A growing number of Chinese online retailers are selling products made in Chinese factories directly to consumers around the world. There are about 10,000 e-retailers engaged in such cross-border e-commerce just in Shenzhen, a manufacturing center in southeastern China, according to a Chinese cross-border e-commerce association Eagle and Bear Union.
Among them is Shenzhen Globalegrow E-Commerce Co. Ltd., which recently released an annual report showing that its sales increased 165% to 3.64 billion yuan ($550 million) in 2015.“We have to maintain high growth, as the average annual growth for the Chinese companies selling through cross-border e-commerce is about 100% in the past few years,”a spokesman of Globalegrow tells Internet Retailer.
Founded in 2007, the Shenzhen-based company now sells 250,000 types of products, like apparel, consumer electronics and toys, to overseas consumers in 200 countries.
“When our founder studied for his doctoral degree in the United States, he noticed the prices of many products in American were much higher than in China,” the company spokesman says. “He realized the potential and returned to China to create the company, aiming to deliver products from factories in China directly to global shoppers at lower prices.”
80% of sales come from English-language e-commerce sites operated by Globalegrow. They include apparel sites SammyDress.com and DressLily.com, and electronics site GearBest.com. The company also sells products on such online marketplaces operated by Amazon.com Inc., No. 1 in the Internet Retailer 2016 Top 500 Guide; eBay Inc.; and AliExpress, the international shopping portal operated by Chinese e-commerce company Alibaba Group Holding Ltd.
“Our merchandise focus is to offer shoppers medium- to low-end products at an affordable price, mostly under $50, ”the spokesman says. “We also allow buyers to return the products in 30 days, if the price is under $50.” Higher-priced goods can also be returned if there is a defect.
Globalegrow reported that 36.5 million consumers had made purchases on its website by the end of 2015, with more than 8 million monthly active users. The company says its average conversion is 1.55% and that 35.51% of 2015 orders were placed by repeat customers.
In the beginning, Globalegrow marketed mainly by email, and now it focuses on sending coupons to loyal customers based on their interests and social media.
The company also studies market data to discover popular items it might sell. “First, we dig into best-selling lists on Amazon and get ideas from those products, the company representative says. “Also, we only purchase 50 pieces from suppliers for each new listing to test the market. If the product gets plenty of traffic but the conversion rate is low, we will sell it at a discount, as the initial price may have been too high. In the end, we will only place additional orders to suppliers for the top three in sales among every 100 items, so that we can always sell our inventory quickly.”
Globalegrow employs 4,000 workers and manages warehouses in China, the United States, Japan, Europe and Hong Kong.