The global expansion of Chinese consumer goods enterprises has entered a new phase of strategic transformation, moving beyond simple product exports to encompass comprehensive supply chain, brand, and digital globalization. As geopolitical dynamics shift and digital trade evolves, companies must navigate complex regulatory environments, optimize cross-border operations, and build resilient international footprints.
This white paper explores the latest trends in overseas direct investment (ODI), cross-border e-commerce, and supply chain internationalization, while offering actionable insights for businesses at different stages of globalization.
Consumer Industry Global Expansion Overview
China’s outward foreign direct investment (ODI) continues to grow steadily, reaching $162.8 billion** in 2024 across all sectors, with non-financial ODI totaling **$143.8 billion. Key investment destinations include ASEAN nations—particularly Singapore, Indonesia, and Thailand—as well as Latin America and the Middle East, driven by brand development and technological advancement.
👉 Discover how global market entry strategies are evolving in 2025.
Overseas M&A Trends in the Consumer Sector
While Chinese consumer companies’ overseas M&A activity declined in 2024—with deal value dropping 52% year-on-year to $1.6 billion** and transaction volume falling to 48 deals—the sector remains active. Notably, investments in Japan, Germany, and New Zealand saw increases. Over the past five years, top target countries by cumulative deal value have been the Netherlands (**$4.4 billion), Saudi Arabia ($3 billion**), the U.S. (**$2.5 billion), Australia ($2 billion**), and Indonesia (**$1.7 billion).
Strategic focus has centered on food & beverage, home appliances, textiles & apparel, and e-commerce platforms. Recent transactions include acquisitions of premium pet food brands in New Zealand, leading home appliance businesses, luxury Italian bedding brands, and local e-commerce platforms in Southeast Asia.
Export Trends in the Consumer Goods Industry
Chinese consumer exports demonstrated resilience in 2024 despite global economic headwinds, growing 1% to approximately $1.2 trillion. The top five export categories accounted for over 80% of total shipments:
- Furniture & décor: $290.1 billion (+3%)
- Consumer electronics: $257.6 billion (-3%)
- Apparel & footwear: $209.8 billion (-1%)
- Home appliances: $131.1 billion (+12%) — fastest growing
- Agricultural products & food/beverages: $91.4 billion (+4%)
Notable regional growth was observed in Northern Europe (+16%), Latin America (+14%), and ASEAN (+5%).
Cross-Border E-Commerce Growth
Cross-border e-commerce has become a cornerstone of China’s foreign trade strategy. In 2024, cross-border e-commerce imports and exports reached RMB 2.63 trillion (approximately $368 billion), up 10.8% year-on-year and representing 6% of total foreign trade volume.
Exports dominate the sector, accounting for nearly 80% of cross-border e-commerce trade. Key export markets include the U.S. (34.2% share), UK (8.1%), Germany (6.2%), France (4.5%), and fast-growing Asian markets such as Malaysia, Singapore, Thailand, Vietnam, and Japan.
Top exported product categories are clothing, shoes, and jewelry (27.3%), smartphones and electronics (14.4%), and home textiles (12.4%).
Multi-Department Support for E-Commerce Development
To promote high-quality development of cross-border e-commerce, multiple Chinese government departments—including the Ministry of Commerce, General Administration of Customs, and State Taxation Administration—have implemented coordinated policies since 2024.
Key initiatives include:
- Support for overseas warehouse construction
- Streamlined customs procedures, including elimination of registration requirements for export-to-overseas-warehouse enterprises
- "Inspect first, load later" model for consolidated cargo
- Digitalization of tax guarantees
- "Departure-based VAT refund" policy for goods exported via overseas warehouses
In 2025, the government work report emphasized further support for cross-border e-commerce through improved logistics systems and expanded overseas warehouse networks.
Bilateral and Multilateral Cooperation
As of 2024, China has established e-commerce cooperation mechanisms with 33 countries, fostering policy dialogue, industrial alignment, local collaboration, and capacity building.
China is actively participating in international rule-making through forums such as the WTO, G20, BRICS, APEC, and the Universal Postal Union. It encourages pilot zones to align with high-standard agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA).
Leading Companies Accelerating Supply Chain Internationalization
Top Chinese consumer brands are expanding their global supply chains to enhance resilience and competitiveness:
- Midea Group operates over 400 subsidiaries, 33 R&D centers, and 43 major manufacturing bases across 200+ countries. It aims to increase overseas revenue from over 40% to 50%.
- COFCO Group has assets in over 40 countries, creating a stable grain corridor connecting global production bases with Asian markets.
- Oriental International runs 46 manufacturing facilities across 29 countries on five continents, with nearly half located overseas.
Stages of Internationalization: From Product Export to Global Integration
Chinese enterprises' global journeys can be categorized into three phases:
Stage 1.0: Product Export
Characterized by low overseas contribution (<20%), limited market coverage, reliance on distributors or third-party platforms, domestic-based R&D/manufacturing, and weak brand premium. Most companies operate under OEM/ODM models.
Stage 2.0: Multinational Operations
Marked by increased overseas revenue share, establishment of foreign subsidiaries, diversified supply chains, expanded product portfolios, growing brand recognition abroad, and partial value chain localization through mergers or greenfield investments.
Stage 3.0: Global Business Operations
Defined by mature overseas revenue dominance (potentially exceeding domestic), full value chain deployment (R&D, manufacturing, logistics, sales), strong global brand influence, high-margin positioning, and sophisticated tax compliance frameworks supporting global operations.
| Stage | Core Characteristics | Market Coverage | Value Chain | Brand Impact | Tax Focus |
|---|---|---|---|---|---|
| 1.0 | Trade-driven export | Low | Domestic R&D/production | Limited recognition | Export compliance |
| 2.0 | Revenue growth abroad | Expanding | Partial overseas presence | Growing awareness | Holding structure optimization |
| 3.0 | Full globalization | High/global | Full international integration | Strong global influence | Advanced tax strategy |
Hotspot: Cross-Border E-Commerce (Stage 1.0)
E-commerce has become a primary channel for Chinese consumer brands entering global markets.
Business Models: Direct Shipping vs. Overseas Warehousing
Direct Shipping:
- Postal networks: Cost-effective but slower
- Commercial express: Fastest delivery but higher cost
- Dedicated lines: Balanced performance with scale advantages
Overseas Warehousing:
Offers superior pricing, faster delivery times, lower loss rates, and better customer experience—making it the preferred model for many sellers.
Leading logistics providers differentiate themselves through:
- Operational advantages: Control of core resources and nodes
- Expansion capabilities: Global network coverage and high order throughput
- Value-added services: Custom returns handling, efficient customs clearance
- Digital infrastructure: WMS, OMS, ERP systems powered by AI and big data
👉 Learn how leading logistics players are transforming cross-border trade efficiency.
Tax Considerations for E-Commerce
Cross-border e-commerce involves complex tax obligations across jurisdictions:
Mainland China & Hong Kong
- Transfer pricing risks: Profits retained offshore may be subject to mainland taxation
- Personal income tax issues: Offshore salary payments without proper withholding
- R&D tax credit eligibility
- Export VAT refund compliance
United States
- Sales & Use Tax: Third-party platforms now collect on behalf of sellers; self-built stores must ensure compliance
- Tariff challenges: Importer of Record responsibilities, accurate HS code classification
- Federal income tax: Risk of triggering a U.S. trade or business ("USTB") via online sales
European Union
- VAT rules: For goods ≤€150 shipped via third-party platforms, VAT is collected at point of sale
- IOSS system: Simplifies VAT compliance for low-value imports into EU
- OSS system: Enables one-stop VAT filing across EU member states
- Tariff exemption threshold: €150 per shipment
Unlocking Cash Flow: Pre-VAT Refund Policy
A landmark policy introduced in January 2025 allows exporters using overseas warehouses to claim VAT refunds immediately upon goods departure—before final sale occurs ("refund upon departure"). This significantly improves cash flow.
However, businesses must reconcile actual sales within a defined period (from the month after refund approval until April 30 of the following year). Discrepancies require adjustments to previously claimed refunds.
Companies can choose between multiple models:
- General trade with overseas warehouses (9810)
- Direct export via e-commerce platforms (9710)
- Bonded warehouse exports (1210)
- Small parcel direct mail (9610)
Compliance remains challenging due to upstream supplier management and data consistency issues—making professional advisory support essential.
U.S.-China Trade Tensions: Impact on E-Commerce
The re-imposition of tariffs under a second Trump administration has significantly impacted cross-border trade:
- Additional 10% tariffs on Chinese imports effective February 2025
- Cumulative tariff increases reaching up to 125% on certain goods
- Elimination of the $800 de minimis exemption for small packages
These changes threaten the cost advantage of Chinese e-commerce sellers relying on low-value parcel shipments. Many direct-mail exporters may exit the U.S. market unless they adapt through nearshoring or regional hubs like Vietnam.
Future Opportunities and Challenges in Cross-Border Logistics
Opportunities:
- Expand overseas warehouse footprint with optimized location selection
- Digitize operations through automation, AI, and cloud computing
- Offer integrated logistics solutions with value-added services
- Strengthen last-mile delivery via local acquisitions or partnerships
Challenges:
- Supply chain disruptions and rising freight costs (up 2–5× normal levels)
- Fragmented digital infrastructure among SME logistics providers
- Talent shortages in international logistics management
- Intensifying competition from traditional freight forwarders, tech platforms, and capital-backed entrants
Strategic Site Selection for Global Expansion (Stages 2.0–3.0)
As companies move beyond exporting to establishing production bases abroad, site selection becomes critical.
Key Decision Factors:
- Political and regulatory stability (32% consider it increasingly important)
- Domestic market strength (28%)
- Financial market liquidity (27%)
- Climate change and sustainability policies (26%)
- Energy costs (23%)
Common Challenges:
- Complexity due to conflicting priorities
- Stakeholder alignment
- Data reliability and objectivity
- Dynamic regulatory environments
- Compliance with incentive programs
EY's Three-Phase Site Selection Methodology:
Phase 1: Strategic Planning & Qualification
Define project needs → Screen eligible countries/states → Conduct preliminary site surveys
Phase 2: Detailed Evaluation & Analysis
Assess labor markets, infrastructure → Identify critical risks → Shortlist locations
Phase 3: Deep Due Diligence & Execution
Engage local authorities → Verify utility availability → Participate in public consultations
Quantitative evaluation includes metrics across:
- Labor (skills, wages, education levels)
- Infrastructure (ports, airports, roads)
- Regulatory climate (taxes, incentives)
- Quality of life (housing, healthcare)
Supporting Enterprises Across Internationalization Stages
EY offers end-to-end solutions tailored to each phase:
Strategy & Entry Phase
- Market research and entry path design
- Target market attractiveness analysis
- Business model selection (import vs local production)
Operational Scaling (Stages 2.0–3.0)
- Global tax architecture optimization
- Transfer pricing documentation
- Supply chain redesign for tariff mitigation
- Digital transformation of finance and HR functions
Exit & Restructuring
Full lifecycle support including divestiture planning, tax-efficient exits, and post-acquisition integration.
EY’s Global Network and Expertise
With presence in over 150 countries, more than 760 offices, and over 400,000 professionals worldwide, EY delivers integrated services through its China Overseas Investment Network (COIN). In Greater China alone, EY employs over 23,000 people across 34 member firms.
Over the past three years:
- Supported 3,600+ Chinese enterprises in overseas expansion
- Executed 90,000+ projects
- Assisted 1,900+ clients in Belt and Road countries
- Covered 90% of Belt and Road nations
Our multidisciplinary team combines deep technical expertise with local market knowledge to guide clients through every stage of globalization.
Frequently Asked Questions (FAQ)
Q: What are the main drivers behind Chinese consumer brands going global?
A: Increasing domestic competition ("involution"), shrinking profit margins, rising demand in emerging markets, supportive government policies on cross-border e-commerce, and advancements in digital infrastructure are key drivers pushing brands overseas.
Q: How does the new “pre-refund” VAT policy benefit exporters?
A: The "refund upon departure" policy allows businesses to receive VAT refunds immediately after shipping goods to overseas warehouses—before final sale—improving cash flow by months compared to traditional post-sale refund models.
Q: Which regions are most attractive for manufacturing relocation?
A: Vietnam stands out due to its proximity to China, lower labor costs, trade agreements with major economies, and growing industrial base. Other popular destinations include Mexico (for nearshoring to the U.S.), Eastern Europe (for EU access), and Southeast Asian nations like Indonesia and Thailand.
Q: How can companies mitigate U.S. tariff risks?
A: Strategies include shifting production to third countries (e.g., Vietnam or Mexico), utilizing free trade agreement benefits, optimizing product classification, leveraging bonded zones, or adopting dual sourcing strategies to diversify supply chains.
Q: What role does digital transformation play in global expansion?
A: Digital tools enable real-time supply chain visibility, automated compliance reporting, intelligent demand forecasting, personalized marketing across regions, and centralized financial controls—critical for managing complexity at scale.
Q: Why is transfer pricing important for multinational consumer goods firms?
A: As operations span multiple jurisdictions with varying tax rates, transfer pricing ensures intercompany transactions reflect arm’s-length principles—avoiding double taxation and complying with evolving global standards like OECD’s Pillar Two rules.