E-commerce gaining ground as online buying habits deepen

Companies providing solutions to help build international business presence

Shopping habits have been shifting away from physical retail and toward online shopping for some time, and the COVID-19 crisis has accelerated this movement.

Data from the United Nations Conference on Trade and Development further shed light on this trend. While global trade in goods decreased 9 percent last year, e-commerce's share in global retail increased from 14 percent to 17 percent from 2019 to 2020.

As the pandemic halted work and disrupted supply chains in many regions, China－as the first major economy to resume the bulk of its production－had an early start in normalizing business operations.

Consequently, digital retail is picking up steam in exporting Chinese goods overseas, where calls for easier and safer access to diversified merchandise are definitely on the rise.

To ride such a wave, AliExpress, the business-to-customer site of Alibaba Group, has unveiled a grand initiative－G100 Global Selling Plan－to help local brands extend their business presence abroad.

The site, connecting sellers with buyers from more than 200 economies, plans to nurture 100 of what it calls "super brands" by utilizing consumer data insights, sales channels and branding resources. The company also aims to incubate some 10,000 fledgling Chinese brands to gain an early foothold in overseas markets.

AliExpress General Manager Wang Mingqiang believes the time is ripe for Chinese suppliers to move beyond just "manufacturing" to actually creating brands, after the country's superior supply chains were proven resilient enough to weather storms such as the pandemic.

"For many Chinese companies, the best opportunity for consumer education beyond the home turf has essentially arrived," Wang said. "Those with genuine technological advantages and independent R&D capabilities that stay ahead of the curve will become the mainstay of cross-border retail exports."

Wang identified two driving forces needed to catapult Chinese online vendors to the forefront of global sales.

"For one, the pandemic has greatly accelerated e-commerce penetration in Western countries, making accessibility of foreign products easier. Second, as digital and social media savvy younger generations overseas become the backbone of shopping, they are more likely to embrace brands and products previously unheard of in their home countries," he said.

AliExpress has mapped out two approaches to bolster companies' overseas ambitions. For brands boasting robust supply chains and maintaining a fair level of brand awareness, AliExpress plans to devote more marketing resources and craft a country-specific strategy for brands to navigate a specific market.

At the same time, AliExpress will also provide local logistical support, including supply chain finance and after-sales services, so that companies can stay laser-focused on R&D and marketing.

Ugreen, a manufacturer of electronic devices, had a bumpy start when expanding overseas. While the category itself is rather standardized, sales data and customer insights are still needed for the company to better navigate unfamiliar markets.

"For instance, white phone chargers are normally popular in China. But would that color be widely accepted in Russia? Or Southeast Asia? That's the kind of question we hope the AliExpress tie-up can help us address," said Lei Jie, Ugreen's general manager of international marketing.

The second pillar targets brands that are still in their infancy but have exhibited huge growth potential. AliExpress offers a one-stop package for brands to expand abroad.

"After working with AliExpress for a trial period, we've seen gross profit grow 20 to 30 percent," said Zhu Huanyu, general manager of Shenzhen, Guangdong-based household supplier Insetlan. "I think it is critical to maximize brand value instead of just being labeled as an original equipment manufacturer."

Global e-commerce, according to an eMarketer study, is forecast to surpass $6 trillion by 2024 from $3.91 trillion in 2020.