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Changes in overseas policies
1. Cosmetics that are not registered with the FDA will face a ban on sale in the United States
On June 27, it was reported that from July 1, 2024, the United States will implement new cosmetics regulations, requiring all cosmetics exported to the United States to complete FDA registration before customs clearance and sales. This new regulation is an amendment to the Cosmetics Regulatory Modernization Act of 2022 (MoCRA) to modernize safety standards and regulations in the cosmetics industry. Unregistered cosmetics businesses may be at risk of being banned from entering the U.S. market, legal liabilities and fines, and damage to brand reputation.
2. Indonesia plans to impose 100%-200% tariffs on Chinese shoes and clothing, cosmetics and ceramics
Indonesia's trade minister Zulkifli Hasan said on June 28 that Indonesia would impose 100 to 200 percent safeguard tariffs on imports ranging from footwear to ceramics to restart plans to protect domestic industries, Indonesia's official Antara news agency reported.
Hassan said Indonesia is drafting a new ministerial regulation, which will also come into effect after the regulation, which could affect the import of footwear, clothing, textiles, cosmetics and ceramics.
Currently, Indonesia's Trade Safeguard Committee is investigating to determine the tariff rate. According to its statistics bureau, Indonesia mainly imports clothing and apparel accessories from China, Vietnam and Bangladesh.
3. The Brazilian Federal Tax Service announced a new plan for import tax on cross-border parcels
On June 25, local time, the Brazilian Federal Tax Service announced the specific plan and details of a new round of import taxes on cross-border parcels in the form of an open letter on its official website.
Specifically, a 20% import tax will be levied on all imported e-commerce packages under $50, which provides a fair competition opportunity for e-commerce platforms that have not been approved to join the PRC program; Second, a 60% import tax will be levied on imported e-commerce packages of $50-3,000, but each package can be reduced by $20, which will be conducive to the sales of home appliances, household and electronic products; Third, e-commerce platforms that join the compliance tax payment plan can enjoy the convenience of advance pre-declaration and fast customs clearance.
4. Thailand will impose a tax on imported goods of no more than 1,500 baht from next month
It is reported that Thailand's finance minister has signed an announcement approving the imposition of a 7% value-added tax (VAT) on imported goods priced at a price of no more than 1,500 baht from July 5, 2024. Currently, Thailand exempts imported goods priced at up to 1,500 baht from VAT. According to the announcement, from July 5, 2024 to December 31, 2024, the fee will be collected by the customs, after which the tax department will take over the collection. Tax authorities are in the process of revising tax regulations to accommodate this change.
Emerging market dynamics
1. Saudi Arabia will become the world's largest construction market
According to the latest analysis by Knight Frank, a world-renowned real estate consulting firm, Saudi Arabia's construction industry is in a period of rapid development, with a construction output value of $141.5 billion covering residential, infrastructure, industrial, energy, utilities and commercial sectors. The country's construction output is expected to grow to $181.5 billion by the end of 2028, when Saudi Arabia will become one of the world's largest construction markets.
Knight Frank also noted in the report that the residential sector currently accounted for 31% of Saudi Arabia's construction output in 2023, or US$43.5 billion, and is expected to grow to US$56.9 billion by 2028. In addition, the energy and utilities sector came in second with an output value of $35.1 billion and is expected to reach $46.5 billion by 2028.
According to the Kingdom's Vision 2030 plan, by 2030, the kingdom plans to build 660,000 new homes, 320,000 hotel rooms, 5.3 million square meters of retail space and 6.1 million square meters of office space.
2. The UAE economy will grow by 6.2% in 2025
The UAE's real gross domestic product (GDP) growth is expected to accelerate from 3.9% in 2024 to 6.2% in 2025 due to strong foreign trade, according to the UAE Central Bank. The UAE's non-oil GDP growth is expected to grow by 5.40% and 5.30% in 2024 and 2025, while the hydrocarbon sector is expected to grow by 0.3% in 2024 and 8.4% in 2025, the Central Bank of the UAE noted in its Economic Quarterly Review 2024 report.
3. The Indian government plans to build an e-commerce hub to accelerate the growth of cross-border exports
According to foreign media reports, in order to promote India's e-commerce exports, India's Directorate General of Foreign Trade (DGFT) is working with the Ministry of Revenue to establish designated e-commerce hubs across the country to simplify the e-commerce export freight process. DGFT Director General Santosh Kummar Sarangi said the e-commerce hub will be equipped with facilities such as dedicated customs and security checks to facilitate the passage of cleared parcels through the airport's green lane without further inspection. He also noted that the hub will be built and maintained by the private sector, with the government taking care of security and customs clearance. In addition to expediting customs clearance, the proposed hub will provide services such as warehousing facilities, returns processing, product testing and repackaging.
Platform dynamics at a glance
1. Amazon plans to launch a "low-cost store" similar to TEMU
On June 28, it was reported that Amazon is considering launching a "low-cost store" similar to Temu to cope with market competition and the transfer of consumer traffic brought by emerging platforms. Amazon plans to use its operational warehouses in China to ensure fast delivery in 9 to 11 days, while allowing sellers to set their own pricing and inventory management.
In addition, the "low-price store" will have an independent display of search results, which is different from the FBA products on the main Amazon site, and is designed to protect the interests of sellers and provide a lower price point. At present, the project is still in its infancy, and only some sellers are invited to participate internally.
2. Ozon will restrict the sale of electronics, car parts, and DIY tools
Starting June 26, Ozon will impose sales restrictions on electronic products, automobiles, motorcycles, and DIY tools for sellers in cross-border stores in China. Considering the impact that sales restrictions may have on sellers' businesses, Ozon advises domestic sellers to focus on other categories, such as fashion, household use, children's and pets, which are not currently restricted, and encourage sellers to expand their business in these areas.
3. TikTok Shop's new rules in the United States: Delayed fulfillment rates of 10% will restrict orders
On June 24, it was reported that TikTok TikTok Shop cross-border store updated the order limit policy to standardize the order of the platform and protect the rights and interests of consumers.
It is reported that if the seller's store has a 10% late fulfillment rate, it will be restricted from receiving new orders until the late fulfillment rate is reduced to less than 4% within seven days. The order limit measures are dynamically adjusted based on the store's highest average daily order volume and late fulfillment rate in the past 28 days. The policy aims to improve transaction efficiency, warn of problematic stores, and provide a way for sellers to recover if they are actively improving.
4. AliExpress reached a strategic cooperation with Brazilian retail giant Magalu
AliExpress AliExpress has reached a cooperation with Magalu, a local retail giant in Brazil, and AliExpress's cross-border goods will be sold simultaneously on Magalu, and Magalu will also enter AliExpress to open a store to sell local goods. This means that Chinese cross-border merchants on AliExpress will add a new sales channel with more than one million active users.
5. Lazada Malaysia is limited to one store per book
Lazada local stores announced a policy change that will limit each company or passport number to one store on the platform with immediate effect, effective immediately in Malaysian stores and will be gradually rolled out to other Lazada markets.
For merchants who already own and operate multiple stores, Lazada has made it clear that it will not be affected by this policy. According to Lazada's official information, this move is intended to circumvent the fraud caused by merchants opening too many stores and abusing the platform's policies.
Popular Industry Observations
1. Goldman Sachs expects global e-commerce sales to increase to $3.9 trillion in 2024
The global equity strategy team of Goldman Sachs Research recently released a research report that global e-commerce sales will reach $3.6 trillion in 2023 and are expected to increase by 8% year-on-year to $3.9 trillion in 2024.
Goldman Sachs Research expects global e-commerce sales to grow at a compound annual growth rate of 7% between 2023 and 2028 to reach $5.0 trillion by 2028, supported by overall retail sales growth and rising e-commerce penetration as the share of e-commerce continues to expand.
2. Canalys predicts that global wearable wristband device shipments will increase by 5% year-on-year this year
According to the latest report from Canalys, shipments in the global wearable wristband device market will grow by 5% in 2024 to reach a total of 194 million units.
Despite a slight decline of 0.2% in shipments in the first quarter of 2024, the overall wearable wristband device market is expected to rebound strongly by the end of the year, thanks to the recovery of the smartwatch market (4% year-on-year) and the continued recovery of the basic watch segment (10% year-on-year growth).
Although the popularity of base watches is still the highest at the moment, Canalys analysts say that in the long run, the growth of base watches will be surpassed by the expansion of smartwatches. With the improvement of battery life and cost competitiveness of smart watches, this category will be more suitable for complex use scenarios.
3. The U.S. home furnishing market is sluggish, and the Q1 sales of home furnishing brands have generally declined
According to foreign media reports, with the rise in loan interest rates and the decrease in home sales, the demand for large furniture and home improvement projects has declined, and the US retail home furnishing market has seen a general decline in sales in the first quarter.
Online home furnishings company Wayfair's net income for the quarter ended March 31 was $2.7 billion, down 1.6% year-over-year. Home Depot's net sales for the quarter ended April 28 fell 2.3% year-on-year to $36.4 billion. Lloyd's Register, the second-largest home improvement chain in the United States, saw net sales fall 4.4% year-on-year to $21.4 billion in the quarter ended May 3. The quarterly financial report for the quarter ended May 4 also showed that its net revenue was $727 million, down 1.7% year-on-year.
4. The fashion category declined, and the beauty category boosted the growth of European e-commerce
According to the latest report from Foxintelligence, the European e-commerce market continued to grow in May, with sales and sales volume increasing year-on-year, but the market share of the fashion category showed a downward trend. At the same time, the beauty category has become the new favorite in the market, driving overall sales growth.
Data shows that in the first five months of this year, SHEIN's sales of beauty products in the Netherlands accounted for the highest proportion and increased significantly. Another fashion giant, Zara, is also strengthening its beauty category layout, and has achieved steady growth in the beauty market in several European countries by launching fragrance, makeup and hair care products.
Trends in the service ecosystem
1. Alibaba Cloud will shut down data center services in Australia and India
On June 28, Alibaba Cloud issued a notice on its official website stating that based on the careful evaluation and review of the global infrastructure investment layout plan, Alibaba Cloud has decided to shut down data center services in Australia and India while increasing investment in data centers in Southeast Asia, Mexico and other regions.
2. YTO China-Kazakhstan cross-border express logistics business opened
On June 25, it was reported that after more than a month of trial operation, YTO and Kazakhstan National Post (hereinafter referred to as "Kazakhstan Post") officially cooperated to open China ⇋ Kazakhstan cross-border express logistics business, and Kazakhstan became the first country covered by YTO in Central Asia. Through cooperation, YTO has established a nationwide distribution network in Kazakhstan, which can provide compliant, stable and convenient express logistics services for e-commerce platforms and customers. At peak times, nearly 10,000 cross-border e-commerce parcels are delivered by YTO one-stop for customs declaration, transshipment, sorting, delivery and other full-link services, starting from the merchant's warehouse in China, and sending them to local consumers through the port, which can be delivered within 10 days at the earliest.
Information source: KSR Saudi Arabian Cai Lianshe Overseas Network Yicai Interface News Global Air Cargo NetEase Logistics Finger News (in alphabetical order)
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