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In 2016, more than 15% of the population will make purchases from abroad worth $85.76 billion and by 2020, more than a quarter of the population will shop digitally for foreign products, according to eMarketer in its first analysis of the consumer trend.

Cross-Border-Ecommerce-In-China-emarketer

The chart above in eMarketer’s brand new study represents buyers age 14 and up who have made at least one purchase from a foreign seller either directly through a foreign-based site or an intermediary at least once during the calendar year. Includes desktop/laptop, mobile and tablet purchases.

Last year’s intense growth is also attributable to Alibaba launching Tmall Global in 2014, and JD launching JD Worldwide in 2015, enabling overseas brands to sell their goods directly to digital shoppers in China. In addition, in some categories, such as infant products, consumers in China perceive overseas goods to be higher-quality and more trustworthy.

Cross-border buyers in China are expected to spend an average of $473.26 each this year on global goods, representing 4.2% of the total retail ecommerce market and will amount to a spend of $85.76 billion this year. 

 

Cross-Border-Ecommerce-In-China-emarketer change over time

The eMarketer forecasting analyst Shelleen Shum predicts shifts in platform use towards official and organized sellers.

“Furthermore, cross-border ecommerce goods sold via the business-to-consumer (B2C) channel are expected to take up a growing share of the total cross-border ecommerce market in 2016 as consumers shift to platforms that are more professional and organized. Since the merchants selling on these B2C platforms have to be authorized, they are considered more trustworthy.”

Rising  global brand.com cross-border ecommerce in China

More ‘professional and organized’ sellers? The article does not cite specifically what those disfavored platforms are (one can take a couple guesses) but with the current negative press around the proliferation of counterfeits on Alibaba, it’s probable that official brand.com webstores and non-marketplace models may see a spike in popularity as cross-border ecommerce in China booms.

Excerpts from eMarketer on June 14. Read full article here. 

By Felicia Moursalien
One Belt One Road

Map of One Belt One Road. Source: Chinainvestmentresearch.org

HSBC’s Asia Pacific Chief Executive, Peter WongTung-shun has stated that the ‘One Belt One Road’ trade initiative will require the banking sector in the region to raise up to US$6 trillion of funding over the next 15 years. This is because no single government is able to raise a large sum of money without help from the banking sector.

The ‘One Belt One Road’ project was announced in Beijing in 2013, and aims to establish linkage between mainland China to India, the Middle East and Southeast Asia to promote cross-border trade.

The project leads have already visited Thailand and Malaysia in May to explore opportunities, and plans to visit Indonesia and Singapore next month to analyze the market potential there. The aim of the project is to serve governments, international firms and SMEs and boost logistics for these businesses. The new infrastructure should also provide trade linkages between the countries, which could then lead to the internationalization of the yuan currency.

One Belt One Road Ecommerce Potential

Alibaba founder, Jack Ma has expressed his interest in following the One Belt One Road initiative announcing that the most important regions for his company were countries involved. This aligns with Ma’s aspirations for SMEs to have access to global markets, but are held back by complex regulations, poor global access and lack of access to financing.

The potential for an inter-connected e-road will boost SMEs and potentially fix one of Southeast Asia’s biggest ecommerce bottlenecks; logistics and infrastructure weaknesses. Countries in the One Belt One Road path have large populations, but they are not utilizing their trade potential, and Ma has slowly been penetrating needy markets such as Thailand, investing in online payments and acquiring Lazada. If One Belt One Road receives the funding it requires to fully enable trade along the regions, then it could create even more opportunities for The Alibaba Group, ultimately enabling ecommerce as a whole.

A version of this appeared in South China Morning Post on June 19. Read the full article here.