Analysis · Consumer health · China market entry · October 2026
Cross-border e-commerce into China: do you still need a Hong Kong company?
For European consumer health brands entering China through cross-border e-commerce (CBEC), Hong Kong has long been an important trade and settlement hub. As mainland CBEC infrastructure has matured, and as trade substance and compliance have become harder to treat as formalities, the traditional Hong Kong structure is worth revisiting.
By Delphine Yan, Partner, JUMO Partners · 21 October 2026 · Sources at the end. English renderings of the Chinese texts are our own.
The question is no longer only where the goods enter China. It is who is the registered overseas seller, who holds title, who files the import declaration, how money moves, when the brand is paid, and who carries product-safety and commercial risk.
For a consumer health brand there is an earlier question: can this product enter through CBEC at all?
The basic logic: a purchase from overseas, through a defined channel
China’s cross-border e-commerce retail import regime differs from general trade in one fundamental way.
Under the Notice on Improving the Supervision of Cross-Border E-Commerce Retail Imports, issued by the Ministry of Commerce and five other authorities in 2018 (Notice 486), CBEC means a purchase by a consumer in China, through a third-party CBEC platform, of goods from overseas, entering China under bonded online shopping (customs code 1210) or direct purchase (customs code 9610). Transactions that do not go through a platform can still fall within the regime where an express or postal operator transmits the transaction and payment data and accepts the corresponding liability.
It is not any form of “buying direct from overseas”. Four principles constrain the structure:
- The CBEC enterprise is an overseas-registered company that sells from overseas to consumers in China, and is the owner of the goods. An entity registered inside a special customs zone or a bonded logistics centre cannot play this role.
- Title should pass directly from the overseas enterprise to the consumer in mainland China. If title first moves to a domestic company or a third party, which then resells the goods to the consumer, the overseas seller is no longer the owner selling to the consumer, and the transaction risks being treated as a secondary sale, which the regime prohibits.
- The goods are for personal use only. They may not be resold on the mainland market.
- The CBEC enterprise must appoint a domestic company to register with customs, bear responsibility for a truthful declaration, and bear joint civil liability. Primary responsibility for product quality and safety sits with the overseas seller, not with the warehouse or the operator.
A mainland company can therefore handle import declaration, bonded storage, logistics and e-commerce operations. In a typical CBEC retail structure it does not first buy the goods and then resell them to consumers as a domestic distributor. A European brand’s mainland subsidiary cannot be the CBEC enterprise either.
This title principle is the starting point for the three models.
The gate a consumer health brand has to clear first
Any discussion of trade architecture assumes the goods can enter under CBEC. For supplements, functional foods and some cosmetics, that is not automatic.
- Positive list. The goods must be on the List of Cross-Border E-Commerce Retail Import Goods. A category or ingredient that is not on the list cannot use 1210 or 9610. General trade is the alternative, and health food under general trade usually requires registration or filing.
- Personal use, no secondary sale. Goods that enter through CBEC cannot be diverted into domestic trade or into an offline distribution network. This is a retail test and a direct-to-consumer channel, not a traditional distribution channel.
- Limits. Under the CBEC tax policy, RMB 5,000 per transaction and RMB 26,000 per person per year. That caps high-ticket orders and frequent repurchase.
- One category is not one rulebook. Health food, ordinary food, cosmetics and medical devices have different entry, labelling and claims rules. A consumer health brand usually has to look product by product.
- Scrutiny is tightening, not loosening. Customs Order No. 280, the rules on registration of overseas food manufacturers (published October 2025, in force since 1 June 2026), applies to food imported as cargo. CBEC retail imports, which are supervised as personal-use articles, are not required to register for now. That is not a relaxation: customs can still run risk monitoring on CBEC goods and issue risk warnings, and trade sources report closer checks on higher-risk supplement ingredients such as NMN, melatonin and coenzyme Q10, including requests for evidence of their legal status in the country of origin.
If the product is not on the positive list, the three models below do not arise.
1210 and 9610: when the goods enter China
The two customs modes determine when inventory and cash are tied up.
- 1210, bonded online shopping. Goods enter a special customs zone or a bonded logistics centre in bulk. They are released and delivered after the consumer orders, so they are already in China before they are sold. While they are in bond, title remains with the overseas CBEC enterprise, not with the warehouse operator.
- 9610, direct purchase. The goods are posted from overseas after the consumer orders. There is no pre-positioned mainland stock, so the timing of inventory risk is different.
Goods arriving in mainland China is not the same as title arriving in mainland China. Managing the stock is not the same as owning it.
Three models: similar channels, different commercial architecture
For a European consumer health brand entering China through CBEC, the usual trade structures fall into three models. The difference is not only the logistics path. It is who is the registered overseas seller, when title passes, who carries the inventory, and when the brand is paid.
Model 1: Hong Kong trading company and Hong Kong logistics
The European brand sells to a Hong Kong trading company. The Hong Kong company becomes the CBEC enterprise, takes title, and carries the main inventory risk and the primary product-safety responsibility. Goods move from Europe to Hong Kong, then into mainland China through CBEC: from a Hong Kong warehouse under 9610, or after a further move into a mainland bonded warehouse under 1210.
- Title: European brand → Hong Kong company → Chinese consumer
- Goods: Europe → Hong Kong → mainland China
The structure is mature. If the purchase contract pays on shipment or on arrival, rather than on sell-out, the brand’s inventory and cash pressure moves to the Hong Kong company. The cost is an extra logistics and storage step, and a shift of regulatory product-safety responsibility onto the Hong Kong company.
Model 2: Hong Kong trading company and a mainland bonded warehouse
The Hong Kong company still buys from the European brand and, as the overseas seller, takes title. The goods move from Europe straight into a mainland bonded warehouse, usually under 1210, and do not physically pass through Hong Kong.
- Title: European brand → Hong Kong company → Chinese consumer
- Goods: Europe → mainland bonded warehouse → consumer
This cuts a physical logistics step and keeps the Hong Kong company’s trade and settlement role. Title passes to the consumer when the goods are released against an order. While the goods are in bond, title is with the Hong Kong company, not with the warehouse operator.
The point to confirm is whether, when goods, title and money travel on different paths, the contract, the invoice, the title documents and the three customs data sets (transaction, payment, logistics) stay consistent, and whether customs, the bank and the payment institution will accept them. A brand-owned Hong Kong subsidiary buying from its European parent is not the same arrangement as an independent trader with real purchasing, financing and regional distribution. The first needs a harder look at substance, related-party pricing and trade authenticity.
Model 3: European brand and a mainland CBEC operator
The European brand, or an overseas selling entity it designates, is the CBEC enterprise and keeps title. Goods can enter a mainland bonded warehouse. A local partner acts as domestic agent or service provider, handling declaration, storage, logistics and operations. The partner does not take title by doing so.
- Title: European brand → Chinese consumer
- Goods: Europe → mainland bonded warehouse → consumer
The mainland partner is not the seller, but it is not without liability: as domestic agent it is responsible for a truthful declaration and, under Notice 486, bears joint civil liability. Primary product-safety responsibility sits with the European brand, or with the overseas entity it has designated.
The brand keeps more control of the market, and usually carries more inventory and working-capital pressure. Under a sell-through settlement, the brand waits for the consumer purchase and is then paid on the agreed cycle. “No Hong Kong company” means the trade structure does not need a Hong Kong seller. Group treasury can still be arranged separately; that is a different decision.
Side by side
How the three models compare
| Dimension | Model 1: Hong Kong trade and logistics | Model 2: Hong Kong trade, mainland logistics | Model 3: direct mainland CBEC |
|---|---|---|---|
| Overseas seller (CBEC enterprise) | Hong Kong company | Hong Kong company | European brand, or its designated overseas entity |
| Primary product-safety responsibility | Hong Kong company | Hong Kong company | European brand, as overseas seller |
| Domestic agent | Mainland partner: truthful declaration and joint civil liability | As in model 1 | As in model 1 |
| Title holder under CBEC | Hong Kong company | Hong Kong company | European brand |
| Title transfer | Europe → Hong Kong → consumer, on release or delivery | Europe → Hong Kong → consumer, on release | Europe → consumer, on release |
| Typical customs mode | 9610, or 1210 after a Hong Kong stop | 1210 | 1210 or 9610 |
| Goods flow | Europe → Hong Kong → mainland | Europe → mainland bonded warehouse | Europe → mainland bonded warehouse |
| Role of Hong Kong | Trade and logistics | Trade and settlement | No Hong Kong seller in the trade structure |
| Mainland partner | Import declaration and fulfilment | Declaration, bonded storage, operations | Declaration, bonded storage, operations |
| Inventory risk | Mainly the Hong Kong company | Mainly the Hong Kong company | Mainly the European brand |
| When the brand is paid | Under a buyout paid on shipment or arrival, usually before sell-out | As in model 1 | Usually tied to actual sales and the settlement cycle |
| Cash-flow pressure on the brand | Lower under a buyout | Lower under a buyout | Higher |
| Brand control of the market | Lower | Medium | Higher |
| Core advantage | A mature regional trade structure | Fewer logistics steps, buyout retained | More direct market participation and control |
| Main watch-point | Logistics and storage cost; safety liability has moved | Consistency of the data sets, title and money; related-party substance | Inventory, operations, cash, and compliance as seller of record |
The comparison describes typical commercial arrangements. Actual title transfer, payment terms, settlement cycle, storage duties and risk allocation depend on the contract and on the applicable rules. A buyout and early payment are the result of the contract, not of the structure. A Hong Kong company can also work on consignment or on sell-through, in which case the brand’s cash-flow advantage narrows.
The real question: which model fits the brand?
Hong Kong remains an important international trade centre for European brands entering Asia. As mainland CBEC operations have matured, whether a Hong Kong company still needs to sit in the middle should depend on the value it actually creates.
If the Hong Kong partner provides regional distribution, purchasing, financing, inventory management or another substantive service, a Hong Kong trade structure can still be the right choice.
If the Hong Kong entity is only a pass-through for invoices and settlement, and title, money and logistics are on separate paths, trade authenticity, bank review and the customs data sets become the main risk of model 2, not its advantage.
If the brand’s aim is to test and develop the mainland market directly, fewer intermediary layers and more control can be attractive, provided the product is on the positive list and the brand is willing to be the party responsible for product safety.
No model is inherently better than the other two. The right architecture is not necessarily the one with the fewest steps. It is the one in which title, import responsibility, money flow, cash flow and commercial risk are clearest, and which fits the brand. For a European brand, that also depends on its ambition for China:
- Is the aim a lower-risk market test, or is China a strategic growth market for the next three to five years?
- Is this product on the CBEC positive list? If it is not, the Hong Kong versus mainland discussion does not arise.
- Does the brand have the team and the resources to manage a cross-border business, a local operator and channel partners?
- What substantive functions can the existing European, Hong Kong or Asian partners actually perform, or do they only provide an invoicing entity?
- How long an inventory and collection cycle can the brand’s cash flow carry? Is payment tied to shipment, or to sell-out?
- How much control does the brand want over inventory, pricing, market operations and the consumer relationship? Is it prepared to carry product-safety responsibility itself?
The answers can point to entirely different architectures. More control of the market usually means more responsibility for the brand.
A buyout sale to a Hong Kong trading partner can reduce the brand’s inventory and cash pressure. The brand usually gives up some margin and some market control, and places regulatory product-safety responsibility with the Hong Kong company.
Holding the stock and selling through a mainland CBEC operator lets the brand participate more directly. It also means a longer inventory cycle, later collection, higher working-capital needs, and compliance and compensation liability as the overseas seller.
The question to answer is therefore not “Which model is best?”
It is: which model fits the brand’s ambition for China, the product’s entry conditions, its internal capability, the resources it can commit, its tolerance for tied-up cash, and the partner ecosystem it already has?
Three questions before entering China
1. Can these goods use CBEC, and who actually owns them?
Is the product on the positive list? Is the overseas seller the European brand, a Hong Kong trader, or another overseas entity? When does title pass? Who holds title to goods sitting in the bonded warehouse? Who carries unsold stock?
2. Who handles import, operations, declaration and settlement?
Who is the domestic agent, and does it bear the truthful-declaration duty and joint civil liability? Who handles bonded storage and logistics? Do the three data sets match? When is the brand paid, on shipment or on sale? Who funds the gap before sell-out?
3. Which model actually fits the brand’s China strategy?
What does the brand want in China? What team, capital and operating resources does it have? Do current partners provide a real service, or only a pass-through layer? Is the brand prepared to be the party responsible for product safety?
If these questions are not settled, the priority may not be finding another distributor. It may be revisiting the cross-border trade architecture.
The point of choosing an architecture is not only to get the product into China. It is to build a commercial base that can support the brand’s longer-term ambition there.
Where this applies
This sits inside China market-entry strategy.
Whether the product can enter should be settled before the architecture is chosen, and the architecture before import and distribution partners are locked in. JUMO Partners helps European consumer health brands assess China entry requirements, design a cross-border trade and operating architecture that fits their aims and resources, and select the right local commercial partners.
Sources
- Ministry of Commerce, National Development and Reform Commission, Ministry of Finance, General Administration of Customs, State Taxation Administration and State Administration for Market Regulation, 《关于完善跨境电子商务零售进口监管有关工作的通知》 (Notice on Improving the Supervision of Cross-Border E-Commerce Retail Imports), 商财发〔2018〕486号, 28 November 2018, in force from 1 January 2019. Definition of CBEC retail import; the overseas seller as owner of the goods; personal use and no resale; the domestic agent’s truthful declaration and joint civil liability; the overseas seller’s primary responsibility for quality and safety. gov.cn. Accessed 16 October 2026.
- General Administration of Customs, 《关于跨境电子商务零售进出口商品有关监管事宜的公告》 (Announcement on the Supervision of Cross-Border E-Commerce Retail Import and Export Goods), 海关总署公告2018年第194号, 10 December 2018, in force from 1 January 2019. Overseas registration of the CBEC enterprise and its domestic agent; transaction, payment and logistics data; monitoring of secondary sales; risk monitoring and risk warnings. gov.cn. Accessed 16 October 2026.
- Ministry of Finance, General Administration of Customs and State Taxation Administration, 《关于完善跨境电子商务零售进口税收政策的通知》 (Notice on Improving the Tax Policy for Cross-Border E-Commerce Retail Imports), 财关税〔2018〕49号, 29 November 2018, in force from 1 January 2019. Single-transaction limit of RMB 5,000 and annual limit of RMB 26,000. chinatax.gov.cn. Accessed 16 October 2026.
- 《跨境电子商务零售进口商品清单（2019年版）》 (List of Cross-Border E-Commerce Retail Import Goods, 2019 edition), Ministry of Finance and twelve other authorities, announcement 2019 No. 96, in force from 1 January 2020. mof.gov.cn. Adjusted by the Ministry of Finance and seven other authorities, announcement 2022 No. 7, in force from 1 March 2022: gov.cn. Accessed 16 October 2026.
- General Administration of Customs, 《中华人民共和国海关进口食品境外生产企业注册管理规定》 (Regulations on the Registration of Overseas Manufacturers of Imported Food), Customs Order No. 280, published 14 October 2025, in force from 1 June 2026, and its implementing announcement of 18 March 2026. Registration applies to food imported as cargo; CBEC retail imports, supervised as personal-use articles, are not required to register for now.
This note is based on public regulatory information available as of October 2026. HS codes and supervision conditions should be checked against the current positive list. Whether a given architecture is suitable depends on the product category, the contracts, and the actual requirements of the relevant banks, customs, payment institutions and operators. This is not legal advice.