MARKET INSIGHTS CHINA .kr

[Pages:11]MARKET INSIGHTS

CHINA

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CHINA

AT A GLANCE

QUICK INTRODUCTION

Population: 1.4 billion Currency: CNY

VAT: 17% GDP per Capita: US$11,199

56.26%

Internet penetration

US$3,428

Average spend per shopper

US$681.9bn

B2C e-commerce turnover

33.3%

Growth e-commerce market

36%

Of the population shops online

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CHINA

E-COMMERCE DEVELOPMENT

This year, nearly one-quarter (24.0%) of digital buyers in China will buy internationally, eMarketer predicts -- representing an 11.5% increase from 2017.

Cross-border retail e-commerce sales will rise 15.3% in 2018 to reach US$115.47

billion, and will hit US$144.15 billion in 2021

Pitney Bowes pegged China's 2017 increase in cross-border buyer penetration at

12%, second only to India (18%). As for the rest of Asia-Pacific, the share of digital buyers purchasing on foreign sites is still increasing in South Korea (8%), while Australia already has a high number of buyers making purchases internationally

Cross-border e-commerce in China will remain unfettered in 2018 as the Ministry of

Commerce (MOFCOM) ? People's Republic of China, for the second year, decided to postpone higher taxes on goods bought online from foreign sites

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CHINA

DELIVERY PREFERENCES

Signature Release

Neighbor Delivery

Scheduled Signature Vacation Service Point Alternate

Delivery

Form

Hold

Delivery

Address

8% 20% 54% 0% 7% 6% 7%

SHIPPING TO CHINA

1-2 164

Days transit time DHL Service Points

US$8,00

De minimis value

ODD Options Available:

1. Signature release 2. Neighbor delivery 3. Scheduled delivery 4. Signature form 5. Vacation hold 6. Service Point delivery 7. Alternate address

E-COMMERCE SALES

(US$, billions)

545.7 480.2 389.9 304.1 211.9

2012 2013 2014 2015 2016

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CHINA

E-COMMERCE ENVIRONMENT

China is the largest e-commerce market in the world with a higher market volume than the US. 41% of online shoppers have bought an item from Europe. 67% of Chinese online purchases are made through eWallets. Chinese buyers purchase overseas products online to fulfill their demand for premium goods.

41%

Of online shoppers have bought from the EU

TOP ONLINE PAYMENT METHODS

eWallet (PayPal): Credit cards: Bank transfer: Cash on delivery: Other: Debit cards: Pre-paid

62% 10%

8% 8% 5% 4% 3%

SOCIAL MEDIA USAGE

China is the world's largest social network market. Its market composition varies considerably from the rest of the world. Due to the Great Firewall of China, Facebook, Twitter and YouTube are all blocked in China. However, China's social media landscape is not incomparable with its western counterparts. Tencent's Qzone, the most valuable social media brand in China as of 2013, is a combination of Facebook and Tumblr, where users share photos, leave messages and blog.

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CHINA

REASONS FOR BUYING ABROAD

Most Chinese consumers favor cross-border shopping due to better quality products, better offers, variety and authenticity. The need for authenticity was stronger in 2017, as there were continuous media reports on counterfeit products in local retail markets.

H1 2017

Better quality

Better cost performance

Wide range of choices

Authenticity assured

2016

Better quality

Lower prices for same product

Better availability than domestic

Wide range of choices

EC100 research shows that Chinese customers are shifting from being price sensitive to quality sensitive. This means that Chinese shoppers will accept higher prices if products have better quality and brand prestige.

2016

Price

Quality

2017

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CHINA

FACTS AND FIGURES

E-SHOPPER PENETRATION: REGIONAL

Share of internet users shopping online, regional, 2017 (f)

43.5%

43.5%

45.5%

50.4%

58%

70.0%

E-SHOPPER SPENDING GROWTH

Average amount spent per e-shopper, per year, Asia Pacific, 2014- 2017(f); e-shopper spending growth rate, Asia Pacific, 2015-2017(f), US$

5.25% -1%

6.7%

1,293.73

1,154.78

1,218.81

1.206.81

South Asia America Pacific

Middle East & Africa

Overall

Europe North America

North America has the highest share of e-shoppers at 70%.

2014

2015

2016

2017

Average spending per e-shopper is increasing in Asia Pacific.

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CHINA

CLEARANCE MODES

1. Personal Effects

Commodity or gift sent from one private

individual to another (unregulated single piece shipments only).

Sufficient quantity for personal use Tax 15%,

30% or 50% (majority under 30%). Unaccompanied baggage

Max value limit 1000 RMB (800 if from Hong

Kong, Macau & Taiwan) about ?111. Single items over max value limit may be permitted B2C technically should not clear as PE

2. Informal (aka KJ3 or Express Clearance)

Exclusively for Express carriers IOR needed

to clear.

Less complex process but phasing out, only

available in 4 GTW

3. Formal

IOR needed to clear. Complex process. Most private individuals & businesses that do

not import regularly do not know how to do formal importation.

Customs have right to request ANY paperwork

and be inconsistent in documentation needs. 3 months to clear

4. B2C Platform (CERI)

Suitable for large number of commodities. Max shipment value approx ?223, max annual

personal limit ?2230. Tax 11.9% average. No duty.

Need to register stock with CIQ and keep up to date

as lines end, new lines sold. Need CERI compatible CN payment vendor. Need CN legal entity for customs registration. Need EDI interface with CN customs

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