As a growing source of foreign trade, B2B accounts for the majority of cross-border e-commerce, holding a stronger market position in the future

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

and 2025.

B2B made up 74.1% of China’s cross-border e-commerce in 2019, holding a stronger market position in the future

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

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

6.1% between 2020 and 2025.

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

•Recent trends suggest that multi-channel customer acquisition and the diversification of self-employed people are taking place in foreign e-commerce.

•An ecosystem with large user base, abundant social-networking, and supply resources is more likely to benefit from social networking.

•E-Commerce SaaS platforms for 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 and medium-sized businesses (SMEs) will accelerate the growth trajectory of cross-border trading platforms.

Market Size

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

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

2025, and the size of China's B2B cross-border export will be up to RMB 11.2 trillion in 2025.

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

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

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

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

Ecosystem of B2B Cross-Border E-Commerce Export

Ecosystem——Resource integration and sharing accelerate industrial integration and prosperity

The essential function of the ecosystem is to facilitate the transaction. Providing commodity information, advertising, and online transaction services for both the supply

and demand sides, integrate more value-added innovative services outside the transaction services, such as warehousing and logistics, marketing, and supply chain

finance to trade activities platform as the core. For the industry, the surface value of the integration of support services is that the platform provides one-stop services

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

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

irreplaceable position. The embedded platform of supporting services also highlights the importance of service providers originally in the periphery of the industrial

chain and achieves cross-stage business growth.

Advantage of Ecosystem – Exponential Growth

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

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

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

RMB 539.1 billion in 2019. The size of service providers based on B2B e-commerce online transactions went up to RMB 62.1 billion. It is estimated 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 online transactions will reach 49.2%. There are three

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

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

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

ecosystem.

Advantage of Ecosystem – Synergy

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

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

and share data between departments on the other hand. Through internal and external synergy 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 of supplier and buyer businesses

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

localization of the mainstream market. On the other hand, DHgate integrates partners in customs inspection, logistics, payment, finance, and other fields to create a

complete platform and online foreign trade ecosystem integrating related services. DHgate's diversified layout of supplier and buyer businesses has substantial

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