It likely will come as no surprise that Alibaba retained its stranglehold over retail ecommerce in China in 2016. According to data from iResearch Consulting Group, Alibaba’s business-to-consumer (B2C) marketplace Tmall far outpaced its competitors with a 56.6% share of retail ecommerce sales in 2016.
JD.com ranked second with a 24.7% share, followed by appliance and electronics retailer Suning (4.3%) and flash-sales site Vipshop, or vip.com (3.5%). Yihaodian, the grocery site that Walmart sold to JD.com in June 2016, accounted for just 1.1% of sales in the country, while Amazon’s China operation made up 0.8%.
JD.com has differentiated itself from Alibaba’s Tmall largely by managing its own inventory and shipping directly to consumers, instead of simply connecting buyers and sellers on an ecommerce platform, as Tmall does. The approach has been met with success of late. The company reported net revenue of more than $9 billion in Q3 2016, a year-over-year increase of 38%. Its efforts have also drawn the attention of a foreign player with a similar model—Walmart. The Bentonville, Ark.-based retailer, famed for its mastery of supply chains, this month expanded its stake in JD.com to 12.1%, up from 10.8%.
Both Alibaba’s Tmall and JD.com are taking advantage of an ecommerce market in China that shows no signs of slowing. iResearch estimated that the gross merchandise value (GMV) of B2C ecommerce in China totaled RMB4.7 trillion ($707.5 billion) in 2016, up 23.9% from RMB3.8 trillion ($572.0 billion) in 2015.
iResearch also reported that B2C platforms will continue to steal share away from consumer-to-consumer (C2C) ecommerce sites over the next few years, as the quality of goods becomes an increasingly important factor in consumer purchase decisions.