#Logistics #SupplyChain #B2C

The cross-border e-commerce tax reform has been implemented for a few days, and the industry has reacted violently, but everyone should be able to clearly realize that this cross-border e-commerce tax reform is aimed at importing cross-border e-commerce, and exporting cross-border e-commerce. There are no new restrictions and requirements. Therefore, when the cost advantage of imported cross-border e-commerce is no longer available, it may be a good attempt to change direction and enter export cross-border e-commerce.

 

One: Development status of export cross-border e-commerce

The export of cross-border e-commerce actually occupies a larger share of the overall cross-border e-commerce and is in a major position. In the field of export cross-border e-commerce, B2B and B2C models coexist. But at this stage, B2C is growing faster. Especially now, the impact of the new crown epidemic has accelerated the increase in the penetration rate of global e-commerce. Thanks to the "China speed", the epidemic has been well controlled. Compared with the world, the resumption of work and production in China is progressing smoothly, and the stability of the supply chain is also guaranteed. In addition, the high cost performance of Chinese products and the formation of overseas e-commerce consumption habits have a certain stickiness, so China's export cross-border e-commerce will continue to grow in revenue, and Chinese products will continue to go overseas. According to research by Chinaandworld, the proportion of cross-border e-commerce users who have purchased Chinese goods has increased significantly, far exceeding that of other countries such as the United Kingdom and the United States.

 

What are the main difficulties in exporting cross-border e-commerce?

The first is that the market is very different. Facing consumers in different regions and countries, exporting cross-border e-commerce companies need to make targeted decisions according to different market environments and policies of different countries, so it is critical to choose a target market reasonably.

Then there is the choice of payment method. At present, the main methods adopted by Chinese enterprises when exporting cross-border e-commerce payment include online payment methods such as Paypal, Moneybooker, and MoneyGram, and traditional methods such as international credit cards, international wire transfers, bank transfers, Western Union remittances and bank letters of credit. Among these payment methods, Paypal, international credit cards and bank transfers account for the major market shares. Therefore, exporting cross-border e-commerce companies can choose these methods first.

Finally, there is the choice of export cross-border e-commerce logistics mode. At present, there are five main modes of outbound logistics for domestic enterprises. Let us introduce them to you one by one.

 

Export cross-border e-commerce logistics

Two: Export cross-border e-commerce logistics model

1. Postal parcel mode

At present, more than 70% of the parcels exported to cross-border e-commerce in my country are delivered through the postal system, and China Post accounts for half of the business volume. The reason why the postal system is so popular is mainly because it covers a wide area and can be delivered on a basically global scale, which also benefits from the cooperation between the Universal Postal Union and the Kahala Postal Organization (KPG), two international postal organizations. effect.

The Universal Postal Union is an agency of the United Nations, which is in charge of international postal affairs. Its purpose is to organize and improve international postal services, to develop international postal cooperation, and to provide postal technical assistance required by member states within its capabilities.
Kahala Postal Organization (KPG) is a group of international postal service cooperation organization, which covers the postal service from China, Japan, South Korea, the United States, the United Kingdom, France, Australia, Spain and Singapore and other countries.

The advantage of the postal system is that it covers a wide range and involves the postal systems of various countries, but this is also a drawback, which is numerous but complex. Therefore, export cross-border e-commerce should pay attention to factors such as differences in shipping ports, timeliness and stability of shipments when choosing postal delivery.

Postal logistics include China Post Small Packet, China Post Large Packet, Hong Kong Post Small Packet, EMS, International e-Postal Bao, Singapore Small Packet, Swiss Post Small Packet, etc. Among them, postal parcels, international e-mail treasure and EMS are the most commonly used.

China Post Small Packet: The weight limit of the mailed product is less than 2kg.

International E-mail: It is an airmail product mainly aimed at light and small items, and is an economical international postal service. Provide Chinese sellers with parcel delivery services to the United States, Canada, the United Kingdom, France and Australia. Only goods within 2kg are accepted, and the total weight is supported. The first weight is 50g, and the additional weight is calculated per gram, and the registration fee is waived.

EMS: Speedpost mail service. The postal, aviation, customs and other departments in various countries and regions have the priority to deal with sensitive goods (non-flammable and explosive, infringing products, securities, cash and other prohibited and restricted items).

In addition to China Post, other postal services used by Chinese sellers include Hong Kong Post and Singapore Post.

 

2. Commercial express delivery mode

(1) International express

The international express mode is the legendary four kings of international commercial express - DHL, TNT, UPS and FeDex. These four major international express delivery companies have self-built global networks, strong IT system support and localized services all over the world, which can provide cross-border online shopping users with the best logistics experience.

The main features of international commercial express delivery are: guaranteed timeliness and low packet loss rate. However, imitation brand, battery-containing and special products basically cannot be delivered. In addition, the biggest disadvantage is that the cost of these international express delivery is relatively high. For domestic enterprises engaged in exporting cross-border e-commerce, unless the customer has a strong time requirement, international express delivery is generally not used.

 

Let's take a detailed look at the characteristics of these four major international express delivery:

DHL: is the world's number one ocean and contract logistics provider, providing customers with a full range of logistics solutions from documentation to supply chain management.

TNT: an international express logistics company that provides postal, express, and logistics services to customers in more than 200 countries and regions, and has a relatively advanced electronic inquiry network.

UPS: is one of the world's largest express carriers and package express companies. Great for sending small items, especially for the US, Canada and UK regions.

FedEx: Entered China in 1984, is the international express company with the largest number of direct flights to China, serving 220 cities around the world.

 

(2) Domestic express

There are EMS, SF Express and "four links and one delivery" in domestic express delivery. However, in cross-border logistics, "four links and one delivery" started relatively late. At present, the international business of SF Express and EMS is relatively complete.

SF Express has now opened express delivery services with the United States, Australia, South Korea, Japan, Singapore, Malaysia, Thailand, Vietnam and other Asian countries. Within Asia, express delivery can usually be completed in two to three days.

EMS is currently the most developed international express service provider in China. Relying on the postal system, EMS can realize express delivery among more than 60 countries in the world. The time is 2 to 3 days in the Asian region, and 5 to 7 days in European and American countries. Compared with the four major diamonds of international express delivery, it is much lower.

3. Supply chain service model

Chinese scholar Shen Chenglin believes that the logistics service supply chain is a new type of supply chain with integrated logistics service providers as the core enterprise, and its role is to provide a full range of logistics services for logistics demanders. The most obvious feature of integrated logistics service providers is to select suitable functional logistics enterprises to serve the logistics demander in the form of business subcontracting.

The representative of this type is the UPS supply chain business company UPS SCS (UPS Supply Chain Solution). It is composed of UPS Express, UPS Capital Company (UPSC), UPS Logistics Group, UPS Freight Service Company, UPS Mail Business Innovation Company and UPS Consulting Company. Its core business has expanded from simple package transportation to global supply chain management services, providing logistics, express delivery, finance, and supply chain consulting for the fields of high-tech, automotive, industrial production, health care, retail and consumer products. It has become one of the best practices in global supply chain management. The emergence of UPS SCS indicates that UPS has transformed from a pure cargo transportation company to a supply chain enterprise giant integrating logistics, capital flow and information flow. At present, it mainly serves FBA in the United States and Canada.

4. Special line logistics mode

Special line logistics is a combination of domestic air transportation and local delivery to the destination of a partner company. One of the advantages of this model is that it can be shipped in large quantities and reduce transportation costs through scale, so the cost is lower than that of commercial express delivery, while the time And significantly faster than postal parcels. Now the special line logistics on the market includes Europe and the United States, Australia, the Middle East, South America, Africa and other regions.

Common special line logistics methods include "Russian Post" and "Australian Post" under Central, Russian Express, Yanwen Line, Aramex Line, etc.

5. Overseas warehousing mode

The overseas warehousing model is currently a hotly debated model. Its advantages lie in lower costs and faster delivery. However, for enterprises, there are many factors to consider when preparing for overseas warehousing, especially the supply and demand estimates of goods, which can Clearly judging the quantity of stored goods according to market demand will determine whether the goods in and out of the warehouse are smooth or not, and will not lead to overcrowding. ability.

The actual operation of overseas warehousing includes four stages, namely head-haul transportation, warehousing management, local distribution and information update.

1. First-way transportation means that Chinese merchants transport goods to overseas warehouses by sea, air, land or combined transportation;
2. Warehousing management means that Chinese merchants remotely operate overseas warehousing goods and manage inventory in real time through the logistics information system;
3. Local delivery is to deliver goods to customers through local post or express delivery in overseas warehouse centers based on order information;

The companies that have set up overseas warehousing and logistics centers include: Export Easy and Delivery Quartet.

 

Easy export: Britain, America, Australia, Russia, Canada;
Delivery to the Quartet: European and American countries (the United States, Britain, France, Germany, Italy), Korea, Japan, Hong Kong, Singapore and other countries and regions have warehouses and transit centers.

The current situation and future of cross-border logistics can be summed up in one sentence - "commercial flow and logistics complement each other, and trillions of cross-border e-commerce give birth to a cross-border logistics market of 100 billion".

The rapid development of cross-border e-commerce has brought about the rapid expansion of the cross-border e-commerce logistics market. The data shows that, taking the volume of international, Hong Kong, Macao and Taiwan express parcels disclosed by the State Post Bureau as an example (international express is only one of the cross-border e-commerce logistics models), from 2011 to 2019, the volume of international and regional parcels increased from 110 million pieces. This increased to 1.44 billion, with a CAGR of 35% during the period. Therefore, only by solving the pain point of cross-border logistics can the cross-border e-commerce market become bigger and more stable. Although the above introduction basically covers the logistics mode of current cross-border e-commerce, the understanding of the logistics mode of export cross-border e-commerce can be said to be only the foundation.
Because of the vast target market and more opportunities for exporting cross-border e-commerce, more and more enterprises choose to join. If you want to engage in export cross-border e-commerce, in addition to grasping cross-border logistics, there are still many points to pay attention to, especially the impact of inter-country trade policies. If you have any questions about cross-border e-commerce, please feel free to contact us.