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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.
tmall

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.

tmall2

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.