Reasons Why China’s Cross Border eCommerce is Flourishing
With close to 6 trillion last year, China is the second-largest retail market across the globe. One particular area the market is showing promise is cross border eCommerce channel. Cross border eCommerce in China holds an absolute distinction where international organizations are allowed to sell specific products to Chinese customers online, through various popular Chinese eCommerce platforms at special duty rates and without the need for a license to operate a business in the country.
A top business official said that the trade-friendly policies and increasing demand among Chinese consumers for international products drove growth. Top eCommerce companies suggest importing 300 billion dollars’ worth of goods to China by 2023, helping the users access more foreign products. Here are some crucial factors that boost cross border eCommerce.
Cross border eCommerce channel is a prominent way for Chinese customers to buy quality products across the globe; otherwise, they lack access to the goods. According to the Chinese Ministry of Commerce, when purchasing imported goods, users look for design, quality, and safety of the products. With quality and safety being the major considerations, unsurprisingly, baby/mother and beauty are the top-selling categories via cross-border channels. Chinese also loves buying diverse categories with pet supplies, and consumer electronics were the fastest-growing categories in 2018.
China’s senior population (65 and beyond) accounts for more than 17 percent as of 2020. The so-called Silver customers from tier 1 and 2 cities have the most spending power. Reports show that health supplements top the category list by Silver consumers that account for 40 percent of their cross-border shopping. Rising incomes and online shopping are making it easy for Chinese consumers to buy whatever they want. Such inclusiveness is seen in rural areas and lower-tier cities, where spending becomes a significant growth driver for the imported product’s market in China. The less-developed regions account for over 65 percent of the total population and over 45 percent of the economy. A reputed eCommerce company’s report said that the average spend per shopper from the developing areas needs to catch up with those from top-tier cities. However, the sales generated from lower-tier cities rises to 11 percent of the total platform GMV from 2 percent from 2015 to 2019. Moreover, the average spend shopper on various eCommerce platforms from each of the top 17 rural areas in China had surpassed top-tier city spending levels in 2019.
Live streaming plays a crucial role in attracting Chinese customers across various platforms for cross border eCommerce in China, as it allows customers to know about the products and take advantage of exclusive deals. Through live streaming, a top e-commerce platform has reached RMB 500 million from RMB 80 million a year ago. According to a report, live streaming sessions about home cleaning products, personal care, and beauty attract the most shoppers. For small international brands with limited resources for launching a business in China, cross border e-commerce is an efficient and fast way for them to tap into the Chinese market.
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