China’s two retailing powerhouses, online commerce pioneer Alibaba and social media-gaming pioneer Tencent, have systematically established a duopoly of record proportions in record time. Combined, they have spent more than $20 billion in the past 12 months alone to change the way people in China shop. (The precise value of their investments cannot be determined, given that many of them are undisclosed or private deals. This figure, along with some others in this article, are drawn from a Bain analysis.)
There’s Only One Way to Break into China’s Crowded Retail Market
You’ll have to partner with Alibaba or Tencent.
August 13, 2018
Martin Barraud/Getty Images
Summary.
China’s retail landscape has room for companies to elbow their way in. However, in China there are two decisions that guide any retailer. The first one is choosing sides: Do you want to align with Alibaba or go with Tencent? For any retailer hoping to earn its slice of China’s expanding retail pie, at least for now, there is no alternative but to play alongside one team or the other — and there are pros and cons with each. The second decision — choosing a partnering strategy — depends on your starting point and your ultimate goals.
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Learn how to overcome barriers when working globally.