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Takehome:
- China crossborder ecommerce has 2 retail modes namely direct mail and bonded warehouse. Chinese authorities in collaboration with industry are now researching new CBEC retail models which will emphasize integration of online and offline elements of the supply chain.
Cross border ecommerce had enjoyed many advantages during its fast development in China, including policy support, price advantages, convenient shopping experience, etc. According to data from the Ministry of Commerce, the total volume of online retail trade in 2016 reached RMB 5,160 billion, with a year-on-year growth rate of 26.2%.
Problems facing future development of CBEC
However, China’s government enacted a series of new CBEC policies last year to balance the development of traditional trade and e-commerce, including a new taxation policy and a positive list for CBEC traded goods which spelled new registration requirements for infant formula, health food and foods for special medical purpose traded through CBEC. The major advantages of CBEC seemed to be lost.
In the last two years, many large overseas retailers have used CBEC. It is reported that more than 20 large scale overseas retailers have set up online stores on Tmall International, including Costco, Macy’s, Target and Saks Fifth Avenue from the US, Sainsbury’s and House of Fraser from the UK, Metro from Germany, Dia from Spain, IPER and Eurospin from Italy, Woolworths, Chemist Warehouse and Metcash from Australia, Countdown from New Zealand, etc. However given the new policy changes new entrants will have more cause for concern.
The future of CBEC: New retail models
Many manufacturers and traders have realized there is room to develop new CBEC trading model and have begun to explore and develop new methods. O2O is a trade mode that combines the advantages of both online and offline trade and is becoming increasingly popular.
The rapid development of new technologies like mobile shopping, big data, cloud computing, etc. will be the key differences offered by CBEC traders in the future. User experience and convenience combined with some price advantages will be the key offerings for Chinese consumers. Consumer behavior analysis, webpage design, commodity displays, etc. will all be optimized to provide an unmatched consumer experience offering convenience, traceability, returns, marketing and interactivity.
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