Online retail sales in China soared past $1 trillion in China in 2017, according to Digital Commerce, while the WEF revealed that this year the global superpower claimed 42% of the world's e-commerce market, up from less than 1% a decade ago.
The boom in China's digital economy, heavy investment and the evolution of a burgeoning startup culture in the nation are responsible for that growth. And it is set to continue gathering pace as, earlier this year, the Chinese government announced that 802 million people are now using the internet. That figure represents just 57.7% of the country's population, indicating that number is only set to skyrocket over the coming years.
All this adds up to a country that is the ideal location for e-commerce startups to thrive and grow.
Ahead of Innovation Enterprise's Digital Marketing & Strategy Innovation Summit in Beijing, we look at some of the most exciting e-commerce startups currently operating in China.
Founded in 2015 in Shanghai, Pinduoduo has stormed onto the Chinese e-commerce market and in three short years become the leading Chinese app for social e-commerce, as well as the fastest growing app in the history of the Chinese internet.
Pinduoduo offers a wide range of products from groceries to home appliances, but its USP is the way in which it blends the social aspect of sharing and messaging with online group-buying. It also offers extreme discounts that would put Groupon to shame, usually offering around 90% reduction on products, using bulk-selling as a way to undercut its competitors.
With 55 million users on the site every day, the company is now worth around $24bn, having raised $1.6bn in its IPO in August this year.
In an open letter to shareholders when the company went public, Pinduoduo CEO and founder Colin Huang, a former Google engineer, stated: "We think the e-commerce business is closely tied with social impacts and responsibilities, and therefore its growth and value should be shared with the public."
Headquartered in Beijing, MissFresh is an online meal kit service that delivers fresh produce in 20 Chinese cities. Founded in 2014, the company has latched onto the demand for fresh, healthy and ethical produce, providing local and seasonal produce which is guaranteed to be "always fresh" with minimal, recyclable packaging.
"Ordering food online can be unsettling as we are used to seeing, touching or even smelling items before we buy them," the company's website reads. "Quality is of the utmost importance to you and that's why it is to us too! At MissFresh, we shop for products with you in mind, choosing healthier ingredients (low in sodium, fat and sugar) and selecting the freshest produce available."
In September, it was announced that it had raised $450m from investors, including Goldman Sachs and Tencent Holdings, which CFO Wang Fun said would be used to develop MissFresh's supply chain, cold chain logistics infrastructure and its smart retail technology.
It was also revealed that the company planned to set up 10,000 front-end warehouses in 100 cities across China.
Developed in 2011 by Tencent, WeChat is the largest messenger platform in China, with more than 1 billion monthly active users in the last quarter of 2018, according to Statista. Its platform has grown so huge it has introduced the options for people to sell and buy products using the platform over the last few years.
Youzan is the largest third-party WeChat shop platform in China, which many large WeChat accounts use as their main e-commerce channel. The platform offers more than just online purchase, allowing brands to customize its WeChat shop with sidebars, music and videos, as well as conducting marketing campaigns and discount promotions through a variety of templates for businesses to quickly build their WeChat store.
It boasts of 2.5 billion sales of goods since it began five years ago, and was recently valued at $800m.
Founded in 2014, Beijing-based startup Meicai has created an app that helps farmers sell vegetables to restaurants. Meicai, which translates to "beautiful vegetable", was founded with the goal to source vegetables for around 10 million small and medium-size restaurants in China and allows restaurant owners to order specialty vegetables directly from farms.
Its goal is to disrupt traditional retail operations by cutting out the costly, often inefficient middlemen in food production and retail.
It frees farmers from the early-morning trek to their local market and gives chefs certainty about their supplies, explained Meicai's founder Chuanjun Liu in an interview with Wired. "It's win-win – farmers get higher wages and restaurants cut their costs," he said. "And we can predict demand to inform the farms how much to grow."
This month, the company raised around $800m at a valuation of about $7bn, having grown from a valuation of about $2.8bn pre-investment in its previous funding round in January this year.
To find out more about the landscape of e-commerce in China or to reinvigorate your digital strategy, visit Innovation Enterprise's Digital Marketing & Strategy Innovation Summit in Beijing on November 21–22, 2018. See the full agenda and by tickets HERE.