China’s cross-border e-commerce hits the ground running as industry builds on strong forward momentum

Driven by the steady development of digital technologies and favorable policies, China’s cross-border e-commerce has continued growing rapidly in recent years.

China’s cross-border e-commerce imports and exports have increased by nearly 10 times over the past five years, with the total size of the country’s e-commerce market surging 18.6 percent year-on-year to reach 1.92 trillion yuan (about $285.5 billion) last year, according to statistics released by the General Administration of Customs of China.

A staff member promotes products during a livestream session inside the Suifenhe Area of the China (Heilongjiang) Pilot Free Trade Zone. (Xinhua/Wang Jianwei)

In the first quarter of this year, the scale of China’s cross-border e-commerce trade hit a value of 434.5 billion yuan, according to the Ministry of Commerce.

Statistics compiled by data provider Qichacha indicate that China is home to a total of 33,900 cross-border e-commerce enterprises that are currently engaged in active operations, among which 10,900 were newly registered in 2021, up 72.2 percent year-on-year.

In recent years, Shein, a Chinese fast fashion clothing brand and cross-border e-commerce company, has grown into a cult hit in European and U.S. markets. In May 2021, the brand’s app beat Amazon to become the most popular shopping app in the U.S. Last year, Shein’s overall revenues exceeded 100 billion yuan, up from 1 billion yuan in 2016.

Many overseas customers are hooked on Shein because it constantly adds new styles at cheap affordable prices. Shein can effectively shorten the time from designing and producing a piece of clothing to stocking the product for sale to within seven days, which compares to an average span of half a year for Japanese clothing giant Uniqlo. Besides, Shein is capable of releasing 10,000 new pieces of different products each and every week.

Shein has realized an endlessly flowing stream of new clothing products thanks to its flexible supply chain. The company will make a small batch of initial orders with its suppliers, and then re-stock the items when sales pick up. It also has a dedicated enterprise resource planning (ERP) system for its suppliers, which can automatically submit new orders according to the latest information on sales and inventory levels. The system has also improved the efficiency of Shein’s suppliers while reducing error rates and lowering costs.

Like Shein, more and more Chinese cross-border e-commerce companies have managed to make full use of China’s complete industrial system and strong supply chain networks, while empowering their supply chains with the continued roll out of digital technologies.

Meanwhile, Chinese cross-border e-commerce enterprises have deployed digital tools to better understand the preferences of overseas consumers or even to predict their various needs.

For example, Shein uses Google Trends, the analytics tool associated with the world’s largest search engine platform, to identify hot searches and rising trends in different countries to predict the colors, fabrics, and styles that will likely become popular. The company accurately predicted that lace would be popular in the U.S. during the 2018 summer season.

Photo shows items displayed at the commodity service center for products from the BRICS countries in Xiamen city, southeast China’s Fujian Province. (Xinhua/Wei Peiquan)

Cross-border e-commerce enterprises in China have meanwhile adopted new operation modes, such as livestreaming sessions. The video-sharing platform TikTok, owned by parent company ByteDance, a Chinese Internet technology company headquartered in Beijing, has launched e-commerce business operations in Britain and Southeast Asia, with many Chinese enterprises seizing the chance to bolster their sales and marketing as they pour onto the platform.

In addition to enterprises’ own efforts, the rapid development of China’s cross-border e-commerce is also inseparable from the policy support provided by the Chinese government.

In July 2021, the General Office of the State Council released guidelines on accelerating the development of new forms and models of foreign trade, calling for additional policies to support the development of cross-border e-commerce.

The State Council has approved the establishment of 132 cross-border e-commerce pilot zones in 30 provincial-level regions.

Local governments have also released supporting policies for the development of cross-border e-commerce.

For instance, Huangpu district and the Guangzhou Economic and Technological Development Zone in Guangzhou city, south China’s Guangdong Province, has allocated a fund of 50 million yuan each year to cross-border e-commerce enterprises there to continue expanding their imports and exports.