Why Should You Start Selling in China’s Ecommerce & On Which Platforms?

July 14, 2022
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China’s e-commerce market is now the largest in the world. Accounting for over 40% of global online orders in the retail industry by volume, Chinese e-commerce market volume now sits at $880 billion, according to figures from BIS Bulletin No 36 from 2021.

The trend towards digital in retail has only accelerated, boosted by the global COVID-19 outbreak. In 2019, 20.7% of all Chinese retail sales were made online. This number is now 24.9% according to the latest figures from Statista.

China is the world’s e-commerce leader

According to a 2020 report by Forbes, 44% of the global e-commerce market share is in the hands of four Chinese companies. As the largest e-commerce market in the world, China’s prominence in the global e-commerce industry has already sent boardrooms across businesses around the world scrambling for new strategies, not just for the Chinese market but for global markets. It is now in China, and no longer the West, where the future of e-commerce will be developed. Understanding and keeping up with innovations and changes in these platforms and companies is crucial for the long-term success of all businesses.

Joining e-commerce platforms is critical for sales success in China

E-commerce is often the preferred shopping method among youngsters in China, to whom cell phones are a kind of extension of their bodies. Two factors make e-commerce in China so convenient to locals, and at the same time, make it so profitable for international brands who seek to penetrate this vast market. The first one is e-commerce festivals that occur several times a year, the largest one being China’s Singles’ Day on November 11th. Since these days attract a mass of people to the e-commerce sites, these festivals create an opportunity for international brands to increase their exposure in front of Chinese consumers and drive sales. The second factor is the smooth and full integration of digital payments through cell phones. As searching for products and paying for them is so convenient and happens in no time, there is no reason not to use this method for shopping.

The Chinese consumer is going through a “consumption upgrade”. The rapid expansion of the Chinese middle class means consumers’ disposable income is increasing. This results in a surge of confidence to purchase more and higher quality products. The middle-to-upper classes seek online products that are not available domestically, which opens a window of opportunity for international brands.

Top 5 Chinese e-commerce platforms to watch in 2022

With that said, let’s take a deep dive into China’s top five e-commerce platforms – we’ll be analyzing the leading players in China’s e-commerce landscape and how they are changing China’s e-commerce trends:

Owned by the Alibaba Group, who is the global leader in e-commerce by gross merchandise value (GMV) at $1 trillion GMV, Taobao is a C2C marketplace platform. It is the largest e-commerce platform amongst Alibaba’s platforms, accounting for 15% of global GMV, making it the biggest e-commerce platform globally. Launched in May 2003, it is the Chinese counterpart to Amazon’s marketplace, allowing vendors to build their business on the platform. Like other platforms, Taobao has implemented social e-commerce functionality such as Taobao Live, allowing vendors to livestream product showcases. In 2020, sales from Taobao Live reached $280 million in just 90 minutes.

The second-largest e-commerce platform in China, and also the world, is Tmall, Alibaba’s B2C platform. It is a spinoff of Taobao that provides a platform for Chinese and international businesses to sell brand-name goods to Chinese consumers. It has become a critical player in many luxury brands’ China strategies by providing a trusted platform for consumers of luxury goods, Luxury Pavilion. Last spring, Tmall partnered with Shanghai Fashion Week to take it online, leveraging live streaming to bring a strong digital user experience for audiences during the coronavirus lockdowns, enabling buy now functionality for luxury buyers to claim their pieces as it goes down the catwalk.

In the summer of last year, Gucci picked Tmall as their partner for its Chinese digital expansion. As a luxury digital mall, Tmall’s luxury pavilion brings the premium feel of luxury brick and mortars to e-commerce, integrating live beauty advisors and free shipping. Knowing that tactile experience still plays a huge role in the purchasing process for luxury products, Luxury Pavilion also offers integrated omnichannel retail methods.

Over the last few years, an increasing number of international brands have started selling on Tmall Global as a gateway to millions of Chinese consumers, eliminating the need to register a company in China or even set their foot in the country. Read more on our e-commerce services in China.

JD.com is China’s largest online retailer for electronics equipment. A B2C platform, JD’s advantage in this competitive market is its integration of cutting-edge technology in its operations. By leveraging AI analysis of how its 417 million users shop on the platform, JD offers invaluable insights and customized information for sellers on how to keep up with the latest consumer spending trends.

In addition, JD.com has heavily invested in its logistics, with a network of over 800 warehouses many of which are fully automated. Rivaling Amazon’s two-day delivery, JD is able to guarantee one-day delivery in most parts of China.

Founded in 2015, Pinduoduo is a relative newcomer to China’s well-established e-commerce industry. The key to its rise has been appealing to the emerging consumers of third and fourth-tier cities in China, traditionally overlooked by major e-commerce players. By capitalizing on the difference in consumption habits and priorities of people from third and fourth-tier cities, Pinduoduo has quickly obtained a market capacity that comes up behind only Alibaba and JD.com.

By gamifying e-commerce of mundane shopping for groceries and household necessities, it has successfully driven reengagement and user retention amongst its target demographic. Translated roughly into “more together”, Pinduoduo allows group buying of products where users are able to split wholesale deals with groups of other shoppers. The social nature of this shopping experience encourages viral engagement and repeat buying as a part of the user experience.

Xiaohongshu was launched in 2013 as a lifestyle-sharing platform. Allowing users to share short videos and photos on topics ranging from beauty, food, fashion, health, and travel, the platform operates as a mixture of social media, viral video, and e-commerce site. Users can easily access its e-commerce functionality through the hashtag functions on videos and photos shared by users.

Unlike Pinduoduo, the demographics of Xiaohongshu skew young, female, and affluent, with most users based in first-tier cities. As a predominantly visual platform, many key opinion leaders, KOLs, and key opinion customers, KOCs, have built their followers base on the platform through their daily posts sharing lifestyle products. The platform plays a key role in many Chinese consumers’ pre-purchase journeys, providing context to products while entertaining.

This post was written by our friend, HI-COM Asia, a multilingual translation agency dedicated to providing professional translation and interpreting services to companies all over the world

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