Shenzhen Tianxingyun Supply Chain Co., Ltd.

An Analysis of Driving Factors For the Development of China's Cross-border E-commerce in the First Half of 2020

Since the beginning of this year, the epidemic has brought a certain impact on China's economy, and traditional foreign trade enterprises have been affected. Cross-border e-commerce, with its unique advantages, has broken the temporal and spatial restrictions and achieved a counter-trend growth in transaction volume. In the first two months of this year, China's cross-border e-commerce retail imports and exports reached 17.4 billion yuan, up 36.7 percent year on year.  

The epidemic has created unprecedented development opportunities for cross-border e-commerce, it accelerated the pace of innovation in cross-border e-commerce, and promoted it to become an important means of foreign trade development. Overall, the development of cross-border e-commerce in the first half of this year is affected by four factors, the policies, total import and export value, consumption level and new technology empowerment.

1 Policies

The outbreak of the epidemic has caused losses to the traditional foreign trade industry. Under this situation, cross-border e-commerce, as a new form of foreign trade, gives full play to its advantages and helps the foreign trade industry forge ahead. Since February, from the central government to the local government, they have been issuing new policies to increase policy support for cross-border e-commerce industry and push the development of the cross-border e-commerce.

2 Total Import and Export Value

Data show that from 2014 to 2019, the total import and export value of China's trade in goods decreased first and then increased. In 2019, China's imports and exports in goods totaled 31.54 trillion yuan, with a year-on-year growth rate of 3.4 percent. Since 2016, China's imports and exports of goods have maintained relatively stable growth, providing a necessary foundation for the development of China's cross-border e-commerce.

3 Consumption Level

In the past five years, the per capita disposable income of Chinese residents has increased continuously. In 2019, the per capita disposable income of Chinese residents was 30,733 yuan, up 8.9 percent year-on-year. National income level is one of the most important factors affecting household consumption, and consumption upgrading is the biggest driving force for the rapid growth of import cross-border e-commerce. In particular, the continuous upgrading of consumption in third - and fourth-tier cities makes the trend of import consumption more obvious.

4 New technologies empower

Data is an important tool to improve the efficiency of cross-border e-commerce system.Through big data, artificial intelligence and other technologies, cross-border e-commerce can optimize the allocation of resources, accurately acquire users, improve the efficiency of goods distribution, and realize rapid development and scale expansion.

With the improvement of residents' income level and the improvement of national consumption level, the focus of cross-border e-commerce products is no longer international price difference, but product quality and brand.In the era of industry 4.0, new technologies such as the Internet of Things and intelligence make the manufacturing industry transform to intelligence, the production at the supply side is determined by the demand side, and the upgrading of national consumption makes the development of cross-border e-commerce turn to refinement and vertical to meet the personalized needs of consumers.