Recap of 2023: Significant Events in Chinese E-Commerce

January

JD.com supports individual merchants in registering the stores
JD.com announces support for individual users and sole proprietors to join, introducing the "Spring Dawn Plan" with 12 supportive policies, including fast onboarding, "Free Trial Operation," and a 2100 yuan ($296) "New Store Gift Pack" to boost entrepreneurship and relieve burdens for new merchants.

February

TEMU launched ads for American ‘Super Bowl’

TEMU launched ads that lasted 2 minutes and 30 seconds on the American ‘Super Bowl’, increasing 45% downloads and 20% daily active users on the same day. This marketing event brought TEMU about 20 million news with a 7 yuan ($0.99) average customer acquisition cost, while the regular cost would reach 100 yuan ($14.1).

March

1. Alibaba Group’s ‘1+6+N’ revolution

Alibaba Group released the ‘1+6+N’ revolution, which means setting independent boards of directors for Alibaba Cloud, Taobao & Tmall, Local Consumer Services, Cainiao Logistics, International Commerce and Digital Media and Entertainment as key strategy business, and other groups, taking responsibility of their own groups respectively.

2. Alibaba announced five key strategies - live streaming, private domain, contentization, local retail, and pricing power

Internally, Alibaba employees refer to these five strategies as the "Five Great Battles." Correspondingly, the five competitors are Douyin (TikTok), WeChat, Xiaohongshu (Little Red Book), Meituan, and Pinduoduo. Within Taobao, it is explicitly stated that, compared to Gross Merchandise Volume (GMV) growth, a more crucial metric for this year is the growth of Daily Active Users (DAU).

3. Pinduoduo's 'Welfare Society' Store Faces Rapid Shutdown Amid Controversial 'Store Bombing' Incident

On March 23, within just 4 hours of the launch of Pinduoduo's self-operated store "Pinduoduo Welfare Society," it was forcibly taken offline. During this time, a large number of small and medium-sized merchants entered the self-operated store as consumers placed orders, and then frequently cancelled orders or applied for "refund only" after delivery. Simultaneously, they used offensive language to insult brand store customer service personnel, disrupting the normal operation order of the store. At the core of the controversy surrounding the "store bombing" incident is Pinduoduo's "refund only" rule. Small and medium-sized merchants believe that Pinduoduo's policy almost unconditionally favours buyers, thereby harming the interests of the merchants.

4. Nike CEO Anticipates Strong Recovery in the Chinese Market

Nike reported its fiscal Q3 2023 results, showing a 14% YoY revenue increase, reaching $12.39 billion, surpassing analysts' $11.5 billion expectations. Net profit declined 11% to $1.24 billion, with diluted EPS at $0.79, beating the expected $0.55. CEO John Donahoe expressed satisfaction with China's market momentum, citing strong fundamentals and growth potential due to sports and health trends.

April

1. Biyin Lefen acquired CERRUTI 1881 and KENT & CURWEN
Biyin Lefen announced its subsidiary, Houdezaiwu, invested €57 million and €38 million in Kerry Tech and Yingfeng Zerun, respectively, acquiring Cerruti's Singapore and France entities. The move indirectly secures global trademark ownership of luxury brands "CERRUTI 1881" and "KENT&CURWEN."

2. Chinese unemployment rate for young people reached 20.4%

Chinese unemployment rate for young people aged 16-24 reached 20.4%, surpassing 20% for the first time. Fu Linghui, the spokesperson for the National Bureau of Statistics, stated on May 16 that relevant departments are actively introducing policies and targeted assistance to improve the employment situation for young people.

May

Heytea × Fendi collaboration

Heytea collaborated with the luxury brand Fendi to launch a co-branded beverage. The product was priced at 19 yuan ($2.67) and accompanied by yellow paper cups, coasters, badges, and a tote bag featuring the Fendi English logo.

June

1. LVMH president visited China for market research
LVMH President Bernard Arnault commenced his first visit to China after the pandemic, touring the retail stores of LVMH brands in Beijing's core business districts. With China as its largest revenue source, contributing 30% of income, LVMH actively prioritises the dynamic and growing Chinese market, where Arnault's visit underscores its commitment.

2. French fragrance brand LE LABO opened its first Chinese store in Shanghai

French fragrance brand LE LABO opened its first Chinese store in Shanghai. The store maintains the traditional architectural style of a century ago, with preserved black lacquer doors and windows complemented by refurbished stained glass. Inside, the brand features a "perfumer's workstation" to recreate the perfumer's working environment, allowing customers to experience LE LABO's fragrance craftsmanship. Additionally, LE LABO has set up the world's second-brand coffee shop within the store.

3. Kering Beauté acquires British fragrance brand Creed

Kering Beauté announced the completion of an agreement to acquire 100% of Creed from the BlackRock Long Term Private Capital Europe fund and Javier Ferrán, the current Chairman of Creed's Board. Founded by James Henry Creed in 1760, Creed is the world's largest independent luxury fragrance brand, renowned for its timeless and exquisite perfume collection, with Aventus being its iconic masterpiece.

August

1. CNY offshore exchange rate fell below 7.3
The Chinese yuan's offshore exchange rate against the US dollar hit a new low in 2023, briefly falling below 7.3. On August 16, the central parity rate was set at 7.1986, down 218 basis points, and the offshore yuan reported a slight drop to 7.3356.

2. Huawei quietly launched the Mate 60 series, leading the trend of domestic chip production

The Mate 60 achieved domestic production of the crucial 5G chip, marking a breakthrough from "zero to one." Over a few years, Huawei has partially overcome technological barriers in 5G mobile chip development, injecting vitality into China's efforts for independent and controllable chip production. Its demands still exceed supply currently.

3. L'Oréal Group acquires Aēsop with 2.53 billion USD
The world's largest beauty company, L'Oréal Group, announced the completion of its acquisition of Aēsop, a niche high-end skincare brand under the Natura&Co. Group. This marks L'Oréal's largest acquisition to date in the beauty industry and the largest acquisition in the beauty sector since 2023.

4. Prada debuts makeup and skincare products in China
Prada debuts makeup and skincare products in China, presenting the Skin Collection for foundations and skincare and the Color Collection for makeup. The products, priced from ¥315 ($44.39) to ¥3,370 ($474.9), emphasize sustainable packaging. This marks Prada's entry into beauty, enriching L'Oréal's high-end portfolio.

5. Japan discharged radioactive wastewater into the ocean

On the day Japan initiated the release of nuclear-contaminated water, radiation levels around the Fukushima Daiichi Nuclear Power Station was measured at over 200 times the standard limit. This behaviour resulted in a sharp decrease in Japanese beauty brands and seafood sales.

September

1. The debate about ‘Florasis’ triggered by Austin Li

One of the top Chinese KOLs 'Lipstick King Austin Li, blamed consumers for insufficient income and stood up for the Chinese beauty brand ‘Florasis’, resulting in a negative impact on himself and the brand image. However, this incident did not influence the GMV of Austin Li during 2023 Single’s Day, while the brand sales decreased to some extent, making brands and retailers more cautious about cooperation with KOLs. 

2. Maotai × Luckin Coffee: Sauce Fragrance Latte
One of the Hottest Marketing Events of 2023. On September 4th, Guizhou Moutai, one of the most expensive Chinese alcohol and Luckin Coffee jointly released the co-branded coffee "Sauce Fragrance Latte." It was reported that the sales exceeded 100 million yuan ($14.1) on the first day, with Moutai selling 8 tons of liquor to Luckin, earning a profit of 20 million yuan ($2.9 million).

3. TikTok launches e-commerce services in the United States

On September 12th, TikTok's official website announced the official launch of the e-commerce service TikTok Shop in the United States.

4. Alimama launched 'AI All-Hours Livestreaming' reducing 90% cost

Alimama, the marketing tool of Alibaba Group, announces the launch of 'AI All-Hours Livestreaming' capabilities, enabling merchants to achieve non-stop streaming 24/7 in the Taobao Live centre. Live commerce enters the era of human-machine collaboration with 'AI All-Hours Livestreaming.' Merchants leveraging Alimama's AI capabilities experience a significant 90% reduction in livestreaming costs.

5. Little Red Book made a 'Buyer E-commerce' strategy

Little Red Book (Xiaohongshu) introduces the concept of "Buyer E-commerce," targeting a niche market of sophisticated consumers. Major brands are cautiously observing, as this model thrives on unique, aesthetically pleasing, and innovative products, which may not align with mass-market preferences. While big brands remain sceptical, smaller businesses see it as an opportunity for rapid growth, leveraging Xiaohongshu's affordable influencer marketing and cost-effective trials.

6. The headquarters of Three Sheep Group, the company of ‘Crazy Little Brother Yang’ opened in Hefei, China

Three Sheep Group's headquarters in Hefei, Anhui, officially open, covering over 10,000 square meters. The founder, known as "Crazy Little Brother Yang," has a successful background in online comedy and e-commerce, positively impacting local employment and digital economic progress.

7. Estée Lauder invested in Chinese beauty brand Codemint

Chinese beauty brand Codemint announced receiving a minority equity investment from New Incubation Ventures, the early-stage investment and incubation arm of Estée Lauder Companies, marking Estée Lauder's first investment in a local Chinese beauty brand.

October

ANTA sport acquires MAIA ACTIVE
ANTA Sports announces plans to acquire 75.13% equity in MAIA ACTIVE, a Shanghai-based sportswear brand for women. The move aims to strengthen Anta's presence in the female sportswear market and enhance its brand portfolio. The deal's financial details are undisclosed.

November

1. The market value of Pinduoduo (Chinese TEMU) outpaced Alibaba Group

On November 29th, the US stock market value of Pinduoduo (Chinese TEMU) outpaced Alibaba Group, reaching $192.1 billion.

2. More supervision will be applied to short videos due to their popularity

The short video industry gains attention due to its brevity and fast-paced content, aligning with modern lifestyles. This brings a new tool for brands for marketing and advertisement. Regulators and platforms strengthen oversight for compliance. State Administration of Radio, Film, and Television initiates a one-month cleanup. 

December

1. Dong Yuhui 'Little Essay' Incident at Dongfang Selection

The Dong Yuhui "Little Essay" incident revealed management issues at Dongfang Selection. CEO Sun Dongxu's response intensified internal conflicts, causing a drop in stock prices and fan numbers. Eventually, Sun Dongxu was removed, and Yu Minhong and Dong Yuhui's collaboration stabilized fan numbers. Dong Yuhui became a senior partner, New Oriental Chairman of Cultural Assistant, and Vice President of the New Oriental Culture and Tourism Group. The rival, Gao Tu Jia Pin, saw a significant sales increase during the internal strife.

2. Taobao and JD.com launched a ‘refund only’ function

Giant e-commerce platforms Taobao and JD.com declared to allow a ‘refund only’ function, showing that ‘customers come first’ had become the common ground of e-commerce platforms.

3. Coupang Announces Acquired Luxury E-commerce Platform Farfetch
On December 18, South Korean cross-border e-commerce company Coupang announced plans to acquire luxury e-commerce platform Farfetch and its affiliated assets. According to the agreement, Farfetch will receive a $500 million investment from Coupang, aiming to help Farfetch navigate its recent financial crisis and avoid bankruptcy proceedings.

4. Estée Lauder invested in Chinese fragrance brand Melt Season

On December 16, New Incubation Ventures (NIV), the early-stage investment and incubation department of Estée Lauder Companies, announced a strategic investment in the Chinese fragrance brand Melt Season. This marks Estée Lauder's first investment in a fragrance brand in China and the second investment in a Chinese beauty brand after CODEMINT.