Goods Returning to China’s Cross-Border E-commerce Welcomes Favorable Policies

On January 30, China’s three departments jointly issued an announcement on the tax policy for returned goods in cross-border e-commerce. The returned goods will be exempted from import duties, import value-added taxes and consumption taxes. Moreover, the export duties already collected at the time of export will be allowed to be refunded.

In short, if goods sent by cross-border e-commerce enterprises are returned from abroad to China again, the tax bureau will refund the export duties already collected before. After this, in addition to freight and customer service operating costs, cross-border e-commerce enterprises can further save tax costs, reduce losses caused by returns, and improve turnover efficiency.

According to the latest data from China’s Ministry of Commerce, China’s cross-border e-commerce import and export scale in 2022 was 2.11 trillion yuan ($312 billion), up 9.8% year-on-year. At the same time, the new business model of e-commerce is showing some vitality.

In Hangzhou, where the pilot project of cross-border e-commerce was first launched, many cross-border e-commerce enterprises have put overseas transactions on the agenda. After the Spring Festival holiday, many merchants have set off for the United States to seize more orders, and the plan to visit Africa in the first quarter has also been put on the agenda. For foreign trade and cross-border e-commerce enterprises participating in international exhibitions and self-organized exhibitions, Hangzhou has put forward subsidy plans to help them reduce costs and increase efficiency.

According to Shanghai Customs’ data, in 2022, cross-border e-commerce at Shanghai Port developed strongly, with 152 million export declarations throughout the year, an increase of 58% year-on-year, ranking third in China. Some logistics enterprises also started to get involved in the cross-border e-commerce freight business in 2022, and processed millions of orders in less than one year. Shipping destinations have included the United States, Britain, Japan, Vietnam and others.

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Domestic Internet e-commerce platforms performed well in their global expansion efforts in 2022. AliExpress, an online retail service based in China and owned by Alibaba, attracted many consumers from Europe and America in the winter of 2022, many searching for heating devices. Pinduoduo‘s online marketplace Temu had previously occupied first place among downloads of US e-commerce apps. In a series of promotional shopping festivals in Southeast Asia at the end of the year, Alibaba‘s Lazada’s sales increased rapidly.

According to Orient Securities’ report, Chinese firms’ global expansion has developed into a new stage, benefiting from the increase of overseas online retail penetration rate. Chinese e-commerce companies have a solid basic ability in commodity and logistics, and their business model will continue to evolve in the future.