Cross-border e-commerce brings business opportunities for China's foreign trade companies

Visitors learn about bamboo and wood products at the 2023 China Cross-border E-commerce Trade Fair in Fuzhou, southeast China's Fujian Province, March 18, 2023. (Xinhua/Lin Shanchuan)

Under the dual drive of policies and market demand, cross-border e-commerce has boomed with innovative measures, which offered massive business opportunities for numerous Chinese small and medium-sized enterprises (SMEs).

"Our company have sold over 20,000 pieces of clothing so far through cross-border e-commerce platforms established last year," said Pan Yong, head of Zhejiang Yunlian Clothing Co., Ltd.

Experts said that the majority of cross-border e-commerce participants are SMEs. Through cross-border e-commerce platforms, they can quickly respond to changes in overseas markets and consumer preferences, which helps enhance the competitiveness of Chinese products in international markets. 

Cross-border e-commerce not only provides a platform for Chinese small and medium-sized foreign trade enterprises to enter the overseas market but also serves as a new growth driver for China's foreign trade.

-- Rapid growth of cross-border e-commerce

Cross-border e-commerce has emerged as a significant force to propel the development of foreign trade.

The value of China's cross-border e-commerce imports and exports exceeded 2 trillion yuan (about 280.55 billion U.S. dollars) for the first time in 2022, reaching 2.1 trillion yuan and marking an increase of 7.1 percent compared with 2021, according to a report released by China's General Administration of Customs (GAC).

At present, there are more than 100,000 market entities in China's cross-border e-commerce sector, and the proportion of cross-border e-commerce goods in foreign trade has risen from less than 1 percent five years ago to approximately 5 percent now. Among these, exports amounted to 1.53 trillion yuan, recording a growth rate of 10.1 percent, and accounting for 6.4 percent of the total value of national exports.

Cross-border e-commerce has maintained its growth momentum since the beginning of this year. According to investigations conducted by the customs on enterprises, over 70 percent of them expect stable or increased cross-border e-commerce imports and exports in 2023, said an official from GAC.

There are two main reasons for the breakthrough in the scale of cross-border e-commerce imports and exports. Firstly, many foreign trade enterprises are seeking transformation and starting to engage in trade through online channels. Secondly, the global economic downturn has led overseas consumers to prefer cost-effective products and online shopping, said Wang Jian, Professor at the University of International Business and Economics.

-- Surging number of comprehensive pilot zones

The rapid development of cross-border e-commerce is inseparable from policy support. 

In recent years, the authorities have formulated a series of policies to provide strong support for the high-quality development of cross-border e-commerce and expand the number of comprehensive pilot zones for cross-border e-commerce, said Zhang Zhouping, director and senior analyst of the B2B and cross-border e-commerce department of CBEC.100EC.CN.

In recent years, various comprehensive pilot zones for cross-border e-commerce have actively promoted the construction of online integrated service platforms. Currently, these platforms serve over 60,000 cross-border e-commerce enterprises, said Li Xingqian, director of the department of foreign trade of the Ministry of Commerce.

"Going forward, the Ministry of Commerce will support and guide these pilot zones to further optimize the functionality of the service platforms, encourage overseas warehouse companies to connect with online integrated service platforms, and provide one-stop service including customs clearance, taxation, finance, and overseas warehousing," Li said.

GAC will continue to strongly support the healthy development of new business forms such as cross-border e-commerce and carry out comprehensive reforms in customs supervision of cross-border e-commerce in an orderly manner, Wu Haiping, director of the comprehensive business department of GAC, said at the regular policy briefing of the State Council.

Many local authorities have also increased their support for the development of the cross-border e-commerce industry.

The Xiamen Municipal Bureau of Commerce recently issued a notice, specifying incentives for the construction of independent cross-border e-commerce platforms and public overseas warehouse projects. Among them, eligible public overseas warehouse projects will receive a subsidy of 500,000 yuan per warehouse, with an annual maximum support fund of 2 million yuan per enterprise.

Hebei Province is striving to promote the construction of local warehouse projects and improve the cross-border e-commerce retail import chain. At the same time, supportive policy measures will be introduced to facilitate the introduction of well-known platforms, payment institutions, and leading enterprises, thus improving the cross-border e-commerce industry chain and ecosystem, said an official of Hebei Provincial Department of Commerce.

--Great potential in market

"Our company has a Japanese brand store and an American brand store on the Amazon platform. Cross-border e-commerce has become an effective path for our company to increase sales. Since the beginning of this year, monthly clothing sales have increased by 20 percent to 30 percent. Currently, we have orders scheduled until October, and we plan to open two more American brand stores on the Amazon platform to strive for an annual output value exceeding 100 million yuan," said Pan Yong.

"Cross-border e-commerce is a very favorable new track for small and medium-sized foreign trade enterprises. Compared to large enterprises, SMEs have faster response to international market preferences and lower cost for market testing," said Wang Jian.

As a new format and model in foreign trade, cross-border e-commerce not only provides development opportunities for foreign trade enterprises but also experiences its own period of growth and opportunities.

According to a research report by the World Trade Organization, global B2C cross-border e-commerce is expected to maintain a growth rate of 27 percent until 2026. 

According to a forecast by Frost & Sullivan, the scale of China's cross-border e-commerce market will reach 13 trillion yuan by 2027, with a compound annual growth rate of 26.6 percent from 2022 to 2027. The contribution of the Chinese cross-border e-commerce market to China's export market will increase from 14.3 percent in 2022 to 27.7 percent in 2027.

"Both in the domestic and overseas markets, cross-border e-commerce has significant room for development and potential, and consumer demand is far from being satisfied," said Zhang Zhouping.