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DeepSeek, TikTok, Red Note, & Temu: China Internet Making Waves in the USA

Winter 2025 China Internet Earnings Report

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TikTok’s potential ban and DeepSeek’s AI efficiency triumph have contributed to a unique moment in the history of China’s internet sector. As of the time of writing, two of the top 10 most-downloaded apps in Apple’s US app store are from China-based companies. The number one app, as of January, is DeepSeek.

We believe this represents a watershed moment for China’s internet sector. Top internet companies, including the top holdings in the KraneShares CSI China Internet ETF (Ticker: KWEB) are going global. They are bridging the gap between the US and China in a way never thought possible when we launched the fund. Meanwhile both China’s own firms and foreign firms are exporting trends, technologies, and online practices that were originally developed in China. These include short-form video social media, social commerce, and high-efficiency large language models (LLMs). This trend has the potential to re-shape the global internet and represents a significant growth opportunity for KWEB companies.

China Internet Recent Highlights:

  • China has expanded its trade-in consumer subsidies to cover electronics including mobile phones, tablets, wearables, and others. The successful trade-in program had previously been limited to automobiles and home appliances. Its expansion into more categories should provide a boost to sales volume on a broader set of E-Commerce platforms than before, especially Alibaba and PDD.
  • China’s top internet companies had a mostly positive third quarter as nine out of KWEB’s top 10 holdings beat analyst estimates for earnings. JD.com stands out for exceeding expectations by one of the widest margins on trade-in subsidies for autos and home appliances.
  • PDD’s Temu, the company’s international E-Commerce brand, now can source from local warehouses for orders in 19 countries, most recently adding Austria, Denmark, and Romania. The ability to provide local sourcing, rather than China-only sourcing, is key for the platform to become more competitive on shipping times and reduce the risk of protectionist backlash.

China Internet Earnings Report Contents:

  • China Internet Sector Recent Highlights
  • Subsector Analysis
  • Theme Highlight – DeepSeek, TikTok, Red Note, & Temu: China Internet Making Waves in the USA
  • KWEB Top 10 Holdings Earnings Update

Sources: Company Reports, The Benchmark Company

For KWEB standard performance, top 10 holdings, and other fund information, please click here.

This is a marketing communication. Please refer to the prospectus of the UCITS, the KIID, and the PRIIP before making any final investment decisions.