Today, RCEP comes into effect comprehensively!

RCEP is in effect today!

Today, RCEP officially takes effect in the Philippines.

This also means that this free trade agreement, covering 30% of the global population with the largest economic output and the highest intra-regional trade volume, is fully implemented among the 15 member countries and enters a comprehensive implementation phase.

What does this mean for the cross-border e-commerce community?

1. RCEP economy with a tailwind of growth

After the RCEP took effect one after another, some people are still watching, while others have tasted the “sweetness”.

In 2022 – the first year of implementation, China’s imports and exports to the other 14 member countries of RCEP amounted to 12.95 trillion yuan, an increase of 7.5%, accounting for 30.8% of the country’s total foreign trade imports and exports. Behind the data is the increasing number of enterprises that are enjoying the growth dividend brought by RCEP.

Regionally, in 2022, Zhejiang Province’s imports and exports to other RCEP member countries amounted to 1.17 trillion yuan, an increase of 12.5%; Shenzhen’s imports and exports to RCEP trading partners amounted to 1.01 trillion yuan, an increase of 7.8%.

Against the backdrop of increasingly cautious global consumption, RCEP’s growth prospects and momentum have injected a shot in the arm for China’s cross-border e-commerce enterprises.

So what are these RCEP member countries buying?

Specifically, the most popular categories in 2022 for the ten ASEAN countries are still consumer electronics, home and gardening, and health and beauty. In addition, musical instruments and equipment, outdoor and sports equipment, clothing accessories and footwear, automobiles and motorcycles and their accessories, and maternal and child products are also performing well.

In 2022, the most purchased items by Australian consumers online are: footwear, clothing accessories, home decor, kitchenware, and 3C products. In New Zealand, the proportion of online shopping has sharply increased after the pandemic, and in 2021, New Zealand’s online shopping spending reached $7.67 billion, setting a new record. The most popular products among consumers here are: clothing, shoes, and groceries. Due to the opposite seasons between the southern and northern hemispheres, sellers can also extend the sales time of goods by making full use of the seasonal differences, achieving high sales throughout the year.

As developed countries in Asia, Japan and South Korea have high per capita income and higher requirements for product quality and brand. Consumers in Japan and South Korea often pay attention to details, are good at surfing online, and are easily influenced by social media KOLs. They also like to buy products with celebrities and influencers to follow the trend. The main popular categories in Japan and South Korea include: food and beverages, home appliances & electronics and communication equipment, clothing, daily goods, beauty products, toys, and hobby goods.

II. What are the opportunities in the implementation phase?

From today, RCEP enters the comprehensive implementation phase. What opportunities are there for export-oriented enterprises?

Tariff Reduction

Tariff reduction is the most direct benefit of RCEP implementation. According to the agreement, more than 90% of goods traded within the region will ultimately achieve zero tariffs. After entering the comprehensive implementation phase, the tariffs between member countries will gradually decrease year by year. This also means that whether it is direct export or import of raw materials from other RCEP countries, a large amount of tax will be saved. With lower tariffs, goods will also have greater competitiveness in overseas markets, which can promote product sales.

Lower Operating Costs

On the one hand, we should not only view RCEP countries as a blue ocean backup market for development, but also recognize their potential as “economically beneficial” raw material suppliers. Currently, many raw materials in our country rely on imports. After the tariff reduction, under the principle of accumulated origin, importing low-priced raw materials from RCEP countries and processing them for export can help reduce production costs for enterprises and also improve the resilience of the supply chain, enabling enterprises to better respond to market competition.

On the other hand, RCEP aims to eliminate trade barriers among member countries, creating an open and inclusive cooperative environment and facilitating fast and convenient trade operations. This is like a clear stream, bringing greater convenience to cross-border e-commerce enterprises. In the trend of anti-globalization, it effectively reduces the uncertainty of enterprise operations and allows enterprises to obtain a healthy and friendly business environment.

Vast Growth Potential

Currently, the competition in blue ocean markets such as Europe and the United States is intense, and customer acquisition costs such as advertising are gradually increasing. In addition, changes in policies and stricter regulations on some large platforms have brought many obstacles and challenges to the development of cross-border e-commerce enterprises.

Compared to this, the market created by RCEP not only has a huge scale, but also has different stages of economic development among member countries and strong cultural diversity. This also gives enterprises more possibilities to explore new markets. As long as we carefully study the market and produce products that meet the needs or preferences of local consumers, RCEP can also become a better growth opportunity than the European and American markets.

Since the beginning of this year, there has been great downward pressure on the world economy, and the uncertainty of the overall environment has been increasing. The advantages of RCEP countries with fewer tariffs, convenient trade, and smooth customs clearance have been highlighted, and the considerable growth rate of e-commerce has also attracted more and more Chinese enterprises to enter this blue ocean market.

As early as 2021, SHOPLINE Logistics joined the China (Guangdong)-RCEP Cross-Border E-Commerce Cooperation Alliance as one of the founding members. It has participated in multiple alliance exchange activities and explored RCEP development opportunities with the alliance and other enterprise representatives. At the same time, SHOPLINE Logistics has been accelerating the logistics layout in RCEP countries and deepening its understanding of RCEP policies. Currently, SHOPLINE Logistics has completed the channel and service network coverage in RCEP member countries. Its professional service team can provide relevant advice and customized logistics solutions based on the specific needs of enterprises, paving the way for enterprises to expand the RCEP market.

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