Cross-border e-commerce is the process of Chinese consumers buying overseas products directly from foreign retailers and suppliers via the internet, without the specific need for an intermediary business entity. That being the case, most consumers go through the top e-commerce platforms such as Kaola launched by Netease in 2015, Tmall Global formed by the Alibaba Group in 2014 and JD Worldwide set up by Jingdong in 2015.
As this distribution channel has been facilitated by these platforms, Cross-Border E-Commerce’s popularity is growing exponentially in China. From 2015, annual growth of Chinese customers purchasing overseas products online was more than 70 percent compared to 2014. By 2016, the total purchases from cross-border e-commerce was estimated at 85 billion USD. It is estimated by 2020, 292 million Chinese online consumers will purchase goods from abroad, with sales expected to surpass 157 billion USD.
We mentioned in the previous post, this is thanks to the growing middle-class, as well as increased exposure to foreign products. This is also a result of Chinese government's desire to stimulate economic growth via domestic consumption of the urbanised population. The central government created preferential import policies focused on increasing cross-border e-commerce. Cross-border e-commerce has been rolled out in Chinese cities in recent years, allowing the industry to flourish. In 2013, Shanghai was the first city to be selected for this distribution channel. Other cities followed; among others, preferential tax policies and the first Cross-Border E-Commerce Comprehensive Pilot Zones were established in Hangzhou in early 2015. On 12 January 2016 the State Council officially approved the establishment of twelve of these zones in other Chinese cities. This includes Ningbo, where Qing's China branch is located. In 2017 the Chinese government confirmed their commitment to maintaining cross-border e-commerce.
How might your business benefit from this distribution channel? Contact us at Qing to find out more.
