With the COVID-19 pandemic severely disrupting the global economy, global e-commerce remains a rare economic bright spot. Following a record year in 2020, during which e-commerce sales rose 25.7 percent to $4.2 trillion, consumers are making a significant percentage of their purchases via cross-border e-commerce. By 2022, it is estimated that upwards of one in four buyers in the United States will have bought online from a merchant in a foreign country.
China’s cross-border e-commerce business is growing even faster than the overall Chinese e-commerce market, which witnessed a 14.1 percent increase in 2021, according to China’s National Bureau of Statistics. Already, more than 235 million Chinese customers purchase products through cross-border e-commerce channels, and this number is set to increase each year.
However, just because China is a lucrative cross-border e-commerce destination does not mean that it is currently easy or convenient for merchants to sell to China. Various obstacles – such as local consumer outreach and China’s increasingly stringent e-commerce regulatory compliance regime – continue to deter many overseas brands and merchants from entering the Chinese market. But new platforms like JD Marketplace, a partnership between JD.com and Shopify, are making this more possible and seamless than ever.
On May 17, Jing Daily hosted a webinar coinciding with the release of a new joint white paper co-authored by JD.com and Shopify, “The Future of Cross-Border E-Commerce in China: A Guide for Global Brands.” During the webinar, a panel of experts discussed the importance of China’s lucrative cross-border e-commerce market for brands large and small, offering valuable and practical advice to help brands navigate the broader global implications of this surging sector.
Here are Jing Daily’s top five takeaways from the white paper “The Future of Cross-Border E-Commerce in China: A Guide for Global Brands”:
1. Cross-border Import is Very Different From Traditional Trade Import
Generally speaking, cross-border e-commerce has significantly lower regulatory barriers, which makes it a faster, lower-risk, and easier way for international brands to start selling in China. On the flip side, large multinational brands that are confident in their ability to move large volumes in China may choose to go through traditional import channels to provide faster delivery and benefit from B2B logistics cost savings.
2. The COVID-19 Pandemic Turbocharged the Rise of E-Commerce
As the pandemic wreaked havoc around the world over the past two years, it had the unforeseen effect of powering the meteoric rise of e-commerce. In China, the world’s largest e-commerce market, e-commerce sales revenue is set to grow from 13.8 trillion yuan ($2.1 trillion) in 2021 to 19.6 trillion yuan ($3 trillion) in 2024, according to GlobalData forecasts. China now accounts for more than half of all e-commerce globally. Within China, online retail sales of consumer goods will account for 24.5 percent of total retail sales by the end of 2021.
3. Women’s Bags and Womenswear Are the Largest and Fastest-Growing Categories on the JD Marketplace Platform
The JD Marketplace platform, a partnership between Shopify and JD.com, makes it significantly easier for overseas merchants to directly sell to Chinese consumers while also offering considerable operational flexibility to those merchants. To date, JD Worldwide has attracted nearly 20,000 brands and over 10 million SKUs, covering more than 100 countries and regions. On JD Marketplace, the largest and fastest-growing categories are currently trendy women’s bags, womenswear, and fashion accessories.
4. The JD Marketplace Platform is a Valuable Way to Test the Waters in China
Many brands that entered China via JD Marketplace rather than a full-scale on- and offline expansion have seen success in experimenting with strategies to see what works best in the market. One such brand is BRAGG, which had built strong name recognition among Chinese consumers for its apple cider vinegar but quickly was able to roll out a full range of products – including soy sauce, olive oil, health care items, and more – on JD Marketplace, capitalizing on consumer interest and demand for easy shipping and purchase options.
5. When Entering the China Market, Your Followers on Facebook, Instagram and Twitter Don’t Matter
Whether your brand has a few hundred followers or millions, the fact that Facebook, Google and Twitter are blocked in China means that your marketing strategy needs to adapt. Beyond being on JD.com, you should consider how your brand adopts an official presence on Weibo, Douyin or WeChat to interact with your Chinese fans. An Instagram post about your Summer Clearance Sale is not going to have an influence on your China business – so it’s time to get creative and try some new social channels.