Rise of Cross‐border E‐commerce Exports in China

• Published date: 01 May 2018
• Author: Shuzhong Ma,Yuxi Chai,Hongsheng Zhang
• Date: 01 May 2018
• DOI: http://doi.org/10.1111/cwe.12243

©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

China & World Economy / 63–87, Vol. 26, No. 3, 2018 63

*Shuzhong Ma, Professor, School of Economics, Zhejiang University, China. Email: mashuzhong@zju.edu.cn; Yuxi

Chai, Doctoral Student, School of Economics, Zhejiang University, China. Email: yuxichai@zju.edu.cn; Hongsheng

Zhang (corresponding author), Postdoctoral Researcher, School of Economics, Zhejiang University, China. Email:

hongshengzhang@zju.edu.cn. Shuzhong Ma acknowledges financial support for this study from the Key Grant

Project of Philosophy and Social Science Research of the Ministry of Education of China (No. 16JZD021) titled

“Research on Forecast and Mitigation Mechanisms for Operational Risks of Cross-border E-commerce Enterprises.”

This project was also funded by the China Postdoctoral Science Foundation (No. 2017M620237). The authors thank

Jiangsu BizArk E-commerce Co., Ltd. for data support.

Rise of Cross-border E-commerce Exports in China

Shuzhong Ma, Yuxi Chai, Hongsheng Zhang*

Abstract

China’s cross-border e-commerce industry has demonstrated stable and rapid

development thanks to the implementation of appropriate policy support and the

progressive establishment of e-commerce platforms. The industry’s prosperity suggests

unique advantages of cross-border e-commerce, which are a result of promoting

industrial transformation and accelerating economic restructuring. Due to asymmetric

information and insufficient data, little research has been conducted on the current

status and the trends of the industry as well as the magnitude of risk in cross-border

e-commerce. Using the cross-border e-commerce hosting service database of BizArk,

the present study has constructed an index for China’s export e-commerce prosperity

and magnitude of risk which reveals that the industry: (i) generally presents a tendency

of solid growth; (ii) has had a relatively stable situation for logistics facilitation but

a drastic fluctuation in customs facilitation; (iii) has gradually shifted to competing

for cheaper and more efcient marketing techniques as well as channels; and (iv) has

experienced a remarkable amelioration of risk magnitude.

Key words: cross-border e-commerce, export trade, prosperity monitoring, risk forecast

JEL codes: F17, F23, F44

I. Introduction

The term “cross-border e-commerce” came into existence around a decade ago. Cross-

border e-commerce today is quite difference to the international electronic trade

discussed, for instance, in Bradley et al. (1999) and Afuah and Tucci (2001), as its key

function has shifted from exhibiting information of online sellers and buyers to fullling

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©2018 Institute of World Economics and Politics, Chinese Academy of Social Sciences

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online exchange of funds (Terzi, 2011; Lai and Wang, 2014). Cross-border e-commerce

is a novel source of trade, which has developed with the spread and advancement of the

Internet. Cross-border e-commerce involves international business activities executed

by trade entities belonging to different customs territories, with transactions concluded

and payments settled through e-commerce platforms, and goods delivery relying on the

international logistics system. Discretionary trading between enterprises is facilitated in

terms of information ow, fund ow and commodity ow by third-party platforms, who

make prots by applying a commission on the basis of transaction value.

In China, the cross-border e-commerce industry has demonstrated stable and rapid

development thanks to appropriate policy support and progressive establishment of

e-commerce platforms, while an integrated industrial chain, consisting of marketing,

payments, logistics and nancial services, has begun to take shape. Whereas the average

annual growth rate of China’s traditional foreign trade fell to less than 10 percent from

2012 to 2016 (NBS, 2017), the corresponding rate of the cross-border e-commerce

industry remained between 20 and 50 percent. According to CECRC (2017), the overall

transaction volume of China’s import and export e-commerce was RMB3.15tn in 2013,

while its growth rate was 50 percent. This represented 12.2 percent of China’s total

import and export trade volume in the same year. In 2016, the transaction volume of

China’s cross-border e-commerce industry reached RMB6.7tn, with a year-on-year

growth rate of over 20 percent, accounting for around 28 percent of China’s import

and export volume of the corresponding period. It was estimated that the transaction

volume would grow to RMB8.8tn by 2018 (iiMedia Research, 2017) and to RMB12tn

by 2020, contributing to around 37.6 percent of China’s total import and export trade

volume, with the market expanding to include over a billion customers (AliResearch,

2016). Furthermore, report data from a global perspective indicates that the B2C cross-

border e-commerce turnover of China amounted to US$766.5bn in 2015 (Ecommerce

Foundation, 2016). China, the USA (US$595.1bn), the UK (US$174.2bn), Japan

(US$114.4bn) and France (US$71.9bn) were the top 5 countries in terms of global B2C

e-commerce sales in that year. Taking into account trade volume, market size, business

types and commodity categories, it is reasonable to conclude that China’s cross-border

e-commerce industry has been maintaining a rapid pace of growth and is leading the

race in global markets (Yang et al., 2014).

As a novel source of cross-border transactions that combines international trade

with electronic commerce, cross-border e-commerce has exerted enormous impacts on

trade entities and their operating mechanisms, processes and competitive posture (Balls

and Dunleavy, 2000; Fingar, 2000; Kauffman and Walden, 2001). Foreign trade barriers

have been lowered for small and micro enterprises and they have been able to engage in

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