China’s Changing Cross-Border e-Commerce Landscape

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The cross-border e-commerce landscape in China is changing for a number of reasons. Shopping online rather than offline has become easier than ever, providing access to different products previously unavailable. Chinese consumers are more informed since they are armed with the ability to shop and compare prices readily online and on their mobile. And, platforms are more advanced and user friendly, accepting digital payments for the consumer’s ease and convenience.

As a result of these changes over the past few years, more players have joined the cross-border digital arena and China’s cross-border e-commerce market has become fragmented. Once dominated by Alibaba and Tencent, new recent research shows that four platforms now have significant market share in the Chinese cross-border e-commerce market. These include Kaola.com, Tmall Global, Weipinhui and JD Worldwide. Other platforms like Ymatou.com, xiaohongshu.com and mia.com are becoming more widely-accepted, as well.

What is causing this division of the cross-border digital market? A closer look at the platforms may provide some insight.

Kaola.com, a website that was launched in 2015 from NetEase, Inc., is one of the fastest-growing websites for Chinese consumers to buy overseas goods. Originally for Australian retailers to sell their products in China, it is now available to all foreign retailers and more than 40 countries sell goods through Kaola.com. The website takes advantage of the Chinese government’s relaxed cross-border e-commerce policies for consumers buying goods for personal use from retailers and brands in other countries. Additionally, it focuses on high-end products and targets the largest group of Chinese internet users, those in their thirties. While some platforms sell through marketplaces, Kaola.com sells directly to consumers, enabling them to save time in deciding and purchase products at better prices. It has become the largest, most popular platform for cross-border e-commerce in China.

Tmall Global, formerly Taobao, is one of the most significant platforms in China for B2C. Operated by Alibaba Group, it is used by the most successful players. Tmall Global selects brand name goods that have a strong reputation and have significant sales in China. It hosts more than 14,000 international brands from 63 countries and regions, and over 80 percent of the retailers it hosts made their entrance into China using the platform. Tmall Global targets Chinese consumers between the ages of 18 to 28, because they are savvy with smartphones and tablets, familiar with foreign cultures and understand e-commerce. Importantly, these consumers are brand-conscious and willing to purchase new products from other countries.

Following Koala.com and Tmall Global in terms of market share in the Chinese cross-border e-commerce arena are Weipinhui and JD Worldwide. Weipinhui is a Chinese company that operates the e-commerce website VIP.com and specializes in online discount sales. Based in Guangzhou, Guangdong, China, it has become the third largest B2C e-commerce retailer. JD Worldwide, another Chinese e-commerce company headquartered in Beijing, introduced its B2C platform in 2004. It has become the leading e-commerce platform for purchases of home appliances and electronic equipment. As more affluent Chinese customers want authenticity over low prices, JD Worldwide’s policy for “zero tolerance” of fake goods makes it a desirable platform.

yMatou.com, a C2C and B2C e-commerce platform based in Shanghai, China, launched in 2009. One of the first platforms in China’s cross-border e-commerce market to offer a more diverse range of goods on its website, it focuses primarily on baby products, beauty products, nutrition, clothes and shoes. Organized carefully by product categories, baby and beauty products are the most popular. Additionally, the website is praised for having very detailed descriptions that Chinese consumers find useful and informative.

Newer platforms like XiaoHongShu.com have taken a different focus. This website, launched in 2014, combines a social media app with an e-commerce platform. This mix of the website allows consumers to post pictures of their purchases to their communities as well as purchase and chat directly on the same site. Unlike some of the larger platforms, XiaoHongShu.com is accessible to smaller brands hoping to expand into China. Cosmetics and beauty products are very popular, especially because XiaoHingShu targets young women between 18 and 30 years old.

Changes to China’s cross-border e-commerce landscape will most likely continue as it matures with more options and platforms focused on a specific niche. With this growing competition, it is evolving into a more sustainable and improved business prospect for retailers looking to sell in China while providing more possibilities for Chinese consumers.

To learn more about how Tolmao Group can help to utilize these platforms to serve your business, visit http://www.tolmaogroup.com.

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