Cross-bor­der trad­ing boom­ing on global scale

China Daily (Canada) - - ANALYSIS - By PATRICK FOO

China’s cross-bor­der e-com­merce mar­ket is grow­ing rapidly. In 2016, the busi­ness is ex­pected to reach 6.5 tril­lion yuan ($770 bil­lion), achiev­ing a 30 per­cent growth rate and a 20 per­cent in­crease in China’s to­tal im­port-ex­port trade ra­tio, ac­cord­ing to the Min­istry of Com­merce.

Cross-bor­der e-com­merce is boom­ing on a global scale as well. It is es­ti­mated that by 2021, 15 per­cent, or $424 bil­lion, of global e-com­merce rev­enue will be gen­er­ated by cross-bor­der trans­ac­tions.

The ex­pan­sion of e-com­merce is cre­at­ing more op­por­tu­ni­ties for Chi­nese busi­nesses. Ac­cord­ing to the sec­ond Global Cross-Bor­der e- Com­merce Sur­vey con­ducted by PayPal and mar­ket re­search com­pany Ip­sos, 19 per­cent of global on­line con­sumers shopped on Chi­nese web­sites in 2015, mak­ing China the sec­ond-most pop­u­lar cross-bor­der e-com­merce des­ti­na­tion glob­ally.

Chi­nese mer­chants are also tap­ping into a global trend by tai­lor­ing their busi­ness mod­els and prod­ucts to ap­peal to mil­len­ni­als in­ter­na­tion­ally. Ac­cord­ing to the PayPal Cross-Bor­der 2015 Mil­len­ni­als Re­port, the mil­len­nial pop­u­la­tion is sig­nif­i­cantly more likely to shop on­line than the gen­eral pop­u­la­tion, and nearly half of mil­len­ni­als sur­veyed pur­chased across bor­ders in 2015.

China re­mains the sec­ond­most pop­u­lar cross-bor­der des­ti­na­tion among mil­len­ni­als glob­ally, with cloth­ing, dig­i­tal en­ter­tain­ment, ed­u­ca­tion and con­sumer elec­tron­ics among the most pop­u­lar cat­e­gories.

As China con­tin­ues to ac­cel­er­ate as an e-com­merce pow­er­house, we’re see­ing the coun­try in­creas­ingly move from man­u­fac­tur­ing to in­no­va­tion. Look­ing to the fu­ture, there are three ma­jor cross-bor­der e-com­merce trends that have been ben­e­fit­ing the de­vel­op­ment of the mar­ket.

Chi­nese mer­chants choos­ing to de­velop qual­ity prod­ucts, and own brands, are in­creas­ingly re­ceiv­ing recog­ni­tion in over­seas mar­kets:

First, as the cross-bor­der on­line pur­chas­ing pref­er­ences of con­sumers in Europe, the United States, and other de­vel­oped coun­tries shift from lower prices to bet­ter qual­ity, a grow­ing num­ber of large Chi­nese busi­nesses are ship­ping higher qual­ity prod­ucts and cre­at­ing their own brands, thereby gain­ing recog­ni­tion in over­seas mar­kets.

StyleWe is a per­fect ex­am­ple. It’s a fash­ion plat­form that fo­cuses on the Eu­ro­pean and Amer­i­can mid- to high-end mar­ket, and has at­tracted hun­dreds of tal­ented Chi­nese de­sign­ers to pro­vide con­sumers with orig­i­nal, high-qual­ity and unique prod­ucts from all over the world. Its mo­bile phone app has set a new bench­mark for Chi­nese cross-bor­der e-com­merce mer­chants try­ing to break into the Eu­ro­pean and Amer­i­can mo­bile mar­kets.

Sec­ond, ver­ti­cal op­er­a­tions and new cat­e­gory de­vel­op­ment are break­through points for small and medi­um­sized mer­chants.

Along with tra­di­tion­ally pop­u­lar cat­e­gories such as cloth­ing and con­sumer elec­tron­ics, on­line ser­vices and tech­no­log­i­cal in­no­va­tions are also grow­ing, cre­at­ing more di­verse op­por­tu­ni­ties. Besthair­ fo­cuses on mak­ing seam­less con­nec­tions be­tween man­u­fac­tur­ers and traders of ex­ported goods and var­i­ous over­seas small and medium buy­ers. Com­pa­nies like this also con­trib­ute to mak­ing Chi­nese brands more vis­i­ble in in­ter­na­tional mar­kets.

Shen­zhen Maker Works Tech­nol­ogy has built an open source project plat­form, Make­Block, of­fer­ing one-stop so­lu­tions for en­thu­si­as­tic DIY ro­bot builders around the world.

Third, so­cial me­dia plat­forms have be­come a bat­tle­ground for mer­chants seek­ing cross-bor­der busi­ness.

The in­creas­ing preva­lence of mo­bile tech­nol­ogy has made so­cial me­dia an es­sen­tial part of ev­ery­day life for mil­len­ni­als. Com­pared with con­ven­tional sales mod­els, so­cial me­dia nat­u­rally gen­er­ates “strong in­ter­ac­tion” and close links be­tween com­pa­nies and con­sumers, thereby help­ing com­pa­nies ad­ver­tise their brands at a lower cost.

As a re­sult, Twit­ter, Face­book and other so­cial plat­forms have be­come a fiercely com­pet­i­tive bat­tle­ground for Chi­nese busi­nesses try­ing to ex­plore over­seas mar­kets. Along with ad­ver­tis­ing di­rectly on so­cial me­dia, Chi­nese busi­nesses are also ex­plor­ing new ap­proaches, such as work­ing with on­line celebri­ties. Th­ese celebri­ties have be­come vir­tual am­bas­sadors for brands and prod­ucts and their on­line in­flu­ence among fans helps cre­ate po­ten­tial buy­ers.

As the cross-bor­der e-com­merce en­vi­ron­ment has con­tin­ued to grow and evolve, the pay­ment in­dus­try has also trans­formed at a rapid pace. Pay­ment meth­ods are fun­da­men­tally chang­ing.

Mo­bile tech­nolo­gies now rep­re­sent the fastest-grow­ing pay­ment trend. Phys­i­cal money is dig­i­tiz­ing be­fore our eyes. Trends show that 40 per­cent of the money pass­ing through con­sumers’ wal­lets to­day is in the form of ei­ther checks or cash. In 2017 that fig­ure is pre­dicted to plunge to 25 per­cent.

Se­cu­rity has be­come a key con­sid­er­a­tion for con­sumers and new fi­nan­cial ser­vices com­pa­nies as soft­ware is prone to be­ing at­tacked. Good risk an­a­lyt­ics and se­cu­rity are cru­cial.

The au­thor is vice-pres­i­dent and gen­eral man­ager of PayPal’s cross-bor­der busi­ness for the Chi­nese main­land, Hong Kong, Tai­wan and South Korea. The views do not nec­es­sar­ily re­flect those of China Daily.


The open­ing cer­e­mony of an in­ter­na­tional con­tainer port for cross-bor­der e-com­merce in Hangzhou, Zhe­jiang prov­ince.

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