Consultant Insight: China-Brazil cross-border e-commerce heats up

China’s e-commerce giants are partnering with global carriers to capture growing e-commerce demand in Brazil. [caption id="attachment_76185" align="alignright" width="298"] Cathy Roberson, Cargo Facts Consulting senior consultant and Air Cargo World columnist[/caption] In March, China-based e-commerce company JD.com launched two charter cargo flights from China to Brazil and Germany. The route between Hong Kong International Airport (HKG) and Guarulhos International Airport (GRU) in Sao Paulo, Brazil, will operate twice weekly with Angola Airlines. The route between Zhengzhou Xinzheng International Airport (CGO) in China’s Henan province and Cologne Bonn Airport (CGN) is scheduled three times weekly and operated by Capital Airlines of China. JD.com and its JD Logistics subsidiary continue to expand and connect its overseas warehouses. The company had almost 80 bonded and overseas warehouses by the end of 2021, according to its annual report. However, not to be outdone, the Cainiao Network, the e-commerce logistics arm of Alibaba Group, teamed up with Qatar Airways Cargo for the launch of a weekly flight connecting HKG with GRU . Cainiao opened direct service in October 2020 with three weekly flights to Brazil and Chile and has gradually increased capacity since then. “Cainiao’s mission is to deliver globally within 72 hours, a goal that can be achieved with the right logistics partners,” said William Xiong, Cainiao’s chief strategist and general manager for export logistics. “In just over a year, Cainiao has established a comprehensive operation in Latin America. We see that e-commerce retail in Brazil, in particular, is growing at a phenomenal rate. With Qatar Airways Cargo, we are in a good position to support that growth and look forward to a long and fruitful partnership.” E-commerce growth E-commerce in Brazil grew by 31% in the first half of 2021, according to the eEbit Webshoppers report . In 2020 alone, the number of online consumers increased by more than 40% due to health restrictions resulting from the global pandemic and changing consumer preferences. Cross-border gross merchandise value in Brazil is estimated at 22.7 billion Brazilian real (US$4.7 billion), or about 21% of total e-commerce GMV in the country. The cross-border trade growth has been driven by the number of orders, which grew 15% in 2021 compared with 2020. Although Brazil has made substantial progress reducing traditional border trade barriers in areas including tariffs and import licensing rates, many of these barriers remain high and favor locally produced products, according to an online report . Amazon, Mercado Libre and AliExpress are considered the top cross-border e-commerce providers. Potential limits on cross-border e-commerce Conservative estimates project that global cross-border e-commerce in goods will increase to about $1 trillion in merchandise value by 2030 from its current value of approximately $300 billion, according to consulting firm McKinsey. However, a growing number of countries, including Brazil, are expressing growing concern over cross-border e-commerce and are looking to implement various restrictions to potentially protect domestic retail. For example, several Brazilian retailers have asked the government to restrict consumer purchases from Chinese marketplaces such as AliExpress and Shopee, according to an online report . The group claims that cross-border sales represent unfair competition that does not respect Brazilian quality-control standards. The retailer group wants consumers to pay taxes at the moment of purchase to make it harder for buyers to dodge levies. If such implementations succeed, cross-border e-commerce efforts will significantly decline and potentially set off a consolidation among e-commerce providers.

Consultant Insight: China-Brazil cross-border e-commerce heats up

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