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Cross-border e-commerce and online food sales grow over 80% in China

February 20, 2017 06:00 AM
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Online sales of food and imported goods are booming in China, thanks to several factors.

Since 2013, policy reforms in China have encouraged the online sale of foreign goods in the country. These changes include reducing the duty tax on cross-border e-commerce, which largely removed major obstacles for foreign online retailers and suppliers selling into China.

Demand by Chinese online shoppers also has picked up dramatically. In 2015, Chinese consumers purchased 118.43 billion yuan ($17.22 billion) worth of overseas products through cross-border e-commerce, a 112% year over year increase. Although cross-border e-commerce growth slowed slightly in 2016, an annual growth rate of 86% and 219.8 billion yuan ($31.99 billion) in sales still makes it a strong category in e-retail.

The drivers of cross-border e-commerce in China also include a push by leading online shopping companies, like Alibaba Group Holding Ltd. and Amazon.com Inc., which keep streamlining their operations in merchandising, international shipping and payments to make it easier for Chinese consumers to buy from overseas merchants. The number of Chinese consumers who purchased imported products on Tmall Global, an online marketplace for imported goods, more than doubled in 2016, according to Tmall Global operator Alibaba. Amazon, No. 1 in the Internet Retailer 2016 Top 500 Guide and No. 4 in the 2016 China 500,  has said  that as of the end of August 2016, Chinese consumers had placed more than 10 million orders on the cross-border e-commerce shopping area of Amazon.cn.

Earlier this month, China’s National Bureau of Statistics said online retail sales in China hit 5.16 trillion yuan ($752 billion) in 2016, representing 26.2% growth from 2015—more than double the growth rate of overall retail sales, which increased 10.4% year over year. 

In addition to some e-commerce giants, startups such as mobile shopping app RED also put great effort into the promotion of overseas products.

Another e-commerce standout in China, online fresh food, is expected to reach 100 billion yuan ($15 billion) sales in 2016. Online would account for about 7% of China’s total sales of fresh foods, and it’s growing about 82% annually, according to Chinese research firm iResearch. 

Chinese consumers’ appetite for fresh food is only growing. A recent survey from consulting firm The Boston Consulting Group shows that fresh food is the most in-demand product category. 63% consumers in the survey says they intend to buy high-quality fresh food in the next several years. 

With surging demand in the future, this sector will attract attention from many new players online and offline, and it is expected to continue to see strong sales growth during the next several years, Boston Consulting Group says.  

Chinese consumers also are more likely to buy fresh products online. The survey reveals that 24% of consumers are satisfied with fresh food bought online, compared with 17% who are satisfied when buying in stores. Price is not the only driver for e-retail in this category as the internet also offers convenience and greater product selection for Chinese consumers, according to the survey.  

 

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