Cross-border e-commerce is growing in popularity in China

 

 

Chinese are really connected and shop a lot online.

The digital shopping in China grew by more than 70% in 2015. The online shoppers are increasing annually by 19.7% and represent about 361 million persons.

There are lot of ecommerce platforms in China, the giant Alibaba is controlling most of the ecommerce market with its BtoC website Tmall.

 

 

The cross border ecommerce sales have increased from $30 to $85.76 from 2014 to 2016.

As we could see on the table, there are more and more digital buyers. In 2014, they were 20% to shop online whereas they are 40% in 2016.

 

 

A phenomenon which is not going to stop

 

By 2020, more than a quarter of the population will shop digitally for foreign products.

 

 

 

A Massive boom is expected in China’s cross-border e-commerce in the coming years. China’s biggest e-commerce company Alibaba, and consultancy Accenture, predicted that the nation’s annual e-commerce imports and exports would increase more than ten-fold in the next five years, to reach $245 billion by 2020.

 

Why buying foreign products online in China?

 

New platforms for Foreign brands in China

 

There are lots of ecommerce platforms in China allowing people to consume imported products.

In 2014, Alibaba launched Tmall Global and JD launched JD Worldwide in 2015, enabling overseas brands to sell their goods directly to digital shoppers in China. That helped to increase the cross border ecommerce consumption because it was easier for Chinese to find foreign brands. Moreover, since the merchants selling on these B2C platforms have to be authorized, they are considered more trustworthy.

 

 

Some people resell these imported products on China’s largest consumer-to-consumer (C2C) platform, Alibaba’s Taobao.

 

A taste for imported products

 

In the past the Chinese government has controlled many aspects of the country’s import-export trade, but we can notice that this model has faced growing challenges in recent years. Actually the population is more and more interested in foreign products even if they are more expensive.

 

With the emergence of the new middle class, Chinese can now spend money to please themselves.  The China’s middle class is now equal in size to the entire US population and is expected to reach 630 million by 2022. This is expected to drive growth regarding the cross borders consumption because consumers are now ready to pay more for products they consider as premium.

In that way, in 2016, more than 15% of the population will make purchases from abroad worth $85.76 billion.

Chinese consumers have discovered while traveling internationally that foreign products have often a better quality.

A lot of people are using cross border to buy products that are not considered safe in China. This is the case for the baby milk powder, health products, and food products, vitamins or some cosmetic products especially.

 

 

The desire for foreign products in China is continuing to grow. Chinese consumers are willing to pay a premium for foreign products for reasons of trust, authenticity and safety.

Chinese are imported food lovers especially, the fast increase will help China to be the biggest importer of food products in the world by 2018. Imported food product market has grown over 15% for the past five years.

 

 

 

Competitive prices

 

On Internet, you can find better prices and diverse products. That is also a real advantage for Chinese to shop online.

 

Cross-border e-commerce globally

 

On a global scale, cross-border ecommerce habits vary widely.

In the United States as well it is really common to buy online. The Canada also often buy products to the United States.

 

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