How cans of German formula get to Chinese babies faster than ever before

Source:Global Times Published: 2015-12-17 19:18:01

Seven years since the tainted baby milk powder scandal killed six babies and hospitalized hundreds of others, Chinese moms still choose imported baby formula over domestic products whenever possible. Not only have e-commerce developments brought great convenience to Chinese customers, the establishment of international warehouses on Chinese soil has also highly benefited cross-border online shopping and ensures a speedy delivery of baby food.

Foreign-made tins of baby formula are stored in a warehouse in Hangzhou, Zhejiang Province. Eight Chinese cities were designated as trial zones for cross-border e-commerce platforms in 2012. Photo: IC

Wang Ye, mother of an 18-month-old daughter, picked out two cans of German baby formula on an e-commerce website headquartered in Guangzhou, South China's Guangdong Province. Seven years have passed since the tainted baby formula scandal became public in 2008, but fear lingers in her heart. Foreign products remain her only trusted choice.

The brand came highly recommended by a lot of Chinese parents. The milk originates from Switzerland and is processed with German technology, they told each other on social media. The website's banner ad shows the picture of a cherubic blond baby cuddling a formula can, with words popping out claiming the product has similar qualities to mother's milk, improves infants' immune systems and prevents constipation.

As soon as Wang filled in her ID number, home address and credit card infomation, the two cans of formula were on their way to her Shanghai home.

That was the first time Wang bought milk powder on a domestic e-commerce website, and it opened a whole new world for her.

Before local e-commerce websites were available, mothers like Wang had had to go to great lengths to find foreign baby formula. Shopping in imported-food supermarkets is an easy option for those living in major cities, but it costs more than buying formula online. Some ask friends to pick milk powder up whenever they go abroad on vacation or on business trips.

Reluctant to bother her friends and unwilling to pay the prices charged by posh supermarkets, Wang first tried online shopping on a foreign e-commerce website but found the process arduous. First she applied for a credit card that could spend multiple currencies, then she visited an US e-commerce website for baby products and spent a long time choosing a suitable product with the help of online translation software, and finally she had to find a reliable courier.

"I was very worried. What if it wasn't delivered correctly? Would it be intercepted by customs?" said Wang.

Her baby's food arrived three weeks later. It was slow, but at that time there were not many options. She was actually overwhelmed with her achievement. Since then, her daughter's crib, car seat, nursing bottle and virtually all the small things that a baby needs, came via various overseas e-commerce websites.

She kept a tally: 74 packages in total, 3,012 euros ($3,269) for milk powder, $5,590 for the rest.

Wang is not alone in buying formula from overseas, as these days it is a common task for Chinese parents. Almost 70 percent of Chinese purchasers of baby products were not willing to buy domestic-made baby formula, three years after the formula scandal resulted in fatal kidney failure among some children, according to a survey conducted by China Central Television in 2011. Mainlanders' bulk buying of milk powder in Hong Kong has triggered political spats.

Idiot-proof purchases

Things are much easier now. Wang's order for two cans of German formula placed on the domestic e-commerce website didn't even directly involve a German firm. It appeared on Xu Enhai's computer network at an international warehouse in Guangzhou's airport.

Xu works with a state-owned corporation dealing in shipping. Seeing the growing demand for foreign products in China, he jumped at the opportunity and set up a logistics platform specifically for cross-border e-commerce in 2014. With the original logistics network already in place, Xu only had to make a few changes to create a one-stop service for consumers like Wang. Sellers, agents, transport companies and so on are linked through Xu's efforts, and foreign-made baby formula is now just a click away.

Eight Chinese cities were designated trial zones for cross-border e-commerce platforms in 2012. There were over 2,000 registered platforms like the one Xu works with by the end of 2014.

Cross-border e-commerce platforms provide an idiot-proof overseas buying experience. It frees Chinese consumers from hassles ranging from visiting a website in a foreign language to finding transport companies, let alone the nagging worry that customs might find fault with a delivery and confiscate it.

Actually, even before Wang saw those two cans of milk powder on her computer screen, Xu's team had received orders from their partner and bought formula from Germany. When Wang saw them online, they were already sitting in the Guangzhou warehouse after going through all the procedures of customs clearance and quality supervision.

Their warehouse is 6,000 square meters, and they're now building another one that will be five times bigger.

As the workers sorted out the Wangs' order in the warehouse, a delivery note was generated on the network together with the bill and her ID info, which would be sent to Guangzhou's customs and quality supervision departments through a virtual channel.

Open and aboveboard

It was not just language obstacles that made mothers like Wang give up on foreign e-commerce websites.

Chinese parents who buy foreign milk powder form various online groups on social media, including WeChat. They compare notes on the taste and quality of various brands of formula all the time. The news that customs are stepping up their duty inspections  was rapidly spread in their groups.

"I was worried about the duties, and even more worried about the delay," said Wang, "my daughter was waiting to be fed."

Now domestic e-commerce platforms are completely open and aboveboard. When Wang gazed back at her order, she was not aware the customs and quality supervision department had already given the green light to its delivery.

The General Administration of Customs announced in 2014 that all cross-border e-commerce platforms must be linked to the customs' network. The decision has not only prevented duty evasion but also sped up transactions.

The boom in cross-border e-commerce can be, to a large extent, attributed to the government's open attitude toward e-commerce enterprises dealing in imported goods, said Chen Yongjun, professor of economics and management at Guangdong University of Finance & Economics.

The growing number of transactions has also posed great challenges to supervision departments. Consumers are demanding ever greater efficiency, and the government has to adapt to the Internet age.

In May, the General Administration of Customs stipulated that customs must work with cross-border e-commerce platforms 24/7 and goods must be cleared within 24 hours of arriving at customs.

Thanks to these policies, it took less than a day for Wang's two cans of milk powder to be declared, checked and cleared.

At another cross-border e-commerce supervision center in Guangzhou where customs officers work alongside the quality supervision department, clearance takes less than 10 minutes.

Saving time is not the only advantage of buying from domestic cross-border commerce platforms, according to Duan Weichang, associate professor of management of Guangzhou University. As everything is "under the sunshine" now, potential quality problems could be prevented.

Greater expectations

Wang's two cans of German formula arrived four days after she placed her order, compared to the three weeks it used to take when she ordered from foreign websites. Her daughter, and millions of others, will rely on these sophisticated platforms for their supply of nutrients, a fact Chinese middle class parents are resigned to.

However, Wang still regularly visits overseas e-commerce websites, as the local ones only provide baby formula, skin care items and basic healthcare products.

Browsing a Japanese e-commerce website with online translation software, Wang is now looking for cough syrup for her daughter, which is highly recommended by other moms in their online group. The syrup has the red-nosed Anpanman anime character on the bottle and has a sweet peach flavor.

Domestic-made medicines for children taste horrible and as such it's a pain in the neck to get her daughter to take medicines, claimed Wang. "Foreigners have lots of devices to make the medicine taste better," said Wang, "I can't find them here."

A Guangzhou-based e-commerce platform began importing foreign products last year. It's owner said he aims to strike deals with foreign suppliers and producers to provide products that are in demand on the Chinese market. "Chinese customers believe that what foreigners use are good products," he said.

"Online purchases from overseas is an economic activity based on consumers' purchasing power, and, compared with other social areas, it provides an opportunity for equality and democracy to all people," commented Bao Yaming, a researcher of the Shanghai Academy of Social Sciences' Literature Research Institute.

Global Times

Newspaper headline: Milk a click away

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