E-commerce boom helps companies expand their global sales footprint, meet growing demand in BRI countries
In Africa, almost every fishing company is familiar with a particular “fishing king” from China. Jiang Song, general manager of Wuhan Jianuo Industrial Co Ltd, has been specializing in the export of fishing net products used by anglers across the continent.
Jiang’s family has been involved in the fishing net business for more than 30 years. His father was engaged in trade in Zhanjiang, Guangdong province, many moons ago, and Jiang — whose English name is Bill — took over the job about 15 years ago and has since begun to expand into overseas markets.
“When I first came to Nigeria in 2011, I found prime angling areas in West Africa to be particularly large but the fishing methods of local fishermen were still relatively primitive. They usually plunged into the water directly to catch fish with their hands or use hand-woven fishing nets,” Jiang said. After visiting some local dealers, Jiang deemed that the fishing nets, which serve as a necessity for local fishermen, would enjoy huge market potential in West Africa.
He initially sold fishing nets overseas through middlemen in South Korea, and now he is riding the cross-border e-commerce wave to sell the products directly to emerging markets such as West Africa and Central America.
In his eyes, channels for traditional Chinese foreign trade enterprises to obtain customers have changed in recent years, as digitalization has become a necessary option for small and medium-sized companies to reach more global shoppers and rev up sales.
“We usually obtained new clients through the Canton Fair and other exhibitions, or directly paid visits to overseas customers to launch promotional campaigns locally,” Jiang said, emphasizing that the fast-developing cross-border online marketplaces have opened up a new gateway to secure orders and boost business abroad.
At the end of 2021, Jiang registered with Alibaba.com — Chinese tech heavyweight Alibaba Group’s online business-to-business marketplace for global wholesalers — to develop digital foreign trade.
His company’s annual sales reached 15 million yuan ($2.1 million) within just two years. Jiang’s firm has also made forays into Europe, the Middle East, Central America, and Southeast Asia. Apart from traditional fishing nets, Jiang has expanded new categories such as fishing gear and fishing rods through the digitalized tools provided by Alibaba.com.
“At present, sales of these new products account for more than 30 percent of my company’s total exports,” Jiang said, adding that he wants to cultivate more distributors and regional agents in emerging markets via digital trade platforms and increase the number of big clients to 50.
Jiang is among a large number of entrepreneurs who are capitalizing on the cross-border e-commerce sector to expand their footprint in emerging markets. Experts said digital trade is a new engine for China’s efforts to build itself into an even more formidable trading nation, while cross-border e-commerce has played a vital role in stabilizing China’s foreign trade amid downward economic pressure and external uncertainties.
China’s cross-border e-commerce industry has seen robust growth in recent years, with the sector’s import and export scale reaching 2.38 trillion yuan in 2023, up 15.6 percent year-on-year, the General Administration of Customs said. E-commerce exports stood at 1.83 trillion yuan, up nearly 19.6 percent year-on-year.
According to Alibaba.com, niche sports products, intelligent hardware, smart home devices, and customized small machinery equipment made by Chinese manufacturers have gained popularity among overseas consumers, whose demand for personalized commodities is rising.
As artificial intelligence technology has accelerated the popularization of intelligent hardware, overseas consumers are favoring consumer electronics products and small household appliances containing innovative technologies, it said.
In addition, the African market is in a phase of high demand for consumer goods, with demand for items such as clocks, glasses, bags, footwear, accessories and household appliances all witnessing triple-digit growth in the continent between January and August 2023, Alibaba added.
Zhang Zhouping, an analyst of business-to-business and cross-border activities at the Internet Economy Institute, a domestic consultancy, said unlike Europe and the United States, where penetration rates of online shopping are relatively high, Africa has enormous growth potential in the cross-border e-commerce sector.
Zhang underscored that digital trade is expected to play a bigger role in promoting economic and trade cooperation between China and Africa, and empower the development of the real economy in Africa.
“As a new form of foreign trade, cross-border e-commerce witnessed rapid growth during the COVID-19 pandemic and became a new engine of the country’s foreign trade development,” Zhang said, adding that it is also playing a vital role in helping micro, small and medium-sized enterprises to build new brands and open up more overseas markets.
Online discounter PDD Holdings, the parent company of Chinese e-commerce platform Pinduoduo, recently rolled out its cross-border e-commerce platform Temu in South Africa. It is the 49th country that Temu has entered since its launch in the US in September 2022.
Temu, which has expanded its presence in North America, South America, Europe, Asia, and Oceania, has gained popularity among consumers there as it offers a wide array of merchandise, including apparel, consumer electronics, jewelry, shoes, bags, cosmetics, baby products and pet supplies at competitive prices.
Chen Lei, chairman and co-CEO of PDD, said the company hopes to leverage the supply chain capacities it has accumulated over the past years to create a new channel that enables consumers from different countries and regions to directly purchase products from factories, providing more flexible and personalized supply chains and more cost-effective shopping experiences.
According to global research firm Statista, the number of registered e-commerce users in South Africa stood at about 27 million in 2022, and the figure is expected to rise to 33.4 million by 2025, with an e-commerce penetration rate of 53.1 percent, making it the largest e-commerce market in Africa.
Industry insiders said demand for Chinese products from economies participating in the Belt and Road Initiative (BRI), and other emerging markets, is rising rapidly, which provides a new approach for foreign trade companies to tap new business opportunities and expand their global footprint.
Data from the GAC showed that in 2023, China’s imports and exports with countries and regions involved in the BRI reached 19.47 trillion yuan, accounting for 46.6 percent of China’s total foreign trade. Imports and exports with Latin America and Africa reached 3.44 trillion yuan and 1.98 trillion yuan, up 6.8 percent and 7.1 percent year-on-year, respectively.
Foshan Xincode Electronic Technology Co Ltd, one of the earliest manufacturers of barcode scanning equipment in China, found, during the product development stages, that demand for such devices in overseas markets was robust.
Cheng Zhen, general manager of Xincode, said the online search volumes for “code scanning guns” in Southeast Asia are very significant, based on statistics from Alibaba.com, so the firm has formulated product promotion strategies targeting the region.
“Our overall sales in Southeast Asia increased 300 percent in the third quarter of last year compared with the previous quarter,” Cheng said. Currently, the company’s products are sold in more than 80 countries and regions.
Qin Fen, an executive in charge of industries and merchant business at Alibaba.com, said they will make use of big data to optimize operations and focus more on specific industries and different countries, in a bid to help Chinese enterprises expand into overseas markets more quickly and smoothly.
Cindy Tai, head of Amazon Global Selling Asia and a vice-president at Amazon, said in an earlier interview that Chinese sellers who marketed products abroad through Amazon’s overseas marketplaces maintained steady business growth last year. She also emphasized that cross-border e-commerce is an unstoppable trend that helps drive the transformation from “Made in China” to “Brands from China”.
Tai added that the recovery of consumption and online shopping demand from overseas consumers has brought enormous business opportunities to China’s cross-border e-commerce sector.
She said the company will ramp up efforts to help Chinese merchants build brands, simplify global operations, optimize global supply chain services and expand their global footprint, as well as scale up localization inputs, this year.
“Chinese online retailers are accelerating their expansion into overseas markets to seek new sources of revenue, as growth in the domestic e-commerce sector is slowing,” said Chen Tao, a Beijing-based analyst at internet consultancy Analysys.
Chen said Chinese enterprises should step up localization efforts in overseas markets, comply with local laws and regulations, and seek development strategies to differentiate themselves from competitors.
Competition among cross-border e-commerce companies is expected to focus on the supply chain, he added. “The platforms that can offer products at competitive prices, fast delivery, and good shopping experience will gain an upper hand in the fierce competition.”
