Enterprising middlemen and overseas warehouses help drive China’s e-commerce exports

BEIJING – Mr Pi Jiawen, 25, knew nothing about e-commerce when he started selling mobile phone accessories online in September last year. Now the former construction project manager earns between 30,000 yuan (S$5,574) and 40,000 yuan a month in net profit from buyers outside China.

He buys his wares—the latest from earphone cases to screen protectors—from Huaqiangbei in Shenzhen, the country’s largest electronics wholesale market. He then sells them on TikTok Shop, where he gets about 100 orders a day from users of the popular online short-video marketplace.

The products are shipped directly from factories in Shenzhen to one of TikTok’s warehouses in China, and the platform then handles onward shipment to customers in the Philippines, Thailand, Singapore, Malaysia and Vietnam.

“Becoming an e-commerce seller is not difficult and you can learn everything quite quickly,” said Mr. Pi, who lives in Jiangxi and started making a profit in his third month on the job.

Many of his friends are looking to get into the business, he told The Straits Times. “The domestic market is too Juan (folded), with excessive competition and very low profit margins. You can make much more by selling abroad.”

Thanks to the entrepreneurship of intermediaries, as well as the development of domestic e-commerce platforms that connect domestic producers and sellers with larger numbers of consumers abroad, exports from China via online sales have surged in recent years.

In 2023, China’s cross-border e-commerce exports grew by 19.6% year-on-year to 1.83 trillion yuan.

In June, the government published policy guidelines aimed at increasing such exports – a source of economic growth.

Overall, it outlines more support for cross-border e-commerce businesses, including through smoother financing channels. It also calls for strengthening infrastructure and logistics systems – especially warehouses abroad that facilitate the rapid delivery of goods.

Overseas warehouses are useful because they allow sellers to have a stock of goods in the destination country, ready to ship when orders come in. Consumers are more willing to place orders when delivery times are short, said Mr. Tino Chen, who lives in Shenzhen. The 35-year-old sells household goods in the Brazilian market and uses the warehouse facilities there.

The push to boost cross-border e-commerce is aimed at tapping overseas demand so Chinese suppliers can continue to produce and expand, said Mr Li Jianggan, founder of Singapore-based research firm Momentum Works, who frequently writes about China’s tech and e-commerce scenes.

“China has all the supply but no demand, so you have to find (a place to sell) that supply,” he added.

Industry experts say the rise of e-commerce will lead to fiercer competition among Chinese companies for overseas market share.

They are seeing not only an increase in the number of intermediaries, but also an increase in the number of producers who sell their products directly to consumers on various platforms.

This latest trend has been illustrated by the rapid growth of retailers offering discounts on Temu, now the second most popular shopping app in the United States after Amazon. Many of Temu’s products come directly from Chinese manufacturers and are sold to consumers in more than 70 countries around the world.