Globalization – How It Will Affect Your International Shipping October 10, 2008

Here at Paystone we solve a key problem for online merchants selling their goods into the Chinese market – getting the RMB money from China and delivering it to the merchant’s bank account here in North America in US or Canadian dollars.  Receiving and converting the money is a major challenge – but it is only 1 of the challenges facing online merchants that want to expand sales into China.  Some of the other key challenges include:

– Shipping – how to get it there
– Duties and Taxes
– Finding out which products are allowed to sell into China
– Website optimization for the Chinese market – including translation and cultural issues

This posting will hopefully give you some insights into the Shipping part of this equation.

Taylor Systems Engeneering writes in a white paper that “as we reflect on what’s happening in the world of small parcels, we can see a clear trend emerging – globalization is going to affect our world more and more.”  The big 3 carrieres – Fedex, DHL and UPS are all working hard to address this issue.  23% of Fedex’s revenues come from direct international shipments.  Direct international shipments is also the fastest growing part of Fedex’s business.

Fedex is opening a $150 million Asian hub in China’s southern Guangzhou city.  UPS is opening a $180 million cargo hub in Shanghai. DHL has plans to double the size of it’s air freight operation at the Hong Kong Airport with a $200 million investment program to increase their parcel service in China.  DHL’s Jerry Hsu claims “China is today one of the fastest growing markets in DHL’s global network, registering and annual growth rate of 50-60% in 2004.”  Wow!

What does this mean to you the online retailer?  You can speak with your existing light parcel carrier about shipping goods into the massive Chinese market.  The big 3 are investing heavily into that country to expand their network and expand their reach past only the Tier 1 cities of Shanghai, Beijing and Guangzhou.

With that said, you now have 2 of the major challenges of selling and shipping to China solved – getting the payment and delivering the product.  We’ll talk more about the other issues of duties, taxes, restrictions, website optimization, translation etc in another post.  In the meantime you can find lots of resources in the Sell to China section of this blog.

Taylor Systems Engineering Corporation is a leading consultant and provider of computerized shipping systems.  Read their whitepaper on global parcel shipping here.

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