Chinese Economic Weekly Review - Jun.18~Jun.24
The must-see weekly hotspots of China's economy, all here for you!
Excessive Collection of Personal Information Leads to Summoning of Starbucks and Two Other Companies
Recently, the Shanghai Cyberspace Administration, in conjunction with the Municipal Market Supervision Bureau, along with the Xuhui Cyberspace Administration and Huangpu Cyberspace Administration, summoned three companies in accordance with the law. Starbucks, Shake Shack, and Tiantai Restaurant were requested to comprehensively rectify their excessive collection of personal information and fulfill their obligations in protecting personal information to safeguard the legitimate rights and interests of consumers.
The representatives of the three companies acknowledged that their misunderstanding of legal provisions such as the "Personal Information Protection Law" and the "Method for Determining Illegal Collection and Use of Personal Information by Apps" resulted in the identified issues. In the next steps, they will actively cooperate with regulatory authorities and conduct self-inspections and rectification measures based on the requirements raised during the summoning.
MJ Comment: Striking a balance in regulatory measures is crucial, as excessive strictness could further limit the advertising effectiveness for small and medium-sized advertisers, while lax enforcement would undermine the significance of law enforcement. Currently, this represents a challenge for regulatory agencies within the current economic environment. Therefore, the "selection" of Starbucks is likely aimed at achieving a deterrent effect.
Alibaba Group Announces Leadership Change: Zhang Yong to Step Down as Chairman and CEO on September 10th
Zhang Yong, Chairman and CEO of Alibaba Group Holding Limited, announced that he will step down from his positions as Chairman and CEO of Alibaba Group Holding Limited on September 10th this year. Cai Chongxin, Executive Vice Chairman of the Group, will assume the role of Chairman of Alibaba Group Holding Limited, while Wu Yongming will become the CEO of Alibaba Group Holding Limited, while continuing to serve as Chairman of Taotian Group.
In his company-wide message, Zhang Yong announced that the new business clusters of Alibaba's "1+6+N" strategy have essentially taken shape, with the boards of directors of various business groups already operational. The listing and financing plans for multiple businesses have also been initiated. The holding group will primarily undertake the role of an innovation incubator, as Alibaba as a whole sets off toward the future with a brand-new posture.
Zhang Yong also revealed that the complete spin-off of Alibaba Cloud Intelligence Group has been initiated and is currently in a crucial stage of upward development. To fully devote himself to this endeavor and to meet future regulatory requirements, he believes it is no longer suitable for him to concurrently hold the positions of Chairman and CEO of two companies. Henceforth, he will focus on serving as Chairman and CEO of Alibaba Cloud Intelligence Group, dedicating his efforts to the development of Alibaba Cloud.
MJ Comment: This is perhaps the most significant change Alibaba has undergone in recent years, and it pertains to both the future of Alibaba and the Chinese economy as a whole. For further analysis, please refer to this article:
Pinduoduo Wraps up its 618 Promotion with Rapid Growth in Various Categories
Despite the recent downturn in consumer spending over the past two years, major e-commerce platforms no longer disclose their respective Gross Merchandise Volume (GMV) during promotional events. However, Pinduoduo's performance during this year's 618 promotion remains impressive.
Among the highlights, there was a more than 790% increase in sales for the beauty category, while women's lingerie brands experienced a staggering year-on-year growth of 1900%. Well-established sportswear brand Warrior achieved sales of 30 million RMB during the opening phase. Pet brand Maifudi sold 300 tons of its single product, cat food. Dairy brand Yili accumulated sales exceeding 50 million boxes of its products, and so on.
MJ Comment: I understand that many people still consider Pinduoduo as a platform for low-priced, low-quality products. However, the reality is that it is gaining increasing recognition from both businesses and consumers. Similarly, although TEMU's growth in North America has slightly receded, I still believe it will be Amazon's biggest challenger in the coming years.
TikTok CEO Announces Plans to Invest Billions of Dollars in Southeast Asia
TikTok, a subsidiary of ByteDance, has revealed its plan to invest billions of dollars in Southeast Asia over the next three to five years, aiming to strengthen the influence of its popular video application in the region.
TikTok CEO Zhang Shouzi stated that the company seeks to make corresponding investments to seize the opportunities presented by Southeast Asia. During an event held in Jakarta on Thursday, he mentioned that TikTok has over 8,000 employees in the region, with nearly 2,000 in Indonesia.
MJ Comment: I believe that TikTok has been slow in making bets on Southeast Asia. In fact, TikTok's commercial performance in North America has not been particularly impressive, and it has faced continuous suppression due to geopolitical reasons. Meanwhile, Southeast Asia has already become the most attractive region for investment by internet companies, without a doubt.
Victoria's Secret Closes Global Flagship Store on Beijing's Wangfujing Street
Recently, the well-known American lingerie brand Victoria's Secret has closed its store located in the Wangfujing Central Plaza shopping center. It is reported that this was Victoria's Secret's largest store in Beijing, officially opened in 2017 and situated in close proximity to the Wangfujing pedestrian street. The store boasted a prime location and spacious area, offering the full range of Victoria's Secret lingerie products.
The Victoria's Secret store at Wangfujing Central Plaza was positioned as a global flagship store. It occupied three levels (basement, ground, and first floor) in the northeast corner of the east wing of the plaza, covering an area of approximately 2,700 square meters. Since its opening in 2017, it had been the fourth full-category store following those in Shanghai, Chengdu, and Chongqing. It was also the second global flagship store in China to feature a Victoria's Secret Angel Suite. The sudden closure of this store after six years has sparked discussions among netizens.
MJ Comment: This brand is stuck in a very awkward market moment. The economic downturn has led to a decrease in consumption of this kind of brand among the middle class, while wealthy individuals feel that Victoria's Secret no longer aligns with their status. Furthermore, based on feedback from my female friends, the quality of Victoria's Secret's lingerie is often considered poor.