Can Block Chain Prosper Cross-Border E-Commerce? -- Empirical Study in Asean
Li Zhang
International College, Krirk University, Thanon Ram Intra, Khwaeng Anusawari, Khet Bang Khen, Krung Thep, Maha Nakhon10220, Thailand
Finance Department, Zhejiang Dongfang Vocational and Technical College，Longwan District, Wenzhou，Zhejiang 325000, China
E-mail: 80006533@qq.com
Article History: Received: 11 January 2021; Revised: 12 February 2021; Accepted: 27 March 2021; Published online: 10 May 2021
ABSTRACT: Due to COVID pandemic, trade protectionism, and even trade wars, increasingly more countries turn to exploiting Cross-border E-commerce to expand the global market. However, many problems still hamper the development of Cross-border E-commerce, such as long logistics cycle, difficult quality assurance, high transaction cost and asymmetric information. Based on a theoretical research and an empirical study on ASEAN, this paper examines the long-run effects of Block Chain technology on the development of Cross-border E-commerce and finds：Block Chain increases purchasers’ inclination through its significantly positive effect of quality, logistics, information transparency, strangers’ trust and cost saving. This finding facilitates the international trade and promotes economic growth of ASEAN countries accordingly. Some policy measures are also proposed: the application of block Chain in various related fields, the establishment of ASEAN logistics industry alliance, the establishment of ASEAN back-to-back customs, and so on.
Keywords: block chain，ASEAN Free Trade Area，cross-border E-commerce，trade facilitation，cross-border logistics，Covid pandemic
INTRODUCTION
Due to the convenience of geographical location, cross-border e-commerce has become an important driving force of the " China-ASEAN Trade". Since the formal establishment of China ASEAN Free Trade Area in 2010, Cross-border E-commerce has been heating up. However, such problems as long logistics cycle, difficult quality assurance, high transaction cost, and asymmetric information still remain obstacles hindering the development of China ASEAN cross-border e-commerce. Characterized by decentralization, collective maintenance, high transparency, distrust and anonymity, Block Chain technology can effectively solve the problems of information asymmetry, high transaction cost and strangers’ trust in cross-border e-commerce transactions. 1 Based on a theoretical research and an empirical study on ASEAN, this paper examines the long-run effects of Block Chain technology on the development of Cross-border E-commerce and finds：Block Chain increases purchasers’ inclination through improving quality control, cross-border logistics, facilitation and Level of Information. These findings maybe helpful to promote the rapid and healthy development of China ASEAN Cross-border E-commerce industry, thus boost ASEAN economy. Accordingly, Corresponding strategies and suggestions are also proposed
This paper aims to solve the four facets of problems which hinder China ASEAN Cross-border E-commerce as follows, arguing that block chain technology can effectively solve these problems.
⑴ Customs Inefficiency: the lack of joint custom supervision mechanism in ASEAN; Intergovernmental information exchange is difficult; customs clearance time is long; tax refund procedures are cumbersome; the lack of Online Dispute Resolution mechanism; cross-border e-commerce services and support system is not perfect.
⑵ Slow Logistics: Cross border e-commerce logistics cycle is long; customs clearance procedures are cumbersome; high logistics cost; packages are damaged and lost.
⑶ Uncertain Quality: Cross border online sales of agricultural products are difficult; quality is difficult to guarantee; the lack of unified quality standard certification; the high risk of decay and damage during logistics.’
⑷ Lack of Information: Information transparency of cross-border e-commerce is low; due to the lack of information it is difficult for buyers and sellers to build trust.
At present, this kind of research is very few at home and abroad, and the research basically stays in the stage of qualitative analysis, while quantitative analysis and mathematical model analysis are rare. Therefore, it has great research value.
Background 1. 1 Block Chain
Block Chain was first invented by a man named Nakamoto in 2008, which is used to record public transaction books of cryptocurrency bitcoin. The invention of bitcoin block Chain makes bitcoin the first digital currency that can solve the problem of repeated consumption without trusted authority or central server. From the micro point of view, Block Chain is a structure composed of block and chain, "block" represents data block, and "chain" represents the arrangement structure of data. Block Chain is a kind of decentralized accounting system, which ensures the data block has a high degree of non tamperability through encryption algorithm. The data arrangement structure is recorded in a chain structure in chronological order. From a macro perspective, Block Chain is not a single information technology, but a highly scalable decentralized network structure.
Today is the Internet age. Internet mainly realizes information interconnection and information sharing, such as people can pass text, pictures and videos through the network. However, the accuracy, security and reliability of information are still difficult to guarantee, and there are problems such as information leakage, theft, tampering and utilization. Different from it, Block Chain is essentially a kind of value Internet, which can solve the problem of blocking e-commerce transactions. First, Block Chain can resist the modification of data. It is "an open and distributed ledger, which can effectively, verifiably and permanently record the transactions between the two parties". Block Chain can effectively solve the security problem of Internet. Second, it can solve the problem of network information asymmetry better with the characteristics of decentralization, non- tampering, openness, autonomy and anonymity. Thirdly, Block Chain has four core technologies: "distributed ledger, asymmetric encryption, consensus mechanism and smart contract", which can rebuild the trust mechanism and reduce the trust cost of network transactions; rebuild the incentive mechanism and improve the efficiency of organizational collaboration. 2
With the gradual maturity of Block Chain technology, "Block Chain +" is also deepening and extending to various industries. "Block Chain + cross-border e-commerce" is to deeply integrate the innovative achievements of Block Chain with cross-border e-commerce, change the operation mode of cross-border e-commerce, and form a new form of cross-border e-commerce through Block Chain platform and modern computer technology and communication technology 1. In a word, Block Chain technology can effectively solve the problems of cross-border e-commerce transaction security and information asymmetry; realize real-time code scanning tracking and solve the quality control problems; reduce the cost of information transaction and solve the problem of information obstruction between governments; improve the work efficiency of government system and provide theoretical basis and technical support for the development of ASEAN single window; optimize cross-border logistics supply chain and solve the problem Solve the problem of cross-border logistics. Block Chain technology has been applied to logistics business by a few enterprises in China, such as Jingdong, and has achieved certain results.
1.2 Trade Facilitation
Trade facilitation refers to a set of specific measures that simplify the technical and legal procedures for products entering or leaving a country for international trade. Thus, trade facilitation covers all border procedures, from the electronic exchange of goods data to the simplification and harmonization of trade documents to the possibility of appealing against administrative decisions of border agencies. Trade facilitation helps to reduce the overall trade cost and improve economic welfare. In 2013, the member countries of the World Trade Organization (WTO) signed the WTO Agreement on trade facilitation, which formulated multilateral rules to seek solutions to specific procedural obstacles in order to promote trade procedures. The agreement came into force in 2017. 6 the essence of trade facilitation is to simplify trade process, improve trade efficiency and reduce trade costs through policies, systems and technologies. 3
In the past, a large number of literature on trade facilitation can be roughly divided into three categories. One is that trade facilitation plays an important role in reducing transaction costs. The second is to use gravity model to analyze the impact of trade facilitation on exports. Wilson uses the gravity model to analyze the impact of trade facilitation on international trade flow. The empirical study of Lwanow and Kirkpatrick shows that the improvement of trade facilitation measures is closely related to the increase of exports; if the regulatory environment and infrastructure quality are improved by 10% respectively, the average increase of exports is 10%. 4 Chinese researchers, Cui Xinsheng, Guo Longfei and Li Fang (2019) found that under the control of tariff and other factors, the improvement of trade facilitation level can greatly enhance the foreign trade of China's provinces. 5 The third kind of literature focuses on the impact of trade facilitation on enterprises.
1.3 Demand Theory
The demand for a commodity refers to the quantity of the commodity that consumers are willing and able to buy at various possible price levels in a certain period of time; it includes two meanings: consumers have both the desire to buy and the purchasing power to pay for the commodity. The demand quantity of a commodity is determined by many factors. The main factors affecting the demand are:
1. Price of the commodity. Generally speaking, the higher the price of a commodity is, the smaller the demand of the commodity will be; on the contrary, the lower the price is, the greater the demand will be; 2. Income level of consumers. For most commodities, when the income level of consumers increases, the demand for the commodity will increase; on the contrary, when the income level of consumers decreases, the demand for the commodity will decrease; 3. Price of related commodities;4. Consumers' preferences; 5. Consumers' expectations of commodity prices. 7
From the literature review at home and abroad, we can see that trade facilitation has been highly valued by scholars at home and abroad. Through qualitative analysis and quantitative empirical methods, scholars from various countries have studied the impact of trade facilitation level on economic development from different application fields. However, in the context of "Internet +" strategy, the existing research has the following problems:
Firstly, some references have been used to analyze the characteristics, nature and development direction of block Chain, but there is a lack of research on the impact of Block Chain on cross-border e-commerce, especially on how to use block Chain technology to overcome the bottleneck of cross-border e-commerce.
Secondly, there are some research results on the trade facilitation of China ASEAN Free Trade Area, but there is a lack of analysis on the impact of Block Chain on trade facilitation. Moreover, the current research on trade facilitation mainly focuses on the analysis of traditional international trade field, while there is little research on cross-border e-commerce, especially on the development mode and Countermeasures of cross-border e-commerce between China and ASEAN.
Thirdly, the demand function is the relationship between the demand quantity of a commodity and the factors that affect the demand quantity. The demand quantity of a commodity is the function of all the factors that affect the demand quantity of this commodity. However, if we consider the special situation of cross-border e-commerce, such as cross-border, long distance, buyers and sellers cannot face-to-face transaction, and sellers' reputation This function may not be so accurate to describe cross-border e-commerce demand, because there may be some other factors.
Fourthly, the state has issued a number of policies in the field of cross-border e-commerce, but there is almost no research on the impact of these policies on consumers, and this factor is included in the research model.
2. Experimental Part
This paper mainly adopts the methods of literature, comparative analysis, theoretical analysis and empirical analysis. After reviewing the existing academic literature, as well as the current situation of development, we initially establish a research model that affects consumers' purchase intention, and accordingly design a preliminary questionnaire to test the model. After determining the research samples and methods, we conducted a pre-survey, and then adjusted the questionnaire scale to get a formal questionnaire. With the help of the questionnaire star platform, 360 questionnaires were sent to consumers through Wechat circle of friends and QQ circle of friends, and 353 valid questionnaires were collected to provide reliable data support for verifying the hypotheses in the model. Empirical analysis: after collecting the data from the questionnaire survey, the sample distribution is obtained through descriptive statistics, and the data is reasonably judged whether it meets the requirements through reliability verification and validity verification. Quantitative analysis such as correlation analysis and regression analysis are carried out on the selected sample data to verify whether the model hypothesis is tenable, and finally the revised influencing factor model is obtained.
2.1 Cross-border E-commerce Online Shopping Willingness Model
After the literature review and theoretical analysis, this paper proposes a research model of cross-border e-commerce platform consumption intention. The specific model is shown in figure 1.
To sum up, Block Chain technology can not only improve the quality of goods, reduce commodity prices, but also optimize logistics services, improve the level of information technology, increase security and increase consumer trust.
2.2 Research Hypothesis
According to the demand theory, four factors influence the customers’ demand, related commodity prices, consumer income, consumer preferences and expectations. The quality, logistics, information level and stranger trust and other factors will affect consumer preferences. Assuming that consumers' income, the prices of substitutes and complements are fixed, and consumers' expectations are set, according to previous references and the actual situation of cross-border e-commerce transactions, five factors that may affect cross-border shopping intention can be inferred: commodity quality, price, logistics, informatization level, and stranger trust. Based on the existing theoretical analysis, this paper puts forward the following five hypotheses.
⑴ Commodity quality has a positive impact on cross-border online shopping intention. ⑵ Commodity prices have a negative impact on cross-border online shopping intention. ⑶ Logistics has a positive impact on cross-border online shopping intention.
⑷ The level of informatization has a positive impact on the willingness of cross-border online shopping. ⑸ Strangers’ trust has a positive impact on cross-border online shopping intention.
This paper adopts the methods of literature review, questionnaire survey, empirical analysis and comparative study.
2.3 Data Sources and Analysis Methods
After determining the research samples and methods, a pre-survey was carried out, and then the questionnaire scale was adjusted to get the formal questionnaire. The formal questionnaire consists of 29 questions, including 1 screening question, 9 basic information questions and 19 formal questions (see Table 1 for the formal questionnaire). The formal questionnaire was scored by Likert 5-level scoring method. Then quantitative analysis, such as correlation analysis and regression analysis, is carried out to verify the hypothesis of the model, and finally the modified influencing factor model is obtained.
3．Results and Discussion
3.1 Screening Questions and Basic Information
A total of 353 questionnaires were collected, 106 of which answered no and were considered invalid. The remaining 247 questionnaires, with complete answers, no short answers and no identical answers, were considered valid.
From the frequency of online shopping, about 60% of people buy online once to four times a month. 19% of people buy online five to six times a month, and about 23% buy online more than seven times a month. About 70% of the online shoppers spend less than 1000 RMB per month. From the perspective of commodity category, the most frequently purchased items are cosmetics and accessories, followed by digital home appliances and nutrition and health care. Agricultural and sideline products should be purchased at least. This is because the shelf life of agricultural and sideline products is short and easy to rot, and the cross-border logistics cycle is often long, so there are few buyers. 63% of the people can accept the longest arrival period is 7 days, 25% of the people 14 days, less people can accept more than 14 days. It shows that the shorter the period from placing an order to receiving goods, the easier people are to accept cross-border online shopping; the longer the period is, the less people are willing to buy.
3. 2 Reliability and Validity Analysis
Most of the items in this questionnaire are verified by domestic and foreign scholars through empirical research, each item can better reflect the meaning of the variable, and the choice is Likert 5-Level Scale. Before issuing the formal questionnaire, we conducted a pre-survey and revised the items of the variables. Therefore, the content validity of the questionnaire is good. The Cronbach's alpha coefficient is 0.910, which indicates that the questionnaire scale has good reliability.
3.3 Correlation Analysis
The correlation coefficients of quality, price, logistics, informatization level, and strangers’ trust to cross-border online shopping intention are respectively 0.449, 0.635, 0.618, 0.623, and 0.646. The coefficients were all positive, and they were significantly correlated at the level of 0.01. This initially confirms the hypothesis.
3.4 Regression Analysis
Regression analysis is carried out on the questionnaire data, see Table 5 for details. The coefficient of determination R is 0.552, and the degree of independent variable’s explanation of dependent variable is as high as 74.3%, which indicates that the fitting effect of regression model is good. In the significant test of regression coefficient, SIG. of each variable to online shopping intention is less than 0.05, and Sig. of price, information level and stranger trust to online shopping intention is less than 0.01. In collinearity statistics, VIF values are much less than 2.5. The correlation of each variable is less than 0.8. In conclusion, it can be judged that there is no collinearity. The regression equation is as follows (see Table2&3 for details)
W=0.248+0.172Q-0.211P+0.151L+0.264I+0.205T (1)
W stands for cross-border online shopping intention; Q stands for broad commodity quality, including commodity varieties; P stands for price; l stands for logistics; I stands for information level; T stands for Strangers’ trust.
The histogram and normalized residual of the regression equation are as follows（See Figure 6&7）. It can be seen that the equation basically fits the scatter diagram and can better reflect the actual situation. The regression equation shows that if Block Chain technology improves commodity quality, logistics, informatization level and stranger trust by one unit each, and reduces the price by one unit by saving transaction costs, the willingness of cross-border online shopping will also increase by one unit. Through regression analysis, the effectiveness of Block Chain technology in promoting cross-border online shopping intention is proved. It further shows that the use of Block Chain technology can promote the rapid development of cross-border e-commerce.
4. Conclusion and Suggestions
To sum up, Block Chain technology can promote the level of trade facilitation, positively affect product quality, logistics, informatization level and consumer trust, and negatively affect commodity prices, thereby enhancing the
willingness of cross-border online shopping. Its role is mainly reflected in the following aspects. First, Block Chain technology can improve the quality of cross-border goods, facilitate the establishment of
Famous Brand, and expand the category of cross-border goods, for example, agricultural and sideline products. Block Chain can improve the quality control of products by the government and e-commerce platform through sharing database, unchangeable timestamp and origin traceability. Through the block chain code scanning traceability,
consumers can easily view all the information of products, from the source of raw materials, manufacturers, distributors, to all the related documents and certificates of logistics companies.
Second, Block Chain technology can reduce the cost of goods. On the one hand, Block Chain technology can reduce transaction costs. The use of Block Chain technology can reduce the time of customs clearance, the cost for customs clearance, and reduce the loss cost of some goods that need to be kept fresh, such as fresh products. On the other hand, the decentralized database of Block Chain solves the cost of management and maintenance of massive logistics data to a certain extent due to the authorization given to the transaction subjects; the transparent public ledger can solve the problem of product traceability, thus saving the cost of third-party certification; The natural decentralization of Block Chain also simplifies the process of cross-border logistics and reduces the cost of logistics and trust.
Third, Fast Block Chain technology can simplify the process of cross-border logistics, improve the efficiency of goods clearance, improve logistics efficiency, realize logistics information sharing, and enhance the ability of cross-border logistics supervision. With Block Chain, Intelligence Cloud, bar code technology, and GPRS satellite positioning system, the inbound and outbound records of products will be clearly recorded and easily traced, which improves the logistics efficiency, reduce the management and maintenance cost of massive logistics data, save logistics human resources, avoid human errors, and thus reduce packet loss rate and delivery error rate.
Fourth, Distributed Accounting realizes real-time monitoring of logistics process, and information is transparent, difficult to tamper with and private, which improves the informatization level of cross-border e-commerce. Each time the distribution information is written into the node, the real-time monitoring makes after-sales responsibility tracing more convenient and clearer. Customer information is closely protected without fear of leakage.
Finally, With the Block Chain’s decentralized distributed database with unchangeable timestamps, the problems of false delivery, fake goods, parallel goods and forged evaluation are avoided, and the imported goods will become more people-friendly, reliable in quality and reliable in reputation, which will win customers' trust both in goods and in cross-border e-commerce enterprises.
China and ASEAN countries are geographically close, even bordering several of them, which makes cross-border e-commerce trade have unique advantages. Compared with other countries, the express delivery time from China to ASEAN countries is also shorter. Take Thailand as an example, the vast majority of express delivery companies can complete the proper delivery from China to Thailand within 14 days, and a few express delivery companies such as TNT and FedEx can complete the delivery from China to Thailand within 7 days. This shows that cross-border e-commerce in China and ASEAN countries still has room for improvement. If the Block Chain technology is used, the logistics cycle is likely to be reduced to less than 7 days, and the logistics cost will be reduced to or close to the domestic express fee level. In this way, the cross-border e-commerce trade between China and ASEAN will be particularly prosperous, and many agricultural and sideline products can enter the markets of various countries through cross-border e-commerce. The following suggestions are proposed:
1. To found China ASEAN Cross-border E-commerce Logistics Alliance, and the Block Chain Sharing Database. With the shared data of logistics, warehousing information and customs information, on the one hand, the efficiency of cross-border logistics will be improved, the cross-border logistics roots will be optimized and traced, logistics cost will be reduced since less workers will be needed, and package breakage will be reduced. On the other hand, with the application of Block Chain and the establishment of new supervision system, the work efficiency of customs and government will be improved, less time needed for customs clearance , and less customs fees and logistics costs will be charged.
2. Use Block Chain technology to realize information sharing, establish back-to-back and one-stop customs clearance supervision services, simplify customs clearance procedures and reduce the time of goods clearance, so that cross-border e-commerce enterprises can "run at most once". The customs of the two countries can issue the inspection and customs clearance certificate after a joint inspection. Check and release the list, collect statistics, and quickly pass the customs.
3. Apply the Block Chain technology to establish a unified quality standard. On the one hand, it makes the quality of cross-border products have a unified international standard to avoid trade friction and disputes caused by different standards. On the other hand, a fair and transparent credit evaluation system enables cross-border enterprises to have the goal and motivation to improve product quality and service; at the same time, it also provides customers with sufficient and reliable information to increase trust.
4. Continuously improve the Block Chain technology. The development of China ASEAN cross-border e-commerce industry relies on relatively mature Block Chain technology. The first is that the fitted Block Chain be actually implemented; the second is to meet the requirements of massive data storage; and the third is to have enough advanced and reliable technology to resist hacker attacks.
REFERENCES
1. Ding Baogen, Zhao Yu, Peng Yongzhang: The Feasibility and the Limitation of the Reform of "Block Chain + Cross-border E-commerce" . Contemporary Economic Management, 2020 (in Chinese)
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3. Zhu Jing, Bi Ying: Influence of Trade Facilitation on Depth and Breadth of China's Agricultural Products Exports- In Context of "Silk Road Economic Belt" Strategy. Journal of International Trade, 2018 (in Chinese)
4. Yu Yimin, Chen Taowei, Zhao Kun: The Development and Countermeasures of Cross Border E-commerce between China and ASEAN: a Study based on Trade Facilitation and Single Window of International Trade. Inquiry into Economic Issues, 2018 (in Chinese)
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6. World Trade Organization( WTO) ，World Trade Report，2015．
7. Gao Hongye: Western Economics (Microeconomics) [M]. Beijing: China Renmin University Press, 2014 (in Chinese)
Table 2. Model Summary
Table 3. Coefficients
Informatization Level
Question
I think the types of imported goods on cross -border e-commerce platforms are very rich
Strangers’ Trust Logistics
Price Quality
Trade Facilitation Cross-boarder Online Shopping Willingness Blockchain
Fig.1. Cross-border E-commerce Online shopping Willingness Model
Fig.3. Online Shopping Frequency (Monthly) Fig.4. Online Shopping Consumption
Fig.5. Maximum Acceptable Receiving Time
