Customers inquire about overseas purchasing at a counter in Modern Plaza, a shopping mall in Beijing. (File photo, 2009) [Provided to China Daily]

Competition and taxes

The increasing popularity of overseas purchasing services has led to business opportunities for new agents - and, in its own way, China Customs.

A Web search for shops related to "US purchasing agent" at taobao.com, which is owned by Alibaba Group Holding Ltd and is China's largest e-commerce site, yields 3,937 shops. A search for "South Korea purchasing agents" yields 8,240 shops.

That means more and fiercer competition for the agents. "I opened my online shop more than half year ago, but I have not received any orders," said Zhao Qian, 21, who owns an overseas purchasing e-shop at taobao.

A regulation that China Customs introduced in September is adding price pressure for overseas purchasing agents, most of whom are individual operators.

The agents or their overseas partners mail most products to the Chinese mainland as personal articles to evade customs duties, essentially turning the transactions into a black market, said Fang Yingzhi, an analyst at CERC.

Previously, customs duty on mailed personal items was waived if it was 500 yuan or less. Now, the exemption limit is 50 yuan. And the duty on cosmetics, the most popular type of overseas purchase, is 50 percent.

For example, a bottle of sunscreen, which is categorized as a cosmetic, costs 800 yuan. A duty rate of 50 percent makes the duty 400 yuan. Under the old rules, no duty would apply because it fell under the 500 yuan limit. Now it exceeds the limit of 50 yuan, making the cost of that mailed bottle of sunscreen much higher.

It might truly be for personal use, but China Customs assumes that the sunscreen and similar mailed items are intended for resale. Customs explains on its website that such goods "have the nature to gain profit" and will enter the trading circle again.

The duty exemption is higher, at 5,000 yuan, for agents who personally bring the overseas products from abroad rather than mail them.