The origin and development history of cross-border e-commerce

Chapter 1 The origin of the term cross-border e-commerce

Key points of this chapter:

• The past life of traditional foreign trade
• The present life of traditional foreign trade
• Cross-border e-commerce now
• The future of cross-border e-commerce

1.1 The past life of traditional foreign trade

The term “foreign trade” has a long history and people are no stranger to it. After China joined the World Trade Organization (WTO) in 2001, foreign trade experienced rapid development. Especially in Zhejiang, Jiangsu, Dongguan and other places, China’s manufacturing industry has a prominent reputation. Slogans such as “The world’s No. 1 manufacturing factory for certain products” can be seen everywhere, which truly reflects the prosperous era of Chinese manufacturing. This decade (2001-2011) is widely regarded as the golden period of China’s traditional foreign trade.

During this period, the operation model of traditional foreign trade was relatively complex: first, factories produced products, and then domestic exporters (usually foreign trade companies or industrial and trade companies) purchased these products and sold them directly to foreign importers. (Large wholesaler). These importers then increase the price of the products and sell them to local overseas retailers, who then simply package the products and put them on the shelves. During this process, additional profits are required at every step, resulting in a high price for the final product in the hands of the end consumer.

According to market share analysis, traditional foreign trade accounted for 99.9% before 2011, while cross-border e-commerce accounted for only 0.1%. It can be seen that during this period, there were many transaction links and the pace of life of consumers was relatively slow. With the rise of the Internet, people’s pace of life has accelerated significantly, which has also opened up a new path for the development of cross-border e-commerce.