Customized logistics solutions, your logistics expert in China

Tel:+8613424475220      Email:info@viputrans.com      

English

Saudi e-commerce express license, those secrets

by:VIPUTRANS     2020-02-14
Saudi Arabia, without a doubt, has become the largest e-commerce market in the Middle East. However, unlike the hustle and bustle of Saudi e-commerce, the e-commerce logistics market in Saudi Arabia is quiet, and e-commerce logistics are struggling. License policies, Saudi Arabia's guarantor system, and COD business itself have all become heavy shackles that restrict the development of Saudi e-commerce logistics. There are two types of licenses related to express delivery in Saudi Arabia The first type is an express delivery license for international goods that enters Saudi Arabia by express delivery (Express), also known as a B2C clearance license. This license is only issued to companies that hold 100% of the shares in Saudi Arabia. Goods that come in through this mode only need to deliver 5% of VAT, and do not need to pay customs duties, which is equivalent to a fast green channel. The second is a license where the origin of the goods is in Saudi Arabia, and it is called a terminal delivery license. The first five express customs clearance licenses issued by the Saudi King were issued by the Saudi King. They are all 100% owned by Saudis. For example, DHL is SNAS, TNT is SAB, UPS is EIRAD, and Aramex is Saudi Tal Behind Naqel is a joint venture between Saudi Post and Hala Arabian. Later, customs clearance licenses began to be issued to local companies separately, and Zajil, Express logistics, and ALJ have successively obtained customs clearance licenses. The predicament of customs clearance resource monopoly was gradually broken, especially in October last year TNT and Zajil changed their strategies to provide customs clearance services to third-party logistics at a lower price, and the overall express logistics cost fell rapidly. Since all customs clearance licenses are 100% owned by Saudis, the usual cooperation modes on the market are: The licensee can exclusively authorize a courier company, such as the exclusive of DHL and SNAS, the exclusive of TNT and SAB, and the licensee's DHL and TNT information can be seen on the license. Another cooperation mode is the company's customs clearance service cooperation with the company, and the service scope is agreed by signing a service contract. The last is to open a subsidiary license under the licensee to share income and profits in a similar way to the insurer. Due to the uneven development of e-commerce, the source of B2C orders has also changed. More and more express licensee holders are no longer accepting exclusive cooperation. For example, SAB, which originally had exclusive cooperation with TNT, also began to look for it in the market. E-commerce companies that have B2C import clearance requirements cooperate with third-party logistics companies. In theory, for a licensee who wants to quickly enter the market, whoever has an order will cooperate with whom. His best partners are e-commerce platforms that have orders for imported express parcels, and logistics companies that import international express delivery. In Q4 of 18, a Chinese freight forwarding company obtained cooperation with Express logistics customs clearance licensee, tried to raise funds in the Chinese capital market, and started a big fight, but later failed due to various reasons such as financing difficulties, team and local operation management. At the same time, with the deepening of Saudi policy reforms, the value of customs clearance licenses is gradually being weakened. In addition to the licenses that have been activated, there are several licenses on the market that are being activated and are expected to be gradually put into operation in the second half of the year. In addition, the import of e-commerce goods in Saudi Arabia will gradually be transferred to Bahrain. King Fahd Avenue between Bahrain and Saudi Arabia connects the economic and trade exchanges between Saudi Arabia and Bahrain. The customs of the two countries are doing some operational and technical details on the Causeway customs clearance between Bahrain and Dammam that has truly become the pre-Saudi Arabian customs Discussion on. In the near future, Saudi Arabia's express customs clearance can be achieved as long as it has a express customs clearance license in Bahrain. At this point, Saudi Arabia's customs clearance will be more open, and the barriers to Saudi customs clearance will be released across the board. End delivery license Saudi Arabia has undergone tremendous changes in policy and administrative supervision since the crown prince of Salman. The earliest express delivery license policy stipulated that the service provider of express delivery clearance must also bear the end delivery service. However, this policy is obviously not suitable for the current business model of customs clearance and separation. Challenge 2: Both customs clearance and last resort are subject to the 100% Saudi ownership system Express delivery involves national economy, people's livelihood and national security. Since the four major express delivery companies started to enter the Saudi market 30 years ago, the policy of 100% holding by Saudis in express delivery business has never been released. Under the 100% Saudi guarantor system, the risk of funds is huge. COD e-commerce logistics itself has a huge amount of capital flow. For example, a medium-sized COD logistics company with a daily order volume of 10,000 orders has a daily cash flow of about 1.5 million MYR (depending on the signing rate and customer unit price), and a month's cash flow of 39 MYR (RMB 7000 Million), a year of 840 million yuan. Just think about it, a year of 840 million yuan of running water is placed in the name of a Saudi, and there is no legal protection. At present, no professional law firm in Saudi Arabia is willing to indirectly control the yin and yang contract abroad under the 100% equity structure of Saudi Arabia, that is It is said that the assets and cash operated under the 100% Saudi equity ownership structure, from the perspective of Saudi law, the ownership is Saudi, and lawsuits cannot be won, and it is currently not feasible to circumvent this risk by legal means. And these legal risks already have a living and painful case: A Chinese gaming company that sailed to Saudi Arabia, operated by a Saudi company, had its local bank account 6 million shillings overnight. A Chinese-based building materials company in Dubai operates through a Saudi company. Ten pickup trucks under its name refused to be handed over by the Saudi guarantor at the end of the business. Challenge three: Cash management of end delivery itself For any bank, if an account regularly deposits more than the normal level of cash, assuming that 1.5 million sand cash a day is deposited in the same branch of a bank, there must be a risk of being judged as money laundering. Therefore, if the bank relationship Without dredging or filing in advance, bank outlets will refuse to deposit such huge amounts of cash. In 2017, a courier company's cash at regional HUB outlets could not be deposited into the bank, and it was forced to hire an insurance company to hold a gun to protect a truck full of cash from one HUB point to a bank in another city to make a deposit. Since the development of the Saudi express market, the barriers to licenses are being broken, and the trend of free competition in the market will be difficult to stop. For cross-border e-commerce sellers, the adjustment of customs clearance prices will make Saudi Arabia a truly high-quality market. The test of courier companies will no longer be the scarcity monopoly of customs clearance resources, but the competition of comprehensive capabilities, such as compliance operations, business refinement, customer service capabilities, technology and cost optimization, and so on.
Custom message
Chat Online
Chat Online
Chat Online inputting...
Dear customer, Good day, Welcome to VIPU, please describe the cargo information and demand in advance if urgent case please contact Email:info@viputrans.com/Mobile phone :+8613424475220/Skype:narrynisha