Cross-border e-commerce Status quo:
In the first three quarters of 2017, Ningbo’s cross-border import volume reached 4.5 billion yuan, a 30.03% growth from the first three quarters of 2016. As the largest among the 15 cross-border e-commerce trading ports in China, Ningbo bonded zone processed 6 million import declaration forms on November 11th, worth 970 million RMB in total during the Single’s Day shopping feast.
Another figure from the Ningbo’s postal exchange office shows that the postal exchange office now processes 30,000 pieces of mail daily, with peak time over 10,000 per day. The processing power of the Ningbo postal exchange office had grown 3 times since 2014 and will maintain sturdy improvement. Looking into 2018, we believe that cross-border e-commerce import in China will continue current hybrid structure of bonded import and postal import. With an increasing number of pilot cities, they will be less room for under-the-table trading, and most imported parcels will need to go through proper clearance procedures.
B2C users are growing faster than the overall cross-border market, although there is also a slight decrease in growth as the number of cross-border buyers catches up with the overall amount of e-commerce users.
A fragmented market
According to the iiMedia report, the market for cross-border e-commerce is surprisingly fragmented.
While the traditional e-commerce market is heavily dominated by Alibaba (with about 60-70% market share), cross-border e-commerce is much more fragmented with no player getting more than 25% of the total market. Surprisingly, although Tmall and JD are significant players, they by no mean dominate
the cross-border game.
Why do Chinese cross-border buyers purchase?
Better product quality is the main incentive for customers to buy cross-border.
Consequently, Japan, Germany, Korea, France, and the U.S. are top destinations for cross-border purchases, with Japan being a clear leader.
How do Chinese cross-border buyers purchase?
Among cross-border buyers, the frequency of purchase is surprisingly high: 65% of users purchase cross-border at least once a month. 11.6% do so more than once a week
66.2% of orders ranging from 300 to 1,000 RMB. It is, however, important to note that these orders are often made on large platforms which focus on promoting cheaper products. Our personal experience operating hundreds of cross-border e-commerce shops is that customers are very willing to spend more than 1,000 RMB on cross-border purchases, especially in order to make the shipping cost worth it. We find orders between 1,000 to 5,000 RMB to be extremely common via cross-border WeChat stores.
The cross-border e-commerce market in China continues its booming growth. Unlike the local e-commerce market, users are used to shopping in platforms other than Tmal, and sometimes buying directly from overseas merchants. This trend gives a unique opportunity for brands to finally break free from Tmall and
JD.com, and start building a direct relationship with their customers.