Online platforms reaping high-end rewards

Ding Yining
Major online platforms have seen fruitful results in their import businesses thanks to domestic consumers' embracing a wider variety of merchandise from overseas brands.
Ding Yining

Major online platforms have seen fruitful results in their import businesses thanks to domestic consumers’ embracing a higher-quality and wider variety of merchandise from overseas brands. The businesses also pledged to double down on their efforts this year to ride this trend.

After purchasing 100 billion yuan (US$14.3 billion) worth of imported products since last November, JD said the total purchase value of overseas brands in the next three years would reach 400 billion yuan and will penetrate deeper into the vast consumer market.

JD said the number of brands on its cross-border import section increased more than 1.5 times since last November, while less well-known brands such as health supplements and personal care brands, Vitamin World, Cenovis, Vidivici and Bubs, saw sales jump more than six times.

Online platforms reaping high-end rewards

Airplane models on display at the Russian Pavilion during the CIIE. Russia is of the countries where Chinese online platforms such as JD reaped the highest sales growth in the first three quarters of this year.

The countries of origin where JD reaped the highest sales growth in the first three quarters included Mexico, Portugal, Ireland, Russia and Israel.

JD said its logistics network now covers 224 countries and regions. Furthermore, in first- and second-tier cities customers will receive their orders within 48 hours.

Jessie Qian, head of consumer markets for KPMG in China, said the CIIE is a witness to how life standards have improved with plenty of shopping choices from all over the world.

She expects the expo to further boost domestic consumption in the future as the country relaxes its import and consumer goods rules.

Technology advancements in data and cloud computing have put China in a leading position in the application and adoption of smart retail.

Research director Zhao Ping, at the international trade sector of the Academy of China Council for the Promotion of International Trade, noted that despite exponential growth in recent years, Chinese players still have less power over the drawing up of online cross-border trade rules, and a stable mechanism for online players in different regions would be a benefit in long-term development.

During last year’s CIIE, Suning signed collaborative deals with companies from 23 countries and regions, and continues to focus on high-end products and daily necessities, and fast-moving consumer goods, even fresh fruit.

In the first seven months, its major focus has been on importing fresh food, beauty, nutritional supplements, and the total import volume jumped more than three times than the same period last year.

It has expanded retail channels to cover online stores and community shops and shopping plazas, with a total of 13,000 physical outlets to help overseas brands reach the largest customer base.

This year, it is leveraging Carrefour and Laox’s platform to introduce import products at the CIIE, which are both Suning affiliates.

Online platforms reaping high-end rewards

A worker at CIIE shows a slice of Parma ham. 

China also approved the establishment of an additional 22 comprehensive pilot zones for cross-border e-commerce, and the total number of pilot zones increased from 13 to 35 in 2018.

The idea is to allow cities with fairly strong economic clout and good business support to leverage their well-developed supply chains to serve the surrounding areas.

China custom figures reveal retail goods imported through China’s cross-border trading policy rose 24 percent to 45.7 billion yuan in the first half this year.

Instead of opening offline stores, leveraging online platforms save logistics, customer service and shoppers’ response can be easily accessed through their comments left on shopping sites.

Domestic consultancy iiMedia Research Group expects cross-border e-commerce import transaction would hit 1.27 trillion yuan by 2020 and online users who use overseas websites for direct shopping would hit 211 million by 2020, more than doubling the size of 101 million at 2018.

In November last year, the Ministry of Finance and several other authorities jointly expanded the product list that are eligible for sale through a cross-border e-commerce scheme, with a total of 1,321 categories of goods.

The Ministry of Finance, customs authorities and the State Administration of Taxation also raised the maximum value of any single purchase through the cross-border scheme to 5,000 yuan from 2,000 yuan, and the combined purchase limit per person from 20,000 yuan to 26,000 yuan.

General manager of Tmall Global Alvin Liu said nearly 700 brands with presence on Tmall is making a name at the CIIE this year with 1,200 new products being debuted, while their latest wares would be available at Tmall Global flagship stores later.

Since last November, the combined transaction of import goods on Tmall Global jumped 40 percent. Pet products, the best-sellers, saw sales more than double over the same period, while electronic devices and nutritional supplements grew over 50 percent, Liu said, adding that the cut of value-added tax has stimulated spending on its platform.

Other popular categories for the mass market, such as beauty and food, grew over 40 percent from a year ago.

Online platforms reaping high-end rewards

Roboy, a robot invented by German company Infineon, is exhibited at this year’s CIIE.

This year, it also expedited the introduction of overseas brands.

The number of brands that opened flagship stores on Tmall Global jumped three times from a year ago, and it also optimized overseas warehouses and logistics in the US, Japan, South Korea and Europe to help ship merchandise to Chinese customers quicker.

Liu added that Alibaba’s retail affiliates, in both online and offline channels such as on-demand delivery shop Freshippo and RT Mart hypermarkets, would be complementary to Tmall Global’s online market place.

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