Chinese E-Commerce Powerhouse Soars on Niche Platforms

In the ever-evolving landscape of global e-commerce, Chinese sellers are increasingly turning their attention to niche platforms across Europe, reaping substantial rewards.

A standout example is Zhiou Technology (致欧科技), which has surged on the German e-commerce platform OTTO, amassing a staggering 570 million yuan (over US$80 million) in just two and a half years.

A Stellar Performance on OTTO

Zhiou Technology’s impressive feat on OTTO, a relatively obscure yet formidable e-commerce platform in Germany, has caught the attention of sellers worldwide.

In a mere six months, the company achieved a Gross Merchandise Volume (GMV) of 180 million yuan on OTTO, a figure that left many in the industry astonished. Over the past two and a half years, Zhiou Technology has generated a total GMV of 573 million yuan on OTTO, solidifying its position as a key player on the platform.

This remarkable growth is underscored by Zhiou Technology’s financial reports, which reveal a consistent upward trajectory.

In 2022 and 2023, the company’s revenues on OTTO reached 138 million yuan and 250 million yuan respectively, marking a year-over-year growth of 80.99%. This momentum continued into 2024, with a six-month revenue of 185 million yuan—a 97.11% increase compared to the same period last year.

These numbers not only highlight the platform’s potential but also Zhiou Technology’s strategic prowess in capitalizing on niche markets.

Understanding OTTO’s Market Position

OTTO, established in 1949, is the flagship e-commerce platform of the OTTO Group, a major player in the European retail sector.

Transitioning from a mail-order business in the mid-1990s to an online retail giant, OTTO now stands as Germany’s second-largest online retailer, trailing only Amazon.

In 2023, OTTO’s GMV reached an impressive 6.5 billion euros, with active users numbering 11.7 million—accounting for 13.85% of Germany’s population of 84.48 million in 2023.

OTTO’s traffic is predominantly driven by direct access and organic search, comprising 87% of total visits, with minimal reliance on paid search.

This indicates a robust brand presence and strong consumer trust in Germany and broader Europe, minimizing the need for extensive advertising expenditures.

Selective Entry and Quality Control

OTTO’s selective approach to onboarding third-party sellers has been pivotal in maintaining a competitive and high-quality marketplace.

Since opening its third-party seller market in 2019 and initiating recruitment of Chinese sellers in 2020, OTTO has meticulously limited the number of new entrants.

In 2023, only 75 Chinese sellers were granted entry, with plans to cap this number at around 50 for 2024. This stringent selection ensures that only sellers with significant qualifications and capabilities can join, fostering a competitive environment conducive to high sales performance.

As of recent reports, OTTO hosts approximately 6,500 sellers, with Chinese sellers making up about 300 of them. Zhiou Technology, being among the first Chinese brands to successfully penetrate OTTO, has leveraged this exclusivity to gain substantial market exposure and sales momentum in Europe.

Expanding Horizons Beyond OTTO

While OTTO has been a cornerstone for Zhiou Technology’s European expansion, the company has diversified its presence across other niche platforms.

Notably, Stone Technology (石头科技), renowned for its smart cleaning robots, has also made significant inroads on OTTO. Products like their dual-roller, 3D obstacle-avoiding robotic vacuum cleaner have garnered high customer satisfaction, with nearly 80% receiving five-star reviews.

Consumers have lauded these products for their efficiency and quiet operation, as evidenced by positive testimonials on platforms like YouTube, where influencer endorsements have played a crucial role in driving sales.