China’s cross-border e-commerce sector has enjoyed explosive growth since 2020, when the Covid-19 pandemic fast-tracked the adoption of online shopping in overseas markets, such as the US and Europe, where consumers who had favoured the bricks-and-mortar retail experience were forced to make more purchases over the internet.

“[China’s] cross-border live-streamers have just begun to develop this field,” iiMedia’s Zhang said. “They are using extensive and cost-effective [product] inventories across the country to start a new journey abroad.”

Chinese exports via cross-border e-commerce grew 40.1 per cent annually in 2020 and 15 per cent in 2021, according to data from the country’s General Administration of Customs. The monthly growth rate for Chinese exports, by comparison, was just above 6 per cent from 2009 to 2021.

“Cross-border e-commerce has expanded at an incredible rate,” said Li Kuiwen, spokesman for the General Administration of Customs and a director at the Department of Statistics and Analysis, at a media briefing in January on recent trade developments. He said China’s total cross-border e-commerce market last year reached 1.98 trillion yuan (US$313 billion).

‘Made in China, sold on Amazon’ business model runs aground in Shenzhen

01:33

How China’s TikTok video app became a global sensation

How China’s TikTok video app became a global sensation

China’s retail social commerce market was expected to reach US$351.65 billion last year, eclipsing the US$36.62 billion total in the US for the same period, according to research firm eMarketer. That means consumers on the mainland spend about 10 times more on social commerce purchases than their US counterparts.

“Many local merchants [have just recently] heard about the overseas version of Douyin, but they didn’t even know how to download it, not to mention use it for selling,” said Huang Erxia, the live-streaming team leader at Shenzhen-based marketing agency Tituo Cross-Border. TikTok’s move to open the UK, US and Indonesia markets to Chinese sellers has raised hopes for these merchants to “get their first pot of gold”, she said.

Huang said she believes that sooner or later, Chinese sellers will gain broader access worldwide through TikTok, which she expected to be more friendly to Chinese merchants than Amazon. “After all, Amazon’s boss is American, but the boss of TikTok is Chinese,” she said.

When asked about the prospects of opening new markets to Chinese sellers, a TikTok spokesman said: “Similar to other global e-commerce platforms, we welcome global suppliers as well as those from China … As the business evolves, we may consider opening in more select markets in future.”

At present, TikTok faces plenty of work ahead to help raise awareness and build up consumer confidence for the merchants on its live-streaming service.

Bolade Kerr, a London-based millennial TikTok user, said she initially hesitated to buy fashion merchandise, such as bags, jewellery and clothing, being marketed on the platform.

“The online bidding approach of some shops [on TikTok Live] makes it appealing to buy the items, which also look good and are reasonably priced,” Kerr said. She indicated, however, that she was unsure of how trustworthy these TikTok shops are.

Such doubts go both ways, according to Tituo Cross-Border’s Huang. Chinese merchants, she said, have often asked whether the platform is reliable, including in terms of delivering the goods.

One of the most important steps, according to experts, is to hire live-streamers who speak good conversational English, understand the products and the company they represent, and more importantly, know their target audience.

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Petite pottery: Chinese artist’s miniature ceramics an online hit on Tik Tok

Petite pottery: Chinese artist’s miniature ceramics an online hit on Tik Tok

Tec-Do’s Chen, however, warned that hiring the right talent for certain target markets can be a delicate balancing act. “Domestic sellers may face high human capital cost if they want people with capable language skills … or live-streamers working in specific markets,” Chen said.

Chinese merchants’ hiring strategy in that regard will ultimately depend on TikTok’s policies, according to Huang. TikTok, for example, requires sellers to have local warehouses in Indonesia. If the cost of skilled talent is cheaper there than in China, then it would make sense to hire local live-streamers for that market, Huang said.

The advantage of Chinese merchants doing cross-border e-commerce today is that the country provides an extensive infrastructure – from production to logistics – to support them, according to iiMedia’s Zhang. “China’s solid logistics system was built on long-standing export practices,” Zhang said.

Asian online shoppers score fast deliveries, avoid US buyers’ supply chain woes

Still, many small and medium-sized online merchants may need to get subsidies from either the government or platform operators to help support their cross-border e-commerce ambitions.

China’s big e-commerce hubs, including Shenzhen, Guangzhou and Hangzhou, all have policies to fund cross-border e-commerce merchants given this sector’s contribution to the local economy, such as in terms of providing employment and generating taxes.

Southern Guangdong province, the nation’s biggest manufacturing hub, last November announced the development of 30 new industrial zones dedicated to cross-border e-commerce that can support 100,000 companies.

Live-streamer Li said TikTok provides coverage for shipping fees. Li’s UK customers, for example, can have their shipping fees covered by TikTok when their order is worth more than £3 (US$4.10).

While live-streaming on TikTok has so far been Li’s highest-paying gig, she said her physical health has suffered from the irregular working hours. Still, she intends to make live streaming a full-time job for a month – pitching products to thousands of viewers six times a week, for four to six hours a day – starting in March.

“If you manage to establish roots when there is an opportunity, you will survive and get ahead,” she said.