How Crossborder E-commerce in China Actually Works

Published on August 12, 2025

Everyday, we hear from brands looking to break into the competitive China market. Smart team, great product, clear ambition. What they don’t always have is a clear picture of how crossborder e-commerce (CBEC) in China actually works.

The assumption tends to go like this: set up an online store, list the products, ship them over from home, run some Google ads, and start taking orders. If only.

Because in China, the rules are not only different, they’re also a part of a completely separate game. A game where logistics, tax structures, compliance, and even delivery speeds have all been engineered with intent. And if you don’t know how the system works, it won’t work for you.

CBEC can be a brilliant channel. But only if you set it up the right way. Otherwise, it’s just an expensive way to learn what you should’ve asked before launching.

Overview:

Why the China CBEC Market is Too Big to Ignore

Let’s start with what grabs attention: the numbers.

China’s crossborder trade hit 2.71 trillion RMB (about US$373 billion) in 2024, according to the General Administration of Customs. Over 200 million people in China now shop from crossborder platforms, and they’re not exactly the patient sort. On average, they expect delivery within 2 days. Compare that to 7-15 days it used to take 10 years ago, and you start to see what global brands are up against.

It’s a massive channel. And one that isn’t slowing down.

Platforms like Tmall Global, JD Worldwide, and Douyin EC Global have made it easier than ever for global brands to reach Chinese consumers without going full domestic. But it only works if the setup is done right. Miss a step, and what looked like a quick win can become a very costly education.

How CBEC Works Inside China’s FTZs

China has designated Free Trade Zones (FTZs) located throughout the country. These are not new. Traditionally, they’ve served manufacturers who bring in raw materials, do a bit of value-adding locally, then ship it all off somewhere else. Nothing radical there.

But China took that old idea and repurposed it for online retail. Specifically, for international e-commerce.

Here’s how it works: foreign brands can ship stock into bonded warehouses inside these FTZs. No duties or tariffs yet. The goods just sit there, in limbo, waiting. Then, when a consumer in China places an order, the product is picked, packed, and sent out from the FTZ straight to their doorstep.

And because the item only officially enters the country when it’s bought by an individual, a different (read: friendlier) set of rules kicks in.

As long as the purchase stays under 5,000 RMB per order (and under 26,000 RMB annually per shopper) it qualifies for China’s crossborder e-commerce policy.

That means:

a 9.1% flat tax (usually already baked into the final retail price)
no duties, no traditional import tariffs
a customs clearance process that skips the usual headaches

In plain English? It’s faster, cheaper, and a whole lot less bureaucratic.

You don’t need a local importer. You don’t need a domestic business licence. And your customer in Shanghai can get their face cream or supplements in less than 2 days, without either of you having to jump through flaming regulatory hoops.

The Alternatives to CBEC and What They’ll Cost You

If you’re planning to sidestep crossborder, there are other ways in. They just come with more strings attached.

Option 1: Go Domestic

This is the classic route. Set up shop inside the country, properly and permanently.

Set up a local entity, register your IP, get the right licenses, open a bank account, hire staff, learn how to navigate the labyrinth of customs codes and lab testings, and hope your pricing holds up next to cheaper, well-known domestic brands.

Then there’s the small matter of competition. Local brands are faster, cheaper, and already know how to win on top Chinese e-commerce platforms like Tmall or JD. They’re built for speed and scale. If your pricing isn’t sharp or your proposition isn’t crystal clear, you’ll be fighting for scraps.

Now, can WPIC help you go domestic? Absolutely!

We’ve helped global brands set up local legal entities, build compliant domestic stores, and manage end-to-end operations on Chinese marketplaces.

But we’ll also be the first to tell you that domestic isn’t always the right starting line, especially if you’re not ready to play the long game.

Option 2: Find a distributor

On paper, a distributor looks like a tidy shortcut. No local entity needed, no warehouse worries, just someone else doing the heavy lifting while you focus on making great products.

Except it rarely works that neatly.

You give up control. You won’t know who your customers are, what they’re buying, or how they’re responding. You’ll be relying on second-hand data and someone else’s priorities. If they decide to discount your flagship product into the ground (like Net-a-Porter’s sudden exit in China and the resulting massive sale), or bury it behind a cheaper house brand, you won’t have much say in the matter.

For certain industries, like agriculture or food service, a distributor-first model can work just fine. But if you’re a consumer brand trying to build recognition and repeat buyers? It’s a bit like handing your brand over to a stranger and hoping they don’t drive it into a ditch.

Why CBEC Gives Brands Room to Learn and Grow in China

Crossborder e-commerce in China isn’t magic. It won’t turn your product into a cult hit overnight or fix a weak brand story. It’s not the easy button for China. But it is one of the smartest ways to test the waters without committing to the full plunge.

Think of CBEC as a live-fire test. A way to see what sticks — without hiring a local team, building a subsidiary, or sinking millions into a long shot. It gives you real signals: Is there demand? Are people actually buying? Does your brand resonate when it’s 5,000 miles from HQ?

Because truth is, most brands don’t fail in China because they’ve got a bad product. They fail because they went in blind. They assumed what works at home would work there. Or they didn’t move fast enough when things didn’t go to plan.

CBEC gives you breathing room. Room to tweak, to learn, to test your message and your margins in a market that moves faster than just about anywhere else.

It’s not for everyone. But if you’re serious about growth then understanding how CBEC works in China isn’t optional. It’s part of showing up prepared.

And if you do want to show up prepared?

That’s what we’re here for. Talk to WPIC. We’ll help you get the setup right, the first time.

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How Crossborder E-commerce in China Actually Works

Overview:

Why the China CBEC Market is Too Big to Ignore

How CBEC Works Inside China’s FTZs

The Alternatives to CBEC and What They’ll Cost You

Option 1: Go Domestic

Option 2: Find a distributor

Why CBEC Gives Brands Room to Learn and Grow in China

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