Business
Cross-border e-commerce sales on AliExpress surge during pandemic
More and more Chinese companies are seeking new ways to reach their target market, with cross-border e-commerce platforms becoming their top priority
By Ma Xiaowen  ·  2020-06-12  ·   Source: Web Exclusive

A poster of a wig-selling livestreaming event of Queenie (Liu Qiang) on AliExpress on May 30 (COURTESY PHOTO) 

Liu Qiang, also known as Queenie, was frustrated when her plan to work at a wig store in New York was shattered due to the COVID-19 pandemic. Starting from March, a large number of offline wig stores in the U.S. have closed.   

But the frustration did not last long because consumer demand hasn't actually gone. Encouraged by Shen Dalei, CEO of a Chinese wig seller, Queenie soon found new opportunities to reach potential overseas consumers via livestreaming on AliExpress, a business-to-consumer (B2C) cross-border platform under Alibaba Group.  

Shen's company, Henan Allrun Enterprise Co. Ltd, sells wigs to the U.S., Europe and Africa, and its sales on AliExpress increased by around 40 percent year on year in the first four months, despite a fall in orders from foreign wholesalers due to the pandemic. The surging wig demand from online consumers compensated for the loss in his off-line store and wholesale businesses.   

In most countries, following suggestions from local health authorities, people were urged to stay at home, which led to a surge in online shopping. During the pandemic, traffic from Spain and Italy to AliExpress platform increased by 20 percent and 14 percent year-on-year. The number of online wig buyers worldwide in May grew by 40 percent, and online sales turnover of wigs in European and American markets in April was up 100 percent year-on-year, according to Wang Mingqiang, General Manager of AliExpress, during a news briefing on June 9.  

"Previously, traditional offline retail channels overseas were very strong, but the pandemic in recent months has changed the landscape, and we think that the pandemic may permanently change the habits of some overseas consumers," Wang said.    

In fact, sales of goods, including bike, household appliance, toy and consumer electronics items, to some of the hardest-hit countries like the U.S., Spain, Italy and France showed a surprising average growth of 40 to 50 percent year on year during recent months, said Wang.  

Wang attributed the sales surge on AliExpress to China's manufacturing prowess. He said, "China has the world's most complete supply chain; most cellular phones, toys, laptops, bikes, clothes and 3D printers are made in China."

According to the General Administration of Customs of China, in the first quarter of 2020, the total value of China's imports and exports of goods was 6.57 trillion yuan ($928.8 billion), a 6.4 percent drop over the same period last year, among which, exports accounted for 3.33 trillion yuan ($470.8 billion), a drop of 11.4 percent. The decline has got a large number of foreign trade enterprises in trouble.  

To survive the crisis, more and more Chinese companies are seeking new ways to reach their target market, with cross-border e-commerce platforms becoming their top priority. In March alone, the number of new stores opened on AliExpress platform increased 132 percent compared with the previous month, many of which were traditional foreign traders. 

Wang believes that overseas demand for Chinese goods still exists, but consumers' needs have changed dramatically. To understand these needs accurately and respond to them quickly has become the lifeline of China's short-term recovery and long-term development of foreign trade. 

Wang said that online retail penetration in developed countries is about 10 percent but the rate is less than 5 percent in developing countries. The overseas online retail penetration is still very low, compared to about 40 percent in China. "Opportunities for online retailers to sell abroad are also rising," Wang said. 

Wang added that AliExpress cuts intermediary costs and connects sellers with consumers through international logistics and warehouses. Through AliExpress, overseas consumers can buy a large variety of cost-effective made-in-China products. Moreover, the online platform makes it easier and cheaper for retailors to build their brands and engage with consumers through online social marketing. 

The proportion of Chinese cross-border e-commerce B2C transactions have continued to expand in recent years. According to data from the General Administration of Customs, in 2011, China's cross-border B2C transactions accounted for only 2.5 percent of total exports. By 2018, it had reached 16.8 percent, an increase of nearly eight times. 

In the next decade, AliExpress will continue to help China's small and medium-sized enterprises go abroad with its services in payment, e-commerce platforms, and logistics. Also, AliExpress aims to increase the number of its consumers to 30 million. To achieve this goal, the company will expand in Europe, the Middle East and South America. In addition, AliExpress will boost its localization efforts in many countries and regions, including Russia, Spain, France, Poland, the Netherlands, the Middle East and South America, Wang said 

In terms of logistics, AliExpress' overseas warehouses have been upgraded to improve the timeliness of local logistics delivery. Wang pointed out that "in countries like Spain and France, orders could reach consumers within three days." In terms of payment, the use of AliExpress wallets has made the settlement and withdrawal more convenient. Last but not least, with the help of Alibaba's AI technology, AliExpress now supports 18 languages.  

Copyedited by Madhusudan Chaubey 

Comment to maxiaowen@bjreview.com  

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