(, Tmall), Shein, Pinduoduo, Lazada, Rakuten, JD.com… a large part of the leaders of the eCommerce worldwide come from Asia. A macro region that encompasses several of the most populated and technologically advanced countries, among which, of course, China stands out. A huge niche market for e-commerce that we have analyzed in detail.
Ecommerce in China: a huge market
There is no doubt that China is a great power with an online market that as of February 2022 has more than 1,000 million Internet users (932 of them on mobile) and It should also be noted that 90% of eCommerce sales in the Asian country are made through mobile devices.
But that’s not all, because at least in this market a promising future is predicted: according to , Chinese e-commerce grew 15% annually in 2021. Thus, according to the latest data published by , Chinese eCommerce revenues will be around 1.41 billion dollars (1.28 billion euros) in 2022. Let us remember that the total turnover of Spanish eCommerce exceeded 50,000 million euros in 2021 for the first time.
Revenue is expected to show an annual growth rate (CAGR 2022-2025) of 4.81%, which means that the projected market volume for 2025 is 1.625 billion dollars (1.48 billion euros). Likewise, by 2025 it is expected that the number of eCommerce users in the Asian country will rise to 1,230 million users.
To understand the Chinese eCommerce landscape a little more in depth, we want to share this article with you, in which we will detail who is who within Chinese eCommerce.
Alibaba, the Chinese eCommerce giant
has managed to maintain its dominance on retail e-commerce in China since its foundation. It is one of the 20 most visited websites worldwide and one of the largest e-commerce companies in the world for a reason. Alibaba Group companies control more than 50% of the e-commerce sector in China They are responsible for sending more than 60% of the packages.
The members of the Alibaba empire in China
Alibaba is like China, an empire. To achieve this, it has created several brands according to the type of business: the best known of Chinese eCommerce are the following:
- Alibaba, which started in 1999, is an open marketplace for buyers and sellers from all over the world. It is the star brand of the empire of hacK Ma.
- Taobao is a subsidiary of the Alibaba group founded in 2003. It is the equivalent of our better known eBay that connects consumers with each other, with a great diversity of products in its catalog. Taobao and Tmall are the undisputed leaders in online sales in China.
- T mall with Taobao. TMall is a marketplace that focuses on multi-product sales, and in it only those companies that are registered in China can sell products. The products put up for sale must be authentic and original. Thanks to this, consumers can learn about foreign brand products and buy them at a lower cost than if they did it from the country of origin. Launched in 2008, it sells branded products to consumers in Mainland China, Hong Kong, Macau, and Taiwan and started life as Taobao Mall. In 2011, Taobao was restructured and divided into 3 different companies. Now TMall is the equivalent in China to companies like eBay, Amazon, or the Japanese Rakuten, and accounts for 56.6% of eCommerce retail sales.
- Juhuasauan .It began its journey in 2010 as a site flash sales website in which significant discounts are offered.
- alipaylaunched in 2004, is a Paypal-style payment platform, with the added advantage that it does not include commissions.
- Hema: Hema supermarkets are Alibaba’s big bet on the “” (as he called it). Since its launch in March 2015, Hema Supermarket explores a new model that integrates online and offline commerce, an omnichannel experience with which it hopes to demonstrate the benefits of ‘new retail’ (as it calls its strategy to redefine commerce) not only to customers but also to companies that have not yet made the leap to digitalization.
- In addition, Alibaba also owns other eCommerce-related companies such as Aliyun, Alimama or the best known in Spain, the B2C portal.
However, not everything is Alibaba in the Chinese eCommerce landscape
JD.com: the alternative to Alibaba in Chinese eCommerce
JD.com has attempted to differentiate itself from Alibaba and its Tmall platform by managing own inventory to ship directly to consumers. In this way, instead of connecting buyers and sellers (as Alibaba does thanks to Tmall), manage to sell their own products. This different approach has made the company the second in importance in the Chinese eCommerce sector, controlling about 17% of the total.
The company was founded in 1999 by Richard Lui Quiandong, although its online platform started in 2004. In 2012 he launched his website, in English version, Joybuy. Since its inception it has become one of the most profitable companies and a member of the Fortune Global 500.
Other big eCommerce in China
Between Alibaba and JD.com they currently account for approximately 73% of Chinese eCommerce sales, and have investments in many retail companies. However, it is a mistake to assume that Alibaba and JD.com are the only players worth mentioning in China’s eCommerce.
pinduoduo
pinduoduo is one that was released in 2015, and quickly has become one of the most important eCommerce in the Asian country, especially in rural communities where it has become very popular, unlike Alibaba and JD.com. It has a little more than 7% of the Chinese eCommerce market.
Other factors that have driven the massive irruption of in the Chinese market are its offer of products at low prices, its reward to users who make their acquaintances clients, discounts for those who buy in groups and its presence in , the immense platform of courier in China.
xiaohongshu
Also known as the little red book or “Red” is an eCommerce platform specifically dedicated to imported luxury products. It was founded in 2013 and originated as an app for chinese shoppers who traveled abroad to post reviews and recommendations on products they had bought and gradually grew into this huge community of savvy consumers sharing their knowledge about luxury products.
Its business model began as an offer of this type of product to meet the needs of its users, and then it began to allow certified brands to open their own digital stores (a marketplace) for a 5% commission per offer.
mogu
Formerly known as Mogujie, Mogu is a eCommerce platform and social network specialized in fashion and beauty content, products and services. It was founded in 2011 as a digital magazine for girls and originally, it looked more like a Pinterest-style bulletin board, allowing users to share fashion items with links to third-party eCommerce platforms.
Back then Mogujie enjoyed a good relationship with Taobao, Alibaba’s third-party marketplace, sending it large amounts of referral traffic and receiving a hefty commission in return, but over time, Mogujie turned down an investment offer from Alibaba and became an eCommerce of its own.
Since then, Mogu has developed the business and social aspects of its platform, allowing high-quality merchants to enter and offering them tools to connect with users, such as live streams to showcase products. In fact, Mogu was one of the first platforms in China that resorted to sales through the , a strategy that has worked great for it and that the rest of the eCommerce platforms in that country have been replicating to reach many more customers.
suning.com
suning.com is one of the leading omnichannel retailers, and is considered a pillar of the Chinese retail landscape. It was founded in 1990 in Nanjing as an air conditioner store, and has now expanded its reach beyond home appliances by selling all kinds of electronics, books, cosmetics, baby care products, and much more.
Its strength lies in its physical presence, however, in the 2010s Suning increased investment in its eCommerce: it opened its doors to third-party sellers, becoming a marketplace in 2013 and has made some strategic acquisitions, such as group shopping site Manzuo in 2014, in addition to its alliance with Alibaba and JD.com to expand into rural China markets.
vip shop
This was one of the first marketplaces in flash sales in china, where brand-name products are offered at deep discounts for a limited period of time. It was launched in 2008 and went public just four years later.
Currently, it ranks as the third largest B2C eCommerce platform in China, reaching revenues of around 20,000 million dollars (approximately 18,200 million euros) in 2021.
dangdang
A pioneer in Chinese eCommerce, Dangdang launched, like Amazon, as an online bookstore in 1999, and even received a takeover offer from Amazon in 2004, which it turned down. However, in 2010 it went public on the New York Stock Exchange, becoming the first Chinese eCommerce site to be listed in the United States. Now focuses mainly on the niche of the online book market.
Main sectors of Chinese eCommerce
In China, the segment that groups toys, hobbies and DIY items is the largest in the eCommerce sector in that country, representing 26% of eCommerce revenue. follow him fashion with 25%, food and personal care (twenty-one%), electronics and media (17%) and furniture and appliances with the remaining 11%.
Top Shipping Service Providers in China
When it comes to parcel shipping services in China, SFExpress is the most requested company to transport products in the Asian country and with which it trusts 60% of Chinese customers. Also, ems Y YuanTong Express appear among the top three shipping service companies offered by online retailers in China, with the 45% and 10%, respectively.
Please note that shipping information is based on orders from the store’s primary country, which is defined as the platform where the store generates the majority of its online revenue. In this case, it’s China. Also, they only take into account stores that offer information about their shipping providers.
WeChat as a means to get sales
Paid advertising is becoming too expensive for some Chinese retailers due to high volume demand and increasingly expanding competition. Therefore, brands have been looking for new alternatives to stay in touch with their users.
It is one of the most used applications…
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