Ecommerce explosion: online cross-border sales boom in China offers Irish exporters opportunities
Ecommerce has exploded in China – on current trends half of all of the world’s online transactions will take place in the economic power house this year.
Local Chinese tech champions such as Alibaba, Tencent and JD.com dominate a rapidly-growing ecommerce ecosystem, mostly within China, according to a paper from the World Economic Forum (WEF).
Cross-border sales are increasing, and with an increasingly wealthy population of 1.4 billion, international businesses are keen to crack the market.
Already a number of Irish companies looking to access China are tapping into online channels. Earlier this month, wet wipes maker Irish Breeze signed an agreement to sell through JD.com, one of the largest business-to-consumer online retail platforms in the country and, in July, Larry Goodman’s ABP Food Group entered an agreement with Beijing Hopewise to sell Irish beef through its ecommerce website.
According to the WEF paper, there are five main trends to look out for in China’s ecommerce landscape. One is the growth in cross-border ecommerce between China and the rest of the world. In 2016, cross-border retail ecommerce sales in China were worth $78.5bn (€69bn), a figure set to rise to more than $140bn by 2021.
This is being driven by increasing numbers of Chinese people travelling abroad and being exposed to more international brands and products.
Once they return, they use cross-border eshopping to purchase international products that are either not available in China or are too expensive in local outlets.
In addition, and key for Irish agri-food exporters, the WEF paper finds that Chinese consumers are turning to cross-border eshopping as a way to access international brands due to concerns around consumer and food safety.
Other trends that are emerging in China are the establishment of ecommerce ‘special trade zones’. Since 2015, the country has been setting up pilot trade zones.
The zones provide a streamlined system for cross-border online shopping, with simplified regulations for the faster examination of goods, and easier information-sharing for cross-border ecommerce imports and exports.
Meanwhile, the rise of influencers is also boosting the ecommerce market.
Another trend that is benefiting the Chinese ecommerce economy is the rise of ‘digitally-connected experiential shopping’, a system being used by JD and Alibaba, both of which are opening outlets throughout the country.
Consumers can use technology such as smartphones to scan the barcode of an item in a shop and learn about its source, nutritional information, and price. Delivery to the store can be as fast as 30 minutes. Finally, the paper finds that more and more ecommerce will take place in rural areas.
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