After the implementation of the new tax reform policy for cross-border e-commerce, the cross-border e-commerce industry will usher in a new round of reshuffle, which is mainly manifested in the following three aspects:
1. The threshold of the cross-border e-commerce industry is further improved
From the current development situation, product quality problems, lack of after-sales service and poor logistics experience are several key problems. Many overseas shopping users said that when they received the goods, they often found that the goods they purchased were different from the same ones overseas, such as inconsistent size and appearance, missing product text descriptions, different places of production, etc.
Of course, some problems may be deliberately taken by overseas brands to distinguish different markets, but when consumers defend their rights, the mutual shirking between Asia Platform operators, logistics companies and brands is common.
There is no doubt that the series of policy adjustments made by the regulatory authorities are to better regulate the development of the cross-border e-commerce industry. In the future, the industry threshold will be significantly increased, and those cross-border e-commerce platforms that obtain low-priced products by means of sweeping goods from overseas retail stores will find it difficult to survive.
In the short one-year period when the new policy is suspended, major cross-border e-commerce platforms need to complete their own transformation and upgrading as soon as possible, strengthen their supply chain management capabilities, further cooperate with overseas brands, obtain product invoices, certificates of origin, etc., so as to better gain consumer trust. Of course, those cross-border e-commerce platforms with insufficient funds and backward supply chain management will also go to extinction during this period.
2. The product strategy of cross-border e-commerce platforms needs to be adjusted urgently
The rise of the cross-border e-commerce industry has also further increased the desire of domestic consumers to buy overseas products.
Although domestic consumers generally have a low awareness of overseas products, they can find all the information they want to know on the Internet. According to data released by statistical agencies, users aged between 25 and 35 account for 65% of the domestic overseas shopping group. This group’s ability to identify overseas products has increased significantly in the past two years. The strategy of cross-border e-commerce platform operators to make a fuss about the product link is no longer applicable.
Current policies stipulate that consumers must pay taxes according to the retail price of goods purchased through cross-border e-commerce platforms. Therefore, the increase in product prices is an inevitable outcome. Many cross-border e-commerce platform entrepreneurs said that due to the impact of policy adjustments, some investment and financing institutions that were ready to invest eventually chose to withdraw, and the platform’s financial pressure was further aggravated. In this context, many start-ups that lack explosive brands and user traffic will face a survival crisis.
3. The cross-border e-commerce industry landscape faces reconstruction
Under the influence of channel diversification, the business model of cross-border e-commerce platforms will be more diverse. Platforms represented by Tmall Global adopt the M2C model to attract overseas brand merchants and channel merchants to settle in, while NetEase Kaola adopts the B2C model of direct mail procurement and self-operated in bonded areas, and Yangmatou adopts the C2C model and M2C model.
Although platforms such as Tmall Global, NetEase Kaola and JD Global Shopping are rushing to deploy overseas warehousing centers, they regard the overseas direct mail logistics distribution model as an important means to reduce the risks brought by price increases. However, with the continuous increase in domestic bonded pilot cities, the establishment of warehousing centers in domestic bonded areas to enhance the advantages in logistics experience and supply chain management has also been unanimously recognized by many cross-border e-commerce operation platforms.
From the development trend of the cross-border e-commerce industry, product categories are becoming more and more abundant, the differences between platforms are gradually weakening, and the industry reshuffle caused by price wars has become an inevitable trend.
It is worth noting for relevant practitioners in the industry that in addition to cross-border e-commerce platforms, a large number of cross-border e-commerce experience stores have also appeared in bonded cities such as Shanghai and Guangzhou. In the past few years since the rise of cross-border e-commerce, some businesses that profited through illegal means have also achieved rapid development under the wild growth of the industry chaos, but the adjustment of the tax reform policy of the regulatory authorities will make these businesses nowhere to hide, and the industry reshuffle process will be further accelerated, and the surviving players will usher in a new round of development.