May 9, 2019

Top 3 E-Commerce Platforms in China

It may appear odd that most cross border e-commerce platforms in China just sprung up in the middle of this decade. But when you consider the changes in tax law on foreign imports that started to take shape around 2010, paired with the increasing demand from Chinese consumers for foreign products, then it’s not surprising that the largest e-commerce platforms in the country are only four or five years old. It’s also worth noting that a bonded warehouses also opened up around that time. This allowed for foreign imports to be stored on China’s mainland and shipped through local logistics companies.

2018 was the first time e-retail spend in China topped the $1 trillion mark. That’s a 35% increase from the previous year. The projections for 2019 are similar, with a more diverse group of cross-border e-commerce platforms solidifying their place in the market. While these lesser-known Chinese e-commerce platforms continue to gain significant traction, the top three players still control approximately 60% of the market. We detail each platform below.

(Chart shows China’s cross-border e-commerce platforms.)

Kaola

(Snap of Kaola’s homepage for its e-commerce platform.)

Kaola currently has the largest market share (26%) of any e-commerce platform in China. It was formed in 2015 from an internet company named NetEase. Fashion and jewelry, along with sports and outdoor products are some of the leading sellers on Kaola. Ironically, they’ve recently announced the opening of 15 brick and mortar stores across China to keep up with retail demand.

TMall

(Snap of TMall’s homepage for its e-commerce platform.)

Launched in 2010, TMall is the most popular e-commerce platform in China. It’s owned by the Alibaba Group and companies like Mercedes, Nike, and Sony all sell products through TMall’s platform. TMall Global is the international version of this platform. The main difference between TMall Global and its parent site is that TMall Global only hosts foreign merchants. That gives Chinese consumers the assurance that all products from the site are exclusively from companies outside of China. With approximately 22% market share, the TMall brand is a dominant presence in the e-commerce space. It makes purchases directly from the merchant brand and prefers to operate through its own logistics.

VIP International

(Snap of VIP International homepage for its e-commerce platform.)

VIP International distinguishes itself with a near-exclusive selection of “famous” brands. Beauty and cosmetics along with maternity and baby products are its top priorities. They own eleven warehouses internationally and four in China, which provides flexibility in the type of logistics services it offers. With approximately 12% market share, VIP continues to compete as one of the top e-commerce platforms in China.

Another e-commerce platform worth mentioning is JD.com. They hold about 13% market share and have strategic partnerships with two major brands: Tencent – who owns WeChat – and Wal Mart, which Fortune rates as the largest company in the world by revenue.

Connecting your business to China

The possibility of connecting your business to Chinese consumers is an exciting one. But it will take a focused effort and accumulating the knowledge necessary to give your business the best chance to succeed. Through Route86, you can take the pivotal first steps towards expanding to China by using both our Trademark Tool and Access China.  


This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed.  All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change.  No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.