China’s second largest online retailer JD.com is partnering with Japanese logistics company, Yamato Holdings for quicker, cheaper delivery of products from Japan to China as early as May, according to a report in the Nikkei Asian Review.
The companies are aiming to expand the already rapidly growing demand for Japanese products among Chinese consumers and the new partnership will cut the time for Chinese consumers to receive Japanese products from eight to four days.
The tie-up, the first between a major Chinese online retailer and a large Japanese logistics company, comes amid increasing competition among Chinese e-commerce services – particularly JD.com’s main competitor, the number one Chinese e-commerce company, Alibaba and its Tmall.com platform – as well as increasing competition from foreign players like Amazon.
China’s e-retailers see increasing demand for Japanese products including cosmetics and electronics, often from tourists ordering products after returning to China from Japan. Orders shipped from Japan to China are estimated at 800 billion yen (US$7.24 billion) for 2015, similar to the amount that Chinese tourists spent in Japan. Some see the market reaching 1.4 trillion yen in 2018, reported.
Nikkei
“We know that China’s demand for Japanese products, among the most trusted in the world, will continue to expand,” said Haoyu Shen, CEO of JD Mall in the report.
The arrangement will see Yamato subsidiary Yamato Global Logistics handle the complex customs process and transport cargo from Japan to China, using the newly created Cross-Border E-commerce Pilot Zones in Shanghai to limit expenses such as value-added taxes and import duties. JD.com partner China Post will handle last-mile home delivery using its nationwide network.
China’s Premier Li Keqiang spoke in a recent State Council meeting, highlighting Cross-Border E-commerce Pilot Zones as a new instrument to support China’s international trade development and boost its sluggish foreign trade. Following the successful established of the first such zone in March 2015 in Hangzhou, the government announced that 12 more cities had been approved for the zones, including: Tianjin, Shanghai, Chongqing, Hefei, Zhengzhou, Guangzhou, Chengdu, Dalian, Ningbo, Qingdao, Shenzhen and Suzhou.
Cross-border e-commerce transactions in Hangzhou, saw expotential growth within just a year. The figure was less than $20 million in 2014, and it surged to $3 billion by November 2015. “Since last March, Hangzhou Customs have coordinated with other government departments, issuing 15 favorable policies to support the cross-border e-commerce. These experience and measures can serve as a reference for future pilot zones,” Li Miao, deputy section chief of Cutoms of Hangzhou Economic & Tech. Dev. Area, said according to a CNTV report.
The Ministry of Commerce says more than 200,000 companies are running cross-border e-commerce businesses in China, via 5,000-plus e-commerce platforms.
JD.com is launching a platform on its website dedicated to Japanese companies recruited through seminars in Japan, which JD.com and Yamato will hold together. Many small to midsize Japanese enterprises have sought growth through the Chinese market, but they often have struggled to expand there due to lack of marketing, promotional experience and funds.
