2018 CCEE Hangzhou reveals cross-border e-commerce trends

Lila Seidman

Global forerunners in cross-border e-commerce, including representatives from Tmall and JD.com, stopped by the second day of 2018 Hangzhou China Cross-Border E-Commerce Exhibition (CCEE) to detail hot trends in the industry.

Xiu Ke, Tmall’s head officer of the company’s overseas New Retail center, told attendees that the primary challenge for e-commerce in 2019 is establishing a dialogue between Europe and China.

Chinese companies seeking to capture foreign markets must educate about themselves about the target culture, as Chinese products and marketing techniques will likely not be effective in Europe and other regions, he said.

Echoing other speakers at 2018 CCEE Hangzhou, Xiu said that while 80% of the world’s goods are made in China, many westerners still believe products made in China are of poor quality.

“Tmall’s Xiu Ke told attendees that the primary challenge for e-commerce in 2019 is establishing a dialogue between Europe and China.”

To counter what Xiu called an incorrect notion, Tmall is working with the government to launch a campaign under the Belt and Road Initiative to raise awareness about the quality of China-made products. Once overseas consumers change their attitude towards Chinese products, Chinese companies can then establish their own brands, he said.

The payoff could be huge. According to Anser X CEO Huang Dongmin, cross-border e-commerce is projected to grow about 24%, from 22 trillion RMB to a whopping 39 trillion RNB by 2020. Meanwhile, traditional retail is only expected to grow 5%, he said.

Based on data collected by Anser X, cross-border e-commerce between China and other countries increased significantly just over the last year: it jumped by 15% with the U.S., 13% with Russia, 11.4% with France, and 8.7% with the U.K.

Beijing’s recent decision to lower tariffs on automobiles and a spate of other goods, including apparel and household products, will also benefit the sector.

“Cross-border e-commerce is projected to grow about 24%, from 22 trillion RMB to a whopping 39 trillion RNB by 2020. Meanwhile, traditional retail is only expected to grow 5%.”

The tariff cuts announced in May are set to go into effect on July 1, at which point Chinese consumers will be able to purchase overseas-made products at lower prices. Tariffs on passenger cars will be lowered from 25% to 15%, with many other products set to see their tariffs similarly slashed in half.

Hu Jinjing, head officer of JD.com’s global pop-up shop platform, told attendees that while cross-border e-commerce is undoubtedly growing, overseas product demands are changing and sellers need to be aware of the shifts.

JD.com data showed that demand for Korean and Japanese skincare products and cosmetics is growing in the U.S., the e-commerce platform’s second biggest market outside of China.

“Beijing’s recent decision to lower tariffs on automobiles and a spate of other goods, including apparel and household products, will give a boost to cross-border e-commerce when they go into effect next month.”

Russia, the platform’s biggest market outside of China, is also showing an evolution in consumer demands. While most Russians are currently buying phones and household electronics on JD.com, orders for furniture and sportswear are increasing.

According to Hu, the platform has high quality standards for sellers on its platforms. But if quality demands are met, would-be sellers can open an online shop on JD.com in just seven days.

To facilitate cross-border e-commerce, Hu said the platform provides support to Chinese companies that want to enter foreign markets, including offering advice about customs and logistics abroad.

2018 CCEE Hangzhou, held June 12-13, was co-sponsored by Zhejiang Province’s Ministry of Commerce and Cifnews. The event attracted more than 1,000 exhibitors and 50,000 visitors.