Cross-border e-commerce: a new strategic channel for Chinese brands to go overseas



According to the General Administration of Customs, the import and export scale of cross-border e-commerce reached 1.98 trillion yuan in 2021, with a year-on-year growth of 15%, among which the export reached 1.44 trillion yuan, with an increase of 24.5%. Cross-border e-commerce has become an important part of China's import and export trade, an important channel for foreign trade enterprises to carry out import and export business, and an important trend of trade mode innovation.

According to the General Administration of Customs, the import and export scale of cross-border e-commerce reached 1.98 trillion yuan in 2021, with a year-on-year growth of 15%, among which the export reached 1.44 trillion yuan, with an increase of 24.5%. Cross-border e-commerce has become an important part of China's import and export trade, an important channel for foreign trade enterprises to carry out import and export business, and an important trend of trade mode innovation. At present, it is particularly important to give full play to the role of cross-border e-commerce in the strategic new channel for Chinese brands to go to sea in China's efforts to build a new development pattern with domestic cycle as the main body and domestic and international cycles promoting each other.

Bringing new certainty to the sea

The world today is undergoing profound changes unseen in a century. The international environment is becoming increasingly complex, with frequent incidents of black swans and grey rhinos, increasing instability and uncertainty. The world economy is Mired in a downturn and economic globalization is encountering adverse trends. At the same time, however, a new round of scientific and technological revolution and industrial transformation is gaining momentum. The new economy represented by e-commerce is deeply integrating with the traditional economy, and the digitalization process of the whole society is greatly accelerating.

The report of the 20th National Congress of the Communist Party of China proposed to "promote the optimization and upgrading of trade in goods, innovate the development mechanism of trade in services, develop digital trade, and accelerate the building of a strong trade country", and "accelerate the development of the digital economy, promote the deep integration of the digital economy and the real economy, and build digital industrial clusters with international competitiveness". Developing digital trade externally and building a digital China internally are already the definitive path for China's future innovation and development. This fully demonstrates that grasping the new opportunities of global digital development and vigorously developing the digital economy are not only an inevitable trend of economic development, but also an important driving force for the new dual-cycle development pattern.

As an important business form of the digital economy in the field of international trade, the emergence and development of cross-border e-commerce adapt to the development needs of trade minimization and flexibility, better adapt to the fast-paced modern society, and greatly reduce the threshold of international trade, so that more small, medium and micro entities can find business opportunities, expand the market, sell products and create brands through cross-border e-commerce. It shows strong vitality and vitality for development.

Lowering the threshold for Chinese brands to go overseas

For enterprises with overseas brands, going overseas through cross-border e-commerce can greatly reduce the threshold of developing overseas markets. Relying on traditional channels, the establishment of a brand in overseas markets needs a lot of investment and long-term operation, brand awareness needs years of accumulation to gradually occupy the target market, only with considerable strength of large enterprises have a chance to succeed.

In the traditional economic era, few Chinese brands have successfully "gone global", and even fewer have become international famous brands. Huawei, Lenovo, Haier, TCL, Hisense, Li Ning and so on are all through long-term continuous product innovation and a lot of channel investment and publicity to gradually establish a foothold in the overseas market, these enterprises are also the domestic market leaders in various fields, with strong strength. Relatively speaking, in recent years, a group of Chinese new brands rely on fast online channels to quickly play brand awareness in overseas markets. These brands have been established for a short time, many of them started from zero, and even have no visibility in the domestic market. After establishing a strong brand influence in overseas markets, they gradually become known to the Chinese people.

In the field of cross-border e-commerce, brands such as Anker Innovation, Shein Xiyin, Zaful Sayf and Zhiou Household have grown rapidly to become the leading brands in various market segments by relying on third-party platforms or self-built independent platforms. Data shows that there are more than 5,000 Chinese overseas brands in the field of cross-border e-commerce. Xinguocao brands such as Jinxing Forest, Perfect Diary and Bubble Mart also attach great importance to online channels in the process of brand going overseas, and quickly build brand mind with the help of cross-border e-commerce.

Supplement the brand to go out of the channel short board

The establishment of a brand is inseparable from the support of channels. For a long time, Chinese foreign trade enterprises have been at the bottom of the global value chain and can only win the market by relying on cheap labor, raw materials, land resources input and a large amount of energy consumption. In recent years, from the perspective of export structure, the proportion of general trade has been much higher than that of processing trade, and high-tech products, mechanical and electrical products, electronic products, automobiles and other products with strong technical content have gradually become the main export products. However, from the perspective of value added, the brand added value of product price is still very small. To a large extent, the reason lies in the lack of channel control of Chinese products in overseas markets. In the export process, most of the products adopt FOB mode. After the products are shipped offshore, the subsequent sales have nothing to do with the export enterprises.

In the age of digital trade, the monopoly advantage of Western countries in the channel market has been weakened by new cross-border e-commerce channels. Cross-border e-commerce serves the online purchasing demand of global consumers and purchasers for high-quality commodities, and connects numerous manufacturers, brand owners, traders and even individual online merchants in various countries. With the support of technology, it builds an efficient online trade and transaction channel. Relying on the new cross-border e-commerce channel, Chinese enterprises with overseas brands can directly reach the global end-consumption and procurement needs, which is self-evident strategic value.

According to eMarketer's research data, the global retail e-commerce transaction volume reached 4.9 trillion US dollars in 2021, with a year-on-year growth of 14%, and is expected to reach 5.4 trillion US dollars in 2022, becoming a new growth point of global consumption. The more than $5 trillion online retail market also provides a large enough market space for Chinese brands to go overseas. More importantly, this online market is open to all enterprises, the rules are equal, and the channels are transparent, which provides a new track for Chinese brands going abroad. On this track, channel capability is no longer the weakness of Chinese brands going abroad.

Enhance the core competence of enterprises with overseas brands

Brands are built on the mental consensus of users. Where users are, how to reach them and how to strengthen them are the core issues of brand building. With the extensive connectivity and deep penetration of the Internet, big data, cloud computing, virtual reality, artificial intelligence and other digital technologies around the world, the synergies between production, supply, circulation, trade and consumption markets are being strengthened rapidly, and a new era of global circulation driven by technology is accelerating. At the same time, with the rapid rise of global emerging economies and the effective implementation of the RCEP Regional Comprehensive Economic Partnership, cross-border e-commerce is breaking through the barriers between countries and regions and becoming an important digital trade infrastructure against the backdrop of the strengthening trend of regional economic integration.

Based on the infrastructure service capability of cross-border e-commerce, enterprises with overseas brands can break up into pieces and effectively reduce trade risks. At the same time, cross-border e-commerce can be used to further improve the ability to judge the demand of overseas markets, timely optimize product development and design, adjust the supply chain, strengthen brand building, and continue to enhance the core competitiveness of enterprises. In this regard, many Chinese brands have carried out successful practice.

In front of consumers, overseas brands can make full use of intelligent data analysis tools provided by cross-border e-commerce platforms, social media and search engines to timely grasp the trend of overseas consumer demand based on consumption big data. Moreover, some brands can establish strong independent apps to directly connect consumer groups, master first-hand consumption data, and realize consumer demand insight for segmented markets. At the same time, with the help of digital tools on the supply side, the supplier network is established to build a flexible manufacturing supply chain with small order and fast reverse, so as to realize rapid product iteration and targeted innovation research and development, and then realize timely product delivery through fast logistics. The whole process fully reflects the consumption insight ability, fine operation ability and continuous innovation ability of cross-border e-commerce enabling brand overseas enterprises, which are exactly the most valuable moat of brand overseas enterprises.

The curtain of a new era of digital trade has opened. On the new track of cross-border e-commerce, there are unlimited opportunities for overseas brands. We look forward to more Chinese products becoming Chinese brands and leading the transformation of made in China into Made in China.