Cross-Border E-commerce continues to grow rapidly in China

2/1/2023

In November 2022 China has approved another batch of 33 cities and regions as pilot zones for cross-border e-commerce (CBEC). This is the seventh time since 2015, bringing the total to 165 pilor zones across the country. Most of the latest new pilot zones are in central and western regions, where e-commerce is still less developed. 

Despite the struggling world economy of the past years and China’s economic, healthcare, social and other challenges, in the past 3 years cross-border e-commerce has shown rapid development in China. Different from general trade, cross-border e-commerce is designed to make it easier for Chinese consumers to import foreign products for personal use, often at lower taxes and prices than they would find in domestic stores (e-commerce or offline stores).

Pilot cities which joined the CBEC retail importation program can conduct more convenient import modes, whereby imported retail goods can be temporarily stored at the bonded warehouse before being delivered to customers. Under certain single and annual transaction limits, retail imported goods on the ‘CBEC positive list’ are deemed as duty-free, and the import VAT and consumption tax (CT) are temporarily levied based on 70% of the statutory tax payable.

If you are a foreign company planning to enter the Chinese market and you don’t have your own legal entity in China yet, nor a Chinese partner or distributor, CBEC is definitely a perfect first entry channel for your products. By using CBEC, an overseas brand can export its products to a bonded warehouse or via the direct mail model directly to the Chinese consumer.

The biggest players in CBEC are Tmall Global and Net Ease Kaola (both part of Alibaba), JD Worldwide, Vipshop Global and Pinduoduo. The most popular products sold through CBEC in China are cosmetics & care products, baby products, food & beverages, fashion (including luxury goods) and jewelry.

In January 2021 Horsten International set up a Belgian Store on Tmall Global, selling exclusive Belgian food products and beverages. If you need more information about how to sell your food products on Horsten’s Belgian store or how to set up your own cross-border e-commerce webshop, please contact us for a free consultation.