Source (left-to-right): 抖音Douyin, 小红书Xiaohongshu
By 2020, China's social commerce market is expected to hit US$150 billion with 24 million merchants onboard the various social commerce platforms. In a nutshell, social commerce is the usage of social media tools for the promotion, marketing, and sales of goods and services. 小红书, or RED, started off as a photo-sharing social platform with a focus on foreign beauty products, allowing its users to discover new brands and products through the lens of key opinion leaders (KOLs) or influencers. With more than 30 million monthly active users (MAUs), RED has now evolved into a platform that brings together the visual, social aspects of Pinterest and Instagram, with e-commerce functionalities to make for an entertaining, yet seamless consumer journey for its users.
4. Local Health and Safety Concerns
From cadium-tainted rice to melamine in milk powders, China is no stranger to health and safety scares. The issue of counterfeit cosmetics is also not uncommon, with harmful materials such as heavy metals and impurities often being present in counterfeit products. The fear of counterfeit goods, especially goods that are of consumable or topical nature that can cause real harm to one's health, has resulted in consumers turning to credible cross-border platforms such as T-Mall, JD.com, or Xiaohongshu to look to foreign goods, often deemed as being of higher safety and quality.
5. Cross-Border e-Commerce Policies
With the growth of the demand for foreign goods, and the strict requirements of the direct importation of foreign goods, the Chinese government has also loosened cross-border e-commerce policies to encourage foreign investment in the country, while meeting the demands of its increasing consumer population. Since January 2019, the Chinese Ministry of Finance has announced the following changes to its cross-border e-commerce regulations:
- Single-transaction limit has been increased from RMB 2,000 to RMB 5,000
- Annual transaction limit has increased from RMB 20,000 to RMB 26,000
The list of products permitted for cross-border importation has been increased, with 63 new categories introduced to the positive list for cross-border purchases.
What Does This Mean for Your Brand?
With the rapid growth of demand for international brands and products, coupled with the introduction of new cross-border e-commerce policies, there is no better time for brands to enter the Chinese market.
Join us at the Alibaba Global Course Series (AGCs) to learn how you can expand your global footprint with cross-border e-commerce from top Alibaba trainers and practitioners. Find out more about the AGCs right here.