Although the COVID-19 pandemic has had a profound impact on global trade, it has also presented immense opportunities for cross-border agricultural e-commerce. Customs data revealed that China’s total import and export value declined by 4.9% in the first half of 2020 – when the impact of the pandemic was most severe – compared to the same period in 2019, with foreign trade only rebounding in the fourth quarter. Cross-border e-commerce bucked this trend, however. China’s cross-border e-commerce regulatory customs platform reported RMB187.39 billion of total import and export value in the first three quarters, comprising a significant 52.8% increase and contributing to the stabilisation of foreign trade.

By July 2019, Alibaba.com, the world’s largest B2B (business-to-business) cross-border e-commerce platform, featured over 1.11 million agricultural commodity listings. Leveraging the platform, China’s agricultural exports achieved a triple-digit compound annual growth rate from 2017 to 2020 and were reaching over 100 countries and regions around the world as of 2020. Agricultural product turnover surged by 183% year-on-year on Alibaba.com in 2020, which is higher than the overall 101% growth rate that was achieved on the platform.

The digital economy has provided a robust foundation for the ascent of cross-border agricultural e-commerce. China’s once-dominant position in agricultural exports has gradually waned since the nation acceded to the World Trade Organization, with trade deficits widening annually. The decline can be attributed to soaring export expenses in addition to mounting trade barriers related to environmental regulation, such as green initiatives and low-carbon policies.

A burgeoning trade model, cross-border e-commerce embodies the hallmarks of digitisation, globalisation and customisation. Advantages such as contactless delivery, online transactions, global networking, strategic supply chain distribution, diverse business models, and localised operations with overseas warehouses empower agricultural producers to engage directly with consumers worldwide. This streamlined approach cuts through transactional red tape, reduces intermediary costs, simplifies traditional trade practices, and lowers export expenditures for agricultural goods.

The transformative shift that has been occurring has been driving a resilient increase in agricultural exports, boosting transaction volumes, emerging as a crucial stabilising force with regard to foreign trade of agricultural products, and facilitating the global exportation of China’s top-tier agricultural offerings through cross-border e-commerce channels.

The country’s government has also been enacting policies designed to drive the high-quality development of cross-border e-commerce in the agricultural sector and has been vigorously promoting cross-border e-commerce and rolling out corresponding policy initiatives since 2012. Reflecting the government’s commitment to streamlining cross-border trade and reducing transaction costs, comprehensive cross-border e-commerce pilot zones have been established. On Feb. 8, 2022, the State Council– China’s chief administrative authority and national cabinet – sanctioned the creation of comprehensive pilot zones in Inner Mongolia Autonomous Region’s Ordos City and 26 other cities and regions, bringing the nationwide total to 132 zones across 30 provinces, autonomous regions, and directly administered municipalities.

With government support and the integration of various information technologies, China’s cross-border e-commerce has been undergoing synergistic evolution, aligning with new retail, social commerce, live commerce, and traditional trade practices. For example, the government of Nanhe District, Xingtai City, Hebei Province, which is located near Beijing in northern China, orchestrated a collaborative undertaking designed to develop both upstream and downstream segments of industrial chains. A strategic partnership with the Alibaba Group led to the creation of a digital rural e-commerce hub featuring data-driven branding, standardisation, quality control, financing, and logistics services, and the endeavour has emerged as a model for rural e-commerce cluster development. Cross-border e-commerce hubs have also been introduced, the entry of foreign trade enterprises has been facilitated, and a series of logistics initiatives have been launched in order to provide further support for the endeavour.

Driven by the combination of these influences, cross-border e-commerce platforms and live streaming channels have emerged as vital pathways that enable agricultural products to reach overseas markets and connect with customers. In recent years, China has witnessed the synergistic growth of rural e-commerce and cross-border trade, particularly with regard to agricultural products, which has given rise to mainstream models that are supported by big data, cloud computing, blockchain and other cutting-edge technologies, such as B2B commerce. These advancements have culminated in a sophisticated agricultural marketing ecosystem that seamlessly integrates online and offline channels, bridging domestic and international markets through digital exhibitions, social commerce, crowdfunding, and data-driven marketing strategies.

A food company based in Jinxiang County, Jining City, Shandong Province, in eastern China, expanded its reach into overseas markets via cross-border e-commerce leveraging Alibaba.com, for example. The company experienced a substantial increase in orders through the international platform despite the challenges posed by the emergence of the pandemic in 2020 and achieved more than US$40 million in annual sales. Alibaba records indicate that fresh garlic export value surged nearly fivefold in 2020, which made it the agricultural product with the greatest increase in export value on the platform that year in terms of  growth percentages, and that over 100 enterprises based in Jining exported garlic through the platform that year.

Source:

AliResearch

Administration and Management Institute (AMI) of China's Ministry of Agriculture and Rural Affairs (MARA)