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