We have published the first version of this article in the beginning of 2020, not too long after China’s new eCommerce Law went into effect in 2019, when all the major cross-border eCommerce platforms have finished their transition to full compliance. Since then we have been updating this post yearly, tracking the changes that happened in this exciting market. This is the latest revision, updated in the beginning of 2022.
Today the China market is open, perhaps more than ever, to foreign brands wanting to sell cross-border. The market is getting mature, it now adheres to a strong set of standards, and is more organized and structured than in previous years.
All these factors clearly have a positive effect on market size as it showed unprecedented growth: almost 20% annually in both 2020 and 2021 – according to China Business Intelligence Network News. Total volume of cross-border eCommerce in 2021 is estimated to reach 14.6 trillion yuan (2.3 trl USD).
Let’s look at the structure of the market. According to Chinese research company iiMedia, the share of independent stores (eCommerce websites, run by the brands themselves), doubled in the last few years. If in 2016 about 1 in 10 shops were independent, in 2020 it is 1 in 5. This trend clearly has a lot of momentum, so we can expect the share of stores outside of main platforms to grow even further. Which comes as no surprise – stores, operated independently, enjoy numerous benefits: flexibility in store features and functions, freedom in choosing policies, and full access to customers’ data.
Having said that, 80% of the market is still held by marketplaces, they are still the major platforms for foreign brands to sell their goods, an especially competitive way for foreign brands to sell to China.
So how should brands choose between the many different platforms that cater to cross-border selling in China? To answer that, we list the top 5 Chinese cross-border eCommerce platforms in 2022.
1. Tmall Global
Opened in 2014, Tmall Global is the largest cross-border marketplace for foreign brands. It is operated by Chinese eCommerce giant AliBaba – the company behind such platforms as TaoBao, Lazada, and the Chinese national version of TMall.
Unlike TMall, Tmall Global is not open to purely domestic mainland companies, the platform only cooperates with overseas companies that have physical presences abroad. It has to have an overseas registered trademark, and “a stellar reputation and business standing abroad” – as TMall puts it.
This way, Tmall Global positions itself as a platform for world’s top brands selling high quality goods. The platform aims to cater to China’s high-end consumers, satiate their increasing demands for top-level items, and harness their high spending power.
Customers, who are mostly middle class young women (up to 35 y.o.), living in large cities, know what they’re getting on Tmall Global: direct access to premium foreign brands and their catalogs.
Kaola is a relatively new player on the cross-border eCommerce market, and it may look like an odd one out. To begin with, it wasn’t an eCommerce marketplace per se when it started – Kaola would operate by itself, buying and importing goods wholesale and selling them to customers.
Lately, however, Kaola opened its virtual doors to sellers, becoming a proper marketplace. The volume of such brand-operated stores is still much smaller than Kaola’s own operations.
In the autumn of 2019 Alibaba (owner of TMall and TMall Global), bought Kaola, making the Tmall Global + Kaola team the runaway leader of Chinese cross-border eCommerce.
3. JD Worldwide
Never one to let Alibaba snap up an eCommerce space without competing for a slice for themselves, Tencent set up JD Worldwide to compete in the cross-border market. Launched in 2015, JD Worldwide has succeeded by leveraging the large existing user base of JD.com – second largest Chinese marketplace.
JD Worldwide is featuring almost 10 million SKUs from nearly 20,000 brands. Product categories run the gamut from nutrition and healthcare to home appliances and car-related items.
JD Worldwide is divided into multiple national and regional ‘pavilions’. The global cross-border eCommerce platform currently has a strong exports focus. To facilitate this approach, it has established presences in Russia and Indonesia to support export merchants there.
4. VIP International
Market share: 9%
Information for sellers: https://h5rsc.vip.com/h5rscSupportInvestme/h5rscSupportInvestme/index.html?lang=en
VIP Shop is China’s third biggest B2C marketplace and leading flash-sale eCommerce platform, and this sales model largely carries over to its cross-border branch.
Launched in 2014, VIP International ensures 100% authenticity for products sold on the platform. SImilar to the way Kaola operated in the first years, VIP International is also self-operated, it uses direct overseas procurement alongside its own wing of delivery partners. Because of this, it is able to deliver some goods from its urban warehouses within 12 hours.
Lately, however, there are signs that cross-border eCommerce is losing its high priority position for VIP Shop – the link to the international site is no longer featured on the main website.
Xiaohongshu doesn’t even have a proper desktop version – users are instructed to install the app.
Market share: 5%
XiaoHongShu (literally “little red book”) was founded in 2013 as a product review platform. Following years of rapid growth in popularity, it is now transformed into what can be called a “Chinese Instagram”. Similar to instagram, social posts are based on pictures or short videos, the majority of the user base are quite young (70% are below 30) and female (up to 80%).
Abundance of insightful customer-written product reviews earned XiaoHongShu a reputation as a reliable source of information for a variety of products. Early on, XiaoHongShu added eCommerce functionality to the platform, becoming one of the prominent domestic platforms. While it is still smaller than giants like TMall or JD, its very young audience and unique social-media-based model has a lot of potential (especially for fashion and luxury brands) that can be realized in upcoming years.
International division of XiaoHongShu is called RED Mall and would also be a great place to sell for brands targeted at younger, dynamic audiences.
Forging Your Own Path
The above five are the most successful Chinese cross-border eCommerce platforms as of 2021 / beginning of 2022. These all represent exciting opportunities for companies wishing to sell their goods cross-border to China.
However, going back to what we started this article with, with the popularity of such platforms, it’s also very possible for your products to get lost among the huge variety of available goods. For companies wanting a bit more control over product presentation, promotion, and performance, a tantalizing option can be to set up one’s own specialized platform. This does mean a lot more of your own research, preparation, development, operations – but it will pay off in the end by greater visibility, flexibility, and overall control of your operations.
TMO Group has considerable experience and expertise in this area, and has successfully guided multiple major brands to cross-border eCommerce success in China. If you’re interested in seeing what TMO can do for you and your brand, check out our solutions page or get in touch with us!