The three cross-border e-commerce models are BC, BBC and CC. All require purchases and customs clearance under the buyer’s real name. The Chinese government sets an annual cross-border e-commerce purchase limit of RMB 26,000 per person.
CC model: Generally used for direct overseas shipment of goods for personal use. Logistics and customs-clearance costs are low, and only personal postal articles tax above the exemption threshold is payable. However, it is mainly suited to unofficial gray-market transactions such as daigou. Shipping and clearance take longer, transactions offer limited protection, and quantities exceeding reasonable personal use may be returned.
BC model: A company operates the business, packs goods at an overseas warehouse and ships them directly to Chinese consumers. Only personal postal articles tax above the exemption threshold is payable. International logistics and clearance costs are very low, but delivery takes a long time and returns or exchanges are inconvenient.
BBC model: This is a more distinctive model and, in our view, the better solution. The operating company stocks goods in advance and ships them to a bonded warehouse in China. Once the consumer pays, the warehouse packs the order, completes customs clearance and dispatches it. This model significantly reduces the tax burden, keeps logistics and clearance costs relatively low, shortens dispatch times and makes returns easier, delivering a better overall experience.
| CC | BC | BBC | |
|---|---|---|---|
| Operating entity | Individual | Brand owner or authorized company | Brand owner or authorized company |
| Payment | Person-to-person | Platform-secured payment | Platform-secured payment |
| Inventory location | Overseas warehouse | Overseas warehouse | Bonded warehouse in China |
| Shipping | Direct overseas mail | Direct overseas mail | Shipped from bonded warehouse |
| Delivery time | Very long | Relatively long | Very short |
| Sales channels | Overseas buyers, daigou, etc. | Tmall Global and similar platforms | Tmall Global and similar platforms |
| Returns & exchanges | Not guaranteed | Difficult and costly | Convenient and low-cost |
| Cost | Very low | Relatively low | Relatively low |
Next, we will examine the different channels in China’s e-commerce market.