Are Cross-Border Electric Providers Ready To Face Harsh Competition?

In early March this year, the General Administration of Customs revealed that China's cross-border market in 2015.

Exports and imports increased by 4.9 times and 16 times respectively.

And data show that in 2015, "black five" overall turnover increased by nearly 30 times over the same period, and the increase in orders was nearly 35 times.

But behind these heartening figures is

Controversial commodities such as counterfeit goods and rights are hard to wait for.

Worse still, the dividend policy that cross-border electricity providers are enjoying may be coming to an end. Are these market and capital favorites ready to face the brutal competition?

On the eve of tax reform, cross-border electricity providers have been enjoying dividend policy.

In July 2014, the General Administration of Customs issued successive announcements on regulatory matters relating to the entry and exit of goods and articles in cross-border e-commerce, and the announcement on adding codes of customs supervision, known as "No. 56" and "No. 57" in the industry, recognizing cross-border e-commerce from the policy level, and also endorsing the prevailing bonded mode in the industry. The move was seen as a clear regulatory framework for cross-border electricity providers.

Before the publication of the two documents, the opening of the "6+1" cross border electricity supplier pilot city gave preferential policies for cross-border electricity supplier taxation, that is, overseas products purchased through cross-border e-commerce channels only need to pay the postal tax, eliminating the general import.

"Tariff + value-added tax + consumption tax".

The larger dividend policy comes from the relevant policies of the State Council executive meeting on April 28, 2015, including lowering tariffs on imported products, reforming the tax system and restoring port duty free shops. This shows the government's determination to promote consumption to return to China.

But rumor has it that the new tax reform means that the policy bonus period for cross-border electricity providers is about to end.

According to Tencent science and technology, the main contents of the new policy include: cross border electricity retail import is no longer taxed according to the postal tax, which means that the preferential tax exemption within 50 yuan will also be abolished. The personal single paction limit is 2000 yuan, the personal annual paction limit is 20 thousand yuan, the quota paction is exempted from customs duties, the import link value-added tax and the consumption tax reduction and exemption 30%, and the part exceeding the quota is taxed according to the general trade mode.

It is reported that the policy will be implemented in April 8th. Further news is that the policy may be tried first in the Guangzhou bonded area and then cover all relevant bonded zones in the first half of this year.

According to the insiders of cross-border e-commerce, Tencent has said that the policy has basically passed, and only a few specific figures are still under discussion.

At present, the pilot cities adopt a policy of imposition of postal tax on cross-border electricity supplier imports.

According to the type of goods, the postal tax has four tax rates of 10%, 20%, 30% and 50% respectively.

Generally speaking, the total tax rate is lower than the general trade because the postal tax is packaged in the value-added tax and customs duties in the import sector, and it can be exempted from taxation if the tax is less than 50 yuan.

However, there have been doubts about postal tax instead of customs duties and value-added tax. There are also comments that the postal tax mode has led to the loss of state revenue.

According to the latest cross-border electricity supplier tax collection mode, a small part of the commodity tax burden will be reduced, but the vast majority of commodities tax will increase.

In response to the latest tax rumors on cross-border electricity suppliers, Liu Nan, CEO, welcomed: "we are looking forward to the introduction of relevant tax laws, which means that the country is now very recognized in the field of cross-border electricity."

However, there are also senior cross border electricity supplier executives who do not want to be named, who told Tencent technology that if rumors are true, they will cause damage to cross-border electricity providers. First of all, adjusting the price is positive, because the existing electricity supplier's net profit has not exceeded 10%, but the increment of value-added tax is close to 12%. Second, the electricity supplier for mother and infant and other just needed commodities is devastating, because the 12% increase will make mother and child cross-border electricity providers totally lose their price competitiveness. Finally, the consumption tax itself is also in the reform category, which may further widen the price difference between some popular products at home and abroad.

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In his view, the major advantage of the cross border electricity supplier tax mode is the performance cost and the high price per unit price: "with 2000 as the quota, it can increase the customer's unit price and reduce the cost of performance. For the products with a high tax rate of 50%, due to the small proportion of the current sales, the future expectation is good, and the commodity richness will increase."

Liu Huipu, senior vice president of jumei.com, told Tencent technology that after the tax reform, the attraction of cross-border e-commerce products will be reduced.

"After the tax reform, all goods will grow at a price of 5% to 15%, which will inevitably lead to a decline in attractiveness."

Liu Huipu believes that "compared with 2016, the cross-border electricity supplier industry may enter a period of adjustment, because the 2015 cross-border electricity providers are running too fast."

If the problem of tax reform will make cross-border electricity providers feel a crisis, then the problem of counterfeit goods may make them feel that they are involved in life and death.

In March 10th, the China Electronic Commerce Research Center released the "2015 China e-commerce user experience and complaints monitoring report".

The report shows that in 2015, China's e-commerce complaints and rights protection public service platform received a total number of consumer complaints related to the electricity industry, which increased by 3.27% over the same period in 2014. Among them, cross-border e-commerce complaints were ranked third in 7.53% complaints.

According to the relevant data, the problem of counterfeit goods in cross-border electricity providers is concentrated on brand authorization and purchase channels, especially the problem of selling fake milk powder, diapers and health products.

After the end of last year's crazy black five, a classic piece about counterfeit goods and counterfeit goods flooding is: "a classic Ferrari with a global limit of six cars has sold seven vehicles in China."

Last year, Tencent science and technology focused on the "3CE" brand in the domestic Shanzhai incident, and with the vigorous rise of cross-border e-commerce, more foreign brands began to have the same experience in China.

According to the relevant legal personage, if there is no authorization to use the trademark to produce, it will constitute infringement, but this brand edge ball is not well defined in the legal aspect.

More direct counterfeit behavior comes from overseas bag companies.

In July last year, Italy customs discovered that there were illegal elements involved in pporting more than one million counterfeit goods to the locality, including six hundred thousand Chinese counterfeit condoms.

More than 20 people were arrested and most of them were Chinese.

A domestic cross border e-commerce operator told Tencent technology that the ultimate goal of these fake commodities is likely to be sold back to China, and through cross-border e-commerce channels: "after a large number of fraudulent sales in the country and overseas sales, a number of loosely controlled country purse companies are sent back to China, with overseas shipments and entry certificates, and the profits are very substantial."

At present, Taobao can find a large number of businesses to purchase information about the packaging of health products bottles and milk cans. The cross border e-commerce operator also told Tencent Technology: "many goods are packaged in the country and washed abroad."

In addition, overseas is no longer a pure land. Italy, South Korea and other countries have also witnessed local fraud. At the beginning of this year, the South Korean Patent Office seized a fake manufacturing dens in South Korea. Although the dens have been closed, there are still more than 100 thousand counterfeit beauty mask to the mainland market, most of which are inflow through e-commerce channels, such as purchasing agents and Hai Tao.

Such covert fraud makes it easier for the cross-border e-commerce platform to be deceived. According to Tencent technology, most cross-border e-commerce platforms are unable to get the direct authorization of all the merchandise they sell, and even some brands are quite exclusive and have direct contact with the electricity supplier channel.

These cross-border e-commerce platforms often use the patterns purchased directly from local shopping malls, but this is often the easiest place to buy local fakes.

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Before the tax reform rumor appeared, a cross-border electricity supplier executives told Tencent technology that there are many cross-border electricity suppliers on the market just for cross-border purposes.

"Some commodities were originally priced at a low price and the tax threshold was relatively low.

What's more, the general trade is taxed according to the wholesale price, and the cross border electricity supplier should have been taxed according to the retail price. There is no price advantage at all. "

In his view, some of the cross-border electricity providers now do not work hard on the industrial chain, but are making profits through the use of dividend policy.

The above executives stressed that tax will not be inclined to cross border tax for a long time, because the balance between traditional trade interests and traditional trade needs to be considered. Now all the pilot governments are exploring the river while feeling the stones.

There is bound to be a change in the future.

In a word, it seems that dividend policy is now closing.

According to the insiders, the cross-border electricity supplier still accounts for a large proportion of cross-border goods. However, the supply channel of overseas explosive brands is unstable, and the possibility of direct signing cooperation with domestic platforms is small. The platform ensures that the supply of explosive products usually adopts composite channels, and the price is difficult to control. Mao Liqu is close to 0.

But even so, part of the electronic business platform is still out of stock.

Now, when the policy dividend is lost, cross-border electricity providers have almost no advantage in price.

But at Zeng Bi Bo, CEO, it seems that the tax reform is a summative judgement through the past three years of cross-border e-commerce pilot work: "from the" tax "at the most basic level to determine the mode and status of cross-border electricity providers, representing the state and the government's positive attitude towards cross-border electricity supplier industry development.

The new policy of tax reform will also speed up the maturity of the industry and guide the industry to "go from chaos to governance" and enter the high-speed development track of standardization, mechanism and scale. This is a sign that the industry has entered a mature stage and is absolutely good for the medium and long term development of the industry.

"Bonded warehouses and bonded logistics in the future are no longer the exclusive advantages of a few large electric business platforms. More ports and regulatory zones with regulatory conditions can carry out bonded import business, which is a long-term good for all SMEs."

Zeng Bi Bo further indicated that after the policy is clear, the regulatory system will mature.

In Liu Huipu's view, under the new policy system, if cross border electricity providers insist on making explosive products, it is difficult to survive: "domestic brands often use electric providers to create explosive products to solve their inventory problems, but if cross-border electricity providers only make explosive products, they will be trapped in price wars rather than doing some special and long tail products, so it will be very difficult to survive."

Turning to the new competitive environment of cross-border electricity supplier in 2016, Zeng Bi told Tencent Technology: "the tax reform will affect the cross-border electricity supplier mode which relies entirely on bonded in the short term, which will be more obvious in the short term, and will have little impact on the direct mail system. This will benefit part of the direct mail mode. The products with more stock depth and uncertain sales rate will be more applicable to the direct mail system, but the fragmentation mode of direct mail is very difficult. No matter how the tax system is adjusted, the whole chain integration capability of the direct mail logistics and supply chain organization is difficult to build in the short term.

In the future, how to balance various stocking modes in the supply chain organization will be a major test for the major e-commerce platforms, which may promote the emergence of new models and patterns in the industry.

Data show that last year, "black five" in the domestic consumption trend showed a "anti explosion" mode, compared with last year's maternal and child health care products sales accounted for more than 50%, this young luxury goods, clothing category occupied the "black five" domestic sales mainstream position.

This is because maternal and child products are the representatives of life demand commodities, and the demand is relatively stable. In the early days of cross-border e-commerce development, most of them started with mother and infant standard products, and opened the market through activities such as "low price" and "explosive money", so that milk powder, diapers and other items became synonymous with overseas shopping.

After meeting the basic needs of life, consumer demand driven by personal interests or interests is more likely to stimulate consumers' desire to buy overseas.