Discussion keeps the world'sturning.
This isRoundtable. Helloeverybody, welcome toRoundtable.
Coming to you live fromBeijing, I'm ayoung, good to have you for this ride on a day'sshow.
Cross-sporter E-commerce is your ticket to a globalmarketplace.
Shopped from New York to Beijing without leavinghome, it's revolutionizing internationaltrade, but not withoutchallenges.
Tariffs could be a potentialhurdle, affecting prices andlogistics.
Anyhow, the thrill of accessing global products at affordable prices keeps both sellers and buyersengaged.
Let's unpack the opportunities and obstacles in this fascinating world of international onlinecommerce.
And wild eat seems to offer a budget-friendly alternative to expensive outdoor activities such ascamping, because let's faceit, it could get a littlepricey, and it's different from a traditional picnic to how exactly does one participate in wildeating.
For today'sprogram, I'm joined by Li Yi and Brandon Yates in thestudio.
First on a day'sshow. In2023, China's cross-border E-commerce hit a record 2.38 trillion yuan or $328 billiondollars, growing by15.6% year onyear.
The surge is a reflection of online marketplace advancements and consumerbehavior.
What are the key elements contributing to thisgrowth?
And what future steps will companies take to enhance this cross-border E-commercebusiness?
What is the role of young shoppers in this thrivingmarket?
Is something I'd also like to findout.
So LiYi, could you help us to go through thenumbers?
What did the figuressay?
Sure. As yousaid, in2023, the totalcostum, I mean the total import and export volume of cross-border e-commerce in China was about 2.38 trillionyuan.
And also especially the export volume of cross-border e-commerce really reached nearly 1.9 trillionyuan, that's about $252billion, USdollars, and an increase of nearly20%.
Andmeantime, the import volume reached about $500 or $540 billion yuan in lastyear.
Andmeantime, in the past fiveyears, China's scale of cross-border e-commerce trade has really increased by more than 10times, that's according to Huoyang Deng spokesman for the Ministry ofCommerce.
In themeantime, there are more than 120,000 cross-border e-commerce enterprises here inChina, at least 1,000 cross-border e-commerce industrialparks, where you got those not only e-commerceplatforms, but maybe with logistics companies aswell.
And over 2,500 overseaswarehouses, with a total area of more than 30 million square meters of which more than 1,800 overseas warehouses focused on serving cross-border e-commerce with a total area of over 22 million squaremeters.
Andmeantime, according toauthorities, they will continue to facilitate those industrial development and also provide essential support to those cross-border e-commerce companies in the country to facilitate thebusiness.
Right, so we're pretty much talking about internationaltrade, but just in the onlinesphere, which is something I don't think we've devoted a lot of attentionto.
This is something that's been growing in recent years as for this to facilitate from a customer tobusiness, business to customeraspect, then you need some really goodapps, easy to useplatforms.
Otherwise, we'll probably still be talking about business tobusiness, buying and bulk that kind ofthing.
But now we're seeing that international shoppers from a whole number of countries around the world are able to buy stuff fromChina.
I think essentially this is kind of what itis.
SoBrandon, what's your observation sofar?
I'm not a fan of e-commercemyself.
I'm quite oldschool.Yeah, so forme, when I shop forclothing, forexample, forme, the way something feels and fits is more important than how itlooks.
So even though I don't like going out to stores and dealing with crowds and shifting through shirts and all of that sort ofthing, I generally find if I purchase something online that looks great when I getit, it won't be what I wasexpecting.
So I've never really been a big fan ofthat.
Andalso,domestically, I think it's still a little bit tricky for foreigners to deal withe-commerce, but that beingsaid, it does sound like a lot of the domestic companies are branching out overseas and that's obviously going to make it easierfor, that'll be more cater to foreignersobviously.
And then that will probably also lead to improved usability of the apps domestically as well for foreigners based inChina, which has already begun toimprove.
Imean, forexample,with, I know Alipay is note-commerce, but I mean Alipay just seems to be getting easier and easier to use for foreigners inparticular.
So, butyeah, Imean, that beingsaid, I've also had some great domestic experiences withe-commerce.
Imean, forexample, my mom was able to organize a birthday cake for me all the way from South Africa using Chinese e-commerce and it arrived on my birthday on time perfectlydelivered.
So that wasamazing. Butyeah, it does soundlike, youknow, there is a big push for these e-commerce brands to expandoverseas.
Forexample,obviously, as a sportsjournalist, I've been watching a lot of Euro 2024 and a lot of these brands like AliExpress and a couple of the other brands that we're going to discuss have been sponsoring major events like Euro2024.
So it does seem like these e-commerce brands are expanding their reach outside of China and they're also pushing the marketing of their company's internationally aswell.
I think you just mentioned two very important factors here in the e-commercebusiness.
One is price and quality and second is aboutlogistics,right?
And when we talk about those e-commerceplatforms, especially these cross-border e-commerceplatforms, actually a very major factor that attract a lot of foreign consumers in those countries is that these Chinese cross-border e-commerce platforms enable them to buy products of pretty much similar quality in acheaper, Imean, much cheaperprice, which is quiteattractive.
Especially for youngshoppers.
Yes,especially. Andalso, I know there are some different discussion about the price and quality between online platforms and offlineplatforms.
Some people like you maythink, I just believe what I see and what Ifeel.
So that I prefer to buyoffline, butmeantime, you can't really ignore that for offlinecompanies, you have to take into all the cost intoconsideration.
Well, these e-commerceplatforms, they're tryingto, even they're trying to reduce cost operation costs for those companies andsuppliers.
But that beingsaid, with my experiences with onlineshopping, it's not necessarily the actual quality of theproducts.
That's theissue. I just think that forme, my proportions are a bitstrange.
I'm quite tall kind ofslim, so it's quite tricky to find clothing for mesometimes, particularly inChina, because normally the sizes don't really match me in a large as a medium in South Africa and that sort ofthing.
So it's not actually the quality of theproduct.
It's just finding the fit that's right forme.
Sogenerally, the quality of the products that are soldonline, even at a very lowprice, are still really goodquality.
But just forme,personally, Ivalue, I don't want to purchase something that I'm not going to wear or use on a consistentbasis.
And I found that particularly withclothing, and this is just mepersonally, it's a lot harder for me to find things that I'm comfortable wearing on a regularbasis.
Sogenerally, when I do clothingshopping, I would prefer to go to astore.
But that beingsaid, with the low prices and convenience ofe-commerce, I can see why it's so incrediblypopular, not just inChina, butglobally.
And alsodomestically, where there is internetcoverage, there is e-commerce or onlineshopping.
And the Chinese shrewd tech savvy shoppers have seen itall.
And we know exactly which platform to go to for exactly the kind of stuff wewant.
Forexample, this is something actually I saw of an interviewonline.
So this regularlady, who's an office worker living inShanghai, and shesaid,well, if I'm shopping for stuffof, I know it's going to be ofaverage, if not lowquality, but I don't mind because it's cheap and it can makedo, then I will go to a certain platform that starts with aP.
And sobasically, she said if she's buying toys for herdog, she would gothere.
But if she's buying food for herdog, so petfood, and then she loves her dog verymuch, she will go to anotherplatform.
See, this is the kind of information that foreigners wish theyhad, this kind of inside aknowledge.
I think it takes a long time for like outsiders to get this level ofknowledge, but it really does sound like Chinese people are really incredibly tech savvy when it comes to onlineshopping.
I guessso. And then so she knows that if this islike, shesaid, if it's stuff that I'm putting on myface, stuff that I'm stucking into my pet'smouth, then I go to the secondplatform.
And if I'm going forelectronics, I will go to a thirdplatform.
And if I'm going for branded apparelstuff, I'll go to a fourthplatform.
So like we know where to goto.
And then it's interesting to see that theseplatforms, as they have penetrated different levels of the geography of market place in thiscountry, now they're settingeyes, or they've already got their tentacles outside and for a globalexpansion.
Absolutely. Because I think the Chinese market is one of the hardest ones to actuallypenetrate, and they've been so incrediblysuccessful.
Dimistically, I think they're going to even achieve greater success in the overseasmarket.
But that beingsaid, they need to achieve that same level of trust and usability that they've achieved inChina.
That could potentially take sometime.
But I do think they can achieveit.
Interesting. SoD.E. Why don't you walk us through the top four players that have branchedglobally.
And they're developing at differentpace.
And some are stealing the spotlight of a lotmore.
Some of already achieved great successalready.
Yeah. So let'ssee. I think currently there are four major top players in the sector that isTimo, AlliePay, Xin and TikTokShop.
And according toDSB,CN, which is one of the most influential e-commerce information service platforms here inChina,Xin, Timo and Allie Express rankedsecond, third andfourth, respectively on the 2023iOS, which was also shopping app penetrationranking.
Xin, Timo and appservice.
So these are really major players in theindustry.
Forexample, when you talk aboutTimo, it's really popular thesedays.
And it's actually the cross-border e-commerce platform launched by Chinese online discounter PDD orPin-duo-duo.
And thisyear, it really sets a transaction volume target of $6 billionUSD.
So that's over three times of that in2023.
You can see how confident it is about its ownbusiness.
Andmeantime, TikTokShop.
Imean, it's the e-commerce platform launched byBaidtens.
And it really sets a gross merchandise volume target of $15 billion USD thisyear.
That's up150% year onyear.
And it really sets a new goal of $17.5 billion USD in its US market only thisyear.
A different past that Baidtens main office in Beijing a couple oftimes, it's reallyimpressive.
I've always enjoyed driving class atoffice.
It looks super modern andhigh-tech.
But that beingsaid, I think Xi'an orXi'an, I think a lot of foreigners have been pronouncing it wrong for quite sometime.
It'sXi'an, Ithink. So inslavery, we say Xi'an or inAustralia, they sayXi'an.
I think it's an accentthing.
But thatXi'an, Ithink, is definitely the most widely recognized brand overseas that originated from China as thingsstand.
But I think those other companies that you mentioned are definitelygaining.
And I think they're also on track to achieve pretty phenomenal success overseas just as Xi'anhas.
Andalso, it's interesting to sort of go into their businessmodel, just a tad to understand how well they'redoing.
Andwell, Alibaba is sort of the biggest player in the e-commerceplatform, at least here inChina.
But it's felt the very strong challenge that comes fromPindoduo.
And Pindoduo has been known for selling stuff at rock bottomprice.
And inChina,originally, it also had the Group Buy element init.
And then how its international branch has done business kind ofcopies, it will not copy extends what it's donehere.
And then when I look at how they're doingstuff, it'slike,oh, this all looks reallyfamiliar.
And I still remember the excitement when it first cameout.
And the Chinese userswere, it's got this sort of contagious effectof, youknow, you and your friends are all sort oflike, you recommend anotheruser.
And then you get like 20 bucks or something of acoupon.
Andalso, there's the gamification function aswell.
So you're kind of like playing agame.
It's reallyenjoyable.
The interface is really userfriendly.
Andyeah,well, they'reshopping.
Andalso, everything comes at such a lowprice.
And that isn't that what peoplewant, especially when you're experiencing sortof, once in a lifetime inflationary pressure if you're living in the US orUK.
I don't know about the gamingelements.
I don't know how popular that would beoverseas.
But Imean, I can tell you one thing that will definitely be popular overseas is lowprices.
I think that's a universallanguage, the lower theprice, thebetter.
Yeah,exactly. And I think price is the major factor that a lot of consumers on a global basis would take intoconsideration.
Andactually, I was quite curious abouthow, youknow, foreign consumers think about those business conducted by these Chinese e-commerceplatforms.
And so I checked the serversand, youknow, sort of like videosonline.
And they were quite surprisedthat, youknow, forexample, a pair of shoes could be sold at$2.85.
And that's even cheaper than a cup of Starbuckscoffee.
And some lightpods, $3.70, and $3.49 ofWebCAM.
So, youknow, this person isreally, youknow, throwing thequestion, I don't really know who's the making moneyhere, me or thosecompanies.
So, andalso,meantime, when we talk about cross-bordere-commerce, you have to admit that there is the delivery time issuerate.
So for localconsumers, you really have to wait for rather longer time if you want tobuy, especially those shoes directly provided by Chinesesuppliers.
Yeah. Because all theprocess, I end up even despitethat, consumers just are willing to tolerate the longer delivery time because they want the cheaper and the cheaper goods with pretty much similarquality.
And so that's why we're seeing this company is already doing successful business in a lot of countries because according to the business daily inGermany, data showed that one quarter of German people have made purchase on Chinese e-commerceplatforms.
And according to the latest research report by Australia based a market researchcompany, RyanMorgan, over two million Australians made purchase on Timu and Shin everymonth.
Andmeantime, when we talk aboutAliExpress, it has about 8.5 million members in South Korea in April until April2024.
So these are really prosperingbusiness.
One stumbling block that some of these companies may encounter coming from a foreign as perspective is that brand loyalty is a very big thingoverseas.
And somepeople, not necessarily youngerpeople, but the older mid-level and upper-oldergenerations, are very loyal to specificbrands.
And are actually willing to pay higher prices because they trust a certainbrand.
So I think where a lot of these Chinese e-commerce platforms should be putting a lot of their emphasis is trying to counter that and to convince potential buyers that they are able to match the quality of the brands that some of these overseas consumers are usedto, but at much lowercosts.
And I think that is something that can beachieved, but it might take sometime.
Yeah, and that's a really interestingpoint.
And also can you just reference the data a littlebit, which also kind of just shows how successful especially Timu hasbeen.
And alsoTimu, by theway, is short for Timup pricedown.
And it only was launched in2022.
And in September that year into theUS.
And now it has 100 million USusers.
Also it is themost, well it was the most downloaded shopping app of 2023 in the US as well as UK lastyear.
And both of those countries are facing massive inflationproblems.
But makes sense that they're seeking out cheaper alternatives to the products that they have available in their owncountries.
And also onemust, the first question that comes to mind is how is it possible to have such a goodbargain?
And I think some people probably have this impression that China has well shown continued strength in the manufacturingbase.
Yeah. Also it's got the most sophisticated supply chain in theworld.
Thisinflation. And these things mean that it can produce affordablegoods.
But also there's another aspect that companies such as Timu and Xi'an has managed to utilize AI and cutting edge technology very well in predicting or at least to respond to consumerdemand.
It'sC2M, customer to manufacturer on theseplatforms.
If you like this bikini top and if you like this one with white flowers better than the one with the blueribbon, that response is immediately given to the platform and the platform immediately gives it to themanufacturer.
So this makes what Zara used todo, rememberZara?
Yes.Yes, it sounds like lastcentury.
Or at least the turn of themillennium.
And remember back then Zara advertised that it's ableto, didn't use the wordcopy, but pretty much lift the fresh from the runway offashion, fashion of Paris fashion week of designs to its storefront in a matter of threeweeks.
But look at what they donow.
It's almost like in realtime.
And in a couple of days it'll be manufactured and then it'll be shippedout.
So this reallyeffective, like on demand super fastturnaround,yeah.
Yes. Of all thegoods. And especially like yousaid, I think this company is there quite well at using different digital technologies because I think a major group of their consumers would be youngpeople.
And these are digitalnatives.
Imean, they aresuper, they can be super welcoming about newplatforms, new apps because theyare, it's just the easier for them to embrace all the newthings.
Andmeantime, they're all thetime, Imean, they're active all day on social mediaplatforms.
And I think theseapps, thesecompanies, they're also usingthat.
They're making a lot of marketing and promotion e-commerce on social mediaplatforms.
They're less stubborn than all the consumers aswell.
So they're more likely to try new things and experience new brandsthan, youknow, the oldergenerations.
And also they're valuesensitive.
And here'ssomething.Well, thattoo,yeah.
What contributes to cheaper prices is another factor that I find really interesting how they manage to pull it off to you move and she and the likes ofsuch.
Thatis,okay, if you look at thetraditional,okay,let's, we need to look at the 500 pound gorilla in the US mark e-commercemarketplace.
That isAmazon. And youknow, what it does is in order to understand what the customerswant, they conduct surveys and collect data assuch, but it's a far more lengthy process and possibly costly process to get the demandin.
But I've also demonstrated to you just now how these Chinese companies managed to use really high tech to get the demands in and calculate and respond reallyquickly.
So that's one thing that Amazon might need to spend moreon.
Also onAmazon, there are so manybrands.
And then likeBrandon, you mentioned earlier that building a brand and then people are shopping for thebrand.
Therefore pay more for that is onething.
But if you look at these platforms led byTimo, the stuff they sell there have nobrands.
Yeah, but it's the samequality.
Like it'sprobably, youknow, at least close toit.
You're so confident aboutit.
I think for somepeople, maybe we see it as there is a little bit of a tradeoff, but are you willing to pay for something at rock bottomprice?
The quality might be a little bit substandard to the expensiveone.
But without thebrand, it's so much cheaper and you sacrifice a little bit of thequality, but it can still get the jobdone.
And young people are caring less and less about brands to behonest.
Right. I remember when I was a kid like having Nike shoes or whatever it was was the biggestthing.
It didn't matter what it looked like or how comfortable it was it was having thebrand.
People, like kids don't care about thatanymore.
So maybe this is the selling point that is forget about the brand of theproduct, but Timo or Pinduador orwhatnot, this is thebrand.
And if you're here that you want to shop for stuff that can make do and you and it's superaffordable, like fivetimes, ten timescheaper, thenyeah, whynot?
I think this is what some people are adheringto.
Yeah. And also on top ofthat, I think theseplatforms, they're also trying to shorten all the logistics process for both local consumers and also to make it more convenient for suppliers domestically because there are some of these cross-border e-commerce platforms they're trying to promote is semi-managedmode, which can be more convenient forsuppliers, especially those with overseaswarehouses.
And meantime on domesticlevel, I think theauthorities, they're also trying to beat more overseas warehouses to provide better logistics and after-sale services for foreign consumers aswell.
