Subscribe now

For our monthly insights digest


Click here for the Privacy Statement.

Invalid Captcha
Thank you for subscribing to DKSH insights. You will receive an email confirming your subscription shortly.

How Businesses Can Benefit From Evolving Cross Border eCommerce in Asia Listen with ReadSpeaker

How businesses can benefit from the evolving cross border eCommerce in Asia

Cross border eCommerce (CBEC) first started to sweep across the globe around 1998. But it was after 2007 when several dominant eCommerce platforms truly ignited the CBEC era in Asia, particularly in China. The market thrived with the government’s offering incentives like preferential duty rates, open market policies, increasing number of pilot cities, widening product categories, and improved logistics flow.

Today, Asia is witnessing more and more international merchants and products entering the market with Southeast Asia leading the way as one of the fastest-growing regions. The region’s eCommerce market is predicted to exceed USD 150 billion by 2025.

Before the COVID-19 pandemic, Asian consumers were hooked on traveling and shopping. When they returned home, they craved these foreign products and sought them out locally. Take China as an example; boosted further by travel restrictions, China’s eCommerce market is the biggest in the world and around three times bigger than the US market.


As reported by Deloitte, “Younger generations under 30 years old make up the largest consumer segment for imported goods while women and those above age 60 are accounting for increasing shares in the cross-border eCommerce market.”


According to market surveys, most Asian consumers are seeking authentic products with guaranteed quality (69 percent), a larger selection of products (58 percent), well-known, trustworthy platforms (66 percent), and convenient payment methods (54 percent).


Consumers are demanding more credibility from the sellers. Among the criteria are business authenticity, product originality, stable supply, brand reputation, and expecting complimentary after-sales service.

However, it is not always easy for multinational companies and foreign brands to do business in Asia. The time, cost, and logistics hurdles for foreign companies to register themselves through general trade can be a demanding and tedious process along with a high threshold.


Even though CBEC has helped in reducing the red tape through general trade, it is not always hassle-free. Every brand and product needs to be carefully checked for product origin, ingredients, label translation, and the list of requirements goes on.


Added to this, the company needs to file the relevant documents at customs, ship products to the warehouse, and formally be allowed to sell on the selected platform. And of course, there is also the matter of sales tax. In general, there are two options for businesses: business-to-business (B2B) and business-to-consumer (B2C).


It is important to understand each market’s consumer composition before going in. For example, China’s CBEC market is focused on those living in Tier 1 cities like Beijing, Shanghai, and Guangdong. Over 75 percent of the CBEC consumers are aged between 24 and 39 with over 91 percent preferring to pay with Alipay.

As businesses embark on their plans to tackle the evolving volatility and unpredictable markets, digital processes have become an important tool to serve the new wave of consumers: millennials with a completely different set of purchasing power, buying habits, lifestyles, and preferences.


The key considerations include how to integrate social commerce with eCommerce, develop content sharing platforms, and acquire key opinion leaders. You need to embrace shopping trends like group buying behavior and shopping festivals.


Today’s product development has shifted from mass production to mass customization whereby consumers prefer personalization that is supported by technology like 3D printing which helps to lower the product cost and differentiate your product from the competition. 


Brands are offering various versions of a single product across their distributing markets or regions. These regions pitch these special editions to the eCommerce platforms separately.

The first thing businesses need to do is to transform their mindset from running physical retail to managing online stores. The sales and marketing team needs to keep ahead of the ever-evolving market trends.


To create new demand and generate new excitement, they must identify how technology can help them allocate resources more efficiently, leverage their existing knowledge, and formulate best practices. Using the appropriate tools can help risk distribution across the organization.


In terms of hardware, more businesses are investing in technological upgrades, analysis modules, and tracking systems to match clients’ requirements. A digitized value chain may include the use of virtual reality, artificial intelligence, analytic tools, and internet security.


The goal is to build a supply chain that is efficient with a logistic network that helps to streamline and speed up the process of goods moving along the value chain and to respond to market demand.

Cross-border eCommerce has made it much easier for international brands to enter the Asian market. What will help differentiate each brand and product are its unique values and brand exclusivity to the target consumers.

With markets evolving at a dizzying pace and heightened by a pandemic that is constantly changing how goods reach consumers, working with an established business partner may be a good option for businesses. A partner like DKSH will be able to help you swiftly establish relationships with traders, distributors, eCommerce platforms, and set up the required distribution and logistics network that will ensure your products reach your consumers.