Using high, low, and strict description of cross-border e-commerce in 2018, what will be the trend in 2019?

Beginning in 2019, this era will gradually go away and enter the era of loose and strict management.

2018 is a very serious and profound year for cross-border e-commerce. In the view of Li Cong, deputy general manager of Fujian Longteng Network, he felt that he could use three words to describe the past 2018, that is, strict, high and low.

What is strict? Internal and external regulation tends to be strict.

What is high? Operating costs are generally increasing.

What is low? Industry changes under low growth flows.

It can be seen from the above three points that the overall pace of cross-border e-commerce in 2018 is slowing down. In the context of slowing down, there have been many very interesting or very profound changes in the entire industry landscape, and it is worthy of further consideration by the sellers – why are these three phenomena occurring?

Looking at the unfriendly trade environment from the international events

People often say that 60 years of a child, and 2018 happens to be the third year of the 18th year since 1898. Looking forward to the two pentacles have had some profound effects. In the big world that will change in the next few decades, cross-border e-commerce is also inevitable, such as the events that occurred in 2018:

1. Post, the United States withdraws from the Universal Postal Union, Spain rejects five groups of postal national parcels, and Russia rejects Mongolian post parcels;

2. Sino-US trade wars and tariffs. From the beginning of 2018 to the present, 10% or 25% of tariffs are pending. In the future, there are still many variables in the trade environment between China and the United States, and the Sino-US strategic partnership has become a competitor. This relationship may have to last for more than a decade;

3. Consumption tax and value-added tax, US and German tax compliance are imperative, and European VAT is approaching step by step.

In Li Cong’s view, these changes are rare things that have been seen for ten years, decades, or even centuries. These changes will now affect at least the next decade or so.

The domestic trade environment is also difficult

The most obvious change in the domestic e-commerce environment is the implementation of the E-commerce Law, which means that domestic e-commerce management has officially entered the era of the rule of law. It is embodied in the following four aspects:

1. According to the “Electric Business Law”, the Customs decided to dock the postal parcel data with China Post Corporation. This means that the logistics management is more strict. On the other hand, the State Administration of Taxation agrees that the 9610 line can be exempted from revocation, but the specific rules are set by the local tax bureaus, and the income tax is still not exhaustive. The combination of the two can be inferred that the future supervision of the parcels may also be carried out, which will be greatly changed in nature;

2. In terms of taxation, the original social security was changed from tax collection and taxation, and individual taxation was changed to a personal initiative. This is a very profound change for Chinese operators;

3. The “Golden Tax III” began to be strictly implemented, which means that the logistics invoices have a reserved logistics code in the future, which means that the interface to logistics will be more strict in the future. All data related to money, tax, industry and commerce, social security, statistics, and banks will gradually come down to this port;

4. Global taxation system. After the implementation of CRS, foreign accounts in the world may be subject to strict supervision. Including the central bank’s proposal, the company’s payment to individuals and personal funds will be subject to quotas, and the collection and management measures will be more stringent.

From the above, we can draw a conclusion that the era of strict collection of management in 2019 has arrived. If the “Electric Business Law” allows e-commerce to be legally compliant, then the initial formation of the electronic regulatory system makes it well documented. E-commerce has already encountered the era of e-licensing, and all systems will realize the dataization of the regulatory system, cross-sectoral chaining and internationalization.

In the future, all parcel data, line data, express mail data or customs air transport data will be included in the customs database. The customs database will be transferred to the Golden Tax 3 or Golden Tax System in the future. Then, the seller’s foreign capital flow will be fully supervised by the tax system and CRS, which means that the logistics and capital flow are closely regulated.

Cross-border e-commerce will show five major trends in the future

Under the above circumstances, in 2019, China’s remarks into the first year of taxation were naturally rolled out. In the 40 years since the reform and opening up in 1978, China has been in a wide-ranging administration, but it is also an era of high rates and high tax rates. However, starting from 2019, this era will gradually go away and enter the era of loose and strict management. However, it is foreseeable that challenges and opportunities coexist.

Population and labor force from the industrial environment: There are data showing that the birth data in 1991 was about 20 million. In 1999, there were only 11.49 million, which means that it was nearly half less than in 1991. If the population was born in 1999, it will take 22 years to graduate from college. After the age of 22, employment will begin in about 2021; if you are not admitted to college, college or high school, the next three years will be a year in which the population born in 1999 is gradually invested in the labor market, meaning that the labor supply will be in the next three years. In a state of decline, then rising labor costs are inevitable.

From the perspective of communication, the development of cross-border e-commerce industry: In fact, the development of cross-border e-commerce is somewhat consistent with the development track of modern communication operation technology conditions. The first stage is the 3G era; the second stage is the 4G era. From the development stage of these two eras, it can be divided into three links: the first link is the dividend period, and the traffic growth rate is fast; the second link has an inflection point, that is, the self-built station. Once the self-built station becomes a wind or becomes a boom, it is actually a problem with traffic. After the third link of the inflection point, basically the traffic growth rate began to slow down. Sellers should have strategies for different stages or links.

What is exciting is that China will gradually surpass the United States in the fourth stage, and the foreign cross-border e-commerce model will follow the Chinese model. In addition, because the growth of mobile traffic provides a possibility for the growth of goods, there will be more social traffic patterns in the future, from simple traffic distribution mode to incremental and social traffic. So, in the face of such a development path, what should sellers do? Li Cong gives the following three suggestions:

1. Find the right category and market. Different categories and markets are at different stages of industry development, and sellers should actively adjust their positioning;

2. Develop traffic increments. Get rid of the path dependence of the traffic distribution model, let “goods” + social to find people. At the same time, we must also pay attention to the opportunities of the new platform and offline;

3, practice internal strength. Strengthen the supply chain, close to the factory, and even participate in the factory. International procurement, looking for opportunities to do a good job.

Looking at the service format from the blessing of capital: Under the blessing of capital, the service format will get better and better. The specific performance is:

1. Overseas warehouse. In addition to the Amazon FBA, Chinese overseas companies may have a blowout in their areas in the next few years, and there will be more than one million square meters of overseas product companies, and even some overseas warehouses that only sell specialized products;

2. The dedicated line business will be faster and more convenient, and the service scope will be better, and the services provided will be more convenient;

3. Supply chain finance has been in the investment window for the past few years, and will be in the pattern of 0 to 1 innovation in the next few years.

However, there is a trend in this. The area and added value of overseas warehouses are still in short supply. If the overseas warehouses are large enough in the future, the amount of goods sold by sellers in overseas warehouses will affect its deformation to some extent; The increase in the amount of goods also means that its capital needs are greater, and the need for more capital will inevitably require credit. The premise of credit is that the seller must operate in compliance and for a certain number of years.

So in a sense, compliance has become an insurmountable threshold for cross-border e-commerce sellers, or sellers must cross the past.

From the above content, there are five major trends in summary:

The first one, compliance. Corporate compliance at home and abroad has become a threshold for development. How to deal with the cost increase brought by compliance, and the choice of market path, it is worth thinking about the enterprise;

Second, the scale of logistics. The involvement of capital has accelerated the development of the logistics and warehousing industry. The stability and cost of logistics services in the future will be significantly improved; and logistics enterprises with large-scale and larger service scope will emerge;

Third, financial popularization. In the future, supply chain financial products will be more abundant, and there will be financial products facing the needs of different sellers, which will be more liquid and stable.

Fourth, the platform is decentralized. With the slowdown of traffic growth, the new retail era of cross-border e-commerce is coming, the trend of socialization and decentralization is obvious; the marketing methods of sellers should keep pace with the times and open up online and offline channels;

The fifth, the operation of internationalization. With the changes in China’s manufacturing resources, the changes in the external environment, the internationalization of procurement, and the multi-nationalization of the market, the level of internationalization of sellers’ operations must be improved accordingly.

In addition, regarding the changing trend of market demand, the alternating trend of new and old platforms, and the improvement of operational skills, all 2019 sellers need to pay attention. If you want to know more about the industry dynamics of cross-border e-commerce in the new year, you can participate in the [2019 Cross-border E-Commerce Trends Conference] held in Hall 4 of Shenzhen International Convention and Exhibition Center on January 11.

(Text / Hugo Network Wu Guizhen)