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With a market roughly twice the size of the US, e-commerce in the Chinese sector offers immense opportunities for businesses looking to enter it. As of 2025, China’s e-commerce market generated over US$2 trillion in revenue, with more than 900 million active online users and a digital buyer penetration rate of 86%. A decade ago, China accounted for only 1% of global online sales. Today, it leads with over 50% of global e-commerce retail sales, demonstrating exponential growth and a dominant online presence.
If you plan to create an online business and tap into the vast potential of the Chinese market, understanding how e-commerce in China works and how to start one is essential. Below, we explore the requirements, the application process, and some tips on getting started.
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Starting Your E-commerce Business in China
The Chinese e-commerce market continues to advance and offers more opportunities for foreign companies wanting to start online businesses. Although the competition is intense, and it is undoubtedly challenging to enter and establish a position in the market, companies still take the risk because of the big profit opportunities.
If you are interested in starting an e-commerce business in China, you should conduct thorough research and gain a comprehensive understanding of the following things first:
- Consumer behavior
- Target audience
- Competition analysis
- Brand awareness
- Product/service interest
Conducting preliminary studies on the needs of the Chinese market is vital since the local preferences for products and services may differ vastly from those of their foreign counterparts. Historical, political, and social contexts greatly influence consumer behavior and the purchase journey. For instance, Chinese buyers like to buy products, receive them on their doorsteps, try them out, and then send them back for a refund or change items.
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The E-commerce Market in China
China’s e-commerce sector continues to lead the world. E-commerce accounts for around 30% of retail sales and 40% of GDP (digital economy contribution), significantly outpacing North America’s 20% of retail sales and 3% GDP penetration. Around 30% of the country’s physical goods were sold online, significantly higher than the global average of 22%, according to China’s official retail-data release. China dominates global e-commerce retail sales, accounting for more than half of the worldwide total — surpassing the combined total of the EU and the US, according to MobiLoud’s 2026 review of global e-commerce markets.
The number of online shoppers in China has increased dramatically, from just 34 million in 2006 to over 900 million today. The digital buyer penetration rate has reached 86% as of 2025. Additionally, B2C e-commerce sales in China surpassed USD 1.5 trillion, with a significant portion of gross merchandise volume (GMV) driven by platforms like TMall and JD.com.
The market’s trajectory indicates substantial opportunities for e-commerce players in China. With the advantages the government provides to foreign investors, more international entities are showing interest in becoming e-commerce operators in China.
| Key Metrics | Value |
|---|---|
| Digital Economy Contribution to GDP | 40% (2024) |
| Online Physical Goods Sales | 30% (2024) |
| Global E-commerce Retail Sales Share | >50% (2024) |
| Number of Online Shoppers | 900+ million (2025) |
| Digital Buyer Penetration | 86% (2025) |
| B2C E-commerce Sales | >USD 1.5 trillion (2024) |
These metrics highlight the immense scale and potential of the e-commerce market in China, making it an attractive destination for global e-commerce investments.
Snapshot: China E-commerce Key Metrics (2025)
| Metric | Value |
|---|---|
| Market size (total e-commerce) | ≈ US$2 trillion+ (2025) |
| Online retail as % of physical goods sales | ≈ 30% (2024) |
| Share of global e-commerce sales | > 50% |
| Number of online shoppers | ≈ 900+ million |
| B2C e-commerce sales | > US$1.5 trillion |
What is an E-commerce Operator?
According to the ECL, e-commerce operators in China are legal entities that supply services or sell goods over the Internet. These entities have a digital space or platform where buyers and sellers conduct e-commerce transactions.
Requirements and Obligations of E-commerce Operators in China
Under the law, e-commerce operators should have a relative business license. Additionally, operators need to do the following:
- Meet the relevant tax obligations;
- Be able to issue an invoice, including a digital copy;
- Obtain administrative licenses required to carry out specific activities or sell certain goods and services;
- Comply with duties on delivery times and methods;
- Comply with laws and provisions to protect user data when collected and used on the platform.
These regulations apply to all those operating within the country’s territory. However, there can be ambiguous instances wherein it is not straightforward which rules apply, especially in entities operating from abroad. For these cases, the government applies the following criteria to activities performed by e-commerce operators to determine if Chinese regulations are applicable:
- The platform from which purchases are made is connected with a Chinese domestic domain;
- Transactions are concluded within domestic borders, on websites with a local domain, or through domestic electronic payment systems;
- The operator has a warehouse or a similar structure within domestic borders from which deliveries are made.
Failure to comply with domestic legislation and obligations can lead to serious consequences. For instance, operating without a business license can result in the seizure of profits and penalties being imposed.
Applying for an Internet Content Provider License
An Internet Content Provider (ICP) license is needed to operate an e-commerce business. China maintains strict control over e-commerce and internet-related activities within its borders, so it requires online businesses to register with the Chinese Ministry of Industry and Information Technology (MIIT).
There are two types of ICP licenses that operators should apply for:
- ICP Beian – this is the standard ICP license needed for hosting a local website
- ICP Commercial – this allows operators to accept payments online for services or physical goods legally
Foreign companies without a legal entity in China are not eligible to get an ICP license. A representative office will not suffice in this case. Foreign entities should have a registered and licensed Chinese company to apply for ICP licenses.
For foreign operators, having a local company lets them do business in China in exchange for compliance with numerous regulations. For foreign e-commerce retailers, their local entities should be set up as Wholly Foreign-Owned Entities (WFOE), in addition to getting a business license.
Localizing Your Products and Service for the Chinese Market
Before starting an e-commerce business, you need to consider website localization. You should align your products and services with the local cultural factors that define how consumers engage with a brand. The language, payment methods, product sizing, marketing strategy, and brand imagery should fit the local culture.
China is a huge market, so tackling it with a regional approach is intelligent and practical. Different regions have different needs and expectations, which can help new entrants focus on specific market segments rather than tackle the general market with generic messaging. The e-commerce space is highly competitive, and local players can put you at a disadvantage if you fail to meet the needs of local audiences with your brand strategy.
Additionally, China has a unique regulatory environment that you should be aware of. Bureaucratic processes for obtaining permits and licenses, what goods can be sold or not, and how intellectual property rights are considered might differ from region to region, so you should always stay updated with any changes that may occur.
The Most Popular Online Marketplaces and E-commerce Platforms in China
Here are the top online platforms that e-commerce businesses use in China to sell goods online, complete with reported data as of 2024/2025:
Taobao
Taobao remains the largest online marketplace in China, with over 960 million monthly active users as of 2024. It is a direct local competitor to eBay and has popularized Alipay for online transactions, making it easier for people to buy and sell goods online. Taobao is known for its vast range of products and user-friendly interface.
Pinduoduo
Pinduoduo has rapidly grown to become one of China’s most trusted e-commerce platforms, with over 700 million monthly active users as of 2024. It is known for its innovative C2M (Consumer-to-Manufacturer) business model, team purchases, and social commerce programs. Pinduoduo is also the largest online marketplace for agricultural produce and facilitates direct sales from Chinese farmers to urban consumers.
JD.com
JD.com, initially a computer equipment seller, has transformed into the largest e-commerce platform in China for electronic appliances, computers, and new technologies. With over 570 million active users as of 2024, JD.com is renowned for its robust logistics network and commitment to authentic products, ensuring high trust among consumers.
TMall/TMall Global
TMall, a subsidiary of Alibaba, is highly popular for its stringent security measures against fraudulent goods. TMall focuses on local products, while TMall Global caters to foreign brands, providing a platform for international companies to reach Chinese consumers. Together, they serve over one billion annual active consumers.
Xiaohongshu (Little Red Book)
Xiaohongshu, initially a review community, has evolved into a prominent e-commerce platform specializing in fashion, beauty, and lifestyle products. With over 300 million monthly active users as of 2024, Xiaohongshu leverages its vital community aspect and mobile app-based platform to target most online shoppers who use their phones for transactions.
Suning
Suning, which started as a domestic appliance store, has expanded its offerings to include a wide range of everyday items, from books to baby care products. Known for its solid logistical system and automated warehousing, Suning continues to be a key player in the Chinese e-commerce market.
Choosing the Right Platform
Selecting the right platform depends on the products you sell. For example:
- Xiaohongshu is ideal for beauty, fashion, and lifestyle products due to its focus on these categories and its strong user community.
- Given its specialization and reputation in these sectors, JD.com is the best choice for electronic products and computer parts.
These platforms offer unique advantages and cater to different market segments, allowing businesses to reach their target audiences effectively.
| Platform | Monthly Active Users (2024/2025) | Specialization | Website | iOS App | Android App |
|---|---|---|---|---|---|
| Taobao | 960 million | General marketplace | Website | iOS | Android |
| Pinduoduo | 700 million | Agricultural produce, social commerce | Website | iOS | Android |
| JD.com | 570 million | Electronics, computer equipment | Website | iOS | Android |
| TMall/TMall Global | 1 billion (annual) | Local and international brands | Website | iOS | Android |
| Xiaohongshu | 300 million | Fashion, beauty, lifestyle | Website | iOS | Android |
| Suning | N/A | Everyday items, strong logistics | Website | iOS | Android |
These metrics highlight the diverse and dynamic nature of the e-commerce landscape in China, providing ample opportunities for businesses to thrive.
Where to Host Your E-commerce Website
To start your e-commerce business, you need a website hosting provider. Although it is easy to choose a host, their performance and location are important when launching your website in China.
If you decide to host your website outside the country, your site will need to go through the “Great Firewall of China”, so it may load more slowly. While this option has its advantages like not having to deal with complex legal procedures, users will have a poorer experience because of slow load times.
The best choice is to find a hosting provider within China to benefit from faster loading times and an enhanced user experience. But in exchange, you have to get an ICP license to proceed.
Importance of Logistics and Customer Support
The scarcity of high-quality logistics providers in China is a problem for e-commerce platforms. It has failed to catch up with the explosive growth of online businesses in the country, and this has resulted in late deliveries, damaged or lost parcels, slow COD processes, and poor return procedures. Special services like payment instalments and product try-on are also unavailable to some logistics providers because of the added complexity of the said options.
To solve the issues with logistics, e-commerce operators build their internal networks, outsource to third-party providers, or form partnerships with logistics firms. These options are for those with enough capital, but for small e-commerce players, the major online platforms like Taobao have their own fleet that can help in the logistics of your business.
Customer service is also important because it helps keep customers and cultivate a loyal following. Loyal customers will then help you acquire new customers through word-of-mouth and positive comments, both of which are effectively cheaper and more effective than any marketing effort.
Integrating Payment Systems Into Your e-commerce Website
Once you have set up your e-commerce website, the next thing to do is to integrate an online payment system.
Digital wallet payments are the leading option for consumers, with credit cards ranking second. In China, AliPay, China UnionPay, and WeChat Pay are the most popular payment methods for e-commerce businesses, followed by 99Bill, YeePay, Payease, and ChinaPnR.
WeChatPay enables customers to purchase directly from the WeChat platform, making transactions convenient. And because payment is easy, customers usually buy on impulse straight from the WeChat mobile app.
The major e-commerce platforms already have integrated online payment systems on their websites. This is the most convenient option for starting e-commerce operators. But if you want to make your own e-commerce website, you have to take the following steps to integrate an online payment system into your platform:
- Establish a Chinese entity for your business.
- Open an account with a Chinese bank and apply for a developer account with your preferred payment systems like WeChat Pay or AliPay.
- Once your account has been approved, apply for an ID from AliPay or WeChat Pay.
- Use the provided SDKs to integrate the system into the backend and front-end of your e-commerce platform.
Mis-handling Chinese tax obligations, invoicing and cross-border sales can lead to fines and reputation risk. MSA provides tailored Tax Advisory & Accounting Outsourcing designed for foreign e-commerce brands in China. Message →
Platform compliance mandates—from product certification to seller agreements—add substantial operational overhead for foreign e-commerce entrants, and violations can result in account suspension or inventory seizure. MSA Asia’s China company setup team guides sellers through platform registration and ongoing compliance requirements. Contact us to establish or expand your e-commerce operations.
