The iPhone 8 for $ 185, a digital camera for 24.65 or a men’s watch in a classy design for $ 16.99: On Aliexpress.com, shopper find products at low prices and with big discounts. Since it was founded in 1999, the Chinese company Alibaba, to which Aliexpress belongs, has experienced meteoric growth. In Switzerland too.
The online platform doubled its sales in Switzerland from 2016 to 2017. According to estimates by the e-commerce consultancy Carpathia, it increased by another 70 percent in 2018. Aliexpress generated sales of CHF 475 million in Germany last year. It is fourth behind Zalando, Digitec and Amazon of Switzerland’s top-selling online shops.
Rapid growth is slowing down
The US company Wish, which sells cheap goods from China from third-party suppliers via the app, is also very popular in Switzerland. So that customers do not have to wait three weeks or more for their orders from China, Wish has even set up pick-up stations in kiosks or in shops in Switzerland. With the Latvian company Joom.com there is yet another aspiring player in Europe through which retailers sell their cheap products from Asia. According to their own information, the app and website already have 250 million users.
The flood of parcels from Asia in Switzerland has been increasing for years. Unstoppable, it seems. Four and a half years ago, 5.7 million small goods shipments were delivered to Switzerland. According to Swiss Post, over 23 million were shipped last year. Two thirds of this came from China Post. These small items in letter format make up the majority of parcels from Asia. Swiss Post anticipates a further increase in these items, albeit with lower growth rates, it is said on request. Experts also predict a slowdown in rapid growth.
“Only cheap products are less and less wanted.”Patrick Kessler, President of the Swiss Mail Order Association
Patrick Kessler, President of the Swiss Mail Order Association, expects single-digit growth in small goods shipments in 2019. “The transaction volume is still immense, but the growth curve for small consignments to Switzerland will flatten significantly in 2019 compared to previous years,” he says. Over the past four years, the number of shipments from Asia to Switzerland has increased between 30 and 50 percent.
The trend is slowly weakening, because only cheap products are less and less wanted, says the expert. “It’s not just the price that counts, but also the quality.” The new platforms are cool at the beginning, but at some point the euphoria fades, it’s a completely normal process. In addition, there would be the climate debate and possibly negative experiences that customers would have had with products from Asian retailers.
Uneven postage costs for online retailers
The digital market and opinion research company Marktagent asked where the Swiss want to do their Christmas shopping in a study. 1000 Swiss said where they want to shop this year. A majority of 69 percent planned to make purchases in stores in Switzerland. And 21 percent wanted to get them from a foreign online shop. Only 10 to 12 percent said they would give their loved ones gifts from Wish or Aliexpress.
Over 90 percent of packages from Asia are declared incorrectly.
Compared to previous years, Thomas Lang, e-commerce expert at Carpathia, also predicts slower growth in the package flood from Asia. But Swiss dealers should hardly calm this news. They are particularly annoyed by the unequal tariffs when sending parcels. China is classified by the World Postal Union as a developing country, the postage costs are significantly lower than those that local traders pay for their parcels. In addition, over 90 percent of packages from Asia are declared incorrectly, says Lang. The amount of shipments is huge and the customs officials are unable to check them all.
This is how the Asian dealers are avoiding VAT payments. A new regulation has been in effect since January 1 of this year, which stipulates that mail order companies with an annual turnover of over CHF 100,000 who deliver to Switzerland must pay VAT from the first CHF converted.
However, the Chinese marketplaces like Aliexpress are not affected by this rule. The problem: Not the platforms, but the retailers who sell their goods there are subject to VAT. And with over 6,000 parcels arriving in Switzerland from Asia in 2018, it seems impossible to ask every sender to checkout.
Created: 12/27/2019, 12:45 PM
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