Cross-border Business · • China’s exportsto somemajor economies, including European Union, Japan,Russia and Brazil, showed a decline in 2015. ... • China’scross-border e-commerce

Cross-border Business

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2

Summary：

• The import and export volume of China’s foreign trade dropped in 2015, with trade surplus at

$593 billion. However, the growth of Chinese export was still faster than other leading

economies and emerging countries.

• China’s exports to some major economies, including European Union, Japan, Russia and Brazil, showed a decline in 2015.

• The growth rate of China’s cross-border e-commerce has been much higher than total amount

of imports and exports in spite of global trade slump, which means that the penetration of

cross-border e-commerce in import and export trade has been very high.


3

Summary：

• In terms of cross-border e-commerce, China’s total amount of exports was higher than imports

in 2015, while the proportion of imports has continued to increase. The major exporting

destinations inlcude the United States, the European Union, and ASEAN. The exporters were

mainly distributed in costal areas, including Guangdong, Zhejiang, and Jiangsu. In all the

product categories for exports, 3-C electronic products turned to be the most popular category.

• China’s cross-border e-commerce mainly focused on B2B business, while the retail business

has boomed, especially in cross-border import retail business.

• Based on the ECI index of cross-border e-commerce, the United States, the UK, Australia,

France, Italy, Japan, and Canada were strongly connected to China. Germany, South Korea,

Russia, India, Turkey, Brazil, and South Africa were moderately connected with China. Mexico,

Indonesia, Argentina, Saudi Arabia had a relatively weak connection with China.


4

The import and export volume of China’s foreign trade dropped in 2015. However, the growth of

China’s export value was still faster than the other leading economies and emerging countries. It

should be noted that the import and export volume in processing trade and traditional labor-

intensive industries has dropped dramatically.


474 510 621

851

1,155

1,422

1,760

2,177

2,563

2,208

2,974

3,642

3,867

4,159 4,303 3,959

249 266 326 438

593 762

969 1,220 1,431

1,202

1,578

1,898 2,049

2,209 2,343 2,277

225 244 295 413 561 660

791 956

1,133 1,006

1,396

1,743 1,818 1,950 1,960

1,684

80

580

1,080

1,580

2,080

2,580

3,080

3,580

4,080

4,580

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

China’s Total Amount of Imports and Exports

Total Amount of Imports and Exports (Billion USD) Total Amount of Exports (Billion USD) Total Amount of Imports (Billion USD)

Source：National Bureau of Statistics of the People's Republic of China

5

In 2015, the situation of China’s foreign trade was not optimistic. China’s exports to some major

economies decreased, including European Union, Japan, Russia and Brazil.


Source：The General Administration of Customs

410.1

356.4

279.0

135.9

58.3 34.8 27.4

3.5%

-3.9%

2.6%

-9.2%

7.4%

-35.2%

-21.5%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

0

50

100

150

200

250

300

350

400

450

The United States The European Union ASEAN Japan India Russia Brazil

China’s Exports to Major Economies in 2015

Total Amount of Exports（Billion USD） YOY Growth Rate

6

The growth rate of China’s cross-border e-commerce has been higher than the total amount of

imports and exports in spite of the slowdown of global trade, which means that the penetration of

cross-border e-commerce in import and export trade has been very high.


Source：Ministry of Commerce, The General Administration of Customs, iResearch, Analysys, Aliresearch

0.8 0.9 1.2 1.6 2.0 2.7 3.8

4.8

12.0

18.0

15.1

20.2

23.6 24.4

25.8 26.4 24.6

31.9

12.5% 33.3%

33.3%25.0%

35.0% 38.9%

28.0%

150.0%

-16.1%

33.8%

16.8%

3.4% 5.7% 2.3%-6.8%

29.7%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

140%

160%

0

5

10

15

20

25

30

35

2008 2009 2010 2011 2012 2013 2014 2015 2020E

Transaction Volume of Cross-border E-commerce and Total Amount of Imports and Exports

Transaction Volume of Cross-border E-commerce (Trillion RMB） Total Amount of Imports and Exports (Trillion RMB)

Growth Rate of Cross-border E-commerce Transaction Volume Growth Rate of Total Imports and Exports

7

Four Strengths of China’s Cross-border E-commerce


Source：Aliresearch

• The number of online shopping users reached 448

million in 2015

• The number of middle-upper class families was

estimated to be about 0.2 billion in 2020

Consumption Upgrade

• Online deals guaranteed

• Good credit will, in turn, boost the deals

Credit Guarantee

• The number of small and medium-sized enterprises

focusing on foreign trade was about 5 million, occupying

60% of total imports and exports

• World-class technology and manufacturing

Industry Support

• The popularity and development of Internet, cloud

computing, and intelligent terminal

• The optimization of payment and logistics system

• Consumers’ demand for C2B/C2M boosted the large-

scale production

Technical Progress

8

90.0% 88.9% 88.0%83.4%

75.0%

10.0% 11.1% 12.0%16.9%

25.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2020E

The Ratio of Imports to Exports in China’s Cross-border E-commerce

Proportion of Exports Proportion of Imports

Exports have a higher proportion compared with imports in China’s cross-border e-commerce,

which was at 83.4%. It was estimated that the proportion of imports among the total cross-border

trade would increase to 25% in 2020.



9

Among all destinations for China’s exports in cross-border e-commerce, the United States ranked

first in 2015, accounting for 16.5% of the total. The European Union and ASEAN were right behind

US. However, the market share of some emerging markets increased sharply, including Russia,

Brazil and India.


Source：China E-commerce Research Center

16.5%

15.8%

11.4%

6.6%

4.2%

3.5%

2.2%

1.4%

The United States

The European Union

ASEAN

Japan

Russia

South Korea

Brazil

India

Destinations for China’s Exports in China’s Cross-border E-commerce (2015)

10

Guangdong has gathered China’s cross-border e-commerce exporters due to its strong economic

foundation, a cluster of manufacturing bases, and foreign trade talents. Second to Guangdong was

Yangtze River Delta Region, including Zhejiang and Jiangsu. This region was know for its highly

developed light industry, including clothing, shoes, and household products.



24.7%

16.5%

12.4%

9.4%

7.1%

5.2%

4.1%

3.3%

17.3%

Chinese Exporters in Cross-border E-commerce (2015)

Guangdong

Zhejiang

Jiangsu

Fujian

Shanghai

Beijing

Hubei

Shandong

Others

11

3C electronic products, clothing, and outdoor products dominated China’s cross-border e-

commerce exports in 2015, which was mainly due to its low costs and high standardization.



37.7%

10.2%

7.5%

7.4%

6.0%

4.7%

4.5%

3.6%

3.1%

2.8%

2.2%

3C Electronic Products

Clothing

Outdoor Products

Health & Beauty

Jewelry

Home & Garden

Shoes & Hats & Bags

Baby Toys

Auto Parts

Lighting

Security Charge

Categories of China’s Cross-border E-commerce Exports in 2015

12

5.0%10.6% 11.8% 15.7%

30.5%

95.0%89.4% 88.2% 84.3%

69.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2013 2014 2015 2020E

The Sum of Retail and B2B in China’ s Cross-border E-commerce

Proportion of Retail Proportion of B2B

China’s cross-border e-commerce mainly focused on B2B business, accounting for 84.3% of the

total in 2015. However, the retail business is booming, and is estimated to reach 30.5% in 2020.



13

30.9% 29.1% 33.0%41.1%

69.1% 70.9% 67.0%58.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2013 2014 2015 2020E

Imports and Exports of China’s Cross-border Retail E-commerce

Proportion of Imports Proportion of Exports

In the retail business of China’s cross-border e-commerce, the proportion of exports was higher

than that of imports, yet showed a downturn trend.



14

With the announcement of the policy on the e-commerce retail imports in the second half of 2014,

a large number of domestic e-commerce business and venture enterprises came into the retail

market of e-commerce imports. It was estimated that the scale of e-commerce retail imports would

maintain the growth at a certain rate, reaching CNY526 billion by 2018.


Source：iResearch

21.3 32.6 55.9

118.4

219.8

341.4

526.0

20.1%

53.0%

60.0%

111.9%

85.6%

55.3% 54.1%

0%

20%

40%

60%

80%

100%

120%

0

100

200

300

400

500

600

2012 2013 2014 2015 2016E 2017E 2018E

The Scale and Growth Rate of China’s E-commerce Retail Imports

E-commerce Retail Import Scale（billion RMB） Growth rate

15

China’s enterprises with e-commerce platform for imported goods accounted for lager proportion

because of its early start-up. However, the market scale of self-support enterprises has expanded.

Proportion of domestic e-commerce enterprises was much higher, while independent cross-border

e-commerce enterprises have a trend to surge.


Source：iResearch

90.0%

10.0%

74.5%

25.5%

Enterprise Structure of China’s Import Retail E-commerce (2015)

Proportion of Platform Proportion of Self-support

2014 2015

91.8%

8.2%

85.7%

14.3%

Enterprise Category of China’s Import Retail E-commerce (2015)

Proportion of Domestic E-commerce

Proportion of Independent Cross-border E-commerce

2014 2015

16

Internet users still need some guidance in cross-border online shopping, and guide websites were

necessary for them to get to know about cross-border shopping websites.


Source：iResearch

2014 201559.8%51.2%

47.3%

36.1%39.8%27.3%

Shopping Guide Websites Recommended by Relatives or Friends Online Searching

Social Media Internet Ads Media Coverage

The Way Internet Users Get to Know about Cross-border Online Shopping in 2016

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Quality assurance, reasonable price, uniqueness of products, and preference for brands were the

main reasons for users to choose cross-border online shopping in 2016.


Source：iResearch

2014 2015

60.7%

58.6%

52.0%

45.6%

42.8%

35.0%

Guaranteed Product Qaulity

Reasonable Price

Unavailable in Domestic Websites

Preference for Brands

Abundant Products and More Selection

Online Shopping after Buying it Overseas

Main Reasons for Cross-border Online Shopping in 2016

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Internet users preferred to buy products that require high safety and quality in cross-border online

shopping, such as cosmetics and personal care supplies, maternal and child supplies, food and

health products.


Source：iResearch

2014 2015

45.7%

39.3%

38.6%

38.0%

30.6%

26.6%

26.1%

26.0%

24.4%

Cosmetics & Personal Care Supplies

Maternal and Child Supplies

Food & Health Products

Clothing & Shoes

3C Digital Products

Household Products

Luggage and Bags

Sports & Outdoor Activities

Appliance

Top 10 Categories on Cross-border Online Shopping in 2016

19

• ECI Index refers to the e-commerce connectivity index between China and other major

economies, reflecting how closely China connects with other countries in cross-border e-

commerce.

• Nowadays, G20 ‘s trade value accounted for 80% of the world total, while the trade value

between China and G20 accounted for more than 50% of China’s imports and exports.

• G20 can be divided into three groups based on ECI value, including highly connected

countries, moderately connected countries, and weakly connected countries.

1. Highly connected countries mainly refer to the countries whose ECI index was higher than 40

with balanced import and export index. These countries have very frequent trade with China in

cross-border e-commerce.

2. Moderately connected countries mainly refer to the countries whose ECI index was between

21 and 40 with unbalanced import and export index. The trade between China and these

countries was relatively frequent, and either the connectivity index of imports or that of exports

was higher.

3. Weakly connected countries mainly refer to the countries whose ECI index was 20 or below

with lower index of both import and export, especially for import index. These countries had

less trade with China in cross-border e-commerce.



20



ECI

Cross-border E-commerce

Connectivity Index

ECI

Import Index

ECI

Export Index

Import

Scale

Import

Penetration

Export

Scale

Export

Penetration

Stock

Index

Potential

Index

Calculating Method of ECI Index

21



G20 Countries ECI Import Index ECI Export IndexECI Cross-border E-commerce

Connectivity IndexThe United States 45 37 82

The UK 35 30 65

Australia 30 25 55

France 32 22 54

Italy 27 18 45

Japan 39 5 44

Canada 7 35 42

Germany 23 16 39

South Korea 25 7 32

Russia 1 31 32

India 1 30 31

Turkey 1 28 29

Brazil 1 22 23

South Africa 1 22 23

Mexico 0 13 13

Indonesia 1 12 13

Argentina 0 11 11

Saudi Arabia 0 3 3

China’s Cross-border E-commerce Connectivity Index with G20

Highly Connected

Countries

Moderately

Connected Countries

Weakly Connected

Countries

22



Trend of Cross-

border E-commerce

Cross-border e-commerce

B2B platform will upgrade

from information platform

to trading platform.

The service environment

of cross-border e-

commerce will enjoy a

more prosperous outlook.

Based on Internet and big

data, cross-border retail e-

commerce will develop

into a new way of global

trading together with B2B.

Cross-border e-commerce

will drive the

establishment of the new

global trade rules and

order in the Internet era.

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Documents

Cross-border Business · • China’s exportsto somemajor economies, including European Union, Japan,Russia and Brazil, showed a decline in 2015. ... • China’scross-border e-commerce