Until recently, Western companies exporting to China were limited to multinational companies or niche companies with a network in China. This is a result of the complexity of Chinese importing regulations.
In essence, Chinese importing regulations via traditional import channels require the company has a legal entity- subsidiary, partner or an own manufacturer - within China. Thus, it would be this entity that would clear customs allowing the import to enter China. The legal entity in China would pay duties and taxes prior to sale in the Chinese market - either e-commerce of brick-and-mortar shops. The process to establish this legal entity is time-consuming, challenging and costly.
Additionally, traditional import channels require different levels of procedures to export goods to China for product compliance, product registration and so forth. This can be particularly cumbersome for cosmetic, haircare and skincare products, including animal testing requirements.
The birth of cross-border e-commerce did not replace this process, rather is a second possibility for importing into China. It revolutionised the possibility to trade because cross-border importing does not require a company to establish a legal or physical business presence in Mainland China.
In addition, especially important for cosmetic, skincare, haircare and personal care products, product compliance checks are not equally applied to imported products, so regulations such as animal testing are not required. This makes the process of selling in China markedly easier, faster and less costly. According to expert estimations by experts, costs can be reduced by 20 to 30 percent and product clearance and dispatch times at the border is considerably faster.
How can your firm exploit cross-border e-commerce? Contact us at Qing to find out more.
