Small China e-commerce firms to be struck hard by US withdrawal from Universal Postal Union

Small Chinese e-commerce services will suffer most from the US choice to withdraw from the international arrangement that sets worldwide postal rates, with some likely to have a hard time to endure, business agents said.The result on larger e-commerce companies, however, might be restricted because many have actually established their own logistical networks to deliver items to customers.The White Home

revealed on Wednesday that the United States would begin the year-long procedure of stopping the 144-year-old Universal Postal Union(UPU ), opening a brand-new front in the escalating trade dispute between Washington and Beijing.The US declares the worldwide rates set by the

UPU for particular establishing nations like China provides an unjust trading benefit. It costs about US$ 20 to send by mail a 2kg(4.4 pound )parcel from one United States state to another, but sending by mail the same plan from China costs only US$ 5. The United States direct-mail advertising business of Chinese sellers will be greatly affected If the Trump administration ultimately ditches the United Nations-run organisation and sets its own”self-declared”postal rates, little packages sent out from China to the US through the postal system would face much higher rates, adding considerable expenses to small Chinese cross-border companies offering items on United States e-commerce platforms like Amazon and eBay. “The formerly revealed tariffs were targeted at standard export merchants in China, while pulling out from the UPU is intended at among the nation’s fastest-growing export sectors, cross-border e-commerce companies, “said Yang Xingjian, founder and chief executive officer of StyleWe, a cross-border online fashion shopping platform. “The US direct mail service of Chinese sellers will be greatly affected,”said Li Pengbo, an analyst with seeking advice from company 100ec.

cn.In its 2017 yearly report Global Leading E-Commerce, a Chinese-listed cross-border retail company, stated 70 per cent of plans delivered by Chinese

cross-border exporters are delivered through the postal system using UPU-dictated rates.However, the effect on Global Leading E-Commerce will be limited given that it has developed its own logistics system, according to a company statement on Thursday in action to the United States announcement.Only 5 percent of

deliveries to the US sent out by Shenzhen Globalegrow E-commerce Co, Global Top’s completely owned subsidiary and primary income source, go through the US postal system, the company said.The other 95 percent flows through the business

‘s own logistics network, which includes 61 overseas warehouses in more than 200 countries.Still, Global Top agreed the White Home decision might cause a purge of marginal Chinese cross-border e-commerce companies.

“The competitiveness of medium and small-sized cross-border e-commerce companies who count on the UPU will decrease, benefiting leading enterprises who have develop their

own logistics systems,”it said.StyleWe’s Yang concurred that small companies would suffer most from greater United States postal rates.

“The only group that will be impacted includes cross-border e-commerce firms which offer small products worth US$ 1 to US$ 5,”he said, on e-commerce platforms such as Yiwu, a popular website for wholesale merchandise

such as socks or plastic flowers.Representatives of 2 hat sellers and a carpet shop on the Yiwu network said they were not even aware of Washington’s choice, let alone its possible result on their organisations. Other companies said they were still waiting to evaluate the impact on their costs.A worker at Superbuy, a Chinese acquiring firm that assists people around the globe to purchase from China’s online platforms, stated the expense of shipping plans to the United States through postal system could rise.”If we are forced to change our shipping fees, we will inform the general public, “the individual stated.”However as of now there is no change to our [shipping] charges.”A cross-border e-commerce executive said companies that depended upon the United States Postal Service for delivering small plans could turn to worldwide industrial carrier services to avoid greater American postal prices.”However international reveal deliveries will still deal with tariff pressures

from the US, “said the Shenzhen-based business person, who decreased to be named.” It is too early to get a clear picture [of the full effect] when the circumstance has simply happened.

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