As a growing source of foreign trade, B2B accounts for the majority ofcross-border e-commerce,holding a stronger marketposition in thefuture

•Cross-Bordere-commerce remains the growth source of foreign trade, with the support ofnational policies. The market is expected to have a CAGR of 25%between 2020

and 2025.

B2B made up74.1% of China’s cross-border e-commerce in 2019, holding a stronger marketposition in the future

B2B cross-border e-commerce export ecosystem contributes to theintegration of industrial resources and sub-sectors, as well as the industryboom, with high growth potential in the future.

•The totalmarket size of B2B cross-border e-commerce service for exports in China reachedRMB 539.1 billion in 2019, which is expected to continue to grow at a CAGR of

6.1% between2020 and 2025.

Ecosystems that focus on small business market and decentralizeddistribution channels are more likely to benefit from social marketing.

•Recent trendssuggest that multi-channel customer acquisition and the diversification ofself-employed people are taking place in foreign e-commerce.

•An ecosystem with largeuser base, abundantsocial-networking, and supply resources is more likely to benefit from social networking.

•E-CommerceSaaS platformsfor small and medium-sized businesses have seen rapid growth in recent years. In the future,those platforms that provide integrated supply

chain services for small andmedium-sized businesses(SMEs) willaccelerate the growth trajectory of cross-border trading platforms.

MarketSize

B2B businesswill still dominate China's cross-border e-commerce export market

The size of the B2B cross-border e-commerce exportmarket in China reached RMB 2.6 trillion in 2019. iResearch projects that theCAGR will reach 28.3% from 2020 to

2025, and the size of China's B2Bcross-border export will be up to RMB 11.2 trillion in 2025.

China's B2B cross-border e-commerce export marketaccounted for 71.0% of China's cross-border e-commerce market in 2019.Therefore, B2B businese will still

dominate China's cross-border e-commercemarket in the future. It is expected that the next five years will seesignificant improvement in the online penetration rate of

B2B trading due toseveral growth drivers: 1) the possible long-term impact of the COVID-19pandemic, 2) favorable national policy for B2B cross-border e-commerce

export, 3) the continuous digitalization of all transactionlinks, and 4) the fragmentation of B2B transaction.

Ecosystemof B2B Cross-Border E-CommerceExport

Ecosystem——Resourceintegration and sharing accelerate industrial integration and prosperity

The essential function of the ecosystem is tofacilitate the transaction. Providing commodity information, advertising, andonline transaction services for both the supply

and demand sides, integratemore value-added innovative services outside the transaction services, such aswarehousing and logistics, marketing, and supply chain

finance to tradeactivities platform as the core. Forthe industry, the surface value of the integration of support services is thatthe platform provides one-stop services

for suppliers, shortens thetrade chain, simplifies the process, and improves efficiency. The profound value manifestsitself as the integration of services leads to the

openness and reuse ofmultiple data links followed by the industry's structural upgrading. As a resource integrator and central hub, theplatform has achieved an

irreplaceable position. The embedded platform ofsupporting services also highlights the importance of service providersoriginally in the periphery of the industrial

chain and achieves cross-stagebusiness growth.

Advantageof Ecosystem – Exponential Growth

Demand and supply resource matching in the system renders a rapidgrowth for the service market

In addition tothe transaction, the service market in the ecosystem registers faster growthand a larger market. For example, the proportion of value-added service

revenues of the ecosystem of DHgate continues to rise in recent years. Thetotal market size of China's B2B cross-border e-commerce export serviceproviders reached

RMB 539.1 billion in 2019. The size of service providersbased on B2B e-commerce online transactions went up to RMB 62.1 billion. It isestimated that the CAGR of the

B2B cross-border service market will reach 27.0%from 2020 to 2025, and the CAGR of service revenue brought by onlinetransactions will reach 49.2%. There are three

driving forces. First, the rapidgrowth of B2B cross-border e-commerce export transaction size; second, theenhanced value recognition of export sellers on e-commerce

services; third, theincrement brought by the transformation of service providers' businessstructure. For example, logistic enterprises are transforming to supply chain

services. While payment enterprises are transforming to cross-border financeintegrating service providers, driving the development of value-added servicesin the

ecosystem.

Advantage of Ecosystem – Synergy

Taking the platform as the core, ecosystem realizesecological collaboration through internal and external synergy

Taking theplatform as the core, internal departments of the platform connect supplier andbuyer with third-party service providers on one hand and connect businesses

andshare data between departments on the other hand. Through internal and externalsynergy and cross-scenario collaboration, the ecosystem connects and

empowers participants at all links in the ecosystem, to achieve cost reduction,efficiency increase and business growth.

DHgate

A resilient ecosystem with diversified development ofsupplier and buyer businesses

On the onehand, DHgate has a substantial advantage over the supply chain, and it has alayout of several countries and regions. It carries out deep cultivation of the

localization of the mainstream market. On the other hand, DHgate integratespartners in customs inspection, logistics, payment, finance, and other fieldsto create a

complete platform and online foreign trade ecosystem integratingrelated services. DHgate's diversified layout of supplier and buyer businesseshas substantial

advantages in source integration and strong anti-riskcapability. Thus it is less affected by single environmental factor.

The market size was 257.3 billion yuan in 2020,increasing by 35.5%. 

According to the statistics of iResearch, the marketsize of China’s online education industry reached 257.3 billion yuan in 2020.The CAGR in the past four years was 34.5%. The accelerated online developmentprocess of early childhood and all-round education track and K12 subject tutoring is the maincontributor to the fast growth of the online education market. Influenced bythe pandemic, the online scope of early childhood and all-round education keepsdeveloping vertically. The online development of the vocational education fieldhas been accelerating, generating supply and demand. Impacted by the pandemicin 2020, the development of online education was accelerated, which willoverdraft the growth rate in 2021. iResearch predicts that the YoY growth rateof the online education industry will fall to around 20%.

Online Education Enterprise Map

Industry Concentration Ratio

In 2020, the CR5 of the online education market was 15.2%, whichwas about 3.3 times of the offline education market.

According to the statistics of iResearch, in 2020, themarket size of the online education industry was 257.3 billion yuan. The totalrevenue of the top 5 companies was about 39.2 billion yuan, and the CR5 was15.2%. Since the online education market is affected by the Covid-19 pandemic,its CR5 in 2020 was not representative. The CR5 calculated based on data in2019 was about 4.6%. The industry concentration ratio of the online educationmarket is much higher than that of the offline education market. Although theconcentration ratio of the education industry is lower than that of otherindustries, both online and offline education are becoming more concentrated.This change is accelerated by the impact of the Covid-19 pandemic on SMEs in2020. According to iResearch, the CR5 of the offline education market willincrease by 3.5 percentage points to around 8.1%.