The And Cross Border E Commerce Website

952 WordsJun 26, 20164 Pages
2. Implication of 2 new regulation The online net of daigou can allow individuals entry this market with very low barriers, even with low capital, scant professional knowledge and crude advertising, they can meet a very wide range of consumers through C2C e-commerce website, such as Taobao.com, which is absolutely free to start a business. Inspired by this method, the cross-border e-commerce websites try to scale and legalize this market, they list the products on websites which them buy from around the world, and offer them at the optimal price (Xiao, 2016a). So consumers can buy from foreign retailers and suppliers directly. Daigou and cross-border e-commerce website are the typical online gray markets in luxury market in China. Price gaps is one of the main causes of the rising of online gray markets in China. For example, in 2011, the Coach Madison Sophia Satchel handbag was sold as $298 in US, after adding an import duty rate of 10% and a value-added tax rate of 17%, the price become to $383.5 after exporting to China. However, its official Chinese price was $603 (3800CNY) (Zhao et al., 2016). The figure below show the pricing differ of bag between Pairs, New York and Beijing (China). Figure 1: Pricing differ of bag between Pairs, New York and Beijing (Chow and Masidlover, 2015) This massive price gap becomes the key motivation of consumers in China purchasing these products and it also creates a very considerable profit for the online gray marketers who
Open Document