Global e-commerce players under pressure amid China's "value for money" battle

Analysts expect that discount e-commerce will take centre stage during the upcoming holiday shopping season in the West and China's Singles’ Day, reshaping the global online shopping landscape. In China, the world's largest e-commerce market, a "value-for-money battle" has emerged, driven by economic uncertainty and a slower retail recovery following the easing of COVID-19 restrictions late last year. Meanwhile, fast-growing platforms like PDD Holdings' Temu and TikTok Shop, owned by Bytedance, have gained popularity in Southeast Asia, North America, and Europe. These platforms offer inexpensive Chinese goods at a time when cost of living concerns are paramount. Disruption in online shopping China's reputation as a major exporter of consumer products has expanded to include its e-commerce marketplace dynamics, causing a significant disruption in online shopping worldwide. Sharon Gai, former head of global key accounts at Alibaba and author of "E-commerce Reimagined," noted, "These marketplace dynamics that first emerged from China or were invented in China are now dominating the Western world. Other online retailers are struggling to compete." The trend towards low-cost platforms is not occurring in isolation but is influenced by macroeconomic challenges such as economic uncertainty in China and inflation in the United States and Europe, which are squeezing consumer spending. Discount competitors Discount competitors like Pinduoduo, Douyin, Temu, and Shein are investing billions in subsidies and discounts to capture market share among consumers seeking affordable products. Amazon is set to ramp up discounts during its "Prime Big Deal Days" on October 10–11. The battle for the bottom is expected to intensify with the entry of TikTok Shop, which will focus on Chinese-made goods in the US, similar to the success of Shein and Temu. Indonesia is even considering banning e-commerce transactions on social media to protect offline merchants from the potential flooding of the market with cheap goods from TikTok Shop. Rise of budget online retailers The rise of budget online retailers globally is filling a void in the low-cost e-commerce sector, which was previously dominated by platforms focused on selling higher-margin items to achieve profitability. Tech analyst Rui Ma explained, "There was a clear vacuum for the discount retailer online experience... There is still so much more room to grow in the discount arena." As discount online retailers gain market share, executives worldwide are grappling with pricing pressures. Trudy Dai, CEO of Taobao and Tmall Group, highlighted the "value-for-money battle" as an area of major investment in Alibaba's latest quarterly earnings report. (With Reuters Inputs)

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Global e-commerce players under pressure amid China's "value for money" battle

In China a "value-for-money battle" has emerged, driven by economic uncertainty and slower retail recovery following the easing of COVID-19 restrictions.

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