The Chinese E-commerce and me/Roshel Moshayev



Today, e-commerce is a common trend in China. It has syncs into the lifestyle of an average Chinese citizen. It is not uncommon to see people today that never have the need to leave their houses to buy anything in a store if they do that maybe they just want to do a little window shopping or sight-scene. This is due to the vibrant e-commerce operations of the major key players in china's E-commerce trade. That is Taobao, Tmall, and Jingdong (JD). I know a friend, in fact, my neighbor that once told me, she has that the last time she stepped into a supermarket or a major store for shopping I about two months. I was a bit marveled, thinking it was an unfortunate incident that happened to her, but later realized what she actually meant was that she consistently engaged the services of e-commerce platforms to order whatever she needed in the house. That is a typical example of how Chinese people live today. Life is more convenient, easier and even shopper-friendly. You can order online and pay for anything you need from groceries, clothes, electronics, furniture, kitchen utensils, shoes, cosmetics, and you won't believe, even food.

Now, let's consider the players.

Taobao Marketplace is a consumer t consumer (C2C) platform created by the e-commerce giant, Alibaba. The objective is to engage small business owners and perhaps individuals to open an online store facility that would render service to consumers in Chinese-speaking regions. The number of registered users now stands at over 375 million, making it about 80% of the Chinese online market.

Taobao Mall or simply called TMall was founded by Alibaba group in April 2008. Its main objective was to be dedicated to the B2C target market. in a way to compliment the C2C market operations.

Taobao Mall established itself as the destination for quality brand name goods for Chinese consumers. Taobao Mall launched an independent web domain, Tmall.com and enhanced its focus on product verticals and improvements in shopping experience in November 2010. As of October 2013 it was the eighth most visited website in Chinese e-commerce front.

In 2008, Taobao fueled the overall growth of the Chinese online shopping industry through execution of the "Big Taobao" strategy with the aim of becoming a provider of e-commerce infrastructure services for all e-commerce market participants.

Jingdong (JD.com), formerly known as 360Buy, is another major player in Chinese online e-commerce platform and could be considered as one of China's largest B2C online retailers and now listed on NASDAQ.

JD.com started with a focus on online direct sales selling electronics products on 360buy.com. As it gained popularity, it started accepting other retailers as an e-commerce marketplace.

Jingdong's gross merchandise volume, or GMV, increased from RMB32.7 billion in 2011 to RMB125.5 billion in 2013.

The number of products JD.com offer has grown from approximately 1.5 million stock-keeping units, or SKUs in 2012, to approximately 40.2 million SKUs in 2015.

JD.com had 12.5 million, 29.3 million and 47.4 million active customer accounts and fulfilled approximately 65.9 million, 193.8 million and 323.3 million orders in 2011, 2012 and 2013, respectively.

JD.com made a strategic decision in 2007 to build and operate Jingdong's own nationwide fulfillment infrastructure. JD.com operated 86 warehouses with an aggregate gross floor area of approximately 1.5 million square meters in 36 cities and 1,620 delivery stations and 214 pickup stations in 495 cities across China as of March 31, 2014, and had 24,412 delivery personnel, 11,145 warehouse staff, and 5,832 customer service personnel as of April 1, 2014.

Leveraging this nationwide fulfillment infrastructure, JD.com deliver a majority of the orders directly to customers Jingdong's shelves, over 70% of which JD.com re-delivered on the day the order was placed or the day after. As of March 31, 2014, JD.com provided same-day delivery in 43 cities under Jingdong's 211 programs and next-day delivery in another 256 cities across China.

Though there are some other smaller e-commerce sites but none of them could easily compete effectively with these three major e-commerce sites in China. As a spill-over of the e-commerce trade, the courier industry too has blossomed and it has evolved small entrepreneurs into bigger and vibrant business. Companies such as SF Express and ZTO Express, just to mention a few are good examples of this e-commerce trade benefits.

Consequently, Alibaba is still regarded as Chinese e-commerce giant, and with its ownership of Taobao C2C platform and Tmall a B2C platform it dominates over 60% of the e-commerce market in China, while JD.com trails behind it. But all together it has been a tough and fulfilling marketing warfare, each player striving so hard to take dominance in the fiery e-commerce market share in China and beyond.

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