How Do Chinese Shops Offer Free Shipping?

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Are you always wondering how on earth they send packages for nothing across the world? Why do we have to pay five times the amount for just sending small packages locally? We will explain how this is possible!

Does Chinese Government Subsidize?

A common miss conjunction is that the Chinese government is subsidizing these worldwide sendings. However, that is not the case. It is not the Chinese government who helps their companies on that part. The main reason is the established rate by the Universal Post Union (UPU).

So to understand this miracle, we will first explain what the UPU does. The Universal Postal Union is a specialized agency of the United Nations that coordinates postal policies among member nations, in addition to the worldwide postal system.
(source: https://en.wikipedia.org/wiki/Universal_Postal_Union)

What the UPU tries to establish is a uniform flat rate to mail a letter to anywhere in the world. That local postal authority should give equal treatment to foreign and domestic mail. These fundamental principles are maintained with one overall global system, called Terminal Dues.

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Terminal Dues

These terminal dues differ from country to country and try to make the costs of sending and receiving post equal distributed among those countries. To achieve this, they calculate those dues on two main factors.

  • The Countries Development Stage
  • Postal Volume

So when a country is lower on the global development stage, they will have a discount when sending the post. Because the recipient nation (which has a better development ranking) will compensate a substantial part of the shipping costs. This first argument is relevant in the case of free shipping from China. Because China was valued as a developing country a few years ago, the other countries will spend much more for their shipments

This together with the agreement that domestic and international post will be treated equally makes it no difference if a shipment is local or all the way from China.

These calculations will be reconsidered each three-year cycle. The current period is from 2014 – 2017, so in 2018 there will be new calculations. So, eventually, when China is increasing on the global development rank their free shipping possibilities will decrease. Or they have to fulfill the shipping costs themselves.

Next to this global system, there is “special” deal called ePacket.

What is ePacket?

ePacket is an agreement between the United States and China. It is created for e-commerce and to allow customers from the US to have low/affordable shipping costs when purchasing items from China. Because the success of the deal many other countries in the world are now also offering ePacket.

Besides the free shipping, ePacket packages will have a tracking code from door-to-door. Notably, the ePacket agreement is only available when shipping from mainland China or Hong Kong to one of the countries in the list above. The ePacket service has nothing to do with shipping time or customs duties. These will be the same as with China Post.

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List of ePacket countries

  • United States
  • New Zealand
  • Belgium
  • Switzerland
  • UK & Ireland
  • Brazil
  • Croatia
  • Denmark
  • Estonia
  • Latvia
  • Canada
  • Australia
  • Lithuania
  • Luxembourg
  • Finland
  • France
  • Germany
  • Gibraltar
  • Malaysia
  • Netherlands
  • Portugal
  • Malta
  • Hong Kong
  • Hungary
  • Israel
  • Italy
  • Singapore
  • Sweden


ePacket Restrictions

The ePacket agreement has a few restrictions which the package needs to meet. Otherwise, the ePacket free shipping agreement is not available.

  • The package value needs to be less than $400 dollar
  • The weight is less than 2kg
  • The size beneath 24inch x 36inch / 60cm x 90cm

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Will This Free Shipping Be Forever?

As you can read above, these advantages for Western customers for ordering from China/Hong Kong will probably not last forever. The main factors like “the development stage” and the “postal volume” will change in the future. China will raise at the development index, and Chinese citizens will probably go to order more from abroad. This will instigate a new twist at the worldwide postal conditions. The first critical moment is the revision of the terminal dues in 2018. For now, we as a customer like the ability to order from China and buying Chinese products without extensive high shipping fees. So enjoy the moment as long as it takes.

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