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The popularity of digital technologies and e-commerce channels in China presents opportunities for EU small and medium-sized enterprises (SMEs). Cross-border e-commerce (CBEC) channels in particular represent interesting tools to gain first access to the Chinese market and valuable feedback from Chinese consumers. This is due to the implementation of a series of policies allowing and supporting cross-border online transactions of goods without the need to complete in advance costly and time-consuming product registration and testing procedures or packaging adjustments. The effectiveness of Chinese logistics and delivery services, as well as the focus on different target groups of CBEC platforms, are also key factors.
CBEC offers the possibility of selling a product in China with lower upfront investment and commitment, thus reducing the complexities and often overwhelming requirements that EU SMEs face when entering the Chinese market. Well-established Chinese CBEC platforms and professional agencies offer different solutions and models for overseas brands, such as:
- Flagship stores opened by brand owners or approved distributors (authorised trademark holders), often referred to as the “merchant business model”;
- Third-party merchants, selling through their own CBEC stores multiple brands;
- Direct selling to CBEC platform, which in turn owns the goods purchases and set pricing and promotion strategies as they wish.
This report provides an overview of all the above models and the resulting potential offered to EU SMEs. The aim is to guide EU SMEs not only to establish but especially to operate and grow their own CBEC stores and operations.
Specifically, the first chapter provides a general overview of the CBEC market, describing the key differences between general trade and traditional e-commerce. It also provides insights into sales figures and market shares of prominent CBEC platforms and examines the relevant legal requirements in terms of taxation and legal representation in China.
The second chapter dives into the specific features, strengths, and procedures for EU SMEs to become a merchant on the most popular CBEC platforms that are currently present in China, mainly Tmall Global, JD Worldwide, Kaola, Xiaohongshu, and WeChat. Some reflections on selling via one’s own website rather than the above platforms will also be provided.
The third chapter provides a brief overview of the most common ways and tools to operate and grow CBEC stores in China, focusing especially on marketing tools, customer service, logistics and IP protection.
Four case studies complement this report: these were developed through one-to-one interviews and calls with the EU SME Centre, providing hands-on insights and tips on the opportunities, challenges, mistakes and lessons for EU SMEs entering the Chinese market via CBEC, as well as the typical steps and elements that are taken into account to develop and implement a CBEC market entry and growth strategy.
Finally, an unofficial translation of the consolidated CBEC Positive List, produced by the EU SME Centre, is included as Annex to this report. The list incorporates all the latest changes and adjustments issued throughout the years, namely the 1,476 types of goods allowed to be traded via CBEC, as of the end of 2022.
1. Introduction to Cross-Border E-Commerce
1.1 CBEC as a market entry channel for imported goods
1.2 Legal framework and requirements
1.3 Market overview
2. CBEC platforms in China
2.1 Tmall Global
2.2 JD Worldwide
2.4 Xiaohongshu (Little Red Book, RED)
2.5 WeChat and WeChat mini-programmes
2.6 Selling through a company’s own website
3. Operating CBEC stores
3.1 Key opinion leaders (KOL) and key opinion consumers (KOC)
3.2 Livestreaming e-commerce
3.3 Social media presence
3.4 Event marketing
3.5 Customer service and after-sale services
3.6 Logistics management
3.7 Intellectual property
4. Case Studies
Horsten International: A Belgian F&B Store on Tmall Global
Redfern Digital Presents its Campaign for Loop
ANNEX: CBEC POSITIVE LIST