The September 20th meeting of China’s State Council unveiled the government’s renewed support for cross-border e-commerce. China’s Premier, Li Keqiang, indicated that China would select more high-potential cities for cross-border e-commerce pilot zones. To drive China’s Belt and Road Initiative, Li encouraged the development of overseas warehouse facilities and supporting logistics services in key countries. These comments point to continued growth for China’s cross-border e-commerce industry.
Addressing Pain-points to Improve Shopping Experience
This support builds on a series of initiatives that China has introduced to fuel the development of cross-border e-commerce. These favorable policies have significantly improved cross-border e-commerce user experience. But, overseas shoppers still face long delivery times, uncertainty about product quality, and weak after-sales service. The overseas warehousing and logistics improvements proposed by the recent State Council meeting focus on compressing delivery times from weeks to days.
The meeting also addressed the need to reduce transaction risk and protect consumers from fake products, inferior quality, and unscrupulous sales practices.
Cross-border E-commerce: Important Foreign Trade Driver
Currently, trade volume from countries along the “Belt and Road” represents about one-fourth of China’s total foreign trade volume. To continue to drive trade, the Belt and Road Initiative remains in the spotlight. And, these cross-border e-commerce policies are another way to drive trade volume along the Belt and Road.
Cross-border e-commerce has grown at a steady rate of 30%.per year over the past ten years. Data from the China E-commerce Research Center indicates that China’s cross-border e-commerce volume during the first half of 2017 reached RMB 3.6 trillion, up 30.7% over the same period the prior year and far above the 19.6% growth in China’s overall foreign trade during the same period.
Tang Min, a member of the State Council, was quoted as say that aggressively developing cross-border e-commerce
Cross-border E-commerce Boom Drives the Belt and Road Initiative
Across ASEAN, businesses are increasingly reaching China via cross-border e-commerce platforms. By early September, 2017, ASEAN countries had completed 1.23 million transactions with China through the China-ASEAN cross-border e-commerce platform. Total sales volume exceeded RMB 26 million. In Russia, the sales volume from China’s online stores accounted for half of Russia’s cross-border e-commerce transactions, and 90% of all overseas express parcels now come from China. In Spain, for example, consumers previous bought tailored wedding dresses in physical stores, but now a growing number of brides are purchasing their dresses via cross-border e-commerce platforms.
will create “a turning point” for Chinese exporters. The transformation of business models with cross-border e-commerce is an important step in reinforcing China’s overall competitiveness.
Against this backdrop, Belt and Road logistics will be an important lever for driving the next phase of growth. Wang Luo, Director of the Institute of Development Cooperation at the Chinese Academy of International Trade and Cooperation in MOFCOM, also says that China has developed deep experience in facilitating cross-border e-commerce along the Belt and Road. This should continue to drive “win-win” results for countries along the Belt and Road.