Market liquidity and growth momentum are key indicators of the new generation of export markets
In this white paper, we use two key indicators to identify high-potential markets:
(a) Growth in cross-border liquidity, defined by the growth in total cross-border e-commerce imports;
(b) Market growth momentum, defined as the growth of the entire e-commerce market.
Measured by the above indicators, the United States will play a smaller and smaller role in China’s future export trade. Although it has one of the largest e-commerce markets, both domestic and cross-border growth are slowing. In addition, the recent US-China trade war has caused huge collateral damage to Chinese companies, with its overall exports hitting the biggest drop in three years.
Looking beyond the United States, there are more and more markets that can become the next export target for Chinese merchants. As the complex supply chain and digital infrastructure boundaries between countries are being broken down, emerging markets can benefit from the transfer of knowledge and technology from other more developed countries.
The United Kingdom, Indonesia, and Mexico are countries that Chinese merchants can “bet on”. They have a growing demand for cross-border goods and services and are constantly improving their infrastructure to support cross-border trade. At the same time, these countries cover different stages of market maturity, which will create different growth opportunities for Chinese e-commerce.
Borderless Emerging Markets: Technological leaps in markets such as China, Indonesia and Mexico have enabled increasingly demanding consumers to purchase global goods through e-commerce platforms. This has not only enabled the free flow of goods and services, but also financial and capital investment, especially as these markets move from being passive recipients of cross-border investment to becoming more active market drivers.
Cross-border Heritage Countries: Markets like the UK have already established a good local e-commerce ecosystem and have a long tradition of cross-border trade to meet their citizens’ demand for high-quality, low-cost goods from other foreign markets.
Figure: Understanding the growth opportunities of various cross-border e-commerce markets