owned marques such as Smart and Galaxy, will have an annual capacity of 24 gigawatt-hours (GWh) next year. This will allow the automaker to achieve an annual production run rate of 840,000 EVs. 

• An mentioned the likelihood of supplying the battery type and module assembly to other Geely-affiliated brands, especially those that share the SEA vehicle platform Zeekr builds its cars on, as well as rivals’ models. 
• The facility started operations last month after being constructed in 15 months. The company is targeting a yield rate, which measures the number of satisfactory units coming out of all produced items, of 93% in Quzhou, Vice President Xie Shibin told reporters during an interview on Thursday. 
• Zeekr’s parent company Geely, which owns the facility, has deployed a set of solar arrays on the rooftop with a long-term goal of making it a zero-carbon plant, the executives added.

Context: Geely is the latest in a range of Chinese automakers from GAC to Changan that has turned to making its own electric vehicle batteries in order to lower production costs and gain control over its supply chain. An original equipment manufacturer (OEM) could recover its investment and make a profit if it produces more than 15 GWh worth of batteries, McKinsey & Company has estimated.

• The global EV battery market is currently led by CATL, with the Chinese giant accounting for more than a third of the market from January to October, according to figures compiled by industry tracker SNE Research.
• Among automakers, BYD made an early bet on in-house battery making, launching its blade-shaped LFP batteries in 2020 and recording shipment of 87.5 GWh during the first nine months of this year.
• Zeekr has been partnering with CATL, with the latter’s Qilin battery first equipped by the Zeekr 009 luxury van and the completion of a $750 million financing round partly backed by the battery giant early this year.
• The EV brand filed for an initial public offering in New York last December in the hope of raising more than $1 billion at a valuation of more than $10 billion. It has also made a foray into the European market, currently selling EVs in the Netherlands and Sweden.

Chinese tech giant Alibaba is doubling down on artificial intelligence to spur the growth of its e-commerce division, after founder Jack Ma wrote an internal memo saying the era of AI e-commerce “has just begun.” The company’s domestic and international retail businesses are testing multiple AI-driven tools and are on a hiring spree for AI-related roles, according to local outlet LatePost.

Why it matters: Alibaba hopes that by integrating generative AI into its core e-commerce business, it will further boost sales in the highly lucrative sector and create new forms of customer experience to up business retention rates.

Details: Taobao and Tmall Group have channeled their AI focus into four key areas:  marketing platform Alimama, customer apps, merchant apps, and industry-specific apps. Before the reorganization led by Alibaba’s chief technology officer Wu Zeming, there were around 20 teams within the group exploring AI-related businesses, the report said.

• This year’s Singles Day shopping festival, which started in late October, was a testing ground for Alibaba-created AI shopping assistants, including Taobao Wenwen, a chatbot designed for consumer-facing interaction that relies on its pre-trained generative ability to provide users with shopping recommendations. 
• The firm also introduced at least ten free tools for merchants to assist in their marketing and merchandising efforts during the month-long bonanza. While Alibaba kept silent on sales achieved during the festival this year, it announced that the Wenwen chatbot engaged with over five million users, and the merchant tools were used over 1.5 billion times.
• Enabling businesses to achieve lower operation costs through generative AI solutions is seen as a commonality among Alibaba’s AI products. Earlier last month, in a pilot launch event of Aidge, a tool facilitating features from translation and marketing to localized content and design, vice president of Alibaba International Zhang Kaifu said that it is dedicated to “simplifying global operations for small and medium-sized enterprises.” 
• Zhang also leads AI initiatives within Alibaba International Digital Commerce Group, overseeing a team of more than 100, according to LatePost, with one-third engaged in training large language models.

Context: AI appears to be a top priority in Alibaba’s strategy since new management took over in September. In his first letter to all staff, CEO Eddie Wu announced “user first, AI-driven” as his vision for the 24-year-old company, a business that has recently been overshadowed by rivals. “We will realign our operations and refocus our business around these two core strategies,” said Wu.

• An employee posted a critical note on an Alibaba internal forum after Temu parent PDD closed in on  the company’s market valuation late last month, a move that prompted Jack Ma’s rare appearance with him calling on staff to provide more constructive comments and suggestions, especially innovative ideas to the group.

Xiaomi on Tuesday released a statement refuting an apparent claim made by senior Huawei executive Yu Chengdong that Xiaomi’s dragon bone hinge technology for its foldable phones is a direct copy of Huawei’s dual rotating water drop hinge. Yu, the CEO of Huawei’s consumer department, made these comments during a company event last week; Xiaomi has said the accusation is “seriously inconsistent with the facts.”

Why it matters: One of the key elements of foldable phones lies in their unique hinge design, which directly influences the phone’s folding mechanism and screen creases. The controversy between Huawei and Xiaomi, two of China’s biggest phone brands, reflects intensifying competition in the foldable phone market.     

Details: In the statement, Xiaomi posted detailed comparisons, including the application dates, publication dates, and technical features of relevant patents. Both the design concept and mechanical structure of their dragon bone hinge are completely different from Huawei’s dual rotating water drop hinge, according to the statement, which was posted to the company’s account on the Twitter-like Weibo platform.

• “Some companies directly copy our technology and then claim it as their own invention. The concept of the dragon bone hinge is fundamentally non-existent, as they’ve transformed our double rotating water drop hinge into a dragon bone hinge,” said Yu during an annual Huawei event on Dec.10. “Once competitors make modifications, this technology becomes their own,” he added.
• While he didn’t explicitly name the rival phone brand, Yu’s remarks were widely interpreted as an attack on Xiaomi, which launched its new generation of foldable flagship, the Xiaomi MIX Fold 3, in August and is the only phone brand on the market to use what it terms a dragon bone hinge.
• According to Xiaomi’s statement, the dragon bone hinge was patented on September 18, 2020, and received patent authorization on January 5, 2021. Huawei’s dual-rotating water drop hinge was only publicly disclosed on June 18, 2021, though it was patented on December 13, 2019. 
• Xiaomi’s dragon bone hinge features a “three-level rod, five-component, seven-low-friction design,” the statement continued, while Huawei’s dual rotating water drop hinge is described as a “two-level rod, three-component, four-low-friction design.” 
• Furthermore, Huawei’s current three-level rod patent was applied for on October 29, 2021, and was publicly disclosed on May 5, 2023, but it has not yet entered mass production, according to Xiaomi.
• In the concluding part of the statement, Xiaomi emphasized that Yu Chengdong should adhere to “the basic principles of science” and refrain from misleading the public.

Context: Research firm TrendForce‘s report indicates that the anticipated shipment of foldable smartphones in 2023 is around 18.3 million units, with a year-on-year increase of 43%. Huawei’s estimated shipment of foldable smartphones this year is expected to reach 2.5 million units, according to the same report.

• The Xiaomi MIX Fold 3 set a new record for Xiaomi upon its release, with sales increasing 2.25 times compared to the previous generation, according to the company’s second quarter financial report.
• In the third quarter of 2023, sales of foldable smartphones in the Chinese market reached 1.98 million units, representing a year-on-year increase of 175%, according to CINNO Research. In terms of brand ranking, Huawei occupied the top spot with a market share of 28.6%, while Xiaomi was in sixth place with a market share of 8.7%.

Chinese tech giant Tencent is planning to expand its short video and livestreaming e-commerce team as sales surge, according to a Monday report by LatePost, which said WeChat’s in-app shopping feature has achieved a total of RMB 100 billion ($13.9 billion) gross merchandise volume this year via its TikTok-like short video service.

Why it matters: The figure shows Tencent has increasingly drawn in users to spend more time shopping on Video Accounts, a service that launched in beta mode in January 2020.

• According to the company’s president Martin Lau, Tencent could gain a competitive advantage by attracting “a pretty significant high-income and affluent customer base” on WeChat, who may not typically make purchases on other short video platforms.

Details: WeChat Video Accounts, Tencent’s short video feature also known as Channels, has been seen as the “hope” of the company since founder and CEO Pony Ma highlighted it in an end-of-year meeting in 2022.

• As a latecomer to livestreaming e-commerce, Tencent is set to further develop the basics of online shopping, including WeChat payments, LatePost reported. During the company’s latest earnings call, Lau said the livestreaming e-commerce playbook was “quite clear” despite involving many steps. Tencent wants, “to build it in a systematic way, step by step,” Lau added.
• While Tencent’s e-commerce sales have reached an impressive RMB 100 billion, it has a long way to go before catching up with rivals Kuaishou and Douyin, as the former boasted sales of nearly RMB 800 billion worth of goods in the first three quarters this year, while TikTok’s sibling app Douyin is expected to see more than RMB 2 trillion in goods sales this year.
• Video Accounts brought RMB 3 billion in advertising revenue in the second quarter, Tencent said, adding that the figure for the subsequent three months showed “strong growth” over the previous quarter, although exact figures were not disclosed. Kuaishou generated RMB14.35 billion in advertising revenue in the same period.
• Ad load, which sits at less than 3% for Channels compared to rival platforms that regularly exceed 10%, serves as a growth driver that translates into more revenue, according to Tencent’s Chief Strategy Officer James Mitchell.

Context: WeChat, which started as an instant messaging service, now offers users a rich ecosystem of services via its mini-programs (in-app mini-apps) and Video Accounts. Tencent’s hope is that it can continue to offer the company more routes to profitability.

• Lau highlighted that several hundred million users interact with over one million mini-programs on WeChat, which facilitated over RMB 1.5 trillion in gross merchandise volume (GMV) between July and September this year. 
• In an indication of the Tencent platform’s importance, iPhone maker Apple opened an official retail store within WeChat this July.

Volkswagen’s software unit Cariad and Chinese auto tech startup Horizon Robotics expect to recruit 300 employees by the end of this month for a newly established joint venture called Carizon, in an effort to meet growing local demand for advanced driving technology. 

Why it matters: The hiring spree marks the German auto major’s latest effort to develop its own in-vehicle software following an announcement last year of a $2.3 billion investment deal for a 60% stake in the JV in partnership with Horizon. 

Details: The two companies have not officially provided details of the recruitment plan, but Horizon’s co-founder and technology chief Huang Chang, leading a team of more than 100 engineers, has reportedly joined the JV. 

• Su Jing, a former head of Huawei’s autonomous driving team who has been on board at Horizon since earlier this year, will lead the development of advanced driving systems based on Horizon’s next-generation computing solution Journey 6. 
• Beijing-headquartered Carizon was officially set up on Nov. 20 with a registered capital of RMB 6.8 ($940 million), with VW and Horizon taking 60% and 40% stakes in the entity respectively, according to Chinese corporate data site Tianyancha.
• The JV will focus on rolling out automated driving technology powered by Horizon’s Journey series processors and integrated into VW’s upcoming battery EVs in China, according to an announcement dated Dec. 8. 
• VW and Horizon are on track to deliver their first collaborative development effort as early as 2025, Cariad China’s chief executive Chang Qing told Chinese reporters last month. This will allow VW vehicles to function independently on Chinese highways and certain urban streets, a feature popular with Chinese consumers.

Context: VW has made a series of moves to step up the pace of its software development for the Chinese market, including a $700 million deal for a 5% stake in Chinese EV maker Xpeng Motors unveiled in July.

• The German carmaker is also forming a JV with China’s ThunderSoft to improve its infotainment systems and car cockpits, Reuters reported in April, while partnering with smartphone maker Vivo on a similar effort.
• VW sold roughly 2.3 million cars in China for the first nine months of 2023, recording a year-on-year decline of 3%, of which roughly 117,100 units were EVs, up 3.9% from a year ago. It delivered 341,100 EVs in Europe over the same period, an increase of 60.9% from last year.
• Horizon said in April it has shipped more than 3 million computing solutions for over 120 car models from prominent Chinese automakers ranging from BYD to Geely. Self-driving startups such as Pony.ai and Qcraft are developing assisted driving technology based on its processors.
• US chip powerhouse Nvidia is also ramping up its self-driving car efforts in China with plans to expand its workforce locally after recently hiring Wu Xinzhou, a former vice president at Xpeng Motors, TechNode has reported.
• Speaking to Chinese media outlet LatePost in July, Wu said that foreign companies would need to establish research and development teams of “at least several hundred people” locally to be able to compete with Chinese carmakers and self-driving car companies (our translation).

A recent report by Taiwanese media outlet DigiTimes suggests that Chinese panel manufacturer BOE is facing challenges in expanding its OLED (organic light-emitting diodes) supply for Apple’s iPhone 15 models, primarily due to light leakage issues. 

Why it matters: If BOE fails to address the light leakage problem, there is a high possibility that they may lose potential orders for the iPhone 15 and iPhone 16 from Apple.

Details: The current yield rate of BOE’s OLED panels for the iPhone 15 has dropped to 30% on the back of the issue, causing a decrease in production output, according to the DigiTimes report. 

• BOE has been selected to supply OLED panels for the iPhone 15 and iPhone 15 Plus. However, the supplier encountered a problem with light leakage, specifically in the panels designed for the standard models. The issue revolves around the Dynamic Island on the OLED display, where the hole punch and the pill-shaped cutout housing the TrueDepth camera sensor and FaceID are located.
• Given the light leakage issue and potential impact on iPhone sales, BOE may face challenges in expanding orders from Apple, which in turn would impact its revenue. According to industry analysis, BOE was expected to supply 5 million to 15 million panels for the iPhone 15 this year. However, due to lower production yields, the actual supply may be limited to a range of 2 million to 3 million panels.
• As Apple shifts its focus to the next-generation iPhone 16 series, avoiding light leakage is becoming more challenging, especially with larger panels. The iPhone 16 and 16 Plus are expected to feature OLED panels similar to the iPhone 15 and 15 Plus, while the Pro series may sport larger sizes, according to US media outlet Wccftech. The iPhone 16 Pro is anticipated to come with a 6.3-inch display, larger than the 6.1-inch display on the iPhone 15 Pro.

Context: Samsung also manufactures OLED panels for the iPhone 15 lineup, holding a dominant 91% share of the supply from June to August this year, according to DigiTimes. If the issue of light leakage persists, Samsung’s greater efficiency would become a significant concern for BOE in the short term.

• In terms of the foldable panel market, Samsung is anticipated to uphold its leading position during the third and fourth quarters of this year, commanding a 74% market share, according to Korean media outlet Business Korea. While this represents an increase from the second quarter’s 63%, it marks a decline of 17% from the 91% share it held during the same period last year. 
• BOE, which previously held a 4% market share in the foldable panel market during the third and fourth quarters of 2022, is projected to surge to 18% in the same period this year. This growth can be attributed to its supply to Chinese foldable smartphone manufacturers such as Huawei, Honor, and Oppo.

Tesla is preparing for a major expansion of the Gigafactory Shanghai, its core electric vehicle production facility in China, in a move that looks set to enable the US automaker to bring out its long-rumored budget compact hatchback, local media has reported. 

The company is also said to be readying to supply Chinese clients with its large-scale utility batteries known as Megapacks from next year, having begun searching for a head of local sales. The availability of the Megapack in China will step up the pace of Tesla’s entry into the country’s energy storage market.

Why it matters: The news comes after Tesla CEO Elon Musk had dinner with Chinese president Xi Jinping, alongside other American company executives, on the sidelines of the Asia-Pacific Economic Cooperation Summit in San Francisco on Nov. 15. 

• In a statement published on the Chinese Twitter-like platform Weibo the next day, Tesla said it looked forward to joint developments with China in areas such as green energy vehicles, energy storage, and artificial intelligence, citing Xi’s support for Tesla’s operations in the country. 
• The moves are expected to help Tesla almost double its local production capacity and diversify its revenue sources at a time when the EV giant sees slowing sales due to growing competition from domestic players. 

Details: The so-called phase-three expansion could facilitate the production of Tesla’s upcoming car, dubbed the “Model 2” or “Model Q” with a price tag as low as RMB 150,000 ($21,800), people with knowledge of the matter told LatePost on Wednesday. 

• The expansion was put on ice early this year, according to a Jan. 12 report by Bloomberg, after apparent concerns from the Chinese government over data security issues related to Starlink, the satellite internet unit of SpaceX, Elon Musk’s rocket company. 
• Details of the plan remain unclear, but if it proceeds, Tesla is expected to be able to nearly double its manufacturing capacity in China to 2 million EVs a year. Analysts expect volume production of the lower-priced, next-gen Tesla vehicle no earlier than 2025.
• Meanwhile, Tesla in April announced plans to build a new facility in Shanghai – capable of making 10,000 large-scale, energy-storage battery systems, or 40 gigawatt-hours-worth (GWh) of the Megapack – scheduled to commence operations in the second quarter of 2024. 
• Sources told LatePost that the China-manufactured Megapack batteries will be delivered locally and overseas. 

Context: Tesla sold 771,171 China-made EVs in the first 10 months of the year, up 39% from a year ago, of which 308,816 were overseas exports, according to figures compiled by the China Passenger Car Association (CPCA). The annual growth rate saw a drop compared to 50.3% last year. 

• The US firm said in January that it deployed 6.5 GWh of energy storage in 2022, representing year-on-year growth of 64%. It estimated that the world requires a total capacity of 2,310 GWh per year of electric-chemical battery storage systems such as the Megapack in order to achieve a 100% global clean energy transition, according to estimates from the EV maker’s Master Plan 3.

On Tuesday, Oppo smartphone subsidiary OnePlus unveiled its flagship series OnePlus 12 just in time to celebrate the brand’s tenth anniversary on Dec. 16. To showcase the specifications of the new device, OnePlus China’s CEO Li Jie spent a full three hours describing it in detail at the launch event, making regular comparisons to Xiaomi’s 14 Pro throughout.

Why it matters: The launch of OnePlus’ new flagship is a direct challenge to Xiaomi and its subsidiary Redmi, as the Oppo sub-brand looks to focus on high-quality smartphones with cutting-edge features offered at competitive prices. 

Details: At the launch event, OnePlus repeatedly compared the OnePlus 12’s software and hardware capabilities with those of the Xiaomi 14 Pro, emphasizing its starting price of RMB 4,299 ($606), compared to the latter’s RMB 4,999 ($705).

• The OnePlus 12 features a 2K BOE screen with medical-grade eye protection, the Find imaging system created in collaboration with Hasselblad, and the latest Snapdragon 8 Gen 3 chipset.
• OnePlus claims to have worked with Chinese display panel maker BOE for the past two years to create the 2K BOE screen for the OnePlus 12. The screen boasts medical-grade eye protection and industry-leading peak brightness of 4,500 nits. 
• The OnePlus 12 offers a camera setup that includes a 50 MP Sony LYT-808 sensor, a 48 MP IMX481 ultra-wide-angle lens, and a 64 MP Omnivision OV64B periscope telephoto lens with 3x optical zoom. For selfies and video calls, it is equipped with a 32 MP Sony IMX615 sensor at the front. The Find camera system is enhanced with Hasselblad branding and tuning technology, ensuring a high-quality imaging experience, according to OnePlus.
• The new flagship comes with a Qualcomm Snapdragon 8 Gen 3 processor under its hood. Working in conjunction with the Adreno GPU, the smartphone aims to achieve an improved gaming performance, thanks to the PixelWorks X7 Visual processor, as claimed by the company.
• The phone has a 5,400 mAh dual-cell battery, marking the largest capacity ever applied in a OnePlus device. It can charge at up to 50W via the company’s self-developed AirVOOC technology, which is three times faster than the 15W rate of Apple’s MagSafe wireless chargers. 
• The entry level model with 12GB RAM + 256GB storage is priced at RMB 4,299 ($606), while the premium version of 24GB RAM + 1TB storage is available at RMB 5,799 ($818). The phone is available in black, green, and white.

Context: In June 2021, OnePlus announced it had merged teams with Oppo, its parent company, to streamline its operations. 

• According to market research platform Counterpoint, Oppo and Xiaomi accounted for 14% of each of global smartphone shipments in the third quarter of 2023, with both firms shipping around 41.5 million units. Oppo’s data includes figures for its OnePlus brand.
• The Xiaomi 14 and 14 Pro, the first phones to feature the Qualcomm Snapdragon 8 Gen 3 chipset, were launched on Oct. 26 in China. The two smartphones are currently only available in China but are expected to launch globally in early 2024.
• OnePlus founder and chief product officer Liu Zuohu stated at the anniversary event that OnePlus smartphones are available in 10,000 Oppo offline stores in China.

Food delivery giant Meituan has shown its ability to defend its moat advantage in local services amid a challenge from ByteDance-owned TikTok sibling Douyin, with the company achieving RMB 2 billion single-month livestreaming sales this October, up from the less than RMB 600 million recorded in July when it officially introduced its in-app livestream feature, local media outlet 36Kr cited multiple sources as saying in a Monday report.

Why it matters: Meituan, a newcomer to the livestreaming domain, is employing a high-subsidy strategy within livestream rooms to attract both customers and merchants. Despite the strong growth momentum indicated by sales figures, the company’s profit margin has seen a decline for two consecutive quarters.

Details: Livestreams conducted by Meituan itself are the main focus of the newly launched function, where hosts are sourced from external multi-channel network (MCN) companies and generate more than 70% of live gross merchandise volume (GMV), according to the 36Kr report. However, this balance is shifting as small- and medium-sized merchants flow in to sell vouchers via independent livestreams. 

• Around 30% to 40% of orders paid for on livestreams are ultimately verified at physical stores and converted into the shop’s sales, one source was cited as saying in the report. Another source, a Meituan service provider, claimed that the overall verification rate is about 60%, nearly double that of Douyin.
• Shen Quan Jie and Shen Qiang Shou are two major official livestream brands within Meituan’s food delivery segment, selling discounted takeout coupons, especially for well-known or chain restaurants. The former is a monthly promotional event occurring on the 18th of each month, while the latter livestreams for 12 hours every day, primarily targeting users in China’s first-tier cities.
• Meituan’s Hong Kong-traded shares have slumped over 50% this year, and the company’s stock experienced its largest single-day decline in over a year last Tuesday after executives warned of a slowdown in revenue growth for its core food delivery business in the fourth quarter.

Context: Meituan has increased its marketing expenses this year in an attempt to resist TikTok sister app Douyin’s push into the local life services sector, spending RMB 16.9 billion in the last quarter, a 62.5% increase from the first quarter. Meanwhile, the operating margin of its core local business has continued to decline over the last two quarters, dropping below 20% in the three months from July to September to 17.5%.

• Short video app Douyin first took a step into the local services space with food delivery trials two years ago. It has now expanded its reach to include everything from sightseeing tickets and leisure events to parent-child activities. Local media outlet LatePost previously reported that these services generated over RMB 100 billion in sales for Douyin in the first half of 2023.

Major Chinese electric vehicle makers from BYD to Xpeng Motors have collectively posted strong delivery figures in November as they attempt to hit their annual targets and as competition shows no signs of subsiding in the world’s biggest auto market. 

Why it matters: Jefferies analysts wrote in a Dec. 1 note that they estimated sales of China’s new energy vehicles (NEVs), mostly all-electrics and plug-in hybrids, to reach 1 million units in November with a solid month-on-month growth rate of 10% from a high base. 

• However, analysts warned of an intensified price war as 2023 comes to a close, as major EV brands including BYD and Li Auto have either cut prices or increased the royalties for customers since late November to boost year-end sales. 

Details: BYD on Dec. 1 revealed monthly sales figures of its premium Fangchengbao and Yangwang marques for the first time following their launches earlier this year, announcing it handed over 626 and 408 units to customers, respectively. Delivery of the RMB 1 million ($150,000) Yangwang U8 and the Bao 5, with a price range of RMB 289,800 to RMB 352,800, began in late September and November separately. Overall, the EV giant outsold its October figures by 70 units in November. 

• Geely’s NEV sales increased 4.7% month-on-month to 65,034 units last month thanks to a wide product portfolio under a multi-brand strategy. Volvo’s parent said it delivered 13,770 units under the Galaxy marque and 13,104 Zeekr-branded battery EVs, while sales of its Lynk & Co 08 extended-range hybrid EV surpassed the 10,000 mark over the month. The numbers of GAC’s Aion and Great Wall Motor rose 0.15% and 0.23% from a month previously, respectively. 
• Huawei-backed Aito posted its best-ever month by delivering 18,827 units, which is nearly 50% higher than its deliveries in October and surpassed the top end of the guidance provided by Huawei’s head of consumer business group a week ago. The number is expected to exceed 23,000 this month and to hit 30,000 in January, as the EV maker said it has secured more than 100,000 non-refundable orders for the revamped M7 crossover over the last two months or so.
• Growth momentum has been sustained for both Li Auto and Xpeng Motors which once again reported record-setting deliveries of 41,030 and 20,041 vehicles last month respectively. Li Auto’s founder Li Xiang said it is aiming for deliveries of 50,000 EVs this month, while Xpeng on Nov. 15 forecasted the fourth quarter delivery of up to 63,500 units. NIO‘s November delivery of 15,959 vehicles is basically flat from the previous month. 

Context: China’s NEV sales were partly boosted by the opening of the annual Auto Guangzhou show on Nov. 17 with dozens of debuts of all-new cars, as major players try to enhance their presence among a crowded field. 

• More than 5.9 million NEVs were sold during the first ten months of this year, representing a year-on-year growth of 34.2% and accounting for 34.1% of total car sales in China, according to figures from the China Passenger Car Association. 
• Miao Wei, former minister of Industry and Information Technology, expects the NEV penetration rate to exceed 50% of all new car sales as early as 2025. That would be 10 years ahead of Beijing’s schedule. Miao made the comment on Nov. 29 during this year’s China Automotive Industry Forum, reported media outlet The Paper.

A federal judge has blocked a law in the US state of Montana that sought to bar the use of TikTok, saying it “oversteps state power”, a month before the ban was due to take effect.

Why it matters: The move suggests efforts to prohibit use of the Chinese-owned video sharing app in the US will face significant legal challenges. Montana was the first state set to implement a blanket TikTok ban.

Details: In a statement, the US District Judge Donald Molloy said the ban targets “China’s ostensible role in TikTok” rather than protects Montana consumers.

• “We are pleased the judge rejected this unconstitutional law and hundreds of thousands of Montanans can continue to express themselves, earn a living, and find community on TikTok,” an account called TikTok Policy posted on social media platform X.
• However, the office of Montana’s attorney general signaled it was not giving up on a ban, saying “the analysis could change as the case proceeds,” and noting that it looked forward to “presenting the complete legal argument to defend the law.”
• The ByteDance-owned video platform filed a federal lawsuit against Montana in May, claiming the law “unlawfully abridges one of the core freedoms guaranteed by the First Amendment,” days after the state passed a law to ban the widely popular app across the state. Senate Bill 419, the initial ruling to ban TikTok in Montana from Jan. 1  2024, outlined a concern that the app accessed data against users’ will and shared it with the People’s Republic of China. An additional consideration for the ban was that it promoted dangerous social media challenges that threatened the health and safety of Montanans.
• TikTok’s Chinese links have been a focal point of running controversy in the US, where the app says it has 150 million users. Inadequate protection of minors’ data is another legal fight the platform has been dealing with.

Context: TikTok has continued to face criticism during its rise in the US, but its popularity and ad revenue point to a continued upward trend in use of the app nationwide. Its parent company ByteDance reportedly generated $54 billion globally in the first half of 2023, a figure close to Facebook owner Meta’s $60.6 billion. The video platform also officially launched an in-app e-commerce feature in September.

More Chinese automakers are planning to adopt NIO’s battery swap technology as two giants join the program – Changan and Geely. NIO on Wednesday said it will partner with Geely to develop a common standard for electric vehicle battery packs and create a sprawling network of swap stations for both consumer cars and commercial fleets, just a week after Changan said it had become NIO’s first ally in a similar effort. 

The move could give a further boost to NIO’s long-term plan to split its money-losing recharging infrastructure unit into a standalone business with financing from outside investors, two people with knowledge of the matter told TechNode on Wednesday. Meanwhile, Geely and NIO will explore the possibility of establishing a shared battery swap network in overseas markets, said one of the people, without elaborating further. 

NIO and Geely declined to comment when contacted by TechNode on Thursday, referring instead to the announcement published by the two companies.

Car industry experts foresee the acceleration of the Chinese EV industry’s migration to a more unified standard for battery specifications and swap techniques originated by NIO. Still, the EV maker and its bigger allies could face a bumpy road despite their eagerness for a unified swapping standard until a number of business and technical hurdles are cleared. 

A common standard? 

It is clear that Chinese authorities are behind the move given that Changan is state-owned and given Geely’s position as the poster child for the Chinese privately-owned car industry, said Lei Xing, former chief editor at China Auto Review. Xing expects no real progress to be made within the next 12-18 months given the challenges in achieving a clear consensus for designing new batteries compatible with their recharging networks. 

A market-wide standardization may also not happen without government intervention. It’s one thing to require a certain plug type, and quite another to force standardization of batteries and chassis configuration, said Daniel J. Kollar, head of automotive and supply chain at business development consultancy Intralink Group. 

“This could have major effects on several design aspects and possibly even lead to certain limits on innovation and supplier choice,” Kollar added.

NIO may also find the need for considerable back and forth with its partners in order to get its swap technology closer to becoming the industry standard. It’s going to be NIO dictating its intellectual property to swapping partners, but Geely and Changan may want to have a say as well, said Tu T. Le, founder of business intelligence firm Sino Auto Insights. 

“There’s a lot that needs to be settled still,” Le added, citing Geely running its own swapping system as one reason. Volvo’s parent began operating its first battery swap station for commercial fleets in the southwestern municipality of Chongqing in late 2020, with plans to run 300 more by the end of this year.

A big relief?

Although it is too early to predict where NIO’s power business may end up, it is possible that a new entity jointly invested in by NIO and multiple other carmakers could be in play – something akin to what Huawei recently announced for its vehicle business unit, according to Xing. “This would ease the financial pressure on NIO and make them de facto outside investors of the startup.” 

The partnership would probably shoulder some of the investment burden for NIO with cash injections, although it may not help them sell cars, Le said. The increase in adoption of swapping will likely result in short-term improvements to their bottom line, but the big question is if it will result in more vehicle sales. 

The Shanghai-headquartered EV maker has built up a nationwide network of more than 2,100 swap stations, each reportedly costing more than RMB 3 million ($420,000) on average. That number is expected to surpass 2,300 by year-end. It delivered 126,067 vehicles for the first ten months of this year, in line with the industry’s average growth rate but lagging behind rivals such as Li Auto. 

“It’s hard to see how this is going to change NIO’s fortunes in the long run to a significant degree without added help from their new partners – either via providing a boost to their marketing reach or supporting the development of mid-market solutions,” said Kollar.

Chinese-owned semiconductor company Nexperia announced on Monday that the Dutch government has approved its acquisition of Nowi, a Dutch semiconductor startup. Previously, the Dutch government had been investigating the transaction on the grounds of national security.

Why it matters: In June, the Dutch government introduced the Act on Security Screening of Investments, Mergers and Acquisitions (Vifo Act), which includes the scrutiny of sensitive technologies such as photonics, quantum technology, and semiconductors. However, despite the influence of export sanctions led by the US, the Dutch government’s approval of Nexperia’s acquisition indicates that the Netherlands may still be open to business with China.

Details: The Dutch Minister of Economic Affairs Micky Adriaansens stated in a letter to the Dutch parliament on Nov. 27 that there are no legal objections to the acquisition of Nowi by Nexperia, according to Bloomberg. 

• Established in 2016, Nowi, is a semiconductor startup based in Delft, in the western Netherlands. The company specializes in manufacturing power management chips capable of harnessing ambient energy sources such as light or vibrations, offering a promising solution to eliminate the reliance on batteries in basic electronic devices. In November 2022, the company announced that it would be acquired by Nexperia. 
• In June of this year, the Dutch government initiated an investigation into the Chinese firm’s takeover of Nowi, based on the Vifo Act that came into effect on June 1. The Dutch government stated at the time that it would order the cancellation of the transaction if the deal was found to affect national security.
• On Monday, Nexperia issued an announcement in response to the Dutch government’s final decision. The retrospective effect of the Vifo Act is applicable only to military or dual-use items, and it is evident from the government’s assessment that Nowi’s products do not fall within this category, the company said. After a “period of uncertainty,” Nexperia and Nowi are “able to further realize their ambitions in the Dutch chip ecosystem,” the announcement added.
• In the current climate, it is crucial to establish a well-defined policy that enhances the investment environment in the Netherlands, said Charles Smit, director of Nexperia Netherlands. A transparent and fact-based communication channel between the government and businesses is essential during these times, he asserted.
• Having access to the production, sales and marketing infrastructure of a leading chip manufacturer allows Nowi to bring products to market faster and therefore have a greater impact, according to Simon van der Jagt, co-founder and former CEO of Nowi.

Context: Based in the Netherlands, Nexperia is a subsidiary of the partially state-owned Chinese company Wingtech Technology. The semiconductor firm has a workforce of over 15,000 spread across Europe, Asia, and the US. Nexperia’s components are used in automotive, industrial, mobile, and consumer industries.

Fast fashion giant Shein has confidentially filed for an IPO in the US, Reuters reported on Monday, citing two sources. The move puts to an end long-running speculation around the China-founded company’s intentions to go public.

Why it matters: A successful listing for the fast-fashion giant would help Shein expand its global reach while diversifying its sources of funding.

Details: Shein has hired Goldman Sachs, JPMorgan Chase, and Morgan Stanley as lead underwriters for the share offering and expects to go public sometime in 2024, according to Reuters.

• The company’s current valuation is uncertain. In a $2 billion funding round in May, Shein was valued at $66 billion, a third less than its $100 billion valuation from a funding round a year earlier.
• Now headquartered in Singapore, the retailer sells everything from skirts to sweaters, typically for around $10 a piece, in more than 150 countries. Shein has actively sought to diversify its supply chain, moving away from reliance on China. The company began manufacturing in Turkey and Brazil this year and is in the process of planning for a factory and warehouse in Mexico.
• Under ongoing regulatory scrutiny in the US, its largest market, Shein faces allegations related to design infringement and the use of forced labor in its factories.
• Shein did not respond to TechNode’s request for comment.

Context: In 2022, eleven years after its founding, Shein recorded $23 billion in revenue and $800 million in net income, according to the Wall Street Journal. A company executive reportedly told investors in July that it had achieved record profitability in the first half of 2023 thanks in large part to strong sales in the US.

• In a bid to further expand its international presence, Shein acquired a one-third stake in Forever 21’s parent company in August, followed by the purchase of fast fashion brand Missguided and all of its intellectual property in October.

Huawei is spinning off its automotive business unit, enabling Changan Automobile and other manufacturing partners to invest, in a move aimed at turning the loss-making car division into a profitable operation amid fierce competition. 

Why it matters: The reorganization is a rare move for Huawei – a company under 100% ownership of founder Ren Zhengfei and its staff since 2003, according to its official website – as the Chinese telecommunication giant puts a date of 2025 on its target of profitability for its as-yet loss-making auto business. 

• Deemed by Citic Securities analysts as “a milestone” for the Chinese auto industry, the move is expected to help Huawei court new industry allies and gain investment to pursue intelligent vehicle technology. Established automakers such as SAIC have reportedly voiced concern about Huawei’s move into electric cars. 
• The equity structure of the new entity may be comparable to that of the United Automotive Electronic Systems, a joint venture formed by German auto supplier Bosch and several Chinese carmakers including SAIC, FAW, and Dongfeng in 1995. This would allow more automakers to benefit from collaboration, and not just Changan, analysts wrote in a Nov. 26 note. 

Details: The new joint venture will focus on areas already covered by Huawei’s Intelligent Automotive Solution (IAS) business unit, including the development of intelligent driving software, digital cockpit systems, and digital platforms, among others, according to a regulatory filing published by Shenzhen-listed Changan dated on Monday. 

• Huawei will take at least a 60% stake in the new entity but will no longer directly compete against the new company in principle. Changan and its relevant parties will acquire no more than a 40% stake in the JV. The two companies plan to discuss the details of the transaction and sign an agreement within six months, the filing said. 
• The establishment of the new entity will have no impact on the ongoing collaboration between Huawei and Chinese car manufacturer Seres, according to a Nov. 26 statement. Seres, which makes Aito-branded EVs for Huawei, added it has been asked to participate in the investment and is in discussions to jointly develop intelligent electric vehicle architecture.
• The entity will prioritize diversified ownership, said the filing. It is anticipated that various parties will engage deeply in the development of the open vehicle platform, said Richard Yu, CEO of Huawei’s consumer business group and chairman of the IAS BU, who compared the platform to “a train engine.” 

Context: Huawei, state-owned Changan and Chinese battery maker CATL announced a partnership to establish EV brand Avatr back in late 2020. The companies have sold roughly 20,000 units of the Avatr 11 battery electric crossover since delivery began last December, launching their second premium model with a starting price of RMB 300,800 ($41,240) earlier this month. 

• Huawei has also been selling EVs since mid-2021 with lesser-known Seres, formerly the Chongqing Sokon Industrial Group, followed by the launch of the first Aito-branded EV last September. Huawei said in early October that it had secured more than 50,000 non-refundable orders for the redesigned version of the M7, Aito’s second model, less than a month after its launch. That number was updated to more than 100,000 as of Monday.
• The Chinese tech giant is also partnering with domestic manufacturers Chery, BAIC, and JAC, showcasing the first model under the new Luxeed marque jointly set up with Jaguar Land Rover’s manufacturing partner Chery on Nov. 9. The Luxeed S7 sedan will be officially launched on Tuesday and the respective new models co-built with BAIC and JAC are set to hit the market in 2024. 
• Huawei reportedly invested $1 billion in its automotive business in 2021 and has since maintained its push into the Chinese intelligent EV market in an effort to diversify its revenue sources and offset the impact on its core businesses from US trade restrictions. The IAS BU recorded revenue of RMB 1 billion during the first half of this year, accounting for around 0.3% of its total revenue. 

READ MORE: Xpeng and Huawei-backed EV maker set new delivery records as demand grows for self-driving tech

Chinese mobile phone company Honor issued an internal announcement on Wednesday stating that the former Huawei sub-brand plans to optimize its equity structure and attract diversified capital through an initial public offering (IPO), as reported by local media outlet Icsmart. Honor has not announced a timeframe or a location for the upcoming listing.

Why it matters: The announcement comes three years after Huawei was effectively forced to sell Honor in November 2020 to help the sub-brand bypass the restrictions imposed upon Huawei by US sanctions. Bought by a state-owned enterprise in Shenzhen, Honor has since emerged as a leading phone brand in the Chinese market.

Details: As part of its preparations for the IPO, Honor has made adjustments to its board of directors: Wu Hui will serve as the new chairperson, while the former chair Wan Biao becomes vice chairperson.

• Following Xiaomi and Transsion, Honor may become the third domestic phone company to go public, according to Jiemian. Xiaomi is listed on the Hong Kong stock exchange and currently holds a market capitalization of HKD 377.8 billion ($48.87 billion), while Transsion’s market capitalization is valued at RMB 95.6 billion ($13.36 billion). 
• Ever since Honor’s spin off from Huawei, there has been speculation in the industry about a possible listing for the handset maker, including the possibility of a backdoor listing through Transsion.
• Honor resumed allocation of shares around June of this year, primarily targeting distribution partners at the municipal level in each province, according to the aforementioned report from Jiemian. Additionally, Honor has initiated an employee stock allocation program, with high expectations for the company’s listing among its staff.
• At the end of 2022, Honor completed another round of strategic financing, adding six new shareholders, with leading display-panel industry player BOE among them.
• The newly appointed chair, Wu Hui, previously served in the Shenzhen municipal committee office, before later being transferred to work in the Hubei provincial government and the municipal government in Xianning, a city in Hubei. In April 2021, Wu Hui returned to Shenzhen and took on the role of chairman of Shenzhen Environmental Water Group.
• Vice chair Wan Biao was once a key figure in Huawei’s consumer business department. He joined Huawei in 1996 and held various positions such as president of Huawei’s wireless product line, president of its terminal company, and COO of its consumer business department. In November 2020, Wan Biao joined Honor and became its chairperson.

Context: In the third quarter of 2023, Honor secured the top spot in the domestic smartphone market with a shipment share of 19.3%, according to research firm IDC. 

• During July to September of this year, Honor released three foldable devices, namely the Magic V2, V Purse, and Magic Vs2, aiming to establish a strong presence in the high-end phone segment. 
• In the third quarter of 2023, the Chinese foldable smartphone market continued its rapid growth trend, reaching a shipment volume of 1.96 million units, an increase of 90.4% year-on-year, according to the same report from IDC. Honor captured a market share of 15.1%, ranking fourth in this segment.

A Tesla car owner who protested against the company during the Auto Shanghai show in early 2021 has been forced to apologize for damaging the US car company’s reputation by alleging that Tesla sold defective cars, Chinese media outlets reported on Wednesday. 

Why it matters: The verdict marks the latest victory for Tesla in China after it faced mounting numbers of car owner complaints over various quality issues including unintended acceleration and brake failure in the past two years. 

• Among infamous cases are the woman who climbed onto the top of one of Tesla’s electric vehicles at the Auto Shanghai show in April 2021, and an accident resulting in two deaths and three injuries in southern China last November.

Details: A local court on Nov. 9 ordered a woman surnamed Li from the northwestern city of Xi’an to apologize to Tesla and pay the company RMB 2,000 in damages in addition to bearing the cost of vehicle appraisal totaling RMB 20,000 ($2,800). The public apology should remain on social media platform Weibo for at least 15 days, the court ruled.

• The female owner alleged faulty brakes caused an incident in March 2021 when her China-made Model 3 crashed into a car coming the other way in the capital of Shaanxi province. Tesla has denied the claim. 
• Li took part in a protest at the Tesla booth during that year’s Auto Shanghai show when she wore a white T-shirt with the words “brake failure” above a Tesla logo. Another female car owner surnamed Zhang then clambered atop a Tesla to express her anger. 
• The Chinese court required a third-party appraiser to conduct systematic inspections of the vehicle after Tesla filed a lawsuit against Li for defamation. The result showed no proof that any mechanical failure had contributed to the accident. 
• A company representative confirmed the news to Caixin on Wednesday, saying the automaker was attempting to appeal for higher compensation. It is also suing Zhang for damaging its reputation without taking further steps, as she rejected a third-party investigation of her car. 

Context: Tesla in May launched a recall involving over 1.1 million EVs in China following an investigation by Chinese regulators that showed Tesla owners could hit the accelerator pedal rather than the brake by mistake when its regenerative braking system was switched on by default. Beijing said the recall was intended to reduce the chance of accidents. 

• The US carmaker shipped 771,171 vehicles from its Shanghai gigafactory during the first ten months of this year, of which 462,355 were for domestic sales, a growth of 37.9% from a year earlier, according to figures from the China Passenger Car Association. Retail sales of new energy vehicles in China, mostly battery EVs and plug-in hybrids, increased 34.2% year-on-year to more than 5.9 million units over the same period, the CPCA figures showed. 

Baidu said on Tuesday it has “comprehensively reshaped” its product portfolios thanks to its AI foundation model ERNIE, resulting in increased operational efficiency, after the Chinese search giant company reported 6% year-on-year revenue growth to RMB 34.4 billion in the third quarter. However, the company’s cloud unit reported its first decline in revenue in almost three years.

Why it matters: Baidu pointed to artificial intelligence bringing about positive changes in key performance indicators across all of its businesses in its latest earnings report. The firm also highlighted that its ChatGPT-like service ERNIE Bot has already amassed 70 million users.

Details: Although the company’s overall growth was up, Baidu’s AI cloud revenue decreased by 2% in the three months to September. Robin Li, CEO of the firm, said this was due to weak demand in smart transportation projects, despite strong demand for generative AI. The figures marked the first decline in Baidu’s cloud business since it started announcing its earnings separately in the last quarter of 2020.

• Online advertising business, which accounts for over half of Baidu’s total earnings, experienced 5% year-on-year revenue growth during the period. This growth rate was slower than the preceding two quarters and lags behind some of its internet-focused peers.
• During the related earnings call, Li expressed confidence that Baidu’s current chip reserves could “keep improving ERNIE Bot for up to two years” amid the US’s tightening of curbs on advanced chip exports to China. He did, however, add that Baidu will still seek alternatives due to the pace of AI development in China being “inevitably” impacted by difficulties in acquiring the most advanced chips.
• The chief executive of Baidu warned a week ago that China’s rush to develop multiple large language models had led to a “wasting of resources,” and he again told investors on the call that “the best option on the market” is companies developing AI-native apps based on Baidu’s foundation model rather than training models themselves.
• Baidu also named JD CEO Sandy Xu as an independent director of its board effective from the beginning of 2024.

Context: Baidu’s large language model, ERNIE, was made available to the public at the end of August after receiving government approval. Last month, Baidu launched the latest version of its AI model, ERNIE 4.0, seven months after the release of its first version.

GAC Group and Changan Automobile, two of China’s biggest automakers by sales volume, detailed their respective timelines to manufacture solid-state batteries on Nov. 17, entering a global competition to bring the potentially transformative technology to play in electric vehicles (EVs). 

The moves resonate in an industry that has long attempted to commercialize the technology, widely seen as a next-generation energy storage device because of its superior performance and safety compared with the current batch of liquid-state electrolyte lithium-ion batteries. Several international carmakers have bet on solid-state batteries, with leading promoter Toyota reportedly projecting adoption by 2027. 

The news also indicates a growing trend among automakers of developing their own batteries, parts that comprise at least 40% of overall vehicle costs, to establish a self-sufficient supply chain. “Few companies have so far profited from making new energy vehicles [mostly battery EVs and plug-in hybrid EVs in China],” said Changan president Wang Jun during a press conference, citing a goal of achieving “sustainable, high-quality development” (our translation). 

Here’s what the two automakers said on Nov. 17 during the ongoing Auto Guangzhou show in southern China’s Guangdong province.

GAC: The Guangzhou-headquartered automaker is hoping to see an EV in production with its own in-house developed solid-state batteries as early as 2026. For now, the batteries have achieved a cell-level energy density of 400 watt-hours per kilogram (Wh/kg) and have proven effective under extreme conditions, according to an announcement. By comparison, the maximum energy density of CATL’s latest Qilin battery is 255 Wh/kg (per pack level).

• The state-owned manufacturer added that it is working on several other new battery types including cobalt-free and sodium-ion packs, without revealing further details.
• Meanwhile, the Chinese partner of Toyota and Honda expects its first wholly-owned battery plant to start rolling out conventional lithium-ion batteries later this month. The RMB 10.9 billion ($1.5 billion) plant, Guangzhou’s biggest ever, will produce an annual capacity of 36 gigawatt hours (GWh) by 2025, enough for 600,000 EVs. 

Changan: China’s fifth largest automaker’s plans include commercializing its first solid-state batteries by 2027 at a cell-level energy density of up to 500 Wh/kg, while large-scale vehicle application is scheduled for 2030 with the launch of several new battery products, said president Wang.

• As part of an RMB 10 billion investment plan, the Chongqing-based manufacturer will more than double its number of research and development employees from 1,200 to 3,000 by next year. It has also set its sights on making lithium-sulfur and other new battery types next decade.
• Ford’s manufacturing partner also projected its timeline for mass-producing lithium-ion batteries, starting as soon as next year. The product features a design in which battery cells are integrated directly with the vehicle body rather than segmented into several modules. This technology has enabled CATL’s Qilin batteries to promise a driving range of over 1,000 kilometers (621 miles) on a single charge. 

Context: Established automakers worldwide have been rushing to get solid-state batteries commercially ready for their green energy cars, which is intended to give them an upper hand as they navigate increasing competition in the global EV market. 

• In addition to Toyota, Nissan plans to launch a production EV with a solid-state battery pack by 2028 and BMW by 2030. China’s SAIC said in May that it has increased its investment in local battery startup Qingtao as part of its ambitious goal to sell 100,000 EVs with solid-state batteries in 2025.
• CATL in April unveiled a so-called condensed matter battery, a semi-solid state product using a condensed electrolyte, with plans to start mass production for aviation by year-end, Reuters has reported. The battery giant controls more than a third of the global market, according to figures compiled by South Korea’s SNE Research on Nov. 7. 
• The world’s second-biggest battery maker by shipment, BYD initiated its battery efforts two decades ago and accounted for 15.8% of global EV battery sales in the first nine months of 2023. Having benefited from its vertically integrated supply chain, the EV giant recorded a net income of RMB 10.4 billion in the past quarter.
• ​​A solid-state battery uses a solid electrolyte instead of liquid electrolytes, boasting a theoretically higher thermal stability and energy density than existing offerings. However, the batteries still suffer interface instability between electrodes and solid-state electrolytes, among other design issues.

Oppo launched its latest high-end foldable phone, the Find N3, on Oct. 19, highlighting advances in screen, imaging, security, and system interaction. The 12GB+512GB variant is priced at RMB 9,999 ($1,392), while the collection edition with 16GB+1TB storage costs RMB 12,999 ($1,810). The new device comes in three colors: green, gold, and black. Our team was given a fortnight to review a black 12GB+512GB model.

The Find N3 is a stylish device, albeit slightly weighty in the hand, with a dual high-resolution display, and a processor that plays to its visual prowess. The Snapdragon 8 Gen 2 processor ensures a steady performance, placing it among the top foldable smartphones currently available. 

Mature leathery design

The leather case with a discernible grain offers users a comfortable grip and a pleasant feel. In terms of dimensions, when folded, the device feels hefty both in the hand and pocket compared with other non-foldable devices’ lightweight profiles. However, for a foldable device, the Find N3 surprises with its relatively lightweight, coming in at approximately 239 grams. The device boasts a thin profile, measuring a mere 5.8mm when unfolded and 11.7mm when closed.

In terms of overall appearance, the Find N3 leans towards the classic, giving it a business look. This is an aesthetic geared somewhat towards older generations.

LTPO technology and durable hinges

The Find N3 unfolds to a 7.82-inch screen with a resolution of 2,440 x 2,268 pixels, and the outer cover screen measures 6.31 inches with a resolution of 2,484 x 1,116 pixels. LTPO (low-temperature polycrystalline oxide) technology makes a smooth 1-120Hz dynamic refresh rate possible for fluid scrolling and gameplay, with up to 2,800 nits peak brightness.

Both screens are covered in toughened glass, improving drop resistance and strength. In addition to IPX4 splash resistance, the Find N3 is the first phone to be independently tested to withstand one million folds by TÜV Rheinland, according to Oppo. The phone’s crease is not visible unless you look at it from a certain angle.

Enhanced imaging performance

The Find N3’s camera system is branded by Hasselblad and sets new benchmarks in its category. It features two selfie cameras, with a 20MP camera inside and a 32MP camera on the cover screen. On the back, there is a 48MP LYTIA-T808 sensor from Sony, which is a 1/1.43″ sensor equipped with dual-layer transistor technology. This technology ensures great light sensitivity and ultimately leads to improved image quality.

The device’s day and night time photography capabilities stand out within the foldable phone category, as evidenced by the following images. In portrait mode, photos have a great sense of contrast, even in low light.

Snapdragon 8 Gen 2 powers high-performance gaming

The Find N3 features the Snapdragon 8 Gen 2 with 16GB of LPDDR5X RAM and 512GB. Qualcomm unveiled the Snapdragon 8 Gen 3 at its Snapdragon Summit on Oct. 24 but as no foldable phone currently on the market features the new processor yet, the N3 is the most powerful in its category. Our two-hour test of the mobile game Honor of Kings revealed stable performance without any overheating. Stereo speakers also enhance gameplay.

Users can play the same game on two different screen sizes: unfolded and folded. Although the display size and games have been adjusted to some extent, the gaming experience may feel quite different to what users are used to when the phone is unfolded. Gaming enthusiasts be warned that, folded, it also takes some time to get used to the phone’s thickness.

High-capacity battery 

The Find N3 is equipped with a high-capacity 4,850mAh battery. For reference, the iPhone 15 Pro features a battery rated at 3,274mAh. Our practical tests have shown that the new Oppo phone’s battery life can support a full day’s use even under moderate or high-intensity usage. The phone also supports 67W fast charging technology and can be fully charged in around an hour.

Privacy protection and office functions

The Find N3 offers multiple privacy protection functions, including a security chip with national encryption certification, file encryption technology, and end-to-end cloud transmission encryption. The device is equipped with a button on the side, allowing users to easily switch to “VIP” mode, which disables the camera, microphone, and location permissions in one go. 

On the software interaction front, the Find N3 improves office efficiency by enabling users to directly access files made in Apple’s office trio Keynote, Pages, and Numbers, as well as CAD engineering drawings. This breaks down a barrier between Android and Apple, enabling seamless file sharing.

Conclusion

The Oppo Find N3 performs well in terms of chipset performance, screen quality, camera capabilities, and battery life, setting a new benchmark in the foldable smartphone category. It is just as well that the Find N3 is suitable for business professionals, as its relatively high price excludes many other consumer groups.

Pros

• Thin and lightweight entrant in the foldable category
• Leathery design for a firm grip
• LPTO screen with 120Hz adaptive refresh rate
• Great camera performance for a foldable phone
• Large battery and 67W fast charging technology
• Self-developed security chip

Cons

• Slightly heavy for long-time use and carrying in the pocket 
• Gaming on the device takes some getting used to
• No wireless charging support
• Expensive

As automakers continue their struggle amid an unrelenting price war in China, both established brands and startups are showcasing their latest products at the Auto Guangzhou 2023 show in a bid to take pole position ahead of what promises to be another year of tight competition. 

Traditionally one of the country’s largest car shows, this year’s Auto Guangzhou offers a glimpse of how intense competition in China has been, and how successful it has been at flushing out weaker foreign marques as domestic rivals fall over one another in a mad rush to crack the market. 

“Joint car manufacturers are faced with unprecedented challenges against the backdrop of the current situation,” said Wen Dali, a deputy general manager of GAC-Toyota, a joint venture between the Japanese automaker and its Chinese partner (our translation). More than 20% of the JV’s new car sales over the next three years in China are set to be new energy vehicles, mostly battery-run electric vehicles (BEVs) and plug-in hybrid EVs (PHEVs), Wen added at a press event on Friday. 

Here’s a quick roundup of some of the highlights from the Guangzhou International Automobile Exhibition, which kicked off on Friday in the capital of China’s Guangdong province. 

BYD – Sea Lion 07

The BYD Ocean family of electric cars on Friday welcomed a new sibling and its latest answer to the Tesla Model Y, the Sea Lion 07, crafted by Wolfgang Josef Egger, BYD’s design chief and a former head designer at Audi Group. 

The mid-size crossover boasts distinctive design elements with its muscular fenders, bold air inlets, and clean character lines on all four corners, while the high shoulder lines and the dual, through-type waistlines give the vehicle a sporty vibe. The features are intended to make the car look unique from miles away, Fan Jihan, a deputy director of BYD said on Friday during the show.

Slightly larger than Tesla’s Model Y at 4.8 meters in length and with a 2,900-millimeter-long wheelbase, the top-end all-electric car is expected to have a driving range of more than 700 kilometers (435 miles), compared with the 688 km claimed by the long-range version of its US rival. Scheduled for official launch later this year, it will be equipped with BYD’s latest advanced driver assistance system (ADAS), according to the company.

Geely – Zeekr 007 

This year’s Auto Guangzhou saw the debut of the long-awaited Zeekr 007, the first electric sedan under the premium marque of auto major Geely. 

The latest model from Stefan Sielaff, formerly a head of design at Bentley, the 4.9-meter-long all-electric vehicle comes with 1,711 high-intensity lamp beads powered by 75 automotive chips. This enables the car’s LED headlights to display a dazzling, customized lighting sequence with animation about 90 inches wide, showcasing some of the most advanced lighting technology by a Chinese carmaker. 

Meanwhile, the Zeekr 007 features an 800-volt battery system, which offers a driving range of up to 870 km on a full charge and can travel another 610 km on 15 minutes’ extra charge. Zeeker claims it to be the quickest accelerating road car of the same class ever made, going from 0 to 100 km/h (62 mph) in 2.84 seconds, while also being one of the earliest models to use Qualcomm’s latest 5-nanometer cockpit chip 8295. 

The company aims to begin delivering the car in January at a lower-than-expected pre-sale starting price of RMB 224,900 ($31,059). 

Xpeng Motors – X9

Xpeng on Friday was on its home court when it unveiled details of its first flagship multi-purpose vehicle (MPV) the X9, which the Guangzhou-headquartered electric vehicle maker expects will stand out from existing offerings with superior comfort and top-notch performance. 

With a competitive pre-sale starting price of RMB 388,000 ($53,544), the seven-seater has a claimed interior space of 7.7 square meters, which makes it 12% bigger than the Toyota Alphard, a worldwide top-seller in the chauffeur-driven luxury people mover category, according to chief executive He Xiaopeng. 

The family van is also said to have the best third-row seats on the market that can be adjusted for recline to a desired angle of nearly 180 degrees and folded down flat to increase cargo capacity. Meanwhile, the luggage compartment offers space for seven suitcases. 

The Xpeng X9 is claimed to be the world’s first MPV equipped with rear-wheel steering as a standard configuration, which reduces the car’s turning diameter to an industry record of 10.8 meters (35.4 feet), making it easy to maneuver. 

Li Auto – Mega

Li Auto has finally made available the details of its long-anticipated MPV, the Mega, with an exterior echoing the bullet-style look of China’s high-speed trains. The seven-seater van boasts the world’s fastest charging speed among electric vehicles of all kinds, capable of traveling up to 500 km on 12 minutes of charge powered by CATL’s next-iteration Qilin batteries. 

It has a drag coefficient (Cd) of 0.215, which the company claimed is the lowest Cd rating for an MPV, while it will consume 15.9 kilowatts (kWh) of electricity for every 100 km of travel, also among the lowest in the industry. 

The company, which has delivered more than 500,000 plug-in hybrid SUVs as of September, confirmed plans to build 300 supercharging stations in China by year-end. Pre-sales of the Mega started on Friday with a price tag of around RMB 600,000 ($82,800) and delivery scheduled for February 2024.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Images of what could be Xiaomi’s first electric vehicle model have leaked online ahead of the car’s expected launch next year. The photos from the Chinese Ministry of Industry and Information Technology show a large sedan with styling similar to the Porsche Taycan, adorned with a Xiaomi logo. 

Why it matters: Automakers are required by Chinese regulators to apply for registration before officially selling vehicles in the country, and the government ministry’s post indicates that the debut of the first Xiaomi car is approaching. 

• Xiaomi has begun trial production of its first EV at its facility on the outskirts of Beijing, with the vehicle expected to hit the market as early as February, a person with knowledge of the matter told Chinese media outlet National Business Daily on Wednesday. 
• A Xiaomi representative declined to comment when contacted by TechNode on Thursday, but in late October, chief executive Lei Jun reaffirmed the company’s plan for the car to go on sale in the first half of 2024, according to an Oct. 25 post published on the Twitter-like platform Weibo. 

Details: The Xiaomi SU7 is around five meters long and spans a 3,000-millimeter-long wheelbase, making it bigger than many mid-size sedans such as Tesla’s Model 3. It has a total mass of 2,430 kg and a curb weight of 1,980 kg, based on the registration details revealed by the MIIT on Wednesday. 

• The car features a sleek, athletic low profile with Xiaomi’s logo on the front and its name on the rear hatch, similar to the Porsche Taycan, a likeness brought to light by a Chinese auto influencer. The images also show a couple of wheel options and a choice of yellow brake calipers.
• The SU7 will be able to reach a top speed of 210 kilometers per hour on a relatively affordable, iron-based lithium-ion battery from BYD. The top speed of the premium SU7 Max will be 265 km/h, with the higher-end model equipped with a more expensive, nickel and cobalt-based battery pack from CATL. 
• An electric motor will provide a power output of 275 kW and 220 kW respectively, while the top-end version will integrate laser sensor units on the roof to enable partially autonomous driving capabilities, according to images released by MIIT.
• The five-seater sedan will be manufactured at Xiaomi’s factory in the Beijing Economic and Technological Development Zone, which has an initial annual capacity of 150,000 units, although its production application was filed in the name of a subsidiary of state-owned automaker BAIC.
• This appears to confirm speculation that BAIC, a manufacturing partner of Mercedes-Benz in China, has joined hands with Xiaomi, meaning the smartphone maker is still waiting for final approval to begin manufacture from the Chinese authorities. 

Context: Xiaomi and Huawei are among the Chinese technology giants with the potential to become major players in the EV space with advanced intelligent capabilities and a broad sales network, which remain difficult for many carmakers to replicate, Morgan Stanley analyst Tim Hsiao commented on an earnings call held by Xpeng Motors on Wednesday. 

• Huawei said on Oct. 6 that it had secured over 50,000 non-refundable orders for the revamped M7 sports utility vehicle less than a month after its launch. The number was updated to more than 90,000 as of Wednesday, local media outlet IT Home reported. 
• The telecoms giant started pre-sales of the first electric sedan under the new Luxeed brand with automaker Chery on Nov. 9, followed the next day by the launch of the Avatr 12, a premium crossover co-developed with partners Changan Automobile and CATL. 

READ MORE: Five things to know about Xiaomi’s new electric car company

In the third quarter of 2023, the import of chip-making equipment by China surged by 93% compared to the same period last year, reaching a total value of RMB 63.4 billion ($8.75 billion), according to data from China’s customs authorities, as reported by Japanese media outlet Nikkei. In terms of product categories, the import of lithography equipment, a key part of the chip-making process, skyrocketed nearly fourfold.

Why it matters: The US began attempts to control the export of advanced chip-making equipment to China last October, with Japan and the Netherlands following suit this year, but these new figures show the issues with enforcing such controls rapidly. As the lead time for chip-making equipment from order placement to delivery is between six months to one year, many Chinese manufacturers had already placed a large number of orders for chip-making equipment from the latter two countries last year, likely in anticipation of a ban.

Details: Although the Netherlands has implemented policies restricting the export of advanced semiconductor equipment to China, imports of semiconductor equipment by China from the country in the third quarter nevertheless increased rapidly. 

• According to data presented by Nikkei, the US accounted for only 9% of semiconductor equipment imported into China in the third quarter, significantly lower than its 17% share during the same period in 2021. Japan’s share also decreased from 32% to 25%, while the Netherlands saw an increase from around 15% to 30%.
• The data from China’s customs authorities reveals that the import value from the Netherlands skyrocketed by over six times in the third quarter compared to the same period last year, rising to 2.44 billion euros. A significant portion of this increase is attributed to lithography machines produced by Dutch market leader ASML. Imports of these machines from Japan grew by approximately 40%, while lithography equipment imports from the US increased by 20%.
• Compared with the second quarter of 2023, ASML’s sales revenue from China doubled from 24% to 46% of the firm’s total in the third quarter, amounting to 2.44 billion euros, according to the company’s financial report. In the first quarter of this year, ASML’s proportion of sales revenue generated by China was only 8%.

Context: According to the Netherlands’ new regulations on semiconductor exports, ASML’s lithography systems require an export license from the Dutch government for shipment. However, a statement from ASML indicated that the company believes its existing licenses still allow it to continue delivering lithography machines to China until the end of 2023, despite the export restrictions taking effect in September.

• ASML dominates the lithography market with an 82.9% market share followed by Canon and Nikon. It holds a market share that is over eight times greater than second-place Canon.

iPhone maker Apple has reportedly asked China’s major app developers to refrain from using gyroscopic motion, a feature that tracks the motion of a user’s phone, for advertising, as it all too readily redirects users to third-party apps on detecting even the slightest shake of a device. 

Why it matters: Open-screen advertising serves as a monetization method for many apps, while gyroscopic ads can boost the click-through rate of the target app. Those employing the feature have found that both parties can gain commercially, despite it taking control away from the user and thus impacting the user experience.

Details: Deployment of the function, criticized by numerous users, escalated during November’s three-week-long Singles Day shopping festival that has just ended. E-commerce platforms extensively used redirect ads across various apps, including the most widely used video and music streaming platforms, as well as social media apps. These ads can be triggered by clicking on an ad page or moving the phone, redirecting the user’s attention to another app.

• A netizen on Weibo, a Twitter-like platform, jokingly wrote that the redirection speed was faster than if they had directly opened the app.
• On-device gyroscopes help to achieve the ad redirect feature, though gyroscopes were originally designed to provide “experiences based on real-time, motion-based information in apps and games,” according to Apple.
• Another form of advertising similarly concealed within social media during China’s largest online shopping event was activated by Weibo blog comments – – individuals would write related comments and attach seemingly relevant webpage links. Once users clicked, they would find their phones had already opened advertised shopping websites. It remains uncertain whether this type of promotional tactic is directly linked to e-commerce sites.
• According to local media outlet Yicai, Taobao, JD, Pinduoduo, and Douyin have not explicitly said they received a notification from Apple, and Apple has not responded to the rumors.

Context: In February, China’s State Administration for Market Regulation made it clear in a guideline that advertisements should be clearly labeled using a closing icon, and should not deceptively induce users to click on or browse any advertisement. The new measures were supposed to further refine the norms of online advertising in China.

Following a year of negotiations, Tencent and Meta have made a deal for Tencent to  exclusively sell Meta’s VR (virtual reality) glasses in China from late 2024, The Wall Street Journal has reported.

Why it matters: As social media platforms Facebook and Instagram are banned in China, the return of Meta to the Chinese market is unexpected. It remains unclear if Tencent requires government approval to sell Meta’s devices due to the absence of VR-related government regulations in China.

Details: The agreement provides Meta with a fresh opportunity to tap into China’s expansive consumer market, a door that closed when access to Facebook was restricted in China in 2009.

• The VR glasses will offer consumers more affordable lenses compared to Meta’s existing Quest 3 headset, which is currently priced at around $500 in the US, according to The Wall Street Journal. The less expensive device is scheduled for sale in various international markets in addition to China in 2024. 
• Insiders told the WSJ that Meta will receive a larger share of hardware revenue, while Tencent will obtain a higher proportion of revenue from content and services. The Chinese version of the VR headset will offer games and apps distributed by Tencent.
• Meta’s current lineup of VR headsets includes the 2023-released Quest 3, the 2022-unveiled Quest Pro, and the Quest 2, which went on sale in 2020. The upcoming VR device from Meta may be named Meta Quest 3 Lite, with an estimated price of $199 for the basic model, according to Chinese media outlet Cailian Press. This new product may feature a modified chip that will impact upon its performance due to its low cost.
• In its third-quarter financial report on Oct. 25, Meta disclosed that its Reality Labs unit, which develops metaverse-related technologies, experienced an operating loss of $3.74 billion. Revenue in the virtual reality and augmented reality division dropped 26% during the reporting period, falling to $210 million from $285 million a year earlier.

Context: Global shipments of augmented reality and virtual reality headsets went through a decline for the fourth consecutive quarter in the second quarter of 2023, dropping by 44.6% year-on-year, according to data from market research firm IDC.

• Meta emerged as the dominant player in the headset market during this period, occupying an approximately 50% market share, according to the same report from IDC. Sony and Pico (the headset division of TikTok parent ByteDance) secured second and third places, respectively.
• On Nov. 7, in response to a decline in global demand for VR headsets, Pico reportedly initiated a significant round of job cuts, marking its most substantial overhaul since being acquired by TikTok’s owner two years ago.

Huawei on Thursday revealed its first electric sedan under the new Luxeed marque in collaboration with automaker Chery, saying it will compete with Tesla and Mercedes Benz’s premium offerings at a price comparable to the cheapest models of its international rivals.

“After some deliberation, we will make all versions of the Luxeed S7 available for purchase despite making a loss,” Richard Yu, the chief executive of Huawei’s consumer business group, told the media during a press conference in Shenzhen (our translation). This will allow more customers to try Huawei’s smart vehicle technology at an affordable price, said Yu.

The aggressive pricing strategy unveiled at the Luxeed S7’s launch marks the latest push by the Chinese technology giant to crack the world’s biggest and most competitive electric vehicle market. Huawei hopes it will be a new revenue source to offset the negative impact of US restrictions on its smartphone business. 

Here’s what we know about the newly-launched Luxeed S7 sedan:

Pricing: The sedan comes at a minimum price of RMB 258,000 ($35,381), RMB 2,000 lower than Tesla’s entry-level Model 3 in China. Pre-sale started on Thursday and the official launch is scheduled for Nov. 28.

Automated driving: The Huawei-Chery electric sedan is the first model to use the tech giant’s latest proprietary Harmony operating system. Its autonomous valet parking feature enables the car to park itself in lots and then return to a designated spot using a remote-control assisted function.

The premium versions of the Luxeed S7 will include Huawei’s laser sensor units and its Advanced Driving System (ADS) that uses deep learning networks and computer vision algorithms, including one called the General Obstacle Detection network, for navigating its surroundings. 

Huawei has claimed its partially autonomous driving technology will be accessible on major city roads across China by the end of the year, potentially ahead of rivals including Xpeng Motors. 

Main specs: Yu specifically identified Tesla’s Model S as Huawei’s major competitor, claiming that Huawei and Chery’s full-size luxury sedan outperformed its rival’s in terms of range, energy efficiency, and luxury. 

The top-end Luxeed S7 will have a driving range of more than 800 kilometers (497 miles) and be capable of driving another 400 km on 15 minutes of supercharging using Huawei’s facilities. By comparison, the dual-motor Tesla Model S has a 715 km range and can add 347 km in 15 minutes. 

The car also impresses with high energy efficiency, consuming an estimated 12.4 kWh per 100 km, compared with 13.2 kWh and 17.5 kWh achieved by the rear-drive Model 3 and the dual-motor Model S respectively. “This is far ahead of our rivals,” said Yu, using a phrase that has become a Huawei-related buzzword on the Chinese internet. 

The S7 slightly beats out the Model S with a drag coefficient of 0.203. Meanwhile, it offers a 0 to 100 km/h (62mph) acceleration of 3.3 seconds, just under the 3.1 seconds reported by the Model S performance version but faster than the Porsche Taycan 4S, according to Yu. 

Interior: The sleek, aerodynamically favorable sedan boasts of a larger cabin space than its major luxury competitors with an interior length of 1,910 mm. The Mercedes E300L and the Tesla Model S measure 1,898mm and 1,816mm in interior length respectively, according to figures cited by Huawei during the press conference. 

The S7 also comes with a sporty design concept for the inside, featuring a wide dashboard, a 12.3-inch smart screen, as well as an oval-shaped steering wheel, allowing drivers to see the whole display, rather than having to view it through the steering wheel. 

In addition, it has adopted so-called zero gravity seat technology for the front passenger seat. This allows the human body to take on a neutral spinal posture, reducing the amount of stress placed on bones and joints, while the backs of the rear seats are heated, ventilated, and 27/32° adjustable.

READ MORE: Huawei-backed Aito now has 50,000 orders for its redesigned M7 model

Temu, the e-commerce platform celebrated for its cut-rate prices, has launched a legal offensive against fraudsters who masquerade as the company. These imposters lure customers into downloading bogus apps that infest devices with malware and pilfer personal data, according to lawsuits filed in the US in the past two weeks.

Boston-based Temu, operating under its legal name Whaleco, has filed suit against seven websites accused of deceptively prompting visitors to download a counterfeit app. The aim, the lawsuit claims, is to snatch personal details from Whaleco’s clients, slip malware onto their devices, or hack into them. This legal move, initiated on November 7 in a U.S. court, comes on the heels of Temu’s earlier legal action against twenty websites for trademark violation and orchestrating internet phishing scams to defraud consumers.

“Fraudsters are posing as Temu on fake apps and websites to scam consumers. This not only damages our reputation but also hurts consumers who were deceived into believing they were engaging with genuine Temu platforms,” said a Temu spokesman.” We will take swift legal action to defend our rights and shield our customers from such malicious and unlawful activities.” 

In the year since Temu launched in the US, it has soared in popularity, propelled in part by its “Shop Like A Billionaire” Super Bowl commercial. Now, the e-commerce contender has broadened its reach, serving customers in 48 countries, from the UK to Malaysia.

Sensor Tower data reveals that Temu broke into the global top 10 most downloaded apps list in the second quarter of 2023, surpassing both its rival Shein and the American titan Amazon in downloads. Further, a data.ai analysis reported by CNBC shows that Temu has outstripped Shein in Japan and South Korea, clinching the top spot in shopping app rankings over an extended stretch.

Wendy Chen, a GAM Investments senior investment analyst, points to Temu’s innovative “fully entrusted business model” as the engine of its meteoric rise. This model blends direct retail sales with a marketplace for third-party vendors, drawing on the strengths of both. Temu streamlines its operations by sourcing directly from manufacturers, who are tasked merely with shipping to Temu’s global warehouses. The company then takes the reins, overseeing customer acquisition, pricing, logistics, and customer service.

This strategy affords Temu the quality control, timely delivery, and customer satisfaction of a first-party model, while it still benefits from the extensive selection and scalability of a third-party model. By connecting factories directly with consumers, Temu not only slashes middlemen expenses but also sidesteps the hazards of overstocking, Chen explains.

According to a recent report by Chinese tech media outlet 36 Kr, the US market, the first destination Temu entered, currently contributes 60% of the platform’s overall sales. The same report stated that the platform’s third quarter sales surpassed $5 billion, and the extraordinary pace of growth may allow Temu to exceed its annual GMV target of $15 billion this year.

“We are in a cost-of-living crisis and people are looking for anything to save a bit of money,” Miya Knights, the publisher of Retail Technology magazine, told the Guardian. “Everyone likes a bargain and Temu ticks those boxes.”

To be sure, Temu’s popularity has come at a price, with a small group of scammers capitalizing on the company’s reputation to launch phishing schemes and install malware, according to its lawsuit. Critics have also accused Temu of intrusive data practices, allegations that Temu has sought to dispel by prominently listing the permissions that it seeks from users. 

In its latest lawsuit, Temu accuses websites such as Dltemuapp.com and temudl.net of mimicking Temu’s domain name and describes them as primarily designed to lure consumers into making purchases or to mislead unsuspecting consumers.

“Bogus websites like these serve as a platform for various cybercrimes. They could be used to extract sensitive and financial information from duped consumers. They could be used to install malware on people’s sites (and/or those of their employers) to steal information or install viruses and serve as leverage for large ransoms,” Temu said in its lawsuit.

“In any of these scenarios, the results would be devastating—and the harm irreparable–to (Temu) and the public alike,” according to the lawsuit.

Meanwhile, Temu has intensified efforts to warn consumers about fake Temu promotions and scams. The company has also advised users of the importance of downloading the official Temu app from the Apple Store and Google Play Store, which have stringent vetting controls.

Chinese video giant ByteDance will conduct a new round of layoffs from its virtual reality arm Pico as demand for headsets was not “as fast as expected,” said chief executive Henry Zhou, acknowledging at an internal meeting that projections for VR had been overly optimistic.

Why it matters: This large-scale downsizing is the latest restructuring effort by ByteDance in response to dim prospects in the VR industry. Despite significant investments in technology and marketing over the past two years, which failed to yield satisfactory sales results, the company has stated its intention to keep its hardware team intact.

Details: The biggest overhaul since Pico was acquired by the TikTok owner two years ago was announced in a ten-minute meeting on Tuesday, with staff from sales, videos, and platform operations hit the most.

• Although the exact percentage of layoffs was not disclosed by the company, a source close to Pico told local media outlet VR Tuoluo saying around half of its VR staff would be affected.
• In February, Pico slashed nearly a third of its positions, equivalent to hundreds of jobs, mere months after ByteDance launched the flagship Pico 4 VR headset, benchmarked against Meta’s Quest 2. Recent layoffs will shrink the workforce to only a few hundred employees, down from a peak headcount of over 2,000.
• Affected employees will be compensated based on their years of service plus one month’s salary, according to Tencent News.

Context: ByteDance acquired Pico for approximately RMB 5 billion in 2021, and launched an extensive marketing campaign for the Pico 4 standalone VR headset when it was launched a year later. The company enlisted musician Leah Dou and ping-pong star Sun Yingsha as spokespeople, covering major shopping malls and bus stops with advertisements. 

• The TikTok owner has high hopes for its VR business, as Pico founder and president Henry Zhou said at last year’s launch event, expecting the headset to sell more than 1 million units eventually. However, early this year, the company lowered its sales target to “slightly over 500,000 units” due to disappointing initial results.
• The Pico 4 boasts a total of 561 apps, according to figures compiled by VR Tuoluo, surpassing Quest’s 532. The report quoted a source as saying ByteDance had spent at least several billion yuan on building a content ecosystem within Pico.

The CEO of Chinese GPU (graphics processing unit) maker Moore Threads, Zhang Jianzhong, sent an open letter to staff on Monday, stating that the company would begin layoffs within a week, according to a report by local media outlet Icsmart. In the letter, which comes just weeks after the company was added to the US government’s restricted Entity List, Zhang also said “There are no darkest hours for Chinese GPU makers, only boundless possibilities.” 

Why it matters: On Oct. 17, the US government implemented a series of new restrictions, limiting the export of more advanced AI chips and semiconductor equipment to China. As one of 13 Chinese companies now added to the Entity List, Moore Threads and its subsidiaries have been substantially impacted by the policy.

Details: In his letter, Zhang directly blamed the impact of US sanctions on Moore Threads’ personnel cuts. The company will now undergo a restructuring, with plans to establish two new divisions: an AI strategy group and a metaverse computing strategy group.

• The exact number of employees facing layoffs at Moore Threads has not been disclosed, and the size of the company’s total workforce before the job cuts remains unknown. However, the company’s LinkedIn page shows a range of 500 to 1,000 employees.
• In the open letter, Zhang claimed that the entire domestic GPU and AI chip industry has been severely impacted by the new limits, but that nothing could deter the company’s determination to move forward. Moore Threads will continue to build high-quality GPUs in China at the juncture between challenges and opportunities, he stated.
• To address the challenges brought by the external environment and policy changes, Zhang announced a three-year plan. The company will focus on four key areas: accelerating independent research and innovation, refining high-quality products, promoting application implementation, and building efficient teams.
• On Oct. 31, the spokesperson for the China Council for the Promotion of International Trade, Zhang Xin, stated that the US measures violate market economic principles and international trade rules, exacerbating fragmentation and risks in the global semiconductor supply chain. 

Context: Established by Zhang, the former global vice-president of Nvidia and general manager of Nvidia China, in October 2020, Moore Threads is a Chinese technology company specializing in graphics processing unit design. The firm has developed two consumer-grade cards for China’s domestic gaming segment, including the MTT S80 and the MTT S70. 

• Chinese retailers are currently offering promotions for the annual 11.11 Singles’ Day shopping festival. Among these deals, the MTT S80 and MTT S70 GPUs are available at their lowest prices ever. The MTT S80 has been reduced from RMB 2,999 ($412) to RMB 1,199 ($165), while the company has cut the original price of the MTT S70 from RMB 2,499 ($343) to RMB 899 ($124).

Xpeng Motors said on Nov. 3 that it will offer some existing owners of its P5 sedan discounts on new purchases after hundreds of customers accused it of failing to deliver promised advanced driver assistance features, which were supposed to be available across the country. 

Why it matters: The complaints, which went viral on Chinese social media last week, mounted after Xpeng on Oct. 24 unveiled plans to roll out its latest advanced driver assistance system (ADAS), the XNGP, nationwide by next year. The company said it will be applicable to existing models including the G6, G9, and P7i, without mentioning the P5. 

Details: Xpeng said in a statement issued on Nov. 3 that it will offer an RMB 20,000 ($2,747) coupon for people who have subscribed to Xpilot, its previous generation driver-assist software, along with their purchases of the premium version of the P5 sedan. The benefit could be used for a new purchase of one of Xpeng’s most popular models, including the G6, G9, P7i, or its upcoming X9 van. 

• The announcement comes after more than 700 P5 owners recently published an open letter, obtained by National Business Daily, asking the company for an explanation as to why its partially autonomous feature for urban driving has remained unavailable to them in most domestic cities, despite the company’s promises.
• Xpeng further explained that the availability of its previous-generation ADAS feature “relies heavily on” high-definition maps, which has reportedly required automakers to secure approval for using mapping data in their vehicles, partly resulting in slow progress in adoption (our translation). 
• The EV startup released the so-called City Navigation Guided Pilot (NGP) function first to Xpilot users in the city of Guangzhou last September and has since expanded the adoption to five major cities including Beijing, Shanghai, and Shenzhen. 
• “We will strive for more new features and improved user experience, despite many challenges,” Xpeng said in the statement, adding that more functions will be available to P5 owners through over-the-air updates next year, including steering assist and more music streaming apps. 

Context: Xpeng began delivery of the P5 electric sedan back in October 2021, with its premium versions featuring two lidar sensors to facilitate more reliable automated driving functions at a price range of between RMB 199,900 and RMB 223,900 ($27,453-$30,749). It sold 19,618 units of the car over the last 12 months, according to figures from the auto services portal Dongchedi.

• The automaker is shifting to a more affordable approach for autonomous driving, which will reduce its reliance on technologies such as lidar and HD maps as part of a plan to roll out its XNGP system in 50 domestic cities by December. 
• The Xpilot system, formerly Xpeng’s rival to Tesla’s Autopilot system as reported by CNBC, is unavailable for driving scenarios without the support of HD maps, according to a Q&A document published by the company last November.

On Thursday, China’s Ministry of Industry and Information Technology issued guidelines on developing humanoid robots, stating that the robots may be the next groundbreaking products to reach consumers after computers, smartphones, and new energy vehicles. The government’s “Opinions on the Innovation and Development of Humanoid Robots” outlines goals and timelines for the new sector in China.

Why it matters: Humanoid robots incorporate advanced technologies, including artificial intelligence, high-end manufacturing, and new materials. With the potential to be a new competitive frontier in future industries, the government plans to promote innovation in key technologies by strengthening policies and mobilizing resources, given that China’s humanoid robot industry is in its budding phase.

Details: According to the guidelines, China expects to have a domestic ecosystem for humanoid robots established by 2025. By that time, robotic products are likely to be in mass production, fast catching up with international contenders.

• The ministry’s guidelines outline ambitious goals. By 2025, the country aims to nurture two to three world-beating companies, establish a cluster of specialized small- and medium-sized enterprises, and create two to three industrial development hubs. 
• By 2027, China is expected to establish a reliable industrial supply chain, with products from this sector seamlessly integrated into the real economy, as stated in the guidelines.
• The guidelines propose promoting artificial intelligence technologies with a focus on breakthroughs in key areas such as the “brain”, “cerebellum” and “limbs.” The “brain” encompasses core technologies of humanoid robots based on large AI models, while the “cerebellum” involves the robot’s environmental perception, behavior control, and human-machine interactive abilities. The “limbs” refers to humanoid mechanical arms, hands, legs, and feet. The emphasis is on addressing key technologies, including lightweight skeletons, high-strength body structures, and high-precision sensors.
• The guidance also outlines measures for expanding the application of humanoid robots in specific areas, including electronics, automotive, healthcare, services, agriculture, logistics, and even specialized industrial environments where humans currently undertake dangerous tasks in harsh conditions.

Context: The global market for humanoid robots, valued at $1.11 billion in 2022, is projected to experience a compound annual growth rate (CAGR) of 21.1% from 2023 to 2030, according to a report by Grand View Research. There is already rising demand from public and corporate subsidy funds for specific goals, guiding research in humanoid robotics, as well as progress in various fundamental aspects of this field like improved AI, natural language processing, and robot dexterity.

Chinese electric vehicle makers Xpeng Motors and Aito on Wednesday posted record-breaking figures for monthly deliveries, as the pace of adoption of self-driving technology accelerates among local customers despite slowing growth in China’s electric vehicle segment as a whole. 

Strong orders for Huawei, Xpeng, and DJI’s city NOA (Navigation on ADAS) products mark the start of the commercialization of smart driving, Jefferies analysts wrote in an Oct. 24 note. They added that Chinese automakers are becoming more willing to “test the waters” with chips by Huawei on some of their vehicles.

Why it matters: The latest figures highlight a brutal price war that has been continuing for months in the market, and the struggle automakers are facing in having to choose between lower prices or losing market share. 

• Xpeng in June unveiled the G6, its crossover answer to Tesla’s Model Y, at a price tag 20% lower than its US rival in China. Aito’s all-new M7 sports utility vehicle now costs RMB 40,000 ($5,468) less than the version launched a year ago.

Riding the self-driving boom: Xpeng Motors handed over 20,002 electric cars to customers in October, crossing the 20,000 unit milestone, nearly a threefold increase from a year ago and  31% growth from September. 

• Aito also reported a record delivery number of 12,700 units last month. The Huawei-backed brand does not report its delivery figures consistently, but its Shanghai-listed manufacturer Seres posted sales of 40,389 EVs for the first nine months of the year. 
• The two companies appear to have taken an early lead in an emerging battlefield for partially autonomous technology among consumer carmakers. More than half of the orders of Aito’s redesigned M7 SUV were placed for versions with Huawei’s Advanced Driving System, Chinese media outlet Caixin reported on Oct. 7, citing company insiders. 
• The Max versions of Xpeng’s G6 crossover, which features the company’s XNGP assisted driving technology, accounted for 70% of total orders in the first month after the launch, chief executive He Xiaopeng said in August. Both companies said their vehicles would be able to travel autonomously most of the time in dozens of major Chinese cities by the end of the year. 

EV startups: Li Auto also accomplished a delivery milestone last month, distributing 40,422 vehicles, making its year-to-date deliveries 284,647 units, the highest among the country’s nascent EV startups. The company has upped its goal to 50,000 units for the remaining two months of the year, CEO Li Xiang said on Wednesday on the Chinese Twitter-like platform Weibo.

• NIO’s October delivery of 16,074 units represented a 59.8% growth from this time last year and a slight 2.8% increase month over month. The company has delivered 126,067 vehicles as of October this year, still far from the annual goal of 245,000 units revealed by CEO William Li in March. It is now aiming for monthly delivery of more than 20,000 units in the fourth quarter of 2023. 
• Leapmotor’s delivery of 18,202 EVs last month comes after the Zhejiang-based EV maker recently announced a deal with European major Stellantis for a $1.6 billion war chest and turned its negative gross margin into a positive for the past quarter. Rival Hozon delivered 12,085 units, representing a decrease of 32.9% year-on-year and 8.5% month-on-month. 

Established majors: BYD’s growth momentum continued to some extent in October as the company saw sales surpassing 301,000 vehicles with a mild 5.2% rise from a month earlier. Analysts expect China’s biggest EV maker to achieve its annual goal of selling 3 million cars this year, as the company on Monday launched a wagon version of its popular Song SUV and readied to sell its long-anticipated Bao 5 off-roader.

• Sales for Aion declined 19.6% from a month earlier to 41,503 units, as the GAC subsidiary ramps up production of its new models, company insiders told financial media outlet CLS. Changan-affiliated Deepal delivered 15,513 vehicles in October, a 10.7% decrease from September. 
• Zeekr delivered 13,077 vehicles last month, up 29.2% from a year ago and 8.5% from September. On Aug. 11, the two-year-old premium EV brand, set up by Volvo parent Geely, cut the price of its 001 hatchback by up to RMB 37,000 to RMB 269,000 for a limited period until the end of this year. 
• Voyah saw its deliveries grow 21% on a monthly basis in October after the Dongfeng-backed EV maker launched its redesigned Free SUV in August, with the model arriving 15% cheaper than the previous version and equipped with Baidu’s advanced driver-assist system. 

Context: Retail sales of new energy passenger vehicles, including all-electrics and plug-in hybrids, are expected to reach 750,000 units in October, up 34.6% year-on-year and 0.9% month-on-month, according to estimates from the China Passenger Car Association. The past two months, known as “Golden September, Silver October,” are traditionally peak seasons for auto sales in China.

China’s most populated social media platforms on Tuesday announced they will soon remove anonymity for content creators that have over 500,000 followers, confirming rumors that stirred up heated debate over personal privacy in recent weeks.

Why it matters: The new policy will force bloggers with large fan bases to disclose their real names to the public on social media, in a change to the rules that will likely further deter discussion online in China, especially when it comes to finance news and current affairs.

Details: At least seven social platforms serving hundreds of thousands of users daily issued statements urging influencers to reveal their real identities. These included X-like platform Weibo, messaging app WeChat, video sites Douyin, Kuaishou, and Bilibili, as well as lifestyle-sharing app Xiaohongshu and search giant Baidu. 

• Weibo has outlined plans to first require creators specializing in content related to social affairs, finance, and legal matters, with more than 1 million followers to post using their real names,  before extending the rule to bloggers in other fields.
• Influencers who refuse to show their real names may be limited by account traffic and revenue, according to Weibo and WeChat.
• WeChat said the move will  enhance the credibility of top “self-media” accounts, while Weibo said that as these influencers have a far greater impact on public opinion than ordinary users, requiring real name identification will encourage them to “take on responsibilities that align with the influence of their words.”
• In recent years, China has strengthened the management of social media accounts run by individuals or organizations independent of state-control. Many of those accounts have amassed sizable fanbases.
• Short video apps Kuaishou, and TikTok’s Chinese sibling Douyin, were among the platforms that published simultaneous statements. Accounts with over 500,000 followers will be the first affected by real-name ID disclosure requirements. Kuaishou added that accounts mainly sharing personal daily life stories will be exempt.

Context: On Oct.21, users noticed that Weibo’s CEO Wang Gaofei gave his real name on  his social media page, a move later confirmed by the executive who said he had decided to first test the policy on his own account.

• A year ago, China asked that posts mentioning Russia’s invasion of Ukraine showed the location of the poster, in response to an incident in which a social media user faked his whereabouts, causing a stir in overseas media. Shortly after, the practice of displaying IP addresses was extended to individual users of Weibo and those of other social media platforms.

Chinese telecom giant Huawei has applied to register the trademark Far Ahead in the fields of transportation tools and scientific instruments, according to China’s trademark platform Tianyancha. “Far ahead” became a trending term on the Chinese internet after the surprise early release of Huawei’s Mate 60 series of smartphones in August, which came with advanced chipsets despite the Chinese tech company being a major target of US sanctions. The trademark is currently pending review. 

Why it matters: Having seen its tech capabilities limited by US chip sanctions, Huawei has ridden a wave of nationalist approval in China following the release of its Mate 60 line, which came equipped with a better chip and higher processor power than many industry observers had thought possible. 

Details: Yu Chengdong, CEO of Consumer Business at Huawei, has repeatedly used the phrase “far ahead” to describe the tech gap between Huawei and its competitors during product launches. Huawei fans often use the phrase as a rallying call on social media. Huawei’s detractors have also utilized this term to satirize the company’s advertising and messaging.

• Huawei’s use of the term “far ahead” first came at the launch event of its Mate 40 smartphone in 2020, according to local media outlet ThePaper. During a presentation of the Mate 40’s features, Yu used the phrase 14 times. Last year, Yu again used “far ahead” to describe the advanced satellite messaging function of the Huawei Mate 50 series, further boosting the popularity of the phrase in China.
• In August 2023, Huawei launched the Mate 60 Pro series, featuring the self-developed Kirin 9000s chip, manufactured in China by Semiconductor Manufacturing International Corp (SMIC). Related short videos with the tag “Far Ahead” went viral on the Chinese internet. For instance, videos on Douyin (the Chinese version of TikTok) with this tag have gained 960 million views.
• Huawei reportedly plans to ship between 60 to 70 million smartphones in 2024. Sources have told local media outlets that Huawei has placed sufficient orders from its supply chain to guarantee the fulfillment of this shipment goal for the year 2024.
• On Oct. 27, Huawei released details of its sales performance for the first three quarters of 2023. During this period, the firm achieved sales revenues of RMB 456.6 billion ($62.39 billion), representing a year-on-year increase of 2.4%, with a net profit margin of 16%. Huawei stated that these results were in line with expectations, though the company did not disclose specific figures for its various business streams during the period.

Context: Thanks to the newly launched Mate 60 series, Huawei’s domestic shipments in the third quarter increased by 37% compared to the same period last year, according to market research firm Counterpoint. Huawei’s share of China’s smartphone market has risen to 14%, making it the fifth largest company in the sector. 

• On Monday, Huawei announced that downloads of its HarmonyOS 4, which was unveiled in August, had topped 100 million. One of the key updates in HarmonyOS 4 is the ability to customize the home screen, allowing users to change system fonts, colors, clock styles, and widgets according to their preferences.

Chinese automaker Geely on Oct. 27 unveiled its biggest bet ever on intelligent vehicles with the launch of the first Jiyue-branded model, which the company says is capable of driving itself on busy urban streets in partnership with search engine Baidu. 

The automaker stated its vehicle relies heavily on a camera-based approach to capture detailed visual information and then respond appropriately, removing expensive laser sensors from its hardware suite to keep costs down. Tesla is reportedly a rare advocate for using the so-called vision-only approach, while most other brands opt for multiple sensors to mitigate safety concerns of their self-driving technologies. 

“I believe we provide users a better self-driving experience [than existing players] in most major Chinese cities,” Luo Gang, Jiyue’s chief operating officer, told reporters during an interview, adding that the Jiyue 01 outperforms Tesla’s offerings in digital services such as its AI assistant (our translation). Tesla’s full self-driving (FSD) function is currently unavailable in China. 

The Jiyue 01, a battery sports utility vehicle, comes in two versions with a price range between RMB 249,900 and RMB 339,900 ($34,148-$46,446), slightly lower than its pre-sale price and differing based on acceleration, driving range, and number of electric motors, among other specifications. Customers are also encouraged to pay RMB 19,900, a 60% cut from its sticker price, for all the premium functions of its self-driving software. 

Here are some of the news and highlights from the launch event held in Shanghai by Jiyue, formerly known as Jidu before Geely and Baidu set up a new venture in August. 

Self-driving tech: Jiyue said its advanced driver-assistance system, the Robo Drive Max, is already available to drivers in Shanghai, Hangzhou, and Shenzhen, meaning the cars can navigate complex urban streets in the three big cities with autonomous features such as overtaking, lane changing, and on-ramp/off-ramp driving. The firm is targeting nationwide availability for the software by 2024, which would mean it matched rival Xpeng. 

• Chief executive Joe Xia claimed the car could drive itself from point to point without many user interventions by using less costly high-definition maps and training multiple neural networks such as occupancy networks in big data sets, rather than relying on lidar. Rival Xpeng is also removing two radar sensors for its upcoming MPV model but retaining lidar technology for enhanced safety, TechNode has reported.
• The five-seater Jiyue 01 is equipped with 11 cameras and 17 ultrasonic sensors and radars. The company believes it is building public confidence in autonomous car safety, as Baidu has tested its autonomous car fleets without accidents for more than 70 million kilometers (43.5 million miles). Baidu has been handling various corner cases over the past decade, which greatly improves the safety of the system, said Luo. 

Smart cabin: The Jiyue 01 also boasts the most advanced voice recognition software on the market for in-car services, which can respond intelligently in milliseconds without losing its connection, as the company deploys artificial intelligence models and moves data analytics from cloud computers to the vehicle. The system is also set to evolve and become more alert to the needs of its owners, powered by Baidu’s ChatGPT-like chatbot, Ernie Bot. 

• Notably, the automaker is bringing voice activation outside the car, saying it is the world’s first model that allows autonomous valet parking via just a spoken command without the driver sitting in the car, from as far as two kilometers away, according to an announcement. A company employee demonstrated the feature with several reporters joined by TechNode in an indoor parking lot on the sidelines of the event. 
• Xia added that the vehicle’s in-car system is powered by Qualcomm’s most advanced smart cockpit computing platform, the SA8295, which provides a processing power of over 60 trillion operations per second (TOPS), compatible with that of flagship smartphones available on the market. This would allow users to play the hit racing game Asphalt with a 35.6-inch display across the dashboard, as would NIO owners do with their handsets and a smaller screen. 

READ MORE: Baidu’s EV firm Jidu aims to take on Tesla

In the collective effort to fight climate change, CCUS (Carbon Capture, Utilization, and Storage) is one of the few frontline tools. Today, carbon dioxide (CO₂) is captured directly by power generation or industrial facilities, or even directly from the atmosphere. The captured CO₂ is then utilized or stored. If stored, it’s injected into deep geological formations for permanent storage. If utilized, carbon can be incorporated into several production processes.

But how many of us are aware of the size and scale to which CCUS is taking place in this day and age – and what happens to the carbon when it’s captured?

By capturing carbon dioxide emissions at their source, CCUS helps mitigate the overall effects of accumulated carbon in our environment. CCUS has its roots in decades of scientific exploration – back to the 1930s. Official figures from bodies like the International Energy Agency (IEA) reveal a significant increase in CCUS projects globally, with over 30 large-scale facilities in operation or under construction (as of the end of 2020).

There is an estimated global CO₂ emission of 33 billion tons per year. The global capacity for carbon capture in 2021 was 43 million tons per year, accounting for just 0.1% of the emissions. The target is for CCUS to reach 10 billion tons per year by 2050, removing a third of our annual carbon emissions. While capacities are increasing year by year (the next goalpost is 279 million tons of CO₂ captured annually by the end of 2023, according to BloombergNEF’s report), very little of that captured CO₂ has been applied in innovative, practical, or useful formats.

Most of the captured carbon at present is pumped into storage wells underground – that’s the ‘S’ in CCUS, but not enough has been done for the ‘U’. Annually, only an estimated 270 million tons per year of CO₂ have been used, mostly on fertilizers, food, metal fab, and concrete. Yet for some of these uses, the CO₂ is re-released back into the atmosphere upon use, defeating the purpose of capturing it in the first place.

This is doubly inefficient: let’s not forget that CO₂ storage facilities need to be maintained and often occupy a very large area that isn’t used for any other purpose.

With 270 million tons/year of CO2 used versus 37 billion tons/year of CO2 emitted – we have a very long way to go.

CO₂: a useful yet misunderstood element

Earth’s CO₂ issue really is about too much of a good thing. Despite the negative climate-related connotations, CO₂ primarily is a very useful element and potential resource. Aside from the need for plants to achieve photosynthesis to produce oxygen, everything on earth is carbon-based.

As the Scientific American mentions, carbon is “the most versatile, most adaptable, most useful element of all. Carbon is the element of life.” 

From the chart we can see that carbon, through conversion, can be applied into fuels, to chemicals, to building materials, and so on. Direct uses of carbon include crop yield boosting, heat transfer media, or applications in food, welding, medicines, and more. The usefulness of carbon is remarkably broad, with plenty of potential waiting to be untapped.

Carbon has the ability to form stable bonds with many elements, including itself. This property allows carbon to form a huge variety of very large and complex molecules. In fact, there are nearly 10 million carbon-based compounds in living things. 

Take for example, the Chimei Asai facility in Taiwan, a joint venture of Asahi Kasei Chemicals and Chi Mei Corp. They have been manufacturing around 150,000 tons of polycarbonates per year using CO₂ as a starting material for over a decade. 

And at the price of $15 to 100 per ton, carbon as an abundant resource isn’t expensive at all. Being so affordable, we believe more research can be done to use carbon as a resource for practical outcomes.

Carbon utilization and removal pathways

To understand what we can work with when it comes to handling carbon, we have to understand the different formats of carbon capture: Closed, Cycling, and Open Pathways.

Of the three methods, ‘Closed’ is the most conservative, practical, and commonplace. ‘Cycling’ and ‘Open’ have their uses, but both require a large investment in time and resources to make it practical.

There are three methods to utilize captured carbon:

1) CO₂ Splitting: CO₂ can be split into different components, leading to various applications.

2) Synthetic Biology (synbio): CO₂ can be absorbed by microbes/algae to produce chemicals, food, or feedstock to make products.

3) Direct Incorporation: CO₂ can be directly incorporated into products.

Splitting carbon to make chemicals and fuels

Electrochemical splitting of CO₂ can create useful chemicals, such as syngas, Formic acid, Oxalic acid, and more. However, as CO₂ is an inert molecule, the science behind splitting carbon is very complex and expensive. Efficiency rates are also very low, often ranking below 50%. The molecule-splitting process also requires plenty of water. If we consider the cost and complexity of the entire process, it’s more efficient to use electrolysis to create hydrogen, a more energy-dense fuel that’s gaining traction globally.

Converting CO₂ into liquid fuels that substitute gasoline or diesel fuel only locks in carbon until the fuel is combusted, at which point it is re-released into the atmosphere.

Synbio process to produce fuels, chemicals, food, and materials

The synbio route is an interesting one, where startups use genetically modified microorganisms to absorb carbon to create useful chemicals.

Examples include using microbes to produce useful chemicals such as bioethylene or glucose. Copious amounts of carbon can also be used to accelerate algae growth, to turn it into an abundant feedstock to make food, biofuels, plastics, or even carbon fiber. But the systems are complex, requiring AI-powered photo-bioreactors for biomass production, requiring at least a two-stage dewatering process.

Generally, the science, research, and development behind using Synbio to decarbonize our climate is extremely expensive and complex, with many companies exploring this space going under.

Direct incorporation of carbon into things we live with

Direct incorporation is a much more practical method of making use of CO₂. Today it’s part of the cement-production process, which ‘locks in’ carbon for much longer. Concrete won’t permanently keep CO₂ out of the atmosphere, but can store it for a century or more, which counts as a form of effective carbon storage. The Nature paper calls these “closed” processes.

As the Nature paper says: “Cement requires the use of lime (CaO), which is produced by the calcination of limestone in an emissions-intensive process. As such, unless calcination is paired with carbon capture and sequestration, it is difficult for building-related pathways to deliver reductions in CO₂ emissions on a life-cycle basis.”

Ironically, cement production itself emits carbon, which needs to be captured and sequestered to make it carbon-neutral. With economies and standards of living around the world improving, and real estate constantly developing, cement production is now the seventh highest emitter of carbon into the atmosphere, with energy production taking the number one spot. So that presents a paradox to the solution.

Another common use of captured CO₂ is incorporation into fertilizers. However, once the fertilizer is placed in the soil, it’s re-released into the environment within weeks.

So, all that investment and effort in carbon capture and utilization vaporizes in just weeks. Is there any point in that?

Locking carbon into a material that doesn’t degrade: plastic

It’s a challenging goal: make use of abundant captured carbon, don’t let it reintegrate with our climate, and ensure it makes no additional contribution to carbon emissions in the process.

One highly plausible solution we’ve studied over the years is to incorporate carbon in something that’s very common in our everyday living: plastics.

As the IEA puts it: “CO₂-derived products that involve permanent carbon retention, such as building materials, can offer larger emissions reductions than products that ultimately release CO₂ to the atmosphere, such as fuels and chemicals.”

More accurately, carbon can be incorporated in polyol, a raw material that’s used to make plastics/PU/surfactants. These become useful materials that we use commonly, and often for a very long time: shoe soles, car seats, insulation, beds, paints, and more. When incorporated into plastics, it keeps carbon locked away for long periods, just like carbon in concrete.

As for the production process, making traditional plastics contributes to carbon emissions (though not as much as the concrete-making process). That’s because traditional plastics rely on fossil-based feedstocks. The aim of incorporating captured carbon in plastics is to replace these fossil-based feedstocks, effectively cutting down carbon emissions in the process.

From the above chart, it is clear that the most practical and profitable use of CO₂ is incorporation into polyol, a raw material for plastics. A UK startup that’s been developing this method effectively is Econic, which uses a catalyst to incorporate carbon into the PU production process. Best of all, it doesn’t call for additional energy requirements (keeping it carbon-neutral), and it fits seamlessly into existing plastic production processes.

As mentioned in an IEA paper: “Potential climate benefits in polymer production depend on the amount of CO₂ that can be absorbed in the material, which can be up to 50% of the polymer’s mass. For example, a polymer containing 20% CO₂ by weight shows life cycle CO₂ emissions reductions of 15% relative to the conventional production process.” 

Of course, there are controversies to this: plastics are the very material the world wants to avoid, because it doesn’t degrade well, polluting our seas and environment. Yet, it’s this very fact that helps to lock the carbon away for decades. Plastic isn’t something we can live without – from fundamental living needs to medical applications, it’s a functional, durable, and waterproof material that is nearly impossible to replace.

A system in which used plastics made from carbon are responsibly collected or recycled at the end of their use will help mitigate this concern.

Economic considerations: profitability and society

Is CCUS economically viable? If the carbon is mostly stored in geological locations, most probably not. But if captured carbon can become an abundant, key resource or raw material that supports our living needs – making buildings from concrete incorporated with carbon, food from carbon, or useful plastic goods made from carbon – it would become very practical. As the human population, cities, and needs grow, so do the needs for real estate development, sustenance, and functional products made out of plastic. Wouldn’t it be great to have ‘locked-away’ carbon serving our living needs while staying out of the atmosphere?

For now, the CCUS systems in place are very expensive investments with very low or no returns. This is in part because many haven’t found a practical solution as to what to do with all that captured carbon, or how to lock it in effectively without having it re-released into the environment.

CCUS represents a multifaceted approach to managing carbon emissions. It challenges conventional perceptions of CO₂ and opens doors to innovative uses. Though still a subject of debate and development, CCUS is emerging as an indispensable tool for a sustainable future, offering untapped opportunities for more responsible use of carbon, potentially revealing paths toward both environmental protection and economic benefits.

If we can unlock the potential of captured carbon – making it useful while keeping it out of the atmosphere – the rewards for society, businesses, and mankind could be profound.

Xiaomi Group on Thursday unveiled its new operating system, the Xiaomi HyperOS, and its new flagship smartphone Xiaomi 14 series. CEO Lei Jun said the company’s strategy had moved beyond “smartphone connections to AIoT (Artificial Intelligence of Things)”, and now entailed having the “phone, home, and vehicle all within an ecosystem.”

Why it matters: The Xiaomi 14 smartphone series showcases the Xiaomi HyperOS, an Android operating system that uses Xiaomi’s self-developed Vela system that enables the phone to connect with other AIoT devices. The lineup is touted by Xiaomi as the first flagship smartphone driven by Qualcomm’s latest processor Snapdragon 8 Gen 3, unveiled on Wednesday.

Details: In the next two years, Xiaomi HyperOS will replace its MIUI operating system across every Xiaomi smart device, as the company seeks to build a comprehensive ecosystem.

• Xiaomi plans to invest RMB 100 billion ($13.66 billion) in research and development (R&D) over the next five years, Lei Jun revealed at the launch event. Xiaomi also revealed that in 2022 it had invested RMB 16.2 billion ($2.21 billion), or 0.53% of its national R&D expenditure. 
• Xiaomi HyperOS is a cross-platform operating system that has been in development for seven years, involving 5,000 engineers, according to the company. Aiming to create a “people-vehicle-home” interactive ecosystem, Xiaomi has integrated its self-developed Vela system with a modified Linux system.
• The Xiaomi 14 series comprises the Xiaomi 14 and Xiaomi 14 Pro, both carrying the latest Qualcomm Snapdragon 8 Gen 3 chipset, as well as Xiaomi’s own Loop LiquidCool technology for heat dissipation. Both models feature Leica Summilux optical rear lenses.
• The latest Snapdragon 8 Gen 3, built using TSMC’s cutting-edge 4nm processor, is designed for AI applications and gaming, and comes with enhanced audio and camera features. The Gen 3 offers a notable improvement on its predecessor, being 30% faster and 20% more energy-efficient. Additionally, the chipset supports LPDDR5x memory at speeds up to 4,800 MHz and can accommodate up to 24 GB of RAM.
• Xiaomi has opted for a smaller sensor for the 14 Pro, introducing the Light Hunter 900 coupled with a custom Leica Summilux lens. Despite being approximately 44% smaller than last year’s 13 Pro 1-inch sensor, the new setup is up to 80% brighter, according to Xiaomi.
• Depending on storage requirements, a new Xiaomi 14 will cost from RMB 3,999 ($546) to RMB 4,999 ($683), with the pro version costing between RMB 4,999 ($683) and RMB 5,999 ($820).

Context: At the launch event, Lei also mentioned Xiaomi’s commitment to environmental protection and social responsibility, reiterating a pledge made in August to achieve carbon neutrality and to switch to 100% renewable energy by 2040. 

• According to intelligence firm Counterpoint, Xiaomi ranked fifth place in the Chinese phone market in the second quarter of 2023 with a 14% market share.

Since its inception in 2011, the CHINABANG Awards has been dedicated to identifying and nurturing the power of innovation in China. Over the last decade, we have witnessed many innovative enterprises such as DiDi, Momo, DJI, Mobvoi, Ele. me, WeChat, and the Little Red Book evolved from humble beginnings to iconic symbols of China’s innovation landscape. At the same time, we have uncovered many exceptional individuals, most of whom have ascended to become highly regarded trailblazers in their respective industries.

Now, the CHINABANG Awards 2023 is officially underway! Since its inaugural launch in 2011, the list has undergone more than ten years of refinement and enhancement, marked by the continuous evolution of our selection process. This year, we have made another breakthrough by setting up the CHINABANG Awards -China’s Overseas New Power List. The list is dedicated to recognizing overseas innovation teams with strong ties to China, identifying the most promising and valuable overseas projects, and striving to create the most open and credible annual overseas accolade in the industry.

The CHINABANG Awards China’s Overseas New Power List aspires to spotlight innovative companies that have achieved breakthroughs in international emerging markets, as well as the innovative organizations and individuals who have played a pivotal role in bolstering China’s global influence. We will recognize companies that continue to explore overseas markets, exporting China’s technological prowess and influence, as well as pioneering entities contributing to the sustainable development of local business ecosystems during the process of localization. Above all, we will acknowledge Chinese overseas entrepreneurs, innovators, and entrepreneurial teams who have exhibited unwavering dedication to innovation throughout their journeys.

China’s Overseas New Power: 4 Awards Categories 

Overseas Technology Company of the Year:

Aims to discover and recognize Chinese technology companies that have taken root and grown in overseas markets. These companies have not only achieved remarkable results in the international market but also successfully integrated into the local business ecosystem during the localization process, winning international recognition for China’s technological and innovative strength.

Overseas Investment Organization of the Year:

Aims to select investment institutions that are keen on identifying opportunities in overseas investment markets. They search for booming emerging markets in China and around the world, providing financial support and strategic guidance to innovative companies, and driving the expansion and growth of Chinese companies globally.

Overseas Service Organization of the Year:

Aims to identify and recognize service providers that can help Chinese enterprises with different needs and in different fields to realize cost reduction and efficiency, and to make goods available globally. Whether it’s in the areas of overseas brand creation, logistics management, payment systems, marketing strategies, or SaaS, these service organizations provide critical support to Chinese companies to help them become more competitive in the international market.

Overseas Pioneer of the Year:

Aims to reward the pioneers who are the first to step out of their comfort zone and expand overseas in the wave of Chinese enterprises going overseas. Their courage to take risks, innovate, and break the limitations of national borders has set a good image for Chinese innovators internationally, as well as a role model for other innovative entrepreneurs.

Award Description: Overseas Technology Company of the Year, Overseas Investment Organization of the Year, and Overseas Service Organization of the Year are enterprise awards. Overseas Pioneer of the Year is an individual award. All awards must be nominated and declared independently through the official nomination channel.

Eligibility of Enterprises Nomination

1. The applicant must be a legally registered company or a legal organization.
2. Must be a Chinese technology brand with at least 1 year of overseas business operation.
3. The submitted product/project/solution must be first marketed/published after December 1, 2022, or must be expected to be marketed before December 1, 2023, and the relevant intellectual property rights have been acquired.
4. The applicant must submit product images in .jpg format and less than 10 MB. In the case of intangible products, the applicant may submit screenshots or diagrams.

All nomination information must be submitted by 23:59 on December 31, 2023. Please complete as much information as possible for the subsequent selection, list announcement, and potential media coverage.

Description of Enterprise Selection Process

Nomination: Enterprises may nominate themselves by scanning the QR code below or clicking on the Link to access the official website’s exclusive nomination portal for submitting information.

Nomination deadline: 12/31/2023

Second Round: Select the list of enterprises/organizations/individuals who qualify for the final round.

Final Selection: The overseas lists of the year will be selected.

Selection Calendar

September – December 2023: Self-nominations;
December 31, 2023: Nominations closed;
January 2024 – Judge’s Second Road and Final Selection.

Award Entitlement

Brand Promotion

CHINABANG Awards is a brand that has accumulated prestige over more than a decade in the tech industry. Award-winning individuals and companies will receive the official certification and trophy from CHINABANG Awards.

International Stage (*within 1 year of official award announcement)

1. Award-winning individuals and companies will be recommended for inclusion in the BEYOND Awards shortlist, with the chance to secure a complimentary exhibition booth and on-stage presentation opportunity at the BEYOND International Tech Innovation Expo, where they can showcase the latest technologies and trends across various industries.
2. Award-winning individuals/companies will also be recommended for inclusion in the shortlist for the Origin Innovation Awards, hosted by TNGlobal. They will receive exclusive invitations to speak at the Origin Summit, becoming featured speakers at the event.
3. Award-winning individuals and companies will have the opportunity to participate in the “出海时刻” (Overseas Moment) dialogue program, a media brand created and produced by Dynamic Tech, where they can discuss industry development trends and share insights into the challenges and opportunities of expanding businesses internationally.

Media Exposure (*within 1 year of official award announcement)

For finalists and winners, we will conduct an extensive promotion on Technode’s English and Chinese media platforms, while national and international media networks will provide ongoing coverage. For award-winning individuals and companies, we offer the reward of five free featured interviews or press releases.

Resource Sharing (*within 1 year of official award announcement)

Through the specialized communication platform established by CHINABANG, connecting businesses, organizations, capital, and media, award-winning enterprises will enjoy convenient resource matching and sharing services.

*More benefits will be continuously updated on the official website.

In this era filled with opportunities and challenges, we look forward to exploring, recognizing, and promoting China’s overseas innovation forces alongside you. CHINABANG China’s Overseas New Power is not just an awards event; it is also an industry celebration. We cordially invite outstanding innovative companies, investment firms, experts, scholars, and media friends to join us in witnessing the brilliant moments of Chinese innovation!

About TNGlobal

TNGlobal, formerly known as TechNode Global, is a pan-Asian tech platform that delivers premium tech news, industry insights, events, and tailored marketing solutions to startups, VCs, corporates, and other industry pioneers. TNGlobal facilitates cross-border collaboration and business through its extensive network, strategic partnerships, events, and resources, bridging the gap between China and the broader Asian tech ecosystem market. The flagship events of TNGlobal include the ORIGIN Summit and the ORIGIN Innovation Awards. TNGlobal is also one of the key organizers of BEYOND Expo, Asia’s leading technology and innovation expo. TNGlobal is an overseas company of TechNode, China’s leading innovation and entrepreneurship platform.

Learn more about TNGlobal: https://technode.global

About BEYOND Expo

Established in 2020, BEYOND Expo has already successfully organized three editions, making it one of the largest and most influential international technology expos in Asia. Over the past three editions, BEYOND Expo has showcased numerous valuable technological breakthroughs and innovations, attracting over 70,000 participants, hosting more than 1,400 exhibitors, inviting over 600 business innovation leaders as conference speakers, and simultaneously holding more than 300 industry forums and over 500 networking events. This extensive track record highlights its success as an international technology exchange platform.

Themed “Embracing the Uncertainties”, BEYOND Exp 2024 is scheduled to take place from May 23rd to May 25th, 2024, at the Venetian Macao’s Cotai Expo. The event will continue to gather the latest achievements and innovative thinking from the global technology sector, providing an unprecedented technological extravaganza for industry businesses and technology enthusiasts.

Learn more about BEYOND Expo: https://beyondexpo.com

Chinese kitchen appliances brand Hauswirt said on Monday that it had sent a legal letter to JD after the retailer lowered the price of one of Hauswirt’s ovens “without authorization” amid intense online battles over price in the run-up to Singles’ Day. Hauswirt claims the reduction led to a dent in the company’s profits.

Why it matters: Competition over low prices in a bid to attract consumers has intensified as China’s biggest shopping extravaganza kicks off, with this case suggesting an increasingly dysfunctional and imbalanced e-commerce ecosystem.

• While JD’s staff have claimed that the platform subsidized the oven in question to sell it below its normal price, Hangzhou-based Hauswirt has stated that they are the ones who actually incurred the loss. 

Details: Hauswirt’s home beginner oven normally retails for RMB 699 ($95.50), but this week consumers can get it on JD for RMB 319.50, a discount of more than 50%.

• Top livestreaming influencer Li Jiaqi was also caught up in the fiasco after a WeChat screenshot, believed to have been posted by a member of JD’s sales staff, showed he had received a legal letter from Hauswirt. 
• The poster said the appliance brand had filed a complaint against him due to the sale price of the oven on JD being lower than the price the controversial livestream star advertised during his broadcasts, thus breaching Hauswirt’s lowest-price agreement with Li.
• The oven was set to be marketed on Li’s Taobao Live livestream on Oct. 26, according to a teaser on his official WeChat account earlier today. The post did not reveal the item’s exact price.
• Local media outlet Jiemian cited Li Jiaqi’s agency MeiOne as saying they didn’t sign a so-called minimum price agreement with Hauswirt and that “pricing of livestreamed goods rests with the brand.” However, it is not known whether MeiOne will still require other brands they cooperate with to promise the lowest price for their products in return for exposure on Li’s livestreams, a practice they have reportedly pursued in the past.
• As the high-profile spat continued, Hauswirt commented with three demands on JD’s official Weibo social media account on Tuesday, asking the e-commerce giant to withdraw the sale of the oven at half price, requesting that it exclude the brand’s entire product line from JD’s regular coupon offers, and urging JD to conduct an “internal review” to “rectify any unreasonable behavior.”
• At time of writing, the oven is currently being sold at RMB 699 on JD. JD did not respond to TechNode’s requests for comment.

Context: The conflict over pricing control between e-commerce channels is growing more prominent in China’s latest online price war. On the one hand, online retailers are pursuing low prices amid a less-than-stellar consumer recovery, but on the other, this is adding pressure to merchants that have set up online stores on multiple platforms.

• During 2021’s Singles’ Day festival, some users found that the same L’Oréal face mask product they bought via the country’s hottest livestreamers, Li Jiaqi and Viya, was more expensive than the cosmetics brand’s own livestream days later, which led the duo to publicly accuse L’Oréal of failing to deliver on its promise to offer them the lowest prices.

On Tuesday, US chip giant Nvidia revealed that the US government has instructed it to immediately halt the export of certain high-end artificial intelligence chips to China, as regulators have expedited the enforcement of new restrictions, which were originally scheduled to take effect from Nov. 16.

Why it matters: The US withdrew Nvidia’s 30-day exemption period for chip exports to China on Oct. 23, implementing the new regulation 24 days earlier than expected. Currently, Chinese customers, such as Tencent and ByteDance, can no longer obtain any AI-related products from Nvidia. 

Details: The US government notified Nvidia of the immediate implementation of export restrictions on AI chips starting Oct. 23, as per Nvidia’s announcement to the US Securities and Exchange Commission. The affected products include five GPUs (graphics processing units): A100, A800, H100, H800, and L40S.

• On Oct. 17, the US Department of Commerce announced a series of new restrictions on chip exports, addressing loopholes identified after the US imposed export limitations on chips last October. These new regulations broaden the definition of advanced AI chips and impose additional licensing requirements on chip products destined for over 40 countries and regions, aiming to prevent resale to China. According to the regulations, the new restrictions will take effect from Nov. 16.
• Following the implementation of the new regulations, Nvidia must cease shipping A800 and H800 chips to China unless it has express permission from the US government. A800 and H800 chips are alternative solutions Nvidia offered in place of the originally prohibited A100 and H100 chips, following the initial AI chip export restrictions imposed by the US last October. The Nvidia L40S, an advanced GPU for data centers, will also be affected by the new restrictions.
• Due to the widespread global demand for these products, the sudden acceleration of US restrictions is not expected to have a short-term impact on the company’s financial performance, Nvidia said in its announcement. 
• However, Nvidia CEO Jensen Huang earlier stated that the new ban is expected to significantly impact Nvidia’s sales in the Chinese market, though he added that the company remains committed to complying with US regulations. 
• Several AI industry professionals in China have voiced concerns and doubts over the new measures, according to a report by local media outlet TMTPost. They worry about the potential impact of the new restrictions on the future training of large-scale AI models in China, which could result in a tech gap compared to US-based AI companies like OpenAI.

Context: In August, Nvidia reported a fourfold increase in its Data Center revenue over the last two years, establishing itself as a leader in AI chips with a market share of over 70%. Nvidia’s stock continues to rise, as the company achieved a market cap of $1 trillion earlier in 2023.

• The data center sector comprises processors such as central processing units (CPUs), data processing units (DPUs), and graphic processing units (GPUs). GPUs are favored for AI applications due to their ability to handle multiple tasks simultaneously.

Xpeng Motors teased how it sees the future of electric vehicles on Tuesday with the debut of its first multi-purpose vehicle model and a new timeline for the expansion of its self-driving software, as it faces an unprecedented offensive from major rivals like Huawei in a hotly competitive battleground.

Chief executive He Xiaopeng also revealed that the company has made significant progress in bringing flying cars closer to reality, while showcasing a working prototype of its humanoid robot, in a move reminiscent of Tesla’s introduction of its Optimus bot last September. 

Here are the key highlights from Xpeng’s annual 1024 Tech Day event. 

First MPV 

Navigating within a sharp and narrow turn at low speed on the stage at Tuesday’s event, Xpeng’s X9 is claimed to be the world’s first multi-purpose vehicle model equipped with rear-wheel steering as a standard configuration. This would allow the seven-seater, three-row van to handle “just like” a regular-sized sports utility vehicle, said He (our translation). 

Xpeng’s next-generation smart cabin system, the XOS, will also be available first to the owners of the X9, which is set to be formally launched at the upcoming Guangzhou Motor Show on Nov. 17. Powered by Qualcomm’s five-nanometer 8295 processor, the in-car software will offer a split screen mode, allowing drivers and passengers to run different applications simultaneously side-by-side for efficient multitasking.

Marking Xpeng’s entry into the Chinese MPV segment, the all-electric X9 will have to compete with an increasing number of similar offerings by established makers including BYD’s Denza brand, Great Wall Motor, and Dongfeng’s Voyah marque. Huawei-backed Aito and Li Auto are also set to launch their first MPVs later this year, targeting China’s growing three-generation families with larger interior car spaces.

Self-driving availability

Xpeng has also begun its switch to a more affordable hardware suite by removing some sensors from its incoming X9 model, betting more on cameras and artificial intelligence for its XNGP advanced driver assistance system, according to He. 

The Chinese automaker has updated its self-driving technology with what it described as some of the most advanced occupancy networks in the industry, comprising a deep neural network that reconstructs barriers and vehicles and predicts occupancy in a three-dimensional space for collision avoidance. 

A similar move has allowed Tesla to remove several ultrasonic sensors from its vehicles while enabling high-definition spatial positioning, longer range visibility, and the ability to differentiate between objects with its Full Self-Driving Beta software, which was announced by the US automaker last October. 

CEO He said Xpeng will deploy its XNGP system for urban traffic roads in 50 cities by December and make the functions available to drivers across China and Europe by 2024. It is competing with Huawei, which has quickly emerged as a rising player in the industry and previously announced a nationwide roll-out of similar features by year-end, while rivals BYD and Li Auto are playing catch-up.

Flying cars and robots

Experimenting with different approaches around flying cars, Xpeng also showcased two prototype aircrafts, or electric vertical takeoff and landing vehicles (eVTOLs). One of them boasts a two-in-one design that can fold up its wings and other components into the vehicle body, although He acknowledged that there are still some safety issues to be addressed. 

The 46-year-old serial entrepreneur sees greater potential for the commercial adoption of the other prototype, which is built on a modular system allowing the separation of the flight and automobile components. This model has a spacious interior with five seats while on the road and is powered by an extended-range hybrid engine, which can also recharge its aircraft component as it drives; up in the sky, the model is capable of carrying two passengers in an all-electric mode.

Xpeng further surprised the audience on Tuesday as its humanoid robotic prototype, the PX5, made its first public appearance. The company showcased the robot’s ability to navigate different terrain and pick up hand-held objects such as pens in a video. He envisions a near future where such AI machines could help look around in its factories or even mingle with customers at showrooms, hopefully by this time next year, he added.

Chinese e-commerce platforms are racing to give consumers attractive deals during this year’s Singles’ Day festival, though the country’s biggest online shopping bonanza has slowly lost its luster as the pushing of low prices has become a standard marketing strategy throughout the year for platforms facing challenges in reviving consumer sentiment.

Why it matters: Emerging retailers such as Douyin and Kuaishou, along with established rivals Alibaba and JD, are turning to direct discounts for shoppers as the 11.11 pre-sale period kicks off because they continue to count on the mega event to encourage consumers to open up their wallets and submit their data, especially in the face of China’s uneven economic recovery.

Details: The Singles’ Day festival is now in its 15th year after it was first co-opted by Alibaba in 2009, who turned an organic, low-key celebration of singledom into a major consumerist event.

• While “low prices” remains a common advertising term for retail platforms, JD has taken a different approach during this year’s Singles’ Day by skipping the pre-sales period. In the past, this has been the standard way for major Chinese online retailers to record enormous sales sums on November 11th itself and allows consumers to pay an advance deposit for products to secure discounts.
• Alibaba is betting big on its premium program 88VIP, providing members with sizable coupons worth a total of RMB 20 billion ($2.74 billion), as the group fills with loyal consumers with high spending ability. 
• “We have a desire to return to our original intention of making Singles’ Day a joyful event for consumers,” said Trudy Dai, chief executive of Taobao and Tmall Group. The well-established Chinese e-commerce platform is introducing various entertainment shows and activities, including live music and cross-talk performances during the weeks-long event, to “create a more immersive shopping experience.”
• JD is once again offering a discount of RMB 50 for every RMB 299 spent, whereas Tmall is providing a similar deal for every RMB 300 spent. Alibaba also said its Tmall and Taobao site will grant a 15% price reduction in addition to the standard discount coupons. E-commerce upstart Douyin, TikTok’s sibling platform, has also adopted a similar strategy, emphasizing its commitment to giving “real price discounts.”
• Kuaishou was the first mainstream site to begin sales for this year’s Singles’ Day festival, commencing pre-sales on Oct. 18. The short video platform had previously announced that it would invest RMB 2 billion in cash subsidies. Apple’s iPhone 15 Pro, for example, can be purchased for a final price of RMB 8,009 if shoppers pay an RMB 100 deposit.

Context: In the third quarter, China’s economic growth outpaced expectations, indicating that a series of recent policy measures are aiding the initial recovery of the world’s second-largest economy. Retail sales increased by 5.5% last month, beating expectations and also surpassing the 4.6% growth recorded in August.

NIO may consider bidding for two manufacturing plants in the eastern Chinese city of Hefei put up for sale by partner Anhui Jianghuai Automobile Group Co (JAC) on Oct. 20, reportedly in an effort to exercise more control over its production process.

Why it matters: Acquiring existing plants is one of the easiest ways for electric vehicle companies to obtain a production license in China, as NIO rival Li Auto did previously. The move could be a big positive for NIO in improving operational efficiency over the long term, a person with knowledge of the matter told the Chinese financial media outlet National Business Daily (NBD) on Oct. 20. 

• In 2020, Xpeng Motors, another competitor to NIO, announced that it had obtained a production license for its fully-owned factory in the southern Chinese city of Zhaoqing. This achievement followed years of collaboration with Haima Automobile, a former partner of Japan’s Mazda, to manufacture EVs, Reuters reported.

Details: State-owned JAC said on Oct. 20 that it plans to look for buyers publicly for part of its assets under its third factory and its Xinqiao plant for a combined value of approximately RMB 4.5 billion ($610 million). 

• This would represent a premium of nearly 6.8% to its book value and include some inventory, equipment, construction, and land use rights that belong to its passenger vehicle subsidiary, according to a regulatory filing (in Chinese).
• The two factories that JAC referred to were in fact the two advanced manufacturing bases established by the automaker for EV production with NIO, according to the person who spoke with NBD and noted the latter’s likely intention to reach a deal.
• A NIO spokesperson neither confirmed nor denied the news when contacted by TechNode on Monday, saying that the company will share more details on relevant matters “when the time is right” and that the decision by its partner has no impact on NIO’s production and operations.

Context: JAC, also a manufacturing partner for Volkswagen in China, completed construction of the so-called first advanced manufacturing base, or the F1 plant, with NIO in the Shushan district of Hefei in late 2017. The facility, which had an initial annual production capacity of 120,000 vehicles, was built after the two companies reached an outsourcing agreement in mid-2016. 

• New York- and Hong Kong-listed NIO and JAC began operating their second facility, or the F2 plant, in the Xinqiao Science and Technology Innovation Demonstration Zone in the city last September. 
• The annual capacity of each of the F1 and the F2 plants can be increased to 300,000 vehicles, and the agreements for manufacturing in the two plants are set to expire in May 2024 and September 2025 respectively, according to NIO’s annual report. 

READ MORE: Visiting the NIO plant in Hefei, China’s rising EV capital

Chinese phone maker Oppo released its new generation foldable the Find N3 on Thursday, combining a lightweight folding design with flagship imaging capabilities for the first time. 

Why it matters: Foldable phones may offer flexible displays and portability, but their camera performance has long been a concern for customers comparing them to conventional models. The Oppo Find N3 has ushered in a “new era of foldable imaging”, the company claimed at the launch event.

Details: The camera setup on the Oppo Find N3 features Hasselblad branding and is looking to set a new standard in the foldable category. 

• On the rear, it incorporates Sony’s cutting-edge 48MP LYTIA-T808 pixel-stacked sensor, which is a 1/1.43″ unit equipped with dual-layer transistor technology. Essentially, this sensor boasts a redesigned pixel architecture that enhances light sensitivity, leading to better image quality.
• On the front, the Find N3 offers two selfie cameras: a 20MP camera inside and a remarkable 32MP camera on the cover screen. The device also includes a 48MP 1/2″ sensor paired with a 14mm f/2.2 ultrawide lens with autofocus. In terms of the zoom camera, it features a 64MP 1/2″ sensor with a 3x 70mm f/2.6 stabilized periscope lens, enabling hybrid zoom capabilities of up to 6x or 145mm.
• Under the hood, the Oppo Find N3 operates on the cutting-edge Snapdragon 8 Gen 2 flagship processor, coupled with a substantial 16GB of LPDDR5X RAM and 512GB of storage. It packs a 4,805mAh battery that supports 67W fast charging, achieving a full charge in 42 minutes, according to Oppo.
• The model follows the trend of compact, wide book-style foldable smartphones. On its exterior, it features a 6.31-inch AMOLED display with a resolution of 2484×1116 pixels and a variable refresh rate ranging from 10 to 120 Hz. The screen adopts a 20:9 aspect ratio and delivers a peak brightness of up to 2,800 nits. When unfolded, the Find N3 reveals a larger 7.82-inch display with a resolution of 2440×2268 pixels and a dynamic refresh rate varying from 1 to 120 Hz, along with the same maximum brightness level.
• The Find N3 boasts another distinctive feature in its self-developed Flexion Hinge. This hinge has undergone extensive testing of 1,000,000 folds, the company says, demonstrating the enduring durability and reliability of the foldable hinge over an extended period.
• The standard model of 12GB+512GB storage is priced at RMB 9,999 ($1,366), while the premium edition of 16GB+1TB is priced at RMB 12,999 ($1,776). It comes in four colors: red, black, gold, and green.

Contexts: In the second quarter of 2023, the global market for foldable smartphones witnessed a 10% year-on-year increase, reaching a total of 2.1 million units, as reported by Counterpoint. This growth stands in sharp contrast to the overall global smartphone market, which experienced a significant 9% year-on-year decline in shipments during the same period. 

• Notably, the Chinese foldable smartphone market saw an impressive surge of 64% year-on-year, totaling 1.2 million units. As a result, China now dominates the global foldable smartphone market, holding a substantial 58.6% share.
• On August 29, Oppo unveiled the Find N3 Flip in China, marking it as the world’s first clamshell foldable smartphone, equipped with a trio of cameras on its cover.

China’s Changan Automobile on Tuesday signed an agreement with Thailand’s Board of Investment in Beijing to build a $241.7 million electric vehicle factory in the country’s coastal Rayong province, the latest development by Chinese automakers to expand their reach in the global car market. 

Changan’s move to Thailand: The announcement was made during the two-day Belt and Road Initiative Summit which ended Wednesday as the Chinese government celebrates the 10th anniversary of its massive global transportation and infrastructure project in an effort to consolidate relations with Asian, African, and Latin American countries.

• The deal is part of an ambitious plan by the state-owned manufacturer, also a Chinese partner of Ford, to sell 1.2 million vehicles annually in overseas markets by 2030, which would represent a fivefold increase from last year’s 250,000 units. 
• The plant will consist of approximately 600 acres of land and is located in the Eastern Economic Corridor Special Zone. It will be able to produce 100,000 units of battery EVs and plug-in hybrids annually once construction is completed next year and allow further expansion to 200,000 units to meet demand.
• The carmaker expects the 8.8 billion Thai Baht ($241.7 million) facility to become a regional production hub from which right-hand drive EVs will be shipped to nearby Southeast Asian countries, as well as Australia, New Zealand, and the UK, among others. 
• Changan in April pledged to invest a total of RMB 4 billion ($550 million) in the facility in the next few years, according to chairman Zhu Huarong, while planning its entry to Europe next year with an annual sales goal of 300,000 units in the region.

Thailand, an emerging battlefield: Thailand, a premier trade ally of China, has been promoting the adoption of green energy vehicles, currently offering each EV with a subsidy of up to 150,000 Baht along with other incentives such as import tax reductions. It is positioning itself as a regional hub for EV manufacturing and has attracted investment from some of China’s biggest automakers. 

• BYD last September revealed plans to establish a 17.9-billion-baht plant in Rayong with the country’s industrial estate developer WHA Group, which will have a maximum output of 150,000 vehicles annually and is scheduled for operation in 2024. 
• SAIC, China’s biggest automaker, in April began constructing a 500 million baht component factory in the Bay of Bangkok, having produced MG-branded cars with local conglomerate CP Groups at a factory in Chon Buri with a capacity of 100,000 units per year since 2014. 
• Chery Automobile, China’s second biggest car exporter, is readying for entry to Thailand with an electric car model in the first half of 2024, while planning to establish a facility in the country, one of its strategic markets other than Malaysia and Indonesia.
• Great Wall Motor opened a factory in the country in mid-2021, which it acquired from General Motors a year earlier, and can churn out up to 80,000 hybrid and electric cars annually. It has targeted a 50% annual growth rate to sell 18,000 cars this year in the country, Nikkei reported.
• Aion, the EV unit of state-owned automaker GAC, began exporting cars to Thailand in August, SCMP reported, after reaching a partnership with local dealership Gold Integrate in June. The company said it would set up its regional headquarters in Thailand this year and look to build a plant in the near term. 
• Hozon in March broke ground at its first overseas plant on the outskirts of Bangkok. Mass production is set to begin next January with an annual capacity of 20,000 units. Hozon’s Neta V was the country’s third best-selling EV model last month, and the startup aims to sell 10,000 units in Thailand this year. 

Baidu released the latest version of its AI foundation model ERNIE on Tuesday at the Baidu World 2023 conference, a mere four months after the previous release. At the launch, the tech giant claimed the capabilities of ERNIE 4.0 were as advanced as OpenAI’s GPT-4 model.

Why it matters: Baidu has emerged as one of China’s fastest companies in leveraging AI models to transform existing products, ensuring its prominence in the competitive space.

Details: Co-founder and CEO Robin Li showed off ERNIE 4.0 during a one-hour presentation, showcasing the model’s ability to generate advertising posters and marketing videos in real time. Li also asked it to write a martial arts novel based on prompts, underscoring the enhanced memory capabilities of the iterated model.

• Baidu did not disclose the number of parameters used to train the updated model at the event, merely saying that ERNIE 4.0 saw “similar improvements” in understanding and prompting capabilities, but without specifying whether this was compared to the previous iteration or to some other standard. The company said that enhancements in memory and reasoning are twice and three times that of understanding, respectively, but again didn’t clarify to what they were comparing the new model.
• The search giant has embedded AI capabilities into its flagship products including search and maps, introducing new upgrades in recent months. Li laid out his vision for Baidu, aiming to leverage AI-driven thinking to create native apps tailored for the AI era. He singled out Baidu Wenku, an online interactive document-sharing platform, as a product that has undergone radical transformation, evolving into a “productivity tool” that assists users in content creation.
• Baidu failed to launch new official plug-ins for its chatbot service ERNIE Bot this time, but the company mentioned that around 27,000 developers have applied to join the firm’s plug-in ecosystem platform since it was unveiled last month. The company first incorporated plug-in functionality into the ChatGPT-like service when it upgraded ERNIE to version 3.5 in June, and then added three more plug-ins two months later. 

Context: Rebuilding applications with large language models has been embraced by tech giants from Microsoft to Baidu and Alibaba. Robin Li sees the AI model as an opportunity to overhaul all of Baidu’s products, aligning with the vision of Daniel Zhang, former chairman and chief executive of Alibaba, who also stated that all Alibaba products would undergo a comprehensive upgrade through integration into its AI model.

• ERNIE Bot, powered by Baidu’s foundation model, was made fully accessible to the public on August 31, and has amassed a user base of 45 million, according to the company’s announcements on Tuesday.

Chinese electric vehicle maker Leapmotor said on Monday that it swung to a positive gross margin of 1.2% in the third quarter that ended Sept. 30 on the back of strong revenue growth, with the chief executive predicting a record performance for the remainder of the year. 

Why it matters: The quarterly results come as the Zhejiang-based and Hong Kong-listed automaker has continued its solid growth momentum in the highly competitive home market and recently announced an ambitious global strategy that covers major regional markets from Europe to Asia Pacific. 

• In addition, Leapmotor has reportedly been in talks with established automakers Volkswagen and Stellantis on potential collaborations that could include an investment deal, and on Monday expressed a willingness in its earnings report to “share” its technological capabilities with partners.

Details: Leapmotor on Monday posted a positive gross margin of 1.2% in the third quarter for the first time and “ahead of schedule,” compared with the negative margin of 8.9% it posted over the same period of last year and the negative 5.2% it achieved as of June. It initially aimed to achieve a positive margin by the end of this year. 

• The company attributed the growth to the strong deliveries of its pricier C01 sedans and C11 crossovers, which have starting prices of RMB 145,800 and RMB 149,800 ($19,933 and $20,481) respectively, significantly higher than that of its earlier model the T03, which is priced from RMB 49,900.
• Quarterly deliveries for Leapmotor increased by 24.5% year-on-year to 44,325 units over the past three months, a record high for the seven-year-old startup, with those of C01 and C11 accounting for more than 80% of total deliveries. 
• Revenue grew 31.9% year-on-year to nearly RMB 5.7 billion, with loss attributable to shareholders narrowing to RMB 986 million from the RMB 1.34 billion Leapmotor posted a year ago. Its research and development expenses of RMB 474 million during the quarter were up 17.3% year-on-year. 
• “Based on the current order volume, our deliveries in the fourth quarter are expected to record a new high,” CEO Zhu Jiangming said. The company delivered 15,800 units last month, still far behind larger rivals BYD and Tesla but slightly ahead of peers including Hozon, Xpeng, and Zeekr. 

Context: Leapmotor followed the suit of BYD and Li Auto earlier than most Chinese EV startups, betting on both pure EVs and plug-in hybrid EVs (PHEVs) with the launches of the extended-range C11 and C01 earlier this year. 

• PHEVs reported an impressive growth rate of 84.5% for the first nine months of this year in China, compared with battery EVs’ 18.1%, according to figures released by the China Passenger Car Association. 
• Meanwhile, on Aug. 1 the company announced a new round of price cuts of up to RMB 20,000 across its lineups, reversing its previous decision to keep prices stable along with several other EV makers in March.
• On Sept. 4 in Munich, Germany, Leapmotor unveiled the Leap 3.0, its proprietary vehicle architecture, and the C10, a mid-size SUV and the first model built upon it. Zhu said the company plans to launch five models in two years in markets including Europe, Asia Pacific, and the Middle East.

Apple is set to become TSMC’s largest customer for the N3E process, with plans to integrate the upgraded 3nm chip technology into its forthcoming iPhone 16 models next year, as revealed by DigiTimes on October 13. The report also mentions that the sales of 3nm chips is expected to account for 4% to 6% of TSMC’s 2023 revenue, amounting to a total value of $3.4 billion.

Why it matters: The development of advanced chips incurs significant costs, particularly in initial stages where 3nm process technology is still maturing and yield rates are low. While most companies cannot afford the high manufacturing costs of TSMC’s 3nm chips, Apple stands out with the capability to drive TSMC’s advanced chip technology forward.

Details: TSMC aims to promote mass production of the second generation of 3nm chips (N3E process) in 2024, with the iPhone 16 series slated to be the first smartphone using N3E technology, according to the exclusive DigiTimes report.

• TSMC’s second generation 3nm node, N3E, offers improved affordability and higher yield rate compared to its predecessor, N3, featured in the A17 Pro chip of Apple’s iPhone 15 Pro models launched in September 2023. The N3E process is specifically designed to enhance chip performance and reduce power consumption in devices.
• TSMC has initiated large-scale production of N3E, with plans to replace the N3 entirely with the upgraded version by 2024, according to insider information from DigiTimes. All major chip manufacturers, except Samsung, are set to adopt the second generation N3E. TSMC has secured orders from various clients, with Apple being the largest among them.
• TSMC is anticipated to gain 4% to 6% of its total revenues in 2023 from 3nm manufacturing, primarily due to substantial orders from Apple for N3 chips powering the iPhone 15 Pro models. Apple’s orders alone are projected to account for up to $3.4 billion in sales for TSMC this year.
• Jeff Pu, an analyst covering companies in Apple’s supply chain, claims that all four iPhone 16 models will feature A18-branded chips. The A17 Pro processor in the iPhone 15 Pro models is a transitional design, and the upcoming iPhone 16 models will all incorporate A18 chips, leveraging TSMC’s N3E technology, he said.

Contexts: In July, TSMC faced efficiency challenges with its new 3nm manufacturing process, achieving a yield rate of only 55%, well below the expected standard. Due to this low yield, Apple opted to pay for qualified wafer batches instead of entering into a fixed rate agreement with TSMC.

• TSMC is expected to further enhance the transistor density of the N3 family with N3P following N3E, according to TSMC. N3P, an advanced process node, will empower chip designers to enhance performance by 5% without increasing leakage, or alternatively, achieve a 5% to 10% reduction in power consumption while maintaining the same speed.

The first installment of an annual digital summit for China-focused marketing, retail, and technology leaders is coming soon. DIGITAL+ SUMMIT 2023 is dedicated to fostering consumer centricity, implementing emerging technologies, and envisioning the future of retail. 

Main Themes of the Event

The Digital+ Summit 2023 will focus on three major themes: developing customer centricity, implementing emerging technologies, and foresighting the future of retail. 

Developing customer centricity: Track the evolution of Chinese consumers and craft seamless journeys from discovery to repeat purchase.

Implementing emerging technologies: Unleash the potential of AI, XR, and OMO for enhanced customer value in marketing and retail.

Foresighting the future of retail: Shape the retail horizon, navigate the future of social commerce, and prepare for what’s next.

The summit offers diverse elements, including keynote speeches, panel discussions, technology showcases, networking opportunities, and book signings by esteemed speakers and intellectuals.

Who Should Attend?

The DIGITAL+ SUMMIT 2023 is tailored for China-focused digital leaders, with a primary focus on B2C spaces and sessions directed at B2B cases too. 

This event is a must-attend if you are:

Brand marketing and commercial teams: This is your chance to explore topics relevant to marketing, retail, e-commerce, CRM performance, consumer insights, and digital strategy.

Tech giants and social media platform teams: connect with brands, and fellow experts, and participate in collaborative learning experiences.

Consultancy and agency leaders: gain valuable insights and networking opportunities to enhance your consultancy or agency services.

Learn – Play – Apply Format

We believe that we learn better when we are engaged. Our keynotes are short and dynamic, with plenty of opportunities for breaks, games, and showcases. We aim to ensure that you leave the summit feeling energized and empowered to make real changes.

What to Expect

Feel the inspiration: Immerse yourself in a dynamic digital community and dive into inspiration, creativity, excitement, and motivation.

Think with vision: Empower yourself with thought-provoking discussions, and cutting-edge insights and foster strategic visions of digital China.

Do with innovation: Equip yourself with practical tips, bold innovations, and forward-thinking solutions to create transformative outcomes right away.

Pre-Summit Online Sessions

We’re bringing a few pre-summit sessions right to your screens on Monday and Tuesday next week. Join these free online sessions on 16-17 October, hosted by top experts. Dive into the latest actionable insights on Chinese consumers, platforms, marketing, and sales. Online sessions are free of charge, delivered live via Zoom, and participation is limited to 100 registered guests. Sign up now to secure your spot.

Don’t miss this opportunity to engage with the best minds in digital marketing, retail, and technology. Sign up for the DIGITAL+ SUMMIT 2023 and the pre-summit sessions today at www.chinadigitalsummit.com/online. The future of digital is here – be a part of shaping it.

Chinese carmaker Guangzhou Automobile Group (GAC) is strengthening its alliance with ride-hailing platform Didi, investing up to $75 million into the latter’s autonomous driving unit. The move is expected to help GAC enhance its self-driving technological capabilities and sustain its sound growth momentum in the Chinese electric vehicle segment, according to an industry veteran. 

The deal, nearly clinched over three years ago, has recently been revived by the two companies as the impact from Beijing’s extended crackdown on Didi has waned, a person with direct knowledge of the matter told TechNode on Friday. It also comes against the backdrop of Didi’s renewed efforts to solidify its position as China’s biggest ride-hailing service with new incentives, putting smaller rivals under pressure. 

Self-driving push: Autonomous driving has proven to be among the most capital-intensive startup businesses on the current tech landscape, and the extended collaboration with Didi would allow GAC to share its costs and risks of making robocars, said Liu Guanghao, partner at Shanghai-based venture capital firm Befor Capital.

• The first robotaxi jointly developed by GAC and Didi is slated to join Didi’s ride-hailing network for commercial operation in 2025, the companies said earlier this year. GAC’s EV arm, Aion, announced a partnership with Didi back in May 2021 to develop a mass-produced car with Level 4 autonomous capabilities, indicating that the car can pilot itself without a human driver most of the time.
• Didi will also jointly test and operate autonomous vehicles for ride-hailing with OnTime, a mobility platform launched by GAC with partners in 2019, as disclosed by an anonymous source. OnTime, primarily active in the southern Chinese province of Guangdong where its parent company is headquartered, has been testing AVs with Toyota-backed Pony.ai, as well as Nissan-supported WeRide.

EV sales boost: The investment would also help GAC’s core carmaking business achieve sustained growth, especially in the Chinese commercial fleet segment, where its EV brand Aion has established a significant presence over the years, according to Liu. “Carmakers need more sales in order to survive in this highly competitive market,” he said. 

• Aion ranked second in sales among all-electric vehicles for ride-hailing, with approximately 49,000 units sold from January to October 2022, which accounted for 29% of its total sales, according to figures compiled by Shanghai-based consultancy LandRoads (in Chinese). BYD was the top-selling brand in the field, with sales of 35,000 more units during the same period, although this accounted for only 14% of its total volume. 
• GAC told investors last March that shipments of its Aion EVs for ride-hailing services only accounted for 12% of its total sales. The automaker, also a manufacturing partner for Toyota and Honda in China, reported sales of nearly 360,000 Aion EVs from January to September and is hoping to achieve 500,000 units for this year, which could almost double the number it sold in 2022. 

Context: GAC Capital, a wholly-owned subsidiary of the automaker, as well as state-owned Guangzhou Development District Investment Group, will invest the same amount of up to $149 million totally in Didi’s self-driving unit. GAC is set to inject no more than $75 million in the funding round, according to a Friday announcement (in Chinese). 

• OnTime is currently pursuing a public listing on the Hong Kong stock exchange, four years after it was launched by GAC along with a group of investors including Didi and Chinese gaming giant Tencent in mid-2019. It completed roughly 60 million rides last year and has operated in 21 domestic cities in the country’s Greater Bay area as of June. 
• GAC declined to comment when contacted by TechNode on Friday. Didi did not respond to TechNode’s request for comment. 

The Indian financial enforcement agency Enforcement Directorate (ED) has arrested four executives involved in the smartphone industry, including a Chinese citizen working at Vivo India, on charges related to illegal remittances, Reuters reported on Tuesday.

Why it matters: Since the border conflict between China and India in June 2020, Indian authorities have increasingly targeted Chinese companies, particularly smartphone manufacturers. The recent arrests, coupled with previous actions such as surprise raids and freezing of funds, indicate a gradual escalation of restrictions on Chinese businesses in India.

Details: Vivo responded to the arrests by expressing deep concern and stating that it will take all available legal measures to address the matter, according to the report. The company said in a statement on Tuesday that it firmly abides by the law at all times.

• Earlier on the same day, two sources told Reuters that four employees from Vivo had been arrested. However, during a court hearing, it was revealed that only one Vivo employee, identified as Guanwen Kuang, a Chinese national, had been arrested. Additional information regarding the investigation remains unclear. The ED’s counsel, Manish Jain, requested a ten-day custody period for the arrested individuals, but the judge granted only three days.
• On Wednesday, the foreign ministry of China stated that it was closely monitoring the alleged money laundering case involving Vivo in India, Reuters reported. The ministry also expressed China’s hope for India to provide a fair, transparent, and unbiased business environment for Chinese companies.
• On July 5, 2022, the Indian ED announced in a statement that it had conducted surprise inspections at Vivo India, covering 23 affiliated companies and 48 business locations. During the search operation, employees of Vivo India, including some Chinese citizens, did not cooperate with the search procedure and attempted to remove the digital devices found by the search team, according to the ED.
• In the statement, the ED mentioned a company related to Vivo India called GPICPL (Grand Prospects International Communication Pvt. Ltd.), which was registered and established in India in 2014 by three Chinese citizens named Zhengshen Ou, Bin Lou, and Zhang Jie. The ED accuses the shareholders of GPICPL of using forged identification documents and addresses during the establishment of the company. After its establishment, Bin Lou registered approximately 18 companies across various states in India, it is claimed.
• GPICPL allegedly transferred a significant amount of funds to Vivo India, according to ED. Vivo India then allegedly transferred approximately 50% of its local sales revenue ($7.87 billion) to overseas destinations, primarily mainland China. The ED states that these transfers were made to create substantial losses for the registered company of Vivo India, in order to avoid taxation in India.
• The ED accuses Vivo of violating India’s Prevention of Money Laundering Act (PMLA). As a result, the authority has frozen 119 bank accounts belonging to Vivo in India, with a total value of approximately RMB 390 million ($53 million). 
• On July 13, 2022, the Delhi High Court in India allowed the unfreezing of Vivo’s bank accounts, provided that Vivo provided a guarantee of RMB 800 million ($110 million) to the banks, according to Icsmart. The court also instructed Vivo to maintain a balance of 2.5 billion rupees ($30 million) in the accounts.

Context: In July 2023, the Indian government requested Chinese mobile phone manufacturers to induct Indian equity partners in their local operations. The companies, including Xiaomi, Oppo, and Vivo, have also been asked to appoint Indian executives in key roles such as chief executive officer, chief operating officer, chief financial officer, and chief technical officer.

• In July 2023, the Indian Ministry of Finance told the Indian parliament that major Chinese smartphone manufacturers, such as Xiaomi, Vivo, and Oppo, had evaded tariffs and illegally transferred at least 80 billion rupees ($980 million) out of India.

Chinese video streaming platform Bilibili has proposed the goal of doubling its current daily active users (DAU), according to local media outlet LatePost. The target was discussed during a mid-year internal meeting, although the company did not specify a clear timeframe for its achievement.

Why it matters: User growth is crucial for content-based Bilibili as an increase in this figure could boost the firm’s advertising revenue and push to create new content, with the company aiming to achieve profitability by 2024.

• In the second quarter, Bilibili’s average DAU reached 96.5 million, marking a 15% year-on-year growth and an increase of 2.8 million compared to the previous quarter. However, its MAU has declined for two consecutive quarters. Despite this challenge, the company successfully reduced its losses by 51% year-on-year during this period, bringing them down to RMB 964 million.

Details: Increasing the supply of high-quality content, and expanding the scenarios available for Bilibili users are the platform’s core strategies for doubling its DAUs, LatePost reported.

• The first strategy aligns with a recent remark made by the company’s chief operating officer Li Ni, during the ANIME MADE BY BILIBILI 2023-2024 event. She emphasized that Bilibili’s investment in original content will “not decrease but only increase” over the next three years.
• Before directing investors to focus on the DAU to MAU ratio in 2022, CEO Chen Rui expressed his confidence during the earnings call over the Q4 2020 financial report that Bilibili could achieve 400 million monthly active users by the end of 2023. The figure exceeded 300 million in the second quarter of the previous year, and reached 324 million in the second quarter of this year.

Context: Bilibili, a long-form video platform primarily favored by Gen Z users, currently offers a wide range of content genres, including anime, TV shows, variety shows, documentaries, and live streaming. Notably, in response to the growing impact of short video platforms, Bilibili has bet big on shorter vertical videos over the past year, aiming to attract new audiences.

• Story Mode, the short video format on the platform, coupled with Bilibili’s pursuit of profitability has led to reduced incentives for content creators who regularly produce long videos with substantial influence on the platform. Several creators publicly announced this April that they would temporarily suspend content updates.
• The Chinese animated series Yao-Chinese Folktales, a collaboration between Bilibili and the Shanghai Animation Film Studio, went live on Jan.1 this year and has already accumulated over 290 million views on Bilibili. The company has announced the commencement of production for the second season of the animation.

China’s Didi has recently set new growth targets in the three years to 2025, with new incentives for drivers and riders, in its latest move to recapture lost market share in the country’s ride-hailing sector, LatePost reported Monday. 

Why it matters: The move comes after Didi received a permit in January to resume new user registration and downloads through Chinese app stores for its ride-hailing service, marking an official end to a long-running regulatory crackdown on the company. 

• The development also puts competitors such as Meituan and Alibaba’s Amap under pressure, although industry insiders warn of a bumpy road ahead for Didi in the face of softening market demand due to weakening economic conditions, according to the report. 

Details: Didi recently informed investors that it is aiming for a 45% year-on-year growth in daily orders in 2023 and expects to keep the pace between 10% and 15% over the next two years, individuals familiar with the matter told Chinese media outlet LatePost. 

• This implies that the company is expected to complete more than 29 million rides per day for the full year, rebounding from its lowest point of around 20 million last January, and increasing the number to nearly 40 million by the end of 2025. 
• The annual target for this year is achievable, according to company insiders, with Didi starting from a low base in 2022 when major Chinese cities were repeatedly placed under Covid-19 lockdowns, dealing a blow to the country’s ride-hailing sector.
• The company delivered roughly 28.2 million rides per day on average in the first quarter of 2023, representing a 42% growth from a year ago, and increased its average number of daily rides to 29.4 million in the second quarter, according to its filings. 
• However, Didi’s ambitious objectives for 2024 and 2025 may face significant hurdles amid shrinking demand. By the end of 2022, ride-hailing app users in China totaled 437 million, down around 15.5 million on the total from the year before, according to figures compiled by the China Internet Network Information Center. 
• China’s biggest ride-hailing platform has increased its efforts to subsidize drivers and riders in recent months. A source estimated that the overall amount of subsidies could reach RMB 26.6 billion ($3.6 billion) this year, which would be equivalent to 14.8% of its total revenue at home, surpassing its previous level of 14%. 
• Didi did not respond to TechNode’s request for comment.

Context: Didi has been scaling back its efforts in developing cash-bleeding, emerging new businesses, and refocusing on its core business over the last two years after the Chinese government launched a cybersecurity probe into the company in July 2021. 

• Chengxin Youxuan, Didi’s community group-buy grocery unit, reportedly shut down more than 60% of its service locations shortly after the probe began, only a year after the launch of the service. 
• The company announced the sale of its smart electric vehicle business to Xpeng Motors in August. It had previously launched an all-electric hatchback for ride-hailing with BYD in November 2020.
• Chinese authorities announced a RMB 8.02 billion fine for Didi last July, closing its 18-month crackdown on the mobility giant, which was initiated following its mega public listing in New York in June 2021. 
• Didi had previously set big targets back in 2020. Notably, it had set its sights on overall daily orders surpassing 100 million globally for the next three years, with its four-wheel businesses in China, including ride-hailing and private chauffeurs, intended to account for half of this figure.

READ MORE: Didi app ban ignites race for ride-hailing market share

Huawei has obtained a smartphone microscope-camera technology patent, with the lens magnifying the photographed object from 20 to 400 times by a minimum distance of approximately 5 millimeters and the phone able to analyze the image for bacteria, according to a recently published report by the United States Patent and Trademark Office (USPTO). 

Why it matters: As competition in the phone market continues to intensify, Huawei has been striving to capture the attention and loyalty of consumers by introducing new features, and will be hoping that its microscope-camera can give it a competitive edge.

Details: At present, Huawei has not announced whether the microscope-camera patented technology will be used in the next generation of its flagship phones, but the patent has already provided details of the microscope lens and how it could be used.

• The advanced feature utilizes two cameras: one regular camera for capturing images and another micro-camera for analyzing hygiene. In the provided screenshot, the phone captures an image that includes an apple and a hand. When put into micro mode, the phone will use voice, text, or other prompts to describe the health status of the object and provide suggestions for maintaining hygiene.

• Huawei’s patent also outlined several use cases for the micro-camera, including food safety assurance, kitchen utensil maintenance, personal hygiene assessment, children’s toys inspections, and pet hygiene monitoring. For example, users could utilize the micro-camera at home to detect bacteria on a vegetable’s surface or to monitor the cleanliness of kitchen utensils and appliances, such as coffee machines and microwaves. 
• Huawei submitted this camera patent application in 2021, according to the USPTO file. The patent description specifically highlights the identification of bacterial quantities in captured images and the provision of hygiene recommendations as particular concerns, especially as the patent was filed during the height of the Covid-19 pandemic.
• In 2021, Oppo introduced the Find X3 Pro, which is capable of magnifying subjects by a maximum of 60 times. But such a function is limited to macro photography instead of microscopic images.

Context: Over 350 companies have obtained licenses for Huawei’s patents through patent pools. Under these licenses, Huawei’s licensing revenue amounted to $560 million in 2022.

• In September, Huawei and Xiaomi announced a global patent cross-licensing agreement that covers multiple communications technologies including 5G.
• In August, Huawei launched the Mate 60 series with satellite call technology, which allows users to make or receive calls without the use of traditional terrestrial signals.

Baidu on Saturday appointed its chief information officer Li Ying to lead the company’s AI speaker subsidiary, Xiaodu Technology, after the sudden resignation of former chief executive Jing Kun.

Why it matters: As the Vice President of Baidu, Li’s taking over as the top executive of Xiaodu may signify the strengthening of the company’s ERNIE Bot support for various artificial intelligence product lines under Xiaodu, with the tech giant betting big on its subsidiary’s potential for transformation in the AI field.

Details: Officially launched in 2015 as a smart life business group under Baidu, Xiaodu was spun off from the search giant in 2020.

• Xiaodu’s former CEO Jing Kun recently resigned for personal reasons, according to local media outlet Caixin. The report also noted that Jing was originally scheduled to give a speech entitled “The era of large models, Xiaodu reshaping smartliving” at Baidu’s annual event, Baidu World 2023, on Oct. 17.
• His successor, Li Ying, joined Baidu in 2004. The long-term Baidu employee has been involved in various businesses within the company, including natural language processing, complex search, and Baidu Maps, publicly available information shows. Li will report directly to Baidu’s chairman Robin Li.
• Before her new appointment, Li also led the rebuild of Baidu-developed instant messaging software product Infoflow based on the firm’s ChatGPT-like AI model, according to tech outlet 36Kr. The software is capable of performing AI-driven tasks such as meeting summary generation and intelligent coding after integrating Baidu’s ERNIE Bot.

Context: In May, Xiaodu teased its first smartphone, Qinghe, which is intended as a child-focused smartphone and features English-speaking and location tracking functions. Although the independent Baidu subsidiary stated on its official WeChat public account in February that Xiaodu-created devices would integrate all the capabilities of ERNIE Bot, Qinghe ultimately utilized “a large AI model for studying” developed by the company itself.

• In January, Xiaodu completed a Series B+ financing round participated in by the Chinese state-backed enterprise restructuring fund, with the company’s valuation reaching RMB 35.5 billion ($4.9 billion).
• More than 40 million households already use Xiaodu’s products, including speakers, televisions, as well as other smart home appliances, according to the company.

Aito, a Chinese electric vehicle brand backed by Huawei, has received more than 50,000 non-refundable orders for its redesigned M7 in less than a month. The orders follow the Sept. 12 public launch of the sports utility vehicle, which features Huawei’s Harmony operating system and assisted driving technologies. 

Why it matters: The latest sales figures, as revealed by a senior executive at Huawei, show tentative signs of a bounce-back for Aito from a months-long slump and could be a boost to the confidence of Huawei’s car manufacturing partners. 

• Aito has also been buoyed by Huawei’s comeback in the smartphone market with the recent launch of its Mate 60 Pro series, following the US ban on exports of advanced semiconductor technology to the Chinese technology giant. 

Details: The revamped M7 crossover has racked up more than 50,000 pre-orders with non-refundable deposits of RMB 5,000 ($685) as of Friday, Richard Yu, the chief executive of Huawei’s consumer business group, said in a post on Chinese social media app WeChat. 

• Yu described the growth momentum of the new M7 as “a miracle,” adding that more than 10,000 customers placed their orders over the past two days. He called on sales employees to ramp up delivery to meet the growing demand (our translation). 
• Accumulative orders per store averaged more than 80 following the launch on Sept. 12, according to figures posted Saturday by Sun Shaojun, founder of consumer behavior research agency CarFans. Aito said in June it operated a network of around 1,000 retail locations and service centers in 230 Chinese cities. 
• Sun added that a surge in store traffic for Huawei’s new smartphones has boosted the sales of the Aito-branded EVs, produced by Chinese manufacturer Seres, over the recent National Day holiday season. Huawei began selling EVs with its little-known partner via its retail network in 2021.
• Roughly 40-50% of the M7’s buyers are Huawei smartphone users and were coming to the stores for the Mate 60 handsets, Jefferies analysts wrote in an Oct. 5 note, citing an executive of a Chinese auto dealership. Customers compare the six-seater with Li Auto’s L7, BYD’s Tang, and the Ford Edge, analysts said.

Context: Huawei on Sept. 12 unveiled the redesigned version of the M7 SUV, featuring Huawei’s Harmony operating system at a starting price of RMB 249,800 ($34,299), which is around RMB 70,000 lower than the initial version launched a year earlier.

• The vehicle also comes with Huawei’s latest assisted driving software, ADS 2.0, which will allow it to travel by itself on busy urban streets nationwide as early as December, making it one of the most ambitious players in the Chinese self-driving car space.
• Huawei has offered future owners of the new large-sized plug-in hybrid early access to purchase its Mate 60 smartphones. The Mate 60 Pro flagship handset reportedly incorporates a self-developed 5G processor, a breakthrough for the Chinese tech giant following US sanctions in 2019. 
• Two-year-old Aito has seen sales slump during most of 2023 amid fierce competition from more established rivals such as BYD and Tesla. Seres, which produces Aito-branded EVs, recorded sales of around 33,000 units for the first eight months of this year, representing a 15.6% decline year-on-year. 
• Meanwhile, Huawei has partnered with several other domestic automakers including Changan and BAIC. It is also on track to launch the S7 with carmaker Chery in November, the first sedan under a new marque called Zhijie in Chinese that will compete against Tesla’s Model S.

Chinese premium electric vehicle brand Denza on Tuesday revealed a cheaper version of its advanced driver assistance system (ADAS) in collaboration with US chipmaker Nvidia, as the BYD affiliate ramps up efforts to compete against leading self-driving players such as Xpeng Motors and Huawei. 

Denza is also eyeing overseas expansion, having established its presence in the China market with year-to-date deliveries of nearly 80,000 EVs as of August. The company expects overseas sales to begin as early as next year, including in Australia, Southeast Asia, the Middle East, and Europe. 

Why it matters: The companies said the launch of the affordable assisted driving technology could reduce the barrier to a transition to intelligent mobility. The system facilitates Denza’s vehicles to navigate most highways in China as well as some busy urban streets in major domestic cities. 

• BYD launched the N7 crossover under the Denza marque in July, with the top-end version powered by Nvidia’s ​​DRIVE Orin processor, which offers 254 trillion operations per second (or TOPS). Now all N7 models can be equipped with Nvidia’s DRIVE Orin chips for automated driving, according to a Wednesday statement. 

Details: The new autonomous driving system will enable on-ramp to off-ramp driving, as well as automatic lane changing on Chinese highways, for Denza’s flagship N7 SUV. It has a price tag of RMB 15,000 ($2,053) and is powered by Nvidia’s DRIVE Orin processor, which can handle up to 84 TOPS. The N7 SUVs that feature the technology will have two lidar sensors removed to reduce costs. 

• The companies say that the higher-end version, priced at RMB 23,000, will allow the vehicles to function by themselves on bustling city streets for the daily commute, using a feature named City NOA (Navigate On Autopilot). Denza’s general manager Zhao Changjiang said the company would release its Highway NOA feature to N7 owners starting in December, followed by an over-the-air update of the City NOA early next year. 
• Tong Liu, vice president and general manager of China auto business at Nvidia, said that he was “impressed” by the efforts made by BYD in developing intelligent cars over the course of their three-year collaboration, calling BYD/Denza a “strong advocate” of commercializing self-driving technology (our translation). BYD’s Dynasty and Ocean lineups are also using Nvidia’s semiconductor. 

Context: Several Chinese auto and tech companies have announced ambitious plans for the adoption of assisted driving technologies for urban driving, akin to Tesla’s full self-driving (FSD) function that has yet to be made available in the country. 

• Volkswagen-backed Xpeng Motors in June launched its City Navigation Guided Pilot feature in Beijing and is on track to expand the capability in at least 50 domestic cities by the end of this year, while Great Wall Motor has set a target of covering 100 cities by 2024.
• In the meantime, Li Auto vehicles will be able to navigate on fixed routes for daily commuters in 100 major Chinese cities by year-end, following weeks of training with its collection of datasets. Rivals Nio and Geely’s Zeekr are also planning to roll out similar features later this year. 
• Huawei is by far the most ambitious company in the field in China, with its head of consumer business Richard Yu stating on Sept. 12 that Huawei’s self-driving system would be applicable nationwide for both highway and urban driving with Aito-branded EVs by December, Caixin reported. 
• BYD has made a series of moves in recent months to enhance its research and development capacity, especially for autonomous driving, including organizational restructuring and talent hiring. More than 80% of the 30,000 fresh graduates recruited by the company this year were research personnel. 

READ MORE: Baidu and Huawei take on global giants with new in-car software offerings at Auto Shanghai 2023

Maverick management and leadership styles have emerged in China as a result of the country’s hypercompetitive market, rapid industrial and digital transition, enormous consumer base, massive labour force, advanced manufacturing infrastructure, and ability to adapt to practical and economic difficulties. 

China’s situation and strong desire to improve its business, economy, industry, and digital skills put it in a position where digitally enhanced directed autonomy (DEDA) could grow, resulting in some fascinating management structures.

As management changes, worker freedom becomes more of a focus. Some Western companies have given workers more freedom and less control, but this way of doing things often doesn’t take into account the role that technology and digital platforms can play and can lose sight of business goals and metrics. 

DEDA gives employees more freedom through digital platforms that let them organise themselves around business targets without direct help from managers. It gives front-line employees direct access to a company’s resources and capabilities, changes based on the situation, keeps an eye on how much freedom employees have, and has clear, measurable goals.

Haier’s Rendanheyi model

Haier, a Chinese refrigerator company, began in the 1920s as a Qingdao factory. It became a state-owned enterprise in 1949, but faced debts and poor management. Zhang Ruimin, an assistant city manager, took over in 1984 and focused on product quality. After partnering with Liebherr, Haier became profitable and globally known, with Zhang as chair and CEO.

Haier’s Rendanheyi, developed under Zhang, integrates producer and customer goals, promoting agility, entrepreneurship, creativity, and innovation. The company consists of self-managed micro-enterprises, each acting as a startup with access to company resources. Teams pursue defined business goals based on customer needs or market gaps. Single-threaded leadership is used in these micro-enterprises, reducing bureaucracy and administrative distraction. Such an approach has been used at Amazon for some time. 

Decentralized leadership in Haier emphasizes coaching over commanding, affecting compensation and hiring protocols. After Haier acquired GE Appliances in 2016, Chief Technology Officer Kevin Nolan was promoted to CEO, focusing on products rather than profits. Haier also changed its hiring process to attract entrepreneurial people. 

The company’s latest update is ecosystem micro-communities (EMs), which are groups of small business units that use contracts to determine rights and responsibilities. An example of this is two Haier refrigerator sales micro-enterprises in different cities forming an EM, offering zero-defect, zero-delay products. They agreed to jointly earn 140,000 RMB for meeting their goal plus a 20% profit boost, and 230,000 RMB for exceeding it by 30%. They ended up exceeding by 30% and got their larger incentive.

The digital middle

Companies in the West have traditionally had a middle management layer that connects top decision-makers and other departments, facilitating access to major corporate assets like archives, databases, warehouses, and logistics. 

However, in some companies in China, this middle layer has been replaced by digital platforms that provide more open access to corporate resources and tight monitoring of project progress for smaller teams. The structure consists of customer and partnership interfaces on the front end and assets like databases, warehouses, and manufacturing plants on the back end. 

Alibaba has honed its middle by focusing on its digital middle office, zhongtai, led by the group CTO. This platform is maintained and developed by cross-functional teams, catering to over two million merchants across hundreds of businesses. It is linked to other Alibaba tools such as Alipay, Alibaba Cloud, Cainiao, and project management service DingTalk, enhancing its flexibility and agility.

Ping An’s difficult transition  

Ping An, founded in 1988, was the most valuable insurance group globally in 2020. The company transformed from a financial services firm to a technology ecosystem, incubating 11 affiliates across five verticals with cloud-based IT systems. The market value of Ping An has increased by over 400% since 2013. 

The founder and chairman, Peter Ma, saw the rise of technology and tech companies like Alibaba and Tencent, and the increasing assessment of corporations on a wider range of assets, including data and intellectual property. 

In 2013, Ping An moved 80% of its proprietary IT systems to the cloud when few other corporations were doing so, with MIT graduate Jessica Tan managing the transition. The company implemented advanced data analytics across businesses through its own cloud. It took time and was painful but ultimately paid off in the long run. 

Ping An also took an ecosystem and incubator approach, focusing on efficiency and market trends. OneConnect, a fintech spin-off, served all of China’s major banks and more than half of China’s insurance companies, and was valued at $7 billion in 2019. Ping An incubated 11 affiliates like OneConnect by sharing talent and experts, incentivizing entrepreneurship, courting third-party investment, and enabling autonomy and entity-specific KPIs.

Applications by Western brands

Western companies have successfully implemented management approaches that emphasize teamwork, focused goals, and team incentives. Continental Airlines, for instance, offered employees a $60 monthly bonus if their scheduling performance ranked among the top five US airlines. Bayer, a German pharmaceutical company, implemented incentives in China that combined money and social rewards, with staff sending thank you messages on their digital platform. These programs can help increase team unity and focus, ultimately improving the company’s bottom line.

New corporate management paradigms emerging from China demonstrate the power of customer focus, an entrepreneurial approach, digitization, data-driven decision-making, open innovation, employee-centricity, and experimentation. 

Ashley Dudarenok is the author of Innovation Factory: China’s Digital Playbook For Global Brands.

TSMC is urgently seeking equipment suppliers from whom it can buy CoWoS (Chip on Wafer on Substrate) machines, as Nvidia, AMD, and Amazon expand orders for AI chips, local media outlet Economic Daily News exclusively reported on Monday. TSMC has increased its equipment orders for CoWoS by 30% to meet growing AI-fueled demand, the report claimed.

Why it matters: The AI boom has reshaped the semiconductor landscape, positioning chip-making companies as critical enablers of the tech revolution while presenting complex challenges related to supply chain resilience and technological advancement. 

Details: CoWoS is a high-density advanced packaging technology developed by TSMC for high-performance chips. The current shortage of CoWoS packaging capacity has become the main bottleneck in the production chain for AI chip orders.

• Nvidia is TSMC’s largest customer of CoWoS advanced packaging, accounting for 60% of the production capacity, according to the report. Recently, in response to the strong demand for AI computing, Nvidia has increased its orders from TSMC, while AMD, Amazon, and Broadcom have also been placing urgent orders.
• Due to its shortage of CoWoS machines, TSMC has sought the assistance of local equipment suppliers including Scientech Corporation, AllRing-Tech, Grand Process Technology, E&R Engineering Corporation, and Group Up Industrial. TSMC has increased its original equipment orders by up to 30%, with delivery expected in the first half of 2024. Mass production will commence in the second half of 2024.
• Currently, TSMC’s monthly capacity of CoWoS advanced packaging is approximately 12,000 units, sources familiar with the matter told Economic Daily News. To accommodate the proposed production expansion, the monthly capacity of CoWoS will be increased to between 25,000 and 30,000 units.
• Major customers such as Nvidia and AMD have increased their orders of TSMC wafers in the third quarter, boosting TSMC’s 7nm and 5nm advanced process capacity utilization.
• Pressure on CoWoS production capacity is expected to ease after next summer, TSMC’s president C. C. Wei stated during a recent earnings call. The Economic Daily News report revealed that TSMC has been expanding its facilities at plants including Zhuke, Zhongke, Nanke, and Longtan, so as to increase CoWoS production capacity.

Context: On September 24, Chinese media outlet IThome reported that Qualcomm’s next generation Snapdragon 8 Gen 4 may have been manufactured using TSMC’s N3E process technology, as indicated by leaked documents from Qualcomm.

• On September 8, TSMC announced net revenue for August 2023 of approximately NT$188.69 billion ($5.87 billion), representing an increase of 6.2% from the previous month.

Nio took a giant leap into the smartphone arena on Thursday with the much-anticipated launch of its Nio Phone, the first handset designed by a Chinese automaker. The new device is hitting the market at a price comparable to the latest flagship offerings by Apple and Huawei. 

Having developed its own phone from the ground up, the electric vehicle maker expects to create an ecosystem across vehicles, devices, and services, which will provide a seamless experience for Nio users. The handset offers the purest form of the Android experience without any pre-installed apps or banner ads, chief executive William Li said during a press event in Shanghai on Thursday.  

Some of the standout features Nio highlights are a master remote control for vehicles with options to control everything from windows to seats, as well as seamless streaming of videos, music, and meetings from smartphone to car infotainment screen. Here’s what impressed us most about Nio’s first Android phone. 

Ultra wideband technology

Nio said the phone offers remote control for in-car devices which differs from most competitors by using Ultra Wideband (UWB) technology, an emerging wireless communication protocol that enables precise, speedy, and secure location tracking.

During a hands-on session where TechNode was present, a Nio ES8 SUV “greeted” the phone by turning its lights on when a Nio employee approached and automatically unlocked shortly before he reached for the door handle without taking out his phone. The smartphone also serves as a central hub to remotely operate the car’s air conditioning among other options at the touch of a single button. 

The short-range, high-bandwidth digital radio technology allows fast data transmission with increased security compared with other wireless standards such as NFC and Bluetooth, which are often absent from existing phone models produced by domestic makers such as Huawei and Xiaomi, according to Nio staff. The first initiative of this kind was announced by Geely-backed rival Meizu a month earlier. 

Several global automakers are also investing in the technology in collaboration with Apple. The US smartphone maker has reportedly been allowing BMW’s iX owners to unlock their cars using select iPhones or wearables since 2021, although most carmakers are currently unable to leverage the technology with Apple’s devices, Nio CEO William Li previously told Chinese reporters.

In-car connectivity

TechNode reporters also played the hit racing game title Asphalt on the in-car display with a Microsoft Xbox wireless controller. It offered a smooth experience which did not freeze or crash, as it runs in the smartphone’s background enabled with 5G services and a Qualcomm semiconductor. 

Nio’s in-car experience also allows users to stream videos on Bilibili, follow turn-by-turn navigation on Amap, or transition to live meetings on Dingtalk from their phones through the car’s infotainment screen. Huawei earlier announced a similar Super Terminal feature, while Geely claimed such capabilities with the recent launch of its new Meizu flagship series and operating system, Flyeme Auto.

It is worth pointing out that the feature is different from screen mirroring, as it actually creates a “doppelganger” of the Nio Phone on the in-car dashboard so that users can use the smartphone and the in-car system simultaneously yet separately. 

With its first self-branded device, Nio is one of the few Chinese automakers capable of integrating users’ smartphones with their car’s infotainment system at the operating system level. Such integration for Aito and Geely was enabled by their respective smartphone partners Huawei and Meizu. 

Specifications and prices

The Nio Phone is powered by a Qualcomm high-end Snapdragon 8 Gen 2 processor, the same as existing flagship offerings such as Xiaomi’s Mi 13, Oppo’s Reno 11 Pro, and the Meizu 20. It also comes with a 6.81-inch 2K+E6 Samsung screen, providing a resolution of 3,200 x 1,440 pixels, a 120Hz refresh rate, and a peak brightness of 1,800nits.

The device features a triple-camera system that includes three 50MP cameras and has a large battery of 5,200mAh, supporting 50 W wireless charging and 10 W reverse charging. An entry-level version weighs 212 grams and measures 165.19 x 75.54 x 8.9mm. 

The Nio Phone’s three versions come in seven colors, and are priced between RMB 6,499 and RMB 7,499 ($890-$1,027). Shipment is scheduled for Sept. 28. For comparison, Huawei’s latest Mate 60 Pro flagship phone costs from RMB 6,499, while Apple on Sept. 15 began selling its iPhone 15 series with a starting price of RMB 5,999 in China. 

The Asian Games 2023 will take place in Hangzhou, China, from September 23 to October 8. Esports (online gaming), included as an official event of the Asian Games for the first time, will offer seven gold medals across seven gaming titles. 

Why it matters: The 19th Asian Games have introduced Esports as a medal event, giving global recognition to this emerging form of sport alongside more familiar physical activities. In recent years, Esports has gained significant popularity worldwide, demanding a comparable level of  skill, strategy, and dedication to traditional sports.

Details: Over 15 days of competition, the Hangzhou Asian Games will award a total of 481 gold medals, including seven gold medals for Esports. 

• A total of 45 countries have registered for the Asian Games 2023, with 31 countries and regions participating in Esports, according to Tencent Games. Over 500 Esport athletes will compete for gold medals at the Hangzhou Esports Center. Completed in 2022, the Hangzhou Esports Center covers an area of 80,000 square meters, and can accommodate up to 5,000 spectators. It was designed specifically for the Asian Games Esports events and resembles a sci-fi spaceship when viewed from above.
• The Esports lineup comprises: League of Legends, DOTA 2, Honor of Kings (also known as Arena of Valor), PUBG, FIFA Online 4, Street Fighter V, and Dream Three Kingdoms 2. Of these, two gaming titles were developed by Chinese game developers. Honor of Kings was developed by Timi Studio Group (a subsidiary of Tencent Games), while Dream Three Kingdoms 2 was published by Hangzhou Electronic Soul Network Technology.
• League of Legends, DOTA 2, and Honor of Kings belong to the multiplayer online battle arena (MOBA) game genre. They involve two teams competing against each other to destroy an enemy base while defending their own base. MOBA games combine elements of strategy, teamwork, and individual skill, offering a wide range of heroes, each with unique abilities.
• PUBG, which stands for Player Unknown’s Battlegrounds, is an online multiplayer battle royale game. Players are dropped onto a remote island along with 99 other players, where they must scavenge for weapons, armor, and supplies while eliminating other players. The ultimate goal is to be the last player or team standing. The game features a shrinking play zone that forces players into closer and more intense encounters as play progresses.
• FIFA Online 4 is a free-to-play online football simulation game, belonging to the popular FIFA series. Players can create and manage their own virtual football teams, compete against other players in online matches, and participate in various game modes, including league play, tournaments, and more. The game includes a wide range of real-life football players, teams, and leagues from around the world.
• Street Fighter V features a roster of diverse characters, each with their own unique fighting styles and special moves. Players engage in one-on-one battles, utilizing a combination of punches, kicks, and special abilities to defeat their opponents. Success hinges on precise timing, strategy, and the execution of combo moves to outmaneuver opponents.
• Dream Three Kingdoms 2 is a strategy game set in ancient China. It challenges players to navigate the intricacies of diplomacy, warfare, and resource management to build their kingdoms and defeat their rivals.

Context: Originally scheduled to take place in 2022, the 19th Asian Games were delayed until this month due to COVID-19 travel restrictions.

• Vivo’s sub-brand iQOO has been chosen as the official Esports gaming phone provider, which means that all contests at the international event will use their flagship smartphones.

Well, it’s here. In June, the rumors were there’d be a 5G Huawei phone towards the end of the year. It hit the shelves two or three months earlier than expected.

In my previous article, I argued that Huawei’s handset would be more of a domestic play, and I stand by that argument. While I did argue Huawei and SMIC creating a 7nm chip was no surprise, what has been produced has nevertheless surprised some, including myself.

So what is good about this chip? How will Huawei and SMIC progress from here? And what does it mean for others in the industry?

The positives

Let’s start with the positives from a Chinese point of view. Although not 100% confirmed, as we are not sure who else could possibly fabricate this chip for Huawei, SMIC has seemingly produced a true 7nm density chip without EUV. (Some still speculate that SMIC isn’t responsible.) Despite what many believe this was always possible – TSMC did it back in 2018 and SMIC did it by itself earlier in 2023 with a bitcoin mining chip. So no surprises here. When it comes to using DUV equipment to create 7nm density designs SMIC now seems to be on a par with the rest of the world. What the yield looks like is unknown, I can’t believe it is as low as 10%, and also it cannot be as good as an EUV process. I can only speculate that it is good enough and will improve as SMIC gets more customers for this process. With government subsidies, the economics of low yields mean less to SMIC than they might to other foundries.

The other positive is its RF front-end. While Huawei was always a leading modem designer, it previously relied on US suppliers like Skyworks and Qorvo for the RF front-end. This is no longer the case with the Kirin 9000S. It’s impressive that a completely self-developed front-end works at 5G speeds, even if the OS still says 4G.  

The negatives

Nevertheless, there are a few negatives. Despite the rhetoric, this is not a completely indigenous Chinese chip. It is based on Arm IP, it uses SK Hynix memory, it was presumably designed somehow using US EDA tools (I would like to know if it wasn’t), and the fabrication process used foreign equipment from the likes of ASML, AMAT, LAM, TEL, KLA, etc.

Sanctions to date haven’t stopped China’s equipment imports. In fact, they are higher than ever on this front rather than finding ways around sanctions. China hasn’t really needed to do anything. The equipment that can be used for 28nm can be repurposed for 7nm, and perhaps 5nm in a couple of years. While this is a positive for China, it does mean that it is still reliant; products from the likes of SMEE are still far behind. SMIC is keeping quiet. It won’t want to have any stricter sanctions placed on it, but really, the only way to truly stop it would be to limit or ban all sales into China for all such equipment. This is unlikely to happen.

The use of SK Hynix memory is also interesting. This must have come from old stockpiles as SK Hynix was not aware of any recent sales to sanctioned Huawei. This answers the question as to whether domestic DRAM or NAND is ready for such applications yet, and it seems the answer is no, as Huawei opted for SK Hynix memory which was first announced in 2020. We don’t know how much is stockpiled, so it could be possible that future versions of the chip will be forced to change to domestic suppliers.

The fallout

The popular opinion in Chinese society is that China has broken US sanctions, Huawei and SMIC have saved China, and the Huawei phone deserves all the praise it can get. In one sense this is true. It performs like a leading edge chip from a couple of years ago and is easily good enough for any application today. I myself use a phone more than two years old.

There are others outside of China that completely dismiss this chip as a low-yield propaganda project. The likes of MediaTek announced its own equivalent chip using TSMC’s 3nm process almost at the same time as Huawei’s announcement. Huawei itself used to use TSMC’s 5nm process before sanctions, so in fact, sanctions have caused Huawei to go backward.

The truth is in between of course. This is a serious chip, but not surprising. We know 7nm chips can be created using multi-patterning on the ASML 1980i series of DUV lithography machines, and this unsurprisingly is what SMIC has done. We know Huawei subsidiary HiSilicon is great at designing handset chips, and this is what they’ve done extremely well here.

Threats and restrictions remain, however, sanctions could get tighter. SMIC could be punished for supplying Huawei.; it does have a considerable foreign business that could be threatened for example. Could Huawei itself be sued in any way for using SK Hynix chips or perhaps illegally using US tools? If SMIC produced a chip where its customer could not prove it was using properly licensed tools, this could also be an issue for SMIC. I know from my own experience that not having a proper license for EDA tools in China can be quite common. This in turn could restrict any sales outside of China. Even if all this is fine, selling outside of China will still be difficult. This is an expensive $1,000 phone with no Google services installed and a chip performing to the standards of two years ago. The average consumer is not going to want to install Google services manually themselves, let alone fork out $1,000 for doing so. Patriotic marketing does not translate outside of China.

Finally, this new device may mean hard times in the Chinese market for Huawei’s competitors and other chip companies. As Huawei’s sales dropped in recent years, Oppo, Vivo, Xiaomi, and Apple, all took a piece of the pie. This in turn led to more sales for Qualcomm and MediaTek who supply these other handset companies. Will Huawei’s sales rise to eat into that of other Chinese handset companies or Apple’s? If Apple sales in China remain strong then Huawei’s phone will only serve to take market share away from other Chinese brands and hurt Qualcomm and MediaTek as well in the process.

Chinese phone maker Honor on Tuesday released its Honor V Purse, a smartphone designed to resemble a handbag. Using optimized hinges and batteries, the new Honor V Purse is the slimmest foldable phone on the market, with a body measuring 8.6mm in its folded state and 4.3m when unfolded.

Why it matters: Three years on from its forced split with Huawei, Honor continues to try and establish its own brand identity and differentiate itself from other Chinese smartphone makers. Meanwhile, the competition for foldable smartphones is steadily increasing as more manufacturers enter this niche market; in recent weeks, major Chinese players Oppo and Huawei have introduced their own foldable devices, namely the Oppo Find N3 Flip and the Huawei Mate X5. Honor’s “handbag” design may help it stand out in an increasingly competitive market.

Details: While the Honor V Purse’s design is certainly eye-catching, its record-breakingly thin body has meant compromises have been made on performance. 

• The V Purse is powered by the Snapdragon 778G. Qualcomm released this mid-range chipset in May 2021 and updated it to the Snapdragon 7s Gen 2 on Monday. The phone’s use of an older generation of chips means that the V Purse is unlikely to be the first choice of those seeking high-performance gaming capabilities.
• In its folded state, the phone measures 156.5 x 74.7 x 8.6mm and weighs 214g. For comparison, the iPhone 15 Pro Max is 159.9 x 76.7 x 8.3mm and 221g. 
• The device offers a 7.71-inch 2K OLED display with a peak brightness of 1,600 nits,  2,160Hz high frequency PWM dimming, and a 90Hz refresh rate. The silicon-carbon batteries provide a capacity of 4,500mAh, which can last for around eight hours of regular usage.
• Designed to be worn like a handbag, the phone comes with a strap or chain and can be customized with different wallpapers on its outer screen. Honor is also selling a leather phone case to complete the purse feel.
• The V Purse comes in three color options: gold, blue, and black. The 16GB RAM smartphone provides two storage variants, 256GB and 512GB, which are priced at RMB 5,999 ($822) and RMB 6,999 ($959) respectively.
• At the product launch, Honor’s CEO Zhao Ming presented a set of data for foldable phones showing that global shipments of the devices exceeded nine million units in 2021, accounting for 4% of the high-end phone market. Shipments of foldable phones are predicted to exceed 100 million units in 2027, and make up 39% of high-end phone sales by that time, according to the data presented by Zhao. 
• Zhao also refuted recent reports that Honor is set to return to the Huawei fold. Zhao labeled Honor’s former parent company “a respected competitor” and said that competition between the two brands was a positive for the industry.

Context: In August, market intelligence firm IDC released a report that indicates the foldable phone market in China has experienced rapid growth, albeit from a low base. In the first half of 2023, 2.27 million foldable phones were shipped, a year-on-year increase of 102%.

• In the second quarter of 2023, the shipment of foldable phones in China reached 1.26 million units, an increase of 173% year-on-year. The leading five brands were Huawei (with a 43% market share), Vivo (19.7%), Oppo (15.9%), Samsung (8.9%), and Honor (7.2%).

Alibaba is to boost its e-commerce business outside China with a $2 billion investment in its Turkish unit Trendyol, Reuters reported, quoting a statement from Trendyol on Monday. 

Why it matters: Alibaba’s decision to increase investment in Trendyol comes after the Turkish platform made an operating profit for the first time in the second quarter. The tech giant’s expansion into the Middle Eastern country, one that often serves as a bridge between Europe and Asia, will bolster its global business efforts.

Details: The financial commitment was made during a meeting between Michael Evans, president of Alibaba, and Turkish President Tayyip Erdogan. While details were not disclosed, the investment is expected to materialize “in the near future,” said Evans.

• Trendyol said in the announcement that the Chinese e-commerce giant intends to establish a data and logistics center in Ankara, the capital of Turkey, and an export operations center at Istanbul airport.
• Alibaba acquired major shares in Trendyol via a $728 million deal in 2018, and has invested a total of $1.4 billion in Turkey to date, according to Evans. Over the past five years, Trendyol, as the country’s largest e-commerce marketplace, saw its customers rise nearly threefold to 30 million. The platform boasts around 250,000 sellers, offering over 200 million items.
• Beyond its business focus on Turkey’s domestic market, the online marketplace made efforts to expand into Azerbaijan in May, a year after Trendyol’s entry into Germany. The platform is also gearing up for launches in the Netherlands, Luxembourg, and the UK soon, according to a report by Turkish media outlet Daily Sabah.

Context: In 2022, the size of the Turkish e-commerce market grew 110%, rising from 382 billion Lira in 2021 to 801 billion Lira last year, according to research conducted by the Turkish E-Commerce Association (ETİD). E-commerce accounted for a 16.5% share of the retail sector in 2022, in contrast to China’s more than 31%.

Chinese electric vehicle battery maker Gotion High-Tech announced on Sept. 16 that it has begun production at its first European plant in Gottingen, Germany, and expects to begin supplying local markets next month. The move represents a major overseas market milestone for the firm, which counts Volkswagen as its largest shareholder with a 24.77% stake.

Why it matters: The move has made Gotion the second Chinese battery supplier after CATL to set up an overseas production base in Europe, which could help strengthen the development of a local battery supply chain on the continent.

• European legislators recently passed new rules that would require businesses to label the carbon footprints of their batteries and use a minimum amount of recycled raw materials eight years after the law comes into effect, Reuters reported. 

Details: Gotion has operationalized its first production line at the Gottingen factory and received a large number of orders from local clients, with plans to begin supplying local markets in October, Peter Willemsen, chief operating officer of Gotion Global said in a statement. The Chinese enterprise took over the plant from German auto supplier Bosch in 2021. 

• Gotion will mass produce battery packs for both commercial and passenger vehicles, as well as those for energy storage in the new facility, which will have an annual capacity of 5 gigawatt hours (GWh) by mid-2024. It aims for a total capacity for batteries equivalent to 20 GWh when construction is completed, which is anticipated by 2025. 
• The Chinese battery maker also announced battery development and supply partnerships with European enterprises including German chemical giant BASF and Swiss engineering company ABB on Sept. 16. The plant will serve as a regional research and development center and a logistics hub at a projected annual output value of €2 billion once it comes into full operation. 

Context: The world’s ninth largest battery maker by shipments, Gotion is already facilitating the establishment of a battery plant scheduled for operation in 2025 with Volkswagen in Salzgitter, a city close to Wolfsburg where its major shareholder is headquartered.

• Gotion also plans to build a $6.3 billion factory in Morocco and is considering setting up a joint facility for making battery cells at an annual capacity of 40 GWh with Slovakian battery startup InoBat in the eastern European country. Construction of two US factories in Illinois and Michigan is also in the pipeline. 
• Rival CATL initiated efforts to build its first European plant in Thuringia, Germany in 2018 and kicked off production last December. Another battery giant, BYD, is mulling local production of EV batteries in Hungary, while Great Wall Motor-backed SVolt recently announced ambitious European expansion plans. 

Chinese telecoms giant Huawei is set to complete a month of high-profile statement-making moves with its autumn product launch on September 25, with the company confirming the event on Chinese microblogging platform Weibo on Thursday. The date marks the anniversary of the return to China of Sabrina Meng (Meng Wanzhou), Huawei’s chief financial officer, who was under house arrest in Canada for three years due to an extradition request from the US, where she faced fraud charges.

The announcement comes after Huawei’s much-hyped surprise launch of pre-sales for its Mate 60 Pro phone, during the visit to China of US Secretary of Commerce Gina Raimondo. The phone features a self-developed Kirin 9000S chip that uses 7nm technology despite US sanctions aimed at limiting China’s chip-developing capabilities. 

Why it matters: Huawei is hoping to re-establish itself in the mobile phone market after three years of US restrictions. The autumn launch also pits the company against two major Chinese phone manufacturers, Xiaomi and Oppo. 

Details: The launch of the new Mate series means that Huawei, Oppo, and Xiaomi have now all updated their flagship phones ahead of November 11, a major shopping festival in China. 

• Oppo launched its latest foldable offering the Find N3 Flip on August 29, the day Huawei started pre-sales of its Mate 60 Pro without warning. The following day, trending topics on Weibo were dominated by discussion around whether the Huawei Mate 60 Pro was 5G-capable or not. Huawei unveiled the Mate 60 Pro+ and Mate X5 foldable on September 8, coinciding with the official sales release of the Oppo Find N3 Flip.
• Some industry analysts have speculated that Huawei picked these dates for maximum marketing value. It was not the first time that Huawei appears to have picked a strategic date. On August 23, several industry sources said Huawei planned to hold a product launch event on September 12, the same day as Apple’s latest product launch.
• Huawei may have invested heavily in promoting its brand and products on Weibo over the last two weeks. Various hashtags related to Huawei products have featured prominently on the platform’s trending topic list, for instance #HuaweiMate60 (1.5 billions views and 238,000 discussions), #HuaweiMatex5 (600 million views and 40,000 discussions), and #HuaweiProductLaunch (200 million views and 29,000 discussions). Discussion figures are a combination of  posts, likes, comments, and forwards. 
• Xiaomi has been discreetly preparing to release its annual flagship Xiaomi 14 series at the same time. The device will be the first Android phone powered by Snapdragon 8 Gen 3 on the global market. On Wednesday, sources told IThome that Xiaomi will release its Xiaomi 14 series in early November, with products positioned in a similar manner to the iPhone 15 Pro/Pro Max. Orders placed with online and physical stores have increased by 60% compared with the same period last year, the IThome report added.
• There has been no official announcement regarding products Huawei will showcase at its upcoming launch event, though there has been speculation that the firm may introduce the Mate 60 series and Mate X5 foldable. The centerpiece of the event will be the unveiling of the Kirin 9000S 5G processor, according to local media outlet IThome.

Contexts: Huawei has enjoyed a wave of nationalistic support in China, with backing for its new products from numerous official channels and state media accounts on social media. 

• On Tuesday, Martin Yang, an analyst from US-based financial firm Oppenheimer, said that Huawei’s new flagship phones may lead to a decrease in iPhone shipments in 2024 by 10 million units.
• On Thursday, Huawei increased its 2023 mobile phone shipment target to at least 40 million units, according to industry sources.

China’s Great Wall Motor (GWM) will bring its next-generation in-car operating system to market next year, and stick to the ambitious goal of rolling out its semi-autonomous driving function nationwide by the end of 2024, according to a press event held on Tuesday. 

The company is undertaking a targeted push to create a scalable and unified software platform for future vehicle models across multiple different brands, a concept that has become mainstream in the years since Tesla entered the market. A significant increase in the number of software updates, aimed at improving the driving experience, is expected from next year, vice president Nicole Wu told TechNode at the event, held in the northern city of Baoding, where the company is headquartered. 

China’s third biggest private automaker by sales volume, GWM had a relatively early start in autonomous driving and in-car technologies. It began testing self-driving cars with the creation of a dedicated division called Haomo.ai in 2019 and became the second Chinese automaker after Xpeng Motors to build a supercomputing center, this January. Now, the company has set up a new artificial intelligence research lab to bring generative AI tools into play in future car models. 

Here are some of the highlights of TechNode’s interview with GWM executives, including vice president Nicole Wu, senior director Jiang Haipeng, director She Shidong, and Yang Jifeng, head of the AI lab. 

Major digital cockpit progress

GWM will roll out an app store and implement it across all brands, as part of its upcoming in-car operating system, Coffee OS 3.0, scheduled for release in the first half of 2024. The store will give users access to common third-party services and infotainment apps fine-tuned for car-friendly usage, as more customers expect a smartphone-like experience in the car. 

By working with smartphone makers such as Huawei and Xiaomi, the new system will allow drivers to use a handset while operating their vehicle. She Shidong added that owners will be able to play video games and watch movies in their cars by connecting gaming consoles, augmented-reality glasses or other devices, with the car dashboard using wireless or bluetooth connections.

By making constant updates of driving and infotainment features possible, the Coffee OS 3.0 is intended to take the in-car experience to a new level. Wu envisions each new GWM model getting a major software update every two to three months. Tesla and Nio released 2.8 and 1.3 software updates per month on average respectively in China during the first half of 2022, according to figures from domestic consultancy Ways. 

Ambitious self-driving goal

GWM has maintained its goal of launching Navigate on HPilot (NOH), a function similar to Tesla’s full self-driving (FSD) technology, to drivers in 100 cities around China by 2024. The software will first be available to owners of its Blue Mountain flagship SUVs in Beijing and Shanghai by next March, according to Jiang. 

This will enable vehicles to change lanes, overtake, and make turns automatically on Chinese city streets without high-precision maps. Jiang added that a set of common middleware plays an important part in creating a platform for assisted driving software that is updateable and scalable at a reasonable cost. 

Chinese auto and tech companies have been competing for a leading position in this space at a time when Tesla’s FSD function has yet to become available in the country. Xpeng’s XNGP advanced driver assistance system is set to be available in 50 major cities by the end of this year, while Li Auto’s EVs will be capable of traveling on fixed routes by themselves after training for weeks in 100 cities. 

Bring generative AI to vehicles

GWM is also looking to greatly expand its in-car system capabilities through the integration of emerging technologies such as generative AI tools. Its first aim is to use AI to anticipate user preferences and create high-quality infotainment content in some new car models in the fourth quarter of this year.

The company’s newly established AI Lab has been exploring the use of large language models in GWM vehicles. Yang expects significant improvement with the upcoming Coffee OS 3.0, especially in voice recognition and natural language understanding, expecting that the latest operating system will be able to give detailed, relevant responses to users’ queries using AI.

Rival players are all developing ChatGPT-like virtual assistants for use in future car models. Geely is scheduled to launch its RMB 128,000 ($17,600) Galaxy L6 SUV on Saturday with a proprietary AI model that can read children’s picture books. Both GWM and Geely-affiliated Ecarx earlier partnered with Baidu to develop AI assistants based on the latter’s GPT-style large language models.

Social commerce is set to grow at an exponential rate over the next two years. Even while the growth of the social commerce sector has so far been slower elsewhere than in China, it is anticipated that from now until 2025, it will expand tremendously in North America, Europe, and Latin America.

This year, it’s anticipated that social commerce will generate global sales of more than $1 trillion. And when it comes to social commerce, China is the market that stands out. Social commerce has expanded rapidly in the country, with a 40.25% increase in market size between 2021 and 2023. Between 2021 and 2025, the size of China’s market is anticipated to increase at a rate of 17% per year. 

It’s critical for brands and businesses to keep ahead of these changes given the growth of social commerce. Alarice and ChatLabs have collaborated together to create the China Social Commerce Report 2023, which provides information on the technologies and strategies used in the sector. Here are some of the key strategies highlighted in the report.

1. Co-creating with consumers

Brands can engage users on social media platforms by allowing them to interact or co-create engaging content as part of an effective strategy for increasing product promotion and awareness. This technique not only creates a user community but also increases brand visibility and engagement.

Take, for example, the milk brand Yili. Yili asked consumers to participate in a packaging design contest aimed at football enthusiasts to increase engagement and sales during the 2022 World Cup. Customers who spent a particular amount on items were entered into a lucky draw as part of the promotion. 

As a result, visibility and sales increased significantly. The campaign received over 27.24 billion Weibo impressions and resulted in a 12.1% increase in sales, illustrating the potential of user participation and co-creation in brand promotion.

In light of this, fast-moving consumer goods brands can consider employing similar techniques by inviting consumers to co-create content during popular events, festivals, or marketing campaigns. This could involve a wide range of activities that tap into the creative potential of the consumer base.

2. Driving repurchases through professional services

In the competitive landscape of the consumer goods industry, brands can distinguish themselves and foster customer loyalty by offering specialized services aimed at driving secondary purchases. This strategy not only ensures customer satisfaction with their initial purchase but also encourages them to become repeat customers.

A case in point is Biostime, a brand that successfully implemented this strategy. Biostime offers a one-on-one inquiry service, providing consumers with personalized product recommendations based on their unique needs. Beyond product recommendations, the brand also prioritizes its consumers’ emotional support and mental health. 

Their unique offering, the “Mom Class,” is designed to provide emotional support to new mothers, further solidifying their bond with the brand. Furthermore, Biostime launched a campaign on Douyin focusing on ingredient safety, which attracted around 800,000 participants. These combined efforts led to impressive results, with monthly sales exceeding 4 billion RMB.

Given the success of Biostime, other brands can look at implementing a similar strategy by offering professional services post-purchase. These services can range from personalized product recommendations to educational classes and support groups. Brands can also launch campaigns to emphasize the unique selling points of their products, such as ingredient safety or ethical sourcing.

3. Collaboration with other brands

Brands may reach a bigger target audience in the ever-changing consumer products landscape by forming strategic partnerships with other popular brands and products. Such collaborations not only increase brand visibility but also give consumers a distinct value proposition.

The successful collaboration between Xiaomi and the video game King’s Glory exemplifies this method. Xiaomi took advantage of cross-promotion by providing exclusive access to a new test map in King’s Glory, which was confined to smartphones purchased from Xiaomi outlets. 

This endeavor piqued gamers’ curiosity, as did Xiaomi’s powerful hardware and processors. As a consequence, store traffic increased by 14%, and Xiaomi’s gaming community and App Store gained 2 million new followers.

Given the success of the Xiaomi-King’s Glory collaboration, marketers should think about forming similar collaborations with stores to expand their reach and engagement. They can provide exclusive material or experiences available only through their products or stores. 

Conclusion

It’s essential to remain ahead of new trends as we navigate the always-changing social commerce landscape and consider their effects on your company. In the present economy, being aware of these trends and taking appropriate action might mean the difference between keeping ahead or falling behind.

It’s crucial that businesses consider how to create shopping experiences that allow users to effortlessly switch between exploring, sharing, being entertained, researching, playing a game, recommending, and purchasing.  

To attract their audience, brands must provide enjoyable, interactive experiences that cover a range of activities, including purchasing. Developing original retail tactics and designing personalized, one-of-a-kind client journeys will be crucial. 

This article was provided to TechNode by Ashley Dudarenok, the founder of China-focused digital marketing agency Alarice and China digital consultancy ChoZan 超赞. For further insights, download a free copy of the China Social Commerce Report 2023 here.

TikTok has officially launched its e-commerce business, known as TikTok Shop, in the US following months of testing, according to a blog post from the company published on Tuesday. TikTok is making a big bet on monetizing its more than 150 million users in the country, even as it faces increased scrutiny from US authorities.

Why it matters: The largest market for the short video platform, the US also represents the greatest political risk for the Chinese-founded company. TikTok will also encounter stiff competition from larger e-commerce rivals such as Amazon and from Chinese counterparts such as Shein and PDD-owned Temu.

Details: The shopping feature now enables TikTok’s US users to directly complete transactions through in-app links within videos or live streamings, eliminating the need to jump to external websites.

• More than 200,000 merchants have already signed up to sell goods on TikTok Shop during a nearly one-year testing period, with brands such as L’Oréal, Benefit, and Olay either already on board or planning to join TikTok Shop, according to Chinese media outlet Jiemian.
• TikTok offers various features to support content creators, brands, and merchants in enhancing their sales experiences. One such feature allows sellers to collaborate with creators through commission-based partnerships, all within the TikTok ecosystem. TikTok said that more than 100,000 creators have already registered for the Affiliate Program.
• While data privacy remains one of TikTok’s biggest challenges in the US, the company emphasized in the blog post that US user data is protected and stored in the country and managed by the US Department of State (USDS). Payment information for users in the States is also managed by USDS, as TikTok is committed to providing “a safe and secure environment,” the post stated. 

Context: TikTok’s e-commerce push was first launched in Indonesia in 2021, and has since been made available in the UK and multiple countries in Southeast Asia. A previous Bloomberg report noted that TikTok plans to quadruple its e-commerce merchandise sales to $20 billion by the end of this year.

• More than half of US states have banned the use of TikTok on government-issued devices, as the country’s officials and lawmakers have continuously expressed their concerns over the ByteDance-owned app’s sharing of user data in recent years. A US House committee voted in March to give President Joe Biden the power to ban TikTok, but a Reuters report last month said the bill had stalled in Congress.

In an era marked by unprecedented digital transformation, digital payment tools have emerged as indispensable enablers of commerce in both the online and offline realms. The future of payment is the future of commerce.

Over the past years, digital payment tools have revolutionized the way consumers and businesses engage in the online sphere, with this transformation not only offering customers flexibility but also encouraging repeat business and fostering brand loyalty.

At the 2023 INCLUSION Conference on the Bund, Douglas Feagin, head of Alipay+ cross-border mobile payment services and senior vice president of Ant Group; Tim Huang, head of corporate banking greater China, JP Morgan; and Shaozhang Ding, vice president of digital sales DFS Group, joined Roberto Chade, CEO, and co-founder of Dotz, to discuss how digital tools are unlocking growth for future commerce.

How are digital payments evolving?

Digital payment methods have come a long way, and their evolution is nothing short of revolutionary. Take Alipay in China, which currently serves over 1 billion consumers through its comprehensive lifestyle services app. 

Alipay’s success has also inspired similar innovations worldwide, as many countries have embraced new forms of digital payments.

One exciting development is Alipay+, which offers payment and marketing solutions for digital consumers and digitally enabled merchants to reach a total of 1.4 billion consumers globally.

An example that Feagin provided during the discussion was that of Alipay+ D-store, which was unveiled last year and is currently mainly used in the food and beverage sector, offering a one-stop solution that companies can use to quickly and affordably build digital stores across multiple platforms.

Digital wallets have become a bridge, enabling not just payments but also offering marketing tools and enhanced consumer engagement.

In the global travel retail industry, represented at this discussion by DFS Group, Alipay+ has assumed a pivotal role in engaging upper-funnel customers and creating international experiences. 

Similarly, companies like Dotz in Brazil are establishing digital payments as a “second currency” in the country, while they also collect data through their loyalty program and gain deep insights into consumer behavior and preferences.

Digitalization has been further accelerated in many countries over the past years as customers worldwide increasingly demand the convenience of mobile payments and digital services. This shift has fueled the adoption of advanced digital solutions and provided fertile ground for further innovation.

The evolution of digital payment methods, exemplified by platforms like Alipay and its global counterparts, is reshaping the way businesses engage with consumers, expand their reach, and secure transactions in an increasingly digitized world.

Misconceptions exist

However, misconceptions about digital payments persist, from consumer behavior to organizational readiness, as highlighted by the four speakers during the discussion. 

Despite the abundance of data and readily available technology, many companies struggle to harness them effectively in personalized communication. 

“Data is everywhere. Technology is available. But at the end of the day, we as consumers keep receiving magnified information communication from different companies that drive payments and consumer behavior,” said Chade, adding that this could be greatly improved if companies engaged in personalized communication and messaging.

From the organizational perspective, Ding stressed that digital transformation is an ongoing journey rather than a one-time event. “We need a lot of coaching, inspiration, education, and sometimes a baby step to help employees adapt to digital changes,” he said.

Like Ant Group’s expansion and investments in digital wallets around the world, Feagin said it reminds him of the significance of recognizing that not all countries are like China, where digital enablement is widespread. 

“Many of these countries are at a much earlier stage of development, so they don’t have that kind of embedded infrastructure.” Therefore, when seeking global expansion, companies need to be aware that countries at different stages of digital development require tailored approaches.

For instance, “beginning with simple peer-to-peer transactions, such as mobile phone top-ups and ride-hailing, can gradually lead to more complex use cases like online cross-border transactions,” said Feagin, adding that building comfort and confidence domestically is the stepping stone to international markets.

What will the future of digital payments look like?

The future of digital payments is poised to bring exciting possibilities, although predicting precisely how these tools will reshape the merchant-consumer landscape in five or ten years is a challenging task, given the rapid pace of change in the digital landscape. However, some key trends are emerging.

“Consumers of the future are likely to adopt a hybrid approach, combining online and offline experiences,” according to Chade.

He emphasized that this combination could offer the “best of both worlds,” where consumers enjoy personalized promotions online, transition seamlessly to the in-store experience, and make digital payments. But he said that he hadn’t seen many companies doing that yet.

Huang shared similar thoughts with Chade during the discussion. “I think it’s more important is, people want to buy things with experience. As they enjoy, they experience something, there’s always an impulse buy moment. You need to capture as a merchant.”

For travel retail, where decision-making often happens well in advance, connecting with customers before their journey will be crucial. 

“Travelers do very extensive research against their travel and also want to leverage all the information sources that would help them understand where they shop and what they should shop,” said Ding, adding that it’s “quite important” for them to connect the upper funnel customers before they travel.

Meanwhile, the influence of social media on consumer behavior will continue to play a significant role in shaping the digital landscape. 

While a lot of social media influences the things that people are already doing to follow the same pattern, leveraging more sophisticated forms of AI will help companies understand consumers on a deeper level and deliver products and experiences that align with their lifestyles and preferences.

The path forward is not without challenges, and collaboration among digital players and businesses will be essential. As the digital payment landscape continues to evolve, Ant Group and its partners look forward to innovating and driving this transformation to create a more interconnected and prosperous future.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.

TSMC is working with Broadcom and Nvidia to develop silicon photonics and co-packaged optics (CPO), after the  AI craze has lifted demand for data transmission, local media outlet Economic Daily News exclusively reported on Monday. The company has already formed an R&D team of over 200 employees to target emerging opportunities in high-speed computing chips based on silicon photonics technology, with production expected to start as early as the second half of next year. TSMC declined to comment on this matter.

Why it matters: The semiconductor industry has been under pressure to achieve faster data transmission speeds with zero signal delay, as AI applications flood most tech fields. This means that the traditional method of using electricity as a signal transmission medium is no longer sufficient. The cutting edge technology of silicon photonics works by converting electricity into light, significantly improving data transmission speeds.

Details: TSMC asserts that silicon photonics represents a new era for semiconductors. Douglas Yu, vice president of TSMC, stated that two key problems, energy efficiency and AI computing power, can be solved if TSMC succeeds in developing an applicable silicon photonics integration system in the upcoming years.

• SEMICON Taiwan 2023 held its grand exhibition in Taipei from September 6 to September 8, with TSMC and Advanced Semiconductor Engineering (ASE) addressing topics related to silicon photonics. Intel, Nvidia, Broadcom, and other leading semiconductor companies have all successively launched development programs for silicon photonics and co-packaged optical components, according to Economic Daily News. The overall market is projected to grow from as soon as 2024.
• TSMC is partnering with Broadcom, Nvidia, and other major customers to develop new products related to silicon photons and co-packaged optical components, citing sources familiar with the matter. These will include chip processes from45 nm to 7 nm, and are expected to enter mass production in 2025.
• TSMC has assembled a team of 200 R&D employees to target silicon photonics, aiming to introduce the new technology into CPU, GPU, and other computing processes in the future. Due to faster transmission speeds enabled by light, the computing power of these new products will be several times greater than existing computing processors. 
• With rapid advancements in transmission speeds, managing power loss and heat dissipation become the next big issues. A solution proposed by the semiconductor industry involves integrating silicon photonics components and application-specific integrated circuits (ASIC) into a single module through co-packaged optics (CPO) technology, a method both Microsoft and Meta have adopted in their new-generation network architecture.

Context：Silicon photonics is the study and application of photonic systems, which use silicon as an optical medium. Silicon photonics technology was introduced by Intel in 2010, with the challenge being the conversion from traditional electricity. Due to its relatively high cost, it is currently limited to data centers and server markets.

China’s top livestreaming influencer Li Jiaqi has angered part of his fanbase after losing his temper with a consumer who questioned a product’s high price during a recent live broadcast. Li asked the viewer of the sales pitch to question if they had worked hard enough to afford the item, rather than niggle about the cost. 

Why it matters: The social media uproar about Li’s remark comes a year after the influencer returned to the public eye following an unexplained three-month absence for livestreaming platforms. The incident also comes less than two months before China’s largest annual shopping extravaganza, Singles Day, where domestic and international brands do their utmost to leverage the huge following top influencers like Li enjoy, in order to expand sales.

Details: Li was forced to apologize twice as his remarks created a PR storm, as the popular celebrity lost nearly a million followers in a day on the Twitter-like social media site Weibo, even though this number represents less than 5% of his total fans on the platform.

• On Monday night, Li apologized during his livestream a few hours after issuing a written apology. He cried, acknowledging that his inappropriate remarks were “disrespectful” to others and that everyone had the right to express their opinions about products marketed on livestreams.
• The controversial eyebrow pencil from Chinese cosmetics brand Florasis was priced at RMB 79 ($11) during Li’s livestream that day. After seeing a comment saying “Florasis products are getting more expensive,” Li responded “How could that be expensive? Domestic brands are struggling.” A clip of the comments spread widely on Chinese social media.
• Established in early 2017, Florasis positions itself as a brand combining “Chinese trends” and “Eastern makeup,” and is a top brand promoted by Li Jiaqi in his online live room. In 2018, Li earned the nickname ‘Lipstick King’ for his performance testing various lipstick colors,  making him the most popular salesperson online during China’s live e-commerce boom.
• Li first promoted Florasis goods in March 2019, with the brand collaborating closely with him ever since. The cosmetic maker’s gross merchandise volume (GMV) increased 5.4 times between 2019 and 2021, reaching total sales of RMB 5.4 billion RMB in 2021.
• Top domestic cosmetics brands that frequently collaborate with Li, including Florasis and Perfect Diary, told local media outlet Caixin that Li’s contribution to their income was less than 5%. Florasis has yet to issue an official response to Li’s outburst.

Context: Chinese netizens’ dissatisfaction with Li is largely due to their belief that his comments made a mockery of low-income groups, as consumers are particularly sensitive to prices amid domestic economic sluggishness. His first apology was also widely viewed as insincere and failing to grasp the source of many users’ anger.

• Li earned RMB 1.855 billion ($2.5 billion) in 2021, according to a September 11 report by Chinese news outlet Shanghai Securities News.

Correction: An earlier version of the article miscalculated the income of Li Jiaqi which is RMB 1.855 billion rather than the RMB 18.553 billion as mentioned.

With the theme of “Technology for a Sustainable Future,” the INCLUSION Conference on the Bund was held in Shanghai from September 7 to 9, bringing together global experts, scholars, and entrepreneurs to explore technological developments in economic industries.

On September 8, one of the events organizing committee members, Ant Group invited three overseas guests from the 10×1000 Tech for Inclusion program to the C3 Forum to share their views on the theme, “Building an inclusive digital economy with the new generation of innovators”: Nuraizah Shamsul Baharin (managing director of MADcash in Malaysia), Anbar Nawar (product manager at bKash in Bangladesh), and Opeyemi Praise (senior product manager at Sterling Bank in Nigeria). 

Underserved communities often face unique challenges when accessing and harnessing digital technologies. However, opportunities can emerge from developing the digital economy in these communities. The three guests individually presented insights into their local markets and the varied challenges involved in developing the digital economy.

10×1000 Tech for Inclusion Program Initiated by Ant Group and IFC

Before the panel discussion, the host briefly introduced the 10×1000 Tech for Inclusion Program, an initiative aimed at promoting tech inclusion and bridging the digital divide in underserved communities. 

The program focuses on providing support and resources to empower individuals and communities to fully participate in the digital economy. Its mission is to nurture and inspire at least 1,000 emerging talents and tech leaders each year for the next ten years. Currently, the program connects more than 5,000 individual talents in the global digital community, representing 96 countries and regions. 

Empowering women to build their own businesses in Malaysia

Fintech, short for financial technology, refers to the use of technology and innovation to provide financial services and solutions. It encompasses a broad spectrum of digital tools, applications, and platforms designed to enhance and streamline various aspects of financial activities, including banking, payments, investments, lending, and insurance.

MADCash in Malaysia is a financial service provider that offers a range of cash loan options to individuals in Malaysia, with a particular focus on underprivileged groups including women with limited educational backgrounds. MADCash offers personal loans with flexible repayment options, aiming to provide a hassle-free loan application process with minimal documentation requirements and fast approval times. 

MADCash stands for “multiply, assist, donate cash”, Nuraizah Shamsul Baharin, the managing director of MADCash explained at the panel. “We provide small funds for female entrepreneurs in our country who do not have access to credit. They cannot get loans since they are high risks for traditional banks, but we can help them build their small business,” she said.

In many developed countries and regions, resources related to education and employment are not equally accessible to women. Therefore, women face more obstacles in building their own startups, as most traditional banks often decline their loans for investments, due to factors such as credit history, educational background, and employment experiences. MADCash looks to offer one model for bypassing these traditional barriers.

Fostering trust in the digital economy for local customers in Bangladesh

bKash is a mobile financial service in Bangladesh, offering a diverse range of financial services, including money transfers, bill payments, mobile top-ups, and more, through a mobile app or USSD code. bKash has played a significant role in promoting financial inclusion in Bangladesh, especially among the unbanked population. One of the key advantages of bKash is its convenience. Users can easily send and receive money, pay bills, and make purchases using their mobile phones, without the need for a traditional bank account. 

However, a key challenge lies in ensuring trust and security in digital technology. Like any digital financial service, there is always a risk of fraud and unauthorized access to personal information. It is crucial for both bKash and its users to prioritize security measures and educate customers about safe usage practices.

“First of all, what we really struggle with is the dependency on cash. There is a huge difference between cities and semi-urban or rural areas,” Anbar Nawar, product manager at bKash, explained “People don’t have access to a lot of technological knowledge, so they are more prone to using cash, even if we provide them with enough awareness about our apps, and our services. No matter how easy that is, they feel more comfortable with cash.”

In addition to trust issues, Anbar also elaborated on other challenges, including employment difficulties for technological talents in Bangladesh, huge differences between urban and rural areas, and the need for financial-related education for local people.

Emerging markets and opportunities in Nigeria

Sterling Bank is a leading financial institution in Nigeria, offering a wide range of financial services to individuals, businesses, and institutions. It provides various financial services, including personal banking, corporate banking, asset management, treasury services, and electronic banking solutions. 

Similar to many banks in Nigeria, Sterling Bank has embraced digital banking to provide its customers with convenient and efficient banking services. This consists of internet banking, mobile banking, and other digital channels for transactions and account management.

“Last year, the total electronic transactions reached $1.7 trillion in Nigeria. It is projected to grow by 30% this year, at least, Opeyemi Praise, senior product manager at Sterling Bank, told the conference. “The internet penetration is 95% in our country. The challenge is that we need to advocate for overseas investors to localize their digital products for the local market.” 

Another key challenge that Praise mentioned was the need for educational training in financial and technological fields for the younger generations in Nigeria. Young people under the age of 30 comprise more than 70 percent of Nigeria’s population, he added, indicating enormous potential in the digital economy for this African country.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.

Lynk & Co, a brand jointly owned by China’s Geely and Volvo Car, launched the 08, its long-anticipated plug-in hybrid crossover on Sept. 8. The automaker says the car has a starting price of RMB 208,800 ($28,815) and is powered by an in-house designed seven-nanometer (nm) chip, claimed by the company to be China’s first.

The compact sports utility vehicle is the first model under Lynk & Co which is exclusively plug-in hybrid. This marks a significant shift for Geely and Volvo as they make a determined move away from the internal combustion engine.

Having grappled with slowing growth in an increasingly competitive market, Lynk & Co expects the mid-sized 08 to be a high-volume model in the mainstream luxury SUV segment, competing against rival offerings including BYD’s Tang, Li Auto’s L7, and the Aito M5.

Why it matters: The Lynk & Co 08 is equipped with two SE1000 automotive chips, which is the first high-performance seven-nanometer semiconductor for cars designed by a Chinese company. The car can perform over 16 trillion operations per second (TOPS), Geely said in a statement. This is twice the number of Qualcomm’s Snapdragon SA8155P, the US tech giant’s flagship automotive cockpit platform. 

• It is also the first model to use Flyme Auto, an operating system jointly developed by Chinese smartphone maker Meizu and Ecarx, an auto tech startup backed by Geely’s chairman Eric Li. This offers an infotainment system that seamlessly connects users’ smartphone apps to the vehicle’s navigation screen.

Details: The Lynk & Co 08 uses a 1.5-liter four-cylinder engine along with a large 39.8-kilowatt-hour battery pack, providing a maximum driving range of 205 kilometers (127 miles) in all-electric mode and 1,400 km on a full tank plus full charge. Delivery is scheduled the begin later this month. 

• It uses little energy on short trips and ensures cost-competitive travel for daily commutes. By comparison, BYD’s Tang hybrid seven-seater and the Li Auto L7 extended-range hybrid run for up to 189 and 170 km, respectively. 
• The SUV boasts fuel consumption of 5.5 liters per 100 km, comparable to the 5.3L/100km of the BYD Tang DM-i, one of China’s best-selling hybrid models, and surpassing the Li Auto L7’s 7.6L/100 km. It can accelerate from 0 to 100 km/h (62 mph) in 4.6 seconds.
• The five-seater compact offers passengers a relatively large interior space measuring 4.8 meters in length and spanning a 2,915-millimeter-long wheelbase, close to the bigger but more expensive Nio ES6 and Li Auto L7, which are priced from RMB 338,000 and RMB 319,800, respectively.
• Priced between RMB 208,800 and RMB 288,000, the SUV is packed with advanced technology and luxurious design features, such as a 92-inch, augmented reality-based display, the largest of its kind in the industry, as well as a Harman Kardon audio system and frameless doors. 

Context: Lynk & Co reported a modest 6% year-on-year growth in sales for the first half of this year, while its peer Zeekr, a premium electric vehicle brand launched by Geely in early 2021, posted a remarkable 124% annual growth over the same period. Seven-year-old Lynk & Co, which formerly focused on China’s gas-powered vehicle segment, sold 180,127 vehicles last year, representing an 18.3% decline from a year ago.

• Ecarx announced the incorporation of the Flyme Auto into the Lynk & Co 08 SUV in March, followed by the public debut at this year’s Auto Shanghai show a month later. 
• Ecarx was founded by Geely chairman Eric Li and close associate Shen Ziyu in 2016, and set up a joint venture, SiEngine, to develop auto chips with Arm China two years later, Reuters has reported.
• Geely entered the smartphone industry with the establishment of a venture called Xingji Shidai in 2021, and renamed it Xingji Meizu after it acquired smartphone maker Meizu in mid-2022. 

In a world of widespread economic uncertainty throughout most of 2023, small- and medium-sized enterprises (SMEs) are looking for new technological solutions to accelerate their businesses in a volatile period following the sudden impact of the COVID-19 pandemic.

A senior executive at China’s Ant Group expected digitalization driven by innovative technologies to become a key factor during the post-pandemic recovery, especially the prosperity of SMEs, while also reducing financial exclusion and enhancing data security. 

Speaking during a panel discussion at this year’s INCLUSION·Conference on the Bund in Shanghai, Yang Peng, President of the International Business Group at Ant Group, said that digital transformation could help deepen SME merchants’ ties to consumers, and drive commerce with more growth tools. He also called for more collaborations among organizations to unleash the full potential of the digital economy.

Fragmented payment landscape

As the pandemic fueled a surge in online shopping and digital payments worldwide, almost all economies of the world have adopted payment innovations, significantly accelerating the development of e-wallets, bank apps, and super apps with a pay button.

However, technologies and support systems behind payment methods are not coordinated. In some countries, there are dozens of payment logos covering up a tiny cashier space. Because of this fragmented landscape, businesses, especially SMEs, face an incredibly complicated payment management situation. 

“SMEs do need a helping hand on the payment side,” said Yang. “They should primarily focus on their businesses and services to serve their customers without spending too much resources on payment.

In 2016, Ant Group initiated efforts to develop Alipay+, a suite of cross-border digital payment and marketing solutions. According to Yang, today Alipay+ connects over 20 payment apps from Thailand to Italy, allowing consumers to use their familiar e-wallets wherever they go. This also allows merchants to focus on improving their products and fine-tuning their services, without the need to handle the maze of payment routes.

SMEs go digital

Payment is the end of a positive consumer journey but also could be the beginning of many new ones. According to Yang, digitalization solutions derived from digital payment can do more to help businesses and the economy, and “many SMEs are hungry for growth and want to harvest the benefit from digitalization”. 

Ant Group is expanding SMEs’ access to more digital technologies, which reduces the barriers to market entry and enables them to operate more efficiently, saving them both time and resources. In November 2022, the Chinese fintech giant further strengthened these efforts with the launch of its Alipay+ D-store solution, enabling SMEs to build their all-in-one store across platforms and connect with different payment channels in just a few minutes using a suite of toolkits.

In Southeast Asia, with a large infrastructure deficit, there is still very limited access to digital and financial services for SMEs. Still, the demand is booming. According to Timothy Utama, Information Technology Director at Bank Mandiri, Indonesia’s state-controlled lender, Indonesia is not as big as China, but there is a lot of water in between which becomes a demographic challenge for financial services.

“We have 3.6 million SMEs in Thailand, which accounts for roughly 44% of the country’s GDP. This can really be a contributing factor if you can make a change,” echoed Monsinee Nakapanant, Co-President of Thailand’s online payment provider Ascend Money.

Privacy computing is a key

The wider adoption of digital technologies brings an increasing demand for data collaborations, which is, however, hindered by concerns such as data security, privacy, and confidentiality.

“We believe privacy-preserving computing (PPC) is a very powerful solution to address that issue of trust and efficiency,” said Yang, “PPC processes privacy data by encryption processing, multi-party computing, and other techniques. With PPC, Company A can share insights generated from its big data with Company B, without the need to provide the raw data to Company B. In other words, data becomes available for use but not visible, which mitigates the data privacy concern and meets regulatory requirements.” 

Yang also sees the urgent need for increased collaboration among various stakeholders to promote the technology and build an ecosystem as it extends beyond the technology itself. He envisions a more connected digital economy in which each party can fully harness the potential of data in the next decade. 

“In this new technological era, collaboration is the new way to compete,” said Utama at Bank Mandiri. “People usually say data is the new ore, but I would say show me the way to extract the ore. This is difficult to monetize. We learn from our partners, work with them, and move forward together as a win-win.”

The comments come a year after Ant Group announced the open source of its privacy-preserving computing framework last July, a project that would enable data analysis for different use cases without the need for decryption of original individual data. The company released an updated version in July this year to further address the pain points in data collaborations among parties. 

Ensuring security with AI

The Asian tech and finance industry is also ramping up efforts to address some of the most pressing issues with new technologies, such as biometrics and artificial intelligence, as online fraud evolves in the region.

Ascend Money has been using biometrics and AI to detect suspicious transactions and prevent hackers’ invasions with the help of Ant Group. Southeast Asia’s second-biggest economy posted losses of $1 billion from online fraud and digital attacks last year, according to Nakapanant of Ascend Money. 

Meanwhile, American Express enjoys the lowest fraud rates in the industry, as the world’s fourth largest credit card network rebuilt its platform entirely on an end-to-end, closed-loop, modern architecture. “That’s something you probably see as well on the Ant Group side,” Mohammed Badi, President of Global Network Services at American Express, said in the same panel discussion. 

Ant Group reported last December that it sends over 500,000 alerts to users on average each day via its transaction fraud detection system, which can identify potential fraud in seconds and has been deployed on its Alipay app and partners’ platforms. 

“You can’t have true innovation at scale if the platform is insecure and if you’re not compliant with the laws and regulations of the land,” Badi added.

This article was supported by Ant Group. We believe in transparency in our publishing and monetization model. Read more here.

Social commerce is set to soar in 2023. The market is projected to exceed a staggering 1 trillion USD in global sales this year. A social commerce pioneer, China will continue to be a major driver of this growth. The country has witnessed a substantial expansion of its social commerce sector in recent years, with a 40.25% surge in market size from 2021 to 2023. 

While traditional e-commerce channels continue to command a significant 72% market share in China as of H1 2022, social commerce is quickly ascending, rising from a 14% market share in 2021 to 21% in H1 2022. This emergence of new sales avenues is changing the e-commerce landscape, prompting businesses to modify their approaches to remain competitive.

Given this growth, it’s crucial for businesses to stay ahead. Alarice and ChatLabs have partnered to produce the China Social Commerce Report 2023, detailing the sector’s technologies and strategies. This report can help brands apply lessons from China’s success to navigate the social commerce landscape effectively. Below are some of the key takeaways.

The 3 Social Commerce User Journeys

As of June 2023, China’s online population reached 1.079 billion, according to a statistical report released on August 29 by the China Internet Network Information Center (CNNIC). The figure represents an internet penetration rate of 76.4% and an increase of 11.09 million people compared to December 2022, according to the report. By June of this year, the number of instant messaging and online video users reached 1.047 billion and 1.044 billion, with penetration rates of 97.1% and 96.8%, respectively.

In light of these trends, content has emerged as a critical element in driving sales on social commerce platforms. Brands equipped with the right insights can craft engaging content and integrate seamless communication and transaction functionalities. Let’s explore the relevant social commerce user journeys that brands can learn from and implement in their strategies.

1. Enhancing user experience with shoppable content

Shoppable content is an approach that integrates purchasing opportunities directly into a brand’s digital content. This strategy transforms traditional browsing into an interactive shopping experience, making it seamless and engaging for users.

A prime example of effective shoppable content usage is the Douyin storefront of Guerlain, a luxury cosmetics brand. Upon entering the store, users interact with a host of dynamic features such as livestreams, membership deals, and engaging short videos with embedded product links. These elements are strategically woven into the user experience, transforming passive browsing into an active shopping journey.

Brands should test multiple social commerce platforms and prioritize those that demonstrate high growth potential and return on investment. Creating engaging and informative content that resonates with the identified target audience is also vital. This content, strategically embedded with shoppable elements and incentivizing Calls To Action (CTAs), can transform casual browsing into potential purchases. Moreover, enhancing user engagement and loyalty by offering special deals and memberships can further increase the likelihood of conversions. 

2. Engage with livestream shopping

Statista projects that by 2023, the livestreaming commerce market in China will expand to a staggering RMB 4.9 trillion (US$ 753 billion). To capitalize on this trend, brands need to learn how to effectively engage with customers during livestreams to drive both engagement and sales.

One brand that has effectively employed livestream shopping is Dior. Dior’s brand zone on Douyin begins with a livestream, ensuring that it is the first element that users engage with. During the livestream, users are just one to two clicks away from product pages, a list of showcased products, membership registration, and special offers. This setup ensures that the shopping experience is as seamless and engaging as possible.

Real-time interaction can significantly enhance the shopping experience, making it more personal and engaging for the viewers. After the livestream, it’s important to follow up with leads, offering them support and additional information about the products showcased. Responding to questions promptly and providing product promotions, limited-time discounts, and recommendations during the livestream can further stimulate customer interest and drive sales.

3. Personalize the shopping experience with shoppable chat

Shoppable Chat is a modern commerce strategy that integrates shopping capabilities directly into chat platforms. This approach, widely adopted in China, allows brands to provide personalised customer experiences while driving conversions.

Platforms like WeCom, WeChat, Weibo, and Douyin are critical tools for businesses in China, enabling them to engage with customers, increase sales, and offer personalized services based on a 360° customer view. Luxury brands such as Graff and Prada have made effective use of these platforms to enhance their customer engagement.

Prada, for instance, leverages its WeChat Mini Program to provide live customer support, offering personalized advice and recommendations. This includes features like checking stock in offline stores, making product recommendations based on the user’s current product of interest, and allowing users to purchase products directly through the WeChat Mini Program.

Brands should reduce reliance on third-party e-commerce platforms and prioritize platforms that allow them to own and control their data, such as WeChat and WeCom. Brands should ensure they connect users with sales agents based on the user’s location. This enables a more personalized and efficient service.

Conclusion

It’s important to stay on top of how social commerce evolves over time. In today’s market, being aware of and acting quickly on new trends can make the difference between being ahead and falling behind.

Companies need to design shopping experiences that make it easy to switch between different things like discovering, sharing, being entertained, doing research, playing games, getting suggestions, and finally buying.

To captivate their audience, brands should focus on creating engaging, interactive experiences that encompass a spectrum of activities, including purchasing. The development of innovative retail strategies and the design of personalized, unique customer journeys will be key.

This article was provided to TechNode by Ashley Dudarenok, the founder of China-focused digital marketing agency Alarice and China digital consultancy ChoZan 超赞. For further insights, download a free copy of the China Social Commerce Report 2023 here.

BYD’s most credible competitor to the Tesla Model 3 would have a 25% cost advantage over models produced by European automakers even if it were manufactured locally in the continent, UBS said on Tuesday, taking costs resulting from protectionism into account.

Why it matters: The findings demonstrate the growing competitiveness of Chinese automakers led by BYD in making centralized, unified, and up-to-date car systems with highly integrated components and self-run supply chains, UBS analyst Paul Gong told reporters in Shanghai on Tuesday. 

• This could help Chinese brands maintain their cost competitiveness even as they transition from exporting to local production in some of the world’s most developed markets. Gong made the comment after the investment bank completed a tear-down analysis of the BYD Seal, calling it “a good balance” between technological advancement and cost optimization.  

Details: New research from UBS’s evidence lab that took apart the Seal electric car, BYD’s closest peer to the Tesla Model 3, reveals that the medium-sized sedan is 15% more cost-efficient than locally made offerings by the US automaker at its Shanghai facility. 

• This percentage would be extended to 35% when compared to Volkswagen’s similar offerings manufactured in Europe. This means it would cost BYD $10,500 less to produce each Seal in China than a Volkswagen ID.3 in Europe, UBS analysts wrote in a Sept. 1 note. 
• For Chinese-branded EVs, exporting from China to Europe is cheaper than manufacturing locally. Even so, Chinese EV makers would still maintain a 25% cost advantage over rivals if they produced in Europe, Gong added. 
• UBS attributed the gap primarily to BYD’s technological and engineering integration of vehicle components. Additionally, the investment bank noted that 75% of the auto parts, ranging from batteries to power semiconductors, were made in-house. 
• BYD could strike a balance between performance and cost by offering a relatively simple assisted driving system at a cost of less than RMB 3,000 ($411), significantly lower than the industry standard of around RMB 20,000. 
• The teardown, aimed at uncovering the secrets of BYD’s success, reinforced UBS’s confidence in the rise of Chinese EVs. The investment bank expects Chinese automakers to double their global market share to 33% by 2030 and increase their European market share to 20% from last year’s 3% over the same period. 

Context: BYD began deliveries of the Seal battery sedan, its closest competitor to Tesla’s Model 3, at a starting price of RMB 209,800 last July, followed by the launch of a cheaper version from RMB 189,800 in May.

• The Warren Buffett-backed EV major said on Monday that it has sold more than 100,000 units of the all-electric vehicle in a year. The vehicles are mainly produced in the eastern city of Changzhou. 
• On Tuesday, at this year’s IAA Mobility show in Munich, the company announced that it plans to sell the Seal to European customers at a starting price of €44,900 ($48,184) in the first half of 2024.

Chinese EV maker Zeekr made a splash on Sept. 1 when it launched its first high-performance, track-focused vehicle – one which it hopes will establish new benchmarks in the field and compete with established brands such as Porsche and Tesla.

The 001 FR, which Zeekr is calling the world’s best-performance electric vehicle, uses four silicon-carbine motors for sophisticated torque vectoring, producing a powerful 1,265 brake horsepower, compared with 887 hp of the Porsche 918 Spyder.

The high-performance brake, completely redesigned from the original 001, can, the company claims, accelerate from 0-100 km/h (0-62 mph) in 2.07 seconds, faster than the 2.1-second acceleration to 60 mph of the Tesla Model S Plaid. The new model promises to be an everyday supercar, with a rapid battery charge from 10% to 80% in 15 minutes.

The debut comes at a time when Chinese manufacturers are rushing to launch premium offerings with eye-catching performance specs in a quest to upscale and compete in the global luxury EV segment. 

Zeekr has not released pricing details for the 001 FR, but has said the car will be made available in limited supply of up to 99 units a month from October. This will bring it into competition with another high-end rival, as BYD begins deliveries of its RMB 1 million ($150,000) electric SUV later this month. 

“Global luxury brands have ruled the performance car segment throughout the era of internal combustion engines … but Chinese electric vehicles are now capable of competing head-to-head against European top-tier supercars,” Andy An, chairman of Geely Auto Group and CEO of Zeekr told reporters in an interview after the launch. 

TechNode also spoke to Chen Qi, vice president of Zeekr and a former Huawei executive, about the company’s approach to autonomous driving as it looks to expand overseas. Geely’s premium EV subsidiary is establishing its footprint in Europe as part of its goal to deliver 140,000 units this year while looking to sell shares publicly in the US. 

Below are highlights from a group interview after the launch, which have been translated, condensed, and edited for clarity:

On limited production of the 001 FR 

An: The Zeekr 001 FR comes with a comprehensive list of high-performance equipment among which are extremely rare parts mostly needed and reserved for professional race cars. 

For example, more than 70% of Brembo’s carbon-ceramic brake systems are provided to today’s top-tier race cars, with less than 20,000 units available for road cars annually. We are individually crafting the 001 FR to ensure the highest standards of quality are attained, which together with other factors restricts the sports car’s output capacity to less than 100 units a month. 

Our customers have reacted remarkably well: the first 99 units of the 001 FR were sold out in 15 seconds after reservations opened [on Sept. 1] and the number exceeded our annual production capacity 20 minutes after that. I think this is because the 001 FR represents the state of the art as a sports wagon, which could improve sales and help establish Zeekr’s image as a technology-driven company. 

On Zeekr’s self-driving roadmap 

Chen: Zeekr has pursued a dual strategy of initiating in-house development as well as outsourcing to catch up with rivals in self-driving technologies. We are pushing forward a new program to bring autonomous driving for urban scenarios with future models using Nvidia’s semiconductor chips.

Meanwhile, it requires a relatively long period of testing and validation for existing Zeekr models to navigate Chinese urban roads with Mobileye’s advanced driver-assist technology. Mobileye has been an early mover in creating its digital maps to enable self-driving cars and we will use its assisted driving systems mainly in the European market. 

Automakers are deploying assisted driving technology on a city-by-city basis because more effort is needed to enhance the neural network’s generalization ability in various practical driving scenarios. [Editor’s note: Transformer is a new deep neural network architecture first mentioned in a 2017 Google paper and later used by Tesla to convert location data gathered by cameras into three-dimensional space for motion planning and control. Many assisted driving software have since been written using the transformer algorithm.]

We are accelerating efforts to roll out driver assistance software, first applicable on major Chinese highways, and we will then let our cars navigate complex urban streets automatically. 

On Zeekr’s US listing plan  

An: Zeekr will venture into the capital markets. But it is not the top priority for our management at the moment. There is no update on Zeekr’s listing plan following approval from the Chinese regulator. We will keep an eye on investor sentiment before taking a chance to go public. 

Zeekr has set an annual delivery target of 650,000 units by 2025 as one of the top three luxury EV makers worldwide since its inception and remains confident under pressure. We’ve made significant progress in a comprehensive way, including building a substantial cost advantage over competitors other than Tesla, and will reach the goal with the launch of a new model later this year, followed by two all-new ones in 2024 and 2025. 

On global expansion 

An: Zeekr started exports to Europe with 500 Zeekr 001 cars last month and will begin vehicle delivery first in Sweden and the Netherlands as early as September and in several other European countries next year. We are also preparing to enter regional markets including Southeast Asia, the Middle East, and Latin America, but will keep our focus on Europe at the moment. 

We expect to see a significant contribution to sales from overseas markets in the future. Chinese electric vehicles are gaining momentum in the global auto industry and we will make use of this to go upscale and expand globally.

READ MORE: Experts bullish on Chinese automakers’ global push as SAIC seeks EU foothold

ASML, the Netherlands-based producer of the world’s most advanced lithography systems (chip-making equipment), has asserted that it is capable of fulfilling its contracts with Chinese customers before the end of this year, according to Bloomberg, despite the Dutch government’s new export control measures for chip-manufacturing equipment coming into effect on September 1. Under the new regulations, Dutch companies need to apply for export licenses from Dutch customs in advance if they intend to export certain high-end semiconductor-related items outside the EU. A spokesperson from ASML added that the company cannot obtain export licenses to export these products to China in 2024.

Why it matters: ASML’s commitment to fulfilling its China orders up to the end of the year will help ease some of the pressure on the country’s chip sector, which has been the subject of a series of stringent export control measures on semiconductor-related items from first the US and subsequently Europe and Japan. From January next year, the export ban on ASML’s advanced DUV (deep ultraviolet) equipment is expected to have a far-reaching impact on China’s domestic semiconductor industry chain.

Details: On June 30, the Dutch government officially introduced new semiconductor export controls, with the measures set to take effect on September 1, 2023. Prior to this date, ASML was permitted to submit export license applications to the Dutch government.

• On August 31, ASML said that the company owned licenses to ship restricted chip-making machines to China until the end of the year, despite the new export restrictions coming into effect in September. Industry observers have therefore speculated that ASML had already applied for export licenses in advance. 
• ASML is the exclusive EUV (extreme ultraviolet) lithography supplier for chip-making below 7nm, according to a report from TMTpost. The company’s most advanced EUV products were already banned from being exported to China even before the Dutch government’s new regulations. Instead, ASML mainly exports DUV lithography for chip-making above 7nm. However, in 2024, the firm will discontinue the export of DUV equipment to China since it is unlikely that new licenses will be approved by the Dutch government beyond the end of this year.
• On July 19, ASML announced its second-quarter financial report for 2023. Sales to China accounted for 24% of ASML’s total revenue in the second quarter, representing an increase of 200% year-on-year, according to the company’s financial report.
• CEO Peter Wennink stated on an earnings call that the new export control measures were unlikely to have a significant impact on the company’s revenue performance in 2023.

Context: At present, China’s import of lithography equipment depends heavily on the Netherlands. In response to new restrictions in 2024, China may increase its imports in the remaining four months of this year. However, this is clearly not a long-term solution.

• China’s lithography imports reached $3.96 billion in 2022, with the Netherlands accounting for 64.3% ($2.54 billion) of this total, according to data from China Customs. From January to July in 2023, lithography imports from the Netherlands amounted to $2.58 billion, marking a significant increase of 64.8% year-on-year.

Tesla has released the long-anticipated, redesigned Model 3 with a sharper appearance and a range of new features in China, although at RMB 259,900 ($35,809), its starting price is higher than expected, according to a poll published on Friday on the Chinese Twitter-like social media platform Weibo.

Why it matters: The US automaker’s pricing strategy for the revamped sedan had attracted enormous attention from Chinese customers prior to its announcement, due to the car’s significant success in the electric vehicle market and Tesla’s recent policy of price cuts in the country.

• Although the launch price is not as low as some were expecting, the revamped Model 3’s arrival has still caused some rival EV makers to announce new deals for Chinese drivers. Xpeng Motors reacted immediately on Friday by offering zero-interest financing for up to 24 months or a price reduction of RMB 10,000 to buyers of its P7i. New owners of the electric sedan, priced from RMB 249,900, will be given a RMB 6,000 Dynaudio audio system for free by the end of this month. 

Details: In a poll conducted on social media site Weibo on Friday, more than 15,000 out of roughly 21,000 respondents said that they would not consider buying the newly-designed Model 3 due to “insufficient budget or an overly expensive price tag” (our translation). 

• Roughly 3,400 participants expressed their intention to purchase the new Tesla as of writing, attracted by a “competitive price or new features.” The poll was released on Friday morning by Chinese internet portal Sina, the parent company of Weibo. 
• The new Model 3 would “have no equal” if it were priced at around RMB 200,000, yet some domestic brands are more attractive at the RMB 260,000 price range, a Weibo user with the handle Kejigangzi in Chinese Pinyin commented in one highly-upvoted response. 
• In an announcement posted by Tesla on its official Weibo account, some internet users spoke critically of the car’s pricing not meeting their expectations, stating that they would be waiting for the price to go down. 
• The EV giant on Friday launched the reworked mainstream premium sedan in rear-wheel drive and all-wheel drive versions, priced from RMB 259,900 and RMB 285,900, respectively, compared with its previous base-version Model 3 at a price tag of RMB 231,900. 
• The revamp comes after Model 3’s initial launch back in 2016, and sees an improvement in driving range from 556 to 567 kilometers (352 miles) for the baseline version. The all-wheel drive version has a driving range of 680 km, reportedly powered by a new Lithium Iron Phosphate (LFP) battery sourced from CATL. 
• The all-new Model 3 gets a 15.4-inch infotainment screen, slightly larger than the 15 inch one seen in the previous version, in addition to an eight inch display for rear passengers. It also introduces new features and equipment such as ambient interior lights and ventilated seats. 
• However, the updated Model 3 removes a physical shifter, replacing it with an automatic system that may ask users to activate gear shifting on the touchscreen, a feature unfamiliar to Chinese EV owners, an analyst who asked not to be named told TechNode. 

Context: Tesla initially began selling locally-made Model 3s in China at a starting price of RMB 355,800 in late 2019. The company shipped 412,805 units of the vehicle from its Shanghai facility during 2020-2022, making it the best-selling premium electric sedan in the world’s biggest EV market, according to figures from the China Passenger Car Association. 

• Tesla sparked an EV price war in China at the beginning of 2023 when it slashed prices across its range. The carmaker announced significant price cuts for the Model 3 and Model Y lineup in China on Jan. 6, with the Model 3’s starting price dropping RMB 36,000 ($5,314) to RMB 229,900, and the Model Y dropping RMB 29,000 to start at RMB 259,900.

READ MORE:  China EV price war: Xpeng, Huawei-backed Aito join Tesla in cutting prices

Chinese search giant Baidu launched its ChatGPT-like service ERNIE Bot for public use on Thursday, as one of the first batches of companies given permission to allow regular access to generative AI bots, having filed details of its algorithms with the government. The move signals a softening of Beijing’s regulatory stance towards artificial intelligence.

Why it matters: The approval comes two weeks after China’s new AI rules took effect, paving the way for an initial eight companies to cater their generative AI services to over 1 billion Chinese internet users.

• For China’s dozens of homegrown AI large language models, being among the first to launch could potentially bring early player advantages, given the relatively small distinctions between each consumer-facing service.

Details: The first tranche of approvals has been granted to tech companies and research institutes headquartered in Beijing or Shanghai, from Baidu, ByteDance, and SenseTime to the state-backed Chinese Academy of Sciences and Shanghai Artificial Intelligence Laboratory.

• Local media outlet Beijing News reported on Thursday that, in addition to the first eight entities given approval, Shenzhen-based tech giants Huawei and Tencent, as well as Hefei-founded iFlytek, are readying to unveil their artificial intelligence bots to the general public.
• Alibaba, located in Hangzhou, is not listed on the approved entities, but a source from the company’s cloud unit revealed that its chatbot service, known as Tongyi Qianwen, has completed its filing process and is ready for rollout, according to tech outlet China Star Market.
• Baidu’s ERNIE Bot topped the free app download chart of Apple’s App Store 12 hours after its public availability announcement. The company is gearing up to introduce an array of fresh AI-native apps.

Context: China implemented detailed regulations for generative AI services on Aug. 15, making it clear that government approval of algorithms is a threshold that tech companies must cross before offering AI products to the public, as a way to better control content.

• In an earnings call last week, Baidu CEO Robin Li noted that the government “has increasingly recognized” ERNIE and ERNIE Bot, believing that this endorsement stands the company in good stead for a large-scale release.

On Tuesday, Huawei launched pre-sales of its Mate 60 Pro flagship phone on its official website without any advance publicity and two weeks before the official launch event, catching the domestic smartphone industry off guard and triggering heated online discussions. Currently, consumers can directly purchase one of a limited batch of Mate 60 Pro models with 12GB+521 GB storage, priced at RMB 6,999 ($960). This is the first time in Huawei’s history that the company has started the sale of the annual flagship before the product launch event and was reportedly in response to online leaks in advance of the device’s official unveiling in mid-September. 

Huawei did not disclose any specific details about the processor, leaving many Chinese citizens curious about the rumored return of its 5G connectivity. Currently, as far as the multi-party test results are concerned, the peak network speed of the Mate 60 Pro meets 5G network speed standards.

Why it matters: In 2019, the US government imposed a trade ban on Huawei, citing national security concerns. This move barred the company from purchasing advanced chips and using Google services for its new smartphones, causing Huawei’s smartphone sales to plummet. However, the Mate 60 Pro model, which reportedly incorporates a self-developed 5G processor, could pave the way for Huawei to recapture some of its lost share of the smartphone market.

Details: On Tuesday, the total number of Huawei Mate series mobile phones shipped worldwide reached 100 million units, according to a post from Huawei’s Weibo account. The company said that to celebrate this milestone, it was launching the Huawei Mate 60 Pro Pioneer Program, giving customers the chance to try out the latest flagship device in advance.

• Following the official release, thought to be taking place on Sept. 12, consumers will have the option to purchase the Mate 60 Pro either in physical stores or online on Vmall. Many Chinese tech bloggers have already tested the new device firsthand, confirming that its internet speed can reach up to 5,00 Mbps, similar to the speed of the iPhone 14 Pro.
• The software benchmark platform AnTuTu identified the Huawei Mate 60 Pro processor as the Kirin 9000s, Huawei’s self-developed chipset. The Kirin 9000s is designed with a 12-core configuration using a 2+6+4 architecture. It consists of two A34 cores, six customized A78AE cores, and four A510 cores. The highest clock speed it can achieve is 2.62GHz. Notably, it obtained an AnTuTu benchmark score of 699,783, surpassing the iPhone 12 Pro’s score of 683,146. For comparison, the AnTuTu benchmark score for the iPhone 14 Pro is 935,157 for overall performance.
• The new model’s CPU performance outperformed the Snapdragon 888, although it did not quite match up to the Snapdragon 8 Gen 1 and Snapdragon 8+, according to the same report from AnTuTu.
• In another noteworthy feature, the Mate 60 Pro offers support for satellite calls and messaging, albeit likely limited to China. The device uses China’s Tiantong-1 satellite system for its satellite calling feature, enabling users to make phone calls without relying on conventional terrestrial signals. 
• The Huawei Mate 60 Pro also features a 6.82-inch OLED screen with a screen resolution of FHD+ 2720 x 1260 pixels. It is equipped with a triple rear camera system, comprising a 50MP main camera with an adjustable aperture (ranging from f/1.4 to f/4.0), a 48MP 3.5x telephoto camera (with f/3.0 aperture and macro mode), and a 12MP ultrawide lens.

Context: In the second quarter, the top five smartphone brands in the global market were Samsung with a 20% market share, followed by Apple at 17%, Xiaomi at 12%, Oppo at 10%, and Vivo at 8%, according to Counterpoint.

PDD-owned Temu made a quiet debut in the Philippines this past weekend, its first Southeast Asia destination, bringing the budget shopping app into head-to-head competition with Chinese counterparts Lazada and TikTok Shop.

Why it matters: Temu’s expansion into Southeast Asia is expected to ignite an already heated e-commerce sector in the region with its aggressive marketing strategies, even as major players already in place have secured enviable market shares.

Details: Since its launch in the US last September, Temu has reached consumers in 38 countries across six continents with its China-produced goods. 

• Aligned with its advertising slogan, “shop like a billionaire,” Temu has entered the Philippines with significant discounts and free shipping, and has priced most items on the local site between PhP 50 and PhP 1,500 (under $0.88 to $27).
• Boston-headquartered Temu works with different third-party logistics providers for local delivery. In the case of the Philippines, Chinese media outlet Jiemian reported that Indonesia-founded J&T Express would oversee its last-mile logistics.
• Similar to its main competitor Shein, Temu leverages China’s supply chain network to offer international customers ultra-low-cost products. 
• An earlier report by local media outlet 36Kr quoted several sources as noting that Temu’s overall loss rate stands at around 60%, in contrast to Shein’s profitability over four consecutive years.

Context: The comparatively lower e-commerce penetration rate in Southeast Asia makes the region highly attractive to Chinese e-commerce companies, especially as they face a slowdown in domestic growth.

• Lazada, an online shopping platform that received over $1.1 billion in investment from its parent company Alibaba this year, saw double-digit order growth in Southeast Asia in the quarter to June. Alibaba’s International Digital Commerce Group, to which the business belongs, experienced a 41% year-on-year revenue growth during this period, making it one of the Chinese tech giant’s best performing segments.
• TikTok plans to invest “billions of dollars” in Southeast Asia over the next few years,  the company’s CEO Shou Zi Chew said in June, as the ByteDance-owned short video app faced increased scrutiny in the US. Recent research by venture capital firm Momentum Works predicts that TikTok Shop will seize a 13.2% stake in the Southeast Asian e-commerce market this year, suggesting a narrowing gap with Lazada, which is projected to hold a 17.7% market share in the region in 2023.

Xpeng Motors chief executive He Xiaopeng said on Monday that he anticipates annual sales for an upcoming model, co-developed with Didi Chuxing under a new brand, to reach 100,000 units, in an unexpected partnership between the electric vehicle maker and the ride-hailing platform.

Why it matters: The move marks Xpeng Motors’ latest effort to expand its product lineup and extend its brand reach into the fleet market. The alliance is expected to help Xpeng significantly reduce costs and generate economies of scale in the production of highly autonomous cars, said He.

• While the deal will help Xpeng accelerate its EV manufacturing growth and facilitate the development of self-driving technologies with more driving data, it can help Didi monetize its smart auto segment and attract drivers with vehicles suitable for ride-hailing, Bernstein analysts wrote on a Monday note.
•  Nonetheless, doubts were voiced over Xpeng’s ambitious sales goal, citing limited market size and fierce competition. “BYD was the only OEM (Original Equipment Manufacturer) to deliver more than 100,000 units, and the remaining top players all have their own ride-hailing affiliates,” wrote Bernstein analysts.

Details: Speaking to Chinese reporters during a media briefing, CEO He expressed confidence in the forthcoming A-class sedan, scheduled for production next year. He believes the model will enhance Xpeng’s performance, but does not specify a timeframe for his annual sales volume goal. The company delivered 41,435 EVs for the first half of this year with six namesake-branded models on sale.

• The EV startup is currently developing the model with assistance from Didi under a project codenamed Mona. He believes that this could become “a hit product” featuring Xpeng’s self-driving technology at an expected price tag of around RMB 150,000 ($20,594). 
• The compact sedan will also be the first model under a new mainstream sub-brand, which He said will be positioned to target the Chinese consumer EV segment while also facilitating Xpeng’s expansion within the fleet market segment.
• As part of the collaboration, Xpeng will acquire Didi’s smart EV business, which comprises the design, research, and development of EVs with intelligent features. This acquisition will be accomplished through the issuance of approximately HK$5.84 billion ($744 million) worth of new shares to Didi.
• China’s biggest ride-hailing service will become a strategic investor in Xpeng with a stake of 3.25% after the deal,  helping take Xpeng’s newly branded EVs nationwide via its strong shared mobility market, according to a statement. 
• In Hong Kong, Xpeng’s shares surged 10.9% to HK$72.2 on Monday following the announcement. 

Context: The news comes a month after Guangzhou-based Xpeng announced a collaboration with Volkswagen to jointly launch two VW-branded B-class EVs in 2026. B-class vehicles are normally larger than A-class vehicles and have larger engines.

• Xpeng is not the only Chinese EV maker exploring new brand options to reach a wider customer base. Rival Nio has recently made notable progress in the development of two entry-level brands codenamed Alps and Firefly, with both scheduled for launch in 2024. 
• Didi initially had ambitious plans for its carmaking business, assembling a team of 1,700 employees dedicated to working on the project, with the aim of releasing a consumer EV in mid-2023, multiple Chinese media outlets reported. It even launched a battery-electric hatchback tailor-made for ride-hailing in collaboration with BYD in November 2020, Bloomberg reported. 
• However, the ride-hailing giant had been under an 18-month investigation for alleged national security issues which began right after its mega-public listing on the New York Stock Exchange in June 2021. Meanwhile, Chinese authorities have imposed strict regulations on the release of EV production licenses in recent years.

READ MORE: What to expect from Volkswagen and Xpeng’s new partnership

On Thursday, NetEase announced in its unaudited financial results for the second quarter that it had generated RMB 24 billion ($3.3 billion) in revenue, a 3.7% increase on the same period in 2022. Net revenue from games and related value-added services amounted to RMB 18.8 billion ($2.6 billion), representing a 3.6% year-on-year increase.  Games accounted for 78.3% of the company’s total revenue.

Why it matters: In the second quarter, NetEase’s games, including flagship titles Fantasy Westward Journey series and Eggy Party, performed steadily. NetEase’s two new hits Justice and Racing Master were only launched in late June so their contributions to the company’s gaming revenue will show in the next quarter. With the revenue from the new titles, NetEase Games’ third quarter performance is expected to accelerate. 

Details: According to the financial reports, NetEase’s net revenue from mobile games accounted for approximately 73.6% of its online games income in the second quarter. 

• Eggy Party continues to explore the combination of UGC (User Generated Content) ecology and AI technology. Game makers recently updated the UGC map editing function using AI, drawing in 26 million players to participate in creating new gaming maps, according to NetEase’s WeChat account. Declaring that Eggy Party was China’s most downloaded mobile game in Q2, as reported by local media outlet GameLook, NetEase now hopes to  promote it in the European, North American, and Japanese markets this year.
• Released on June 30, open-world martial arts game Justice gained around 40 million domestic players in July. The game employs AI generated avatars and dialogues. Young players have flocked to the game, generating huge amounts of UGC content on social media. On micro-blogging platform Weibo’s discussion forum, Justice ranked fourth in terms of popularity for mobile games at time of writing, with 544,000 posts from players.
• Racing Master topped the iOS download list in China for 10 days following its domestic debut on June 20. According to the game’s Weibo account, its pre-registered players exceeded 30 million on June 17. The company is expected to start overseas testing soon.
• NetEase took the opportunity of unveiling its latest results to announce a brand new free-to-play open-world RPG title Project Mugen, for which pre-registration opened for players globally on Thursday.
• A trailer for the action-adventure game highlighted its anime stylings and a high-quality open cityscape supported by Nvidia DLSS 3 technology, according to GameLook. Project Mugen reportedly marks the first domestic GTA (Grand Theft Auto) game using AI technology that combines racing, parkour, role-playing, and combat in the open-world of an urban city. The industry is viewing it as an upcoming competitor to HoYoverse’s Genshin Impact in revenue terms.

Context: In July, NetEase’s Justice secured third place in the global mobile game market by revenue with a figure of $113 million, according to analytics firm SensorTower. 

• As for July’s iOS mobile game revenue charts in China, NetEase’s Justice, Racing Master, and Eggy Party ranked second, ninth, and eleventh respectively.

Chinese e-commerce giant JD on Wednesday lowered its free shipping threshold by almost half in an announcement labeled an “important notice” on its official WeChat account, as the retailer makes a further push in its low-price strategy.

Why it matters: Providing faster and cheaper delivery has become a new battleground among China’s domestic e-commerce platforms, as they bid to lure users from their rivals.

• “From day one of our existence, our core competitiveness, the essence of our business, has been low prices,” said JD CEO Sandy Xu on the firm’s latest earnings call. She said JD adheres to this principle, and that cost efficiency and customer experience are at the heart of the company’s business philosophy.
• “We welcome users to compare prices across platforms before they place their orders, as JD is confident in its supply chain capabilities and the low-price and high-quality services we can provide,” Xu stated.

Details: JD cut its minimum order requirement for free shipping by nearly half from RMB 99 ($13.8) to RMB 59, its first lowering of the free shipping threshold in seven years.

• As part of the shipping policy adjustment, JD’s paid members, known as the JD Plus cohort, will now have unlimited free deliveries no matter how much they spend, compared to the previous limit of five free shipment coupons per month.
• While JD Logistics has enjoyed a reputation for efficiency for years, Alibaba-owned rival Cainiao is ramping up efforts to expand its nationwide logistics network. In July, Cainiao launched a half-day delivery service in Hangzhou, Shanghai, and six other major Chinese cities, initially in partnership with Tmall Supermarket.
• The upgraded model rolled out by Cainiao, entitled 1212, ensures delivery by 9 p.m. on the same day and by midnight the next day based on orders made by midnight and midday, respectively. The format is several hours faster than JD’s traditional 211 program, which guarantees same-day delivery for orders submitted before 11 a.m. and next-day delivery (before 3 p.m.) for orders placed before 11 p.m.

Context: JD saw its total revenue grow 7.6% to RMB 287.9 billion in the quarter that ended in June, mainly thanks to China’s second-largest shopping festival 618, which boosted multiple e-commerce platforms’ sales through month-long discounts. The company’s retail segment only gained 4.8% growth in the second quarter following negative year-on-year growth in the previous quarter, casting a cloud over China’s fragile retail recovery. Revenue for its logistics unit however has experienced continuous quarter growth of over 30% since this year.

China’s Instagram-like lifestyle platform Xiaohongshu has merged its e-commerce and livestreaming operations, establishing a new trading division in parallel with its community division, according to a report by local media outlet LatePost.

Why it matters: With the platform having met its milestone of 100 million daily active users earlier this year, Xiaohongshu has moved to solidify its previously vague strategy in e-commerce, aiming to diversify a revenue stream that has to date relied mainly on advertising.

Details: Xiaohongshu’s chief operating officer, widely known by the nickname Ke Nan, will assume leadership of the new department.

• While gross merchandise volume (GMV) or order volume are key metrics that help mainstream e-commerce platforms monitor business tendencies, LatePost revealed that Xiaohongshu prioritizes tracking daily purchasing user numbers.
• Promoting purchases through high-quality posts and livestreamed content seems to be “a more fitting growth model for Xiaohongshu’s e-commerce effort,” LatePost cited an internal employee as saying. The reference to “high-quality content” is based on the soft-sell techniques employed by actresses Dong Jie and Teresa Cheung, which bolstered the platform’s presence in the livestreamed shopping arena this year.
• A senior member of staff at a multi-channel network (MCN) agency, which manages livestreamers, told LatePost that Xiaohongshu places less emphasis on fan numbers when seeking hosts, but instead appreciates those with aesthetic sensibilities or professional capabilities in certain fields.
• The actress Dong Jie for example, engages with livestream viewers relatively gently, sharing her feelings and experiences when using or wearing showcased products in a calm manner compared to some other personalities in the livestreamed e-commerce sphere. Items for sale undergo pre-selection by her team to ensure alignment with Dong’s personal style. Most are designer garments valued at several thousand yuan. 

Context: While safeguarding its community content ecosystem remains a priority, Xiaohongshu has kept a quiet eye on the evolving e-commerce arena in recent years. Reports in March noted that the platform had elevated livestreaming operations to a standalone division, a move that centralized the oversight of livestreamed content and e-commerce activities.

• The number of brand merchants selling on Xiaohongshu more than doubled from March to May this year compared to a year earlier, according to tech media outlet 36Kr.

Li Auto’s chief executive Li Xiang launched a series of business startup courses on Chinese audio content platform Dedao on Monday. With this move, the entrepreneur is aiming to tap a wider customer base and showcase his firm’s thought leadership, local media reported. 

Why it matters: During a livestream, Li mentioned that the target audience for his newly-launched online product development program significantly overlaps with Li Auto’s intended user base. He expects the marketing initiative to help the automaker further expand its influence in the electric vehicle market, media outlet Jiemian reported. 

Details: The program consists of 16 audio-based online courses, each lasting approximately 12 minutes, and aims to educate the audience about the fundamentals of product management, including the methodology for designing successful products, crafting powerful pricing strategies, and increasing operational efficiency and profitability.

• The program also offers insights into what makes a startup more competitive, including tips for building a collaborative and unified team, based on Li’s extensive startup business experience of over 20 years in the Chinese tech and auto industries. As of the time of writing, more than 15,000 users have subscribed to the paid program, priced at RMB 99 ($14), according to Dedao. 
• In one of the lessons observed by TechNode, Li recalled the initial challenges Li Auto faced while positioning itself as a manufacturer of EVs for Chinese families with children and grandparents, a potentially lucrative segment that was neglected by competitors, some of whom had voiced concerns that the customer base might be too small, Li said. 
• On the online education platform, some influential users have voiced their support for Li Auto and its founder. Li Auto’s success story is “worth learning and researching” (our translation), posted a user whose account was labeled as a manager at SAIC-Volkswagen, a Chinese joint venture of the German automaker.
• Li Auto entered a segment with high growth prospects and offered products at competitive prices for families, said another Dedao user, who labeled himself as a brand manager at Great Wall Motor. Li Xiang is already an outspoken and prolific user on China’s Twitter-like microblogging platform Weibo, with 2.2 million followers.

Context: Li Auto delivered 139,117 units of plug-in hybrid crossovers in the first half of 2023, surpassing last year’s total of 133,246 units. 

• The Beijing-based EV maker expects to deliver more than 100,000 units in the third quarter and anticipates posting monthly deliveries of 40,000 units during the last three months of this year, CEO Li told investors on Aug. 8.

Semiconductor giant Qualcomm is set to work with both TSMC and Samsung simultaneously to create a new 3nm version of its Snapdragon 8 Gen 4 chip, Taiwanese media outlet Commercial Times reported on Aug 17. It seems likely that Qualcomm will only be able to secure around 15% of TSMC’s 3nm production capacity for its chips, with Apple’s upcoming iPhone 15 Pro series expected to dominate the Taiwanese firm’s output. Samsung’s 3nm process yield has significantly improved in recent months, allowing it to catch up with sector leader TSMC.

Why it matters: Adopting 3nm technology will allow Android devices using Qualcomm’s Snapdragon 8 Gen 4 to narrow the performance gap with the forthcoming iPhone 15 Pro series and its A17 Bionic chip. Qualcomm’s Snapdragon system on chip (SoC) lineup currently powers the majority of Android smartphones on the market, with the Snapdragon 8 Gen 4 processor scheduled to launch in 2024. 

Details: Qualcomm looks set to adopt a dual-source approach by partnering with both TSMC and Samsung for next year’s Snapdragon 8 Gen 4. 

• TSMC has indicated that demand for its 3nm process remains strong. The process will support HPC (High-Performance Computing) and smartphones in the second half of this year, accounting for an estimated 4% to 6% of TSMC’s wafer revenue in 2023. The firm has already received customized orders for its N3E process, its latest 3nm offering, which has successfully passed verification and is expected to start mass production in the fourth quarter.
• To meet the demand for Apple’s A17 Bionic chip, TSMC aims to reach a monthly production capacity of 100,000 units for the 3nm process by the end of the year. Compared to the 5nm process, the 3nm process is set to deliver an 18% increase in speed, while reducing power consumption by up to 30% under the same performance conditions, according to TSMC.
• Qualcomm’s Snapdragon 8 Gen 3 and MediaTek’s Dimensity 9300 are expected to be released in October using TSMC’s N4P (4nm) process, according to the report from Commercial Times. Both companies are projected to adopt the N3E (3nm) process in 2024. 
• According to Wccftech, a leak of the Qualcomm Snapdragon 8 Gen 4’s specs shows that it will feature custom Phoenix cores and TSMC’s N3E technology. The report mentioned that Qualcomm will apply its self-developed Nuvia CPU architecture to the new chipset.
• Qualcomm opted for the 4nm process for this year’s Snapdragon 8 Gen 3 due to the high cost of TSMC’s 3nm process. Currently, Apple dominates the allocation of these cutting-edge 3nm wafers, according to media outlet Wccftech. 
• In July, Korean media outlet KMIB claimed that Samsung now boasts a 60% yield rate for its 3nm process, slightly higher than TSMC’s 55%. TSMC’s low yield rate has reportedly led Apple to commit to only paying for qualified wafer batches, instead of establishing a standard rate with TSMC.

Context: In the first quarter of 2023, the top three brands in terms of global smartphone chipset shipments were Mediatek with a 32% market share, Qualcomm with 28%, and Apple with 26%, according to market research firm Counterpoint.

Alipay, a digital payment service operated by Alibaba-affiliated Ant Group, is taking steps to monetize its 1 billion-strong user base by doubling down on livestreamed e-commerce, a route taken by many other Chinese platforms with vast user pools.

The fintech giant also announced an updated international version of Alipay on Thursday that promised to make it easier for foreign visitors to China to use the digital payment service using Visa, Mastercard, and other major credit cards.

Why it matters: Labeled an “important strategic partner” by Alibaba, Ant Group is focused on preparing for a Hong Kong IPO. This puts pressure on the Jack Ma-founded business to accelerate commercialization with a more diversified business ecosystem.

Details: The twin updates, unveiled on Thursday at this year’s Alipay Partner Conference, are a key part of the company’s expansion into “digital connectivity,” a term that refers to providing merchants with product and service interfaces such as mini-programs within their digital operations.

• The “living channel” on the payment app’s homepage serves as a hub where merchants and influencers share short videos, lifestyle content, and engage in livestreaming. The live rooms that promote goods are mainly conducted by the brands themselves, adopting a similar style to Taobao Live. Viewers are directed to brands’ mini-apps once they click on a link located at the bottom right of the live page, enabling them to place an order within Alipay.
• Alipay’s livestreaming product manager, Zhu Qinmei, told the conference that the company believes the average transaction value per user in Alipay’s livestreaming rooms could surpass the industry average by two or three times. Alipay has also mentioned an approach for sellers to upload their products to a centralized “product pool,” where influencers can select specific items for promotion within their individual live rooms.
• Mini-programs, which are effectively apps within a bigger app such as WeChat and Alipay, are increasingly regarded as vital drivers of business growth in China. The number of active mini-programs on Alipay has surged by 119% in the past year, according to He Yongming, vice president of Ant, while the gross merchandise volume (GMV) generated by merchant mini-programs has risen by 79%. Alipay has not yet disclosed the scale of total sales. By comparison, WeChat mini-programs achieved a transaction volume in the tens of trillions of yuan in 2022, marking a year-on-year growth of over 40%.
• As for the second announcement of the day, Alipay has updated its international version as it looks to enhance user experience for foreign customers, by integrating frequently-used travel services, including hotel booking, air ticket booking, ride-hailing, public transport, and exchange rate checking.

Context: The Jack Ma-backed Ant Group has reportedly been undergoing significant restructuring ahead of its listing in Hong Kong. This may involve the separation of certain non-core operations of its finance-related business. The decision comes after Ant was hit with a nearly $1 billion fine in early July, in a signal by the Chinese authorities that it was concluding its crackdown on the firm in the wake of its abrupt abandoning of what was expected to be the world’s biggest IPO in late 2020.

BYD on Wednesday officially unveiled its newest premium marque with a performance-oriented plug-in hybrid off-roader. The Chinese automaker expects the new brand to signify personality and luxury, and is betting on it to help attract more of the country’s affluent middle-class buyers. 

With the launch of the Bao 5, BYD’s reply to makers of top-tier luxury off-roaders, China’s biggest electric vehicle maker is seeking to “redefine” a market segment that has been ruled by internal combustion engine cars (our translation), Chairman Wang Chuanfu declared during a press conference at BYD’s headquarters in Shenzhen on Wednesday. 

The name of the new brand, FangChengBao, translates literally to Formula Leopard. BYD said the new lineup responds to emerging and future demands for off-road travel with an edgy design, strong performance, and sophisticated personalized features. 

The architecture: The Bao 5, the first model under BYD’s new luxury lineup, is a large sports utility vehicle based on tailor-made PHEV architecture that is expected to underpin future EV performance. 

• BYD stated that its DMO (dual-mode off-road) PHEV platform splits up the car’s torque and delivers it to the wheels in a fluid way. This could provide enhanced traction and stability when driving on uneven and slippery surfaces and make the Bao 5 one of the most maneuverable SUVs on the market, with a turning radius of 3.4 meters (11.2 feet), according to chief scientist Lian Yubo. 
• The DMO platform has an in-house developed powertrain system that uses a 1.5/2.0-liter high-performance petrol engine along with a dual-motor rear-drive unit, delivering a combined output of more than 500 kW. This allows the spacious SUV to accelerate from 0 to 100 km/h (62 mph) in just 4.8 seconds, while its DiSus adjustable suspension system provides passengers with an improved experience on sideroads. 

Other details: The seven-seater SUV has a straightforward, boxy design with a lot of hard lines and angles. The car radiates a high-definition car-width strip of light in a rectangle ahead, and boasts luxury interiors including a high-quality stereo system provided by French audio engineering brand Devialet.

• The car comes with BYD’s blade battery, leveraging the company’s latest technology to place the cells in the chassis, allowing for single trips of up to 1,200 kilometers (746 miles) on a full fuel tank and a full charge. Lian added that the lineup’s upcoming models, ranging from sportscars to full-size SUVs, could travel between 800 and 1,500 km on one charge depending on powertrain and specifications. 
• No official pricing details have yet been released, but the new lineup is expected to have a price range of between RMB 400,000 and RMB 600,000 ($54,685-$82,028). The company will debut the car publicly at the upcoming Chengdu Motor Show on Aug. 25, with plans to open more than 100 direct-sales stores under the brand in 60 or so Chinese cities by year-end. 

Context: BYD first revealed its plans to develop a premium marque that “specializes in professional and personalized identities” last November. The company already operates two luxury brands, Yangwang and Denza, with price ranges between RMB 800,000 and RMB 1.5 million, and between RMB 300,000 and RMB 500,000, respectively. 

• In January, the automaker introduced the first two Yangwang-branded models, namely the U8 off-roader and U9 sports car, and is scheduled to begin delivery of the former in September. The two all-electrics come with four electric motors, have an 800-volt battery system, and can accelerate from 0 to 100 km/h (62 mph) in two and three seconds, respectively. 
• Denza’s general manager Zhao Changjiang wrote on the social media site Weibo that it has sold more than 100,000 D9 multi-purpose vehicles 10 months after delivery began last October. BYD on July 29 began delivering the N7 crossover with a starting price of RMB 301,800, the second model since its refresh of the brand in late 2021, and launched the larger N8 SUV on Aug. 5
• BYD sold 1.25 million pure electric and plug-in hybrid vehicles in the first six months of 2023, of which around 81,000 were exported EVs, representing a year-on-year growth of 94.3%. That number beat Tesla’s 476,539 units sold over the same period in China, of which nearly 40% were for overseas exports, according to figures from the China Passenger Car Association. 

Crystal of Atlan (CoA), the new action role-playing game developed by ByteDance’s video game company Nuverse, was the eighth best-selling mobile game on iOS in China in July, according to local media outlet GameLook, despite only launching on July 14. 

Why it matters: The new game has the potential to be a breakout hit for ByteDance, which has been aiming to develop its own successful mobile title in the wake of HoYoverse’s global success with Genshin Impact. In the second half of July, Crystal of Atlan’s revenue only ranked behind Tencent’s Honor of Kings, NetEase’s Justice Online, and Tencent’s PUBG Mobile, GameLook reported. Fueled by the success of the new game, Nuverse’s July revenue saw a remarkable 109% month-on-month increase.

Details: Based on data from Sensor Tower, CoA’s iOS revenue surpassed RMB 210 million ($29 million) in July. GameLook predicted that the revenue across all platforms amounted to RMB 600 million ($83 million) for the same month.

• Crystal of Atlan is an action role-playing DNF (Dungeon ’n’ Fighter) game that uses 3D graphics and open-world scenarios. Its anime style resembles Genshin Impact and Honkai: Star Rail, both of which were launched by HoYoverse.
• In May, according to CoA’s official Weibo account, the number of pre-registered players reached 8 million.
• ByteDance is actively promoting the game on its short-video platform Douyin (the Chinese version of TikTok), using internal advertising resources to enhance the game’s visibility. A large number of gaming KOLs introduced the gameplay via videos and broadcasts on Douyin to attract domestic players. 
• As of August 8, the hashtags #CoA and #CrystalofAtlant have collectively reached more than 3.5 billion views on Douyin, according to a report by 36Kr. Additionally, ByteDance also recruited KOLs on Chinese broadcast platforms Huya and Betta, to increase publicity for the game. Given the outlay on marketing, some analysts have suggested that maintaining the title’s high profile may prove a challenge in the months ahead.

Context: ByteDance established Nuverse in 2019, announcing its entry into the gaming sector. In 2021, ByteDance acquired game studio Moonton and C4games for RMB 10 billion and equity worth RMB 15 billion, according to 36Kr.

• On July 13, Moonton launched the fantasy role-playing card game Watcher of Realms in the global market. The revenue of this game reached approximately RMB 70 million ($9.6 million) in the first month, according to GameLook.
• In 2023, NetEase’s Justice Online and HoYoverse’s Honkai: Star Rail are the two most prominent new titles in China’s mobile game market.
• In July, Justice Online, the martial arts role-playing game launched by NetEase on June 30, ranked seventh with a revenue of $63.3 million.
• In May, Hoyoverse’s new hit game Honkai: Star Rail earned approximately RMB 1.2 billion ($168 million) in the first month since its global launch on April 26.

In June, news emerged that Huawei will potentially come back into the 5G smartphone space by the end of 2023. This information apparently was provided to research firms anonymously from “industry sources including Huawei’s suppliers”. Huawei would not comment on the news, and neither would SMIC, the fab Huawei is using.

But what would a 5G phone using SMIC N+1 7nm process look like? Could Huawei reach its 2019 peak again? Who would buy such a phone? Is there any hope for Huawei’s handset future?

The past

In the not-so-distant past, Huawei handsets were the second best-selling brand in the market. In 2019, Huawei handsets accounted for roughly 15.6% of global handset sales, beating Apple but falling just short of Samsung. This amounted to nearly 241 million Huawei phones being sold that year.

Most of these phones – not all, but definitely the high-end phones – used Huawei’s own Kirin application processor chips. They were 5G enabled, ran Android, were fabricated at TSMC on the latest process nodes, and very rarely got anything but positive reviews. At the time, Huawei and HiSilicon had access to the latest EDA tools from Synopsys and Cadence, the latest IP from Arm among many many others, and full access to the Google ecosystem for the export market.

The present

Since 2019, Huawei and HiSilicon have lost access to all these suppliers to varying degrees. No access to properly supported EDA tools and foreign fabs has meant it has moved flagship phones over to Qualcomm as it can no longer manufacture its Kirin AP. Restrictions have also meant its phones are now limited to 4G as it is not allowed to buy 5G-enabled chips and is not able to produce them either. Using Qualcomm chips still means Huawei sells capable phones like the Mate 50, but it is the lack of Google services that means its products are now difficult to recommend in Western markets, even if they do take nice pictures of the moon. 

Even in China, where Google services do not exist, Huawei’s phone sales plummeted in 2020 and 2021, with the brand dropping out of China’s top five. But now, in 2023, Huawei’s sales have increased by 76% year-on-year in Q2 bringing the brand into joint fifth place with Xiaomi at around 13% of the China market. In a market where all other brands (other than Apple) are losing sales, Huawei is somehow managing to increase its own at the expense of BBK, its previous subsidiary Honor, and Xiaomi. 

Why anyone would buy a worse phone at the same or more expensive price can only be down to marketing and a sense of national pride, as although its phones are good, so are Oppo’s and Vivo’s – and they have 5G. Whatever it may be, Huawei has obviously done a great job at reviving its phone brand in the last year within China. Maybe aftermarket 5G enabling Huawei smartphone cases have helped.

The future

So let’s say the rumors are true. Huawei will have its 5G phone by the end of the year using its own chip. Unlike TSMC EUV 7nm, SMIC has only been able to achieve its 7nm through multi-patterning, basically doing multiple lithographic exposures to get the desired resolution. I expect SMIC’s approach will result in low yields and have limited capacity, meaning the resulting chips could potentially be more expensive. This could be compounded by the fact that Huawei handset APs are usually for internal use, not to be sold to other phone brands, so there is limited scale compared to Qualcomm or MediaTek. One could envision Huawei allowing other brands to use it to help SMIC scale up, but how would its performance compare to Qualcomm and MediaTek? Would other brands even want to buy it if it cost more and performed worse?

This is clearly very strategic for China, and would be a big win, but it puts SMIC in a difficult position. Historically it has always kept its head down, but announcing such a feat could put it in the spotlight for further sanctions and equipment it needs to expand its mature node capacity.

Perhaps the chip isn’t the key factor to Huawei’s future global success. I feel it will certainly become a successful brand in China. China-designed chips, China-manufactured chips, and a China-made OS are all very potent selling points in the market. From a global perspective,  it would still have a worse chip, even compared to other Chinese brands, but more importantly, no Google services, which is a killer for most of the rest of the world.

This will be a win for Huawei and for China, but Huawei won’t become the Huawei of 2019 any time soon. In my experience, HiSilicon has always had a great chip design team, but now apparently using its own EDA tools – and I suspect still some Western tools (supported or not) – along with a new process at SMIC rather than TSMC, means this chip won’t be world beating and potentially not commercially viable unless yields and scale are improved. For now, this will be a domestic play.

Douyin, TikTok’s Chinese counterpart, has established a new department dedicated to entertainment ventures, according to a Monday report by 36Kr citing multiple sources. The move aims to centralize the management of activities ranging from live-streaming programs and variety shows to dramas and music.

Why it matters: Douyin’s emphasis on cultural and entertainment content not only enriches its product ecosystem but, more importantly, helps the platform to further diversify its revenue streams.

Details: Chen Duye, head of the recently established division and previously in charge of Ocean Engine, ByteDance’s marketing platform for business promotions across its various apps, will directly report to Han Shangyou, who now holds a prominent position within Douyin.

• Live broadcasts, particularly sports events and concerts, will take priority within the newly-established department, according to 36Kr, due to Douyin getting a taste for broadcasting major events over the past year.
• Official data reveals that 10.6 billion cumulative viewers tuned in to watch the 2022 Qatar World Cup on Douyin. The leading short video platform reportedly spent over RMB 1 billion to secure broadcasting rights.
• Amid COVID-19 restrictions impacting offline entertainment, Chinese-operated short video platforms recognized online events as a source of growth. Douyin, along with competitors Kuaishou and WeChat Channel, organized various concerts and live events featuring renowned musical artists, which has proven effective in drawing user engagement.
• Variety shows, traditionally confined to television or long-form video platforms, have often been constrained by funding limitations during their pre-project phases in China. Nonetheless, the report highlights Douyin’s current efforts to create more original reality TV and variety shows, subsequently monetizing on an uptick in popularity. This involves various approaches, including live commerce activities on the platform and the introduction of content-charging within the platform.
• Short-form dramas have also become a growing focal point for Douyin and its rival Kuaishou, as they strategically monetize their extensive user base. According to data revealed by Kuaishou, by the end of 2022, short dramas on the app attracted up to 260 million active viewers a day, with paid users for short dramas increasing by over 480% in the first quarter compared to a year earlier. While both companies did not provide specific figures, Douyin reported a 72% year-on-year revenue growth in the same sector in 2022.

Context: As of last December, the China Internet Network Information Center reported that over 70% of the Chinese population had accessed short videos, highlighting the significant reach of these platforms as mainstream entertainment channels across the country. The report also noted that individuals spent an average of 2.5 plus hours on the platforms every day.

Huawei achieved sales revenue of RMB 310.9 billion ($43 billion) in the first half of 2023, with a year-on-year increase of 3.1%, according to its H1 business results announced on August 11. During the first half of this year, the Chinese telecom giant’s net profit rate reached 15%, in contrast to the mere 5% achieved in the same period last year. Huawei attributed the rising profits to its enhanced management, improved operational efficiency, strategic sales adjustments, and product optimization. The company launched the flagship phones P60 series, Mate60 series, and foldable MateX3 in H1.

Notably, Huawei’s revenue from its consumer business (terminal devices) in the first half of 2023 increased by 2.2% year-on-year, reversing the downward trend observed since 2021. 

Why it matters: Huawei’s phone business has experienced a relatively tumultuous trajectory in recent years, primarily due to the stringent chip sanctions imposed by the US since 2019. According to company data, in the first half of 2021 and 2022, the revenue growth of Huawei’s consumer business was -47% and -25.4%, respectively. While the 2.2% increase in consumer business revenue signals a turnaround for Huawei, the growth is still relatively modest. The figures come at a time when Huawei has been trying to regain its market share in the mobile phone business, while simultaneously exploring new directions and growth prospects for other business departments.

Details: Sabrina Meng, the rotating chairperson of Huawei, described the company’s business performance in the first half of the year as “stable”, according to Beijing Business Today. Huawei’s business structure comprises five key components, which include its ICT (Information and Communications Technology) infrastructure business, terminal devices, digital energy, cloud services, and the newly added smart vehicle segment.

• In the first half of 2023, the ICT infrastructure business led Huawei’s positive results with a revenue of RMB 167.2 billion ($23.12 billion). The firm’s terminal business generated revenue totaling RMB 103.5 billion ($14.31 billion), while the cloud services and digital energy services garnered RMB 24.1 billion ($3.33 billion) and RMB 24.2 billion ($3.35 billion), respectively. However, Huawei’s car business, which was established in 2019, only achieved a relatively modest revenue of RMB 1 billion ($140 million).
• Next year, Huawei will launch a comprehensive range of commercial 5.5G network equipment aimed at facilitating the commercial deployment of 5.5G technology, the company revealed at the Mobile World Congress Shanghai 2023 in June.
• Huawei did not disclose the detailed shipment figures for its smartphones. According to a July report by IDC, Huawei has reclaimed its position among China’s top five smartphone brands in terms of revenue, with a year-on-year rise of 76% in domestic sales in the second quarter of 2023. Huawei’s return to prominence can be attributed to the impressive sales performance of its P60 series and foldable Mate X3 model, according to the report.
• Launched on August 4, Huawei’s self-developed operating system HarmonyOS 4 saw over one million downloads in three days, according to the company. The HarmonyOS ecosystem currently includes more than 700 million connected smart devices, said Richard Yu,  the CEO of Huawei’s consumer department. 
• In July, Huawei announced the launch of its Pangu Models 3.0 along with AI cloud services. This offering comprises a set of pre-trained models that can be quickly customized for various businesses. Currently, Pangu models are being used across multiple sectors, such as finance, manufacturing, pharmaceutical R&D, coal mining, and railways.
• Aito, the car brand co-developed by  Huawei and Cyrus, saw sales decline significantly, according to its latest results. Despite recording monthly sales of 12,000 units last October, according to Beijing Business Today,  this figure plummeted to fewer than 3,000 units in February and March. 

Context: Huawei has maintained its substantial investment in R&D as it strives for a new growth point. In 2022, the company’s R&D expenditure was approximately RMB 161.5 billion ($22.33 billion), accounting for 25.1% of the company’s annual revenue, according to its 2022 annual report.

Chinese e-commerce giant Alibaba reported a solid quarterly performance on Thursday, attributed to improvements across all of its operations. Notably, its logistics unit Cainiao and digital media arm both achieved profitability for the first time. Total revenue reached RMB 234.16 billion ($32.3 billion), marking a 14% year-on-year increase and a 12.5% rise from the previous quarter.

Why it matters: Alibaba has successfully returned to double-digit growth after a year of relatively stable performance. This achievement comes despite a number of China’s economic indicators suggesting a gloomier overall picture. 

• Revenue growth in the June quarter was primarily driven by Taobao and Tmall, Alibaba’s most profitable businesses, with a significant surge in both the volume and value of orders. China’s second-largest online shopping event, the month-long 618 festival, was also included in this period.

Details: The results of the quarter to June mark the conclusion of Daniel Zhang’s leadership, as he prepares to fully focus on leading the company’s cloud business starting in September. The cloud and computer division experienced the slowest revenue growth (of 4%) among Alibaba’s six independent businesses, while the firm’s international commerce division saw the most rapid expansion with a robust growth rate of 41%.

• Zhang, who is also the CEO of Alibaba Cloud, stated that the 4% growth rate was partly influenced by a “revenue decline from a top customer,” during an earnings call. Nevertheless, he said he believes that the opportunity for AI-driven growth has “just begun.” Alibaba is among the first batch of Chinese companies to launch its own large model and ChatGPT-like tool.
• Despite the robust demand for AI cloud services, the supply of GPUs in the Chinese market fell short, according to Zhang. He added that the cloud and computing unit “only partially met” the demand for AI-related services received.
• Alibaba’s overall net profit experienced a significant 51% year-on-year increase between April and June, while the cloud division more than doubled its profits during the same period.
• Cainiao, which has initiated the process of going public, posted a profit for the first time, making RMB 877 million. This comes after the unit recorded a RMB 185 million loss in the same period last year. The logistics arm’s expansion efforts, both internationally and domestically, contributed to quarterly revenues of RMB 23.2 billion, up 34% year-on-year.
• Alibaba’s digital media and entertainment division also posted its first-ever quarterly profit, spurred by a post-pandemic resurgence in offline shows and cinema screenings. Coupled with an increase in subscription revenue from the streaming site Youku, these incomes helped to boost the unit’s balance sheet.

Context: These are the first quarterly results from Alibaba since the Hangzhou-based powerhouse split its business into six divisions in March. Daniel Zhang will step down as CEO and chairman of the group on Sept. 10, to be succeeded by Eddie Wu and Joe Tsai, who will assume the positions of CEO and chairman, respectively.

BYD said on Wednesday it has produced a total of 5 million electric vehicles, a landmark that comes almost three decades after the company was launched in 1995. Chairman Wang Chuanfu choked up at a press conference in Shenzhen, wiping away tears as he called on domestic rivals to strive for leadership in the global market. 

Why it matters: The milestone reflects the accelerated shift towards green energy vehicles in the world’s biggest auto market, where Chinese manufacturers are revving up to compete with global automakers.

• It took BYD, originally a consumer electronics battery maker, almost two decades to achieve an output of 1 million EVs in May 2021, following its acquisition of domestic automaker Qinchuan Automobile in 2003. 
• The company then reached a landmark 3 million just 18 months later and accelerated again to hit 5 million vehicles nine months after that. 

Details: During the 50-minute press conference, Wang detailed the ups and downs of China’s largest electric carmaker, including how its plug-in hybrid technology was initially met with skepticism before becoming a mainstream vehicle segment.

• Wang foresees Chinese automakers establishing “world-class, respectable” car brands as the global auto industry transforms rapidly. In a show of solidarity, BYD exhibited multiple rivals’ EVs outside the venue at its headquarters in Shenzhen, including models from Great Wall, Zeekr, and Xpeng Motors. 
• Additionally, Wang estimated that new energy vehicles, including all-electrics and plug-in hybrids, will account for 60% of new car sales in China in 2025 and that Chinese brands will take a 70% share of the country’s auto market by that time. 

Context: The combined market share of domestic automakers rose by 5.8% year-on-year to 53.2% in July in the Chinese passenger vehicle market, according to figures published by the China Passenger Car Association (CPCA) on Tuesday.

• The market shares of German and US brands slightly declined to 20.8% and 7.7% respectively, while Japanese carmakers accounted for 15.8% of the total Chinese auto market, down 5% from a year ago, the CPCA figures showed. 
• Experts have suggested global carmakers take lessons from the Chinese industry so as to stay competitive in the coming years. 
• Advisory firm AlixPartners predicts that global car sales from Chinese companies could grow in market share from 16% last year to 30% in 2030.

Xingji Meizu, a smartphone company controlled by Geely founder Eric Li, has decided to discontinue its chip development business for cost-saving reasons. The move is expected to result in layoffs of dozens of staff members, including some fresh graduates, local media outlet Meiren Auto reported on Tuesday.

Why it matters: Xingji Meizu is the latest company to abandon its pursuit of critical and emerging technologies in the Chinese auto and tech industries, reflecting the challenges of a faltering economy and intensifying competition. 

• The news comes just days after electric vehicle maker Nio delayed the development of its own batteries to ease cashflow constraints. Similarly, in May, rival phone maker Oppo announced the closure of its chip design unit Zeku after five years of operations.

Details: In a statement sent to financial media publication CLS on Tuesday, Xingji Meizu said the company is closing down its in-house chip design program in the face of global economic uncertainties, and will instead sharpen its focus on product innovation and user experience.

• Xingji added that it will offer compensation as required by law, along with internal job transfer opportunities, to ensure the rights and interests of employees, especially fresh graduates, without revealing further details. Geely did not respond to TechNode’s request for comment. 
• The company’s chipmaking institute employs approximately 200 people, and dozens of recent graduates are likely to be impacted by the layoffs, according to Meiren Auto. “[The news] came just three weeks into the job,” one of the new employees told the outlet. 
• Development has mostly stalled since the launch of the institute, according to a person with direct insight into the company’s operations. Chief executive Shen Ziyu told Chinese reporters in March that emerging technologies, including chipmaking, were at the center of Xingji’s strategic efforts, alongside smartphones and in-car systems.

Context: Geely’s other affiliates have reported progress in semiconductor technology. The most recent example is the Lynk & Co 08 SUV featuring an in-car operating system built upon a supercomputing platform provided by Ecarx, another auto tech firm founded by Shen Ziyu and Geely’s Eric Li. 

• Siengine, Ecarx’s joint venture with Arm China, was responsible for designing seven-nanometer chips intended for use in computers in partnership with leading global chipmaker TSMC, Shen told Reuters back in March 2021.
• Xingji Technology, a company established by Li, acquired nearly 80% shares in beleaguered smartphone maker Meizu last summer, which preceded the establishment of Xingji Meizu and the release of Meizu’s first high-end handset series in two years this March.
• Xingji Meizu is also leading the business development of Geely-owned Swedish automaker Polestar in the Chinese market, having set up a joint venture with the EV maker in June. 
• Geely founder Li first revealed his plans to enter the smartphone market back in 2021.

Foxconn, Apple’s biggest supplier, has secured an exclusive order to supply Apple’s AI servers, which will ship from the company’s Vietnamese factory, Taiwanese media outlet Economic Daily News reported on Monday. Apple’s demand for AI servers and data centers has increased significantly as the company expands its investment in AI development.

Why it matters: The upsurge of generative artificial intelligence products has swept the technology industry in 2023. ChatGPT, the large language model from OpenAI, was estimated to have 100 million monthly active users in June, making it the fastest-growing application in history. In due course, Apple plans to apply its heavy investment in AI research to products including the iPhone and iPad, according to the Financial Times. 

Details: As Apple’s largest supplier, Foxconn not only assembles iPhones but also acts as a server supplier for Apple’s data center, according to the Economic Daily News report. With Apple’s recent stepping up of its interest in AI applications, the need for Foxconn’s support has increased.

• Foxconn has taken the global lead in the AI server market. The manufacturer already accounts for approximately 40% of the global server market, according to Reuters. Foxconn also provides AI servers for major tech companies including OpenAI, Nvidia, and Google.
• Apple CEO Tim Cook confirmed last week that the company has been studying various AI technologies including generative language models for years. Industry observers have speculated that the tech giant’s increase in AI investment may have contributed to its R&D expenditure reaching $22.61 billion last quarter.
• Apple is reportedly building a large-scale voice model named Ajax and is expected to launch a generative chatbot soon. Given Apple’s large user base around the world, this puts potential pressure on Google and Microsoft as the tech titans also look to launch similar AI offerings.
• There are more than 1.46 billion active iPhone users worldwide as of 2023, according to data from analytics firm Demand Sage. iPhone users account for 21.67% of the world’s total smartphone population, according to the same report. Apple’s mature App Store ecosystem also gives it an advantage over other companies in rolling out AI applications.
• Foxconn’s server revenue reached RMB 1.1 trillion ($138.64 billion) last year. According to industry estimates cited by the Economic Daily News, its AI server-related orders surged by billions of dollars in 2022.
• Apple is recruiting for dozens of AI-related jobs in its offices across California, Seattle, and Paris. New recruits are expected to engage in the research of large language models that can generate text, images, or codes in response to simple user prompts.

Context: Securing an AI server order from Apple has solidified Foxconn’s leading position as a supplier of AI servers. On August 4, Nvidia shifted some of its AI server orders from its manufacturing partner Wistron to a subsidiary of Foxconn, due to concerns over Wistron’s insufficient production capacity.

Chinese battery manufacturer CATL has imposed restrictions on working hours for some positions within its facilities since the end of last year, according to an August 4 report by Chinese news magazine China Entrepreneur, as demand from the country’s booming EV sector starts to stall. Since November last year, CATL has been cutting salaries, curtailing night shifts, and enforcing an eight-hour workday structure for select positions, an employee at CATL’s production base in Sichuan province told the outlet.

Why it matters: CATL has been actively expanding its battery production capacity in recent years, with the battery giant operating more than 10 production bases across nine Chinese provinces. However, the Chinese EV market has been experiencing a slowdown in the pace of battery demand growth leading to overproduction concerns at the Ningde headquartered firm.

Details: Prior to CATL’s recent moves, a number of workers at the company’s battery plants were reportedly on duty 11 hours a day to earn higher performance-based salaries, amid strong demand for batteries in the electric vehicle (EV) market. 

• In June and July of 2022, when battery orders surged for CATL, workers were able to earn a monthly salary ranging from RMB 7,000 ($973) to RMB 8,000 ($1,112), China Entrepreneur reported, based on conversations with a CATL employee.  But during the first half of this year, those salaries have been cut by RMB 1,000 to RMB 2,000, the employee stated.
• From 2014 to 2019, CATL began constructing production bases in four Chinese provinces, Qinghai, Jiangsu, Fujian, and Sichuan, with a combined investment of RMB 49.4 billion.
• In 2020 and 2021, the company unveiled plans for the construction of six new production bases, with a total investment of RMB 67.5 billion, along with four extension projects budgeted at RMB 58 billion, according to calculations by a TechNode reporter.
• In 2022, CATL decided to build three new plant bases in China’s central Henan province, eastern Shandong province, and southeastern Fujian province, with a combined investment of RMB 41 billion.
• From January to June 2023, the total power of battery shipments in China reached 152.1 GWh, accounting for 51.8% of the full production capacity of 293.6 GWh, a significant drop from 54% in 2022 and 70% in 2021.
• CATL’s surplus stock of batteries has surged more than twelvefold in the past five years. According to the company’s annual financial reports, its battery stock was 5.55GWh, 10.53GWh, 14.17GWh, 40.19GWh, and 70GWh from 2018 to 2022. 

Context: The largest battery maker in China is experiencing a decline in domestic market share, amid both excessive battery capacity and fierce competition from other domestic battery manufacturers. 

• Sales of new energy vehicles (NEVs) surged to 374.7 million units in the first half of 2023, marking a year-on-year growth of 44.1%, according to data from the China Association of Automobile Manufacturers. However, the year-on-year increase rates for NEV sales were substantially higher in 2021 and 2022, at 160% and 93.4% respectively. Notably, in these two years, cumulative sales figures reached 352.1 million units and 688.7 million units.
• By 2025, China’s battery production capacity is projected to reach 3,000 GWh, far exceeding the expected demand of 1,200GWh, according to Chinese media outlet The Paper, which cited data from Tsinghua University’s Professor Ouyang Minggao, an expert on new energy vehicles.
• In the first half of 2023, CATL held a market share of 43.4% with a power battery shipment of 66.03GWh in China. This represented a decrease from 48.2% in 2022 and 52.1% in 2021, according to statistics from China’s battery industry association CABIA.

The Cyberspace Administration of China (CAC), the national internet regulator, on Wednesday issued new draft regulations aimed at preventing minors from becoming addicted to their phones. The rules seek to create a healthy online environment for minors by broadening the scope of supervision to include smart terminals and app stores. The draft is open for public comment until Sept. 2, 2023.

Why it matters: Safeguarding the online experience of minors is a key concern of authorities overseeing China’s entertainment and internet industries. In 2019 and 2021, CAC introduced laws that curbed the amount of time young people could spend playing video games. If approved, the new regulations would impact a range of industries, including gaming, streaming, hardware, and other internet-connected sectors, confronting companies with a wave of challenges as the government sets increasingly stringent rules for mobile terminals and internet content providers.

Details: The draft regulations require internet companies to create customized designs for minors on different mobile platforms, including mobile smart terminals, apps, and app stores. Content and functions will need to be tailored to different age groups.

• The minor protection mode, initially focused on video, live broadcasts, and games, will soon be an essential built-in setting for mobile phones, smart watches, learning machines, and VR/AR wearable devices. When users set up their mobile devices for the first time, they will be prompted to activate a minor mode based on their ID information.
• Internet content providers will be required to modify their offerings according to different under-18 age groups. The customized designs for minors will be divided into five age ranges: under 3 years old, 3 to 8 year-olds, 8 to 12 year-olds, 12 to 16 year-olds, and 16 to 18 year-olds.
• Minor mode settings should be easy for parents to locate, the draft regulations state. Users will be able to access minor mode via a power-on reminder, desktop icon, and system setting. To exit minor mode, parents will need to verify their ID information by using their password, fingerprint, or facial recognition.
• Mobile terminals are required to provide differentiated time management for minors of different age groups. By default, mobile devices will limit usage to 40 minutes each day for those under 8 years of age, and allow a maximum of two hours for those between 8 and 18 years of age. In minor mode, access to mobile devices will be restricted between 10 pm and 6 am. However, parents will be able to exempt their children from the restrictions if they prefer.

Context: In recent years, the Chinese authorities have implemented strict measures to limit minors’ game-playing time.

• In 2019, CAC passed a law restricting minors to less than 1.5 hours of online gaming time on weekdays and three hours on weekends, with no game playing allowed between 10 pm and 8 am. Additionally, the amount minors could spend on virtual gaming items each month was limited, with maximum amounts ranging from RMB 200 to RMB 400 ($28 to $56), depending on age.
• In 2021, CAC further limited minors to an hour of gameplay from 8 pm to 9 pm on Fridays, weekends, and public holidays.

In July, more than 10 Chinese automakers reported deliveries of over 10,000 units of their electric vehicles, signaling a significant shift in China’s car market as newer entrants and previously smaller brands continue to increase their sales. Notably, Nio saw remarkable growth, nearly doubling its figures from the previous month, while Xpeng Motors surpassed the 10,000 threshold following months of lackluster performance. 

Why it matters: The latest ranking of the best-selling EV brands in China reflects the changing landscape in the world’s biggest car market. Although BYD and Tesla are still miles ahead of their competitors, local rivals are capturing market share with new product launches and aggressive price cuts as the sector’s intense battle shows no signs of abating.

Bright spot: On Tuesday, Nio announced that it had exceeded the monthly delivery threshold of 20,000 vehicles for the first time in its nine-year history. The firm’s July deliveries reached 20,462 units, nearly doubling its figures from a month earlier. 

• This achievement follows the company’s decision to implement an RMB 30,000 ($4,199) price cut across its vehicle lineups on June 12. Additionally, Nio began delivering the redesigned versions of its popular ES6 crossovers and ET5 sedans starting late May, when monthly sales hit a record low. 
• Xpeng’s July deliveries of 11,008 units also marked an important milestone, one which the EV maker attributed to a smooth production ramp-up of the G6. The mainstream sports utility vehicle recorded shipment of more than 3,900 units immediately after its launch on June 29. 
• The Guangzhou-based automaker is aiming to deliver at least 15,000 units as early as September and has recently received backing from Germany’s Volkswagen. However, its year-to-date deliveries fell 35% year-on-year to 52,443 units as of July. 

Other results: While BYD maintained its dominant position in July with a new sales record, GAC’s EV arm Aion made progress with its new premium marque, Hyper. Aion sold 45,025 units during the month, with 2,011 of them being the Hyper GT coupe, which it began selling on July 3. 

• Li Auto said it has sold more than 30,000 plug-in hybrids for two consecutive months as July deliveries grew 5% month-on-month to 34,134 units. Great Wall Motor followed closely behind with sales of 28,896 units, representing an 8% increase from the previous month. 
• Leapmotor also posted impressive growth in July sales, with a notable increase of 8% to 14,335 units compared to the previous month. Additionally, the Zhejiang-based automaker is reportedly in discussions with Volkswagen’s Jetta brand regarding the licensing of its technologies. 
• This was followed by Changan’s subsidiary Deepal and Geely’s affiliate Zeekr which delivered 13,172 and 12,039 units last month, up 64% and 14% on a sequential basis, respectively. However, Hozon’s numbers declined for the third month in a row, reaching 10,039 units. 

Context: In addition to Chinese automakers, several global auto majors also revealed some details of their July sales in China.

• Volkswagen’s joint venture with state-owned SAIC reported securing more than 10,000 pre-orders of its ID.3 after the German auto giant slashed the price of the locally-made electric hatchback by RMB 37,000 to RMB 125,900 ($17,523). 
• General Motors announced that it shipped around 10,000 EVs with its local partner SAIC last month, of which 8,692 were Buick EVs. Furthermore, SAIC-GM-Wuling, another venture between SAIC, the US automaker, and Guangxi Automobile Group, sold 35,000 units, up from 31,246 units a month ago.

On Tuesday, Apple removed more than one hundred AI-related apps that offered ChatGPT-style services from its China App Store. In a notice sent to affected developers, Apple stated that the removal was “pursuant to orders by the Chinese government” as the related content is deemed “illegal” in China.

Why it matters: The targeted removal of AI-related apps comes two weeks before the implementation of China’s artificial intelligence regulations. The action may send mixed signals to AI developers who aim to offer AI tools for users in China while striving to comply with the country’s regulations.

• Dozens of generative AI apps were removed in a single day from China’s App Store, data from mobile application analysis platform Qimai shows, including apps powered by ChatGPT and domestic-grown iFlyTek’s AI chatbot SparkDesk.

Details: A source close to Chinese regulators said the reason for taking the apps off the store is that they are not standardized enough in terms of data collection and usage, according to local outlet China Star Market. The source added that it is expected to “take a long time” before these apps are allowed back to the store.

• A developer behind OpenCat, a popular AI app that had a rating of 4.8 before its removal early Tuesday, shared a screenshot from Apple entitled App Review on Twitter, which stated that the Chinese government has tightened regulations over deep synthesis technologies and generative AI. OpenCat, powered by ChatGPT, did not secure a license from the Ministry of Industry and Information, which may have contributed to its removal from the App Store.
• SparkDesk, an AI application developed by voice recognition company iFlyTek and built on its proprietary large language model, has been relaunched on the iOS Marketplace 12 hours after it was taken offline. 
• Search giant Baidu’s ERNIE Bot is still available for download on the Chinese App Store, with only those with invitation codes having access to the chatbot service.

Context: As the latest wave of artificial intelligence-related products continues to spread worldwide, governments are racing to keep pace with the rapidly developing technology. China is set to implement new AI restrictions starting August 15, aiming to regulate the development and deployment of AI within the country. 

• The new AI rules in China require companies providing generative AI services to the public to “adhere to core socialist values,” and refrain from publishing content that jeopardizes national interests or spreads false information. 
• The regulations also emphasize that AI-related services will be treated with an “inclusive and prudent attitude,” indicating an attempt to foster innovation while ensuring compliance.

China said on Monday that it will impose export controls on certain high-performance drones with both commercial and military potential applications to prevent their use by armed forces, in a setback for strong exporters such as Shenzhen-based drone maker DJI.

Why it matters: The measure is an extension of an existing export ban on unmanned aerial vehicles (UAVs) for military use imposed on drone makers by Chinese regulators since August 2015.

• It comes after Beijing faces accusations from the US that China may supply Russia with military technology for its conflict against Ukraine, Reuters has reported. 

Details: Drones with radio power exceeding the limit set for civilian products globally, will be subject to export controls from September “to protect national security and interests,” China’s Ministry of Commerce said in an announcement on Monday (our translation). 

• This will also apply to drones that are equipped with sensors such as multispectral cameras in a wide wavelength range, and those that can determine their position and navigate beyond certain distances using lasers, as well as those capable of carrying “unauthorized” payloads. 
• The two-year order requires drone exporters to apply for an export license with the submission of proof documents that show how their products will be used and who will be the end users. 
• The ministry will also impose export controls on drone components ranging from engines to radio equipment, according to another document published Monday. It has not specified when the restrictions will be lifted. 
• China is concerned that certain high-end civilian drones could be repurposed for military use, and insists that its proposed measures are not against any specific country or region, China Daily cited a ministry spokesperson as saying.  
• DJI has always opposed the use of its products for war-related purposes and will strictly adhere to the temporary export control policy to ensure full compliance, Zhang Xiaonan, a senior director at DJI, posted on the Twitter-like platform Weibo. 

Context: DJI, with the lion’s share of the global consumer drone market at over 70%, suspended sales and after-sales services in Russia and Ukraine in April 2022. Its products have, however, been available from third parties in the two countries, Chinese media outlet Caixin cited industry insiders as saying.

• Beijing on July 3 released restrictions on exports of gallium and germanium, two precious metals used in making chips and radars. Earlier this year, Japan and the Netherlands decided to limit the sale of certain types of chip making equipment to China. 

Chinese EV giant BYD is taking on a record 30,000 fresh graduates this year, with research personnel accounting for 80% of the total intake, in a move intended to shore up its research and development department, a company representative has confirmed. 

Why it matters: The hiring drive comes as BYD looks to retain its dominance in the Chinese electric vehicle market as rivals continue to offer a competitive challenge. The move contrasts sharply with general hiring trends as China faces soaring youth joblessness. 

• China’s unemployment rate for those aged 16 to 24 rose to a record 20.8% in May, according to the National Bureau of Statistics. One Peking University professor said she expected that number could rise to nearly 50%, according to a July 20 report by Reuters. 

Details: Around 31,800 fresh graduates have come on board at BYD since the start of 2023, more than 61% of whom have a master’s or doctorate degree, and over 80% of whom will work in R&D projects. State-owned newspaper People’s Daily was the first to report the story on July 29.

• The Chinese automaker has been hiring research employees in electronics and electricals, new energies, and semiconductors, to be mainly based in Shenzhen, Shanghai, and the northwestern city of Xi’an, according to a job post on its official website. 
• A BYD spokesperson confirmed the news when contacted by TechNode, without offering further details. 

Context: BYD has been expanding its R&D team for several years with the number of engineers hired by the company growing 31.5% year-on-year to around 40,400 in 2021. That number increased 72.6% year-on-year to nearly 70,000 as of last year. The company had around 570,000 employees in 2022, of which around 75% were production workers, financial media outlet Caixin reported.

• The Chinese EV giant, which had a relatively late start in the autonomous driving field, recently hired between 4,000 and 5,000 software engineers, Reuters reported on May 17, citing the company’s senior vice president Stella Li. It has also been running an intelligent driving research unit in Shanghai since last year, the Reuters article said, while reportedly restructuring its vehicle engineering institute. 
• The company is rushing to reach the top end of its full-year sales target of 3.6 million EV units, which would almost double last year’s total. It has sold nearly 1.3 million units this year, as of June. BYD spent RMB 20.2 billion ($2.83 billion) on R&D last year, up 90.3% from a year ago, and has developed key components in-house including EV batteries, electric powertrain systems, and vehicle control technologies. 

Chinese tech giant Tencent has acquired Japanese game developer Visual Arts (Kabushikigaisha Bijuaru Atsu), a specialist in galgame (female anime character-based games) and visual novels. The Osaka-based developer announced the news on Chinese social platform Weibo on Thursday. 

Why it matters: With Tencent’s acquisition, Visual Arts has said it will be able to reach a wider audience and explore new growth opportunities. Tencent, meanwhile, will further its aim of becoming a global gaming powerhouse by acquiring another reputable developer after a series of such moves in recent weeks. 

Details: Visual Arts’ announcement on Thursday coincided with confirmation of the retirement of its founder Takahiro Baba, which was initially revealed last year. Baba has reportedly transferred his controlling stake to Tencent, with Genki Tenkumo announced as the new CEO. 

• Founded in 1991, Visual Arts was at the forefront of the Japanese animation style galgame, a subgenre of dating games and visual novels focused on romance, typically marketed to heterosexual men. 
• Visual Arts is the parent company of Key, which is known for creating acclaimed works such as Kanon, AIR, and Clannad.
• Most Visual Arts games are characterized by a sentimental storyline. Kanon, AIR, and Clannad are all titles that were adapted into animations by Japanese studio Kyoto Animation, which has significant influence among ACG (anime, comics and games) groups.
• Heaven Burns Red, the company’s 2022 turn-based role-playing game, once topped Japan’s iOS bestsellers list, according to Jiemian.
• In the announcement of the Tencent deal, Takahiro Baba said the company was “in the best condition ever.” With the help of Tencent’s investment, Visual Arts hopes to create classics that spread across the world, he added.

Context: Tencent, China’s biggest gaming firm, has been expanding its international footprint in recent months, adding to its majority ownership of Riot Games with a series of major deals. 

• On July 5, Tencent invested an unspecified amount in Lighthouse Games, which will support the UK game studio to build an as yet unnamed forthcoming title. Lighthouse Games is a recently-opened triple-A studio from Playground Games co-founder Gavin Raeburn.
• Weeks later, on July 24, Tencent announced that it had become the majority shareholder in Techland, the Polish studio behind the popular game Dying Light. 

In a historic development, Volkswagen said on Wednesday it will make electric vehicles in a joint effort with Chinese EV startup Xpeng via a $700 million investment plan. The news sent Xpeng stock rocketing as much as 40% during trading on Nasdaq. 

The move is expected to create a win-win situation that will help the two automakers secure their market shares in a brutally competitive market. However, analysts expect big challenges for the partnership. 

Both Volkswagen and Xpeng are in a relatively weak market position when it comes to EVs and face sluggish sales in the world’s largest EV market. Also, cultural clashes and different mindsets could potentially lead to friction in the partnership. 

TechNode spoke to various analysts on the ground about what lies ahead. While some saw the collaboration as being beneficial to both automakers, most saw challenges in the unprecedented deal between a German auto giant and a rising Chinese EV maker. 

A happy union?

The Volkswagen-Xpeng partnership makes perfect sense as they complement each other’s strengths, according to Yale Zhang, managing director of Shanghai-based consultancy AutoForesight. “Xpeng’s vehicle platform is state-of-the-art compared with rivals, while Volkswagen definitely needs a helping hand in making intelligent EVs,” Zhang said.

Elliot Richards, a correspondent at the Fully Charged Show, believes Volkswagen knows how to build good quality affordable cars and has an advantage in terms of economy of scale, while Xpeng has top-of-the-line software stacks with a more lively, fun, and risk-taking brand image. He expects the collaboration to help both “efficiently grow together” in China by pooling their resources.

Volkswagen could accelerate the launch of new EV models with the latest tech in the Chinese market through the alliance, predicts David Zhang, a visiting professor at Huanghe Science and Technology University. Volkswagen has had a relatively late start in electrification and its ID series lacks competitiveness in China, despite a decent performance in Europe, added Zhang.

Looming challenges

Daniel J. Kollar, head of Automotive & Mobility Practice at business development consultancy Intralink Group, said the problem is that neither has been able to effectively differentiate themselves in the market, so it is unclear whether teaming up will allow them to change that. Both foreign and younger Chinese original equipment manufacturers (OEMs) are having a rough time lately, experiencing trouble with penetrating the mid-tier and entry-level markets and gaining the trust of average Chinese consumers, Kollar added.

Meanwhile, cultural fit will remain a challenge in this collaboration. Pitting a rigid process-oriented culture from Germany against a fast and furious startup culture in China, has the potential for problems, according to Lei Xing, former chief editor at China Auto Review. As Xing put it, “Is VW willing to sacrifice certain things for speed?” 

Tu T. Le, founder of business intelligence firm Sino Auto Insights, also expects culture clashes as VW’s careful checks and balances are challenged by Xpeng’s much faster pace. “Volkswagen will have to let go of its want to centrally control everything and do its best to learn from Xpeng if it truly wants success,” according to Le.

There might also be wounded pride on Volkswagen’s part, as global carmakers that used to enjoy the upper hand are now acquiring technologies from newcomers, rather than licensing to them, AutoForesight’s Zhang stated. “This could become an invisible barrier and lead to tension in day-to-day collaboration,” he added.

Reasons for skepticism

Experts have voiced concern about the sales prospects of the two automakers given a relatively late launch date of two new models.

“By virtue of the investment, VW is hopeful that its EV sales can be turned around with these two new products, but the 2026 launch dates could be too little too late,” said Le. His comments were echoed by Xing: “The tie-up does nothing to guarantee the success of VW badged EVs with Xpeng tech ‘inside.’ Also for the time being, at least until 2026, it does nothing to influence the market performance of Volkswagen and Xpeng as each controls their own destiny.” 

Meanwhile, they do not foresee the tie-up with Volkswagen as having a significant impact on Xpeng’s sales and presence in the market, although licensing its technologies is potentially a recurring revenue stream for Xpeng.

Volkswagen will likely have to shell out a huge amount of money as a transfer fee for accessing Xpeng’s technology, which has been a common practice in such collaborations, said David Zhang. “Chinese auto manufacturers used to pay tens of thousands of RMB per unit to their foreign counterparts for localizing a vehicle model that came from abroad.”

Zhang added that the collaboration with Volkswagen could be a significant endorsement of Xpeng to boost its credibility in the European market. Aware of Xpeng’s recent momentum following the launch of its G6 crossover last month, Le also believes the cooperation with VW could help it more in Europe than in China. “Xpeng is still two or three successful products away from becoming a sales leader in the Chinese market,” added Le.

“The game has changed”

Kollar sees the Volkswagen-Xpeng partnership as the latest sign that the Chinese market is now ready for consolidation, which means more young, domestic EV makers are either going to go bust or be acquired. The best way for foreign OEMs to regain their previous standing and catch up in the EV sector is to become an acquirer of some of the promising players, Kollar predicts.

The tie-up ushers in a new era where foreign legacy automakers now depend upon Chinese EV makers for their technologies and speed to market, noted Lei. In this context, Volkswagen can be seen as playing a “pioneering” role yet again, having been one of the first major foreign car brands to enter China, and has now opened the floodgates for similar deals involving other foreign legacy automakers and local firms in the future. The German giant on Wednesday also announced an extended partnership between its Audi brand and China’s SAIC.

Global brands are recognizing that Chinese EV companies have progressed to the point that foreign companies have something to learn from them, said Stephen Dyer, a co-leader for AlixPartners’s Greater China business. “We can expect to see more Chinese auto players become part of the global community of strategic collaboration going forward.”

Richards added that, “They now need their local partnerships more than ever, but the shoe is on the other foot.” 

READ MORE: Experts bullish on Chinese automakers’ global push as SAIC seeks EU foothold

Chinese EV maker Nio will roll out a single-motor version of its first mass-market Alps model, as part of a lineup scheduled for delivery in the second half of next year, Chinese media outlet 36Kr reported. 

Why it matters: The plan to produce a more affordable single-motor car marks a rare shift for Nio, which has so far insisted on a dual motor on all its offerings to date, as this is responsible for Nio’s impressive acceleration and premium performance. 

• The move is expected to help the Chinese electric vehicle maker adapt and appeal to a wider group of customers as the country’s months-long EV price war pushes down prices. 

Details: The upcoming sedan under Nio’s mass market Alps marque will come with the company’s self-developed electric powertrain featuring a next-generation induction motor, the 36Kr report said, citing people familiar with the matter. 

• The car, priced between RMB 200,000 and RMB 300,000 ($27,951-$41,927), will be built on the third generation of Nio’s NT vehicle architecture, which features an 800-volt battery system that allows much faster recharging than existing offerings, the report said. 
• The decision was, says the report, made after Nio announced an RMB 30,000 price cut across its lineup on June 12 in a move to defend market share as rivals reduce prices to boost sales. 
• Nio did not respond to TechNode’s request for comment. 

Context: Nio’s chief executive William Li on June 9 told investors that the company is on track to launch the first model under the Alps marque in the second half of 2024. 

• It is also reportedly in the development phase for another lower-end, budget sub-brand codenamed Firefly. The car has a target price range of between RMB 100,000 and RMB 200,000 ($13,985-$27,969) and is expected to first launch in Europe later next year. 
• Year-to-date deliveries of the Shanghai-based EV maker reached 54,561 units as of June, representing a year-on-year growth rate of 7.3%. It currently has eight models on sale, all equipped with dual motors. 
• China recorded sales of more than 3 million new energy passenger cars (a combined total of pure battery EVs and plug-in hybrids) over the same period, up 37.3% from a year ago, according to figures from the China Passenger Car Association. 

The Indian Ministry of Finance informed the Indian parliament that prominent Chinese smartphone manufacturers, including Xiaomi, Vivo, and Oppo, evaded tariffs and illegally remitted a minimum of 80 billion rupees ($980 million) in India, according to a CNBC report on July 21. The report also stated that the Indian tax authorities were able to retrace only 18% of the total amount evaded by these companies.

Why it matters: With its vast population and rapid economic development, India has become an attractive destination for numerous international enterprises seeking to enter the local market. In recent years, Chinese mobile phone manufacturers have achieved significant success in the Indian market. However, the issue of tax evasion has gradually emerged as a prominent concern, drawing the attention of Indian authorities.

Details: According to the CNBC report, Chinese mobile phone brands are accused of evading taxes by manipulating financial data, engaging in fictitious transactions, and overpaying fees to affiliated companies. 

• India’s Ministry of Finance reported that the combined turnover of Chinese phone brands in India, which also includes Transsion, Realme, and OnePlus, amounted to 15 billion rupees ($180 million) from 2021 to 2022, leading to the creation of 75,000 employment opportunities for local citizens. Furthermore, these companies have employed 80,000 sales and operation staff across India.
• Xiaomi’s total tax evasion reached 11.37 billion rupees ($140 million) during 2019-2023, while Oppo evaded tariffs to the value of 44.03 billion rupees ($540 million), according to Indian authorities. 
• The Indian Ministry of Finance claimed that there have been a total of 13 similar cases involving tax evasion on goods and services by these companies from July 2017 to June 2023. Specifically, Xiaomi was reported to have paid interest amounting to 3.17 million rupees ($39,000) and a fine of 1.33 million rupees ($15,000) from 2019 to 2020.
• In April 2022, Indian authorities accused Xiaomi of illegally transferring money to foreign entities in the form of royalty payments since 2015, freezing the company’s funds of 55 billion rupees ($680 million) in the bank accounts of its Indian subsidiaries. Xiaomi refuted these allegations and stated that these royalty payments were made for the licensed technology and intellectual property used in the Indian versions of its products. Despite Xiaomi’s re-appeal to address the situation, the Indian government rejected the firm’s demand to unfreeze its funds.
• In July 2022, India’s financial crime agency blocked 119 bank accounts linked to Vivo’s India business, which collectively held 4.65 billion rupees ($58.76 million). This move came as part of an investigation into alleged money laundering activities. The Indian authorities conducted raids at 48 locations belonging to Vivo and 23 entities connected to the company. The allegations suggested that the proceeds of Vivo India’s sales were being transferred out of the country to evade taxes. While Vivo presented arguments in their defense and managed to recover access to the bank accounts, they were required to pay a guarantee of $119 million to the Indian government.
• In July 2022, the Directorate of Revenue Intelligence (DRI) stated that Oppo’s Indian subsidiary had improperly obtained tax-free benefits amounting to 29.81 billion rupees ($360 million) through false declarations of certain imported goods.

Context: According to market analyst firm Canalys, four Chinese phone brands entered the top five by market share in India in the second quarter of 2023, behind Korean brand Samsung. Vivo was second, shipping 6.4 million units, and Xiaomi held the third spot by shipping 5.4 million units, while Realme and Oppo (excluding its sub-brand OnePlus) ranked fourth and fifth by shipping 4.3 million and 3.7 million units respectively.

A Chinese joint venture between Volkswagen Group and SAIC Group will start building its own plug-in hybrid electric vehicles in a move to follow the growing adoption of PHEVs in the world’s biggest car market, Chinese media outlet Caixin has reported.

Why it matters: The move marks Volkswagen’s efforts to become more localized and step up its introduction of new electric vehicle (EV) models in China, where it is losing ground to electric rivals such as BYD and Tesla. Its premium brand Audi is also looking to develop EVs with the purchase of partner SAIC’s electric vehicle platform.

• The current offerings from global automakers’ JVs in China are not competitive on the EV and software side, resulting in continued market share loss and prices that remain under pressure amid overall lackluster demand, UBS analysts wrote in a June 16 note.

Details: According to the July 22 report by Caixin, SAIC-Volkswagen has yet to reveal detailed plans on any specifications or launch information for the new model.

• And yet, the move is expected to “unleash the power” of the joint manufacturer, and employees were fed a free meal to celebrate the decision, the report said, citing people familiar with the matter. SAIC-Volkswagen did not respond to TechNode’s request for comment.

Context: SAIC-Volkswagen currently has two PHEV models on sale, namely the popular Tiguan sports utility vehicle and the mid-sized Passat sedan, with a starting price of RMB 261,050 and RMB 233,150 ($36,268 and $32,392), respectively, according to its official website.

• Retail sales of the company declined 0.1% year-on-year to 532,509 units for the first six months of this year, while those of rivals such as BYD and Tesla grew 82.2% and 48.9% from a year earlier.
• Sales for FAW-Volkswagen, another China joint venture formed by the German automaker, were down 2.8% to 838,723 units in the same period, figures from the China Passenger Car Association (CPCA) show. VW Group delivered 321,600 battery EVs (BEVs) globally over the period, according to its filings.
• PHEVs have continued to gain momentum over the past few months in China, with year-to-date sales nearly doubling to around 995,000 units in China from a year ago, compared with a 19.8% annual growth rate of BEV sales, according to CPCA figures.
• A PHEV normally carries a smaller battery pack than BEVs with similar specifications, which could mean a lower purchase price. It also reduces owners’ concerns about their EVs running out of power by using both a battery pack and a gas-powered engine.

Nio announced on Thursday that it has updated its battery leasing program to allow drivers to replace their battery packs with a higher energy density one daily rather than after months or years, as was previously the case.

The Chinese EV maker also reaffirmed an earlier commitment to expanding its battery swapping and supercharging network, as a way to showcase what it sees as the superior experience offered to Nio owners, including easy access to recharging ports.

Why it matters: The daily package may present new challenges for Nio, given its already large and dispersed power infrastructure deployment across China. Despite this, it is expected to draw in revenue as it offers greater convenience to users and lowers the purchase prices of Nio’s EVs, senior company executives told reporters at a press briefing in Beijing. Nio has recently experienced cashflow pressure amid slowing sales.

Details: Customers who currently have a 70/75 kilowatt-hour (kWh) battery pack for their Nio EVs may now swap the battery for a so-called “long-range” one (100kWh) for an extra fee of RMB 50 ($7) per day and will be able to return it to any Nio swap station in China.

• The service option is part of Nio’s Battery-as-a-Service (BaaS) leasing program, which was launched in August 2021 and has since allowed Nio owners to upgrade their batteries for longer driving ranges with a monthly and yearly fee of RMB 880 and RMB 9,800, respectively.
• In the last two years to Thursday, Nio has provided 80,000 upgrades, according to the company’s president Qin Lihong. He added that number could surge by “several hundred thousand” over the next year, as customers take advantage of the flexibility afforded by a longer driving range at a relatively low cost.
• Still, senior vice president Shen Fei acknowledged that the move could put the company under “exponential” pressure to operate its consistently growing swapping network when it comes to the transport and allocation of battery packs across the nation (our translation).
• He cited an extreme case in which 100 kWh battery packs could be in short supply during hot weather in Beijing as owners travel to summer resorts. “I believe we’re well prepared, but we haven’t foreseen all the potential problems with this,” said Shen.
• Qin reaffirmed Nio’s efforts to double its number of swap stations to more than 2,300 by the end of the year, adding that the company has established 500 ultra-fast chargers since April, with a maximum power output of 500 kW and a maximum current of 660A.

Context: Nio owns and operates one of the largest recharging networks in China with 1,564 swap stations and 16,745 public chargers as of Thursday. It has swapped over 25 million EV battery packs, meaning a Nio car is starting up with a replenished battery pack every 1.6 seconds, said Qin.

• The automaker faced cashflow issues until recently when Abu Dhabi’s CYVN Holdings provided relief with a $1.1 billion investment. As a result it has scaled back production of its proprietary EV batteries. It cut prices of its vehicle lineups by RMB 30,000 ($4,199) on June 12, with year-to-date deliveries growing by 7.3% to 54,561 units as of June.

READ MORE: Nio bets big on battery swap stations amid growing EV price war

OnePlus launched its Nord Buds 2 globally at a budget-friendly price of $59 in April. Our team received a gray model for a two-week trial. Here’s our take on the new earbuds. 

The Nord Buds 2, may cost $20 more than their predecessors, but they’re still some of the most affordable earbuds on the market and deliver solid audio quality and impressive active noise cancellation (ANC). Equipped with four microphones, the stylish earbuds – also available in white – come with a 12.4mm dynamic titanium driver, a 36-hour battery life, and IP55 water and dust resistance.

Stylish design and comfortable fit

With a stylish look and sustainably sourced materials, the Nord Buds 2 ought to appeal to a younger consumer base. The smooth, eye-catching design is augmented with speckled accents on the buds’ bodies, though at first glance this can be mistaken for specks of dust.

The compact, oval-shaped charging case and earbuds may be made of plastic, but they feel durable. There are three sizes of silicon tips available, the buds weighing 4.7 grams per earpiece, and despite somewhat chubby stems, they sat in my ears comfortably. 

The snug fit, combined with an IP55 rating which means they are resistant to light sweat and rain, makes the earbuds suitable for wearing during exercise. Over the fortnight I had them, I walked and jogged with them in and they didn’t fall out. 

Audio quality and active noise cancellation

For the price, the Nords Buds 2 deliver a relatively crisp sound quality with clear vocals, soothing treble, and convincing deep bass. The plus-sized 12.4 mm drivers feature a larger diaphragm with titanium coating, meaning users rarely need to turn the volume up beyond 50%. 

Impressively, the Nord Buds 2 are the first Nord product with up to 25dB2 of active noise cancellation. While noise-canceling is a standard feature in more expensive wireless earbuds, it is still not common in earbuds costing less than $100. ANC is effective at muting consistent low-frequency sounds, and can block some high-pitch frequencies too, without eliminating them. 

A surprising drawback is that the earbuds lack in-ear detection, meaning they are unable to automatically detect if they are being worn or removed. 

Battery life and tap controls

The Nord Buds 2 come with a 480 mAh battery that gives you seven hours of usage. With the case, they work for up to 36 hours. However, when using ANC, the battery life is reduced to five hours for the earbuds and 27 hours with the charging case. 

The earbuds support fast-charging and can gain five hours more battery life on just a 10 minute charge. Based on our test, the buds can support a two-hour commute every day and only need to be charged once a week.

The Nord Buds 2 come with built-in controls for quick adjustments, such as:

• One tap: Play or pause your music
• Double tap: Skip forward
• Triple tap: Skip backward
• Press and hold: Turn noise-canceling on or off

There is no tap control for volume however, and sometimes you can trigger commands without meaning to: when we went to adjust the earbuds to fit our ears, we accidentally turned off the noise-canceling mode. There is also no option to seamlessly switch between devices while wearing the buds. Each time you change from a laptop to a phone or tablet, you have to reconnect the earbuds, adding a degree of inconvenience. 

Conclusion

In general, the Nord Buds 2 are great value at $59. They deliver good sound quality and functional noise-canceling, despite lacking in-ear detection and seamless connectivity.

Pros

• Stylish design
• Lightweight and comfortable fit
• Dust and water resistant
• Great audio performance with convincing bass
• Impressive noise-canceling for the price
• Long-lasting battery
• Fast-charging support

Cons

• Speckled design looks dusty
• No in-ear detection
• Connectivity issues

China’s battery giant CATL is considering a bid for exploration rights to two domestic lithium mines in the southwestern Sichuan province. The electric vehicle battery maker recently established a new mining subsidiary to comply with the bidding process, a local media outlet has reported. 

Why it matters: CATL’s interest in two new lithium mines signals its intention to further integrate upstream resources amid already-volatile battery supply chains. 

• However, CATL may find it hard to extract the abundant lithium resources in a safe and cost-efficient way due to poor geological conditions in the plateau areas, the report added, citing a Jan. 12 research note on lithium supply by Guosen Securities. 

Details: CATL set up a new mining company called Maerkang Times Mining (our translation) through a subsidiary, with a registered capital of RMB 300 million ($42 million), according to the Chinese enterprise database Tianyancha. 

• The new firm has listed its main business interests as mineral resource exploration, development of new raw materials, as well as mineral washing and processing. CATL set up the entity with the intention to bid for two local lithium mines, state-owned media outlet The Paper reported on Monday. 
• This comes just days after China’s Ministry of Natural Resources kicked off bidding for exploration rights to two lithium mines in Maerkang city and nearby Jinchuan county on June 20. The two licenses will be put up for an unreserved auction at a combined starting price of RMB 3.76 million early next month, according to government filings. 
• Industry watchers expect the two mines to hold an impressive amount of lithium, as the China Geological Survey reported “significant findings” related to mineral resources in Maerkang during 2019-2020, with an estimated lithium oxide equivalent content of over 1.8%. Jinchuan reserve is expected to hold oxide content reaching 1.3%, the report said. 
• CATL did not respond to TechNode’s request for comment. 

Context: China’s surging adoption of EVs has in turn created more business moves in the mining space. 

• CATL in January reportedly secured regulatory approval for a massive RMB 6.4 billion acquisition of Sinuowei Mining Development Co. Ltd, a bankrupt lithium mining firm that has exploration rights to a local mine with an average grade of 1.18% lithium oxide in western Sichuan. This translates into a reserve of around 24.9 million tons of lithium ore. 
• Zhite New Materials, a lithium miner formerly backed by CATL, in February won an RMB 6.1 billion bid to develop lithium reserves in China’s Xinjiang Uygur Autonomous Region, Yicai reported. However, the firm failed to complete the transaction on time and in April was barred from upcoming auctions for three years by local regulators, Caixin reported. 
• Battery-grade lithium carbonate prices reached a peak of nearly RMB 600,000 per ton late last November before sinking to around RMB 180,000 in China in April. Lithium remains a wild ride for commodity investors as prices then bounced back to around RMB 300,000 on May 18, according to figures from industry consultancy Mysteel Group. 

China’s biggest travel agency Ctrip on Monday introduced a vertical AI large model designed for the tourism industry. The AI-driven model, called Xiecheng Wendao, allows users to ask Ctrip travel-related questions. The company’s chair James Liang said the model is in its early stages and still “requires a long process of iteration.”

Why it matters: Many companies are fine-tuning existing general large models with industry-specific data to cater to their specific needs. Ctrip, in this case, said its specialized model is built on an undisclosed general model, filtering 20 billion high-quality unstructured streams of tourism data along with its own structured real-time data and search algorithms.

Details: Ctrip’s AI model will offer recommendations on destinations, hotels, and sightseeing, the firm said at the Monday launch event, and also can offer real-time search results for flights and hotels.

• The country’s biggest travel services provider did not reveal the specific number of parameters used to train Xiecheng Wendao, with Liang emphasizing that parameters are not as critical for a vertical model compared to other data integrations.
• Ctrip said users often take up to 11 days to research and decide on travel plans on average, as pre-journey planning is often the most time-consuming and complex part of the process. Liang further claimed that this is an area where generative AI can significantly improve efficiency.
• Although Chinese tech majors have been quick to release their own AI models and services, the country is yet to have a local AI tool as widely popular as OpenAI’s ChatGPT has been outside of China. Baidu, the local search giant, is still restricting its ERNIE Bot service to internal testing after releasing it four months ago. Ctrip’s AI model is also in a testing phase; users currently have to apply to use it.

Context: Chinese companies are increasingly turning to industry-specific models, in a variation on the race to create artificial intelligence chatbots similar to ChatGPT. It seems a safer path for domestic firms to utilize the rapidly-growing technology, especially in a country that has recently taken a major step to regulate generative AI content.

• James Liang, also an economics professor at Peking University and a researcher of demography, expressed his concerns over China’s long-term innovativeness at the press conference, according to local media outlet Caixin. While he said innovative work and emotional work cannot yet be replaced by AI, low fertility rates are hurting China’s future innovation potential.

TSMC is struggling with the efficiency of its new 3nm manufacturing yield, with the semiconductor giant currently hitting a yield rate of just 55%, far below the standard expected, according to a July 13 report in technology media outlet wccftech. The low yield rate has reportedly led Apple to only pay for qualified wafer batches instead of establishing a standard rate with TSMC. Apple occupies 90% of TSMC’s 3nm process production capacity for its A17 Bionic and M3 chips. 

Why it matters: The iPhone 15 Pro and iPhone 15 Pro Max are widely expected to become the first smartphones powered by TSMC’s 3nm process chipset. However, TSMC’s yield rate of 55% may cause it to lose customers to competitors such as Samsung, which has reported a 60% to 70% yield rate with its 3nm process.

Details: Brett Simpson, senior analyst at Arete Research, claimed that TSMC and Apple have reached a special deal, through which Apple will only pay for functional circuits, rather than paying standard pricing for the entire wafer. If the 3nm yield rate improves to a regular 70%, the deal may be adjusted so that Apple pays up to $17,000 per wafer in the second half of 2024.

• The monthly production of TSMC’s 3nm wafers is expected to reach 100,000 pieces by the end of 2023 to meet the demand for the iPhone 15 series smartphones. 
• In 2024, Apple may switch to TSMC’s N3E process technology instead of N3B process technology, due to the lower production cost and higher yield rate of the N3E, according to the wccftech report. However, the N3E process may reduce the processor performance of the A17 Bionic and M3, and a final decision has therefore not yet been made. N3B is the original 3nm node created in partnership with Apple, while N3E is the simpler version produced for the majority of TSMC’s customers.
• The iPhone 15 series will begin mass production in August, with the iPhone 15 Pro and iPhone 15 Pro Max using the A17 Bionic processor. As Apple’s first chip manufactured with a 3nm process, the A17 Bionic is expected to bring major performance and efficiency improvements over its predecessors the A14, A15, and A16 chips, which used a 5nm process.
• Apple plans to release a 13-inch MacBook Pro with its M3 chip, as well as 14-inch and 16-inch models of the MacBook Pro with M3 Pro and M3 Max chips, according to a report from Bloomberg.

Context: In May, Samsung said in its first quarterly earnings report that its 3nm chip process had an impressive 60% to 70% yield rate. Samsung previously struggled with its 4nm process, which caused Qualcomm to partner with TSMC for the Snapdragon 8 Plus Gen 1 and Snapdragon 8 Gen 2 over the Korean company.

• TSMC’s 4nm process yield rate was reported to be around 70% to 80%, while Samsung only achieved approximately 50%, according to Digitimes. As Samsung gradually improves its 3nm and 4nm process yield rates, the company may regain former customers it lost to TSMC.

China’s e-commerce giant JD on Thursday introduced its own large AI model ChatRhino during the JD Discovery tech summit. Positioned as a vertical AI model that offers industry-specific use cases, JD’s AI offering arrives a few months later than rivals Alibaba and Baidu.

Why it matters: JD is the latest Chinese tech major attempting to upgrade its offerings with AI and large models. The company said ChatRhino combines 70% generalized data and 30% native intelligent supply chain data, targeting a number of sectors including retail, finance, education, and government. 

• “Large models shouldn’t just be limited to toys for chatting, writing poetry, or painting,” Cao Peng, chair of JD’s technology committee and president of JD Cloud, said at the launch event.

Details: CEO Sandy Xu, who took office in May, emphasized at the summit that ChatRhino has shown “clear practical results” within JD. The company has already utilized the AI model to enhance customer service, facilitate code writing, and improve product recommendations, she added.

• JD plans to expand its large AI model (also known as large language model, LLM) capacities for commercial applications to corporate clients in early 2024.
• JD’s healthcare unit also unveiled a specialized model called Jingyi Qianxun based on ChatRhino on the same day, the name of which means asking doctors thousands of times in Chinese. The model, designed for the medical industry, is capable of “quickly adapting and learning from various healthcare scenarios,” which will serve as a technological foundation for remote medical services, according to the company’s description.
• The e-commerce giant also showcased its ambition to develop humanoid robots, which will be a key exploration direction for the JD Explore Academy. In a pre-recorded video presented at the launch event, a robotic arm seamlessly poured a glass of water for He Xiaodong, director of the Academy, in response to his prompt.
• He Xiaodong also stated that while JD has been making technological preparations in AI for several years, the introduction of their own large model was delayed as the company prefers to focus more on industry-focused, specialized models rather than a general-purpose model. 

Context: Beijing currently is home to approximately half of the more than 80 large models available in China, according to Jiang Guangzhi, the director of the Beijing Municipal Bureau of Economy and Information Technology, who delivered a speech at the Global Digital Economy Conference held in Beijing earlier this month.

• With the rising trend of large model development kicked off by OpenAI last November, Chinese authorities are actively encouraging innovation in generative artificial intelligence while also formulating detailed regulations to ensure that ChatGPT-style services operate under oversight.

On Wednesday, Chinese phone brand Honor launched its third-generation foldable phone the Honor Magic V2 at a new product launch event. The company announced it as the slimmest foldable on the market, measuring an ultra-thin 9.9mm in foldable state and weighing just 231 grams. 

Why it matters: Honor claims its new device breaks the boundary between regular smartphones and foldable phones. The Magic V2 is comparable in size to a standard smartphone – for comparison, the iPhone 14 Pro Max is 7.85mm thick and weighs 240 grams. 

Details: When smartphone makers first introduced new generation foldable phones in 2019, the devices’ foldable state was commonly around 16mm. By 2022, the thinnest model on the market, the Xiaomi Mix Fold 2, measured 11.2mm. The Honor Magic V2 is the first such device with a thickness below 1cm when folded. 

• Despite the thinner design, the phone offers a large 5,000mAh battery that can be fast-charged at 66W. Equipped with the Snapdragon 8 Gen 2 processor, it has three rear cameras including a 50MP main camera, a 50MP ultra-wide camera, and a 20MP telephoto camera.
• The Magic V2 utilizes a light titanium hinge and has been certified by Swiss testing and inspection authority SGS as being able to withstand more than 400,000 folds, according to Honor.
• The Magic V2 comes with a 7.92-inch primary screen and a 6.43-inch cover screen, both utilizing an OLED panel with a refresh rate of 120Hz. It features a high-frequency 3,840Hz PWM dimming function, which the company says eliminates flickering and ensures smooth animations. 
• The phone is available in three colors: black, gold, and purple. There are actually three black models, including the basic black version, a silk black version coated in vegan leather, and what the brand calls the ultimate black version, which comes with a golden brand logo.
• The device is priced from RMB 8,999 to RMB 11,999 ($1,255 to $1,674), with storage of up to 1TB.
• The Magic V2 is currently only available in China, though an international release is anticipated later this year. Its predecessor the Honor Magic Vs was introduced in China in November 2022, followed by a global release in February 2023. 
• In addition to Magic V2, Honor also unveiled the MagicPad 13, Magic Watch 4, and Honor Smart Screen 5 at the launch event. 

Context: According to research platform Counterpoint, global foldable shipments grew 64% year-on-year to 2.5 million units in the first quarter of 2023, while the overall global smartphone market faced a 14.2% year-on-year decline during the same period.

• In the first quarter of 2023, Honor shipped 9.7 million units globally, making it the fourth-biggest mobile phone maker by global market share, ranking after Apple, Oppo, and Vivo, according to market analysts firm Canalys.

Audi is considering buying authorization for an electric platform directly from a Chinese electric vehicle company in order to enhance the competitiveness of its electric cars, according to a July 9 report by German media Automobilwoche.

Why it matters: The news has attracted 7.2 million views on China’s Weibo as of writing. BYD, Geely, and Xpeng Motors, with years of experience making cars on their dedicated EV architectures, are seen as among the most likely options by Chinese netizens.

Audi and Chinese electric platform: The Automobilwoche report did not specify which Chinese companies Audi was in talks with. And yet the plan has already been approved by Volkswagen Group CEO Oliver Blume and will be confirmed by Audi’s board this week, according to a Tuesday report by Automotive News Europe.

• The move is expected to accelerate the development and roll-out of Audi’s future electric models in the hope of catching up with rivals, especially in China. A company spokesperson declined to comment when reached by TechNode on Wednesday.
• ​​In September 2021, BYD launched the 3.0 version of its e-Platform, a dedicated battery vehicle architecture, which the Chinese biggest EV manufacturer said would enable a driving range of more than 1,000 kilometers (620 miles) and offer improved driving safety with its combustion-proof “blade battery.”
• Previously, Audi was said to be set to purchase BYD’s DM-i plug-in hybrid drive systems for its A4L sedans, but this was later denied by BYD’s spokesperson Li Yunfei, local media outlet Jiemian reported last November. BYD has been supplying its blade battery packs to Audi’s Chinese manufacturing partner FAW Group for its Hongqi marque since 2021.
• Geely launched its open-source, ground-up EV platform, called Sustainable Experience Architecture (SEA) in September 2020. Multiple EV models have been built upon it since then, including Zeekr’s 001 hatchback, the Smart #1 small SUV, and the Polestar 4. Volvo’s parent is now a partner of Renault in developing hybrid systems, Reuters reported.
• Xpeng Motors in April unveiled its Smart Electric Platform Architecture (SEPA) 2.0 with the debut of its G6 crossover. The platform features an 800-volt battery system, massive aluminum die casts, and assisted driving technology that currently allows vehicles to navigate by themselves on busy streets in China’s first-tier cities.

Context: Audi began selling its Q4 e-tron crossover with partner FAW with a price range between RMB 300,000 and RMB 380,000 ($41,729-$52,857) in China last May. It is built upon Volkswagen’s MEB open vehicle platform, as are Audi’s Q5 e-tron seven-seater and Volkswagen’s ID.6 SUV.

• Sales of Audi declined 15.6% in a year to 136,416 units in China during the first three months of this year, when peers BMW and Mercedes posted around 195,000 and 191,000 units, respectively.
• Volkswagen said on June 29 that a new Audi CEO will be on board from September 1, as it hopes to produce EVs only from 2026. Audi’s current lineup is not “competitive,”, especially in China, Blume told investors on June 21.
• ​​The product offerings from global carmakers are not competitive on the EV and software side, resulting in continued market share loss, while pricing remains under pressure in an environment of overall lackluster demand, UBS analysts wrote in a June 19 note.

Chip giant TSMC plans to construct a second chip plant in the Kumamoto Prefecture of Japan to manufacture 12nm chips by the end of 2026, Japanese media outlet Nikkan Kogyo Shimbun reported on Tuesday. TSMC will reportedly invest 1 trillion yen ($7.1 billion) for the second plant, which is expected to start construction in April 2024.

Why it matters: In recent years, the Japanese government has gradually realized the limitations of its own chip industry, especially with the world transitioning to EV and the automobile industry’s increasing demand for advanced chips. TSMC’s further expansion in Japan may make it eligible to receive huge subsidies from the local government, and improve the company’s production capacity by utilizing local water and power resources. 

Details: In June, TSMC’s chairman Mark Liu revealed that the company was evaluating the possibility of another plant aimed at producing mature-process chips in Kumamoto Prefecture, near the company’s first facility.

• On June 9, Yasutoshi Nishimura, the Minister of Economy, Trade and Industry of Japan, responded to the news by saying that the Japanese government would consider providing financial aid to a potential second TSMC plant in Japan.
• In June, Sony CEO Terushi Shimizu told a round-table conference that TSMC’s first plant in Japan had been unable to fulfill an order for his firm, after receiving a large order from electric vehicle makers such as Honda. He also said that Sony has not yet decided to invest in the second plant.
• On June 30, at a press conference held in Yokohama Japan, Kevin Zhang, TSMC’s Senior Vice President, said the company did not rule out the possibility of manufacturing advanced process chips in Japan in the future.
• Last year, TSMC and Sony invested approximately $7 billion to build the first semiconductor factory in Kumamoto Prefecture, while the Japanese government decided to provide 476 billion yen ($3.38 billion) in subsidies.
• TSMC has already started the construction of its first plant in Japan and is targeting local production in 2024, according to the Nikkan Kogyo Shimbun report. Japan Advanced Semiconductor Manufacturing, a joint venture with TSMC, is in charge of Japan’s business operations, with Sony, Honda, and Denso all investing. According to TSMC, the first factory will produce 55,000 wafers a month by the end of 2024, using 12nm, 16nm, 22nm, and 28nm process technologies.

Context: Last December, TSMC announced it would increase its planned investment of $12 billion to $40 billion for two new factories in Arizona, US. For its US factories, the company plans to start producing 4nm chips in 2024 and 3nm chips in 2026, respectively.

• The US passed the CHIPS and Science Act last August to offer around $52 billion in incentives for US-based chip manufacturing.

NetEase’s new mobile martial arts game Justice has rapidly gained popularity after launching in China on June 30. The role-playing game has consistently ranked in the top three of the App Store’s free download game list and best-selling game list since its release.

Why it matters: Justice is being tipped as NetEase’s answer to Tencent’s Honor of Kings and HoYoverse’s Genshin Impact. The Chinese gaming giant also used AI to generate in-game dialogue and interactions with non-player characters (NPCs). 

• NetEase’s flagship game in 2023, Justice achieved 40 million pre-registrations before its launch, according to its official account on social media platform Weibo. A flood of about one million online players crashed the game’s servers temporarily on the first day of its launch. On July 7, it topped the best-selling iOS game charts. 

Details: Set in China’s Song dynasty, Justice’s mobile version integrates diversified elements of imperial Song culture, including martial arts, mythical creatures, and traditional architecture. NetEase has said it will update the game regularly for at least the next ten years in a bid to build an adventurous martial arts fantasy world and serve millions of mobile players.

• Players can customize their characters’ avatar through AI-powered settings, choosing various facial features, graphics, and literal descriptions. For instance, when players upload a portrait of themselves or input the requirements of ideal facial features, the system will generate a unique character in seconds.
• Set in an expansive open world, players can choose from a range of game modes, such as instance dungeon, battles, puzzles, relationships, card collection, architecture building, farming, and map exploration.
• Currently only available in China, Justice’s other significant feature is the use of AI to generate in-game dialogue and enable unique reactions from NPCs. Every action taken by players may have an impact on the game plot, the open world’s order, and NPCs’ behavior, NetEase has said.
• Justice’s advertising budget amounted to RMB 46.2 million solely on June 20, a source from the game project has revealed. The general advertising fee of RMB 170 million ($23.49 million) on all platforms includes RMB 23 million ($3.17 million) on Douyin (the Chinese version of TikTok) and RMB 20 million ($2.76 million) on Weibo.
• According to market analysis platform DataEye, the iOS version of Justice reached an estimated RMB 25.85 million ($3.57 million) in revenue on the first day of its launch.

Context: NetEase’s net revenues from games and related value-added services were RMB 74.56 billion ($10.8 billion) for the fiscal year 2022, with mobile games accounting for approximately 67% of net revenues from the operation of online games.

• On May 20, NetEase unveiled 11 new games and updated 35 existing titles at its annual product launch event. In addition to Justice, the company also plans to launch another wuxia (martial arts fantasy) game called She Diao in the second half of this year.

As Chinese automakers begin to beat overseas rivals on their home turf for the first time, analysts at AlixPartners, a global consultancy, expect their international push to net them a 30% global market share by 2030.

Among the biggest Chinese car manufacturers, SAIC and BYD have announced plans to build their first regional facilities in Europe and South America for easier access to booming EV markets through local production. Chinese EVs have already made big in-roads into the reputational market for stylish designs, high-tech features, and low cost.

Established global carmakers, no matter where they are operating, can only maintain their competitive positions by learning from the Chinese industry, Stephen Dyer, a co-leader for AlixPartners’s Greater China business, told reporters on Wednesday in Shanghai. “Those that ignore this future disruptive force do so at their own peril,” he said.

The big picture

AlixPartners sees recent moves by Chinese automakers as a way to further boost sales volumes and reduce risks from volatile exchange rates and potential logistics issues in overseas operations. China overtook Japan as the world’s top vehicle exporter in the first quarter of 2023 and is extending its international presence from under-developed regions to more developed ones such as Europe.

A major threat to western original equipment manufacturers (OEMs) could emerge by 2030 in the shape of Chinese carmakers. AlixPartners expects the latter’s global car sales to grow in market share from 16% in 2022 to 30% in 2030. In Europe, market share could grow from 2% to 15% over the same period, while Latin America and Southeast Asia show even greater potential with Chinese carmakers expected to have an estimated 19% market share in each by 2030, up from just 1% last year.

Dyer said he is convinced that Chinese brands could achieve success in the highly competitive European market, by employing the same “winning formula” they have been crafting at home. “Chinese automakers will have a chance to win favor, especially from younger European buyers, with their in-car technologies,” added Dyer, speaking in Mandarin Chinese (our translation).

Lessons to be learned from China

AlixPartners suggests global automakers may need to rethink their emphasis on traditional vehicle attributes such as durability and handling, adapting fast as Chinese-style competition comes to their markets.

Chinese brands have made a mark by providing feature-rich offerings at affordable prices, responding to local consumers’ preferences for stylish design, engaging interiors, and advanced technologies while accepting “good enough” reliability and performance, said Dyer.

READ MORE: Chinese carmakers showed up big time at Auto Shanghai 2023

Nearly 60% of Chinese-brand vehicles sold in 2022 and priced between RMB 80,000 and RMB 120,000 ($11,040-$16,560) were equipped with advanced driver assistance systems, considered a standard feature on higher-end models, compared with only 15% sold by foreign brands, according to AlixPartners’ analysis.

China’s homegrown makers, especially the younger ones, take a less cautious approach to vehicle development with an aggressive appetite for risk, using digital simulations to reduce the amount of physical testing for fast development and delivery to the market. Traditional overseas carmakers normally complete two years of extreme winter and summer testing, while Chinese brands often carry these out simultaneously in different parts of the world, according to Dyer.

Automakers’ latest plans

AlixPartners estimates that Chinese brands will secure a combined 51% share of China’s auto market this year, taking gas-powered vehicles and EVs into the equation, versus 49% by their foreign counterparts. This would mark the first time that Chinese automakers would have overtaken their more established foreign rivals in the market.

Having become leading forces in the world’s biggest EV market, brands such as BYD, SAIC, and Chery are upping their efforts to expand overseas by announcing the establishment of new plants near their local customers. 

SAIC said on Tuesday that it has been searching for a site for the carmaker’s first EV manufacturing facility in Europe in a move the company said would help secure a stable business environment over the long term, Chinese media outlet Caixin reported. Volkswagen’s Chinese partner expects sales to almost double to 200,000 units this year.

On the same day, BYD unveiled its plan to establish a $620.2 million industrial complex in Brazil, which will include three plants for the production of EVs and key components and is scheduled for operation as early as mid-2024. This would be the first production hub outside Asia for the Warren Buffett-backed EV giant. BYD is also reportedly closing a deal to take over a German factory from Ford.

Another giant Chery is mulling several facilities in the UK and Southeast Asia, while GAC and Great Wall Motor have similar plans in Thailand and Vietnam, respectively.

Note: This article was first published on TechNode China (in Chinese).

China has been making strides in vehicle electrification for some time, with an eye to digitizing its entire automotive industry. As a key part of this shift, Chinese EV makers are currently competing to produce the most comprehensive assisted driving systems, endeavoring to turn their offerings into key selling points as the market matures.

Here, TechNode takes a look at the assisted driving software of three leading players in the Chinese EV sector.

Xpeng’s NGP advanced driver assistance system

The Advanced Driver Assistance System (ADAS) is the standout feature of Xpeng’s new model, the G6. The car has possibly the most advanced autonomous driving technology in China: with its 31 smart sensors, the G6 outperforms its competitors. Dual forward-facing LiDAR sensors, millimeter-wave radar, cameras, and ultrasonic radar throughout give the vehicle the tools to sense and see all around its body. 

In urban settings, the City NGP (Navigation Guided Pilot) smart navigation-assisted driving tool enables seamless travel along accessible city roads. Once a user inputs a destination and activates the tool, the vehicle maintains its position within its chosen lane, performs necessary lane changes or overtaking maneuvers, merges on and off roads, navigates around stationary vehicles or obstacles, recognizes and passes through traffic light intersections, circumvents loop roads, steers clear of construction zones, and evades pedestrians and non-motorized vehicles, on its way from inputted A to B.

The G6 comes with Lane Centering Control (LCC), a Lidar-based adaptive cruise and lane-centering feature that also enables the car to maintain optimal cruising speed. Linked to Xpeng’s advanced XNet neural network, the system processes 4D information on dynamic targets, including size, distance, position, and speed of vehicles and two-wheelers, as well as 3D information on static targets: lane lines and road edges from above.

Compared to Xpeng’s first-generation visual perception architecture, the XNet employs neural networks to replace manual post-processing, enabling end-to-end algorithm optimization. It boasts enhanced 360-degree perception, covering more than eight lateral lanes, demonstrating superior performance, and improving lane change success rates. Uniquely, this vehicle relies on vision-based recognition and display capabilities, becoming the first in the industry to not rely on mapping. It includes detailed rendering and visual representation of traffic participants and road infrastructure surrounding the vehicle. Drivers can see lane markings and nearby vehicles on the in-car map. XNet also recognizes and displays traversable areas, traffic lights and turn signals, setting a new industry standard. 

On highways, the system can efficiently execute autonomous lane changes, lane selection, and overtaking maneuvers by assessing the surrounding environment and required driving tasks, such as avoiding traffic restrictions and adhering to speed limits. It also provides seamless on and off-ramp transitions while switching between high-speed driving modes, ensuring improved straight-line stability and enhanced cornering.

Li Auto’s City NOA smart driving 

By putting strategic effort into smart software and electric power, Li Auto has made huge strides in smart space (SS) R&D, smart driving, and high-voltage fully electric platforms. With its own large model called Mind GPT, Li Auto will soon begin testing its City NOA smart driving system.

Li Auto’s smart driving system doesn’t depend on high-precision maps, as it utilizes a bird’s eye view (BEV) large model to perceive and comprehend road structure information in real time. The BEV large model has undergone extensive training, enabling it to generate stable road structure data on most roads and intersections in real time. Neural Prior Net (NPN) refers to a set of neural network parameters which are difficult for humans to directly interpret when dealing with complex intersection patterns. The large model effectively deciphers these patterns. Compared to high-precision maps, NPN replaces human rules with network models for better understanding and use of environmental information.

For complicated intersections, it’s essential to conduct advanced intersection NPN feature extraction. On a vehicle’s second approach to an intersection, the previously extracted NPN features are retrieved and combined with the BEV feature layer from the vehicle’s large-scale perception model, resulting in what the company says is an optimal perception outcome. In addition, the “AI driver” must comprehend the traffic light regulations at the intersection, posing another challenge on urban streets. The prevailing method involves devising a rule-based algorithm to interpret traffic lights and road use intentions. Li Auto prefers to rely on a large model to address this issue.

To navigate complex urban roads, Li Auto trained a Traffic Intention Net (TIN) to do away with the need for software to interpret pre-set human traffic regulations or even know the exact position of a traffic light. The system will input video footage into the TIN network model, and it will directly indicate the appropriate vehicle maneuver – turn left or right, go straight, or stop and wait. By analyzing the reactions of a large number of human drivers to signal changes at intersections, the performance of the TIN model is highly refined. To ensure the “AI driver” emulates human drivers’ judgment and driving patterns, Li Auto trained the AI with a huge amount of real driver behavior data, making NOA’s decision-making and planning more human-like, while maintaining safety and adherence to traffic regulations.

NOA is designed to accommodate more than 95% of commuting situations for car owners. While using NOA for commuting, each model will receive continual updates and training. In the latter half of the year, Li Auto plans to introduce the NOA commuting feature and expand urban NOA coverage, with the goal of allowing early adopters to commute using NOA’s navigation-assisted driving.

Huawei Aito’s second-generation autonomous driving system

The M5 smart drive edition released by Huawei’s automotive brand Aito sees the debut of the telecom giant’s second generation autonomous driving system ADS 2.0, which offers a comprehensive fusion perception system made up of various sensors working together to provide 360 degree coverage. This fusion perception system consists of 1 LiDAR, 3 millimeter-wave radars, 11 camera sets, and 12 ultrasonic radars, allowing for distance detection of up to 200 meters. The Aito M5 employs network technology based on fused BEV perception capabilities that can identify objects outside the standard obstacle whitelist. Paired with a road topology inference network, the Aito M5 is designed to drive efficiently with or without a map, equipped to see, understand, and navigate regardless.

The Aito M5 can handle changing light conditions in tunnels and minimize the impact of nighttime glare. It can accurately identify pedestrians, vehicles, and obstacles with ease. On urban roads, the car actively maneuvers around obstructions caused by other vehicles and the company claims it can deal with pedestrians carelessly opening car doors or unexpected cyclists emerging from a blind spot. Even in the most challenging conditions, such as intense glare at night, the Aito M5 can brake at speeds of up to 50 km/h.

With assisted driving capabilities, the M5 can merge onto and off highway ramps with a 98.86% success rate. The reliable long-distance piloting system has an average Miles Per Intervention (MPI) of up to 114 km, rivaling experienced drivers.

The Huawei ADS 2.0 package comes with 19 features as-standard, such as high-speed Lane Centering Control (LCC), urban LCC, and high-speed Navigation-based Cruise Assist (NCA). Additionally, the optional advanced package offers urban NCA, Automated Valet Parking Assist (AVP), and enhanced LCC for urban areas.

Huawei’s Aito is the first car brand to achieve high-speed urban smart driving capabilities without relying on high-precision maps, bringing the assisted driving experience significantly closer to the L3 level of autonomy. According to Huawei’s roadmap, its mapless functionality will be introduced in 15 cities, including Shanghai, Guangzhou, and Shenzhen, during the third quarter of 2023. By the fourth quarter, coverage will encompass 45 cities.

A sophisticated race to autonomy 

The race to launch assisted driving in the Chinese market is well underway. As time goes on, we can expect more car companies and self-driving solution providers to join. China’s Ministry of Industry and Information Technology (MIIT) plans to introduce an updated standard system guide for smart, network-connected vehicles, which will accompany the competition as it intensifies further.

Renowned computer scientist and venture capitalist Kai-Fu Lee on Monday unveiled his new artificial intelligence startup, 01.AI (Lingyi Wanwu in Chinese), providing long-awaited details about his plans to “build an AI 2.0 platform and applications”. In an official announcement shared on theWeChat account of Lee’s VC firm Sinovation Ventures, the Beijing-based company said it had chosen “the most difficult path” of developing its own large language model (LLM).

Why it matters: In the lengthy official post, Lee wrote that he believes AI-powered LLMs present a “historical opportunity” that China cannot miss. Lee hopes the startup will develop a domestically-grown model capable of producing products similar to OpenAI’s ChatGPT. 

Sinovation Ventures quoted Lee as saying China will see a variety of high-quality and creative applications once the country has truly native, high-quality LLMs, much like the era of mobile internet. 

Details: 01.AI details its model training strategy in seven major modules, including pre-training, post-training, AI infrastructure, and multi-model technology. The firm hopes to equip each module with top-notch technical experts to build an LLM with greater capabilities.

• Within three months, the company has already achieved model testing of tens of billions of parameters, and is currently in the process of expanding to 30 to 70 billion parameters. Launched in March, rival Baidu’s ERNIE Bot has recorded 260 billion parameters.
• “Many of the current batch of open-source models in China claim to have similar capabilities to ChatGPT, yet are limited to simple conversations. They tend to struggle with complex tasks,” the startup stated in the WeChat post. Lee emphasized the need to develop homegrown LLMs by extensively incorporating Chinese language data in order to keep competitive in this field.
• 01.AI was formally founded on May 16, according to corporate database Qichacha, with Ma Jie, former head of Baidu’s metaverse unit, holding a 99% stake, and Sinovation the remaining 1%.

Context: The vast success of OpenAI’s ChatGPT has prompted Chinese tech majors, startups, and research institutions to join the race to create something similar. Data from a state-backed scientific institution shows that China had at least 79 LLMs with parameters exceeding 1 billion as of late May.

• In February, a month before Kai-Fu Lee announced his plan to found an AI startup, Wang Huiwen, co-founder of Meituan, surprisingly entered the market and stated his intention to build China’s version of OpenAI. However, at the end of June, Meituan announced the acquisition of Wang’s fledgling AI company, Light Year, for $234 million in cash and RMB 367 million in debt assumption, shortly after Wang left Meituan’s board of directors citing “personal health reasons.”

Denza, a luxury car subsidiary of Chinese electric vehicle maker BYD, released its first SUV model N7 on Monday, priced from RMB 301,800 ($41,705). The company said it has received more than 24,000 pre-orders since its public unveiling on April 18.

The N7 is also the first model equipped with BYD’s assisted driving technology and will be capable of navigating on complex urban roads in China early next year, general manager Zhao Chaojiang said during the press conference.

Why it matters: BYD’s latest launch shows its intention to elevate the brand and secure a foothold in the premium market. The budget-friendly automaker is hoping its sub-brand Denza will become a luxury marque, and the launch of the N7 is a crucial step towards achieving this goal.

• The N7 will also be seen as a test of the company’s aspirations and its ability to beat rivals like Tesla, Huawei, and Xpeng when it comes to autonomous driving features.

Intelligent driving: The top-end version of the N7 features a hardware suite of 33 high-precision sensors, including two 8-megapixel cameras and two lidar sensors, and is powered by Nvidia’s Drive Orin processor which offers 254 trillion operations per second (or TOPS). By comparison, Xpeng’s G6 features 31 sensors and Nvidia’s dual Orin chips.

• Denza also revealed that its advanced driver assistance system (ADAS) will cost RMB 23,000. It will allow cars to change lanes, speed up, and slow down on Chinese highways when it is updated in the last three months of this year and on city streets by next March.
• By comparison, Huawei-backed Aito and Avatr last week cut the price of their similar offerings in half to RMB 18,000. Both will roll out their assisted driving tech for urban scenarios in 45 cities by year-end, according to Richard Yu, head of Huawei’s consumer business group.

Other details: The N7 has a driving range of 702 kilometers (436 miles) and can be refueled with an additional 350 km of range in 15 minutes by BYD’s proprietary dual charging technology. For comparison, Xpeng’s G6 can travel 300 km on a 10-minute charge.

• The five-seater battery electric crossover is also among several new BYD models to adopt the company’s body control suspension system DiSus for a smooth ride on bumpy roads, with Zhao on Monday claiming the function can eliminate car sickness.
• Zhao also told Chinese reporters that around a third of the N7 reservations were from existing owners of German brands such as BMW, Mercedes, and Audi. Delivery of the vehicle is scheduled to begin later this month and the company expects monthly deliveries to reach 10,000 units as early as October.

Context: BYD and partner Daimler first unveiled the Denza brand in early 2012 two years after the set-up of a joint venture to develop EVs for Chinese consumers. Denza in late 2019 began selling the X, a seven-seater SUV with a starting price of RMB 289,800, which was discontinued two years later.

• In late 2021, BYD announced plans to restructure Denza as the company reached a deal to buy an additional 40% shares of the JV from its German partner, Reuters reported. Last August, Denza launched the D9 multi-purpose vehicle, its first model after the rebranding, with a starting price of RMB 329,800, and posted deliveries of nearly 80,000 units as of writing.
• China’s biggest EV maker has been aggressively entering the high-end market with a growing portfolio of luxury brands including Denza, Yangwang, and an upcoming sub-brand called Fang Cheng Bao. The first two models under the Yangwang brand were priced from RMB 1 million; Fang Cheng Bao will specialize in professional and personalized identities, according to the company.

Chinese electric vehicle makers Nio, Xpeng Motors, and Zeekr on July 1 reported significant volume gains in June after months-long dips amid intensifying competition. Nio’s aggressive price cuts and Xpeng launching new models have spurred each to improved numbers.

Although BYD remains the dominant player in China, Aion, Li Auto, and Great Wall Motor are emerging as rivals with enhanced technologies and competitive prices, with the sector’s intense competition showing no signs of easing anytime soon.

Why it matters: Jefferies analysts forecast an 8% monthly growth in the wholesale volume of new energy vehicles to around 774,000 units in June and a 20% sequential increase in foot traffic in the industry. 

• Still, the ongoing price war could intensify across the industry during the upcoming summer slow season, as global automakers such as BMW and Mercedes widen their retail discounts and compete on price, Jefferies analysts wrote in a July 1 note.

Major improvements: Li Auto crossed another monthly delivery threshold, reporting delivery of 32,575 plug-in hybrid crossovers to customers in June, up from the 28,277 units a month earlier. The automaker’s year-to-date deliveries of 139,117 units have already surpassed its total unit sales from 2022. Chief executive Li Xiang previously stated he expects that number to get to more than 40,000 units later this year.

• Great Wall Motor also saw strong growth last month, as sales of its new energy passenger vehicles, including pure electrics and PHEVs, surged 110% year-on-year to 26,643 units following the recent launches of its new Haval-branded SUV and six-seater Blue Mountain. Jefferies analysts said sales of the Blue Mountain reached a similar level to Li Auto’s L8 in some areas last month, citing information from dealerships.
• Nio’s delivery figures bounced back to 10,707 units in June, following two consecutive months of lackluster sales of less than 7,000 units. The firm’s June figures were buoyed by its recent price cut across all lineups. 
• Zeekr reported slightly fewer deliveries of 10,620 units last month when it began shipping its third model Zeekr X, a compact crossover with a starting price of RMB 189,800 ($27,590). This figure was up 22.4% from May.
• Xpeng Motors also saw a solid recovery in June with deliveries of 8,620 units, which marked a 14.8% growth from a month earlier. That figure was still 44% lower than a year ago, however, yet the company’s newest model G6 SUV might give it a chance to get further back on track. Jefferies analysts expected the G6, with delivery scheduled for this month, to “surprise on the upside” with monthly sales likely to reach more than 10,000 units.

Other results: BYD sold 253,046 EVs in June (of which 11,058 were Denza-branded multi-purpose vehicles), a new record compared to the 240,220 it achieved in May. The company had projected monthly sales of its D9 premium vans to reach 15,000 units and is set to begin sales of its second model, the N7 crossover, on Monday.

• Aion maintained its growth momentum and delivered 45,013 vehicles last month, slightly more than the 45,003 units it reached a month earlier. The EV arm of state-owned GAC Group is also moving upscale with the launch on Monday of its Hyper GT, a coupe with a price tag of RMB 219,900.
• EV startups Leapmotor and Hozon are still catching up in the sector, with June deliveries of 13,209 and 12,132 representing a mild growth of 9.5% and a 6.9% reduction from a month earlier, respectively. They’re followed by Changan’s EV brand Deepal with deliveries of 8,041 units.
• Huawei-backed EV brand Aito continues to face growth challenges in an increasingly competitive market, reporting deliveries of 5,668 units last month. That figure brings its total delivery numbers for this year to just 27,541 units.

Context: UBS analysts expect Chinese carmakers to continue market share gains as foreign rivals see a shrinking demand for internal combustion engine vehicles. Chinese EV makers “are acting fast in terms of new model launches, with a better understanding of consumer’s needs,” wrote UBS analysts led by Paul Gong on June 19.

Chinese EV maker Xpeng on Thursday revealed the prices of its G6 sports utility vehicles at a competitive starting price of RMB 209,900 ($28,956), more than 20% cheaper than Tesla’s Model Y in China. The automaker is under growing pressure from investors to drive up sales with the new model after the months-long slump.

Why it matters: Speaking to reporters during an interview on Thursday, Xpeng’s CEO He Xiaopeng said that the G6, which has a similar size and appearance to Tesla’s Model Y, has the potential to achieve monthly deliveries of over 10,000 units.

•  He voiced confidence in a “positive” conversion ratio of its backlog reservations to orders following Thursday’s launch, adding that the company has received more than 35,000 pre-orders for the G6 as of Wednesday after reservations opened on June 9.

Details: The long-anticipated G6 five-seater is almost the same size as the Model Y. The new model measures around 4.75 meters in length, and 1.92 meters in width, and spans a 2.89-meter-long wheelbase.

• The higher-end version is powered by dual electric motors combining an output of 358 kW and maximum torque of 660 Nm, a bit higher than the respective 357 kW and 659Nm of the Model Y.
• The G6 accelerates from 0 to 100 km/h (62 mph) in 3.9 seconds, a bit slower than the Model Y’s 3.7 seconds, yet the crossover has a maximum driving range of 755 kilometers (469 miles), compared with the Model Y’s 660 km.
• Xpeng’s CEO also boasts a faster charging time for the G6, allowing additional travel of 300km on a 10-minute charge and greater powertrain efficiency than peers’ offerings, empowered by an 800-volt silicon carbide power module.
• The charging rate could be more than twice as fast as existing offerings with a 400V charging system, according to a Thursday statement from the company. Xpeng has operated more than 1,000 proprietary charging stations as of Friday and has had plans to add 500 ultra-fast charging stations this year.
• He added that Xpeng owners will be able to access the company’s automotive driver assistance system (ADAS), called the XNGP, for urban traffic roads without the utilization of high-precision maps in 50 major domestic cities during the second half of this year.
• Additionally, Xpeng will begin offering a so-called “AI Valet Driver” function to all XNGP users from the fourth quarter of 2023, allowing its vehicles to navigate on some fixed routes like an “experienced” human driver, according to the company. Rival Li Auto shared similar plans earlier this month.
• The G6 has a price range of between RMB 209,900 and RMB 276,900 ($28,956-$38,134), with the starting price being 7% lower than its previously announced tag of RMB 225,000. By comparison, the China-made Model Y currently costs from RMB 263,900 to RMB 363,900.

Context: Xpeng reported year-to-date deliveries of 32,815 vehicles as of May, a nearly 40% reduction from the same period a year earlier.

• President Brian Gu on May 24 told investors that it expected monthly deliveries to reach 15,000 units starting September when the G6 is scheduled for mass delivery.
• Xpeng’s shares rose 6.85% in Nasdaq during before-hours trading as of writing on Friday, although its shares have fallen 80% since the beginning of 2022.

Alibaba’s logistics arm, Cainiao, on Wednesday launched a new express delivery service that will put it in a position to compete directly with delivery companies such as JD Logistics and SF Express. The major move comes a week after Alibaba appointed Joe Tsai as the group’s chairman. Cainiao CEO, Wan Lin, unveiled the new service during Cainiao’s annual Global Smart Logistics Summit, promising that it will offer half-day, same-day, and next-day doorstep deliveries, along with other “high-quality” services.

Why it matters: Wan stated that the company was once “deeply conflicted” about whether to establish its own domestic logistics operations. However, as Cainiao has begun preparations for a listing in Hong Kong, it has become crucial for the firm to become sustainable and competitive in China’s crowded delivery industry.

• Cainiao is expected to pursue an independent IPO within the next 12 to 18 months, according to Alibaba’s latest financial results.

Details: The new service, named Cainiao Express, is an expansion of the express delivery previously provided exclusively to select Alibaba-owned businesses such as Tmall Supermarket, Freshippo, and Tmall Global; e-commerce merchants on Taobao regularly rely on third-party courier services.

• During the summit, Cainiao Express announced partnerships with Chinese dairy company Adopt A Cow, beer manufacturer Tsingtao Brewery, and Intime Retail.
• Joe Tsai, the chairman of Cainiao, and soon-to-be chairman of Alibaba in September, said in a pre-recorded video that Alibaba hopes to continue driving economic growth through online consumption, as it remains the most important force for economic development. Tsai also emphasized the crucial role of “efficient logistics operations.”
• Cainiao is also actively gearing up overseas expansion plans in collaboration with Alibaba’s global online platform AliExpress, saying they will launch a global delivery service this year that promises cross-border parcel deliveries within five working days.

Context: Building an independent express network and creating cost-effective express services requires heavy upfront costs, as well as higher operational costs. 

• JD’s logistics arm JD Logistics has not yet achieved profitability despite being known for prompt and trustworthy fulfillment. In 2022, it recorded a yearly loss of RMB 1.09 billion.

Apple’s orders for the iPhone 15 series’ 3nm chips may boost TMSC’s revenue in the third quarter of 2023 by 11%, with a company representative estimating that the firm’s second quarter revenue will reach approximately $17 billion, according to Economic Daily News. Apple is the largest customer for TSMC and the consumer tech giant’s chip orders accounted for 23% of TSMC’s revenue in 2022, according to its yearly financial report. This proportion may be even higher this year.

Why it matters: With Apple’s new iPhone 15 series set to be released in September, industry analysts are predicting that iPhone 15 series shipments may reach 85 million units, which is 9% higher than the 78 million units of the iPhone 14 series shipped last year. This marks a growth opportunity for TSMC, as the company is the exclusive manufacturer of Apple’s 3nm advanced processor.

Details: Apple is widely expected to switch to a 3nm process for its A17 Bionic chip in this year’s flagship iPhone 15 Pro and iPhone 15 Pro Max. TSMC’s 3nm process is expected to lead to a combination of performance and efficiency improvements.

• In order to meet the mass production requirements of the new iPhone 15 series, Foxconn has been stepping up its recruitment in Zhengzhou, the central Chinese city home to its largest facility. Currently, the number of recruits per day has reached around 1,000, according to Economic Daily News. The report suggested that the peak production period will run from July to September, by which time recruitment may reach 10,000 new workers per day.
• Compared to the current 4nm process used in Apple’s iPhone 14 Pro chips, the ‌3nm‌ process brings both speed and efficiency improvements. The ‌3nm‌ technology is predicted to achieve a 35% power efficiency improvement and 15% faster performance compared to 4nm. Additionally, Apple’s M3 chip for new Macs and iPads is expected to use the ‌3nm‌ process, according to MacRumors. 
• Apple has booked nearly 90% of chip supplier TSMC’s first-generation 3nm process capacity this year for future iPhones, Macs, and iPads, according to industry sources cited by DigiTimes.
• Due to the strong demand for the 3nm process, TSMC’s 3nm production capacity is in short supply, although the company has not announced many details about its monthly production capacity. The industry estimates that TSMC’s 3nm production capacity needs to increase to 100,000 pieces per month if they want to fully meet customer demand this year.

Context: On June 23, the US Department of Commerce announced the expansion of subsidies for the Chip Act, according to the Wall Street Journal. Originally, the subsidies were only for companies building new fabs in the US, but they now include support for supply chain manufacturers such as those working in chemicals, materials, and semiconductor equipment.

• By the end of 2022, TSMC’s new production base in the US had attracted dozens of chip-related suppliers to follow suit by building factories in the area, including Dutch ASML, US Applied Materials, US Lam Research, Tokyo Electron, and Sunlit Fluto & Chemical.

Chinese automaker GAC Group on Monday showcased an electric, unmanned flying car prototype, a product it says can move both on the ground and through the air, in a futuristic plan to take its urban mobility to another dimension.

Why it matters: The debut makes GAC the latest Chinese automaker to promise riders flying taxis, a still immature technology, after the Toyota manufacturing partner began recruiting for a number of aircraft research and development engineering roles a year ago.

Details: The prototype, dubbed Gove, is being built on a modular system in which the flight and automobile components can be separated, meaning passengers could drive away the concept once it lands.

• GAC envisions a future where passengers can easily access multi-dimensional mobility services ranging from electric air taxis to ride-hailing platforms, according to Wu Jian, president of GAC Research Institute, who spoke at the company’s annual tech day event in Guangzhou.
• The automaker did not reveal many production details about the flying car, with Wu only mentioning that passengers within the Greater Bay Area where GAC is headquartered  would prefer a driving range of at least 200 kilometers (124 miles), Chinese media outlet Caixin reported.

Context: Several Chinese automakers have been working on electric vertical take-off and landing (eVTOLs) air taxis, but none have yet received approval for commercial use from local regulators.

• Aerofugia, an affiliate of Volvo’s parent Geely, said it had filed an application for operations of its prototype test aircraft with the southwestern bureau of the Civil Aviation Administration of China last year. Aerofugia’s AE200 eVTOLs have reached the airworthiness review stage, Caixin reported on April 7.
• Xpeng Aeroht, a startup backed by Chinese electric vehicle maker Xpeng Motors, said in January that it had been granted a regulator-issued certificate to pilot test its Xpeng X2 two-person flying car which has a battery life of 25 minutes. The company plans to start selling the next generation of its flying car with a price tag of around RMB 1 million ($138,596) as early as 2025.

Update: Xpeng Aeroht said on Tuesday that it would not sell its fifth-generation flying car, the Xpeng X2, which was previously referred to in this article as the Traveler X2, but has plans to sell the next generation of its aircraft as early as 2025.

Chinese online retailer JD on Monday announced changes to its senior executive line-up, involving its logistic arm and healthcare unit, days after releasing ambitious growth targets at its 20th-anniversary celebration last week.

Hu Wei, former chief executive of JD Property, will succeed Yu Rui, who resigned for personal health reasons as CEO of JD Logistics, on June 26. Additionally, the chief financial officer of JD Health, the drug store operator, will assume the position of CEO for JD Property.

Why it matters: The top-level changes come at a time when JD experienced its lowest-ever pace of revenue growth. Just a month prior, the Beijing-based company made a surprise management reshuffle, with chief financial officer Sandy Xu replacing Xu Lei, who had served as CEO for only a year. 

• Executives now face challenges on multiple fronts in their pursuit of JD’s ambitious growth goal, which it has called “35711 Vision” and was announced on June 18.
• As part of the plan, JD plans to establish three enterprises with more than RMB 1 trillion ($140 billion) in revenue and RMB 70 billion in net profit over the next two decades.

Details: In 2022, JD achieved a milestone by surpassing the trillion-dollar revenue mark, with revenues totaling RMB 104.62 billion. The company also recorded a net income of RMB 10.4 billion thanks to strict cost-cutting measures, compared to a loss of RMB 1.04 billion a year prior.

• JD currently has two Hong Kong-listed affiliates, JD Health, which went public at the end of 2020, as well as JD Logistics, which was listed a year later. The drug store operator’s total revenue amounted to RMB 46.7 billion in 2022 while achieving a net profit of RMB 380 million. However, the logistics unit has not yet recorded a profit despite having nearly three times the revenue of JD Health.
• JD also has majority control of Dada group, the Nasdaq-listed delivery and retail company, which is also yet to turn a profit.
• JD’s property and industrial units are gearing up for Hong Kong listings, according to the e-commerce firm’s March filing. A previous Reuters report cited sources as saying the two firms are valued at $1 billion each. Under the company’s “35711 Vision,” JD intends to bring seven publicly listed companies with at least RMB 100 billion in market cap over the next 20 years.
• Meanwhile, Yan Xiaobing, former head of JD’s international business, is reportedly back at the company after leaving a year ago. Yan will lead a newly-created team that merges grocery chain 7Fresh and group-buy businesses into a unit called “innovative retail.”

Context: Alibaba, a major rival to JD, has conducted several rounds of structural and management changes this year. Earlier this month, Alibaba appointed Joseph Tsai as chairman and Eddie Wu as CEO, succeeding Daniel Zhang. Alibaba also announced in late March that it will split its operations into six standalone units, each managed by a different chief executive and able to pursue separate IPOs or external funding.

• Both JD and Alibaba, as China’s leading e-commerce firms, have seen increased top-level reshuffles and ongoing restructuring efforts in recent months as they aim to stay competitive amid a larger economic slowdown and increased competition.

China’s government on Wednesday announced a detailed plan to provide a full exemption of electric vehicles from purchase taxes in the next two years, an exemption that will be gradually rescinded from 2026. Beijing is also planning a pilot scheme to regulate passenger cars with partially and highly autonomous functions for potential large-scale operation, according to a deputy minister.

Why it matters: Industry players have responded positively to Beijing’s recent efforts to stabilize the EV market, where competition has heated up significantly in recent months.

• The extension of the EV purchase tax credit is “a big positive” from the market perspective, since automakers will be able to plan for new models and cost control going forward following Beijing’s early disclosure, BYD said on Wednesday (our translation).
• The government also underscored its strong support for EVs with swappable batteries, as battery prices will not be included in the dutiable value if a customer purchases an EV with a battery lease scheme, Nio’s chief executive William Li said on microblogging platform Weibo.

Analysts’ take: Bernstein analysts have voiced cautious optimism about the prospects for the world’s biggest EV market, as consumer confidence and credit impulses could be supportive of auto demand in the next few months after a slow recovery in car sales early this year.

• The long-term growth outlook for EVs “remains intact” as demand has shifted from government policy-led to consumer-driven, although EV sales growth is set to decelerate amid growing competition and overcapacity issues, Bernstein analysts wrote in a June 21 note.
• Jefferies analysts also hailed Beijing’s longer-than-expected tax credit as a positive sign, on Thursday forecasting China’s new energy vehicle sales, including all-electrics and plug-in hybrids, will reach 830 million units this year, up 27% from the 654 million units sold last year.

Details: EV buyers will be entitled to a 10% purchase tax exemption, or a credit of up to RMB 30,000 ($4,178) until the end of 2025. From 2026 to 2027, they will be taxed by 5% of the purchase price of their EVs, and the reduction amount will not exceed RMB 15,000 per vehicle, according to a government filing published Wednesday.

• The move is intended to maintain Beijing’s efforts to sustain the development of the EV industry and underpin China’s advantage in green car technologies, Xu Hongcai, deputy minister of finance said during a media briefing on Wednesday in Beijing.
• The Chinese authorities have put a limit on the amount of EV tax relief in an aim to ensure fair play and avoid luxury EVs, with some priced as high as RMB 1 million, taking extra resources, Xu said. He estimated total tax breaks to reach RMB 520 billion by 2027, up from RMB 200 billion as of last year.

L3 deployment: Meanwhile, the central government is planning a pilot scheme to officially lift the barriers to entry of passenger cars with semi-autonomous functions, or with the so-called Level 3 automation, said Xin Guobin, deputy minister of industry and information technology.

• Regional government authorities will also issue more permits for the commercial adoption of highly autonomous cars to operate in pilot projects, according to Xu, an endeavor that has been undertaken by a number of Chinese tech companies such as Baidu.
• Automakers are currently not allowed to market cars with L3 capabilities by Chinese regulators. In Level 3, or the partial autonomous level, the driver is required to take over the vehicle in emergencies, according to the definitions set by the Society of Automotive Engineers (SAE).

Note: This article was first published on TechNode China (in Chinese).

Southeast Asian courier company J&T Express has recently submitted its prospectus to list in Hong Kong, with plans to raise from $500 million to $1 billion. 

Unlike Chinese rivals SF Express and YTO Express, which operated for ten years before going public, J&T Express is not even eight years old. But with its bold expansion plan, J&T has gone after market share and captured 10% within just three years of entering the Chinese market. The release of its prospectus sheds light on the development strategy of this ambitious overseas company operating in a competitive Chinese landscape.

Cutting a path through the jungle

J&T was founded in 2015 in Indonesia, where prominent e-commerce players Shopee, Tokopedia, and Lazada emerged.

During its initial two years, J&T gained a strong presence in Indonesia by capitalizing on its founder’s extensive distribution network built during his tenure as CEO of Oppo Indonesia, and following the well-established Chinese express delivery models.

By recruiting skilled professionals from China’s logistics industry, J&T’s business volume soared. Remarkably, within five years of launching, J&T surpassed long-standing Indonesian logistics company JNE to become the country’s largest express delivery and logistics enterprise.

In 2020, Jet Lee, the Sichuanese founder of J&T, made the decision to take the company to China for further expansion and development.

Intense competition followed, and the express delivery and logistics industry in China turned into a landscape dominated by companies like SF Express, YTO Express, and JD Logistics. By 2019, six leading enterprises commanded a combined market share of 68.7%.

The entry of J&T, which is known for offering low prices, disrupted the domestic express delivery sector. In Zhejiang’s Yiwu, the largest express delivery hub in China, J&T subsidized shipping costs for local Pinduoduo merchants, leading to a substantial reduction in delivery prices, offering prices as low as RMB 1 ($0.15) for both large and small parcels. 

As a price war broke out, the Chinese express delivery industry experienced pricing as low as ten cents for the first time thanks to J&T. Such shocking prices also caught the attention of regulatory authorities. On April 6, 2021, the Yiwu Postal Administration even issued a warning letter to the company, specifically addressing their practice of “dumping at low prices.”

However, J&T’s aggressive subsidy strategy proved to be effective. Within ten months, it surpassed a daily volume of 20 million shipments, and has currently reached 40 million. 

This approach of offering low prices also came with drawbacks. From 2020 to 2022, J&T incurred an average annual gross loss of $0.28, $0.15, and $0.06 per shipment.

J&T relied on its substantial fundraising to support its lavish spending. According to the prospectus, J&T has completed five rounds of financing since entering the Chinese market, with a cumulative fundraising amount of $5.39 billion. Sequoia Capital China, Morningside Venture Capital, and Hillhouse Capital have repeatedly reinvested. The company is now valued at RMB 130 billion.

Growing together with Pinduoduo 

E-commerce plays a pivotal role in driving orders for the express delivery industry, and the rise of prominent new e-commerce platforms presents fresh market opportunities for express delivery companies.

Data shows that Pinduoduo held a substantial 31% market share of e-commerce deliveries in 2020, and J&T Express relied on Pinduoduo for 90% of its delivery volume. By strategically establishing multiple branches in lower-tier cities, J&T Express has achieved an impressive geographic coverage rate of over 98% across China’s counties and districts.

The collaboration between J&T Express and Pinduoduo can be attributed to a combination of coincidence and inevitability. Prior to establishing J&T Express, Lee had a connection with Pinduoduo through his previous work at Oppo, which was associated with Duan Yongping’s Better Life Investment Group. Duan, who had shown favor to Pinduoduo’s founder, Colin Huang, was an angel investor in the company and had even introduced Huang to Warren Buffett’s renowned high-priced lunch. This connection led Pinduoduo to give J&T Express special attention among China’s various delivery companies.

Simultaneously, driven by competitive needs, Pinduoduo required its own dedicated express delivery service. Both Pinduoduo and J&T Express strategically positioned themselves to compete for substantial user traffic in the lower-tier markets through low-cost services, making their partnership a perfect fit.

According to the prospectus, J&T Express generated revenues of $543 million and $1.715 billion from its largest customer, Pinduoduo, in 2020 and 2021, respectively, accounting for 35% of its total revenue.

However, this heavy reliance on Pinduoduo was short-lived. Starting from 2022, J&T Express experienced a significant decline in revenue from Pinduoduo, dropping to $1.231 billion, a year-on-year decrease of 40% and a reduction of nearly $500 million.

“The percentage of revenue from this customer [Pinduoduo] as a proportion of our total revenue has decreased as our business expands and our customer base diversifies, and we expect it to continue to decline in the future,” stated J&T Express in the prospectus.

Acquiring weaker rivals

In the price war with J&T Express, traditional delivery companies faced a gradual decline in net profit. Best Express was the weakest among them. In 2020, Best Express generated revenue of RMB 29.995 billion, a year-on-year decrease of 7.3%. It incurred a net loss of RMB 2.05 billion, while its asset-liability ratio soared to 91.3%. It became crucial for the company to sell underperforming businesses to improve its financial situation.

In late October 2021, Best Express transferred its domestic express delivery business to J&T for approximately RMB 6.8 billion. J&T was attracted to the company’s well-established network and team, including 87 transshipment centers and over 49,000 end-point branches, which were vital for J&T Express to expand its market presence.

Moreover, through the acquisition of Best Express, J&T successfully gained another major client—Alibaba, which was the largest shareholder of Best Express. Previously, due to its ambiguous relationship with Pinduoduo, J&T was not allowed to deliver packages to Cainiao, Alibaba’s delivery network.

Furthermore, in May of this year, J&T acquired Fengwang Express, a subsidiary of SF Express, for RMB 1.183 billion, in the hopes of strengthening its business network in China.

As the tail-end market gradually consolidates, acquisitions of capital among top-tier express delivery companies are becoming more frequent. J&T’s entry into China’s logistics industry indicates a transition from a concentrated stage to competition among a few dominant players.

Conclusion

J&T Express, currently profitable only in Southeast Asia, experienced modest yearly revenue growth of 4% in 2022, accompanied by a slight decline in net profit. Meanwhile, the company has been actively expanding its presence globally, having entered the Middle East and Latin American markets, and introduced cross-border services targeting Europe and North America through Pinduoduo’s sister app Temu.

Although J&T Express has started to turn losses into profits, the narrowing profit margins in its Southeast Asia business, combined with uncertainties surrounding its ability to sustain price wars in China and other global regions, have created a pressing need for the company to go public and raise funds.

The previous listing of JD Logistics took three months from application to listing. While J&T Express has a stronger financial position compared to JD Logistics at the time, it’s still unclear whether it will see a successful listing. Furthermore, with increasing uncertainties in profitability and declining liquidity in the Hong Kong stock market, it remains uncertain whether the IPO will generate sufficient funds for J&T Express.

US electric vehicle startup Fisker is planning to enter the Chinese market. The company has announced plans to establish its first regional delivery center in Shanghai, with deliveries scheduled to begin in early 2024, its China board member Daniel Foa told Chinese media outlet Yicai on Tuesday.

Why it matters: EV newcomer Fisker is trying to enter China at a time when some traditional global auto majors are struggling to maintain their market share in the country due to their slow transition to EVs. The move also highlights Fisker’s ambition to succeed in the world’s biggest auto market, following in the tracks of its US peer Tesla.

Details: Foa declined to comment on whether Fisker would deploy a direct sales model in China, as it has been doing in the US and Europe, or sell its vehicles through franchised dealers when interviewed by local media outlet Yicai.

• The report added that Fisker’s CEO Henrik Fisker held talks with Lingang Group during his recent visit to China earlier this month. Lingang Group is a state-owned industrial park developer that facilitated the establishment of Tesla’s Gigafactory Shanghai back in 2019 in the city’s Lingang New Area.
• Meanwhile, Fisker on June 9 revealed its plans to build a manufacturing plant in China with an annual capacity of 75,000 units as early as 2024.
• “We expect China to be an important growth market for EVs in the future and believe our vehicles will be very appealing,” said Fisker in a statement.
• China’s premium and affordable luxury segment is growing faster than general segments, Foa told investors on June 6, “This presents a vast opportunity for Fisker in China.”

Context: Fisker currently has two models on sale, the Ocean and the Pear crossovers, with starting prices of $37,499 and $29,900, respectively. It started making the Ocean sports utility vehicles with contract manufacturer Magna Steyr in Austria late last year and began delivery in Denmark in May, while rushing to hand the model over to US customers on Friday.

• Another US EV maker Lucid is also exploring a foray into China. The company hired Izzy Zhu, a former vice president at Nio and Baidu’s EV arm Jidu, to oversee its China business development. It has been recruiting for roles including supply chain and charging infrastructure management based in Shanghai since late last year.
• Chinese auto majors led by BYD are extending their lead over traditional foreign counterparts as a growing number of local customers favor EVs over gas-powered cars. Sales of FAW-Volkswagen and GAC-Toyota shrank 4.3% and 12.2% year-on-year in May, according to figures from the China Passenger Car Association.

Major Chinese e-commerce platforms have kept quiet on the gross merchandise volume (GMV) figures for the month-long 618 shopping festival, a key indicator of success in years past. JD said the event “exceeded expectations and set a new record,” while Alibaba’s e-commerce group said it saw users’ willingness to spend more time browsing on Taobao as their “greatest achievement” from this year’s festival. 

Why it matters: Third-party data provider Syntun said total sales during 618 from Tmall, JD, and Pinduoduo increased 5.4% from a year prior to RMB 614.3 billion ($85.6 billion), signaling that China’s consumption growth is on a slower pace than expected, as consumers spend their money more cautiously.

Details: The mid-year shopping festival is still a major event to observe changing consumer trends and tastes. According to various surveys, this year’s event shows that livestream shopping has become increasingly influential in consumers’ shopping decisions. 

• Data produced by Syntun shows that the cumulative sales generated from live commerce platforms including Douyin and Kuaishou reached RMB 184.4 billion during the 618 period, representing a 27.6% year-on-year increase. 
• According to a survey conducted by local media outlet Yicai involving approximately 400 respondents, nearly two-thirds stated that they primarily shopped on livestreams. 
• Alibaba’s Taobao saw its daily average number of views of short videos on the platform surge by 113% compared to the same period last year, while the number of active influencers grew by 200%.
• Low cost was another major theme emphasized by e-commerce platforms during this 618, as businesses offer discounts to boost sales. 
• A survey conducted by the media outlet Southern Metropolis Daily also revealed that consumers have varied ideas of what constitutes low cost. Close to 60% of respondents believe that it refers to products with ultimate cost-effectiveness, where the brand, quality, or after-sale services are superior despite the product having a comparable price. One-third of respondents consider it the lowest price for the same item across all platforms, while 11.5% perceive it as products priced at an absolute minimum, such as goods costing RMB 9.9.

Context: JD recorded an overall transaction volume of RMB 379.3 billion during last year’s 618 festival. However, its annual growth of 10.3% was a new low, slowing from the previous year’s 27.7% increase.

• Chinese retail sales grew by 12.7% year-on-year in May, according to data released by the National Bureau of Statistics, lower than the expected 13.6% and also lower than April’s 18.4%. Fu Linghui, a spokesperson for the bureau, stated that retail sales showed a “stable growth momentum,” and any growth rate decline was mainly due to starting at a higher base than the previous year.

Senior executives from TSMC will gather in Shanghai this week for the company’s annual tech forum TSMC Technology Symposium on June 21, where the chip giant will share details of its forthcoming products and technologies, according to media outlet icsmart. The visiting group includes TSMC CEO C.C. Wei, vice president of business development Kevin Zhang, and deputy general manager of technology research Cliff Hou. As part of their trip, the trio plans to visit Chinese chip design companies such as Alibaba and Biren Technology, the report said.

Why it matters: This will be the first time that TSMC executives have been able to visit the company’s customers in mainland China in person since 2020. The company’s mainland China events were all held online during the last three years due to the Covid-19 pandemic.

Details: A number of significant customers for the chip maker are set to attend the TSMC Technology Symposium in Shanghai, which comes one month after similar events in Taiwan and Europe and a week before another symposium in Japan.

• TSMC representatives will visit Alibaba and Biren. Alibaba has a chip unit called T-Head, which specializes in designing chips for cloud computing and various other applications.  Biren is a fabless semiconductor design company founded in 2019 by Lingjie Xu and other former NVIDIA and Alibaba employees.
• Currently, the Chinese mainland market accounts for 10% to 15% of TSMC’s overall revenue, only second to its North American business, according to the firm’s first-quarter financial report. 
• In 2016, TSMC established a factory in Nanjing, the capital of eastern China’s Jiangsu province. The facility manages a 12-inch wafer fab and a design service center. The firm also operates a factory in Shanghai, which was established in 2002 and includes an 8-inch wafer fab.
• On Wednesday, in addition to providing a showcase of TSMC’s advanced chip process technology, the forum is expected to focus on how to reduce cost and increase efficiency, with prices for everything from building factories to purchasing equipment and even neon gas rising due to global inflation, according to media outlet Vocus.
• On April 26, TSMC held its 2023 North America Technology Symposium, introducing its latest technology developments including progress on 2nm technology and new products in its industry-leading 3nm technology range.

Context: Last October, TSMC secured a one-year license to continue ordering US chipmaking equipment for its expansion in China, allowing it to avoid the US’s export controls to China. Recently, senior officials from the US have reportedly indicated that the government may extend the one-year exemption for TSMC, which may enable the company to pursue its expansion plan in China.

• TSMC started pre-production operations on its 2nm process in June, and the company plans to start mass production of the advanced 2nm chip in 2025.
• TSMC claims that compared to the 3nm chip technology (N3 series), the speed of its 2nm chips will increase by 15% using the same power consumption and that power consumption will be reduced by 30% when used at the same speed.
• At a shareholders’ meeting in June, President of TSMC Mark Liu said that TSMC holds a key role in calming geopolitical tensions between China and the US.

Note: This article was first published on TechNode China (in Chinese). 

Chinese EV maker Nio announced on June 12 that it would be cutting prices by RMB 30,000 ($4,200) across all lineups and discontinuing its free battery swapping service, an unusual decision from an automaker that has repeatedly refused to enter China’s EV price war.

Among the leading Chinese EV startups (Li Auto, Xpeng, and Nio), Nio is currently facing increasing market pressure. As Chinese EV makers head into a critical competitive period, Nio has to adapt and strategize to secure a larger market share for itself. After all, maintaining a substantial scale is essential for newcomers to survive in the automotive industry. The second half of 2023 and early 2024 is a critical period for young EV makers to secure a healthy market share, as more new models are launched and more traditional major auto companies enter the competition.  

Nio has announced a price reduction of RMB 30,000 ($4,200) across all its new vehicle lineups, as well as adjustments to the rights of first-time buyers for newly purchased cars. Alongside these changes, the company has discontinued its free battery swap policy, replacing it with a paid service effective immediately. According to Nio’s announcement, starting from June 12, 2023, the first owner will receive a 6-year or 150,000 km warranty for the entire vehicle, and a 10-year unlimited mileage warranty for the main electrical systems (battery, motor, and control), among other benefits. The free battery swap service will no longer be included as a basic car benefit; instead, users may opt for a pay-per-use system when using Nio’s battery swapping service. Nio also mentioned plans to introduce flexible charging and swapping service packages for its customers.

In essence, Nio is separating its battery swap service from the vehicle price, leading to a lower overall purchase cost. Instead of a straight price cut like Tesla’s previous approach, Nio is offering a reduced package, by removing perks such as lifetime free battery swaps, extended vehicle warranties, etc. From August 1, Nio will charge new customers for battery swaps at an average cost of about RMB 80 to RMB 100 ($11.2 to $14) per swap. Theoretically, this change should have a positive impact on the company’s financial results.

Nio’s CEO, William Li, disclosed that the company had been internally discussing this change for quite some time. He revealed that they had been taking into account the opinions and suggestions of various users, using the Nio App. Despite the numerous factors involved, the discussions continued, right up to the morning when the news was finally announced. The decision-makers believed that it was the most appropriate time to implement the adjustment. Li recognized the impossibility of pleasing everyone and acknowledged that there may still be some aspects that were not fully considered. 

This drastic price change decision represents Nio’s response to mounting pressure. The pressure stems from multiple sources, and we will explore it from three aspects: 

The first aspect to consider is the product’s competitive edge. Back when new players first entered the EV market, there were fewer EV offerings, and the available models were not as diverse as they are today. However, as the market has matured and charging infrastructure has improved, an increasing number of models have been introduced. This competitive landscape now includes Li Auto and Xpeng, as well as traditional foreign manufacturers and established local Chinese automakers, all of whom have expanded their product lines. Additionally, numerous enterprises and companies from other industries, such as smartphone manufacturer Xiaomi and technology giant Baidu, are now venturing into the EV sector. 

When it comes to competition within its product line, Nio is set to face numerous rivals, particularly in the next one or two years. EVs have a shorter update cycle, and amidst the challenging economic climate, overall consumer demand is unlikely to grow significantly. In such a situation, securing customers is crucial for market dominance. For Nio, adjusting its models’ prices will significantly boost its products’ market competitiveness. From a practical standpoint, the quality of Nio’s vehicles is not in question; they are widely regarded as top-notch products. Strategically implementing price adjustments at this crucial juncture is undoubtedly a means to capture a larger market share for the company.

Additionally, regarding charging infrastructure and policy changes, Xin Guobin, the Vice Minister of China’s Industry and Information Technology, stated that it is essential to guide social capital toward rational investments while avoiding blind expansion and disorderly development. He emphasized promoting the standardization of battery-swapping technology, including the size, interface, and communication protocols involved. Such policy shifts could potentially affect Nio’s future charging and swapping operations, although the extent of the impact remains uncertain. However, leveraging price adjustments might serve as a strategic move to alleviate some pressure on the company’s battery-swap operations, preemptively addressing any potential criticism that may arise.

On June 1 of this year, Nio reduced its battery swapping benefits: originally, customers without a home charging station could enjoy six free battery swaps per month, but this was decreased to four. After only 12 days, the benefits were reduced again, indicating that the once-celebrated battery-swapping feature had become a source of operational pressure. Some users wondered if Nio’s fees for battery swaps were too high compared to supercharging, and whether the prices would be adjusted. In response, Nio’s Vice President, Shen Fei, addressed the issue via Weibo, acknowledging the concerns as valid and promising prompt changes. Soon after, Nio changed accordingly and said the fees for battery swaps will be determined by duration, while the cost of charging will be based on electricity usage. With this change in strategy, Nio’s swap stations should be able to operate more efficiently in the future, potentially leading to a positive impact on the company’s financial performance.

Besides, it is evident that the mounting pressure from sales has compelled Nio to implement this price adjustment. Before the price reduction, Nio had faced two consecutive months of weak sales, with 6,658 and 6,615 units sold in April and May, falling short of the 10,000-unit benchmark. On June 9, Nio announced its first quarter financial results, which displayed a considerable decline in several key metrics: revenue grew by only 7.7% year-over-year to RMB 10.676 billion ($1.5 billion), falling below the anticipated RMB 11.7 billion ($1.64 billion); net loss widened by 166% year-over-year to RMB 4.74 billion ($0.67 billion), marking 19 consecutive quarters of losses since the company’s IPO; the gross margin and automotive business’ gross profit margin decreased to 1.5% and 5.1%, respectively. 

Li Xiang, Li Auto’s CEO, expressed his perspective on the Chinese social media platform Weibo. He said, “For an auto company to be healthy and sustainable, attaining a revenue scale of RMB 100 billion and a product gross margin of 15% to 25% is essential, as demonstrated by sales leaders BYD and Tesla.” In that sense, Nio has to adjust its pricing strategy to increase sales and revenue scale. Only then can the cost per vehicle be reduced. In the intensely competitive EV market, Nio’s price reduction is a strategic move for survival. 

China’s 618 shopping festival, the country’s mid-year online deals event, is coming to a close after a month-long campaign. This year’s 618 is the first major shopping event since China reopened in December, offering some insight into China’s current consumer sentiment. 

It’s also an interesting test for Chinese e-commerce giants Alibaba, JD, and Pinduoduo, all of whom have recently undergone management adjustments. Each company continues to face significant growth pressure in the face of fierce competition.

Alibaba, JD competing on lower prices with Pinduoduo

This year’s 618 festival encapsulates the escalating price war in China’s e-commerce industry. With the slowdown in economic growth, consumers are actively seeking cost-effective products. In response, multiple Chinese e-commerce platforms have followed Pinduoduo’s marketing strategy by offering higher discounts to attract buyers.

During the month-long mega promotion, Alibaba customers have received a discount of RMB 50 (about $7) for every RMB 300 spent across Tmall stores. In addition, Taobao has introduced an “RMB 10 billion subsidy” project, adopting a similar approach and bearing the same name as Pinduoduo’s signature campaign. Through this channel, products were directly sold at lower prices without the usually complicated coupon application.

JD, with former CFO Sandy Xu recently taking over as CEO, offered the most generous discounts compared to other platforms. Buyers have been able to get RMB 50 back for every RMB 299 spent. Prior to the festival, Trudy Dai, CEO of Alibaba’s newly independent Taobao Tmall Commerce Group, expressed the platforms’ commitment to making a “historical investment” in this year’s event, while JD announced its intention to undertake “industry-wide investment efforts” during the festival.

Pinduoduo, known for selling ultra-low prices goods, prominently displayed a slogan on its 618 promotion interface that roughly translates to “no need to compare with other platforms because we offer the lowest prices.” Pinduoduo has also been offering RMB 30 off for every RMB 200 spent.

“Encouraging consumption became the priority for the government, the market, and the e-commerce platforms in all aspects,” said Fabian Sinn, a managing partner at e-commerce marketing firm Genuine. “As a result, there were more subsidies and more affordable prices to attract consumers and stimulate the market’s economic recovery.”

Retail sales, as a key figure indicates consumer confidence, rose 12.7% in May, falling short of market expectations and down from 18.4% in April. The recovery in China’s consumption sector is not as strong as it appears.

The rise of Pinduoduo, which has steadily gained market share in an e-commerce industry once dominated by Taobao and JD, has combined with the emergence of live commerce platforms like Douyin and Kuaishou in recent years to have a significant impact on price-sensitive consumers. These consumers now consider the price differentials and after-sales services offered by various shopping outlets when making their purchasing decisions.

Copying from each other’s playbooks

In a heated competition, Chinese e-commerce platforms are copying strategies from each other. Rising content commerce platforms like Douyin and Kuaishou are copying from the majors, trying to offer more serious online shopping experiences like Taobao and JD on their apps, adding new dedicated shopping sections rather than directing people to shop while they are watching content like they used to. While majors like Alibaba and JD are trying to offer more video entertainment and content, making the shopping experience more casual in their apps. 

Douyin and Kuaishou, known for stimulating consumption via livestreaming and short videos, have focused on leveraging various promotional activities to drive sales through dedicated shopping channels called “marketplace,” where product listings can be displayed in columns. 

Wei Wenwen, president of Douyin’s e-commerce unit, recently highlighted at the TikTok sibling’s ecosystem conference that the GMV generated from the “marketplace” accounted for over 30% of its total sales in 2022.

Douyin and Kuaishou “have been steadily capturing more market share, despite offering similar products to other major platforms,” Jacob Cooke, CEO of WPIC, an e-commerce tech and marketing firm that helps foreign brands sell in China, told TechNode.

“People use these short-video apps for entertainment and knowledge acquisition,” added Cooke, “and the platforms have cleverly integrated e-commerce so that users are exposed to brands and products that relate to their interests, which has been a catalyst for impulse buying and consumer engagement.”

Mainstream shopping sites are adopting a content-driven approach as a defensive strategy to promote sales. The content-based browsing was repeatedly emphasized by Trudy Dai at the 618 Merchant Conference held on May 10. Dai promised that Taobao would provide a wide range of products, short videos, and livestreaming services to enhance user engagement.

Alibaba is investing heavily in its content ecosystem. The e-commerce giant announced at the Merchant Conference that over 50,000 new livestreaming hosts would make their debut during the annual mid-year discounts on Taobao and Tmall. 

Notably, on May 31, US tech giant Apple made its first foray into livestreaming on Tmall, an event that drew 1.28 million viewers. Football celebrity Messi also joined Taobao Live for nearly 20 minutes on June 14, as part of his Chinese trip schedule, which drew over 2.5 million viewers and even caused the stuttering of the livestream event when Messi came onto the scene.

JD Live is also leveraging top influencers to attract user transactions. Smartisan Technology founder Luo Yonghao, who previously had an exclusive partnership with Douyin, joined JD’s livestream on May 31 and helped sell goods for more than RMB 150 million.

Major Chinese phone brands operating in India including Xiaomi, Oppo, Vivo, and Realme, are being required by Indian authorities to appoint Indian nationals in executive roles such as chief executive officer (CEO), chief operating officer (CPO), chief financial officer (CFO), and chief technical officer (CTO), according to Indian media outlet ET Telecom.

Why it matters: In light of ongoing geopolitical tensions, India and China have increased scrutiny of each other’s businesses, causing significant economic turbulence in recent years. The Indian government has again tightened restrictions on Chinese technology companies in the last few months, with experts predicting this will inevitably dampen investment by Chinese companies in the Indian market. 

Details: The tussle between Indian authorities and Xiaomi has been escalating since the former launched an investigation into the latter last year. On June 9, the Enforcement Directorate (ED), an Indian financial law enforcement agency, issued a show-cause notice to Xiaomi India chief financial officer Sameer Rao, former global vice president Manu Kumar Jain, and three banks for alleged illegal remittances of 55.51 billion rupees ($673.2 million), according to a report by Indian news agency Press Trust of India. 

• On June 13, the Indian government requested major Chinese phone brands involve local companies in the manufacturing process and develop local distributors for exports, according to Indian media outlet ABP News.
• On the same day, Xiaomi India responded to this announcement by saying that the company’s operations were compliant with local laws and regulations, according to Chinese media outlet National Business Daily. 
• Last April, the ED summoned former Xiaomi global vice president Jain, who resigned this January, to cooperate with the federal investigation, alleging that the company had made illegal remittances by falsely presenting them as royalty payments to foreign entities. Xiaomi has since claimed that the royalty payments were for in-licensed technologies and intellectual property applied to Indian phone products.
• As part of the investigation, it is possible that the substantive frozen funds from three banks – Citibank, HSBC Bank and Deutsche Bank AG – may be confiscated by ED.

Context: In the first quarter of 2023, the top three phone brands in India were Samsung (with 20% of the market), Vivo (18%), and Xiaomi (17%), according to research platform TechInsights. Chinese phone brands account for about 50% of sales in the Indian phone market.

• Last December, a Vivo shipment of 27,000 cellphones from India to neighboring markets was detained by Indian officials. The shipment, worth nearly $15 million, was delayed for over a week because of an alleged misdeclaration of the device models and their value.
• Last June, the Indian government issued a show-cause notice to Oppo for allegedly evading customs duty of $550 million. Oppo says it has cooperated with the investigation since then; a final ruling in the case has not yet been announced.

Asus subsidiary ROG (Republic Of Gamers) launched its first handheld gaming console called the Asus ROG Ally at a summer product launch event on Monday. Equipped with a customized AMD Ryzen Z1 Extreme processor, the company claimed  its new product’s performance was on a par with the PS5 game console. 

The handheld device runs on a Windows 11 system, supporting game platforms Steam, Epic Games, Xbox, and GOG among others. Gamers can also explore Android mobile games through the software Tencent mobile game simulator. Asus initially unveiled a global version of the ROG Ally on May 11, priced at $699; the device will sell at a comparable price point in China.

Why it matters: The Asus ROG Ally is one of the most widely anticipated handheld gaming consoles to launch this year, with the company positioning the device as a rival to the Steam Deck and Nintendo Switch. Asus has been a major player in the PC space for years and will hope to boost the reputation of its new venture by making a positive impact in the world’s biggest gaming market.

Details: With multiple functions, the ROG Ally is essentially akin to a portable Windows 11 PC rather than a handheld gaming console. Players can play games, browse the internet, download files, and run programs. 

• Built on a cutting-edge 4nm processor, the customized AMD Ryzen Z1 Extreme processor features both Zen 4 architecture and RDNA 3 graphics. The Ally boosts high frame rates and strong image quality. 
• The ROG Ally screen features a 7-inch LCD display with 1080p resolution, a 16:9 aspect ratio, 500 nits of peak brightness, and a 120Hz refresh rate. Asus claims a 7ms response time and 100% coverage of the sRGB color space.
• The device weighs approximately 608 grams and is equipped with two fans, allowing better cooling at slower speeds to keep noise to a minimum.
• The new console comes with dual Dolby Atmos speakers and AI Noise Cancellation, which processes both incoming and outgoing audio to filter errant background noises from voice chats.
• The console comes with a 40Wh battery that Asus claims gives it up to two hours of life when playing heavy gaming titles. The ROG Ally comes with 16GB of LPDDR5 memory and 512GB of solid state storage, and can be upgraded with a microSD card. It is fully compatible with Steam, Xbox Game Pass, Epic, and GOG, among other platforms.

Context: Established in 1989, Asus is a Taiwan-based company known for personal computers and monitors. It founded ROG as a gaming brand n 2006. 

• According to market analyst firm Canalys, as global PC shipments declined by 16% year-on-year to 285 million units in 2022, Asus ranked in the top five, albeit also declining on 2021 shipments by 4%. Asus occupied a 7.2% share of the global PC market in 2022, selling 20.61 million units.

Nio announced aggressive price cuts on Monday. The unusual decision from the premium EV maker, which has previously refused to join the ongoing China EV price war, has drawn mixed reactions from experts, with some speculating on a significant sales recovery for the electric vehicle maker while others remain concerned about worsening margin pressures.

The Chinese EV maker on Monday decided to cut prices by RMB 30,000 ($4,199) across all its vehicle lineups, reversing its previous decision to keep pricing stable as part of “the DNA” of the premium brand. For instance, the base version of Nio’s ET5 sedan, once expected to be a high-volume model, now costs RMB 298,000 ($41,630) after the price cut, and RMB 228,000 if a customer chooses the company’s battery leasing plan, with a monthly battery lease fee of RMB 980.

Nio’s share price surged 8.7% on the news on Monday. But at the same time, the company’s gross margin hit a historic low of 1.5% in the last quarter, and the price reduction could further impact this figure. The company’s changing attitude toward price cuts comes at a time when it has faced a persistent delivery decline this year.  

Whether Nio’s lower-priced ES6 and ET5 cars prove to be popular could be the key to its very survival, as pressures mount on the smaller Chinese players in an increasingly competitive EV market. Nio’s deliveries in the first quarter fell by 22.5% to 31,041 vehicles from the fourth quarter last year; it also gave a weaker outlook for the second quarter: up to 25,000 units.

“Nio is playing a double sword game, and the outcome remains unknown,” said Yale Zhang, managing director of Shanghai-based consultancy AutoForesight.

Sales and efficiency boost

Nio’s recent price cuts could drive sales, especially in lower-tier Chinese cities where battery swap facilities remain inaccessible, according to Sun Shaojun, founder of consumer behavior research agency CarFans (our translation).

Sun expects the move, coinciding with the end of free battery swaps, to help Nio control costs and improve recharging network efficiency. Nio’s public chargers often lie idle as owners use the free swap service instead, Sun told TechNode on Monday.

Lei Xing, an auto industry analyst and former chief editor at China Auto Review, saw Nio’s decision as “a long overdue change” to better adapt to the environment, and the first step in a series of potential measures to save costs and improve efficiency. Xing added that Nio should also eliminate under-performing models from its overly large lineup.

Long-term uncertainty

In a market where most major EV makers are offering big price cuts in recent months, some experts are skeptical about the sustainability of Nio’s sale-boosting move.

Nio is anxious to reverse its declining sales trend and prevent further loss of market share from competitors such as Li Auto and some bigger players, AutoForesight’s Zhang said when contacted by TechNode. The price cuts will further damage Nio’s gross margins, as well as its ability to maintain its premium brand reputation long-term, added Zhang.

Xing thinks the price cut will help Nio deliver 180,000 vehicles this year, its current best-case scenario. Even this figure will fall short of an earlier prediction by the company: double last year’s unit sales of 122,486 cars.

“We believe there is an opportunity for us to still achieve deliveries of 20,000 units per month,” Nio chief executive William Li told analysts during an earnings call on June 9. “We need to make sure we can find a better way to meet user needs and expand their demands.”

Douyin is reportedly abandoning its goal of achieving RMB 100 billion ($14 billion) in total sales this year, as the business’ progress in the first half of 2023 has only reached one-tenth of the yearly target, falling extremely short of internal expectations.

Local media outlet LatePost first reported the news on June 10, citing a source close to the matter. While GMV is no longer the most important metric for the unit, the report said that exploring various ways to successfully run the food delivery business is now a more urgent priority for TikTok’s Chinese sibling.

Why it matters: Due to a lack of its own delivery logistic team, Douyin has relied on selling higher-priced set meal kits (which cut down the frequency of deliveries) and third-party delivery companies to offer its food delivery service. The approach is currently presenting challenges in scaling up the business.

Details: Starting in mid-2022, the short video platform has been testing food deliveries in Beijing, Shanghai, and Chengdu. Users in these three cities are able to order food for delivery within Douyin. But unlike market leaders Meituan and Alibaba’s Ele.me, restaurants selling goods on the Douyin platform need to use delivery riders from another service or deliver the food themselves, making the delivery cost run higher.

• Typically priced over RMB 100, meal kit takeaways are designed for several people to share and have longer delivery times compared to other platforms that prioritize individual sales and more timely delivery.
• In contrast to Meituan, which recorded a peak of 60 million in daily order volume for food deliveries last August, Douyin’s takeaway orders have experienced limited growth, with its average daily order volume from January to March reportedly remaining at around 10,000 to 20,000 units.

Context: Meituan and Ele.me now dominate the food delivery market in China, holding a more than 90% share of the market between them, highlighting the challenge for Douyin. Meituan has already begun a counteroffensive to maintain its leading position in the face of this new challenger.

• In March, Meituan introduced a marketing event called Shen Qiang Shou for merchants, which is currently being trialed in Shenzhen and Beijing. The promotional event allows users to purchase discounted coupons through Meituan’s own livestreaming or short-form videos, which can be redeemed for real goods within a specified timeframe.
• For consumers, Meituan conducts regular live commerce promotional events on the 18th of every month, with influential merchants selling discounted goods with the aim of stimulating demand. According to a Meituan statement, takeout vouchers worth RMB 86 million were sold on its first livestream shopping event, which lasted 11 hours on April 18.

Five years after a Nasdaq IPO, Chinese video site Bilibili faces mounting pressure to reach profitability. Despite 315 million monthly active users, the user-generated content site well-loved by China’s Gen Z and millennials has yet to find a way to sustain its growth. 

On June 1, Bilibili reported its first quarterly earnings of 2023, showing continued flat growth in revenue but far reduced net losses. It made RMB 5.1 billion ($738.2 million) in revenue, representing 0.3% yearly growth and a 16.39% decrease from the last quarter. The company reported a net loss of RMB 629.6 million, narrowing 72% from the same period in 2022, and 58% less than the previous quarter’s RMB1.5 billion losses. 

Bilibili attributed narrowed losses to effective spending control, specifically a reduction of 8% in revenue-sharing, 16% in server and bandwidth, and 30% in sales and marketing compared to the same period in 2022. 

Despite continued improvements in cutting its losses, Bilibili is facing persistently slower revenue growth over the past several years. In 2022, Bilibili brought in RMB 21.9 billion (US$3.2 billion) in revenue, up 13% from the previous year. To compare, in 2020, revenue grew by 77% in a year, and in 2021, by 62%. 

Bilibili had RMB 19.56 billion left in cash at the end of 2022. Based on Bilibil’s current operating expenses, the cash will be enough to sustain it for another five to seven quarters, or until mid-to-late 2024, according to its earnings report. With a tighter investment sentiment and an increasingly competitive online content space, Bilibili needs to achieve profitability soon, or at least show investors that it is on the right path. 

Bilibili’s plan for commercialization

Compared to other mainstream long-video platforms in China, Bilibili has a competitive advantage: decent quality content generated by users. This makes its video content and style completely different from long-video competitors such as iQiyi, Mango TV, Tencent Video, and Youku, which focuses on professional content like TV dramas, variety shows, and movies. 

Bilibili understands its strength and sees the engagement of users within the community as the foundation of its business. It has taken strong measures to protect that community feeling, such as when founder Xu Yi promised users in 2014 that the platform would never do bumper ads on newly imported anime series. 

But as Bilibili faces a more competitive market and an urgency to make money, integrated marketing and performance-based ads have become greater focus areas. 

Bilibili plans to utilize its creators’ influence and the platform’s community atmosphere to expand customized and in-stream ads, according to the two most recent quarterly earnings calls. 

Li Ni, vice chairman and COO of Bilibili, said in the first quarter earnings call that in order to expand ad revenue, the platform selected six specific industries last year and developed precise advertising models tailored to each industry. These include gaming, online shopping, consumer electronics, fast-moving consumer goods, and automobiles.

Li emphasized Bilibili’s advantages in gaming and e-commerce in particular. For example, Bilibili integrated its internal units to convert more gaming-interested users to spend more on game-related items on the platform, after seeing that more than 40% of mobile users on Bilibili watched gaming content daily. Li said the platform also saw 110% yearly growth in ad revenue growth in the online shopping segment after sharing data and ads with Alibaba, Pinduoduo, and JD. 

Bilibili currently uses Huahuo, an advertising platform established in late 2020, to connect advertisers directly to its content creators. In the past, the platform relied more on highly customized and creative ads (such as known creators making customized scripts and video ads). It may now create more general ads for creators to embed in their videos, speeding up ad execution. 

E-commerce is another place Bilibili is seeing growth, viewed by the platform as “an opportunity for increased advertising and revenue streams for content creators,” according to its first-quarter earnings call. In the first quarter, the platform saw more than 10 million users watch shopping suggestions and other e-commerce-related content on Bilibili daily, surpassing expectations. 

Competing for Chinese users’ viewing time

Two factors have contributed to Bilibili’s revenue slowdown in the past years. The first is short-term: Covid-related hits on ads and e-commerce revenues. The second is more long-term and structural: Bilibili faces increased competition from other rising content platforms — short video platforms like Douyin (the Chinese version of TikTok), Kuaishou, social e-commerce platforms like Xiaohongshu, and others. 

In 2022, like many other businesses, Bilibili was hit by uncertain macroeconomics, as advertisers and consumers scaled back spending during Covid resurgences. The video site saw sharp quarterly declines of 34.42% and 13.33% in advertising in the first quarters of 2022 and 2023, and a recovery in the second to fourth quarters of 2022. As China’s economy continues to recover in the second half of 2023, the company is likely to overcome these setbacks. 

Yet Bilibili faces a more entrenched threat: the rise of short video platforms and social content platforms that increase competition in the content sector, making it harder for Bilibili to grow profits. 

Short video platforms like Douyin and Kuaishou are expanding much faster in the past five years, in terms of market size, than video platforms like Bilibili. 

China’s online video sector has a market size of RMB 600.9 billion ($92.5 billion) and a 32% annual growth rate in 2020, according to China Netcasting Services Association (CNSA). Short video platforms benefited from the widespread success of Douyin and Kuaishou, with astonishing annual growth rates of 179%, 731%, and 172% in 2017, 2018, and 2019. Although the growth rate of short videos has slowed down to 42% in 2021, it still far exceeds the average annual growth rate of around 20% for other long-form video platforms over the past five years. In 2020, short videos accounted for more than a third of the online video industry, exceeding the 20% market size of long-form videos.

Moreover, Xiaohongshu, a content platform known for product reviews and lifestyle blog posts targeting mobile users, is also expanding its own commercialization potential. The private company saw about 200 million monthly active users on its platform in 2022, according to Qian-gua data. 

As Bilibili faces increasing revenue pressures, the company is compelled to explore aggressive advertising strategies. The platform has already suffered public backlashes. In April, some creators complained that the site’s updated incentive system has reduced their income, with some experiencing a significant drop in income. To reach its own goal of becoming break-even in 2024, Bilibili needs to prove to advertisers and marketers it has value and competitive advantage over other content platforms while maintaining its healthy user and creator ecosystem. 

TikTok has announced that it has 8.5 million monthly active users in Australia, in the short video platform’s first disclosure of its user numbers in the country. The platform, owned by Beijing-based tech firm ByteDance, also said TikTok is being utilized by 350,000 businesses as a marketing tool to reach and engage new clients in Australia.

Why it matters: The figure suggests that more than 30% of the Australian population is using TikTok. Australia banned TikTok on government-issued devices in April.

Details: Australia joined more than 10 countries (including the US, the UK, Canada, New Zealand, France, Denmark, and India) in banning the use of the ByteDance-owned short video platform on government devices in April.

• Australia’s Attorney-General’s Department said in April that TikTok poses “significant security and privacy risks to non-corporate Commonwealth entities” due to its extensive collection of user data.
• Lee Hunter, TikTok’s Australia and New Zealand general manager, said the company was “extremely disappointed” by the government-level ban, attributing the decision to “politics” instead of facts.
• TikTok set up an Australian branch office in mid-2020 when the video-sharing platform experienced massive user growth in overseas markets. 
• TikTok announced it had 150 million monthly active users in the US three days before a congressional hearing in the country attended by TikTok CEO Shou Zi Chew on March 23, in an attempt to emphasize the platform’s wide reach across the US and counter a potential nationwide ban. 

Context: TikTok has long been questioned by Western countries on whether it shares users’ data with the Chinese government.

• Over half of US states have announced bans on using TikTok on official devices. Montana authorities have announced their intention to begin blocking all residents from accessing the platform from January 2024. TikTok filed a lawsuit against the Montana government shortly after the bill passed in May.
• TikTok is also under scrutiny in Vietnam. The country’s Ministry of Information and Communications stated on Monday that it is holding probes into allegations of illegal and irregular activities by TikTok, and is expected to make a public announcement in July upon completion of the official investigation.
• The Vietnamese government frequently requests social media platforms such as YouTube, Facebook, and TikTok remove content it considers illegal, and regularly reports on the number of links or videos removed by each platform. In April, the information ministry said that TikTok may face a ban in the country if it fails to comply with instructions to remove content it deems to be in violation of its rules, according to local media outlet VnExpress.

Volkswagen has made headlines in China following an incident on Monday in which a VW electric vehicle crashed into a motorway toll station and caught fire in Hangzhou, resulting in the death of four people, according to a report in financial media outlet Caixin.

Why it matters: Video clips that show firefighters working near the burning car have drawn social media attention, with comments voicing concerns about EV safety that may cast a shadow over VW vehicles sold in China.

Details: A passenger vehicle hit a barrier at a Hangzhou toll station in the eastern Chinese city early on Monday, catching fire immediately, and killing the four men in the vehicle, the city’s traffic police confirmed in a post on Chinese microblogging platform Weibo.

• The local authorities did not provide further details about the incident or specify a cause of the blast. Several video clips have gone viral on the Chinese internet showing a VW-branded battery-powered EV at the center of the fatal crash.
• SAIC-Volkswagen, a joint venture between the German automaker and SAIC Motor, is cooperating with investigations, Caixin reported, citing someone close to the company. The firm did not respond to TechNode’s request for comment.

Context: China requires EV battery systems to be designed so as not to catch fire or explode for at least 30 minutes after a crash at 50 kilometers per hour (31mph) or under, an expert from the China Automotive Engineering Research Institute Co., Ltd told Caixin.

• Sales of VW’s battery-powered EVs in China dropped 25.4% year-on-year to around 21,500 units for the first three months of this year, as the German auto major faced growing pressure from Tesla and a slew of Chinese firms led by BYD.
• VW currently sells three models under its purely electric ID. series in China, namely the ID.4 crossover, the ID.3 hatchback, and the seven-seater ID.6, covering the mainstream luxury car segment with a price range of between RMB 150,000 and RMB 350,000 ($21,045-$49106).

Chinese short-video platform Kuaishou reported impressive growth in home appliance sales on the platform as China’s mid-year 618 shopping festival gets underway. Kuaishou saw single-day GMV of home appliances on June 1 top RMB 100 million ($14 million), a 42-fold increase compared to last year, data from the company showed.

Why it matters: Kuaishou is seeing results from the continued expansion e-commerce on the platform. In 2022, the Chinese short video platform generated over RMB 900 billion from its livestream commerce business. 

• Chinese content platforms, whether short video apps such as Douyin and Kuaishou or social content apps like Xiaohongshu, are increasingly looking at e-commerce as a way to commercialize their popularity. 

Details: In the first three days of June, the GMV growth rate of household appliances that have high unit prices on Kuaishou increased by nearly 500% from a year earlier, making it the category with the largest increase, according to data released by the firm.

• On June 1, 15 merchants selling home appliances saw their total sales exceed RMB 1 million. Chinese brands TCL, Haier, and Aucma were the top three brands in terms of sales volume.
• Taking the Haier 470L refrigerator as an example, users can purchase it for RMB 3,599 in Haier’s official store on Kuaishou. This price is consistent with the flagship Taobao store of the brand. But users can earn cashback of RMB 300 after they complete their order on Kuaishou. However, the same refrigerator is priced at RMB 3,099 on value-oriented platform Pinduoduo.
• In 2022, the repurchase rate of Kuaishou’s e-commerce business was basically stable at 70%, according to data compiled by Southwest Securities. Meanwhile, Kuaishou recorded over 100 million monthly active paying e-commerce users in the third quarter of 2022; it did not update these figures in its latest earnings report. 
• The Douyin rival launched the “Stream Initiative” program this January, which aims to help merchants identify their target customer base through KOL (influencer) distribution and accurately recommend merchants’ self-operated livestreams to potential clients.
• Since the first quarter of 2023, Kuaishou has started to charge commission revenue from influencer distribution.

Context: Categories with higher unit prices, such as home appliances and consumer electronics, are currently showing more growth on Chinese mainstream live-commerce platforms, although the timeframe of the statistics differs from platform to platform.

• TikTok sister app Douyin saw GMV generated from the home appliance industry increase 808% compared to the same period last year during this year’s 618 pre-sale period, which started from May 25 and lasted five days. Douyin saw seven home appliance brands surpass RMB 50 million in sales on the platform.

On Monday, leading chip manufacturer TSMC started pre-production operations on its 2nm process, according to Taiwan-based media outlet Economic Daily News. Sources revealed that the chip maker will use an advanced AI system to improve energy efficiency and accelerate efficiency. Apple and Nvidia are expected to be among the first batch of customers for the Taiwan-headquartered company’s 2nm production, putting significant pressure on its competitors such as Samsung.

TSMC did not comment on specific details in response to the report, but stated that the development of 2nm technology is progressing well and aims to hit mass production by 2025.

Why it matters: TSMC’s 2nm plan could bring it into head on competition with Samsung. Samsung, which beat TSMC to be the first chip manufacturer to widely employ 3nm processes, also announced last year that it expects to have 2nm chips in mass production by 2025.

Details: According to the report, TSMC is estimated to begin test producing hundreds of 2nm chips this year, laying the foundation for mass production in 2025. The 2nm production base will be established at TSMC’s Fab 20 at Hsinchu Science Park, with subsequent expansion to Taichung Science Park, encompassing a total of six phases of engineering. 

• TSMC has already begun to dispatch engineers to the Hsinchu Science and Industrial Park for the 2nm process, building a research and development team of over 1,000 employees, according to Economic Daily News. 
• In the initial stages, TSMC will set up a small trial-production line at its Hsinchu headquarters, with a target of taping out around 1,000 2nm chip pieces by the end of this year, the report said. 
• On April 26, TSMC showcased its latest technology developments at its 2023 North America Technology Symposium, including in the fields of 3nm and 2nm technology. 
• The 2nm process will be the first process node at TSMC to employ gate-all-around (GAA) transistors, nanosheet transistors which TSMC says will boost performance, energy efficiency, and transistor densities. The company claims this will offer an improvement in speed of up to 15% over 3nm at the same power, and up to 30% power reduction at the same speed.
• Nvidia’s CEO Jensen Huang previously said at GTC 2023 that TSMC will bring the AI system that Nvidia and TSMC and other partners worked on into 2nm trial production this June. The system promises a computation time that is 1/40th of its predecessor.

Context: Samsung expects to have 2nm chips in mass production by 2025 and plans to deliver mass production using a 1.4nm process by 2027.

• TSMC reported record revenue for 2022 of NT$2.26 trillion ($74.25 billion), a rise of 42.6% from 2021. It was the first time the world’s largest contract chip manufacturer reached NT$2 trillion in revenue for a year.
• The Apple iPhone 15 Pro will be powered by the A17 Bionic chip based on TSMC’s 3nm technology, according to product review site Tom’s Guide. The chip is also expected to debut in this year’s upcoming MacBook models.