SHEIN, Temu dominate Southeast Asia's e-commerce market
What's the story
Chinese e-commerce giants have quickly taken over the online shopping market in Southeast Asia, a new report by consulting firm Bain & Company has revealed. The study found that these companies now account for nearly half of the e-commerce market in Indonesia, Thailand, and the Philippines. The surge comes as firms expand China's Singles Day shopping event to other countries this year.
Market dominance
SHEIN and Temu lead in local e-commerce markets
The report highlights that Chinese e-commerce players, including SHEIN and PDD's Temu, now hold 50% of the local e-commerce market. They have also made their mark in the burgeoning online commerce markets of countries as far away as the US and Brazil. The findings come amid a global expansion push by Chinese companies, despite slowing domestic economic growth and rising US-China trade tensions.
Market performance
Singles Day shopping extravaganza expands to more regions
The report also notes that Chinese sellers have mostly outperformed in markets with lower online purchasing power. This year, Alibaba's Taobao is taking Singles Day shopping promotions to 20 regions. The move indicates that the world's biggest shopping event is no longer just a China-centric affair but also targets countries where Amazon has introduced its Black Friday sales.
Financial performance
Alibaba's international division sees revenue growth
Alibaba's international division, "International Digital Commerce Group," reported a 19% year-on-year (YoY) revenue growth in the June quarter to ¥34.74 billion ($4.85 billion). This was slightly more than what the company's cloud computing unit brought in, but still way behind Alibaba's China e-commerce business, which saw slower growth at 10%. The Chinese e-commerce market is more than twice as big as the US market, with a gross merchandise value (GMV) of $2.32 trillion last year compared to America's $1.05 trillion.
Market challenges
Challenges for Chinese players in certain markets
In Southeast Asia, Indonesia led with a whopping $62 billion in e-commerce GMV last year. However, the path to growth isn't smooth for Chinese players everywhere. In Singapore, Alibaba's Lazada lost market share to local player Shopee while Amazon and Walmart still rule the US market. Non-Chinese e-commerce players made up nearly 95% of the US market, according to Bain data.