The 8 Best E-commerce Platforms in China

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The 8 Best E-commerce Platforms in China

Most of the world’s eCommerce volume is dominated by Asian countries, especially China. Not surprisingly, this East Asian country provides a huge market niche for e-commerce. According to the latest data published by Statista, China’s eCommerce revenues will amount to more than $723.13 billion by 2019.

There is no doubt that China is a great power with an online market whose number of consumers is expected to reach 1,000 million by 2023, 17% more than today, estimated at 850 million people who everyday access different eCommerce and marketplaces to make their purchases online. The average annual expenditure per person is 850.60 dollars (just over 769 Euros) this 2019.

Of course, this figure far from staying or decreasing, is estimated to continue increasing over the coming years: by the end of 2020 the estimate of average spending per Chinese consumer is $ 930 (840 euros), while by 2023, this average spending will be $ 1095 (990 euros).

To understand a little more deeply the panorama of Chinese eCommerce, we want to share with you this article, in which we will detail who is who within the eCommerce of China.

1. Alibaba, the giant of Chinese eCommerce

Alibaba has managed to maintain its dominance over retail e-commerce in China since its founding. Not for nothing is it one of the 20 most visited websites in the world and one of the largest e-commerce companies in the world. Alibaba Group companies are responsible for delivering more than 60% of the packages in China.

The members of the Alibaba empire in China

Alibaba is like an empire. To achieve this it has created several brands according to the type of business. The best known in 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 Jack Ma’s empire.

Taobao is a subsidiary of the Alibaba group founded in 2003. It is the equivalent of our best known eBay which connects consumers to each other, with a great diversity of products in its catalog.

Tmall presents some differences with Taobao. Tmall is a marketplace that focuses on multi-product sales, and only those companies that are registered in China can sell products there.

Juhuasuan is another eCommerce site that became independent from Taobao. It started in 2010 as a flash sales website offering significant discounts.

Alipay, launched 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 “new retail” (as Jack Ma called it). Since its launch in March 2015, Hema Supermarket has been exploring a new model that integrates online and offline commerce, an all-round experience with which it hopes to demonstrate the benefits of ‘new retail’ (that’s what it calls its strategy to redefine commerce) not only to customers but also to companies that have not yet made the leap to digitalization.

2. JD – the alternative to Alibaba in Chinese eCommerce

JD has tried to differentiate itself from Alibaba and its Tmall platform by managing its own inventory to send it directly to consumers. In this way, instead of connecting buyers and sellers (as Alibaba’s Tmall), it manages to sell its own products. This different approach has made the company the second largest in the Chinese eCommerce sector.

The company was founded in 1999 by Liu Qiangdong, although its online platform started in 2004. In 2012 it launched its website, in the English version, Joybuy. Since its inception, it has become one of the most profitable companies and a member of the Fortune Global 500.

Other eCommerce greats in China

Between Alibaba and JD they currently account for approximately 73% of 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.

3. Pinduoduo

Pinduoduo is a startup that was launched in 2015, and has quickly 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.

Other factors that have boosted the massive irruption of Pinduoduo in the Chinese market are its product offerings at low prices, its rewards for users who make customers of their acquaintances, discounts for those who buy in groups and its presence in WeChat, the huge messaging platform in China.

4. 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 buyers who traveled abroad to post comments and recommendations on products they had purchased and gradually developed into this large community of smart consumers who shared their knowledge about luxury products.

Its business model started as offering these types of products to meet the needs of its users, and then began allowing certified brands to open their own digital stores for a 5% commission per offer.

Like Pinduoduo, Xiaohongshu is going through a transition period as it tries to expand its reach and maintain incoming revenues, trying out new strategies such as including TikTok-style micro videos and live streaming, another trend that is in vogue among Chinese eCommerce platforms.

5. Mogu

Formerly known as Mogujie, Mogu is an eCommerce and social networking platform specializing in fashion and beauty content, products and services. It was founded in 2011 as a digital magazine for girls and originally looked more like a Pinterest style bulletin board, allowing users to share fashion items with links to third-party eCommerce platforms.

At the time Mogujie enjoyed a good relationship with Taobao, Alibaba’s third party marketplace, sending it large amounts of referral traffic and receiving a considerable commission in return, but over time Mogujie turned down an investment offer from Alibaba and became an eCommerce company in its own right.

Since then, Mogu has developed the commercial and social aspects of its platform, allowing high-quality merchants to log in and offering them tools to connect with users, such as live streaming to showcase products, a feature Mogu pioneered, and which in 2018 generated 11.8% of its total sales.

6. Suning

The largest omnibus retailer in China is Suning.com, and it is considered a mainstay of the Chinese retail landscape. Founded in 1990 in Nanjing as an air conditioning store, it has now expanded its reach beyond home appliances to sell all types of electronics, books, cosmetics, baby care products and more.

Its strength lies in its physical presence, however, in the 2010 decade Suning increased investment in its eCommerce: it opened its doors to outside vendors, becoming a marketplace in 2013 and has made some strategic acquisitions, such as the Manzuo group shopping site in 2014, as well as joining with Alibaba and JD.com to expand into rural markets in China.

7. Vipshop

This was one of the first flash sales marketplaces in China, where branded products are offered at large discounts for a limited period of time. It was launched in 2008 and went public only four years later.

For a while, it was the third largest B2C eCommerce platform in China, and although it is now far from the giants in the industry, its user base continues to grow: during the third quarter of 2019 its active customers reached 32 million and its total orders increased by 33%.

8. Dangdang

A pioneer in Chinese eCommerce, Dangdang was launched, like Amazon, as an online bookstore in 1999, and even received a takeover offer from Amazon in 2004, which it declined. 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. It now focuses primarily on the niche market of online books.

Main sectors of Chinese eCommerce

Fashion is undoubtedly the sector in which Chinese eCommerce is growing most. In 2019, this category achieved sales of $281.979 billion (about 253 billion euros), followed by electronics and media, with almost $151 billion in revenue.

Toys, hobbies and DIY will achieve revenues of $128.857 billion this 2019, followed by furniture, with $108 billion, and ending with food and personal care, with revenues of 52,812, according to data shared by Statista.

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