Taobao is powerful but probably should not be the first word to describe Chinese retailing and consumers’ choices.
T-mall and JD might be considered as the second generation e-commerce in China, where branded goods are sold.
With the rise of Chinese middle class and their disposable incomes, retailers found that they are willing to pay a little extra to get a sense of some kinds of “premium”.
So there arises a wave of e-commerce efforts that are selective about their offerings, in terms of quality and design. Meanwhile, some marketplace will emphasize on their own brand (website/marketplace), instead of the brands of the products – somewhat similar to “AmazonBasics” but more correctly “AmazonPremium”.
Yanxuan (网易严选), by NetEase (NASDAQ: NTES), might be the most successful one.
It started with products made by original manufacturers who supply to top international brands, hitting consumers’ sweet spot in price and quality.
Xiaomi has a similar strategy but featuring more of its own products or affiliated products. on Xiaomi Youpin (小米有品), independent of its core Mi Store (小米商城).
Alibaba has its response under Taobao’s name called Taobao Xinxuan (淘宝心选), making Xinxuan its own brand.
Updated
- From NetEase 2018 Q4 earnings report, we could see its E-commerce net revenues were RMB6,678.7 million (US$971.4 million), an increase of 43.5%
compared with the fourth quarter of 2017. (Its e-commerce revenue includes Yanxuan and Kaola) - 2018 full year net revenues from e-commerce were RMB19,235.5 million (US$2,797.7 million), an increase of 64.8% compared to RMB11,670.4 million for fiscal year 2017.
- And Amazon is in talks to merge its China business with NetEase‘s e-commerce site Kaola, ranked as the No.1 cross-border import retail e-commerce platform in China.
- The new e-commerce unit will be as important as gaming to NetEase, with 3 sub-teams: Yanxuan, Kaola and Amazon China. The latter two might combine into one team.
- And Yanxuan has opened it first offline store in Hangzhou last December
