The tricks of China's online retailers

For many years Chinese customers had to pay significantly more for many products from Europe than Europeans themselves. Now companies in the People’s Republic are turning the tables and charging a premium from German customers. Stephan Scheuer explains how it works, using action cameras as an example. Chinese companies can afford to do this – their devices, even at the higher price, are still far cheaper than competing international products.

Background

China’s e-commerce was already the world’s largest in 2017 – significantly bigger than the American market. It was dominated by Alibaba (with its Taobao and Tmall platforms) and rival JD.com. This report shows the aggressive marketing tactics that were already the norm: the detailed knowledge platforms held about their customers, personalised pricing, the role of live-shopping streams in which hosts sell products to millions of viewers in real time.

Singles’ Day on 11 November – a shopping event invented by Alibaba – grew in the years after this report into the world’s largest retail event. In 2020 Alibaba’s platforms generated turnover of more than 74 billion dollars in a single day – more than the entire annual online retail of most European countries. Since 2022 Alibaba has stopped publishing Singles’ Day figures; the numbers are no longer to be the central metric – partly a response to the tech crackdown era.

With Pinduoduo, founded in 2015, a third giant emerged in the years after this report. The company specialised in cheap offers for smaller cities and rural areas and grew explosively. In 2022 Pinduoduo launched its international sister app Temu, which with radical low prices and aggressive marketing (Super Bowl ads, top App Store rankings) became a rapidly growing online retailer in the United States and Europe.

In parallel, Shein – a Chinese fast-fashion company with a global orientation – upended online fashion retail. Shein delivers ultra-cheap clothing directly from Chinese factories to customers worldwide, with an algorithm-driven range that adds thousands of new models daily. Both companies – Temu and Shein – exploited a regulatory loophole in the US (the de minimis exemption for shipments under 800 dollars) to avoid tariffs and import duties. The Trump administration announced in 2025 that it would close this loophole.

For Alibaba itself, the years after this report were turbulent. The planned IPO of Ant Group, Alibaba’s financial arm, was stopped at the last minute in late 2020 on the orders of Chinese regulators – just days after Jack Ma had publicly criticised the Chinese financial regulatory system. Antitrust proceedings against Alibaba followed, with fines in the billions and a break-up of the company into six business units. Jack Ma largely withdrew from public life.

What this report shows as novel tricks – personalised prices, algorithmic recommendations, live shopping, discount-driven advance sales – is standard practice in global e-commerce today. China’s platforms were the pioneers: Amazon, Walmart and eBay have adapted many of these methods from China, not the other way round.