PayPal Senior Leader Vince Lee Visited ChinaDivision

On May 4, 2016, Head of SMB, China Director of PayPal – Vince Lee and his assistant Chris visited the headquarter of ChinaDivision. Founder and CEO of ChinaDivision Ethan Chang and Head of Order Fulfillment Michael Chan cordially received the PayPal representatives and opened a discussion about cross-border e-commerce and the future cooperation with PayPal in terms of payment.

Paypal ChinaDivision

PayPal representatives visited ChinaDivision (from left to right: Michael Chan, Ethan Chang, Vince Lee, Chris)

At the beginning of the meeting, CEO of ChinaDivision Ethan Chang gave a brief introduction of the company’s development to the Paypal representatives. ChinaDivision is a B2B brand of CNstorm Co.,Ltd, who is dedicated to sourcing and shipping products to overseas Chinese globally, and obtained the Angel Investment by Shenzhen Creative Investment Group in 2014. As a B2B brand of CNstorm, ChinaDivision is a leading provider of crowdfunding and e-commerce order fulfillment, recognized for China product sourcing, China warehousing and worldwide shipping from China services. For years cooperation with PayPal, ChinaDivision won high affirmation of Mr Vince Lee as an enterprise with innovative spirit and move with the times.

Current Situation of Cross-Border E-commerce in China

During the meeting, both sides had a discussion about the current situation of cross-border e-commerce. It is believed that 2016 is till a time of challenges and opportunities. Traditional retailers, domestic and oversea e-commerce giants, start-ups, logistic service providers and distributors have all joined this battle trying to get a share of the cake. An analysis of the current situation is helpful to forecast the future and make plan for the next step of a company.

a) China is leading the way as production center and consumer market

Nowhere is the rapid expansion of e-commerce more apparent than in Asia. China is leading the way, shedding its identity as a production center and emerging as a burgeoning consumer market, with an increasingly affluent and populous middle class eager to embrace online technologies and chase for the developed world’s consumption styles.

As a production center of the world, there is an increasing number of e-commerce merchants choosing China as product sourcing destination for their e-commerce business. China manufacturers or Chinese suppliers have become cross-border online merchants’ preferred business partners. A recent survey shows that cross-border e-commerce’s market size hit 4 trillion in 2014 and accounted for 15% of the total import and export trade volume of China. It is estimated that it will account for 23.1% by the year 2017.

b) Spread of mobile devices brings huge potential customers

With the spread of smart phones and tablet computers, more and more consumers would like to shop by their mobile devices. Mobile devices make it possible to check orders and shipping status anytime. Affluent and well-educated young people make up the majority of cross-border online shoppers and the cross-border online shopping features at low frequency and higher spending per order compared to domestic online shopping.

Challenges that Exist with Cross-Border E-commerce

Although the whole situation is favorable for cross-border e-commerce, there are still some challenges that hinder and constrain its future development, reflected in the following four aspects:

1. Low efficiency of customs

Its is unavoidable to face customs supervision and taxation during e-commerce transactions. Dissonant customs practices create significant uncertainties for shippers, which greatly reduce the efficiency of customs clearance.

2. Complicated shipping cost

Logistics includes warehousing, picking, packing and shipping. It places the role as a bridge between the seller and the buyer in cross-border e-commerce. However, international shipping options are complicated by VAT, customs charges and others more. Shoppers will be discouraged by the price opacity.

3. Unreliable transit time

Consumers want shorter, more precise and more reliable shipping for their goods. However, some parcels are failed to be tracked or the tracking information lags the actual delivery. In this circumstance, the unreliable transit time constitutes an obstacle in cross-border e-commerce.

4. Risky international payment

As the core of cross-border e-commerce, e-payment involves safety of funds transfer. For one thing, in the process of information transmission, payment information will be loss due to a system failure. For another, there are lawbreakers who use computer technology to steal payment information illegally.

When people are deciding whether to use cross-border payment, they are subject to safety, rates, efficiency and personal payment habits. Among all of this, safety is the most important factor. According to a survey conducted by PayPal, Vince Lee said, more than 40 percent of consumers believe that “the premier security system” is the main reason why they firmly use PayPal as the cross-border e-commerce payment tool, while 80 percent of consumers finally complete their cross-border transaction because of the trust of PayPal’s Buyer Protection Policy. As PayPal’s long term business partner, Ethan said that ChinaDivision will continue to work with PayPal to provide our customers with a better payment experience and create a more safety payment environment.

Innovative Business Model of ChinaDivision

It is based on the current situation of cross-border e-commerce and the challenges it exists that ChinaDivison creates a new business model – providing China sourcing, warehousing and shipping services to e-commerce businesses. During the meeting, Ethan and Michael shared this new business model to PayPal representatives.

As the world’s factory and production center, almost anything can be bought in China with multiple choices and fair price. But due to languages and time difference, it may not be such an easy thing for most online sellers. Considering the importance of inventory souring, ChinaDivision makes the most of its favorable location in Shenzhen, China. Applying tactical local sourcing strategies and collaborating with China-based factories and industry alliances, ChinaDivision is skilled in managing Chinese suppliers and has abundant high-quality sourcing resources at command, so with millions of products manufactured in China we can get you connected and assures product quality with competitive prices.

When it comes to start an online business, a variety of fixed overhead could have discouraged many people. Renting a warehouse, purchasing facilities, hiring workers etc, all this are costly and sometimes are wasteful when it happens to be off-season. ChinaDivision provides China warehousing services, allowing activities such as inventory receiving, repacking, weighing and quality check to be carried out on products before shipping to the customers. What’s more, free warehousing for 30 days is offered, no minimums, no set up fees, thus start-ups and small size business will not be blocked out.

  • China shipping

Just as mentioned above, with the emergence of cross-border e-commerce, traditional retailers, distributors, logistics service providers etc., all join a battle for the share of this cake. However, as an order fulfillment agent in China, ChinaDivision not just serve clients in one way, but take the whole situation into account, thus clients in ChinaDivision can enjoy a one-stop solution, from warehousing to shipping. With the good connection with famous international couriers, ChinaDivision ships goods worldwide to customers fast, easy and affordable. To enhance service of delivery, ChinaDivison also has a system that allows any order to be tracked in real time. This contributes to convenience and efficiency thus leading to a great customer experience.

At the end of the meeting, Vince Lee kindly asked the problems that ChinaDivision faced when using PayPal and opinions for its further improvement. Both sides also had a pleasant discussion about the future cooperation details. As one of the strategic partners of global payment leader PayPal, ChinaDivision is very honored to be chosen and visited by the top of PayPal and will continue the good cooperation with PayPal and other payment giants.

ChinaDivision CEO Ethan Chang Attended PayPal 2015 China E-Commerce Conference

September 17th, the online payment leader PayPal held the fourth annual Cross-Border e-commerce Conference in Shenzhen, China, bring together more than 800 large and small sized foreign trade companies, government representatives and industry expert to explore the new market of global cross-border E-Commerce trends, new opportunities, and jointly promote the growth of China’s Cross-border E-Commerce sector. PayPal launched the conference “PayPal Biz+” innovative solutions, aimed at B2B2C (supplier companies → foreign companies → overseas consumers) potential export model, leading E-Commerce supplier upgrades, sharing global opportunities.

List of Speakers at Paypal Conference

ChinaDivision founder and CEO Ethan Chang, a “dark horse”, was invited to participate the conference and share thinking about the cross-border E-Commerce development on the conference:

The impact of mobile cross-border E-commerce

Cross-Border E-Commerce business presents three major trends: mobile, social and vertical. “breakthrough” has become a hot word in the field of mobile E-commerce. As to E-Commerce companies, they notice mobile E-Commerce is the trend of future, so does ChinaDivision. Ethan Chang highlighted 4 key characteristic of mobile shopping: First, the consumers’ shopping habit has changed and recommendation is the king; The second is that the consumers use fragmented time to browse, and easy to make a purchase; the third is vertical integration, vertical platforms are easier to win customers. So we mainly share products on mobile, pushing attractive products to the home page. In western business theory there is a famous saying: Numbers never lie, – we found that the growth of mobile orders have not grew in the same pace with users and revenue form mobile devices, conversion rate on mobile is still lower compare to PC. Users’ feedbacks gave us a very important message, “Mobile devices make it possible to check orders and shipping status anytime, anywhere. But speaking of placing orders, I prefer PC. Because it is easy to do it on computer, the screen is larger, I see the products more comfortable. ” So we think mobile can’t replace PC in the short term, But mobile ecommerce is really a primary growth factor for cross-border E-Commerce.

CEO of ChinaDivision (second from left) at the meeting talked about how cross-border E-commerce companies use government policy of Shenzhen

Recently the government introduced a number of rules and regulations, including:
Establish the integrity mechanism, increase industry subsidies, help cross-border corporate in financing, establish the FTA, reduce tariffs and simplify the approval workflow and so on. These policies has reduced the cost of cross-border goods, accelerated flow of goods, on the other hand, as the country’s policies encourage companies to target overseas markets which is indeed a reassurance to them. ChinaDivison welcome these policies, because they would ease the pressure on cross-border E-Commerce industry. We like this saying: fall in love with government, but do not marry the government. Because enterprises’ development more rely on their own. Based on our experience of cross-border B2B platform ChinaDivision, we think completive edge of cross-border E-Commerce companies mainly lies in the low labor cost and information asymmetry. But with the rise in labor costs, fiercer and fiercer competition, Branding will become a trend in the future export E-Commerce. Import E-Commerce has huge potential. Chinese government encourages its development; E-Commerce Export market is very large, national policy encourages it. If you want to make best use of national policy, the cross-border corporate business of import and export need to develop together. So we launched our B2B business ChinaDivision in order to help cross-border E-commerce companies to build their brand by providing exc fulfillment service.

List of Speakers at Paypal Conference

VIP guests posed for pictures (from left of the second: ChinaDivision founder Mr. Zhang Lisheng)

The impact of exchange rate on cross-border E-commerce and how to response

When the RMB appreciates, import business has absolute advantages, while devaluation happens, exports do have a great advantage. Facing exchange rate, after five years we may not see any business only do export or , or import. Those who survive in the cross-border E-commerce are the ones do both export and import. In two cross-border E-Commerce dispatch model, “first trip, overseas warehouse” model will be greatly affected by the exchange rate, because of the need to store goods in large amount, “Foreign Direct Mail” model can stay calm. It mainly involve non-standard products based, consumers are less sensitive to price, and more likely to compare overseas direct mail price with the domestic counter. Overseas direct mail operation is also more flexible, exchange rate effect can quickly be reflected in commodity prices, but has little effect on the purchase. So overall, changes in exchange rates hardly impact overseas direct mail. As long as the appropriate increase in foreign exchange reserves, targeted use of financial products to hedge the exchange rate, so that to reduce the affect of exchange rate to a minimum. If 2014 is the first year of cross-border import E-Commerce, then with the sharp depreciation of the RMB and introduction of the policy on cross-border export E-Commerce,then 2016 is expected to become China’s first year of cross-border export E-Commerce.

ChinaDivision was invited as guest speakers of the conference. It is the reflection of long-term close cooperation between Paypal and ChinaDivision, as well as PayPal’s affirmation to ChinaDivision’s achievements.

List of Speakers at Paypal Conference

In July, China Southern Region Leader of PayPal Sean had visited the headquarters of ChinaDivision. ChinaDivision’s efforts and achievements are much appreciated by Paypal on constantly optimize and improve the user’s payment process, refund experience and so on. ChinaDivision will continue cooperate with PayPal, Alipay and other big names, hoping to better serve our customers, and lay a solid foundation for global branding.