A Hong Kong or Mainland China-based fulfillment center can help you distribute products directly from the factory to customers all over the world.
In this article, we list the leading China-based fulfillment centers, including Floship, Easyship, Exchain, Shipwire, and others.
In addition, we also cover the following:
1. Potential tax issues with cross border e-commerce fulfillment
2. When does it make sense to use a fulfillment center in Hong Kong or Mainland China?
3. Should you select a fulfillment center in Hong Kong or Mainland China?
What is a fulfillment center?
Fulfillment center offers e-commerce merchants warehousing (storage) and shipping services, that allows online businesses to operate without owning their own warehouse or physical storage space.
Sellers or e-commerce merchants can directly send their inventory to the fulfillment center from where it is shipped to their customers.
Most fulfillment centers are integrated with e-commerce marketplaces and platforms like Amazon (which also operate their own fulfillment centers, Shopify, and eBay, making it easier for merchants to manage inventory and delivery products.
These are the top reasons why Importers choose fulfillment centers:
1. You can get closer to foreign markets. If you are based in the United States and want to sell in Europe, it’s way easier to send your goods to a fulfillment center in the EU – compared to setting up your own warehouse or sending products from the US.
2. It’s often cheaper to use a fulfillment center to store and pack your products, compared to renting a warehouse and hiring employees.
3. Your international customers get receive the product in only a few days, rather than waiting more than a week.
In most cases, fulfillment centers go through the following process:
1. E-commerce merchants (or the supplier in China) send their products to the warehouse
2. The center stores the products in the warehouse
3. Customer makes a purchase and orders from the merchant’s website
4. The fulfillment center picks & packs products
5. The fulfillment center ships products to each individual customers
List of Fulfilment Centers
EXchain is a fulfillment center based in Hong Kong, that focuses on e-commerce order fulfillment. The fulfillment center is owned by SFC Services Limited, a China-based Group that was founded in 2007. SFC Services Limited operates a similar fulfillment and delivery company in China, called “Send From China”.
With more than 10 years in the service, EXchian now ranks as one of the leading fulfillment services in Hong Kong with shipments to all over the world.
They also have a warehousing network in Hong Kong, Europe (Germany), the United States, and China. For China, they also offer discounted rates and tailored-made shipping routes for clients, while they offer same day delivery within Hong Kong.
Their online system automatically imports orders using an API service from all major e-commerce platforms like Wish, Alibaba, Amazon, and eBay.
They offer both delivery services (e-shipment) and fulfillment solutions to their clients in Hong Kong and Mainland China.
The information related to their pricing for a 225 g shipment is as follows:
- HK$ 78 for Europe
- HK$ 76 for Australia
- HK$ 63 for the United States
Office Address: Unit B, 24/F, Excelsior Building, 68-76 Sha Tsui Road, Tsuen Wan, NT, Hong Kong
DHL Hong Kong
DHL has recently started their fulfillment center in Hong Kong to offer a wide range of fulfillment and e-commerce delivery services to clients.
The fulfillment services offered by DHL are:
- Inbound freight
- Service Level Agreements
- Receiving, handling, and shelving
- Inventory tracking
- Pick and Pack service
- Returns handling
- Last-mile delivery services
They also offer quick domestic and international delivery, with 1-2 days domestic shipment through Express Shipping and 1 to 4 days international delivery.
They also have a 27,000 sq ft warehouse in Hong Kong, situated right beside the international airport. In addition, they also have several other offices and warehouses in Mainland China, that includes Urumqi, Beijing, Harbin, Shanghai, and Taipei.
Office Address: Tsing Yi Island, just 2 km away from Hong Kong International Airport
Easyship was founded in 2014 in Hong Kong, but now have offices and warehouses in Singapore, Netherlands, Australia, and the United States. With its smart and interactive online portal for clients, it allows e-commerce merchants to manage all their orders and shipping in one place.
The offer full e-commerce integration for all major e-commerce platforms like Alibaba, Amazon, and Shopify. You can use their services for B2C as well as B2C shipments.
Easyship is not a shipping company on its own, but if connects sellers with shipping companies like DHL, FedEx, and others. This allows sellers to choose the most cost-effective shipping solution for their orders to more than 100 countries.
The fulfillment services offered by Easyship are:
- Pick & Pack
Office Address: 171 Hollywood Road, 2/F, Unit 4-6, Lee Wah Mansion, Sheung Wan, Hong Kong
Floship is also a Hong Kong-based fulfillment company that was founded in 2015. It offers services like:
- Pick & Pack
In addition, they also offer value-added services like Quality Control (QC), Kitting, and Marketing Inserts.
Their services are offered under different service categories that include e-commerce and crowdfunding fulfillment and Floship certified logistics plan services.
Floship connects and integrates with all major e-commerce platforms like Shopify, Amazon, WooCommerce, Magento, and BigCommerce. They connect sellers with the leading shipping companies to deliver their products.
You can use their services if you’re shipping more than 300 orders a month, or at least have 500 crowdfunding backers. In addition, your international sales must be 30% of your sales.
They do not offer services for the products that weight more than 10 kg.
Office Address: Unit 1102, Tower 2 Ever Gain Plaza, 88 Container Port Road, Kwai Chung, NT, Hong Kong
Shipwire is a global fulfillment company and a brand of Ingram Micro, that owns more than 154 fulfillment centers in 45 countries around the globe.
Shipwire is a leading Europe based e-commerce service provider that also has offices in China and Hong Kong. They currently have a fulfillment center and 125,000 sq ft warehouse in Shenzhen, and another warehouse and office in Hong Kong.
They work with multiple well-known shipping companies that include DHL, Hong Kong Post, FedEx, and SF Express.
Their services include:
- Same-day order processing
- Return shipping optimization
- Order optimization (offers the most competitive rates based on multiple factors)
- Custom packaging
- Kitting & virtual kitting
Office Address: 3/F, Goldlion Holdings Centre, Siu Lek Yuen, Shatin, Hong Kong
V Logic is a Hong Kong-based global fulfillment and delivery company that was founded in 2000.
The services offered by them are:
- E-commerce and e-fulfillment
- Inventory management
- Pick & Pack
- Wide range of value-added services
- Domestic & worldwide distribution
- International freight forwarding
Office Address: Room 1003-5, 10/F, Phase One, Modern Terminals, Berth One, Kwai Chung, New Territories, Hong Kong
Send From China
Send From China is a subsidiary of SFC services and a sister company of EXchain, that operates in Hong Kong.
They’ve fulfillment centers and warehouses located in Shenzhen, Shanghai, and Dongguan. They offer services to mainly made-in-China products and to help Chinese e-commerce stores to store and ship their products all over the world.
They also offer easy online store integration with Web Service APIs that allows sellers to track orders, manage inventory, and keep an eye on product information and order processing.
Their fulfillment services include:
- QC and product labeling
- Package scanning
Office Address: 1st Floor, Block 2, Meitai Sci-Tech Park, Guanguang Road, Guanlan, Longhua New District, Shenzhen, Guangdong, China
ChinaDivision is a leading Shenzhen-based fulfillment service provider, that offers a wide range of fulfillment services. These services include:
- Picking & packing
- QC and inspection
- Shipment management
- Returns handling
- Other value-added services
It is a subsidiary of CNstorm Co., Ltd, that was founded in 2011 The head office and the warehouse of the ChinaDivision is based in Shenzhen.
It also offers easy integration with all major e-commerce platforms and offers dedicated service for Amazon, by the name of “Amazon China fulfillment Service”.
Office Address: 4F, Block E, Feng huang gang No.2 Industrial Zone, Qianjin 2nd Road, Bao’an District, Shenzhen, Guangdong, China
Questions & Answers
Should we choose a fulfillment center in Mainland China or in Hong Kong?
There is a reason why most fulfillment centers are based in Hong Kong. While the city is still part of China, Hong Kong is a free port without import duties.
Products can be freely transported from the mainland to Hong Kong without the need to pay any import taxes.
Hong Kong is also a leading logistics hub, that can offer lower costs than the Mainland in many cases.
My impression is that the fulfillment centers in Mainland China primarily work with e-commerce companies based there, while those in Hong Kong focus more on international clients.
Why can’t I just let the supplier ship the products to the end customers?
Manufacturers are not logistics companies. They don’t have the expertise or personnel to efficiently store, pack and deliver products to customers around the world.
In the unlikely scenario that a supplier does offer such services, there is no way they can compete on price and delivery speed with any of the companies listed in this article.
Who pays import duties and other taxes if the products are shipped directly from China to the end customer?
For centuries, Importers bring in foreign products, pay import taxes and sell the items domestically.
Fulfillment centers and cross border e-commerce are about to turn the old system upside down.
Let me explain why:
a. Product is delivered from Hong Kong to a customer in EU (The seller is also based in the EU)
b. The customer receives the items but doesn’t bother to pay import duties and VAT on the purchase (the customs tax less than 10% of all incoming B2C shipments). This is also the case with dropshipping.
c. Hence, the transaction is completed without any taxes paid by the customer, and the seller.
The same can be applied to sellers that are avoiding import duties by sending shipments valued below duty threshold from abroad, thereby avoiding taxes.
In essence, sellers exploit loopholes in the system. It may work now, but the tax authorities can decide to crack down on this practice by tomorrow.
One way they could do this is by tracking all your cross border shipments and send a tax bill covering the last few years.
That will likely put you out of business.
Nobody knows for sure what will happen, but there are clear signs that the ‘golden age’ of cross border commerce is over.
But don’t expect anyone with a vested interest to agree with this assessment.
So, when does it actually make sense to use a fulfillment center in Hong Kong or Mainland China?
Taxes are only a problem when you are shipping from abroad to your home market. If you’re based in the EU, you should not be ‘dropshipping’ products into the EU.
The same thing applies to the United States, Canada, Australia, and other markets. Well, even China itself.
However, a US company is not responsible for paying taxes in the EU, or Australia.
As such, using a fulfillment center in Hong Kong or Mainland China to distribute goods to third countries, is not a problem.
For small businesses, it’s way cheaper to utilize a Hong Kong-based fulfillment center, rather than sending goods to different centers around the world.
That’s why fulfillment centers in Hong Kong and Mainland China still makes sense for many businesses.
Interview with Steven Suh: Founder of Floship.com
These days it’s common that E-commerce companies don’t start with one target market in mind. Instead, European importers start selling in the US and EU on day one, and vice versa.
For Startups, it’s expensive to ship stock from the manufacturer to several countries – not to mention how complicated it can be to get a grip of taxes and customs procedures in all those countries.
This is why more companies are using Hong Kong as their main fulfillment center. From Hong Kong, a freeport in southern China with no import duties, you can ship products directly to customers in the US, Europe and the Asia Pacific Region.
In this interview with Steve Suh at Floship in Hong Kong, you will learn how your business can save time and money using Hong Kong as a fulfillment center.
Steve Suh, please tell us a bit more about yourself and your work at Floship in Hong Kong
I am Korean-American from Philadelphia. I Embarked on my start-up career in Shanghai, where I got involved with a Sequoia Capital-backed start-up called MyLuxBox, a cosmetics subscription box start-up that later got acquired by jumei.com.
After that exit, I joined China’s largest cross-border e-commerce logistics company 4PX, where I gained knowledge on the industry and led me to kick-start Floship, a platform catered to international merchants – whereas 4PX was China merchant focused.
Regarding work at Floship Hong Kong, started in February 2015, went through a couple rounds of funding led by prominent Asia VC’s and angel investors.
To date we’ve raised more than USD 7 million and, as we continue growing and adding new products, for example, we are soon launching a FBA prep service, a China e-commerce B2C inbound channel, global warehouses and a few other projects we are excited about but aren’t ready to disclose yet that will continue to make it easier for online sellers of all sizes to take advantage of marketplaces globally and participate in the world economy in ways never before possible.
Many of our readers want to know if it’s possible to deliver products, one piece at a time, directly from Mainland China or Hong Kong – to their customers all over the world. Is this possible today?
Yes. This is one of Floship’s most popular offerings.
As far as whether or not this model is possible – it is now at a mature state: it has been going on for over 10 years.
Due to the high volume of e-commerce cross border shipments from China and Hong Kong, there are now cost-effective and fast shipping options that have opened up to facilitate cross border trade.
What’s the shipping cost per unit I should expect?
Of course, as I’m sure any of your readers who have ever shipped anything, cost, when it comes to shipping is dependent on many factors; such as weight, dimensions, and method of shipping.
But, to put things into perspective, for example, say you wanted to ship an iPhone weighing about 200g; this you can ship to the US for a little less than US$5 with a relatively fast shipping time of about four to eight days and delivered last mile by USPS. At that rate, it’s comparable to domestic shipping rates.
Does Floship charge only for freight or are there other fees to expect when using a fulfillment center in Hong Kong?
For storage and pick & pack, we charge in a tiered system. The more orders you ship, the cheaper the storage and pick & pack rates become. We charge per item picked.
For shipping, it’s based on the item weight for postal shipments and for express shipments, it’s dependent on the actual or volumetric weight – whichever is higher.
Are there any minimum volumes or thresholds to be aware of when dropshipping from Hong Kong?
We have a 300 parcel shipment minimum and there is a US$1,000 monthly spend minimum, or retainer, for those that do not meet the shipment thresholds.
In our experience, for clients that do not meet the monthly shipping thresholds but are happy to pay the US$1,000 per month retainer, they tend to have products with higher margins.
On the other hand, for sellers with low margin goods that cannot meet our 300 order per month minimum shipping requirement the US$1,000 per month retainer often is too high to be profitable for them. In cases like this Floship would not be a good fit.
In your experience, is it more common to use Hong Kong as a fulfillment hub for the Asia Pacific market, or also Europe and America?
I’m clearly biased because I’m based here and because it is my focus but, in my experience, Hong Kong is the preferred and most common fulfillment hub.
Despite my own personal affinity for the place, there are more objective reasons that make Hong Kong one of the most strategic fulfillment hubs in the world for global shipping, mainly due to the high international shipping costs to ship from the other markets you mentioned.
Not to mention, Hong Kong’s proximity to mainland China, it’s status as a duty-free port and the empirical data proves this out, as far as air cargo – Floship’s specialty – is concerned. For example, HKTDC reports, Hong Kong too, “ranks as the world’s busiest airport in terms of international cargo throughput since 2006”.
Actually, it was for this very specific reason that Floship was founded in Hong Kong.
What’s the delivery time from Hong Kong to the US or Europe?
When choosing Express Couriers like FedEx or DHL, you can ship within two to three days worldwide and then, for traditional postal methods the delivery window tends to be more between 7-14 days on average.
With that said, there are also hybrid solutions, something often referred to as postal injection in industry speak, which crossover between postal and Express that will allow you to ship to major destinations in as fast as 4 days.
What are the benefits of shipping from Hong Kong, rather than Mainland China?
Firstly, Hong Kong is a free trade port and you can qualify for an export tax rebate of up to 17% upon bringing your stock into Hong Kong.
You can work with a reliable postal option such as Hong Kong Post (as opposed to China Post) where tracking is more stable and less incidence of lost parcels.
Do I need to open a Hong Kong company to use it as a logistics hub?
If I use Hong Kong as my logistics hub, where do I pay taxes?
Hong Kong having the status as a free trade port, so, with the exception of only four dutiable goods. Those being tobacco, hydrocarbon oil, alcoholic beverages, and methyl alcohol. The import and export clearance regulation in Hong Kong is really the best in the world and can be digested in under a minute right here (HK Customs official site).
I’m not a tax adviser but – the general practice and law as I understand it is–for people who do not reside in Hong Kong tax is exempted for income not sourced in Hong Kong.
So when an individual is using Hong Kong as a storage or transshipment center for their goods and is not vending products in the SAR, then there are no taxes to pay.
Taxes in one’s home country or the destination country of the goods would be subject to the jurisdictions of the destination port. While an individual tends to be taxed based on their country of residency
One of the key benefits of cross border shipping is that for large e-commerce markets such as USA and Australia, any shipment declared under US$800 can enjoy duty-free customs clearance where the seller or the buyer would not have to worry about duties or taxes.
Hence, Floship’s B2C model – we have really built the company based on this strategy and offer that opportunity to our clients and their customers.
In other markets where tax thresholds are quite low, such as the EU, it depends on the shipment incoterm (DAP or DDP) where you decide if you want to take the tax responsibility or whether the consignee is responsible.
Thank you. How can Floship help our readers take the next step and start using Hong Kong as their logistics hub?
Thanks for this opportunity to reach your readers.
To help people understand the opportunities Floship offers, they can visit our website at www.floship.com, we also have a popular blog that may be of interest to those actively participating in the cross-border e-commerce space, you can find that here.