Chinese small and medium-sized enterprises are tasting success in overseas markets through cross-border e-commerce platforms such as AliExpress from the Alibaba stable.
Launched in 2010, AliExpress aims to provide online buyers worldwide wider access to Chinese products made by small businesses.
With a reach spanning over 220 countries and regions, AliExpress has already helped many SMEs to expand their sales channels abroad. Its online marketplace serves over 100 million consumers worldwide.
Deko, a Guangzhou, Guangdong province-based company offering building materials, is one among the many that have benefited from AliExpress.
“Before we started our business through AliExpress, we were a little-known original equipment manufacturer or OEM,” said the spokesperson for the company. “In the traditional mode of business, manufacturers have very limited access to consumers and don’t really understand the needs of consumers. We had to do whatever our clients told us to.
“We used to work with a supermarket chain in the (United States of) America and we could sell only two cargos of goods.”
After joining AliExpress, Deko once clinched 20,000 deals on a single day (Nov 11, the Singles Day shopping festival, in 2016), with revenue going up to $500,000, a sterling performance that set the benchmark for the industry.
“In the traditional way of international trade, middlemen used to decide the goods that will be sold and their prices. Chinese manufactures had no say in such matters. And 60 percent of the manufacturers were relying on the processing of orders. Once they lost their strength (which lay in the lower cost of labor and materials), they found themselves in a position of passive weakness,” Shen Difan, general manager of Ali-Express, said.
“We won’t get too far if we only do processing on receiving orders because profit for an OEM tends to be really low,” said Zhang Wei, a Chaozhou, Guangdong province-based small business owner who sells wedding dresses.
“Since launching on AliExpress, we have turned our business mode from processing on orders to design-produce-deliver,” Zhang said. “We now receive 460 orders a day, which is 40 times higher.”
Cross-border e-commerce platforms such as AliExpress have also helped Chinese startups such as Simplee to shine. Simplee is a domestic designer clothing brand founded by four young designers. The brand targets female consumers aged between 25 and 35 who appreciate wild, passionate and intimate clothing.
Since launching on AliExpress, Simplee has seen a surge in the number of its customers. It now boasts 1.2 million “fans” globally.
“The platform not only gave us support on marketing and ramping up business volumes but also offered us detailed guidance on how to grow our business,” said Tao Hongjing, founder of Simplee.
AliExpress said it aims to enlist 1,000 companies so that their monthly revenue could reach $500,000.