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China Business News (2021-03-26)

1.Xiaohongshu gears up for IPO.

The social media and eCommerce company Xiaohongshu has hired a new chief financial officer who was the former managing director of Citigroup in Hong Kong. This is another step towards an IPO, which has been expected from Xiaohongshu for some time. The IPO should occur in the USA, with a company valuation of more than USD 10 billion.


2. Alibaba builds a new platform to counter Pinduoduo.

Alibaba operates Taobao, one of the largest eCommerce platforms in China. Now they have announced that they will release a Taobao Special Edition. This Taobao Special Edition is supposed to come next year and will establish a direct connection between manufacturers and customers. The idea is to subsidize consumer goods, just like Pinduoduo, in order to attract customers through low costs. The two focus categories are to be fresh food and clothing labels. This is another step to counter Pinduoduo's rise.


3. Xiaomi wants to build electric vehicles at Great Wall Motor factory.

Xiaomi, one of the world's largest smartphone makers, is in advanced negotiations to use one of Great Wall Motor's factories in China to produce electric vehicles under its own brand. Xiaomi will target its EVs at the mass market, in line with its other electronics products' broader positioning. Great Wall Motors, which has not previously offered manufacturing services to other companies, will provide technical advice. Strategically, it makes sense for Xiaomi as they are now trying to diversify their revenue streams from the smartphone business, which accounts for the majority of its revenue but has low-profit margins.


4. Three major telecom operators turned over CNY 387 million every day.

The whole of China is run by three telecom operators namely China Mobile, China Telecom, and China Unicom. All these companies grew 4% on average last year due to more expensive 5G contracts and more new customers. China Mobile's revenue was CNY 768.1 billion (3% YoY) with a profit of CNY 107.8 billion. The revenue of China Telecom was CNY 393.6 billion (4.7% YoY) with a profit of CNY 20.9 billion and China Unicom's revenue reached CNY 30.8 billion (4.6% YoY) with a profit of CNY 12.5 billion in 2020.


5. EV manufacturer Xpeng presents good autonomous driving figures.

Xpeng Motors is a Chinese electric vehicle manufacturer that also specializes in autonomous driving technology. Today they published the first numbers of their currently launched autonomous driving challenge. This takes place on actual Chinese highways with production vehicles during rush hour. These numbers set some of the most successful performance records to date for autonomous driving in actual road conditions in China. The frequency of human driver intervention was just 0.65 times per 100 kilometers. More than 200 automotive journalists, EV enthusiasts, and industry experts are participating in the seven-day expedition.


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