E-commerce spreads its cross-border wings

Problem-solving

For Danyuan's Hu, despite the increased business revenue, his biggest headache remains achieving smooth logistics and transaction payments across borders.

"Unlike China, which has developed a mature online payment network such as Alipay, overseas buyers sometimes still prefer to use credit cards when conducting transactions," Hu said.

He added that his company still relies on both online and offline payments to solve the problem, adding that it also still uses a cash-on-delivery payment method when working with local logistics companies.

When conducting cross-border e-commerce, companies have to work with banks and regulators. Even cultural differences can add to the stress, hindering smooth transactions.

One Chinese company is tackling such problems.

In September, PingPong Financial Group, a financial technology company in Hangzhou, said its Luxembourg entity, PingPong Europe, had received a license from the Luxembourg government, making it the first Chinese fintech company to establish an office in Europe.

The license enables PingPong, which offers an innovative and streamlined way for sellers to receive international payments from e-commerce platforms, to operate throughout Europe, improving e-commerce transactions between China and the continent through its payments services.

The company, a startup launched in 2015, aims to reduce both the time and costs for Chinese internet sellers to receive international payments from e-commerce platforms in their local currency. It said it is the sole payment platform to focus exclusively on repatriating e-commerce revenue to China.

The European Union's payment licensing requirements are especially stringent, with strict regulations covering infrastructure, shareholder qualifications and information security programs. Only 10 foreign companies have obtained such a license in Luxembourg. Among the Chinese financial services companies to have established a presence in the EU, PingPong is the only startup. The others are all major Chinese banks.

PingPong Financial Group has offices in the US, Japan and Luxembourg, as well as its Hangzhou headquarters.

"For the past three years, we've served 250,000 SMEs (small and medium-sized enterprises) in China," said Lu Shuai, co-founder and chief marketing officer.

"I believe SMEs will be the most dynamic economic force in China. Through our services we can now shorten the time for repatriating e-commerce revenue to less than 24 hours, compared with seven to 15 working days before 2016."