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E-Commerce Guidance for the Chinese Market

9 min read

E-Commerce Guidance for the Chinese Market

China is now the biggest e-commerce market in the world. There are many aspects of the Chinese market that are different from those in other countries or markets in the world. In this series of articles, we outline some specific considerations for companies that are looking to implement or roll-out their e-commerce platforms in China.  

Table of Contents

Market Overview 

Market Size and Growth

The National Bureau of Statistics of China reported that the e-commerce marketing trading volume in 2017 reached 29.16 trillion RMB (4.2 trillion USD). This increase was by 11.7% year-over-year. Since 2015, China has surpassed the United States to become the largest e-commerce market in the world and has kept a high growth rate. E-commerce is a common type of economy in China with online shopping being quite popular and prevalent, especially in big cities. With the rapid development of technology, the future shopping experience is expected to change significantly. New entrants need to account for this constant change, otherwise they will risk falling behind.

Major Players in E-Commerce (belongs to the Alibaba Group) and control more than 80% of the whole Chinese B2C market; ~50% for, and ~30% for Their market share has remained roughly the same for more than 10 years and it is expected to remain the same for the foreseeable future. For the B2B area, (belongs to the Alibaba Group) has a 45%+ market share of the whole Chinese B2B market. For the Customer to Customer(C2C) market, (belongs to the Alibaba Group) has more than 80% market share. is sometimes referred to as "omnipotent" since you can buy almost anything on it. If you cannot find where to buy a product online, it can likely be found on The difference between the Alibaba Group and the JD Group is that Alibaba acts only as a marketplace. Whether on, or, Alibaba is not the seller. As the owner of the platform, it provides C2C, B2B2C, and B2B business models. The JD Group has only B2B2C and B2C models. It sells its own products on and it is the most similar to

There are also some very popular vertical e-commerce platforms. An example is that of an emerging platform, the C2M (customer to manufacturer) business model. In this case, the customer deals directly with the manufacturers who make products for big and famous brands. This means customers can buy the same quality products without a brand name at a lower price. Another type is to provide custom-tailor service, often used in the apparel industry. For example, more and more people choose to buy their shirts or suits on platforms which could make the products tailored directly to them.

Below is a report from iResearch Inc:

A local market company states that the B2C market will take more and more market share from the online shopping area. This means that more brands and enterprises are establishing their B2C channels. Some of them have launched their own websites or apps. Others have set up their online stores, collaborating with marketplace platforms such as,, and others.

Special Shopping Events

“Double 11” or "Singles Day" (November 11th each year) is now the biggest promotion festival of online commerce in China. This is similar to “Black Friday” in the United States. The goal is to bring in more traffic and orders through attractive promotions. The price is much lower than usual. Based on the GMV (Gross Merchandise Volume) of “Double 11” published by Alibaba Group each year, we can see the following:

The Gross Merchandise Volume of November 11th has been growing at a high rate. Even though the promotion originated with, it is now part of most e-commerce platforms' campaigns. Aside from the November 11th promotion, there are also some special shopping events like group-buy/flash-buy that occur periodically, with dates varying by e-commerce platforms. These are now important factors that you need to consider either from the technology or business perspectives to support these challenges.

Because your platform may face tremendous traffic in a short period of time, from a technology perspective, your e-commerce platform should have the ability to handle the traffic increase by adding more servers without a software update. You may need to take care of two kinds of performance challenges for this scenario:

  • Large query requests to fetch information from your application. It requires the capacity of the web server to handle massive HTTP requests and a stable cache mechanism to respond quickly to the static/not-often-changed information query requests.
  • Large write/transaction requests to your application and database. The database is the bottleneck that needs to handle large concurrent transaction requests. List all scenarios which could impact the database and decrease any unnecessary database pressure. Then, configure the database properly and set up high-availability database servers to backup each other. 

From a business perspective, how do you maintain your inventory for this special event? Keep in mind that it may also require the strong alignment with vendors depending on your business model. How big will your discount be?  Will the event match with your brand strategy? Would faster shipping be required or can you ship your goods to your customers as usual? Are you ready to handle massive returns and refunds? These questions should be considered before publishing or joining these special events. The answers and solutions vary by industry and by company’s business. Some examples are:

  • Prepare inventory that will be dedicated to this special event to speed up the shipping process and to make the shipping process simple. The inventory numbers could be estimated based on your past sales. In your system, you need to link the orders with the special event promotion to the dedicated inventory to distinguish from other orders which requires you to customize or pre-configure the sourcing strategy. For those who has large offline stores, share the stock with online sales channels and customize the stock allocation logic to make it smarter. For example, re-allocate per channels if it meets certain rules. The offline stores are distributed everywhere to shorten the shipping time.
  • All business users and IT maintenance users should standby in case of any issues. For example, prepare all necessary online content like banners, product images, promotion images, in case any updates are required during the event time. Monitor the IT system capacity and run time status for any exceptions. This is also a good practice to guide you for your system performance improvement.

Another big special event is “618” celebration day. This promotion festival lasts a few days in June each year. It was started by in 2010 to compete with Alibaba. Now, most e-commerce platforms and brands join this event as well. 


Depending on where in China your customers are located, you could be dealing with different spoken and written languages as well as currency. China can be divided into three regions (Mainland China, Hong Kong, and Taiwan) as can be seen in the image below:

Below, we list some basic differences between these regions:

Mainland China

Hong Kong (HK)

Taiwan (TW)

Language (Speak) Chinese Chinese (Cantonese)/English Chinese
Language (Write) Simplified Chinese Traditional Chinese/English Traditional Chinese
Currency Chinese Yuan (CNY) HK Dollar (HK $) NTW Dollar (TW $)
Population Around1.4 Billion 7~8 Million Around 23 Million

Law and Policy

According to the Cyber Security Law of the People’s Republic of China (PRC), the data generated by internet applications which serve the Chinese market should remain in China. It requires that your e-commerce platform is hosted in a data center based in China. This is a significant factor to consider when selecting a data center for your e-commerce platform, especially when you are selecting a Cloud solution (Note: at the publication of this article, SAP Commerce Cloud does not yet have a China data center, though it is on the roadmap).  

According to the Administrative Measures for Internet Information Services, all the websites served in China should register for a record to local government before your websites are opened to the public.

According to the Law of the PRC on the Protection of the Rights and Interests of Consumers, certain products under certain categories that are bought by customers online and that can be sold by a secondary party, those customers can request a return or exchange for no reason within seven days from when the buyer receives the products. A survey has revealed that the online products marked with ‘return or exchange within seven days for no reason’ increases customers' trust in the e-commerce platform or seller.

Some popular and commonly used internet application services cannot be accessed on mainland China, such as Google, Facebook, Twitter, YouTube, and others. Instead, you need to use local services such as Baidu, WeChat, Weibo, and Youku. This is not an issue in the HK and TW region.

Information with politically sensitive or illegal words and images are not allowed to be displayed on public applications. Therefore, it is important to verify the customer's inputs before displaying them. For example, when customers submit comments and images regarding their purchased products.


This article is the first in a series about e-commerce in China. If you're interested in learning more, we encourage you to look at the other articles in this series. Please see the top right of this page for related articles.