In terms of agro food, the influence of e-commerce is also clearly noticeable. Online trade is increasing in these products, and more and more opportunities are arising. Nick Hong, Senior Employee Agro-Food at the Dutch consulate in Shanghai, explains. "From the top sector agro food, there's a lot of interest in e-commerce. The Holland Center is one of the frontrunners. This centre was opened in Shanghai last year, and one of its tasks is to showcase the strength of the Netherlands in agri & food. The Holland Center now works together with 10 Dutch companies in setting up the www.hollandbuy.cn website. This site is expected to be online toward the end of September.
Many individual companies are also active, like Holland at Home and Global Milk. From the Agriculture department, we try to bring companies in touch with e-commerce platforms. For instance, at SIAL, the most well-known trade show in our sector, we also invited e-commerce companies to our reception. The Dutch companies appreciated that."
Chances for products, regions and taxes
Hong sees opportunities for many different products. "There's a lot of demand for flower bulbs, for instance. Dutch cookies also offer opportunities, not just stroopwafels, but other kinds as well. Chinese people won't start eating a stroopwafel with their tea every day, but once in a while, they will. That offers possibilities."
Opportunities also vary per region, he says. In Ningbo and Guangzhou, the government is involved in the development of e-commerce, actively promoting this. In Shanghai, it all appears to be a bit slower.
Tax benefits are another reason for companies to invest more in e-commerce. While import taxes on agro food products are around 10 to 15 percent and VAT another 13%, tariffs for cross-border e-commerce are only 10% in total.
Challenges: market access, delivery costs and cooling
Nick notes that the challenges for e-commerce aren't fundamentally different from the challenges of traditional trade with China.
Market access is also required before you're allowed to import products through e-commerce. For food, strict requirements apply, just as in the Netherlands.
Delivery costs are another issue that may cause Dutch companies challenges. Often, delivery within China, from one end of the country to the other, is very inexpensive.
Cooling - some food products have to be stored cool, not just in storage, but also during the transport to the client. For many cheese products, for instance, this is a reason not to go to China yet, although more and more options are added in this respect as well.
Source: Nieuwsbrief Zakendoen China