Market Size and Growth Trends - The live e-commerce market in China has experienced explosive growth since its inception in 2016, with transaction volume rising from 16.8 billion RMB in 2017 to 3.5 trillion RMB in 2022, a year-on-year increase of 53%. In 2023, the transaction volume further increased to 4.92 trillion RMB, reflecting a year-on-year growth of 40.48% [2] - As of June 2023, the user base for live e-commerce in China reached 526 million, accounting for 54.7% of the total internet users, indicating that live e-commerce has become a significant channel for online shopping [2] Future Growth Trend Forecast - By 2025, the total scale of China's live e-commerce industry is expected to reach 2.1373 trillion RMB, driven by continuous internet technology development, enhanced consumer preferences for live shopping experiences, and ongoing innovations in the live e-commerce model [3] - The application of technologies such as 5G, AI, and VR/AR is anticipated to enhance user experience, making shopping more intuitive and interactive, while the penetration of live e-commerce into lower-tier cities and sectors like healthcare and furniture is expected to further expand the market [3] Consumer Behavior and Market Drivers - Increasing health awareness among consumers is influencing purchasing decisions in live e-commerce, with a focus on product ingredients and long-term health benefits. The health industry in China is projected to reach 16 trillion RMB by 2030, highlighting the impact of health consciousness on the live e-commerce market [4] - Economic development and rising living standards are providing a strong consumer base for live e-commerce, as higher disposable income allows consumers to spend more on non-essential goods, driving market growth [6] - Technological advancements, policy support, and changing consumer behaviors are also significant drivers of live e-commerce growth, with younger demographics showing higher engagement and spending potential [7] Technological Development Impact - The commercialization of 5G technology is revolutionizing the live e-commerce industry by enhancing video and audio quality, thereby improving user immersion and interaction. This technology is expected to create new growth opportunities for the industry [8] - AI and big data analytics are providing robust support for the development of live e-commerce, enabling personalized recommendations and deeper user insights, which are crucial for optimizing content and marketing strategies [9] Competitive Landscape and Market Participants - The competitive landscape in live e-commerce is characterized by a tiered structure, with leading platforms like Douyin, Kuaishou, and Taobao Live dominating the market. In the first three quarters of 2024, Douyin e-commerce, Kuaishou e-commerce, and Taobao Live achieved GMV of 745.23 billion RMB, 588.82 billion RMB, and 506.02 billion RMB, respectively, capturing market shares of 40.5%, 32%, and 27.5% [11] - Emerging platforms and smaller participants are seeking growth opportunities through differentiation and innovation, often focusing on niche markets or specific sectors [12] Regulatory Policies and Market Standardization - The introduction of the "Network Live Marketing Management Measures (Trial)" marks a new phase of regulatory management in the live e-commerce industry, establishing responsibilities for platforms and operators while enhancing market competitiveness [14] - The implementation of the Consumer Rights Protection Law provides a clearer legal basis for consumer protection in live e-commerce, addressing issues like fraud and ensuring a more trustworthy shopping environment [15] Business Model Innovation and Profitability - The live e-commerce industry's profitability has evolved from traditional models like tipping and advertising to innovative approaches such as direct sales through live broadcasts, which are expected to drive significant revenue growth [16][17] - New business models, including paid content and cross-industry collaborations, are emerging, providing diverse revenue streams and expanding the application scenarios of live e-commerce [17] International Development Trends - The integration of cross-border e-commerce with live e-commerce is creating new shopping experiences for global consumers, with significant market potential projected for the coming years [19] - Companies expanding into international markets must consider local market conditions, consumer behaviors, and regulatory environments to effectively implement their strategies [20][21]

Core Viewpoint - The company, Zhongxu Future (9890.HK), has issued a profit warning, projecting a net profit between 10 million and 50 million yuan for 2024, a significant decrease from 273 million yuan in the previous year, but is expected to reverse its losses by the end of 2024 [1][2]. Group 1: Financial Performance and Forecast - In the first half of 2024, Zhongxu Future recorded a net loss of 385 million yuan, primarily due to increased operating expenses and asset impairment provisions, which are expected to impact the overall performance for the year [1][2]. - Despite the challenges, the company anticipates a strong recovery in the second half of 2024, with operational improvements expected to enhance profitability beyond last year's levels [2]. Group 2: Strategic Focus and Market Environment - The company is focusing on its core gaming business, benefiting from a strategic transformation that aligns with the growth of the gaming market, which reached a record sales revenue of 325.78 billion yuan in 2024 [3]. - The gaming user base in China has also reached 674 million, indicating a robust market environment that supports the potential for revenue growth from new game launches [3]. Group 3: Product Development and Growth Potential - Zhongxu Future is actively developing and launching new games, with over 20 games in reserve and more than 10 IP resources, which are expected to contribute to revenue and maintain market interest [4]. - The company’s long-term growth is supported by its deep experience in game operations, allowing it to maximize the potential of new titles once they enter the revenue recovery phase [4]. Group 4: Globalization and Technology Integration - The company is expanding its global footprint, with successful game launches in overseas markets, such as Vietnam and Thailand, where its titles have topped app store charts [6]. - Zhongxu Future is integrating advanced technologies like VR/AR and AI into its operations, enhancing game quality and operational efficiency, which is expected to lower costs and increase profitability [7].