Bjorn Van Der Veen - arctic solutions-cross-border fulfilment

2. Using Free Trade Zones to sell online in China
• Speaker Biography
• E-commerce in China
• Introduction to FTZ‘s
• Common Practices
• Expectations for 2016
• Questions & Answers

3. Speakers biography
Bjorn van der Veen has over 15 years of experience in e-commerce for large multinationals like Philips and on the agency
side for companies like Tribal, Salesupply and Arctic Solutions. He currently manages Arctic Solutions who offer full service e-
commerce solutions for the temperature controlled products such as food and food supplements. Bjorn has been working
in China for 9 years and has firm grasp of the opportunities and challenges for cross border e-commerce in China.
Mail: bjorn@arcticsolutions.cn; Mob: 0086 186 2168 1301
DigiDutch is collective of 8 companies specialized in complementary E-Commerce services in China. We service companies
that either want to enter the online market or who want to expand their strategy to sell online in China. Combined we have
50 years of experience and 200 employees at your service. www.digidutch.cn

4. E-commerce in China

5. Introduction to FTZ’s
1. PILOT AREA’S FOR CROSSBORDER E-COMMERCE9 Pilot Area for Cross Boarder eCommerce
(Zhengzhou)--E (eMaoe)
www.emaoe.net
Started Operation from July 15,
2013
Model: The only pilot area visited
by President Xi with his expectation
of “Purchase from Globe, Sell to
the Globe”
(Shanghai)--
www.kjt.com
Started operation Dec 18, 2013
Model: Direct purchase import,
bonded import, general export
Nov 16, 2015 SH gov’t announced
re-establishing a new cross
boarder ecommerce platform open
to register user.
(Chongqing)-- e
(Cross boarder )
www.cqkjs.com
Started operation Jan 28, 2014
Model: First multi-model pilot
area in China
(Hangzhou)--
www.kjeport.com
Started operation from
May 20, 2014
Model: bonded import,
direct purchase import
(Ningbo)--
www.kjb2c.com
Started operation Mar 26, 2014
Model: Import B2C pilot model, General
import, personal effect import, postal
tax consolidation payment.
(Guangzhou)— (KuaJing YI)
www.kjy.cn
Project planed since Oct 15, 2013
Started operation from Jan 14, 2014
Model: Retail Export, Bonded import,
direct mail B2C
(Shenzhen)-- (Qianhai)
www.szceb.com
Started operation since Sep 9, 2014
Model: bonded import, pre-
registration, customs supervise
WHS, category verification, list
verification, foreign exchange final
settlement
(Fuzhou) (Pingtan)--
Website is under construction
Announced on Aug 7, 2015
Model: direct purchase import,
bonded import, general export

6. 2. CROSSBORDER E-COMMERCE FLOW

7. 3. IMPORT OPTIONS
<Jewelry> Daigou * Overseas Retail CBEC in FTZ **
Purchase 100 100 100 100
Purchasing Fee 0-10 0 0 0
Import Duty n/a 0-35 35 10
Import VAT n/a 0-20 -25 n/a
Customs Tax n/a n/a 15 n/a
Total Price 100-110 100-150 175 110
Order capacity Low Moderate High High
Delivery time Moderate Moderate Short Short
* Daigou = Someone buy for you and mails it to China
** CBEC = Cross-Border E-Commerce

8. 4. ADVANTAGES OF FTZ
NON-BONDED
WAREHOUSE
•Bulk clearance
•Commercial tax rate
•No customer ID
required
•Delivery after order 2-3
week days
•Product registration
can take months
•Import licenses
required as B2B
DIRECT MAILING
•Clearance on parcel
•Postal Tax rate
•Customer ID required if
tax or VAT applies
•Delivery after order 10-
15 work days
•No Product registration
•No import license
required as B2C
BONDED WAREHOUSE
(FTZ)
•Clearance on parcel
•Postal Tax rate
•Customer ID required
•Delivery after order 2-
3 week days
•Product registration
within 1 week
•Foreign company
required in FTZ

9. 5. POPULAR PRODUCTS

10. 6. CATEGORIES & TAXES
Commodity B2B (General Trade) CBEC in FTZ
Duties VAT Import Tax Personal Tax
Accessories 10% 17% - 10%
Bags and Suitcases 20% 17% 30% 10%
Cosmetics 10% 17% - 50%
Clothing 14-17% 17% - 20%
Electronic Goods 10% 17% 20% 10%
Luxury Watch & Accessories 11% 17% - 30%
Milk Powder 10% 17% - 10%
Overseas Souvenir 10% 17% - 10%
Personal Sports Equipment 12-14% 17% - 10%
Shoes and Hats 15% 17% - 20%

11. Common practices
1. ONLINE STRATEGY
SME
•Start own online store
•Keep stock in home country and
send by Post or Express
•No registrations with direct mail
solution
•Full data ownership
MULTINATIONAL
•Select market place
•Fast-moving products in FTZ
•Company & product registrations
required in FTZ
•Limited data ownership

12. 2. ONLINE SALES CHANNELS
MARKETPLACES BRAND
•Branded webshop
•WeChat store
•O2O

13. 3. LOGISTICAL OPTIONS

14. 4. RETURN HANDLING
Practice:
Most goods are returned to non-bonded warehouse and destroyed when
returned.
Why?
• Once it passes customs difficult to return to FTZ
• Not sure what happened with the product
• In case of multiple products in parcel and partially returned too complex in
paperwork
• Legal right to return 7-10 days

15. 5. POPULAR PAYMENT METHODS
PLATFORM OWNED TRADITIONAL / BANKS

16. Expectations for 2016
•More diversity in products
• O2O in combination with Retail (Brick & Mortar)
• Shift towards (frozen & chilled & fresh) food
• Government policy changes

17. Q & A
PHONE: +31 (0)85 - 016 00 46
EMAIL: info@digidutch.cn
WEBSITE: www.digidutch.cn
LINKEDIN: Company page
Group page
WE HELP YOU SELL ONLINE IN CHINA