Cross-border E-commerce in China

CNC
Added On November 4, 2014

Many Chinese people today have developed a lifestyle of buying almost everything online, but it is still not that convenient to order an original foreign product. 
 
Fortunately, the situation may soon become a history. 
 
Lightinthebox.com is a Beijing-headquartered e-retail website that sells and delivers products directly to consumers around the world. 
 
It is a leading foreigner-focused e-commerce platform in China with more than 90 percent of its revenue coming from overseas sales.
 
SOUNDBITE(CHINESE): JIANG YONG, Lightinthebox’s vice president
"We have the most reliable payment system for the suppliers and the platform. Customers from all around the world could enjoy convenient shopping with cheap prices on our website."
 
China is the world’s largest online retail market.
 
The total revenue in the business is estimated to reach 502.4 billion U.S. dollars in 2014.
 
Behind the rosy picture are the country’s 332 million online shoppers, about the same size as the entire population of the United States. 
 
They largely have decent income, fluent computer skills and good exposure to fashion trend.
 
SOUNDBITE: LI YANSHENG, Senior Vice President of Shenzhen 4PX Information Technology
"China has two advantages, the ability to be cost effective globally due to the low cost of production, which has already been proven by traditional exports worldwide. The only difference now is taking the goods and selling it directly on the internet. The advantage still stands.
Secondly, Chinese people are earning more and the standard of living is rising, the need and want of overseas high quality, high priced and safe products is increasing. So for both sides, there are huge demands which prosper the development of international e-commerce."
 
Earlier in September, a group of Chinese and foreign e-commerce insiders gathered in Xiamen, a coastal city of southeast China's Fujian Province, participating the China International Fair for Investment and Trade.
 
They aimed to seek cooperation in cross-border e-retail in belief that growing global economic integration has opened up great opportunities in the sector.
 
Cai Hua, co-founder of the Global Cross-border E-commerce Association, has a 12-year experience in three foreign e-commerce platforms.
 
He says the e-commerce business in China is entering a golden era.
 
Cai’s optimism was shared by Nigel Sims, a director at British company Union Jack Marketing.
 
The British company has wide connections with e-commerce business in Britain.
 
And it is establishing an online platform in China next year, selling many brands not very familiar to the Chinese people.
 
Sims' move represents only a drop in the ocean in terms of foreign companies looking to access the Chinese market via e-commerce channels.
 
Last Month, fashion retailers Top Shop and Miss Selfridge announced partnership with Shangpin.com in hope of approaching Chinese customers. 
 
So far, over 20 British brands have established flagship stores in China’s major business-to-customer platforms.
 
At the same time, a growing number of foreign online retailers, such as Mothercare and Wiggle, are now running Chinese language websites.
 
Along with foreign big names “looking east”, Chinese e-commerce companies have already been “looking west”.
 
Lightinthebox’s vice president Jiang Yong said the company has built warehouses in foreign countries and hires local people to do after-sale service.
 
SOUNDBITE(CHINESE): JIANG YONG, Lightinthebox’s vice president
"Our businesses cover scores of countries and we hired some local people in after-sales service. We also established local warehouses. For example, U.S. and European customers can have their purchased goods directly returned to local warehouses instead of to China."
 
At the same time, China’s better-off middle class is rich enough to buy Europe-made products or even luxuries, therefore, cooperation will be mutually beneficial.
 
The prospects of cross-border e-commerce may be bright but insiders warned that there is a lot to do to substantially tap market potentials.
 
SOUNDBITE: LI YANSHENG, Senior Vice President of Shenzhen 4PX Information Technology
"There are still some difficulties of international e-commerce.  Taking exports as an example, the method of payment and tax return may be a problem. Many cities now are at a trial state but there are still some manor flaws. Secondly from a political point of view, the amount of government subsidies and methods of operating should be strengthened."
 
A presence in foreign e-commerce markets typically entails trusted local partners for technical and logistics support.
 
In addition, cross-border shipments need concerted efforts between two customs. Tariff reductions and other complicated issues are also involved.