Chinese cross-border e-commerce platforms gain popularity overseas

Estimated reading time: 4 minutes

By Xu Peiyu

According to a recent report by a third-party market analysis firm, Chinese e-commerce platforms claimed half of the top 10 most downloaded shopping apps worldwide in 2023. SHEIN, a China-based international fashion e-commerce platform, ranked first on the list, followed by Temu launched by Chinese e-commerce giant Pinduoduo. Alibaba, AliExpress, and Pinduoduo were on the seventh, ninth, and tenth places, respectively.

AliExpress, a cross-border retail platform under Chinese e-commerce titan Alibaba, is the app that has gained the most new users in South Korea over the past year, said a report by a South Korean media outlet.

Temu has been well received by American consumers. An executive of the app said that it now offers nearly 4 million SKUs (Stock Keeping Units) in the United States, and has long remained the most downloaded app on both the Apple Store and Google Play in the United States.

Currently, Temu exports over 400,000 packages daily, with more than half of them being shipped to the United States.

Over 100,000 companies engage in cross-border e-commerce in China. Behind the rapid growth of cross-border e-commerce platforms is the rise of the country's manufacturing capabilities. More and more Chinese factories are able to produce highly competitive products in terms of both quality and price.

The Pearl River Delta and the Yangtze River Delta, two major manufacturing hubs in China, have become important sources of goods for cross-border e-commerce. According to a report, the Yangtze River Delta has 32 comprehensive pilot zones for cross-border e-commerce, accounting for about 20 percent of the total in China. It also accounts for nearly half of the country's cross-border e-commerce revenue.

"These Chinese cross-border e-commerce platforms are favored by global consumers mainly because, against the backdrop of global inflation, there is a greater demand for affordable goods. Compared to those on some other overseas e-commerce platforms, the products on Chinese platforms have significant price advantages," said Li Mingtao, head of the research institute at the China International Electronic Commerce Center.

Li said these platforms have price advantages by connecting consumers directly with manufacturers, which eliminates intermediaries, and adopting shipping methods that have advantages and flexibility in terms of taxes, warehousing costs, and delivery. Besides, these platforms are still expanding their market share by offering subsidies and incentives to users, which greatly benefits consumers, Li added.

The rise of Chinese cross-border e-commerce platforms overseas has generated more opportunities for Chinese small- and medium-sized enterprises to expand the overseas market.

Multiple Chinese cross-border e-commerce platforms have rolled out one-stop services, helping merchants with consumer attraction, logistics fulfillment, and after-sales services. The only thing merchants need to do is to put their products on the shelf.

"The benefit of this approach is that it greatly lowers the access to cross-border e-commerce. In the past, you may need to have excellent English skills, know how to run a store and make logistics calculations, and handle after-sales issues. Now you only need to know your products and be able to supply them," said a staff member of AliExpress.

After adopting the one-stop services, an online shop that sells children's clothing on AliExpress saw a tenfold increase in its daily order volume on the first day of the "Double 11" shopping festival, and the shop's monthly performance is still improving, according to the staff member.

SHEIN has adopted an on-demand flexible supply chain system, enabling efficient digital manufacturing while reducing inventory pressure.

Compliance is important for cross-border trade. Li said that protecting intellectual property rights is a key focus for major platforms, and strict measures have been formulated to prevent counterfeiting.

Products infringing upon intellectual property rights, suspected of dumping or receiving relevant complaints will be immediately delisted, said an executive of Temu.

With supply chain upgrades, innovations in platform models, and enhanced product competitiveness, it is believed that more and more Chinese products will be placed in the shopping carts of overseas consumers.