Cross-border e-commerce is a new platform for global business. Why can Amazon do the most？
Cross-border e-commerce is an opportunity. Thanks to the rapid rise of Internet business, more and more people have recognized online shopping. The rules of online shopping platform have been greatly improved to standardize the online transaction process. Governments have also seen the future economic development direction and encouraged enterprises to invest resources to develop Internet infrastructure and logistics facilities. In short, cross-border e-commerce has become an indispensable part of global business.
1. What impact does cross-border e-commerce have on global business?
Cross-border e-commerce can become the representative of Internet business, which has had an unimaginable influence on global trade for a long time. Just as there were basically no imported products in China before, few people were able to use imported products, but the trend of economic globalization began in the 1980s, and foreign capital and products entered the markets of various countries at will, enriching the lives of local people. However, the traditional trade route was difficult, and because of the high tariffs, It is also necessary to pay value-added tax and consumption tax. Many imported products have become luxury goods overnight, but they have changed hands from cheap products to luxury goods through multiple companies. This trade method is only suitable for brand channel providers, and enterprises that do not need special channels can completely benefit consumers, so that products can truly become the welfare of consumers.
The emergence of the Internet in the 1990s has enabled business to find a new platform, and business can be done all over the world quickly.
What impact does cross-border e-commerce have on global business?
First, cross-border e-commerce has turned "global selling, global buying" from a myth into a reality. Good business actually means that the more convenient it is, the more development potential it has. Cross-border e-commerce can make it easy for people living in Britain to buy goods made in the United States on the other side of the ocean without leaving Britain, and it can make it easy for people living in the United States to buy goods made in China without leaving the United States. Besides global buying, they can also sell French-made perfumes and cosmetics to the United States through cross-border e-commerce. You can also sell clothes made in China to the UK through cross-border e-commerce, and cross-border e-commerce uses the Internet to efficiently sell goods from manufacturing countries to demanding countries, thus realizing long-distance and high-efficiency trading.
Second, the rise of cross-border e-commerce has given birth to a number of emerging cross-border industries. In particular, the global logistics industry has developed rapidly. Cross-border e-commerce does not exist independently. It needs industrial support, such as delivering goods to foreign customers and passing through international logistics. The fastest way of international logistics is air transportation, which requires customs declaration in the destination country and finally delivery to customers. Logistics plays an important role in cross-border e-commerce transactions, as well as cross-border payment. It can ensure the safety of foreign customers’ funds and sellers’ funds, as well as intellectual property certification services. Trademark registration and VAT tax number registration are indispensable for cross-border e-commerce business. Certification must be done before platform stores operate to protect their brands from infringement. These emerging cross-border industries have developed very rapidly, thus continuing to promote the development of cross-border e-commerce.
Third, the rapid growth of cross-border e-commerce has brought tax revenue to governments all over the world, and also solved a large number of jobs, especially young people are very fond of Internet careers. In the past five years, the global cross-border e-commerce transaction volume has shown double-digit growth, especially some manufacturing countries have made great profits during the development period of cross-border e-commerce. Some mainstream cross-border e-commerce platforms such as Amazon, eBay, wish and AliExpress have great market environment potential, and manufactured products in underdeveloped areas can use these cross-border e-commerce platforms to obtain high profit returns.
2. What are the global policies for cross-border e-commerce?
The emergence of cross-border e-commerce is not only the result of market choice, but also the result of governments’ efforts to encourage the development of cross-border e-commerce. Without the platform technology of cross-border e-commerce, there would be no well-being of people around the world. Let’s take a look at how some mainstream market countries in the world develop cross-border e-commerce. Xiaobian has classified and summarized:
(1) On May 16, 2013, the United States passed the Market Fairness Act, which levied sales tax on cross-border e-commerce buyers. No tax was levied on goods below $200, and States levied sales tax on online retailers with annual sales of more than $1 million, and exempted tariffs on online transactions of intangible goods. These tax policies are encouraging local enterprises to actively develop cross-border e-commerce.
(2) Britain’s import declaration policy is loose. In Britain, which is in the predicament of Brexit, the British government encourages goods from other countries to transit to Britain. According to the Daily Mail survey, 80% of British netizens often shop online. The British government attaches great importance to the development of its own e-commerce market.
(3) In 1998, the European Union began to levy value-added tax on e-commerce and business tax on suppliers who provide online sales and services. In 1999, the European Commission announced the tax standards for online transactions, and no new tax or additional tax was levied. The European Union has formulated a tax system since the rise of e-commerce, without increasing the tax burden on online retailers.
(4) In 1998, Japan announced the basic guidelines for e-commerce activities, emphasizing the principles of fairness, tax neutrality and tax simplification in taxation to avoid double taxation and tax evasion.
(5) On March 7, 2015, the State Council agreed to set up China (Hangzhou) cross-border electronic commerce Comprehensive Experimental Zone, and on January 6, 2016, the State Council set up a number of cross-border electronic commerce Comprehensive Experimental Zones in 12 cities including Ningbo, Tianjin, Shanghai, Chongqing, Hefei, Zhengzhou, Guangzhou, Chengdu, Dalian, Qingdao, Shenzhen and Suzhou. On August 7, 2018, the State Council established cross-border electronic commerce Comprehensive in 22 cities including Beijing, Hohhot, Shenyang, Changchun, Harbin, Nanjing, Nanchang, Wuhan, Changsha, Nanning, Haikou, Guiyang, Kunming, Xi ‘an, Lanzhou, Xiamen, Tangshan, Wuxi, Weihai, Zhuhai, Dongguan and Yiwu. Up to now, 35 cross-border electronic commerce pilot zones have been set up in China, which is enough to show the support of the China government for cross-border e-commerce.
Third, what magical commercial power does Amazon have to achieve the largest platform for cross-border e-commerce
The development of Amazon is a shortened history of e-commerce in the world, catching up with the emerging Internet. Apart from the promotion of the Internet tide, there are also Amazon’s own reasons. Let’s talk about what magical business power Amazon has to achieve the largest platform for cross-border e-commerce, such as:
(1) The founder of Amazon has a unique vision and sees opportunities for e-commerce to surpass physical business in the future. Jeff Bezos, the founder of Amazon, just started his business and chose to use the Internet to sell books. Because books are a standard commodity, they are very suitable for online sales, so books have become a golden key to open the online retail market. At that time, Bezos saw that the online book market was far greater than the physical book market, and dared to make a bet to develop the online book retail market.
(2) Amazon saw the value of the Internet virtual community earlier, allowing sellers and buyers to communicate on the e-commerce platform, so that they could evaluate the goods. Later, the Prime membership system evolved, which greatly protected the rights and interests of online shopping users and spread the reputation of Amazon.
(3) Amazon saw the potential of cloud computing and the essence of Internet business during the period of platform growth. The platform must rely on powerful cloud service capabilities and ensure the security of every transaction. Amazon’s Excellence in technology has enabled Amazon to become the world’s largest e-commerce platform. (Source: Everyday Cross-border)
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