Chinese rivals snap at Alibaba's heels in cross-border e-commerce race

Wed Feb 25, 2015 4:00pm EST
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By Brenda Goh

SHANGHAI Feb 26 (Reuters) - A Chinese government push to promote e-commerce has created a host of online retail rivals for Alibaba Group Holding Ltd and Inc catering to shoppers' fears about the quality and safety of local everyday goods.

Encouraged by tax-relief programmes and other policies that gained traction last year, logistics firms including SF Express and state-owned Sinotrans are seeking to grab a piece of the cross-border e-commerce market which the government estimates to be worth $1 trillion by 2016.

Smaller local internet firms like Netease Inc, which partnered last month with Sinotrans to set up an online bazaar, are also keen to gain from the sector known as "haitao", which roughly translates as "seeking treasures abroad".

"Local e-commerce businesses aren't able to meet the needs of China's consumers who are increasingly buying from abroad," said Masa Ren, vice president of international e-commerce services at SF Express, one of China's biggest logistics firms.

The company launched a portal in January selling lobster, milk powder and other items it sources from retailers in countries such as Canada and Japan.

Since 2012, more than 2,000 firms have registered as cross-border e-commerce businesses, the customs bureau said.

While Beijing's policies, aimed at reducing smuggling, have helped, the sector is booming thanks to the growing number of affluent Chinese who prefer global brands and whose faith in local goods has been frayed by a slew of safety scandals, mainly involving food.

Advertising executive Fiona Chen says she buys most of her daily necessities from overseas, spending about $200 on items such as shoes and cosmetics online at least once a month.   Continued...