Ecommerce is enormously important for Chinese retail: its share of total retail in China was 45% in 2021, leading the world. The foundations of China’s ecommerce juggernauts were largely laid during the SARS epidemic in 2002-2003 as the country entered near-lockdown. Retailers like JD.com adapted to the epidemic by taking orders by phone and email and eventually launching an online platform. Alibaba, which previously only had a small ecommerce platform, also took advantage of the opportunity to found third-party online shopping platform Taobao in 2003. Around this time Chinese consumers started desiring higher quality goods rather than cheap products, and in 2008 Alibaba founded T-Mall, a platform where products have a guarantee of authenticity and face quality control measures. In 2010, JD.com broadened its platform to third-party sellers and imposed similar regulations. As China’s major ecommerce platforms led this trend of increased quality control of online transactions, lower-income buyers began to see fewer affordable deals online. But in 2015, Pinduoduo was launched, targeting China’s lower income and rural area markets by offering lower quality and sometimes counterfeit products.
Presently, these three main companies have expanded beyond their specialties to compete with each other for market share while also continuing to diversify their portfolios. Alibaba established a local consumer delivery business and JD.com is developing its logistics services and operates a real estate development and management business. Each company is also continuing to experiment with new selling strategies, as exemplified by Alibaba’s livestream selling. Alibaba and JD.com have expanded to international markets, while Pinduoduo has concentrated on trying to attract new, higher-income consumers, and has also entered foreign markets with its Temu platform in 2022.
The future of Chinese ecommerce remains bright; China has a major advantage with its extensive logistics system that supports the growth of its ecommerce market. Moreover, thanks to widespread mobile penetration throughout the country, rural areas and lower-tier cities lacking shopping centers or retail markets have especially high interest in ecommerce. Additionally, mobile payment systems such as Alipay and WeChat Pay are significantly ahead of international competitors in terms of accessibility, usability, and rate of adoption.
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