Retail in Asia

In Shops

China’s e-tailers look for offshore bases to slip tighter customs net

A sales manager for a ­Shenzhen-based cross-border ­e-commerce solutions provider, Ye said warehouse rents had risen by 10 to 20 per cent in Hong Kong since the mainland tightened import rules for e-tailers last month.

In the past month, Kevin Ye has had more inquiries than ever from mainland e-tailers about logistics and storage services in Hong Kong.

“Many companies started looking for warehouses overseas to facilitate direct shipping, and Hong Kong is the nearest option,” Ye said.

The new rules, designed to standardise the booming e-commerce trade in imported goods, included limits on the products the platforms could sell, stricter customs procedures, and a more sophisticated tax regime.

But they do not apply to products mailed directly to customers from overseas. For the time being, these still qualify as personal parcels and although they do attract a postal tax of 15 to 60 per cent, in many cases they simply slip through the tax net. There are also fewer limits on what can be sent as personal parcels.

That’s why more e-commerce platforms are looking to take advantage of this loophole by building or renting warehouses overseas. Ye said offshore storage centres helped lower purchasing costs and expanded the opportunities for direct shipping.

Many industry players have already gone down this path but most have relied on the bonded warehouse model and are struggling to survive.