Data from the Chinese Ministry of Commerce has revealed that cross-border ecommerce in China has been growing at over 30% per year from 2008 to 2016, and this expansion looks set to continue. This is in part thanks to the updated guidance issued by the Chinese government on rules for cross-border ecommerce. There was some confusion following some previous statements by the government but this latest clarification has cleared this up and has been received favourably by Chinese ecommerce businesses.
The statement that was released by China’s Ministry of Commerce stated that preferential treatment would still be given for overseas goods purchased online and distributed through bonded warehouses. The preferential treatment in question is where these goods avoid quality checks and quarantine. If this was not to be the case (as was feared before the Chinese government’s clarification), it could have halted the import of many popular foreign products.
The news has been widely welcomed, with Chief Executive Officer of ecommerce provider Voyage One stating “It gives everybody, including our clients, peace of mind to let them know that this is something the Chinese government continues to support.” Deborah Weinswig, the Managing Director of Fung Global Retail and Technology agreed saying “We believe this policy move injects confidence into China’s [cross-border e-commerce] industry as it demonstrates the authorities’ determination to provide regulatory clarity and spur growth for the industry.”
One of those businesses likely to be positive about the government’s clarification is Alibaba and its subsidiaries. Alibaba is undoubtedly the outstanding success of Chinese ecommerce, and this week, its subsidiary AliExpress has announced that it intends to have over one billion customers globally within the next seven years thanks to China’s ‘One Belt, One Road’ initiative.
Since its launch back in 2010, the company has attracted more than 100 million buyers to its website, currently 40th in the Alexa’s list of the world’s most popular websites but rising rapidly. AliExpress has customers from more than 220 countries with Russia, Spain and the United States of America being the biggest spenders on the site. Aliexpress is aiming to increase its market share with various initiatives, the most eye catching being its aim to implement in the next five years 72 hours delivery wherever the customer is in the world. This is in response to the fact that logistics is still the main challenge to Chinese ecommerce. In a recent interview, AliExpress Shen Difan, their general manager said that the current international logistics system is still very traditional and designed for traditional trading and needs to evolve to cater better for ecommerce.
It’s not just Alibaba and its subsidiaries such as Aliexpress that are eyeing the foreign market however. Some of Alibaba’s rivals are also looking to expand their share of the overseas consumer market, JD.com and Suning Commerce Group being two of the most well known as well as a growing number of startups and the next few years will only see China’s dominance in the ecommerce sector grow.