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China Cross-border E-commerce

2014 was a big year for China’s cross-border e-commerce initiatives. Since the beginning of the scheme implementation of cross-border e-commerce in China has been gradually scaled up from specifically catering to small niche markets to fully encompassing mainstream markets. Two events marked this transition, one was the entry of e-commerce giants such as Alibaba and Amazon and the other was the large amount of finance available to cross boarder ecommerce startups.

2014 was a big year for China’s cross-border e-commerce initiatives. Since the beginning of the scheme implementation of cross-border e-commerce in China has been gradually scaled up from specifically catering to small niche markets to fully encompassing mainstream markets. Two events marked this transition, one was the entry of e-commerce giants such as Alibaba and Amazon and the other was the large amount of finance available to cross boarder ecommerce startups.

Tmall Global was launched on 19 Feb 2014, in line with the shift of import supply from B2B towards B2C. Tmall Global has benefited from the high traffic and numerous existing Tmall clients to become China’s largest cross border e-commerce platform. Apart from Tmall Global, other domestic e-commerce platforms such as JD, YHD, Jumei have also consolidated significant market share. The cross border e-commerce market has even seen the entry of some logistics companies such as sf-express and YTO Express.

Due to the huge market potential startup companies engaging in cross-border e-commerce sprung up around China during 2014. Some of them successfully obtained financing, such as Ymatou closed on $100 million in funding, Metao obtained $30 million and Miyabaobei obtained $60 million.

In addition to e-commerce giants, startup companies are attempting to avail of the huge opportunities presented in the incipient stages of China’s burgeoning e-commerce markets. Considering the increased market entry requirements and financial and manpower resources required, it is expected that not so many entrepreneurial companies will emerge in 2015.

The Size of China’s Cross-border E-commerce Markets

In 2011, 2012 and 2013 the value of commodities traded via cross-border e-commerce in China was 1.6 trillion, 2.1 trillion and 3.1 trillion respectively with an annual growth rate of over 30%. The value of ecommerce trades is expected to rise to 6.5 trillion in 2016.

Since the implementation of the pilot cross-border e-commerce projects in July 2013, 16 cities such as Shanghai, Hangzhou, Ningbo, Zhengzhou, Xian, Yinchuan have been approved for the project by the General Administration of Customs (GAC). Up to the end of 2014, the import-export volume of cross-border e-commerce in these pilot cities has reached 3 billion RMB, according to statistics released by GAC this January.

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