The Paris Olympics Showcased a Multitude of Chinese Technological Innovations
The opening ceremony of the Paris Olympics commenced at 19:30 Paris time on July 27. Chinese companies are playing pivotal roles in various aspects of the event, from broadcasting to athlete training.
Alibaba, a top-tier global partner of the Olympics, is at the forefront of this technological revolution. The company’s cloud computing division, Alibaba Cloud, is responsible for two-thirds of the live signal remote distribution through its innovative Olympic Broadcasting Cloud (OBSCloud). This cloud-based solution, developed in collaboration with the Olympic Broadcasting Service, offers global broadcasters unprecedented efficiency and flexibility in accessing and distributing the estimated 11,000 hours of live event footage.
Chinese AI technologies are also making significant contributions to enhance the Olympic experience. Alibaba’s large language model, Qwen, is being utilized for event commentary and visual search, while the company’s multi-camera playback system is revolutionizing broadcasting technology. SenseTime and Baidu have developed AI-powered performance analysis platforms for China’s national basketball and diving teams, respectively, providing real-time data analysis and strategic insights.
The presence of “Made in China” is prominently felt throughout the 2024 Paris Games, both inside and outside the venues. The striking LED screens along the Seine River, the spectacular fireworks over Paris, and the impressive performance featuring 1,100 drones further highlight this influence. The transition from “Made in China” to “Intellectually Made in China” reflects a significant evolution in perception, as the Paris Games showcase not only the quality of Chinese products but also their advanced technological capabilities, offering a remarkable experience for all attendees.
In the realm of visual technology, Chinese companies are supplying a substantial number of LED displays for the Games. These high-tech screens, featuring ultra-high refresh rates, will be used for live broadcasts in 25 locations across Paris, including over 80 giant screens along the Seine River during the opening ceremony. Despite previous challenges in the European market, Chinese tech giant Huawei is set to play a crucial role in providing 5G infrastructure for the event, leveraging its advanced technology and industry experience to ensure smooth operations.
Apple Has Fallen Out of the Top 5 in China’s Mobile Phone Market
As the second quarter of 2024 ends, the Chinese smartphone market is changing significantly. Recent data from IDC and Canalys shows that Apple has dropped out of the top five smartphone brands, now ranking sixth with about 13% market share. Vivo is in first place, followed by Huawei, OPPO, Honor, and Xiaomi. The market is recovering, driven by a decline in shipments last year and a new replacement cycle, leading to increased sales in the first half of the year. Over 140 million units were shipped in the first half of 2024, marking a y-on-y increase of 7.7%. The Android segment, in particular, experienced an 11.1% growth, propelled by manufacturers like Vivo, Huawei, and Xiaomi. Despite a notable price reduction, shipments of iOS devices declined by 3.1% y-on-y, though there was an improvement in market demand for Apple products. Here is an overview of the market share.
The decline in Apple’s market position is attributed to the intensifying competition. Apple is reportedly planning to launch folding products in 2025, with supply chain sources confirming active research and development in folding screen technology. However, the specific product lineup remains undisclosed. The folding screen market in China continues to grow robustly, with IDC data indicating a triple-digit y-on-y growth rate in the second quarter of 2024. In response to the competitive pressures, Apple is focusing on optimizing channel management to maintain stable retail prices and secure profit margins for its partners. The company is also localizing its Apple Intelligence service to better cater to the Chinese market.
Data Source: https://www.idc.com/getdoc.jsp?containerId=prAP52467524
A Significant Decline in Consumer Spending Among Chinese Citizens Has Emerged, Presenting Substantial Challenges for Luxury Conglomerates
On July 23, French luxury giant LVMH Group released its financial results for the first half of 2024, revealing a 1% y-on-y decline in sales revenue to EUR 41.7 billion, falling short of analysts’ expectations of EUR 42.2 billion.
Additionally, the company’s operating profit decreased by 8% to EUR 10.7 billion, and its net profit dropped by 14% to EUR 7.3 billion. Regionally, Japan maintained its leading position in the global market, with a 44% y-on-y increase in sales revenue for the first half of the year, raising the Group’s share from 7% to 9%. However, in Asia (excluding Japan), sales revenue declined by 10% y-on-y, making it the only market to experience a decrease, though it still represents LVMH’s largest market with a 30% share.
Sales in Europe and the United States saw modest increases of 2% to 3% y-on-y. Stifel analyst Rogerio Fujimori expressed reservations about LVMH’s outlook for the second half of the year, anticipating heightened challenges due to the moderating trends in China’s luxury market. LVMH’s Chief Financial Officer, Jean-Jacques Guiony, indicated expectations for modest growth in the second half of the year.
The sharp decline in China is a notable aspect of this earnings report. A significant number of Chinese consumers are now purchasing luxury items outside of China, particularly in Japan, adversely impacting LVMH’s sales performance in mainland China. Guiony also highlighted the yen’s lowest level against the euro in 34 years and high volatility in Japanese rents, which limit the company’s ability to enhance operational efficiency and expand its business. Despite the sales growth in Japan, the company’s overall profits and margins have been negatively affected. The surge in consumption, including shopping in Japan to offset cost differentials, suggests that Chinese consumers are becoming more discerning and price-conscious.
Honda Announced Plans to Cease ICE Operations at 2 Facilities and Construct EV Plants in China
Honda Motor has announced a significant reduction in its ICE production capacity in China, marking the largest production cut by a Japanese automotive manufacturer in the country. The company plans to decrease its capacity by one-third, from 1.49 million units to 1 million units, representing approximately 10% of Honda’s global output.The restructuring involves the closure of two plants: one in Guangzhou, operated by GAC Honda, and another in Wuhan, managed by Dongfeng Honda. The Guangzhou plant will cease operations in October, while the Wuhan facility will close in November. An additional plant in Guangzhou is also slated for closure.
Honda China stated that this decision is part of a strategy to optimize capacity and accelerate the transition to electric vehicles. Following these adjustments, Honda’s total vehicle production capacity in China will be reduced to 1.2 million units.The move comes in response to declining sales in the Chinese market. In June, Honda’s retail performance in China fell by nearly 40% y-on-y to less than 70,000 units, marking the fifth consecutive month of decline. From January to June 2024, Honda’s cumulative sales in China dropped by 21.5% compared to the previous year.
While reducing ICE capacity, Honda is simultaneously advancing its new energy transition strategy. The company is constructing two new EV plants in joint ventures with Guangzhou Auto (in Guangzhou) and Dongfeng (in Wuhan), expected to commence production by the end of the year. This expansion aims to restore capacity to 1.44 million units. Honda’s long-term plans include launching six new pure-electric vehicles through GAC Honda by 2027, and Dongfeng Honda aims to achieve a 50% share of electrified vehicles by 2025, phasing out all fuel vehicles by 2027. This strategic shift reflects the intensifying competition in China’s new energy vehicle market, where domestic brands have rapidly gained market share, challenging long-established joint venture brands.
Honda is actively pursuing a diversified energy strategy to meet market demands and promote sustainable development. The company is particularly focused on advancing hydrogen fuel cell technology and plans to expand its lineup of hydrogen-powered vehicles in the coming years, including models like the Clarity Fuel Cell. Honda aims to achieve zero emissions through hydrogen solutions while balancing investments in hydrogen, battery technology, and conventional fuel vehicles to meet long-term environmental goals. This strategy reflects Honda’s commitment to maintaining its competitive edge in the global automotive market. In China, Honda plans to launch six new electric vehicle models by 2027 and aims for EVs to comprise 100% of its sales in the country by 2035. This aligns with the company’s broader goal of transitioning to more sustainable transportation solutions. Industry analysts note that Honda’s focus on hydrogen technology, alongside its electric vehicle developments, positions the company well in a rapidly evolving automotive landscape. As the industry faces environmental challenges and changing consumer preferences, Honda’s diversified approach may provide the flexibility needed to navigate these dynamics successfully.
Let’s see how Honda’s new energy transition will perform in the future!
Temu Merchants Face Massive Fines, Sparking Controversy
Recent reports have revealed that numerous merchants on the Temu platform are facing substantial fines, with amounts ranging from hundreds of thousands to millions of CNY. This wave of penalties has raised significant concerns within the e-commerce community and prompted questions about the platform’s practices.
Affected sellers have begun organizing themselves in online groups to share their experiences, claiming that the total fines could amount to billions of yuan. The penalties are primarily a result of Temu’s updated merchant service agreement, which imposes fines of up to five times the product value for violations of quality standards. Many merchants believe that these fines are excessive and have speculated about Temu’s motives, suggesting that the platform may be using these penalties as a means of generating revenue.
The pressure to maintain low prices on the platform has led some merchants to prioritize cost over quality, which in turn has resulted in increased instances of quality issues and subsequent fines. Compounding the situation is Temu’s recent introduction of a “refund only” policy, which allows customers to keep items while receiving refunds. This policy has further complicated matters for merchants, who are already struggling to navigate the new penalty structure. If the reported fines are accurate, they could represent a significant portion of the net profit for PDD Holdings, Temu’s parent company, in the first quarter. In response to these developments, some merchants have staged protests outside Temu’s offices in Guangzhou, expressing their dissatisfaction with the platform’s practices. As of now, Temu has not provided official comments regarding the specific amounts of the fines. The situation remains fluid, and further developments are expected as the e-commerce community continues to grapple with these challenges.
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