Chinese eCommerce Platforms
There are lots of e-commerce marketplaces in China. So if you want to sell your products online, which platform is the best for you?
What are the major e-commerce players in China?
The major e-commerce player is certainly Alibaba – which dominates 80% of the e-commerce market. Alibaba’s major e-commerce sites – Taobao and Tmall had 443 million annual active buyers in 2016. So what is Taobao and Tmall and what is the difference between them?
Tmall is a business-to-customer (B2C) platform. Contrary to Taobao, Tmall is exclusively devoted to professionals. To set up a shop in Tmall, there are stricter rules on the application than Taobao. First and foremost, you need to prove that you are the brand owner or an authorized merchant, in order to prove your legitimacy to sell your products and the rights you have to sell in China. The strict rules give more confidence and trust to Chinese consumers to buy on Tmall, knowing that what they are buying are real products with quality.
Tmall is a brand-driven marketplace. It gives opportunities to overseas brands to launch their businesses in China, by first selling on Tmall. In fact, many of the international brands have already opened a flagship store on Tmall. Norway is not exactly a very international market, so very often I can’t find the brands I like here. I will then visit Tmall and buy from there instead.
Given the higher quality control on its platform, the startup fee on Tmall is higher than on Taobao. Tmall also charges higher annual service fee, commission and deposit. However, comparing to the cost of opening a physical store, selling on Tmall is probably easier and more cost efficient for foreign companies.
The second largest e-commerce player is Jingdong (JD). Like Tmall, JD is a also business-to-customer marketplace. Their major difference is logistic. JD provides leading in-house delivery and logistics, which is quite similar to Amazon, while Tmall requires sellers to ship products directly to their customers. In order to compete with Alibaba, JD formed a strategic partnership with Tencent, the internet giant company that owns WeChat, in 2014. By sharing data, the two companies help brands drill down and target specific demographics that are likely to want to purchase certain products. Moreover, JD has a good reputation for supplying only authentic brands because of its strict policies on excluding counterfeits.
KaoLa (by Netease)
Netease Kaola is a comprehensive e-commerce company based on cross-border business. With more than 24% of market share, it is now China’s largest cross-border e-commerce platform.
Kaola provides a large range of products in maternal and child, beauty make-up, home and lifestyle, nutrition and health care, global cuisine, clothing and bags, digital home appliances and ect.
Xiaohongshu (小红书) also known as “Little Red Book” or “RED” , is one of the largest and fastest growing social media and e-commerce platform in China. It is “a sharing platform for young people’s lifestyles through deep-rooted UGC shopping sharing community”. By January of 2019, it has over 200 million registered users, 85% of which are female and most users were born after 1990s. The app help users discover products, post and share product reviews and tips. Moreover, users can buy products directly within the app, and keep creating new recommendations and reviews, making the app a highly community and content driven platform integrating social media, e-commerce and branding.
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