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Alibaba dominates online sales in China but facing ‘credible’ competition, report claims

Alibaba is continuing to dominate the battle for online shoppers in China despite facing “credible” competition, a report has found.

The retail giant will capture almost 60% of all retail ecommerce sales in 2018, with JD.com a distant second with 16%.

But according to the eMarketer study, new players selling branded products are gaining popularity, particularly in China’s densely populated secondary cities. However, their market shares are still dwarfed by Alibaba and even JD.com

Among them is Pinduoduo, or PDD, described as a Groupon-style retailer that enables consumers to buy direct from wholesalers and factories. PDD is expected to take a 5.2% share, up 0.1% since its launch in 2015.

Home goods specialist Gome, electronics retailer Suning and fashion-focused Vipshop were also identified as “credible competition” despite market shares of 0.7%, 1.9% and 1.8% respectively.

Director of forecasting at eMarketer, Monica Peart, said the growth is being driven in China’s secondary cities.

“China’s smaller cities such as Tier 3, Tier 4 and lower are less urbanized than Tiers 1 and 2, but they are growing rapidly in ecommerce participation as digital buyers in those cities begin to seek out the benefits of more affordable yet genuine products online,” she said.

“Smaller ecommerce players such as relative newcomer Pinduoduo have benefitted from this trend as buyers in lower-tier cities have been less tolerant of the higher prices found on large players such as Alibaba and JD.com. But they are quick to seize upon the relative deals found on Pinduoduo’s platform.”

 

 

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