Cross-border E-commerce Ushers in New Normal

By Ada Wang

After continuous develop- ment in the past decade， Chinas cross-border e-commerce has finally taken shape. As the global economy slumped in 2020， Chinas cross-border e-commerce sales rose against the negative trend.

The COVID-19 pandemic has quickly changed the buying habits of all consumer groups. The global e-commerce market has continued to grow and become the new normal. This requires cross-border e-commerce operators to adopt new methods to maintain sustainable development in the long run.

Recently， Google and Deloitte co-issued the 2021 China Cross-border E-commerce Development Report. The report showed that online sales in overseas markets are continually and rapidly growing， attracting more and more e-commerce consumers. The varieties of products sold through e-commerce is also increasing rapidly.

The report shows that many sub-varieties of e-commerce will also benefit from online operations， especially womens clothing， mens clothing， shoes， computers and mobile phones. This has great significance for the selection of market segments and the positioning of target customers for cross-border e-commerce. Meanwhile， online consumers tend to purchase more from brand websites and try new brands. As such， these developments will reshape the brand structure and provide a new round of development opportunities for cross-border e-commerce companies.

In addition， product function is also a key factor which is taken into consideration by consumers in their first-buying behavior. The emotional factor also plays an important role in promoting repurchasing. This reflects the fact that cross-border e-commerce companies are improving their value and function， and are building emotional connections with users through the advocacy of brand values.

Changes in consumer behaviorsare continuous under this new normal， which is also mentioned in the report， in which it is revealed that approximately 75% of consumers said they will continue to purchase products online， after they chose to shop online for the first time during the pandemic. This shows that in 2020， the growth of global e-commerce will continue to accelerate.

Fan Xucheng， General Manager of the E-commerce Section of the Big Customer Department of Google， said that as consumers buying habits and mindsets are undergoing big changes， the pandemic has made the types of e-commerce products become even richer. Some traditional brands have extended their services online and retail companies are investing more in the online platform. Some DTC brands in specific sectors have also mushroomed.

The report shows that in the past year four varieties dominated the scene： fashion， gardening， 3C and cosmetics. Fashion is still the main battleground for DTC brands， most of which focus on the mass market with prices under USD 50. DTC brands in the gardening sector showed an excellent performance， and some DTC brands saw their annual sales up by more than 100%. DTC brands specializing in the 3C sector also mushroomed and grew robustly. Industry competition is relatively low， and DTC brands in the cosmetics sector show a strong potential for competition.

Lin Guoen， Managing Partner of TMT of Deloitte， said， “compared with other countries， Chinas cross-border e-commerce companies have distinct advantages in terms of policies， supply chains and talent. In the past 20 years， cross-border e-commerce has received great policy support from the national government. With the continued impact of the pandemic， cross-border e-commerce has played a key role in promoting the transition and upgrading of foreign trade and consolidating external circulation. Many favorable policies have been issued. Meanwhile， Chinas cross-border e-commerce brands have built up their supply chain systems through long-term development and competition. The flexible manufacturing， rich product lines and premium product quality have constituted the core competitiveness for Chinas cross-border e-commerce industry. Also， the ‘bumper crop of graduatessatisfies the need for talent in the building of cross-border e-commerce brands. Rapidly-developing domestic e-commerce companies can also provide advanced development concepts and skilled talentfor cross-border brands.”

The report also points out that cross-border e-commerce companies are facing challenges from products， users and brands in their transition and upgrading. First， supported by Chinas strong supply chain system， Chinas cross-border e-commerce companies normally have strong production capabilities， but in terms of product development， there is still room for improvement. Second， although some cross-border e-commerce companies have started to realize the importance of digitizing user behaviors， many companies have not deeply developed usersneeds in such a way as to improve their business. Third， foreign users focus on the spiritual values of brands， but many cross-border e-commerce brands are still in the early phases of development. The shaping and conveyance of brand values have created huge challenges for most cross-border e-commerce companies.