The Next Step For Cross-border E-commerce: From Scale Expansion To Ecological Deepening

The next step for cross-border e-commerce: from scale expansion to ecological deepening

 

From the small commodity cross-border distribution center in Yiwu, Zhejiang Province, to the wig export base in Xuchang, Henan Province, and then to the Qingdao International Airport Comprehensive Bonded Zone in Shandong Province, China's cross-border e-commerce is redefining the "global trading" model with its flexible supply chain system, complete supporting services and continuously optimized policy environment.

 

"Cross-border e-commerce, as a new type of trade, has greatly facilitated consumers both at home and abroad," said Lu Daliang, the spokesperson for the General Administration of Customs and the director of the Statistics and Analysis Department. "According to preliminary estimates, in the first three quarters of this year, China's cross-border e-commerce imports and exports amounted to approximately 2.06 trillion yuan, with a growth of 6.4%. Among them, exports were approximately 1.63 trillion yuan, with a growth of 6.6%; imports were approximately 425.54 billion yuan, with a growth of 5.9%."

 

Behind the rapid growth, challenges are also emerging. Factors such as intensified competition, rising costs, and stricter regulations frequently occur. Enterprises must not only strive for "speed" but also consider "stability". The next stage of China's cross-border e-commerce is not only about market expansion, but also about a deep upgrade in models and capabilities.

 

Cross-border e-commerce has accelerated its pace.

Starting from September this year, cross-border merchants in many places of Zhejiang have begun to prepare for the "Double 11" sales. The overseas warehouses are bustling with activity. The Ningbo-based merchant Aozen E-commerce has been well-prepared and has stocked 20,000 Christmas trees in advance. For the Christmas season, it has also adopted the overseas custody model of AliExpress as its core channel.

 

These 20,000 Christmas trees are specifically prepared for the European market. After being shipped from the overseas warehouse, they can generally be delivered within 3 to 5 days. In some areas, the delivery can even be the next day. If the sales are good during this year's 'Double 11' event, we will replenish the stock in time, said Adela, the head of Aozen E-commerce.

 

Chen Yuheng, who runs a glasses factory, felt a great sense of freedom and potential after getting involved in cross-border e-commerce. Currently, this glasses factory has not only overcome its development bottleneck but also increased its workforce from 100 people to over 230. Chen Yuheng said, "Some consumers place orders for 10 or 20 pieces at a time."

 

After securing a large number of orders in the overseas market, Chen Yuheng has developed new ideas for the future development direction. He hopes to adopt a flexible and on-demand manufacturing model similar to SHEIN, to reorganize the process of product development and launch, and has established a young operation team of 30 people to provide professional support for the next stage of expansion.

 

As of now, there are over 120,000 cross-border e-commerce entities in China, expanding from major cities and provincial capitals to second- and third-tier cities. The 165 cross-border e-commerce pilot zones have shown significant effects, covering all 31 provincial administrative regions.

The global expansion strategy of platform enterprises is also accelerating. The Southeast Asian e-commerce platform Lazada under Alibaba has completed the system integration with Tmall on the eve of this year's "Double 11" and officially launched the "One-click Easy Go Global" project, helping Tmall brands enter the five major overseas markets of Malaysia, Singapore, Thailand, Vietnam and the Philippines.

Temu, a subsidiary of Pinduoduo, has now expanded to 90 national markets. Its website system covers numerous countries and regions in the Americas, Europe, Middle East, Africa, Asia and Oceania. According to the "Market Insights on E-commerce Applications and E-commerce-related Brands in 2024" report, in 2024, Temu's global downloads reached 550 million, with a year-on-year growth of 69%.

 

Not only that, TikTok Shop is continuously expanding in Europe. As the first stop for TikTok Shop in Europe, the UK has now become a mature market. As of December 2024, there are over 200,000 active merchants in the UK. The European site is an important territory in SHEIN's internationalization process. Now, with the adjustment of the platform strategy, SHEIN is continuously exploring emerging markets, such as Africa and Oceania. Xiaohongshu has also included overseas business in its agenda. Since early March this year, many Xiaohongshu merchants have received an internal test invitation for the "Outbound Leadership Plan" on their backends. The first phase mainly covers the United States, Hong Kong of China, and Macao of China.

 

Dual drive by policies and industries

This year's government work report stated that efforts would be made to promote the development of cross-border e-commerce, improve the cross-border express delivery logistics system, and strengthen the construction of overseas warehouses. Recently, the "15th Five-Year Plan" proposal indicated that "support will be given to the development of new business forms and new models such as cross-border e-commerce."

 

The steady development of China's cross-border e-commerce industry is driven by both policy incentives and the combined effect of technological and industrial advantages. The manufacturing and supply chain advantages of China have also become the foundation of cross-border e-commerce. China has the world's most complete manufacturing system, with a fast supply chain response speed and strong cost control capabilities, which forms the base for cross-border e-commerce competition. From small commodities in Yiwu to electronic products in Dongguan, to shoes and clothing in Quanzhou and plastic molds in Taizhou, the cost-effective products made in China constitute the core competitiveness of cross-border e-commerce.

 

Technology empowerment has made cross-border e-commerce development more efficient. The involvement of artificial intelligence is bringing cross-border e-commerce into an era of accelerated intelligence. More and more platforms and brands are incorporating artificial intelligence into the entire product lifecycle management. For instance, in the product selection process, artificial intelligence analyzes historical sales, market buzzwords, and social media discussion levels to predict potential best-selling products and demand turning points; and the artificial intelligence customer service, based on user behavior patterns, responds to buyers' demands in real time.

 

Not only that, Li Mingtao, an expert from the China International E-commerce Center, told People's Daily Online, "Cross-border e-commerce has unique characteristics and advantages compared to traditional trade, enabling it to better meet the current global consumption and procurement needs. For instance, cross-border e-commerce reduces trade links and improves the efficiency of cross-border transactions."

 

The penetration rate of cross-border e-commerce in China is still steadily increasing. The proportion and scale of online shopping among the Z Generation and other consumer groups in overseas markets are continuously rising, and Chinese cross-border e-commerce platforms are actively exploring new global markets. At the same time, due to factors such as intensified domestic competition, more and more domestic market entities are entering the cross-border e-commerce sector. All these are driving the steady development of China's cross-border e-commerce market. Li Mingtao added.

Iterating and upgrading through challenges

However, behind the booming development of cross-border e-commerce, there are also challenges that cannot be ignored. Chen Duan, the director of the Center for Digital Economy Integration and Innovation Development at Central University of Finance and Economics, told People's Daily Online that "the current challenges faced by cross-border e-commerce lie in the sharp increase in compliance costs. To cope with different countries' tax, data privacy protection laws, intellectual property reviews, etc., a large amount of funds, manpower and time need to be invested for learning and adaptation, directly squeezing the profits of enterprises. Moreover, the regulatory policies of various countries are in a state of dynamic change. Enterprises may face risks such as account freezing, product removal, fines and even legal proceedings due to unfamiliarity with new regulations or sudden policy changes. This uncertainty poses a huge challenge to business planning."

 

The Ministry of Finance of Japan has released a new draft plan, which aims to abolish the consumption tax exemption policy for imported goods priced below 10,000 yen (approximately 495 yuan). Starting from 2026, a 10% consumption tax will be imposed on small packages from some cross-border e-commerce platforms. This policy is not an isolated case. The United States, the European Union, and Vietnam have successively abolished the small-item tax exemption.

 

Based on this, Zheng Jichang, the director of the China Service Innovation Research Institute, once pointed out that the direct purpose of abolishing the small-amount tax exemption policy was to undermine the "cost-effectiveness advantage" of China's cross-border e-commerce, especially targeting platforms that rely on direct mail small package models, and weakening their price competitiveness.

 

Furthermore, the difficulty of local operation has been generally underestimated. Issues such as language differences, inconsistent payment systems, inadequate after-sales systems, and insufficient cultural identification have caused some Chinese platforms to encounter setbacks during their initial expansion phases. For instance, in the Middle East market, religious and festival factors have a greater impact on the marketing rhythm.

 

At the competitive level, overseas local e-commerce giants and regional players are intensifying their counterattacks. Amazon, Shopee, etc. have a first-mover advantage in local warehousing, payment, and advertising. Overseas e-commerce platforms such as Wildberries in Russia, Bol in the Netherlands, Kaufland in Germany, and B&Q in the UK have actively invited Chinese merchants to join and have launched policies like "zero monthly rent", "commission reduction", and "traffic support".

 

In Chen Duan's view, the future competition in China's cross-border e-commerce is a competition in ecosystem construction and value creation. She stated, "The future competition is an ecosystem competition. Platforms need to integrate resources from logistics providers, payment institutions, marketing service providers, training and consulting firms, etc., to build a one-stop ecosystem that empowers sellers to succeed, and become the organizer of a 'win-win ecosystem'."

 

Li Mingtao believes that in the future, the competition among cross-border e-commerce platforms will focus on several aspects. Firstly, the ability to adapt locally is crucial. Platform enterprises need to quickly adapt to the local compliance requirements in overseas markets and enhance their local operation capabilities. Secondly, it is necessary to expand diverse traffic channels and enhance global market coverage. At the same time, they should have the ability to differentiate product supply and create new competitiveness beyond price advantages. They also need to pay attention to the disruptive impact brought by AI and make preparations for the transformation of intelligent interaction and traffic entry.

 

The overseas expansion of cross-border e-commerce is not merely the transportation of goods; it is also the global expression of Chinese manufacturing, Chinese brands, and Chinese models. Currently, Chinese cross-border e-commerce is accelerating its overseas expansion, and the challenges are also escalating. Driven by multiple factors such as policy support, industrial foundation, and technological innovation, this new business model still has a vast space for growth. In the future, how to continuously unleash innovative momentum and win long-term trust in the complex international environment will become the key to determining success or failure in the next stage.