Henan-Europe trade flies high as customers take to e-commerce

From a LuxFresh store at the Zhengzhou Airport Economic Comprehensive Experimental Area, Li Meng, 31, called his girlfriend in town to check if she would like to enjoy the French wine, Icelandic seafood called red ginseng and other imported stuff he had just bought.

"It is my first visit to this store. A friend introduced me to this outlet. Prices here are reasonable, even lower than I had expected," Li said.

People of Zhengzhou in Central China's Henan province no longer need to go overseas to buy their favorite foreign products, which are now available in their own city at competitive prices.

Zhu Xinqiang, chairman of the Henan Civil Aviation Development and Investment Logistics Co Ltd, said the company is trying to exploit the opportunity presented by the State Council's policy to support cross-border e-commerce. Zhengzhou airport now has an e-commerce pilot zone for imported products.

LuxFresh stores are a result of an HNCA project with Cargolux Airlines International, Europe's biggest all-cargo airline.

The airport-linked, Luxembourg-Henan Cooperation project involves online and offline channels in China and overseas.

While the LuxFresh stores constitute the offline channel, HNCA has developed a cross-border e-commerce platform called HTLUX. "What's more, the offline service would be extended to all the cities in Henan," Zhu said.

"The project boosts our competitive edge in providing global products to Henan province," Zhu said. "We are benefiting from the easing of procedures like customs clearance, quarantine, inspection, duties and foreign currency exchange."

Perishable products like seafood, meat and dairy are easily airlifted from Europe to Zhengzhou. "Each ordered product will land in Zhengzhou within 24 hours by air," Zhu said. That is a contrast to sea cargo that takes more than one month.

Zhengzhou was part of the seven cities that were designated import e-commerce pilot zones in 2014. Along with Shanghai, Hangzhou, Ningbo, Guangzhou, Shenzhen and Chongqing, Zhengzhou has been storing foreign goods in bonded warehouses before customs clearance. Two coastal cities were added to the list this year.

According to local tax regulations, usually, each customer order worth under 500 yuan ($78.9) is duty-free, and each order above 500 yuan incurs a 10 percent or more duty.

"Unlike coastal cities, Zhengzhou is in Central China, and is well connected by railway, air and highway. So, we focus on air transport," Zhu said.

In January 2014, HNCA invested $216.25 million for a 35 percent stake in Cargolux to build an air cargo network linking Asia and Europe.

The two companies also designed the Dual-Hub Development Strategy to make Zhengzhou their logistics center in the Asia-Pacific and Luxembourg its counterpart in Europe-Americas.

"The Dual-Hub Development Strategy enhances the cooperation between Henan and Europe. This way, some Henan specials like red jujube or Chinese dates can be exported to Europe in a short time," he said.

"In the future, we will enhance cooperation with Cargolux in ground operations, warehousing, distribution, cold-chain logistics, aircraft maintenance and flight training," said Zhu.