Cross-border e-commerce injects new kinetic energy into foreign trade development
Cross-border e-commerce is a vital force in China’s foreign trade development and an important trend in international trade development. In June this year, the Ministry of Commerce and other departments jointly issued the Opinions on Expanding Cross-border E-commerce Exports and Promoting the Construction of Overseas Warehouses, aiming at expanding cross-border E-commerce exports, optimizing the layout of overseas warehouses and accelerating the cultivation of new kinetic energy of foreign trade. In this issue, invited experts will discuss relevant issues.
Leading the innovation and development of foreign trade formats
What are the characteristics and advantages of cross-border e-commerce compared with traditional foreign trade?
Wang Jian (Professor, university of international business and economics Institute of International Economics and Trade): Cross-border e-commerce is a new format and mode of foreign trade. The development and application of network information technology enables enterprises to innovate the mode of e-commerce, thus promoting the reform of foreign trade management mode.
The basic performance of cross-border e-commerce in the foreign trade industry is that many small and medium-sized foreign trade enterprises and other foreign trade operators can directly sell their goods to overseas final consumers through the Internet platform or their own independent websites. Cross-border e-commerce can bypass many intermediate links in previous trade, such as importers and exporters, wholesalers, retailers, etc., so that foreign trade operators can have direct transactions with overseas consumers. Cross-border e-commerce also enables many small and medium-sized enterprises to compete with traditional foreign trade enterprises and even multinational companies in the global market. The gap market formed by the fragmentation of the global consumer market and the personalized evolution of demand allows small and medium-sized enterprises to find their own development space.
Small and medium-sized enterprises can participate in global trade through cross-border e-commerce because there has been business model innovation in the global market in the past 20 years, that is, the third-party platform model. Third-party platforms empower small and medium-sized enterprises and drive the rapid development of cross-border e-commerce. For example, the combination of Alibaba, China Manufacturing Network, Amazon, Yi Bei and other platforms with domestic industrial belt manufacturers has driven a large number of small and medium-sized enterprises to go to sea. In recent years, through innovative service modes, such as the fully managed and semi-managed service modes of overseas e-commerce platforms Temu and Shein, and the combination of short videos such as Tiktok and e-commerce, the platform has once again promoted the export of China manufacturing through cross-border e-commerce to a record high. According to official statistics, the import and export volume of cross-border e-commerce in China has exceeded 2 trillion yuan.
2023 is a year of explosive growth of cross-border electronic commerce in the world. The COVID-19 epidemic indirectly promoted the rapid development of e-commerce in the world. According to statistics, in 2023, 2.64 billion consumers around the world will have at least one online shopping experience. It is estimated that global e-commerce sales will increase by 50% in the next three years.
Cross-border e-commerce is leading the global market transformation. At present, the scale of cross-border e-commerce trade in all regions of the world has increased significantly, and consumers and business circles are concerned about the changes brought by cross-border e-commerce to global trade. Cross-border e-commerce has not only become an important choice for consumers in mature markets such as Europe and America, but also in Southeast Asia, Latin America and Africa.
Compared with traditional foreign trade, cross-border e-commerce has the following basic characteristics and advantages.
First, cross-border e-commerce has fragmented global trade. Because most cross-border e-commerce companies receive orders directly from overseas consumers, and network information technology makes global market information transparent and market trends change rapidly, foreign trade orders tend to be small and multi-frequency. Foreign trade service enterprises are also constantly innovating to provide various cross-border transportation and distribution methods to adapt to the development trend of fragmented trade.
Second, small and medium-sized enterprises participate in global trade in large quantities. Relying on the cross-border e-commerce platform, SMEs can quickly sell their products to consumers anywhere in the world. The third-party platform of cross-border e-commerce can provide foreign trade services such as information matching, payment and settlement, trade financing, etc., which greatly reduces the threshold for SMEs to participate in global trade, and the global market shows a trend of inclusive trade.
Third, cross-border e-commerce has changed the traditional trade process. Cross-border e-commerce sellers can pre-sell products on overseas e-commerce platforms, or test changes in market consumption preferences through "small orders and quick returns" to obtain the latest trends in overseas market consumption through data in the fastest way. This enables small and medium-sized enterprises to quickly lead overseas consumer markets and gain competitive advantages.
Fourth, cross-border e-commerce has formed a special international cooperation ecological service system. Although cross-border e-commerce can be understood as selling products directly to overseas final consumers, the development of cross-border e-commerce not only includes online marketing, sales and supply chain operation, but also involves many cooperation between horizontal and cross-border e-commerce operators based on the Internet. For example, cross-border e-commerce enterprises selling clothes in Africa should not only lay out the supply chain of cross-border e-commerce in China, but also cooperate with fashion designers, models, online celebrity and even local physical stores in Africa to establish a cross-border service ecosystem. China’s cross-border e-commerce enterprises and platforms pay more and more attention to integrating local resources into the cross-border e-commerce service system, which will help to create new cooperation models with host countries.
After more than 20 years of development, China’s cross-border e-commerce has become an important driving force to lead the innovation and development of foreign trade formats. At present, cross-border e-commerce continues to innovate. Through the pilot project in cross-border electronic commerce Comprehensive Experimental Zone, we attach great importance to the innovation of foreign trade mode and format, promote the digital transformation and international cooperation of foreign trade enterprises, and lay a solid foundation for the high-quality development of cross-border e-commerce. Model innovation, regulatory innovation, policy innovation and format innovation, which interact and integrate with each other, have become the main theme of cross-border e-commerce development.
Release consumption and supply dividends to the world
What is the significance of expanding cross-border e-commerce exports to foreign trade development? How effective has China’s cross-border e-commerce development achieved?
Li Mingtao (Dean, China International Electronic Commerce Center Research Institute, Ministry of Commerce): At present, China’s foreign trade export growth is facing greater uncertainty, global inflation has weakened external demand, geopolitical factors have caused logistics costs to rise, and trade protectionism in traditional key export markets such as the United States and the European Union has risen, which has become a major challenge for many foreign trade export enterprises.
In recent years, China’s cross-border e-commerce has maintained a rapid development trend, and its proportion in the scale of foreign trade import and export has been increasing, which has become a new channel for foreign trade enterprises to cope with global trade challenges. According to the statistics of the General Administration of Customs, in 2023, China’s cross-border e-commerce import and export was 2.38 trillion yuan, up 15.6% year-on-year, accounting for 5.7% of the total import and export value of goods trade in the same period, of which exports were 1.83 trillion yuan, up 19.6% year-on-year. In the first quarter of this year, China’s cross-border e-commerce import and export was 577.6 billion yuan, a year-on-year increase of 9.6%. Cross-border e-commerce has become an important part of China’s import and export trade and an important channel for foreign trade enterprises to carry out import and export business.
At present, China is building a new development pattern with the domestic big cycle as the main body and the domestic and international double cycles promoting each other. Giving full play to the role of cross-border e-commerce as a strategic new channel can further enhance the global appeal of the powerful domestic market, effectively release the productivity of the domestic supply chain, and continuously enhance China’s ability to co-ordinate the domestic and international markets and resources. Cross-border e-commerce has always been at the forefront of opening to the outside world. China has fully released the dividends of market consumption and manufacturing supply to the world through the active opening policy in the field of cross-border e-commerce, which is conducive to expanding imports, promoting balanced trade development, and allowing more global high-quality goods to enter the China market to meet the needs of domestic consumption upgrading; It is also conducive to encouraging more China goods, brands and services to go abroad, tapping the advantages of China’s manufacturing and supply chain to explore the global market, and bringing more development dividends to global consumers. Cross-border e-commerce serves the online purchasing needs of consumers and buyers around the world for high-quality goods, connecting manufacturers, brands, traders and even individual online merchants from all over the world, and building an efficient online trade channel driven by technology. Relying on the new channel of cross-border e-commerce, Chinese enterprises have the extensive ability to directly reach the global terminal consumption and procurement needs.
In order to better serve the development needs of cross-border e-commerce industry, China has approved the construction of 165 cross-border electronic commerce Comprehensive Experimental Zones (hereinafter referred to as "Cross-border e-commerce Comprehensive Experimental Zones") in seven batches since 2015, covering 31 provinces (autonomous regions and municipalities), and Guangdong, Zhejiang, Jiangsu and Shandong have achieved full coverage of prefecture-level cities. As the main policy carrier to support the cross-border e-commerce industry, the core of the cross-border e-commerce comprehensive test area is to build "six systems and two platforms", namely, information sharing system, financial service system, intelligent logistics system, e-commerce credit system, risk prevention and control system and statistical monitoring system, as well as online comprehensive service platform and offline industrial park platform. Focusing on the development of cross-border e-commerce industry and the construction of comprehensive test area, China has successively issued a series of supportive and convenient policies for cross-border e-commerce, such as free customs clearance form for bonded stocking, check and release of parcel export list, summary statistics, tax exemption without tickets, 4% approved income tax for cross-border e-commerce retail enterprises, direct export from cross-border electronic commerce enterprises to enterprises, and facilitation of cross-border e-commerce export return.
The cross-border e-commerce comprehensive test area faces the needs of local industrial development, and continues to invest in carrier construction, hub building and policy innovation, strengthening the construction of "six systems and two platforms", especially deepening innovation in the public services of "six systems". On this basis, we will give priority to serving the export of China’s advantageous industries, vigorously develop the "cross-border e-commerce+industrial belt", tap the strong domestic supply chain capabilities through cross-border e-commerce, let more and better goods go out to serve the global market through cross-border e-commerce, build the cross-border e-commerce comprehensive test area into the main channel to support the standardized development and convenient services of cross-border e-commerce, and continuously improve the personalized and refined service level for the development needs of cross-border e-commerce enterprises, so that enterprises can truly enjoy the state’s taxation, foreign exchange settlement and customs clearance. At the same time, improve the infrastructure of public overseas warehouses, accelerate the construction of cross-border e-commerce public data service platforms, and cultivate more cross-border e-commerce export brand enterprises.
Overseas warehouses provide strong support for export e-commerce
What convenience can overseas warehouses provide for exporting e-commerce? What concrete achievements have been made in the construction and development of overseas warehouses in China?
Wang Huimin (researcher, Institute of International Trade and Economic Cooperation, Ministry of Commerce): Overseas warehouses refer to warehouses built or rented and operated by cross-border e-commerce related enterprises overseas, which provide comprehensive services such as overseas customs clearance, storage, transshipment, sorting, packaging, labeling, distribution and after-sales for cross-border e-commerce goods. Under the mode of cross-border e-commerce exporting overseas warehouses, enterprises can export cross-border e-commerce goods to overseas warehouses in batches first, and then deliver the goods from overseas warehouses to overseas consumers after the cross-border e-commerce platform generates orders. According to different clients, it is divided into self-operated overseas warehouses, third-party overseas warehouses and platform-type overseas warehouses.
Specifically, overseas warehouses can provide various conveniences for exporting e-commerce.
Conducive to improving the localization experience of consumers. In the traditional cross-border e-commerce logistics system, when overseas consumers place an order, the goods are transported from China to foreign countries and then distributed to consumers, which takes a long time and is difficult to support the return. Overseas warehouses transport goods overseas for stocking in advance, which can effectively shorten the delivery time of goods, ensure the stable supply of goods, improve the after-sales service ability and enhance the consumption experience in all directions.
It is conducive to optimizing the export structure of cross-border e-commerce. Compared with air transportation, the centralized transportation mode of overseas warehouses has broken through the restrictions on the weight, volume and nature of goods, and enriched the categories of goods exported by cross-border e-commerce. Overseas warehouses use big data technology to analyze inventory, cargo turnover, customer feedback, etc., and can find changes in consumer demand in time, and feed back information to domestic foreign trade enterprises, driving foreign trade enterprises to quickly develop new products and adjust product supply.
Conducive to cross-border e-commerce supply chain to reduce costs and increase efficiency. Overseas warehouses can achieve a good balance in reducing logistics costs and improving logistics efficiency. The docking of overseas warehouse management platform with enterprise resource planning systems of manufacturers and traders can promote the unification of production and stocking and meeting consumer demand, and alleviate problems such as insufficient inventory or unsalable goods. The supply chain management system of overseas warehouse construction is connected and linked with the cross-border e-commerce platform, which can realize the whole process tracking and dynamic management of source procurement, logistics and transportation, overseas sales and after-sales service, improve the efficiency of goods turnover, improve the accuracy of overseas stocking, and enhance the flexibility of supply chain. Build an overseas integrated service system with overseas warehouses as the core, and digitally connect with the domestic integrated service system to effectively improve the efficiency and level of cross-border e-commerce supply chain.
Conducive to cross-border e-commerce and local common development. In order to improve the localization service level, overseas warehouses gradually deepen cooperation with local governments, hire and train local employees, set up local management teams, and jointly operate distribution networks with foreign enterprises. Overseas warehouses can increase local employment, residents’ income and national tax revenue, and drive local businesses to improve their service capabilities. At the same time, it is also conducive to Chinese enterprises to understand local customs, consumption habits, lifestyles, etc., and better promote Chinese products and brands.
In recent years, the development of overseas warehouses in China has achieved remarkable results, which has strongly supported cross-border e-commerce exports.
First, the scale of overseas warehouses has grown rapidly. Overseas warehouses have increased from more than 1,200 in 2019 to more than 2,500 in 2023, more than doubling. The area of overseas warehouses has increased rapidly, the number of service enterprises has been increasing, and the categories of service goods have been enriched. In 2023, China’s overseas warehouse area exceeded 30 million square meters.
Second, the types and subjects of overseas warehouses are diversified. With the rapid development of cross-border e-commerce business, cross-border e-commerce platforms, cross-border logistics, cross-border supply chains, foreign trade and other enterprises actively participate in the construction of overseas warehouses and carry out differentiated services with their own unique advantages. Cross-border e-commerce sellers can choose suitable overseas warehouses according to their own business characteristics and sales scale.
The third is to expand the service function to high value. More and more overseas warehouses cooperate closely with cross-border e-commerce platforms and foreign trade enterprises to realize the linkage of manufacturing, logistics and transportation, multi-warehouse stocking and online sales, and enhance the stability and flexibility of cross-border supply chain. In order to enhance the product competitiveness of small and medium-sized enterprises, overseas warehouse enterprises continue to expand their service functions. The main value-added services include customs clearance integration, supply chain finance, international compliance consulting, precision marketing promotion, personalized customization and other services, as well as guiding foreign trade enterprises to quickly develop new products according to consumer demand. The localization service of overseas warehouses has enhanced the trust of overseas consumers in cross-border e-commerce platforms and sellers.
Fourth, the level of automation and intelligence of overseas warehouses has improved. Overseas warehouses usually include cross-border e-commerce goods storage center, commodity sorting system, warehouse management system, order management system and local logistics distribution system, equipped with automatic transmission lines, sorting lines, three-dimensional warehouse stackers, robots and other automatic equipment, and strengthen the interconnection of related information systems. Overseas warehouse enterprises continue to increase investment in R&D, and independently develop and deploy various operating systems, such as warehouse management system, cargo tracking system, automatic sorting system, intelligent dispatching system, supply chain management system, business intelligence analysis system, etc., to improve the automation and intelligence level of overseas warehouses.
Fifth, the global layout of overseas warehouses has been gradually optimized. Developed countries are the main markets for China’s cross-border e-commerce exports, and they were also important areas for China’s overseas warehouse construction. With the continuous expansion of cross-border e-commerce export market, emerging markets have become the focus of a new round of overseas warehouse layout in China. China’s overseas warehouses are widely distributed in Europe and the United States, countries and regions that have jointly built the "Belt and Road", and continue to optimize their layout according to changes in market demand.
Actively grasp the opportunity of "cross-border e-commerce+industrial belt"
How do you view the role of cross-border e-commerce in empowering industry development?
Zong Fangyu (Director of the Research Office of the Foreign Economic Research Department of the State Council Development Research Center): In 2023, the Opinions of the General Office of the State Council on Promoting the Stable Scale and Excellent Structure of Foreign Trade proposed that all localities should be encouraged to combine their industrial and endowment advantages to innovate and build a comprehensive cross-border e-commerce pilot zone, actively develop the "cross-border e-commerce+industrial belt" model, and drive cross-border e-commerce enterprises to export to enterprises. In June this year, the Opinions on Expanding Cross-border E-commerce Exports and Promoting the Construction of Overseas Warehouses issued by the Ministry of Commerce and other nine departments proposed to vigorously support the development of cross-border e-commerce empowerment industries.
In recent years, based on the industrial base, all localities have actively joined the new cross-border e-commerce track, forming a large number of "cross-border e-commerce+industrial belts" with distinctive characteristics and international competitiveness. Cross-border e-commerce has the advantages of market channel and business model, and industrial belt has the advantages of manufacturing and products. The two are mutually connected and promoted, forming a new model and new kinetic energy for China to participate in international trade. Guangzhou Cosmetics Industrial Belt, Shunde Small Household Appliances Industrial Belt, Yiwu Small Commodity Industrial Belt, Nantong Home Textile Industrial Belt, etc., which have their own characteristics, have quickly become important participants in international trade in sub-sectors with the empowerment of cross-border e-commerce.
Cross-border e-commerce helps the industry to rapidly expand the international market with high-quality products. Cross-border e-commerce has a fast growth and strong driving force, and its proportion in China’s goods trade has been increasing, driving industrial belt products to achieve high growth. On the one hand, cross-border e-commerce improves the efficiency of product exhibition and sales, so that the supply of products is directly connected with the demand of the international market in real time, and the products are displayed and sold to international customers after being put on the e-commerce platform; On the other hand, cross-border e-commerce has greatly expanded the market scope, changing the limitation that traditional product orders are mainly for a certain range of traders and buyers, not only for corporate customers, but also directly for large-scale individual consumers, covering a wider and deeper international market.
Cross-border e-commerce helps small and medium-sized business entities in industrial belts to deeply participate in economic globalization. There are more than 120,000 cross-border e-commerce business entities in China, a large number of which are small and medium-sized enterprises. Limited by the lack of international resources and asymmetric information, some small and medium-sized manufacturing enterprises are limited by manufacturing links and OEM models. Cross-border e-commerce provides enterprises with a convenient "interface" to enter the international market. Many small and medium-sized enterprises quickly become micro-multinational companies, seize the opportunity of internationalization, actively build their own brands, participate in the whole process of product internationalization, and successfully obtain higher added value in the global value chain.
Cross-border e-commerce reshapes the organizational model of industrial belt. In terms of technology and business model, cross-border e-commerce connects the whole chain of industries such as design, procurement, production, logistics, finance, trade and sales through digital empowerment, and promotes the efficient flow of key elements such as logistics, information flow and capital flow. In terms of demand traction, the rapid development of cross-border e-commerce puts forward higher requirements for the response and support ability of industrial belts. After digital reconstruction and industrial upgrading, industrial belts have formed an efficient linkage industrial chain and ecosystem. For example, traditional industrial belts such as textiles, clothing and household products that have joined cross-border e-commerce show a trend of digitalization and intelligence.
Cross-border e-commerce promotes industrial belts to enhance innovation advantages. With the real-time analysis and judgment of cross-border e-commerce consumer demand big data and the efficient and integrated industrial cooperation system, the innovation process of products and categories has become more active, accurate, fast and flexible, thus enabling the industrial belt to form innovative advantages in core competitiveness such as iterative innovation of featured products and leading industrial trends. For example, relying on Guangzhou’s "Cross-border E-commerce+Clothing Industry Belt", the design and listing of a garment has been shortened from two or three months in the traditional mode to more than ten days, forming the innovative advantage of "small order and quick return" and leading the fashion consumption trend.
Cross-border e-commerce promotes the radiation extension of industrial belts and promotes new industrial belts. The high growth of cross-border e-commerce has continuously formed a radiation linkage around the industrial belt, attracting and gathering more specialized resources to join the industrial belt and promoting the industrial belt to become bigger and stronger. At the same time, the innovation speed of cross-border e-commerce format is fast, and the consumer demand is changing with each passing day. Some areas show new features such as diversification, niche and customization, which constantly spawns industrial belts featuring new categories and formats.
In the future, we should actively grasp the opportunity of "cross-border e-commerce+industrial belt" and promote the integrated development of digital economy and real economy. Efforts should be made to cultivate well-known brands of cross-border e-commerce, encourage enterprises with outstanding competitive advantages and great potential to improve their brand international popularity, and drive industrial belts to enhance their position in international trade and global value chains. Using "AI+ cross-border e-commerce" to form a new empowerment for the industrial belt, the breakthrough of AI technology is expected to accelerate the innovation and transformation of the whole process such as manufacturing, R&D and design, consumer demand and business model, and open up new space for the integrated development of cross-border e-commerce and industrial belts. Promote the green transformation of "cross-border e-commerce+industrial belt", introduce green technologies, provide more green products, and form new advantages in green development. Encourage accurate two-way cooperation between cross-border e-commerce platforms and industrial belts, guide more sub-sectors to develop into characteristic industrial belts, and build a platform for more SMEs to participate in the new cross-border e-commerce model. Improve the comprehensive service level of "cross-border e-commerce+industrial belt", increase the cultivation and supply of compound talents, provide a good development environment for business entities, and accelerate the cultivation of benchmark industrial belts.