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Four strategies of China’s top 10 e-commerce apps

By Eva Yoo

Screen Shot 2017-01-26 at 10.01.45 AM

Pushing advertisement online and offline has been the typical strategy of China’s e-commerce giants to bring in customers, explaining why e-commerce sector is one of the toughest battlegrounds for freshly born startups since they have little money to spend on advertising. However, the trend is changing.

As startups like Bolome, combining live streaming into cross-border e-commerce, and Yitiao, a WeChat public account-based e-commerce platform with high-quality content and storytelling around their handmade products, even the e-commerce behemoths are following the trend of live streaming and content marketing. Of course, Chinese e-commerce giants were not lazy on their investment and M&A to consolidate the market.

Seeing the ranking, Alibaba stayed competitive in its forte, e-commerce sector. Alibaba’s C2C e-commerce platform Taobao ranked first, its B2C e-commerce platform Tmall ranked second, its second-hand retailer ranked seventh, and its electronics retailer Suning ranked the eighth. The report was jointly published by Cheetah Global Lab, Cheetah’s big data platform libra and 36kr.

China’s e-commerce market will get even bigger, with a boost from the Chinese government. Online retail sales could reach 10 trillion yuan in 2020 as the country’s online population will pass 1 billion, growing by 7.8 percent a year from 2015, according to the 2016-2020 e-commerce development plan released by the Ministry of Commerce and other government departments. The e-commerce market will employ over 50 million people by the end of 2020, according to the plan.

1. Live Streaming

Taobao, JD and Mogujie added live streaming to their platform. Online celebrities live stream and recommend products on the video, and shoppers can click on the link while watching the video to buy the featured product.

Online celebrities, mainly female broadcasters in their 20s and 30s, try on brand cosmetics and clothing at home. Online celebrities in overseas countries visit the local supermarket and explain each product while putting them in the cart and visit the local cosmetic shop to get further explanation of the cosmetic product from the clerk.

2. Content is king

Some e-commerce platforms added content-reading features to their apps, such as Taobao Headlines (淘宝头条) and JD Findings. Since Alibaba’s content cannot go on WeChat public accounts, Alibaba had no option but to come up with a content service on its e-commerce platform to encourage their customers to get to know more about their products.

Vipshop is a Guangzhou-based online discount retailer for brands in China. After listing on New York Stock Exchange, the company reported its revenue up 38.4% YoY to 12 billion RMB (1.8 billion USD) in the third quarter of 2016.

3. Consolidating the market using M&A and investment

Some e-commerce companies showed consolidation. Hangzhou-based Mogujie now takes control of its previous rival Meilishuo (ranking 20th in the list) through a stock swap in January last year. Ranking 5th in the list, Mogujie was founded in 2011 by a former Alibaba engineer.

Suning is an electronic product focused retailer in China. The company invested in Eight Days, an e-commerce startup targeting university students to get a grip of post-95 consumers in April 2016.

4. Focusing on the second-hand market

Xian Yu (meaning Idle Fish), a second-hand e-commerce has risen from no.10 to no.7. Alibaba spent 15 million USD to acquire Xianyu in March 2016. The customers can use their smartphones to run their stores, and add promotional voice recordings to sell their products, which makes the app more like a social app.

Other e-commerce companies include Zhe800 and Juanpi. Pinduoduo is an e-commerce company invested by James Mi, the co-founder and managing director of Lightspeed China Partners.

Source:: Four strategies of China’s top 10 e-commerce apps

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