Overseas merchants can now sell their products in China to Kuaishou’s 379.2 million daily active users (DAU), the short-video platform confirmed with KrASIA on Tuesday.
This new feature comes as Kuaishou reported that the total gross merchandise volume of e-commerce transactions on its platform reached RMB 118.6 billion (USD 18.5 billion) in the first quarter of 2021 ended March 31, up 219.8% year-on-year (YoY), according to the company’s recent earnings release.
However, while the company’s revenues increased 37% to RMB 17 billion (USD 2.65 billion), sales from livestreaming went down almost three times faster than a year earlier in Q1, which has worried investors.
Currently, Kuaishou is onboarding international vendors, mainly offering cosmetics, skincare products, food, watches, and luxuries, the company said. Goods can be shipped to Chinese consumers directly via 15 ports, including Beijing, Guangzhou, and Changsha, or stored at Kuaishou’s network of partner warehouses.
Merchants can enjoy certain beneficial tax policies such as zero tariffs and a 30% cut in the value-added tax, Kuaishou said. International vendors can also cooperate with popular livestreamers on the platform to sell their products. In its earnings release, Kuaishou mentioned that a “greater portion of average daily time spent per DAU was on e-commerce live streaming,” compared to the same period last year, yet without providing specific details.
Kuaishou’s entry into the cross-border e-commerce sector comes after its archrival Douyin also announced support for cross-border merchants last December. However, ByteDance has since then not released more information. Currently, imported wines and various skincare products can be ordered on Douyin, KrASIA found on Wednesday.
“There is still market potential to be released in the cross-border e-commerce sector, so it is a good direction for Kuaishou to enter, but it will not be an easy thing for Kuaishou to break the established market layout,” iiMedia’s analyst Liu Jiehao told KrASIA.
“However, compared with running solely a domestic e-commerce business, the new business brings challenges such as cross-border logistics management, and stricter quality control,” Liu added.
Kuaishou will also have to compete with established cross-border e-commerce import marketplaces such as Alibaba’s Tmall Global and Kaola, in addition to JD International. Tmall Global took a 26.7% share of the e-commerce cross-border e-commerce market in the first quarter of this year, followed by Kaola with a 22.4% slice, and JD International with an 11.3% share, according to data obtained from market research firm iiMedia.
In 2020, the value of cross-border B2C e-commerce transactions in China decreased by 4.6% YoY to RMB 10.3 trillion (USD 1.6 trillion), mainly due to the negative effects from the COVID-19 pandemic, but still accounted for about a third of China’s entire foreign trade, which reached RMB 32.16 trillion (USD 5 trillion) last year, up 1.9% YoY, iiMedia data shows.
This story has been updated on May 27 to include the opinion of Liu Jiehao, analyst at iiMedia.