The term “cross-border e-commerce” may be unfamiliar to many, but it has actually gained popularity in recent years as one of the fastest-growing businesses in the market.
Cross-border EC is expanding its market to the United States, Europe, and other countries around the world, and among them, the market in “China” is expanding at a tremendous speed.
In this issue, we will focus on China, which is the focus of much attention in the cross-border EC market, and introduce in detail the reasons for the popularity of cross-border EC in China, popular products, and popular websites.
If you are considering using cross-border EC in the future, please check it out.
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Meaning of cross-border EC
As mentioned at the beginning of this article, cross-border EC can be described in a nutshell as “the business of selling Japanese products to overseas consumers.
In recent years, opening a store in an overseas e-commerce mall and selling products to overseas consumers has also been referred to as cross-border e-commerce.
Four categories by way of business
Cross-border EC can be divided into four categories depending on how you do business.
The first is to create and operate your own cross-border e-commerce site.
We create the target country’s language and payment system for that country, and then sell the product.
The second method is to open a store in an overseas e-commerce mall.
The famous online shopping site “Amazon” is a good example of this. In China, cross-border e-commerce is available through sites such as “TianNeko International” and “JingDong Global Purchasing.
The third is cross-border EC utilizing conservation zones.
The warehouse in the target country stores the products that are in stock and delivers them from the warehouse when payment is made in the e-commerce site.
The fourth is agency sales-type cross-border EC.
Agency-based cross-border e-commerce consists of a mechanism in which products are purchased by an overseas agency sales company, which then sells the products to customers.
As you can see, there are many different methods of cross-border e-commerce, and products are sold to overseas customers through a variety of means.
Cross-border EC is “hot” in China!
Cross-border e-commerce, as introduced above, is actually a market that is expanding at a tremendous pace in China right now.
According to the Ministry of Economy, Trade and Industry’s “Survey of the Electronic Transactions Market in Fiscal Year 2048,” the size of the market is US$1.93 trillion in 2019, which translates to approximately 208 trillion yen. This is more than 10 times the size of the Japanese market and more than twice the size of the U.S. market, which is the largest economy in the world.
Next, we will discuss why cross-border EC is so popular in China.
If you are considering using cross-border EC in China in the future, please check it out.
Impact of the new coronavirus
One reason for the popularity of cross-border e-commerce in China is the impact of the new coronavirus.
This is not limited to China alone, but people are going out less and less to prevent the spread of the new coronavirus.
With fewer opportunities to go out, more and more people are shopping via the Internet, and the cross-border e-commerce market is expanding rapidly as a result.
Impact of Visitors to Japan
One possible reason for the popularity of cross-border e-commerce in China is the influence of tourists visiting Japan. For several years now, Chinese people have been visiting Japan and bringing back many products, known as “Bakuhai,” and the quality of Japanese products has become well known in China.
Another reason for the popularity of cross-border EC is that Japanese goods can be purchased through cross-border EC without having to come all the way from China to Japan .
Widespread use of smartphones
One reason for the popularity of cross-border EC in China is the widespread use of smartphones.
Like the impact of the new coronavirus, this one is not limited to China, but the Internet penetration rate in China is over 70%.
The fact that 7 out of 10 people in China, which has a large population to begin with, use the Internet can be said to be a factor in the expansion of the cross-border EC market.
Chinese Lifestyle
One reason for the popularity of cross-border EC in China is the Chinese lifestyle.
Although it may seem unthinkable in Japan, in China, where it is said that it is normal for married couples to work together, the style of working from morning to evening at the office, receiving products shopped online at the office, and returning home has become widespread.
Therefore, more and more people are using cross-border EC to purchase quality Japanese food products and other items before returning home.
Popular products in China
Next, we will discuss what kind of Japanese products many people in China like and prefer.
If you are considering using cross-border EC in the future, please check it out.
child-rearing products
One point to note is that Chinese consumers prefer to purchase Japanese parenting products through cross-border EC.
In China, where the abolition of the “One-Child Policy” has increased child-rearing opportunities, diapers and other products made by high-quality, safe Japanese manufacturers are particularly popular.
beauty products
Secondly, Japanese beauty products are selling well through cross-border EC.
After all, beauty products made by Japanese manufacturers are of high quality, and many people are willing to pay a little more for them because they can use cross-border EC to buy official and legitimate products.
consumer electronics
Second, many people use cross-border EC to purchase Japanese consumer electronics.
Many people may imagine a Chinese person holding a paper bag in both hands at an electronics store in downtown Tokyo when they think of bomb shopping.
Due to the new coronavirus, people who wanted to come to Japan but could not afford to buy are now using cross-border e-commerce to purchase Japanese electronic products.
consumable goods
Next, consumables are the most common items that Japanese products sell well in cross-border e-commerce.
As with childcare products, Japanese products that are “high quality” and “safe and secure ” are popular in China, even for consumable items, and many people repeat the purchase of a product they have already made once.
Popular EC sites in China
Next, we will introduce some of the e-commerce sites that have become popular in China.
Currently, three e-commerce sites are popular in China: T-MALL, Jingdong Commerce City (JD.com), and pinduoduo.com.
Please check out the features of each of them.
Tenko (T-MALL)
The first one we will introduce is Tian Cat (T-MALL). T-MALL is the largest e-commerce site in China, operated by the Alibaba Group.
50% of those who use e-commerce sites in China use this Tianxue.
With 70,000 stores and more than 65 million members, we can say that we are No. 1 in China in both name recognition and performance.
Tianyao has high standards for opening a store, and the hurdles are set higher than other e-commerce sites, so it takes a lot of effort to open a store. However, because of its high reliability and “no fake goods” image, many people seem to be shopping at Tianyao.
Food products account for 40% of Japanese goods purchased on Tianxico, followed by home appliances and accessories. It seems that Chinese people use Tianxico in search of high-quality “authentic” Japanese products.
Jingdong Business City (JD.com)
Next, we introduce you to Jingdong Shopping Mall (JD.com).
Jingdong Shopping Mall, operated by a company called Jingdong Group, is the second most popular e-commerce site after Alibaba Group’s Tenco.
In 2015, Kyongdong Group opened an e-commerce site dedicated to Japanese products called “Japan Pavilion,” which indicates that the company is focusing on Japanese products.
As with Tianyao, food and accessories are the preferred items at Jingdong Shopping Center, and there is little difference in the products most likely to be purchased at different sites.
One of the features of Kyodo Trading City is its partnership with Yamato Global Logistics Japan, which allows Japanese companies to have items on display delivered in four days, which is why Kyodo Trading City is so popular.
In Japan, it is a matter of course that “the products you order will be delivered immediately to your home,” but in China, this is not a matter of course.
Another reason for the popularity of this service is that the intervention of a Japanese company in the process from order to delivery also makes it more secure.
Pinduoduo.com
Last but not least is pinduoduo.com.
Compared to Alibaba Group’s Tianxico and Jingdong Group’s Jingdong Shopping Mall, the number of users of Pingtai is again small, and it is a new e-commerce site, having been established only in 2015.
Although newly established, Pingtu has the third largest market share in China, following TianNexo and JingDong Shopping Mall.
How did Pingda increase its market share? Pingda’s target customers are the exact opposite of those of Tianneko and Jingdong Shancheng, such as low-income customers.
As a result, the market has gradually expanded, and today, about 7% of those who use e-commerce sites use PINTAK.
summary
We introduced in detail why cross-border EC is popular in China, popular products, and popular sites.
In China, where the market is expanding at a tremendous pace, Japanese products are “selling like hotcakes. If you are considering using cross-border EC in the future, why not consider opening a store in China?
