What is China’s ecommerce secret?
While we all know of Alibaba’s success, tens of billions of dollars worth of goods are sold directly from China to consumers globally every year – with virtually no press coverage, no case studies or venture capital. This is the smooth evolution of a business that did not exist before 2010. In the 2010s, AliExpress and Wish launched, and most recently, Joom. A few years before that, DHgate, SHEIN, LightInTheBox opened but started to see significant growth only in the last decade. They are either Chinese online retailers sourcing from local factories or marketplaces consisting of China-based sellers. They do not sell in China. The businesses that sell through those platforms are small companies, rarely backed by capital, and mostly focused on producing a single line of products. Most have no Instagram following – or an account at all – but they do have profits. The platforms do most of the work of attracting customers and matching them with the selection of products.They represent an invisible but significant part of global ecommerce. The model is simple – they make products consumers want at prices they are willing to pay and at quality worth the price.
Services like Wish or SHEIN are mostly unknown to anyone, but their target customer base. Both of those companies’ apps are consistently in the top 10 most-downloaded shopping apps on both iPhone and Android app stores. They organize the shipping and distribution of their suppliers’ goods to individuals, retailers, drop shipping companies, small national ecommerce companies and so on. AliExpress has over 440 million monthly visitors. Wish has 100 million, SHEIN 50 million, and DHGate 25 million. There are dozens of other websites. Combined, they almost equal the total of eBay’s global traffic ($85 billion).
According to SCMP’s Chinese news site Abacus, SHEIN’s sales amounted to $2.83 billion in 2019. Estimates put Wish at above $10 billion GMV, and AliExpress is aiming to reach $10 billion GMV by 2022-2023 in Russia alone, according to Reuters.
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