International

Local China Merchants Upbeat About 2019 Cross-Border Sales

Despite a trade war between the U.S. and China, local Chinese vendors operating in Yiwu International Trade City are upbeat about 2019.

According to a report in The Financial Times, despite U.S. tariffs placed on Chinese exports and a crackdown on eCommerce platforms like Amazon by the European Union to stop online vendors from evading taxes, local Chinese merchants expect cross-border sales to grow. The Financial Times noted cross border eCommerce sales are growing at a rate of 30 percent this year in China and are expected to hit $175 billion, representing 10 percent of the online consumer retail across the globe. China has become a leading player in cross-border online trade, with total cross-border eCommerce exports hitting $130 billion last year, noted the Financial Times, citing data from China E-Business Research. The paper noted that in Europe 39 percent of the top-selling merchants on Amazon marketplaces are located in China.

Local Chinese merchants are also getting support from the government of China, with Yiwu and roughly 20 other cities getting exemptions from VAT for cross-border eCommerce exports. The exports of products sold online from the city are expected to reach $4.3 billion in 2018, noted the report. Of the businesses in Yiwu, 36,000 have registered on Alibaba’s AliExpress, which is its international platform, while 35,000 are registered on eBay, 12,000 in Wish and 10,000 on Amazon. Meanwhile, Amazon and Alibaba have helped local merchants by providing training in setting up and operating stores as well as extending credit and logistics services to speed up delivery times.

The Financial Times noted that around 80 percent of Chinese vendors are middlemen who purchase from factories instead of making products in-house but that trend is shifting toward direct sales by Chinese manufacturers.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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