An ancient Chinese poem by Liu Yuxi, a poet in the Tang Dynasty (618-907), features the following line: “Swallows that once nested in front of the halls of ministers have now flown into the houses of ordinary people.” Describing the flow of changing times, the line echoes China’s current consumption trends. Individual consumers now have access to rare products, especially those coming in from overseas markets.

In the past, due to limited supply, cubilose, the salivary secretion different swift species use to make their nests and used as a food item in Asian cuisine—said to boost one’s beauty and health, was one of those more unusual goods to come by. Chinese consumers had to hunt down the precious tonic from foreign countries like Thailand-- at a high cost.

But as China has opened its door wider and wider and cross-border e-commerce has thrived, consumers now have one-click access to more varieties of overseas products.

They can easily obtain dried cubilose, and their demands today evolve and upgrade as newly emerging models of e-commerce provide them with even more options. They, for example, now prefer freshly stewed and instant cubilose alternatives.

In 2020, PT Swift Marketing Sdn Bh, a Malaysian corporation that integrates the complete chain of bird's nest ranching, built a new factory in China, relocating the last steps of its production, such as dehairing the raw cubilose, filling and stewing, from Malaysia to China.

This constitutes a new model of cross-border e-commerce, featuring “import bonded plus processing for retailing,” which gives full play to the preferential policy of the comprehensive bonded zone (CBZ), a special commercial area with favorable taxation policies managed by customs officials, a boon to those active in cross-border e-commerce. Enterprises registered in the CBZs will be granted general VAT taxpayer status. They will also be permitted to import machines for self-use and streamlining of customs clearance procedures is underway.

Initiated in 2020 by Tmall Global, Alibaba Group’s dedicated channel for cross-border e-commerce, the model, called the “new world factory,” allowed overseas brands to conduct the final processing and packaging stages within the CBZs, which has since “transformed the process of the existing import supply chain for retailing businesses,” according to Wang Haoyang, Vice President of Alibaba Group’s B2C Retail Business Group.

PT Swift is one of the beneficiaries of the “new world factory” project. In the past, it took up to two weeks for the company to transport freshly stewed cubilose from Malaysia to China, whereas the finished cubilose bottles only have a shelf life of 15 days. Time became an obstacle to import.

With the new model, PT Swift built its new factory in one of the CBZs in Xiasha District of Hangzhou, Zhejiang Province. It can store the raw cubilose in its Chinese factory in advance, workers begin production the day they receive the orders, and no later than the following day can consumers get a taste of the fresh cubilose delivered to them directly from the bonded zone.

“Chinese consumers boast strong demand on imported goods of short shelf life like the freshly stewed cubilose, but the traditional cross-border supply chain failed to meet the new demands,” Wang told Beijing Review, adding that “the new model shortens the period of supply and creates a brand-new import model.”

It has addressed the cost and efficiency issues for overseas brands entering the Chinese market, stabilizing the supply chain against the backdrop of the COVID-19 pandemic, he explained.

To date, Tmall Global has cooperated with six CBZs, including the Hangzhou CBZ, Suzhou CBZ in Jiangsu Province and Haikou CBZ in Hainan Province, the goods ranging from cubilose, coffee, pet food and cosmetics to daily chemical products.

In the Suzhou CBZ, many overseas cosmetics brands are relocating their bottle filling and packaging stages, cutting their costs by 30 percent. Some of them also develop customized new products for Chinese consumers in the CBZ, shortening their production cycle from nine to three months.

Copyedited by Elsbeth van Paridon

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