At the end of November 2018, the number of Chinese online shoppers using e-commerce apps on their mobile phones followed a tremendous rise of 278%, going from 207 million to 783 million in just a year. A penetration rate equivalent of 71.1% of the total Chinese population. And considering a global population reaching 1.4 billion people, this literally means over a billion people using China’s shopping apps. A market representing USD 1.53 trillion!
With such growth, the competition is obviously becoming tougher and tougher each year. Newcomers are fighting for a piece of cake but nonetheless, there has been a steady stream of new entrants on the market resulting in constant evolution in the China e-commerce environment.
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Also, it’s important for foreign companies entering the Chinese market to take their time in choosing which market place they want to settle in. therefore, we’ll try to cover here the prime selling points, focuses, and different specializations of the largest China shopping apps.
We hope to make this article as the perfect guide to lead you in your choice of the best China E-commerce platform for your business.
A quick review of the top 5 online shopping sites in China:
- Taobao: undisputed leader of the e-commerce market
- Pinduoduo: When group-buying meets social commerce
- JD.com: Luxury goods, Top-Notch Logistic and more
- XiaoHongShu: Content-driven platform
- Tmall: The premium E-commerce experience in China
Top 5 China Online Shopping Apps in 2019
The huge development of the smartphone market led to a sharp increase in popularity of mobile shopping apps, which has, later on, drive the growth of China Ecommerce. Shopping apps are nowadays the most popular way to access online shopping. Fast and convenient, it’s the perfect match with a fast-growing environment and busy lifestyle. According to China Internet Watch, over 80% of Chinese online sales were generated from mobile apps, and this trend is expected to continue in the future.
On the graph below, you can check on the number of MAUs on China’s largest e-commerce platforms to get an idea of the rankings. But don’t forget, MAUs are not always converted into revenue. Keep it in mind while checking the figures.
The Chinese E-commerce market continues on its explosive growth, but we can’t help noticing a slow down on this evolution. With an increase in the competition level, the landscape is under constant innovation. However, following the new laws affecting the market since beginning 2019, platforms will be facing new challenges and administrative burdens.
1. Taobao: the undisputed leader
Taobao, a giant of the E-commerce industry.
- 27 million average monthly users (MAUs)
- 5% Install penetration rate
Since it has been created in 2003, the Alibaba-backed app remains the most preferred shopping app in China, continues to operate as the market leader and trend-setter for other Ecommerce platforms. Involved in a C2C business model, Taobao allows the sale of goods and services between individuals.
Basically, Taobao is THE Chinese E-bay. Any person in China can register to the platform and start doing business while selling products to a massive online market.
And with such a business model and opportunities, there’s no surprise on the huge range of products and services available on the platform. You can find on Taobao anything you may think about, and even more. It’s beyond imagination. A dominant company that owns its success to advanced logistics providers, strong incentives for both purchasers and sellers, and a trendsetter for Chinese E-commerce.
As an example of their dominance on the market, the creation of the 11/11 in 2009. The Chinese “black Friday”. An amazing event that turns out to be very famous in China. The event during which one, brands and companies had to follow the given trend and offer promotions on the same day in hopes of getting a piece of the pie. From now, even foreign brands that usually don’t participate in third party shopping events, like Apple, offer promotions on this day.
The double 11 in 2018:
- 4% rise of Taobao’s active users
- $1 billion sales in one minute and 25 seconds
- Over $30.8 billion sales in 24h
- called by many as an “Ecommerce Miracle”.
Marketing facts on Taobao:
- Implementation of social media aspects: a new E-commerce experience
- The appearance of live streamers who showcase their products and act as KOL on the platform
Some new innovation of the Chinese giant resulting in an excellent way to drive sales without taking the risk for KOL to upset their followers while being too “salesy”.
- Development of beverage and food-ordering experience through the app (in accordance with a new partnership with Starbuck)
By the end of April 2019, it was more than 2,100 Starbucks stores in 35 chinese cities that got offered on-demand delivery services.
Some news strengthening the non-stop desire for innovation that makes Taobao the undisputed leader of China Shopping apps.
2. Pinduoduo: When group-buying meets social commerce
- 7 million average monthly users
- 4% install penetration rate
Since its launch in 2015, Pinduoduo has experienced explosive growth. In just three years, they managed to become the 2nd most popular Chinese shopping app. In fact, it’s the fastest-growing experience in the history of the Chinese internet. Even its Chinese name 拼多多 is a sign of success. It literally means “to combine a lot of purchase”.
An app is different from others in its primary features which is based around group-buying. The more people buy a product, the cheaper it gets. But of course, it means for users to share the products with others in hopes of getting cheaper products.
Furthermore, they use limited-time offers and regular flash sales every day to boost the customer return rate. By setting up this type of limitation, it encourages impulsive buying behavior and makes the customers’ decision process shorter.
Integration of WeChat payment, which is alone the biggest social media app in China. And one more time, the more users share their chosen products, the greater the chance they have of receiving a discount. A smart strategy that led to tons of deals being shared across social media platforms like WeChat.
A word of mouth business generating huge amounts of sales through users posting and sharing product information. An organic content generated by the customer themselves, which revolutionizes the market and makes Pinduoduo the most unique of China’s online shopping sites.
To sum up, Pinduoduo is a very popular app in China, especially among 2nd and 3rd tier cities with lower income and consumption power. Its users are looking for deals, so it may not be the platform to sell premium products, but it’s definitely a unique business model that led the app to secure its place among the top China shopping app.
Some figures about JD.com:
- 64 million average monthly users
- 3%.of Install penetration rate
Also known as JingDong, they started focusing on direct sales of electronic products in the 90s’. But their business started to really grow only after being online, with more and more categories of products coming up. Until one day, when they got completely developed all around China’s E-commerce marketplace.
The company is a secure provider of domestic products but also, goods from all around the world. With the use of a simple “button”, customers can get access to global brands including the ones not physically represented in the country.
JD.com and its nationwide logistics network offer both same-day and next-day delivery system. Which makes the company the only China E-commerce platform to control every part of its supply chain.
Have you heard about the 6/18?
Base on the same model as Taobao’s double eleven, it’s JD’s shopping holiday which is celebrated during the first 18 days of June. This shopping event turns out to be the second-largest China Ecommerce holiday right behind double eleven over the last few years.
The interesting fact about JD.com:
- Signed partnership with Walmart as managing all the Chinese e-commerce business of the American retail company, in exchange for a 5% equity share.
- Back up by Tencent company (owner of WeChat) with over 21% equity stake.
The leader in luxury sales among China online shopping sites, the company is currently developing its business empire at a worldwide level while bringing more overseas brands into the Chinese market such as Swiss, luxury watch brands ORIS. TISSOT, TITONI, MOSCHINO, and others have also confirmed their partnership with JD.
JD.com is the ideal shopping app in China for any luxury buyers looking for security in their purchasing experience and exposure to overseas brands.
4. XiaoHongShu: Driven Ecommerce Platform
- 85 million average users monthly
- 8% Install penetration rate
Created by Miranda Qu and Charlwin Mao, XiaoHongShu or also called the “little red book”, is a social e-commerce app registering 250 million users in 2019.
Focus on beauty and fashion, the platform offers people the opportunity to post and share shopping tips, product reviews, and lifestyle stories. Targeting authentic information sharing, the platform turns out to be a trusted source of advice and recommendations for its users (mostly female).
XiaoHongShu launched its cross-border platform in 2014, connecting Chinese consumers with global brands by allowing them to buy overseas products directly through the app. Since then, the company has signed huge brands such as Lancome, Swisse, and Innisfree. In 2017 the platform reached over 6.5 billion yuan sales.
XiaoHongShu works following a shopping cycle, in which one user will:
- Read shopping guides or reviews from other users
- Make purchase through the app
- Publish product review about their own purchase
- Communicate about their shopping experience
Strongly working on their reputation, the online shopping app has been inviting famous celebrities and KOL to open accounts and share beauty tips, such as FanBingBing who amassed over 10 million followers on XiaoHongShu. She was so successful that any products she endorsed on the app were sold out on the platform.
Even though the company had some previous challenges in monitoring its 3 billion pieces of content on the platform, it’s still one of the best UGC-driven e-commerce platforms with an innovative business model.
To headline some of their marketing content, they use short videos and live to the stream which are currently prevalent in the Chinese market.
5. Tmall: The Premium experience in China Ecommerce
Some figures about Tmall:
- 2 million average monthly users
- 4% Install Penetration rate
Although similar to Taobao, Tmall is more focused on selling branded goods with a B2C business model. In fact, it’s currently in China the biggest B2C platform. Its brands are more trustworthy than Taobao, and buyers can buy products directly from businesses rather than individual sellers.
Tmall has two versions: the domestic one and T-mall Global.
But it’s important to notice that getting on Tmall Global can be extremely difficult without being directly invited by T-mall Global itself. Especially if you don’t have any reputation in China…
Companies with an overseas business license of domestic Chinese business operations can set up a Tmall store. And among the top 5 shopping apps, Tmall is the one that could be compared the most to a shopping mall. brands can run their business like a “flagship store”, which is customizable and therefore allow brands to maintain their image and showcase their values.
N.B.: Alibaba is a Tmall agent and allows brands to manage their own sales and website.
And as for future plans, Alibaba expects to help around thousand of international brands to launch their own Tmall Stores. And according to the advantages we saw previously, Tmall is the best option among e-commerce platforms in China to start with.
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