In an era characterized by the interconnectedness of global economies, small and medium-sized enterprises (SMEs) have increasingly turned their attention toward international markets, eager to explore broader avenues for growthThe rise of cross-border e-commerce has emerged as a vital pathway for these businesses to venture abroad.

Statistics reveal that in 2023, China's cross-border e-commerce reached an astounding 2.38 trillion yuan, showcasing a 15.6% growth rateThe export figures alone account for 1.83 trillion yuan—a 19.6% increase—while imports stood at 548.3 billion yuan, up by 3.9%. This cross-border exchange now makes up 5.7% of the country’s overall foreign trade volumeThe first quarter of this year saw cross-border e-commerce imports and exports total 577.6 billion yuan, marking a growth of 9.6%.

Furthermore, the number of active players in the cross-border e-commerce landscape is steadily growingPreliminary figures from the Ministry of Commerce indicate that over 645,000 enterprises within the country have reported import-export activities, with the number of cross-border e-commerce enterprises surpassing 100,000.

Among those riding the crest of this cross-border trading wave are companies with sharp market insights and relentless innovation, which have successfully transitioned from domestic trade to foreign markets, boldly forging their paths onto the global stage.

Take for instance Lu Bin, a seasoned veteran of the foreign trade industry with 27 years of experienceHe founded Dongguan Hongjin Industrial Co., Ltd., which focuses on the research, manufacturing, and sales of packaging materialsLu comments on the struggles his company faced: “In the early years of our establishment in 1997, our main business concentrated on packaging, tags, and colored boxes, primarily aimed at the domestic marketA decade later, we encountered a bottleneck, with declining sales and difficulties in receiving payments

Advertisements

To overcome these challenges, we shifted our business model from domestic to overseas markets using cross-border e-commerce.”

Since pivoting toward foreign trade, Lu’s firm has transformed from operating under an OEM (Original Equipment Manufacturer) model, essentially providing private-label services, to developing its own direct-to-consumer (DTC) brandsThe company is now leveraging various products, focusing particularly on stationery and artistic goods as focal points for its brand expansionToday, Lu's products are present in over 80 countries, with more than 100,000 foreign clients, including partnerships with global giants such as Coca-Cola, Disney, and Starbucks, where his company supplies paper gift boxes.

Regarding the future of foreign trade, Lu believes there is a positive trend emerging: “From our observations, foreign trade is gradually warming up this yearThe data from the Spring Canton Fair has reached all-time highs, indicating a resurgence in overseas demandWe will continue to enhance our brand development and marketing efforts, improving product quality and service levels, aiming to establish ourselves as a trusted brand among global customers.”

Another aspect of this evolving landscape is the increasing presence of SMEs in the “green economy.” The government has emphasized the need to expand green trade, paving new avenues for numerous foreign trade enterprisesWang Chuangliang, a partner at Guangdong Baohongxiang New Material Technology Co., Ltd., which integrates product R&D, production, sales, and service, reflected this shiftSince the start of 2023, the company has refocused its efforts on exporting products, particularly pearlescent pigments and titanium dioxideTheir sales ratio of domestic to international markets has shifted significantly to three-to-one, demonstrating the success of their international endeavors.

Focusing on emerging overseas markets like Pakistan, Wang elucidated, “Our products are mainly utilized in PVC pipes, which indicates that markets with significant infrastructure demands are key targets for us.” The company has also begun exporting certain products to developed regions such as Europe, where environmental regulations are stringent

Advertisements

To keep pace with these requirements, Wang's company has upgraded its products to meet local environmental standards, resulting in remarkable growth in Europe, with sales surging over 30% year-on-year.

Despite the relatively short duration of their foray into international markets, the company has built a robust technological base and practical expertise through years of domestic salesWang commented, “In recent years, Chinese manufacturing enterprises have continuously innovated technologicallyBeyond the well-known new energy sectors, there are many competitive products in global markets, such as our specialized chemical materials, including pearlescent pigments and titanium dioxide, which are increasingly popular.”

Looking ahead, Wang expressed his commitment to aligning with the government’s call to expand green trade, incorporating sustainable and environmentally-friendly practices into the core strategy of their enterprise. “We aim to actively develop new green markets and seek opportunities for growth that resonate with environmental needs, contributing to the global green economy and sustainable development,” he affirmed.

An emerging trend amidst this transformation is the rising demand for cross-border payment solutions, giving rise to new institutionsThe governmental work report for 2024 emphasizes the importance of stabilizing the quantity and quality of foreign trade while optimizing cross-border payment services and foreign exchange risk management.

In an interview, Zheng Kai, co-founder and CSO of XTransfer, a financial platform supporting over 450,000 small and medium-sized foreign trade enterprises, highlighted the opportunities in cross-border development. “Since its establishment in Shanghai in 2017, XTransfer has propelled many SMEs providing global and local payment accounts, forex transactions, risk control services, and CRM solutions.” Zheng noted that traditional banks often impose complex compliance requirements on SME clients seeking cross-border payment solutions

Advertisements

This scenario has resulted in stringent scrutiny and lengthy processing times in international trade, creating barriers for SMEs to operate effectivelyConsequently, new service institutions specializing in cross-border payments, like XTransfer, have emerged to complement traditional banking services.

However, challenges persist alongside these opportunitiesZheng emphasized, “With the continuous growth of global trade and the accelerated adoption of digital solutions, SMEs are expressing an increasing demand for accessible, efficient, and secure cross-border payment servicesThis opens expansive development avenues for payment solutions.”

“We tailor our solutions for SMEs based on a deep understanding of their business models and payment requirements,” Zheng further explainedBy fostering cooperative relationships with major global banks and financial institutions, XTransfer strives to forge strategic partnershipsFor instance, they recently enhanced their local payment accounts in Thailand alongside Deutsche Bank and successfully executed the first onshore baht transaction under the Bank of Thailand’s Non-Resident Qualified Company (NRQC) programSimilarly, partnerships with JPMorgan Chase have allowed them to offer global payment account services.

As Zheng noted, “The opportunities for cross-border payment services are intricately linked to the needs of SMEs engaged in foreign tradeXTransfer aims to seize these opportunities, continuously innovate our service models and technological solutions to collectively spur the prosperity and development of global trade.”