China’s e-commerce platforms are eager to expand into manufacturing. In their efforts to work more closely with factories, NetEase, Pinduoduo and Alibaba have adopted different approaches, which this article from tech media platform Huxiu.com compares, detailing successes, failures, and ongoing challenges. Anyone interested in digital collaborations and the expanding reach of the tentacles of Chinese internet companies will find this report informative.
As China’s e-commerce platforms move into manufacturing, they experiment with various factory-to-consumer business models.
Responding to slowing growth, China’s leading e-commerce platforms – Alibaba, NetEase, Pinduoduo and JD.com – are expanding into manufacturing. Rather than merely providing a retail platform for brands and businesses, these companies work with manufacturers of designer brands to launch new lines of affordable quality goods.
NetEase was the first to move into that direction when it launched it own e-commerce store and line of products called NetEase Yeation in 2016. Yeation tweaks and rebrands existing product offerings from original design manufacturers (ODMs) for sale. In its marketing, Yeation highlights the designer brands its ODMs also produce, implying that Yeation’s products are of similar design and quality at a fraction of the price. The message quickly won over Chinese consumers, but competitors such as Alibaba and JD.com soon entered this lucrative market and chipped away at Yeation’s profitability. Working with ODM businesses – without innovative ways to cut costs or increase efficiency – Yeation also faced traditional retail problems...
Fan Xiangdong is a writer for Huxiu.com, a media platform that covers business, technology, startups, and the latest cultural trends.
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