How Would ‘Brexit’ Affect China’s Cross Border eCommerce?

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It is official now. The UK has voted to leave the European Union. The whole process of withdrawal will probably take two years, but it’s certain that “Brexit” will even affect the cross border ecommerce industry in China. Below will explain how.

 

Great news for Chinese Customers

You can already see the Brexit impact on currency now: Britain’s pound and has fallen 11 percent to a nearly 31-year low against the dollar. However, cross border eCommerce shoppers can buy British products much cheaper than it was because of a weaken pounds.

Take this classic Burberry trench coat for example: at price of £1,195, Chinese customers need to spend roughly 11,711 RMB Yuan before June 24th. Now, since the CNY/GBP exchange rate dropped to 0.11, one only need to pay 10,555 RMB Yuan and he/she can get the exact same product.

Brexit China cross border eCommerce

Trench Coat selling on Burberry’s UK site

The 1,156 RMB Yuan difference means that now Chinese customers will have a 10% off on every product they buy from Britain. Lots of cross border eCommerce companies saw this as an opportunity, and most of them have been promoting “Brexit Sales” right after June 24th. Plus UK & Europe always have mid-year sales promotion as a tradition, now could really become a great period of for British cross border eCommerce retailers and the customers.

 

Not that a great news for Japan cross border eCommerce retailer

Just like every coin has its two sides, Brexit will certainly have negative impacts. Japan cross border eCommerce retailer has emerged as a victim, since yen jumped 13 percent against the British pound and 5 percent against the United States dollar.

Brexit China cross border eCommerce

Japanese cross border eCommerce has always been popular in China market, with the star products like cosmetics, snack foods and electronics. Unfortunately, rising Yen means that shoppers have to a little bit more than before. This may scare a certain number of potential Chinese eCommerce shoppers away.

 

Cross border eCommerce in China: Not just a price war

Although Brexit happened last Friday, the real deal will probably happen over two years from now. Then the United Kingdom will leave the EU and its free-trade zone. Surely this will make cross border sales more complicated, but the silver lining is: cross border eCommerce businesses have enough time to study and adjust to the new laws and regulations.

Brexit cross border eCommerce China

Theoutnet.com, a British cross border eCommerce site that offer direct shipping to China

With these being said, the Brexit negative impact can be reduced to minor if your eCommerce already planned ahead. China market is huge, but tax rules and cross border logistics won’t always be the same as time goes by. To stay alert and find your best partner with channels and logistics can help you win over the price war.

Besides, cross border eCommerce is not just a price war: it’s your users who you need to win over. Today’s eCommerce consumers are not satisfied with sites that simply allow them to shop cheap – they care a lot about their user experiences too.

Improving the usability of your eCommerce site will build a competitive advantage for you. Contact TMO Group to find out the best practices to shape up your eCommerce’s user experience!

 

More about China cross border eCommerce:

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