Trade disputes aren’t new. According to Senior Fellow David Dollar of the Brookings Institute, there could be economic disruption and job loss in some areas of the United States. If the dispute drags on, it might further damage China’s already weakening economic growth. This time, other factors are in play that could offset the fallout from the current battle of dueling tariffs and economic sanctions.
Both nations are working behind the scenes to promote the growth of cross-border e-commerce. This continued growth of cross-border sales of consumer goods should strengthen business and government relationships, create new and profitable markets for both nations and help lower tensions.
New Markets, New Relationships
For the first time, cross-border e-commerce enjoys circumstances conducive to making it a significant factor influencing global trade. The current trade dispute centers on addressing inequities in the balance of trade between the United States and China. Positive cross-border business relationships will help to ease tensions and create new and exciting markets for enterprising companies and individuals in both nations.
Positive Factors for Growth
• Active support by the government on both sides
• Better logistics infrastructure
• Faster, safer payment options
• Faster, more reliable delivery to the consumer
• The rapid growth of global smartphone use for accessing the web
Even as the current dispute focuses on manufacturing and resources, retail trade across borders fosters increased healthy relationships between both nations. Increased cross-border marketing opportunities encourage the sales of consumer goods by the larger e-commerce companies as well as many new companies.
According to Forbes expert contributor Frank Lavin, the Chinese government encourages this type of trade by allowing any international brand to market products inside China with little to no regulatory constraints. Easing the regulatory requirements gives millions of middle-class Chinese consumers increased opportunity to buy American made products. That reduces tensions in the U.S., helps the economy and looks good politically for the U.S. government.
This trade is happening even as both nations work behind the scenes to promote cross-border e-commerce. The growth is explosive with e-commerce retailers and consumers across the area enjoying access to new markets and products.
The demand for increased e-commerce retail in China and the Asia Pacific region is getting fueled by rapid improvements in mobile communication technology. Consumers enjoy greater access to goods and safer, more secure payment systems for credit, debit or PayPal transactions.
Safe, fast and hassle-free shipping will play a significant role in the growth of cross-border e-commerce. Currently, UPS, FedEx, and most postal services are improving logistics infrastructure and warehousing to make delivery more efficient.
Strong demand, coupled with increased availability and ease of purchase all will contribute to help ease the current tensions. The best solution is one where everyone gains. Cross-border e-commerce is a right place to start.
New E-commerce Cooperation
Only a few major players dominate web-based retail inside North America and China: Amazon rules the West and Alibaba is top of the ladder in the China, Asia Pacific region. New cross-border opportunities for marketing consumer goods may well level the field for many smaller companies and, over time, lead to the rise of new e-commerce giants.
Big players Amazon and eBay are cautiously working with Chinese merchandisers to bring goods to the West, and smaller wholesale operators take advantage of the Wish smartphone shopping platform to find product bargains for resale. The app is readily available on Google Play, Geek, Mama and Cute.
Several new startups in China empower local marketers. Lightinthebox, DealExtreme, and others work to capitalize on the new openness to Western markets. Other merchants go to Alibaba and Taobao to purchase goods for resale on eBay and through Amazon Stores.
Opening Doors into Asia
The U.S. government provides a variety of assistance and resources for entrepreneurs promoting B2b and B2c e-commerce cross borders. Export.gov, the E-commerce Export Support Center, provides helpful tools, resources, and information to both established and prospective merchants.
American business is slowly making inroads into the Chinese marketplace. Partnering with local firms like Red, JD.com, VIPShop, and Alibaba’s TMall International helps overcome the difficulties many Western traders have doing business in China.
Understanding the differences between Western and Chinese consumers and the infrastructure for sales, payment, and delivery opens new opportunities to merchants offering the Chinese consumer western products they are hungry for.
There are many hurdles to overcome for cross-border e-commerce to reach its full potential. The contest is only in the early innings, but continued growth is more than possible. The public demand for imported goods at prices they can afford will continue to drive growth and open up new markets, new opportunities for international cooperation. Perhaps these factors will help lessen the tension the current trade war generates on both sides of the problem.
Is Cross Border E-Commerce Easing Trade War Tensions?