Source: Star Chart Data (ID: syntun)

Looking back at 2021, the e-commerce industry experienced ups and downs, causing strong shocks. Since the beginning of 2022, with frequent outbreaks of the pandemic, China's e-commerce industry will face more unknown variables and more challenges.

Star Chart Data elaborates on this report from five parts: overview of e-commerce status, comprehensive e-commerce platforms, live-streaming e-commerce platforms, community group buying platforms, and new retail platforms.

The following is the report content:

Part 01 Overview of E-commerce Status

Online retail sales increased by 14.1% year-on-year, higher than the overall market

  • In 2021, social retail grew rapidly in the first half of the year, slowed down in the second half, and achieved a growth of 12.5% for the whole year. Among them, online retail accounted for about 30%, with a growth trend consistent with the market, and a year-on-year growth rate of 14.1%, higher than the overall.

Number of online retail financing events decreased year-on-year, while amount increased

  • In 2021, there were 179 financing events in online retail, with a year-on-year decrease in growth rate. The total financing amount was 70.64 billion yuan, a year-on-year increase of 59.6%, but the total was lower than in 2019.

The industry as a whole started high and ended low, with trends returning to rationality

  • In 2021, the e-commerce industry showed a trend of starting high and ending low: in the first half of the year, live-streaming e-commerce and fresh food delivery, which started due to the pandemic, were booming; in the second half, policies became increasingly tightened, consumption declined, and trends returned to rationality.

Comprehensive e-commerce share exceeds 80%, still the most important channel for online shopping

  • From the perspective of annual GMV, comprehensive e-commerce platforms have a stable position, leading with an absolute share advantage; followed by live-streaming e-commerce; community group buying and new retail currently account for relatively small proportions.

Rural consumption is strong, and national policies support the upward movement of agricultural products

  • In 2021, the national rural online retail sales reached 2.05 trillion yuan, a year-on-year increase of 11.3%, an increase of 2.4 percentage points over the previous year, showing strong rural consumption capacity; online retail sales of agricultural products reached 422.1 billion yuan, and the state continued to strongly support the upward movement of agricultural products at the policy level.

Healthy, green, and high-quality products are favored, with a clear trend of online consumption upgrading

  • In terms of products, technology-based, health-oriented, and environmentally friendly products represented by smart home, smart wearables, outdoor supplies, and organic food are popular, and the trend of consumption upgrading in the online shopping market is obvious.

Part 02 Comprehensive E-commerce Platforms

GMV: Taobao/Tmall has a large volume, Pinduoduo grows fast

  • Currently, the GMV of Taobao/Tmall exceeds the sum of JD.com and Pinduoduo; Pinduoduo's GMV maintains rapid growth with significant increases.

Promotions: Tmall and JD.com share promotion share, Pinduoduo is less affected

  • During the 618 and Double 11 promotions, Tmall and JD.com made efforts to grab share; Pinduoduo is relatively laid-back, with promotions contributing less to its total platform GMV.

User situation: Pinduoduo has the highest daily active users, average usage time, and user stickiness

  • From the user situation during the Spring Festival period (Jan 31-Feb 6), Pinduoduo has a relatively high number of daily active users, and its average usage time and user stickiness are also relatively high.

Alibaba establishes a foundation in lower-tier markets with Taote, while also developing self-operated business to expand into mid-to-high-end

  • In Alibaba's fiscal quarter, new users were mainly acquired through Taote. Taote has many price-sensitive users, which can complement Taobao's users; it continues to invest in self-operated business, increasing control over products, after-sales, and logistics, expanding into mid-to-high-end business.

JD.com expands incrementally downward and explores value upward, maintaining growth in both user scale and quality

  • JD.com's user scale and quality continue to improve, with new users mainly coming from lower-tier markets; as the first paid e-commerce membership system in China, JD PLUS members are also increasing in number and lifetime value, showing the "three highs" characteristics of high spending power, high activity, and high loyalty.

Pinduoduo slows expansion, shifts to deep user cultivation and heavy investment in agriculture

  • Pinduoduo has changed its previous practice of attracting new users through subsidies, reducing marketing investment, and instead focusing on deep user cultivation and continuously increasing investment in agriculture.

Part 03 Live-streaming E-commerce Platforms

High proportion of e-commerce live-streaming users, steady development of the live-streaming industry

  • As of December 2021, the scale of online live-streaming users in China reached 703 million, accounting for 68.2% of netizens; by type, e-commerce live-streaming has the largest user scale, accounting for 44.9% of netizens, and the e-commerce live-streaming industry continues to develop steadily.

Diantao, Douyin, and Kuaishou divide the market, with Douyin showing signs of catching up

  • According to Star Chart Data, in 2021, the combined GMV of Diantao, Douyin, and Kuaishou exceeded 1.9 trillion yuan, with Diantao leading by a slight margin.

Douyin live-streaming GMV grows fast, Kuaishou begins "breaking links"

  • Douyin's live-streaming GMV maintains rapid growth; Kuaishou's small shop has a high contribution rate to Kuaishou e-commerce, and its live-streaming e-commerce is moving towards a fully closed loop, cutting off links to Taobao and JD.com alliance products from March 1 this year.

All in on Channels, Tencent pursues Douyin and Kuaishou

  • In Tencent's 2021 annual report, it stated that in 2022 it will commercialize Channels through short video ads, live-streaming tips, and live-streaming e-commerce; Channels, backed by WeChat's social ecosystem, may gradually release its unique potential.

The state cracks down on tax-related violations in live-streaming, with top anchors frequently falling

  • Since the end of 2021, incidents of anchors evading taxes have been exposed, and many top anchors have bid farewell to live-streaming e-commerce. After the nationwide ban of top anchor Wei Ya, the pattern of super top anchors was broken, and the huge traffic gap may bring development opportunities to small and medium anchors and brands.

Part 04 Community Group Buying Platforms

Community group buying still has large growth space, with scale expected to approach 450 billion in 2022

  • In 2021, the GMV of the community group buying industry was about 300 billion yuan; at the beginning of 2022, scattered outbreaks in many places may boost the growth of community group buying again, mainly driven by the growth of unit price.

Kitchen and bathroom cleaning, grain and oil seasoning currently have high penetration rates, with large penetration space for daily necessities

  • At present, kitchen and bathroom cleaning, grain and oil seasoning have relatively high penetration rates in community group buying; in the medium and long term, daily necessities have large penetration space.

Small players collapse, giants also cannot escape the ebb tide

  • In 2021, strong government regulation ended the explosive growth stage of community group buying, with small platforms closing down one after another, and veteran player Xingsheng Youxuan suspending expansion; at the beginning of this year, Chengxin Youxuan, which burned more than 20 billion, failed and withdrew, and Jingxi Pinpin's business contracted, with capital-rich internet giants also bidding farewell to their brief glory days.

Capital market cools, small platforms are no longer favored by capital

  • Community group buying reached a capital peak in the first quarter of 2021, but after the government began imposing severe penalties on non-compliant platforms in March, financing amounts plummeted, and small platforms rarely gained capital favor again.

Alibaba integrates business to develop Taocaicai, with impressive GMV growth

  • On September 14, 2021, Alibaba announced the integration of Hema Market and Taobao Grocery, upgrading the brand to "Taocaicai". On the supply side, combined with RT-Mart, Taocaicai has performed well since its launch.

Meituan Select and Duoduo Maicai have obvious leading advantages, Taocaicai is catching up strongly

  • Meituan Select and Duoduo Maicai lead in share, firmly in the first tier, while regional strong player Xingsheng Youxuan is temporarily in the second tier.

  • Alibaba's Taocaicai still has a certain gap with competitors, but to cope with competition from other e-commerce giants and as one of the channels to deeply explore lower-tier markets for new users, Alibaba may mobilize its omni-channel system to protect Taocaicai, showing a strong trend of catching up with Pinduoduo and Meituan.

Competition pattern becomes oligopolistic, "New Three Groups" engage in a tug of war

  • Traffic in community group buying is concentrating towards the "New Three Groups" composed of Meituan Select, Duoduo Maicai, and Taocaicai, inevitably moving towards oligopoly. Before achieving real profitability, the "New Three Groups" will engage in a prolonged tug of war.

Part 05 New Retail Platforms

New retail penetration is growing rapidly, and scale continues to expand

  • With the improvement of residents' demand for consumption convenience and the expansion of consumption scenarios, the penetration rate of new retail is expected to increase to 10.6% by 2023.

Taoxianda "quietly achieves results", ranking first in sales

  • Taoxianda is one of Alibaba's layouts in same-city retail, belonging to the local life sector along with Ele.me. It mainly attracts retail supermarkets to join, offering users "1-hour delivery" instant delivery service, with the entrance on the Taobao App homepage.

Platform type: JD Daojia has strong GMV growth, Meituan and Ele.me have advantages in rider systems

  • JD.com, Meituan, and Alibaba compete around instant retail: in terms of delivery efficiency, Meituan Flash Purchase and Ele.me have mature local rider systems, giving them certain advantages in same-city delivery; JD Daojia is also stepping up, launching the hourly purchase business during the 2021 Double 11 period, striving to run "faster".

Front warehouse: Miss Fresh's volume is less than Dingdong Maicai, and both losses hit new highs

  • Both are listed stocks in fresh food front warehouse, the pioneer Miss Fresh has fallen significantly behind Dingdong Maicai in volume; both continue to expand losses, with Miss Fresh losing 3.01 billion in the first three quarters of 21, while Dingdong Maicai lost 6.65 billion for the whole year.

Dingdong Maicai and Miss Fresh stocks are sluggish, PUPU receives capital injection again

  • Consecutive losses have caused the stock prices of Dingdong Maicai and Miss Fresh to fall all the way. As of April 6, 2022, their market values have shrunk by more than 70%; at the same time, the low-key front warehouse e-commerce PUPU received strategic financing from IDG Capital in November 2021.

  • PUPU started in Fuzhou, with a wide range of product categories, more like an instant delivery supermarket. It once defeated Hema and forced it to withdraw from the Fuzhou market; PUPU's expansion pace is relatively steady, with its main battlefield currently in Fujian and Guangdong.

Store-warehouse integration: Hema temporarily "tightens its belt", Seven Fresh restarts and accelerates

  • Hema Fresh has more than 300 stores, already having a certain scale advantage. Its future development goal is to upgrade from current single-store profitability to overall profitability; Seven Fresh accelerated its pace in 2021, with stores, performance, and growth rate starting to achieve rapid growth since Q2 2021.

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