“Fierce” seems to be the right word to describe the competition in Haitao. Tmall. JD, Suning and Yihaodian Joined in it since last year. Also China Amazon, who make use of the advantage from America Amazon, is getting in on the act.
At the same time, some grass roots cross border eCommerce platform has also risen astonishingly fast. A statistics from Paypal said that there were 21 million Haitao consumers in China last year and they spend 350 billion RMB. It is estimated that there will be 35 million consumers and 1 trillion market size in 2018. The cake is getting bigger and we need to hold rational attitude to analyze the future of Haitao.
3 eCommerce models in China
Any industry has its own logic and law of development, let alone eCommerce. Basically, there are 3 main eCommerce models in China: Vertical B2C, Comprehensive B2C and Comprehensive C2C.
It is said that the more categories of products, the more people like to purchase. As a result, comprehensive B2B model usually becomes the first model which is used by many eCommerce giants such as JD or Suning. Compared to B2B, C2C strengthen the diversity of products. Products are produced by customers and it reduce the cost of warehouse and logistics.
Haitao is in its beginning stage
As already mentioned, eCommerce originated in B2B and C2C makes it expanded. From my perspective, cross border Haitao will also become popular after few years though now it relies on some big B2C platforms like Amazon or Tmall.
The reason why people like Haitao is the consideration of product safety. And customers also found that even they need to pay tax and shipping fee, the total price is still cheaper than that in China. Not only some big platform help with Haitao, but also China government introduced some policies which also support cross border eCommerce.
According to the latest statistics from China ministry of commerce, the number of cross border eCommerce export transactions already reached 3 trillion RMB by the end of 2014. And it is also estimated that the number will up to 6.5 trillion RMB at the speed of 30% increasing.
The future of Haitao
The fighting between B2B and B2C in cross border eCommerce never stopped. Now B2B has the advantage on marginal cost which can be reduced by massive purchase. But C2C will show its unique advantage later:
- Firstly, people are keen on personalization. But B2B is limited by categories.
- Secondly, consumers need better shopping experience. And cross border eCommerce Haitao platform will be faced with unprecedented opportunities for development.
In conclusion, after tested the water for Haitao last year, C2C which is a new emerging force will also be involved in the future. And then eCommerce industry will make new waves.