Chinese Manufacturing Exports Through Cross-Border E-Commerce Sites Face Logistics Bottleneck

Guan Jian / Yicai

2016-12-08

(Yicai Global) Dec. 8 -- Original equipment manufacturers have proliferated on the southeastern coastal fringe of China, specializing in processing goods for export. Plants and small businesses are having a hard time as price wars heat up.

Some manufacturers had to become cross-border e-commerce exporters, selling to foreign markets through Amazon, eBay and other online marketplaces. By using these platforms, their profit margin is increased by cutting out middlemen such as importers and retailers in foreign markets.

Today, Chinese manufacturers can choose from a growing number of online platforms, including Amazon, Ali Express, eBay, Lazada in Southeast Asia and Wish, a mobile cross-border e-commerce site in the US.

Saving on overheads does not mean there are not hidden expenses, which concerns some manufacturers. "Cost must be taken into account while operating on multiple platforms." Yan Yin, the general manager of Shenzhen Roxi Jewelry Co., who has launched stores on all the cross-border ecommerce sites, told a Yicai Global reporter.

There is still a long way to go before problems related to cross-border logistics can be solved. These issues are the main cause of customer complaints and what worries sellers the most.

Chinese merchants selling on eBay, Wish and other foreign platforms need to find third-party logistics companies themselves. Amazon offers its own warehousing and shipping service, Fulfillment by Amazon, for cross-border sellers.

Once an order is placed, Amazon checks the goods purchased and ships them out. Logistics, however, still need to be managed by the seller themselves. Chinese sellers still need to get customs clearance and deliver the goods to Amazon’s warehouses overseas at their own expense.

Some Chinese sellers are wary about using such one-stop logistics services. "Backlogs of goods stored in warehouses overseas entail risks, and it's very difficult to bring goods back to China once they have been exported through customs," said Zou Fei, the owner of Zhi Yuan Holdings Group, a Shenzhen-based manufacturer and exporter of telecommunication products.