Are Chinese platforms challenging Amazon in Europe and the US?

The short answer is no, for now.

Also the heighten scrutiny on Chinese investment in both Europe and north America make it difficult for the Chinese Tech giant to just ‘buy their way in’ by swallowing smaller companies in both those markets. At least not in the scale they would need to start really appearing on Amazon’s radar in any significant way.

So what is their new Strategy?

Targeting Asian and Emerging Markets

But while Western Europe and The US are increasingly difficult targets, emerging ecommerce market in south-east Asia have proven easier to get into. JD.com still gets most of its revenues from China, but it has expanded its international presence in recent years. 

Joybuy.com is good example of that. It an international online shopping portal. It is the largest shareholder in Tiki, a Vietnamese online shopping platform, and has an ecommerce joint venture in Thailand.

Finding a new formula in the west

But that setbacks don’t stop the big e-commerce plarforms from China to try and find new way into the lucrative western markets. So what is their latest foray into the West?

The latest challenger is JD.com, the well-known Chinese e-commerce company, second only to Tmall (Alibaba Group) in China.

They recently started operating two Dutch retail shops that will be staffed with robots for preparing and delivering packages.

These “robotic shops”, branded Ochama in Leiden and Rotterdam, mark JD.com’s first European foray with bricks-and-mortar locations. This demonstrates the ambitions of the Chinese giant to expand beyond China.

JD.com stated that customers can order products from food, beauty, and home furnishings using the Ochama app. The app allows them to order products from food, beauty and home furnishings and then they can go to the store where robotic arms and automated vehicles will sort and pick up orders. Once a customer reaches the store, they will scan their barcode and have their orders transported to them via a conveyor belt. Delivery being also an option.

And new stores are on their way.

While sounding all that impressive on its own, it shows the desire from Chinese Tech Giant to seek a different approach until they find a working proof of concept and can then build on it and expand.

Cross-border Ecommerce is still the biggest segment by far

Alibaba continues to invest in Europe this year, in a move to competes against Amazon in the European Union’s growing e-commerce market.

Alibaba was still the number one online seller of consumer goods in Eastern Europe last year. Surprisingly to many, Amazon was not on the Top 10 List for the Region, which includes countries such as Poland and Czech Republic.

According to Euromonitor, Amazon is the most popular seller in western Europe. This includes France and Spain. The U.S. ecommerce giant, however, has a 19.3% market share in this region.

The data revealed that Alibaba’s market share rose to 2.9% in 2020 from 2% the year before.

According to Euromonitor International, Alibaba occupied the first place in Eastern Europe e-commerce for 2019. According to data, Allegro, a Polish online shopping site, took first place during the pandemic in 2020, while Wildberries, a Russian competitor, took second. This pushed Alibaba down three places last year.

Online shopping has given Europe a boost this year, increasing the competition. In the midst of multiple Covid-19 outbreaks, stay-home policies and other social distancing strategies have been in place for months.

The report stated that e-commerce sales increased by two-thirds in Italy and Spain for “fast-moving consumer products” (a category that covers food, beverages, and personal care, as well as home care, in the first quarter. This compares with the same period in 2020. At the time of publication, updated figures were not available.

While still an underdogs in the western hemisphere, Chinese E-Commerce giant are gaining ground. Notably by targeting Eastern European Markets.