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1 2015-2016 Sino-Russia’s Cross-border E-commerce Development Report (Abbreviated version)
1
2015-2016 Sino-Russia’s Cross-border
E-commerce Development Report
(Abbreviated version)
2
Imprint
Editorial board
Honorary Direct
Sun Yao
Direct
Prof. Dr. Tang Bingyong
Meng Xiangjun
Zhao Wujun
Kino kwok
Vice Direct
Tian Xiaoning
Ding Kai
Zhao Di
Board member
Xiong Li Sun Yong Wang Deli Huang Wenfu
Gu Xiaobin Yang Lei He Yang Liu Chenguang
Lao Guoling Yang Tao Zhu Ruonan Li Yanbao
Adviser
Yang Shanlin Chen Shuguang Li Mingtao Li Guanghui
English translation
Kuang Yi
3
Prof. Dr. Tang Bingyong
Kino kwok
Prof. Dr. Xiong Li
Sun Yong
Graduated from the Computer Engineering Department of the University
of Newcastle Australia. Having plenty of management and practice
experience in information technology, E-commerce, mobile
communications and finance, Mr. Kino is currently the general manager
of Payease, a company that provides safe, stable and creative paying
services to Fortune Global 500 companies as well as other domestic and
foreign enterprises of all sizes.
China Cross-border E-Commerce Application Alliance Vice Chairman,
Shanghai E-Purchasing Chamber of Commerce Deputy Secretary-
General, National E-Commerce Demonstration Base Shanghai Mid-ring
Business Area Consultant, E-Commerce China Cross-border E-retailing
Headquarters Park General Manager, having over 10 years of Cross-
border E-Commerce platform experience of planning, R&D, consulting,
being familiar with the enterprise E-Commerce solution, transnational-
purchasing process, enterprise ERP application.
Professor, Graduate Student Mentor, National “The Belt and Road”
Expert Advisory Committee Member, China Cross-border E-commerce
Application Appliance Chairman, Director of Donghua University-IBM
E-Commerce Academic Development Center, First Class Prize of
Shanghai Municipal Teaching Achievement and Second Class Prize of
National Teaching Achievement, Mainly focusing on E-Commerce,
Cloud Computation, Big Data Application Platform, Mobile Business and
Cross-border E-Commerce Application System Research and
Development.
Graduate Student Mentor, E-Commerce Teaching Guidance Committee
Member of the Ministry of Education of P. R. China, Dean of E-
Commerce Research Centre in Shanghai University, Standing Director of
Chinese Information and Economy Academic Society, Shanghai Dawn
Scholar. Awarded Zhejiang Province People’s Government Science and
Technology Award and many others. Research covers various subjects
such as E-Commerce, Information Management, and Information
Systems
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Contents
Executive summary……………………………………………………………...…06
1 Sino-Russia Trade & Cross-border E-commerce…………….………...…08
1.1 Sino-Russian Bilateral Trade………………………………………………....08
1.2 Russian E-commerce Development…………………………………………..08
1.2.1 Russian E-commerce Market Summary………………………………..……..08
1.2.2 Russian Cross-border E-commerce Development……………………..……..09
1.3 Russian E-commerce Consumption Trends Analysis…………………….…..11
1.3.1 Chinese Online Shoppes Publicity in Russia………………………………....11
1.3.2 Russian Online Shopping Consumers Demand and Behavior………………..11
1.4 Sino-Russia Cross-border E-commerce Development……………………......12
1.4.1 Summary…………………………………………………………………...…12
1.4.2 Trends…………………………………………………………………...…….13
2 Sino-Russia Cross-border E-commerce System Structure……...……..….15
2.1 E-commerce Industry Chain……………………………………………...…...15
2.2 Comprehensive Service System………………………………………...…….16
2.2.1 Main Functions………………………………………………………...……...16
2.2.2 Online Value-added Services………………………………………….....…...16
2.2.3 Offline Value-added Services………………………………...……….....…...16
2.3 Third-party Payment System………………………………………….....…...16
2.3.1 Chinese Cross-border Payment Organization and Business Mode……....…...17
2.3.2 Cross-border E-commerce Third-party Payment Transaction Flow……..…...17
2.3.3 Cross-border E-commerce Third-party Payment Development…....………....17
3 Heilongjiang Province Cross-border E-commerce to Russia ..………......19
3.1 Government Sponsored Environment for Cross-border E-commerce Industry19
3.1.1 Guidelines on Cross-border E-commerce Development..……….....................19
3.1.2 Work Plan for Cross-border E-commerce Development.. ………...................19
3.1.3 Development Plan for Cross-border E-commerce Major Cities………...........19
3.2 Cross-border E-commerce Platforms in Heilongjiang………..........................20
3.3 Talents Cultivation………………………………………………………...….22
3.4 Cross-border Logistics………………………………………………………..22
3.5 Overseas Warehouse in Russia………………………………………………..22
3.6 Working Focus on Cross-border E-commerce to Russia……………………..23
3.6.1 Multi-channel Development…………………………………………………..23
3.6.2 Transportation ………………………………………………………………..23
3.6.3 Logistics & Warehouses……………………………………………..………..23
3.6.4 Cross-border E-commerce Comprehensive Experimental Zone…..…...……..23
3.6.5 Cross-border E-commerce Industrial Parks…..……………………………....24
3.6.6 Cross-border E-commerce Service System…..……………………………....24
4 Sino-Russia Cross-border E-commerce Enterprises Examples………......25
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4.1 Chinese Cross-border E-commerce Enterprises……………………………....25
4.1.1 TradeEase.net………………………………………………………………....25
4.1.2 AliExpress.com…………………………………………………………….....29
4.1.3 DHgate.com……………………………………………………………...…....30
4.1.4 Ruston.cc……………………………………………………………………...31
4.1.5 Detbuy.com…………………………………………………………………...32
4.1.6 Intkit.ru………………………………………………………………..……....33
4.1.7 I1515.com…………………………………………………………………......33
4.1.8 Come365.com…………………………………………………………….......34
4.1.9 Foxmall.ru…………………………………………………………….............34
4.1.10 Esh1688.cn……………………………………………………………...........35
4.1.11 Rueyt.com…………………………………………………………………....35
4.1.12 Ets-Express.com……………………………………………………………...36
4.2 Russian E-commerce Enterprises…………………………………………..…36
4.2.1 Ozon.ru………………………………………………………………………..36
4.2.2 Ulmart.ru ….………………………………………………………………….37
4.2.3 Wildberries.ru..………………………………………………………………..38
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Executive summary
On June 20th 2015, the Chinese State Council launched the “Guidelines on Inducing
Development in the Cross Border E-commerce Industry” which clearly state that
supporting the development of the E-commerce is beneficial for “Internet +
International Business” which can lead to quality imports and exports and induce the
development of the Belt and Road.
China and Russia has always been important trade partners. The recent decade was a
time period in which continuous trade and growth has been seen for both sides. In the
wake of the Belt and Road initiative, trade between China and Russia is projected to
be around 200 billion USD by 2020. As an important E-commerce market in Europe,
Russian E-commerce industry has been growing rapidly over the past years. With an
upgrade in the strategic cooperation between China and Russia, a huge opportunity
for growth has arrived.
With the government’s support, Cross-border E-commerce enterprises can develop in
a safe and healthy environment, shaping the interactions of the Belt and Road,
promoting the congregation of Cross-border E-commerce enterprises, and assisting in
the development of the Belt and Road. The “2015-2016 Sino-Russia Cross-border E-
commerce Development Report” written by the China Cross-border E-commerce
Application Alliance (CCEAA), Department of Commerce of Heilongjiang Province,
and Beijing Easepay E-Commerce Co., Ltd. details the state of development in the E-
commerce industry between Russia and China, incorporating research of the core
elements of the industry, analyzing the flow of development, and introducing the
ideology behind TradeEase while finally giving examples of major cities and
enterprises in the Cross-border E-commerce industry for the reference of the reader.
This report has been greatly sponsored and assisted by organizations like Russia
Association of Internet-Trade Companies, E-commerce Foundation, Russian National
Association of Mail Order and Distance Selling Trade along with Shanghai Mid-ring
Business Area.
China Cross-Border E-Commerce Application Alliance (CCEAA) is a collection of
China Cloud Association, China Management Science and Engineering Academic
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Society, China Mobile Business Application Alliances, Cross-border E-commerce
Research Center of China E-commerce Association and many other E-commerce
Industrial Parks and E-commerce enterprises in China. Under the guidance of the E-
commerce and Information Department of Ministry of Commerce of the P. R. China,
CCEAA aims to bring more innovation to the cross-border E-commerce industry, to
aid traditional industries in transitioning to the new medium, and to increase the
overall competitiveness of the cross-border electronic commerce industry. CCEAA
has already started cooperating with the E-Commerce Europe, E-Commerce
Foundation, CBEC, AKIT, NORA, National Distance Selling Association and some
other national E-commerce associations to promote the unity and cooperation between
E-commerce businesses around the world.
Prof. Dr. Tang Bingyong
Chairman of China Cross-border E-Commerce Application Appliance
8th
June, 2016
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1 Sino-Russia Trade & Cross-border E-commerce
1.1 Sino-Russian Bilateral Trade
According to the Russian Customs, imports and exports between China and Russia
total in 88.4 billion USD, growing by 29.4%. Of the 88.4 billion, Russian imports
from China totals 50.89 billion USD, a 1.6% reduction, and takes up 17.8% of total
Russian imports. The Russian trade deficit totaled to 13.38 billion USD, reducing by
61.8%. China is Russia’s second biggest export market and the biggest source of
import. Russian imports from China mainly consists of electronics, textiles, and
metals, with a total value of 23.47 billion USD, 4.92 billion USD, and 3.98 billion
USD respectively, taking up 46.2%, 9.7%, and 7.8% of total Russian imports from
China respectively, which was reduced by 0.1%, 4.6%, and 2.8% respectively. Food,
beverages, and tobacco has seen a significant increase by 15.9% while light industrial
products such as shoes, boots, and umbrellas has seen a decrease of 22.1%.
1.2 Russian E-commerce Development
1.2.1 Russian E-commerce Market Summary
In recent years, Russian E-commerce market has seen a state of rapid growth with
online shopping entities strengthening and providing opportunities for global E-
commerce industry. According to the Association of Internet-Trade Companies
(AKIT), up until 2015 Russia has 59.62 million internet users (age 12-64), 47.5%
were male and 52.5% were female. Cities with over 100 thousand people has 61%
internet users and in 2015 Russian E-commerce value reached 760 billion Rubles with
an increase of 7% (see figure 1-1, 1-2). According to predictions by Morgan Stanley,
in 2020, Russian E-commerce value is projected to reach 50 billion USD.
Figure 1-1 Distribution of Russian Internet Users
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Figure 1-2 Range of Russian Internet Users
Source: the Association of Internet-Trade Companies (AKIT)
1.2.2 Russian Cross-border E-commerce Development
In the Russian E-commerce industry, the best performance comes from the Cross-
border E-commerce sector. According to AKIT, Russian Cross-border (import) E-
commerce value reached 220 billion Rubles, an increase of 5.1%, and took up 29% of
total Russian E-commerce value. From 2008 to 2015 the number of parcels increased
up to 75.5% annually. (See figure 1-3)
Figure 1-3 Russian Cross-border Trade Trends (2008-2015)
Source: the Association of Internet-Trade Companies (AKIT)
In the B2B market, Russia has 80 B2B platforms currently. According to statistics
from the E-Commerce Foundation, in the B2C market, airplane tickets,
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accommodation, travel, clothing, telecommunications, everyday products, and
entertainment is among the most popular transactions in 2015. (See figure 1-4)
Figure 1-4 Russian Online Shopping Categories and Values (2015)
Source: E-Commerce Foundation
According to AKIT, the top four most visited online shopping sites are AliExpress,
OZON , Ulmart, and Ebay. (See figure 1-5)
Figure 1-5 Russian Online Shopping Visitor Chart (2015)
Source: the Association of Internet-Trade Companies (AKIT)
In recent years, Cross-border E-commerce between China and Russia has seen a rapid
grow. According to AKIT, Chinese parcels sent to Russia makes up 90% of all
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transactions in Russian cross-border E-commerce in 2015 and 49% of all trade value.
(See figure 1-6)
Figure 1-6 Russian Cross-border E-commerce Distribution (2015)
Source: the Association of Internet-Trade Companies (AKIT)
1.3 Russian E-commerce Consumption Trends Analysis
In the long run, Russian E-commerce market will see a continuous growth, which
comes from the following factors: increase in accessibility of internet and E-
commerce, electronic payment becoming more and more popular, maturity of
facilities reducing transport costs to far and rural areas, exchange rates guaranteeing
Russian consumers access to a variety of cheap and plentiful Chinese products.
1.3.1 Chinese Online Shoppes Publicity in Russia
According to research by GFK, Russian consumers who have at least visited overseas
online shopping sites at least once in 2014 have grown from 36% to 50%. In the
census, Chinese sites have seen an increase from 25% in 2013 to 39% in 2014.
According to statistics from Russian company YANDEX, the most frequent search
keywords appearing alongside “China” is “shop”, “products”, and “delivery”. 45% of
all searches are related to Chinese productions, a number that far exceeds other
countries. Also, mailing and translation services for Chinese online shopping sites
have been major search terms as well.
1.3.2 Russian Online Shopping Consumers Demand and Behavior
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1. Uneven Regional Development and Distance Between East and West
Russian territory is vast, crossing between two continents, and internet prevalence and
IT skills vary significantly from region to region. Usually, central cities makes up a
major portion of the E-commerce market, with Moscow’s average market being 10
times the scale of other cities. However, due to proximity and economic power, the
Siberian and far-east regions of Russia shows a huge demand for Chinese products
while Western regions of Russia shows more interest towards European and
American products. According to search results from Russian internet users, China is
ranked 4th among searches, with over 4.1 million searches monthly, which is 5% of
all searches relating to countries.
2. Product Demands
Russian consumers turn to cross-border shopping for two main reasons: relatively
cheaper products and a bigger variety of products, and Chinese products have both of
those advantages. Russian consumers mainly purchase clothing, accessories, and tele-
communication equipment from China.
1.4 Sino-Russia Cross-border E-commerce Development
1.4.1 Summary
Russia has become the most important overseas market in the Chinese cross-border E-
commerce industry. Chinese E-commerce enterprises entered the Russian market in
2010 and in the span of a few years, Chinese E-commerce market shares has been
steadily increasing with sales value totaling 70% all Russian overseas E-commerce
values. Of the various platforms, Chinese enterprise AliExpress under Alibaba has
become the biggest online shopping site in Russia with market shares over 35% of
Russian cross-border online shopping market with eBay right after it with 30% and
Amazon with 7.5%.
According to State Department of Commerce, over 300 thousand parcels from
Chinese E-commerce platforms to Russia are delivered daily, with a value of over 4
million USD daily. According to statistics on the Alibaba, AliExpress has over 4
million active Russian users with 2 million USD worth of products delivered to
Russia daily and the numbers increase on holidays. According to Russian “East-West
Digital News”, Chinese E-commerce sales totaled up to 3.5 billion USD in Russia in
2014.
The most popular products in cross-border E-commerce platforms between China and
Russia are clothing, electronics, cosmetics, tea leaves, toys, furniture, and automobile
accessories. With the decreasing exchange rate of the Ruble, Russian exports to China
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has seen a significant increase with honey, flour, juice, leather products and other
Western luxury products seeing big welcomes from Chinese consumers.
On the matter of logistics, the cycle period is around 3-50 days. Due to the high cost
of DHL, UPS, and EMS, Chinese E-commerce mainly send packages via Chinese and
Russian airline cargo, but that also has a high cost. On January 19th, 2015, China Post
and Russian railway companies signed an agreement to open Chinese postage
delivery on Russian railways, greatly reducing the cost of transportation. Also,
Chinese Cross-border E-commerce enterprises are constructing warehouse areas
around the borders and overseas warehouses. In June, 2014, the first border
warehouse started operation in Harbin with over 3000 square meters in area and
reduced the time of package arrival to Russian consumers to 10 days.
On the payment side, Cross-border E-commerce enterprises between China and
Russia employed both online and offline payment in cooperation with third-party
payment service platforms. Online payment platforms consists mainly of WebMoney,
YandexMoney, and PayPal etc. AliExpress has also opened payment services through
mobile.
On the aspect of customs, on April 8th, 2015, with huge support from the Chinese
government, a customs service platform has formed in Suifenhe city, Heilongjiang
Province, enabling the connection of customs to Chinese Cross-border E-commerce
enterprises, marking an important milestone in the development of cross-border E-
commerce between China and Russia.
From 2014 onward, Cross-border E-commerce between China and Russia has entered
a new stage of rapid growth. Chinese Cross-border E-commerce enterprises boast
high quality products and service, winning over the Russian consumers with a
significant increase in website visits. From late 2014, AliExpress has reached 15.6
million hits monthly, far exceeding eBay with 3.7 million hits and Amazon with 1.4
million hits. According to web statistics from Yandex, since 2014 63% of Russian
internet users has bought products from Chinese E-commerce enterprises. In May,
2015, Alibaba established its first headquarters in Russia, improving its services in
Russia and cooperation with the Russian government. On June 18th, JD.com officially
launched its Russian site, opening up the Russian market.
1.4.2 Trends
1. Russian E-commerce Market Hides Huge Potential
The Russian consumer population is very large. According to Yandex, the top internet
services company in Russia, 300 million people speak Russian world-wide, and
Russia being the largest internet user base in Europe has a projected 40 billion to 50
billion USD market by 2020 in E-commerce (including both domestic and cross-
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border). In 2015, Russian E-commerce retail value has reached 2.9% of its total retail
value, compared to China’s 6.3% and the global average 6.5%, it is still a low number,
but the potential for growth in the future is dramatic.
2. Russian Economic Hardships Provides a New Opportunity for Cross-
border E-commerce Between China and Russia
Since 2014, due to Western economic sanctions, drop in international oil prices, the
devaluation of the Ruble, and economic stagnation, the Russian people has been
affected dearly. Russian consumer’s purchasing power has clearly dropped, leading to
future Russian consumers being very sensitive to prices. Under the restriction of
income, Russian consumer’s ability to purchase European and American products and
luxury products has seen a decline while the demand for quality cheap products from
China has and will see rapid and continuous increases. Chinese E-commerce
enterprises will continue to spearhead the cross-border E-commerce retail market
between China and Russia, providing more and more development opportunities for
both parties.
However, the development of Cross-border E-commerce industry between China and
Russia faces many obstacles, mainly in the form of customs and import/export tax,
logistics, payment systems, cutthroat competition, Russian government’s protection
policy of local E-commerce businesses. The biggest obstacles to Russian cross-border
trade are mainly: homogeneous competition, inconvenience of online payment, trade
protectionism, devaluation of the Ruble etc. These will all have to be in the near
future through development and application.
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2 Sino-Russia Cross-border E-commerce System Structure
2.1 Cross-border E-commerce Industry Chain
In the recent years, Cross-border E-commerce platform service system between
China and Russia has seen rapid growth, with the following main components (See
figure 2-1):
Figure 2-1 Cross-border E-commerce (Export & Import) Flowchart
1. Producer
Produce and create products to be sold overseas.
2. Cross-border E-commerce Enterprises
Two types: Opening platforms and Proprietary platforms.
3. Payment Enterprises
The main methods of payment currently include credit card, direct transfer, and
third party payment.
4. Logistics Enterprises
Logistics is one of the most important steps of cross-border E-commerce. Currently
the major forms of logistics are postal services, international courier services, and
overseas warehouse services.
5. Third-party Comprehensive Services
Third-party comprehensive services primarily provide management, IT, marketing,
operation, sales, physical distribution, financial, and human resource services.
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2.2 Comprehensive Service System
2.2.1 Main Functions
Cross-border E-commerce comprehensive service system mainly functions as:
Internet services, such as management of sites, domains, server rentals, etc.
Advertisement services, such as CMP advertisements, site specific ads,
keyword search ads, target national advertisement associations, DM ads,
proxies for search engines, etc.
Assorted services such as call center services, web management, translation
services, SAAS, etc.
Offline services, such as financial services, international trade proxies,
customs services, etc.
2.2.2 Online Value-added Services
1. Call Center Outsourcing
Cross-border E-commerce platforms utilize relevant Russian companies in order to
help Chinese businesses acquire Russian phone numbers and relay all calls to the
Chinese local customer service centers, increasing the rate of deals with consumers.
2. Web Management Outsourcing
With E-commerce platforms introducing the web management services, businesses
can lower costs by services such as translation, updating, system maintenance, and
web sales.
3. Translation Outsourcing
Cross-border E-commerce platforms can provide businesses with translation
services, helping businesses lower translation costs and increase the rate of
successful deals.
2.2.3 Offline Value-added Services
Offline services include custom service, quality check, physical distribution,
customs clearance, financial services, tax services, banking services, and insurance
services, etc.
2.3 Third-party Payment System
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2.3.1 Chinese Cross-border Payment Organization and Business Mode
Until the end of March 2015, there have been 23 third-party payment businesses
that were awarded the Chinese National Administration of Foreign Exchange
license for cross-border payments.
Currently the Chinese cross-border payment market can be divided into three
major types:
Third party domestic businesses that also extend their services to Cross-border
E-commerce businesses, such as AliPay.
Third party domestic financial organizations that extend their services to
Cross-border E-commerce businesses and also offer overseas ATM and credit
card services, such as China UnionPay.
International payment services businesses, such as PayPal.
2.3.2 Cross-border E-commerce Third-party Payment Transaction Flow
Taking a Russian consumer buying Chinese products online as an example, the
consumer first logs on Chinese Cross-border E-commerce platform and places an
order. The platform will send the order to a third-party payment platform. After the
third-party payment platform receives the information of the Russian consumer, it
will charge the consumer the amount in Rubles and send a confirmation to the
Chinese Cross-border E-commerce platform informing the transaction has been
made. The Chinese Cross-border E-commerce platform will then contact logistics
services to deliver the product to the Russian consumer. Once the consumer has
received the product, the third-party payment platform will contact its affiliated
bank, which will transfer the payment to the Chinese Cross-border E-commerce
business. Once the payment has arrived, the Chinese Cross-border E-commerce
business will inform the third-party payment platform, finishing the transaction.
2.3.3 Cross-border E-commerce Third-party Payment Development
Cross-border online payment is the biggest obstacle in the development of Cross-
border E-commerce to Russia. Local governments, traditional banks, E-commerce
enterprises, and third-party payment organizations are all working very hard to
resolve these problems.
1. Government and Traditional Banks.
Heilongjing province is currently constructing a financial center for online
transactions in Rubles, promoting the “Sino-Russia Cross-border E-commerce
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Online Payment Platform” initiative by Harbin Bank in order to provide
transaction services for Cross-border E-commerce businesses to Russia.
Harbin Bank, in cooperation with Russian company Wallet One, has signed an
agreement to provide easy transactions between China and Russia. In the future the
two hope to provide services that will reduce the cost of transactions for Russian
and Chinese E-commerce businesses, decreasing commission fees to 2% and
secure internet transaction safety measures in order to provide Russian consumers
a trustworthy platform and Chinese businesses a safe storage area. Harbin Bank
plans to open 95% of mainstream payment services to Russia such as online
currencies, bank cards, online banks, mobile payment in order to solve the problem
of cross-border payment.
2. E-commerce Enterprises and Third-party Payment Services Companies
In 2012, Alibaba already established business cooperation with the biggest Russian
payment service company, Qiwi Wallet, allowing Russian consumers to buy
Chinese products through Qiwi Wallet on the Alibaba platform. Qiwi Wallet is the
biggest Russian third-party payment tool, with a wide variety of risk-safe
mechanisms. Because of this, orders through Qiwi Wallet do not have a 24 hour
probation period, and Chinese sellers can ship their product as soon as the payment
achieves.
In the beginning of 2015, third-party payment service company, PayEase,
cooperated with Bank of China, Suifenhe division, assisting local financial systems
in enabling online and offline payments, increasing the fluidity of transactions
between Russia and China.
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3 Heilongjiang Province Cross-border E-commerce to Russia
Heilongjiang province started early in the development of Cross-border E-
commerce with Russia, and all levels of governments of Heilongjiang has treated
this issue as a priority due to geographical proximity and advantages of trade with
Russia, focusing on developing new business models, perfecting the environment
for development, promoting the platforms and expanding air and land logistics for
Cross-border E-commerce with Russia. After lots of hard work in 2015,
Heilongjiang has achieved significant progress, gaining valuable experience, and
has become a major region in Cross-border E-commerce with Russia.
3.1 Government Sponsored Environment for Cross-border E-
commerce Industry
3.1.1 Guidelines on Cross-border E-commerce Development
Heilongjiang provincial government released their Guidelines on February, 2016,
developing the Cross-border E-commerce industry, supporting the construction of
service platforms, encouraging E-commerce enterprises to develop overseas,
constructing a service system for E-commerce businesses, and promoting the
construction E-commerce Experimental Zones.
3.1.2 Work Plan for Cross-border E-commerce Development
Department of Commerce of Heilongjiang Province has written a development
plan on August 2015, stating that: before 2020, create 5 Cross-border E-commerce
platforms that exceed 100 million RMB, create 10 traditional transformation
Enterprises to become E-commerce enterprises that exceed 100 million RMB,
develop two payment platforms for Cross-border E-commerce businesses,
construct 5 border warehouses and 4 overseas warehouses, promote the
construction of Cross-border E-commerce service cities, and become the top
province of Cross-border E-commerce with Russia in China.
3.1.3 Development Plan for Cross-border E-commerce Major Cities
In 2014, the three cities Harbin, Mudanjiang, and Suifenhe have been designated as
Cross-border E-commerce service major cities by the Chinese customs. With
Harbin as the center, Mudanjiang as transit, and Suifenhe as the frontier, the
Chinese government wishes to create a flow of physical distribution, human
resources, finances, and information, creating Cross-border E-commerce
demonstration and pilot areas.
1. Harbin City
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Harbin City has greatly increased the logistics, customs, and payment capabilities
of Cross-border E-commerce businesses.
Parcels originating from Harbin to Russia makes up 30% of Chinese parcels to
Russia, ranking first. At the end of 2013, Harbin set up the first International Postal
Exchange Center in northeastern China, satisfying the needs of Russian consumers
for logistics from China. In June, 2014, the first border warehouse in China for
Russia started operating in Harbin, decreasing the time of delivery for Russian
consumers and decreasing the cost of logistics for Cross-border E-commerce
businesses. In February 2016, Harbin Cross-border E-commerce service platform
officially started operations, with services such as customs service in order to
increase the efficiency of parcels clearing customs, reducing the average logistics
time to 3-7 days. In November 25, 2015, the platform finished its first batch of 240
orders, totaling in 110 thousand RMB, collecting a custom tax of 1837.6 RMB.
Harbin’s next plan is to establish a physical distribution industrial park area in the
600 thousand square meters around the Harbin airport.
2. Mudanjiang City
Mudanjing City is a major center for Cross-border E-commerce to Russia, Korea,
North Eastern Asia, and all the way over to European and American markets.
Currently over 2,000 enterprises have hosted in the various platforms, and in 2015
the E-commerce transaction value has reached 13 billion RMB. In March 2016,
provisional customs supervision site in Mudanjiang City was approved trial operate,
the first batch of 200 Cross-border E-commerce orders successfully directly passed
the customs and was dispatched to locations throughout Russia.
3. Suifenhe City
Suifenhe City is the center of imports and exports from Russia in China, with 1.1
million square meter with 1500 shopping malls, clothing, furniture, household
electronics, and Russian goods businesses throughout. In 2015, Cross-border E-
commerce businesses completed transactions totaling over 6.08 million parcels,
valued at 390 million RMB.
Suifenhe City has established customs service platform, public service platforms,
and general service platforms for Cross-border E-commerce businesses, which
greatly reduced the time of customs clearance from 3-5 days to 3-5 minutes.
3.2 Cross-border E-commerce Platforms in Heilongjiang
Up until May 2016, Heilongjiang has 17 Cross-border E-commerce platforms,
mainly serving as platforms for import and export, logistics, and payment. (See
Chart 3-1)
Chart 3-1 Heilongjing Cross-border E-commerce Platforms List
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No Platform Name E-commerce Platform Main Service
1. Harbin City
1 TradeEase www.tradeease.net
www.trade-ease.ru
Commodities (Export &
Import)
2 COME365 www.come365.com Commodities Sales (Export)
3 Dhgate Russia ru.dhgate.com Commodities Sales (Export)
4 Rufavor www.rufavor.com Commodities Distribution
(Import)
5 Ruston www.ruston.cc Physical Distribution
6 Chinacoms www.chinacoms.com Information & Match-making
Services
7 Coco China www.cocochina.cn Information & Match-making
Services
8
Heilongjiang Public
Information Industry
Group
www.easebuy.ru Women’s clothing (Export)
9 Rueyt www.rueyt.com Physical Distribution
10 Harbin Bank https://pay.hrbb.com.cn/hrbiz Financial Services
2. Mudanjiang City
11
Daetong
www.detbuy.com Commodities (Export &
Import)
12 www.druexpress.com Express Services
3. Heihe City
13 Intkit www.intkit.ru Mechanical & Electrical
Equipment (Export)
4. Suifenhe City
14 Epinhui www.epinhui.com Commodities (Import)
15 ETS Express www.ets-express.com Physical distribution
16 Esh www.esh1688.cn Commodities Wholesale
&Distribution (Import)
17 10268 shop http://10268shop.web08.com.cn/ Commodities (Import)
22
3.3 Talents Cultivation
Heilongjiang employs the cooperation of enterprises and higher education to train
Cross-border E-commerce personnel. Enterprises provide training, office space and
steady jobs for students and also create scholarships and funding, encouraging
students to pursue a career in Cross-border E-commerce.
3.4 Cross-border Logistics
Due to Heilongjiang’s position, it is at an advantage when it comes to physical
distribution to Russia, for cities like Harbin, Suifenhe, and Heihe act as ports for
transportation. Up until the end of 2015, 34.02 million parcels have been sent
province-wide (weighing over 7,502.55 tons), among them, parcels from Harbin to
Yekaterinburg and Novosibirsk total to 20.7741 million pieces (weighing 3,574.85
tons), from Suifenhe through land transport total to 12.649 million pieces
(weighing 3,571 tons), from Heihe total to 602 thousand parcels (weighing 176.7
tons).
Heilongjiang opened the “Harbin-Hamburg Delivery Express”, clearing a new path
for cargo transportation. On June 13th
, 2015, the first transport departed, marking
the opening of this new milestone. By the end of 2015, 54 trips have been made,
totaling 821 cargo crates valued at 117 million USD (Export & Import), collecting
customs tax of 12 million RMB.
3.5 Overseas Warehouse in Russia
In order to decrease the cost of transportation and delivery time to Russia and
increase the satisfaction of customers, businesses in Heilongjiang have started
constructing overseas warehouse areas in Russia. By May 2016, 5 businesses in
Heilongjiang province have constructed 11 overseas warehouse areas in Russia
(See Chart 3-2), investing over 34.42 million USD, totaling 131.1 thousand square
meters in area, with a total transaction value of 30.954 million USD.
Chart 3-2 Chinese Overseas Warehouse in Russia
Number Chinese Enterprise Russian Location
1 Ruston Moscow Oblast
2
Intkit
Krasnoyarsk
3 Chelyabinsk
4 Novosibirsk
5 Rueyt
Novosibirsk
6 Zabaykalsk
7 Feng Tai Mechanical and Electrical Blagoveshchensk
23
8 Equipment Vologda
9 Chelyabinsk
10 Moscow Oblast
11 CAEC Yekaterinburg
3.6 Working Focus on Cross-border E-commerce to Russia
3.6.1 Multi-channel Development
Mainly includes:
Promoting growth and development of well know Cross-border E-commerce
platforms, increasing sales, matching and physical distribution capabilities.
Develop Cross-border E-commerce service sector in order to provide storage,
physical distribution, courier, customs, and financial services to Cross-border
E-commerce businesses.
3.6.2 Transportation
Mainly includes:
Expanding transportation pathways (air cargo, mixed passenger and freight
transport, and post route) from Harbin to major Russian cities.
Promoting the construction of Suifenhe’s land routes to Russia.
Advocating the development of Heihe city’s freight transport pathways.
3.6.3 Logistics & Warehouses
Mainly includes:
Encouraging the development of both logistics and storage capabilities of
Cross-border businesses in Heilongjiang.
Constructing border warehouse areas for Cross-border businesses and overseas
warehouse areas in Russia.
3.6.4 Cross-border E-commerce Comprehensive Experimental Zone
24
Mainly includes:
Supporting Harbin, Mudanjiang, Suifenhe, and Heihe cities to advocate for the
construction of Cross-border E-commerce Experimental Zones, in order to
create a healthy environment for future businesses.
3.6.5 Cross-border E-commerce Industrial Parks
Mainly includes:
Promoting the construction of Cross-border E-commerce industrial parks in
the various regions of Heilongjiang in order to attract new businesses and
provide support for them.
3.6.6 Cross-border E-commerce Service System
Mainly includes:
Constructing Cross-border E-commerce Service Platforms
Constructing service platforms for Cross-border E-commerce businesses,
improving the general service capabilities of the platforms in order to create a fast
and green information and physical distribution pathways for businesses.
Constructing Overseas Service Platforms
Through cooperation and agreements, building overseas warehouse areas, O2O
experience stores, overseas physical distribution areas, and communication
pathways in Russia.
Upgrading the Domestic Service Platforms
Encourage banks and payment organizations to open up services for Cross-border
E-commerce businesses in order to satisfy the payment needs of domestic and
overseas enterprises and individuals.
25
4 Sino-Russia Cross-border E-commerce Enterprises Examples
4.1 Chinese Cross-border E-commerce Enterprises
4.1.1 TradeEase.net
TradeEase is the first company to specialize in the Russian and Chinese market and
is a professional Chinese Cross-border E-commerce platform promoting “Made in
China” in Russia and “Russia Fine Quality” in China. TradeEase went online in
September 2015, introducing Cross-border payment, financial, customs, logistics
and storage, and market advertisement services, serving as an integrated service
platform for both Chinese and Russian consumers and producers. (See Figure 4-1,
4-2, 4-3)
Figure 4-1 TradeEase Chinese Site
Figure 4-2 TradeEase Russian Site
26
Figure 4-3 TradeEase’s Partnerships
PayEase is the first cross-border third-payment service company in China and
provides the TradeEase platform with electronic payment services. PayEase was
established in 1998 and is the first establishment in China to gain the PCI/DSS
certification, and has received VISA QSP certification along with ISO 9001 and
ISO 27001 certifications. In 2009, it received the Payment Service License from
the People’s Bank of China, and ranked 13th in VISA’s world payment
organizations list in 2013. Its partners include VISA, MasterCard, American
Express, JCB, UnionPay and YandexMoney.
1. TradeEase Russian site
TradeEase Russian Site (TERS) is warmly welcomed by Russian consumers
because of the popularity of its digital products, clothing, accessories, furniture,
jewelry, automobile parts, and sports equipment. It provides prices in Rubles,
payment in Rubles, and currency exchange between Rubles and RMB. Through the
cooperation with YandexMoney, TERS provides payment with local Russian bank
cards for the convenience of consumers. All commodities’ descriptions on the
TERS are translated by Russian staff and also provides local Russian customer
service call centers.
2. TradeEase Services
TradeEase services include 4 modules and 12 functions: (See Figure 4-4, 4-5)
4 Modules: financial service, operation service, marketing service, and
customs service.
12 Functions: store design, product collection, translation & communication,
logistics distribution, customs clearance, financial payment, customer
management, marketing, exhibition recommendation, operation support, order
management, and statistical analysis.
27
Figure 4-4 TradeEase Four Modules
Figure 4-5 TradeEase Twelve Functions
3. Cross-border Logistics Services
TradeEase has a safe and open logistics service system in order to improve
efficiency. Settled producers can freely choose their original logistics provider or
recommended by the TradeEase in order to satisfy the needs of both the producers
and the consumers. TradeEase also provides storage services in Beijing, Shanghai,
Guangzhou, Shenzhen, Yiwu and various other places. TradeEase possesses border
warehouse in Harbin and Suifenhe, guaranteeing the consumers in major Russian
cities receiving their products within 7-15 days. (See Figure 4-6, 4-7)
28
Figure 4-6 TradeEase Logistics Service System
Figure 4-7 TradeEase Storage Services in China
4. Financial & Payment Services
For Chinese producers, settled producers can designate public and private bank
accounts and credit cards in order to guarantee the payment arrives as soon as
possible; and accordingly to trade history and status, businesses can enjoy short
term financial services from both the bank and TradeEase.
In Russian consumers, TradeEase cooperates with YandexMoney to provide
Russian consumers with the most convenient and familiar methods of payment.
(See Figure 4-8)
29
Figure 4-8 TradeEase Russian Payment Interface
5. Marketing Promotion System
TradeEase provides marketing promotion for producers in various pathways:
Internet search engines－—Yandex.Direct, the No. 1 search engine in Eastern
Europe (with 65% of market shares).
Internet markets － —Yandex.Market, largest online price-comparisons
platform in Eastern Europe.
Social media—－VK，the No. 1 social media application in Eastern Europe
with over 150 million Russian speaking users.
6. Professional Seller Service
TradeEase provides a professional and comprehensive management support and
training system for settled producers.
Fast Start-up——Provides businesses with information, store design, product
upload services.
Training Support——Provides a comprehensive training course in start-up,
marketing, operation, etc., increasing producers’ sales.
Information Sharing——Periodically provides market data reports, helping
businesses keep ahead in the market.
4.1.2 AliExpress.com
AliExpress is online trading platform under the Alibaba Group aimed at the
international market. Online since April 2010, it currently operates in over 220
countries and territories with over 50 million overseas users daily. AliExpress’s
30
popular commodities in Russia include clothing, shoes, accessories, undergarments,
and electronic products. AliExpress is currently the most popular and largest online
shopping platform in Russia, ranking first in the App store with several hundred
thousand parcels on average delivered daily from China to Russia. In April 2015,
AliExpress upgraded the Russian premier channel, naming it “Mall”. “Mall” is
AliExpress’s fine-quality commodities website, introducing three new polices: 100%
quality assurance, 7 days unconditional refund, and 15 days delivery time in major
cities. (See Figure 4-9)
Figure 4-9 AliExpress Russian Site
4.1.3 DHgate.com
DHgate is the first online trading platform established for medium and small
businesses. Founded in 2004, DHgate enables Chinese medium and small
businesses to step out into the international market, employing a commission
system, free registration, and payment after successful deal policy. According to
statistics from PayPal, in 2014, 30 million types of products were traded on the
platform. DHgate Russian site went online in 2014, employing the use of advanced
translation tools enables the seller and consumer to communicate in Russian
through IM. It also supports payment in Ruble. (See Figure 4-10)
Figure 4-10 DHgate Russian Site
31
4.1.4 Ruston.cc
Ruston is established in September 2013 as a company with four modules: logistics,
E-commerce platform, human resources, and technology specialized in the Russian
speaking countries. It offers management, storage, logistics, and information
services to Cross-border E-commerce businesses. In March 2014 Ruston
cooperated with AliExpress; January 2015 Ruston entered DHgate; and since
November 26, 2013, Ruston has been operating air freights between Russia and
China and constructing a storage, logistics, call-center, and E-commerce service
network. Currently, it has over 6000 outlets, 5 domestic warehouse areas, 2 border
warehouse areas, 1 Greenwood-Moscow overseas warehouse area, 2 direct air
freights, 24 hour customer service, real time information service, and over 50
thousand parcels on average delivered daily, taking up 30% of the Chinese-Russian
logistics market, and delivery time at 5-12 days. At the end of 2015, Ruston has
delivered over 22 million parcels to Russia. It possesses a complete system for
small and large packages, with is paid by the gram with no base cost. Average
delivery time is 13 days, and over 80% of packages arrive within 25 days, and is
trackable throughout the trip. (See Figure 4-11)
Figure 4-11 Ruston Logistics Platform
Rufavor platform is Russian commodities distribution platform with integrated
services, including storage, order management, sales management, logistics, and
information services, with over 20 thousand online SKU, over 1200 service
providers, 1000 domestic settled producers, 2000 international E-commerce
businesses, and valued at over 120 million RMB. (See Figure 4-12)
Figure 4-12 Rufavor distribution Platform
32
4.1.5 Detbuy.com
Daeton (detbuy.com) is a Chinese E-commerce platform specialized in Russian
services. Through B2B, B2C management modes, it provides a professional online
shopping platform, a cross-border supply chain system, and an online payment
system, providing Russian consumers with fine-quality products. Daeton provides
free professional Russian customer service, able to solve problems encountered by
consumers, boasting a high quality service to attract Russian consumers. Daeton
accumulated years of logistics in providing a B2B, B2C logistics platform with
quality check, domestic transport, domestic customs inspection, Russian customs
inspection, customs tax services.
Daeton combines Russian product supply chain and Russian product sales as core
ideologies, and plans to attract over 200 Russian suppliers, over 500 thousand
Chinese consumers, over 80 million RMB in sales in 2016.
Daeton already set up a 1000 m2 OTO experience store in Dongning port beside
the Russian border and is currently constructing experience stores in cooperation
with Russian companies in Moscow and Vladivostok. (See Figure 4-13)
Figure 4-13 Daeton Cross-border E-commerce Platform
33
4.1.6 Intkit.ru
Intkit follows the ideology of “Promoting Chinese machinery to the international
market” and employs the B2B, B2C, O2O models to introduce online shopping
centers in Russia. Currently possesses warehouse areas in Chelyabinsk,
Krasnoyarsk, and Novosibirsk. In order to further upgrade the capabilities of these
overseas warehouses, Intkit employs the “overseas warehouse + financial service +
exhibition hall” style. In the financial aspect, it cooperates with Chinese financial
organizations; in the E-commerce aspect, it employs the COD payment method; in
the exhibition aspect, it adds the exhibition hall features to its Russian overseas
warehouse areas. (See Figure 4-14)
Figure 4-14 Intkit E-commerce Platform
4.1.7 i1515.com
i1515 was established in 2011 with headquarters in Beijing, and is the only
platform granted special administrative rights by the Ministry of Commerce of the
P. R. China and guaranteed by China UnionPay. It employs the B2B+O2O system,
and takes Barter model to reduce the capital cost of transaction enterprises. i1515
provides four models: i1515 marketing, i1515 destocking, i1515 procurement, and
i1515 investment. (See Figure 4-15)
Figure 4-15 i1515 E-commerce Platform
34
4.1.8 Come365.com
Come365 established in October 2012 and provides online Ruble trade, custom
clearance, and logistics services. Come365 focus on the Russian speaking market
and has quite a bit of fame in Russian speaking countries. The platform has already
purchased over 300 thousand different products from over 140 thousand Chinese
producers to sell to Russian speaking countries. Its major products are women’s
clothing, wedding dresses, 3C products, adult products etc. (See Figure 4-16)
Figure 4-16 Come365 E-commerce Platform
4.1.9 Foxmall.ru
Foxmall is a Cross-border E-commerce platform created by a joint investment by
23 E-commerce businesses. Online since January 2014, it focuses on small scale
wholesale of electronics to Russia, mainly targeting medium and small Russian
businesses by using the B2B model. Its major products are mobile phones, tablet
computers and accessories, automobile electronic equipment, furniture, outdoors
products, pet products. (See Figure 4-17)
Figure 4-17 Foxmall E-commerce Platform
35
4.1.10 Esh1688.cn
Esh1688 utilizes the “wholesale + distribution” method and acts as a Russian
products distribution platform for Chinese import companies, wholesale companies,
distribution companies and retail companies. On the Esh platform, Chinese
companies pick-up the Russian products and sell in their own channels. Esh1688
provides domestic logistics distribution service, and currently has over 1000
Chinese proxy agents. (See Figure 4-18)
Figure 4-18 Esh1688 E-commerce Platform
4.1.11 Rueyt.com
Rueyt is online since August 2015, and is an international trade and E-commerce
enterprise focused on physical distribution services such as online transportation
and cargo tracking services and has 132 Chinese logistics provider members, 110
Russian logistics provider members. By the end of 2015, Rueyt has sent over 15.9
thousand tons of cargo to Russia. (See Figure 4-19)
Figure 4-19 Rueyt Logistics Platform
36
4.1.12 Ets-Express.com
ETS-Express provides one-stop services, includes, customs, transportation, storage,
and order management. The company also operates border warehouse areas in
Suifenhe, physical distribution, and courier services to Russia. It has offices in
Suifenhe, Dongning, Hunchun, Khabarovsk, Yekaterinburg, and Moscow. It boasts
delivery to major cities such as Moscow and St. Petersburg within 3-7 business
days and to Siberian, Northeastern, and Northern regions within 7-15 business days.
ETS-Express makes appointments with their clients via phone after the products
arrived at the destinations, confirming with customers the time they will receive
the products so as to better the experiences on ETS-Express. All orders can be
tracked in time so that customers can know where the products are. Reverse return
service is also provided. (See Figure 4-20)
Figure 4-20 Ets-Express Logistics Platform
4.2 Russian E-commerce Enterprises
4.2.1 Ozon.ru
Ozon was established in 1998, and its major products include e-books, electronics,
music, and movie tickets. With over 3.5 million types of products, the three largest
categories are books (28%), electronics (26%) and baby products (14%). Aside
from this, Ozon also has projects such as Ozon.travel, ocourier.ru, litres.ru. Ozon
covers over 130 cities and 2100 regions and can reach over 80% of the Russian
population. Ozon’s income reached over 1 billion USD in 2014 and is a trusted E-
commerce business in Russia. Ozon is currently thinking about its IPO and aims to
gain over 50% Russian E-commerce market share. (See Figure 4-21)
37
Figure 4-21 Ozon E-commerce Platform
4.2.2 Ulmart.ru
Ulmart is a well-known Russian online shopping site. Ulmart was established in
2008 and includes products such as mobile phones, computers, automobile
accessories, clothing, baby products, furniture, and books. Currently, the platform
has 14.7 million consumers, with 30 thousand orders daily. In 2015 the Ulmart
Group had a turnover of 1 billion USD, a growth of 11% from 2014. Ulmart’s
advantage as a platform is its far reach with various stations throughout Russia.
Ulmart intends to allot 25-30% of its stocks in its IPO and will enter the stock
market in Russia, New York, and London. (See Figure 4-22)
Figure 4-22 Ulmart E-commerce Platform
38
4.2.3 Wildberries.ru
Wildberries was established in 2006 in Moscow and is the leading online shopping
platform in Russia for clothing and accessories. Its main products include women’s
fashion, men’s fashion, kid’s fashion, and fashion footwear with over 1000 fashion
brands in its contents. Wildberries provides nation-wide free courier service and is
the first in Russia to provide unconditional free delivery. (See Figure 4-23)
Figure 4-23 Wildberries E-commerce Platform
