China’s cross-border e-commerce industry currently has three key characteristics. If you chose to sell to the region via your own website rather than a marketplace, then it should be noted that 70-80% of online purchases are made via a Smartphone, with only a minority of online consumers having a personal computer. L’Oréal’s brand account and digital store on XiaoHongShu, XiaoHongShu has been very successful in building a community of user-generated content (UGC). Moreover, Chinese customers have a positive perception of foreign products. LehmanBrown tells us more about how the cross-border e-commerce system works. In case the transaction does not happen through an e-commerce platform linked with the Chinese Customs network, the inbound and outbound courier operator or postal enterprises will undertake the corresponding legal liability – they will need to transmit the electronic information of transaction, payment, and logistics to Customs, according to the Notice on Work Relating to Improved Regulation of CBEC Retail Importation (Shang Cai Fa  No.486). International companies are allowed to sell certain goods to Chinese consumers online, through platforms such as Alibaba’s Tmall Global and Kaola, at preferential duty rates and without a license to operate a business in China. At $5.8 trillion last year, China has the second-largest retail market in the world. Cross-border E-commerce in China is unique because of the Chinese method of doing business, and due to the specificities of the Chinese market itself. In 2019, China's cross-border e-commerce retail import market was valued at about 416 billion yuan, increasing from around 381.4 billion yuan in 2018. Given the large number of online shoppers, the trend of China cross-border e-commerce transactions is also worth noticing. Noticing users’ demand for buying foreign goods, XiaoHongShu launched its own China cross-border e-commerce platform, the “RED store” in 2014. To further attract foreign brands, Alibaba launched an English-language portal in 2019, which aims at assisting merchants with tasks such as opening shops on Tmall Global. Direkt an Deutschland angrenzende Länder wie Frankreich, Polen oder die Niederlande sind perfekte Kandidaten für weitere Verkaufsorte. By far, the State Council has approved five batches of 105 comprehensive pilot zones for cross-border e-commerce (CBEC pilot zones), covering almost all the provinces except for Tibet. Different from general trade, China’s CBEC retail importation program is designed to make it easier to import certain foreign goods for Chinese consumers’ personal use, in order to satisfy the growing domestic demand. The introduction of the CBEC new policies facilitates further growth and development of the market. Let’s walk through the important changes in policy in recent years. Some platforms like Tmall Global are difficult to enter as they mainly invite well-established, high-end brands. The rapid development of cross-border e-commerce in China has not only triggered a heated discussion on how to support and regulate cross-border e-commerce, but also attracted local governments to introduce more high-quality international brands through the import expo. Besides, most of the online shoppers are highly educated with over 61% own a degree or above. Cross-border e-commerce has become increasingly popular amongst Western brands and retailers looking to enter the China market for the first time. The Top 3 China Cross-border Ecommerce Platforms Read Now, #1: Tmall: The Biggest Player Backed by Alibaba, #2: Kaola: Direct Selling of Authentic Goods, #3: XiaoHongShu: Content-driven Platform for Beauty Lovers. According to the STA Announcement on Issues Concerning the Levy upon Assessment of Income Tax on Retail Export Enterprises in CBEC Pilot Zones (STA Announcement  No.36) released in 2019 and taken effect January 1, 2020, for the in-zone e-commerce export enterprises that meet certain criteria – corporate income tax (CIT) can be levied upon verification. If you have enquiries about products that can be sold to China, please feel free to contact us for detailed information! The major players include Tmall Global, Kaola and JD WorldWide. To fuel this engine of China’s import and export growth, Premier Li Keqiang reiterated the government’s support for accelerating the growth of CBEC and enhancing the country’s international shipping capacity in the 2020 Government Work Report. E-commerce facts & figures in China. These are extremely popular among global brands that already have a recognizable brand in China. Number of cross-border e-commerce companies in China 2019, by type. In China, it exists many online platform operating in cross-border e-commerce but the main Chinese key players are as followed: 37 cities (up from 15) are now included in the cross-border tax rebate. In the future, Koala will open bonded logistics centers in South China, North China, and Southwest China. In 2018 alone the marketplace introduced 122% more overseas brands, over 80% of which entered the Chinese market for the first time. The country should no … Gerade in Europa lohnt sich der grenzüberschreitende E-Commerce. Reducing the VAT levied on imported goods from 16% to 13%. The first differentiator is its focus on authenticity and quality assurance. Wichtig ist es aber vor allem, den richtigen Verkaufskanal in den genannten Ländern auszuwählen. cross border e-commerce in china, new way to sell in china Cross-border websites are online retailing platforms which connect Chinese consumers to International retailers . Demographic distribution of China Cross-Border E-commerce customers. Dieser bietet Unternehmen zahlreiche Vorteile: 90 Prozent der chinesische Käufer suchen ihre Waren auf Online-Marktplätzen. It helps to bypass intermediaries and minimize the risk of selling counterfeit goods, as well as lowering the cost and thus the selling price. Aligned with the mobile penetration rate, over 592 million people shop via mobile devices – indicating the importance of a mobile-friendly e-commerce platform for brands. This approach allows brands to fine-tune their product selection for the market without the need for a physical retail presence in China or significant investment in developing a logistics network. Upon completion of the deal, NetEase Kaola has changed its official name to Kaola Haigou. As China has been putting much effort into upgrading its manufacturing infrastructure, it is seeking opportunities to export products with higher value and margins. The CBEC retail imports can be divided into two modes of operation: Goods are purchased in advance and temporarily stored in a bonded warehouse in China. For tax rates in different product categories, please check the list here (in Chinese). 4. The following policies are applicable nationwide: According to the Notice on Tax Collection Policies for Retail of Exports in CBEC Pilot Zones (Cai Shui  No.103) released by the Ministry of Finance (MOF) and the State Taxation Administration (STA) in 2018, in-zone e-commerce export enterprises that have not obtained a valid proof of purchase (like input value-added tax invoice) are still allowed to be exempted from value-added tax (VAT) and consumption tax (CT) when exporting goods if they meet certain criteria. It has created a shopping cycle on the platform, which users. Cross-border e-commerce (CBEC) – activities of purchasing or selling products via online shopping across national borders – is gaining momentum in China. It is exciting news for foreign businesses as cross-border e-commerce is an efficient way to get a slice of the China retail market without actually setting up an offline store in the country. She loves yoga, drama and literature. مهرجانات. Retailer Case Study: Feelunique Learn how we helped Feelunique scale its e-commerce operations, starting with a China-optimized cross-border e-commerce website, mobile app, and WeChat mini-program, and later expanding to Tmall, JD.com, etc. By Mark Schaub, Chen Bing and Martyn Huckerby, King & Wood Mallesons . FedEx website… Around 47% of them receive a high salary with over 10,000 yuan monthly income. The number has been increasing year on year as T-Mall Global invites more and more brands onto the platform. Interestingly, 98.6% (816.98 million) used mobile devices to access the internet. The list goes on for nearly 100 pages, so read it carefully! It focuses on the direct selling of high quality and authentic commodities from around the world to Chinese customers. In 2018, China announced a series of new regulations which are designed to improve the regulatory framework of Cross Border E-Commerce (hereafter CBEC) retail imports and promote the development of this sector. Below we’ll introduce the 3 most popular cross-border e-commerce platforms in China. Save my name, email, and website in this browser for the next time I comment. Besides the innovative system and facilitating customs clearance procedures, the government has also rolled out favorable tax policies for in-zone e-commerce export enterprises. CBEC is becoming a more prominent channel for import and export in China. Foreign businesses that want to access the Chinese cross border e-commerce (CBEC) market first need to choose their model. For example, Hangzhou is the city where Hangzhou CBEC Pilot Zone was established. Please contact the firm for assistance in China at firstname.lastname@example.org. On top of that, Kaola has also gotten in on the trend of social e-commerce by having an online community called “种草社区” (Zhǒng cǎo shèqū). Im Cross-Border E-Commerce werden Produkte von Deutschland nach China verkauft. Also, many of China’s e-commerce giants provide various modes of warehouse and logistics support for overseas partners. Currently, Chinese cross-border e-commerce is growing at an estimated annual rate of 20-30%. 10 Most Popular Social Media Sites in China (2020 Updated), Luxury Brands: Localizing For Chinese Luxury Consumers, Double 12: The Sequel to Alibaba’s Single’s Day, 5 Ways to Pay Suppliers in China: An Analysis on The Pros & Cons, A Quick Guide on How To Optimize Your Chinese Content Marketing, Fashion and Apparels (Footwear, Accessories, Dresses etc. France – The fastest growing e-commerce segment in France is cross-border purchases. Being one of the largest China cross-border e-commerce platforms, Tmall Global currently hosts more than 20,000 brands in over 4,000 categories from 77 countries and regions. China cross-border e-commerce platforms offer different cooperation models for businesses with different needs. Since January 1, 2019, the government has increased the duty-free quota on a single transaction from RMB 2,000 (US$291.6) to RMB 5,000 (US$729) and the annual quota per person from RMB 20,000 (US$2,916.2) to RMB 26,000 (US$3,791) for retail imports, according to the Notice on Improving Tax Policies for Cross-border E-commerce Retail Importation (Cai Guan Shui  No.49). Other key cross-border e-commerce players include Rakuten (Japan) and JD.com (China). In this issue of China Briefing magazine, we offer foreign investors a practical guide to selling to China through CBEC. In view of Kaola’s great market share and growth potential. Now the country has a total of 86 CBEC pilot cities as well as Hainan island. With a focus on beauty and fashion, it acts as a platform for people to post and share shopping tips, product reviews, and lifestyle stories. Second, the focus is mainly on exports, which is expected to continue the rapid development trend. In the first three quarters this year, China's import and export through the customs cross-border e-commerce management platform reached 187.39 billion yuan ($28.03 billion), a year-on-year increase of 52.8 percent, Zhu said. Golden Week, China’s national holiday that spanned Oct. 1 to 8 this year, prompted a surge in domestic spending which drove a robust rebound in consumption as pandemic effects begin to recede. Chinese companies look to ride a new cross-border e-commerce wave driven by the coronavirus ... "There is a trend towards more direct shipping out of China through digital cross-border … They are perceived as being of good quality and innovative. Q3: How is the currency conversion handled throughout cross-border trade with China? Cross-border e-commerce keep growing and is expected to reach a 7.5 trillion RMB volume in 2017; 58 million users in China are expected to engage in cross-border transactions in 2017; Cross-border e-commerce market is very fragmented as opposed to local e-commerce market; Cross-border shoppers make frequent purchases between 300 RMB and 1,000 RMB E-commerce – the trade in goods and services via the Internet – has become a growing component of the global economy, and cross-border e-commerce a major topic of discussion for Customs authorities. In the last few years a great number of Platforms sprang up, such as Jumei Global Store, Daling, Amazon Global, B&G, Kaola.com, Suning Global, JD Worldwide and VIP International. In a move to facilitate CBEC import and export, local CBEC pilot zones are exploring innovative breakthroughs in the management of customs clearance, tax collection and management, foreign exchange supervision, cross-border financial services, and logistics. The new measures took effect on 1 January 2019, which opens up the cross-border market for luxury retailers who are selling high-end products. In this article, we’ll talk about some must-know rules and regulations, as well as introduce the top 3 China cross-border e-commerce platforms. The development of China’s e-commerce has captured the world’s attention with many foreign brands and retailers selling their products via cross-border e-commerce platforms. If the dutiable value of an item exceeds RMB 5,000 for a single transaction but is below the annual limit of RMB 26,000, it may still be imported via the standard China cross-border e-commerce retail channels. It also lowers thecost of doing business in China. As China continues on its path of economic recovery from the pandemic, smaller U.S. beauty brands are turning to Alibaba’s cross-border e-commerce to reach a Chinese audience. China is expected to become the largest ecommerce market in the world this year with USD 296 billion ecommerce value, … In recent years, there have been ID certificates of Legal Representative and Shareholder. According to China Internet Watch, as of December 2018, the total number of internet users in China has reached 829 million, which occupies 59.6% of the total population. From another perspective, it means that around 73.6% of China’s online population shop online! First, let’s have a look at what cross border E-Commerce means practically and in terms of shipping. This law aims to reinvent China’s reputation as a global e-commerce leader. What is China’s CBEC pilot zone program? Over these limits, consumers will need to pay full general import taxes, including tariff, VAT, and CT. A Bonded warehouse is a secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It is expected that China will scale-up favorable policies to support the growth of CBEC as well as roll-out further measures to regularize CBEC. China cross-border ecommerce retail imports market. Most zones are located in coastal regions like Beijing (1), Shanghai (1), and the provinces of Guangdong (13), Zhejiang (10), Jiangsu (10), Shandong (7), and Fujian (6). It has developed an extensive logistics network of 7 global fulfillment centers, 10 transportation hubs and 9 import clearance centers across 29 countries. In this scenario, consumers place an order through CBEC websites, then overseas suppliers or sellers directly deliver the products to China by post or express, mainly by air. Dutiable value is calculated on the basis of the transaction price appraised by Customs, which includes the price of the goods and packing, shipping, insurance, and other fees. Bei Direct Shipping werden die einzelnen Pakete in Deutschland verpackt und in konsolidierter Menge nach China gesendet. In November 1st, China implements a tariff cut on 1,585 imported goods. Digging deep into insights about China’s cross-border online shoppers, a majority of them (76.8%) aged between 18-34. It has led to strong share price growth of brands that have been particularly favoured by Chinese consumers. It connects Chinese consumers with global brands by enabling users to buy overseas products directly through the app. On a global scale, cross-border ecommerce habits vary widely. According to China Internet Watch, the China cross-border e-commerce retail import market is valued at 620 billion yuan (US$96.98 billion) in 2019. CBEC retail imports are regulated as items imported for personal use and can’t be re-sold. Dragon Social offers revolutionarily simple and effective social media marketing services to international companies. ), Supplements (Coenzyme Q10, Vitamin C & its derivatives, linolenic acids etc. Another option would be direct shipping from overseas to China, this is a cost-effective method for merchants who would like to test the market with a small number of products. With an increasing number of Internet giants and traditional retailers setting up their own CBEC businesses in China, the government has tried to be as supportive as possible to encourage further investment in the country. Through selling authentic and high-quality goods, Tmall has established itself as the destination for quality, brand-name goods catering to increasingly sophisticated Chinese consumers. Moreover, Chinese customers have a positive perception of foreign products. The full list of cities covered by the pilot zone program: Beijing, Tianjin, Shanghai, Tangshan, Hohhot, Shenyang, Dalian, Changchun, Harbin, Nanjing, Suzhou, Wuxi, Hangzhou, Ningbo, Yiwu, Hefei, Fuzhou, Xiamen, Nanchang, Qingdao, Weihai, Zhengzhou, Wuhan, Changsha, Guangzhou, Shenzhen, Zhuhai, Dongguan, Nanning, Haikou, Chongqing, Chengdu, Guiyang, Kunming, Xi’an, Lanzhou, Pingtan. Individual customers are the import taxpayers. For example, Hangzhou CBEC Pilot Zone, the first CBEC pilot zone in China, hosts established import e-commerce platforms (like Tmall Global, NetEase Kaola, and JD Worldwide), export e-commerce platforms (Jollychic and club factory), third-party payment platforms (Alipay), logistics companies (EMS, SF Express), and other enterprises providing supporting services, such as credit insurance, for CBEC businesses. The positive list is very long with around 1,321 types of commodities, but generally includes product categories such as: As the list greatly influences overseas businesses’ e-commerce operations in China, make sure that you have gone through the list before you make any significant investment. Diese Statistik bildet den Umsatz im Cross-Border-E-Commerce-Markt (B2C) in China im Jahr 2017 sowie eine Prognose für die Jahre bis 2022 ab. CROSS-BORDER E-COMMERCE IN CHINA Cross-border E-commerce in China is unique because of the Chinese method of doing business, and due to the specificities of the Chinese market itself. Cross-Border E-commerce in China: a convenient entry strategy. Cross-border eCommerce China's eCommerce channels generally require that any firm wanting to set up a web shop on its domestic eCommerce B2C channels to have a Chinese legal entity. And in June this year, retail e-commerce spend in China for 2019 was said to increase 27.3% to $1.935 trillion – making up 36.6% of total retail sales, according to digital data and research company eMarkter. For a single transaction exceeding a certain limit – RMB 1,000 (US$141.3) for mailed item from abroad or RMB 800 (US$113) for items from Hong Kong, Macao, or Taiwan, goods must be cleared and subject to general import taxes (Tariff, VAT, and CT), or they will be returned. Such substantial growth reveals a great market opportunity in China. As Chinese people rely a lot on peer-to-peer advice, it is beneficial for e-commerce platforms to build an online community to increase conversion rates. These pilot zones provide a streamlined system with simplified regulations for … In 2019, the number reached RMB 186.2 billion (US$26.25 billion), five times that of 2015, showing an average annual growth rate of 49.5 percent, according to the official data. Communication … To launch a store on Tmall Global, brands can choose from 3 main business models, which are Tmall Overseas Fulfillment, Tmall Direct Import, and Tmall Global Flagship store. Cross-border e-commerce in China holds a specific distinction.International companies are allowed to sell certain goods to Chinese consumersonline, through platforms such as Alibaba’s Tmall Global and Kaola, atpreferential duty rates and without a license to operate a business in China. 2018 war ein spannendes Jahr für die cross-border E-Commerce-Branche in China: Die chinesische Regierung hat die Kauflimits für cross-border E-Commerce gelockert und so den Markt für internationale Brands und Einzelhändler weiter geöffnet. Launched in 2013 by Miranda Qu and Charlwin Mao, XiaoHongShu, literally the “Little Red Book”, is a social e-commerce app with over 250 million registered users as of 2019. Policy makers think that the CBEC trade will help China diversify its trade links in the context of the One Belt and One Road Initiative and reshape international trade patterns amid US-China trade tensions. In the past, China was a key player for sourcing goods and exporting them to the world.For example, via dropshipping, Amazon FBA and so on. To get your products shipped in China, you can either develop your own logistics network (which is extremely difficult) or rely on 3rd party logistics providers or e-commerce platforms that you are cooperating with. Alibaba’s 11.11 online shopping extravaganza ended with a total GMV of $74.1 billion for the time period of November 1 to 11. It allows more brands to customize their storefront, allowing them to optimize the page to the best of their ability and maintain their brand image. XiaoHongShu provides customer service and full logistics support for partner brands. co-released the updated version of “Positive List for Commodities Traded through Cross-Border E-Commerce (2018)”, under which 63 new items categories were added to the positive list for cross-border trade, while the 2016 version was abolished. Foreign brands can expect that they are mainly selling to relatively young, high-end consumers. With the slogan “the world’s best lifestyle at your fingertips”. For retailers or brands who would like to expand their business through China cross-border e-commerce there are two major shipping models that they can consider, the bonded warehouse and direct shipping. Für den chinesischen Markt hat sich beispielsweise die Eröffnung eines Flagship-Stores auf einem der Cross-Border-Marktplätze, wie Alibaba oder Tmall Global bewährt. It focuses on preventing the sale of counterfeit merchandise, which has been a big problem for the industry. 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