After years of development, the Mainland e‑commerce market ecosystem has matured, with new retailing operating modes emerging one after another and constantly evolving into new business formats. Mainland e‑commerce platforms are diverse, having different roles and functions.

In expanding their Mainland e‑commerce business, Hong Kong companies should understand in depth the structure of this e‑commerce industry. They should collaborate with various types of e‑commerce platforms based on the development needs of their own business to seek suitable entry points to the local market. When resource allocation allows, they should consider adopting a multi‑platform operating strategy to reach a wide array of consumer groups comprehensively.

E-commerce platforms dominate Mainland’s e-commerce retail market

The majority of Mainland consumers have already acquired the online shopping habit of browsing various types of e‑commerce platforms, while the local e‑commerce retail market is mainly selling through third‑party e‑commerce platforms. Broadly speaking, Mainland e‑commerce platforms can be roughly classified into digital shelf platforms, and emerging “interest‑based” platforms such as live‑streaming, social media and private‑domain platforms, each operating on different models and having different attributes. Therefore, Hong Kong companies should examine the corresponding operating strategy based on the characteristics of the different features of each platform. By choosing suitable platforms and fully leveraging their special features and advantages, they can promote and sell to consumers in general.
 

Digital shelf e-commerce helps expand e-commerce sales

Shelf‑based platforms function like online department stores or supermarkets in that consumers can browse and buy various types of products through websites or apps. Examples of more well‑known shelf‑based platforms on the Mainland include Taobao, JD.com and Tmall. On these platforms, products are classified by category or attribute to make it convenient for consumers to search for and compare goods of different brands and prices before placing an order for the products they favour. Digital shelf platforms mainly operate on a “people looking for goods” model. This means that consumers usually already have a product in mind before they search for it among platform shelves, select options and compare prices until they have found the product they want and complete the shopping process.

In general, shelf‑based platforms are sizeable and have mature operating systems such as well‑run logistics support services, a good payment system and a host of membership programmes. Consumers also consider this type of platform reputable; their product prices are more stable and the products are guaranteed by “authenticity policies”. Consumers generally have full confidence in these types of platforms, which have been operating for many years.

In recent years, while these platforms have gradually expanded into the content marketing business, such as developing short videos and live‑streaming, they still mainly acquire traffic through search engine optimisation (SEO), search engine marketing (SEM) and the platforms’ own recommended algorithm. Compared with well‑known enterprises in the Mainland market, when up‑and‑coming brands or enterprises make an entry into shelf‑based platforms, they have to invest more marketing resources to increase online traffic for enterprises to increase the exposure of products under their brands. The overall characteristics of shelf‑based platforms are as follows:

• Reputable: Having large user bases and lots of reviews, these platforms further boost users’ confidence in shopping online on them.
• Rich product selections: A large range of goods are offered, from daily necessities to high-end luxury goods, meeting the diverse demand of users.
• Well-designed membership system: The multiple membership levels, points redemption systems and exclusive promotional activities of these platforms can effectively enhance user loyalty and repeat purchase rates.
• Mature logistics support services: On these platforms, efficient warehousing and fast delivery networks are integrated to offer next-day or even same-day delivery services. Coupled with real-time logistics tracking, these services can provide users with a seamless shopping experience.

“Interest-based” e-commerce platforms rise rapidly to become the key to increasing traffic

“Interest‑based” e‑commerce platforms are essentially bases for generating online traffic. Unlike shelf‑based platforms, the sales model of interest‑based platforms is “goods looking for people”. They stimulate consumer interest and create additional consumption demand through various kinds of content, thereby keeping people engaged and increasing the sales of branded products.

On these platforms, there is eye‑catching and interesting content, including short videos, live‑streams and posts, so consumers usually spend more time browsing these platforms that combine entertainment with shopping. In addition to using these platforms for shopping, consumers see them as social platforms similar to Facebook or Weibo for seeking everyday information and satisfying their social needs. Different “interest‑based” e‑commerce platforms have various methods of drawing traffic, and their points to note and bright spots include the following:

• Live-streaming e-commerce platforms (e.g., Douyin, Kuaishou): These platforms boost the buying confidence of consumers by letting them learn more about product details through interesting and entertaining short videos and highly interactive “live-streaming marketing” sessions. Consumers can also interact directly with the live-streaming hosts and merchants, allowing the collection of immediate consumer feedback and the offering of limited-time discounts during live streaming. This can effectively elevate user stickiness and buying desires.
• Social media type e-commerce platforms (e.g., Xiaohongshu): These are not only e-commerce platforms that offer products for sale, but also serve as media through which consumers can engage in daily interactions and share experiences. On these platforms, users or influencers can share real content such as their shopping insights, reviews and daily life moments. This way, product recommendations can be spread exponentially through word of mouth to stimulate consumption desire.
• Private domain e-commerce platforms (e.g., WeChat, Weibo): Through close-knit social interactions, these platforms sell products to consumers or provide brands or companies with an independent, controllable private domain traffic pool. For example, displaying and marketing products or making announcements via WeChat’s “Moments” or Weibo’s “Friends’ Updates” is a way of increasing engagement and cohesion among consumers through social groups and raising their buying desire.
• Instant type platforms (e.g., Meituan, JD Daojia): This type of platform focuses on providing instant delivery services by coupling localised lifestyle services with e-commerce functions to respond to consumer demand quickly. They effectively enhance user experience and drive platform traffic by allowing the instant delivery of fresh produce, daily necessities and takeouts to satisfy the need for convenience and timeliness.

A lot of small companies have been attracted to set up shops on these “interest‑based” e‑commerce platforms since the threshold for joining them is usually lower. But local consumers are doubtful of the credibility of some of these companies and are worried that the products they buy may be counterfeits or not as advertised. They are also worried that there may be issues with after‑sales service, or that purchasing experience and product quality are difficult to guarantee. Therefore, when Hong Kong companies use these platforms to draw traffic, they should also develop effective marketing strategies, such as offering impeccable after‑sales services and efficient logistics services to build consumer trust in the company in multiple ways.

Based on the aforementioned characteristics of different types of platforms, Hong Kong companies can choose to set up shops in suitable e‑commerce platforms according to their corporate circumstances and sales strategies so as to reach different consumer groups through multiple platform channels. While considering collaborating with the platforms concerned, however, companies should also gain a thorough understanding of the platform joining guidelines to ensure that their products and services comply with the requirements.

In general, all e‑commerce platforms have their own set of operating rules and admission requirements, such as product standards, logistics and delivery, payment methods and after‑sales service. Before applying to join a platform, a company should carefully read and understand these rules to avoid its online shops being taken down or banned due to violations of regulations.

More relevant articles:

Chinese Mainland's E-commerce Retail Market: A Closer Look

The Mainland’s Huge Online Retail Market