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Chinese e-commerce manufacturers surge, but fear increased competition

A Chinese girl is buying goods from Amazon.cn
Kevin Winter | Getty Images
A Chinese girl is buying goods from Amazon.cn

Chinese e-commerce outlets keen to make inroads abroad prefer to sell on Amazon than homegrown platforms, a new survey of more than 900 Chinese e-commerce sellers has found.

Of the major sellers, 62 percent said they sell on Amazon, compared to 45 percent on Wish, and 40 percent on AliExpress, a division of Alibaba. Ebay, Lazada, and JD.com all accounted for smaller portions of the pie.

The survey, conducted by Payoneer, a b2b online payments company, found that of the respondents who preferred Amazon, they felt the retailer to be trustworthy and favored its emphasis on quality products and simple and fair rules.

The respondents, which included manufacturers in both China and Hong Kong, found that the leading categories for sellers include electronics and accessories, followed by clothes and then home goods.

Despite China's economy showing sustained signs of weakness, its e-commerce industry continues to surge. According to China's National Bureau of Statistics, Chinese retail websites sold nearly $590 billion worth of goods last year, an increase of 33% from the year before. Meanwhile, eMarketer predicts China will account for 40 percent of the world's retail e-commerce sales this year, an increase from 35 percent.

New technological advancements are lowering barriers among manufacturers in China which now have the opportunity to compete with brands in markets around the world.

"The 'brand' matters less," Scott Galit, CEO of Payoneer told CNBC. "Now the consumer is just shopping for what they want: the description, the review, not the brand."

Payoneer works with sellers on e-commerce platforms to facilitate the payment process for manufacturers.

Sellers, who until several years ago could barely reach buyers across their own country, can now utilize marketplaces to reach buyers across continents. Even small-scale sellers can distribute their goods to large number of buyers, leveling the playing field for operators.

"Instead of going through a brand or intermediary, they're able to leverage this marketplace as a new intermediary," Galit said "A very powerful way to get into marketplaces around the world that otherwise would have been possible."

While opportunities have increased, close to half of the respondents cited an increasing number of fellow Chinese sellers as the biggest challenge to selling online.

This competition could be what's driving more sellers to use multiple marketplaces. "There's very much a growing opportunity and adding additional marketplaces is helping growth," Galit added, noting the more marketplaces a manufacturer sold on, the larger their volume tended to be.

But China could just be setting the stage for a global e-commerce movement. "We think we're very early days for e-commerce in places around the world," Galit said, who works with partners building brands in Africa and Latin America. "Everyone's seen what Amazon and Alibaba has done by offering a massive offering and now marketplaces around the world are looking to replicate that."