Alibaba (Aliexpress, Tmall), Shein, Pinduoduo, Lazada, Rakuten, JD.com... many of the world's eCommerce leaders come from Asia.
A macro region that encompasses several of the most populated and technologically advanced countries, including, of course, China.
A huge niche market for e-commerce that we have analysed 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 million of them from mobile devices) and 782 million online shoppers.
It is also worth noting that 90% of eCommerce sales in the Asian country are made using mobile devices.
But that's not all, because at least in this market a promising future is predicted: according to eCommerceDB, Chinese e-commerce will grow by 15% annually in 2021.
Thus, according to the latest data published by Statista, Chinese eCommerce revenues will be around 1.41 trillion dollars (1.28 trillion euros) in 2022.
Let's remember that the total turnover of Spanish eCommerce exceeded 50 billion euros for the first time in 2021.
Revenues are expected to show an annual growth rate (CAGR 2022-2025) of 4.81%, which means that the projected market volume for 2025 is USD 1.625 billion (EUR 1.48 billion).
Furthermore, by 2025, the number of eCommerce users in the Asian country is expected to reach 1.23 billion users.
To understand the Chinese eCommerce landscape a little more in depth, we want to share with you this article, in which we will detail who is who in China's eCommerce.
E-commerce 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 million of them from mobile devices) and 782 million online shoppers.
In addition, it is worth noting 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 foreseen: according to eCommerceDB,
Chinese e-commerce will grow by 15% annually by 2021.
Thus, according to the latest data published by Statista, Chinese eCommerce revenues will be around 1.41 trillion dollars (1.28 trillion euros) in 2022.
Recall that the total turnover of Spanish eCommerce exceeded €50 billion for the first time in 2021.
Revenues are expected to show an annual growth rate (CAGR 2022-2025) of 4.81%, which means that the market volume forecast for 2025 is USD 1.625 billion (EUR 1.48 billion).
Furthermore, by 2025, the number of eCommerce users in the Asian country is expected to reach 1.23 billion users.
To understand the Chinese eCommerce landscape a little more in depth, we would like to share with you this article, in which we will detail who is who in Chinese eCommerce.
Alibaba, the Chinese eCommerce giant
Alibaba has managed to maintain its dominance over retail e-commerce in China since its founding.
No wonder it is one of the top 20 most visited websites globally and one of the largest e-commerce companies in the world.
Alibaba Group companies control more than 50% of the e-commerce sector in China and are responsible for shipping more than 60% of packages.
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 the 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 flagship brand of Jack Ma's empire.
- 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 catalogue.
Taobao and Tmall are the undisputed leaders in online sales in China.
- Tmall has some differences with Taobao.
Tmall is a marketplace that focuses on multi-product sales, and only companies that are registered in China can sell products on it.
The products offered for sale must be authentic and original.
As a result, consumers can get to know foreign brand products and buy them at a lower cost than if they were to buy them from the country of origin.
Launched in 2008, it sells branded goods to consumers in mainland China, Hong Kong, Macao and Taiwan and started life as Taobao Mall. In 2011, Taobao was restructured and split into 3 different companies.
Now TMall is the equivalent in China to companies such as eBay, Amazon, or Japan's Rakuten, and accounts for 56.6% of eCommerce retail sales.
- Juhuasauan is another eCommerce company that became independent from Taobao, which started in 2010 as a flash sales website offering significant discounts.
and started as Taobao Mall.
In 2011, Taobao was restructured and split into 3 different companies. Now TMall is the equivalent in China to companies like eBay, Amazon, or Japan's Rakuten, and accounts for 56.6% of eCommerce retail sales.
- Juhuasauan is another eCommerce company that became independent from Taobao, which was launched in 2010 as a flash sales website offering significant discounts.
- Alipay, launched in 2004, is a Paypal-style payment platform, with the added advantage of being commission-free.
- 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 omni-channel 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 digitalisation.
In addition, Alibaba also owns other companies related to eCommerce such as Aliyun, Alimama or the best known in Spain, the B2C portal AliExpress.
However, it is not all about Alibaba in the Chinese eCommerce landscape.
JD.com: the alternative to Alibaba in Chinese eCommerce
JD.com has tried to differentiate itself from Alibaba and its Tmall platform by managing its own inventory and shipping it directly to consumers.
In this way, instead of connecting buyers and sellers (as Alibaba does through Tmall), it manages to sell its own products.
This different approach has made the company the second largest in the Chinese e-commerce 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 it launched its English-language website, Joybuy. Since its inception, it has become one of the most profitable companies and a member of the Fortune Global 500.
Other eCommerce giants in China
Between them, Alibaba and JD.com 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 Chinese eCommerce.
Pinduoduo
Pinduoduo is a startup that launched in 2015, and has quickly become one of the most important eCommerce players in the Asian country, especially in rural communities where it has become very popular, unlike Alibaba and JD.com.
It has just over 7% of the Chinese eCommerce market.
Other factors that have driven Pinduoduo's massive entry into the Chinese market are its offer of products at low prices, its rewards for users who refer customers to their acquaintances, discounts for those who buy in groups, and its presence on WeChat, China's huge messaging platform.
Xiaohongshu
Also known as the Little Red Book or "Red" is an eCommerce platform specifically dedicated to imported luxury goods.
It was founded in 2013 and originated as an app for Chinese shoppers travelling abroad to post reviews and recommendations about products they had bought and gradually grew into this large community of savvy consumers sharing their knowledge about luxury products.
Its business model started as offering such products to cater to the needs of its users, and then began to allow certified brands to open their own digital shops (a marketplace) for a 5% commission per offer.
Mogu
Formerly known as Mogujie, Mogu is an eCommerce platform and social network specialising 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 pinboard, allowing users to share fashion articles 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 itself.
Since then, Mogu has developed the commercial and social aspects of its platform, allowing high-quality merchants to join 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 to turn to social media sales, a strategy that has worked to great effect and that the rest of China's eCommerce platforms have been replicating to reach many more customers.
Suning.com
Suning.com is one of the leading omni-channel retailers, and is considered a pillar of the Chinese retail landscape.
It was founded in 1990 in Nanjing as an air conditioner shop, 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 external sellers, becoming a marketplace in 2013 and has made some strategic acquisitions, such as group buying site Manzuo in 2014, as well as partnering with Alibaba and JD.com to expand into China's rural markets.
Vipshop
This was one of the first flash sale marketplaces in China, where branded products are offered at deep discounts for a limited period of time.
It was launched in 2008 and went public only four years later.
Today, it ranks as the third largest B2C eCommerce platform in China, reaching revenues of around USD 20 billion (approximately EUR 18.2 billion) by 2021.
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 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 US.
It now focuses mainly on the niche online book market.
Top Chinese eCommerce sectors
In China, toys, hobbies and DIY items are the largest segment of the Chinese eCommerce sector, accounting for 26% of eCommerce revenues.
It is followed by fashion with 25%, food and personal care (21%), electronics and media (17%) and furniture and appliances with the remaining 11%.
Top shipping service providers in China
In terms of parcel delivery services in China, SFExpress is the most sought-after company for transporting goods in China and is trusted by 60% of Chinese customers.
In addition, EMS and Yuantong Express are among the top three shipping services offered by online retailers in China, with 45% and 10% respectively.
It is worth noting that the shipping information is based on orders from the shop's primary country, which is defined as the platform where the shop generates the majority of its online revenue.
In this case, this is China. They also only take into account shops that provide information about their shipping providers.
11/11, the big day for online sales in China
China's Singles' Day has been celebrated every year on 11 November since Chinese students decided decades ago to choose this date to celebrate their singleness, since, depicted as 11/11, the numbers resemble solitary figures.
It began as a holiday to go out, eat, spend time with friends and shop.
Taking advantage of its appeal, Chinese e-commerce giant Alibaba chose this day to organise an online sales campaign in 2009.
Such was its success that China Singles' Day has since established itself as the world's biggest online shopping day.
Such is its projection that names such as Nicole Kidman, Daniel Craig, Victoria Beckham or Pharell Williams are among the celebrities chosen for the various galas promoting the event.
In 2020, Alibaba dropped the classic "Singles' Day" name and renamed the campaign the Global Shopping Festival.
In 2021, this celebration reached a GMV of 73.8 billion euros during the 11-day campaign.
WeChat as a means to drive sales
Paid advertising is becoming too costly for some Chinese retailers due to the high volume of demand and ever-expanding competition.
As a result, brands have been looking for new alternatives to keep in touch with their users.
WeChat is one of the most widely used applications in China, with 1.2 billion active users and with the particularity that more than 50% of the app's users are under 30 years old.
WeChat allows users to pay, play games, chat, shop, order services and everyday products, and 80% of Chinese consumers use WeChat Pay for online payments.
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