Cross-border e-commerce energizing export growth

Chinese online retailers are accelerating steps to expand their global footprint in a bid to cultivate new customers and diversify revenue sources, as a rising number of Chinese vendors opt to sell their products overseas via cross-border e-commerce platforms, industry experts said.

As an emerging modality for foreign trade, cross-border e-commerce has become an important driving force boosting China's exports amid downward economic pressure and external uncertainties.

Online discounter PDD Holdings, parent company of Chinese e-commerce platform Pinduoduo, said recently that its cross-border e-commerce platform Temu — which offers discounted products shipped directly from China — is now present in more than 50 countries across North America, Europe, Asia and Oceania.

Launched in the United States in September 2022, Temu has gained popularity among consumers overseas as it offers a wide selection of merchandise, including apparel, consumer electronics, jewelry, shoes, bags, cosmetics, baby products and pet supplies at competitive prices.

Chen Lei, chairman and co-CEO of PDD Holdings, said the company hopes to use the supply chain capacities it has built up in recent years to create a new channel that enables consumers from different countries and regions to buy products directly from factories, providing more flexible and personalized supply chains and more cost-effective shopping experiences.

Other Chinese cross-border online marketplaces are ratcheting up efforts to expand their global presence. Short-video app TikTok, owned by Chinese tech company ByteDance, launched its e-commerce service, TikTok Shop, in the US in September.

The service enables users to find and directly buy products featured in livestreaming broadcasts and short videos. TikTok, which began rolling out e-commerce services in 2021 in Indonesia, has entered more than 10 countries, including the United Kingdom, Malaysia, Thailand, the Philippines and Vietnam.

Moreover, fast-fashion online retailer Shein has announced a further expansion of its product categories through collaborations with select global brands and third-party vendors to fulfill its customers' increasing demand for diversified products.

China's cross-border e-commerce sector has seen robust growth in recent years. The import and export scale of the country's cross-border e-commerce transactions reached 2.38 trillion yuan ($329.7 billion) last year, up 15.6 percent year-on-year, said the Ministry of Commerce.

Cui Lili, director of Shanghai University of Finance and Economics' Institute of E-commerce, said the popularity of made-in-China products in overseas markets shows these cost-effective goods have gained wide recognition and burnished the image of Chinese brands abroad in recent years.

Fresh growth opportunities are emerging, Cui said, adding that Chinese enterprises should make full use of cross-border e-commerce platforms to quickly meet demand from overseas markets, learn more about relevant laws, regulations and quality standards of other countries, and adjust supply chains to make products that meet local needs.

"In recent years, Chinese e-commerce platforms have accelerated steps to expand their global footprint by offering shopping subsidies and launching promotional campaigns, thus increasing their influence in overseas markets," said Zhang Zhouping, an independent analyst who has been tracking the cross-border e-commerce sector for more than a decade.

Cross-border e-commerce has emerged as a vital channel for small and medium-sized Chinese enterprises to expand in overseas markets, Zhang said. "Price, quality and service are the most important factors consumers consider when buying products, and cost-effective goods have shown some obvious advantages amid global economic downward pressure."

For Temu and Shein, one of their core competitiveness factors lies in products with competitive prices and fast delivery, which are highly reliant on the establishment of supply chains, he said, adding that the platforms that provide good shopping experiences and services will gain the upper hand amid fierce competition.

Cindy Tai, vice-president of Amazon and head of Amazon Global Selling Asia, said Chinese sellers who sell products abroad through Amazon's overseas marketplaces have maintained steady growth in the past year. She said cross-border e-commerce is increasingly becoming a new growth driver for China's foreign trade.

Tai said the company will ramp up efforts to help Chinese merchants build brands, simplify global operations, optimize global supply chain services, expand their global footprint, as well as scale up localization inputs this year.

Data from Amazon showed that the number of Chinese sellers on Amazon's global sites, each with sales exceeding $1 million, increased by more than 25 percent year-on-year from October 2022 to September 2023.