The retail ecommerce ecosystem in China is extremely diverse. While Alibaba and JD.com are the clear sales leaders, a handful of other players are holding their own, sometimes by carving out a niche market, be it Suning in consumer electronics or Mogujie in women’s apparel.
Here are the companies marketers are paying attention to:
Since its 2015 debut, social buying app Pinduoduo has quickly captured the attention of bargain-seekers in China and is now challenging JD.com as the second-largest retail ecommerce player by market share. Pinduoduo offers discounts on products if consumers join together to buy at the same time. One of the major reasons Pinduoduo was able to go viral was because of the wide use of its WeChat miniprogram (a lite applet living within WeChat that does not require downloading to use and disappears when users are done with it). Pinduoduo said that its monthly active app users averaged 289.7 million in Q1 2019.
“The group-buying app positions itself as the place to seek bargains,” said Man-Chung Cheung, eMarketer research analyst and contributor to our latest report collection “Global Ecommerce 2019.”
“The pitch begins as soon as Pinduoduo users enter the app, with the navigation menu featuring flash sales, clearance and constant pop-ups displaying deals. And every listing shows shoppers the value of their bargain. Discounts of over 90% are prevalent, and one can easily find deals for RMB1.00 ($0.15). Pop-ups appear frequently showing group buys that other users have joined to maintain the interactive experience.”
This omnichannel retailer an extensive network of 11,000 physical stores—offering the option of buy online, pick up in-store (BOPUS), as well as post-sale services, such as installation and maintenance. Most stores are based in China, with others in Japan.
Online-to-offline (O2O) integration is a core focus for Suning. The retailer has also opened smart retail stores—outlets equipped with next-generation retail technologies featuring artificial intelligence (AI) and facial recognition. In February 2019, Suning.com acquired commercial developer Wanda Department Stores’ 37 locations nationwide. Its plan is to augment the retail chain with smart retail technology and turn the stores into destinations for eating, shopping and entertainment.
This year, Gome takes fifth place in retail ecommerce sales in China. The retailer (which also operates approximately 2,000 physical stores in over 30 provinces) specializes in consumer electronics, and it also carries products in such categories as food/beverages, personal care/beauty, apparel/accessories, home furnishing, toys, and auto products and services.
“Gome’s strategy focuses on high quality at an affordable price,” Cheung said. “The retailer has adopted a direct sales model and has forged relationships with brands to ensure product authenticity.”
We forecast that Vipshop will account for 1.2% of retail ecommerce sales in China in 2019. The company has benefited from rising apparel consumption, which grew 4.1% to RMB1,289 ($194.81) per consumer in 2018, representing 6.5% of total spending, according to data from the National Bureau of Statistics (NBS). Vipshop generated over 50% of its sales in Q1 2019 from this product category.
The company reported that active digital buyers of its platforms reached 29.7 million in Q1 2019, an expansion of 14% year over year.
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