CIW News 240215

Author

Elaine Wong
February 15, 2024

CIW Weekly, is now CIW News, our email newsletter on China digital and tech trends.

Join us as we navigate through the bustling digital streets of China's internet economy, uncovering insights and strategies that are setting the pace for the global digital future. Let’s dive in…

The International Data Corporation (IDC) forecasts a global surge in artificial intelligence (AI) investments, expecting a total of $423.6 billion by 2027, with a compound annual growth rate (CAGR) of 26.9% from 2022 to 2027.

Key predictions from IDC:

  • GenAI Security and Governance: By 2025, 40% of cloud and software platform providers will integrate GenAI security and governance with their primary services, tripling the reduction in GenAI-related risks.

  • Regulatory Divergence: AI regulatory differences across regions will pose significant challenges for multinational companies by 2026, increasing the time and effort required to manage sensitive issues by 20%.

  • Digital Assistants Over Software Interfaces: By 2027, GenAI digital assistants will replace 20% of enterprise software interfaces, playing an increased role in business processes.

  • …

The concept of “data weaving” gains traction in the Chinese market, with increasing demands for multi-dimensional, cross-modal, cross-departmental, real-time, agile, and secure data middle platforms, driven by policies on data elements and data assets. Check out IDC’s Top 10 Predictions for China’s Data and Analytics Market in 2024.

A recent unveiling at the “2024 WeChat Open Class PRO” has shone a light on its video account e-commerce business, demonstrating a nearly threefold increase in Gross Merchandise Value (GMV) in 2023. This growth is complemented by a more than 244% rise in order volume and an approximately 300% increase in product offerings.

The integration of WeChat Moments ads with video account commerce represents a deepening of video accounts’ role within Tencent’s ecosystem, offering merchants enhanced promotional opportunities and streamlined customer purchase pathways. However, achieving a significant uplift in conversion rates through this integration will require meticulous data alignment and robust cross-departmental collaboration.

In a strategic move, Starbucks has entered the Chinese co-branding arena, partnering with the iconic “Journey to the West”. This marks Starbucks China’s first beverage collaboration, notably with a Chinese IP – the “superhero” Sun Wukong.

Starbucks’ approach differs from domestic brands like Luckin Coffee, which cater to price-sensitive youths and capitalize on marketing stunts. Starbucks opts for a more conservative strategy, partnering with well-known Chinese content IPs to reinforce its premium positioning.

Baidu has announced an innovative feature within its Wenxin Yiyan app (its GenAI product; a.k.a. Ernie Bot) that allows users to create digital twins with unprecedented ease. Both iOS and Android users can access this feature for free upon updating to the latest version of the app.

Ernie Bot has reached a new milestone, surpassing 100 million users.

Samsung Electronics China and Baidu AI Cloud have joined forces earlier this year to integrate Baidu’s advanced ERNIE AI model into the Galaxy S24 Series.

This collaboration brings ERNIE’s content understanding and generation capabilities to the Samsung Note Assistant, enabling it to translate and summarize extensive text efficiently.

Baidu has announced an innovative feature within its Wenxin Yiyan app (its GenAI product; a.k.a. Ernie Bot) that allows users to create digital twins with unprecedented ease. Both iOS and Android users can access this feature for free upon updating to the latest version of the app.

Ernie Bot has reached a new milestone, surpassing 100 million users.

Samsung Electronics China and Baidu AI Cloud have joined forces earlier this year to integrate Baidu’s advanced ERNIE AI model into the Galaxy S24 Series.

This collaboration brings ERNIE’s content understanding and generation capabilities to the Samsung Note Assistant, enabling it to translate and summarize extensive text efficiently.

BRIEF BLASTS

China’s smartphone market witnessed a significant turn in 2023, with Apple seizing the lead for the first time, capturing a market share of 17.3%. The year’s shipments, however, dwindled to 271.3 million units, a 5.0% decrease from 2022, marking the lowest in a decade.

Alibaba’s communication platform, DingTalk (China’s answer to Slack), has hit a monumental user base of 700 million by the end of 2023.

IDC forecasts a leap to $43 billion in big data IT investments in China by 2027. This figure represents about 8% of the global market, with a staggering 21.5% five-year CAGR, the highest globally. Focusing on the big data services market, China’s 2027 expenditure is projected to reach nearly $14 billion, ranking second in the technology market.

In 2023, China’s digital commerce arena, led by Douyin (TikTok’s China version), displayed extraordinary growth, with its GMV expanding by a staggering 277%. The top 10 brands on Douyin, including Duck Duck (8 billion yuan), Apple (6 bn), and Huawei (5 bn), each garnered sales surpassing 3 billion yuan, highlighting a robust consumer base and high per-customer spending.