Cross-border in China: what are the opportunities for Western companies in 2024?
As you probably may know the e-commerce in China is still booming in 2024 and the figures can make you loose your mind.
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Opportinuties in China in these Products for Crossborder
- Beauty: High-quality international skincare and cosmetic products are highly sought after.
- Health : Vitamins, nutritional supplements, and natural health products are popular.
- Baby Products: Including foreign baby formula, diapers, and baby care items.
- Fashion : Especially luxury and designer brands, as well as high-street fashion.
- Luxury : Including high-end watches, jewelry, and designer accessories.
- Electronics : Latest international electronic devices and gadgets.
- Personal Care : Such as imported shampoos, conditioners, and dental care products.
- F&B : Including foreign snacks, confectionery, health foods, and specialty items.
- Sports and Fitness : Quality sports gear and nutritional supplements for fitness.
- Footwear: High-quality international brands of shoes and sports footwear.
- Pet Products: Premium pet food and accessories from international brands.
- Home Appliances: High-quality, innovative appliances for home and kitchen use.
- Automotive Accessories: Quality car accessories and gadgets from overseas.
- Watches and Jewelry: Including luxury and designer watches and fine jewelry.
- Educational Products: High-quality, educational toys and children’s books.
As of 2023-2024, here are ten key data points about the cross-border e-commerce landscape in China:
- Market Growth: China’s cross-border e-commerce market continues to grow rapidly, with a significant increase in both import and export activities.
- Government Support: The Chinese government has implemented policies to facilitate cross-border e-commerce, including establishing more comprehensive free trade zones and streamlining customs processes.
- Consumer Demand for Foreign Products: Chinese consumers demonstrate a strong demand for foreign products, particularly in categories like luxury goods, beauty products, health supplements, and baby products.
- E-commerce Platforms Dominance: Platforms like Tmall Global, JD Worldwide, and Kaola are leading in cross-border e-commerce, offering foreign brands a gateway to the Chinese market.
- Mobile Commerce: A substantial portion of cross-border e-commerce transactions in China are conducted via mobile devices, emphasizing the importance of mobile-optimized shopping experiences.
- Digital Payment Preference: Chinese consumers predominantly use digital payment methods such as Alipay and WeChat Pay for cross-border transactions.
- Key Source Markets: The top countries for cross-border purchases by Chinese consumers include the United States, Japan, South Korea, Germany, and Australia.
- Logistics and Supply Chain Advancements: Continued investment in logistics and supply chain infrastructure supports the efficient handling of cross-border shipments.
- Rise of Social Commerce: Social commerce, particularly through platforms like WeChat and Little Red Book (Xiaohongshu), plays a significant role in driving cross-border e-commerce sales.
- Regulatory Adaptation: Chinese regulatory frameworks are continually adapting to the evolving nature of cross-border e-commerce, focusing on consumer protection and fair competition.
Then, the Chinese e-commerce market is incredibly exciting thanks to its size and its rapid growth. But the last tendency in China is the development of the cross-border shopping.
What is the cross-border ?
The cross-border shopping allows the Chinese consumers to buy products abroad through e-commerce website.
This technique deserves to be known by more company wishing to sell their products in China. Is actually an excellent way to enter the Chinese market.
The cross-border e-commerce market is flourishing in China as the consumers are more and more willing to buy their products from abroad e-commerce website if they offer them a good service (as a fast delivery, a free returns…). Actually a cross border site in China will have to compete with the e-commerce giant such as Tmall. That’s why you need to have a clear and different positioning to succeed.
Website | Estimated Turnover (USD) | Specialties |
---|---|---|
Tmall Global | 176M USD | A subsidiary of Alibaba Group, Tmall Global is a leading platform for international brands entering the Chinese market, known for its wide range of high-quality products and strong consumer trust. |
JD Worldwide | 38M USD | JD.com’s cross-border platform specializes in offering a curated selection of global products, with a focus on quality assurance, authenticity, and fast logistics. |
Kaola | 80M USD | Known for its specialization in imported goods, particularly in categories such as beauty products, maternal and baby products, and health supplements. |
Pinduoduo | Several Millions | Offers a variety of imported products with a unique approach focusing on group buying and value deals, catering to price-sensitive consumers. |
Douyin E-commerce | 144M USD | The e-commerce arm of Douyin (Chinese TikTok) integrates social media and shopping, leveraging influencer marketing and live streaming to promote cross-border products. |
Why opening a cross-border e-commerce ?
A lot of foreign brands first, decide to open an e-commerce shop using the Tmall Glogal, JD global, douyin etc .
Why?
Because it’s a generic platform which take care of the payments services and all the others problems such as the logistics and the regulatory issues.
But if you only use these platforms the Chinese consumers won’t be able to perceive your brand identity as the platform is quite standardize.
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What are the opportunities for the Western companies?
According to Jack Ma , Alibaba Group , the top categories in cross-border e-commerce in China, reflecting the preferences of Chinese consumers for international products, include:
- Beauty and Skincare: This market includes international skincare, cosmetics, and luxury beauty brands. Chinese consumers value high-quality ingredients and brand prestige. Estimated market size: Several billion USD.
- Health Supplements: Vitamins, nutritional supplements, and wellness products are in demand due to growing health consciousness. Includes traditional herbal supplements and modern health products. Estimated market size: Billions of USD.
- Mother and Baby Products: Includes foreign baby formula, diapers, baby food, and baby care items. Trust in foreign brands, especially after domestic scandals, drives this market. Estimated market size: Billions of USD.
- Fashion and Apparel: Encompasses luxury brands, designer wear, and high-street fashion from international labels. Demand is driven by fashion-conscious consumers and the middle class. Estimated market size: Several billion USD.
- Luxury Goods: High-end watches, jewelry, bags, and accessories. The luxury market in China is one of the largest globally, driven by increasing affluence. Estimated market size: Tens of billions of USD.
- Electronics and Gadgets: Latest technology products including smartphones, laptops, and smart home devices. The market is driven by a tech-savvy consumer base. Estimated market size: Several billion USD.
- Personal Care Items: Imported shampoos, conditioners, dental care, and other toiletries. Quality and brand reputation are key drivers. Estimated market size: Billions of USD.
- Food and Beverages: Includes foreign snacks, health foods, specialty beverages, and confectionery. Chinese consumers are increasingly experimenting with international cuisine. Estimated market size: Billions of USD.
- Sports and Fitness Equipment: Quality sports gear, outdoor equipment, and fitness supplements. Driven by a growing focus on health and fitness. Estimated market size: Billions of USD.
- Footwear: High-quality shoes, including sports footwear and designer brands. Demand for comfort, style, and brand value drives this market. Estimated market size: Billions of USD.
- Pet Products: Premium pet food, accessories, and care products. The rising number of pet owners in China fuels this market. Estimated market size: Billions of USD.
- Home and Kitchen Appliances: High-quality, innovative appliances for modern homes. Driven by urbanization and lifestyle upgrades. Estimated market size: Billions of USD.
- Automotive Accessories: Car accessories, gadgets, and maintenance products. The growing car ownership in China propels this market. Estimated market size: Billions of USD.
- Watches and Jewelry: Luxury and designer watches and fine jewelry. The market is driven by the status symbol and investment value. Estimated market size: Billions of USD.
- Educational Toys and Products: High-quality educational toys, children’s books, and learning aids. Increasing focus on child development and education drives this market. Estimated market size: Billions of USD
These categories are driven by a combination of factors including perceived quality of international products, trust in foreign brands, and a growing middle class with increased spending power.
Moreover, the Chinese government is beginning to facilitate online sales from platforms hosted outside of Mainland China
Logistic Question: Easier than what you think
Logistics for cross-border e-commerce in China involves several key steps and components to ensure efficient and compliant movement of goods from international sellers to Chinese consumers. Here’s an overview of how it works, broken down into points:
- Warehousing Solutions: Many businesses use warehousing solutions either in their home country or in China. Bonded warehouses in China’s free trade zones are commonly used for storing goods, allowing for faster delivery once an order is placed.
- Cross-Border Shipping: (cost too much) Products are shipped from the country of origin to China. This can be done through various modes of transportation, including air, sea, or land, depending on the cost, delivery time requirements, and nature of the products.
- Customs Clearance: Goods entering China must go through customs clearance. This includes submitting necessary documentation, such as proof of purchase and compliance with Chinese import regulations.
- Payment of Tariffs and Taxes: Depending on the product category and value, certain tariffs and taxes may be applicable. E-commerce platforms often have systems in place to calculate and collect these fees at the point of sale.
- Last-Mile Delivery in China: Once the products clear customs, they are handed over to local courier services for last-mile delivery. Companies like SF Express, YTO Express, and JD Logistics are popular choices for efficient and reliable delivery within China.
- (%agic) Integration with E-commerce Platforms: Many cross-border e-commerce platforms have integrated logistics systems. For example, Tmall Global and JD Worldwide offer end-to-end solutions that include international shipping, customs clearance, and last-mile delivery.
- Efficient Tracking and Customer Service: Providing tracking information and customer service throughout the delivery process is crucial. Customers expect to track their orders in real-time and receive assistance if there are any issues with delivery.
- Returns – problem Management: Handling returns can be more complex in cross-border transactions.
- Regulatory : Ensuring compliance with Chinese laws and regulations regarding product imports is essential.
International brands have numerous opportunities in China’s cross-border e-commerce market.
Here are ten key opportunities:
- Growing Demand for Quality Products: Chinese consumers increasingly seek high-quality international products, particularly in categories like health and wellness, beauty, and luxury goods.
- Access to a Vast Market: China’s massive consumer base presents a substantial market opportunity for international brands.
- E-commerce Platform Partnerships: Platforms like Tmall Global, JD Worldwide, and Kaola offer international brands a gateway to enter the Chinese market with less regulatory complexity.
- Increased Consumer Spending Power: The growing middle class in China has more disposable income, leading to an increased willingness to spend on premium international products.
- Brand Differentiation: International brands can differentiate themselves by highlighting unique aspects such as heritage, craftsmanship, quality, and exclusivity.
- Leveraging Digital Marketing: Utilizing China’s digital ecosystem, including social media platforms like WeChat, Weibo, and Douyin, for targeted marketing campaigns.
- Demand for Authentic and Niche Products: Chinese consumers are looking for authentic products and are interested in niche brands offering unique products not available locally.
- Mobile Commerce Advantages: With the prevalence of mobile commerce in China, brands can capitalize on mobile-first strategies for marketing and sales.
- Cross-Border E-commerce Policies: Favorable government policies for cross-border e-commerce simplify the process of selling international products in China.
- Influencer Collaborations: Collaborating with Chinese influencers and KOLs (Key Opinion Leaders) can significantly boost brand visibility and credibility among Chinese consumers.
International brands can leverage these opportunities to successfully enter and grow in the Chinese market, adapting to local preferences and trends while maintaining their global brand identity.
International Brands need a Local Partner for sure
Then, the environment is excellent for the Western companies with the desire of developing their export in China.
Easy approach
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Seoagencychina, the startup Division of GMA? known for its expertise in cross-border e-commerce in China, stands out for its deep market knowledge and innovative approaches. Here are five facts highlighting GMA’s strengths and experience:
- Extensive Experience in the Chinese Market: GMA has accumulated a wealth of experience in navigating the complexities of China’s e-commerce landscape. Their deep understanding of the market nuances makes them a go-to agency for international brands looking to penetrate the Chinese market.
- Up-to-Date with Latest Market Trends: GMA prides itself on staying abreast of the latest trends and developments in the Chinese digital market. They continuously adapt their strategies to leverage new technologies and platforms, ensuring their solutions are cutting-edge and relevant.
- Comprehensive Cross-Border E-commerce Services: The agency offers a full range of services tailored for cross-border e-commerce, including market entry strategy, digital marketing, platform selection and management, and logistics coordination. This holistic approach ensures a seamless market entry and growth for international brands in China.
- Strong Focus on ROI and Data-Driven Strategies: GMA emphasizes return on investment for their clients, utilizing data-driven strategies to maximize marketing effectiveness and sales. They leverage analytics to inform their decision-making, ensuring that their approaches are both efficient and effective.
- Expertise in Digital Marketing and Branding: GMA has a track record of successfully leveraging digital marketing techniques like SEO, social media marketing, influencer collaborations, and content marketing to build and enhance brand presence in the Chinese e-commerce space. Their expertise in digital branding is crucial for businesses looking to establish a foothold in China’s competitive online market.