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The following is the Cross border e-commerce takes advantage of tax exemption From Consumption situation in 2021 recommended by recordtrend.com. And this article belongs to the classification: Electronic Commerce.
2020 has become history.
Looking back on this year with mixed feelings, apart from the epidemic situation, the word we hear most is probably promoting consumption. In order to boost the economy, both the central and local governments have taken “promoting consumption” as an important starting point for macroeconomic policy-making. Many people have witnessed the sudden emergence of live broadcasting with goods, remembering key words such as consumption vouchers and internal circulation.
What are the highlights of the consumer market in 2021? Let’s look ahead.
1、 Growth will become the core keynote of the whole year
As we all know, at the beginning of 2020, a sudden new epidemic disrupted everyone’s rhythm. In order to prevent and control the epidemic, a large area of residents were isolated in the first quarter of the year, and various transportation control measures were taken in various places, which led to poor logistics in some areas, affected the realization of consumption, delayed the resumption of work and production in some enterprises, affected the supply of consumer goods, and made it difficult for the market demand to be fully met For various reasons, the growth rate of consumption has dropped sharply.
Since then, with the domestic epidemic prevention and control situation becoming more and more stable and better, all walks of life have been steadily promoting the resumption of work and production, business and market, the inter provincial mobility of Chinese people is no longer limited, the national economy is increasingly returning to the normal track, and the consumption growth momentum is constantly recovering. In August, the year-on-year growth rate of social zero has changed from negative to positive, and the cumulative year-on-year negative growth rate is also increasing As a result, the number of flights has returned to the level before the epidemic, which not only shows the strong resilience of China’s economic development, but also reflects the huge consumption potential of people going abroad (see Figure 1 and Figure 2).
So, will this good momentum continue in 2021? In my opinion, unless there is another extreme situation, the answer will be yes.
After a whole year of experience, we have accumulated a lot of mature experience in epidemic prevention and control. Even if sporadic cases still occur from time to time in China, we can quickly control the situation and put it out every time. Moreover, the vaccine has been published and promoted, so the possibility of a large-scale outbreak in China is almost zero, which provides a basis for the continuous recovery of the follow-up consumer market It provides a solid guarantee: people will no longer have to be isolated in a large area as during the Spring Festival in 2020, shopping malls, restaurants and cinemas will no longer have to close down, and logistics will not be overstocked again When the epidemic situation will not impose strong restrictions on consumption scenarios and production activities, the growth of consumption will naturally occur.
In addition, there are three forces to boost the consumer market:
(1) Demand side: consumer demand has stabilized and confidence has been constantly restored.
The recovery of the national economy has led to a rebound in the growth of people’s income. From the data point of view, the actual cumulative per capita disposable income of residents in China has turned from negative to positive in the third quarter of 2020 (see Figure 3). At the same time, people’s consumer confidence and expectations for the follow-up market trend are improving day by day, which will lay a foundation for the stability of consumer demand and the release of consumption potential.
(2) On the supply side: new formats are expected to continue to lead new consumption.
Under the pressure of the epidemic, online consumption will rise like an elephant in 2020, from fresh e-commerce, live delivery, online group shopping, to short video entertainment, games, online education, online medical consultation, and telecommuting. Behind the phenomenon is the acceleration of the digital process in all walks of life, the popularity of mobile phones and other mobile terminals, the comprehensive coverage of the Internet, and the display of new momentum of consumption growth.
Nowadays, with the development of “new infrastructure”, the digital infrastructure of the consumer market will be further improved, coupled with the overall acceleration of online and offline integration process, the smart supply chain is constantly integrating, various new formats and new models are booming, and the new consumption habits of Chinese people are increasingly formed, which will inject a steady stream of growth power into the consumer market. It can be expected that new consumption will continue to play the role of “ballast stone” in 2021.
(3) Policy: favorable policies are emerging.
In recent years, the country has paid more and more attention to the improvement of people’s lives, and has made efforts to introduce a series of policies to stimulate the release of the consumption potential of Chinese people. As mentioned above, from the central to local governments, promoting consumption has become an important starting point of macroeconomic policy-making. In the fourteenth five year plan, it is clearly mentioned that we should “strengthen the basic role of consumption in economic development, conform to the trend of consumption upgrading, enhance traditional consumption, cultivate new consumption, and appropriately increase public consumption”, and the important position of consumption is reiterated. With the gradual implementation of the early policy, the consumer market is bound to continue to prosper.
In a word, “growth” will become the core keynote throughout the consumer market in 2021.
2、 Tax free consumption guides consumption return
Just after the new year’s Day holiday, a piece of news attracted great attention from the market
“During the new year’s Day holiday this year, Haikou customs supervised the sale of 669000 duty-free products from outlying islands, with 76000 people shopping and a sales amount of 540 million yuan, an increase of 200%, 80.9% and 195.16% respectively over the same period of last year, creating a new record for the new year’s Day holiday over the years.”
The data reveal the huge energy of the tax-free economy and the fact that overseas consumption has returned.
For various reasons, quite a number of people in China are keen to spend their money overseas when they have a choice, especially in the field of luxury consumption.
For many years in a row, China is the world’s largest consumer of luxury goods. According to Bain’s global luxury market tracking, the global personal luxury market sales in 2019 amounted to about 281 billion US dollars, of which 35% came from Chinese residents. However, over 70% of China’s luxury goods consumption was completed overseas, including clothing, perfume, box bags, jewelry, watches and so on. A large number of overseas shopping not only causes a deficit of more than 200 billion US dollars in tourism service trade every year, but also consumes a large amount of foreign exchange reserves in China, and aggravates the outflow of consumption.
The reason for this is that the tariff rate of luxury goods is relatively high, the objective factors exist, the price difference between domestic and foreign is generally large, and the more friendly overseas price has become the biggest chip to attract the attention of Chinese consumers.
However, from another perspective, if we can really improve the price and richness of luxury goods in China through some effective measures, then this part of the outflow of consumption is easy to stay in China. Naturally, this kind of consumption “transfer” is easier than blindly “mining” domestic consumption.
In this context, the tax-free economy is on the air: due to the exemption of import customs tax, import link consumption tax, value-added tax and other taxes, the price of duty-free goods is generally about 30% lower than that of the same goods in department stores; at the same time, duty-free goods are all international famous brands, which are purchased directly from international brand suppliers, with authentic protection; the main categories of goods include tobacco products Products, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry and advanced writing tools, candy and food, luxehome supplies, etc., are also more closely related to the overseas consumption structure.
Therefore, by actively arranging the development of domestic duty-free industry, taking measures such as increasing the number of duty-free shops and types of duty-free goods, and increasing the duty-free shopping quota, we can accurately target specific consumers and provide them with richer consumption choices, and will not cause a large-scale impact on the national retail system and ecology, which can be called the most effective way to undertake the return of overseas consumption Hold hands.
Therefore, we can see that in 2020, China will vigorously promote the implementation of Hainan tax-free policy, reducing commodity prices through tariff reduction and value-added tax. Under the development keynote of “domestic big cycle”, Hainan Island tax-free policy has undergone several rounds of adjustment, and the preferential strength has been improved to a higher level (see the table below), which has greatly stimulated the upsurge of Chinese people to go shopping.
In addition, the release of tax-free license is also a positive signal.
For a long time, China’s tax-free business is exclusively managed by the state, which adopts the license access system. Enterprises must be approved by the relevant departments before they can have the business qualification to carry out the duty-free goods business. The opening of new duty-free shop outlets also needs to seek the approval of the relevant departments. The duty-free goods are imported, retailed and formulated by the business units of duty-free shops Management regulations. This, to a great extent, limits the entry of non-state-owned capital. Coupled with the scarcity of tax-free licenses, it is not conducive to market competition and the improvement of operation level.
However, this situation has changed.
On June 9, 2020, Wangfujing Group Co., Ltd. announced that it had obtained the qualification of duty-free products. It is worth mentioning that Wangfujing group is different from other enterprises in terms of its main business and enterprise nature, which reflects the changing conditions and direction of the approval of tax exemption qualification by the state. It also shows that China’s tax exemption policy has been further liberalized, and the degree of market-oriented reform has been strengthened. Based on its strong store layout, its role in brand resources and consumption has been strengthened With the accumulation and advantages of scene, operation experience and other fields, Wangfujing group is likely to make efforts in duty-free shops, which is another vast blue ocean.
On the one hand, the epidemic situation overseas is still severe, the number of tourists going abroad is declining sharply, and the consumption that once flowed out will be transferred to China. On the other hand, the tax-free policy will be gradually liberalized, and the duty-free shops may step on the fast track of development. These are all good news for the consumer market. Let’s see how the tax-free economy will make a big impact in 2021.
3、 Consumption upgrading drives industrial upgrading
During the epidemic period, many discussions about “consumption degradation” emerged in the market. However, in my opinion, the pace of consumption upgrading has not stopped or regressed because of the arrival of the epidemic, just because the connotation of consumption upgrading has been misread by many people.
The judgment of consumption upgrading should be based on whether the consumer welfare has been improved or not. The so-called “consumer welfare” includes not only the increase of total consumption and the optimization of consumption structure, but also the improvement of consumption quality, the richness of consumption content and the diversity of consumption forms.
According to the Research Report of Guotai Junan Securities, there are two mechanisms for improving consumer welfare: one is the “wealth effect” caused by the increase of residents’ income; the other is the “progress effect” caused by the change of production curve caused by the progress of science and technology, which leads to the change of residents’ consumption choice and consumption mode (see figures 5 and 6). All kinds of complex consumption upgrading phenomena and market behaviors can be explained reasonably, which also tells us that it is biased to judge consumption upgrading or degradation only from commodity price or quality.
It is not difficult to find that the current consumption upgrading of Chinese people is mainly reflected in two aspects
First, there is a strong demand for quality consumption.
The outbreak of the epidemic has triggered an unprecedented scale of national health education, and consumers’ awareness of health consumption has reached a new height. Whether it is the use of products or lifestyle, consumers generally attach great importance to the options with health, safety, quality and other attributes. As a result, we can see that the products that can reduce diseases and meet the long-term needs of nutrition and health are more and more favored by consumers, fresh food is highly sought after, the demand for health appliances continues to rise, and the rise of national sports makes fitness equipment hot sale. These are the performance of “upgrading”.
At the same time, consumer demand in the higher end of the market is still strong. From the data point of view, the year-on-year growth rate of retail sales of cosmetics, communication equipment, gold, silver and jewelry, which represent high-quality consumption, is basically higher than that of social zero (see Figure 7), which further proves the overall consumption upgrading trend of Chinese people.
Second, consumers are becoming more mature.
After the epidemic, some people began to rethink the meaning of wealth, and their consumption became more rational. They paid more attention to the pursuit of self realization demand, and also paid more attention to the quality and cost performance of goods. The consumers who originally advocated high cost performance goods became more determined, while the consumers who were pursuing personalized goods and famous brands before began to consciously desalinate their products The persistence of brand premium is similar to Japan’s “fourth consumer society”, that is, returning to the true meaning of consumption, valuing the commodity itself rather than blindly pursuing personalization and high-end brands.
It is worth mentioning that, affected by the experience of the whole country uniting as one to fight the epidemic, the national cohesion and cultural identity of Chinese people have been strengthened; at the same time, under the new development idea of “domestic circulation”, we will rely more on our own strength to seek development, which is a rare historical opportunity for the rise of local brands. We have reason to believe that a new wave of domestic products is on the way.
Under the pressure of consumption upgrading, the “quality revolution” is bound to speed up further in 2021, which will also drive the all-round upgrading of the industry, including product development, creative design, performance control, product packaging and marketing. At the same time, local brands will also catch up quickly, pay more attention to product quality and value creation, and constantly improve Product added value and competitiveness, and is expected to seize the future market and industrial competition commanding heights shine.
All these will continue to empower the high-quality growth of China’s consumer market and national economy in 2021.
4、 Opportunities for cross border E-commerce
Although the overseas epidemic situation is still grim, it has created opportunities for the development of cross-border e-commerce in China for three reasons
First, China’s exports continue to pick up, and its production capacity is making up for the overseas gap.
Looking at the world, China’s economy can be said to be unique, and export data can support this. According to wind data, since the third quarter of 2020, China’s exports of goods have been in a positive growth trend in the same month compared with the same period last month. On the contrary, the exports of the United States, the United Kingdom, Japan, the European Union and other economies have not been able to get rid of the epidemic (see Figure 8).
The underlying reason lies in the obvious capacity gap caused by the shutdown of some industries in other countries and regions. As China’s economy took the lead in getting out of the quagmire and the capacity continued to recover, a considerable part of the global orders were concentrated in China, which led to the growth of exports. According to the statistics of the General Administration of customs, in the first 10 months of 2020, China’s exports of mechanical and electrical products, textiles, plastic products and furniture have achieved good results, with cumulative year-on-year growth rates of 3.8%, 34.8%, 18% and 7.9% respectively.
Secondly, the online consumption habits of overseas consumers have been formed.
At present, the road of anti epidemic in overseas countries is still hard and long. Many consumers who can’t go out have to resort to the Internet more, thus subtly reshaping their online consumption habits, which can be seen from Amazon’s financial report.
According to the data, the revenue of Amazon in Q3 in 2020 reached US $96.1 billion, a significant increase of 37.3% compared with us $70 billion in Q3 in 2019; the net sales of online stores were US $48.35 billion, a year-on-year increase of 38%, accounting for half of the total net sales; the net profit was US $6.331 billion, a year-on-year increase of 197%.
And statista data also shows that since 2020, Amazon.com The number of visits (desktop and mobile devices) continued to rise, reaching 2.437 billion in September, an increase of 18.4% over the same period last year; the number of visits to Wal Mart online shopping platform also reached 386 million in September, an increase of 26.2% over the same period last year.
These data can reflect that the new crown epidemic has accelerated the trend of consumption behavior of overseas consumers from offline to online to a certain extent. It can be expected that with the long-term continuation of global epidemic prevention and control work, overseas online consumption will also become normalized, just like the way of online consumption has been followed and developed after SARS in 2003.
Finally, the penetration rate of overseas e-commerce has great room for improvement.
We might as well take China and the United States as examples to compare them. According to Euromonitor’s statistics, in 2019, China’s penetration rate of e-commerce in household appliances, consumer electronics, wine and drink, clothing and shoes, beauty and personal care, packaged food and pet care is significantly higher than that in the United States (see Figure 9), and the other side of the gap is just the objective existence of improvement space.
The above three aspects are the important factors that benefit China’s cross-border e-commerce. In fact, at present, China’s cross-border e-commerce industry in Europe, the United States, South Korea and other countries and regions has quite perfect supporting infrastructure, foreign exchange payment, domestic and foreign warehousing and logistics, transshipment and customs clearance and other links have been relatively mature. With the help of the epidemic, the penetration rate of e-commerce in overseas consumer markets is expected to be further improved, which also provides an opportunity for Chinese goods to go to sea.
In fact, we have tasted the “sweetness” of it. Taking the home sector as an example, according to the statistics of the 21st century economic report, in September 2020, the orders and revenue on the cross-border e-commerce platform of a large domestic e-commerce company showed explosive growth, in which the sales of large pieces of furniture increased by three times, the sales of home office chairs in Europe increased by 500%, the sales of sofas increased by more than 200%, the sales of large indoor lamps increased by more than 50%, and the sales of ultraviolet germicidal lamps increased by the same amount In addition, according to the data of the e-commerce platform international station, as of late October, the transaction volume of the furniture industry increased by 191% year-on-year, and the number of payment orders increased by 112% year-on-year. The export demand of the industry is booming, and many factory orders have been arranged to the year after
Will cross border e-commerce rise against the trend in 2021? rub one’s eyes and wait.
The past is the preface.
Some people may think that the outlook of this paper is somewhat optimistic, but what I want to say is that China’s economy is a sea, not a small pond. Since it is a sea, there will be calm waves, big waves, challenges and opportunities. Even if the storm can overturn the small pond, but it can not shake the sea. After 5000 years of ups and downs, we have survived any difficulties. What’s more, in 2020, when the new epidemic is raging around the world, even if it is so difficult, we still hope to become the only major economy in the world to achieve positive economic growth. Looking forward to 2021, shouldn’t we be more confident?
Of course, the development of our country is inseparable from the struggle of each and every one of us. In 2021, let’s join hands and refuel together! Read more: pmcaff: 2017 cross border e-commerce industry report (import) Ali Research Institute: 2016 China cross border e-commerce development report (with download) iResearch: 2014 China cross border e-commerce industry research cross border e-commerce: new mode of foreign trade, e-commerce new blue sea, Guosen Securities: 2020 cross border e-commerce industry special Research Report (with download) Alibaba international station: China’s small and medium-sized enterprises Cross border electricity supplier white paper (essence version download) MobData:2018 cross border electricity supplier Research Report (download) the Atlantic monthly: Americans also love “Hai Tao” electricity supplier From Shanghai, China online shopping center one belt, one road, the lowest entry rate of 19%, the 2017 electronic commerce consumer import product failed to pass the rate of up to the highest level of 2017. The Jingdong Data Research Institute: “one belt and one road” cross boundary electricity consumer trend report Amazon: 2016 cross-border online shopping trend report 96% of users have university degree or above. Ministry of Commerce: in 2016, cross-border e-commerce B2B accounted for more than 70% of import and export. Penguin Zhiku: what opportunities do entrepreneurs have when cross-border e-commerce giants enter? Meihua.com: changes of new generation consumers and trend analysis of import cross-border e-commerce AQSIQ: unqualified rate of cross-border e-commerce is about 4.6%
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