What is the impact of Japan's proposed modification of small parcel tariffs?
Editor's note: Small scale cross-border e-commerce goods are gradually becoming an important consumer object in the lives of Japanese people, but recently they have been "targeted" by the Japanese government. According to multiple Japanese media reports, the Japanese government plans to adjust the tax rules for cross-border e-commerce platforms and impose the originally exempted consumption tax on imported goods with a taxable price of less than 10000 yen (approximately 4.5 yuan). Some analysts believe that behind this is the competitive pressure brought by e-commerce platforms and merchants in countries such as China and the United States. The new rules will affect cross-border e-commerce platforms such as Temu and Xiyin in China, as well as Qoo10 under eBay in the United States, and push up consumer prices for goods in Japan. Experts and industry insiders interviewed by Global Times stated that Japan's tax adjustment is nothing more than seeking greater discourse power in the industrial chain, and does not mean the end of China's cross-border e-commerce competitive advantage. However, Chinese companies should quickly adapt to the changes.
Cancelling tax exemption is expected to increase the price of goods by 10%
In recent years, the shopping method of placing orders through e-commerce and shipping packages directly from overseas has become familiar in daily consumption scenarios in Japan. With the increasing popularity of cross-border e-commerce platforms, the number of small imported goods under 10000 yen has rapidly increased. According to data from the Japanese Ministry of Finance, the import quantity of small goods with a taxable price below 10000 yen in 2024 reached approximately 170 million pieces. These products are basically shipped directly from overseas warehouses to consumers' homes, with low prices and simplified procedures, gradually becoming a choice for some consumers' daily shopping.
It is worth noting that a considerable portion of small-scale imported goods currently come from China and are traded through online shopping platforms operated by Chinese companies. According to a report by the Yomiuri Shimbun in Japan, Chinese goods account for 77% of the total import value of goods under 10000 yen. This is mainly due to the increasing popularity of Chinese e-commerce platforms Temu and Xiyin among the consumer group mainly composed of young people. The first time the Global Times special correspondent in Japan used Xiyin locally was recommended by a German mother. She often makes purchases on this platform and even recommends it to her mothers around her. Due to the low prices of the products, strong promotional efforts, and convenient returns and exchanges, although sometimes waiting is necessary, everyone can accept it.
According to the current system, when small goods with a taxable price of less than 10000 yen are directly delivered from overseas to Japanese consumers, in order to reduce the burden of tax related affairs, consumption tax and other taxes can be exempted. But some people in Japan have expressed that this has led to unfair price competition between domestic operators who pay consumption tax and overseas operators who do not pay tax. The Japanese government and ruling party are exploring reforms to the current system. According to Nikkei Asia Review, the ruling Liberal Democratic Party's proposed reform plan plans to cancel the consumption tax exemption for imported goods worth 10000 yen or less, and platforms with annual sales exceeding 5 billion yen will be required to pay taxes on behalf of sellers. The government's goal is to incorporate this reform into the 2026 fiscal year tax reform plan formulated by the end of this year.
The Nikkei Asian Review reported that the cancellation of tax exemptions is expected to increase the purchase price of goods by about 10%. Consumers' consumption choices may be affected. In response to this, a special correspondent for Global Times in Japan conducted a survey on Japanese consumers around Xiyin as an example. The feedback received was that Xiyin's products have advantages in both creativity and price, but consumers value quality control and service the most. If they can show outstanding performance in this area, their competitiveness still exists. A Japanese consumer who purchased a Chinese brand shoe rack on an e-commerce platform told reporters that when inquiring about details, the customer service's response was timely and thoughtful. Compared with Japanese products in the same price range, the shoe rack uses more solid materials.
I will take action sooner or later, I didn't expect it to be so fast
Japan will take action sooner or later, but I didn't expect it to be so fast. "Zhang Yongjun, the head of a cross-border e-commerce company headquartered in Shenzhen that specializes in the Japanese market, said in an interview with Global Times reporters that the industry had long anticipated Japan's cancellation of small parcel tax exemptions, but the speed of its action was still unexpected.
According to reporters, Japan's tax exemption policy for goods under 10000 yen aims to simplify the customs clearance process for small commodities. However, in recent years, with the influx of a large number of packages from cross-border e-commerce platforms such as Temu and Hisense into the Japanese market, it has brought tremendous pressure to the local retail industry in Japan.
Zhang Yongjun told Global Times reporters that China is Japan's largest source of imports, and the number of goods entering Japan through cross-border e-commerce has been increasing year by year. The industry estimates that Japan has become the third largest market for China's cross-border e-commerce in the world, second only to the United States and Europe. Most of the daily consumer goods entering the Japanese market through cross-border e-commerce include small furniture, 3C (computer, communication, and consumer electronics) products, cosmetics, kitchen supplies, clothing, shoes, hats, jewelry, and more.
Zhang Yongjun analyzed that "the share of cross-border e-commerce in China is increasing, which not only has an impact on the Japanese retail industry, but also under inflationary pressure, Japanese consumers are turning to Chinese cross-border e-commerce with price advantages, further exacerbating the pressure on the Japanese retail industry. This may be the reason for Japan's adjustment of tax policies
In the eyes of Chinese enterprises engaged in cross-border e-commerce business with Japan, if the consumption tax exemption for small goods is cancelled from the 2026 fiscal year, it will mark a new stage of cross-border e-commerce regulation in Japan. Zhang Yongjun believes that cross-border e-commerce platforms relying on the "small package direct mail" model will face challenges, resulting in the loss of price sensitive customers. Furthermore, it forces cross-border e-commerce to adjust its strategy and shift more towards high-end competitive methods such as overseas warehouse layout and brand premium.
However, Zhang Yongjun also stated that there are many technical difficulties in implementing Japan's small parcel tax in practice, and it is not easy to implement. In addition, the value of small parcels is relatively small, and the final price fluctuations may not be as significant, so Japanese people will not stay away from Chinese goods because of this. Zhang Yongjun suggests, "For Chinese cross-border e-commerce, it is even more important to focus on enhancing product competitiveness and expanding more customer channels to avoid market loss
It does not mean the end of China's cross-border e-commerce competitive advantage
In addition to Japan's plan to modify small parcel tariffs, countries and regions such as the United States, Europe, and Brazil also have related measures or trends. According to Radio France Internationale, after the United States officially abolished the "small exemption" on August 29, EU countries reached an agreement on December 12 to impose a 3 euro tariff on imported small packages starting from July 1, 2026.
According to Deutsche Welle, in 2024, approximately 4.6 billion euros worth of individual packages with a value below 150 euros will arrive in the European Union, of which 91% will come from China. As early as November last year, EU finance ministers had reached a consensus in principle to cancel the tax exemption for small packages and implement it "as soon as possible". The initial plan was to implement it in 2028, but under pressure from France, the temporary plan agreed upon above will be implemented from next year onwards.
According to a recent report by Haitong International analyst Yao Shuqiao, this means that each package will incur an additional cost of about 8 RMB, which will have a significant impact on cross-border transactions mainly focused on small package direct mail. Chinese cross-border e-commerce that attracts consumers with a low price strategy may weaken its price advantage due to rising costs, thereby affecting market competitiveness.
Cao Lei, director of the NetEase E-commerce Research Center, told Global Times reporters that the cross-border small parcel duty-free policy, as an important component of the global trade system, has undergone nearly a century of development and evolution, and will reach a critical turning point in 2025. He said that after the United States lifted the small exemption on August 29th, it quickly caused a chain reaction worldwide, stimulating Japan and Europe to accelerate similar policies and showing a trend of further spreading to emerging markets.
According to the "Dianshubao" e-commerce database, in 2024, exports accounted for 77.6% of China's cross-border e-commerce import and export structure. Cao Lei believes that in this context, the comprehensive tightening of global small parcel duty-free policies will have a profound impact on China's cross-border e-commerce industry. He believes that when major cross-border e-commerce markets such as the United States, Europe, and Japan successively set obstacles and emerging markets follow suit, the original "low-priced direct mail" model of some Chinese companies may face obstacles globally, which may weaken the price competitiveness of Chinese goods. The simultaneous adjustment of policies by multiple countries has also led to a sharp increase in the difficulty and cost of risk diversification strategies for related enterprises through market diversification; At the same time, the complex and constantly changing tax regulations and customs requirements of various countries also pose high compliance requirements for China's cross-border e-commerce.
Li Hua, director of Hong Kong Ouzhimeng International Trading Company, told Global Times reporters that there has been a major turning point in the global cross-border e-commerce market, and the traditional model of China's cross-border e-commerce is being changed, with the advantages of overseas warehouse models highlighted. However, he believes that the purpose of taxing small parcels by various countries is not to eliminate the import of Chinese goods. In fact, these countries are aware that they cannot do without "Made in China", and the goal of their policies is nothing more than to minimize their competitive disadvantage in the face of China and seek greater discourse power in the industrial chain.
Cao Lei also stated that the end of the "tax-free era" for cross-border small parcels does not mean the end of China's competitive advantage in cross-border e-commerce, but rather marks a new stage in the industry's development. Enterprises that can quickly adapt to changes, actively adjust their strategies, and adhere to long-term value orientation will occupy a more advantageous position in the new round of global competition.