Cross-border B2B and Made in China create a surprising chemical reaction.

The four words, “Against the Current,” are the most realistic portrayal of the development of cross-border export e-commerce during the epidemic. According to data released by the General Administration of Customs, in the first half of this year, China’s overall trade in goods fell by 3.2% year on year due to the epidemic’s impact. In comparison, the import and export of the Customs cross-border e-commerce supervision platform achieved a 26.2% increase in the same period, with exports increasing by 28.2%.

Cross-border B2B and Made in China create a surprising chemical reaction.

As the most rapidly developing trade method in the Internet era, cross-border e-commerce has also fully demonstrated its ability to break through time and space restrictions, reduce intermediate links and resolve information asymmetries between supply and demand, among other advantages that distinguish it from other trade methods during this particular period in history. Not only for the country but also for more enterprises and groups to provide new development opportunities.

Cross-border B2B and Made in China create a surprising chemical reaction.

Half a year has passed since the outbreak of the new crown, and the epidemic in Europe and the United States is not only still not fully controlled, but some European countries have even shown signs of a second outbreak. The development of traditional offline channels can only face the stalemate of continued obstruction. The importance of e-commerce as a new channel for trade growth continues to be highlighted, and innovations in the industry are better able to stimulate market demand. The cross-border B2C retail model has been able to flourish, but the digital transformation of traditional foreign trade has also brought new growth points for cross-border export business.

I. Riding the wave to break the blue sea, the layout of B2B cross-border e-commerce is the right time

Cross-border B2B and Made in China create a surprising chemical reaction.

As an essential channel for traditional foreign trade exchange and customer acquisition, the exhibition has been hit by the new epidemic and has not yet been restored. Although the online Canton Fair, which was hastily digitally packaged, failed to deliver a satisfactory answer sheet, it has pointed out the direction of transformation and upgrading for many traditional foreign trade enterprises in a state of order shortage. According to the data provided by Statista, the world has a 12.2 trillion U.S. dollars market, the market size up to B2C mode more than six times the B2B e-commerce finally in the role of the combined force of various opportunities on the stage of history.

The transformation and upgrading of traditional foreign trade to cross-border B2B have come a long time. Cloud computing, big data, and artificial intelligence are constantly driving the digital and intelligent transformation of society and transforming traditional business procurement models to make online procurement more transparent, convenient, and efficient, thus attracting more and more corporate and institutional buyers to join.

The epidemic outbreak has coincidentally pressed the fast-forward button for this development process.

Since entering the Internet era, foreign trade orders have started to show a trend of small order fragmentation and high frequency. Hundreds of millions of small and medium-sized B-tier customers worldwide have become the leading force for buying. Compared with traditional foreign trade methods, cross-border e-commerce can quickly achieve channel sinking through the Internet, thus reaching more SMEs. On the other hand, in the era of network economy, the original horizontal professional division of labor has gradually strengthened in-depth, and the supply chain has begun to show a flattening development trend. It has become a concept of transformation not to allow intermediaries to earn the difference. More manufacturers directly contact end customers through one-stop sourcing sites like Amazon.com, thus giving full play to their supply chain advantages.

The Internet era has brought about changes in order patterns and the consumer mindset of buyers and sellers. Both on the supply and demand side, millennials are gradually becoming the mainstream of the labor market. As a generation growing up in such a general environment as internet shopping, as they continue to join the decision-making level of enterprises, the mindset and consumption habits of these young people will also reshape the new commercial sourcing standards, driving the supply side from the demand side to achieve the online transformation of retail sourcing.

In addition to the growth momentum brought about by cross-border B2B’s development advantages, the support of national policies has also provided favorable conditions for the growth of cross-border B2B. Since this year, a series of significant guidelines to support the development of B2B cross-border e-commerce have been introduced to the ground. The General Administration of Customs in Beijing, Hangzhou, Shenzhen, and other ten directly under the Customs to carry out a cross-border e-commerce B2B export supervision pilot from July 1, and on September 1, again expanded to include Shanghai, Fuzhou, and other places, including 12 directly under the Customs to carry out cross-border e-commerce B2B export supervision pilot, to open a new journey of scale to sell The new journey to sell globally.

Promoted by multiple favorable factors, the new B2B cross-border export e-commerce model has undoubtedly become a blue ocean market that cannot be ignored. And this blue ocean market and the Chinese supply chain in the manufacturing gene fit; the two will meet bound to produce a surprising chemical reaction.

Cross-border B2B and Made in China create a surprising chemical reaction.

Second, tap the manufacturing gene of the industrial zone, and open the world window for the world factory.

China has a good manufacturing base and has been the world’s largest exporter since 2009. As the “factory of the world,” the supply chain system of Chinese manufacturing has improved through long-term accumulation over the years, and the upstream and downstream industries have become more closely integrated. At the same time, the various industrial zones in the country also provide potential quality supply chains for cross-border exports. These manufacturing enterprises are in direct control of product quality and inventory supply, eliminating the need for inbound stock preparation and allowing the best quality products to be delivered directly to overseas buyers.

Quality products with global merchanting potential can be tapped from the industrial zones in different country regions. For example, North and Central China have advantages in industrial goods and office supplies; the Yangtze River Delta region has a deep foundation in traditional manufacturing industries and has significant benefits in several categories such as office and commercial furniture; the Pearl River Delta region has the advantage of a mature foreign trade base, a concentration of specialized industries and continues to lead in categories such as I.T. supplies and hotel supplies. It can be said that for Chinese sellers, B2B cross-border export e-commerce has a deep supply-side foundation.

Cross-border B2B and Made in China create a surprising chemical reaction.

Yet right now is an era where even wine smells good. Even with solid manufacturing genes, if you can’t get access to a quality customer base, no matter how good the quality of the product itself is, others won’t appreciate you. In the traditional foreign trade model, to reach the target customer base, the development of distributor resources and the construction of the distributor system, not only extremely time-consuming and sometimes challenging to achieve the expected results, can be described as laborious but unpleasant. In the cross-border B2B era, suppliers can quickly promote their products to their target groups by choosing an excellent online platform, significantly saving marketing and operating costs.

As a one-stop business sourcing site for corporate and institutional buyers, Amazon Enterprise brings together many quality customers, covering educational institutions, commercial enterprises, medical institutions, and government agencies. These include 80% of the top 100 US universities, over 60% of Japanese national universities, 55 U.S. Fortune 100 companies, over 100 of the top 100 US hospitals, and 11 German municipalities with a population of over 500,000.

In addition to its premium customer base, Amazon Enterprise Shopping focuses on helping buyers solve long-tail sourcing challenges. Long-tail sourcing, which is not directly related to a company’s productive spend, accounts for only 20% of the overall corporate spend. Although it is not price-sensitive, many suppliers and the variety of categories often mean high management costs for companies. Companies can be freed from the cumbersome transaction process by taking long-tail sourcing online and saving 10-15% on overall sourcing costs.

Long-tail sourcing is only part of commercial sourcing. Strategic sourcing, which accounts for 80% of corporate spending, is the mainstay of the B2B trade model. However, commercial procurement is a long-run process, firstly, to improve efficiency and simplify the process as the entry point, through visualization of long-tail procurement into the enterprise’s supplier system, accumulate high-quality enterprise customer resources; then, according to the needs of enterprise users, to achieve scenarios based on different categories gradually penetrate the market segments of the institutional procurement plan, based on accumulating enough transaction records, and enterprise buyers to establish their deep Only then will it be possible to enter the strategic sourcing sector and provide buyers with integrated sourcing solutions. The achievement of this goal will also release more volume space for Chinese suppliers and sellers, helping them to cut the most significant piece of the cross-border B2B market.

Five strategic categories to fully connect supply chain advantages and quality customer base

With the collision of supply chain advantages and a quality customer base, the spark of success is not difficult to rub out. To develop this spark out of the prairie momentum, it is necessary for sellers in the category selection of their advantages and the current wind trend to blow the last missing east wind for their B2B cross-border e-commerce business.

In the recent “Global Commerce, Quality Empowerment” 2020 China Sellers Online Summit held by Amazon Enterprise, Amazon Enterprise combined the three dimensions of online purchasing power, category market potential, and Chinese sellers’ competitiveness and conducted a scanning analysis of the blue ocean categories under the global scenario of commerce; Amazon Enterprise targeted five significant categories for Chinese sellers These categories include industrial goods, medical supplies, school supplies, business furniture, and I.T. supplies.

Cross-border B2B and Made in China create a surprising chemical reaction.

As the world presses the fast-forward button to resume work and production, the demand for back-to-work purchases also shifts to the new normal. MRO industrial goods, an essential sourcing category for sustaining industry, business operations, and urban construction, will rapidly recover. The acceleration of global production operations will see a significant increase in demand for labor protection supplies used in industrial production. In addition, demand for workplace safety products such as safety warning signs and caution strips related to social isolation will also begin to enter an upward trend.

A relatively high threshold niche category, medical supplies achieved high growth during the epidemic. From January to May 2020, only three significant types achieved positive double-digit export growth, including medical devices. Fighting the epidemic together overseas also gave the world a deeper understanding of domestic medical device brands, helping to increase demand for domestic medical device products in overseas markets in the future.

The epidemic outbreak has forced schools and colleges around the world to suspend classes and more than 1.5 billion students to stay at home to receive distance learning. There has been a surge in demand for various products related to online teaching and learning. As the back-to-school season begins and the autumn school year progresses, educational institutions are beginning to purchase teaching aids and protective gear to keep students and teachers safe.

During the epidemic, working from home has become a new way of working, and companies and government agencies have introduced policies to encourage employees to buy office furniture. China is one of the world’s largest office furniture producers, accounting for 35 percent of the global scale. In the post-epidemic era, the home office will still be the norm in people’s working lives for some time, further boosting the market demand for office furniture. At the same time, office electronics as a highly standardized product, corporate buyers usually purchase in bulk, and the new norm of telecommuting will further boost the category’s growth.

In the online summit industry forum, Mr. Luo Huiping, general manager of Foshan Kezimei Furniture Co., Ltd, as one of the representative sellers of traditional foreign trade transformation of cross-border e-commerce, has been deeply involved in the office chair category for many years. His company operates the brand Xihao in the class, both domestic and overseas, have become a household name. However, brand exports are different from product exports; there are too many intermediate links between traditional foreign traders and customers, resulting in the brand display far from the expected effect, while the online platform provides sellers with more opportunities to contact the end customer, and can directly access customer information and data, a clearer understanding of the customer’s product needs, to give full play to their advantages in the product design and development process. In addition, Luo Huiping also emphasized that through Amazon Enterprise Shopping, his brand has started to receive orders from well-known enterprises and government agencies. By building a deeply trusting relationship with these customers, his brand awareness has expanded further, thus forming a virtuous cycle.

The five strategic categories released by Amazon Enterprise are not only compatible with the procurement needs of Amazon Enterprise but also can give full play to the manufacturing advantages of industrial zones around China, which can be said to be the ideal bridge to connect China’s supply chain advantages and overseas quality customer groups, thus helping Chinese sellers to develop multiple business growth models and fully grasp the new opportunities of the blue ocean of commercial procurement.

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