China’s Top Electronics Retailer Opens a Virtual Storefront on Tmall

China’s biggest brick-and-mortar retailer of home electronics and gadgets has made a new move to embrace e-commerce today. Gome (HKG:0493) has launched a virtual storefront on Tmall, China’s top e-store marketplace.

Gome (which has over 1,600 conventional stores across China) does have its own standalone e-commerce site as well as a stake in struggling Coo8. But Gome’s launch on Tmall seems to suggest that the retailer fancied having the greater traffic that comes from being on Alibaba’s platform. Gome’s new store is here.

It’s a contrast to the strategy of Gome’s gadget retailing nemesis, Suning (SHE:002024). Suning (with over 1,300 stores across China) has been more successful with its own shift to selling on the web, and Suning’s standalone store ranks as China’s fourth largest in the B2C sector (in Q1 2013 figures from iResearch) with 4.5 percent market share. That’s ahead even of the over-hyped “China’s Amazon” that is Dangdang (NYSE:DANG). Gome is in sixth position:

According to Alibaba’s official Alizila blog, the Gome virtual storefront on Tmall “creates the opportunity to play off of each other’s complementary strengths and could serve to further solidify Tmall’s leading position in the consumer electronics sector as well as allow Gome to gain a competitive edge in the online retail arena,” says Tmall general manager Tan Biao.

Gome has a lot of catching up to do to its arch rival Suning, so we’ll have to wait and see how much this new e-store helps.

Tmall now has 88 Chinese B2C sites on its open platform, including Dangdang, Walmart-owned Yihaodian, and own-brand fashion store Vancl.

Interestingly, new figures from McKinsey show that Chinese e-commerce has shifted to platform-based marketplaces – like Alibaba’s Tmall and Taobao; or Tencent’s Paipai – much more so than in the US. Indeed, 90 percent of the industry in China is currently marketplace‑based, compared to just just 23 to 24 percent in the US. Amazon Marketplace is the largest in the US.