• Wednesday, October 07, 2015

Haitao's international e-commerce boom hobbled by logistics

Staff Reporter 2014-04-19 18:02 (GMT+8)
yMatou's overseas shopping website. (Internet photo)

yMatou's overseas shopping website. (Internet photo)

Haitao — an increasingly popular cross-border e-commerce platform, is struggling to navigate the maze of international logistics. Many consumers have complained about serious delays in getting the goods ordered overseas, China Entrepreneur Magazine reports.

Since 2009, the international shopping market over e-commerce platforms has doubled every year in China, with the nation's annual revenue reaching US$14 billion in 2013. The figure includes shopping through Haitao and domestic e-commerce platforms such as Taobao's global shopping.

Haitao rising popularity has boosted the logistics business and Haitao's shopping guide websites. The shopping guide section can help customers collect discount information on overseas e-commerce platforms, teach customers how to order products, and arrange logistics firms operated by overseas Chinese to get the products and transfer them to China for a low price.

Major domestic private couriers have joined the fray, including giants SF Express and Shentong Express, which have opened their overseas logistics businesses.

For international shopping platforms like Haitao, consumers buy have two options for pricing spreads: one is the spread of online to offline operation, and the other is the spread between domestic and overseas product prices, experts said.

The biggest headache for Haitao's operations is logistics. Using recognized international logistics services such as UPS would be too expensive, but there are no reliable domestic logistics firms that can catch up with the demand.

Currently, Haitao's mainstream consumers are females aged between 25 and 35 years old with a monthly income averaging between 6,000 yuan (US$960)and 10,000 yuan (US$1,600). These consumers know the comparative advantages of foreign products in both pricing and quality, such as baby formula and health products, but they are also sensitive to pricing. That is why the evasion of taxes by cheap, small-sized logistics firms has become rampant.

The typical operation is one Chinese customer plans to buy one product from Amazon, arrange a US logistics firm run by overseas Chinese, print the address of the logistics firm's warehouse when ordering products, ask the e-commerce platform to send the product to the warehouse, which then ship the product to China's customs. Then domestic counterpart logistics firms take over to send the product to the customer.

In theory, the logistics cost should include the tariffs, but many small-sized logistics firms have been evading tariffs. The following problems will be safety and timely delivery. Almost every logistics firm has been accused by angry consumers on Haitao.

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Wang Xiaochu (王曉初)

Wang Xiaochu is president of China Telecom and an alternate member of 17th CPC Central Committee. Born: 1958 Birthplace: Weihai, Shandong province Country of Citizenship: China Education: ...