Online marketplaces are gateways for Chinese retailers and brands to reach international customers.  And as Amazon is the top marketplace choice for many Chinese sellers, this may mean more competition for North American retailers selling on the marketplace.

62% of e-retailers in China sell goods on marketplaces operated by Amazon.com Inc., the most popular among other international shopping portals, such as eBay Inc. and Etsy Inc. That’s according to a new study released by Payoneer Inc., a business-to-business payment services company. Survey results are based on the responses of 900 e-commerce sellers throughout China and Hong Kong, China between January and March.

Of the 62% of respondents selling on Amazon, 91% sell on Amazon.com in the United States. Among the Chinese merchants who don’t currently sell through Amazon, many plan to join. 26% say they want to sell on Amazon.com, the site for U.S. consumers; 23% wish to join Amazon’s European sites and 12% want to sell through Amazon.co.uk, Amazon’s U.K. site. Other marketplaces Chinese retailers and brands seeking to sell on include: Wish.com (8%), Lazada (6%), eBay (5%), AliExpress (4%), Etsy (3%), JD.com (3%) and Rakuten (3%).

More Chinese sellers on Amazon means more competition for marketplace sellers in North America and abroad—a weight some e-retailers have already noticed. Take Spreadshirt Inc., for example. Spreadshirt is a German custom T-shirt printing company, which sells on marketplaces around the globe, including Amazon.com. The e-retailer says it is facing increased competition on Amazon from Chinese manufacturers selling copycat designs on the marketplace, says Philip Rooke, CEO of Spreadshirt. That competitive pressure from China-based merchants has led Spreadshirt to lower its prices of some products, Rooke says.

Amazon began allowing Chinese merchants who listed products for sale on Amazon.cn--its Chinese site—to list products for sale on some other Amazon-operated sites in 2012. eBay Inc. has allowed Chinese companies sell on its marketplaces around the world since 2007.

Amazon’s high-quality products and “simple and fair rules” are the top reasons Chinese sellers prefer the marketplace, the report says. That’s likely because the process to begin selling on Amazon is simpler than some other marketplaces. Sellers can upload their product listings on Amazon.com within one day and begin selling. In contrast, the marketplace Wal-Mart Stores Inc. operates typically takes more than one month for merchants to get approved and upload their product feed. Wal-Mart attributes its longer timeframe to its extensive vetting process that includes background checks.

Sellers also cite high traffic volume, local customer support and access to multiple markets for choosing Amazon.

Furthermore, 76% of retailers selling on Amazon are selling private-label products. Private label is defined as ordering customized merchandise from a factory and selling it with a custom brand, according to the report.

E-retailers in China sell on marketplaces other than Amazon, too. Many Chinese retailers sell on multiple marketplaces, the report found. 59% sell on more than one marketplace, 41% sell on one marketplace and 33% sell on more than two marketplaces.

“Sellers who until a few years ago could barely reach buyers across their own country, can now utilize marketplaces to reach buyers across continents,” the report says. “Even small-scale sellers can distribute their goods to a large number of buyers, lowering barriers to entry and leveling the playing field of sellers of all sizes.”

45% of respondents said they sell on Wish, an app-based marketplace where Chinese wholesalers and retailers sell to U.S. and European consumers. 40% sell on AliExpress, Alibaba Group Holding Ltd.’s international marketplace, and 28% sell on eBay.

AliExpress and Wish are dominated by smaller sellers, while eBay and Amazon have a more even split between small and larger retailers and brands, according to the survey results. For instance, 77% of AliExpress’s sellers are small, which Payoneer defines as companies with annual revenue less than $150,000. Meanwhile, 52% of Amazon’s sellers are small.

Selling on marketplaces comes with its challenges, too, the biggest being stiff competition. Nearly half (45%) of respondents cited increasing numbers of Chinese sellers as the biggest challenge to selling on online marketplaces. Other common challenges marketplace sellers in China face: high fees and low marginal revenue (27%), following strict rules (16%), tax and trading policies of different countries (11%) and unstable payment methods (2%).

(Source: internetretailer.com  Author: FAREEHA ALI)