China Cross-Border E-Commerce Sales Channels (1)-Marketplace Platforms
Updated: Oct 18, 2019
In our previous post, Major Business Models of China Cross-Border E-Commerce, the flowchart, logistic models and sales models of China cross-border e-commerce were discussed. As to sales channels, there are many choices, ranging from small players to big ones and each of them has its own advantages and disadvantages.
In general, there are two types of sales channels, marketplace platforms and standalone websites (including Wechat mini program). In order to choose the right sales channel(s), the brands are required to understand how each sales channel operates, who the major users of each channel are, and what the prominent differences between the key sales channels. In this article, we will talk about the first half of cross-border e-commerce sales channels --- marketplace platforms.
According to iMedia, the main cross-border e-commerce marketplace platforms in the first half of 2019 are Netease Kaola, Tmall Global, JD Worldwide, Little Red Book, VIP International, and Ymatou.(Click here to view more in Introduction of China Cross-Border E-Commerce). Alibaba Group has acquired Netease Kaola in September 2019. After Netease Kaola integrates into Tmall, it will create the largest cross-border e-commerce platform in China, occupying almost 53% of the entire cross-border import market.
China Cross-Border E-Commerce Import Market Share (H1 2019)
In the remainder of this article, the six major marketplace platforms are going to be discussed one by one.
1. Tmall Global
Launched in 2014, Tmall Global (www.tmall.hk) is an extension of Alibaba Group’s Tmall platform which addresses increasing Chinese consumer demand for international products and brands. Tmall Global is hosting more than 20,000 international brands and over 4000 categories across 77 countries and regions. Millennials (23-38 years old) are the main users of Tmall Global and Post-Millennials (under 22 years old) are powering the growth of Tmall Global.
Tmall Global is planning to bring USD 200 billions worth of international goods into China over the next five years and help businesses of all sizes enter the Chinese market, giving more opportunities to SMEs and niche brands.
Tmall Global currently works with brands/retailers by invitation or applications, giving priority to overseas renowned brands which haven’t yet tapped into the Chinese market.
It has 3 sales models: Tmall Direct Import(TDI), Tmall Global(TMG) and Tmall Overseas Fulfillment (TOF), please refer to below chart for more information.
2. JD Worldwide
JD Worldwide (www.jd.hk ), launched in 2015, is JD.com’s cross-border e-commerce subsidiary which provides Chinese consumers with the most convenient way to purchase authentic imported products. JD Worldwide, hosting almost 20,000 brands, is the biggest competitor of Tmall Global.
JD Worldwide mainly has 2 sales models: JD Worldwide Direct Import(JDI) and JD Worldwide(JDW), see below:
3. Netease Kaola
In 2015, Netease Group launched Netease Kaola, the No.1 cross-border import retail e-commerce platform that delivers cost-effective, high-quality and trustworthy products to Chinese consumers since they buy most of their inventory in bulk (Kaola Direct Import mode). Compared to Tmall Global and JD Worldwide, Kaola provides relatively smaller No. of SKUs. In order to make the SKUs richer, Kaola gives brands/retailers opportunities to open stores on its platform (Kaola Third-Party Suppliers mode).
Please refer to below chart for more information:
4. Little Red Book
Little Red Book(LRB) is a typical content-oriented social media and cross-border e-commerce app. Created in 2013 to allow users to share travel stories, it has now transformed into a lifestyle social media and e-commerce platform for users to post and share product reviews, travel blogs and lifestyle stories, and purchase their favourite foreign products. By Jan 2019, it had over 200 million registered users, 85% of them are female, and 84% of the users are below 30 years old.
The content cycle works like this: customers read shopping notes from other users--> they make a purchase--> publish a shopping note about the purchase--> communicate with other users about the shopping experience...
It has two types of sales models: Direct Import and Third-Party Stores, please refer to below chart for more information:
5. VIP International
Launched in 2014, VIP international is the cross-border e-commerce arm of VIP.com. Till 2019, it has 330 million registers and 33.1 million active users. It has set up professional buyer groups in many countries and formed close relationship with renowned brands. Similar to VIP.com, VIP international adopts online & offline discount sales strategy compared to other cross-border platforms.
Started in 2009, Ymatou is a C2C and B2C cross-border e-commerce platform with more than 50 million registered users. Its own international logistics company, xLobo Global Express, having more than 17 fulfillment centres across the world, plays an important role in Ymatou’s company strategy.
Ymatou provides two options to consumers, one is buying products from regular listings, and the other one is choosing from a section that’s solely dedicated for discounted products, which is similar to the way Vip.com international works.
Summary: Marketplaces Comparison