Ecommerce has become a ridiculously valuable industry, pulling in around $3.4 trillion in the previous year. In the west we’re particularly hung up on Amazon as the eCom flagship – but did you know that worldwide they only just make the top three biggest online companies? The truly incredible thing about this industry is that it is thoroughly dominated by Chinese companies, with four in particular owning 44% of the entire market. This is partly because of the fact that China has a far more advanced ecommerce model with it being the preferred way in which the average person can end up buying whatever it is that they might need at any given point in time.
According to Activate's Technology and Media Outlook 2021 report, the four Chinese companies that dominate global ecommerce are Taobao.com with 15%, TMall.com with 14%, JD.com with 9% and Pinduoduo with a relatively small but still massive 4%. Amazon does pretty well here too with about 13% of the global market, but it’s just one company and China has two that have a larger market share than it.
It's interesting to note that these companies aren’t even selling products themselves. They have destroyed the old school business model wherein you created a product and sold it at a profit or purchased it from a supplier and then sold it at a markup so that you could earn some money. Instead these companies generate revenue by connecting sellers with buyers, becoming perhaps the most lucrative middle men in history.
This just goes to show that the future of many industries might just lie outside of the west, although it’s fair to say that a company like Amazon which has offices all around the world and fulfils orders from many places might have more of a global influence than a Chinese company that relies on a massive native population to drive its sales within a single nation. Still, these companies are valuable which means that they are powerful, and they might have a decisive role in the future of ecommerce.
A word from the author:
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