Cus­toms cracks down on trade by pri­vate

China Daily (Canada) - - BUSINESS - By MENGJING mengjing@chi­nadaily.com.cn

The de­sire for for­eign goods pur­chased via the In­ter­net is be­com­ing so com­mon in China it has spawned the term hai­wai daigou, which roughly means over­seas shop­ping rep­re­sen­ta­tives.

These rep­re­sen­ta­tives, who make a liv­ing by sell­ing taxfree for­eign goods to Chi­nese buy­ers over the In­ter­net, are fac­ing a dilemma as a new cus­toms reg­u­la­tion re­quires all en­ter­prises and in­di­vid­u­als en­gaged in cross-border e-com­merce to go through the process of cus­toms dec­la­ra­tion.

An­a­lysts said that the new rule is good news to le­git­i­mate on­line daigou plat­forms, such as Tmall Global, but cat­a­strophic to small com­pa­nies and in­di­vid­u­als, who have been prac­tic­ing in the gray area of China’s boom­ing daigou mar­ket, which is es­ti­mated at 100 bil­lion yuan ($16.23 bil­lion) in 2014.

The new reg­u­la­tion from the Gen­eral Ad­min­is­tra­tion of Cus­toms, which came into ef­fect on Aug 1, stip­u­lates that all en­ter­prises and in­di­vid­u­als en­gaged in cross-border e-com­merce have to pro­vide a list of im­ported and ex­ported items to the cus­toms au­thor­i­ties.

When the value of the im­ported items reaches a cer­tain amount, the au­thor­i­ties will im­pose tax, which means the price ad­van­tage of pri­vate daigou will no longer ex­ist, said Lu Zhen­wang, an in­de­pen­dent In­ter­net ex­pert and the chief ex­ec­u­tive of­fi­cer of the Shang­hai-based e-com­merce firm Wan­qing Con­sul­tancy.

Lu said the new reg­u­la­tion is ex­pected to force pri­vate shop­ping rep­re­sen­ta­tives and small com­pa­nies to quit the busi­ness or trans­form value of on­line busi­ness in China in 2013, ac­cord­ing to a China E-com­merceRe­search

Cen­ter study their busi­ness model.

“Those who do not play by the rules will be seen as law­break­ers or even smugglers. That’s a risk few­peo­ple would want to take,” he said.

The ex­act num­ber of those who are en­gaged in pri­vate daigou busi­ness is un­known. They of­ten spread the in­for­ma­tion of the goods they sell from Alibaba Group Hold­ing Ltd’s Taobao mar­ket­place to weibo ac­counts of Weibo Corp, a Twit­ter-like ser­vice, and Ten­cent Hold­ings Ltd’sWeChat, a pop­u­lar mo­bile mes­sag­ing app with more than 400 mil­lion users.

Sta­tis­tics from the Hangzhou-based China E-com­merce Re­search Cen­ter show the mar­ket for on­line daigou amounted to 74.4 bil­lion yuan in 2013. The cen­ter fore­casts it will ex­ceed 100 bil­lion yuan in 2014.

Yao Jian­fang, an an­a­lyst with the e-com­merce re­search cen­ter, said that large on­line plat­forms with proper cus­toms dec­la­ra­tions, such as Alibaba’s Tmall Global and JD.com Inc, which both di­rectly link over­seas mer­chants with Chi­nese buy­ers, are ex­pected to ben­e­fit from the new­cus­toms reg­u­la­tion as the surg­ing de­mand for over­seas prod­ucts is ir­re­versible.

“The in­creas­ing wealthy Chi­nese cus­tomers sim­ply adore for­eign brands. Lux­ury goods, cos­met­ics and baby­care prod­ucts are those in high de­mand by Chi­nese shoppers,” she said.

How­ever, how to su­per­vise pri­vate be­hav­ior could pose for au­thor­i­ties. ac­tu­ally daigou a chal­lenge

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