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China’s XR Development 101: How Chinese Tech Giants are Navigating Towards the Metaverse

Chinese tech giants are massively investing in virtual reality and in the technologies that are building up the Chinese metaverse.

Jialing Xie

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Virtual, Augmented, and Mixed Reality technologies are blurring the lines between the real and digital worlds and are powering the metaverse. Chinese tech giants are at the forefront of the latest developments on the mainland market, including XR, that are making the metaverse possible. Time for a round-up of what China’s key players are focusing on and which virtual initiatives are already live.

2021 is the year in which the concept of ‘metaverse’ has blossomed. In March of last year, the hugely successful online multiplayer game and game creation system Roblox went public with a market value of over $41 billion at the time, earning its reputation as the world’s first metaverse IPO.

Following the release of the 2021 sci-fi comedy Free Guy – which is set in a fictional metaverse-like video game, – and Facebook’s rebranding to ‘Meta’ last fall, ‘metaverse’ became one of the hottest buzzwords on the internet.

The term metaverse is actually decades old. In the 1981 novel True Names, the American computer scientist Vernor Steffen Vinge already envisioned a virtual world that could be accessed through a brain-computer interface, and the term ‘metaverse’ was first mentioned in the 1992 Snow Crash science fiction novel by Neal Stephenson.

Now, 5G, AI, VR, Blockchain, 3D modeling, and other new technologies converged on the concept of the metaverse industry are seeing an explosive growth in China.

At the recent 20th Party Congress, it became clear once again that the digital economy is key in China’s long-term strategies, with Chinese leader Xi Jinping promoting digitalization as one of the new “engines” of future growth.

 
About Metaverse (元宇宙) in China
 

In Chinese, ‘metaverse’ is referred to as yuányǔzhòu (元宇宙), which is a literal translation of ‘meta-verse’ – meaning ‘transcending universe’ (超越宇宙). Chinese tech sources also describe the year 2021 as “the metaverse year” (元宇宙元年).

Metaverse is a collective, shared virtual realm that can interact with the real world and where people can interact with each other and the spaces around them. There is not just one single metaverse – there can be many digital living spaces referred to as the ‘metaverse.’

Metaverse is a fluid concept or virtual experience that is still developing and due to the differences in cyber regulations, digital ecosystems, and strict control on online information flows, the Chinese metaverse will unquestionably be very different from the metaverse spheres that companies such as Facebook are working on.

The metaverse is made possible through a wide range of technologies including AI, IoT, Blockchain, Interaction Technology, computer games, and network computing. XR is key to the rise of the metaverse. XR, or Extended Reality, is an umbrella term for a range of immersive technologies including VR (Virtual Reality 虚拟现实), AR (Augmented Reality 增强现实), and MR (Mixed Reality 混合现实). A 2020 Deloitte report suggests that the global XR market consists of mainly VR technologies (48% of market share), followed by AR (34%) and MR (18%).

In December of 2020, Tencent’s CEO Ma Huateng (马化腾) announced the concept of the “All-real Internet” (全真互联网) in a special internal publication regarding the company’s growth and major changes. Ma proposed that the deep integration of the virtual and real world, the “All-real Internet,” is the future opportunity to focus on as the next stage of the (mobile) internet. Although there are some subtle differences, Ma’s idea of the “All-real Internet” overlaps with the concept of the metaverse.

The metaverse, XR, and related technologies are not just a hot issue for Chinese tech companies, they are also an important theme for Chinese authorities. The 20th Party Congress was by no means the first time for China’s leadership to stress the country’s focus on the latest digital innovations. In October 2021, President Xi Jinping also spoke about evolving China’s digital economy during the 19th CPC Central Committee. He asserted that one of the focal points within the development strategy of China’s digital economy is the further integration of digital technologies and real-world economies.

This idea was further clarified in the outline of the 14th Five-Year Plan issued by the State Council at the end of 2021, which listed VR and AR as one of the seven key industries of China’s digital economy along with cloud computing, IoT, AI, and others.

Subsequently, many local governments incorporated metaverse (“元宇宙”) and related relevant terms into their respective 14th Five-Year Plans. For example, Shanghai authorities stated it will focus on the further developments of industries related to quantum computing, 3rd-gen semiconductors, 6G communications, and metaverse.

Here, we will provide an overview of XR industry development in present-day China, going over the key players Baidu, Alibaba, and Tencent (BAT) along with the younger Chinese tech giant ByteDance. We provide an overview of what they are investing in, what their respective strategies are when it comes to XR, and give examples of the kind of initiatives that they have already launched. To limit the scope of this article, we have left out Netease, Huawei, Bilibili, and some other relevant Chinese players for now (we might still make a part two later on!).

 

Key Players and Strategies

 

 

▶︎ BAIDU

 

As one of the leading artificial intelligence (AI) and internet companies in the world, Baidu specializes in internet and AI-related products and services. Baidu is mostly known as China’s number one search engine, but its ambitions go far beyond that. “We want to be like Amazon Web Services (AWS) for the metaverse,” Ma Jie (马杰), vice president at Baidu, recently said.

The company has taken a special interest in building the infrastructure to support metaverse-related projects, deviating from the strategies that focus more on the XR-related content development and distribution that you see at Tencent or Bytedance.

 

What’s Happening?

 

Investments

◼︎ iQiyi (爱奇艺), one of China’s top media streaming platforms (sometimes also referred to as the ‘Chinese Netflix’), released its all-in-one virtual reality headset ‘Adventure Dream’ in December 2021 powered by Snapdragon XR2. Baidu owns 53% of iQiyi and holds more than 90% of its shareholder voting rights.

 
Research & Development

◼︎ Baidu launched the ‘Baidu VR Browser’ on July 15, 2016, becoming China’s first browser powered by webVR technology.

Xirang

◼︎ In 2017, Baidu launched ‘Baidu VR’ platform, which is now offering a wide range of VR-related software and hardware products and services, including the Baidu VR Headset, VR Creation Center, AI app, and XiRang (希壤), which is referred to as China’s “first metaverse platform.”

 

What’s Live?

 

 
Retail

◼︎ In 2018, Baidu VR and UXin Limited, a Chinese online used car marketplace, jointly developed VR 360° interior panoramas that put viewers in the driver’s seat to see how interior details come together and to better understand the details of each vehicle such as scratches, wheels and engine models.

◼︎ Baidu’s ‘Meta Ziwu’ (元宇宙誌屋Meta ZiWU), a virtual space within XiRang, hosts various fashion shows for international brands. In August of 2022, Italian luxury fashion house Prada livestreamed its Fall 2022 collection within the interactive realms of ‘Meta Ziwu,’ and so did Dior, the French fashion house which has also launched its first-ever metaverse exhibition “On the Road” (在路上) via Meta Ziwu.

 
Social Networking

◼︎ In late 2021, Baidu launched its metaverse project XiRang (希壤, ‘the land of hope’) as “the first Chinese-made metaverse product.” In December, Baidu held ‘Baidu Create 2021′, a three-day annual developers’ conference in a virtual world generated by the XiRang platform, hosting 100,000 people on one set of servers at the same time. Baidu’s Vice President Ma Jie, also Head of the Metaverse XiRang project, shared that the main goal behind this project is to lay the infrastructure of the metaverse by providing developers and content creators with the tools to build their metaverse projects.

Chinese architect Ma Yansong (马岩松), founder of MAD architects, also works together with Meta Ziwu as a virtual architect.

 

▶︎ALIBABA

 

Founded in 1999, Alibaba is one of the world’s largest e-commerce and cloud computing companies in Asia Pacific. Its massive success in e-commerce also established Alibaba’s leading position in artificial intelligence and other key technologies that have supported e-commerce, as well as in the future of metaverse.

As one of the biggest venture capital firms and investment corporations in the world, Alibaba struck several deals with prominent XR companies including Magic Leap and Nreal to gain footing in the Extended Reality industry.

As for R&D, Alibaba’s ambition in becoming the world’s fifth-largest economy led to a strong emphasis on technological research and XR-focused innovation and the founding of DAMO Academy.

Within the field of XR, Alibaba primarily focuses on two aspects: underlying technology solutions (e.g. cloud computing) and XR application in its own core business model (e-commerce).

 

What’s Happening?

 

Investments

◼︎ In February 2016 and October 2017, Alibaba led the investment rounds in Magic Leap, an augmented reality firm headquartered in Florida.

◼︎ In March of this year, Alibaba led a $60 million investment round of Beijing-based augmented reality glasses maker Nreal. Nreal, founded in 2017, has since launched two AR glasses for the Chinese market: Nreal X for developers and content creators and Nreal Air for regular consumers. Nreal Air glasses have been released in Japan and the UK in February and May of this year. In addition to AR glasses, Nreal also cooperated with iQiyi, China Mobile Migu, Weilai, and Kuaishou to develop AR content.

 
Research & Development

◼︎ In March 2016, Alibaba announced its own VR research lab, GM LAB ( ‘GnomeMagic’ Lab), which aims to power its e-commerce platform and other subsidiary businesses such as the VR content production for its film and music platforms.

◼︎ Alibaba registered several metaverse-related trademarks, including “Ali Metaverse.”

◼︎ In 2021, Alibaba’s DAMO Academy, a global research program in cutting-edge technologies, launched ‘X Lab’ that focuses on research in key areas related to the metaverse industry, including quantum computing, XR, and xG Technology. Tan Ping (谭平), the former Head of XR Lab, shared several of their ongoing projects at the time. One example he mentioned is the virtual character Xiaomo (小莫), who is very versatile and can, among other things, convert textual information into sign language to enable smoother communication for the hearing impaired.

Xiaomo by Alibaba can turn spoken text into sign language.

‘X Lab’ is also experimenting with making history come alive through virtual initiatives. Recently, Alibaba’s cloud gaming platform Yuanjing made it possible for visitors at their Alibaba Cloud’s Apsara conference to virtually visit the Xi’an Museum and check out its artifacts via mobile phone or laptop, or to have an immersive experience of the Tang dynasty’s imperial palace complex, powered by automatic 3D space creation and visual localization technology.

 

What’s Live?

 

eCommerce

◼︎ In November 2016, Alibaba launched the Mobile BUY+ feature in Taobao mobile apps in light of its annual Single’s Day Global Shopping Festival. With VR headsets and the app, China-based Taobao shoppers could experience shopping in-store at Target, Macy’s, or Costco in the US and other malls located in countries such as Japan and Australia.

◼︎ As Alibaba constantly keeps innovating its e-commerce landscape, its research institute DAMO Academy, in collaboration with its licensing platform Alifish, rolled out an XR-powered marketplace on Alibaba’s e-commerce platforms Tmall and Taobao for its November 2022 Single’s Day festival that allows consumers to visit virtual shopping streets and shop for merchandise as their own customizable avatars.

Entertainment

◼︎ In 2021, Alibaba led a $20 million Series A financing round of DGene, a virtual reality and immersive entertainment developer. Among others, DGene creates digital influencers or can even recreate historical figures based on its AI-driven technologies.

Dong Dong was launched as the first virtual brand ambassador for the Winter Olympics in 2022.

◼︎ For the Olympic Winter Olympics in 2022, Alibaba launched Dong Dong, a digital persona developed by Damo Academy using cloud-based digital technologies. Dong Dong was able to engage with fans and online viewers through livestreams, respond to questions in real time, and she even hosted online talkshows.

 

▶︎TENCENT

 

As a multinational technology and entertainment conglomerate with the highest-grossing revenue in the world, Tencent has the financial resources to gain an upper hand in technological innovation through acquisition and investment. In 2021 alone, Tencent made a total of 76 investments in Gaming, accounting for 25.2% of Tencent’s total investment throughout the year – a 9.3% increase compared to 2020. Tencent is now the biggest gaming company in the world.

Tencent also ramped up the company’s total headcount working in R&D department by 41%, accounting for 68% of its total workforce in 2021.

Although XR is used to create immersive experiences in different industries including healthcare, manufacturing, or education, its primary fields are still gaming and social – which just so happen to be Tencent’s main focus areas. It is therefore perhaps unsurprising that Tencent, as the country’s Gaming & Social giant, has made XR part of its core business.

 

What’s Happening?

 

Investments

◼︎ In 2012, Tencent made an investment in Epic Games, the owner of Unreal Engine which powers well-known video games such as Fortnite, purchasing approximately 40% of the total Epic capital, making it the second largest shareholder. Epic Games’ major businesses span across RT3D game engine (Unreal), in-house developed games (Fortnite), and platform games. This investment is one of the reasons why Tencent conquered a leading position in the metaverse realm when it comes to games.

◼︎ As early as 2014, Tencent already tapped into the VR market by investing in social VR platform AltspaceVR, which was later acquired by Microsoft in 2017.

◼︎ In May 2019, Tencent and Roblox announced a joint venture in which Tencent holds a 49% controlling stake.

◼︎ In September of 2021, Tencent became the new investor behind Beijing-based VR game developer Vanimals (威魔纪元), known for its flagship games Undying and Eternity Warriors VR.

◼︎ In November 2021, Tencent joined the $82M Series D fundraising of Ultraleap, the world leader in mid-air haptics and 3D hand tracking. Ultraleap’s hand-tracking platform has been built into multiple platforms including Qualcomm’s XR and VR devices.

◼︎ In March 2022, Tencent invested in the Chinese AR glasses manufacturer SUPERHEXA (蜂巢科技) holding 7.3% of its shares.

 
Research & Development

◼︎ In 2015, Tencent announced its avant-garde VR Project ‘Tencent VR,’ a plan consisting of building its own VR games and releasing Tencent Virtual reality software development kits (VR SDKs) to support other VR game developers.

◼︎ As of September 2021, Tencent applied for registration of nearly 100 trademarks related to the metaverse, including “Tencent Music Metaverse” (腾讯音乐元宇宙).

◼︎ In June 2022, Tencent officially set up its XR department led by its Interactive Entertainment Division (IEG) game developer NExT Studios. During Tencent’s annual gaming conference SPARK 2022, the Head of IEG, Ma Xiaoyi (马晓轶), shared Tencent’s ambitions in charting all segments of the VR industry in the next 5 years, from developer software tools and SDKs to VR hardware, to consumer-facing content.

◼︎ NExT Studios, which is the youngest studio within the Tencent Games family, has partnered with the Shenzhen-based FACEGOOD, a 3D content generation technology company that is focused on building metaverse infrastructure.

 

What’s Live?

 

Gaming

◼︎ At ChinaJoy 2019, the largest gaming and digital entertainment exhibition across Asia, Tencent launched its cloud gaming solution on its WeGame client, allowing users to play several games instantly without a download. In December of that year, Tencent Games and global leader AI hardware & software leader Nvidia announced a new partnership to launch the START (云游戏) cloud gaming service for PC and console titles.

◼︎ Following the Sino-American joint venture with Roblox in May 2021, Tencent officially launched the Chinese version of Roblox (罗布乐思) topping the App Store free game list in July of 2021.

 
Social Networking

◼︎ In November 2021, Tencent led a $25 million Series A funding in the British developer Lockwood Publishing best known for the metaverse app Avakin Life, which allows users to create 3D characters and socialize in the virtual community.

◼︎ During the Lunar New Year in February 2022, Tencent’s instant messaging software QQ launched a new feature called “Super QQ Show” (超级QQ秀), which is an upgrade of its ‘QQ Show’ service that’s been running since 2003. Super QQ Show allows users to create their own 3D avatars and use them in an interactive context. It added AI face recognition and rendering. The platform is an interesting one for brands. Fast-food chain KFC even has its own restaurant in this virtual world.

Visiting KFC in the Super QQ Show.

◼︎ In the summer of 2022, the Tencent-backed app developer company Soulgate Inc., which operates the social networking app Soul, applied to be listed on the Hong Kong Stock Exchange. Tencent is the largest shareholder holding 49.9% of the shares. Soul is a virtual social playground with the mission of “building a ‘Soul’cial Metaverse for young generations” where users can connect with other users through the virtual identity they develop in the app. The majority of its users, nearly 75%, belong to Gen-Z.

 
Entertainment

◼︎ On New Year’s Eve of 2021, Tencent Music Entertainment (TME) Group launched China’s first virtual social music platform TMELAND, where users can create their own avatars and interact with each other through their “digital identity.” It’s worth mentioning that TMELAND was powered by the ‘Hybrid Edge-Cloud Platform Solution’ developed by XVERSE (元象科技), which was founded by a former Tencent executive committed to building a one-stop shop for 3D content development.

Coca Cola zone in TMLAND.

Recently, Coca-Cola partnered up with TMELAND to open a new metaverse zone, accessible via the TMELAND mini-programme on WeChat.

 

▶︎BYTEDANCE

 

Known as “the world’s most valuable startup,” the Bytedance success story started with the algorithm-powered Toutiao (头条 ‘Headlines’) in 2012, a news and content platform that personalizes content for each user based on their own preferences. The Bytedance app TikTok (Douyin in China) conquered the world as one of most successful Chinese apps internationally.

Bytedance is a social networking leader, but is also focused on its in-house development in VR/AR. By 2021, Bytedance had completed at least 76 investment events, more than the previous two years combined.

From ByteDance’s activities in the XR industry, the company seems to have its strategy primarily focused on hardware, content development, and distribution across gaming, social networking, and entertainment industries.

 

What’s Happening?

 

Investments

◼︎ As early as 2018, Toutiao (Bytedance’s core product) acquired VSCENE (维境视讯) a Beijing-based solution provider for VR Live streaming.

◼︎ In July 2020, Bytedance participated in Series A funding of Seizet (熵智科技), an industrial automation company that provides a 3D industrial camera and software.

◼︎ In February 2021, Bytedance invested in Moore Threads (摩尔线程), a company that specialized in visual computing and artificial intelligence fields. In November last year, Moore Threads announced it has developed China’s first domestic full-fledged graphic processing unit (GPU) chip. Along with 5G communications, Wi-Fi 6, cloud computing, and chip technology, GPU is considered one of the main infrastructure technologies of the metaverse.

◼︎ In August 2021, ByteDance acquired Chinese VR hardware maker & software platform Pico for approximately $771 million to support its long-term investment in the VR ecosystem. By the end of Q1 2022, Pico is estimated to hold a 4.5% share of the global VR market, following Meta which is the dominant global player (90%). This year, Bytedance has set a higher sales target for Pico headsets to reach 1.6 million device output. To meet its VR industry goals, Bytedance is investing more into promotion and hiring more staff for Pico to catch up with or even surpass Meta’s Quest.

◼︎ In June 2022, ByteDance acquired PoliQ (波粒子), a team specialized in making virtual social platforms that allow users to interact with one another using their self-invented avatars in the virtual world. Jiesi Ma, the founder of PoliQ, is appointed to lead the VR Social department at ByteDance.

 
Research & Development

◼︎ To boost its entire VR ecosystem, Pico is engaging in more partnerships with Hollywood’s major film studios and leading streaming media companies in China (iQiyi, Youku, Tencent Video, Bilibili, and so on). In July 2022, Pico hosted Pico WangFeng@VR Music + Drifting Fantasy concert which leveraged 3D 8K VR Live Streaming technology to create a “magical” and immersive visual musical experience. By wearing Pico’s VR headsets, the audience can enjoy Wang’s performance from 5 different angles and as close as a meter away.

 

What’s Live?

 

Gaming

◼︎ On February 22, 2021, Bytedance released its game development and publishing brand Nuverse (朝夕光年). To date, Nuverse has launched several successful games through APAC and the western markets including “Burning Streetball” (热血街篮), “Houchi Shoujo” (放置少女), “Ragnarok X: Next Generation” (RO仙境传说:新世代的诞生), “Mobile Legends: Bang Bang”, and “Warhammer 40,000: Lost Crusade.”

◼︎ In April 2021, Bytedance put another US$15 million into Chinese Roblox competitor Reworld (代码乾坤), a platform for creating game worlds and playing games using the company’s own simulation engine.

 
Social Networking

◼︎ In September 2021, Bytedance launched its avatar app Pixsoul in Southeast Asian markets and Brazil. Users can create personalized avatars and use them to socialize.

◼︎ In January 2022, Bytedance launched a beta version of its virtual social app “Party Island” (派对岛) where users can make friends with people sharing similar interests and hang out with avatars in various virtual settings such as parks and movie theaters. However, the app was reportedly removed from app stores again and its date of relaunching is unknown.

 
Entertainment

◼︎ In September 2021, TikTok introduced its creator-led NFT collection titled “TikTok Top Moments” where TikTok will feature a selection of culturally-significant TikTok videos from some of the most beloved creators on the platform. Powered by Immutable X, users can ‘own’ a moment on TikTok that broke the internet and trade the TikTok Top Moments NFTs.

Li Weike, image via Pandaily.

◼︎ In January 2022, ByteDance bought a 20% stake in Hangzhou Li Weike Technology Co., Ltd. (Li Weike, 李未可). The company aspires to build China’s first AI+AR-powered glasses that connect users with the virtual idol Li Weike, a digital character built by the company to help users with various tasks and essentially provide users with social and emotional support.

 

By Jialing Xie and Manya Koetse

 

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Jialing is a Baruch College Business School graduate and a former student at the Beijing University of Technology. She currently works in the US-China business development industry in the San Francisco Bay Area. With a passion for literature and humanity studies, Jialing aims to deepen the general understanding of developments in contemporary China.

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China Brands, Marketing & Consumers

In Hot Water: The Nongfu Spring Controversy Explained

Nongfu and nationalists: how the praise for one Chinese domestic water bottle brand sparked online animosity toward another.

Manya Koetse

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PREMIUM CONTENT

The big battle over bottled water has taken over Chinese social media recently. The support for the Chinese Wahaha brand has morphed into an anti-Nongfu Spring campaign, led by online nationalists.

Recently, China’s number one water brand, Nongfu Spring (农夫山泉) has found itself in the midst of an online nationalist storm.

The controversy started with the passing of Zong Qinghou (宗庆后), the founder and chairman of Wahaha Group (娃哈哈集团), the largest beverage producer in China. News of his passing made headlines on February 25, 2024, with one Weibo hashtag announcing his death receiving over 900 million views (#宗庆后逝世#).

The death of the businessman led to an outpouring of emotions on Weibo, where netizens praised his work ethic, dedication, and unwavering commitment to his principles.

Zong Qinghou, image via Weibo.

Born in 1945, Zong established Wahaha in Hangzhou in 1987, starting from scratch alongside two others. Despite humble beginnings, Zong, who came from a poor background, initially sold ice cream and soft drinks from his tricycle. However, by the second year, the company achieved success by concentrating on selling nutritional drinks to children, a strategy that resonated with Chinese single-child families (Tsui et al., 2017, p. 295).

The company experienced explosive growth and, boasting over 150 products ranging from milk drinks to fruit juices and soda pops, emerged as a dominant force in China’s beverage industry and the largest domestic bottled-water company.

Big bottle of Wahaha (meaning “laughing child”) water.

The admiration for Zong Qinghou and his company relates to multiple factors. Zong was loved for his inspirational rags-to-riches story under China’s economic reform, not unlike the self-made Tao Huabi and her Laoganma brand.

He was also loved for establishing a top Chinese national brand and refusing to be bought out. A decade after Wahaha partnered with the France-based multinational Danone in 1996, the two companies clashed when Zong accused Danone of trying to take over the Wahaha brand, which turned into a high-profile legal battle that was eventually settled in 2009, when Danone eventually sold all its stakes.

It is one of the reasons why Zong was known as a “patriotic private entrepreneur” (爱国民营企业家) who remained devoted to China and his roots.

Netizens also admire the Chinese tycoon’s modesty and humility despite his immense wealth. He would often wear simple cloth shoes and, apparently not caring much about the elite social stratum, allegedly declined invitations to dine with Bill Gates and the Queen of England. He had a people-centric business approach. He prioritized the welfare of Wahaha employees, ensuring the protection of pensions for retired workers, establishing an employee stock ownership plan, and refused to terminate employees older than 45.

A post praising Zong and his daughter for staying humble despite their wealth: wearing simple shoes and not looking at their phones.

Zong and his daughter stand out due to their simple shoes.

As a tribute to Zong following his passing in late February, people not only started buying Wahaha bottled water, they also initiated criticism against its major competitor, Nongfu Spring (农夫山泉). Posts across various Chinese social media platforms, from Douyin to Weibo, started to advocate for boycotting Nongfu as a means to “protect” Wahaha as a national, proudly made-in-China brand.

 
From Love for Wahaha to Hate for Nongfu
 

With the death of Zong Qinghou, it seems that the decades-long rivalry between Nongfu and Wahaha has suddenly taken center stage in the public opinion arena, and it’s clear who people are rooting for.

The founder and chairman of Nongfu Spring is Chinese entrepreneur Zhong Shanshan (钟睒睒), and he is perhaps less likeable than Zong Qinghou, in part because he is not considered as patriotic as him.

Born in 1954, Zhong Shanshan is a former journalist who started working for Wahaha in the early 1990s. He established his own company and started focusing on bottled water in 1996. He would become China’s richest man.

His wealth was not just accumulated because of his Nongfu Spring water, which would become a leader in China’s bottled water market. Zhong also became the largest shareholder of Wantai Biological Pharmacy Enterprise, which experienced significant growth following its IPO. Cecolin, a vaccine against human papillomavirus (HPV), is manufactured by Innovax, a wholly owned subsidiary of Wantai.

Zhong Shanshan, image via Sohu.

The fact that Zhong Shanshan previously worked for Zong Qinghou and later ventured out on his own does not cast him in a positive light, especially in the context of netizens mourning Zong. Many people perceive Zhong Shanshan as a profit-driven businessman who lacks humility and national spirit compared to his former boss. Some even label him as ‘ungrateful.’

By now, the support for Wahaha water has snowballed into an anti-Nongfu campaign, resulting in intense scrutiny and criticism directed at the brand and its owner. This has led to a significant boycott and a sharp decline in sales.

Netizens are finding multiple reasons to attack Nongfu Spring and its owner. Apart from accusing Zhong Shanshan of being ungrateful, one of the Nongfu brand’s product packaging designs has also sparked controversy. The packaging of its Oriental Leaf Green Tea has been alleged to show Japanese elements, leading to claims of Zhong being “pro-Japan.”

Chinese social media users claim the packaging of this green tea is based on Japanese architecture instead of Chinese buildings.

Another point of ongoing contention is the fact that Zhong’s son (his heir, Zhong Shuzi 钟墅子) holds American citizenship. This has sparked anger among netizens who question Zhong’s allegiance to China. Concerned that the future of Nongfu might be in the US instead of China, they accuse Zhong and his business of betraying the Chinese people and being unpatriotic.

But what also plays a role in this, is how Zhong and the Nongfu Spring PR team have responded to the ongoing criticism. Some bloggers (link, link) argue their approach lacks emotional connection and comes off as too business-like.

On March 3rd, Zhong himself issued a statement addressing the personal attacks he faced following the passing of Zong Qinghou. In his article (我与宗老二三事), he aimed to ‘set the record straight.’ Although he expressed admiration for Zong Qinghou, many found his piece to be impersonal and more focused on safeguarding his own image.

The same criticism goes for the company’s response to the “pro-Japan” issue. On March 7, they refuted ongoing accusations and stated that the architecture depicted on the controversial beverage packaging was inspired by Chinese temples, not Japanese ones, and that a text on the bottle is about Japanese tea culture originating from China.

 
Calls for Calmer Water
 

Although Weibo and other social media platforms in China have recently seen a surge in nationalism, not everybody agrees with the way Nongfu Spring is being attacked. Some say that netizens are taking it too far and that a vocal minority is controlling the trending narrative.

Posts or videos from people pouring out Nongfu water in their sink are countered by others from people saying that they are now buying the brand to show solidarity in the midst of the social media storm.

Online photo of netizen buying Nongfu Spring water: “I support Nongfu Spring, I support private entrepreneurs, I support the recovery of China’s economy. I firmly opposo populism running wild.”

While more people are speaking out against the recent waves of nationalism, news came in on March 13 that the 95-year-old mother of Zhong Shanshan had passed away. According to an obituary published in the Qianjiang Evening News newspaper, Guo Jin (郭瑾) passed away on March 11.

The obituary.

A screenshot of a WeChat post alleged to be written by Zhong Shanshan made its rounds, in which Zhong blamed the online hate he received, and the ensuing stress, for his mother’s death.

Wechat post, allegedly posted by Zhong himself, blaming the recent Nongfu Spring controversy and cyberbullying for the death of the 95-year-old Guo Jin.

While criticism of Zhong resurfaced for attributing the old lady’s death to “indescribable cyberbullying” (“莫名网暴”), some saw this moment as an opportunity to bring an end to the attacks on Nongfu. As the controversy continued to brew, the Sina Weibo platform seemingly attempted to divert attention by removing some hashtags related to the issue (e.g., “Zhong Shanshan’s Mother Guo Jin Passed Away” #钟睒睒之母郭瑾离世#).

The well-known Chinese commentator Hu Xijin (胡锡进) also spoke out in support of Nongfu Spring and called for rationality, arguing that Chinese private entrepreneurs are facing excessive scrutiny. He suggested that China’s netizens should stop nitpicking over their private matters and instead focus more on their contributions to the country’s economy.

Others are also calling for an end to the waves of attacks towards Nongfu and Zhong Shanshan. Chinese entrepreneur Li Guoqing (李国庆), co-founder of the e-commerce company Dangdang (once hailed as the ‘Amazon of China’), posted a video about the issue on March 12. He said: “These two [Nongfu Spring and Wahaha brands] have come a long way to get to where they are today. The fact that they are competitors is a good thing. If old Zong [Qinghou] were still alive today and saw this division, he would surely step forward and tell people to get back to business and rational competition.”

Li Guoqing in his video (since deleted).

Li also suggested that Zong’s heir, his daughter Kelly Zong, should come out, broaden her perspective, and settle the matter. She should thank netizens for their support, he argued, and tell them that it is completely unnecessary to exacerbate the rift with Nongfu Spring in showing their support.

But those mingling in the matter soon discover themselves how easy it is to get your fingers burned on this hot topic. Li Guoqing might have meant well, but he also faced attacks after his video. Not only because people feel he is putting Kelly Zong in an awkward position, but also because his own son. like Zhong Shuzi, allegedly holds American citizenship. Perhaps unwilling to find himself in hot water as well, Li Guoqing has since deleted his video. The Nongfu storm may be one that should blow over by itself.

By Manya Koetse

With contributions by Miranda Barnes

References

Tsui, Anne S., Yingying Zhang, Xiao-Ping Chen. 2017. “Chinese Companies Need Strong and Open-minded Leaders. Interview with Wahaha Group Founder, Chairman and CEO, Qinghou Zong.” In Leadership of Chinese Private Enterprises
Insights and Interviews, Palgrave MacMillan.

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China Brands, Marketing & Consumers

Show-Inspired Journeys: Chinese Netizens Explore Next Travel Destination Through Favorite TV Series

The rising influence of Chinese TV dramas on tourism highlights the synergy between entertainment & social media in China, serving as a powerful tool for travel promotion.

Wendy Huang

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The Chinese TV series Meet Yourself has significantly boosted the popularity of Dali in Yunnan. The series’ success, coupled with the official funding behind it, not only underscores the impactful role of Chinese dramas in tourism but also illustrates how Chinese travel destination promotional strategies are being reshaped in a competitive post-Covid era.

On December 25th, the Dali Bai Autonomous Prefecture’s Culture and Tourism Bureau in Yunnan Province, Southwest China, announced a proposed subsidy of 2 million yuan ($282k) for the Chinese TV series Meet Yourself (去有风的地方).

The news soon went trending on Weibo (#去有风的地方获200万元补助#). Many found it noteworthy, especially since the announcement clarified that this funding is part of the prefecture’s special fund for cultural and tourism industry development, and the TV series was the only project under consideration.

There are several reasons why Dali might consider this strategy.

Firstly, Dali plays a pivotal role in Meet Yourself. Launched in January 2023, the TV series quickly became an online sensation, achieving an impressive rating of 8.7 out of 10 on Douban—a platform in China similar to IMDb. Spanning 40 episodes, the series features actress Liu Yifei (刘亦菲), renowned for her role in Disney’s live-action Mulan, and Chinese actor Li Xian (李现).

Promotional image for Meet Yourself (去有风的地方).

The narrative follows a white-collar worker in her mid-30s who, following her best friend’s unexpected cancer diagnosis and subsequent passing, embarks on a quest to understand the true meaning and purpose of life.

The TV series not only captivated audiences because of its soothing narrative about life and interpersonal relationships, but the show was also a hit because most of its scenes were filmed in Dali and showed picturesque rural landscapes and portrayed a slow-paced, idyllic lifestyle.

The show accumulated more than 3 billion views on the streaming platform Mango TV by the time its final episode aired on February 2, 2023. It also sparked numerous trending topics on Weibo during that time. For instance, one snapshot from the drama, “Liu Yifei Holding Flowers” (刘亦菲捧花), also went viral, with many netizens even changing their profile pictures to this image. Captivated by Liu’s beauty and charm, they believed that the image possessed some sort of magical power, like the symbolic significance of koi fish in Chinese culture and how they’re believed to bring good luck.

The ‘lucky’ Liu Yifei holding flowers image.

The lucky Liu Yifei holding flowers meme spread across social media in various ways.

Benefiting directly from the popularity generated by the TV series, Yunnan experienced a surge in visitors during the 2023 Spring Festival holiday. This influx significantly boosted its tourism revenue to an impressive 38.4 billion yuan (approximately US$5.4 billion), surpassing all other provinces and regions in the country.

The primary filming location of the drama, the Dali Bai Autonomous Prefecture, welcomed over 4.2 million visitors, marking a significant year-on-year increase. Within the first six days of the holiday, Dali boasted the highest room occupancy rate nationwide, and became the fifth most visited tourist destination across the country.

 
TV Series Inspiring Real-Life Travel to Featured Destination
 

Dali is not the only city or travel destination that has become popular because of Chinese dramas or TV shows. The recent Chinese TV series There Will Be Ample Time (故乡,别来无恙), in which Chengdu plays a major role, has also come to be seen as a promotion for the Sichuan Province capital city.

The series revolves around four women who grew up together, chose different paths in life, and then reconnect in Chengdu. The series showcases the city’s laid-back lifestyle, especially in contrast to the fast-paced metropolises like Beijing and Shanghai where the featured women return from.

Scene from There Will be Ample Time (故乡,别来无恙).

Back in 2003, the TV series Lost Time (似水年华), which was filmed in the historic scenic town of Wuzhen, also became popular. Lost Time was written, directed, and starred by the renowned Chinese actor and director Huang Lei (黄磊). The series narrates a poignant love story of a couple in their thirties who meet in Wuzhen, only to be separated by the vast distance between Wuzhen and Taipei.

The TV series successfully showcased the timeless beauty of the Wuzhen water town to a broader Chinese audience and, indirectly, promoted the town’s unique artistic and cultural atmosphere. This later led to the establishment of the Wuzhen Theatre Festival, a celebration of performing arts and a center for cultural exchange. The festival has since become one of the premier events in China and Asia. Each year, as the festival unfolds, there is a significant increase in business, with tourists flocking to the area.

On social media today, Lost Time is still seen as one of the major reasons why Wuzhen became so popular among Chinese travelers.

Wuzhen featured in Lost Time (似水年华).

But it’s not only the television series that portray a slower-paced and romantic lifestyle that motivate viewers to visit the showcased destinations. In 2020, the filming locations of the popular Chinese crime and suspense drama The Bad Kids (隐秘的角落) not only entertained its audience but also boosted tourism in the actual places where it was shot.

Much of the filming for the TV thriller took place in Chikan, an old township located in Zhanjiang in Guangdong. As a result, Zhanjiang’s popularity as a tourist destination skyrocketed by 261 percent in a single week.

Earlier in 2023, Jiangmen in Guangdong Province also gained popularity after it was featured in the popular crime TV drama The Knockout (狂飙). As a result, it became a sought-after destination during the May Day holiday, drawing numerous TV enthusiasts to the city. Jiangmen reportedly received over 765,200 visitors in the first two days of the May Day holiday alone, generating a revenue of approximately 439 million yuan (US$62.2 million).

Jiangmen’s popularity went beyond the May Day holiday. The Knockout caused a steady influx of visitors to the Guangdong city. From January to October of 2023, the city saw a total of 20,278,200 tourists, a reported year-on-year increase of 85.36%. This resulted in a tourism revenue of 19.649 billion yuan, representing an impressive increase of 133.77%.

 
Beyond the TV Screen: Social Media Creating Travel Hits
 

Over the past few years, we’ve seen how there are always unpredictable factors that help Chinese destinations suddenly become a hit among travelers. For instance, in late 2021, a song titled “Mohe Ballroom” (漠河舞厅) gained popularity across various social media platforms in China. This song narrates the story of a man who, for thirty years, danced alone in the Mohe Ballroom following the death of his beloved wife.

Prior to the song’s release, many Chinese netizens were familiar with Mohe as it is the northernmost point of China, and it is extremely cold. As the song gained traction on social media, the local government seized the opportunity to promote the city’s ice and snow tourism. Now, Mohe has emerged as a new destination for tourists seeking a unique, chilly experience.

Another example is Zibo, an ancient industrial city, which treated students well during their Covid quarantine period. So, when China lifted all Covid restrictions in the spring of 2023, these students returned to express their gratitude and celebrate the city. Their contagious enthusiasm, coupled with their social media posts about the city, sparked nationwide interest and people soon flocked to Zibo to enjoy the vibe and the local BBQ (read more here).

During the summer of 2023, the city of Tianjin became online hit due to a group of energetic seniors who transformed a local bridge into a stage for their remarkable water acrobatics. Tianjin’s so-called “diving grandpas” attracted attention for their daring dives into the river from the Stone Lion Forest Bridge (狮子林桥). Videos of their dives quickly went viral on China’s social media, drawing tourists, including many foreign residents in China, to witness the spectacle firsthand. Some people even joined to dive, including He Chong (何冲), the 2008 Olympic Champion in the 3m springboard.

Tianjin’s diving grandpas had to stop their diving activities after rising to internet fame, causing too many people to dive into the river.

In a playful twist, some visitors created their own scorecards, acting as judges and rating the divers’ performances. However, this spontaneous event eventually had to be toned down due to safety concerns. Despite this, the event kept Tianjin in the spotlight for quite a while as a tourist destination.

Social media has become a vital tool for cities and tourist destinations aiming to attract potential visitors. While some destinations organically become online sensations due to a combination of factors, other efforts are more deliberate and strategic. For instance, in spring of 2023, Chinese local government officials went all out to promote their hometowns via online channels, going viral on Weibo, Douyin, and beyond for dressing up in traditional outfits and creating original videos about their hometowns with low to zero budget.

However, when an article by Xinhua News criticized this approach, suggesting that local officials should prioritize improving service quality in their hometowns rather than striving for internet fame, the online trend appeared to wane.

Over the last year, different regions and industries in China made significant efforts to boost their local economies through tourism to recover from the impact of the pandemic. The China Tourism Academy recently published a report that forecasts that the number of China’s domestic tourists in 2023 has hit 5.407 billion, and domestic tourism revenue will amount to 5.2 trillion yuan. This figure allegedly represents a recovery to 90% compared to pre-Covid year 2019.

The upcoming Chinese New Year’s holiday is expected to kick off a promising start for the Chinese tourism industry in 2024. According to Trip.com data, bookings for the 2024 New Year’s holiday have surged by over threefold compared to the corresponding period last year. Furthermore, Tongcheng Travel highlights skiing, hot springs, Northern Lights viewing, music events, outdoor activities, island retreats, cruises, staycations, and firework displays as the top domestic travel preferences during this holiday season.

As China has significantly relaxed several travel and visa policies for both Chinese and international travelers, the number of outbound travel bookings for the New Year’s holiday on Trip.com has also seen a nearly fivefold increase compared to the same period last year while inbound tourism is on the rise.

Meanwhile, the way in which the TV drama Meet Yourself (去有风的地方) has boosted the tourism industry of Dali, which already was a popular tourist destination, is generating ongoing discussions on Chinese social media as it is a good example of how the integration of destination themes can captivate viewers’ attention, inspiring them to visit and discover the real-life locations.

In this way, TV shows serve as powerful platforms for local tourism authorities across China. First, utilizing television series provides them with a higher level of control compared to other methods of online promotion, including more fleeting trends. The show’s narratives, vibe, and filming locations can precisely showcase a destination’s unique features, attractions, and local culture.

Second, featuring destinations in TV series effectively accomplishes two goals at once, as Chinese TV dramas and online communities have become strongly intertwined. This amplifies the influence and reach of such productions, as fans engage, share, discuss, and promote the series and associated destinations across various social media platforms. And so, a featured scene or image, such as the one with Liu Yifei, can transcend the series itself and become an entire trend of its own on Chinese social media channels.

For travelers, visiting a destination featured in a beloved TV drama is not just about exploring a new location—it’s about experiencing a feeling and and immersing oneself in a fantasy. This trend won’t end with Meet Yourself, as new dramas inspire viewers to visit new locations again. As fans are binge watching the TV series Love Me, Love My Voice (很想很想你), Guangxi’s Guilin is the next hotspot attracting attention online for its portrayal in the show. “I finished watching the show,” one viewer wrote, “Now I want to start traveling.”

By Wendy Huang

Edited for clarity by Manya Koetse

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