German E-commerce Market Faces Major Shift As Chinese Platforms Gain Ground

Chinese E-commerce Giants Dominate Digital Market

Alibaba, PDD, JD.com, and ByteDance are the four major companies that dominate the Chinese market, with a combined annual revenue of over US$350 billion and 80% of the world’s largest e-commerce market.

With US$978 billion in revenue from Taobao and Tmall, Alibaba remains the largest, but its market share has changed dramatically. Alibaba, which in 2019 shared 70% of the Big 4’s GMV (Gross Merchandise Value) with JD.com, has faced growing competition from newer companies that put an emphasis on low prices and social commerce.

ByteDance’s Douyin has reached US$388 billion in GMV. Pinduoduo’s low-price strategy now captures almost a quarter of the Big 4’s GMV. Meanwhile, Shein has emerged as a significant global force through its parent company, Roadget Business Pte Ltd.

Since 2019, PDD Holdings has expanded by 300%, Shein has expanded by an incredible 1,200%, and ByteDance has become the fifth-largest e-commerce company globally with its 6,000% e-commerce activity.

European Market Entry: Mixed Success for Chinese Platforms Across Regions

With a 40% market share, Alibaba’s Trendyol leads the European GMV market, while Turkey holds a 21% lead. In its first year, Alibaba’s Miravia in Spain generated US$1 billion in GMV, with France and Spain coming in second and third, at 15% and 14%, respectively.

Germany is an interesting case study. Despite being the second-largest e-commerce market in Europe, it only accounts for 7% of Chinese companies’ European business, a situation that is largely due to strong domestic players like Otto, Zalando, and Ceconomy.

Chinese platforms, however, have become very popular: In its first year, Temu made US$750 million, ranking 13th in terms of marketplace size, while AliExpress grew 54% to over US$1 billion, securing seventh place.

Shein’s sales in Germany increased 40% to US$617 million, even though it only ranked 18th among online retailers.

40% of Spanish customers have used AliExpress, compared to just 11% of Germans.

This suggests that there are wide variations in consumer adoption.

It is probable that these trends will continue to alter the dynamics of European e-commerce given its rapid growth and the fact that Chinese e-commerce practices typically precede those of Western markets by a number of years.