In recent years, China's cross-border e-commerce has been rising rapidly, and more and more Chinese enterprises regard the European market as an important target. Against this background, Hungary has gradually become a ‘bridgehead’ for Chinese cross-border e-commerce to enter Europe by virtue of its unique geographical location, favourable policy environment and huge market potential. This paper will analyse the strategic position and importance of Hungary in China's cross-border e-commerce development from the dimensions of Hungary's geographic and logistical advantages, policy dividends, market potential, cultural and technological cooperation, and the layout of Chinese cross-border e-commerce in the country.
Geographical and logistical advantages: Europe's ‘crossroads’
Hungary is located in the hinterland of Central Europe, bordering Austria, Slovakia, Ukraine, Romania, Serbia, Croatia and Slovenia, and is an important transport hub connecting East and West Europe. As an important node of the China-European liner, Budapest, Hungary has become the ‘transit brain’ for Chinese commodities to enter Europe. 2023, the China-European freight liner through Hungary has increased by 40 per cent year-on-year, accounting for one-third of the total volume of freight transported in the Central and Eastern Europe region. In addition, Hungary's well-developed logistics infrastructure and road, rail and air transport networks enable the rapid distribution of goods to all parts of Europe.
Policy Dividend: ‘Special Administrative Region Testing Ground’ for Chinese Enterprises
The Hungarian government has introduced a series of favourable policies to attract foreign investment. For example, Hungary's corporate income tax is only 10 per cent, and science and technology enterprises can also enjoy a preferential tax rate of 5 per cent. In addition, Hungary provides cash subsidies of up to 30% of the investment amount for emerging industries such as new energy vehicles. Against the backdrop of tightened foreign investment scrutiny in many EU countries, Hungary has maintained an open attitude towards Chinese investment, with Chinese direct investment in Hungary reaching 7.6 billion euros in 2023, accounting for 58 per cent of Hungary's total foreign investment attraction, once again making it its largest source of foreign investment.
Market potential: the ‘Golden Gateway’ to the EU
As a member of the European Union, Hungary's market access standards are consistent with those of the EU, and Chinese enterprises can quickly enter the EU unified market through Hungary. At the same time, Hungary's neighbouring countries, such as Austria and Slovenia, are Western European countries with strong consumption capacity, providing a broad market space for China's cross-border e-commerce. 2024, Hungary's e-commerce market revenue reached HUF 1,920 billion (about 4.7 billion euros), a year-on-year growth of 15%, of which the cross-border e-commerce sales increased by 17% year-on-year, and has become a key driving force for the growth of the market.
Cultural and scientific co-operation: deepening exchanges between China and Europe
Hungary and China have a deep history of cultural exchanges, and cooperation between the two countries in the fields of education, science and technology has become increasingly close. 2024, Hungary became the guest of honour at the Pujiang Innovation Forum, and hosted the ‘China-Hungary Science and Innovation Day’, which further deepened bilateral cooperation in science and technology innovation. In addition, Hungary has strong strength in automobile manufacturing, information technology and other fields, Chinese enterprises through cooperation with Hungary, not only can improve their own technology level, but also through Hungary to enter the European science and technology market.
Chinese cross-border e-commerce in Hungary
1 . Logistics Hub Construction
The China Europe Business Logistics Co-operation Park has become an important logistics base for cross-border e-commerce in China. The Watts Intelligent Warehouse Project in the Park has attracted many cross-border e-commerce platforms such as Cainiao, Pinduoduo and Xiyin, and has turned Hungary into a ‘distribution centre’ in Central and Eastern Europe.
2 . Localised operations
Many Chinese cross-border e-commerce companies have set up localised operation centres in Hungary to provide support such as warehousing, distribution and after-sales services to enhance customer satisfaction.
3. E-commerce platform expansion
China's cross-border e-commerce giant Temu entered the Hungarian market in 2023 and quickly gained an important share, with an order volume of more than 9 million in 2024 and a revenue of about 270 million euros.
The Shenzhen cross-border e-commerce company's ‘front shop and back warehouse’ model in the Budapest Airport Free Trade Zone is an important innovative layout in the European market, with the following significant advantages and features:
‘Innovative Model of ‘Front Store and Back Warehouse
Shenzhen cross-border e-commerce enterprises in the Budapest Airport Free Trade Zone (FTZ) ‘front shop and back warehouse’ model, through the establishment of a display shop and warehousing centre in the FTZ, to achieve the visual display of goods and efficient logistics and distribution. With the help of Budapest Airport's logistics network, the enterprise can deliver Chinese commodities to major cities in EU within 72 hours, and at the same time reduce the cost of returns and exchanges by 60% through localised warehousing, as well as realise one-stop processing of VAT tax by using the EU's OSS and IOSS systems to simplify the declaration process and reduce the cost of compliance. This model gives full play to the cross-border e-commerce policy advantages and the geographic and logistical convenience of the bonded zone, significantly enhancing the competitiveness of enterprises in the European market.
Conclusion
With its unique geographical advantages, policy dividends and market potential, Hungary has become the ‘invisible springboard’ for Chinese cross-border e-commerce to enter the European market. In the future, with the deepening cooperation between China and Hungary in the fields of economy and trade, science and technology, culture and other areas, Hungary will further consolidate its position as the ‘European bridgehead’ for Chinese cross-border e-commerce. Through the construction of logistics hubs, localised operations and the expansion of e-commerce platforms, the layout of Chinese cross-border e-commerce in Hungary will be more complete, injecting new vitality into China-EU economic and trade cooperation.
