Why the new China cross-border ecommerce platform by SF Express might be a game changer

Written by Denis Suslov || March 02 2015

There are now 18 million shoppers in China who buy goods from international platforms and have already spent RMB 216 billion doing so, according to Nielsen. The market is constantly growing, boosted by a more affluent middle class and government support. In our Top 10 China Banking Technology Trends report we talk about how China UnionPay extended its cross-border payments expertise to the ecommerce and joined the industry with its Haigou service in 2014. A new entrant to the cross-border e-commerce market is SF Express. SF is one of China's major logistics and delivery companies and relies on an entirely different set of strengths to develop thier business.

SF Express’s new platform, SF Haitao was launched in January. In February, the platform was already busy marketing seafood from North America and other traditional New Year products to Chinese New Year shoppers. The new service boasts 15-day delivery from any country and 7 day delivery from Hong Kong warehouses. All fees including customs, packaging, international and domestic shipping are included in the listed price, significantly reducing the headache of cross-border shopping for Chinese consumers. Ten years ago, ordering from abroad may have meant a long wait and somewhat random, definitely expensive, customs fees. 

The company leverages its logistics network to source and receive products to its warehouses overseas, provides custom clearance, and, of course, does the domestic delivery. This business model is unique and definitely sets apart from current competitors who used to come from the online commerce side such as Alibaba’s Tmall and Amazon. 

As to the future of the new service, we are cautiously positive. While SF Express doesn’t have the massive user base that a Tmall or UnionPay does, it certainly does many things right.

First, it is the fastest company on the market, according to an experiment conducted by the 21st Century Business Herald in November 2014.  

Second, the company’s management succeeded in building a unique business culture of efficiency and customer service. Delivery couriers arrive within minutes of a phone call almost at any big office building and always are very helpful with packaging and filling in delivery slips. There is a feel of pride to these delivery guys as it is must be exhausting to traverse China’s cities on electric bikes, but seems like there is a great team spirit at SF Express and they are proud to work for the company and not someone else. In addition, they are paid according to package delivery metrics, so the more they help the customers, the more business they will handle. 

The company also strives to stay ahead of the game on the payments side. The company has announced the addition of TenPay as a payment option in February. Also, similar to Alipay and WeChat, SF Express will allow its ecommerce platform customers to invest the balance money in their accounts in a money fund managed by the E Fund fund management company.

It is clear that cross-border e-commerce will be one of the main stories in 2015. Will SF Express be a part of it?

SF Express joins China's cross-border ecommerce