The story appears on

Page A8

November 30, 2016

GET this page in PDF

Free for subscribers

View shopping cart

Related News

Home » Business » Biz Special

Holiday shopping is crossing borders in the global village

RETAIL merchandise isn’t the only import ushered in by China’s relaxed cross-border e-commerce regime. Western shopping customs, like last week’s Black Friday sales, are also emerging in the country.

Indeed, starting from China’s Singles Day on November 11 and extending through Thanksgiving, Christmas, New Year’s and Spring Festival, Chinese online retailers have geared up for a long season of brisk sales to domestic buyers wanting foreign goods.

The Ministry of Commerce stepped out of the way of the shopping juggernaut with a newly released notice announcing a one-year postponement of stricter regulations over cross-border imported merchandise.

Before the inauguration of free trade zones, Chinese buyers wishing to purchase goods from overseas had to navigate foreign e-tail websites, pay in foreign currencies, swallow shipping costs, pay customs duties and then, usually, wait a long time for delivery.

That system is being revamped by a relatively new cross-border e-commerce system since 2013, that allows both foreign and local retailers in free trade zones to import and store merchandise domestically, offer goods in the local currency and expedite home deliveries. It has been expanded to 10 cities in early 2016, resulted in booming trade.

In May, China’s General Administration of Customs announced a one-year moratorium on additional quarantine approvals for certain imported foods, cosmetics and medical devices sold through import e-commerce sites in 10 pilot zones, which was announced abruptly in early April.

Easier purchase

Under the trial program, 10 domestic cities, including Shanghai, Hangzhou and Ningbo, have allowed online vendors to dispatch imported goods from bonded domestic warehouse once consumers have placed orders, saving logistics costs and paring delivery times.

Commerce ministry spokesperson Sun Jiwen told a press briefing in mid-November that the postponement of tighter regulations is designed to ensure “stable development” of the industry and allow authorities to draw up a more “practical supervision scheme” for cross-border imports.

It’s not that the foreign goods are necessarily any cheaper than domestic merchandise. Orders dispatched from domestic bonded warehouses still draw consumption duties ranging from 15-60 percent, plus value-added tax where applicable. It’s that consumer have so much more choice and easier access to goods they consider of higher quality.

Buyers now have become accustomed to fast deliveries of imported goods through e-commerce sites, many of which offer promotional discount coupons.

In an interview with the China Economic Times, e-commerce researcher Zhang Li at the Ministry of Commerce said that the nation’s “positive list” of goods eligible to be sold through cross-border retail websites will be adjusted to include more items.

The Ali Research Institute, an arm of Chinese e-commerce giant Alibaba Group, estimates that cross-border retail import trading will grow 43 percent each year through 2020, hitting 1.5 trillion yuan (US$220 billion).

For now, estimates on exactly how much Chinese spend on foreign goods are imprecise because a large chunk of that merchandise arrives through personal mail parcels and purchasing agents.

In an emailed reply to Shanghai Daily, Kaola, the import-goods site of Chinese Internet operator NetEase, said booming cross-border e-commerce imports have accelerated upgrades in logistics and warehousing systems, which benefit the nation’s whole retail industry.

“It’s important for policymakers to expedite and simplify some of the process for time-sensitive merchandise, such as food and nutritional supplements,” the statement said. “It’s beneficial for vendors and consumers alike to raise regulatory efficiency.”

Cao Lei, director at the China E-commerce Research Center, said the new rules will encourage cross-border online retailers to adjust their operations and put more focus on services and infrastructure instead of resorting to price wars to lure buyers.

Industry insiders predict that required import approvals for merchandise sold through cross-border retailers will eventually be scrapped. With these new channels so popular with consumers nowadays, policymakers are expected to be cautious about any new rules that may hamper the industry.

Indeed, the business models of this new breed of e-commerce merchants are changing.

Hangzhou-based, a website that links to discount items on foreign shopping sites, allows consumers to place orders in yuan and have goods delivered to home addresses. It saves Chinese consumers the hassle of browsing through foreign-language websites. Haihu gets rebates from foreign vendors when orders are placed.

Currently, half of Haihu’s transactions involve European and US merchandise and half come from Japanese and Korean products.

These “cash-back” websites aggregate discount information for consumers but don’t have to invest in inventory and logistics, leaving choices to buyers themselves.

Wu Wentao, chief executive of Haihu, said most of its current discount information comes from US and Japanese websites. Instead of setting up its own dispatch centers, it’s working with several overseas logistics companies to handle orders during peak periods.

Haihu currently has hundreds of thousands of active daily users, with monthly volume of about 10 million yuan.

Smart seller

Shanghai-based is also sidestepping the headache of inventory. It sells through more than 30,000 overseas buyers offering more than 600,000 products. Purchasing agents work either with third-party courier services or with Ymatou’s proprietary logistics service to dispatch orders from overseas, giving users a wider range of choice compared with websites that sell through bonded warehouses.

YMatou founder and chief executive officer Zeng Bibo said his company is beefing up its logistics capabilities and its wholly owned logistics unit now charters 90 international cargo planes to China every week.

“Chinese consumers prefer individualized offerings, and that increases demand for products from smaller European countries instead of just US mainstream fashion and luxury brands,” he said. “We will be enhancing our delivery capability from these regions.”

The company has already more than doubled logistics services personnel in its 15 dispatch centers globally.

Overseas players are keeping close watch on the fast-growing cross-border retail market in China. Some are setting up their own presence; others are teaming up with existing giants.

Mitsukoshi Holdings, Japanese’s largest department store group, has paired with Alibaba’s Tmall in the imported merchandise segment this year. Initially, it is focusing on its own brands but plans to add other Japanese brands to its lineup.

US-based Amazon last month launched its Prime membership service, costing 388 yuan for Chinese subscribers. The service offers unlimited free cross-border shipping on orders of 200 yuan or more through Amazon’s global sites. The program now has subscribers from 270 domestic cities.

Backed by its 125 operations centers worldwide and its four domestic centers, Amazon promises delivery in five to nine working days for Prime members in 82 domestic cities. This year, 45,000 imported products were offered on Black Friday specials.

Cao at the China E-commerce Research Center noted that Alibaba and other mainstream e-commerce players have already made the purchase of import goods through online channels widely acceptable, and as the market expands, opportunities for smaller players will increase.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend