June 28, 2024
2 mins read

Global E-commerce Giants Compete for Chinese Sellers

A Growing Battlefield

Global e-commerce giants are intensifying their efforts to attract Chinese sellers to strengthen their foothold in the lucrative Chinese market. Recently, Amazon announced the launch of its “2024 Amazon Global Logistics Accelerator Program,” aimed at enhancing cross-border logistics services for Chinese sellers through improvements in logistics products, supply chain management, destination warehousing, and local team building. This move underscores Amazon’s ongoing commitment to fostering partnerships with Chinese sellers.

Similarly, other major e-commerce platforms like eBay have extended olive branches to Chinese sellers. This competitive landscape has seen Chinese sellers rapidly occupying significant positions across various global platforms. As of now, China boasts over 120,000 cross-border e-commerce entities. On Amazon’s U.S. site, Chinese sellers make up nearly 50% of top sellers, contributing to almost half of the third-party GMV.

The Dynamics of Cross-Border E-Commerce

The mutual benefits are clear: Chinese sellers seek new profit avenues, while e-commerce platforms leverage China’s vast and competitively priced product offerings to gain an edge. With China being the “world’s factory,” the synergy between Chinese sellers and global e-commerce platforms continues to break sales records. However, this symbiotic relationship has its challenges.

The competition among sellers is fierce, often leading to a race to the bottom in pricing. This “involution” has become a significant issue, with Chinese sellers undercutting each other to mutual detriment. Moreover, the relationship between platforms and sellers remains contentious, with platforms frequently imposing various fees and stringent penalties, leading to a zero-sum game.

Platforms Intensify Efforts to Attract Chinese Sellers

Global e-commerce platforms are ramping up efforts to attract Chinese sellers. In March, Walmart hosted its first seller summit in Shenzhen, featuring key executives and an official recruitment team to drive engagement. Walmart has introduced a Chinese-language seller platform and simplified the logistics integration process to accommodate Chinese sellers.

Polish e-commerce giant Allegro has also targeted Chinese sellers, offering free training, professional Chinese support, and a simplified onboarding process that allows sellers to upload documents in Chinese without translation.

These initiatives have yielded significant results. In April, three-quarters of new sellers on Walmart’s marketplace were from China, surpassing the 67% recorded in March. Similarly, the Russian e-commerce platform Ozon has seen a rapid increase in the number of Chinese sellers. In November 2022, Ozon opened its China headquarters in Shenzhen, aiming to recruit over 100,000 Chinese sellers by 2024, a goal it achieved by the end of 2023.

The Historical Context and Future Prospects

Amazon, the undisputed leader in cross-border e-commerce, owes much of its success to Chinese sellers. Many Chinese sellers began their global journey on eBay around 2010, benefiting from affordable logistics and lenient platform policies. Wish, another major player, focused on Chinese sellers from its inception in 2011, eventually comprising up to 94% of its user base.

Amazon’s “Marco Polo” initiative in 2015 marked a significant shift, as the company aggressively recruited Chinese sellers, translating its seller centre into Chinese and providing real-time customer support. This effort paid off, with thousands of Chinese sellers registering on Amazon daily from 2015 to 2016.

Today, Chinese sellers contribute significantly to Amazon’s GMV. In 2017, Chinese sellers accounted for $48 billion in GMV, 18% of Amazon’s total. By 2022, this figure had surged to $201 billion, representing 26% of Amazon’s total GMV. eCommerceDB predicts that by the end of 2023, Chinese sellers will generate $238 billion in GMV, accounting for 28% of Amazon’s total.

Navigating Challenges and Opportunities

The rise of Chinese sellers has not been without friction. Practices like “strategic losses,” where sellers initially price products deficient to boost rankings before gradually increasing prices, have led to intense competition and market saturation. This zero-sum game often results in mutual harm among sellers and the broader industry.

Despite these challenges, the demand for Chinese products remains high. As cross-border e-commerce continues to evolve, the focus is shifting towards brand-building and refined operations. Sellers increasingly recognize the need to balance cost-cutting with quality improvements to meet diverse consumer needs.

Conclusion

The journey of Chinese sellers in the global e-commerce landscape is a testament to their resilience and adaptability. As platforms and sellers navigate the complexities of this dynamic market, the emphasis on cooperation and sustainable practices will be crucial for long-term success.

What are your thoughts on the evolving relationship between Chinese sellers and global e-commerce platforms? Share your insights in the comments below!

Joe Zhang

Independent Consultant. 2X Founder and Contributor. Based in Shenzhen, China.

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Joe Zhang

Independent Consultant. 2X Founder and Contributor. Based in Shenzhen, China.

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