2017 China Cross-Border E-Commerce (Export B2B) Report - DHgate.com
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2017 China Cross-Border E-Commerce (Export B2B) Report DHGATE.COM | TSINGHUA UNIVERSITY, NATIONAL ENGINEERING LABORATORY FOR E-COMMERCE TECHNOLOGIES | CENTRAL UNIVERSITY OF FINANCE AND ECONOMICS, CHINA CENTER FOR INTERNET ECONOMIC RESEARCH1
Table of Content
Preface .............................................................................................................................. 1
1. 2016 China Cross-Border E-Commerce Development Index .................................... 2
(i) 2016 China Cross-Border E-Commerce Development Index ......................................... 2
(ii) 2016 China Cross-Border E-Commerce Market Analysis, By Categories .................... 4
1. Capacity Index ................................................................................................................... 4
2. Growth Index ..................................................................................................................... 6
3. Penetration Index ................................................................................................................ 8
4. Support Index ................................................................................................................... 10
2. Overall Trading Partner & Products Traded ............................................................. 12
(i) Trading Partner ............................................................................................................... 12
(ii) Product Categories ........................................................................................................ 13
3. China’s Cross-Border E-Commerce Development & Distribution Analysis 2016 16
(a) Eastern Region ............................................................................................................... 16
1. Trade Volume & Growth ................................................................................................... 16
2. Trade Partners .................................................................................................................. 16
3. Trade Product Categories ................................................................................................... 18
(b) Central Region ............................................................................................................... 19
1. Trade Volume & Growth ................................................................................................... 19
2. Trade Partners .................................................................................................................. 19
3. Trade Product Categories ................................................................................................... 20
(c) Western Region .............................................................................................................. 22
1. Trade Volume & Growth ................................................................................................... 22
2. Trade Partners .................................................................................................................. 22
3. Trade Product Categories ................................................................................................... 23
4. China Cross-Border E-Commerce Development Trends & Outlook 2016 ............ 25
(a) The “Belt and Road” National Strategy: Constructing an Online Silk Road, Leading
Enterprises to “Make A Mark Globally”................................................................................. 25
(b) Outstanding Development Potential of the ASEAN Market ........................................ 27
(c) Support for Product Branding, Putting “Chinese Brands” on the Map ...................... 29
(d) Nurturing of Local Industry Clusters, Connecting to Global Merchants.................... 30
(e) B2B as Key Driver, E-Commerce’s Transition from Consumers to Commercial ....... 31
(f) The Dawn of the Digital Trade Era ................................................................................. 33
5. Conclusion .................................................................................................................. 34
Appendix: Calculation Methodology ............................................................................ 37
DHGATE.COM | TSINGHUA UNIVERSITY, NATIONAL ENGINEERING LABORATORY FOR E-COMMERCE TECHNOLOGIES
| CENTRAL UNIVERSITY OF FINANCE AND ECONOMICS, CHINA CENTER FOR INTERNET ECONOMIC RESEARCH2
Preface
Since 2016, China’s cross-border digital trade has been undergoing rapid growth, with
competition in the industry further intensifying. Production, The penetration rate of e-commerce
activities concerning production, demand, and distribution continued to proliferate, while user base
continued to grow as user experience is constantly improved. The “2017 China Cross-Border E-
commerce (Export B2B) Development Report" takes into account the performance of Chinese
provincial level administrative regions in cross-border e-commerce in 2016, by examining their
respective performance in market size, growth, penetration and market support mechanisms. Apart
from highlighting the scale of the cross-border e-commerce market, this index also places an
emphasis on the weightage of each province’s performance on China’s overall cross-border e-
commerce trade, as well its contribution towards the province’s international trade. This index was
created on actual statistics from Chinese cross-border e-commerce platforms, and was calculated
using a scientific approach, resulting in an objective and true reflection of the current situation and
future developments of China’s cross-border digital trade.
The index results from the 2017 report shows that major e-commerce hub provinces (or cities)
Guangdong, Zhejiang and Beijing are the top 3 performing players in cross-border e-commerce,
while Ningxia, Qinghai, Inner Mongolia and several other provinces have undergone remarkable
growth. Lastly, Tibet, Yunnan, Xinjiang and a few other provinces still have great room for
improvement pertaining to their cross-border e-commerce activities. Moving forward, under the
strategic backdrop of the “One Belt One Road” initiative, Chinese cross-border e-commerce
businesses and players shall capitalize on policy incentives to satisfy market demands, to further
enhance on supporting infrastructure, and finally to promote the acceleration of development for
cross-border e-commerce.
2016 Cross-border 2016 Cross-border
E-Commerce E-Commerce
Rank Province Development Index Rank Province Development Index
1 Guangdong 65.294 18 Hebei 5.734
2 Zhejiang 46.556 19 Gansu 5.556
3 Beijing 38.003 20 Sichuan 5.531
4 Shanghai 29.209 21 Shaanxi 5.328
5 Fujian 25.179 22 Heilongjiang 5.041
6 Ningxia 20.549 23 Liaoning 4.906
7 Jiangsu 19.435 24 Jilin 4.759
8 Shandong 16.238 25 Tianjin 4.666
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 1
9 Qinghai 15.086 26 Guizhou 4.483
10 Henan 11.350 27 Guangxi 3.929
11 Hunan 9.877 28 Hainan 3.597
12 Inner Mongolia 9.477 29 Shanxi 3.142
13 Hong Kong 9.146 30 Chongqing 2.869
14 Jiangxi 8.929 31 Tibet 2.254
15 Anhui 8.119 32 Yunnan 1.844
16 Taiwan 7.584 33 Xinjiang 0.582
17 Hubei 7.543
1. 2016 China Cross-Border E-Commerce Development Index
(i) 2016 China Cross-Border E-Commerce Development Index
In 2016, the Chinese cross-border e-commerce market has continued to grow, albeit at a more
gradual rate, cross-border e-commerce has exerted a large impact (penetration) on each province’s
economic development, resulting in the continual improvement of market support mechanisms
provided by each province for the general e-commerce market landscape. The performance index
and rank of all provinces’ B2B cross-border e-commerce trade is presented in the following table 1.
Table 1: China Provincial Level Administrative Regions Cross-Border E-commerce Index 2016
Rank Province Capacity Growth Penetration Support Cross-Border Rank in Change
Index Index Index Index Index 2015 in Rank
1 Guangdong 100.000 14.075 38.813 73.582 65.294 1 -
2 Zhejiang 60.276 16.397 39.538 56.293 46.556 2 -
3 Beijing 10.496 15.199 100.000 53.822 38.003 5 ↑ 2
4 Shanghai 26.432 14.477 33.372 45.331 29.209 4 -
5 Fujian 19.926 10.044 56.248 19.753 25.179 3 ↓ 2
6 Ningxia 0.008 100.000 0.039 2.689 20.549 33 ↑27
7 Jiangsu 22.971 7.274 12.863 31.096 19.435 6 ↓ 1
8 Shandong 8.075 32.914 16.285 15.844 16.238 13 ↑ 5
9 Qinghai 0.174 54.064 18.328 2.689 15.086 27 ↑18
10 Henan 5.364 13.353 24.077 8.593 11.350 7 ↓ 3
11 Hunan 2.183 12.232 26.020 6.769 9.877 9 ↓ 2
12 Inner Mongolia 0.349 33.834 6.908 5.942 9.477 31 ↑19
13 Hong Kong 0.808 16.514 17.600 10.000 9.146 32 ↑19
14 Jiangxi 2.550 12.794 20.207 6.545 8.929 11 ↓ 3
15 Anhui 2.105 9.735 16.966 9.685 8.119 14 ↓ 1
16 Taiwan 0.006 10.308 17.600 10.000 7.584 24 ↑ 8
17 Hubei 1.759 7.773 13.901 12.526 7.543 12 ↓ 5
18 Hebei 1.765 4.932 8.060 12.148 5.734 10 ↓ 8
19 Gansu 0.143 13.443 10.903 3.148 5.556 28 ↑ 9
20 Sichuan 0.847 3.973 5.444 16.545 5.531 15 ↓ 5
21 Shaanxi 0.379 10.508 5.097 10.277 5.328 20 ↓ 1
22 Heilongjiang 0.210 8.686 9.108 6.990 5.041 25 ↑ 3
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 2
23 Liaoning 0.212 8.639 0.213 15.252 4.906 30 ↑ 7
24 Jilin 0.238 7.167 8.257 7.893 4.759 18 ↓ 6
25 Tianjin 0.141 12.587 0.116 10.346 4.666 26 ↑ 1
26 Guizhou 0.199 12.543 6.672 2.802 4.483 29 ↑ 3
27 Guangxi 0.637 6.203 8.209 3.958 3.929 16 ↓11
28 Hainan 0.062 10.723 1.768 5.368 3.597 19 ↓ 9
29 Shanxi 0.098 8.201 1.605 5.708 3.142 21 ↓ 8
30 Chongqing 0.362 6.650 1.395 5.574 2.869 23 ↓ 7
31 Tibet 0.022 2.513 4.632 4.081 2.254 17 ↓14
32 Yunnan 0.193 3.965 1.604 3.263 1.844 22 ↓10
33 Xinjiang 0.030 0.000 0.000 2.852 0.582 8 ↓25
The 2016 China Provincial Level Administrative Regions Cross-Border E-commerce Index
indicates that the top 5 provinces for cross-border e-commerce trade activities are Guangdong,
Zhejiang, Beijing, Shanghai and Fujian. Notably, as the best-performing province in cross-border e-
commerce, Guangdong has promulgated new strategies consistently, made improvements on
regulatory measures to enhance the monitoring of cross-border e-commerce activities, and promoted
the Guangdong Free-Trade Zone cross-border e-commerce regulatory standard, to further propel the
development of cross-border e-commerce. In addition, Guangdong province’s focus and fostering of
the “Internet+” strategy in recent years, which aims to improve the industry and ecosystem
continually, have reaped substantial benefits on promoting cross-border e-commerce’s impacts on
the overall national economy.
Looking at the change in rankings, various provinces have performed exceptionally and risen
through the ranks in 2016: Ningxia (up 27 spots), Inner Mongolia (up 19 spots), Special
Administrative Region Hong Kong (up 19 spots), and Qinghai (up 18 spots). These four provinces
are relatively new to cross-border e-commerce, but have undergone more rapid growth, and have
strong potential for further development.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 3
(ii) 2016 China Cross-Border E-Commerce Market Analysis, By
Categories
1. Capacity Index
The capacity index reflects the cross-border e-commerce export capacity in the respective
provinces. They are primarily calculated based on each province’s total volume of export B2B
transactions and their respective Gross Merchandise Volume (GMV). The evaluation results with
regards to the capacity index are presented in Table 2 below.
Table 2: China Provincial Level Administrative Regions Cross-Border E-Commerce
Capacity Index & Ranking 2016
Rank Province Capacity 2016 Rank in 2015 Change in Rank
1 Guangdong 100.000 1 -
2 Zhejiang 60.276 2 -
3 Shanghai 26.432 3 -
4 Jiangsu 22.971 4 -
5 Fujian 19.926 5 -
6 Beijing 10.496 6 -
7 Shandong 8.075 7 -
8 Henan 5.364 8 -
9 Jiangxi 2.550 9 -
10 Hunan 2.183 12 ↑2
11 Anhui 2.105 11 -
12 Hebei 1.765 10 ↓2
13 Hubei 1.759 13 -
14 Sichuan 0.847 14 -
15 Hong Kong 0.808 16 ↑1
16 Guangxi 0.637 15 ↓1
17 Shaanxi 0.379 18 ↑1
18 Chongqing 0.362 17 ↓1
19 Inner Mongolia 0.349 24 ↑5
20 Jilin 0.238 19 ↓1
21 Liaoning 0.212 21 -
22 Heilongjiang 0.210 22 -
23 Guizhou 0.199 23 -
24 Yunnan 0.193 20 ↓4
25 Qinghai 0.174 29 ↑4
26 Gansu 0.143 26 -
27 Tianjin 0.141 25 ↓2
28 Shanxi 0.098 27 ↓1
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 4
29 Hainan 0.062 28 ↓1
30 Xinjiang 0.030 30 -
31 Tibet 0.022 31 -
32 Ningxia 0.008 33 ↑1
33 Taiwan 0.006 32 ↓1
Some notable highlights of the capacity index:
1. Guangdong, Zhejiang, Shanghai, Jiangsu, and Fujian provinces took the first five spots on the
ranking. These provinces that are ranked higher on the index are all located along coastal areas,
and have entered into e-commerce activities relatively earlier, hence their experience and first-
mover advantage in cross-border e-commerce is substantial, while their unique traits and
strengths are apparent. The turnover in the provinces of Guangdong and Zhejiang accounted for
60% of the total turnover nationally. In terms of market size, those ranking lowest on the index
are mainly provinces in the Northwestern region. The gap between the best-performing and
weakest-performing provinces on the ranking is huge, with market size disparity between them
reaching a thousand times or more. The considerable gap can be attributed to factors such as
information technology, social awareness, standard of living, infrastructure, government
policies and so on. There is vast room for growth and improvement for these weaker players;
2. Over 50% of provinces did not undergo any change in ranks on the 2015-2016 capacity index.
Inner Mongolia recorded the largest move upward on the chart through the implementation of
effective measures such as establishing its own cross-border e-commerce platform, bringing in
e-commerce enterprises, organizing delegations to Zhejiang and other more developed
provinces to learn from their experiences in promoting a more conducive cross-border e-
commerce environment. The policy system of Inner Mongolia continues to improve, allowing
the overall e-commerce ecosystem to progress as well; this brings great opportunities and
prospects for the development of cross-border e-commerce businesses in the province.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 5
2. Growth Index
The growth index measures and reflects the provinces’ prospects and potential, focusing on and
calculated with the growth rate of the volume of export orders and overall turnover. The growth index
evaluation results are presented in Table 3 below.
Table 3: China Provincial Level Administrative Regions Cross-Border E-Commerce
Growth Index & Ranking, 2016
Rank Province Growth Index 2016 Rank in 2015 Change in Rank
1 Ningxia 100.000 32 ↑31
2 Qinghai 54.064 33 ↑31
3 Inner Mongolia 33.834 31 ↑28
4 Shandong 32.914 23 ↑19
5 Hong Kong 16.514 30 ↑25
6 Zhejiang 16.397 28 ↑22
7 Beijing 15.199 26 ↑19
8 Shanghai 14.477 29 ↑21
9 Guangdong 14.075 24 ↑15
10 Gansu 13.443 21 ↑11
11 Henan 13.353 16 ↑ 5
12 Jiangxi 12.794 8 ↓ 4
13 Tianjin 12.587 14 ↑ 1
14 Guizhou 12.543 27 ↑13
15 Hunan 12.232 9 ↓ 6
16 Hainan 10.723 5 ↓11
17 Shaanxi 10.508 25 ↑ 8
18 Taiwan 10.308 11 ↓ 7
19 Fujian 10.044 18 ↓ 1
20 Anhui 9.735 19 ↓ 1
21 Heilongjiang 8.686 17 ↓ 4
22 Liaoning 8.639 20 ↓ 2
23 Shanxi 8.201 13 ↓10
24 Hubei 7.773 12 ↓12
25 Jiangsu 7.274 22 ↓ 3
26 Jilin 7.167 15 ↓11
27 Chongqing 6.650 10 ↓17
28 Guangxi 6.203 4 ↓24
29 Hebei 4.932 6 ↓23
30 Sichuan 3.973 3 ↓27
31 Yunnan 3.965 7 ↓24
32 Tibet 2.513 2 ↓30
33 Xinjiang 0.000 1 ↓32
Some notable highlights of the provinces’ growth index:
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 6
1. Ningxia, Qinghai and Inner Mongolia took the top three spots on the cross-border e-commerce growth index; they are considered newer entrants to the e-commerce market but have massive potential for development. The three major approaches adopted by the Western regions to promote the growth of cross-border e-commerce activities are: nurturing cross-border e- commerce business entities, improvements on supporting infrastructure and to foster an ecosystem conducive for cross-border e-commerce activities; 2. Nearly 50% of the provinces have undergone a change of 10 positions or more, compared to their ranking in the previous year. Shandong moved upwards 19 spots on the growth index, benefitting from the establishment of policy and regulatory systems that are viable to the development of cross-border e-commerce, efforts on resolving prominent issues that hinder the growth of cross- border e-commerce, guiding enterprises to capitalize on “internet+ foreign trade” to realize optimized import and export activities as well as to transform and modernize their business model, to promote a systematic approach and standardization to the development of cross-border e- commerce, and to enable steady growth through such a systematic approach. DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 7
3. Penetration Index
The penetration index reveals the impact exerted by each province’s cross-border e-commerce
activities, as a weightage on their overall import and export trade. The assessment results are
presented in Table 4 below.
Table 4: China Provincial Level Administrative Regions Cross-Border E-Commerce
Penetration Index & Ranking, 2016
Rank Province Penetration Index 2016 Rank in 2015 Change in Rank
1 Beijing 100.000 4 ↑ 3
2 Fujian 56.248 1 ↓ 1
3 Zhejiang 39.538 3 -
4 Guangdong 38.813 2 ↓ 2
5 Shanghai 33.372 7 ↑ 2
6 Hunan 26.020 6 -
7 Henan 24.077 5 ↓ 2
8 Jiangxi 20.207 9 ↑ 1
9 Qinghai 18.328 14 ↑ 5
10 Hong Kong 17.600 29 ↑19
11 Taiwan 17.600 28 ↑17
12 Anhui 16.966 8 ↓ 4
13 Shandong 16.285 12 ↓ 1
14 Hubei 13.901 10 ↓ 4
15 Jiangsu 12.863 13 ↓ 2
16 Gansu 10.903 21 ↑ 5
17 Heilongjiang 9.108 22 ↑ 5
18 Jilin 8.257 15 ↓ 3
19 Guangxi 8.209 17 ↓ 2
20 Hebei 8.060 11 ↓ 9
Inner
21 Mongolia 6.908 19 ↓ 2
22 Guizhou 6.672 20 ↓ 2
23 Sichuan 5.444 18 ↓ 5
24 Shaanxi 5.097 16 ↓ 8
25 Tibet 4.632 27 ↑ 2
26 Hainan 1.768 25 ↓ 1
27 Shanxi 1.605 23 ↓ 4
28 Yunnan 1.604 26 ↓ 2
29 Chongqing 1.395 24 ↓ 5
30 Liaoning 0.213 31 ↑ 1
31 Tianjin 0.116 30 ↓ 1
32 Ningxia 0.039 33 ↑ 1
33 Xinjiang 0.000 32 ↓ 1
Some notable highlights of the provinces’ penetration index:
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 81. The provinces that ranked higher on the penetration index are essentially the same provinces that are placed higher on the capacity index. This signifies that the cross-border e-commerce activities in these provinces have a larger impact on their overall trade. Cross-border e-commerce already plays an important role in China’s export and import trade, and other provinces can draw on the experiences of these successful players, to continuously improve the overall penetration rate of cross-border e-commerce on the domestic economy; 2. Although Beijing is ranked at the sixth place on the capacity index this year, its ranking on the penetration index has improved, moving upwards to the number one position. The penetration index of Hong Kong and Taiwan has also advanced significantly. The improvements to penetration rate can be largely attributed to local government policy support as well as the optimization of the industry value chain; 3. The provinces that fared poorer on the penetration index are mainly landlocked inland provinces such as Xinjiang and Ningxia, implying that cross-border e-commerce activities are affected by economic development, and a degree of economic openness to a certain extent. DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 9
4. Support Index
The support index examines environmental factors to reflect the provinces’ overall market
landscape and mechanisms that support the development of digital trade, through assessing indicators
such as infrastructure, logistics framework, and human resources. The assessment results are
presented in Table 5 below.
Table 5: China Provincial Level Administrative Regions Cross-Border E-Commerce
Support Index & Ranking, 2016
Rank Province Support Index 2016 Rank in 2015 Change in Rank
1 Guangdong 73.582 1 -
2 Zhejiang 56.293 4 ↑ 2
3 Beijing 53.822 2 ↓ 1
4 Shanghai 45.331 3 ↓ 1
5 Jiangsu 31.096 5 -
6 Fujian 19.753 6 -
7 Sichuan 16.545 8 ↑ 1
8 Shandong 15.844 7 ↓ 1
9 Liaoning 15.252 15 ↑ 6
10 Hubei 12.526 12 ↑ 2
11 Hebei 12.148 13 ↑ 2
12 Tianjin 10.346 11 ↓ 1
13 Shaanxi 10.277 14 ↑ 1
14 Hong Kong 10.000 10 ↓ 4
15 Taiwan 10.000 9 ↓ 6
16 Anhui 9.685 21 ↑ 5
17 Henan 8.593 23 ↑ 6
18 Jilin 7.893 16 ↓ 2
19 Heilongjiang 6.990 19 -
20 Hunan 6.769 26 ↑ 6
21 Jiangxi 6.545 24 ↑ 3
22 Inner Mongolia 5.942 20 ↓ 2
23 Shanxi 5.708 18 ↓ 5
24 Chongqing 5.574 22 ↓ 2
25 Hainan 5.368 17 ↓ 8
26 Tibet 4.081 27 ↑ 1
27 Guangxi 3.958 30 ↑ 3
28 Yunnan 3.263 32 ↑ 4
29 Gansu 3.148 31 ↑ 2
30 Xinjiang 2.852 25 ↓ 5
31 Guizhou 2.802 33 ↑ 2
32 Qinghai 2.689 28 ↓ 4
33 Ningxia 2.689 29 ↓ 4
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 10Some notable highlights of the provinces’ e-commerce support index: 1. The seven provinces Guangdong, Zhejiang, Beijing, Shanghai, Jiangsu, Shandong and Fujian all have a viable environment for the development of growth of digital trade, with internet penetration rate, capital flows and logistical networks presently in leading positions nationally. 2. Provinces in Western China fared relatively poorer on the support index. These provinces require more support mechanisms in the forms of policymaking, financing and funding, for the establishment of infrastructure, logistics network, and human resources. 3. Liaoning, Henan and Hunan climbed 6 positions upwards on the support index, and their progress can be attributed to various factors. Liaoning had established a cross-border e-commerce public service platform, focused on developing business logistics services and the overall e-commerce sector, and accelerated on the establishment of the Liaoning cross-border e-commerce demonstration area, to facilitate the rapid growth of its support environment. Henan has been endorsed recently as a Free Trade Zone, and has been successfully approved for the comprehensive pilot program; these facilitated the robust growth of Henan’s cross-border e- commerce environment. Lastly, Hunan has gradually nurtured the growth of a core group of e- commerce enterprises, through the establishment of exemplary e-commerce demonstrations and the fostering of key projects. The core group of such e-commerce enterprises have a stimulating effect on their respective market sectors, with e-commerce platforms competing healthily and thriving together, forming a cluster effect, further boosting the entire province in its overall e- commerce landscape development. DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 11
2. Overall Trading Partner & Products Traded
(i) Trading Partner
In 2016, the top three major countries of export for China’s cross-border e-commerce are United
States, Russia and Spain respectively. Russia accounted for 21% of the total export trade volume, up
from 16% in 2015, its performance is essentially on par with United States. Paraguay experienced
the highest year-on-year growth rate, with trade volume increasing by over 10 times, the following
chart below features the top 10 countries recording the fastest growth in 2016.
Chart 1: Top 10 Countries in Cross-Border Export Growth, 2016
Top 10 in Cross- Top 10 in Cross- Top 10 in Cross- Top 10 in Cross-
Border E- Border E- Border E- Border E-
Commerce By Commerce By Commerce By Commerce By
Rank Volume, 2015 Volume, 2016 Rank Growth, 2015 Growth, 2016
1 United States United States 1 Latvia Paraguay
2 Russia Russia 2 Chile Dominican Republic
3 Brazil Spain 3 Slovakia Morocco
4 Spain France 4 Bulgaria Netherlands
5 United Kingdom United Kingdom 5 Slovenia Argentina
6 Canada Brazil 6 Lithuania Philippines
7 France Israel 7 South Korea Pakistan
8 Israel Canada 8 Kazakhstan Sri Lanka
9 Belarus Netherlands 9 India South Africa
10 Chile Ukraine 10 Moldova Ghana
From the composite index of export by continent, featuring the top 5 countries of respective
regions, Russia has surpassed United States at the number one spot this year, while Canada and Brazil
both recorded a larger drop from 2015.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 12Table 6: Composite Index of Export by Continent, Top 5 Countries, 2016
Region 2015 2016 Region 2015 2016
North America Africa
United States 83.49 81.14 South Africa 27.31 37.10
Canada 51.81 39.30 Morocco 25.97 32.06
Mexico 34.44 35.59 Ghana 27.86 27.12
Costa Rica 25.37 25.70 Nigeria 22.06 23.35
Honduras 18.22 24.67 Guinea 14.27 22.98
South America Europe
Brazil 61.28 45.48 Russia 77.48 88.20
Paraguay 10.71 40.92 France 50.61 54.01
Chile 46.84 39.84 Netherlands 41.26 52.80
Argentina 20.54 38.10 Spain 62.82 49.90
Colombia 28.03 32.62 Ukraine 36.45 47.74
Oceania Asia
Australia 38.17 39.31 Israel 49.07 47.65
New Zealand 35.34 36.99 Turkey 44.17 41.38
American Samoa 26.40 32.73 Indonesia 31.22 36.94
Fiji 17.24 23.49 Saudi Arabia 35.36 36.19
French Polynesia 12.73 22.06 Lebanon 37.80 35.70
(ii) Product Categories
Along with the development of the industry and shifts in the overall trade environment, there
have been significant changes in rankings on the product categories index in 2015-2016. In 2016,
cross-border e-commerce export product trade volume and growth have been registered primarily in
over 20 major product categories such as mobile phones & accessories, fashion apparel, maternity &
baby products, health & beauty, household items, consumer electronics, as well as sports & outdoor
products.
Looking at the composite index of market size and growth, (see Table 7), product categories
with the most marked improvements in ranking are gaming products and footwear, while product
categories recording the sharpest decline are luggage, bags & accessories, and fashion accessories.
Table 7: Major Product Categories Size & Growth Ranking 2016
Rank Product Category 2015 2016 Change in Rank
1 Mobile Phones & Accessories 89.38 91.69 -
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 132 Fashion Apparel 79.55 91.58 ↑1
3 Health & Beauty 73.96 89.62 ↑1
4 Maternity & Baby Products 58.35 80.07 ↑2
5 Household & Gardening 82.47 75.72 ↓3
6 Consumer Electronics 63.54 72.34 ↓1
7 Sports & Outdoor Products 47.70 56.73 ↑2
8 Hair Products 50.58 54.64 ↓1
9 Computers & Networking 41.28 51.56 ↑2
10 Jewelry 50.57 44.65 ↓2
11 Cars, Motorcycles 37.40 43.37 ↑1
12 Watches 29.33 38.72 ↑2
13 Commercial & Industrial 35.65 36.97 -
14 Footwear & Accessories 25.24 32.53 ↑4
15 Toys & Gifts 28.01 27.82 -
16 Luggage, Bags & Accessories 44.17 27.55 ↓6
17 Gaming Products 15.62 25.10 ↑3
18 Lighting 28.00 23.48 ↓2
19 Digital Camera, Photography Equipment 22.16 21.89 -
20 Security & Surveillance 14.42 18.97 ↑1
21 Bridal Gowns 11.28 15.62 ↑2
22 Fashion Accessories 26.69 12.79 ↓5
23 Musical Instruments 11.55 10.90 ↓1
With respect to specific product line (chart 2), the top 10 product sub-categories with the best
potential for growth are virtual reality headsets, sports & action cameras, kitchen accessories,
cosmetic bags, slippers, manicure tools & supplies, wearable devices, professional sports & outdoor
shoes, hair care products and outdoor equipment. With virtual reality headsets and wearable devices
recording rapid growth for two years consecutively.
Chart 2: Top 10 Product Sub-Categories, By Growth
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 14Top 10 Product
Top 10 Product Categories For Top 10 Product Top 10 Product
Categories For Cross-Border Categories For Categories For
Cross-Border E-Commerce, By Cross-Border Cross-Border
E-Commerce, Volume, 2016 E-Commerce, E-Commerce, 2016 -
Rank By Volume, 2016 – Weightage Rank By Growth, 2016 YOY Growth
Mobile Phones &
1 Accessories 10.1% 1 Computing Gaming 114.7%
2 Hair Products 9.3% 2 Health & Beauty 110.8%
Maternity & Baby
3 Fashion Apparel 8.9% 3 Products 75.9%
4 Health & Beauty 8.2% 4 Watches 73.6%
Digital Camera,
Photography
5 Maternity & Baby 7.7% 5 Equipment 52.0%
Consumer
6 Electronics 6.6% 6 Cars, Motorcycles 41.8%
Household &
7 Gardening 6.2% 7 Musical Instruments 39.3%
Security &
8 Watches 5.6% 8 Surveillance 37.5%
Household &
9 Jewelry 5.4% 9 Gardening 36.4%
Mobile Phones &
10 Sports & Outdoor 4.9% 10 Accessories 32.7%
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 153. China’s Cross-Border E-Commerce
Development & Distribution Analysis 2016
This section is an analysis on the development of China’s e-commerce (export B2B) sector through
three dimensions: regional development, product classifications, and trade partnerships.
(a) Eastern Region
1. Trade Volume & Growth
The Eastern region consists of 11 provincial level administrative areas including Beijing,
Tianjin, Hebei, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Guangdong and Hainan.
The Eastern region accounted for 93% of the total cross-border e-commerce export trade volume,
with a growth rate of 28%, outperforming both the Central and Western regions considerably. With
respect to trade volume, the top 5 ranking provinces – Guangdong, Zhejiang, Shanghai, Fujian and
Jiangsu remain unchanged. In terms of growth, the export trade volume of Tianjin surged by 208%,
making it the fastest developing province.
Chart 3: China Cross-Border E-Commerce (Export B2B) Regional Distribution: Size
2. Trade Partners
Statistics by country and region from respective provinces pertaining to their export trade
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 16activities also reveals traits unique to each province. For instance, Guangdong, the leader of cross-
border e-commerce, exports primarily to two major trade partners, the United States and United
Kingdom, while their export trade volume with Slovenia and Turkey has experienced the most rapid
growth. On the other hand, Zhejiang’s trade volume with Philippines and Poland has experienced the
greatest growth.
Table 8: Eastern Region Export Composite Index, By Continent & By Country, 2016
2015 2016
North America
United States 84.78 83.84
Canada 70.81 65.65
Mexico 49.98 42.98
The Dominican Republic 27.74 30.49
Puerto Rico 30.48 28.19
South America
Paraguay 18.01 64.33
Brazil 36.32 47.48
Colombia 33.51 43.82
Argentina 21.73 37.62
Peru 28.27 37.27
Oceania
Australia 60.66 60.18
American Samoa 28.74 55.12
New Zealand 35.76 34.54
Wallis and Futuna 9.90 24.07
Independent State of Samoa 9.96 23.33
Africa
Egypt 24.34 39.85
Ghana 33.23 39.25
Nigeria 40.75 36.26
South Africa 43.58 33.07
Botswana 30.92 29.20
Europe
Russia 71.52 72.20
United Kingdom 70.69 67.40
Belgium 29.33 55.83
France 48.49 55.43
Spain 43.50 54.21
Asia
Republic of the Philippines 33.56 47.73
India 64.34 44.77
Saudi Arabia 38.51 42.35
Turkey 20.18 41.25
Israel 27.82 40.59
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 17From the composite index exhibiting the region’s top 5 export trade partner countries from each
continent, United States is still the country accounting for the largest trade volume this year, with
Russia trailing closely behind in the second spot, narrowing the gap with the United States gradually.
3. Trade Product Categories
From the index of the Eastern region (table 9), the product categories undergoing the biggest
change in positions this year are footwear & accessories, bridal gowns, watches, and jewelry.
Table 9: Eastern Region Major Trade Product Categories, By Volume & Growth, 2016
Rank Product Category 2015 2016 Change in Rank
1 Mobile Phones & Accessories 91.72 92.36 -
2 Fashion Apparel 53.84 69.86 ↑3
3 Health & Beauty 88.25 66.82 ↓1
4 Maternity & Baby Products 65.15 65.28 ↓1
5 Consumer Electronics 41.03 62.73 ↑3
6 Sports & Outdoor Products 59.31 60.12 ↓2
7 Household & Gardening 41.08 44.15 -
8 Hair Products 42.11 31.19 ↓2
9 Footwear & Accessories 24.13 26.82 ↑7
10 Bridal Gowns 21.18 26.52 ↑8
11 Computers & Networking 28.01 23.56 ↑1
12 Commercial & Industrial 33.55 23.12 ↓2
13 Fashion Accessories 26.94 22.86 ↑1
14 Watches 15.05 22.54 ↑8
15 Gaming Products 22.85 22.04 ↑2
16 Automobile, Motorcycles 21.04 21.06 ↑3
17 Digital Camera, Photography Equipment 29.71 19.57 ↓6
18 Jewelry 35.74 18.42 ↓9
19 Toys & Gifts 27.59 17.93 ↓6
20 Lighting 24.20 17.86 ↓5
21 Luggage, Bags & Accessories 20.90 17.25 ↓1
22 Musical Instruments 11.06 13.38 ↑1
23 Security & Surveillance 16.09 13.31 ↓2
With respect to specific products, the product sub-categories with the most robust growth in
2016 (Chart 4) for the Eastern region are fairly consistent with the overall national findings on
product growth. In addition, underwear and LED light-up toys are also performing well.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 18Chart 4: Top 10 Product Sub-Categories, By Growth, Eastern Region
(b) Central Region
1. Trade Volume & Growth
The Central region is made up of 8 provincial level administrative regions in total, comprising
of Shanxi, Jilin, Heilongjiang, Anhui, Jiangxi, Henan, Hubei, and Hunan. The Central region
accounted for 5% of the total cross-border e-commerce export trade volume. With respect to growth,
Jiangxi province recorded a growth rate of 43%, while Hunan recorded a growth rate of 29%. And
in terms of trade volume, Henan and Jiangxi are the two best performing provinces in the Central
region. Henan’s trade volume weightage in the Central region remains unchanged in 2016, with India
being its fastest growing trade partner of the country that it exports to. Jiangxi’s fastest growing
export trade partners are Turkey, Poland and Israel respectively.
2. Trade Partners
From the composite index exhibiting the region’s top 5 export trade partner countries from each
continent (table 10), Russia has surpassed the United States to clinch the spot at the top of the table,
this is also due to the United States slight decline in performance compared to 2015.
Table 10: Central Region Export Composite Index, By Continent & By Country, 2016
2015 2016
North America
United States 82.48 82.07
Canada 70.22 63.28
Mexico 46.07 37.58
The Bahamas 14.57 27.76
Puerto Rico 34.78 25.03
South America
Paraguay 10.81 46.35
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 19Brazil 36.16 42.96
Colombia 26.74 34.63
Peru 24.92 32.32
Chile 34.79 29.60
Oceania
Australia 62.02 72.93
American Samoa 23.41 46.96
New Zealand 37.42 33.45
Independent State of Samoa 9.98 20.63
Republic of Kiribati 21.10 12.86
Africa
Republic of Cape Verde 22.59 79.56
South Africa 46.08 49.89
Nigeria 37.40 29.22
Republic of Botswana 26.78 25.96
Republic of Sierra Leone 10.04 21.69
Europe
Russia 81.87 82.18
United Kingdom 74.58 66.44
Italy 42.80 50.42
Spain 39.73 49.48
Sweden 40.19 49.37
Asia
India 61.05 52.19
Saudi Arabia 33.46 48.87
Singapore 34.90 42.95
Iran 15.94 42.51
Israel 25.22 38.86
3. Trade Product Categories
In the Central region’s trade product categories index (table 11), product categories that have
undergone relatively greater changes in position are footwear & accessories, gaming products, and
watches.
Table 11: Central Region Major Trade Product Categories, By Volume & Growth, 2016
Rank Product Category 2015 2016 Change in Rank
1 Footwear & Accessories 38.02 96.10 ↑ 9
2 Household & Gardening 89.17 82.53 ↓ 1
3 Sports & Outdoor Products 61.49 62.85 -
4 Health & Beauty 51.02 61.97 ↑ 2
5 Fashion Apparel 46.04 44.08 ↑ 2
6 Gaming Products 17.98 43.20 ↑ 17
7 Mobile Phones & Accessories 65.20 42.97 ↓ 3
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 208 Hair Products 42.21 38.42 ↓ 3
9 Consumer Electronics 71.62 36.04 ↓ 1
10 Watches 21.82 34.95 ↑ 11
11 Fashion Accessories 25.77 33.92 ↑ 4
12 Commercial & Industrial 20.12 28.01 ↓ 11
13 Computers & Networking 23.68 27.42 ↑ 3
14 Cars, Motorcycles 28.98 26.20 ↓ 3
15 Maternity & Baby Products 25.85 23.33 ↓ 3
16 Jewelry 37.22 23.23 ↓ 7
17 Luggage, Bags & Accessories 29.22 20.55 ↓ 4
18 Musical Instruments 19.64 19.92 ↑ 4
19 Bridal Gowns 21.20 16.22 ↓ 2
20 Toys & Gifts 75.42 15.64 ↓ 1
21 Lighting 24.60 14.91 ↓ 7
22 Security & Surveillance 20.23 14.90 ↓ 2
23 Digital Camera, Photography Equipment 23.75 10.28 ↓ 5
With respect to specific products, product sub-categories that have undergone robust growth in
2016 (Chart 5) for the Central region are household slippers, computer accessories, as well as art &
craft & gift products. Out of the top ten major product categories, two of them, namely slippers and
festive & party supplies, are also in the top ten growing product sub-categories.
Chart 5: Top 10 Product Sub-Categories, By Growth, Central Region
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 21(c) Western Region
1. Trade Volume & Growth
The Western region consists of 11 provincial level administrative areas including Sichuan,
Chongqing, Guizhou, Yunnan, Tibet, Shaanxi, Gansu, Qinghai, Ningxia, Xinjiang, Guangxi and
Inner Mongolia. The Western region accounted for 1% of the total cross-border e-commerce export
trade volume in 2016, constituting a relatively modest national market share presently. Sichuan and
Guangxi are the best performing provinces in the Western region with the highest cross-border e-
commerce trade volume, while Ningxia and Qinghai recorded the most rapid growth.
Chart 6: Western Region Cross-Border E-Commerce (Export B2B) Provinces Weightage, By Market Share
2. Trade Partners
Taking Guangxi as an example, its three major country of export are the United States, United
Kingdom and Germany, while their export trade volume with Indonesia and Germany has
experienced the most rapid growth.
In the Western region, the province that has recorded the fastest growth in the past year is
Ningxia. And with respect to primary country and region of export, export volume to Australia has
overtaken Canada, moving upwards to the number two spot, and at the same time, Australia is also
the country with the most rapid growth in the past year.
Table 12: Western Region Export Composite Index, By Continent & Top 5 Country
Region 2015 2016 Region 2015 2016
North America Africa
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 22United States 82.09 79.15 Morocco 30.75 35.49
Canada 72.28 63.58 South Africa 46.13 33.58
Mexico 48.36 40.22 Nigeria 36.61 27.83
Dominican Republic 21.05 35.69 Ivory Coast 9.97 27.17
El Salvador 11.84 32.01 Republic of Liberia 10.02 27.06
South America Europe
Brazil 39.2 54.76 United Kingdom 73.67 67.35
Colombia 26.08 48.22 Germany 46.61 66.17
Chile 35.31 45.94 Spain 42.58 63.52
Peru 32.89 42.22 Russia 39.88 56.75
Venezuela 14.65 34.27 Norway 29.77 55.17
Oceania Asia
Australia 66.31 67.84 India 59.86 75.29
New Zealand 35.33 41.49 United Arab Emirates 51.69 49.51
American Samoa 22.4 29.56 Indonesia 32.11 45.28
Kiribati 21.6 26.33 Turkey 35.83 44.45
Papua New Guinea 13.81 19.30 Saudi Arabia 34.78 43.60
From the composite index exhibiting the region’s top 5 export trade partner countries from each
continent, European countries (with the exception of United Kingdom) have undergone the most
significant improvements on the index. Lastly, United States and India are the top two countries with
the highest index scores.
3. Trade Product Categories
From the index of the Eastern region (table 13), the product categories undergoing the biggest
change in positions this year are bridal gowns, maternity & baby products and sports & outdoor
products. Export volume of jewelry products has been on the decline in 2016, resulting in its drop in
overall weightage.
Table 13: Western Region Major Trade Product Categories, By Volume & Growth, 2016
Rank Product Category 2015 2016 Change in Rank
1 Household & Gardening 93.28 93.51 ↑ 1
2 Computers & Networking 64.86 85.33 ↑ 1
3 Fashion Apparel 50.83 64.52 ↑ 1
4 Health & Beauty 46.22 51.65 ↑ 2
5 Sports & Outdoor Products 16.66 46.66 ↑ 18
6 Footwear & Accessories 34.68 37.82 ↑ 1
7 Mobile Phones & Accessories 27.31 35.86 ↑ 6
8 Watches 97.69 34.64 ↓ 7
9 Bridal Gowns 20.86 30.91 ↑ 10
10 Cars, Motorcycles 32.01 30.42 ↑ 1
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 2311 Maternity & Baby Products 19.86 28.07 ↑ 10
12 Consumer Electronics 46.76 27.65 ↓ 7
13 Fashion Accessories 24.80 25.59 ↑ 1
14 Commercial & Industrial 33.54 20.75 ↓ 4
15 Toys & Gifts 31.07 19.88 ↓ 3
16 Luggage, Bags & Accessories 34.10 18.19 ↓ 8
17 Jewelry 33.82 16.51 ↓ 8
18 Security & Surveillance 20.33 13.44 ↑ 2
19 Musical Instruments 24.14 12.64 ↓ 4
20 Digital Camera, Photography Equipment 22.29 11.85 ↓ 2
21 Lighting 23.00 11.34 ↓ 4
22 Hair Products 17.18 9.63 -
23 Gaming Products 23.00 9.32 ↓ 7
With respect to specific products’ growth rate in the Western region (chart 7), docks and stands
under the electronic products category, and massage products under the health & beauty product
category undergoing the most rapid growth. In addition, computer accessories, casual footwear, and
medical products are sub-categories with great potential for growth in the Western region.
Chart 7: Top 10 Product Sub-Categories, By Growth, Western Region
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 244. China Cross-Border E-Commerce Development
Trends & Outlook 2016
(a) The “Belt and Road” National Strategy: Constructing an Online Silk Road,
Leading Enterprises to “Make A Mark Globally”
Development Overview of Cross-Border E-Commerce Along the Belt & Road
The 18 provinces under the “Belt and Road policy initiative accounted for 78% of the total
national export B2B trade turnover, evidently they are key provinces for export trade activities. The
“Belt and Road” national strategy has developed extensively with far-reaching impacts, creating
massive opportunities and potential for enterprises to make a mark globally. It has also spurred the
growth of provinces benefiting under this policy initiative, bringing along substantial changes to the
growth index of various provinces in recent years, causing great changes to the positions on the index:
of which notably, Ningxia, Qinghai and Inner Mongolia has undergone massive development to
clinch the top 3 spots on the 2016 growth index.
Table 14: Growth in Trade Turnover, By Change in Rank, 2015-2016
Province Change in Rank Province Change in Rank
Ningxia ↑ 17 Fujian ↓ 2
Qinghai ↑ 15 Liaoning ↓ 1
Inner Mongolia ↑ 13 Guangxi ↓ 5
Gansu ↑ 7 Heilongjiang ↓ 4
Zhejiang ↑ 8 Chongqing ↓ 8
Shanghai ↑ 9 Jilin ↓ 10
Hainan ↓ 4 Yunnan ↓ 12
Shaanxi ↑ 6 Tibet ↓ 15
Guangdong ↑ 3 Xinjiang ↓ 17
Of the Chinese provinces under the “Belt and Road” policy initiative, the cross-border e-
commerce sector in the Central and Western region have the greatest potential for development. How
to best capitalize on the “Online Silk Road” strategy, and leverage on the platform’s strengths to
implement a digital trade strategy to facilitate on the transformation and modernization of local cross-
border trade activities, these are key issues that the local authorities, enterprises, and other relevant
industry players shall examine, brainstorm and strategize on together.
The “Belt and Road” Major Trade Partners Analysis
Central Asia, Russia, South Asia and South-East Asia are regions that the “Belt and Road”
policy initiative has pledged to prioritize; with the Middle Eastern and East African countries being
where the “Belt and Road” shall converge eventually, while trade cooperation with Europe,
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 25Commonwealth of Independent States and various African countries shall be implemented in the
long-run. Of the over 60 countries involved under the “Belt and Road” initiative, 26 of them has
experienced year-on-year growth in sales by 30% and above. Looking at trade volume, Russia
continues its leading positing, with a boost in growth rate as well. And finally, looking at growth,
Bhutan, Kyrgyzstan and Qatar are the top three fastest growing trade partners. The table below
presents overview on the cross-border e-commerce (B2B) performance of countries under the “Belt
and Road” initiative.
Table 15: China’s Cross-Border E-Commerce (Export B2B),
Major Trade Partners & Growth: “One Belt One Road” Countries, 2016
Rank Market size Market growth
1 Russia Bhutan
2 Israel Kyrgyzstan
3 Ukraine Qatar
4 Poland Oman
5 Turkey Republic of the Philippines
6 Czech Republic Pakistan
7 Saudi Arabia Bangladesh
8 Belarus Sri Lanka
9 Hungary Bahrain
10 Slovakia Republic of Serbia
11 Kazakhstan Vietnam
12 India Russia
13 Latvia Nepal
14 Lithuania Jordan
15 Bulgaria Montenegro
16 Romania Turkmenistan
17 Estonia Indonesia
18 Thailand Egypt
19 Singapore Tajikistan
20 Indonesia Cambodia
With respect to specific products’ growth rate in countries under the “Belt and Road” initiative,
virtual reality headsets, kitchen products, wearable devices and health & beauty product categories
have undergone the most rapid growth (see Chart 8).
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 26Chart 8: Top 10 Product Sub-Categories, By Growth, One Belt One Road Trade Partner Nations
(b) Outstanding Development Potential of the ASEAN Market
The ASEAN region is comprised of ten countries, including Indonesia, Malaysia, the
Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. The Philippines
and Vietnam are the two fastest growing countries as China’s cross-border e-commerce export
partners this year. The chart below illustrates the top 5 ranking ASEAN countries with the most
significant growth in trade volume. Thailand’s growth in the past year has been sluggish, while
Malaysia’s year-on-year trade volume has declined from 2015.
Chart 9: China’s Cross-Border E-Commerce (Export B2B), Trade Partners’ Growth (ASEAN Region), 2016
Table 16: Composite Index of Cross-Border E-Commerce Export, ASEAN Nations
2015 2016
Indonesia 31.22 36.94
Singapore 24.18 29.28
Philippines 23.99 28.93
Thailand 39.36 25.26
Vietnam 22.42 22.46
Malaysia 30.96 20.62
Cambodia 22.19 19.89
Brunei 18.35 19.54
Myanmar 20.02 14.55
Laos 16.90 13.85
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 27Chart 10: China Cross-Border E-Commerce (Export B2B)
Trade Product Categories, By Growth, ASEAN Region
From the trade product categories exported, consumer electronics (computing,
communication, and consumer) products accounted for the highest weightage of 29%, followed by
health & beauty and fashion accessories products. Fashion accessories registered the highest
growth this year, while luggage & bags, watches, and health & beauty products all recorded year-
on-year growth of over 80%.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 28(c) Support for Product Branding, Putting “Chinese Brands” on the Map
Since the reform and opening of China’s economy, foreign trade has been one of the three major
pillars in fostering the national economy. It has continually sustained growth higher than the growth
of China’s GDP, and is one of the major drivers in the rapid development of the Chinese economy.
Historically, Chinese foreign trade enterprises have been relying on the low cost of labor, raw
materials and resources to provide competitive pricing and competitive advantage – essentially
positioning itself as the “factory of the world.” However, as the cost of labor is rising and as resources
are gradually depleting, “Made in China” is currently on the brink of transitioning. The China
economy has a critical need to move upwards from the manufacturing industry value chain, and to
disassociate itself from the “low cost, cheap quality” label, to transition into providing value-added
products with branding. It has shifted from “exporting economical products” to “establishing
valuable Chinese brands”, and gradually eliminate products that are low in quality or counterfeits,
and reposition itself as provider of high quality, branded products to attract and retain customers, and
to sustain a high market share.
Through this process, cross-border e-commerce can certainly provide a diversity of options and
channels to promote Chinese brands to consumers globally. Through the synergy effect of platforms
established for the trading of goods and services, reducing the overdependence on the middlemen in
conventional wholesale business models, to consequently reduce on the need for large amount of
capital and liquidity for enterprises, and maximize on operational efficiencies to the greatest extent.
Current statistics on e-commerce B2B export indicates that since 2015, export weightage of Chinese
brands have been surging, and it is forecasted that the rapid development will continue in the coming
few years. To revitalize the significance behind the “Made in China” label, and to firmly establish
Chinese brands on the world map are what Chinese manufacturers and foreign trade enterprises shall
continually strive for in the coming days.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 2935%
32%
30% 30%
25%
23%
20%
19%
15%
12% 12%
10% 10%
9%
5%
0%
2011 2012 2013 2014 2015 2016 2017 E 2018 E
Chart 11: Sales Weightage of Branded Items in China’s Cross-Border E-Commerce, 2011-2018
(d) Nurturing of Local Industry Clusters, Connecting to Global Merchants
Each city shall anchor itself with its key industries and unique products, tapping on their local
expertise as the core driver of economic development. The key trait of local industry clusters is a
complete industry value chain, where raw materials are sourced, processed, manufactured locally,
while product marketing and logistics are also completed within the area. This generates momentum
and gives more focus for industry players to provide the market with quality products at the most
competitive pricing, right at the primary source. In the past two years, as Chinese internet industries
proliferate and as the digital economy undergoes rapid development, many industries are realizing
the shortcomings and inadequacies of traditional offline commerce business models, and have begun
developing their presence on online e-commerce platforms, utilizing cross-border e-commerce
platforms to promote their products to the vast overseas market, with a growing awareness and
emphasis on brand identity. This phenomenon brings two major benefits: firstly, to promote and
strengthen the development of local industry clusters, and secondly, to act as a catalyst for local
industries to develop and launch branded products. Export statistics from this report substantiates
this development trend and attribute.
Taking Suzhou for instance, the B2B export e-commerce trade data for 2016 indicates that bridal
gown products accounted for the highest weightage of Suzhou’s overall e-commerce exports at 68%,
followed by household products. Bridal gowns are almost synonymous with foreign trade in Suzhou
exports, with the bridal industry forming its own massive trade sector independently, catering to the
broadest segments of the market with the latest fashion trends at the most competitive pricing. From
branded bridal gowns to independent boutique designers, from exclusive tailor-made items to ready-
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 30to-wear products, and in addition to bringing in renowned global brands, Suzhou has transformed the
traditional business model in the bridal industry into a value chain comprised of the trifecta of
professional standards, quality, and branding.
There are plenty of similar cases to Suzhou, with the local industry expertise bringing dynamic
growth in the area’s cross-border e-commerce. For instance, Fujian’s export e-commerce has a robust
presence in sports shoes products, accounting for 90% of its exports. Meanwhile, in Xuchang city,
which specializes in hair products, massive growth has been recorded, with trade turnover surging
by 93%, with the market share increasing from 90% to 94%. Other areas with industry clusters
include: printers and consumables in Zhuhai, stainless steel products in Chaoshan, furniture in
Foshan, luggage and bags in Guangzhou, toys in Chenghai, children’s clothing in Zhili, and so on.
These cities are focusing on establishing an entire value chain dedicated to products unique to their
locality and corresponding to their expertise.
Chart 12: Cross-Border E-Commerce Regional Product Distribution, 2016
(e) B2B as Key Driver, E-Commerce’s Transition from B2C to B2C
From export B2B statistics (chart 13), it is evident that the growth rate of large volume orders
far surpasses the growth in the quantity of overall orders. The trend of engaging in larger orders for
e-commerce, pursuing commercial clients shall become increasingly salient.
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 31Chart 13: China Cross-Border E-Commerce B2B, Growth of Orders, 2016
How products from Chinese brands can be launched to the global market more rapidly and
consistently, how to add value for Chinese foreign trade enterprises and bridging them to more
resources, how to revitalize industries unique to a locality through clustering – these are all intricately
linked to the development and reform of cross-border e-commerce business models. They also
converge to further advance the development of the overall cross-border e-commerce sector.
Along with the impacts of supply-side reform policies nationally, and as industries transform
and modernize, there will be an increasing number of traditional enterprises embracing internet
technologies to dive deeper into the foray of digital trade activities; e-commerce is shifting from
targeting consumers to targeting industry players, and progressing from purely cross-border e-
commerce activities to conducting transactions completely via digital trade. In the future, purely e-
commerce enterprises and purely offline business entities will cease to exist, remaining foreign trade
businesses will adopt a highly-integrative online-and-offline business model. At the same time, as
transitions from B2C to B2B continues, trade transactions will be digitized and conducted online,
with service platforms catering to such functions being the development trend in the near future. In
the next 5-10 years, traditional enterprises will shift rapidly to online, while internet-based business
entities will continually make their presence felt offline. The market will no longer emphasize
whether the enterprise is online or offline, as the boundary will be blurred. Such far-reaching
integration shall permeate across all industries, with the successful adopters emerging as the business
leader in their field, along with the restructuring of the industry’s ecosystem. Under the “integration
and conducting large commercial transactions via online platform” strategy, the entire industry value
DHGATE.COM | TSINGHUA, NELECT | CUFE, CCIER 32chain and periphery services along the chain shall be restructured; the shift to online platforms shall
connect with the relevant government authorities through a uniform channel, offering one-stop export
services for businesses, and offering them cost savings and increased efficiency. Using the digital
trade platform as its core, the value chain upstream and downstream shall integrate all relevant actors
from merchants, customs offices, service providers, government authorities, financial organizations,
industry clusters, buyers, overseas channels, industry associations, forming a brand new massive
digital trade ecosystem with the ability to develop to an even broader horizon.
(f) The Dawn of the Digital Trade Era
1. The Definition of Digital Trade
Digital trade is the crux of the digital economy, it is the evolution and development of cross-
border e-commerce. Digital trade is comprised of not only the trade transactions for goods through
e-commerce, it also encompasses comprehensive services pertinent to the delivery of goods, such as
marketing, payment, logistics, supply chain financing, customs clearance, goods inspection, tax
refunds, settlements of exchange, as well as all other services along the industry value chain. The
“Digital Globalization: The New Era of Global Flows” report published by McKinsey in 2016 stated
that approximately 12% of the global goods trade is conducted via e-commerce, with 50% of cross-
border services trade facilitated by digital means.
Four Key Traits of Digital Trade
Trade of both tangible goods and virtual economy; integrates online and offline
Synergy in the development of both goods and services trading platforms
Multilateral strategy and cooperation between various countries
Enhances the trading ecosystem, solves various issues of traditional trading business
models via a one-stop solution
2. The Interconnectedness of Digital Trade & the Online Silk Road
Under the Chinese “Belt and Road” policy initiative, the “online silk road” is declared as one of
the innovative strategy approach, hence by allowing the countries involved in the initiative to
leverage on the establishment of digital trade instruments, is an important step in accomplishing an
enhanced trade flow.
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