Frequent readers of our posts may have already learned how to set up your e-commerce presence in China and generate traffic to their WeChat store.
We’ll now deep-dive into a common problem of vendors selling to China: logistics and shipping to China.
Can my product be shipped to China?
The first question you might have is: is it legal to ship my product directly from oversea to China, via cross-border e-commerce?
Thankfully, the EU SME Center has put together a helpful list of products that are legal to export from EU to China. You can find the list here.
The list is very long, and includes, among other products:
- Fashion & Fashion accessories (footwear, watches, jewelry etc.)
- Furniture and kitchenware
- Coffee & various spices
- Various kinds of seafood
- Milk products and milk powder
Cross-border trade and FOREX
Another common question is: who handles currency conversion when conducting cross-border trade with China?
With the rise of Alipay and WeChat Payment, there are now two clear alternatives: Alipay cross-border and WeChat Payment cross-border.
With both of these services, upon transaction:
- Chinese user will pay in RMB
- Alibaba or Tencent will handle currency conversion with their partner bank (usually they will apply a charge around 2.5%)
- Payment amount will be sent to an oversea account
- A transfer will be made to the merchant’s account once the settlement amount is reached
The custom clearance can be a complex process in China.
It involves the following steps:
- During the customs clearance procedure, the importer will have to complete the following formalities
- Customs registration
- Commodity inspection (inclusive of animal and plant inspection and quarantine)
- Customs declaration
- Documents submission
- Payment of taxes and other fees
- Foreign exchange control
In order for the customs to be cleared, the vendor also have to provide the personal information of the buyers:
- Legal name
- Chinese ID number
Most companies will leverage the help of third party logistic providers in order to ship their products to China. The logistic provider will handle the custom clearance process and help to pay the appropriate taxes when shipping your products to China.
Here are a few examples of logistic providers:
Another alternative is direct shipping from oversea to China. This is usually a slow and expensive option. Shipping a small box (weighing up to about 2 kilos) from the U.S to China will cost you around $32 with USPS. And the shipment are often neither trackable nor guaranteed.
USPS offers transparent pricing for shipping to China https://postcalc.usps.com/
In that case, there is also a higher probability that the items might get help up by the customs (around 5% probability). If that were to happen, your customer in China will have to go claim the item, and possibly pay some custom taxes to have it enter the country.
Most countries have manageable when shipping from their local post office to China, especially countries with large trade volumes with China such as New Zealand or Australia.
Overall, direct shipping is not a scalable option for companies wanting to do significant business with China. It is however a good option if you are conducting a small test and are looking for a simple way to ship a handful of items sold after your first promotion.
If your products are legal to export in China, shipping can be a hassle but which is easy to overcome. Working with logistic partners operating from Hong Kong or free trade zones is the easiest way to handle your start in China in a transparent and efficient way. For a first test, direct shipping might be an option. But be ready to switch to a more scalable shipping strategy after things gain momentum.