Cross Border E-commerce is Opening China’s F&B Market for Foreign Exporters

May 19, 2021

The Chinese government is supporting the growth of CBEC (cross border e-commerce) businesses to promote foreign trade in the country with a range of new initiatives. CBEC is therefore gaining momentum in China and is opening more opportunities for foreign F&B (food and beverage) exporters and enterprises to enter China’s giant consumer market.

 

Woman shopping online with credit card and phone

 

CBEC – the activities of trading products through online platforms across national borders is gaining momentum in China and is opening the Chinese F&B market wider to international exporters. Through CBEC platforms, international brands can sell their products to Chinese consumers at preferential duty rates without a license to operate a business in the country.

In the recent years, CBEC is becoming an important channel for import and export activities in China. From 2016 to 2020, the percentage of CBEC from China increased from 2.2% to 11.25%. According to a study of iiMedia Research Group, in the first quarter of 2020, Chinese CBEC users were more likely to buy F&B, toiletries, and healthcare items via CBEC platforms, partly due to the Chinese New Year and the COVID-19 outbreak. In China, there are many online platforms that operate cross-border e-commerce, some of the key players in China are Alibaba’s Tmall with 28% market share, Kaola with 20.5%, JD.com and Vipshop Global with 13.5% and 9.8%, respectively.

 

Chart showing market share of cross border e-commerce companies in China

In 2020, in an attempt to accelerate the growth of CBEC, Chinese government rolled out several policies, including adding more CBEC pilot areas and pilot cities, expanding CBEC retail import list as well as cutting down tax and tariffs. In May 2020, China’s State Council approved the establishment of 46 comprehensive CBEC pilot zones, bringing the total to 105 areas in China. In January 2020, Chinese authorities released the notice to expand the pilot cities for CBEC by adding 50 cities and the island of Hainan into the new pilot scheme of CBEC .

Further, in December 2019, the “List of Goods under CBEC Retail Import” were also expanded to allow more international F&B products to be sold through CBEC platforms. The products in the list will not be subject to the license approval, registration, or filing requirements for first time importation. A total of 92 items were added to the list, including frozen seafood like frozen oysters, scallops, octopus, and alcohol drinks such as gin and vodka.

In conclusion, it is undeniable that these new initiatives of Chinese government have made it easier for foreign F&B companies to bring their products to China’s market. Selling products through CBEC platforms not only save money but also save time for foreign brands since companies do not need to have warehouse or legal license and legal entity in China. International F&B entrepreneurs can also use CBEC platforms to develop a mechanism to collect customer and sales data from the platforms to build up market expansion strategies as well as discovering the opportunity to develop offline channels in the country.


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