In the initial cross-border activities, “sea shopping” and “agent purchasing” were the main forms, which can be called the 1.0 era of cross-border e-commerce. In this era, having high-quality sources of goods and preferential prices is the only way to occupy the market.
The first to open up the road of sea shopping and purchasing on behalf of others were Chinese living overseas. They have a natural geographical advantage when purchasing overseas goods, and there is an asymmetry in commodity information with domestic consumers. Therefore, they can purchase overseas goods for domestic consumers, send the goods back to China through international ordinary mail, and earn the difference.
However, with the continuous development of information technology and the popularization of the Internet, the information barriers at home and abroad have been broken, and information asymmetry can no longer bring high price differences to these people. However, their geographical advantages still exist, because many countries’ shopping platforms require private addresses and credit card accounts in their own countries, so they can still earn commissions by purchasing goods on behalf of others.
In addition, channels are also an important magic weapon for cross-border transactions in this era. International Chinese forwarding companies seized this opportunity. Their main business is to receive goods for domestic consumers and send them back to China, and collect part of the management fee and international shipping fee.
Generally speaking, if consumers adopt this model to shop overseas, the price is much lower than that of purchasing on behalf of others, so such companies have quickly gained market recognition since their establishment, and more and more domestic consumers have become their loyal users. In countries such as the United States where overseas consumption is relatively concentrated, similar companies have sprung up like mushrooms after rain, and competition has become increasingly fierce.
In fact, the focus of competition among similar companies is concentrated in the same place, that is, the import channel. In terms of cross-border purchases of goods by individuals, the country has always cleared customs through the post, but low efficiency and difficulty in supervision have always been constraints, and some forwarding companies even choose gray channels when clearing customs. At this time, under the condition that other conditions are almost the same, whoever can clear customs stably and efficiently and ensure the safety of goods will be able to occupy the market high ground.
When classifying the levels of forwarding companies, the most important and critical criterion is their customs clearance capabilities. Companies that can conduct independent customs clearance are naturally ranked higher. They can not only conduct customs clearance for their own companies, but also help many other forwarding companies. Such companies are actually channel merchants in the industry. Those forwarding companies that do not have this ability can actually only be regarded as a warehouse for channel merchants. In other words, although there are many and complex forwarding companies in the market, there are actually only a few channel merchants.
It seems that as long as you have the source of goods and channels, you can gain a foothold in the market. The cross-border e-commerce 1.0 era, which relies on the development of these two, seems to be booming. But in fact, cross-border e-commerce still has its drawbacks that cannot be ignored at this stage, which can be analyzed from the following three perspectives.
(1) Transaction behavior requires high costs
Although domestic consumers can compare product information when shopping overseas and purchasing on behalf of others because of the gradual transparency of information, there are still considerable commissions and management fees. In addition, it takes a lot of time to compare products, not to mention understanding the forwarding information and other links.
After all, cross-border transactions are thousands of miles away. Consumers dare not trust sellers rashly and can only conduct trial and error by themselves, which also requires a certain amount of money.
(2) Unable to protect the rights and interests of consumers
From the perspective of the transaction process, because of the distance, the credit problem of the transaction is an insurmountable gap. Even after trial and error, the after-sales, return and exchange of the goods themselves cannot be guaranteed. After all, cross-border transactions involve different countries and regions. Once the rights and interests of consumers are damaged, it is difficult to find a way to protect their rights.
First, there is no regulatory department. If the rights and interests are damaged, consumers do not know who to find; second, even if they know who to find, the high cost of international rights protection will make them discouraged, and they can only blame themselves for their bad luck.
(3) There are certain legal risks within the industry
As we have said in the previous article, some forwarding companies will choose gray channels when clearing customs, which is actually illegal. Once seized by customs and identified as smuggled goods, the goods purchased by consumers will be confiscated and destroyed.
In addition, not all forwarding companies meet the qualification standards, so there will be layers of subcontracting, and some forwarding companies do not even have physical institutions in China. Even if there is infringement of consumer rights, it is difficult for the relevant regulatory authorities to find them, let alone hold them legally responsible. In fact, it is not uncommon for forwarding companies to disappear with money and goods.