Is China Taking Over US Retail?
Yes.
Let me explain.
Amazon made it easy for Chinese companies to sell their products directly to American consumers. In response, the Chinese, after having hollowed out American manufacturing, have moved up the value chain to do the same thing to American wholesale and retail. We are transitioning from a world where everything is made in China, to one where everything is designed and sold by China too.
This is a real threat to the American economy and workers. Once upon a time, Chinese-made products were a joke, but they’ve gone from crap novelties that fell apart in your hand to the iPhone. Now they’re undergoing the same transformation in advertising, marketing, and branding, here in the United States and they’re getting really good.
August 15th, 2021 Data | Marketplace Pulse China Sellers Share of Amazon Marketplace
42% of the top 10,000 sellers on Amazon.com are based in China. The real number is probably higher than that, given that Chinese companies register shell companies in the United States so they appear American. They compete viciously, they are advantaged over domestic competition, and their marketshare online has risen steadily. As this has happened, e-commerce as a whole has become an ever larger part of the American retail economy.
This is being driven by convenience, but also because of covid and lockdowns. People fear the virus so they shop from home, and sometimes governments prevent them from shopping any other way. In 2020, this resulted in a huge shift in purchases away from brick-and-mortar retail to e-commerce, likely a persistent change.
Simultaneously, the US government unleashed the largest economic stimulus program in world history. This led to an unprecedented wave of new business creation, much of which was in e-commerce. New brands were formed and every new brand needs a trademark.
US Patent & Trademark Office Trademark Application Data | USPTO Trademark Database
Look at the huge growth in 2020. That’s American office workers working at home, flush with cash, starting brands. Between 2011 and 2019, the rate of growth in trademark applications was 5.4%. Between 2020 and 2019, it was 33.3%, an over 6x times increase! However, it turns out it was not just Americans who were filing those trademarks…
USPTO Trademark Application Data | USPTO Trademark Database
26.11% of all trademark applications filed in the United States were filed by entities based in China. That’s up from 1.08% in 2011. These Chinese companies are applying for US trademarks so that they can sell directly to US consumers, mostly online and they are getting very good at it. The Chinese are already more proficient in logistics and most manufacturing than the United States. China inc. is now doing the same in advertising, marketing, and branding. It’s early, but with each passing year they get better and better at selling directly to American consumers.
This poses a major threat to the American economy and workers. As manufacturing moved overseas, we forgot how to make the essential goods that our daily lives depend on. Now the same is happening for product design, distribution, and marketing. Where do we draw the line? If the United States does not change its laws and policies, the trend of Chinese economic domination will continue and they will take over the design and sale of physical products the same way they’ve done with manufacturing.
