Source Code: Your daily look at what matters in tech.

chinachinaauthorShen LuNoneDavid Wertime and our data-obsessed China team analyze China tech for you. Every Wednesday, with alerts on key stories and research.9338dd5bb5

Get access to Protocol

Your information will be used in accordance with our Privacy Policy

I’m already a subscriber
Protocol | China

China’s $2.4 trillion shopping festival is more competitive than ever

Government scrutiny of "pick one from two" exclusivity deals has left 618 sellers free to list goods on multiple marketplaces.

The 618 shopping event takes over Chinese ecommerce starting in late May.

The 618 shopping event takes over Chinese ecommerce starting in late May.

Photo: Chan Long Hei/Bloomberg via Getty Images

China's mid-year ecommerce extravaganza known as 618 reaches its peak on Friday. Last year's event, which hauled in an estimated $2.4 trillion in consumer spending, signaled the economy's rebound from the coronavirus. This year's shopping spree is weighed down by a different concern: Beijing's antitrust crackdown on the country's internet giants.

Shoppers are more likely to find the same goods promoted across the biggest online superstores this year. That's because the longstanding practice of demanding exclusivity — known as "pick one from two" (二选一) in China — is under fire.

618 isn't even the largest shopping event in China — that's Nov. 11's Singles Day. But in 2019, 618 became a flashpoint for large marketplaces' exclusivity demands. Guangdong-based home appliance company Galanz took to Weibo to air its grievances: Alibaba's Tmall had removed its promotional banner after the company announced a partnership with Alibaba competitor Pinduoduo. Galanz noted a significant drop in traffic to its store, with searches for the brand name yielding no results on Tmall. The reason? The company said Tmall had asked Galanz to enter a "pick one from two" agreement in early 2019, and Galanz had refused. Galanz sued Tmall in November 2019 for "abusing its dominant market position," but later dropped the case.

This year looks different: Galanz, among many other brands, is promoting 618 across platforms, including, Tmall and Pinduoduo.

The exclusivity deals involved carrots and sticks. Marketplaces offered subsidies to boost discounts and promised traffic to brands' hot offers. But they also blocked stores and restricted traffic to sellers who didn't play ball. That's all changing: With China cracking down on its domestic Big Tech giants, no one wants to get caught looking like a monopoly.

In early February, the State Council, China's cabinet, finalized antitrust guidelines for "the platform economy," updating their rules for the modern internet age. New guidelines state that if a marketplace "abuses its dominant market position" by requiring brands to exclusively sell products there, that behavior may break the law. Last December, the State Administration for Market Regulation launched an antitrust investigation into Alibaba, China's largest ecommerce player, for its practice of preventing vendors from selling on other marketplaces. Alibaba was fined a record $2.8 billion in April.

As a result, "this year's ecommerce environment is more friendly," Wang Juntao, founder of TNO Water Drop Tea, told the Economic Observer, a Chinese financial publication. "This might be the biggest difference of this year's 618."

It doesn't hurt that this year's 618 extravaganza has been stretched into a near-monthlong affair — not unlike in America, where retailers start Black Friday discounts well before Thanksgiving. Presales began as early as May 24 on and Taobao. And the festival ends on June 20.

New entrants

What's also different about this year's midyear shopping event — a shopping bonanza invented in 2010 as an anniversary promotion — is two new entrants vying for consumers' wallets. Sensational short-video services Douyin and Kuaishou, which entered the ecommerce arena with space guns blazing not long ago, made their 618 debuts only last year. Douyin and Kuaishou now are the fourth and sixth largest ecommerce marketplaces in China by gross merchandise value, respectively.

According to a pre-618 survey conducted by the ecommerce-focused publication Ebrun, more than half of the surveyed brands said they would increase their marketing budget for 618 on Douyin. And over 22% said they would increase their promotional spending on Kuaishou. That's the biggest change consumers will see from the antitrust pressure on dominant marketplaces: It may become easier for new entrants to woo brands if sellers don't have to worry about getting punished for a lack of "pick one from two" exclusivity.

Still, size matters. Despite Alibaba's antitrust woes and the rise of social commerce, sellers still put their largest stock on Tmall. Two-thirds of the surveyed businesses considered Tmall their main 618 battleground. And 40% of them expected more than half of their 618 sales would come from Tmall.

During last year's 618 shopping event, total transactions across platforms reached $2.4 trillion, up 42% from 2019, according to Chinese online payment clearing house NetsUnion Clearing Corporation. If pre-618 sales numbers are any indication, this year's total turnover will likely smash records: Alibaba claimed that sales turnover on Taobao generated through livestreaming during the first hour of June 1 was higher than last year's daily average. And on the same day, claimed that over 4,800 brands saw their sales increase more than fivefold year-over-year.

The Activision Blizzard lawsuit has opened the floodgates

An employee walkout, a tumbling stock price and damning new reports of misconduct.

Activision Blizzard is being sued for widespread sexism, harassment and discrimination.

Photo: Bloomberg/Getty Images

Activision Blizzard is in crisis mode. The World of Warcraft publisher was the subject of a shocking lawsuit filed by California's Department of Fair Employment and Housing last week over claims of widespread sexism, harassment and discrimination against female employees. The resulting fallout has only intensified by the day, culminating in a 500-person walkout at the headquarters of Blizzard Entertainment in Irvine on Wednesday.

The company's stock price has tumbled nearly 10% this week, and CEO Bobby Kotick acknowledged in a message to employees Tuesday that Activision Blizzard's initial response was "tone deaf." Meanwhile, there has been a continuous stream of new reports unearthing horrendous misconduct as more and more former and current employees speak out about the working conditions and alleged rampant misogyny at one of the video game industry's largest and most powerful employers.

Keep Reading Show less
Nick Statt
Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at

Over the last year, financial institutions have experienced unprecedented demand from their customers for exposure to cryptocurrency, and we've seen an inflow of institutional dollars driving bitcoin and other cryptocurrencies to record prices. Some banks have already launched cryptocurrency programs, but many more are evaluating the market.

That's why we've created the Crypto Maturity Model: an iterative roadmap for cryptocurrency product rollout, enabling financial institutions to evaluate market opportunities while addressing compliance requirements.

Keep Reading Show less
Caitlin Barnett, Chainanalysis
Caitlin’s legal and compliance experience encompasses both cryptocurrency and traditional finance. As Director of Regulation and Compliance at Chainalysis, she helps leading financial institutions strategize and build compliance programs in order to adopt cryptocurrencies and offer new products to their customers. In addition, Caitlin helps facilitate dialogue with regulators and the industry on key policy issues within the cryptocurrency industry.
Protocol | Workplace

Founder sues the company that acquired her startup

Knoq founder Kendall Hope Tucker is suing the company that acquired her startup for discrimination, retaliation and fraud.

Kendall Hope Tucker, founder of Knoq, is suing Ad Practitioners, which acquired her company last year.

Photo: Kendall Hope Tucker

Kendall Hope Tucker felt excited when she sold her startup last December. Tucker, the founder of Knoq, was sad to "give up control of a company [she] had poured five years of [her] heart, soul and energy into building," she told Protocol, but ultimately felt hopeful that selling it to digital media company Ad Practitioners was the best financial outcome for her, her team and her investors. Now, seven months later, Tucker is suing Ad Practitioners alleging discrimination, retaliation and fraud.

Knoq found success selling its door-to-door sales and analytics services to companies such as Google Fiber, Inspire Energy, Fluent Home and others. Knoq representatives would walk around neighborhoods, knocking on doors to market its customers' products and services. The pandemic, however, threw a wrench in its business. Prior to the acquisition, Knoq says it raised $6.5 million from Initialized Capital,, Techstars and others.

Keep Reading Show less
Megan Rose Dickey
Megan Rose Dickey is a senior reporter at Protocol covering labor and diversity in tech. Prior to joining Protocol, she was a senior reporter at TechCrunch and a reporter at Business Insider.
Protocol | Workplace

What’s the purpose of a chief purpose officer?

Cisco's EVP and chief people, policy & purpose officer shares how the company is creating a more conscious and hybrid work culture.

Like many large organizations, the leaders at Cisco spent much of the past year working to ensure their employees had an inclusive and flexible workplace while everyone worked from home during the pandemic. In doing so, they brought a new role into the mix. In March 2021 Francine Katsoudas transitioned from EVP and chief people officer to chief people, policy & purpose Officer.

For many, the role of a purpose officer is new. Purpose officers hold their companies accountable to their mission and the people who work for them. In a conversation with Protocol, Katsoudas shared how she is thinking about the expanded role and the future of hybrid work at Cisco.

Keep Reading Show less
Amber Burton

Amber Burton (@amberbburton) is a reporter at Protocol. Previously, she covered personal finance and diversity in business at The Wall Street Journal. She earned an M.S. in Strategic Communications from Columbia University and B.A. in English and Journalism from Wake Forest University. She lives in North Carolina.

Protocol | Fintech

The digital dollar is coming. The payments industry is worried.

Jodie Kelley heads the Electronic Transactions Association. The trade group's members, who process $7 trillion a year in payments, want a say in the digital currency.

Jodie Kelley is CEO of the Electronic Transactions Association.

Photo: Electronic Transactions Association

The Electronic Transactions Association launched in 1990 just as new technologies, led by the World Wide Web, began upending the world of commerce and finance.

The disruption hasn't stopped.

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at or via Signal at (510)731-8429.

Latest Stories