Analysis of key characteristics and business models of mainstream cross-border e-commerce

As an emerging business form, cross-border e-commerce’s characteristics and business models are constantly evolving. The following is an in-depth discussion of the key characteristics, business models and payment tools of mainstream cross-border e-commerce.

Characteristics of cross-border e-commerce

1. Global

The global nature of cross-border e-commerce enables merchants to spread goods and services to the global market through the Internet. The borderless nature of the network frees customers from geographical restrictions and promotes large-scale sharing of information. However, differences in culture and laws between countries also bring risks to businesses.

2. Brandability

Cross-border e-commerce has promoted the transformation of Chinese manufacturing into branding. The Internet not only promotes the in-depth transformation of the industrial chain, but also greatly enhances the brand awareness of enterprises. With the development of cross-border e-commerce, merchants are gradually transforming from simple processing trade to brand marketing and management, which provides impetus for domestic industrial upgrading.

3. Mobility

With the increasing export sales of China’s high-quality goods, cross-border e-commerce is also showing a mobile development trend. The continuous optimization of cross-border payments has made mobile commerce become mainstream and online retail sales have grown steadily.

Business model of cross-border e-commerce

At present, the two mainstream models of cross-border e-commerce are B2B (business to business) and B2C (business to customer).

B2B model

The B2B model allows companies to exchange data and information through a private network or the Internet. This model focuses on providing customers with high-quality and affordable goods while establishing partnerships with logistics companies to ensure smooth transactions. Under this model, enterprises rely more on offline processes to achieve transactions and customs clearance.

B2C model

In the B2C model, companies directly face overseas customers and mainly sell personal consumer goods. Online retail is the mainstream form of B2C model, and its development provides new opportunities for corporate brand promotion. In recent years, B2C companies represented by 8848 Online Mall have continued to grow, and market competition has become increasingly fierce.

Mainstream payment tool: PayPal

As an international third-party online payment tool, PayPal is widely popular for its convenience and security. Its main features include:

• Financial Security: Effectively reduce the buyer’s risk of not receiving the goods after payment;
• Quick Transaction: Similar to Alibaba’s Alipay, the balance will be credited immediately after payment;
• High global acceptance: Covering 190 markets and 6 currencies, it is the mainstream payment method for small cross-border transactions.

Although PayPal performs well in small-value payments, for large-value transactions, the traditional wire transfer (T/T) method is still safer to avoid potential risks.

Import model of cross-border e-commerce

In recent years, cross-border e-commerce import models have become increasingly diverse, mainly including overseas shopping B2C, overseas self-purchased and self-operated B2C, third-party platform C2C/B2C and other forms. Different models can combine e-commerce operations, logistics and customs clearance, and various subdivisions and operating models are also emerging. Among them, the B2C self-purchasing model is suitable for the transformation of traditional enterprises into cross-border e-commerce.

Take Amazon’s overseas shopping as an example. More and more overseas brands and e-commerce platforms have begun to promote direct mail services to provide users with a more convenient shopping experience. This trend also shows that technological advancements and market segments in cross-border e-commerce will continue to promote the improvement of user shopping experience.

To sum up, cross-border e-commerce continues to develop towards globalization, branding and mobility, and at the same time, it is also gradually showing a trend of diversification in terms of business models and payment tools. The continued growth and technological improvements in this area indicate that cross-border e-commerce will continue to flourish in the future.