One of the main pain points for cross-border e-commerce merchants to operate in China is the difficulty of managing returned products. China Customs regulation requires CBEC products when sold – are not able to be returned and admitted by the bonded warehouse, unless the products are intact, and are still in sellable condition.
The recent Hangzhou Qianjiang bonded warehouse trial could resolve some of the problems for merchants to manage return lead time. Hangzhou Comprehensive Bonded Zone has completed the first cross-border e-commerce online shopping return trial orders, where parcels shipped from other China bonded warehouses, can be admitted by the Hangzhou Warehouse to manage returns and refunds.
Previously, while merchants operating multiple bonded warehouses in China, product returns must follow the "original in, original out" policy. For example, products sold from Guangzhou Bonded Warehouse cannot be admitted by other warehouses and need to be returned to Guangzhou Bonded Warehouse to qualify for tax refund and second listing.
The first 3 quarters of 2023 saw an increase of 5.3% in import cross-border e-commerce revenue growth, reaching 0.4 trillion CNY, according to the latest data released by China Customs. As of date, there are dozens of bonded warehouses serving importing merchants to store and deliver cross-border e-commerce orders. Lacking a unified process to handle returning orders had been a hassle for merchants, as they had to keep track of returning orders originating from various warehouses. The innovation in return handling could further ease the barrier for foreign marketplace players and fashion sellers to ease entry via cross-border e-commerce.
Who benefits from the return?
While the majority of the smaller merchants manage cross-border e-commerce fulfilment from single bonded warehouses, there are some of merchants requiring a multi-warehouse operation. Such as clothing, food, or marketplace type of merchants who operate from multiple China bonded warehouses to minimize cost & shipping lead time. Brands operating on multiple channels, such as Douyin, JD.com, WeChat and Tmall, would require placing inventory in multiple warehouses. Merchants who provide both B2C and B2B drop-ship services also operate from multiple bonded zones to penetrate the China market – which will benefit the most.
The new Hangzhou Qianjiang Bonded Warehouse initiative could save these merchants a lot of time and effort in handling returns from different warehouses, increase the response time for the customer service team, and a speedy refund process for customers.
What's the latest return policy?
Whilst Hangzhou Comprehensive Bonded Zone is piloting the single channel to return – it does not mean that the China Customs are lowering the threshold for returning.
In practice, the returning of cross-border e-commerce orders must follow the requirement of following:
• The product needs to be in sellable condition, which means the product's original packaging needs to remain intact, and for fashion apparel and shoe retailers, the product's original tags need to remain intact.
• For any edible products, such as nutrition supplements, pre-packaged foods, or infant formula – returns are not allowed. According to a recent policy released by most China bonded warehouses, they would only accept customer-rejected orders, meaning that if the outer package of the parcels is opened (or any sign of opening), it will not be admitted by the warehouse.
• Return of the goods must be admitted to the warehouses within 30 days of declared import.