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First Specialized E-commerce Train of China Railway Express to Europe Arrives at Chongqing

    On September 26, the first specialized e-commerce train of China Railway Express to Europe (hereinafter referred to as CR Express) arrived at Chongqing and was unloaded at Lianglu Cuntan Bonded Port Area. It is said that the train with 41 wagons mainly carried baby milk powder and other maternal and infant products worth more than EUR 5 million.
    The shipper of the cargo is Netease’s Koala (a cross-border purchase application), which started business at the bonded port area in 2015 and soon established a cooperative relationship with CR Express (Chongqing).
    According to Wang Xiao, Vice President of Netease’s Koala, all of those goods transported by the train were intended to supplement its warehouse in Chongqing to meet the market’s demand and be prepared beforehand for the “Double 11” shopping festival.
    One specialized train brings two-pronged benefits.
    Using a specialized train to transport cross-border e-commerce products is not only new to CR Express (Chongqing), but also the first try made by the cross-border e-commerce industry. The successful arrival of this train has brought two-pronged benefits.
    Firstly, it promotes Chongqing to establish itself as an e-commerce distribution center in China's western region.
    Facilitated by this train, NetEase’s Koala signed a three-party cooperation agreement with Geodis, the platform company of CR Express (Chongqing) on September 26. In accordance with the agreement, NetEase’s Koala will strive to build Chongqing into its distribution center in the western region.
    As a leading enterprise in the field of cross-border e-commerce, NetEase’s Koala gained over 20% of domestic market share last year and occupied the first place in China. In the first half of this year, it still occupies the largest market share in China. Its major competitors like Tmall, Jingdong and vip.com are all running their business in Chongqing. Apparently, the cooperation between NetEase and CR Express (Chongqing) will have impact on the strategic layout of the competing companies.
    In this case, Chongqing is promising to create a much bigger cross-border e-commerce business cluster, and will possibly become the distribution center of China’s cross-border e-commerce in the western region.
    As a matter of fact, Chongqing is competent. As one of the pilot cross-border e-commerce cities, Chongqing has witnessed fast growth of cross-border e-commerce in recent years. For example, the value of Xiyong Comprehensive Bonded Area’s bonded cross-border e-commerce goods reached RMB 1.5 billion last year. Meanwhile, there are 170 cross-border e-commerce enterprises settled at Lianglu Cuntan Bonded Port Area. From January-July 2017, the number of cross-border e-commerce orders reached 2.6 million, representing 74% year-on-year growth.
    Wang Xiao indicated, “Chongqing enjoys a favorable geographic location and the CR Express (Chongqing) line is the most developed one among all the train routes. This is why we chose Chongqing.”
    Secondly, the train also contributes to the backhaul of Chongqing-Europe freight trains.
    For most China-Europe freight trains in China, hauling cargo back from China to Europe has always been a challenge.
    In 2014, Chongqing was approved to establish a finished automobile import port, which significantly contributes to the backhaul of Chongqing-Europe freight trains. At present, finished automobile has become a type of goods with stable supply, while Chongqing-Europe freight trains returning to Europe are in regular operation.
    Nevertheless, much more will have to be done. To attract more backhaul loads, Chongqing has set up liaison offices in Europe and 28 distribution sites along the railway line for collection and coordination of backhaul loads. The successful arrival of the specialized cross-border e-commerce train in Chongqing provides a helpful reference for collecting backhaul loads for Chongqing-Europe freight trains.
    Wang said, “The cross-border e-commerce market in Chongqing is very large, and there is huge demand.” Compared with finished automobile, cross-border e-commerce goods are much smaller, and thus it is uncommon to transport the goods via specialized trains. However, as most cross-border e-commerce goods are fast-moving consumer goods sold more quickly than finished automobile, the goods will be more frequently transported via Chongqing-Europe freight trains.
    Wang suggested that if NetEase’s Koala were to purchase products worth more than RMB 22 billion in the following three years, all the products located in China’s west region would be transported via Chongqing-Europe freight trains and the goods would be shipped to Chongqing via specialized trains at least once a week.
    According to the person in charge of Geodis, this cross-border e-commerce train provides a useful reference for collection of backhaul loads.

   

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