Over the past decade, China’s e-commerce landscape has grown in leaps and bounds. Around 10 years ago, China accounted for less than 1% of the global e-commerce market; today, that share is a whopping 42%. China is such a huge player in e-commerce, it now handles more transactions per year than France, Germany, Japan, the UK and the US combined.
Image: eMarketer/The Economist
This robust e-commerce landscape represents a huge opportunity for foreign brands wanting to break into the Chinese market. But such a robust scene also has its difficulties – with hundreds, perhaps even thousands, of e-commerce sites on offer, and new ones cropping up all the time, just where do you start? In this post, we take a closer look at the 8 online shopping sites currently dominating China’s e-commerce landscape.
In fact, it is the world’s second biggest e-commerce website, with over 500 million monthly active users as of February 2018. Selling everything from clothing to electronics, appliances and even cars, Tmall is focused on offering authentic, high-quality goods, and makes significant efforts to combat counterfeit products, which makes the platform highly trusted by consumers.
This, however, comes at a price for brands, who have to meet stringent criteria and pay relatively high fees in order to appear on the platform.
Also known as Jingdong, JD.com has a relatively large slice of the online shopping pie, with a market share of around 25% in Q3 2018, and around 300 million monthly active users.
Like Tmall, it also sells products from a huge range of categories, such as fashion, electronics and health, but it is steadily gunning for a bigger piece of the market share pie, branching into categories with little to no coverage on Tmall, such as travel, fresh produce and industry
JD.com also boasts their very own delivery network that covers 99% of China’s population, meaning even customers in rural areas can enjoy fast and seamless delivery – an important consideration for brands for whom rural consumers are a key demographic.
And they show no signs of slowing down – JD.com is also working on cutting-edge technologies, such as AI, robotics and drones, in order to further improve the customer experience, which promises to make them more competitive in the months and years to come.
Pinduoduo has taken the Chinese e-commerce world by storm, sweeping up market share and becoming the fastest-growing app in China’s history. Unlike Tmall and JD.com, which focus on premium products, Pinduoduo is targeted at bargain hunters looking for a great deal.
Pinduoduo’s biggest point of difference is its “group buy” or “team purchase” model, in which users invite friends to join a shopping team in order to lower the price of a product. The social nature of Pinduoduo encourages product virality – the more people buy a product, the more it is discounted, and the higher the product is ranked, further driving sales.
This is a great platform for lesser-known brands to spread awareness, as there is less premium placed on branding, and more on cost competitiveness. It’s also worth mentioning that Pinduoduo’s demographic is largely from third- or lower-tier cities, and mostly senior citizens, so if your target demographic aligns with this, Pinduoduo might just be the platform for you.
Rounding out the top 4 list is online shopping site Suning, which had a market share of around 7% in Q3 2018. While Suning’s thousands of brick-and-mortar stores chiefly sell electronic appliances, their online store, like Tmall and JD.com, sells a wide range of products, including books, beauty and maternity.
This strong offline presence, however, means Suning’s brand is largely associated with electronic appliances in the minds of consumers – so if your brand falls into this category, this is certainly one platform to seriously consider.
Also known as Wei Pin Hua, Vipshop is one of China’s leading online discount retailers, selling products in categories like fashion, home and beauty at heavily reduced prices for a limited time.
Their focus on premium and popular brands, quality products and good customer service has given them a good reputation among consumers, and their membership program, Super VIP, has managed to breed high customer loyalty by offering exclusive deals.
Its shifting focus to luxury brands in recent times, though, could mean that less-established brands will find it difficult to get a foothold on this platform.
Little Red Book
Another platform with a strong luxury brand focus, Little Red Book (or Xiao Hong Shu) promises its users the opportunity to buy international brands previously off-limits to Chinese customers. Despite being a relative newcomer on the e-commerce scene, the site has really taken off in the last year or so, with over 100 million registered users. (Particularly impressive when you consider the more-established Vipshop has 60 million users.) Even Kim Kardashian West is on the platform.
With a strong social media component – users are encouraged to share reviews and tips – Little Red Book could be a great way to grow brand awareness, particularly if you also harness the power of key opinion leaders (KOLs). If you have a high-quality product aimed at females aged 30 or under, consider adding Little Red Book to your marketing strategy.
Dangdang is China’s answer to Amazon. Like Amazon, it began as a book retailer before branching into all sorts of categories, such as beauty and personal care; home and lifestyle; baby, children and maternity; and electronics. That being said, it remains the biggest book retailer in China, and is heavily associated with this category.
According to Dangdang’s cofounder Penny Yu Yu, “Dangdang caters to medium- to high-end customers with higher-than-average education level and larger wallet size and they tend to live in top 20 cities.” If this sounds like your demographic, and your product is of the educational or entertainment persuasion, Dangdang could well be worth exploring.
If you’re in China and you need groceries, but don’t feel like making a trip to the supermarket, you’ll likely turn to Yihaodian, the largest online food shopping site in China. Here you can find most products available at major Chinese supermarkets, such as fresh produce, healthcare products and appliances. Yihaodian’s clientele tends to be affluent, with imported products such as wine enjoying premium billing on its homepage.
If your product falls into categories such as food and beverage, beauty or healthcare, Yihaodian certainly warrants a closer look. Recently acquired by JD, it is also likely to benefit from technological developments that will improve supply chain logistics.
As you can see, there are plenty of options when it comes to China’s online shopping sites. But the best place to start your foray into the Chinese e-commerce market is Tmall, due to its unquestioned supremacy and mammoth market share.