Today the economic growth in Asia is very rapid, in contrast to the EU economy hit hard by the economic crisis in Greece. Some Asian countries enjoy the impact of the European economic crisis; investors shift their money mostly to countries in Asia. Cheap salaries for workers in China may now have started to rise, with labor costs in China each year began to rise about 20%. In the province of Shenzhen for example, which is a specialized area of China’s industries, they have raised wages by up to 50%. What a significant progress!
Demand for the new platform, foreign products, and encouragement from the government are the consequences caused by the significant increase of the Chinese economy. In China, the customers tend to buy directly from foreign retailers through the Internet and they have contributed to cross-border consumer e-commerce amounted to 259 billion renminbi ($ 40 billion) by 2015, this number is 6 percent of the total Chinese e-commerce spending. Basically, the increase in purchases continues to grow by 50% per year. Alibaba is one of the parties that won the most benefit from this phenomenon. For information, Alibaba’s Tmall have moved into the market with cross-border sites because competition is quite small. However they should be aware that the more active US Amazon.
Various factors above lead to the Chinese middle class to transact with the aim of getting a variety of new items that are not available in the local market. They also require some degree of protection from counterfeit goods commonly attacking some second-tier cities and rural areas. To solve this problem they need the support of the Chinese government.
In an effort to stem illegal imports, the Chinese government has established several posts that are able to benefit from 10 to 50 percent for a large list of personal-use items. Every manufacturer needs to realize that in China, Taxes less than 50 renminbi are usually freed. The latest development is the eight major cities in China have formed a sort of qualifying trade zone to prevent the various problems that arise as a result of the tax regime. They have agreed to speed up the clearance of goods through customs. They have formed so-called special distribution channels to handle the distribution of goods to remote areas. You can take Fengqu.com as one example.
Rapid economic growth will automatically trigger alliance of several parties and also the implementation of new strategies. For example, Tmall has worked with several major retailers, such as Costco (based in the US) and also Lotte Mart (based in South Korea). This of course triggers the so-called cross-border trade. Even Amazon has offered Amazon.cn as a provider of foreign products to Chinese residents. Of course, this site features Chinese descriptions so it’s easy to be understood by the people of China.
I hope this article can help you in understanding what going on Chinese e-commerce. Don’t forget to share this to your family and friends.