With the accelerated reconstruction of global digital trade, China’s cross-border e-commerce industry is ushering in an unprecedented explosive period.
In recent industry summits and seller communities, a controversial but widely resonated point of view has been frequently mentioned: “Foreigners’ money is easy to make.” This seemingly straightforward and even slightly joking sigh actually reflects the huge price difference dividends, differences in consumption habits, and brand premium space that China’s supply chain currently faces when going overseas.
According to the General Administration of Customs and multiple third-party data agencies, China’s cross-border e-commerce import and export scale will continue to expand in 2023, with the proportion of exports increasing significantly.
Many small and medium-sized sellers have discovered that the same daily necessities or electronic accessories that sell for only a few tens of yuan in China can often be sold for five times or even ten times once they are packaged in a European and American aesthetic and listed on Amazon, TikTok Shop or independent websites.
This astonishing difference between exchange rates and purchasing power parity forms the core cornerstone of the argument that “money is easy to make”.
A person in charge of a Shenzhen hypermarket who has been deeply involved in the North American market for many years said frankly in an interview: “At a time when domestic e-commerce is seriously ‘involved’, the price war has made profits as thin as a razor blade. But in the European and American markets, consumers pay more attention to the design, functionality and brand story of the product, and are more concerned about the price.”
The sensitivity is relatively low.
As long as the product quality is high, even if the price is high, you can still get a good conversion rate.” He pointed out that the consumption logic of mature Western markets is completely different from China. They are willing to pay for “experience” and “values”, which gives Chinese merchants a lot of room for premium operations.
For example, an ordinary yoga suit may only sell for 99 yuan in China, but through precise social media marketing and brand image building, it can easily sell for more than 60 US dollars in the United States.
In addition, the rise of emerging markets has also provided new footnotes to this view.
In Southeast Asia, Latin America and the Middle East, with the popularization of mobile Internet and the growth of the middle class, local consumers have shown great enthusiasm for cost-effective products from China.
Since the local manufacturing industry is relatively weak, China’s complete supply chain system can quickly fill the market gap.
Many practitioners said that in these areas, Chinese products often represent “advanced” and “high quality”. This cognitive bias further reduces the cost of educating users, making it particularly easy to acquire customers in the early stages.
However, “easy to make money” does not mean that you can “win at a loss”.
Industry experts warn that blind optimism can lead to serious strategic misjudgments.
First, compliance thresholds in overseas markets are rising sharply.
From VAT tax reform in the EU to intellectual property litigation in the United States, to increasingly stringent data privacy protection regulations in various countries, any negligence may lead to store closures, frozen funds, or even huge fines.
Recently, there have been many cases of products returning to pre-liberation overnight due to neglect of product certification standards or patent infringement.
Secondly, the complexity of cross-border logistics and after-sales systems far exceeds that in China.
The long transportation chain not only increases the cost, but also brings extremely high uncertainty.
Once there is port congestion or flight delays, the inventory turnover rate will drop significantly.
At the same time, the perfect consumer rights protection laws in Western countries mean that the return rate is generally higher than that in China, especially in the clothing category. The return rate of some sellers is even as high as 30%.
How to deal with high reverse logistics costs has become a key hurdle to test sellers’ profitability.
The deeper challenge lies in cultural integration and localized operations.
Many sellers who initially relied on the “distribution model” have found that with the upgrade of platform algorithms and the sophisticated tastes of consumers, the simple “porter” model has become unsustainable.
If you really want to make “foreign money” in the long term, you must have a deep understanding of local cultural customs, festival atmosphere and even aesthetic preferences.
Those brands that can successfully go overseas have all made great efforts in localized marketing, customer service and social responsibility fulfillment.
Industry analysts believe that the statement “foreigners make easy money” is essentially a description of a phased dividend from the transformation and upgrading of China’s manufacturing.
It reflects the potential energy gap in China’s supply chain from “exporting products” to “exporting brands”.
But this potential energy gap is gradually narrowing as global competition intensifies.
In the future, cross-border e-commerce will enter an era of “intensive cultivation”. Only those companies with strong supply chain integration capabilities, keen market insights and high compliance awareness can turn temporary “good profits” into long-term “steady profits”.
To sum up, cross-border e-commerce is indeed a blue ocean full of opportunities, and high gross profits attract countless entrepreneurs.
However, when sailing in this sea area, you not only need to see the benefits when the sea is calm, but you must also always be alert to the risks of undercurrents.
For every practitioner, abandoning the speculative mentality, returning to the essence of business, and winning the respect of global consumers with high-quality products and services is the fundamental way to keep “foreigners’ money” flowing into their pockets.
