According to GlobalData, China’s e-commerce market grew by 11.9 percent in 2023, reaching CNY 15.4 trillion ($2.2 trillion). The market is projected to continue expanding at a compound annual growth rate (CAGR) of 9.9 percent from 2024 to 2028, reaching CNY 25.4 trillion ($3.6 trillion) by 2028. This growth is driven by the ongoing shift in consumer preferences from offline to online shopping.
While Alibaba’s Taobao and Tmall, along with JD.com, continue to dominate China’s e-commerce space, newer platforms like Pinduoduo are gaining significant ground. By mid-2023, Pinduoduo’s market share had surged to 19 percent, up from 7.2 percent in 2019, according to Yinma Data Research. In comparison, Alibaba’s Taobao and Tmall held a combined 44 percent, while JD.com had 24 percent. Other players, such as Douyin (leading the growth in live-streaming and short-video e-commerce) and Little Red Book (Xiaohongshu, benefiting from influencer-driven commerce), are also carving out strong niches. Additional platforms, including Kuaishou, Netease’s Yanxuan, VIP Shop, Poison (De Wu), and mini apps within Tencent’s WeChat ecosystem like Weidian and Youzan, further diversify the market. Each platform has its own target demographic and product specialty, making platform selection a dynamic and highly regional decision.
Rather than establishing a physical presence in China, U.S. companies can choose to sell their products via cross-border e-commerce. This option allows foreign firms to bypass the complexities of local registration and benefit from streamlined customs procedures. China’s over 100 cross-border e-commerce pilot zones offer a point of entry for foreign companies looking to tap into the Chinese market without establishing a local entity.
The traditional route of importing products involves setting up a local entity or working with a Chinese distributor. However, establishing a local entity requires navigating complex bureaucracy, while partnering with a Chinese distributor means complying with strict government regulations —which may include product-specific approvals from agencies such as the National Medical Products Administration (NMPA) for cosmetics, supplements, and medical devices; the General Administration of Customs of China (GACC) for imported food products; the State Administration for Market Regulation (SAMR) for general consumer goods, electronics, and product labeling or other relevant regulatory agencies—and paying full tariff rates. In contrast, the cross-border e-commerce model allows foreign companies to sell products under their original entity, without needing to register in China. Additionally, products sold under this model are tariff-free, making it an attractive option for companies without a physical presence in the country.
However, there are limitations. Since 2019, China has applied raised limits on cross-border e-commerce purchases by individual consumers, allowing up to 5,000 RMB (approximately $727) per transaction and 26,000 RMB (approximately $3,782) per year. These thresholds apply to all individual buyers, regardless of nationality. Products must be shipped from overseas, with bonded warehouses in the cross-border pilot zones considered “overseas” under this model. U.S. companies will need to partner with authorized third-party providers (TPs) who handle logistics, warehousing, customs clearance, storefront management on platforms, customer service, and digital marketing.
In 2023, China’s cross-border e-commerce (CBEC) import and export volume reached CNY 2.38 trillion (approximately US$331 billion), growing by 15.6 percent year-on-year. While China does not publicly break down CBEC data by partner country, a 2023 report from the U.S. Department of Agriculture (USDA) estimated that the United States was the second-largest source of China’s cross-border e-commerce imports, holding a 17.9 percent market share in the first half of the year—trailing only Japan. This suggests that roughly US$28–30 billion worth of U.S. products may have entered China via cross-border e-commerce in 2023, primarily in high-demand categories such as nutritional supplements, cosmetics, personal care items, and packaged foods. This underscores the scale of opportunity for U.S. exporters, particularly those targeting health-conscious and brand-sensitive Chinese consumers via platforms like Tmall Global, JD Worldwide, and Kaola.
Antitrust Regulations
In February 2021, China’s State Council introduced Antitrust Guidelines for the Platform Economy. According to the Chinese Government, this action was taken in response to the rise of the digital economy and intended to stop monopolistic behaviors and promote the sustainable and healthy development of online commerce. In April 2021, Alibaba was fined $2.8 billion when the State Administration of Market Regulation (SAMR) found the company to have abused its dominant market position. Since then, the major platforms that used to deny access to any competing eCommerce platform’s link within their app, have removed the ban on competitors. This has allowed both merchants and consumers more flexibility in their marketing and purchasing activities.
Significant Shopping Holidays
Singles’ Day (November 11) remains China’s largest annual online shopping event, and the 2024 festival marked a significant rebound in consumer activity. According to estimates by data provider Syntun, total sales across major e-commerce platforms during the 2024 Singles’ Day event reached approximately 1.44 trillion yuan (US$197 billion), representing a 26.6 percent increase from the previous year. While leading platforms like Alibaba and JD.com did not disclose specific gross merchandise value (GMV) figures, both reported substantial growth. Alibaba noted that 45 brands, including prominent U.S. companies such as Apple and Nike, each surpassed 1 billion yuan (approximately US$138 million) in sales on its platforms. JD.com experienced a more than 20 percent increase in shoppers and reported double-digit growth in transaction volume. Notably, categories such as home appliances – currently enjoying a robust subsidy through the central government’s ongoing “consumer goods trade-in program” – , AI-enhanced electronics, and winter apparel saw significant year-over-year growth on JD.com. Additionally, imported food and beverage products experienced substantial increases in sales, highlighting opportunities for U.S. exporters in these sectors.
The 618 Shopping Festival, founded by JD.com, is considered the second-largest shopping festival after Singles’ Day and China’s largest mid-year shopping event. Originally a one-day sale on June 18, it now runs for over a month, with presales starting as early as mid-May. All major e-commerce platforms participate, offering extensive discounts and promotions.
Despite the overall growth, consumer behavior indicated a shift towards domestic brands, with over 60 percent of surveyed consumers expressing increased spending on Chinese products. This trend underscores the importance for U.S. companies to emphasize unique value propositions and brand differentiation when targeting Chinese consumers.
Livestreaming eCommerce
Livestreaming is a very popular form of eCommerce in China where Key Opinion Leaders (KOLs) conduct live video broadcasts of themselves while they market different goods to their audiences. The pandemic accelerated the adoption of livestreaming. According to the China Internet Network Information Center, consumers who purchased products or services over livestreaming platforms reached 597 million as of December 2023, accounting for 54.7 percent of total Chinese netizens. The prominent livestreaming platforms for live shopping are Taobao, Douyin, and Kuaishou with products ranging from jewelry and cosmetics to cars and real estate.
The greatest advantage of livestreaming eCommerce is its ability to reach a great number of people spread throughout China, especially those outside of major cities. By targeting livestreams to rural and lower-tier cities, companies can increase brand awareness and expand their audience to all parts of China. Many companies have found success by working with local digital marketing partners to develop a social media marketing strategy and support its implementation in China.
Social Media Marketing
China is the world’s largest social media market, fostering a diverse online landscape and innovative social platforms through video sharing and online reviews. Powered by 5G, AI and VR, social media has evolved to more scenario-based and service-oriented platforms as a smarter, simpler, and faster way to produce and distribute content.
The leading social media platforms in China include WeChat, Douyin, QQ, Baidu Tieba, Little Red Book, Weibo, Kuaishou, QZone, Meipai and Douyin Huoshan. Wechat is the most popular application for mobile users in China and has functions that include not only messaging but a huge array of services through “Mini Apps.” Douyin is the most popular short video app and has attracted massive users, including celebrities, influencers, and key-opinion-leaders. Another prominent platform particularly among young and affluent Chinese—Little Red Book—is China’s social community for shoppers, where shopping recommendations, travel itineraries, and lifestyle advice are shared and posted by nearly 200 million active users.
Social media marketing has become a digital arena for brand promotion and customer engagement. U.S. companies looking to build a presence and increase awareness in the Chinese market should consider taking advantage of social media platforms to learn consumer behavior and reach out to specific audiences for marketing strategy and business growth.
Intellectual Property Rights (eCommerce)
Protecting intellectual property rights on China’s eCommerce platforms remains a persistent challenge for U.S. businesses. The enactment of the eCommerce Law of the People’s Republic of China, effective January 2019, provides for a general legal framework to better regulate the industry. This law introduced “notice-and-takedown” mechanisms, enabling individuals to request platforms to remove listings or links selling products that violate established IP rights. To effectively engage in these mechanisms, companies must have their patents and trademarks registered in China, a prerequisite for engagement with eCommerce platforms.
To effectively protect IP, companies need to familiarize themselves with the distinct takedown procedures implemented by various eCommerce platforms in China, as procedures for submitting requests can vary significantly across different platforms. Given the vast scale of these platforms, monitoring them for infringing goods demands significant time and resources. Many firms opt to employ local agents who specialize in monitoring China’s major eCommerce platforms. Nevertheless, as a substantial portion of business-to-business and business-to-consumer transactions occur on these platforms, developing an effective IP enforcement strategy necessitates a robust online component. Keeping pace with the evolving landscape of eCommerce and IP protection in China remains a critical aspect of safeguarding intellectual property for U.S. businesses operating in this domain.