Cross border eCommerce pilot zones in China was built as a new instrument to nurture cross border eCommerce and support China’s international trade development.

The first Pilot Zone was set in Hangzhou in March 2015. Up to now, 13 more pilot cities are added: Tianjin, Shanghai, Chongqing, Hefei, Zhengzhou, Guangzhou, Chengdu, Dalian, Ningbo, Pingtan, Qingdao, Shenzhen and Suzhou.

To all the foreign businesses that want to make an impact on China eCommerce, what are these eCommerce pilot zones good for? Here are seven advantages you should know:

1. To set up your bonded warehouse

Bonded warehouse is the biggest perk a pilot zone could offer. “Stock first, sell later” – your imported goods will be stored temporarily in the warehouse under the customs supervision once shipped to China.

When an order is placed, there will be a real-time declaration to Customs based on the particulars of the order, payment and logistics. Then the product will clear customs directly at the bonded warehouse and be delivered to the consumer.

Shipping from a bonded warehouse in China pilot zone help reduce waiting time for your customers. Generally it takes no more than five days for customer to receive a domestic package, while it will be around 20 days for oversea shipping. Moreover, the fact that imported goods requiring no customer clearance until a later stage simplifies the operation and reduces your costs.

[Related: B2C Online Retailer: How Do You Want Your Products Export to China?]

2. Improved efficiency and transparency

Aiming at solving the existed problems and speeding up the cross border eCommerce process, cross border eCommerce pilot zones also develop the following six systems:

Information sharing system;

Online financial services system;

Intelligent logistics system;

Ecommerce credit system;

Data monitoring system;

Risk management system.

Therefore, data and info are shared between administrations of customs, inspection & quarantine, taxation, foreign exchange, Industry & Commerce and postal. The improved transparency leads to a more efficient process, making your foreign business land in China eCommerce market much faster.

3. One-stop logistics hub

Shipping is always more complicated for cross border eCommerce, and pilot zone will save you a lot of trouble.

With the synchronized database, pilot zones will offer integrated services such as: custom clearance, imported goods registration, bonded warehouse application. No need to visit different bureaus just to get one thing done.

Shanghai Free-Trade Zone

Besides, big domestics logistics companies is devoted to providing convenient and reliable cross-border logistics and supply chain solutions within pilot Zone. Companies like SF and YTO offers various choice of services including Heavy Freight, Bonded Warehousing, Overseas Fulfillment, domestic shipping and more customized services to meet different customer expectation.

4. New policy transition period eligible

“New Policy” refers to the new cross border eCommerce policy announced by The Ministry of Commerce of the Government of China (MOF) in April, 2016.

The new policy outlined a strict set of rules: “customs clearance certificate” is introduced for the first time, which is essential for foreign products to enter pilot zone bonded warehouses. Moreover, cross border eCommerce “Positive List” required special registration, special licenses or filings under PRC law for first-time imported cosmetics, baby formula, medical equipment and special food products (including healthcare food products).

However, cross border eCommerce pilot cities and their customs inspection sectors have received a notice on May which suspended the new tax policy which will come into effective next May. Now MOF has extended this transition period to the end of 2017.

5. Demonstrates product authenticity

Even China eCommerce market represents world’s biggest growth yearly, fake products are still a serious problem. As a result, China eCommerce customers care about authenticity, a lot.

However, working with pilot zones will erase all doubts on authenticity: before stocking your imported goods in pilot zones, Customs the import licenses, import declarations and other documents need to be submitted. In other words, only real, legitimate foreign business can work with cross border eCommerce pilot zones in China. This will prove your products quality to your Chinese customers.

6. Supportive Rules from local government

Each pilot city has different supportive rules to encourage more foreign business to work with pilot zones and develop foreign trade.

For example, Ningbo offers free Internet usage and rental reimbursements for businesses entering Ningbo pilot zone. Ningbo pilot zone will also award those growing cross border eCommerce businesses with financial aids.

Meanwhile in Chongqing, tax incentives are used to attract firms. Certain qualified companies will enjoy a lower enterprise income tax of 15%.

7. Hong Kong laws applicable (in Shenzhen)

For all the foreign businesses struggling in China laws, Shenzhen’s Qianhai pilot zone could be your breakthrough.

Just across the sea from Hong Kong, Qianhai zone made a smooth relationship between the legal environments of China and Hong Kong: companies are allowed to adopt Hong Kong laws for Hong Kong-related commercial contracts in Qianhai, and Hong Kong laws are applicable to Qianhai commercial disputes. In addition, Hong Kong laws may be considered when signing Hong Kong-related commercial contracts.

Since Hong Kong common law is based on the common-law principles of England and Wales, British business will encounter fewer barriers when investing in China cross border eCommerce.

TMO Group Help Your China eCommerce

As a developing pioneer in China, TMO Group know China eCommerce ecosystem well, and we will to give you the service and quality workmanship that is well expected.

Please feel free to contact us with any questions regarding cross border eCommerce solutions that you may have.