Market News

Alibaba tops e-commerce market share while facing fresh competition in China

11/07/2018 Wed 12:54 in China by Sharon Kwok

Alibaba will continueto take the top spot of retail e-commerce sales with 58.2% share of the marketin China, but facing increasing competition, according to the latest report byeMarketer. eMarketer has released its forecast ranking of the top 10ecommerce retailers in China, which highlighted that Alibaba will continue todominate the e-commerce market, followed by with 16.3% share.

Over the past fewyears, the dynamic marketplace in China has welcomed some new players that areoffering branded products, which are popular among consumers. The reportreveals that the two giants are facing soaring competition from smaller, morespecialist players which can offer “authentic” goods.

Pinduoduo, or PDD, aGroupon-style retailer that mixes in social buying, will secure the third placebehind Alibaba and this year with a 5.2% share. Started by a formerGoogle engineer in 2015, PDD allows consumers to buy direct from wholesalersand factories at competitive prices. A key factor in PDD’s success to date isthat it has targeted Tier 3 and Tier 4 cites in China, thus attracting newprice-conscious e-commerce customers.

“China’s smaller citiessuch as Tier 3, Tier 4 and lower are less urbanized than Tiers 1 and 2, butthey are growing rapidly in ecommerce participation as digital buyers in thosecities begin to seek out the benefits of more affordable yet genuine productsonline,” said Monica Peart, eMarketer’s senior director of forecasting.

She added, “Smallere-commerce players such as relative newcomer Pinduoduo have benefited from thistrend as buyers in lower-tier cities have been less tolerant of the higherprices found on large players such as Alibaba and, but they are quick toseize upon the relative deals found on Pinduoduo’s platform,”she said.

There are othercompetitors such as electronics retailer Suning and online discount fashionretailer Vipshop, which will account for nearly 2% and 1.8% of retaile-commerce sales respectively, report stated.

Suning has beenexploring multichannel integration over the past few years. This approach hasproved profitable so far, while Vipshop benefits from the flash sales andpartnership with Tencent and

Edited by Sharon Kwok