Imagine a world where your smartphone isn’t just a tool for communication, but your personal shopping mall, fashion consultant, and bargain hunter. That’s the reality in China, where e-commerce has exploded from a blip on the radar to a global powerhouse, capturing nearly 50% of the market. What sparked this meteoric rise? From mobile tech everywhere to innovative giants revolutionising the shopping experience, the factors are as diverse as they are fascinating. Read on as we explore China’s e-commerce boom and look at three trailblazers taking the world by storm.
In past decades, China’s presence in global e-commerce was minimal, with less than 1% market share. Today, China commands nearly half of the global market. Key factors behind this transformation include:
1. Mobile technology: Nearly 98% of Chinese internet users access the web via mobile devices, driving a mobile payment revolution adopted by 72% of users.
2. Internet penetration: With over 900 million internet users, China boasts the world’s largest online population, providing a vast user base for e-commerce platforms.
3. Urbanisation and the rise of the middle-class: Rapid urbanisation and a growing middle class have increased demand for online shopping, with e-commerce catering to evolving consumer preferences. Today, China has 113 cities with populations of over one million.
4. Innovative business models: Giants like Alibaba and JD.com have revolutionised commerce with platforms like Taobao and Tmall, enhancing the e-commerce experience and building consumer trust. Features such as live streaming and rapid delivery have become integrated into the Chinese e-commerce experience.
5. Government support: Supportive policies and regulations have promoted innovation, expanded internet infrastructure, and enabled competition, creating a conducive environment for e-commerce growth.
However, with intensifying domestic competition and a relatively muted economy, Chinese e-commerce giants are expanding overseas to sustain growth and enhance their global presence. They are eager to go global, aiming to transform their reputation from sellers of inexpensive ‘made in China’ products to exporters of entire brands and business models. Let’s look at three Chinese e-commerce giants seeking faster growth abroad – Temu, Shein, and TikTok Shop.
Temu launched in September 2022 and swiftly made an impact. Within a year, it had expanded to 48 countries with over 61 million monthly active users in the US alone. Temu’s low prices, highlighted by its ‘shop like a billionaire’ Super Bowl ad, led to 426,000 app downloads in the US in one weekend. Launching during an economic downturn proved fortuitous for this budget-friendly platform.
Browsing the Temu app reveals a huge variety of products, from steel-toecap trainers to sock aids for the elderly and pregnant women, mostly made in Chinese factories. A stand-out feature is Temu’s gamified experience, which has for example involved users playing virtual farming or fish-feeding games to win free items, encouraging frequent visits and social sharing. Coupled with free shipping and rock-bottom prices, this strategy makes Temu a strong alternative to Amazon.
A key Temu strength is its large-scale data collection, tracking consumer trends and popular products. Unlike Amazon, which sells this data at a premium, Temu gives it to manufacturers for free, allowing them to test the market with a small product range.
Despite its success, Temu faces challenges, including legal disputes with Shein over antitrust issues, allegations of bypassing US anti-forced labour sanctions, and questions about the sustainability of its subsidised pricing. Nonetheless, Temu continues to draw bargain hunters and those seeking a unique shopping experience.
Shein has been around for longer – it was founded in 2008 and was a pioneer in international markets from the outset. The brand has become synonymous with fast fashion, offering a vast array of affordable clothing and accessories. The company’s innovative social media strategy, featuring viral #sheinhaul videos – in which creators sometimes tried on more than 100 items in one go – propelled it to global prominence during the pandemic. Sales skyrocketed from $4 billion in 2019 to $23 billion in 2022.
Shein’s ability to offer thousands of new items daily, thanks to a flexible supply chain and a vast network of Chinese apparel factories, sets it apart. The brand’s low prices—often 39% to 60% cheaper than competitors like H&M—are a major draw for budget-conscious consumers. In 2023, Shein expanded its offerings to include an Amazon-like marketplace, further cementing its position in the e-commerce ecosystem.
Like Temu, Shein has faced significant scrutiny. US lawmakers have accused Shein of exploiting tariff loopholes, and there are ongoing concerns about the environmental and ethical implications of its fast fashion model.
TikTok Shop is tapping into its parent app’s massive user base to pioneer social commerce outside of China. Following a successful launch in Southeast Asia, TikTok Shop debuted in the US in September 2023. The platform seamlessly integrates e-commerce into the social media experience, enabling users to buy products featured in livestreams and short videos.
China pioneered this kind of social commerce with Alibaba’s introduction of shopping livestreams on its Taobao app in 2016. Hosts promote everything from makeup to laundry detergent, attracting huge followings and generating billions in sales. For example, Austin Li, known as the ‘Lipstick King,’ once sold 15,000 lipsticks in just five minutes.
Livestream shopping is now a staple of Chinese e-commerce. In 2022, consumers on Douyin, TikTok’s Chinese sister app, purchased $208 billion worth of goods through this method. However, the model has met with mixed success outside Asia. TikTok Shop’s initial foray into the UK was tepid, leading to a temporary halt in its European and US expansion. Despite this, the recent US launch aims to convert TikTok’s massive American audience into regular shoppers. However, regulatory challenges loom large, with countries like Indonesia banning social media platforms from selling products directly, and US politicians scrutinising the platform over data security and trade practices.
A notable aspect of Chinese e-commerce is the series of innovative sales events over the years that have disrupted the global retail landscape, including:
1. Singles’ Day (11/11): Launched by Alibaba in 2009, this event, also known as Double 11, has become the world’s largest online shopping festival, celebrated on 11th
2. 618 Shopping Festival: Initiated by JD.com to mark the company’s anniversary on 18th June, this mid-year shopping event now involves numerous e-commerce platforms.
3. Double 12 (12/12) Shopping Festival: Created by Alibaba, this event on 12th December extends the shopping frenzy of Singles’ Day and focuses on smaller merchants and local businesses.
4. 8 Shopping Festival: Promoted by Suning, this event takes place on 8th August, providing summer discounts and deals on a variety of products.
5. Black Friday/Cyber Monday adaptations: Originally American, these sales days have been adopted and localised by Chinese retailers, offering significant discounts to Chinese consumers.
To keep on top of these and other cultural and retail milestones around the world, Oban’s Global Marketing Calendar is a useful resource.
China’s e-commerce giants—Temu, Shein, and TikTok Shop—are reshaping the global digital shopping landscape through their innovative approaches and aggressive international expansion. Each platform brings unique strengths to the table: Temu with its gamified, low-cost shopping, Shein with its fast fashion and flexible supply chain, and TikTok Shop with its integration of social media and e-commerce. However, their rapid rise also invites scrutiny and controversy. For digital marketers working in international e-commerce, these trends present both opportunities and challenges.
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Ready to take your e-commerce game to the next level? Contact Oban today to find out how we can accelerate your international e-commerce growth.
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