All cross-border e-commerce in China cumulatively generates USD 1.1 … Cross border e-commerce retail import is specifically addressed in detail in this Part. daxue consulting is owned by Ever Access trading Limited, Ever access trading owns 博圣轩投资顾问有限公司上海分公司. Daigou merchants have decided to quit the game entirely instead of retailers who previously had their products resold in China through the Daigou channel welcome the new CBE regulations. Daxue Consulting is a market research company providing tailored strategic advisory, fieldwork solutions & full-length reports on your market of interest. According to the latest ECRC (E-commerce Research Center) report, transaction value of Chinese cross-border e-commerce topped US$1.3 trillion in 2018 and is expected to reach US$1.5 trillion in 2019. “Positive lists” are lists of cumulatively generates USD 1.1 trillion annually, and that number is growing 21% year over year. Consumers can now purchase higher-value products from abroad The Chinese government’s decision to lift purchase limits on cross-border e-commerce (CBEC) indicates a strong outlook. goods. increased. The government sometimes cost as much as 4 times what As per the report, there were more than 900 million online shoppers in 2019. In 2017, e-commerce amounted to 6.3 trillion yuan, accounting for more than 78% of total transactions. of violations in a timely manner. Many These previous benefits that still hold All cross-border e-commerce in China Daigou sales across all sectors in China total USD 15 billion annually, meaning that Chinese authorities lose tremendous tax China’s new CBE regulations create incentives for businesses to import goods legally through the CBE channel, instead of through the Daigou. Foreign sellers can stockpile their activities can be charged as criminal offenses like smuggling, tax evasion, fraud, turning their business legal or struggling to keep selling illegally. sell their products from an FTZ to Chinese consumers. Product Categories in Which Cross-Border Digital Buyers in China Make Cross-Border Digital Purchases, Jan 2019 (% of respondents) Download. Yet it has been fairly unregulated in many aspects. Daigou merchants have adopted a wait-and-see attitude towards China’s new cross-border e-commerce regulations. We also post daily on Western and Chinese social media up-to-date articles on various markets in China and we have been regularly quoted in many media such as The Financial Times, The Wall-Street Journal, South China Morning Post or China Daily. The major players include Tmall Global, Kaola and JD WorldWide. have reportedly increased inspections and imprisonments of Daigou merchants at airports. prices to make the risk of getting caught worth it. the merchants are forced to obtain licenses, register as businesses, and pay Chinese marketplaces quiz – How much do you know about e-commerce in China ? The lists have now been expanded to include 63 new product categories that are exempt from paying import taxes. New cross-border e-commerce regulation (published November 2018 – apply from January 2019) The Chinese Ministry of Finance announced in November a new set of regulation affecting cross-border purchases. According to the policies, China’s Ministry of Finance will add 63 categories of products to the list of goods that are duty-free when purchased via cross-border e-commerce platforms, including popular consumer goods like electronics, small home appliances, food, and healthcare products. A supplementary "Positive List" was promulgated on April 15, 2016, adding 151 more commodity categories to the list. E-commerce The service route is exclusively for cross-border e-commerce, making it the first of its kind. This benefit Businesses selling through The cross-border e-commerce industry in China E-commerce sales in China currently account for 24% of all retail sales domestically, and the channel is expected to grow by another 10% in 2019. Once safely back in China with the goods from overseas, the Daigou shoppers sell the items to domestic buyers at an upcharge. Allison is a marketing manager at daxue consulting. © Daxue Consulting, Daxue Conseil, Daxue Consulting HK, Daxue Consulting China. Now that Daigou products and legally imported products cost around the same, Cross-Border E-Commerce consumers in China (2014 - … China is currently the biggest e-commerce market in the world, with a market revenue of $636.09 billion in the past year. (Beijing Declaration, First Global Cross-Border E-Commerce Conference, 10 February, 2018). In late November, the State Council released new policies promoting cross-border e-commerce, which came into effect on January 1, 2019. had used to avoid import tariffs and make the entire process entirely illegal. Seoul. import higher-cost goods under the CBE program. This high import taxes on luxury goods. In 2019, the value of cross-border e-commerce purchases is estimated to be over 144 billion USD (see chart 3) Chart 1. China. The relaxation of the value limit permits Chinese merchants to Share this article. will benefit from purchasing goods from credible and legally liable retailers, gets to collect hefty taxes from a new source and has the validity of their laws they are buying, or think they are buying. The Australian businesses tapping into the Chinese CBEC market, will immediately afford access to over 800 million potential shoppers. Daxue Consulting now has offices in Beijing and Shanghai and its team is composed of local and overseas-educated Chinese and China-educated foreign project managers. Consumers You have a question on how to benefit from new regulations, do not hesitate to get in touch with our experts at dx@daxue-consulting.com who already has ideas of the solutions for you. Cross-border e-commerce continues to flourish in China. What are these new regulations, and how will they affect you? In Part One, the guideline elaborates on how EU SMEs can access the Chinese market through e-commerce without local presence, i.e. EU SMEs can sell their goods and services through their own platform, or opt to join a third-party platform, either located in or out of mainland China. year. platforms and sellers found guilty of smuggling, tax evasion, and willful Mobile E-commerce Is Still on the Rise. 25-34 years-old are the largest user segment (48%). While it lacks in market share and its platform lacks a localized Chinese user experience, Amazon does have a strong global supply chain and an extensive network of quality suppliers from around the world. The ‘consumption upgrade’ trend in China will continue to power cross-border e-commerce growth. goods in China’s designated free trade zones (FTZ), from where they can fulfill Daigou merchant is defined as an importer because they buy products abroad and The two Circulars were Сross-border e-commerce in China: What do new CBE regulations mean for your exports business? strengthened. The law provides incentives for business to transact through the CBE channel and an enforcement mechanism against illicit operations. and legal exploitation. Cross-border e-commerce (CBEC) has been used to supply Chinese consumers for many years. e-commerce laws warn parties to more rigorously protect intellectual property rights and respond to reports Since the new laws rolled out in January, Chinese customs The list of cross-border e-commerce pilot zones in China has now been expanded to 22 more cities, including more efficient for overseas sellers who would alternatively have to deliver purchases through constant items. The monthly report will allow you to keep track of the most important upcoming events about China around the world, as well as not to miss useful articles and reports. This practice is China’s cross-border e-commerce, or Haitao, grows on search for exclusivity and thrift. explicitly holds the overseas sellers and their designated Chinese partners GLOBAL ECOMMERCE MARKET RANKING 2019 - 13 CROSS BORDER SHOPPING As consumer trust for eCommerce grows, a significant amount of online shoppers are now shopping across borders. new CBE regulations luxury shoppers found that 35% have used the Daigou Even the merchants who slip through are selling their smuggled goods at higher channel are exempt from customs duties, and import VAT and consumption taxes are collected at a 30% discount. Luxury goods in China can Many other For SMEs, cross-border e-commerce platforms have become increasingly important venues for accessing global market, because of a much lower entry cost associated with capital investment and human resources, as well as greater opportunities to expand customer base comparing to traditional international trade. Daigou products over legally imported ones. Daigou shoppers buy the desired goods outside of China, and then mail the goods back or re-enter China posing as tourists, concealing their purchases or carrying in quantities as ‘personal items’ under the threshold for customs declaration. That limit has now been raised 150% to RMB 5000 per shipment and RMB A new regulatory system will be by establishing a Chinese legal entity (including but not limited to a foreign invested enterprise, FIE). The Cross Border Summit is an annual conference bringing together top e-commerce cross border business leaders from around the world to share expertise about business strategy, marketing, team building, and other strategies to stay ahead in today’s global world. On 2 March 2019, a new China-Euro express train departed from Zhengzhou, capital of central China’s Henan province, for Liège in Belgium. The It also has the highest number of online shoppers (approx. purchases by Chinese consumers has been importers enjoy easier customs procedures Overseas products imported through the Daigou had a competitive advantage over the Ministry of Finance, the General Administration of Customs (GAC), the State Having taken effective measures, such as streamlining procedures for revenue collection, platform interfacing, etc., to support the growing cross-border e-commerce flows, China has become a "role model” for trade facilitation with regard to cross-border e-commerce, which helps China become the world’s No.1 e-commerce market. for imported goods to legitimate channels. expressly subject to CBE regulation. Other prominent platforms include JD Global (13%), VIP Glob… tighten up loopholes that Daigou shoppers main beneficiaries of the new cross-border e-commerce regulations customer orders and deliver products directly to purchasers. Daxue Talks 4: How to start an online business in China, Daxue Talks transcript #3: Cross-border e-commerce in China in 2019, China Paradigm 70: Selling health supplements in China, a promising market, Chinese Retail Market: Chinese Consumer Embraces O2O Services, Music streaming platforms in China: profiting with minuscule subscription fees. increases the business costs, so in order to from cross-border e-commerce channels. A total of 803 million Chinese consumers, or 58 per cent of the Chinese population, makes day-to-day purchases via different eCommerce channels in China. A significant amount of cross-border e-commerce in China was previously done through the grey channel known as ‘Daigou.’ Daigou ( 代购), literally ‘Surrogate Shopping’ or ‘buy on behalf’ is a form of cross-border importing in which a group or individual outside of China buys goods and then illegally circumvents Chinese import tariffs on their purchases. against exploiting the tax reduction benefit of the new CBE program, and The lists of duty-free CBE goods now cover 1321 products. The "Positive List" on "Cross-Border E-Commerce of Imported Commodities at Retail" (hereinafter referred to as the positive list) was first released on April 7, 2016 by 11 China government departments, including 1,142 commodity categories. Products imported through the CBE Jing Wang | November 7, 2019 . However, in certain markets, regulatory requirements regarding cross-border e-commerce fail to keep up with the dynamics and trends of e-commerce in terms of their efficiency and effectiveness, posing substantial challenges for a more positive role for the Customs (with regard to trade facilitation, revenue collection, general security etc. This 46 pages-guideline includes the following information: Enter your email address and we will send you back your password. Daigou purchases are often luxury goods from major cities like Paris, Follow With Haitao, as cross-border e-commerce is known in China, is a $1.8 trillion business involving 211 million shoppers in the country. unfair competition is regulated, and overseas In Part Two, the guideline will elaborate on models for EU SMEs’ e-commerce business in China with local presence, i.e. Traditional methodologies as well as technology-driven tools between imported Daigou products and analyse advantages... 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