Key Takeaways
- Chinese online shopping platforms now command approximately half of the internet retail market in key Southeast Asian nations like Indonesia, Thailand, and the Philippines.
- Major Chinese players including Alibaba, TikTok Shop, Shein, and Temu are expanding their global reach, driven by slower domestic economic growth and increased trade friction.
- Alibaba’s annual Singles’ Day event is becoming a global phenomenon, directly competing with established international shopping holidays like Black Friday.
- Filipino fintech company FundPark has experienced rapid growth, arranging $3 billion in loans for Chinese e-commerce businesses in just over a year, highlighting the swift international expansion of these sellers.
- Despite the rise of Chinese platforms, American e-commerce giants like Amazon and Walmart maintain dominant positions in markets such as the United States.
Chinese E-Commerce Dominance in Southeast Asia
Chinese online retail platforms have captured a near 50% share of the internet retail market across several Southeast Asian countries. This significant shift in the region’s digital commerce landscape is detailed in a recent report by consulting firm Bain and Company. Specifically, in Indonesia, Thailand, and the Philippines, platforms owned by Chinese companies such as Alibaba, ByteDance’s TikTok Shop, Shein, and PDD’s Temu now represent about half of all online retail activity, based on 2024 data.
These Chinese companies are not only solidifying their presence in Southeast Asia but are also establishing strong footholds in other growing online shopping markets, extending their reach to countries like the United States and Brazil. This global expansion is occurring as Chinese businesses face slowing economic growth within their home country and navigate increasing trade tensions with the United States.
The report suggests that Chinese retailers are entering a new phase of internationalization, largely unaffected by tariffs. Authors of the report observed that these merchants tend to perform particularly well in markets with lower online purchasing power, indicating strategic market penetration.
Global Expansion of Major Shopping Events
Alibaba’s popular Singles’ Day shopping festival is now gaining international traction, with its Taobao platform extending the event to 20 regions this year. This move transforms what was once a China-centric promotion into a global shopping occasion, directly challenging established salespires like Amazon.com’s Black Friday. While past international efforts for Singles’ Day were less documented, this year’s expansion marks a substantial step, following Taobao Malaysia’s announcement last year to promote the event in English for the first time alongside Chinese.
Alibaba’s international operations, managed by its International Digital Commerce Group, reported significant revenue growth. For the three months ending June 30, this segment posted 34.74 billion yuan ($4.85 billion), reflecting a 19% increase compared to the same period in the previous year. This figure was notable, slightly surpassing the revenue generated by Alibaba’s cloud computing division and demonstrating the growing importance of its overseas e-commerce ventures.
Similar to Amazon.com, Alibaba provides a platform for merchants to establish accounts for direct sales to consumers. However, while its international segment is growing, revenue from Alibaba’s China e-commerce operations remains considerably higher, reaching 140.07 billion yuan in sales, although this segment experienced slower growth at 10%.
Rapid Growth Fueled by Fintech Support
Data from lending services highlights the accelerated pace of growth for Chinese sellers in the international online market. Fintech company FundPark has facilitated $3 billion in loans to small Chinese businesses involved in international e-commerce in just over a year. This achievement is particularly noteworthy as it took the company six years to reach the same $3 billion lending milestone previously. Anson Suen, co-founder and CEO of FundPark, shared these insights in a discussion with CNBC.
FundPark, which has received substantial backing including $750 million from financial giants Goldman Sachs and HSBC, employs a technology-driven data assessment approach to determine loan amounts for small merchants. The startup also recently secured $71 million to develop a new artificial intelligence tool. This tool is designed for dynamic funding, aiming to assist merchants in navigating the complexities and uncertainties associated with tariffs.
Bain analysts attribute the success of Chinese e-commerce firms partly to the valuable experience gained from operating within their highly competitive domestic market. This includes expertise in live streaming sales, agile product development cycles, and efficient delivery systems. This experience proved crucial, especially considering that Amazon itself withdrew from the Chinese marketplace in 2019 due to intense competition from local players.
China’s domestic e-commerce market is significantly larger than the U.S. market. In the past year, China’s e-commerce sector generated $2.32 billion in gross merchandise value (GMV), more than double the $1.05 billion GMV recorded in the U.S. GMV is a key metric that tracks the total value of goods sold through an e-commerce platform over a specific period.
Within Southeast Asia, Indonesia led in e-commerce GMV last year with $62 billion. Thailand and Vietnam each reached $30 billion, while the Philippines recorded $20 billion in 2024 GMV. Singapore’s market, though smaller, still generated $8.55 billion in GMV.
Despite these impressive figures, the expansion of Chinese platforms is not without challenges in certain regions. Bain noted that in Singapore, Alibaba’s Lazada has seen its market share decline in favor of local competitor Shopee. Similarly, in the U.S. market, Amazon and Walmart continue to maintain strong positions.
American E-Commerce Giants Maintain Global Leadership
While PDD, Alibaba, and ByteDance dominate the market landscape in China, the United States presents a different scenario for e-commerce. Bain’s data indicates that non-Chinese e-commerce platforms hold nearly 95% of the U.S. market share. American e-commerce giants also maintain substantial international operations, demonstrating their continued global influence.
Amazon, for instance, reported North American net sales of $100.1 billion for the quarter concluding on June 30. Additionally, its international sales reached $36.76 billion during the same period. This robust performance means that Amazon’s total net sales, both domestic and international, exceed those of Alibaba combined, underscoring its significant global presence. Amazon was expected to release its earnings report on the same day the original article was published.
Walmart also reported strong online sales figures, with $23.7 billion in U.S. online sales for the quarter ending July 31. Its international operations contributed an additional $8.3 billion, marking a 22% year-over-year increase for its overseas business.
Final Thoughts
Chinese e-commerce companies are demonstrating remarkable growth and expansion, particularly in Southeast Asia, significantly reshaping the regional retail landscape. Their success is driven by advanced domestic market strategies and robust technological infrastructure.
While Chinese platforms gain ground internationally, established American giants like Amazon and Walmart continue to hold dominant positions in key markets like the United States, highlighting a dynamic and competitive global e-commerce environment.