The Battlefield of (China’s) E-commerce Platforms
In today’s e-commerce landscape, platforms like Amazon, Tmall, JD.com, and others have become the battlefield where sellers compete fiercely. With supply often exceeding demand, these platforms host the inevitable clashes between merchants striving for market share.
Much like how, in the physical world, conflicts may happen in parks or other common spaces, in e-commerce, we don't need to set a time or place—we know where the action is. The platforms provide the arena, and in exchange, they monetize the competition, much like selling tickets to a match. It's a model that works well for the platforms but can feel intense for the players involved.
The competitive landscape has become so fierce that even the Chinese government is taking note, attempting to curb what is now being called "involution." This refers to the situation where, rather than creating value, the competition appears to be leading to mutual destruction. It’s not just about growth anymore; it’s about survival.
Now we find ourselves on the brink of 11/11, the biggest e-commerce event of the year, where every merchant pulls out all the stops. Alibaba has expressed hope that the competition will remain sustainable, urging sellers not to go overboard. However, the reality of the situation isn't caused by the platforms themselves—it’s the nature of the market. Sellers are driven to fight for their place, and it's unlikely to change anytime soon.
That said, there are some positive developments, particularly when it comes to protecting intellectual property. We're seeing platforms take more action against counterfeit products, although there’s still room for improvement when it comes to tackling parallel imports—a perfectly legal practice but one that exacerbates the “race to the bottom.”
The so-called fight against "involution" is still in its early stages, and it remains to be seen whether significant change will occur. What’s clear, though, is that competition is here to stay. Some sellers will win, and others may fall, but this is the nature of the market. It’s survival of the fittest in this digital jungle.