China to spend $85.7B on cross-border e-commerce

More consumers in the country are making online purchases from foreign-based sites, accounting for more than half of all digital buyers by 2020, up from 15 percent this year.
Written by Eileen Yu, Senior Contributing Editor

More consumers in China are expected to make online purchases from foreign websites and third-parties, as the population enjoys a higher standard of living and is exposed to foreign products.

More than 15 percent of the Chinese population this year would make cross-border e-commerce purchases worth US$85.76 billion, according to figures from eMarketer. This was expected to increase to a quarter of the population by 2020, accounting for more than half of all digital buyers in the country.

Online shoppers in China were expected to spend an average US$473.26 each in 2016 on goods outside the domestic market, accounting for 4.2 percent of total retail e-commerce purchases, said eMarketer in a report Tuesday.

The marketer researcher added that online shopping in China increased by more than 70 percent last year, fuelled by a higher standard of living and greater exposure to foreign products.

This significant market growth was further driven by the launch of Alibaba's Tmall Global in 2014 as well as JD Worldwide in 2015, paving the way for foreign brands to peddle their wares directly to online shoppers in China.

Local consumers in search of better quality goods and more trustworthy brands, particularly in categories such as infant products, also looked for foreign retailers.

eMarketer's forecasting analyst Shelleen Shum said: "While the new cross-border e-commerce tax implemented in April this year negatively affects some categories of goods, the demand for foreign goods via the cross-border e-commerce channel is still expected to remain strong due to better prices compared to offline retailers, perceived quality, and better variety.

"Furthermore, cross-border e-commerce goods sold via the business-to-consumer (B2C) channel are expected to take up a growing share of the total cross-border e-commerce market in 2016 as consumers shift to platforms that are more professional and organised," Shum said. "Since merchants selling on these B2C platforms have to be authorised, they are considered more trustworthy."

According to a March report from Forrester, China's e-commerce market was projected to climb to US$1.1 trillion in 2020, leading the region's growth to become nine times larger than Japan's US$122 billion market and 17 times larger than South Korea's US$65 billion.

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