China’s top 4 B2C websites, JD, Jumei, Dangdang and Vipshop announced financial reports in Q2 2015, JD further inproved its business scale while suffering from greater losses. Jingdong lost over 1.8 billion yuan in the past year.

JD in Q2 2015 gained a revenue of 45.9 billion yuan (about US$7.4 billion), an increase of 61% year-over-year, mainly due to the increase of active users and orders; Vipshop totaled a net revenue of 9 billion (US$1.5 billion), 77.6% increase compared with 5.1 billion in the previous year; Jumei got a revenue of 1.963 billion yuan (US$308.1 million), 100% growth compared with US$154.4 million the same period last year; and Dangdang got a revenue of 2.312 billion yuan (US$373 million), a YoY increase of 29.8%, which was the slowest among the four companies.

Also read: China Mobile Shopping Market Value Exceeds RMB36 Bln in Q1 2015

Short-term accommodation booking platforms, Airbnb and Homeaway, the success of which attracted a lot of attention. In the mean time, you may be wondering how China’s local Airbnbs are doing; this article will give you an overview.

Xiaozhu Short-term Accommodation (xiaozhu.com)

Short-term accommodation appeared long before Airbnb, and China’s “Airbnbs” actually began from online classified information platforms, as mayi.com, muniao.com and etc. Xiaozhu short-term accommodation (Xiaozhu) was the closest in concept and business model with Airbnb. However, the exact clone of Airbnb model may not work well in China as proved; Xiaozhu had to adapt to localize its business.

By accelerating the growth of the supply end, Xiaozhu is devoted to building an orderly platform for C2C (consumer to consumer). As of July 2015, the platform covered more than 200 cities, and the number of accommodations exceeded 50,000 and about 10,000 individual house owners. The number of transactions has increased by four times compared with that in early 2015.

Different from Airbnb, Xiaozhu concentrated more on the business operation than pure platform. Through landlord service training, house keeping and searching for high quality houses, Xiaozhu intends to build a brand and reputation among Chinese users.

Tujia Short-term Accommodation (tujia.com)

Xiaozhu mainly targeted at first-tier and second-tier cities while Tujia mainly at tourism destination cities market, which was similar with HomeAway.

In terms of the business operation model, HomeAway and Tujia are totally different. Tujia cooperated with about 80% of China’s top 100 real estate developers, providing design ideas and solutions of houses to make it more in line with consumes’ expectations. The standardization of new houses could solve the shortage and quantity problems of Tujia.

In addition to renting houses from the developers, from the management point of view, Tujia would also support short-term hotel accommodation by standardized services and a large number of houses. In the future, Tujia would further integrate online and offline resources and transform to a combined model of both B2C and C2C.

Zhubaijia Short-term Accommodation (zhubaijia.com)

Zhubaijia was a special existence in China’s short-term accommodation market. It targeted domestic outbound tourists who would rent houses abroad for a short period, which is different from Xiaozhu and Tujia.

Zhubaijia was originated from the Asian office of Wimdu in October 2012, formerly known as the “European Airbnb”. After Airbnb entering China, it first expanded the needs of Chinese outbound tourists, which was almost coincident with the strategy of Zhubaijia. However, many houses and services from Airbnb couldn’t be guaranteed and suitable for the Chinese, which was just the superiority of Zhubaijia. Zhubaijia had its own set of access and audit standards of houses: the platform would follow the Putonghua proficiency level of landlords, attitude towards Chinese, reception of Chinese tourists, response speed, cleanliness, traffic, facilities and so on to search for good accommodation sources. In addition, Zhubaijia would supply a series of services including consultancy, language services, delivery, dispute resolution and others.

Most short-term platforms including Airbnb generate revenues by charging a commission while Zhubaijia does not charge any from users or landlords. The future business model of Zhubaijia would be to generate revenues through related outbound travel services, and might support personalized services for different users.

With the development of the online travel market and the popurity of the tourism, short-term accommodation would usher in new development opportunities. And to gain profits, China’s short-term accommodation operators must change to meet with China’s unique situation; or they may be out of the market.

Also read:  China Travel Market to Reach $617.4B in 2015

China Internet Magazine released a list of top 100 e-commerce companies in China in Q3 2015.

Also read: Moda, Tmall Virtual Dressing Room Debuted

In Q2 2015, China’s online shopping market reached 872.54 billion yuan (US$136.77 billion), with a high level increase of 39.6%, which accounted for 12.3% of total retail value compared with 10% in 2014.

The transaction value of mobile shopping market exceeded 443.45 billion yuan (US$69.51 billion), an increase of 133.5% far higher than the overall growth of the online shopping market, which has become the main driving force for the rapid development of online shopping market in China.

Also read: China’s Mobile Market Analysis in Q2 2015

China’s personal care online shopping market included goods as oral hygiene products, hair care products, body care products, facial cleaning products, cosmetics, perfumes, etc. Transaction values of China’s personal care online shopping market was 206.88 billion yuan (US$32.60 billion) in H1 2015.

C2C sales accounted for 75.3% which still pioneered e-commerce models. Various subdivisions of personal care products and advantage in price gradually attracted more offline personal care consumers shopping online.

Tmall and Jingdong respectively accounted for 48.4% and 21.8% of B2C personal care online shopping market. As the largest domestic B2C platform, Tmall could attract more consumers with overwhelming advantages; Jingdong, the fourth largest internet company in China which was only next to Alibaba, Tencent and Baidu, gained returns after category expansion strategy and large advertising placement.

With the rapid development of China’s economy and rising living standards, China has become one of the world’s largest personal care market. Relying on the huge internet population and improving consciousness of health, personal care online shopping market would have better development opportunities.

Also read: China’s Mobile Market Analysis in Q2 2015

Transaction value of China’s mothercare products on the online shopping platforms reached 190.24 billion yuan (US$29.67 billion) in the first half of 2015, including products such as infant formula, supplementary foods, diapers, baby supplies, baby clothing, toys, pregnant women supplies and so on.

Apart from deals on the official websites, all the transactions of mothercare products were completed on B2C and C2C platforms. C2C (consumer to consumer) platforms accounted for 69.7% of sales pursuant to overseas purchasing of various categories of mothercare products; Taobao and Baidu led the C2C market in China.

Tmall and Suning are the top two B2C platform for mothercare products, accounting for 60.9% and 14% respectively.

In China, over 16 million infants were born every year and the number of infants aged 0 to 3 years was more than 70 million. Large demand for mothercare products drvies China to be the second largest country of mothercare products market, only next to the United States.

The post-80s, who were familiar with online shopping and became accustomed to purchase related products online, promoted the maturity and development of the industry. Male shoppers of infant formula reached over 55.8% in 2014 and the ration was to keep increasing this year.

Also read: China E-commerce Market to Reach US$3.8 Trillion in 2018

Total retail sales of China consumer goods were 26.24 trillion yuan (US$4.11 trillion) in 2014, an increase of 12% compared to the previous year. The growth rate of the Chinese retail market has dropped for five consecutive years. More than two-tenths of responding retailers have reduced opening new stores and the average number of employees fell by 0.8% and 1.2% respectively in 2013 and 2014 according to Deloitte.

Consumption in education, travel, culture, entertainment and others gradually occupied more share on consumers’ expenditure in the past few years. In the next 6 months, customers tend to spend more on food and beverage, travel, entertainment, investment, investment, home appliances and so on.

State-owned enterprises managed China’s industry in most aspects with overwhelming advantages. In recent several years, state-owned enterprises have given up much control to promote more dynamic market.

The growth rate of Chinese consumer goods market has declined following the slowing macroeconomy and residents’ income. Total retail sales of Chinese consumer goods were 26.24 trillion yuan (US$4.11 trillion) in 2014, an increase of 12% compared to the previous year. About 23% companies didn’t open any new stores in 2014 according to Deloitte.

Also read: 22% Online Shopping Spend Are Newly Created Demand

Transactions of China’s apparel online shopping market reached 413.05 billion yuan (US$65.08 billion) in H1 2015, including women and men’s clothes and excluding bags, shoes and children’s clothes.

Apparel faced the most frequent transactions on the B2C and C2C platforms in China. C2C sales accounted for 67.7%; Taobao is one of the typical C2C platforms.

Tmall had the largest market share on apparel online shopping market, accounting for 76.2%. As a platform gathering millions of merchants and brands, Tmall provides users variety of options.

Online shopping platforms usually offered affordable products on both B2C and C2C. Consumers could buy products across the world without limitation of time and distance. However, existing problems disturbed the further expansion of online shopping:

• some merchants were lack of credibility and integrity
• some products when received look different from online photos
• after-sale services were not good enough
• potential privacy and security problems

Also read: China Mobile Shopping Turnover Surpassed PC in Q2 2015

Transaction values of China’s B2C online market reached 503.6 billion yuan (US$78.58 billion) with an increase of 49.7% in the third quarter of 2015 compared to the same period in 2014 according to Analysys.

Although China’s B2C market tended to slow down while it maintained a modest growth in the third quarter with 4 percentage points higher compared to the growth rate in the second quarter of 2015.

Owing to the Double 11 shopping festival and Black Friday cross-border shopping season, China’s B2C market is expected to achieve a much larger transaction sales. And from November to December 2015, Chinese online shoppers are expected to spend US$150 billion in total and the average expenditure will reach US$209.87 according to Adobe Digital Index.

China’s online shopping market has maintained a relatively stable structure: Tmall (54%) led the market with an overwhelming advantage, Jingdong (23.2%) came next, and followed by Vipshop (3.3%), Suning (3.2%) and Gome (1.6%).

Total online transaction values on Tmall reached 91.2 billion yuan (US$14.25 million) on Double 11 in 2015. Although the transaction sales during Black Friday shopping season this year haven’t been reported, consumers spent an average of US$79.22 per order and per capita consumption of more than US$156.25 on Nov 20th according to Ymatou.

Also read: China Retail V.S. Online Shopping 2015

China’s online retail market reached 945.1 billion yuan (US$143.5 billion) with a growth rate of 45% in Q3 2015 according to Analysys. The growth rate was lower compared with the previous quarters in 2015.

The growth rate of China’s online retail market slowed down in 2015. The market tended to mature. However, total online retail sales only accounted for 12.3% of total retail sales. The online market still faced enormous development opportunities.

More shoppers were active on the mobile end than PC in Q3 2015. Mobile online sales reached 524.3 billion yuan (US$79.6 billion) which surpassed PC as the major online shopping channel as of Q3 2015.

The business pattern of China’s B2C market remains the same in Q3 2015. Tmall and Jingdong dominated the market both in market and business innovative capacity. E-commerce suppliers were trying to win subdivision market to seek a breakthrough.

China’s online retail market has been stabilized since 2014. Three business formats have shaped, online fair, online department store, and online discount retailer. Tmall, Jingdong, and Vipshop were representative companies of each format.

Tmall was the earliest online fair platform in China which has built a relatively perfect system for followers. Tmall has been devoted to building a high-quality shopping platform by strict selection of merchants and to provide consumers a safe and efficient platform. Total online transaction values on Tmall reached 91.2 billion yuan (US$14.25 million) on Double 11 in 2015.

Jingdong started as an online magneto-optical store, but soon diversified, selling electronics, mobile phones, computers, etc. Self-built delivery stations and pick-up stations were the core of Jingdong’s diversified services.

Vipshop was a leading online discount retailer for brands in China. The Company offered high-quality and popular branded products to consumers throughout China at a significant discount from retail prices targeting at women buyers. Vipshop reported net revenues up by 63% to 8.67 billion yuan (US$1.36 billion) in Q3 2015.

Also read: China Retail V.S. Online Shopping 2015

On March 24 2016, China Ministry of Finance, the General Administration of Customs and the State Administration of Taxation jointly issued the “notice on cross-border e-commerce retail import tax policies”.

From April 8 2016, China will implement cross-border electronic commerce retail sales (enterprise to consumers, B2C) import tax policy and adjustment of personal postal articles tax policy.

Cross-border e-commerce retail goods will no longer be charged by personal postal articles tax but imposed tariffs on goods and import value-added tax and consumption tax. For goods that do not belong to cross-border retail personal products or do not have electronic information of the cross-border transactions will be taxed according to the existing provisions.

The good news for cross-border online shoppers is, products on cross-border e-commerce platforms can get instant customs clearance.

Currently reasonable quantity of imported goods for personal use are charged a personal postal articles tax, which is a combined taxation of customs tariff, import VAT, and consumption tax and is still lower than regularly imported goods. And, it can be exempted from tax if the tax payment is no more than 50 yuan.

In accordance with the new cross-border e-commerce retail import tax policy, cross-border e-commerce retail imports of goods in a single transaction has a limit of 2,000 yuan and an annual limit of 20,000 yuan for personal transactions. Within the limited value of imports of cross-border e-commerce retail import goods, tariff rate is temporarily set to 0%; import VAT and consumption tax have temporarily taxable amount of 70% levy. The 50 yuan tax payment exemption will no longer apply.

According to the news released by the Ministry of Finance, in order to optimize the tariff structure, make it convenient for travelers and consumer declaring tax, and improve the efficiency of customs clearance, China will adjust the personal postal articles tax policy (four tax categories of 10%, 20%, 30% and 50%) to three categories of 15%, 30% and 60%.

Category 1 goods (15%) are items of major MFN with zero tariff; category 3 (60%) are for high-end and luxury goods; the rest fall into category 2.

Also read: China Cross-border Online Shopper Insights 2015

As 40% china online consumers buy foreign goods, cross-border e-commerce in China will hit $85.76 billion this year according to the analysis of eMarketer.

E-marketer estimated that China’s each online shoppers will spend an average of $473.26 on foreign goods. By 2020, the cross-border consumers will account for 50.7% of total digital consumers, up from 20% in 2014.

The growth of living standard and global digital sales platforms greatly boomed China’s cross-border e-commerce market. Alibaba’s Tmall Global, JD Worldwide, and other B2C global platforms provide convenient accesses for both sellers and buyers to trade. China’s consumers prefer foreign goods such as milk powder, diapers and pet food, which make international brands break the market quicker and easier.

On April 8 2016, China implemented cross-border electronic commerce retail sales (enterprise to consumers, B2C) import tax policy and adjustment of personal postal articles tax policy. Cross-border e-commerce retail goods are no longer charged by personal postal articles tax but imposed tariffs on goods, import value-added tax and consumption tax.

Some product such as jewelry and infant formula has slightly increased due to the new tax policy. But, the marketer analyst Shelleen Shum noted, “the demand for foreign goods via the cross-border e-commerce channel is still expected to remain strong due to better prices compared to offline retailers, perceived quality and better variety.” She added that since the merchants selling on these B2C platforms have to be authorized, they are considered more trustworthy.

B2C platform sales are expected to take up a growing share of cross-border e-commerce market in 2016. The cross-border consumer will be a quarter of the total population by 2020 according to estimation of eMarketer.

Thanks to the combination of overseas travel, increased internet usage, exposure to foreign brands and convenience of online retail, as well as the surging demand of foreign products, China is projected to become the largest cross-border e-commerce market by 2020.

Also read: Chinese online shoppers insights 2016

The online retail market in China reached 1.59 trillion yuan (US$244.6 billion) in the second quarter of 2017 (up 31.2% over Q2 2016), with B2C sales accounting for 860.5 billion yuan (US$132.4 billion), an increase of 32% over the second quarter of 2016.

The second quarter is the traditional peak of the online sales season in China, with JD.com’s 6.18 (June 18th, a major promotional activity for online sales) having caught on and developed into a summertime companion to 11.11 (the winter sales peak, comparable to the US’s Cyber Monday).

This year, retailers unveiled major promotional initiatives including advertising, discounts, and interactive and live activities. At the end of Q2, data showed that Tmall had captured 51.3% of the online B2C retail market, with JD.com as its primary competitor with 32.9%.

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Tmall was able to leverage big data to better meet consumer demand and envisage different demand scenarios, improve its shopping guides, and broaden its distribution channels. JD.com reached a total turnover of 119.9 billion yuan (US$184.5 billion) during its 6.18 promotion, breaking its prior record; it also introduced a series of offline promotional activities called “6.18 Offline”.

Vipshop harnessed a drive for quality among consumers as a new growth engine, with the slogan “Global selection, genuine articles”, while splitting off its finance business and restructuring its logistics business.

A new round of competition in online retail is in the offing, even as major players continue to experiment with foreign brand offerings, improving logistics, and expanding into cross-border e-commerce.

China’s B2C apparel market reached 307.74 billion yuan (US$46.37 bn) in Q2 2017 with an increase of 47.3%.

Tmall has 80.7% market share in China’s B2C online clothing market in Q2 2017, followed by JD (8.7%) and Vipshop.

The online retail market in China reached 1.59 trillion yuan (US$244.6 billion) in the second quarter of 2017 (up 31.2% over Q2 2016), with B2C sales accounting for 860.5 billion yuan (US$132.4 billion), an increase of 32% over the second quarter of 2016. Read more »

Also read: China cross-border e-commerce market 2017

China online retail market totaled 1,974.59 billion yuan (US$311.69 billion) with an increase of 41% YoY in Q4 2017 according to data from Analysis. China’s B2C online retail market reached 1,189.35 billion yuan (US$187.74 billion) with an increase of 43.2%.

Total transactions on Tmall grew by 45% in Q4 2017, accounting for 60.9% of the total B2C market in China. JD grew by 35% to 25.6% market share, followed by Suning and Vipshop.

China’s FMCG spending grew by 4.3% in 2017