The Chinese e-commerce industry is the largest in the world. Alibaba Group topped its Single’s Day (11th November record of USD 38 billion of GMV (Gross Merchandise Volume) in 2019. That is more than 10% of Amazon’s GMV for the entire year!
But because of the dominance of large e-commerce platforms like Taobao, JD.com and Pinduoduo in China, the competition for small merchants on these platforms can be too overwhelming. All these platforms generate “public traffic”, where most people who visit these platforms are attracted by the platforms themselves and not looking for a particular store. On the other hand, we can also generate “private traffic” where customers are looking for a particular store or brand. The best example of this is looking at the difference between Amazon and Shopify.
Shopify Store Template
When you create a store on Amazon, you will have a standard template and become one of the hundreds of thousands of sellers on the platform. It will be hard for you to promote or differentiate yourself with your own branding inside the platform. However, what you lost in identity is made up for by the millions of users that visit the Amazon website every day.
Or you can choose to create a Shopify store instead, having your website, design and branding. It gives you more control over how you want to market your products and company. But what you lose is all that free traffic. You will have to attract your own customers, grow your followers on social media platforms like Instagram and Facebook.
Both strategies have their advantages and disadvantages, and both can be very profitable for the merchants. However, in China, most of the growth over the past decade has been focusing on growing within these large public platforms like Taobao and JD.com.
Yet, according to some reports, over 40% of the time spent online by Chinese mobile users are spent on Tencent Holdings’ assets, and in particular, on WeChat, the largest social media app in China. With …..
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Stanley Lim has spent the last decade in the investment industry. Over the course of his career, he has kick-started a few businesses, worked in the family office industry and most recently in the investment advisory industry. He has been a writer and analyst for The Motley Fool Singapore from 2013 to 2017. He has written close to 2000 articles online, on investment education and market analysis. He is the co-writer of the investment book: “Value Investing In Asia”, published in 2018. Stanley is currently the chief editor of Value Invest Asia.