Chinese websites for shopping are growing faster than anywhere else. In 2021, it snatched over half of global online sales, beating the US for the first time. With digital trade booming in China, many wonder how to get in on the action. The answer? Chinese online marketplaces. Our article explains what they’re all about, how to pick the right one, start selling, and learn from others’ experiences.
Features of eCommerce in China
Before diving into the world of China marketplaces, it’s crucial to grasp the market’s unique characteristics and the mindset of its people. Chinese employees are known for their efficiency, while as partners, they tend to be cautious and skeptical. As consumers, they’re famously demanding, sometimes even picky. With over 1.04 billion internet users, 812 million of whom shop online regularly, and a yearly growth rate of 10%, it’s no surprise.
China eCommerce Value by Global Data Banking and Payments Intelligence Center, 2024
Online sales in China have surpassed traditional retail, and ordering ready-made meals for delivery has become so common that many homes don’t even have kitchens anymore.
Here are some key aspects of eCommerce in China:
- Competition and ecosystems. Online business in China is centralized around the digital giants BAT – Baidu (a search engine similar to Google), Alibaba (largest eCommerce company in China including about 700 subsidiaries), and Tencent (digital services corporation). An aspiring startup must integrate into one of the ecosystems of monopolists. Otherwise, it simply will not survive.
- Mobile dominance. The majority of Chinese users purchase goods through smartphones. This requires Chinese eCommerce platforms to optimize their interface and functionality for mobile screens.
- Social media integration. Sellers shorten the path to the client and allow them to purchase goods or services by scrolling through the news feed or viewing reels on the social networks WeChat, Weibo, and TikTok.
- Changing user behavior. Buyers increasingly prefer to use short video services of social networks rather than search engines to look for the necessary information.
- Regional variation. China is a big country. A budding entrepreneur will not be able to reach the country’s entire audience, so they should target residents of individual macro-regions, especially since their interests and needs are very different.
- Marketplace preference. Chinese online stores are becoming a thing of the past. Customers use them when buying products from big brands or looking for highly specialized products. They go to marketplaces – electronic trading platforms with many merchants – for everything else. There, they get access to a vast assortment of items, bonus programs and discounts, as well as budget collective purchases (their essence is simple: one person creates an ad on the platform that they want to purchase a particular product/service, others join, and when they get enough participants they can buyout the item at a reduced price).
Now let’s talk about the Chinese websites themselves: what are their features and what you need to be prepared for when entering multi-vendor platforms.
Pros and cons of working on Chinese online marketplaces
Collaborating with Chinese marketplaces comes with its own set of considerations, shaped by cultural norms, socio-political dynamics, dense population, and high digitalization levels. Before diving in, it’s crucial to weigh the pros and cons of such an investment.
Pros
- Sales boost. With over 1 billion online consumers in China and beyond, the potential to find buyers is significant.
- Low seller commissions. Typically ranging from 2-10%, much lower than those on American and European platforms.
- Ease of use. Marketplaces offer intuitive tools for listing, selling, and promoting products, often with automatic translation and multi-country payment support.
- Fulfillment services. Chinese websites often handle packaging, labeling, storage, and delivery, streamlining the process for sellers.
- Access to technology. Collaboration provides access to cutting-edge digital solutions, enhancing business efficiency and competitiveness.
- Government support. State programs and free trade zones offer tax breaks, low export duties, and less strict currency controls, fostering a favorable business environment.
Cons
- High competition. Chinese marketplaces employ millions of sellers from all over the world. This means an entrepreneur must promote products or services with few analogues. It is better to give preference to locally produced goods.
- Price pressures. To remain competitive, entrepreneurs often need to reduce prices significantly.
- Return challenges. Returns are common, and sellers may lose profits if they haven’t included transportation costs in their prices
- Language barrier. Product descriptions and customer communication must be in Chinese, requiring professional translation due to dialect variations.
- Counterfeits. China is a country where it is easy to “copy” the desired product. The biggest Chinese online retailers are fighting unscrupulous sellers, but intellectual property infringement is a risk despite efforts to combat it.
“When entering the Chinese market, be prepared to plunge into a new reality: the way of life, traditions, and customs of Asian countries are fundamentally different from Western ones. This is reflected in literally everything: from the culture of negotiations with trading partners to the design features of product cards — people here love brightness and eccentricity, and video is a must for publishing an ad. It will take some time to adapt, but considering that marketplaces will give you access to a billion-dollar audience (not only Chinese but also other foreign countries who make purchases on Alibaba, Tmall Global and other platforms), it’s worth it”.
Olga, Head of Sales and Customer Support at Simtech Development.
Types of Chinese marketplaces
Choosing the right platform to sell your goods and services is a key decision for any business, especially when entering the Chinese market. Chinese online retailers can be broadly categorized into domestic and international platforms. Domestic platforms primarily cater to Chinese buyers, while international ones facilitate cross-border transactions, attracting users from various regions worldwide.
Domestic Chinese marketplaces
Domestic marketplaces focus on Chinese buyers. Sellers whose business is registered in China or have a partner with a local passport and a bank account can cooperate with such platforms. Such conditions cause many difficulties for foreign entrepreneurs. Still, they are ready to solve them because the audience of many domestic trading platforms is larger than the population in their countries. Moreover, Chinese websites are accommodating to foreign businesses – they offer government support to those who want to open an enterprise in China or recommend certified specialists with a good reputation and experience working on the platform as local partners.
We will give examples of the most famous domestic marketplaces in China below.
Taobao
The brainchild of the eCommerce corporation Alibaba, the Internet megamall, which appeared in 2003. The marketplace sells goods in the B2C (business-to-consumer) and C2C (consumer-to-consumer) segments.
You can buy anything from phone cases to CNC machine parts on Taobao. And most importantly, at a relatively low price. Interestingly, the site’s operation principle is reminiscent of a traditional market, where buyers and sellers can bargain freely. The number of users on the site breaks all records – 900 million people per month.
From its inception, Taobao began to grow rapidly, and over time, large brands began to open stores in the marketplace. Therefore, in 2008, management launched a premium version of Taobao – Tmall, and later Tmall Global.
Tmall and Tmall Global
Tmall is aimed at large companies that sell well-known brands to Chinese consumers. The platform offers a huge range of offers from various categories: sports, cosmetics, textiles, cars and motorcycles, and food.
Today, the marketplace has more than 500 million users and 150 thousand sellers. For a long time, it was difficult for foreign companies to enter the eCommerce platform without a legal presence in China. In 2014 owners of Alibaba launched the global Tmall. According to the rules of the new site, it did not matter in which country the supplier was registered and whether he had an account in a Chinese bank. This is how European and American goods poured into Tmall Global.
Today, Tmall Global hosts 20 thousand brands from 77 countries. Most are from the USA, Canada, South Korea, Australia, New Zealand, and Japan. Foreign companies receive their revenue in different monetary units, including cryptocurrency.
Suning
One of the largest Chinese wholesale websites, founded in 1996 for the domestic market. It has about 12 million monthly users and specializes in television, audio, video and consumer electronics, as well as computers and networking equipment. One can find products from Samsung, Sony, Panasonic, Fly, HTS, and ASUS here. Among other things, Suning sells clothing, textiles, food products, home furnishings, personal care products, cosmetics and perfumes.
When working with foreign partners, the marketplace offers two models of cooperation. The first is fulfillment, in which the platform provides store support, logistics and warehousing of the supplier’s goods. The second is a complete repurchase of products and independent sale of goods on behalf of the marketplace. One of the disadvantages of Suning is the lack of an English-language interface, and payments are made exclusively in yuan.
Kaola
The marketplace was founded in 2015 by Netease and was intended for Australian companies that wanted to sell their products in China.
Kaola has over 30 million active users on its platform. It offers products for children, food, cosmetics, clothing and accessories. In 2019, the marketplace was sold to Alibaba Group, and since then, the geography of product suppliers has expanded to 80 countries. The marketplace provides foreign manufacturers with a full range of services for importing goods: logistics warehouses, cross-border payments, and assistance in promotion.
Poizon
A Chinese marketplace launched in 2015 as an online community of sneaker collectors and street fashion connoisseurs. By 2022, it had developed into a full-fledged marketplace for branded and designer items, where, in addition to comfortable shoes, you could buy bags, accessories, cosmetics, perfumes, and electronics. Poizon is aimed at a young audience and is widely used on smartphones. The platform’s audience numbers over 100 million users, with 1.5 million using the app monthly.
One of the key advantages of the site is its multi-stage verification system. Before sending the goods to the buyer, Poizon specialists check the items for authenticity. For example, sneakers are evaluated according to 16 parameters: the sole, label, insole, and laces are examined. After this, the items are sealed with a branded clip with an identification number, and a certificate stating that the item has passed inspection is included and packed in a Poizon branded box.
1688
Another Asian online marketplace store owned by Alibaba, the largest B2B trading site. Intended exclusively for Chinese wholesale buyers who subsequently resell products worldwide, including on Amazon and eBay.
Why does the site have such a name? 1688 in Chinese sounds like “Yi Liu Ba Ba”, almost like “Alibaba”, it has become the “little brother” of the global alibaba.com. The marketplaces are similar: the general business model and the wide range of products offered: auto products, plumbing, personal protective equipment, industrial and construction products, materials for beauty salons and much more. All these are supplies from factories. But unlike alibaba.com, the cost of products on “1688” is much lower because the marketplace defends the interests of Chinese consumers.
There are other “bonuses” for buyers: on the site, they can agree with manufacturers on product branding and changes in characteristics and packaging. When purchasing, money goes not directly to the seller but is “frozen” by the marketplace. The seller will be able to receive them only when the cargo reaches the customer and they do not open a dispute in due time.
Domestic marketplaces in China are large trading platforms where both local and foreign sellers can sell, but only Chinese residents can buy. Such platforms satisfy the population’s demand, expand the range of available goods and services, and promote the development of domestic trade.
International Chinese marketplaces
International Chinese marketplaces cater to consumers and suppliers from various countries, offering opportunities for cross-border trade. Unlike domestic platforms, registration requirements for foreign sellers may vary. While some platforms may only require foreign passport information and licenses for goods, others may mandate a Chinese bank account or the presence of a local representative. Let’s explore some of the most popular international platforms:
Alibaba
Alibaba is one of the first eCommerce platforms in China and the world’s largest online marketplace, specializing in the wholesale trade of products in various categories: electronics, equipment, building materials, household goods, car parts, etc.
This Chinese Amazon equivalent was launched in 1999 by Alibaba Group as a space for interaction between entrepreneurs from different countries. On the platform, they can contact directly: conduct negotiations, order product samples, and arrange delivery.
Today, Alibaba provides access to its site to 190 million buyers from all over the world, and the site is translated into 15 languages. This applies to the interface and the chat, where you can easily communicate with company managers through automatic text translation.
JD
Jingdong Mall is one of Alibaba’s main competitors. The platform was created in 1998 by JD Multimedia, now JD.com Incorporation, and initially dealt with magnetic and optical media. Then, it expanded the range to electronics, phones and household appliances. This category of goods remains the main one today, although you can also purchase clothes, shoes, hygiene products, toys for children and much more on the site.
The main advantage of JD is the most modern logistics infrastructure of all Chinese eCommerce platforms. It contains 1,300 warehouses, more than 7,200 delivery points, and about 200,000 courier service employees. It practices the delivery of goods using robots and drones.
The marketplace’s audience is almost 500 million users and more than 100 thousand sellers. There are support programs for foreign brands. JD started as a domestic marketplace, but since 2012, it has expanded its activities and offers goods and services in China and abroad.
AliExpress
Another online store of Alibaba Group. It allows buyers from all over the world to purchase goods directly from manufacturers and sellers from China, Europe, the USA, and Turkey.
Chinese websites like Aliexpress offer products in various categories at low prices, making it a popular online shopping destination for over 100 million shoppers. Moreover, many sellers provide free delivery of goods to other countries. One of the features of AliExpress is the ability to purchase wholesale and retail goods. The platform also provides various payment methods, including credit cards, bank transfers, and electronic payment systems.
The marketplace’s clients are residents of 230 countries, so the content on the store’s website is automatically translated into 18 languages (Polish, French, Italian, English, Russian, Dutch, Arabic and others).
Pinduoduo
A marketplace focusing on an audience that accesses the Internet from a smartphone. Especially for this purpose, the site owners developed the Temu mobile application. Pinduoduo was founded in 2015 by a former Google engineer named Huang Zheng, who immediately fell in love with many users thanks to its low prices and group buying function. This applies not only to non-perishable goods (clothing, shoes, tools), but also to farm products, which customers can receive within a couple of hours after paying for the order.
Thanks to this, the marketplace has become one of the fastest-growing online marketplaces in China and has a huge base of active users – more than 800 million people monthly and more than 300 thousand sellers. The latter are attracted by the soft terms of cooperation with the platform: it does not take commissions on sales but receives its profit through advertising.
The platform is also actively developing outside of China. Since 2020, it has been used by customers from the USA, Great Britain, Germany, the Netherlands, Italy, France, Spain, Austria and Mexico. The marketplace plans to increase its presence in all 27 EU countries.
Made-in-China
This Chinese B2B marketplace specializes in the trade of industrial equipment, auto parts, building materials, household goods, recreation and sports. As the name suggests, Made-in-China presents exclusively to Chinese manufacturers, and the platform acts as an intermediary between Chinese sellers (large importers, factories, trading companies) and foreign buyers.
The platform has a simple interface and supports 11 languages, greatly simplifying searching and communicating with suppliers. You can search for products by categories, keywords, and—surprisingly—provinces of China.
Users can conduct online transactions directly on Made-in-China. This includes requests for quotes, price negotiations, ordering and payment. In addition, the marketplace boasts a panoramic factory tour with a demonstration of the production process.
How to choose a suitable marketplace and launch sales
To choose the right marketplace and set up your sales strategy, start with a thorough market analysis. Consider your target audience, competitors, and these key questions:
- Which platform best suits my products or services?
- What are the supplier requirements, such as documents, certificates, or partnerships in China?
- How financially viable is trading on the platforms? Compare commissions, advertising costs, and warehouse storage fees.
- What support program’s or bonuses do the marketplaces offer?
Contact the marketplaces to gather precise information and submit your application once you’ve made your decision. Once approved, you can:
- Create a mini-store from scratch
- Integrate data from an existing online store to simplify product listings. The Simtech Development team can perform data integration work for you.
Next, arrange the product delivery to the marketplace warehouses. Once everything is set up, launch your store and focus on continuous product promotion using the marketplace’s tools and capabilities.
“Entering Chinese marketplaces for entrepreneurs is a unique opportunity to enter global markets and also gain invaluable experience. China is a technology leader that uses advanced IT solutions on its trading platforms. Understanding them, mastering them and adopting them means gaining a competitive advantage in the digital trade market”.
Andrew, CTO at Simtech Development.
Top 10 advanced technologies of Chinese marketplaces
Let’s look at the most interesting and significant technologies used by Chinese marketplaces. Perhaps you would like to use them in your current project?
1. Streaming trading and integration with streaming services.
Imagining a Chinese marketplace without entertaining and selling video content is impossible. Sellers or specially invited bloggers record commercials or broadcast in real-time, demonstrating products that users can purchase on the marketplace. JD, Pinduoduo, Suning, and many other sites do this. Streaming has turned online shopping into entertainment and is now very popular among shoppers.
Simtech Development also has experience in such integration. Recently, for one of the banks in Kazakhstan, we created a mobile application with a built-in streaming service. This is how the bank finds common ground with the youth audience and attracts new clients.
2. Face recognition
Some Chinese marketplaces use facial recognition technology. For example, the JD platform offers a face-scanning payment option, and Suning offers a secure user authentication option.
3. Own payment systems
Large businesses launch not just online stores, but create ecosystems in which, in addition to trading platforms, there are many other products and solutions, including their own payment systems. For example, buyers of Alibaba Group marketplaces use Alipay. The system allows you to make online payments, transfer money, pay bills for services and mobile communications, buy transport tickets, and book hotels.
4. Social media integration
Chinese marketplaces often integrate with social media platforms. For example, Taobao and Tmall, with WeChat or Weibo, have billions of active users worldwide. The technology allows customers to share their carts and reviews with friends and sellers to virally spread information about products and thereby increase sales.
5. Virtual and augmented reality (VR/AR)
Chinese marketplaces help customers try on clothes or accessories in a virtual environment before purchasing (Tmall). You can also “overlay” interiors and virtual furniture onto a physical environment (Alibaba) or conduct virtual tours of properties (Fang.com).
Simtech Development implemented virtual glasses fitting for an online optics store SeeWhatHappensOnline from Belgium. Our team has integrated FitMix technology into the online store, allowing to recognize customers’ faces, select the frame size as accurately as possible, and display the person in a mirror. And all this in real-time.
6. Drones and robot couriers
JD has become one of the pioneers in using unmanned aerial vehicles to deliver goods to customers. The marketplace has developed its own delivery system using drones, which can cover significant distances and deliver orders weighing up to several hundred kilograms to remote areas of China.
JD also uses robot couriers. The vehicles can travel on sidewalks and roads to deliver goods directly to customers’ doors. They are equipped with navigation systems and sensors to navigate urban environments safely and avoid obstacles.
7. Virtual assistants and chatbots
Digital consultants are an essential part of Chinese marketplaces. They provide effective customer service and increase customer satisfaction. One of the most popular virtual assistants is AliMe from Alibaba. It uses artificial intelligence and neural networks to process customer queries and provide answers to questions about products, shipping, payment and other aspects of shopping.
JD also developed his own chatbot known as Jingdong Xiaoice. It can carry on conversations with users, recommend products, and even emotionally adapt to the user’s mood.
8. Gamification tools
Chinese marketplaces have many game mechanics to attract and retain customers. These are quests, wheel of fortune, and virtual avatars. This also includes comprehensive customer loyalty programs. For example, Alibaba Group has a program called Alibaba Points, where users can earn points by purchasing on the Alibaba platform.
Thus, at a client’s request from Hong Kong, Simtech Development developers created and integrated the Treasure Hunt game into the online store. The idea is simple: customers “travel” through the store pages, and when they reach the end, they receive a cash gift certificate, which can be used as a discount when purchasing a product.
9. Use of artificial intelligence (AI)
Chinese marketplaces are actively using the capabilities of artificial intelligence. Alibaba, for example, uses computer vision to generate personalized offers for users. JD — increases logistics efficiency. Meituan (a popular food ordering platform) optimizes delivery routes, forecasts demand and makes recommendations for users.
10. 3D configurators
3D configurators are software tools that help users create and customize 3D models of products interactively. You can change product parameters: shape, size, color, materials, and set of elements. This is how personalized products are created, taking into account the buyer’s needs.
Configurators can rotate the model and zoom in and out to understand the product’s appearance and functionality thoroughly. One of the latest cases of Simtech Development is a project of an international offline company selling lighting equipment, which digitized its business and provided customers with the opportunity to construct a product from various parts online.
Wrapping up
China, as the world’s second-largest economy, prioritizes the development of eCommerce, fostering an environment conducive to digital innovation. This includes advancements in broadband Internet, digital infrastructure, mobile payments, and emerging technologies.
Marketplaces stand out as the cornerstone of online commerce in China, serving as highly effective platforms for trading. They can be categorized into domestic platforms catering to Chinese residents and international platforms serving consumers worldwide. These platforms boast millions of buyers and thousands of sellers spanning the globe. By incorporating advanced technology into your eCommerce platform, you can attract a broader customer base, ultimately driving sales growth.
At Simtech Development, our developers possess global expertise in eCommerce development and are equipped to implement various solutions tailored to your needs:
- Building a digital ecosystem
- Integration with external services, including streaming platforms
- Development of virtual reality-based solutions
- Incorporation of gamification elements into your website
- Creation of 3D models and product configurations
We look forward to collaborating with you. 再見! (See you soon!)
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