Foreign E-Commerce Platforms Pitch Themselves to Chinese Merchants
By Bao Yunhong and Ding Yi
European, Asian and Latin American cross-border e-commerce platforms are stepping up efforts to attract Chinese merchants as U.S. tariffs on Chinese imports remain high despite a temporary truce in the trade war between the world’s two largest economies.
This trend was evident at the 10th Shenzhen International Cross-Border E-Commerce Trade Expo earlier this week, where online retailers including Russia’s Wildberries, South Korea’s Coupang and Argentina’s MercadoLibre tried to sell Chinese vendors on the benefits of doing businesses on their platforms.
At the expo, Zhang Jianhui, executive director of the Shenzhen branch of Wildberries’ China merchant services center, pointed out that the center had relocated its office to Shenzhen’s Bantian district — a cross-border e-commerce hub in China — as a show of the company’s commitment to Chinese merchants. The center has established a system covering training, customer service and brand development to help Chinese vendors expand into the Russian market, Zhang said.
An industry insider said that Russia is likely to become one of the world’s fastest-growing e-commerce markets this year, with profit margins expected to reach at least 30% in certain sectors where demand remains unmet.
Jiang Wei, a manager responsible for Coupang’s expansion in South China, talked up South Korea’s internet usage rate of 93% and its per capita GDP of $34,000, predicting that the country’s e-commerce market value, which now stands at $160 billion, will grow at a compound annual growth rate of 6.4% over the next five years. Currently, South Korea is the fourth-largest e-commerce market after China, the U.S. and the U.K.
With a user base of over 21 million people, Coupang is the only e-commerce platform in South Korea that can provide same-day and next-day delivery, and plans to expand further into categories including small home appliances, outdoor gear, consumer electronics and pet supplies this year, according to Jiang.
Wu Boying, a business development manager at the Shenzhen subsidiary of Japanese e-commerce company Rakuten Group Inc., said that the platform has lowered its registration requirements and fast-tracked approvals for eligible merchants. She suggested vendors would do well on the platform, noting that Rakuten and Amazon.com Inc. together controlled more than 70% of Japan’s e-commerce market.
As for MercadoLibre Inc., the company has opened its door wider to Chinese merchants, allowing them to sell products to Mexico, Brazil, Chile, Colombia and Argentina via its platform, according to the head of business development and service ecosystem management at the company. In addition, MercadoLibre charges merchants lower commission fees and provides them with transportation subsidies through a program in which the company handles logistics on their behalf.
Other cross-border e-commerce platforms with a presence at the expo included Germany’s Otto and France’s Cdiscount SA, which has been in business for about 30 years and specializes in categories like mobile phones, toys and home appliances — all of which Chinese manufacturers excel at producing.
Many Chinese e-commerce vendors took a hit from the trade war the U.S. launched in early April. On May 12, China and the U.S. reached a deal to suspend most of the reciprocal tariffs that they had imposed on each other over the previous month. On the same day, Donald Trump signed an executive order slashing the tariff on small parcels valued at up to $800 shipped from the Chinese mainland and Hong Kong. The levy was instituted at the start of May to close the “de minimis” loophole allowing low-value goods to be sent to the U.S. without paying import duties.
Contact reporter Ding Yi (yiding@caixin.com) and editor Michael Bellart (michaelbellart@caixin.com)
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