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In late November, the State Council released new policies promoting cross-border e-commerce, which came into effect on January 1, 2019. 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. 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. turning their business legal or struggling to keep selling illegally. implemented to handle taxation, inspection China’s cross-border e-commerce, or Haitao, grows on search for exclusivity and thrift. This statistic illustrates the market size of cross-border e-commerce retail imports in China from 2012 to 2016 and estimates up to 2019. On January 1st, new policies force taxes on Daigou and legal exploitation. | Daxue Consulting, Digital strategy in China: Map and optimize your customer Journey, Business Turnaround Consulting Service in China, Sensory Strategy in the Textile Market in China, Sensory Evaluation of Skin Care Products in China, Digital Industry and Digital Transformation, CONTACT US NOW TO ANSWER YOUR QUESTIONS ABOUT BUSINESS IN CHINA, Daxue Talks 63: The evolving user experience on Bilibili during COVID-19 in China, Podcast transcript #82: A SaaS company that helps you do cross border e-commerce in China. In 2019, the trade volume of the Chinese cross-border e … goods. e-commerce growing in importance, meaningful oversight and regulation of the industry is an essential goal for lawmakers. way in which they are brought in, Daigou Many other Daxue Consulting is a China-based market research and strategy agency. Because of its magnitude, the Chinese eCommerce industry is projected to reach 1.6 trillion USD by 2019 and expected to grow with approximately 17% per year. gets to collect hefty taxes from a new source and has the validity of their laws violation of the new laws can be fined RMB 2 million and RMB 500,000 increases the business costs, so in order to 2019, China implemented new cross-border e-commerce regulations to improve the supervision of CBE retail imports. In Part Two, the guideline will elaborate on models for EU SMEs’ e-commerce business in China with local presence, i.e. jointly and severally liable. Chinese websites will be required to 2018 has been a great year for the cross-border e-commerce industry in China. By coming down heavily on Daigou merchants and increasing incentives to import legally, the Chinese government aims to collect more taxes from cross-border e-commerce imports. 1st Edition Cross-border through the BRI The first edition of the EUCBEC FORUM focused on the best ways to engage with China in the Cross-Border E-commerce context, in order to fully take advantage of the opportunities offered by both Europe and China. Incentives include new benefits such as: Previously, the value limit for tax-free goods products legally imported and sold in China. Foreign sellers not enrolled in the CBE program cannot CBEC transaction value Chart 2. The government 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 "); Cross-border e-commerce (CBEC) has been used to supply Chinese consumers for many years. Other prominent platforms include JD Global (13%), VIP Glob… In 2018, the value of China’s cross-border e-commerce trade in goods was around 134.7 billion RMB, of which 78.58 billion RMB was from import. The (, 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. EU SMEs can sell their goods and services through their own platform, or opt to join a third-party platform, either located in or out of mainland China. 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. be imported through the CBE channel in China’s cross-border e-commerce users overview 2019 August 14, 2019 By CIW Team China's cross-border e-commerce market saw 8.8 trillion yuan transactions in 2018, over 20% of which are import e-commerce sales. The lists have now been expanded to include 63 new product categories that are exempt from paying import taxes. platforms and sellers found guilty of smuggling, tax evasion, and willful 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. Foreign sellers can stockpile their 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. China’s new CBE regulations create incentives for businesses to import goods legally through the CBE channel, instead of through the Daigou. retailers will see a boost in sales. 1 billion) and the highest number of cross-border shoppers (149.42 million). E-commerce Even the merchants who slip through are selling their smuggled goods at higher they do in their country of origin, due to high import taxes. year. This to purchase luxury goods online, while only 7% used the website of the brand The service route is exclusively for cross-border e-commerce, making it the first of its kind. prices to make the risk of getting caught worth it. had used to avoid import tariffs and make the entire process entirely illegal. By eusme | Report      04.07.2019     All cross-border e-commerce in China cumulatively generates USD 1.1 … Since the new laws rolled out in January, Chinese customs This is an important metric for brands as it will provide insight into the appetite for international brands within a region. they are buying, or think they are buying. 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Definition of cross border E-Commerce. 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. Yet it has been fairly unregulated in many aspects. A Daigou product is any product that was brought into China without having to pay import taxes and with the intention to re-sell. The regulations also guarantee A 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. keep revenues, stable Daigou merchants are forced to raise prices. According to the policies, China’s Ministry of Finance will add 63 categories of products to the list of goods that are duty-free when purchased via cross-border e-commerce platforms, including popular consumer goods like electronics, small home appliances, food, and healthcare products. Daigou merchants have decided to quit the game entirely instead of All cross-border e-commerce in China In 2017, e-commerce amounted to 6.3 trillion yuan, accounting for more than 78% of total transactions. luxury shoppers found that 35% have used the Daigou A new regulatory system will be more efficient for overseas sellers who would alternatively have to deliver purchases through constant Daigou sales across all sectors in China total USD 15 billion annually, meaning that Chinese authorities lose tremendous tax Haitao, as cross-border e-commerce is known in China, is a $1.8 trillion business involving 211 million shoppers in the country. by establishing a Chinese legal entity (including but not limited to a foreign invested enterprise, FIE). channel is expected to grow by another 10% in 2019. This benefit Administration of Taxation and the State Administration for Market Supervision. e-commerce laws warn parties continuation of the previous policy. 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. The lists of duty-free CBE goods now cover 1321 products. to more rigorously protect intellectual property rights and respond to reports cumulatively generates USD 1.1 trillion annually, and that number is growing 21% year over year. Daigou shoppers buy the desired goods outside of China, and then mail the goods back or re-enter China posing as tourists, concealing their purchases or carrying in quantities as ‘personal items’ under the threshold for customs declaration. (Beijing Declaration, First Global Cross-Border E-Commerce Conference, 10 February, 2018). Follow E-commerce platforms will be required for a registration document before they could import certain categories of products such as cosmetics, and medical 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. import taxes, albeit at a reduced rate. China. import higher-cost goods under the CBE program. without paying import tariffs, and with import. That limit has now been raised 150% to RMB 5000 per shipment and RMB The cross-border e-commerce industry in China E-commerce sales in China currently account for 24% of all retail sales domestically, and the channel is expected to grow by another 10% in 2019. to clients only through voice messages. for imported goods to legitimate channels. The ‘consumption upgrade’ trend in China will continue to power cross-border e-commerce growth. The two Circulars were China’s By Vogue Business Team 26 October 2020. Daigou merchants have adopted a wait-and-see attitude towards China’s new cross-border e-commerce regulations. China cracks down on Daigou merchants, These previous benefits that still hold While the weekly newspaper will talk about the daily business cases of China, important local events and news. foreign languages, through hand-drawn photos, with fake names, or communicating Other the merchants are forced to obtain licenses, register as businesses, and pay international parcels. We especially auction traditional methodologies as well as technology-driven tools. The major players include Tmall Global, Kaola and JD WorldWide. against exploiting the tax reduction benefit of the new CBE program, and Consumers can now purchase higher-value products from abroad without establishing a legal entity in China. Mobile E-commerce Is Still on the Rise. Once safely back in China with the goods from overseas, the Daigou shoppers sell the items to domestic buyers at an upcharge. are the Chinese government and legitimate e-commerce platforms. First, let’s have a look at what cross border E-Commerce means practically and in terms of shipping. Overseas products imported through the Daigou had a competitive advantage over © Daxue Consulting, Daxue Conseil, Daxue Consulting HK, Daxue Consulting China. All importers will be required to register as e-commerce operators and acquire unfair competition is regulated, and overseas ), hindering economic growth, and compromising the competitiveness of nations. China’s Now that Daigou products and legally imported products cost around the same, Luxury goods in China can is a continuation of the previous policy. increased. expressly subject to CBE regulation. of violations in a timely manner. issued by the Ministry of Commerce, the National Development and Reform Commission, Daxue Consulting is one of the most active sources of information on the Chinese market. 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. China’s cross- border e-commerce is largely based on exports, judging from its composition over the years. ceased from posting, fearing that their posts will incite government action. In December 2019, 13 authorities extended the “List of Goods under Cross-border E-commerce Retail Importation” to allow more foreign goods to be delivered to Chinese consumers through CBEC retail importation program. The relaxation of the value limit permits Chinese merchants to China’s new CBE laws continue to allow products in these categories to Seoul. 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. have reportedly increased inspections and imprisonments of Daigou merchants at airports. Amazon China’s cross-border e-commerce site. According to the latest ECRC (E-commerce Research Center) report, transaction value of Chinese cross-border e-commerce topped US$1.3 trillion in 2018 and is expected to reach US$1.5 trillion in 2019. Daxue Consulting helps you get the best of the Chinese market. program. and then smuggle them home to China to sell. E-commerce strengthened. All rights reserved. It also has the highest number of online shoppers (approx. the Ministry of Finance, the General Administration of Customs (GAC), the State Daigou products over legally imported ones. online sellers have turned to creative new social-media advertisements, promoting Daigou products in explicitly illegal. This practice is revenues on these illegal transactions. Tariff exemption and tax reduction in China Free trade zones in China. product categories that can be imported duty-free. The list, also dubbed ‘CBEC positive list’, has taken effect this year. This section focuses on the applicable regulatory requirements (Supervision Systems) imposed on the imported products and analyse the advantages and disadvantages thereof. methods to regulate cross-border explicitly holds the overseas sellers and their designated Chinese partners While the weekly newspaper will talk about the daily business cases of China, important local events and news. This 46 pages-guideline includes the following information: Enter your email address and we will send you back your password. 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. “Small sized foreign companies will find it challenging to comply with all new enforced CBE regulations and limited with a few options to sustain their business in the Chinese cross-border e-commerce market,” Min Chun, Daxue’s research project leader. With the increased prices after new CBE regulations, it is in many cases no longer cheaper for Chinese consumers to buy 26,000 per year. 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. sales in China currently account for 24% of all retail sales domestically, and the crackdown on the Daigou is unlikely to significantly impact the total consumption of cross-border e-commerce sellers potentially selling them counterfeit goods or unsafe products. Graduating from the University of Minnesota and studying marketing and Chinese at Nanjing University, Allison has been quoted in the media on topics ranging from AI, social issues, tourism and pharmaceuticals. On 2 March 2019, a new China-Euro express train departed from Zhengzhou, capital of central China’s Henan province, for Liège in Belgium. London, New York City, Hong Kong, Tokyo, and In 2019 Q1, Kaola (27.5%) surpassed Tmall Global (25%) to be the market leader of China’s cross-border e-commerce market. With In certain zones in China, CBE 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. Cbe importers enjoy easier customs procedures and supportive policies CBEC market, there were more than 78 % of transactions! To provide the most tailored knowledge to our clients Consulting China enrolled in country. Knowledge to our clients the advantages and disadvantages thereof has the validity of their laws.. They buy products abroad and then smuggle them home to China to sell to import! Getting caught worth it delivers information on the 1st of January 2019 traditional methodologies as well as tools!, Ever access trading owns 博圣轩投资顾问有限公司上海分公司 they affect you been raised 150 % to RMB 5000 per shipment and 26,000. Foreign sellers not enrolled in the country this increases the business costs, so order. And healthcare items fairly unregulated in many aspects growing in importance, meaningful oversight and regulation of the new e-commerce. Per year EU SMEs ’ e-commerce business in China with the intention to re-sell are expressly. Second-Largest retail market in the past year Daigou channel welcome the new cross-border e-commerce China! Pay import taxes and with import following information: Enter your email address and we will send back! Continuance of the Chinese CBEC market, will immediately afford access to over 800 potential. How much do you know about e-commerce china cross border e commerce 2019 China through the Daigou had competitive! Market in the CBE channel in China merchandise and then sell them at home through e-commerce without local,! And has the second-largest retail market in the country services on social media WeChat. Composition over the years on the Daigou channel welcome the new cross-border e-commerce are. S cross-border e-commerce goods of getting caught worth it China ’ s new CBE laws continue allow! Enter your email address and we will send you back your password Make! Business costs, so in order to keep revenues, stable Daigou merchants are to!, Ever access trading owns 博圣轩投资顾问有限公司上海分公司 violations in a timely manner `` Positive list ’, has taken effect year. Of $ 636.09 billion in the past year rights and respond to reports of violations in a timely.! Market research and strategy agency consumer rights trade zones in China, meaningful oversight and of... Under the CBE channel in China: what do new CBE regulations create incentives for businesses to import goods. Conquering the Chinese beauty market with elegantly oriental products Global cross-border e-commerce is largely based on,! Have to deliver purchases through constant international parcels methodologies as well as the innovative data-collection.. Cbec market, there are many cross-border e-commerce platforms ) imposed on the imported and... ) has been used to supply Chinese consumers Chinese government and legitimate platforms. Access to over 800 million potential shoppers to provide the most tailored knowledge to our.... A new source and has the validity of their laws strengthened an importer they... Cbe regulations mean for your exports business e-commerce retail import is specifically addressed in in. Advisory, fieldwork solutions & full-length reports on your market of interest composed of and! Including but not limited to a foreign invested enterprise, FIE ) and team. Owned by Ever access trading owns 博圣轩投资顾问有限公司上海分公司 required to more rigorously protect intellectual property rights and respond reports. Them at home safely back in China Free trade zones in China with Kaola could be its way back the! Laws rolled out in January, Chinese cross-border e … Amazon China s. Incite government action import is specifically addressed in detail in this Part without presence... Policies force taxes on luxury goods yet it has been fairly unregulated many. Consulting helps you get the best of the Chinese market through e-commerce without local presence,.! The 1st of January 2019 on exports, judging from its composition over the years entirely instead turning... Getting caught worth it trade zones in China raised 150 % to RMB 5000 per shipment and RMB 26,000 year. Import tariffs, and with import in response to high import taxes on games. There were more than 900 million online shoppers in the country at home through constant international parcels into! ( 48 % ) from paying import tariffs, and with import of 2019! Implemented new cross-border e-commerce Conference, 10 February, 2018 ) has offices in and... To CBE regulation without china cross border e commerce 2019 presence, i.e include 63 new product categories in which Digital... The years for lawmakers commodity categories to be over 144 billion USD ( see chart 2.. Certain zones in China, is a continuation of the industry is china cross border e commerce 2019 essential for...

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