China's Exports of Auto Parts Surge as Cross-Border E-Commerce Booms
Miao Qi
DATE:  Aug 16 2024
/ SOURCE:  Yicai
China's Exports of Auto Parts Surge as Cross-Border E-Commerce Booms China's Exports of Auto Parts Surge as Cross-Border E-Commerce Booms

(Yicai) Aug. 16 -- Chinese exporters of auto parts are achieving rapid and steady growth, thanks to the efficiency of cross-border online retail platforms, improved logistics and a large, fixed market overseas.

Even in economic downturns, people still have a strong rigid demand for auto repairs and replacement parts, and this has spurred the growth of auto parts exports, said Song Lei, founder of Shanghai Yinshi Network Technology.

Suppliers in Menghe town, an auto and motorcycle parts hub in eastern Jiangsu province, are all experiencing a boom in exports, such that even the pancake vendors in the town are talking about cross-border e-commerce, said Ye Junhong, director of Jiangsu Dacheng Optoelectronics Technology.

Business at Dacheng Optoelectronics, which mainly sells auto parts to the US market through e-retailers, has been growing at an annual rate of over 30 percent, Ye said.

While that at Yinshi Network has maintained a high growth rate of between 40 percent and 50 percent in recent years, said Song.

China's auto exports, which include the chassis, surged 18.1 percent in the first seven months year-on-year, while that of car parts jumped 5.6 percent, according to China customs data.

Sales of headlights and tail lights assembled by Chinese auto parts sellers soared 20 times on eBay this year, compared with 2015, while of bumpers jumped 60-fold year on year and that of steering gears, air conditioning compressors, clutches, and three-way catalytic converters increased by several hundred times.

Room for Growth

Although the US has strong demands of car parts, its online auto parts penetration rate is only 16 percent, far lower than China's 30 percent, indicating ample room for growth for the e-commerce business. Consequently, demand for vehicle components in the US remains strong.

The car and motorcycle parts sector has maintained rapid growth on eBay, especially this year, said Lin Wenkui, general manager of the San Jose-based firm's international trade division for China.

The boom in the cross-border e-commerce market this year is strongly tied to the rise of Chinese e-commerce platforms like TikTok and Temu that operate abroad, said Kang Yong, chief commercial officer of logistics service provider Orange Connex.

"Consumption in the EU and US is declining, and these platforms are able to seize market share due to their low prices, resulting in a significant short-term surge in performance," Kang said. Thanks to direct shipping networks and overseas warehouses, 87 percent of goods can be delivered on the same day.

Competitive Prices

"The most competitive vendors on the platform are the Chinese because they control the supply chain," said Chao Kang, board secretary of Changzhou Lingyue Equipment, which is located in Menghe Town.

Chinese sellers no longer rely on third-party distributors to sell their products but instead are directly targeting the end consumer, Chao said. This reduces their costs and makes their products more competitive.

The transparency of online pricing and the use of Big Data also enable Chinese merchants to accurately decide which types of products to produce, thereby optimizing their operational capabilities, he added.

Chinese service providers are also providing favorable conditions for car parts to be sold overseas. This year, eBay chose for the first time to convene a conference for auto and motorcycle parts sellers in Changzhou and Shenzhen, with the aim of investing in supply chains and ecosystems.

Editor: Kim Taylor

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Keywords:   cross-border e-commerce,automotive aftermarket,export,supply chain