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Chinese discount store operator HotMaxx is winning over bargain hunters by offering branded goods well below their original prices, as an economic slowdown has consumers growing more cautious about spending.
Managed by Shanghai-based Xinguo Technology, HotMaxx's "super warehouse" outlet in a Nanjing shopping mall has become its biggest draw since opening in December 2024, showcasing racks of discounted Nike clothes, Doritos chips, and even Hermes bags.
"Wow, this is cheap even though it's imported," a local man said as he placed a RMB 4.5 (USD 0.6) bottle of Perrier sparkling water into his shopping cart. The suggested retail price is RMB 7.9 (USD 1.1).
The outlet in the eastern Chinese city has over 10,000 square meters of floor space, and is the company's biggest. A typical HotMaxx is around 200 square meters. The company also recently opened a similar super warehouse outlet in Beijing.
Concerns over a real estate downturn, job security and the tariff war with the US have stirred Chinese consumers' appetite for bargains. HotMaxx's expansion shows how growing demand for "value for money," a popular term in the country these days, is creating new opportunities for retailers.
"Pricing typically involves production cost plus [sales] channel margins before eventually reaching the consumer," co-founder Zhang Ning said at a recent conference in Shanghai. "But for HotMaxx, pricing is usually based on what a first-time buyer would be willing to pay on impulse."
HotMaxx opened its first store in 2020, at a high-end Shanghai shopping mall, selling discounted snacks and drinks close to their expiration dates at a time when supply chains were disrupted by the Covid-19 pandemic. It now has more than 900 stores nationwide, mostly in major cities, that are increasingly stocked with cosmetics, clothes and shoes. Many of these products are new items that failed to gain traction at traditional retailers.
The company, which brands itself as the "discount king," said it has a large procurement team that cuts deals with suppliers looking to offload excess inventory. Thanks to its growing size, HotMaxx now sources products directly from manufacturers or top-tier distributors, according to a Shanghai-based supplier who has worked with the company.
In its stores, staff are often seen busily stocking shelves with new products. The company uses algorithms to optimize pricing so that goods sell out within 20 days.
"If you haven't visited the store for a month, it will feel almost like a completely new store because most of the items on the shelves will be things you haven't seen before," Zhang said.
The unpredictability of what products are on offer, and at what prices, creates a sense of "treasure hunting," according to Jason Yu, managing director of CTR Market Research, making HotMaxx popular among younger consumers. This feeling is further stoked by receipts comparing the original retail prices of purchased items with how much the customer has saved.
Analysts say downtrading, the practice of switching to a less expensive alternative, intensified after China ended its tight Covid-19 policy in late 2022, as the economic rebound was weaker than expected. In an effort to stimulate consumption, the government has <a title="" href="https://asia.nikkei.com/Economy/China-races-to-calm-worries-over-end-to-42bn-consumer-subsidies" target="_blank" rel="noopener">rolled out subsidies</a> for cars, electronics, and home appliances. While the policy has helped <a title="" href="https://asia.nikkei.com/Economy/China-consumption-beats-expectations-buoyed-by-trade-in-subsidies" target="_blank" rel="noopener">boost overall spending</a>, the consumer price index fell year-on-year (YoY) for four consecutive months to May.
The value of fast-moving consumer goods rose 2.7% YoY in the first quarter, according to a report by Bain &amp; Company and Worldpanel. A 5.3% increase in volume was offset by a 2.5% drop in average selling prices. The report found that opting for cheaper products was the biggest factor in suppressing household spending across categories such as packaged food and beverages, as well as home and personal care products.
"People are no longer ashamed of buying products at a discount price, as long as the quality is good," CTR's Yu said. He noted parallels with developed markets, where discount retail "grew in a time of economic difficulties."
Foreign players are also taking note. German supermarket chain <a title="" href="https://asia.nikkei.com/Business/Retail/Aldi-and-Costco-test-China-s-retail-appetite-with-fresh-approaches" target="_blank" rel="noopener">Aldi</a> has opened 65 stores in China as of last year, driven by the popularity of its affordable private label products. A carton of Aldi-branded fresh milk, for example, costs RMB 7.9, less than half of domestic peer Bright Dairy.
Privately held HotMaxx counts Chinese venture capital firms such as GSR Ventures and Grandway Capital among its backers. The company does not disclose its earnings, but its annual gross merchandise value reportedly stood at RMB 4 billion (USD 560 million), according to local media.
Signaling its growing ambitions, HotMaxx's Zhang has even joked that the company could sell <a href="/industry/ev">electric vehicles</a> if there is excess stock. The company has also begun to venture outside the mainland, opening stores in Hong Kong and announcing plans to enter the Japanese market.
Part of its expansion strategy is in response to intensifying competition. Busy Ming Group, a retailer based in Hunan, has rolled out more than 14,000 outlets across China, primarily selling low-priced snacks and drinks. In April, the company filed for an IPO in Hong Kong.
CTR's Yu noted that major retailers like Sam's Club, a membership-based retail chain owned by Walmart, and Chinese supermarket chain Yonghui are also "getting more aggressive in their pricing." Still, he said replicating HotMaxx's treasure hunt experience across categories like clothing and footwear could help it become a truly distinctive brand.
This article first appeared on <a href="https://asia.nikkei.com/Business/Retail/Chinese-discount-retailer-grows-as-demand-rises-for-affordable-goods">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

Chinese discount retailer grows as demand rises for affordable goods

Retail

Consumer Economy

China

Cross-border payments often face two persistent challenges: lengthy settlement times and currency fluctuations. A single transaction can take one to five days to process through multiple intermediary banks. In that time, shifts in exchange rates can significantly impact a company’s bottom line. Stablecoins are beginning to offer a potential solution. By removing intermediaries, these digital currencies allow funds to move almost instantly, even within an app.
On May 21, the Hong Kong government passed the “Stablecoins Bill,” which will take effect on August 1. Major companies such as <a href="/company/ant-group">Ant Group</a>, Standard Chartered, and <a href="/company/jd">JD.com</a> are already exploring applications, with some targeting cross-border payments and others focusing on B2B transactions or specific markets across Asia Pacific and Africa. The range of use cases is still evolving.
Still, key questions remain. What underpins a stablecoin’s value? How do they differ from older cryptocurrencies like Bitcoin? And what specific advantages do they offer over traditional cross-border payment systems? To shed light on these issues, 36Kr spoke with Jiang Bo, a cross-border business expert at a major financial institution, about how stablecoins are developing and what their international prospects look like.
The following transcript has been edited and consolidated for brevity and clarity.
<h3>36Kr: Why are stablecoins gaining momentum now, and why has Hong Kong chosen this moment to launch a new regulatory framework?</h3>
Jiang Bo (JB): Delays and currency volatility have long created friction in cross-border payments. Transfers from overseas banks to domestic accounts can take days, and even a brief delay can affect profit margins for large companies. Stablecoins aim to address these issues.
Hong Kong’s framework is a response to two developments: a desire to reduce dependence on the US dollar and other global currency systems, and a more mature market that is now ready to adopt stablecoins commercially.
<h3>36Kr: What sets stablecoins apart from cryptocurrencies like Bitcoin? How do they maintain price stability?</h3>
JB: Bitcoin is decentralized and not backed by physical assets, which makes it volatile. In contrast, stablecoins are pegged to fiat currencies or high-value assets. Issuers are required to deposit equivalent reserves in regulated banks. This reserve model supports the coin’s price stability.
<h3>36Kr: Why is Ant Group focusing on Hong Kong, Singapore, and Luxembourg for its stablecoin efforts?</h3>
JB: These markets have relatively advanced financial systems and clear regulatory frameworks. Hong Kong has introduced specific rules for stablecoins, Singapore encourages financial innovation, and Luxembourg provides a gateway for compliance in the EU. These locations are considered conducive environments for stablecoin pilots.
whereRelatedArticle
<h3>36Kr: As more companies enter the space, how will their stablecoin offerings differ?</h3>
JB: JD.com, through Jingdong Coinlink Technology, is developing a stablecoin to facilitate trade across the Asia Pacific, Middle East, and Africa. It enables rapid transactions with suppliers, with settlement times measured in minutes.
Ant Group is focusing on cross-border finance and supply chain payments. Ant International, for example, is exploring ways to streamline these services. Standard Chartered is concentrating on cross-border B2B payments.
<h3>36Kr: How do the challenges faced by large enterprises differ from those encountered by small and medium enterprises in cross-border transactions?</h3>
JB: Large enterprises prioritize minimizing exposure to exchange rate fluctuations, especially for high-value transactions. Speed of settlement is also key. Small and medium enterprises, by contrast, often focus more on reducing transaction fees.
<h3>36Kr: How do stablecoins improve efficiency and reduce costs compared to traditional systems?</h3>
JB: Stablecoins enable direct, real-time transfers without the need for intermediary banks. Funds can be transferred point to point in real time. Eventually, users will be able to transact directly in apps using stablecoins. Cross-border settlement could take just minutes, representing a game changer for cross-border sellers. For instance, Amazon merchants typically face a payment cycle spanning 7–15 days. Faster settlements mean steadier cash flow and better capital utilization.
Costs are also lower. Stablecoin transaction fees are typically a fraction of those associated with conventional systems. From what we’ve seen, this makes them especially attractive for businesses handling high volumes of small transactions, such as cross-border e-commerce merchants and digital services providers.
<h3>36Kr: With more than 300 stablecoins in circulation, what should companies consider when selecting one?</h3>
JB: Companies should align their choice with their specific business needs. Some stablecoins are designed for speed, others for specific currency pairs or trading strategies.
Two main criteria to consider are regulatory backing and liquidity. Is the issuer licensed and recognized by a government authority? Can the coin be quickly converted to fiat? Coins like USDT and USDC offer same-day liquidity, making them practical for everyday use. Companies can find this information on issuer websites or consult with financial institutions for guidance.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3374380778133763">article</a> was written by Feng Yaling and Yang Yuexin for 36Kr.

Can stablecoins displace the old guard in cross-border finance?

Fintech

Blockchain

Payments

Cryptocurrencies

Hong Kong

… visibility.
These changes are aimed at enhancing reach and competitiveness. At the same time, the brand is experimenting with promotional pricing. In April, a pop-up shop at a Sam’s Club in Shanghai offered ten-scoop bundles for RMB 189.9 (USD 26.6). In some cities, takeaway coffee was priced at RMB 9.9 (USD 1.4) as part of localized campaigns.
The brand’s messaging has also evolved. Its former romantic slogan has been replaced with a more introspective one: “Everyday Made Extraordinary.” Su noted that as demographics shift, more consumers are looking for small personal pleasures. Haagen-Dazs hopes to position itself as a suitable option for gifting and everyday indulgence.
Still, challenges remain. In 2024, major Chinese dairy players like Mengniu and Firmus revised their frozen product strategies. Meanwhile, new entrants such as Adopt A Cow and Feihe ramped up their ice cream development.
With industry-wide margins under pressure, pricing promotions may help stimulate demand but also raise concerns about long-term brand dilution.
Harmening acknowledged the complexity of the situation, emphasizing that pricing is just one element of a broader strategy. He said the company plans to increase marketing investment. “Although Haagen-Dazs’s store sales in China continue to decline, our retail performance is on the rise,” he said.
This may explain why General Mills is exploring a sale of its store operations while expanding its retail line.
According to Zhang Yi, chief analyst at iiMedia Research, Chinese consumers today expect more from premium food brands: it needs to be healthy, culturally resonant, and socially relevant. Haagen-Dazs’s current store format falls short.
Some foreign brands have responded to similar pressures with localization strategies. After CITIC Capital became the majority owner of McDonald’s China, the chain embraced a more localized identity. Starbucks has also reportedly explored selling its China operations, though it has denied those reports.
“If Haagen-Dazs were operated by a Chinese firm, it could be more down-to-earth and better adapted to local market conditions,” analyst Zhu said. He believes the brand should offer a tiered product line with high-end, midrange, and mass market options.
SCSC’s Du added that while Haagen-Dazs still holds brand equity, it must evolve. Potential changes include adding grab-and-go windows to existing stores or launching smaller, DQ-style formats to better suit the current market environment.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3344575415141000">article</a> was written by Chen Sizhu for 36Kr.

Once a luxury indulgence, Haagen-Dazs faces an identity crisis in China

<blockquote>China Recap is a weekly roundup tracking Chinese companies expanding abroad, covering market entries, funding rounds, product launches, and global partnerships.</blockquote>
China’s corporate globalization strategy is evolving fast. Industry giants are rewriting the global playbook, while a new generation of companies charts fresh paths overseas.
China Recap tracks both—focusing on strategic expansion, brand building, and localized operations—to help readers make sense of shifting trends and understand how Chinese firms are reshaping their global approach.
Here’s what made headlines last week:
<h3>Chinese device makers juggle innovation amid scrutiny</h3>
<ul>
<li>Romoss is facing a deepening crisis after recalling about 491,700 power banks. The company has suspended production, shut down online stores, and undergone multiple leadership changes. Employees have reported wage issues and absent management, while Shenzhen regulators have launched round-the-clock oversight to ensure refunds and trace defective products. —<a href="https://www.thepaper.cn/newsDetail_forward_31130498">The Paper</a></li>
<li>Vivo launched the X200 FE, its first compact flagship smartphone in the X series. Weighing just 186 grams, the device features a 50-megapixel Zeiss telephoto lens, a Dimensity 9300+ chip, and a 6,500-milliampere-hour battery in a one-handed form factor.</li>
<li>Xiaomi refuted reports that it is ending its partnership with German optics firm Leica. Public relations chief Wang Hua dismissed the claims on July 6, stating that the two companies continue to co-develop mobile imaging systems used in Xiaomi's smartphones. Rumors had surfaced in May after Leica’s watermark briefly disappeared from some Xiaomi camera apps. —<a href="https://www.jiemian.com/article/12997182.html">Jiemian News</a></li>
<li><a href="/company/anker">Anker Innovations</a> traced its global power bank recall to unauthorized changes in battery cell materials, uncovered through internal testing and supplier audits. In an interview, vice president Xiong Kang said shifts in cathode composition and separator performance raised thermal risks, despite initial denials from the supplier. The case exposes key gaps in upstream quality control. —<a href="https://36kr.com/p/3365435892680709">36Kr</a></li>
<li><a href="/company/xiaomi">Xiaomi</a> filed a broad range of "Xiaomi Life" trademarks across categories including transport, apparel, and convenience foods, with several already approved. This year, the company also registered copyrights for SU7-branded lifestyle products, including mugs, blankets, and fridge magnets, signaling a wider IP strategy tied to its automotive line. —<a href="https://36kr.com/newsflashes/3364275052005122">36Kr</a></li>
</ul>
<h3><a href="https://kr-asia.com/nothing-brings-its-design-focused-phones-to-china-starting-with-the-phone-3">Nothing launches Phone (3) in China</a></h3>
British tech brand Nothing launched its Phone (3) in China at USD 799, alongside its first over-ear headphones, the Headphone (1). The midrange phone prioritizes design over performance, featuring a customizable LED subdisplay and software suite aimed at younger users.
<h3>J&amp;T delivers over seven billion parcels in Q2</h3>
For the second quarter of 2025, J&amp;T Express reported a 23.5% year-on-year rise in parcel volume to 7.39 billion. Southeast Asia led with a record 65.9% growth, driven by e-commerce partnerships and infrastructure expansion. China and new markets also posted double-digit gains as the company scaled its global logistics network.
<h3>Electric vehicle maker Neta falters in Thailand</h3>
Neta Auto, one of the first Chinese <a href="/industry/ev">electric vehicle</a> brands to operate in Thailand, is struggling to meet local production targets under a government subsidy scheme, with sales plunging 48.5% and dealers filing complaints over unpaid debts. Its parent company has entered bankruptcy in China. —<a href="https://www.reuters.com/business/autos-transportation/chinas-intense-ev-rivalry-tests-thailands-local-production-goals-2025-07-05/">Reuters</a>
That wraps up this edition of China Recap. If your company is expanding internationally, we’d love to hear about your latest milestones. <a href="mailto:changweiqian@global.36kr.com">Get in touch</a> to share your story.

China Recap | Device makers juggle innovation amid scrutiny

… 92 million (USD 12.9 million) in 2024, with a net loss margin of just 3.8%.
Zheng once identified two key milestones: surpassing 50,000 units shipped annually and seeing robots used in three out of every ten warehouse projects. Both now appear within reach.
With 2024 revenue of RMB 2.4 billion (USD 336 million), Geek+ leads all B2B robotics companies on the Hong Kong exchange. Regionally, revenue was split across Asia Pacific (28.1%), the US (26.1%), and EMEA (17.9%).
Overseas gross margins exceeded 46%, and warehouse AMR margins topped 39%. However, industrial handling AMR margins fell from 18.4% to 12.1% due to price competition in sectors like lithium batteries.
Geek+ named Hikrobot, Exotec, and Locus Robotics as its main global competitors. Hikrobot remains its chief rival in domestic industrial logistics, while Geek+ maintains an edge in warehouse fulfillment and international reach.
The global warehouse AMR market grew from RMB 7.9 billion (USD 1.1 billion) in 2020 to RMB 24.3 billion (USD 3.4 billion) in 2024. At a CAGR of 32.4%, it is projected to surpass RMB 1 trillion by 2029.
<h3>Commercializing robotics in a tough market</h3>
Startups specializing in robotics and <a href="/industry/ai">artificial intelligence</a> must arguably clear four hurdles: technical feasibility, product reliability, cost efficiency, and market readiness. Many never make it through all four.
Even Boston Dynamics, despite high visibility, cycled through multiple owners and more than USD 500 million before focusing on logistics robots.
In China, few B2B robotics firms have reached scale. Consumer brands like <a href="/company/dji">DJI</a> and Roborock are better known. In B2B, the landscape is still evolving.
Firms such as Hai Robotics, Horizon Robotics, UBTech, and Seer Robotics are still chasing commercialization and scale. Some have turned to humanoid robots and embodied intelligence, but most efforts remain early-stage.
Geek+ is a rare outlier. With RMB 2.4 billion in annual revenue and operational breakeven in sight, it offers a potential blueprint for scaling AMR technology into a sustainable B2B business.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3371062683750151">article</a> was written by Xiao Xi for 36Kr.

Geek+ goes public in Hong Kong with a global robotics agenda

Robotics

Deep Tech

As Chinese manufacturer <a href="/company/xiaomi">Xiaomi</a> prepares to expand capacity for <a href="/industry/ev">electric vehicles</a>, the company is responding to the overwhelming demand for its EVs by employing 1,000 robots at its plant.
Xiaomi's sole EV factory sits on a 720,000-square-meter site in Beijing that also contains a dealership, a delivery center and a test course.
The factory itself is a rectangular block of a building where pressing, casting, bodywork, painting, battery packaging, and assembly take place. During a recent visit to the plant, robots were seen playing key roles in each of the six processes.
Xiaomi takes particular pride in its gigacasting, a form of aluminum die-casting that produces large body parts. One gigacast module to be placed atop the rear wheels would have required 72 parts to be welded together at 840 contact points using conventional methods. Die-casting a single large piece instead cuts production time by almost half.
"Our company and Tesla are the only two in China that have gigacast presses of this class," a Xiaomi factory guide said.
A giant white gigacast press took center stage at the plant. The parts churned out by the machine were continuously conveyed to three-tiered shelves several meters above the ground nearby.
The parts are inspected in automated fashion using high-performance lidar sensors. <a href="/industry/ai">Artificial intelligence</a> helps find defects with nearly 100% accuracy, Xiaomi said.
Automated guided vehicles (AGVs) transport components from the giant press to the inspection processes. Robotic arms of all shapes and sizes gyrate in repetition to carry out their given tasks, giving the impression that automatons have truly taken over.
The auto body frames are assembled without human help. Doors were installed in a minute. The areas witnessed during the tour felt orderly and clinical, in stark contrast to a traditional assembly plant.
No photographs were allowed during the visit inside Xiaomi's plant. The tour did not provide a glimpse of finished vehicles leaving the production line.
But unlike a traditional assembly line, where parts are pieced together on a giant conveyor belt, AGVs bring finished components to robots that construct the vehicles. The operating process resembles that of a smartphone manufacturer, Xiaomi's original stock in trade.
At the factory, one vehicle comes off the line every 76 seconds, equating to daily production volume of around 1,000 units. The plant has operated at full capacity in two-shift rotations since June 2024. One thousand people work each shift.
Xiaomi has nearly completed a second EV plant adjacent to the first factory, and the company plans a third plant just east of the complex. On June 19, Beijing's municipal government said Xiaomi bought around 500,000 square meters for about RMB 640 million (USD 89.6 million).
Sales have surged for Xiaomi's first EV, <a href="https://kr-asia.com/chinas-xiaomi-jumps-into-ev-market-battle-with-gusto">the SU7</a>, since it debuted in March 2024. The car boasts a sporty exterior and connects seamlessly with Xiaomi's smartphones.
Anyone wishing to buy a Xiaomi EV needs to wait more than 30 weeks from the initial order to delivery, according to Chinese media.
Xiaomi set as its benchmark Tesla's Model 3 sedan. The SU7 is priced at RMB 215,900 (USD 30,226) while the Model 3 starts at RMB 235,500 (USD 32,970) in China. The SU7 has sold 256,000 units during the past year, Chinese car information platform Dongchedi reports, compared to roughly 200,000 units for the Model 3.
Xiaomi chairman and CEO <a href="https://asia.nikkei.com/Business/Automobiles/Electric-vehicles/Xiaomi-stock-hits-record-as-YU7-electric-SUV-draws-rush-of-orders">Lei Jun</a> said on June 26 that Xiaomi's new YU7 SUV will start at RMB 253,500 (USD 35,490), less expensive than the starting price of RMB 263,500 (USD 36,890) for Tesla's Model Y SUV.
During the launch, Lei touted the YU7's range and power compared with the Model Y. Though Tesla is ahead in such areas as driver assistance functions, the YU7 has higher overall specs and a far better customer experience, Lei maintained.
whereRelatedArticle
Xiaomi said 200,000 preorders were made in the first three minutes of the YU7 going on sale at 10 p.m. on June 26. China's Tianfeng Securities wrote in a June 22 report that the model will accelerate Xiaomi's growth. The YU7 has the potential to be a hit that far exceeds market expectations, according to the report.
Tesla's flagship Model Y sold about 440,000 units in the past year, according to Dongchedi. Xiaomi's EV factory has already started production on the YU7, and vehicles waiting for shipment sit in storage spaces.
This article first appeared on <a href="https://asia.nikkei.com/Spotlight/Electric-cars-in-China/China-s-Xiaomi-takes-on-Tesla-armed-with-1-000-EV-factory-robots">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

China's Xiaomi takes on Tesla, armed with 1,000 EV factory robots

Tesla

East Asia

Transportation

Electric Vehicles

Mobility

Mercedes-Benz is taking steps to shore up its performance in smart vehicle features, particularly in China, its largest single market.
36Kr has learned from multiple sources that Mercedes-Benz has entered into an agreement with Ecarx and DreamSmart, both subsidiaries of Chinese carmaker <a href="/company/geely">Geely</a>. Under the partnership, some Mercedes-Benz models sold in China will be equipped with the Flyme Auto operating system. The long-wheelbase E-class is expected to be the first to adopt the system.
A person familiar with the matter said the first model equipped with Flyme Auto is likely to launch in 2027. 36Kr confirmed that the long-wheelbase E-class is due for a facelift that year.
As of publication, Mercedes-Benz has not responded to a request for comment.
Ecarx, founded in 2017, is a Geely-backed company that develops full-stack automotive platforms. The startup was co-founded by Shen Ziyu, then CEO of Pateo, and Geely chairman Li Shufu. At its inception, Geely held a 70% stake, while Shen owned the remaining 30%. Ecarx went public on the Nasdaq in 2022.
Initially focused on smart cockpits, Ecarx has expanded into areas such as autonomous driving and core automotive components.
DreamSmart was formed following Geely’s 2022 acquisition of smartphone brand Meizu. It is central to Geely’s plan to integrate mobile and in-vehicle technologies. Shen has likened the roles of Ecarx and Meizu to Huawei’s internal structure: Ecarx functions like <a href="/company/huawei">Huawei’s</a> automotive unit, while Meizu mirrors its consumer-facing business.
In March 2023, Ecarx and Meizu jointly launched the Flyme Auto system. It first appeared in the Lynk &amp; Co 08 EM-P and has since been integrated into multiple Geely and Lynk &amp; Co models. It has become a prominent feature in the company’s efforts to upgrade cockpit technology.
Mercedes-Benz’s decision to include Flyme Auto in the E-class suggests a strategic shift aimed at regaining ground in China’s competitive smart car market.
Mercedes-Benz’s China sales fell to just over 714,000 vehicles in 2024, down nearly 7% from the previous year. In the first half of 2025, sales declined another 14% year-on-year to 293,200 units, according to media reports.
To counter this trend, Mercedes-Benz had already partnered with autonomous driving startup Momenta. Now, by adopting Flyme Auto, it is addressing a perceived shortfall in its in-car technology.
Before Flyme Auto, Geely faced criticism for the performance of its infotainment systems. Flyme Auto marked a change in direction, offering features such as seamless smartphone integration and customizable interfaces. At launch, Meizu emphasized its vision of treating phones as extensions of the car.
Since debuting on the Lynk &amp; Co 08 EM-P, Flyme Auto has been integrated into models such as the Galaxy E5 and Lynk &amp; Co 900. As of May, 23 Geely models carried the system. By June 16, cumulative sales of Flyme Auto-equipped vehicles had surpassed 1.16 million units, with 130,000 sold in May alone.
Flyme Auto 2.0, the latest version, is now rolling out with design improvements and <a href="/industry/ai">artificial intelligence</a>-enabled features.
Geely’s longstanding ties with Mercedes-Benz may have helped lay the groundwork for this collaboration. In 2018, Geely acquired a 9.7% stake in Daimler for USD 9 billion, becoming its largest shareholder at the time. The two companies later formed a joint venture in 2020 to develop Smart-branded <a href="/industry/ev">electric vehicles</a>.
Bringing Flyme Auto to the E-class further deepens that relationship, and could help Mercedes-Benz remain competitive in China’s evolving car market.
Currently, the long-wheelbase C-class, E-class, and GLC models in China use the third-generation MBUX system introduced in 2023.
MBUX 3.0 runs on Qualcomm’s Snapdragon 8295 chip and includes a 5G modem. It features three screens: for the instrument panel, central control screen, and the passenger screen. An in-car camera supports video conferencing.
The software includes natural language processing, wake-word-free activation, and quicker response times. Voice recognition supports over 2,000 phrases, and navigation has been localized for China with improved lane-level guidance and visuals.
Despite these upgrades, domestic brands such as <a href="/company/li-auto">Li Auto</a> and <a href="/company/xpeng">Xpeng Motors</a> have pushed ahead faster. Some offer gesture controls for doors and lighting, features now seen in models like the <a href="https://kr-asia.com/maextro-s800-huaweis-audacious-bid-to-win-the-luxury-ev-market">Maextro S800</a>.
whereRelatedArticle
Mercedes-Benz is betting on its upcoming MB.OS system to close this gap. Launching in the all-electric CLA later this year, MB.OS promises more frequent over-the-air updates, generative AI capabilities, and faster development cycles. However, it is designed for future EVs based on the company’s MMA, MB.EA, AMG.EA, and VAN.EA platforms, and won’t be available for current combustion engine models which still represent over 80% of its sales in China.
That makes cockpit upgrades in gas-powered vehicles a priority. The partnership with Ecarx and Meizu is a step in that direction.
According to Flyme Auto’s website, the system features customizable interfaces, dialect-friendly voice control, and seamless switching between navigation, music, and calls across phone brands.
If these functions are adopted into Mercedes-Benz models, it would represent a substantial improvement over its existing cockpit experience. More broadly, the collaboration reflects a pivot in the company’s smart vehicle strategy.
Mercedes-Benz has increasingly relied on its R&amp;D team in China to meet local expectations. The long-wheelbase E-class introduced in late 2023 included a high-speed navigation assistant developed by that team, which also contributed to MB.OS.
The company is now moving faster to work with domestic suppliers. The new electric CLA will incorporate autonomous driving tech from Momenta. Meanwhile, the partnership with Ecarx and DreamSmart represents another milestone.
But the success of these efforts will depend on execution. Will these upgrades reach users soon enough to make a difference? Will they meet the standards now set by local players?
Mercedes-Benz may still benefit from brand loyalty in China, but only consistent, satisfying car experiences will keep customers coming back.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3371254486454785">article</a> was written by Fan Shuqi for 36Kr.

Mercedes-Benz taps Flyme Auto OS to boost smart vehicle appeal

Europe

On July 9, British tech brand Nothing officially launched its first smartphone in China, pricing it at USD 799, the same as the iPhone 16. Alongside the flagship Phone (3), the company also released its first over-ear headphones, the Headphone (1), priced at RMB 2,299 (USD 321.9).
In terms of performance, the Phone (3) isn’t exactly a standout. It runs on the Qualcomm Snapdragon 8s Gen 4 processor, a chip commonly found in midrange models like the Redmi Turbo 4 Pro and iQOO Z10 Turbo Pro. The device features a triple-camera setup with 50-megapixel sensors and a 5,150-milliampere-hour battery that supports 65-watt wired and 15-watt wireless charging. These specifications fall short of what is typical in most flagship smartphones today.
But performance was never the brand’s primary focus. As a startup, Nothing has leaned more heavily on design and brand identity. The Phone (3) introduces a notable visual update over its predecessors. Its signature “Glyph” light strips now form a monochrome LED subdisplay called the “Glyph Matrix,” composed of 489 individually controlled LEDs. This screen can display pixel-style alerts for calls, app notifications, and battery status, and it supports user-defined animations.
The device also debuts a new software suite called Essential Space, which includes features like “flip to record” and “essential search.”
<figure id="attachment_155559" aria-describedby="caption-attachment-155559" style="width: 640px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" class="wp-image-155559" src="https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3.jpg" alt="Image shows accessories included with the Nothing Phone (3)." width="640" height="480" srcset="https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3.jpg 1920w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3-720x540.jpg 720w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3-1024x768.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3-768x576.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Phone-3-1536x1152.jpg 1536w" sizes="(max-width: 640px) 100vw, 640px" /><figcaption id="caption-attachment-155559" class="wp-caption-text">Image shows accessories included with the Nothing Phone (3). Image and header image source: Nothing.</figcaption></figure>
The smartphone industry has long operated in a cycle of performance upgrades. With diminishing returns on hardware improvements, the current challenge is to serve niche audiences with precision.
The generation that was born the same year the iPhone launched is now reaching adulthood. Raised on digital devices, these users want more than technical specifications, seeking emotional connection and personal expression. Nothing’s global user base has an average age of just 26, about ten years younger than that of many competing brands. More than 60% of its users cite design as the top reason for purchase. That alignment gives Nothing an edge among younger buyers who are growing tired of uniformity across established brands.
With this audience in mind, Nothing has gradually broadened its product lineup. This month’s debut of the Headphone (1), an over-ear model, reflects that direction. Unlike TWS (true wireless stereo) earbuds, which are often seen as purely functional, over-ear headphones are viewed more as a style choice.
<figure id="attachment_155560" aria-describedby="caption-attachment-155560" style="width: 1920px" class="wp-caption alignnone"><img loading="lazy" decoding="async" class="size-full wp-image-155560" src="https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1.jpg" alt="Image of the Headphone (1) by Nothing." width="1920" height="1080" srcset="https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1.jpg 1920w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1-720x405.jpg 720w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1-1024x576.jpg 1024w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1-768x432.jpg 768w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1-1536x864.jpg 1536w, https://console.kr-asia.com/wp-content/uploads/2025/07/Nothing-Headphone-1-480x270.jpg 480w" sizes="(max-width: 1920px) 100vw, 1920px" /><figcaption id="caption-attachment-155560" class="wp-caption-text">Image of the Headphone (1) by Nothing. Image source: Nothing.</figcaption></figure>
Nothing’s global market share remains small, at just 0.2%. However, it is the only smartphone startup in the past decade to achieve any meaningful scale. While the industry remains dominated by major players, Nothing demonstrates that it is possible to build a business by serving niche segments.
The company is unlikely to become a dominant force in the market, and expectations are modest. But maintaining relevance with a focused user base would, in itself, be a notable accomplishment.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3371522037469701">article</a> was written by Yuan Silai for 36Kr.

Nothing brings its design-focused phones to China, starting with the Phone (3)

Smartphones

… translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3360208796125189">article</a> was written by Zhou Xinyu for 36Kr.

China’s video AI startups are doing what LLM firms haven’t: Making money

Artificial Intelligence

Foundation and Large Models