Subsidies and other forms are used to suppress price increases to avoid touching the sensitive points of consumers
During the buffer period, the tax rate adjustment will still be levied in accordance with the adjustment of the new tax reform policy. All goods obtained by consumers through cross-border channels need to be taxed according to the retail price, and the express delivery costs caused by the transportation process are naturally also included in the tax collection. This also shows that the price increase of goods purchased by overseas shopping users has become an inevitable trend.
Therefore, in the next long period of time, cross-border e-commerce platforms need to strengthen their own supply chain management capabilities, control input costs in various links such as product selection, warehousing, and logistics, and make up for the impact of price increases on users as much as possible. Of course, in terms of supply chain management capabilities, compared with start-ups, giants such as Tmall Global and JD Global Shopping will have greater advantages.
After the implementation of the new policy, the tax costs of maternal and child products, health products, cosmetics, etc. have increased, resulting in a substantial increase in the prices of related products. From the current development of the entire domestic cross-border e-commerce platform, it is the low-priced popular brands in these categories that support the development of many platforms. Data released by market research institutions show that since the implementation of the new policy, domestic cross-border e-commerce platforms have experienced price increases of varying degrees.
The prices of some cosmetics in No. 1 Haigou have increased significantly, the price of infant formula in JD Global Shopping has increased by nearly 44%, and the figure for adult formula has reached 60%. How to effectively control prices and reduce consumers’ negative emotions towards cross-border e-commerce due to price changes is a key issue that all major cross-border e-commerce platforms need to solve.
In order to break the current dilemma, Tmall Global has provided subsidies to itself and overseas brands to ease the pressure on consumers caused by price increases; JD Global Shopping only provides partial subsidies to itself and brands, and consumers have to pay for the remaining part; NetEase Kaola Haigou has reduced logistics and management costs through large-scale procurement, which has played a good role in keeping prices stable.
However, overall, the price increase of Haigou products is an inevitable trend, and the current price has a significant impact on consumer decisions, which undoubtedly poses a huge challenge to the operational capabilities of the majority of e-commerce platforms.
2. Actively improve the supply chain and end the barbaric industry development in advance
The policy adjustment of the suspension of the implementation of the new tax reform policy is only a phased measure, which can enhance the integration of resources and may become the key to the development of the cross-border e-commerce industry. In fact, before the new tax reform policy was implemented, relevant practitioners said that the regulatory authorities should give cross-border e-commerce platforms more buffer time to allow them to complete the transformation and upgrading through their own adjustments, so as to avoid the relevant practitioners and investors from suffering heavy losses due to untimely adjustments, thereby causing the cross-border e-commerce industry, which is just in its infancy, to fall into a development dilemma.
It is quite surprising that the major cross-border e-commerce platforms in fierce competition have shown unprecedented unity in the communication process with government departments. However, the implementation of the new policy is a foregone conclusion, and the era of barbaric growth in the cross-border e-commerce industry is destined to become a thing of the past. Only by improving their own supply chains can the major platforms gain a firm foothold in the fiercely changing market environment.
Establishing storage centers overseas is an inevitable choice for major e-commerce operating platforms, but this will also lead to a substantial increase in commodity costs and even tax outflows, which is by no means the outcome that the regulatory authorities want. The postponement of the new tax reform policy also conveys a very clear message to cross-border e-commerce platforms: the competition between cross-border e-commerce platforms has always been a competition of e-commerce models, and supply chain control capabilities and capital strength will be the core factors for cross-border e-commerce platforms to achieve leapfrog development.
For the entire cross-border e-commerce industry, there is not much difference between start-ups and cross-border giants. In recent years, the development of the cross-border e-commerce industry has been driven mainly by price advantages and policy dividends, and the implementation of the new policy has brought about drastic changes in the cross-border e-commerce industry.