How to sell to China? TOP 7 online sales platforms in China: where to sell goods and services?

Are you planning to sell in China, but don’t know where to start? China is the second largest economy in the world, where the lion’s share of sales occurs online. Sixty percent of China’s population purchases online, making this niche a key market for brands and companies looking to expand their business. However, given the many Chinese trading platforms, it is difficult to find a better place to start. In this article, we will introduce you to some of the most popular Chinese online platforms for foreign brands.

What are online sales platforms in China: two directions.

First we need to understand the difference between the two types of marketplaces that are common in China. This will help you decide which e-commerce platform and strategy to use if you want to enter the Chinese market.

China’s domestic e-commerce platforms.

Internal online trading prioritizes sales for the local population. This is mainly used by stores as a way to connect with consumers who use the Internet to view and buy goods.

Many small and even large enterprises create online stores on social networks or create landing pages for sales.

The Chinese market is saturated with such stores, but we are seeing a surge in another type of online markets – cross—border e-commerce, which forces local e-commerce stores to switch to cross-border e-commerce platforms and build their stores on them.

Chinese Cross-border e-commerce Platforms

China’s cross-border e-commerce is estimated at 60 billion US dollars and is one of the largest in the world. Cross—border e-commerce is the online trade of goods between enterprises, consumers and suppliers living in different countries. This means that a person can buy goods from a seller who is located outside the borders of his country and uses a different currency.

Businesses that want to expand their activities should consider cross-border e-commerce as an opportunity to enter international markets that in the past might have been inaccessible due to logistics problems.

The largest Chinese online sales platforms

There are many Chinese trading platforms that offer a unique service for users and are designed for specific demographic groups. However, there are several e—commerce platforms in China that dominate the market and are therefore excellent starting points if your goal is to reach as many Chinese consumers as possible.

Taobao: Chinese “eBay”

Founded in 2003, it is one of the largest Chinese e-commerce platforms, and is also part of the Alibaba Group. The user base is about 755 million people. Taobao is a platform for small businesses. A range of products from electronics, household appliances to cosmetics. Taobao is basically an e—commerce platform between customers and is the leader of C2C e-commerce in the Chinese market.
It also integrates social media features such as live streaming, and even has its own social e-commerce platform called Weitao, which it shares with its sister platform TMall.

Only Chinese citizens and companies can sell on Taobao. However, like most Chinese marketplaces, foreign brands can open a store on the Taobao platform by following a few steps.

First you need to create an account on Taobao, and then create a registered joint venture with a Chinese company. If this is not possible, then the best way to access the Taobao ecosystem is to create a store in TMall Global. We will explain how to do this later, but we believe that this method is much cheaper than creating a completely new company in China.

Pinduoduo: Interactive and social e-commerce

With over 500 million users in China, Pinduoduo is one of the fastest growing e-commerce platforms in the Chinese market. The way Pinduoduo works is unique compared to other platforms on this list, as this application is more like a game than a trading platform.

Pinduoduo (or PD) has consolidated its popularity in small towns thanks to favorable offers and unique opportunities to award the best offers to a large group of buyers.

PDD does not take commissions from sales, reducing entry barriers for new merchants and making a profit through advertising.

Despite the fact that PDD is indeed one of the most basic and inexpensive e-commerce platforms among Chinese online markets, its rapid and steady growth may be a reason to create a store. Many global brands use PDD for one of their e-commerce stores, including Apple and Chanel.

Tmall: marketplace with the highest level of trust

TMall, originally named Taobao Mall, is Alibaba Group’s response to the growing problem of counterfeiting on Taobao. With a user base of about 100 million, TMall is more focused on selling branded consumer goods, as opposed to inexpensive Chinese-made goods on Taobao.

In terms of transaction value, Tmall is the No. 1 trading platform in China with over 64% market share in 2021.

Like its sister platform, TMall only allows Chinese companies to sell on its platform. However, thanks to the TMall Global program, international brands can now sell their products on this Chinese trading platform.

The cost of TMall Global services is actually more expensive than standard tariffs, due to measures to ensure enhanced protection against counterfeit products.

JD.com : Fortune Global 500 Company

JingDong.com or JD.com It was previously called 360buy and was founded in 1998. This e-commerce platform is a member of the Fortune Global 500 club and is one of the largest e-commerce platforms in terms of operations and revenue in China. In 2021, JD com shows good growth: net income reached 218.7 billion yuan, which is 25% more than in 2020.

JD.com with a user base of 552.2 million active customers per year as of 2021 (an increase of 25% compared to last year), it specializes in the delivery of goods using high-tech tools and artificial intelligence, such as robots and drones.

Like Tmall, JD also has its own global e-commerce platform called JD worldwide, which functions similarly to Tmall Global, offering foreign companies to reach Chinese consumers, not yet entrenched in the country.

JD.com focuses on cooperation only with reputable and well-established brands. JD.com It also went beyond the high-tech industries, affecting such market niches as the cosmetics and grocery segment.

Thanks to JD’s global platform, foreign brands can take full advantage of JD’s superior logistics system and reach numerous consumers in the Chinese market.

Chinese marketplace for fashion and lifestyle brands

Despite the fact that the first four platforms offer access to significant demographic groups in China, businesses and brands are likely to be interested in narrower Chinese marketplaces. One of the market niches includes lifestyle and fashion. There are 2 excellent Chinese online platforms in this market segment that focus on the youth and luxury demographics of China

Xiaohongshu

Xiaohongshu, or Little Red Book, or abbreviated RED, is a pioneer in the field of social shopping in the Chinese market, with about 148 million active users (as of November 2021). 90% of RED users are under the age of 34, and 64% of the user base is female with 33% of male users, which is a significant increase compared to 2019, when the majority of users were women (November 2021).

RED combines Instagram-like features such as layouts and filters, as well as comments and other community engagement tools, with its trading platform. Thanks to this, RED’s popularity has grown among young market users in China, where special attention is paid to finding the best and necessary products for fashion and lifestyle.

RED’s target market is young users, men and women who follow beauty and fashion, but it has become home to wealthy users and people who follow trends in the lifestyle, cosmetics and fashion segments.

Thanks to this, Xiaohongshu can become an excellent option for foreign brands that seek to reach a more affluent demographic group of Chinese marketplaces.

VIP.com for unsold goods — beneficial to both buyers and brands

With over 43 million active users, VIP.com It is also a great option for luxury and fashion-oriented brands that want to enter the Chinese market.

Unlike Xiaosongshu, VIP.com it is more popular in small towns and uses discounts and sales as the main tactics of promotion on its platform. This means that VIP.com It is the preferred platform if you are looking for a marketplace specializing in inexpensive beauty and fashion products.

VIP.com It also has a specialized global platform, like TMall and JD, called VIP International, which helps foreign brands sell their products to marketplace users.

Gome

Gome is one of the top 50 companies in Asia and is a competitor of JD and Suning, as it focuses on the sale of electronic equipment through retail stores throughout China. In recent years, Gome has been expanding its activities and now operates throughout China. It is Suning’s main competitor, 360buy, as they both sell electronics and electrical appliances through retail stores.

The Gome e-commerce platform started with the sale of 3C products, but has since expanded into electronics, groceries and more. They provide services in four main categories: goods for mother and child; health/medical goods, such as prescriptions or asthma medications; household goods, such as bed linen and bathrobes, and also offer gifts for all occasions in the “Art of Culture” section, which includes volumes books.

Gome cooperates with Pinduoduo in the field of e-commerce, as the latter is enjoying increasing success.

In fact, if you are looking for the largest online store of household electrical appliances, then Gome is exactly it. It is also the largest private retailer of electrical appliances in China and Hong Kong combined.

Requirements for sale on Chinese trading platforms as a foreign brand

Conclusion

After studying the best Chinese online platforms and choosing the best e-commerce platform for creating a store, what exactly steps should be taken to gain access to this market?

Unless they offer a global or international platform like TMall, JD and VIP.com , foreign brands will have to set up a fully foreign enterprise (WFOE) in China, which involves a deposit of $25,000, an annual service fee and a commission of 1 to 5%. After creating a WFOE, you will apply for an Internet content Provider License (ICP), which will allow you to work with the platforms we talked about above.

We are a company that can help you organize online sales of the above platforms.
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