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By Casey Hall
SHANGHAI (Reuters) - Discount e-commerce is set to dominate globally during the critical upcoming holiday shopping season in the West and Singles’ Day in China, analysts said.
Platforms in China, the world’s largest e-commerce market, have recently described a “value-for-money battle” stoked by economic insecurity and a slower-than-expected retail recovery following the lifting of COVID-19 curbs late last year.
In much of the rest of the world, meanwhile, from Southeast Asia to North America and Europe, consumers are in the thrall of fast-growing platforms, like PDD Holdings' Temu and Bytedance-owned TikTok Shop, which ship cheap goods from China at a time when cost-of-living is front of mind for many.
China has long been a major exporter of a host of consumer products, but this latest export trend, of its e-commerce marketplace dynamics to the rest of the world, has shaken up online shopping globally.
Low-cost platforms in China, as well as multinational companies shipping from the country, look set to shape the year's final quarter - one that included the all-important holiday season, as well as China's largest shopping festival.
“These marketplace dynamics that first emerged from China, or were invented in China, are now dominating the Western world,” said Sharon Gai, the former head of global key accounts at Alibaba and author of "E-commerce Reimagined."
“(Other online retailers) are seeing this insurgence of these cheap Chinese goods that are flooding in from the likes of Temu and Shein and their boats have been rocked," she said. "They don't know if they can compete.”
The trend towards low-cost platform isn’t happening in a vacuum however, but bolstered in part by macroeconomic challenges facing different markets - including belt-tightening amid economic uncertainty in China and inflation in the United States and European markets putting pressure on consumer spending.
Fast-rising discount competitors, such as Pinduoduo and Douyin in China and Temu and Shein, which have rolled out their services to countries from Canada to Australia, as well as across Latin America and some Asian markets, are themselves pouring billions of dollars into subsidies and discounts to grow market share among consumers who are happier to snap up $10 dresses and $5 headphones than higher-priced items.
Amazon is set to ramp up discounts during its Oct. 10-11 "Prime Big Deal Days."
"From an e-commerce standpoint, you definitely notice the massive amounts of discounting that are currently occurring, even on Amazon,” Humphrey Ho, U.S. managing partner at digital advertising agency Hylink Digital, said.