China’s cross-border e-commerce has increased by 50 percent over the past year, according to a report from eMarketer, and Aussie retailers are well-positioned to cash in on the growth.
Cross-border e-commerce is set to hit US$85.76 billion this year, up 50 percent from US$57.13 billion in 2015, according to a new report from eMarketer.
The report suggests that by 2020 a quarter of the Chinese population — or about half of China’s online shoppers — will be regularly buying foreign products online. This amounts to sales of US$157.7 billion, according to eMarketer estimates
Cross-border shoppers are expected to spend an average of US$473 each this year on foreign purchases.
The increases in cross-border e-commerce in China is part of the massive growth in e-commerce in general in China. The total Chinese e-commerce market grew by more than 70 percent in 2015 to US$672 billion. This growth has been well-documented and generally attributed to the strong growth in China’s increasingly affluent middle class and the expansion and global reach of Chinese e-commerce platforms like Alibaba’s Tmall Global and JD.com.
“While the new cross-border e-commerce tax implemented in April this year negatively affects some categories of goods, the demand for foreign goods via the cross-border e-commerce channel is still expected to remain strong due to better prices compared to offline retailers, perceived quality and better variety,” said eMarketer forecasting analyst Shelleen Shum.
“Furthermore, cross-border e-commerce goods sold via the business-to-consumer (B2C) channel are expected to take up a growing share of the total cross-border e-commerce market in 2016 as consumers shift to platforms that are more professional and organised. Since the merchants selling on these B2C platforms have to be authorised, they are considered more trustworthy.”
Chinese e-commerce operators like Alibaba and JD.com have made substantial strides in opening up their platforms to international retailers.
On June 18th, JD.com generated more than 100 million orders in in a single-day sales event, representing a 60 percent increase on the same day last year. And foreign brands shared in this growth.
According to Internet Retailer, Adidas increased its sales on JD.com tenfold compared with last year’s sales event, while Puma grew its sales by a factor of six.
Aussie retailers are in a great position to take advantage for the growing demand for foreign products. Australia’s (relative) proximity to China, its strong trade relations, and its reputation for high-quality products put Australian retailers in a great position to capitalise on the growing Chinese demand for foreign products.