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

 

 

 

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