Five predictions for China cross-border e-commerce in 2019

It has been a great year for the cross-border e-commerce industry in China. It’s clear that the cross-border e-commerce industry in China is becoming more and more complex. Brands and retailers will have to choose an appropriate market entry model, and be more targeted in their marketing efforts. This means narrowing down what kinds of customers they want to reach, as well as what kind of brand image they want to convey to them.

However, the government’s support for the cross-border e-commerce industry remains strong and policies are likely to be further relaxed. All in all, we remain positive on the outlook for the industry and think that 2019 will be a year in which many new opportunities will arise. Brands and retailers who remain flexible and open-minded will be best positioned to succeed.

1. Chinese government will continue to lower tariffs and restrictions on cross-border e-commerce 

China is expanding the scope for cross-border e-commerce because cross-border e-commerce (CBEC) can be better tracked and taxed, when compared to gray-market daigou purchases. It also makes it easier to protect consumers from fake/shoddy goods. The recent limits on CBEC purchases have been expanded to RMB5,000 (around US$75) per transaction and RMB 26,000 (US$3,800) per year, up from RMB2,000 (US$291) and RMB20,000 (US$2,900), respectively. In November, taxes on inbound postal shipments for the top two tax brackets were reduced to 25 per cent and 50 per cent from 30 per cent and 60 per cent, respectively.

2. Niche-focused categories will continue to emerge as Chinese consumers become more sophisticated

What’s going on: In the past, Chinese consumers have flocked to the same well-known brands that everyone else buys. Now, as consumers become more sophisticated they are beginning to consider long-tail products that do a better job of catering to a specific need or function. Examples include Chinese women adding more steps and products to their makeup routines, and more niche sub-categories such as probiotics emerging within the health & nutrition category.

3. New and creative marketing tactics will continue to emerge

What’s going on: To differentiate oneself in a competitive market, brands have to come up with unique ways to connect with customers and build their loyalty. Brands are mixing e-commerce with games, live streaming, short videos, and more to stand out from the crowd. Some recent examples include L’Oreal livestreaming Chinese influencers at the Cannes Film Festival on its WeChat mini-program, and Dior designing a Tetris game to promote its lipstick products.

4.More retailers may leave large marketplaces like Tmall Global and consider other alternatives

To differentiate oneself in a competitive market, brands have to come up with unique ways to connect with customers and build their loyalty. Brands are mixing e-commerce with games, live streaming, short videos, and more to stand out from the crowd. Some recent examples include L’Oreal livestreaming Chinese influencers at the Cannes Film Festival on its WeChat mini-program, and Dior designing a Tetris game to promote its lipstick products.

5. Cross-border WeChat shops built on mini-programmes will grow in popularity

For small brands, WeChat stores are a cost-effective way to build a China e-commerce presence without paying large upfront fees for marketplace platforms or setting up an official Chinese website. For big brands, they can be used for different functions such as launching limited collections, live streaming makeup tutorials, or designing creative games.

Chinese Social media network has long provided marketers a more cost-efficient and targeted way to reach potential customers. Using WeChat moment advertising and public article advertising, brands can reach their exact consumer based on real data points, rather than “spraying and praying” on other channels such as TV or print.The results are more significant. Therefore, gonna start your online marketing promotional plan from now on.

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Source: Predictions for China cross-border e-commerce in 2019 Technode