GoDigitalChina is organizing a Cross Border E-Commerce Opportunity Tour in China. We welcome Norwegian companies which are now selling products to China via Cross Border E-Commerce or in the process of preparing to join us in this trip. Click here for more information on the trip.

China is the largest e-commerce market in the world. Admittedly, there is keen competition already in the Chinese e-commerce market. However, since the Chinese consumers are very open for trying new products, there are always opportunities for new brands in China with the right niches. With a good digital marketing strategy, cross border e-commerce is probably one of the best ways for Norwegian companies to reach their Chinese consumers. So what are the facts we need to know about cross border e-commerce in China?

A huge and growing market
In recent years, cross border e-commerce has become a new growth force of China’s foreign trading. The Chinese government has also implemented policies and rules that flavours the development of cross border e-commerce – we will discuss more about it later. The trade value of cross-border e-commerce reached almost five trillion yuan in 2015, increased by almost one-third of the size from 2014.

Middle class wants to buy rare brands
Customer-buying-luxury-watch-in-China-photo-Bloomberg
China has now a bigger middle class in the world. The richer Chinese consumers like to buy international apparel and gadgets that are not yet available in China – this gives them more face and feel more socially superior than the others.

Moreover, travelling abroad allows the Chinese consumers to try out brands that one cannot find in the Chinese market yet. If they like the products, they will look for them in China – naturally on cross border e-commerce sites.

Chinese love to buy foreign brands
We all know that Chinese like to buy international luxury goods – Chinese shoppers account for more than one third of the global luxury purchases. In fact, the most popular overseas products among Chinese consumers by categories are: baby products, cosmetics & personal care, fashion and food & health.

With Chinese consumers becoming more sophisticated, the values they look for when it comes to a purchase are – authenticity, a positive buying experience and a good balance between price and quality. Foreign brands are usually able to provide these. This has encouraged the development of cross border e-commerce in China and attracted over 14500 brands from more than 60 countries on Tmall Global – Alibaba’s cross border e-commerce site.

A good way to reduce risk and costs
When we meet our clients, we often hear their concerns on the risk and costs about expanding their businesses to China. Cross border e-commerce is a good way to start small and scale fast. Not only can cross border e-commerce allow you to get familiar with the Chinese market and test your products there, it also reduces the risk and costs your company needs to bear in comparison to opening a physical shop in China.

In addition, cross border e-commerce is a topic with high priority in the Chinese government. In an effort to tackle the grey market imports, the Chinese government implements favourable policies and rules that promote cross border e-commerce. For example, in 2016, the Chinese government set up cross border e-commerce zones in 12 cities. These zones are designated exclusively for the development of cross-border e-commerce industry, with preferential tax policies and streamlined customs clearance procedures. International brands operating in these zones can choose two models to deliver to their customers in China – direct shipping model and bonded warehouse model. Products sold through the online trading platforms in these cross border e-commerce zones are subject to “parcel tax” – which is lower than the normal custom duties. They are also not subject to normal import rules for quarantine and quality checks on goods such as food, cosmetics and health supplements.

GoDigitalChina is organizing a Cross Border E-Commerce Opportunity Tour in China. We welcome Norwegian companies which are now selling products to China via Cross Border E-Commerce or in the process of preparing to join us in this trip. Click here for more information on the trip.

Email: j@godigitalchina.com
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Photo credit: CPP luxury, HKTDC