Cross-border logistics – An important differentiator of export e-commerce

• Chinese e-tailers, selling their goods to the world, are not only competing with domestics rivals in China, but also global e-tailers on numerous international e-commerce platforms
• B2B e-tailers play a dominant role in China’s export e-commerce, while B2C business is expanding. This report provides a deep-dive on the logistics development of B2C export e-commerce.
• To boost online sale, it is important for e-tailers to establish a reputable brand, providing quality products with reasonable price
• Apart from product quality, delivery experience is also a crucial factor for the shoppers’ buying decisions. A quick, secure and traceable delivery service with reasonable shipping cost (zero cost is the best!) is most welcome by the shoppers
• Indeed, cross-border logistics involves a chain of complex processes, e.g. line-haul delivery services in China, cross-border delivery between the Mainland China and countries abroad, warehouse operations, customs clearance and last-mile delivery in the destination country
• Certain international couriers can provide door-to-door delivery services with stable service quality, normally at higher service charges. Other logistics solutions are available for the considerations of export e-tailers, including postal services, charters, overseas warehouses, local/ regional couriers, etc.
• For business development in longer term, stakeholders in B2C export e-commerce should pay attention to the competitive market landscape, cross-sector development of e-commerce and logistics, potential logistics demand in emerging markets and expectation of tech-savvy shoppers

Complexity of logistics involved in B2C export e-commerce from China

In the early stage, most of the B2C export orders were small parcels and delivered by postal service
Merits of using postal service:

• Comprehensive global network coverage
• Low delivery costs of posting low value, small-size and light-weight parcels from China to overseas
• No huge investment in building and operating warehouses
• No extra service charge for any logistics intermediary

Customs and tariff

• In the past, many export e-commerce operators delivered their goods to overseas clients by post. Since postal parcels are generally classified as personal items (subject to regulations of different countries), they can easily pass through customs without inspection, i.e. no tariff or other taxes will be imposed
• Today, many customs departments have started to refine the tariff and value-added tax policies on e-commerce and requests official documents from e-tailers
• E-tailers have to study the customs and tariff requirements of the destination countries, since the requirements of each country/ customs territory are different

Last-mile delivery

• To provide last-mile delivery services, an experienced logistics team shall be able to communicate with Chinese e-tailers, local shoppers and other stakeholders, possess cross-border e-commerce knowhow and understand local culture. Obviously, it is costly for export e-tailers to set up a self-operated logistics team in every export destination.
• Thus, the selection of a reputable local partner is important in handling last mile delivery.

Development trends

• Logistics companies try to tap into export e-commerce market
• China’s e-commerce companies are moving fast in logistics investment
• Apart from the international logistics services providers (LSP), more and more local/ regional logistics players seize opportunities in the cross-border e-commerce logistics business
• Chinese goods are well-accepted by global online shoppers. Growth in demand from the emerging markets is even faster than that of the mature markets. Selection and management of regional/ local logistics partners are crucial to ensure a stable delivery experience
• Online shoppers along the Belt and Road crave for Chinese goods. Rail service is an alternative delivery solution of air/ sea transport

Transparent global tracking services and real-time inventory management system are important in export e-commerce

• The tech-savvy shoppers have gotten used to tracing the delivery status by using mobile APPs or via webpage. Their online logistics reviews will affect buying decisions of other shoppers from all over the world
• A global, traceable delivery service is crucial to enhance the visibility of shipment status and reduce the risk of order cancelation. Sophisticated IT support is important to ensure smooth logistics information flow among stakeholders
• Also, a real-time inventory management system can assist etailers to better monitor worldwide orders, quickly respond to changes in different markets and make accurate replenishment decisions and demand forecast