A practical guide to COD from China to Southeast Asia: order processing, tariffs and settlement processes

I. Overview
COD (Cash on Delivery) is a common payment method used by Chinese cross-border e-commerce in the Southeast Asian market, especially suitable for regions with low credit card penetration but rapid e-commerce growth. This guide will introduce the full process of COD from China to Southeast Asia in detail.

  1. Order processing process
  2. Order reception and confirmation
    Platform connection: Receive orders through Southeast Asian e-commerce platforms such as Shopee and Lazada or self-built websites

Order review: Check the integrity of the delivery address and the validity of the contact information

Risk screening: Identify high-risk orders (such as large orders from newly registered users and orders in remote areas)

  1. Warehousing and packaging
    Local warehouse stocking: It is recommended to set up overseas warehouses in major markets such as Malaysia and Thailand

Standardized packaging:

Use waterproof and shockproof materials

Include bilingual instructions in Chinese/local language

Attach return policy and customer service contact information

Meeting order requirements: Clearly mark the order number, consignee information, COD amount

  1. Logistics selection
    Main logistics partners:

J&T Express

Ninja Van

DHL eCommerce

SF Express International

Timeliness requirements: Ensure delivery within 3-7 days to reduce the rejection rate

  1. Tariff processing process
  2. Tariff policies of major Southeast Asian countries
    Country Tariff threshold Common product tax rate
    Malaysia ≤500MYR tax-free Electronics 10-30%
    Thailand ≤1500THB tax-free Clothing 20%
    Vietnam ≤1,000,000VND tax-free Electronics 15%
    Philippines ≤10,000PHP tax-free Household goods 15-30%
    Singapore ≤400SGD tax-free Most goods 7%GST
  3. Tariff processing method
    Delivery Duty (DDP): The price of the goods includes the tariff, and the customer does not need to pay extra

Delivery Duty (DDU): The customer pays the tariff when receiving the goods (increases the risk of rejection)

Recommendation: Use DDP for small-value goods, and clearly inform customers of the possible tariffs for high-value goods

  1. Preparation of customs declaration documents
    Commercial invoice (marking “Sample” or “Gift” may be inspected)

Packing list

HS code confirmation

Certificate of origin (such as FORM E can enjoy preferential tax rates)

IV. COD settlement process

  1. Payment recovery process
    text
    Customer signature → Logistics company collects payment → Weekly/monthly settlement cycle → After deducting the service fee, remit the money to the seller’s account
  2. Main cost composition
    Logistics cost: first weight + additional weight, about 15-30 yuan/ticket

COD handling fee: usually 2-4% of the amount received

Exchange rate loss: about 1-3%

Rejection return fee: about 50-80% of the original freight

  1. Settlement cycle and method
    Settlement cycle: T+7 to T+30 (J&T usually settles weekly)

Settlement currency: local currency settlement or RMB settlement (poor exchange rate)

Repayment method: cross-border wire transfer or third-party payment platform (such as Lianlian, PingPong)

V. Risk management and optimization

  1. Measures to reduce rejection rate
    Pre-delivery SMS/telephone confirmation (including product value and amount to be paid)

Establish a customer credit scoring system

Provide online payment discounts

Settle minimum order amount in remote areas

  1. Return processing
    Establish a local return processing center

Secondary sale or disassembly processing

Purchase return insurance

  1. Data analysis
    Monitor the acceptance rate of each region/logistics channel
    Analyze the characteristics of high rejection customers
    Optimize pricing strategy (including some rejection costs)
    Six, special requirements of each country
    Malaysia:
    Requires SIRIM certification (electronic and electrical products)
    Muslim products require Halal certification
    Thailand:
    Food requires FDA certification
    High-value goods may require the consignee to provide a copy of the ID card
    Indonesia:
    Many types of restricted import goods (local warehouses are recommended)
    Customs clearance time is long (average 3-5 days)
    Seven, practical suggestions
    When negotiating with local logistics companies, focus on negotiating COD handling fee rates and settlement cycles
    Clearly mark “COD available” and “COD additional handling fee” on the product page
    Establish a multilingual customer service team to handle COD inquiries
    Confirm capacity guarantees with logistics companies before peak season
    Use ERP system to integrate multi-platform COD order management
    By optimizing the full process management of COD, the acceptance rate in the Southeast Asian market can usually reach 70-85%, which is much higher than other emerging markets. The key is to balance growth and risk and establish localized operational capabilities.

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