China E-commerce Weekly: Labor Day Outlook, Alibaba's GPT effort, Growing Anxiety of Traditional E-commerce Sellers

E-commerce platforms kick-start Labor Day Campaigns

JD.com announced the schedule and rules of the Labor Day campaign, starting from April 24 to May 5th. The campaign targets consumer's outbound travel, household renovation, and willl award additional traffic to merchants that are actively participating. Tmall's campaign start from April 24th to April 28th, with a focus on offering high quality products at value prices to customers. Douyin, on the other hands, join hands with vast amount of offline merchants & restaurant to bring best value to the visitors - trying to capture the long-awaited domestic travel boom. It's speculated that the Labor Day campaign is a prelude to the June 18th - the most important campaign of first half of year 2023.

Taobao Beta-tests the Merge of Shop & Content

Taobao is making a move to merge the shop sturcture & the multi-media content account. After the merge, customers are able to find all historical content released by the merchant in the shop - and vice versa. This is seemed as an effort for Taobao to further transition to building interest-based e-commerce. Douyin's high YoY growth in e-commerce sales proved that content that captures interest are valuable assets to the merchants. The Douyin model had completed what Taobao had set out to do much ealier - and now Taobao is making the transformation to enhance it's attraction to audience by making e-commerce more entertaining.

LVMH Plans to Relocate More Roles to Shanghai

According to Bloomberg, LVMH is considering to relocate more roles from Hong Kong to mainland China. After the restructuring, Shanghai office to take more responsibility of the market of China mainland, Taiwan, Macau, while Hong Kong office will manage the local Hong Kong market. LVMH also mentioned in the financial meeting that Chinese off-shore spending is growing much faster than domestic consumption, however China mainland revenue were 4-5 times higher than offshore. Relocating the senior roles to Shanghai is seen as an effort to further grow China market performance.

Tencent's WeChat Short Video Channel Announced Incentives to Brands

WeChat Short Video channel announced latest incentives to brand merchants who are operating livestream campaigns in WeChat, by providing thousands extra UV exposure per live campaign through it's recommendation algorithm. This will also come with an evaluation of the brand's historical performance and brand awareness. The UV bonus will help brands grow per live campaign sales, but requiring each campaign to last for at least 3 hours.

Alibaba Announced Closed Beta Test of GPT Tongyi

On April 7th, Alibaba's AliCloud announced closed beta test of GPT Tongyi. Earlier this month, influencer ChapingX shared a short video of a integrated and optimized GPT model had been fitted into Tmall's Genie, a smart-home speaker comparable to Amazon Alexa. The GPT empowered Tmall Genie adopted the voice of a popular talk show host Niaoniao, and due to the optimized GPT effort and fast local network connection, the GPT powered Tmall Genie was able to respond faster and more logical to the users than other domestic competing products.

Growing 'Anxiety' Among Chinese Online Sellers As Douyin E-commerce Boom

Traditional e-commerce businesses in China are facing increasing anxiety as content e-commerce platforms like Douyin surpass them in terms of sales. However, brands should not compare platforms, but instead focus on evolving operation strategy. In an interview conducted by Ebrun to several traditional Taobao & JD merchants, many responded that Douyin deserves more investment, but the user base and transaction volume of Tmall and Taobao are still significant. Traditional e-commerce channels need to be retained. Brand should focus on user retention and conversion, making use of existing channel resources to turn visitors into buyers. The business strategy of many brands is to focus on the market share and profit margin of core categories, challenging the organization's capability to manage efficiency across the production of content, acquisition and conversion of traffic. "The brand is global, and the users are mobile".

L'Oreal China Launches "5 Realms" Strategy to Capture China Beauty Market Boom

L'Oreal China recently held its "Beauty Without Boundaries · Novelty - 2023 Development Strategy Annual Communication Meeting" in Shanghai. The financial report showed that in 2022, L'Oreal China's performance will increase by 5.5% year-on-year, 11 percentage points higher than the market average, with double-digit growth in e-commerce channels. L'Oreal China will top the list of beauty makeup groups on Tmall, JD.com, and Douyin platforms during the "Double 11" period in 2022. The company has released a new "5 Realms" strategy, focusing on innovation, diversity & inclusion, global localization, and sustainability. L'Oreal is committed to becoming a leader in beauty technology and innovation, creating personalized services in China, and promoting sustainable social development. L'Oreal China aims to "cover 200 million Chinese consumers by 2030" and continue to help China become the trend vane and source of inspiration for the global beauty market.