Chinese Grocery's Age of Empires
CHINESE GROCERY’S AGE OF EMPIRES TWO GIANT GROUPINGS ARE CARVING UP THE MARKET CHINESE GROCERY’S AGE OF EMPIRES Chinese retail is evolving into two rival empires, each dominated by competing e-commerce giants. One realm is centered on Alibaba, which owns two of China’s largest e-commerce platforms, Taobao and TMall, as well as an electronic payments system, AliPay. The other is an alliance between JD, a leading online retailer, and Tencent, an internet and digital-technology conglomerate that owns WeChat, China’s most popular social-media app. These two empires already own the digital lives of Chinese consumers today, where the average Chinese spends over 60% of their mobile app usage on either ecosystem. Now Alibaba and Tencent/JD have set their sights on physical retail, including acquiring stakes in six of China’s top 10 hypermarkets, the country’s biggest electronics retailer, one of the largest department stores and the largest commercial property and entertainment conglomerate. Exhibit 1: Empire of JD/Tencent and Alibaba Experiece Online Physical Online Offline Social retail retail influence influence JD/ Mobike, QQ Vip.com, Little Walmart, Tencent Video, WeChat Pay, WeChat, QQ, Tencent University, Red Book, Yonghui, Dianping, JD logistics, LY.com, Qzone, Tencent Cloud, YHD.com, Wanda, Sogou, QQ Meituan Pengyou.com QQ Gaming, Zhuanzhuan Carrefour Music, WeChat DiDi ChuXing Pay Alibaba Ali Health, Taobao Etao, Taobao, Intime Retail, MGTV, YTO express, Sina Weibo, Group Education, Hema, Tmall, New Huadu, Yicai.com, 36Kr, Cainiao, Alipay, Momo, Amap.com, Suning.com Bailian, SCMP, Alipay Ali LST, Koubei Qyer.com, Xiami, Eleme, Century Mart, AcFun, Youku DiDi ChuXing, Sanjiang, Sun Ali Cloud Art, Hema Source: Oliver Wyman analysis Underlying their growing dominance is Chinese consumers’ enthusiasm for online shopping: In 2006, just 11 percent of the population enjoyed internet access; today, more than 460 million Chinese – one-third of the population – regularly shop online.
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