Amazon eyes bigger H2 e-commerce sales in China

US tech giant Amazon is banking on the burgeoning cross-border e-commerce in China and anticipates Chinese consumers' purchasing demand to rebound in the second half, said Li Yanchuan, head of Amazon China Global Store and Prime.

"Although the resurgence of the COVID-19 pandemic had an impact on international logistics in the first half, the most difficult period has passed and the global logistics segment is gradually recovering in the second quarter," Li said.

Li said Chinese consumers have shown immense enthusiasm and vibrant purchasing power for cross-border online shopping, as the sales on Amazon Global Store, its cross-border shopping platform, during this year's June 18 shopping carnival increased 30 percent compared with the same period last year.

"The country's cross-border e-commerce sector will likely show greater vitality in the second half along with the recovery of consumption," Li added.

He underscored Amazon Global Store's long-term commitment to development in China, saying he has full confidence in the future prospects of the cross-border e-commerce market in China.

"The Chinese government has given strong support to the cross-border e-commerce market, especially cross-border import business in the past few years," Li said, while noting Chinese consumers could buy more diversified imported products and enjoy preferential tax policies, which will boost the healthy development of the cross-border e-commerce sector.

Furthermore, Amazon is tapping into the booming livestreaming e-commerce format via WeChat mini programs. The number of its new WeChat mini program users grew by 140 percent year-on-year in the first quarter, Li said.

He noted beauty, personal care, clothing and sports-related products have been the most popular categories among Chinese consumers in the cross-border e-commerce sector, and fishing, skiing, virtual reality and camping products have also gained popularity among Chinese buyers.

"The orders of cross-border online shopping are still mainly from first-tier cities. However, residents living in second and third-tier cities have displayed rapidly growing purchasing power," Li added.

China's cross-border e-commerce sector has been growing exponentially over the past few years as the country's middle and high-income shoppers are demanding increasingly diversified and personalized products and services.

Statistics from the General Administration of Customs showed the import and export value of China's cross-border e-commerce sector reached 1.98 trillion yuan ($295.6 billion) in 2021, up 15 percent year-on-year.

The country has further optimized the list of imported retail goods for cross-border e-commerce from March 1. A total of 29 product categories with strong demand from consumers in recent years, such as ski equipment, dishwashers and tomato juice, have been added to the list, according to a statement jointly issued by the Ministry of Finance and seven other central departments in late February.

Amazon Global Store now offers over 32 million selections across 35 categories and 550,000 international brands directly from four overseas sites－the United States, the United Kingdom, Japan and Germany.

China became the largest market among all worldwide Amazon Global Store businesses in 2021, with sales surging more than ninefold compared with 2015. The transaction volume during last year's Black Friday shopping spree saw an over 50 percent increase year-on-year, according to Amazon.

"We make use of the advanced artificial intelligence technology to learn about the consumption habits of Chinese consumers and their preferences for overseas brands, and then put the commodities in the cross-border front-end warehouses in advance," Li said.

"As a new form of foreign trade, cross-border e-commerce has witnessed rapid growth during the COVID-19 pandemic, and become an important driving force for stabilizing China's foreign trade," said Zhang Zhouping, a senior analyst on business-to-business and cross-border activities at the Internet Economy Institute, a domestic consultancy.

It will also have a profound impact on the transformation and upgrade of the country's foreign trade, Zhang said, adding that with big data technologies, precision marketing can be realized. In addition, cross-border e-commerce is playing an important role in bolstering traditional foreign trade enterprises to build new brands, he added.

"The penetration rate of cross-border e-commerce in lower-tier cities and townships has been increasing in recent years. Chinese consumers show a rising demand for diversified, personalized and niche products from abroad," said Chen Tao, an analyst with internet consultancy Analysys in Beijing.

Chen said online shopping via livestreaming videos is very popular among the post-80s and post-90s generation of consumers.