An Exploratory Study of Cross Border E-commerce (CBEC) in China: Opportunities and Challenges for Small to Medium Size Enterprises (SMEs)

An Exploratory Study of Cross Border E-commerce (CBEC) in China: Opportunities and Challenges for Small to Medium Size Enterprises (SMEs)

Qiuyan Fan (Western Sydney University, Penrith, Australia)
Copyright: © 2019 |Pages: 7
DOI: 10.4018/IJEEI.2019010103

Abstract

Development of cross border e-commerce (CBEC) is one of the major enablers of SMEs access to overseas market opportunities. The boom in China's cross border e-commerce has been exponential. It has made China the world's largest cross-border market with over 200 million cross-border online consumers. This article explores the opportunities and the challenges for SMEs to leverage the China's CBEC to find and develop new customers in markets outside their domestic ones. It aims to help small to medium enterprises understand the unique Chinese e-commerce ecosystem and develop an appropriate e-commerce strategy that enables them to enter the Chinese e-commerce ecosystem. This research reveals that the significant growth opportunities and challenges for those SMEs poised for business expansion into Chinese market via CBEC and offers a detailed understanding of the China's cross border ecommerce system. SMEs are a major and important part of the world economy in terms of making contribution to Gross Domestic Product (GDP) and employment. It is important to help SMEs to understand the significance of cross border e-commerce ecosystem and develop an appropriate e-commerce strategy that enables them to engage with CBEC and empower them to maximize the opportunities offered by CBEC in China. This article recommends that SMEs take a proactive approach to developing effective digital marketing strategies to engage with Chinese online consumers and keep up with new policies, programs and regulatory changes introduced by Chinese governments in a fast changing digital environment. It also suggests that SMEs consider cooperation with an online retailer who is present on China's cross border B2C platforms to yield better results for brand building and direct sale.
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Significance Of Cross Border E-Commerce For Smes

The result of a recent study by World SME Forum highlighted the importance of promoting cross border e-commerce platforms and logistics fulfilment services to connect with overseas market opportunities (Sahbaz, 2017). The research result also shows that cross border e-commerce brings the benefits of higher productivity and better revenue and innovation to SMEs as they are exposed to competition, best business practice and advanced technologies (Sahbaz, 2017).

The conceptual framework of this research is based on a new model of small and medium size enterprises (SME) exporting developed by the eBay Public Policy Lab research team. The four key building blocks in this new model of SME exporting include:

  • Connectivity to the global Internet at lost cost and without gatekeepers

  • Global platform-based marketing, marketplace and payment services

  • Efficient, modern and “connected” package-level logistics and delivery services

  • Legal, regulatory and public policy framework supporting direct SME to consumer global commerce (eBay Public Policy Lab, 2016)

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