On July 24, the 2024 Dongguan Cross-border E-commerce Procurement and Service Ecological Conference with the theme of "Cross-border E-commerce + Industrial Belt" opened in Humen. The conference brought together 15 Dongguan characteristic industrial clusters, more than 200 high-quality suppliers, more than 20,000 cross-border hot-selling products, more than 40 large cross-border e-commerce platforms and ecological partners, and more than 2,000 cross-border e-commerce sellers. The scale is grand. It will build a bridge for Dongguan manufacturing companies and cross-border e-commerce buyers to connect production and sales and win-win cooperation, and help more Dongguan companies open up the international market with new cross-border e-commerce formats.

When visiting the exhibitors at the conference, the reporter found that more and more manufacturing companies in Dongguan have fully utilized the city's advantages as an important source of production at home and abroad, seized new opportunities for the development of cross-border e-commerce, and "ran in both directions" with the industrial belt, and found a way to go overseas for high-quality products and brands through cross-border e-commerce platforms.

As one of the new foreign trade formats with the fastest development speed, the greatest potential, and the strongest driving force, cross-border e-commerce has shown great market vitality and growth resilience in recent years, becoming a new engine for foreign trade growth. The same is true for Dongguan. Since it was approved as the third batch of national cross-border e-commerce comprehensive pilot zones in 2018, Dongguan's cross-border e-commerce has developed rapidly and "crossed" into a new era of going overseas. Data shows that from 2018 to 2023, Dongguan's cross-border e-commerce import and export volume increased from 37.01 billion yuan to 90.72 billion yuan, with an average annual growth rate of 19.64%, providing important support for promoting stable growth, innovation and momentum of foreign trade.

Written by: Nanfang Daily reporter He Qiying Dai Shuangcheng

Planning: Dai Shuangcheng

A. New gameplay

Strive to expand overseas markets through cross-border e-commerce

Cross-border e-commerce is a vital force in the development of my country's foreign trade and an important trend in the development of international trade. How to layout overseas markets through cross-border e-commerce is an important issue facing many Dongguan companies at present.

"We started to layout the cross-border e-commerce sector in 2019. After five years of development, we have successfully broken through and grown rapidly in this track." Chen Yuanping, chairman of Dongguan Taiyang Precision Machinery Co., Ltd. (hereinafter referred to as "Taiyang Machinery"), said.

In the production workshop of Taiyang Machinery, workers are doing final tests in front of rows of neatly arranged automatic lathes. These products will be shipped to Russia. As a company specializing in the production of high-speed precision automatic lathes, high-precision CNC lathes and other precision equipment, before the layout of cross-border e-commerce, Taiyang Machinery's products have always been sold in the domestic market using traditional business marketing models, and have not been involved in overseas markets.

With the changes in the trade environment, the number of orders obtained by relying on traditional trade models has begun to decline, and the development of enterprises has entered a bottleneck period. Chen Yuanping decided to burn his boats and fight with his back to the water. "I took out the enthusiasm of starting a business to use cross-border e-commerce to start going overseas and enter a new track. Fortunately, the final result did not disappoint us."

Chen Yuanping introduced that through the layout of cross-border e-commerce, the products have been exported to dozens of companies in more than 20 countries including Russia, India, Vietnam and Cambodia. ‌

Dongguan Sanzhong Smart Home Products Co., Ltd. (hereinafter referred to as "Sanzhong Smart"), which produces home appliances such as aromatherapy machines, aromatherapy humidifiers, and beauty instruments, also began to layout cross-border e-commerce in 2019. Zhang Yingchang, general assistant of Sanzhong Intelligent, said: "We have always been doing foreign trade. In the early days, we mainly shipped goods through trading companies or Chinese offices of overseas companies. With the development of the market, we began to slowly contact cross-border e-commerce sellers."

The market is always changing, and companies are always looking for opportunities in the changes. After trying out third-party platforms such as Alibaba International Station, Zhang Yingchang found that cross-border e-commerce has great potential. In 2022, he began to establish the company's independent station and continuously improve and optimize it.

"Cross-border e-commerce business has brought us different differentiated markets. Orders have changed from previous large-scale sales to more fragmented orders. It has not only increased the company's sales and increased revenue, but also put forward different new product requirements for us, allowing us to better cater to the market, meet demand, and enhance the company's market competitiveness." Zhang Yingchang said.

The "beachhead" experience of Taiyang Machinery and Sanzhong Intelligent is a microcosm of many manufacturing companies in Dongguan.

Different from the overseas orders "coming to the door" in the past OEM (original equipment manufacturing) period, more Dongguan companies that have entered the ODM (design and manufacturing) and OBM (own brand) stages are more and more proactive in "going out". With strong manufacturing capabilities and supply chain advantages, Dongguan continues to deliver products to the global market with the help of cross-border e-commerce.

“Based on the background of a famous manufacturing city, Dongguan has inherent advantages in developing cross-border e-commerce. With the support of the real economy and manufacturing, it has laid the foundation for its development.” Bai Ming, a member of the Degree Committee and a researcher at the Ministry of Commerce Research Institute, said frankly.

As a world-renowned international manufacturing city, Dongguan is one of the most important sources of goods for e-commerce in Guangdong Province and even in the whole country. 210,000 industrial enterprises have cultivated a complete manufacturing system involving more than 60,000 products in 34 industries, forming a trillion-level electronic information cluster, equipment manufacturing, new materials, food and beverages, textiles and clothing, four hundred billion clusters, and new energy, semiconductors and integrated circuits, biomedicine and other 10 billion clusters. These high-quality industrial belts with their own characteristics distributed in various towns and streets are important supports for the development of Dongguan's cross-border e-commerce.

In recent years, Dongguan has focused on the overall goal of "giving Dongguan manufacturing the wings of e-commerce", combined with industrial advantages and supply advantages, and promoted the high-quality development of cross-border e-commerce in accordance with local conditions. In the first half of this year, under the influence of various unfavorable factors, Dongguan moved forward under pressure and completed cross-border e-commerce imports and exports of 42.74 billion yuan. Among them, cross-border direct purchase exports and cross-border e-commerce export overseas warehouses performed particularly well. In the first four months of this year, cross-border direct purchase exports and cross-border e-commerce export overseas warehouses increased by 19.3% and 11 times respectively, and the two together raised the export growth rate by 1.6 percentage points.

“Cross-border e-commerce has brought us many opportunities. When we first started cross-border e-commerce, we tried different cross-border e-commerce platforms such as Alibaba International Station, Made in China, Dunhuang.com, Global Sources, and TradeLink. At the same time, we evaluated the market that suited us and the needs and preferences of customers in different regions. Our products began to be sold in more countries and regions.” Dongguan Tiangan Electronics Co., Ltd. (hereinafter referred to as “Tiangan Electronics”), which mainly produces potentiometers, encoders, switches, sensors, connectors and other products, joined the cross-border e-commerce in 2020. Sales Director Qiao Yuntian introduced that cross-border e-commerce accounted for 14% of the company’s sales of 23 million yuan in the first half of the year.

B. New model

E-commerce data feeds back to enterprise production

“Cross-border e-commerce is first and foremost international trade. Whether for enterprises (To B end) or individuals (To C end), the first challenge they face is the international trade situation, involving changes in products, supply chains, market areas, and trade rules.” Yang Tao, executive director of the Shanghai United E-commerce Research Institute, said that data is the blood of the digital economy era. Data is both a source and a result. It is very important to make good use of cross-border e-commerce data. We must have the thinking of using data, accurate data sources, and efficient data mining capabilities.

From the transformation and upgrading of traditional enterprises to "touch the electricity" and go overseas, the first thing we face is data processing in the digital economy era.

Take Taiyang Machinery as an example. The automatic lathe products it produces have a long-standing reputation in the industry and are widely used in the processing of hardware, electronics, electrical appliances, clocks and watches, instruments, pen tips, glasses, mobile phone accessories, various screws, etc.

"Demand determines the market. As a research and development company, demand-oriented e-commerce data can point out the direction for the development of the company's core technology and improve product competitiveness." Chen Yuanping frankly said that using cross-border e-commerce data to guide the company's production is an important manifestation of understanding market demand and putting it into practice, which can effectively increase user stickiness.

For Guangdong Wangying Environmental Protection Packaging Industry Co., Ltd. (hereinafter referred to as "Wangying Group"), cross-border e-commerce data makes them more sensitive to the market. Founded in 1996, Wangying Group is an industry-leading printing and packaging company that mainly provides one-stop packaging services for products of major cross-border e-commerce brands around the world.

Zhong Shihui, deputy director of Wangying Group, introduced: "Data has a relatively large guiding significance for the production of enterprises. Take the toy packaging we make for customers. Through cross-border e-commerce data, we can understand the changes in consumer preferences and prepare for the raw materials such as packaging pigments and materials in advance to avoid the products being affected by the price of raw materials. At the same time, we have also introduced the APS system, which can also meet the diverse and precise production needs."

For daily necessities manufacturers, the importance of cross-border data is self-evident.

What is the user profile of a daily silicone wiper overseas? What are the competing products? The first step before a product goes overseas is market research, which used to take months and was costly.

"Through the cross-border e-commerce platform, we can test the market acceptance of the product at a lower cost before mass production." Huang Jinfeng, general manager of Dongguan Dongrong Silicone Products Co., Ltd. (hereinafter referred to as "Dongrong Silicone"), introduced: "There is a wiper product. At that time, it was put on the platform with a casual trial mentality. Unexpectedly, it was widely used abroad and was very popular among consumers in Europe, the United States, Japan and South Korea. It achieved good sales data. This product has been on the shelves for 5 years and is still selling well."

Sanzhong Intelligence, which is seeking a "new way out" through cross-border e-commerce, also realizes the importance of data. "Our aromatherapy products are mainly sold to countries such as Japan, the United States, the United Kingdom, Italy and the United Arab Emirates. The sales of cross-border e-commerce channels have accounted for 70% of the company's foreign trade sales and have become the main channel for export. Cross-border e-commerce orders generally require spot or quasi-spot goods, and such orders have accounted for more than 50% of the company's total turnover." Zhang Yingchang said: "We also conduct customer analysis based on these past data in a timely manner, optimize and improve the inventory and quasi-inventory of products, integrate the supply chain, improve the overall delivery speed, and shorten the delivery cycle."

In addition, the establishment of overseas warehouses also provides another effective way for Dongguan companies to reduce costs and increase efficiency. "There are different models in the cross-border e-commerce model, such as direct mail export (9610), cross-border e-commerce B2B direct export (9710), and cross-border e-commerce export overseas warehouses (9810). Among them, the batch entry of products into overseas warehouses is equivalent to the pre-delivery warehouse, which can reduce logistics costs and realize localized services in the sales area with logistics services, which helps sales-oriented cross-border e-commerce companies to reduce costs and respond quickly to shipments." Yang Tao said.

"Our company is currently exploring the overseas warehouse model in the Middle East, and has also moved after-sales service and centralized procurement and distribution to the local area. For local customers, face-to-face communication and discussion can be carried out faster. Customers' needs for samples or urgent orders in a short period of time can be quickly resolved locally, which is convenient for customers and saves time costs for communication." Zhang Yingchang introduced.

Shangrui Technology Co., Ltd. (hereinafter referred to as "Shangrui Technology"), founded in 2011, is also a "loyal fan" of overseas warehouses. Shangrui Technology, which started as an agent sales, has now become a leading cross-border e-commerce company in Dongguan City, with more than 30 self-operated brands, driving nearly 100 traditional manufacturing companies to open up overseas online markets.

"More than 90% of our orders are shipped from overseas warehouses. We hope to deliver the goods to customers as soon as possible from the warehouse closest to overseas consumers. Only such a fast logistics experience can make customers more loyal to our brand." Cheng Tianle, chairman of Shangrui Technology, said.

C. New policies

Solving the pain points

Recently, a batch of cross-border e-commerce goods such as fashion accessories and household goods from Dongguan Yida Yitong E-commerce Co., Ltd. were loaded and shipped to Hong Kong after completing customs supervision at the Dongguan International Mail Exchange Bureau.

The Dongguan International Mail Exchange Bureau, which officially started operation in 2017, mainly provides a full range of services such as cargo collection, customs declaration, supervision, and logistics for cross-border e-commerce companies.

"In the past, after the e-commerce export goods were controlled and inspected, we had to cooperate to complete the unloading, picking, and inspection, and reload the goods after no abnormalities. The customs clearance process was cumbersome and time-consuming." Zhang Shuyong, head of the Dongguan International Mail Exchange Bureau, said: "Under the new model of embedded supervision of cross-border e-commerce, the supervision granularity is refined from the whole vehicle to the package, and the declaration list is 100% sorted by machine. The released packages can be loaded and shipped first, the customs clearance time is greatly shortened, and the logistics arrangement is more flexible."

For foreign trade to achieve high-quality development, we must have both "effective market" and "proactive government". Some industry insiders believe that the current development of cross-border e-commerce in my country has ushered in many favorable factors.

On the one hand, domestic policies are improving, and cross-border e-commerce has been included in the government work report for many consecutive years. Many municipal and county-level meetings have mentioned the "cross-border e-commerce + industrial belt" model to promote the high-quality development of cross-border e-commerce. In June this year, the Ministry of Commerce and nine other departments issued the "Opinions on Expanding Cross-border E-commerce Exports and Promoting the Construction of Overseas Warehouses", and overseas warehouses have become the focus of attention in the cross-border e-commerce industry. Secondly, overseas online shopping is still in its bonus period, and there is still a lot of room for improvement in the global e-commerce penetration rate. Against this backdrop, the new "Silk Road e-commerce" channel developed around the "Belt and Road" digital economy international cooperation also has great potential.

Focusing on Dongguan, in September last year, Dongguan's cross-border e-commerce digital trade demonstration project was launched; in March this year, Huawei (Dongguan) Cross-border E-commerce Comprehensive Service Innovation Center was unveiled, introducing Huawei's capabilities to help Dongguan enhance the agglomeration effect and leading role of the city's cross-border industry. Favorable policies such as the Implementation Plan for the China (Dongguan) Cross-border E-commerce Comprehensive Pilot Zone, the Interim Measures for the Management of Special Funds for New Cross-border E-commerce Business in Dongguan, the Interim Measures for the Management of Special Funds for the Cross-border E-commerce Comprehensive Pilot Zone in Dongguan, and the Work Plan for the Reward of Special Funds for Cross-border E-commerce Digital Trade Demonstration Projects in Dongguan have been introduced one after another, which has accelerated the development of cross-border e-commerce in Dongguan.

Haixin Intelligent Kitchen Co., Ltd. (hereinafter referred to as "Haixin Intelligent"), one of the first batch of "double-increase enterprises" in Dongguan, has tasted the sweetness of expanding cross-border e-commerce channels and expanding exports. From January to May this year, Haixin Intelligent's export volume reached 170 million yuan, doubling, of which cross-border e-commerce exports accounted for as high as 95%, turning from a new business format into a main business format.

Zhang Yunyun, customs manager of Haixin Intelligent, said that under the new model of cross-border e-commerce B2B (enterprise to enterprise) export supervision, enterprises can enjoy convenient customs clearance measures such as priority inspection, and export efficiency has increased by 30%, helping Haixin Intelligent to strive for a broader market space and more cooperation opportunities.

Recently, the Dongguan Municipal Bureau of Commerce has also issued the "Dongguan E-commerce "Strengthening Foundation, Promoting Development" Action Plan" (hereinafter referred to as the "Action Plan"), focusing on the construction of overseas warehouses, cultivating key cross-border e-commerce enterprises (parks), promoting enterprises to carry out cross-border e-commerce business, expanding live sales, accelerating the construction of industrial belts + live e-commerce bases and cultivating local e-commerce platforms. Intensify support efforts in six aspects, guided by corporate needs, and build an e-commerce industry chain and ecosystem with Dongguan characteristics.

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