With the continuous development of globalization, cross-border e-commerce and traditional foreign trade have become important ways for merchants to expand overseas markets. However, for merchants, choosing cross-border e-commerce or traditional foreign trade requires comprehensive consideration of multiple factors. This article will explore the respective advantages of cross-border e-commerce and traditional foreign trade from the perspective of merchants.
Advantages of traditional foreign trade:
Traditional foreign trade has become one of the important sources of national finance. After years of development, it has accumulated a large number of professional foreign trade personnel and factories, and has developed widely in the global market.
Disadvantages of traditional foreign trade:
1. The product itself-most of the foreign trade products are still concentrated in the low-end market.
2. Cost-the cost of local labor has risen, and the low-cost labor in Southeast Asia, India and other places has brought pressure to China’s manufacturing industry.
3. Branding-there is still room for improvement in product brand building and promotion. OEM is still the mainstream of many factories, and the global economic downturn has led to a decline in profits.
4. Traditional foreign trade model – Chinese goods need to go through at least 5 channels to reach overseas consumers: domestic factories-domestic traders-importers in the destination country-distributors in the destination country-retailers in the destination country.
Advantages of cross-border e-commerce:
1. Global trading scope – cross-border e-commerce eliminates the geographical restrictions of international trade and realizes borderless trade. Domestic merchants can directly face overseas consumers, and domestic consumers can also directly contact overseas merchants.
2. Instant information exchange – the two parties in trade can exchange information immediately. No matter how far the time and space distance is, the information is sent and received almost at the same time, and orders and payments are completed instantly.
3. Convenient trade channels – cross-border e-commerce reduces the intermediate links of traditional trade, lowers the threshold for engaging in cross-border trade, simplifies international trade, saves costs, shortens the operating cycle, and provides small and medium-sized enterprises with marketing channels directly facing foreign markets.
4. Professional service functions – cross-border e-commerce platforms provide professional communication, transaction, settlement, payment, logistics and other services, replacing the demand for professional talents in traditional trade, greatly increasing the convenience of international trade, and merchants and individuals can open stores on the platform.
Disadvantages of cross-border e-commerce:
Since price, product quality, service, delivery and after-sales are controlled by various merchants rather than unified standards by the platform, the platform cannot unify inventory levels and cannot accurately understand the actual inventory status of listed products.