Remaining obstacles
Compared with traditional importing, cross-border e-commerce has special advantages. According to Zhang, it only takes Kaola a week to clear products for sale with the Chinese government while before it could take months.
Success can pose difficulties, however. In the partnership meeting hosted by Kaola, some European companies expressed concerns that it will be difficult for them to balance quality and quantity in the face of booming demand.
The representative of a German company said that the size and choosiness of the Chinese market may make it difficult for his firm to ramp up production quickly enough to meet demand and maintain their product's quality at the same time.
Arriaga told the Global Times that one of the most difficult things about working with e-commerce websites is how to effectively control quality.
Zhang said that Kaola directly purchases products from manufacturers to guarantee authenticity and they have a quality control center to monitor what they sell. On Tmall, where firms directly sell their own products to buyers, there are strict rules on people selling fake products. Serious violators will see their shops permanently closed.
Still, a simple search of e-commerce websites turns up apparently imported products which claim to be the real thing but are on sale for suspiciously cheap prices.
Li Zhao, Greater China CEO of the Eurocomfort Group, said that China's counterfeiting issue is a problem. Eurocomfort is Germany's largest home textile company.
He said that the problem is complicated and for now Eurocomfort can only depend on the platforms to monitor it. "We try to provide a competitive price. Also we hope to provide customers the best experience so that our products will not be easily copied," he said.
According to Zhang, Kaola has set up branches in different countries and regions to monitor the whole import process from purchasing goods to transportation, and it cooperates with top-notch logistics companies. The company has also set up a team to review the qualifications of its suppliers.
Besides the issue of knockoffs, changing government policies have brought uncertainty to cross-border e-commerce. Starting from April 8, 2016 a new tax was placed on imports, dealing a huge blow to e-commerce websites who were enjoying fast development back then.
According to the new regulation, goods purchased by individuals from abroad will be taxed as imports, rather than personal postal articles, for the first time.
Imports are subject to tariffs, consumption tax and import VAT, and are therefore taxed at a higher rate than personal articles, though there will be tax breaks for those who buy their products via e-commerce platforms and tariffs for individual purchases are currently set at zero.
However, there will now be a 20,000 yuan annual limit on individuals' cross-border purchases over which goods will be taxed at the general trade rate.
This policy has hit cross-border e-commerce platforms hard are some are still trying to recover from its impact.
In the Global Times' interviews with European companies, many said that promoting their brands in China has proved to be a difficult task.
Li Jing said that most German companies are focused on improving their manufacturing techniques and expertise but are poor at promoting themselves.
"In China, without enough promotion the brand will lack influence. So it still takes time for both sides to communicate on this aspect and also learn how to provide better after-sales services," she said.
Many European companies are overly cautious about the Chinese market. Without grasping the enormous potential on offer, they aren't willing to devote more personnel and resources to Chinese market.
To help those companies, e-commerce platforms have made efforts such as organizing live streaming shows and inviting celebrities to China to promote certain products.
