Core viewpoints
A few days ago, the General Office of the State Council issued the "guidance on promoting the healthy and Rapid Development of Cross-border E-Commerce". We understand that the core purpose of this opinion is: (1) to give full play to the advantages of China's manufacturing power, guide Chinese enterprises to expand their overseas marketing networks, and make use of overseas demand to dredge the excess capacity of some Chinese industries; (2) reasonably increase imports and keep household consumption in China. (3) to support powerful enterprises to become leaders and cultivate a number of influential public platforms; (4) to improve the efficiency of the import and export industry chain, especially in customs clearance, inspection and quarantine and payment and settlement; and (4) to guide the industry to develop in the direction of standardization.
According to the 2015 global cross-border e-commerce conference, China's cross-border e-commerce import and export volume was about 6.5 trillion yuan in 2016: according to the 2015 global cross-border e-commerce conference, China's cross-border e-commerce import and export volume was about 4.2 trillion in 2014, an increase of 33% over the same period last year, of which about 85% are exports, and it is estimated that the size of China's cross-border e-commerce transactions will rise to about 6.5 trillion by 2016. We believe that for B2C cross-border e-commerce merchants, the distribution of daily chemical products with a relatively high proportion of online business at the initial stage of establishment will help to quickly obtain traffic and increase the rate of turning back: according to Euromonitor data, the top categories of online sales in China in 2014 are mothers and infants, makeup, skin care, sets, men's care products and bath products. The proportion of online sales revenue is 18.1%, 17.6%, 15.5%, 13.3%, 12.7% and 10.1% respectively. Considering that almost all high-end daily chemical products are occupied by overseas brands, we believe that the layout of B2C cross-border e-commerce merchants at the initial stage of establishment will help to quickly gain traffic and match the high brand loyalty of daily chemical products. it also helps to increase the rate of turning back.
The fragmentation of B2C cross-border ecommerce is an opportunity for new entrants: online shopping penetration in China was about 14 per cent in 2014 and is expected to rise to 20 per cent by 2017, according to Euromonitor. The pattern is extremely scattered. In 2014, the top three merchants were Tmall (under BABA (BABA.N, unrated), Jumei (JMEI.N, unrated) and maintenance (VIPS.N, unrated), with GMV of about $2.97 billion, $750 million and $460 million, respectively, even with the largest share, Tmall. Its GMV also accounts for only 5 ‰ of imported cross-border e-commerce (China's cross-border imports in 2014 is about 630 billion yuan = the scale of China's cross-border e-commerce imports and exports in 2014 is about 4.2 trillion * 15% (of which 15% are imports), and 5 ‰ = Tmall's GMV is about 630 billion yuan in 2014 / 2014).
Resources enterprises are the beneficiaries, reiterate 000973.SZ (unrated): we reiterate that Dover Technology is based on: (1) the company owns the core land located in Guangzhou Nansha Free Trade Zone, the resources are scarce and can not be replicated, and it is expected to attract large cross-border e-commerce; (2) Guangxin Holdings, the major shareholder, is the largest foreign trade enterprise in Guangdong Province; and (3) the foundation of state-owned enterprise reform is solid.