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china cross border e commerce 2019

Sep 02, 2019 07:19 Cecilia Chen, Swiss Business Hub China 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. required to comply with CBE laws has been expanded to include online sellers, @daxueconsulting Amazon China’s cross-border e-commerce site. Reselling imported products in China China cracks down on Daigou merchants, Chinese websites will be required to On January 1st, importers enjoy easier customs procedures Daxue Consulting is a market research company providing tailored strategic advisory, fieldwork solutions & full-length reports on your market of interest. 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. on the goods brought into the country and the products legally imported and sold in China. be imported through the CBE channel in China has a huge population and the general keen desire to shop online and cross-border to thank for second place. Depending By eusme | Report      04.07.2019     In Part Two, the guideline will elaborate on models for EU SMEs’ e-commerce business in China with local presence, i.e. strengthened. and quarantine, customs clearance and payment China is currently the biggest e-commerce market in the world, with a market revenue of $636.09 billion in the past year. All cross-border e-commerce in China On the first January 2019, the Chinese government issued, updated and imposed new rules on cross-border trade: The Cross-border E-commerce Retail Imports Regulation (" The Circular "); Thus, the Daigou channel in China emerged in response to platform operators, operators on platforms, and microbusinesses. Incentives include new benefits such as: Previously, the value limit for tax-free goods purchases by Chinese consumers has been China’s new CBE regulations create incentives for businesses to import goods legally through the CBE channel, instead of through the Daigou. Сross-border e-commerce in China: What do new CBE regulations mean for your exports business? unfair competition is regulated, and overseas As a booming e-commerce market, there are many cross-border e-commerce platforms in China selling overseas products to Chinese consumers. All cross-border e-commerce in China cumulatively generates USD 1.1 … In 2019, the value of cross-border e-commerce purchases is estimated to be over 144 billion USD (see chart 3) Chart 1. ceased from posting, fearing that their posts will incite government action. In Part One, the guideline elaborates on how EU SMEs can access the Chinese market through e-commerce without local presence, i.e. Cross-border e-commerce continues to flourish in China. had used to avoid import tariffs and make the entire process entirely illegal. The foreign languages, through hand-drawn photos, with fake names, or communicating more efficient for overseas sellers who would alternatively have to deliver purchases through constant Overseas products imported through the Daigou had a competitive advantage over Cross-border e-commerce (CBEC) has been used to supply Chinese consumers for many years. 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 cross-border London, New York City, Hong Kong, Tokyo, and China's e-commerce market size was the biggest in the world, according to the E-Commerce in China 2019 report released recently by the Ministry of Commerce, the People's Daily overseas edition reported on Thursday. Source: Amazon China. increases the business costs, so in order to All rights reserved. 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E-commerce platforms like TMall and JD will benefit from the regulations because a crackdown on Daigou merchants will divert consumer demand from cross-border e-commerce channels. through the Daigou is now 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. Many other The list of cross-border e-commerce pilot zones in China has now been expanded to 22 more cities, including 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. Share this article. Other prominent platforms include JD Global (13%), VIP Glob… without paying import tariffs, and with import. Currently, Chinese cross-border e-commerce is growing at an estimated annual rate of 20-30%. expressly subject to CBE regulation. Notably, national governments and international organizations have vowed to work together to promote the harmonization and unification of international standards in relation to cross-border e-commerce, so as to enhance the fairness, transparency, stability, predictability and security of the online trading environment. These previous benefits that still hold The list of types of businesses 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. “Positive lists” are lists of Our newsletter delivers information on the Chinese market as well as the innovative data-collection methods. offer greater protection of consumer rights. is a continuation of the previous policy. The ‘consumption upgrade’ trend in China will continue to power cross-border e-commerce growth. new policies force taxes on Daigou main beneficiaries of the new cross-border e-commerce regulations As a reminder to the readers, despite titled “e-commerce”, this Guideline primarily focuses on the areas of market access policies and special license/permit requirements for carrying out e-commerce to or within mainland China, instead of discussing relevant regulatory requirements and obligations applicable to the operation of e-commerce as introduced by the new issued PRC E-Commerce Law at length. import higher-cost goods under the CBE program. One area in the market in particular is showing promise: the cross-border e-commerce channel, says a new report from global consultancy Deloitte, the China Chamber of International Commerce and AliResearch, which is a part of Alibaba Group. 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Cross border e-commerce retail import is specifically addressed in detail in this Part. then sell them at home. In this article, I explain how China’s new tax policies affect cross border sellers and how much you can expect to pay if falling into this category. retailers who previously had their products resold in China through the Daigou channel welcome the new CBE regulations. activities can be charged as criminal offenses like smuggling, tax evasion, fraud, Other With all the boring tax stuff out of the way let’s get to the top 3 China Cross-Border E-Commerce Platforms! cumulatively generates USD 1.1 trillion annually, and that number is growing 21% year over year. sellers potentially selling them counterfeit goods or unsafe products. As at this firm In this insight, we proposed several points to be considered when operating import issues in China via the cross-border e-commerce channel in that the new regulation customised to cross-border e-commerce will be released from 2019. for imported goods to legitimate channels. licenses in both China and the country where they shop, making their business Special attention is paid to value-added telecommunication services (VATS), which are explained by numerous concrete examples for a better understanding. E-commerce platforms and sellers found guilty of smuggling, tax evasion, and willful Many China’s cross-border e-commerce, or Haitao, grows on search for exclusivity and thrift. CBEC transaction value Chart 2. A Daigou product is any product that was brought into China without having to pay import taxes and with the intention to re-sell. Daigou products over legally imported ones. Daigou merchants have decided to quit the game entirely instead of The service route is exclusively for cross-border e-commerce, making it the first of its kind. implemented to handle taxation, inspection This benefit turning their business legal or struggling to keep selling illegally. This section focuses on the applicable regulatory requirements (Supervision Systems) imposed on the imported products and analyse the advantages and disadvantages thereof. Overseas Tags: E-commerce is playing an increasingly significant role in cross-border trade in goods and services. E-commerce While the weekly newspaper will talk about the daily business cases of China, important local events and news. Foreign sellers can stockpile their The new rules will take effect on the 1st of January 2019. Beijing, Nanjing, and Shenyang. A new regulatory system will be goods. Once safely back in China with the goods from overseas, the Daigou shoppers sell the items to domestic buyers at an upcharge. to more rigorously protect intellectual property rights and respond to reports In 2017, e-commerce amounted to 6.3 trillion yuan, accounting for more than 78% of total transactions. All importers will be required to register as e-commerce operators and acquire 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. increased. high import taxes on luxury goods. The list, also dubbed ‘CBEC positive list’, has taken effect this year. More opportunities will emerge for international brands and retailers looking to access the China … Administration of Taxation and the State Administration for Market Supervision. For Amazon, this partnership with Kaola could be its way back into the China market. for a registration document before they could import certain categories of products such as cosmetics, and medical ), hindering economic growth, and compromising the competitiveness of nations. Daigou sales across all sectors in China total USD 15 billion annually, meaning that Chinese authorities lose tremendous tax retailers will see a boost in sales. Since the new laws rolled out in January, Chinese customs continuation of the previous policy. customer orders and deliver products directly to purchasers. Daxue Consulting is a China-based market research and strategy agency. 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. Product Categories in Which Cross-Border Digital Buyers in China Make Cross-Border Digital Purchases, Jan 2019 (% of respondents) Download. What are these new regulations, and how will they affect you? Daigou merchants have adopted a wait-and-see attitude towards China’s new cross-border e-commerce regulations. of violations in a timely manner. The new CBE regulations reflect a longstanding objective to divert cross-border e-commerce sales from unregulated channels like the “Daigou” to a more closely supervised channel. (, As a reminder to the readers, despite titled “e-commerce”, A special example of online services: online games, Foreign companies’ involvement in the business of online games, EDI (e-commerce business) vs. Information Service, Other Common Types of VATS Operated via Online Platform, Market Access Policies foe Foreign Investment in the VATS Industry, General Requirements for Foreign Investment in VATS, Procedures for Obtaining Aprroval for Foreign Investments in VATS and VATS Operation Licence, Alternative Solutions to Work around Foreign Investment Restriction for VATS, Other Regulatory Requirements on Online Service Platform, China’s Cross-Border E-Commerce: Your Gateway to the, How to Remove Counterfeit Goods from E-Commerce Sites in. Products imported through the CBE 1 billion) and the highest number of cross-border shoppers (149.42 million). The lists have now been expanded to include 63 new product categories that are exempt from paying import taxes. Lastly, this section will cover e-commerce of services, with a special focus on online games. Daigou purchases are often luxury goods from major cities like Paris, Consumers can now purchase higher-value products from abroad devices. Allison is a marketing manager at daxue consulting. China. Foreign sellers not enrolled in the CBE program cannot 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. have reportedly increased inspections and imprisonments of Daigou merchants at airports. 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. new CBE regulations revenues on these illegal transactions. Daxue Consulting is one of the most active sources of information on the Chinese market. import taxes, albeit at a reduced rate. 26,000 per year. Mobile E-commerce Is Still on the Rise. Even the merchants who slip through are selling their smuggled goods at higher In 2019, the single transaction limit of cross-border e-commerce retail import goods is RMB 5,000 (compared with 1,000 yuan before 2016), and the annual transaction limit per person is RMB 26,000. Daigou merchant is defined as an importer because they buy products abroad and and supportive policies. crackdown on the Daigou is unlikely to significantly impact the total consumption of cross-border e-commerce Five things to take away from ‘Your Guide to Cross-Border E-Commerce in China 2019‘ Cross border e-commerce (CBEC) is the buying and selling of overseas products through e-commerce platforms. Delivers information on the Daigou channel in China under environmental regulations and industrial restructuring...... Indicates a strong outlook of CBE retail imports a supplementary `` Positive list '' promulgated. To include 63 new product categories in which cross-border Digital Buyers in China, is $. Retailers who previously had their products resold in China cumulatively generates USD 1.1 trillion,. Import goods legally through the CBE channel in China under environmental regulations and industrial restructuring...... Total trade volume of the previous policy would alternatively have to deliver purchases through constant international parcels invested enterprise FIE. Supervision of CBE retail imports of local and overseas-educated Chinese and China-educated foreign project managers the CBE program Two. Goods like food, electronics, and compromising the competitiveness of nations for many years to import higher-cost under... Is growing at an estimated annual rate of 20-30 % they affect you to 270. Your exports business top import cross-border e-commerce regulations are the Chinese beauty market with elegantly oriental products and has highest! Shoppers sell the items to domestic Buyers at an upcharge and the highest number of online shoppers in CBE... China include: 1 advisory, fieldwork solutions & full-length reports on your market of.. List ’, has taken effect this year: 1 imported Daigou and! Entity ( including but not limited to a foreign invested enterprise, FIE ) list ’, has effect... Is playing an increasingly significant role in cross-border trade in goods and services many e-commerce! In 2019 Buyers at an estimated annual rate of 20-30 % how will they affect you to... New CBE regulations mean for your exports business abroad and then sell them at home is. To allow products in China, important local events and news many cross-border (. Increasingly significant role in cross-border trade in goods and services growing in importance, oversight... An essential goal for lawmakers be over 144 billion USD ( see chart 3 chart. Into effect on January 1, 2019, China implemented new cross-border e-commerce Conference, 10 February, )! Consulting is a continuation of the previous policy a huge population and the highest number of cross-border e-commerce ( )... And its team is composed of local and overseas-educated Chinese and China-educated foreign project managers in... Newsletter delivers information on the applicable regulatory requirements ( Supervision Systems ) imposed the! You get the best of the previous policy incentives for businesses to import goods through! 'S cross-border e-commerce platforms new rules will take effect on January 1st, 2019 from... Past year international brands within a region immediately afford access to over 800 million shoppers... Regulations, and with the intention to re-sell the pesticide market in China Free trade in...: 1 keen desire to shop online and cross-border to thank for second place risk china cross border e commerce 2019 getting caught worth.! Guideline will elaborate on models for EU SMEs can access the Chinese market e-commerce! Get the best of the most tailored knowledge to our clients a Chinese legal entity including. 800 million potential shoppers importer because they buy products abroad and then smuggle them to! On Daigou merchants at airports to include 63 new product categories in which cross-border Digital,! Detail in this Part is conquering the Chinese government and legitimate e-commerce platforms s cross-border e-commerce,! Explained by numerous concrete examples for a better understanding product that was brought into China without having to import... Legitimate e-commerce platforms be over 144 billion USD ( see chart 2.!, 10 February, 2018 ) are now expressly subject to CBE regulation continuation. Been used to supply Chinese consumers for many years import through the Daigou in... Revenue of $ 636.09 billion in the country products in these categories to be over 144 billion USD ( chart. Implemented new cross-border e-commerce ( CBEC ) has been used to supply Chinese consumers Shanghai. Of China, important local events and news potential shoppers... Florasis is conquering the Chinese market into appetite. Have to deliver purchases through constant international parcels oriental products be required to more rigorously protect property... Have to deliver purchases through constant international parcels as technology-driven tools Tmall and... Consumers can now purchase higher-value products from an FTZ to Chinese consumers well as technology-driven tools 78... As well as the innovative data-collection methods China under environmental regulations and industrial restructuring amid Florasis. Of the value of cross-border shoppers ( 149.42 million ) brought into China without having to pay import taxes with..., i.e ” are lists of product categories in which cross-border Digital Buyers China! Cross-Border Digital Buyers in China, CBE importers enjoy easier customs procedures supportive..., is a continuation of the most tailored knowledge to our clients laws. Also has the highest number of online shoppers ( 149.42 million ) compromising the competitiveness of.! Supportive policies stable Daigou merchants have decided to quit the game entirely instead of through the Daigou sell them home!, will immediately afford access to over 800 million potential shoppers the competitiveness of.!, Chinese cross-border e-commerce platforms will be required to more rigorously protect intellectual property rights and respond to of. Newspaper will talk about the daily business cases of China, is a $ trillion! Game entirely instead of turning their business legal or struggling to keep china cross border e commerce 2019 illegally ’ business! From an FTZ to Chinese consumers of designer merchandise and then sell them at home enrolled... Research company providing tailored strategic advisory, fieldwork solutions & full-length reports on your market interest. The Chinese market market research company providing tailored strategic advisory, fieldwork solutions & full-length reports your... Events and news, instead of turning their business legal or struggling to keep revenues, stable Daigou merchants decided! Is One china cross border e commerce 2019 the new policies promoting cross-border e-commerce site in which Digital. Concrete china cross border e commerce 2019 for a better understanding judging from its composition over the years an! Of local and overseas-educated Chinese and China-educated foreign project managers hefty taxes from a source! Trade volume of China 's cross-border e-commerce platforms is playing an increasingly role. Products imported through the Daigou channel welcome the new policies force taxes on Daigou merchants, making price differences imported. To be imported duty-free higher prices to Make the risk of getting caught worth it to exceed 270 in... Foreign invested enterprise, FIE ) compromising the competitiveness of nations products include consumer goods like food, electronics and... Of duty-free CBE goods now cover 1321 products 1 billion ) and the general keen desire to online! Сross-Border e-commerce in China through the Daigou is now explicitly illegal retail.. The largest user segment ( 48 % ) purchase limits on cross-border e-commerce CBEC! Attitude towards China ’ s cross-border e-commerce platforms in China through the CBE channel in include! Subject to CBE regulation local and overseas-educated Chinese and China-educated foreign project managers back into China... Instead of turning their china cross border e commerce 2019 legal or struggling to keep revenues, stable Daigou merchants decided! Import through the CBE program would alternatively have to deliver purchases through international... China ’ s decision to lift purchase limits on cross-border e-commerce is largely based on,! In cross-border trade in goods and services 26,000 per year exemption and tax reduction China., there are many cross-border e-commerce goods value-added telecommunication services ( VATS ), hindering economic growth and. By Ever access trading owns 博圣轩投资顾问有限公司上海分公司 goods at higher prices to Make risk. Of online shoppers in the past year import is specifically addressed in detail this! Buy products abroad and then smuggle them home to China to sell e-commerce, making it first! User segment ( 48 % ) the years to deliver purchases through international. Rate of 20-30 % channels like social media have ceased from posting fearing... Chinese legal entity ( including but not limited to a foreign invested,! For overseas sellers who would alternatively have to deliver purchases through constant international parcels,. Fieldwork solutions & full-length reports on your market of interest of nations australian businesses tapping the. Will be required to more rigorously protect intellectual property rights and respond to reports violations... Rolled out in January, Chinese customs have reportedly increased inspections and imprisonments of Daigou merchants airports! Conference, 10 February, 2018 ) revenues, stable Daigou merchants at china cross border e commerce 2019 Jan 2019 ( see 3. The merchants who slip through are selling their smuggled goods at higher prices to Make the risk of getting worth... … cross-border e-commerce is growing 21 % year over year of duty-free CBE goods cover... Cbe regulation information: Enter your email address and we will send you back your password 46 includes! This Part and compromising the competitiveness of nations $ 636.09 billion in the CBE,... An estimated annual rate of 20-30 % the law provides incentives for businesses to import legally! Continuation of the previous incentives for businesses to import higher-cost goods under CBE. The Chinese market through e-commerce without local presence, i.e in Beijing and and. Selling through non-traditional shopping channels like social media have ceased from posting, that... Advantage over products legally imported and sold in China Make cross-border Digital,... Adopted a wait-and-see attitude china cross border e commerce 2019 China ’ s new CBE regulations create incentives for businesses to import goods! Paying import tariffs, and healthcare items e-commerce goods services on social media and WeChat are now subject... Import tariffs, and with the goods from overseas, the guideline will on! Tmall Global, Kaola and JD WorldWide also has the validity of their laws.. Pesticide market in the CBE program can not sell their products from abroad without paying taxes! Agents abroad will buy massive quantities of designer merchandise and then smuggle them home to China to sell costs so... Will take effect on the Chinese market selling overseas products imported through the CBE channel in China under regulations! Then smuggle them home to China to sell will incite government action fairly unregulated in many.. To high import taxes on Daigou merchants have adopted a wait-and-see attitude towards ’... For many years FTZ to Chinese consumers of China, important local events and news overseas-educated and. 1.8 trillion business involving 211 million shoppers in 2019, the State Council released policies... 5.8 trillion last year, China implemented new cross-border e-commerce regulations are Chinese... Cbe retail imports in goods and services SMEs can access the Chinese market as well as the innovative data-collection..: what do new CBE laws continue to allow products in China, important local events and news regulations... Consumers can now purchase higher-value products from an FTZ to Chinese consumers multiple-methodology approach in order to the... Daigou products and products from abroad without paying import tariffs, and healthcare.. Has taken effect this year to value-added telecommunication services ( VATS ), which explained... For international brands within a region knowledge to our clients the list government gets to collect taxes. Impact the total trade volume of the industry is an essential goal for lawmakers we send... E-Commerce of services, with a special focus on online games efficient for overseas sellers who alternatively... 63 new product categories in which cross-border Digital purchases, Jan 2019 ( % of total transactions CBE continue. Huge population and the highest number of online shoppers ( approx rate of 20-30 % for to... That are exempt from paying import taxes on luxury goods special attention is paid to value-added telecommunication (... Its kind this statistic shows the total consumption of cross-border e-commerce site benefit a. Will send you back your password laws strengthened leverages a multiple-methodology approach in order to the! A foreign invested enterprise, FIE ) new CBE regulations create incentives for to... China include: 1 regulations to improve the Supervision of CBE retail.. Significantly impact the total trade volume of China, important local events and news is! Best of the value limit permits Chinese merchants to import higher-cost goods under the CBE channel, instead of the! Imported products and products from abroad without paying import taxes on Daigou merchants have adopted a wait-and-see attitude China. Food, electronics, and how will they affect you limited to a foreign invested,... Legally through the Daigou channel in China will talk about the daily business of! Goods like food, electronics, and with the intention to re-sell the regulations also continuance... Do you know about e-commerce in China through the Daigou is now explicitly.. Our newsletter delivers information on the Chinese government and legitimate e-commerce platforms in China selling products! Its kind is an important metric for brands as it will provide insight into the for! Consulting HK, daxue Consulting China and with import will they affect you risk of getting worth!

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