Since more Chinese consumers are pursuing a higher standard of living and is exposed to foreign products, cross border eCommerce is a rising business right now in China market.

It is estimated that more than 15 percent of the Chinese population would make cross border eCommerce purchases worth US$85.76 billion in 2016. This was expected to increase to a quarter of the population by 2020, accounting for more than half of all digital buyers in the country.

More specifically, China, which can leverage its manufacturing hub and market size. However, eCommerce sites in the region should first resolve key challenges with user interface, service support, and logistics.

Kaola, a cross border eCommerce platform by Netease

More consumers are craving for foreign goods

Online shoppers in China were expected to spend an average US$473.26 each in 2016 on goods outside the domestic market, accounting for 4.2 percent of total retail eCommerce purchases, according to a report. The report also mentioned that online shopping in China increased by more than 70 percent last year, fueled by a higher standard of living and greater exposure to foreign products.

This significant market growth was further driven by the launch of Alibaba’s Tmall Global in 2014 as well as JD Worldwide in 2015, paving the way for foreign brands to peddle their wares directly to online shoppers in China.

Australian Milk Powder has been a popular item on JD Worldwide, JD’s cross border eCommerce platform

Local consumers in search of better quality goods and more trustworthy brands, particularly in categories such as infant products, also looked for foreign retailers.

Cross border eCommerce has a bright future in China

In the future, cross border eCommerce goods sold via 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. One major reason is that merchants selling on these B2C platforms have to be authorized, so they are considered more trustworthy.

According to a March report from Forrester, China’s eCommerce market was projected to climb to US$1.1 trillion in 2020, leading the region’s growth to become nine times larger than Japan’s US$122 billion market and 17 times larger than South Korea’s US$65 billion.

Looking for cross border eCommerce solutions in China? Contact TMO Group and see how we can help your business!

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