Top 5 China Shopping Apps: China Ecommerce Trends (2019)
According to Jiguang's report at the end of November 2018, the total number of online shoppers using Chinese ecommerce apps installed on their mobile devices grew from 207 million to 783 million within just one year. The penetration of ecommerce in China has reached 71.1% of the total Chinese population. With the population of China reaching over 1.4 billion this means there are over a billion people on China's shopping apps. In terms of spending, Emarketer estimates that spending on China's shopping apps reached USD 1.53 trillion!
With China shopping apps experiencing such tremendous growth, competition is becoming more and more fierce. New players are forced to fight for even a sliver of market share but nonetheless, there has been a steady stream of new entrants to the market causing constant shifts in the China ecommerce landscape.
Foreign brands players entering the market should take their time in choosing which marketplace to work with. In this blog we'll cover the prime selling points, focuses, and specializations of the largest China shopping apps. Hopefully, this will be the perfect article to inform you about which China Ecommerce platform to choose for your business.
Top 5 China Online Shopping Sites
#1. Taobao: The Undisputed Leader in The China Ecommerce Market
#2. Pinduoduo: Where Group Buying and Social Commerce Meets
#3. JD.com: JD.com: Luxury Goods, Top-Notch Logistics, and more!
#4. XiaoHongShu: Content-driven Ecommerce Platform
#5. Tmall: The Premium China Ecommerce Experience
Ranking: Top 5 China Online Shopping Apps in 2019
The widespread availability of smartphones gave rise to the popularity of mobile shopping apps which has helped further drive the growth of China Ecommerce. China Shopping apps have become the most popular way for users to access online shopping. According to research from China Internet Watch, over 80% of Chinese online sales were generated from mobile apps, and this trend is expected to continue in the future.
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Check out the below graph to see the number of MAUs on China's largest e-commerce platforms for an idea of the rankings. However, remember MAUs does not necessarily translate into revenue, so take these figures with a grain of salt.
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The China Ecommerce market continues to see tremendous growth, but it's impossible not to notice that the growth is gradually slowing down. With more and more competition entering the market the landscape has seen consistent innovation. However, challenges lay ahead, as new laws put into effect in early 2019 have increased the administrative burden many of these platforms face.
#1. Top China Shopping Apps: Taobao: The Undisputed Leader in The China Ecommerce Market
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Platform Statistics:
Average Monthly Users (MAUs): 540.27 million
Install Penetration Rate: 52.5%
The Alibaba-backed app has always been a synonym for "online shopping" in China. Ever since its launch in 2003, it remains the most preferred China shopping app and continues to act as a trend-setter for other ecommerce platforms. Operating on a C2C business model, Taobao allows the sale of goods and services between individuals.
For a direct comparison, it acts like the Chinese equivalent of E-bay (without the auction style) with a marketplace focused business model. Any person in China can register to easily to become a merchant and sell to users on the platform, with Taobao acting as the platform and agent in between.
With this business model, it's no surprise that there is a huge range of products and services available on the platform. Nearly anything you can imagine can be found on Taobao and even things that might be beyond your imagination. The dominant position of Taobao is due to its advanced logistics providers, strong incentives for both purchasers and sellers, and its place as the trendsetter for Chinese ecommerce.
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The Double 11 Festival Showcasing Total GMV Of Alibaba's China Ecommerce Platforms in 2018.
One example of Taobao's dominance was the creation of the Double 11 shopping holiday in 2009. Due to the popularity of this shopping holiday, Brands and competing for Chinese online shopping sites have had to follow the trend and offer promotions on the same day in the hopes of capturing a piece of the pie. Even foreign brands that do not usually participate in third-party shopping festivals, like Apple, now offer promotions on this day.
When we take a look at last year's data, on the day of Double 11, Mobile Taobao's daily active users saw a rise of 63.4%. The Double 11 shopping festival dwarfs other popular shopping holidays like Black Friday in the US. The creation of this shopping holiday has been called by many as an "Ecommerce Miracle."
Noticing the recent rise of "social commerce" apps like XiaoHongShu, Alibaba has also recently started implementing some social media aspects into its E-Commerce experience on both Taobao and T-Mall. There are now live-streamers on the platform who showcase products and act as KOLs on the platform. E-commerce brands can work with these KOLs to showcase their products and drive sales. This has been successful in luring KOLs away from other platforms as they are able to seamlessly sell products directly on the Taobao and T-Mall platforms without the risk of upsetting their followers for being too "salesy."
For 2019, Alibaba has just announced a partnership with Starbucks, that enables a seamless beverage and food-ordering experience by using the app. By the end of April, Alibaba offered on-demand delivery services for more than 2,100 Starbucks stores in 35 Chinese cities. Collaborations like these and its non-stop desire for innovation makes Taobao the undisputed leader of China shopping apps.
#2. Top China Shopping Apps: Pinduoduo: Where Group Buying and Social Commerce Meets
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Ever since its launch in 2015, Pinduoduo has seen explosive growth. Within just three years of launching Pinduoduo rose to become the 2nd most popular China shopping app. In fact, it is the fastest growing app in the history of the Chinese Internet. Its Chinese name 拼多多 literally means to combine a lot of purchases.
What makes Pinduoduo different is that its primary features revolve around group-buying. This means that the more people buy a product the cheaper the products get. Naturally, this leads to users sharing the products with others in the hopes of getting cheaper products.
To further incentivize newly registered users, there are special RMB $1 deals to help users get familiar with buying on the platform. Regular flash sales and limited time offers occur every day to boost the customer return rate. By setting up time limitations it shortens the customers' decision-making process and encourages impulsive buying.
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Statistics on the second largest China Shopping App, Pinduoduo (Source: Techcrunch)
Pinduoduo integrates its paying method with the largest standalone social media app in China, WeChat. The more users share about their products, the greater the chance they have of receiving a discount, which leads to tons of deals on Pinduoduo being shared across social media platforms like WeChat.
Through utilizing this word-of-mouth business model, it has generated a huge amount of sales through users posting and sharing product information. This organic content voluntarily generated by the customers themselves makes Pinduoduo one of the most unique of China's online shopping sites.
The platform has proved most popular to residents of 2nd and 3rd tier cities, with lower income and consumption power. However, it should be noted that Pinduoduo's users are on the platform looking for deals, so this might not be the best platform for selling premium goods. Pinduoduo's unique business model has led it to climb the rankings and secure its place among the top China shopping apps.
#3. Top China Shopping Apps: JD.com: Luxury Goods, Top-Notch Logistics, and more!
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JD.com (otherwise known as JingDong) started with a focus on the direct sale of electronic products in the 1990s. However, JD only really started to grow when it took its business online. It slowly added more and more categories until it developed into the all-around China e-commerce marketplace it is today!
The company has been recognized as a secure provider of not only domestic products but also goods from around the world. With just a push of a button, customers can get direct access to many global brands, including those which do not even have a physical presence in the country. With its nationwide logistics network, JD.com offers both same-day and next-day delivery. By getting its hands on the logistics network as well, JD, in fact, is the only China ecommerce platform that controls every part of its supply chain.
JD.com has even launched its own shopping holiday in the same vein as Alibaba's Double 11. JD's shopping holiday is called 6.18, and is celebrated during the first 18 days of June. Like Double 11 other platforms have begun to participate in this holiday. This holiday has developed into the second-largest China ecommerce holiday behind double 11 over the last few years.
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JD even opened up its logistics arm, JD Logistics, for investment in February 2018. It was able to raise $2.5 billion at a $13.5 valuation. It's logistics arm has given it a competitive advantage among competing China shopping apps.
JD's worth is further proved by its collaboration with Walmart. Since 2016, the retail giant was confident enough to hand over all of its Chinese e-commerce business to JD, in exchange for a 5% equity share. Speaking of shareholders, JD is also backed by Tencent with maintains an over 21% equity stake.
JD.com is a leader in terms of luxury sales among China online shopping sites. With its well-developed logistics network, it is on its way to expanding its business empire globally by bringing more overseas brands into the Chinese market.
More and more foreign luxury brands including Swiss independent luxury watch brands ORIS, Tissot and TITONI, Italian fashion house MOSCHINO, etc, have also confirmed strategic partnerships with JD. For luxury buyers looking for security in their purchasing and exposure to overseas brands, JD.com is the ideal China shopping app.
#4. Top China Shopping Apps: XiaoHongShu – Content-driven Ecommerce Platform
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The Logo of XiaoHongShu
Average Monthly Users (MAUs): 85 million
Install Penetration Rate: 4.8%
Launched in 2013 by Miranda Qu and Charlwin Mao, XiaoHongShu, literally the "Little Red Book", is a social ecommerce app with over 250 million registered users as of 2019. With a focus on beauty and fashion, it acts as a platform for people to post and share shopping tips, product reviews, and lifestyle stories. With the aim of authentic information sharing, the platform has successfully developed into a trusted source of advice and recommendations for its users (mainly female shoppers).
Noticing users' demand for buying foreign goods, XiaoHongShu launched its own cross-border ecommerce platform, the "RED store" in 2014. It connects Chinese consumers with global brands by enabling users to buy overseas products directly through the app. Since then, XiaoHongShu has formed strategic partnerships with many overseas brands including Lancôme, Swisse, and Innisfree (Brands can open a brand account/digital store on XiaoHongShu). As of 2017, the platform has reached 6.5 billion yuan sales.
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App Interface of XiaoHongShu's "RED Store"
XiaoHongShu has been very successful in building a community of user-generated content (UGC). It has created a shopping cycle on the platform, which users –
(i) Read shopping guides/product reviews from other users
(ii) Make a purchase through the app
(iii) Publish product reviews about the product
(iv) Communicate with other users about their shopping experience
To maximize the power of content marketing, XiaoHongShu invited famous celebrities and KOLs to open verified accounts and share beauty tips to other users. For example, FanBingBing has amassed more than 10 million followers on XiaoHongShu. Her following is so active that every face mask she ever endorsed was sold out on the platform. With celebrities settling in, XiaoHongShu has generated considerable traffic and further boosted user commitment to the platform.
Still, with over 3 billion pieces of content on the platform, the sheer volume of content makes it very difficult for XiaoHongShu to monitor. As of July 2019, the app was removed from the Android App Store due to government intervention. It was accused of facilitating the sale of restricted, forbidden and fake products, which included tobacco, electronic cigarettes and medicinal products such as skin-injection skits. According to Baidu, there were over 95,000 articles related to keywords "Cigarettes", "Smoke", "Tobacco" etc. on XiaoHongShu. All the related content has been removed upon the outbreak of the scandal.
Such an incident reveals the difficulty of monitoring a large volume of content for the UGC platform. According to reports released in the second quarter of 2019, XiaoHongShu's 500-person content audit team deletes an average of 4,285 notes a day, but it's still not enough to prevent the outflow of inappropriate information. In fact, in recent years, some users have complained that the content on XiaoHongShu has become too commercialized, filling with advertisements and fake information. To rebuild people's trust towards the platform, XiaoHongShu is actively participating in web cleanup campaign to get rid of spam, or any type of inappropriate content.