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Chinese Cross-border E-Commerce Development
Time Published:2017/05/03 14:12       Browse Times:Times         News Sources:www.wanhaomaoyi.com/en


The personal income of Chinese consumers keeps rising sharply, even as China’s economic growth slows, and many of China’s increasingly affluent middle-class consumers are taking advantage of relaxed import rules to buy more from foreign brands and retailers via the web.

 

Chinese consumers and companies purchased 206.38 billion yuan ($31.96 billion) worth of overseas products via what the Chinese government calls “cross-border e-commerce,” up 60% from 2014, according to a report from Chinese research firm Analysys international and web-only retailer JD.com Inc., No. 1 in the Internet Retailer 2015 China 500. Consumers accounted for 31.3% of those sales, or about $10 billion, compared with 22.5% in 2012, the report says.
 

The report forecasts imports into China via cross-border import e-commerce will top 611.84 billion yuan ($94.76 billion) in 2018, which would represent annual growth of more than 40% for the next three years.
 

The so-called cross-border e-commerce rules China has adopted in recent years make it easier for Chinese consumers to buy foreign goods online, whether through overseas websites or through Chinese marketplaces that take orders for foreign goods. Goods sold under these rules only go through China customs after they’re ordered, and the government developed an expedited clearing process and charges lower duties for small purchases—up to 2,000 yuan ($309)—than for bulk imports. Online orders can be shipped from abroad or stored in special free-trade zones that exist in about a dozen Chinese cities.
 

The report only includes sales through the cross-border e-commerce rules, and not sales by overseas companies via their own e-commerce sites in China, like Apple Inc.’s Apple.cn, No. 11 in the China 500. The report says these cross-border rules have helped slow the growth of a “gray market” in which Chinese entrepreneurs would travel abroad to buy foreign goods, bring them into China as personal purchases and sell them at a profit to Chinese consumers.
 

The growth in consumer purchases through these cross-border rules reflects the rising standard of living of many Chinese consumers, the report says. While China’s economic growth slowed to below 7% last year for the first time in many years, consumer spending increased to 66.4% of the country’s gross domestic product, while average personal income increased 33% in 2015 compared with 2012, according to the report.
 

The cross-border rules prompted big Chinese e-commerce companies like DHgate.com. to open sections of their online shopping portals where foreign brands could take orders and then fulfill items via the free-trade zones or from warehouses abroad. Launched in April 2015, DHgate.comnow sells 3.3 million products from 8,000 brands through 2,000 storefronts, and the report says 10 million shoppers have visited DHgate.comin the past year.
 

To reduce the time the time between a shopper’s order and delivery, DHgate.comoperates facilities in five of China’s free-trade zones and manages warehouses in the United States, Europe, Korea, Japan, Australia and Canada where sellers can store goods for sale on DHgate.com. Chinese consumers can receive cross-border e-commerce orders in as little as one week after placing orders, according to DHgate.com.
 

Although the report doesn’t break out sales of DHgate.com, it says sales in the first quarter of 2016 tripled from those in the second quarter of 2015, the first quarter in which the overseas marketplace was operating.
 

Consumers between the ages of 26 to 45 represent 71% of shoppers on DHgate.com, 83% of shoppers on the site have a college education and 86% are female, the report says. DHgate.com shoppers like to try new products and look for products from well-known brands.
 

Consumers place about 70% of their orders of DHgate.com via mobile devices. The report attributes this high mobile commerce penetration in large part to DHgate.com ties to Tencent Group, the Chinese Internet giant that operates the WeChat mobile social app that claims nearly 700 million users. Every WeChat user’s account includes a link to JD.com, making it easy to click from a message to DHgate.com. Tencent acquired a 15% stake in DHgate.com in 2014.
 

However, when it comes to cosmetics, the report says, Chinese consumers prefer products from Korea, Japan, France, Australia and the United States, especially products specifically designed for Asians.