'Brands from China' ride waves of foreign trade

Global sales increasingly vital as nation steps up efforts to develop new models for cross-border commerce

More Chinese vendors now sell their products globally through cross-border e-commerce platforms, and their number is on the rise, industry experts said.

The increase in such transactions is also playing a substantially vital role in stabilizing China's foreign trade and economic growth amid the COVID-19 pandemic and complex external environment, they added.

Chinese earphone maker 1More is reaping handsome rewards by selling in overseas markets, including the United States, Europe, Japan, the Middle East, Australia and Singapore, via Amazon, the global e-commerce giant.

Lin Boqing, who created 1More in 2015, said Amazon offered the company helpful guidance with consumer demand analysis based on big data. It also provided professional training in operations and taught market expansion strategy.

"Sales of our earphones on Amazon account for about 35 percent of the company's global sales. In 2020, sales via overseas e-commerce channels increased by 400 percent annually," Lin said.

Chinese sellers are paying more attention to building brands and expanding their presence in overseas markets, given the rapid growth in the cross-border e-commerce industry, according to Amazon Global Selling, which helps Chinese merchants sell their products abroad.

"In the past, many Chinese products had only a price advantage," said Cindy Tai, Amazon vice-president and head of Global Selling Asia. "However, we are seeing more and more differentiated and high-tech products of good design come from China, such as smart home appliances, office supplies, clothing and home furnishings."

China has a strong manufacturing base and competitive edge in supply chains, coupled with favorable policy support and the innovative spirit of Chinese entrepreneurs, Tai said. She called cross-border e-commerce an unstoppable trend that is helping drive the transformation from "Made in China" to "Brands from China".

With China's advantages in those areas, "we have full confidence in the prospects of cross-border e-commerce," she said.

The number of Chinese brands that have completed their registration on Amazon has grown 40-fold in four years, and those sellers are emphasizing global expansion, with 14 percent of Chinese brands possessing trademarks in more than five countries and regions, the e-commerce giant said.

"Cross-border e-commerce platforms connect some key links covering procurement, sales and logistics, thus providing a way for micro, small and medium-sized enterprises and entrepreneurs to expand their footprint in overseas markets and create unprecedented new development opportunities," said Zhang Jianping, head of the center for regional economic cooperation at the Chinese Academy of International Trade and Economic Cooperation.

"As a new form of foreign trade, cross-border e-commerce has witnessed rapid growth during the pandemic and become an important driving force for stabilizing China's foreign trade," said Zhang Zhouping, a senior analyst of business-to-business and cross-border activities at the Internet Economy Institute, a domestic consultancy.

It will have a profound impact on the transformation and improvement of the country's foreign trade, Zhang said, adding that with big data technologies, precision marketing becomes accessible. Cross-border e-commerce is also playing an important role in encouraging traditional foreign trade enterprises to build new brands, he added.

This type of trade has been growing exponentially, particularly in the past two years as the pandemic impeded business travel and face-to-face meetings.

The import and export volume of China's cross-border e-commerce totaled 1.98 trillion yuan ($293.2 billion) in 2021, up 15 percent year-on-year, according to the General Administration of Customs. E-commerce exports stood at 1.44 trillion yuan, an annual increase of 24.5 percent.

The country has stepped up efforts to boost the development of new forms and models of foreign trade as part of a broader push to promote high-quality development, the experts said.

As part of the government's supportive measures, the People's Bank of China said in June that it will improve policies for cross-border renminbi settlement in e-commerce and other new modes of foreign trade to better serve the real economy and facilitate trade and investment.

The cross-border business scope of payment institutions will be expanded from goods and services to all transactions under current accounts. It detailed requirements for banks and payment institutions to carry out settlements and specified arrangements for authenticity verification and to prevent money laundering.

The new policy, in effect as of July 21, provides better supportive financial services for foreign trade companies, guides the healthy and sustainable development of new trade models and helps stabilize the economy, the central bank said.

The move will also reduce the negative impacts of exchange rate fluctuations on enterprises and help stabilize foreign trade, said Ma Ruichao, an analyst from China Merchants Securities.

In February, the State Council, China's Cabinet, approved setting up more cross-border e-commerce pilot zones in 27 cities and regions as the government seeks to stabilize foreign trade and investments.

The new pilot zones－including those in Ordos, Inner Mongolia autonomous region, and Yangzhou, Jiangsu province－are meant to replicate and advance the experience of the previous five groups of test zones, according to the State Council.

The move has brought the overall tally of pilot zones to 132, covering almost all provincial-level regions in China, from coastal industrial powerhouses such as Jiangsu, Zhejiang and Guangdong provinces to inland areas.

"Digital tools and digital transformation are key factors for global micro, small and medium-sized enterprises, or MSMEs, to survive and thrive in the unpredictable COVID-19 era," said Diane Wang, founder, chairwoman and CEO of DHgate, a leading Chinese cross-border business-to-business e-commerce company.

Relying on the resilience of China's supply chain, DHgate has empowered global MSMEs with capabilities like greater data flow, deeper understanding of customer demand and a more tailor-made product portfolio to help them succeed in the challenging business environment, Wang said.

The company saw a steady increase in sales of products designed for home use last year. Home appliances, consumer electronics, apparel, toys and outdoor sportswear have gained popularity among overseas consumers, it said.

DHgate is also exploring new possibilities in industries driven by social media. It has launched Myy-Shop, a social commerce software-as-a-service business that connects Chinese supply chains with people who have substantial private domain traffic or influencers on social networking platforms worldwide.

It aims to help Chinese manufacturers, brands and MSMEs access global private domain channels. It is designed to empower Gen Z consumers－those born between the mid-1990s and the early 2010s－and content creators, including internet celebrities, key opinion consumers and brand owners, Wang said.

Myyshop provides social media-based services such as artificial intelligence-powered smart product selection and smart logistics services. It also helps MSMEs, especially entry-level merchants and individuals with social influence, to run their online stores as direct sellers.

The number of active users on MyyShop increased 76.3 percent year-on-year in the first quarter of this year, while the number of paying users rose 65.6 percent year-on-year, with the gross merchandise value skyrocketing by 845.5 percent on a yearly basis, according to DHgate.

Gross merchandise value is the total amount of sales a company makes over a period of time, calculated before deducting accrued expenses. It is useful for comparing total sales volumes between periods of time.

Many foreign trade enterprises are facing mounting pressure and challenges from supply chains and rising logistics costs. The pandemic has affected all forms of transportation, causing supply and demand issues and higher freight rates. Experts have called for an accelerated opening of overseas warehouses and improvements in global service networks.

"Cross-border e-commerce platforms have become an efficient and convenient way for traditional manufacturing enterprises to expand their overseas footprint. They also can help MSMEs open up new markets," said Lyu Gang, a researcher from the Development Research Center of the State Council.

There should be more efforts to participate in the formulation of international digital trade rules and to ramp up policy support for MSMEs in taxation, Customs clearance, exchange rate fluctuations, digital transformation of enterprises and protection of rights in overseas markets, he added.