New Opportunities for Cross-border E-Commerce

In 2014, China’s total number of internet users reached 649 million (CAGR 17.5%) while number of online shoppers grew to 316 million (CAGR 32%), which is roughly the size of the entire US population.iloveshopping

E-Commerce accounted for 10% of China’s total retail sales in 2014 and has been forecast to reach 20% by 2017.

 

According to Steven Zhong, associate director of PwC Operations Consulting Department, over half of Chinese consumers use e-commerce to shop with overseas retailers particularly for clothing.

ladysittingoncomputerThe Chinese government has relaxed policies on customs and foreign exchange to spur cross border shopping.

 

Cross-border commerce accounted for 14.8% of China’s total foreign trade in 2014 and is expected to climb up to ¥6.2 trillion (US$ 1 trillion) by 2016. Innovative projects like the cross-border E-Commerce pilot zone in Alibaba’s heartland, Hangzhou, will fuel the development, setting the standard for procedures and supervision of E-Commerce transactions including tax refunds.

 

The launch of Tariff Free Zone (TFZ, 保税区) is a big step forward of cross border ecommerce in China.

4 characteristics:

  • No Chinese legal entity required for overseas companies
  • Receive sales proceeds in foreign currency
  • Reduced customs duty
  • No income tax

 

 

 

Tmall Continues To Lead Ecommerce in China

tmall1According to Steven Zhong, associate director of PwC Operations Consulting Department, by 2018 China is expected to eclipse the US as the world’s largest B2C ecommerce market. With more spending shifting to mobile, Tmall’s dominance is expected to continue.
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According to iResearch and Emarket(2014), Tmall dominated both online and mobile channels.

Tmall International, as a branch of Alibaba, was officially launched in 2014.

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Tmall International has stricter specification for retailers in order to provide high-quality services to customers.

First of all, the retailers on Tmall International should be an overseas legal entity. Further, it is preferred if the overseas entity operates for over 2 years with annual revenue over USD 10 million.

The overseas entity must be the brand owner or authorized brand agent with a full documentation of purchase vouchers.

What’s more, the after service and goods return recipient shall be provided in mainland China. Services that iQubator Fashion can provide if you are eager to sell on Tmall International.

Nowadays, cross border ecommerce is a hot topic in China, and therefore Alibaba has focused more on cross border ecommerce. It will be more likely and easier for international brands to get into China through these channels.

Latest Duty Regulations in China

Duty regulations are changeable in China. As the cross-border ecommerce is becoming more and more popular, the Chinese government also tries to catch up with this trend.

As we all know, there are several types of cross border ecommerce. The first one is sales though a global website, the second one is sales through bonded warehouse and the third is sales through a Chinese website.

In the first two cases, if the imported packages by mail for personal use have a total value of RMB1, 000 or less, or the package only contains 1 article with the exceeding RMB1,000, China Customs uses an “assessed value” approach to impose customs duties.chinacustom

There are 4 ranks of customs duty rates (i.e. 10%, 20%,30% and 50%). And articles having a customs duty payable of RMB 50 or less can be imported free to duty (Personal Parcel Exemption), unless the articles belong to “20 commodities prohibited from duty exemption”, such as camera and TV. There is no VAT for this type of cross border ecommerce.

On the other hand, if the imported package by mail having a total value exceeding RMB 1,000(except for only 1 product contained),it should be regarded as a “general goods”, rather than as an article for personal use purpose. Duty and VAT are payable based on the commercial value of imported goods. The duty rates are based on the HS codes of the imported goods.

Starting June 1, imported goods such as skincare products, cosmetics, sneakers, diapers, and other daily use products will become less expensive as tariffs will be reduced by almost two-thirds in some cases.

Revised taxes on imported goods include: a 7-10 percent tariff on Western clothing goods, down from 14-23 percent; a 12 percent tariff on footwear, down from 22-24 percent; a 2 percent tariff on cosmetics, down from 5 percent; a 2 percent tariff on skin care products, down from 6.5 percent; and a 2 percent tariff on diapers, down from 7.5 percent.

The Ministry of Finance explained the temporary adjustments are intended to stabilize economic growth and stimulate domestic consumption.

New Consumer Rights Law for Goods Return in China

According to a revised “Consumer Rights Law in China”, online shoppers can now return the goods unconditionally for refunds within seven days of purchase but they have to shoulder logistics cost.

It also lists products not suitable for unconditional returns and refunds, such as digital products sold via downloads, audio-visual goods with the packaging removed, bespoke products, fresh and perishable goods, magazines, newspapers and software.

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Consumers can seek compensation from online trading platforms if the platforms fail to provide contact details for vendors using their networks. After compensating consumers, the platforms are entitled to claim compensation from the vendors.

Each coin has two sides. As to the cons of ecommerce, the brand needs to establish delivery mechanism, set up goods return option and build customer confidence in the market. Especially Chinese consumers are used to the return policy. According to PwC, Total Retail Survey(2015), Chinese consumers concern more about online purchase returns available in-store(74%) than global range(67%). So if you want to expand your market into China through online channels, it’s necessary to have a returns point in mainland China. Also because of this new policy, the rate of turns increases a lot.

So get prepared before you enter China through ecommerce channels.  iQubator is willing to help any international brands to get familiar with Chinese market and consumers and provide customized services according to your own business plan and strategy.

The Little Dior Theatre in Shanghai

Today The Little Dior Theatre is held in IFC Mall in Shanghai for one month. It takes us back to an event that struck Parisian hearts and minds in 1945.From the tiny Bar ensemble to miniature ball gowns, they encapsulate all the essence and spirit of Dior in the delicate proportions of a doll’s house.7f025a97jw1esc6bbugsqj20qt11utgg

There are 11 sections of the mini exhibition.

  1. The New Look

February 12,1947,”The New Look” was born. Among all the silhouettes in this revolutionary show, the Bar ensemble left the strongest impression.

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  1. The Dior Allure

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3.The Dior Garden

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4.Miss Dior

It was the first perfume that Mr.Christian fulfilled.

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  1. From Pink to Red

This section is very special. All the dolls look like a lipstick. The dolls go up and down, and turn around and around. “Rouge Dior” also inspires Raf Simons to continue with the Dior Spirit.

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6.The Dior Ateliers

Everyone is amazed how Dior produce each works. From garments to watch,  from lipsticks to shoes.

Each works is a work of art.

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7.Dior &His Artist Friends

The film on the screen is playing all the time, telling the story of Dior and his artist friends.

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8.Versailles:The Trianon11

9.Paris

Paris represents a sense of finish and perfection.It is there,more than anywhere else,that quality of craftsmanship is really understood and we must preserve this tradition”,wrote Christian Dior.

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10.J’adore

It’s one of the most popular and classic perfumes in the world.

There is a button in front of the visitors as well. When you press the button, you will smell the fragrance of J’adore.

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  1. The Grand Dior Ball

“To make each woman a princess ”. Dior made it!

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Little things make a big difference. Each detail of the exhibition shows the reason why Dior can stay successful in the past few decades. The answer is, striving for excellence.