Cross-border e-commerce seen as path to diversify revenue sources, boost foreign trade
Chinese online retailers are ratcheting up efforts to expand their global footprint amid a broader drive to cultivate new users and diversify revenue sources, industry experts said. This comes as an increasing number of Chinese vendors sell their products globally through cross-border e-commerce platforms, they said.
As a new form of foreign trade, cross-border e-commerce has been growing exponentially. It has become an important driving force for stabilizing China's foreign trade, particularly in the past three years as the COVID-19 pandemic impeded business travel and face-to-face meetings, the experts added.
Online discounter PDD Holdings, parent company of Chinese e-commerce platform Pinduoduo, recently announced that the company would roll out its cross-border e-commerce platform Temu in Australia and New Zealand in March to help Chinese manufacturers boost their global reach.
Chinese-made products sold on Temu in North America will also be available for Australian shoppers, the company said. To attract domestic merchants, Temu will offer a series of preferential policies like an exemption from deposits and commission fees.
A consumer compares product prices between Temu, an online cross-border marketplace of PDD Holdings, and popular fashion retailer Shein in October. (PHOTO/CHINA DAILY)
The company will provide infrastructure services, including warehousing, cross-border logistics and after-sales services for Chinese manufacturers that expand their presence in overseas markets, PDD Holdings said. Other services such as language assistance, product standards, intellectual property rights protection and legal aid will also be offered.
Temu, launched in the United States in September, has gained popularity among consumers there as it offers a wide selection of merchandise, including apparel, consumer electronics, jewelry, shoes, bags, cosmetics, baby products and pet supplies at competitive prices, the company said.
Temu said it offers deep discounts and coupons as part of its strategy to serve price-conscious consumers, including a wireless headset for $8.99, an electronic dental irrigator for $11.50 and a skirt for $5. Consumers in the U.S. haven't seen prices this low for a long time, it said, and most of its offerings are shipped directly from factories or warehouses in China.
Last month, Temu made a splash at the Super Bowl, the most-watched television event in the U.S., with a 30-second advertisement titled Shop Like a Billionaire.
As of Jan 31, Temu had been downloaded nearly 20 million times globally, with shoppers from North America accounting for more than 90 percent of the total, according to U.S.-based mobile app analytics company Sensor Tower.
Experts said Temu's business model removes middlemen from the equation, allowing Chinese suppliers to sell directly to U.S. consumers and ship directly from China, instead of building a network of U.S. warehouses.
In September, Pinduoduo announced plans to invest 10 billion yuan ($1.47 billion) to help China's manufacturing enterprises widen their global reach. The first phase of the initiative will help 100 Chinese brands go global and also assist 10,000 manufacturers in connecting directly with overseas markets.
"We will learn from successful domestic experience and increase investments in scientific research and technology to better serve the overseas business operations of Chinese manufacturers," Chen Lei, chairman and CEO of Pinduoduo, said in a previous interview.