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… has not settled on how</h3>
Overall, the short-term cash returns AI is bringing Tencent are currently reflected mainly in the advertising business.
Mitchell said many Tencent products, including its expansion into games, the launch of Weixin, and its move into payments, went through long incubation periods with no immediate return on investment. Tencent backed those products because it believed they could create franchise value over time.
Most companies now investing heavily in large models are winners of the internet era, and they generally understand delayed returns. The difference is that AI may not only take longer to make money, but also burn money faster.
In the internet era, companies mainly paid bandwidth costs, while most computing power sat on users’ devices. That made near-unlimited expansion possible. In the AI era, every user served comes with a fairly high cost.
On the earnings call, an analyst asked whether Tencent’s AI products would pursue a large DAU scale or focus more on serving a small group of heavy users with strong willingness and ability to pay.
Lau said high-value use cases matter at least as much as, if not more than, simply increasing DAU and user time. The difference between the AI and internet eras, he said, is that AI is about intelligence, and the value of intelligence is reflected in how much people are willing to pay for it. In AI, every service delivered carries meaningful variable cost.
Doubao, <a href="/company/bytedance">ByteDance’s</a> AI assistant, is already trying to make money through advertising, e-commerce, and paid subscriptions. For now, however, a fully workable business model does not exist.
Lau believes the subscription model will not be especially large in China, but that subscriptions are still necessary. He said e-commerce or advertising as monetization methods remain very early, even in the US, where eCPM (effective cost per mille) is much higher. Leading players have not yet built a robust advertising model, he said, so advertising monetization will be a long-term process and most likely a supplement to subscriptions.
Tencent is not rushing to set an ARR (annual recurring revenue) target for AI agent products because the field is changing too quickly. Mitchell said Tencent could set a target today and be off by an order of magnitude a year later in either direction, because usage demand is so dynamic. For now, the company is focused less on hitting specific ARR targets and more on building the right products.
For Tencent, the era of cost reduction and efficiency gains appears to be giving way to the cash burn of AI. The company succeeded in the previous internet cycle, but a new challenge is directly ahead. The wealth, talent, and businesses Tencent accumulated in the previous era are all being rebuilt through AI.
Judging from its share price performance, the market is somewhat nervous about that.
Mitchell said Tencent has a cash-generative business and a substantial investment portfolio, and is accelerating the process of monetizing part of that portfolio. That should allow it to sustain buybacks through the rest of the year. “We believe our share price is somewhat dislocated, and therefore it’s an opportune time for buybacks,” he said.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3808710182034944">article</a> was written by Wang Yuchan for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Tencent is putting AI into everything, but when will it pay off?

East Asia

China

Artificial Intelligence

Deep Tech

… more capital and talent into this sector.
<h3>36Kr: Over the past few years, there have been repeated claims that this industry is in a bubble and will soon cool down. How do you see this?</h3>
YY: Claims that the industry is “cooling” have existed for years. But we believe the long march of embodied intelligence has only just taken its first step. The industry is far from convergence.
This year, some robotics companies are going public, which will actually be a major positive for the industry. Just like large model companies going public this year, it will stimulate more capital to pay attention to and invest in the sector, making the whole ecosystem more prosperous, rather than creating so-called capital siphoning.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3804282431659779">article</a> was written by Qiu Xiaofen for 36Kr.

Vbot’s home robotics push starts with a quadruped bot and RMB 500 million in funding

Robotics

36Kr has exclusively learned from multiple independent sources that Nowwa Coffee’s 2025 revenue reached RMB 700–800 million (USD 102.8–117.4 million), with profit of about RMB 60 million (USD 8.8 million).
It was a year of rapid expansion for Nowwa. From more than 1,200 stores at the end of 2024, it surpassed 10,000 stores by the end of 2025, making it the fourth coffee brand in China to cross that threshold.
Unlike its rivals, most Nowwa stores use a shop-in-shop model. Nowwa partner Li Lixu recently said publicly that about 80% of Nowwa outlets are shop-in-shops, while around 20% are standalone stores. A shop-in-shop refers to a model that embeds coffee operations inside convenience stores, internet cafes, gas stations, and other locations. Partner stores provide the space and staff, while Nowwa provides materials and equipment. The former earns incremental revenue from the coffee business, while Nowwa profits from ingredient margins.
“For convenience stores, first, they do not need to purchase heavy assets. Second, they can use Nowwa’s online traffic to sell coffee. Third, for some convenience store chains that already had coffee operations but poor sales, it also allows them to reuse idle assets such as coffee machines,” one industry insider told 36Kr.
<figure id="attachment_162076" aria-describedby="caption-attachment-162076" style="width: 405px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-162076" src="https://console.0722vps.aieehr01.top/wp-content/uploads/2026/05/Nowwa-Coffee-Nowwa-Express.jpg" alt="Photo shows a Nowwa Express kiosk inside a convenience store, based on the shop-in-shop model." width="405" height="480" srcset="https://console.0722vps.aieehr01.top/wp-content/uploads/2026/05/Nowwa-Coffee-Nowwa-Express.jpg 1080w, https://console.0722vps.aieehr01.top/wp-content/uploads/2026/05/Nowwa-Coffee-Nowwa-Express-608x720.jpg 608w, https://console.0722vps.aieehr01.top/wp-content/uploads/2026/05/Nowwa-Coffee-Nowwa-Express-864x1024.jpg 864w, https://console.0722vps.aieehr01.top/wp-content/uploads/2026/05/Nowwa-Coffee-Nowwa-Express-768x910.jpg 768w" sizes="(max-width: 405px) 100vw, 405px" /><figcaption id="caption-attachment-162076" class="wp-caption-text">A Nowwa Express kiosk inside a convenience store, based on the shop-in-shop model. Photo source: 36Kr.</figcaption></figure>
For Nowwa, lower store opening costs have also become a key factor in breaking through the 10,000-store mark.
But quality control is also the weakness of the shop-in-shop model. Under this model, Nowwa does not hire dedicated store staff. Instead, it uses the convenience store’s existing employees, who can start after training.
Another industry insider pointed to FamilyMart’s self-operated Par Cafe as an example. FamilyMart’s coffee business sells only two categories, Americano and latte, and uses prefilled ice cups. For store staff, the process requires only simple steps such as adding milk and pouring coffee concentrate.
“But Nowwa has more SKUs, including fruit coffee products. With the same convenience store staff operating the business, Nowwa requires them to remember more formulas. And because Nowwa cannot directly manage store staff, quality control and shelf-life risks are greater,” he said.
It is not that Nowwa does not want to add more staff. Its existing cost structure does not allow it. At present, Nowwa settles with franchisees uniformly at beverage cost plus RMB 2 (USD 0.3) and also pays a certain amount of monthly rent. But a person familiar with the matter told 36Kr that the monthly rent Nowwa pays to some convenience store chains is “very low, almost negligible.”
In other words, franchisees earn RMB 2 in profit from each cup of coffee. An employee at a convenience store that works with Nowwa told 36Kr that the store’s daily coffee sales are around 80 cups. At that level, it is not economical for the franchisee to add another coffee staff member. When existing staff are reused, they may struggle to handle concentrated order volumes. On social media, many users have commented on inconsistent product standards at Nowwa.
For coffee brands, shop-in-shops are not new. In 2024, Cotti Coffee also tried the model and once announced an ambitious target of 50,000 stores in three years. But the model soon generated controversy because some stores were roughly operated and locations were chosen casually. Cotti has since suspended shop-in-shop recruitment.
Nowwa also wavered over the shop-in-shop model before committing to it. In 2022, it slowed its shop-in-shop push and tried to expand through standalone franchised stores, but the results were limited. That was also the year China’s RMB 9.9 (USD 1.5) coffee price war began. As competition intensified, entry costs became too high. Amid heavy subsidies and low prices, Nowwa struggled to find expansion opportunities. Only after restarting its shop-in-shop push did it surpass 10,000 stores.
whereRelatedArticle
Li once said that, compared with Japan and Taiwan, convenience store coffee already has mature consumption habits. Consumers are buying caffeine and convenience, making it category-driven consumption. In China, however, consumer education around freshly made coffee was largely completed by brands such as Starbucks, so consumption is more brand-driven. This is also one reason convenience stores choose Nowwa rather than operating coffee businesses themselves.
In other words, Nowwa wants to brand convenience store coffee. But to sustain that story, it may have to answer two questions.
First, is the shop-in-shop model inherently at odds with building a branded experience, making it harder to build recognition when users buy incidentally rather than seek out the brand?
Second, in Japan, convenience stores have an infrastructure-like presence and account for more than 65% of freshly made coffee sales, making them the dominant channel. But in China, the main channel for coffee remains grab-and-go stores, with convenience stores serving only as a supplement. Could that limit Nowwa’s ceiling?
If the model is mainly about helping convenience stores earn extra money from coffee, Nowwa may look less like a consumer brand and more like a channel operator.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3800419059555584">article</a> was written by Zhong Yixuan for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

After crossing 10,000 stores, Nowwa Coffee faces the hard part

Retail

Consumer Economy

Coffee

… Excluding losses from the quick commerce business, EBITA was stable YoY. In addition, first-quarter cash flow turned negative again, with heavy investment causing a net outflow of RMB 17.3 billion (USD 2.5 billion).
Taotian Group’s customer management revenue (CMR) has returned to normal growth. Under the new reporting basis, the e-commerce business launched a plan to return part of marketing expenses to merchants if they meet gross merchandise value (GMV) targets. Previously, merchants’ advertising fees and commissions were included in CMR, while marketing expenses were included in market spending. In the first quarter, China e-commerce CMR grew 1%, but on a comparable basis, actual YoY growth was 8%, exceeding market expectations. This was mainly due to delayed Lunar New Year stockpiling and continued revenue growth from Taobao Shangou.
Taobao Shangou’s path to positive unit economics depends on continually reducing costs and expanding merchant revenue.
At present, Taobao Shangou has made reasonable adjustments to both user and rider subsidies. After a year of user accumulation, Alibaba’s subsidy focus has shifted toward users with higher average order values. Rider subsidies have also been adjusted based on order volume and business layout. Compared with last year, more Shangou rider capacity will support retail businesses such as four-hour and half-day delivery.
Some leading merchants now have a strong willingness to pay because early adopters have already seen results. Take Decathlon as an example. Since launching a direct sales plus in-store pickup model on Taobao Shangou, its average daily order volume has reportedly exceeded 5,000, and peak order volume during major promotions can reach 20,000. Its single-store fulfillment radius has expanded from three kilometers to ten kilometers, and sales have already surpassed RMB 100 million (USD 14.7 million).
This is closely tied to Taobao Shangou’s push into retail. Since the end of last year, Shangou has expanded its retail footprint, increasing investment in formats such as warehouses built for rapid local fulfillment, Tmall Supermarket, and Hema front warehouses. A person close to Shangou told 36Kr that fresh groceries still account for 70–80% of its retail business, but its target this year is to increase the combined share of daily necessities, beauty products, alcoholic beverages, and healthcare products to about 50%. The SKU count for each of these categories will increase by more than 1,000.
The next step is to make those retail categories easier to discover and convert. That is where Qwen enters the e-commerce story. In the same week Alibaba released its earnings, it announced that Qwen had been integrated into the Taobao app across all e-commerce categories. Taobao also launched an AI shopping assistant powered by Qwen, which will provide services such as outfit styling and price comparison. The integration came only one quarter after Qwen was connected to Taobao Shangou, making it a relatively fast rollout compared with other AI e-commerce efforts globally.
36Kr has learned that Alibaba’s approach to consumer-facing AI differs from the more sales-driven orientation of AI in the business-facing market. For B2C use cases, Alibaba will evaluate token consumption, user volume, and ecosystem synergy together. Rather than focusing only on consumer user numbers, it is also examining how products such as Qwen can coordinate with other business segments inside Alibaba’s ecosystem.
The main external question around the integration of e-commerce and Qwen is whether Alibaba can succeed where major US technology companies have struggled.
In AI-driven e-commerce, Alibaba’s advantage is that it has both a leading open-source large model family, Qwen, and a sizable e-commerce platform, Taobao. It can pursue deeper integration without cross-company coordination. This is also why, after Alibaba’s market value was overtaken by <a href="/company/pinduoduo">Pinduoduo</a> in 2023, Jack Ma could write confidently on Alibaba’s internal forum:
<blockquote>“The era of AI e-commerce has just begun. It is an opportunity and also a challenge for everyone.”</blockquote>
Major US tech companies have faced a structural constraint: few possess both advanced large model capabilities and a large e-commerce ecosystem. OpenAI and Google do not have e-commerce ecosystems, while Amazon has lagged behind leading AI model developers. To explore new opportunities and expand its business-facing services, OpenAI turned toward Amazon and loosened its tie with Microsoft, shifting to a nonexclusive partnership.
But the window may not stay open for long. ByteDance is putting pressure on Alibaba from the other direction, through Doubao and Douyin E-commerce, whose integration is expected to deepen. For Alibaba, the challenge is not just improving Taobao with Qwen, but doing so before ByteDance narrows the gap.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3807527591058948">article</a> was written by Peng Qian for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Has Alibaba’s AI bets started to meet the revenue test?

Taobao

Tmall

Alibaba Cloud

… lower than the L9 Livis.
Li Auto’s pricing model is changing. It is no longer following a step-by-step pricing strategy from the L6 to the L7, L8, and L9. Instead, it is using higher-configuration models to push further into the premium market, widening price gaps while using relatively lower-priced models to drive volume. The company is trying to capture both pricing power and sales volume.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3810562142445058">article</a> was written by Xiao Man for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Li Auto plays its hand with the new Li L9, starting at RMB 459,800

Transportation

Electric Vehicles

Mobility

… the industrial sector in the first half of 2025, even as overall industrial-linked VC investment remained relatively flat since 2022. Within those AI and machine learning deals, investment rose 268% year-on-year during the same period.
The more important question is whether that enthusiasm can be priced in the secondary market. Hong Kong stocks have historically placed greater weight on fundamentals and shown limited tolerance for concept speculation. In the current global AI rally, however, fear of missing out on AI gains is temporarily changing that constraint. It has also created a relatively loose listing window for industrial AI companies with the dual narrative of large models and robotics.
But short-term enthusiasm does not provide sustained valuation support on its own. Based on current data, industrial AI has already begun to move beyond the purely conceptual stage. CIC expects the global industrial AI agent market to grow at a compound rate of 35% between 2025–2030. Leading companies represented by SmartMore have also produced historical compound revenue growth of more than 50%, alongside narrowing losses.
whereRelatedArticle
Filing for an IPO is only the starting point. For industrial AI companies that have just begun their Hong Kong listing journeys, the market’s real focus is not historical performance. It is whether growth and loss-narrowing trends can continue to be verified across a series of milestones: filing, listing, and the first quarterly report.
Specifically, the market will examine three progressively deeper questions:
<ul>
<li aria-level="1">First, can growth continue to move from leading customers into a broader base of midsized manufacturers?</li>
<li aria-level="1">Second, are narrowing losses supported by real internal cash generation?</li>
<li aria-level="1">Third, can scale effects translate into hard financial metrics and continue to be delivered after listing?</li>
</ul>
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3808918209748489">article</a> was written by Xiao Xi for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Can industrial AI companies carry Hong Kong’s next IPO wave?

Hong Kong

… Al-Takhassusi. It is planned around public transit and will include residential, commercial, and leisure spaces.
whereRelatedArticle
<h3>Qatar’s inward FDI rises 2% in 2025</h3>
According to <a href="https://thepeninsulaqatar.com/article/14/05/2026/qatar-inward-fdi-up-2-to-qr1654bn-outward-fdi-rises-81-to-qr210bn-in-2025">The Peninsula</a>, Qatar data showed that inward FDI (foreign direct investment) stock in Qatar rose to QAR 165.4 billion (USD 45.4 billion) in 2025, up 2% year-on-year. Outward FDI stock climbed to QAR 210 billion (USD 57.7 billion), up 8.1%, showing the continued expansion of Qatari companies overseas.
More than 90% of foreign investment inflows were concentrated in five sectors: mining, finance and insurance, manufacturing, professional and technical services, and information and communications. The figures reflect foreign investors’ confidence in Qatar’s economy and the impact of its diversification efforts.
<h3>Ooredoo launches digital and AI transformation program</h3>
Ooredoo has launched a digital and artificial intelligence transformation program in partnership with Microsoft, <a href="https://www.gulf-times.com/article/725413/business/ooredoo-announces-launch-of-strategic-digital-ai-transformation-programme">Gulf Times</a> reported.
Building on existing cooperation, the program will help the company build a more agile and future-ready operating system. Its priorities include sovereign cloud and hybrid cloud capabilities, AI applications, and scalable digital infrastructure development. These efforts are intended to support advanced digital solutions, improve customer experience, and strengthen the company’s digital capabilities.
<h3>QFC and Commercial Bank of Qatar sign banking services agreement</h3>
QFC and the Commercial Bank of Qatar have signed a memorandum of understanding to provide more convenient banking services to licensed firms on QFC’s platform, <a href="https://www.zawya.com/en/business/banking-and-insurance/qfc-commercial-bank-sign-deal-to-facilitate-banking-access-for-qfc-firms-h1md3imq">Zawya</a> reported.
Under the agreement, QFC will designate Commercial Bank as one of its strategic banking partners. Commercial Bank will offer tailored banking products for QFC firms and their employees, while also supporting immediate account opening for newly licensed companies. The two sides will also cooperate in fintech and digital assets.
This <a href="https://mp.weixin.qq.com/s/Dzy7oK-LpJkaX-k1NHXHDA">article</a> was adapted based on a feature originally written and published by Al Shasia. KrASIA is authorized to translate, adapt, and publish its contents.
Note: AED, QAR figures are converted to USD at rates of AED 3.67 = USD 1 and QAR 3.64 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

Middle East weekly: Dubai Business Forum returns to China, HK webinar explores Qatar opportunities, Saudi Arabia raises film rebates, and more

Saudi Arabia

Qatar

Middle East

… may have been traditional longform video platforms, and in the past two years, emerging short drama platforms. In the AI era, who are iQiyi’s rivals?</h3>
GY: Our attention is still primarily focused on longform content. But from a broader perspective, user attention is limited. If users watch short dramas, they may not have the energy to watch long dramas. On that level, we do face competition from short dramas.
<h3>36Kr: Which type of competition creates more pressure for you?</h3>
GY: Industry upheaval caused by technological innovation concerns me more. That is what makes me most anxious.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3808886419054337">article</a> was written by Xiao Xi for 36Kr.

AI can decentralize film and TV production for the better, iQiyi CEO says

Entertainment

Short Video

Video

Creative

Content

Creator Economy

… which GLP issued in mainland China, offers one reference point. From 2023–2025, the fund maintained a distribution yield above 5% for three consecutive years based on market capitalization at the end of each year, performing relatively well among 11 listed warehousing and logistics REITs. As China’s public REITs market continues to expand, more properties may be securitized, improving asset liquidity and valuation.
At present, GLP’s reported target valuation of USD 20 billion corresponds to a price-to-earnings ratio of about 8.5 times, broadly in line with the industry average.
For Vanke, however, GLP’s IPO remains a market rumor. The timing of its filing, fundraising scale, and listing outcome all remain uncertain. Volatility in Hong Kong logistics stocks or cyclical adjustments could also erode the value of Vanke’s stake. More importantly, companies such as Amazon and JD.com are building their own logistics networks, creating competitive pressure.
Still, whether or not GLP completes its IPO, Vanke’s GLP stake remains one of its most visible high-value assets as it works through a risk resolution period.
Last year, Vanke recorded a net loss attributable to shareholders of RMB 88.556 billion (USD 13 billion). It had total assets of about RMB 1 trillion (USD 146.8 billion), total liabilities of about RMB 784.76 billion (USD 115.2 billion), a net gearing ratio of 123.48%, and RMB 160.56 billion (USD 23.6 billion) in interest-bearing debt due within one year.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3808685381885700">article</a> was written by Wang Hanyu for 36Kr.
Note: RMB figures are converted to USD at rates of RMB 6.81 = USD 1 based on estimates as of May 21, 2026, unless otherwise stated. USD conversions are presented for ease of reference and may not fully match prevailing exchange rates.

GLP’s potential IPO could give Vanke a much-needed exit window