China Market Entry Advisory

Driven by over 800 million internet users, China achieved over US$1 trillion on e-commerce revenue, accounting for about 45 percent of the global e-commerce market, according to the 01.2020 data of Statistics. China market entry via e-commerce is becoming a new trend among international brands and retailers.

What is Cross Border E-Commerce?

Among the fastest growing subsectors of China’s e-commerce market is Cross Border E-Commerce – the purchase of overseas products via e-commerce platforms. Cross border e-commerce in China holds a specific distinction where international companies are allowed to sell products to Chinese consumers online, through authorized platforms such as Alibaba’s Tmall Global and Kaola, JD Global or WeChat, at preferential duty rates and without a license to operate a business in China.

Why is Cross Border E-Commerce Attractive for International Brands?

Cross Border E-Commerce is an attractive channel for foreign businesses to sell to China, as it allows them to access the world’s largest e-commerce market without the costs and commitment of establishing a formal presence there. This means overseas brands and retailers can access millions of Chinese consumers at a relatively low cost.
No Chinese legal entity, no product registration, no Chinese labeling needed. Furthermore, foreign businesses can benefit from favorable policies such as fast lane customs clearances, lower tax rates and clustering of e-commerce logistics services, among other benefits.
Cross Border E-Commerce therefore allows overseas brands and retailers to test the Chinese market while potentially making significant profits at the same time.

How to Sell to China through Cross Border E-Commerce?

Products can be imported on a per-order basis and shipped from overseas directly to the Chinese consumers. Payment will be received by overseas retailers to their home country bank account and in local currency.
cross border china market entry

Major Cross Border E-Commerce Sales Channels in China​

Tmall Global and Kaola are the biggest domestic Cross Border E-Commerce platforms, contributing over 52.6% of market share by the end of 2018.

Cross border ecommerce channel

Certainly, companies do not have to limit to one platform. In fact, most companies pursue a multi-channel strategy. In this case, companies should consider how the different platforms fit into their overall e-commerce roadmaps along with the market entry strategy.

eTOC Offers Practical Guide for Cross Border E-Commerce

Cross Border E-Commerce is the new opportunity window of China market entry. The potential for retailers and brand manufacturers is enormous. But entering the Chinese market also brings some challenges, e.g. ever-changing framework conditions such as import regulations, rapid development of the highly digital environment, complex and vague information from different sources, strong competition despite of the huge potential, cultural differences and communication barriers… Misunderstandings over how Cross Border E-Commerce in China works frequently end in costly disappointments and retreats from the market despite its vast size and growth prospects.
We hope to help your business access vast and dynamic China e-commerce market. For any questions about Cross Border E-Commerce in China, please do not hesitate to contact us.

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