China's demand for imported consumer goods remains strong, bolstered by digital upgrades in cross border e-commerce--Report
Time: 2019-11-05 20:50   Views:338
SHANGHAI, CHINA (5 November, 2019) -Driven by strong domestic consumption in China and the growing access to international brands to meet this demand, China has become a key growth engine of the global consumer market. In particular, innovative technology-driven models, led by cross-border e-commerce, have enabled closer ties between China and countries across the world. Exemplifying these trends, Deloitte China, the China Chamber of International Commerce (CCOIC) and AliResearch recently published the Chinese Imported Consumer Goods Market Report (the Report), which provides an in-depth analysis of the latest trends in China’s imported consumer goods market and insights for international brands that aim to access the China market. 

In recent years, China has been actively expanding its imports while lowering the threshold for foreign goods to enter the Chinese market. With continued cuts in import tariffs, China has fulfilled and exceeded the World Trade Organization's (WTO) requirements on promoting trade. As China introduces favorable policies for cross-border e-commerce, cross-border trade is growing rapidly. 

Zhang Tianbing, Head of Deloitte Asia Pacific Consumer Products and Retail Industry says, "China's emphasis on robust policies for imported consumer goods has boosted confidence in the sector and stimulated consumers' appetites. At the same time, consumers' desire for diversified, personalized and quality goods are being increasingly satisfied and unlocked."  

China's imported goods market has made significant strides as a result of encouraging policy incentives. Digital innovation and consumer demand in less-developed areas of China continue to drive a healthy consumer market. Retail imports are being transformed by digital upgrades across personnel, goods and storefronts. Amid new trends in digitalization, brands, retailers and logistics providers are using technology solutions to digitize entire value chains, including improving operational efficiency and integrating online and offline data to give consumers a diversified, personalized shopping experience. Additionally, demand from less-developed areas is becoming a new driver of the imported goods market in China. According to the Report, demand for quality imported goods with specific added value is higher due to maturing consumption patterns and increasing income in tier 3-5 cities and counties, as well as growing coverage by convenient, efficient e-commerce channels. 

Director General of the ICC China Secretariat, CCOIC's Yu Min believes the inclusive development of cross-border e-commerce shows China's commitment to further opening up its domestic market. This momentum will invigorate global industry chains, create diverse engines for global economic growth, and provide more alternatives in upgrading consumer lifestyles.      

As suggested in the Report, the number of cross-border consumers continues to grow as the sector develops. Younger generations under 30 years-old make up the largest consumer segment for imported goods, while women and those above age 60 are accounting for increasing shares in the cross-border e-commerce market. 

Driven by digital transformation, the cross-border e-commerce market is enabling a more diversified selection of imported goods from many countries and regions to enter China. Alibaba Group Vice President and Head of AliResearch, Gao Hongbing notes, "The rapid development of cross-border e-commerce in China is driven by encouraging policy incentives and rising consumer demand for quality products. This sector will serve as an important engine for the country's continued consumption growth. With cross-border e-commerce accounting for just 2.2% of the total online retail market, there is substantial room for long-term growth for brands and retailers.”

Zhang Tianbing adds, "With an increasingly mature livestream model, the industry has entered a new stage of development shaped by diverse content in an ever-expanding market. E-commerce and livestreaming have become new industry drivers. Brands are increasing investment to build their livestreaming channels and create a stronger influence over consumers. The prevalence of social media and evolution of technologies will give rise to more social networking tools, enabling even greater alignment of products with consumers." 
 
Finally, the Report  analyzed the paths and strategies of foreign brands entering the Chinese market. Collaboration between cross-border e-commerce platforms and foreign brands has evolved in areas such as business operations and consumer engagement. This is best exemplified by vertical integration of online and offline consumption scenarios. E-commerce platforms can help foreign brands gain deeper insights into consumption data and help them develop strategies for fast growth and increase their brand awareness. Furthermore, the overseas warehouse incubator model can help small high-quality brands—which may lack the resources to set up their own flagship stores—enter the Chinese market. Niche overseas brands with the opportunity to enter the Chinese market should consider adopting nimble, efficient strategies, leveraging consumer insights from their operations on cross-border e-commerce platforms to achieve rapid business growth.

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