Analysis of the differences between import cross-border e-commerce and traditional trade and their respective advantages

Definition and background

Cross-border e-commerce, also known as “cross-border shopping” or “overseas shopping”, refers to a business model that enables cross-border transactions through the Internet platform. Consumers can directly purchase goods from other countries or regions through the import cross-border e-commerce platform without going through traditional import trade channels. Traditional cross-border trade refers to the exchange of goods, services and technology between one country (region) and another country (region).

Transaction process and cost

Transaction process

The transaction process of import cross-border e-commerce is relatively simple, including consumer ordering, platform review, payment, customs clearance, delivery and other links. Traditional import trade involves more links, including manufacturer preparation, exporter customs declaration, transportation, importer customs clearance, transportation, etc. Traditional cross-border trade has a long circulation link of goods, and it takes multiple links from manufacturers in country A to consumers in country B; cross-border e-commerce greatly reduces the circulation links of goods and directly reaches consumers through local e-commerce platforms.

Cost

Because import cross-border e-commerce eliminates the intermediate links of traditional import trade, it has an advantage in cost. Consumers can directly purchase relatively low-priced overseas products through cross-border e-commerce platforms. In contrast, traditional import trade requires more intermediate links, such as transportation, warehousing, customs declaration, etc., and the cost is relatively high. In addition, the delivery scale of traditional cross-border trade is large, using containers, and the delivery frequency is low; the delivery scale of cross-border e-commerce is small, using parcels, and the delivery frequency is high.

Tax Policy

Imported cross-border e-commerce adopts the “bonded stocking” model. The goods are stored in domestic bonded warehouses and will be cleared and delivered after consumers place orders. Consumers can enjoy lower tax rates and tax incentives. Traditional import trade needs to pay taxes and fees according to relevant national tax policies. The taxation operations of traditional cross-border trade are more troublesome than those of cross-border e-commerce, and sometimes you may have to pay multiple taxes. Cross-border e-commerce transactions mainly occur between merchants and individuals. The transaction method is similar to current online shopping, so the tax operation is relatively simple.

Respective advantages

Cross-border e-commerce advantages

1. Global transaction scope: Cross-border e-commerce eliminates geographical restrictions on international trade and achieves borderless trade. Domestic merchants can directly face overseas consumers, and domestic consumers can also directly contact overseas merchants. .
2. Instant information exchange: Trading parties can exchange information immediately, regardless of the distance in time and space. Information is sent and received almost simultaneously, and orders and payments are completed instantly.
3. Convenient trade channels: Cross-border e-commerce reduces the intermediate links in traditional trade, lowers the threshold for engaging in cross-border trade, simplifies international trade, saves costs, and shortens the operation cycle. Provides small and medium-sized enterprises with marketing channels directly facing foreign markets.
4. Professional service functions: The cross-border e-commerce platform provides professional communication, transaction, settlement, payment, logistics and other services, replacing the demand for professional talents in traditional trade and greatly increasing the number of international trade. Convenience.

Traditional foreign trade advantages

1. Mature professional foreign trade personnel and factories: Traditional foreign trade has become one of the important sources of national finance. After years of development, a large number of professional foreign trade personnel and factories have been accumulated, and they have developed extensively in the global market. .

Summary

Import cross-border e-commerce, as a popular business model in recent years, meets the diversified needs of consumers, is in line with the development trend of globalization, and has broad prospects. It brings new opportunities and challenges for sellers. Cross-border e-commerce and traditional foreign trade each have their own advantages, and merchants need to make reasonable choices based on their own conditions and market demand.