Author | Guo Zhaochuan
Edit | weber
Since the beginning of 2024, China's exports have continued to maintain a growth momentum.
According to the latest data from the General Administration of Customs, the scale of imports and exports in the first quarter exceeded 10 trillion yuan for the first time in the same period in history, a year-on-year increase of 5%, setting a new high in six quarters, showing the strong resilience of China's foreign trade.
Many Chinese cross-border sellers and entrepreneurs who have gone overseas have felt that the growth momentum of going overseas is shifting from the original extensive marketing and traffic-driven to a new stage with brand and product quality as the core.
Chinese overseas enterprises are constantly expanding their business scope, setting foot in a number of emerging market countries and regions, forming a global market layout, and enhancing the competitiveness of their products in the global market by building brands with international influence.
Behind the activity of cross-border e-commerce sellers in the first half of the year, what are the new trends in the current overseas strategy of Chinese enterprises? What are the possible risks when doing business in more overseas markets, especially emerging markets? Where will the cross-border service ecology of small and medium-sized sellers go in the future?
In the first quarter of 2024, Chinese cross-border sellers will become more active in the international market, and the wave of Chinese enterprises going overseas will accelerate again.
At the Canton Fair, which opened on April 15 this year, the number of customers and merchants from many regions around the world also reached a record high. According to the data of the Canton Fair, the number of participants in the Canton Fair reached 240,000 this year.
According to data from WorldFirst, a one-stop cross-border digital payment and financial services platform for enterprises under Ant International, the number of Chinese merchants overseas has increased by 56% year-on-year, the number of merchants operating on multiple platforms has increased by 29%, and the number of merchants with brands going overseas has increased by 145% year-on-year.
Compared with the previous foreign trade of Chinese enterprises, the trend of going overseas this year has shown some new characteristics: the most typical is that the overseas expansion of Chinese enterprises has shown a trend of localization, diversification and branding.
First of all, Chinese companies pay more attention to in-depth localization when going overseas.
Since the beginning of this year, many medium-sized enterprises going overseas have also been deploying entity registration, entity construction and local recruitment in overseas local markets. The strategy of deep localization is no longer limited to traditional large multinational enterprises, but is now also widely used in small, medium and micro multinational enterprises involved in global trade.
Secondly, overseas markets are becoming more and more diversified.
In particular, many overseas emerging markets, Southeast Asia, the Middle East, Africa, Latin America, etc., are showing a new trend of rapid growth. Although the foundation of overseas emerging markets is relatively weak, the Internet and e-commerce are developing rapidly, and there are a large number of consumer groups, which provides a large space for growth. China's cross-border e-commerce in emerging markets has also developed rapidly, with almost every market achieving double-digit growth.
Taking this year's overseas customers at the Canton Fair as an example, although the number of American customers at the Canton Fair has basically not increased, the total number of customers in emerging markets has still rushed to 240,000.
In addition, many Chinese brands have really launched a branding strategy to rush to the world.
Different from the previous foreign trade OEM, Chinese enterprises have now had many successful cases of branding in the process of going overseas. For example, Chinese tea brands represented by Mixue Bingcheng go overseas, and Chinese new energy vehicles represented by BYD go overseas.
In the process of overseas branding, Chinese overseas brands understand the consumption habits of local consumers, and make targeted adjustments to marketing, design and other elements, which has changed the situation that "China only has manufacturing, no brand" in the past.
In the process of localization, diversification and branding, Chinese enterprises going overseas are also facing many challenges.
With the large-scale expansion of Chinese enterprises, the risks and problems they face when expanding overseas such as the stability of the external environment, payment security, smooth logistics, and compliance assurance have gradually increased.
For example, in today's intensive and frequent cross-border trade, one of the biggest risks faced by companies is exchange rate risk.
Shi Wenyi, CEO of Ant International Miles, mentioned that in her previous customer visits, she learned that the exchange rate fluctuations in many emerging markets are very large, and even bring losses to merchants: "Merchants said that they signed a large order at the beginning of the year in Africa, and at the end of the year, they took back the money to calculate the cost and suddenly found that they had lost money. Why? All the profits were eaten up by foreign exchange. ”
More and more overseas enterprises are beginning to realize the importance of controlling payment and operational risks in cross-border trade.
In order to better support Chinese enterprises on their way to the sea, service platforms such as Wanlihui have continuously upgraded their service content and launched more innovative products and tools, providing a comprehensive service foundation for the rise of Chinese brands in the global market.
Wanlihui has been solving cross-border trade problems including foreign exchange risks for merchants.
Since its establishment in 2004, Wanlihui is a one-stop digital payment and financial services platform owned by Ant International, and has been committed to providing better cross-border payment and redemption services for small and medium-sized enterprises around the world, and more localized services for Chinese sellers.
The highlight of the 2.0 version of Wanlihui in this upgraded version of the overseas service is that one account can achieve worry-free business, management and finance, so that merchants can sail to sea faster and more energetic.
In terms of global business, Wanlihui aims to "open an account quickly, receive and pay globally", and the fastest time to open an account in the world is 1 minute, and the countries and regions covered have also been upgraded from the original 43 to more than 200 now. The number of supported receiving currencies has expanded from 14 to more than 30, and it also focuses on small currency services in emerging markets such as Southeast Asia, Latin America, Africa, and the upcoming Middle East, of which 80% support T+0 arrival; The number of supported payment currencies has also increased from 41 to more than 100, of which 90% support T+0 arrival and RMB settlement and foreign exchange settlement. It provides merchants with a rapid return of funds and improves the efficiency of capital use.
Through technological innovation and the construction of a global financial network, this service provides global merchants with a secure, efficient, multi-currency payment solution through a streamlined process, reducing the opening time that could have taken six months to just a few minutes, greatly improving efficiency.
In particular, when cross-border RMB foreign exchange is settled, it can be settled in real time, which is very important for merchants involved in RMB transactions, helping merchants to expand their business globally while ensuring the safety and compliance of capital flows.
Merchants can customize account permissions according to their own business needs and management structure, increasing the flexibility and security of operations. Through the continuous upgrading of the exchange rate system, the real-time exchange rate of the benchmark market is benchmarked to achieve zero exchange loss. Through short-term foreign exchange locking and forward foreign exchange locking products, it helps merchants lock in the exchange rate for up to 6 months to reduce the risk caused by exchange rate fluctuations.
In terms of financial services, Wanlihui has launched mature wealth management and loan services, such as Wanyuying wealth management service, which is similar to Yu'e Bao in China, providing merchants with enterprise-level financial management options. In terms of loan services, Miles Club also provides credit facilities in both USD and RMB to support merchants' cross-border trade.
At this year's spring Canton Fair, Wanlihui also officially launched the "World Trade" service, with the help of security risk control and intelligent fulfillment technology, it can support 6 major card group payment and Wanlihui's account payment, traditional foreign trade merchants can quickly realize the seamless mitering of business flow and capital flow after use, and at the same time, improve the efficiency of order payment by 10 times, and reduce payment costs by more than 30%. Less than two weeks after its launch, the product has already attracted foreign trade buyers from 33 countries to do business with Chinese merchants.
In the near future, Wanlihui also plans to expand its product line with new services including Wanlipay cards and exclusive apps. Designed to provide both virtual and physical forms of cards to support multi-currency transactions, the 10,000-mile card is expected to be launched in the European market and in China. At the same time, the app will optimize the mobile payment experience for overseas buyers, thereby driving the expansion of Chinese merchants in the global market and contributing to the prosperity of the cross-border trade ecosystem.
The wave of Chinese enterprises going overseas is gradually expanding, and the online transformation of traditional foreign trade and the development of cross-border e-commerce are becoming new forces to promote the growth of China's foreign trade.
Looking back before 2005, China's overseas expansion was still in the period of "foreign trade".
Many domestic manufacturers began to try foreign trade, receive foreign merchants, and obtain overseas orders. At that time, there was no such thing as "cross-border", and after 2005, "cross-border e-commerce" really appeared on the stage of history. Today, China's foreign trade has entered the era of going to sea and has become an important means to participate in the global industrial layout, and it is no longer just about earning foreign exchange through exports.
In addition to the typical transition from "manufacturing to sea" to "brand going to sea", the large-scale online foreign trade of intermediate products is also a major feature worth paying attention to.
At present, the development of cross-border e-commerce is closely integrated with the domestic manufacturing industry, and the foreign trade of intermediate products plays a particularly important role in the overall overseas situation. About 70% of China's exports are intermediate goods, and more than half of its imports are intermediate goods, which are actually very active in import and export. For example, many electronic product assembly enterprises have pushed industrial semi-finished products to the international market, realizing the integration of global resources and the international layout of the industrial chain.
On the one hand, the business of semi-finished products going overseas in the foreign trade of traditional manufacturing industry is also moving closer to online channels. Many foreign trade enterprises facing overseas enterprises have realized this trend, and cross-border e-commerce is also transforming from simply selling terminal products to adding a large number of B-end semi-finished products.
On the other hand, the domestic manufacturing industry for the overseas market is also transformed under the promotion and promotion of cross-border e-commerce, from the previous price war and the mode of winning by quantity, to a more refined, digital and intelligent production mode.
In the future, Chinese enterprises will still face multiple challenges in the process of promoting the strategy of globalization and bringing more high-end manufacturing products and intermediate products to the sea online. These include overseas logistics, payments, procurement, marketing and taxation, taking into account both the complexities of cross-border finance and the specifics of specific emerging markets.
In particular, Chinese enterprises have entered the "deep water area" when they go overseas, and all aspects of the problem are more like a dense network, interrelated and mutually influential.
In order to help Chinese enterprises cope with these problems, Wanlihui has not only upgraded its products and services, but also plans to invest 100 million yuan to launch the "Gravity Plan". The plan aims to build a full-link ecosystem service system. By bringing together more than 100 core ecosystem service providers to form a strong cluster effect, the program will provide both internal and external impetus for the growth of the company's export business.
In the face of overseas emerging markets, enterprises need to rely on local service providers to solve a series of local operational problems. The "Gravity Plan" aims to cultivate and support service providers to collectively go overseas, and through the development of cross-border e-commerce, it has driven the growth of a series of service industries from market research to payment, regulation, law and tax.
In the future, in the process of global expansion, Chinese enterprises will have more professional services to rely on in key business links including logistics, procurement, marketing and taxation.