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  • China opens Cross border eCommerce business to the World, Opportunity or Challenge?

    Post by : expatree
Recently expect the news of big discounts offered by luxury brands, the open-minded cross border B2C eCommerce policy announcement brought much attention to the public. Compared to commercial B2B import and export trading, this new policy takes advantage of product exemption from inspection system, short-term administrative process, and of course strength on lower tax rate. On the other hand, Chinese consumers enjoy this benefit with alternative choice of overseas products, suddenly Japan, Korea, Europe, America, Australia, New Zealand etc. a diversity of products from those countries are landed in Chinese eCommerce platforms.

Some reasons must be behind it, the tax calculation formula is definitely straight forward. At this moment, 10 product categories’ tax rates are available meanwhile duty free works in case the tax amount is paid less than 50 RMB. Obviously the simplified formula helps a lot to both companies and individuals, but one tip you have to know alcohol drinking and tobacco are not totally opened yet by China custom.

In fact there are two gateways of goods shipment from oversea to end user’s hand after end user made an online order,
- Oversea B2C, direct post for separated package
- B2B2C, Backup stock in storage for amounts of package orders

Oversea B2C solution saves storage cost but it’s time consuming on shipment duration as well as higher unit pricing per order, in opposite B2B2C solution is affordable to huge immediate online orders however the warehouse storage expense must be paid at first. There is no better solution just it depends on practical marketing strategy.
Now 5 majority cities (Zhenzhou, Shanghai, Chongqing, Hangzhou, Ningbo) are leading to bonded areas for cross-border B2C eCommerce solution. For example of B2B2C solution, all arrival goods have to be landed in warehouse at one of 5 bonded areas, then it goes through China custom clearance as long as the online order is made.

Thanks to this opened policy, Cross-border B2C eCommerce business in China is steadily growing and estimated to occupy 11% market share in 2017 against B2B eCommerce. Not limited to eCommerce platforms, suppliers, distributors even business individuals are trying every means to explore new oversea channels and introduce products into China domestic market. When we cheer up for this trending opportunity, some question is raised in our mind, “Will duplicated products or alternatives cause a big pricing war in the future because of a huge backlog stock?” In a Chinese Proverb, “Every extremity is a fault.” We hope this economic tragedy would be never happened, and also these tips are helpful enough to meet your needs.
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Date:2015-06-12 18:53:50
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