Cross-border e-commerce makes increasing portion of import trade in China

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The recent trend of China’s consumption upgrades has led to a surge in demand for imported consumer goods. More and more international brands are seeking to enter the Chinese market to seize these market opportunities. Deloitte China, China International Chamber of Commerce (CCOIC) and AliResearch today jointly released China’s consumer goods market report (report), in-depth analysis of the latest trends in China’s imported consumer goods market and the necessary insights to enter the Chinese market international brands.

According to Zhang Tianbing, Deloitte’s Asia Pacific consumer goods and retail industry leader, “Deloin China’s report, CCOIC and AliResearch focus on an in-depth analysis of China’s imported consumer goods market. It provides valuable insights to support higher quality access. Consumer goods enter the Chinese market from abroad.”

Yu Min, Director General of the China International Chamber of Commerce China Secretariat added: “CCOIC has been committed to foreign trade promotion and international economic cooperation. In recent years, China’s economy has grown steadily, consumer income has increased substantially, and consumer demand has grown. This has promoted imports. Expansion and promotion of consumption upgrades have become one of our top priorities. At the same time, the rise of cross-border e-commerce platforms and the maturity of related business models have provided strong support to meet people’s needs. Better life.”

“China is becoming the world’s largest consumer market and is increasingly open to international exporters. The government continues to reduce import tariffs and introduce business-friendly policies for cross-border e-commerce operations,” said Alibaba Group Vice President and The person in charge said. Ali Research Gao Hongbing “In recent years, Alibaba has been the epitome of an open, flexible, versatile, inclusive and modern global trading platform that enables billions of consumers to buy on a global scale, tens of millions of small and medium enterprises (SMEs) Selling on a global scale. The next wave of globalization will be driven by global SMEs and young consumers, leveraging digital economic infrastructure and digital business models. This will be a more inclusive and sustainable globalization. It is also the China solution Internet infrastructure that Alibaba has built for decades. It will achieve the largest global output in the history of Chinese business in the last century and benefit the international market.

The report shows that due to the sustained and rapid growth of the Chinese economy, the income of Chinese consumers has increased significantly. In addition, the continuous development of infrastructure and the adequate supply of consumer goods have also unleashed consumer demand. China’s total retail sales have grown steadily, accounting for an increasing proportion of the global consumer market. At the same time, China’s online retail market in 2017 – the world’s largest e-commerce market – reached 7.2 trillion yuan, an increase of nearly 32.2% over 2016. This huge potential is largely due to the rapid growth of the digital economy.

China’s cross-border e-commerce market has grown significantly since 2014, and the proportion of total e-commerce sales has soared from 1.6% in 2014 to 10.2% in 2017. The consumer base for importing goods through cross-border e-commerce has also expanded rapidly. According to AliResearch, from 2014 to 2017, the number of Tmall global consumers has increased tenfold. The steady development of retail merchandise imports under the bonded warehouse model and other increasingly mature operating models has changed the cross-border e-commerce shopping experience. Last but not least, the contract time was reduced by half and the average delivery time of bonded warehouses fell from 9.2 days in 2014 to 4.5 days in 2017.

“Consumers are increasingly accustomed to purchasing imported goods through cross-border e-commerce channels, which has become an effective supplement to the general trade model. As another channel to meet the consumption of imported goods, it also stimulates a large number of purchase needs, and To provide Chinese consumers with a variety of products,” Zhang Tianbing said.

Looking ahead, young consumers are becoming the dominant consumer power, and more young people will start buying imported goods. The post-1990 and post-95 generations who are proficient in the Internet have become the largest consumer groups of imported goods, accounting for 45.2% of total spending in 2017.

Since 2016, consumer demand has shifted from everyday necessities to quality goods. For example, in Tmall Global, sales of beauty products increased the fastest in 2016, and digital home appliances ranked first in 2017. Consumers eager for a better life are concentrated in three main categories: beauty (beauty products and clothing, health (health products and food) and households (digital home appliances and household goods).

With the continuous improvement of the consumer experience, the consumption of imported goods has increasingly become the new normal of daily life, resulting in a relatively low consumption ratio of imported goods on key promotion days. “According to our research, in the past few years, the number of transactions and items purchased by new users has increased year after year through the purchase of imported goods through cross-border e-commerce,” Zhang added.

The report also analyzes the ways in which foreign brands enter the Chinese market. Currently, international retailers or brands can enter China through traditional general trade or emerging cross-border e-commerce channels. Compared with general trade, cross-border e-commerce is more likely to obtain imported goods with more open and active policy support, and can help overseas products directly and more easily reach consumers at relatively favorable tax rates. Most importantly, it has greatly shortened the preparation time for foreign brands to enter the Chinese market.

Utilizing Chinese consumers’ e-commerce platforms and big data analytics, global brands are able to regularly update their marketing strategies, sales channels and products, all of which increase their operational efficiency. China’s unique digital environment has evolved from consumer preferences, technology and diverse market players. Therefore, for global brands, entering China through cross-border e-commerce means more than just market expansion. It requires a combination of digital resources and methods to connect and interact with consumers and meet their needs quickly, accurately and efficiently. At the same time, they need to apply advanced technology and data analysis in operations and management to increase efficiency and grow with the digital transformation of China’s retail industry.

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