This Week in China (2/10–2/16)

Top news in China this week

Tencent established a 1.5 billion RMB (200 million USD) fund targeting anti-coronavirus efforts. The fund is for technological support, science and medical projects, humane care, disease prevention, and so on. On top of that, Tencent has already donated 20 million USD to Tsinghua University for its coronavirus research projects.

Besides, with its powerful A.I., cloud, and big data assets, Tencent has been helping research efforts by providing its technological resources for free in support of vaccine selection and mutation prediction studies currently underway.
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Alibaba’s Q3 revenue reached 161.456 billion RMB, beating market consensus of 159.209 billion RMB, and year over year growth reached 38%. On the other hand, net income reached 52.309 billion RMB beating the 30.335 billion RMB consensus by a large margin and showed a YOY growth of 58%.

On the user side, monthly active users in the Chinese retail market reached 824 million in December 2019 for the firm, up 39 million from September. However, Alibaba CEO Zhang Yong said during the earnings call that coronavirus would bring new challenges to the company, and the March earnings will likely be negatively impacted. The stock fell following the news.
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The coronavirus outbreak may delay the iPhone 9 production. According to Nikkei News, Foxconn has canceled its original back-to-work date due to safety concerns regarding the coronavirus in Shenzhen as well as Zhengzhou factories.

Analyst Guo Mingzheng of T.F. Securities CO. stated that the Zhengzhou Foxconn factory is its most important production line in manufacturing iPhones, mainly responsible for the iPhone 11 and S.E. 2 series. The factory was initially scheduled to resume work on February 10 but postponed the plan for another week. The return rate of workers might be around 40–60%.
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Industry insider AI
AI sector battles the coronavirus. Ever since the beginning of the epidemic outbreak, A.I. technology has been an integral, crucial part of the resistance. It is undeniable that robotics and A.I. have made a truly significant impact during the epidemic, safely and efficiently completing tasks to reduce human risk factors.

On top of the medicine delivering robots, mask manufacturing robots have also been playing an essential role in disease prevention. Yang Anming, deputy general manager of Takuno Robot, told CV intelligence that, “At the time of the outbreak, masks were becoming more and more expensive and inaccessible, so we decided to create the automatic mask production line.” With experience from previous overseas orders of mask producing robots, the company utilized its robots to efficiently produce N95-masks without having to risk human lives in crowded factory environments.
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Grocery Delivery
Online food and grocery delivery platforms are getting a sale boost as more people are staying home and ordering everything they need online under the fear of coronavirus.

  • Sales from JD Daojia show a 470% increase from last year
  • Miss Fresh’s sales show a 350% increase.

However, with the rapid increase in order volume, delivery speed is lagging. Miss Fresh, which used to boast its “1-hour delivery”, is now taking up to a day to fulfill its orders. Vendors are trying out new methods to cope with the situation, including trying to recruit restaurant workers who are not working anymore into their delivery force.
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Fundings this week

Medical Services
Universal Medical Imaging Diagnostic, an independent diagnostic imaging provider, has secured over 600 million RMB (86 million USD) in a Series Bround of funding, completing the largest fund-raising so far in the diagnostic imaging field. This round was led by CEC Capital-owned industrial fund, Cathay Capital, and V Star Capital.

Founded in 2011, Universal Medical is the first independent third-party imaging center in China. The company focuses on the diagnostic imaging of complicated diseases. It provides exclusive medical services such as accurate imaging diagnostic services, in-depth health examination services, and multi-disciplinary joint consultation for patients. Universal Group has offered its cloud-based resource-sharing platform to medical institutes across China to fight the Novel Coronavirus outbreak.
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Wedding Brand
Galleria, the largest high-end wedding chain brand in China, has raised tens of millions of USD in Series A financing led by Vision Knight Capital. Founded in 2014, Galleria has deployed more than ten one-stop wedding halls in a combination of direct and joint models, serving more than 25 thousand newlyweds. Its business covers first-tier cities such as Beijing and Shanghai and new first-tier cities such as Hangzhou and Suzhou.

The wedding industry is a trillion-dollar industry, maintaining 15% annual growth. And young newlyweds are more willing to pay a premium for high-quality product and service experience in wedding consumption.
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More Buzzes Struggling Business
As Chinese companies resumed work after the long break, some people faced no work on the first day. Xinchao Media, a Chinese unicorn that places ads in elevators, announced a slash of roughly 500 employees, which accounted for 10% of its total workforce. Additionally, it also reduced executives’ salaries by 20%.
The ongoing epidemic has created a cruel reality for Chinese white-collars. Offline businesses, such as restaurants and retail stores, are already suffering. How many more people will lose their jobs amid this outbreak? Only time can tell.
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“Cloud” Entertainment
Kuaishou launches “cloud clubbing”; Nightclub gets 300,000 fans in 30 minutes. Recently, “cloud clubbing” has been a popular topic in many major cities such as Beijing, Qingdao, Chengdu, etc. Several nightclubs in these cities have joined the trend on Kuaishou to live broadcast the party scene.

Some of the renowned nightclubs and labels include Dr. Oscar, Monster Park, Supre Monkey, SPACE PLUS, 0731 MISSION, SIR TEEN, ECHOBAY, etc. Among them, SIR TEEN, accumulated 300,000 fans in a 26 minutes broadcast, with more than 100,000 people being simultaneously online. The total number of audience exceeded 2.31 million people, with over 3 million likes.
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Despite the spreading of the coronavirus, Xiaomi launches the Mi Note 10 Pro.

  • The starting price of this new 5G incorporated phone is 3999 RMB (about 550 USD), making it Xiaomi’s first step towards manufacturing high-end, luxurious smartphones.
  • The new model utilizes the Snapdragon 865 chip and is named “The world’s strongest 5G device” by Lei Jun.
  • Furthermore, its GPU functionality has increased by 25%, with a decrease of 25% on battery cost. The A.I. performance is also equipped with the fifth-generation Qualcomm engine, making it one powerful device.

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Chinese Electric car maker Xiaopeng announced Xpeng P7, with a 700km range. According to Xiaopeng, P7 will become the electric car with the longest range in China, surpassing Tesla’s Model S.

Is longer range the correct path of development for electric cars? It is not likely that battery capacity will increase much with current technology, so longer range equates putting more battery cells into the vehicles making it more expensive. Some analysts have pointed out that the industry should focus on increasing the number of charging stations and battery charging speed. As of November of last year, China has 1.1 million charging stations according to estimation from EVCIPA. But it’s estimated that 4.8 million outlets are needed to satisfy the 5 million electric vehicles’ basic charging needs. China will need to increase its charging facility construction to keep up with the market demand.
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Happy Weekend!

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Stories about China’s tech giants, startups, funding, venture capital, trends, and industries of tomorrow.