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Two Guangdong Cross-border E-commerce Sites Open for Business

For mainland shoppers, the move to simplify the process of online ordering of goods from abroad continues apace.

Photo: Cross border online shopping: The final e-frontier. (Shutterstock.com)
Cross border online shopping: The final e-frontier.
Photo: Cross border online shopping: The final e-frontier. (Shutterstock.com)
Cross border online shopping: The final e-frontier.

Two cross-border e-commerce pilot enterprises have recently gone online in Guangzhou. The development marks the next stage in the ongoing process of easing the import of goods into China.

The two websites are 020 (www.sd020.com), operated by the Shengdi Group's e-commerce offshoot, Lingerling, and Yen City (www.jinkouyi.cn – literally "easy to import"), operated by Jinkouyi, a Guangzhou-based e-commerce company. Both sites have been ratified by the Guangdong Provincial Department of Commerce, Guangzhou Customs, and the Guangzhou Entry-Exit Inspection and Quarantine Bureau.

Consumers can place orders on the two websites after previewing the goods in display-only outlets in Guangzhou, where no onsite purchase is possible. Personal identification information and merchandise orders, payment and delivery details are then provided online, before being reviewed and cleared by customs. Goods are then dispatched via the Nansha or Baiyun Airport special customs supervision area and delivered directly to customers by the relevant logistics providers.

To service its customers, Yen City has teamed up with Yuehua Logistics and HACTL, Hong Kong airport's second largest logistics service provider. This partnership has led to the establishment of a cross-border e-commerce bonded logistics park dedicated to serving Yen City clients.

020's first preview-only store started trading in Shengdi Hui on Guangzhou Avenue North in March this year. Positioned at the mid- to high-end of the market and selling mainly baby and maternity products, cosmetics and health care products, most of the store's range was initially sourced from Italy, Japan, South Korea and a number of Southeast Asian countries. The store has a floor area of 800 square metres and currently offers some 2,000 product lines.

At present, 020 has two major sourcing channels. One is through authorised China distributors of foreign goods. Such goods will be declared as personal items and subject to personal postal articles tax after being delivered by the distributor. The second channel is direct purchase from overseas suppliers. In the latter case, each foreign branded product must have official authorisation from the overseas supplier. Once the company has placed a large-volume order for certain foreign goods, it will then proceed with the formalities of general foreign trade in the form of bonded goods being imported in batches and stored in bonded areas, all under the supervision of Guangzhou Customs.

A number of the foreign goods in question are subject to the Three Taxes: tariffs, consumption tax and VAT at 17%. In the case of cosmetics, the consumption tax rate is somewhat higher. Meanwhile, distribution costs incurred at each intermediate step from distributor to other dealers also add to the overall cost.

Foreign goods sold via cross-border e-commerce platforms – and not through general trade channels – are not subject to the Three Taxes, but are declared as personal items and thus subject only to personal postal articles tax. A certain imported milk powder, for example, if purchased from cross-border e-commerce sites, costs Rmb518, with a delivery charge of Rmb20 and personal postal articles tax of Rmb51.8. Customers are given the exact price breakdown of their order and there are no hidden costs.

For additional information see: Guangzhou Pioneers Overseas Online Shopping via Conventional Stores, 10 April 2015.

Dionne Liu, Guangzhou Office

Content provided by Picture: HKTDC Research
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