FTZ online shop offers discounts

The first cross-border e-commerce platform in the China (Shanghai) Pilot Free Trade Zone is about to go online soon, offering products with prices as much as 30 percent lower than those sold in stores.

Shanghai Buyeasy International Trade Co Ltd, operated by the Shanghai-based third-party payment company Orient Electronic Payment Co Ltd, is one of the first 25 companies to have obtained a business license in the zone.

Du Ying, director of Buyeasy, said that apart from the price for each product, the website will also provide import tariff and logistics fees. As the products go directly from warehouses to customers, a lot of costs will be reduced and thus prices offered to consumers will be lower.

There are basically six categories of products sold on Buyeasy: clothes, accessories, baby products, digital products, cosmetics and bags. The e-commerce website is conducting trial operations at present, awaiting approval from the General Administration of Customs before it is finally officially launched.

All the brands running on Buyeasy must have branches in China to provide after-sales service, and all the products must have records at the customs office. Consumers shopping on Buyeasy are required to register using their real names. There will also be a limit on each consumer's shopping amount on the website.

"Of course, the e-commerce platform will pose competition to other websites of the kind. Apart from the obvious and convenient services provided, we also guarantee after-sales services to customers, which differentiates us from competitors," said Du.

What is the most attractive to customers, Du explained, is the guarantee of genuine products, a requirement that most online agents of overseas products cannot meet.

Therefore, Mo Daiqing, senior analyst on the e-commerce industry at research company China e-Business Research Center, said that it is good news for customers to be able to protect their rights in the first place. But more importantly, it will help to restore order to the online shopping agent market.

"Online overseas shopping agents have grown rapidly in the past few years. But the problem is the market is not that regulated. Customers face quite a large number of risks in terms of prices and the authenticity of products. Therefore, the biggest impact will be exerted to the online shopping agents," said Mo.

The products sold on Buyeasy are basically mid- to high-end brands , like Calvin Klein, Coach and Burberry.

The convenience of using Buyeasy to buy luxury products is thus of great interest to consumers. Zhou Ting, director of the Fortune Character Research Center, which covers the luxury industry, said that online shopping agents on existing e-commerce websites will be affected the most. Many of these agents will be eliminated by the official e-commerce websites and brick-and-mortar stores in the long run.

"Such agents are actually illegal. Their only attractiveness, which is lower prices, does not equate with quality and authenticity, which matter way more."

Zhou said that these online platforms are not likely to exert a strong influence on existing brick-and-mortar stores for luxury goods.