How much do you know about the difference between cross-border and foreign trade？
Image source: the idea of the worm
Many times, we don’t know exactly what the strict definitions of foreign trade and cross-border are, because we won’t make a detailed distinction between them without touching the actual sea business. Foreign trade and cross-border e-commerce are actually very similar, but if you list them, you can still find out the relevant differences. First of all, for foreign trade, it covers a wide range, and the goods suspected of trading are not limited to physical objects, and foreign trade tends to be wholesale, just like B2B trading, and it is more complicated in tax declaration. Compared with foreign trade, cross-border e-commerce has not developed for a long time, mainly for individual overseas consumers. To sum up, it belongs to a trading model with small quantity, many types and large batches.
According to the differences between cross-border and foreign trade, we can sum up the following points:
1, the main body is different:
In the foreign trade market, enterprises expand overseas markets by promoting their own goods and services through information channels to attract foreign merchants. Therefore, from the perspective of communication methods, foreign trade belongs to information flow.
From the perspective of cross-border platforms, merchants directly publish commodity information through platforms or self-built stations, in order to complete commodity transactions. From this point of view, cross-border e-commerce takes the commodity flow.
2. Different links:In the foreign trade market, because they are all commodities, time and cost enterprises will not obviously consider optimization in import and export links and other places.
In cross-border e-commerce, both the time and cost of transportation will affect the final transaction and profit of goods, so merchants should compliment these links, try to reduce costs and improve efficiency as much as possible.
3. Different trading methods:In foreign trade, the double-sending transaction mode is offline, or the transaction is not connected to the third-party payment platform. In cross-border e-commerce, both parties to the transaction and the transaction mode are generated by the platform, and the payment also needs the intervention of a third-party payment platform.
4. Different taxes:Because foreign trade often involves large-scale transactions, it is complicated to make tax declaration in customs examination, which involves not only value-added tax but also consumption tax. Cross-border e-commerce, as a business-to-individual transaction, is simpler in terms of taxation. Sometimes you may only involve a postal tax.
5. Different modes:The basic mode of foreign trade is B2B direction, which is the product of the initial stage of global trade development. The mainstream trade model of cross-border e-commerce is B2C, which is the inevitable result of the development of global trade. Cross-border e-commerce has broken the operation mode of traditional foreign trade e-commerce, but now the boundary between cross-border e-commerce and foreign trade is becoming more and more blurred.
The advantages of To C to ToB are as follows:
Advantages of product selection:C-end sellers are more skilled than traditional B-end sellers in product selection and testing, and get market feedback earlier.
Operational advantages:C-side sellers are much better than traditional B-side sellers in operation and promotion, especially in advertising material planning, crowd positioning and data optimization.
Service advantages:A large number of overseas buyers turn online, and small and medium-sized sellers are small orders and multiple batches (less than 500 pieces), so C-end sellers can provide better service.
Therefore, at this stage, for many enterprises, especially when the C-side cross-border operation is relatively mature, it is still very advantageous and full of opportunities to consider cutting into the ToB market!
(Source: Michael talks about cross-border)
The above content belongs to the author’s personal opinion and does not represent Hugo’s cross-border position! This article is reproduced with the authorization of the original author, and it needs the authorization and consent of the original author. ?