Comparison of the Top 5 Cross Border ECommerce Platforms in China

While China is no stranger to eCommerce, the idea of Cross-Border eCommerce is however relatively new but growing very fast…

Of course, this isn’t always the case. Just a few years back, China’s strict taxation and foreign trade policies made it very difficult for the foreign company to import and sell their products directly into China, and the idea of Cross-Border eCommerce is virtually none existent.

But in 2009 things started to change…

Back in the mid-2000s, due to a lack of ability for the Chinese consumer to purchase oversea products, many Chinese consumers begin to rely on friends and families who are living abroad to help them purchase brands and products they wanted but couldn’t buy in China.

As a result of the huge demand for foreign products in China, more and more people started to look for DaiGou to purchase foreign products. Later companies such as Ymatou(洋码头) looking to tap into this trend and created the first official Cross Border E-commerce Platform to allow foreign manufacturers to sell directly to Chinese buyers in China.

By 2014, because of the newly opened Bonded Warehouse and the improvement of Chinese Taxation Policy for foreign imports, a great number of Import Cross Border E-commerce Platforms sprang up during 2014-2015, such as Tmall Global, Jumei Global Store, Daling, Amazon Global, B&G, Kaola.com, Suning Global, JD Worldwide, VIP International also enter the Cross-Border eCommerce space.

Today, there are more than a dozen different Cross-Border eCommerce platforms in China in every product category and verticals. And as the industry begins to mature and become more and more complex, trying figure out which platform is best to sell your products into China can be a daunting experience for most foreign brands and products. So, we’ve compiled a list of 5 of the best Cross-Border eCommerce Platforms in China and pit them again each other.

But before dig any deeper on each of these 5 platforms, let us explain the different types of Cross-Border E-commerce platforms and their differences.

Terms You Need to Know

Before we compare the top 5 Cross-Border eCommerce platforms in China. Here are a few terms you must understand first.

B2B – Meanings the platform trades mostly from Business to other Business, for example, Alibaba is a good example of B2B platform

B2C – Meaning the platform trades mostly from Business to Consumer. Platforms such as JD international and TMall Global are strictly B2C Cross Border Platforms

C2C – Meaning the platforms allow trading between Consumer to another Consumer. Think of eBay as a C2C platform, a user lists an item to sell and another use purchase it.

Vertical Platform – Vertical platforms are Cross-Border eCommerce platforms that focus on a specific category or “vertical” of products or brands.

Comprehensive Platforms – Comprehensive platforms are Cross-Border eCommerce platforms that carry multiple categories of product and brands and do not limit them self to any specific category or industry.

Sub Platform – Meaning the platform has a parent platform or company, and the Cross-Border eCommerce platform is only a subdivision. For example, TMall Global and JD Worldwide are derived from TMall and JD.

Independent Platform – Independent Platforms are platforms that focuses only Cross-Border eCommerce trading and do not have a parent platform or company.

Marketplace Platforms – Cross-Border eCommerce Platform that offers or acts like a marketplace is where individuals, businesses, and brands can setup and operate their own store instead of having the eCommerce company to handle transactions and logistics.

Proprietary Trading Platforms – Contrary to Marketplace Platforms, Proprietary Trading means all products or brands are sold directly by the platform company and not the brand itself. For example, Amazon started out as a Proprietary Trader where all books were sold and fulfilled by Amazon, later Amazon added functionality to allow other brands and individuals to sell directly on Amazon but shipped and fulfilled by themselves.

Direct Mail or Shipping – With direct mailing or shipping, the goods will be delivered directly from the brand abroad to the customer. The positive for using direct mailing is that often Chinese consumer will have a higher trust and comfort in knowing that the product they will receive is most likely going to be genuine and not a knockoff.

Bonded Warehouse

In the bonded area import model, the goods from abroad will be shipped and stored in a government-appointed bonded warehouse in a free trade zone. When an order is placed, the goods will be distributed from the bonded warehouse by the domestic logistic system.

With these terms out of the way, let’s compare the top 5 Cross-Border E-commerce Platforms in China.

The Top 5 Cross Border E-commerce Platforms in China

In the 24th July 2017, iiMedia Research, a leading third-party institute who specializes in data excavation and data analysis, issued a ranking list of the Top 10 Cross-Border eCommerce platforms in China for the first half year of 2017.

From the ranking list, we can see that Kaola.com, Tmall Global, Vip International, JD Worldwide, and YMT are the Top 5 Cross-Border eCommerce platforms in China. So below we’re going to take a deeper comparison between the 5 Cross-Border eCommerce platforms.

We’ll take a look at each of these 5 platforms in terms of their Operation Pattern, Application Process, Logistics, Market Share, and Finally Product Categories.

TMall Global

TMall Global is the child platform of TMall which is ultimately all own and operated by Alibaba Group. While nationally within China TMall is the leading eCommerce website, TMall Global places second place in terms of market share compared to Kaola.com.

Operation Pattern: Comprehensive, B2C, Marketplace, Sub-Platform

Market Share: 20.3%

Product Categories: Cosmetics, Maternity & Baby, Food & Health Care, Apparel & Luggage, Digital Appliance

Application Process:

TMall Global has the most significantly special application process. TMall global do not accept any application for setting up stores on their platform, instead, it is by invite only. TMall global will actively look for international brands that are in demand or urgent need by the consumer and the market. You can find Tmall Global Merchant Acceptance Standards here

Logistics:

For logistics, TMall Global has appointed Cainiao Express as the exclusive bonded warehouse service provider. This means that if you want to sell on TMall global and wanted to use a Bonded Warehouse as your part of your logistics you must use Cainiao Express.  But if you want to sell on TMall global and want to use direct shipping as your logistics then you’re open to using Cainiao or any other international logistic company of your choice.

Kaola

Kaola is actually owned by NetEase Inc which is a Chinese Internet company that provides online services focused on content, community, and commerce. Kaola.com is the leading cross-border eCommerce website in China right now with a market share of 24.2%.

Operation Pattern: Comprehensive, B2C, Proprietary Trading, Independent Platform

Market Share: 24.2% (Biggest Market Share)

Product Categories: Fashion & Apparel, Jewelry & Accessories, Sports & Outdoors, Children’s Wear & Shoes, Home & Personal Care, Nutrition and Health Food, Digital Appliances, Fresh Food & Produce, Maternity & Baby Products, Cosmetics

Application Process:

Since Kaola.com is a proprietary trading platform, their main method of cooperation will be to purchase directly from the brand. Because Kaola.com mostly handle their own operations in terms of selling and logistics, in order to sell on Kaola you must apply to become a merchant.

To become a merchant, you must first possess legitimate corporate entities, valid brand authorizations, good brand reputation, and operation status. And if you’re interested in applying to Kaola.com, simply follow these 4 steps to become a partner with Kaola:

  1. Submit an application on Kaola’s website.
  2. Wait for your application to be approved by Kaola
  3. If you’re approved by Kaola, you’ll then receive offer letter via email. Follow the instruction to finish the registration process.

Logistics:

With Kaola also offers both bonded warehouse services and well as direct shipping services. If you choose to use their bonded warehouse services your product will go through the following procedure.

  1. Kaola will purchase products from you
  2. Your products will be transported either by sea or by air
  3. Once your product arrives in China, they will be inspected
  4. After inspection, they will be transfer and store in a bonded warehouse.
  5. Upon an order is placed by a customer on Kaola, your product will be taken to be cleared by customs.
  6. Finally, your product will be shipped by domestic logistics to ensure it is delivered to the customer’s hand on time.

Alternatively, if you want to use Kaola’s direct mailing or shipping services where you will be shipping the product directly from an overseas warehouse to the Chinese consumer below is the general procedure:

  1. Kaola will purchase products from you
  2. Instead of shipping your product to China they will store them in an overseas warehouse
  3. Upon an order is placed by a customer on Kaola, your product will be shipped via international logistics.
  4. Once your product arrives in China, they will be inspected and wait for customs clearances in a bonded area.
  5. Finally, your product will be shipped by domestic logistics to ensure it is delivered to the customer’s hand on time.

JD Worldwide

JD Worldwide also was known as Joybuy.com is the brainchild of JD.com the second largest eCommerce website in China. The company was founded by Liu Qiangdong back in 1998 but it wasn’t 2004 that JD.com official went online.

Operation Pattern: Comprehensive, B2C, Marketplace, Sub-Platform

Market Share: 12.5%

Product Categories: Maternity & Baby, Cosmetics & Personal Care, Nutrition & Health Food, Digital Appliance, Watches & Jewelry, Sports & Outdoors, Car Accessory, Home & Luxury

Application Process:

JD Worldwide offers 4 different store types for their merchants. You can create a Brand Flagship Store, Outlet Flagship Store, Franchised Store, and Exclusive Store. In order to be accepted and set up your store on JD Worldwide, you must have a legal registered corporate entity, a public bank account, a reputable brand, and meet the specific requirement for the store type you want to open.

However, just because you meet this basic requirement it does not mean JD Worldwide will accept your application and allow you to open a store. However, JD Worldwide has a priority list and if your brands fit within the list then your application will be approved right away.

Here is the current priority list:

  • Famous retailers (ex: Costco)
  • Famous international brands (ex. Apple)
  • Famous foreign brands that have never entered the Chinese market before.
  • If your brand is selling products in one of the following industries: maternity & baby, nutrition & health, food, wear & shoes, bags and suitcase, and cosmetics, you may also be qualified for priority recruiting.

To begin your application process with JD Worldwide send an email with the following format to

Logistics:

In terms of logistics, JD Worldwide is far more superior than the other platforms. JD operates its own logistics company with one unify logistic system that ensures efficient shipping and delivery of any products sold on JD.

With direct shipping from countries where JD’s logistics do not have the cover, they are currently cooperating with international third-party logistic corporations such as Kuehne & Nagel, Schenker, etc… Overall JD Worldwide covers more than 50 countries and regions around the world.

Apart from the third-party partnerships, JD Worldwide also owns multiple oversea warehouses in countries like USA, Europe, South Korea, Japan, Australia and so on. This allows JD to carry out external drop shipment in multiple warehouses and deliver products upon an order immediately.

JD’s logistics is truly touched notch with superior customer service and excellent user experience. As for JD national, it is currently the only eCommerce platform with its own logistic team covering 2661 counties and districts in China that guarantees fast delivery when the product from overseas warehouse reaches China.

YMatou

Ymatou.com was founded in Shanghai, China by Chunyan Fan, Hua Cai, Phoebus Zhang, Zeng Bibo. It is one of the first cross-border eCommerce platform and marketplace that allowed an overseas franchise to sell directly to Chinese consumers.

Operation Pattern: Comprehensive, B2C, C2C, Marketplace, Independent Platform

Market Share: 5.8%

Product Categories: Appliance, Electric Appliance & Car Accessories, Home Products, Pets Products, Cosmetics, Sports & Outdoors, Bags & Suitcases, Watches & Jewelry, Health & Nutrition, Maternity & Baby, Apparels

Application Process:

The application process for YMatou is pretty straightforward and simple. Just follow this 5 steps process to submit your brand for approval on YMatou.

Step 1: Estimate and Assess Your Sales.

Step 2: Submit the estimated sales along with merchant information and email them to YMatou

Step 3: Wait for YMatou to Process your application which will usually take several working days.

Step 4: If approved YMato will email you back an agreement for you to sign and resubmit back to them.

Step 5: Finally, you’re not a YMatou merchant, so create your store and start listing your products.

Logistics:

In terms of logistics, YMatou has 3 different types of direct mailing services and 2 different types of bonded warehouse services. It is worth to note that YMatou actually has one of the fastest direct mailing services. The average arrival time for a package from aboard supplier to a Chinese buyer is about 5 days. It’s amazing because it is faster than the average time of the bonded warehouse logistic model.

Direct Mailing Using xLobo Global Express

xLobo Global Express is YMatou’s official international logistics company, and they offer direct mail from most countries around the world. The whole direct mailing process is highly controlled by YMatou, so it is more efficient compared to other logistics companies.

Direct Mailing by Verified Third-Party International Logistic Companies

Alternatively, you can also use one of many third-party international logistic companies that are officially verified by YMatou to handle all your logistics.

Direct Mailing by Unverified Third-Party International Logistic Companies

You can also use any third-party international logistic companies that are not verified by YMatou for your shipping and delivery, but it will not be as efficient and fast compared to the other 2 options above.

Using Bonded Warehouse From xLobo Global Express

xLobo Global Express also provide bonded warehouse service should you want to go that route.

Using Bonded Warehouse from Unverified Third-Party International Logistic Companies

If you don’t want to use xLobo Global Express for your bonded warehouse services, you can also use any third-party international logistics company that offer bonded warehouse services.

VIP International

VIP international is the Cross-Border eCommerce platform of VIP.com or Vipshop.com ( 唯品会). VIP is currently the third largest eCommerce platform in China right after JD.com and TMall.com. Its primary focuses on online discount sales and discount shopping.

Operation Pattern: Vertical Platform, B2C, Proprietary Trading, Sub-Platform

Market Share: 15.7%

Product Categories: Cosmetics & Beauty, Maternity & Baby, Food & Nutrition, Home & Personal Care, Fashion & Apparel

Application Process:

In order to become a supplier for VIP International, you need to have at least one of the qualifications below:

  • The owner of a famous brand
  • The authorized sole agent of a famous brand
  • The authorized sole distributor of a famous brand
  • A branch of a famous brand
  • Chinese Agency of a famous Global brand

If you think you meet at least one of the requirement above then you can submit the required information such as your name, your company name, your company address, your phone number to global@vipshop.com.

VIP International will usually reply your email within 5 business days and if you do not receive a response within that timeframe. You can send another email to feedback@vishop.com to follow up on your application request.

Logistics:

As for logistics, VIP currently owns 11 overseas warehouses, and 4 bonded warehouses in China. Hence VIP international provides support for both direct mail and bonded warehouse service.

Conclusion

As you can see each of these 5 Cross Border Ecommerce platforms in China has its own strength and weaknesses. While, you might think that it would be beneficial to have your brand listed on each platform, the reality however is even you’re some able to get your self approved for every single on of these platforms, you really do not want to be selling your product on them all.

The reason is, first you’ll need to allocate separate resources to manage and promote your product on each one of these platforms. With 5 different platforms you will need to have 5 different customer services to support them. On top of that, each platform has a different set of rules for their logistics, which means you’ll have 5 separate logistics systems to just work with all 5 platforms.

Finally, each platform attracts slightly different type of market and you as a foreign brand must consider which platform will suit your brand and your end goal the best.

Do you want to sell your product or services to Chinese consumers?

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