Wait, Is Amazon Beating Alibaba In China?

No, not technically, but a new study finds that Amazon is the preferred marketplace for Chinese eTailers when they want to sell their goods internationally.

That’s right, Amazon beats Alibaba’s international marketplace, AliExpress, which actually ranked third among Chinese merchants when it came to selling their goods internationally, 62 percent to 40 percent.

Wish, a mobile app-based online marketplace that lets Chinese retailers and wholesalers reach U.S. and European consumers, actually came in second in the survey at 45 percent.

And eBay was fourth among retailers in China at 28 percent.

The study by Payoneer surveyed 900 eCommerce retailers in China and Hong Kong between January and March. Those who preferred Amazon’s international marketplace cited its “high-quality products” and “simple and fair rules.”

“The opportunity for Chinese sellers working in a global market is growing rapidly. The stigma of ‘made in China’ has quickly changed to ‘branded in China,’ and global online marketplaces are offering more and more opportunities for China-based sellers,” according to Payoneer’s study. “Sellers who, until a few years ago, could barely reach buyers across their own country can now utilize marketplaces to reach buyers across continents. Even small-scale sellers can distribute their goods to [a] large number of buyers, lowering barriers to entry and leveling the playing field for sellers of all sizes.”

China is a huge marketplace that Amazon would love to make more inroads in, and these numbers could also spell trouble for Alibaba’s own ambitious expansion plans, if as China’s most popular online marketplace, it can’t even convince Chinese eTailers to list their products on its international marketplace.

China is already the world’s largest eCommerce marketplace. Chinese retail websites sold $589.61 billion in products in 2015, a 33.3 percent increase from the previous year, according to the National Bureau of Statistics in China. Online sales alone grew 42.4 percent in 2015 to $96.55 billion.

Amazon’s dominance in this category may be somewhat overstated, as 59 percent of eTailers surveyed said they sell their goods internationally on more than one marketplace and 33 percent said they sell on more than two marketplaces.

When the number was upped to those who sell on two or more marketplaces, 41 percent of those surveyed generated revenue of $152,000 or more a year, compared to only 17 percent of those that sold on just one marketplace.

Sellers that made less than $152,000 annually tended to sell on AliExpress and Wish, while those that made more seemed to gravitate toward Amazon and eBay (77 percent of AliExpress sellers generate less than $152,000 in annual sales, compared to only 48 percent of those who sold on Amazon).

And of those 62 percent of Chinese eTailers selling on Amazon, 91 percent of them are doing so on Amazon U.S.

Amazon’s popularity as an international marketplace in China doesn’t appear as though it will slow down anytime soon either.

“The share of sellers on Amazon as a percentage of all cross-border marketplace sellers has consistently increased over the years, with the biggest increase recorded in 2015,” according to the study, which forecasts another increase for Amazon amongst Chinese eTailers in 2016 as well.

For Chinese merchants that sell their goods internationally on Amazon, most seem to be opting to do so because Amazon is a more “trusted brand.”

Of those Chinese eTailers surveyed, 36 percent said they chose Amazon because of its “emphasis on quality products,” 27 percent cited “simple and fair rules,” 20 percent liked the “high traffic volume,” 7 percent praised the “local costumer support,” 6 percent wanted “access to multiple markets” and 4 percent cited “consumer trend.”

For Alibaba, these numbers should be troubling, because the massive Chinese online marketplace has been getting hammered lately for the abundance of counterfeit or knockoff goods sold on its site.

Alibaba has announced new initiatives to try and stem the tide of black market goods available on its site and repair its reputation, but if Chinese eTailers don’t trust the brand to offer their products on the international marketplace, why would American or European retailers be any more eager to follow suit?