The seller feast under the wave of store closures How is Chinese cross-border e-commerce getting a share of the US market?

How is Chinese cross-border e-commerce gaining a share of the US market amidst store closures?

The wave of store closures by retailers in the United States will continue this year. According to a report from UBS, there may be 40,000 to 50,000 retail stores closed in the United States in the next five years.

In this issue of iPayLinks Observation, we will discuss the “store closure” from the perspectives of the reasons, the impacts and the countermeasures for cross-border sellers.

01

Is it time for Chinese cross-border e-commerce sellers?

• What is USMCA?
• How to conduct online market research – What are the contents of consumer behavior analysis?
• Take it down immediately! Sabaton band trademark infringement case frozen for rights protection! Quickly take a look and avoid any potential legal trouble!

Some analysts believe that the wave of store closures has been going on for several years, and the supply-demand relationship is crucial. The main reasons are as follows:

First, under the influence of the COVID-19 pandemic, the rapid popularity of remote work in the United States has accelerated the development of cross-border e-commerce. Online shopping continues to put pressure on offline retail. According to data from the US Census Bureau, online retail sales accounted for 14.7% of total retail sales in the fourth quarter of last year, with clothing, accessories, health products and electronic products being the most affected by online shopping.

Secondly, the buying power of American consumers has changed. A study by Stanford University shows that the average annual consumption of ordinary office workers in downtown areas in the United States has decreased by $2,000 to $4,600 compared to before the pandemic. In fact, the purchasing power of American consumers has not kept up with the inflation rate. Some consumers need to be more cautious when purchasing goods or choose cheaper alternatives.

As a large number of physical stores of American retailers are closing, consumers’ shopping channels will increasingly shift to online platforms and cross-border shopping websites. This means that Chinese cross-border e-commerce sellers may face more extensive market opportunities.

02

How can Chinese cross-border e-commerce players gain a foothold in the US market?

Several aspects need to be considered:

• Changes in American consumer purchasing preferences

  Studies have shown that consumers have strong purchasing intentions for certain categories of products, such as health, cleaning supplies, smart home devices, electronic games, etc. However, for other products such as luxury goods and environmental products, consumers’ purchasing intentions are not as strong.

• Logistics pressure brought about by intensified market competition

  Due to the reduction of local retailers in the US, Chinese cross-border e-commerce sellers may face increased competition from peers, leading to intensified market competition. Cross-border e-commerce sellers will face pressure in logistics and warehousing.

• Policy uncertainty

  The US government’s trade protectionism and measures such as tariffs on China may affect the market and prices of cross-border e-commerce exports. Different countries have different payment and regulatory policies, which may result in difficulties in cross-border payments, affecting the process and efficiency of cross-border e-commerce.

03

How should Chinese cross-border sellers respond?

The closure of US retailers presents both opportunities and challenges for Chinese cross-border e-commerce sellers. To fill the gap left by local retailers, they can respond in the following ways:

• Improve product quality and brand image

  In a fiercely competitive market environment, only by providing high-quality products and establishing a good brand image can they attract more consumers and enhance customer loyalty.

• Develop new sales channels through careful cultivation

  Focus on specific target markets and use platforms outside of conventional channels to expand sales channels, increase sales and profits.

• Strengthen logistics and warehousing management

  To avoid problems such as delayed delivery time and lost goods, cross-border e-commerce sellers need to strengthen logistics and warehousing management, optimize supply chain management, and reduce costs, ensuring that goods can reach their destination in a timely and secure manner.

• Pay attention to policy changes

  With the constant changes in the international trade environment, new policies and regulations will emerge. Cross-border e-commerce sellers need to closely monitor relevant policy changes and strengthen communication with local governments and departments to ensure that their business and funds are legal and compliant.

  In addition, choosing a reliable cross-border payment service provider will help cross-border e-commerce sellers manage cross-border funds efficiently.

We will continue to update BusinessDialogue; if you have any questions or suggestions, please contact us!