Analysis of the functioning of Chinese e-commerce platforms

Since the COVID-19 pandemic, social isolation and traditional retail channels have made consumers more inclined to the convenience of online shopping, which has continued in the postpandemic era. With a flexible supply chain, stable economic and political environment, and a well-functioning industrial system, China can provide the world with many categories and costeffective products online that are popular with overseas consumers. China has become the world's largest B2C cross-border e-commerce market [1].

Around 26% of global payment transactions occur in mainland China, with the US coming in second at 21%, followed by the UK, Germany and Japan.

China has the world's largest number of digital shoppers, with 792.5 million, or 33.3% of the world's total. The country has become the first in history to sell more than half of its retail sales online, with more than half (52 %) being done via e-commerce. As online shopping is now a rapidly growing activity in China, digital platforms are increasingly being used. An ecommerce platform is a business model that creates certain values, for the visualization of which the so-called marketplaces are used - websites that sell goods and services from various suppliers [2].

In the current conditions, the Chinese ecommerce market is experiencing rapid development of trade based on electronic platforms that reflect the diversity of the Chinese market.

Let us present the results of the analysis of their activities.

Taobao marketplace is an example of a C2C (consumer-to-consumer) platform and shows how to use various product options and innovative business strategies to effectively attract customers. The obvious advantages of the Taobao platform are its user-friendly design and diverse product range, which includes almost everything from daily necessities to luxury goods. Taobao primarily relies on high-quality user-generated content, such as consumer reviews and seller rating systems, which not only help consumers make purchasing decisions but also increase trust in the platform. The platform is unique in its live shopping feature, where key opinion leaders can recommend products live, which increases consumer demand during live broadcasts. Another advantage of Taobao is the optimization of the logistics tracking system. With accurate order tracking, real-time information updates and convenient inquiry methods, the platform provides users with instant notification after parcel delivery, which increases user satisfaction and trust.

Tmall, a B2C service platform, mainly provides services to brand merchants and large enterprises. Tmall has established partnerships with famous global brands, aiming to offer consumers high-quality products and services and enhance their brand loyalty. The competitive advantage of the Tmall platform is the Singles'Day shopping festival, which is the largest e-commerce promotion in the world. In addition, Tmall's membership system has also helped the platform success- fully retain many loyal customers, thereby increasing users' purchase frequency and brand appeal [3].

The Pinduoduo marketplace demonstrates the power of social e-commerce as it uses group buying to attract users through social media. Consumers can get discounts by teaming up with friends, family, or strangers on social platforms. This is an advantage that has helped Pindoduo attract many users in just a few years. Pin-duo's success is especially noticeable in the field of agricultural products and low-cost goods. The competitive advantage of this platform is the gami-fied shopping process, where users can earn discounts by playing games, which increases users’ loyalty. Thus, in 2023, Pinduoduo's monthly active users reached 900 million, helping it become one of the largest e-commerce platforms in China.

JD.com marketplace stands out from its competitors with its innovation in the logistics system. As a B2C platform, JD has widely adopted logistics innovations, including drone delivery and intelligent warehousing, which have made the company stand out in the highly competitive e-commerce market, especially in China’s vast rural and remote areas, where it can quickly deliver goods to consumers. In addition, JD.com has a prominent position in the sale of electronic goods and home appliances, which require high efficiency in logistics and after-sales service, and this is precisely why JD.com has won the trust of consumers [4].

The cross-border e-commerce platform Aliex-press mainly serves global markets, especially Russia and Europe. Unlike other platforms, Al-iExpress has the advantage of focusing on crossborder trade, which helps Chinese sellers sell their products worldwide.

Therefore, the growth of marketplace companies in the Chinese market has also brought new challenges to the industry, encouraging the entire digital platform economy to continue to move forward. These platforms have attracted the attention and participation of many users with their unique market positioning and innovative service models and contributed to the transformation and development of the digital economy era [5].

The development of e-platforms in the market on the one hand simplifies the transaction process and reduces business costs, but on the other hand promotes the upgrading of traditional companies and digital economy development. Facing increasingly fierce market competition, marketplaces continue to strengthen and expand their market leadership through flexible competition strategies and innovative service models.

The competitive analysis of the largest Chinese e-commerce platforms based on several key comparative criteria was carried out. These criteria included market share, user activity, crossborder business, logistics capabilities, and brand influence.

In terms of market share, Taobao and Tmall continue to dominate the Chinese e-commerce market, with market shares of 48.3% and 33.9%, respectively, in 2023. As a consumer-to-consumer (C2C) platform, Taobao can attract many users with its rich product variety and innovative marketing models. Tmall mainly serves brand owners and enterprise users (B2C model), focusing on high-end brands and quality products, and has a strong performance among high-spending groups. The situation is different for Pindoduo. Although its market share is only 12.2 percent, it has grown rapidly with its low-cost group buying and social group buying models and has a huge user base in rural areas and lower-tier cities. The market share of Jd.com and Al-iExpress marketplaces is 9.2% and 4.5% respectively, with AliExpress's main markets being in the international sector, especially in Russia and Europe.

In terms of user activity, Pinduoduo led all platforms with 8.81 million monthly active users, largely due to its unique social e-commerce model and price-sensitive user base. Taobao and Tmall have 8.11 million and 5 million monthly active users, respectively, and JD.com has 3.397 million, while AliExpress has 50 million monthly active users worldwide, demonstrating the wide reach of its cross-border business and the engagement of international users. Although Al-iExpress has a relatively small number of users, the platform is very active and in demand in certain international markets.

In terms of cross-border business, AliExpress is the most prominent vendor specializing in cross-border e-commerce, with major markets in Russia, Europe, and South America. Through Al-iExpress, Alibaba helps Chinese sellers sell their products worldwide, promoting the internationalization of Chinese products. Jd.com also has significant growth in cross-border business, espe- cially in the B2C segment, which enhances its global competitiveness through direct cooperation with international suppliers. In contrast, Pinduoduo's cross-border business is still in its early stages of development, although its agricultural exports have begun to attract attention from overseas markets. Taobao and Tmall have relatively weak cross-border businesses, focusing mainly on the domestic market.

In terms of logistics capability, JD.com has its own logistics network, which can provide fast and reliable delivery services, especially in rural and remote areas of China. Jd.com has unmanned delivery and intelligent warehousing technologies, which gives it significant advantages in logistics efficiency. Taobao and Tmall rely on cooperation with third-party logistics companies, and although the company's logistics capability is relatively weak, their extensive network of partners ensures the smooth delivery of goods. Al-iexpress's cross-border logistics mainly relies on third-party transportation services, although it has certain distribution capabilities on a global scale, but there is still a gap compared with Jingdong.

In terms of brand influence, Tmall and Jing-dong have strong influence in both the Chinese and international markets. Tmall's cooperation with many international brands has made it popular among high-end consumers. Jd's professionalism and service quality in the field of electronic goods and home appliances have also ensured consumer trust in the brand. Aliexpress has a high brand recognition in the international market, especially in Russia and Europe, while the influence of Pidoduo and Taobao brands is more concentrated in the domestic market of China, especially in lower-tier cities and rural areas.

From the perspective of competitive analysis, the major electronic platforms show their ad- vantages in different markets and fields. Taobao and Tmall still dominate the domestic market, but their overseas expansion is relatively slow. Pinduoduo’s rapid growth thanks to the social group model has surpassed its competitors in user activity, but its logistics capabilities and crossborder business still need to be further improved. Jd.com has gained ground in the competition thanks to its own effective logistics system, especially in the electronics and home appliances market. Aliexpress focuses on cross-border ecommerce and shows high growth potential in international markets.

Thus, the following conclusions can be drawn based on the analysis of the major e-commerce platforms. Taobao and Tmall marketplaces focus on the domestic market and have achieved significant success in the country due to their large user bases and well-established service systems. Pindoduo’s e-commerce platform has successfully attracted many users in third tier and below cities thanks to its low prices and group buying model and is actively expanding its cross-border e-commerce business despite its weak logistics capabilities. AliExpress, as an important international platform in China, has achieved success in Russia, Europe and other places with its global cross-border e-commerce business.

The emergence of Chinese e-commerce platforms has led to a change in the behavior of consumers and sellers, the need to improve supply chains and optimize business processes in the field of e-commerce. Further development of the system of e-commerce platforms requires the use of a systematic approach to optimize their activities and build effective relationships between all participants in this system.