10/7 TBC Insider Digest
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Insider Digest 10/7/21: Algorithm Governance, Updated Thoughts on WeChat Channels, Taobao Live Reorganization
Housekeeping / Announcements:
Well, our New York City meetup finally happened today! For a second I thought these guys were going to miss each other due to traffic and whatnot. It looks like everyone made it though! Do check out the Discord for opportunities to meet up with others in your city!
Refer an Insider! Do you have anyone you think would enjoy being part of Tech Buzz China Insider? If so, you can either send them to the Quiz (currently a 55% passing rate) or directly to the signup form (only available for referrals from Insiders like you so please do not share publicly!). For a limited time only, we are offering a $10 OFF coupon for Golden Week, China’s National Holiday week! The code is “YOUAREGOLDEN” at checkout. It expires 10/15/21.
Meanwhile, we’ll still have our Friday morning meetup this week on Discord, please do join us! As always, it is 9AM EST / 9PM Asia time inside the app. We will also have our first Community Sharing on 10/29 with Anton on Semiconductors! We’ll provide more details next week but if you’re interested in presenting something to the rest of the community for learning purposes & to get feedback, please message me!
I was out again for an illness briefly this week, but here’s what I wrote about. Yup, back to Tencent and Alibaba:
9/29 Goal of Algorithm Governance in 3 Years
There have been 2 important documents issued on algorithms in the last two months：
August 27: Regulations on the Administration of Algorithm Recommendations for Internet Information Services (Draft for Comments) from CAC (in Chinese).
September 17: Guidance on Strengthening the Comprehensive Governance of the Internet Information Service Algorithm from 9 organizations (CAC, Propaganda Dept, Ministries of Education, Science & Technology, MIIT, Public Security, Culture & Tourism, SAMR and NRTA which is Radio & Television). Full document in Chinese.This is the first change in "main conflict" since 1981 when back then the contradiction between the growing material and cultural needs of the people and the backward social production. This means the main aim of economic policy has changed.
The August document outlines specific, immediate regulations that the CAC is contemplating action on, and after the comment period ends (there may be multiple), they will kick in. It is not a law, so enforcement and punishment (if any) will be up to the CAC, not the courts. The ”targets" in question are the tech companies. The September document, on the other hand, is addressed to the provincial and municipal subsidiaries of the 9 listed organizations. The audience is not the tech industry but the rest of the bureaucracy.
10/7 Updated Thoughts on WeChat Channels
It's been a while since I wrote about WeChat Channels. My initial thoughts were recorded here in a conversation with Dan Grover at the very beginning of the year, on January 23, 2021. Unfortunately, since then, there's basically no update to Channels usage stats, except for one research firm who claimed in mid-2021 that DAU had exceeded 450mm. (Yet another claimed 300mm, so who knows? All we know is that WeChat had claimed 18% usage in January, which should mean ~200mm DAU based on the 1Bn user base.) Based on my personal experience, that number would not surprise me, mainly because clicking on a single Channels video link shared in chat or Moments would make you a DAU, and that is happening with more regularity now from what I can see. But I also doubt that the usage time is anywhere close to Douyin / Kuaishou, for the obvious reason I reiterate below: Channels is simply not a standalone product and has to complement the rest of WeChat's offerings.
Anyway, my updated thoughts aren't drastically different, but from much more frequent usage, I have a lot more confidence that we were more or less directionally correct, with a few more thoughts to add …
10/7/21 Alibaba Taobao Live Reorganization
A brief history: Taobao Live began as a function within Taobao in 2015, but it only became a top level function visible from the front page in 2016. In 2019, an independent Taobao Live app was launched, but there were few users. At the beginning of 2021, short video functionality was added to the independent Taobao Live app, and it was renamed and relaunched as Diantao 点淘. However, before this reorg, the standalone app and the Taobao Live function within Taobao were actually run by different teams.
Yu Feng was in charge of the Taobao Live function (the bigger portion of the business). Cheng Daofang, who was in charge of running VMATE in India, Alibaba's livestreaming endeavor, before it was banned, was moved to head Diantao last September. (VMate had about 50mm users and was in third place behind TikTok and Likee, at the time of ban. In functionality, it was very much like Kuaishou.) Yu and Cheng's roles are now basically combined, with Cheng taking over, and Yu moving on to another part of the Taobao ecosystem. The standalone app and function are now merged, which means that Diantao has a chance to compete head on with ByteDance and Kuaishou, not as a subsidiary of Taobao.
Alright, we’re going to try something new! Some of you have mentioned that it’s too hard for you to keep track of Discord messages given the volume of activity. We’re going to try to highlight the most interesting posts from the week, and documents shared. So please click through below to the exact message that you missed:
JX: gaming companies diversifying revenues with battle passes
Freya: Livestreaming matchmaking
Michael: Northeast securities chief economist Fu Peng on consumption slowdown (in Chinese)
Please join us there, I think you’ll enjoy it, as it’s quickly become the most active part of TBCI!
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