Payoneer Global (PAYO) Q1 2025 Earnings Call May 07, 2025 08:30 AM ET Company Participants Michelle Wang - Vice President-Investor RelationsJohn Caplan - Chief Executive OfficerBea Ordonez - Chief Financial OfficerDaniel Krebs - Senior AssociateWill Nance - Vice PresidentTrevor Williams - Managing DirectorSanjay Sakhrani - Managing Director Conference Call Participants Cristopher Kennedy - Research Analyst, Financial Services and Technology Operator Morning and thank you for standing by. Welcome to the Payo ...

Group 1 - The executive order signed by President Trump on April 2 imposes tariffs on cross-border e-commerce, significantly impacting trade between the U.S. and China [1][3] - The new tariffs will increase costs for U.S. consumers, who previously enjoyed low prices for goods from China, as they will now face additional charges [5][9] - The threshold for duty-free imports has changed, with items under $800 now subject to tariffs, leading to price increases for small goods [7][9] Group 2 - The tariff structure includes a 30% duty on the product price or a flat fee of $25 per item, which may rise to $50 after June 1 [9][11] - The majority of consumers purchasing these goods are middle and lower-income families in the U.S., increasing their economic burden [9][11] - Some foreign brands have ceased shipments to the U.S., and smaller American businesses are withdrawing from the market, reducing options for consumers accustomed to affordable Chinese products [15] Group 3 - China's manufacturing sector has grown significantly, accounting for 30% of global manufacturing by 2023, with a total output projected to reach 39.9 trillion yuan in 2024 [17][23] - The U.S. has historically relied on affordable Chinese goods, and the new tariffs may lead to higher prices for American consumers, particularly affecting the availability of low-cost products [27][31] - The CEO of a U.S. logistics company expresses concern over the impact of increased tariffs on supply chains, especially for small and medium-sized enterprises that rely on timely imports [31][33]

Core Viewpoint - The cancellation of the T86 customs clearance policy by the U.S. government marks a significant shift in global trade dynamics, particularly affecting Chinese cross-border sellers who previously benefited from this simplified customs process [1]. Group 1: T86 Customs Clearance Overview - T86 customs clearance, introduced in 2019, facilitated rapid growth in cross-border packages from China, with 1.36 billion packages processed in 2023, over 30% of which were Chinese goods [1]. - The policy allowed B2C e-commerce packages valued at ≤ $800 to be exempt from tariffs, simplifying the process through electronic declarations and reducing clearance time to 1-3 days [3]. Group 2: Impact of Policy Termination - The cancellation of T86 customs clearance presents multiple challenges for Chinese sellers, including increased customs costs and a significant decline in market competitiveness [5]. - The effective tax rate for Chinese goods will rise to 54% after May 2, with additional tariffs leading to a minimum charge of $25 for packages valued at $50, severely impacting profit margins [6]. Group 3: Strategic Responses - Chinese sellers are advised to build a "threefold moat" by localizing supply chains, enhancing product value, and diversifying market presence [5]. - Companies must adapt to the new regulatory environment by establishing compliance systems, leveraging digital tools for inventory management, and focusing on high-margin products [6]. Group 4: Industry Insights - The end of the T86 policy emphasizes the need for compliance-driven operations to avoid significant penalties and the importance of digital transformation to optimize supply chain efficiency [6]. - Companies should explore emerging markets and utilize multiple platforms to mitigate risks associated with over-reliance on a single market [6].

Core Viewpoint - The opening of the "Hanoi-Ezhou-Chicago" round-trip cargo route marks a significant expansion of international cargo services at Ezhou Huahu International Airport, enhancing its role as a logistics hub [1][3]. Group 1: Route Details - The cargo flight 5Y8244, carrying electronic products, retail clothing, and home goods, arrived at Ezhou Huahu International Airport on April 24 and will operate three hours later to Chicago, officially launching the new route [1]. - This route is the 10th international cargo route opened by Ezhou Huahu Airport in 2025, following the Copenhagen route opened on April 2, and is the 4th fifth freedom route [1][3]. Group 2: Operational Aspects - The route is operated by Apex International Logistics (China) Co., Ltd., with Atlas Air as the U.S. cargo operator, initially offering three flights per week, increasing to six flights per week starting May 21 [3]. - The cargo types include electronic products, auto parts, retail clothing, industrial products, and cross-border e-commerce goods [3]. Group 3: Efficiency and Strategic Importance - The new route utilizes a "one single waybill" approach, significantly reducing transit time at Ezhou Huahu Airport to 3-5 hours through battery document mutual recognition, thereby lowering operational costs and enhancing customs efficiency [3]. - The route aims to leverage the hub advantages of Ezhou Huahu Airport to establish a global air cargo network centered around the airport, facilitating cross-border e-commerce and multimodal transport integration [3].

Group 1 - The 137th China Import and Export Fair (Canton Fair) has opened in Guangzhou, showcasing Lianlian International's one-stop foreign trade payment solutions and multiple benefits [1][2] - Lianlian International has launched a foreign trade payment service that offers rapid fund collection, real-time currency exchange, and convenient supplier payments, addressing challenges faced by foreign trade enterprises [4][7] - The service has been implemented in over ten countries, including the USA, UK, Canada, UAE, Singapore, Australia, Mexico, Thailand, and the Philippines, covering more than 100 countries and regions [4][8] Group 2 - Lianlian International hosted the "AI + Consumer Electronics New Ecology" forum at the Canton Fair, where the "Consumer Electronics Export Country Opportunity Insight White Paper" was released [5][7] - The white paper aims to provide actionable guidelines for Chinese consumer electronics companies to develop differentiated export strategies and achieve high-quality growth in the global market [7] - The consumer electronics industry in China continues to lead the global market due to technological innovation and supply chain advantages, but companies face challenges such as policy fluctuations and complex cross-border fund management [7][8] Group 3 - Lianlian International offers comprehensive cross-border trade services, including one-click store setup, global payment collection, order management, global distribution, and tax refund services, covering a wide range of client types [8] - The company supports transactions in over 130 currencies and has served approximately 5.9 million clients globally [8]

Core Viewpoint - The article highlights the surge in foreign tourism to China, driven by policy changes and social media trends, creating new business opportunities for young entrepreneurs in the tourism and e-commerce sectors [3][4]. Group 1: Tourism Opportunities - The influx of foreign tourists, particularly from Russia, has led to a significant increase in demand for foreign language tour guides, with some individuals earning substantial income through guiding services [5][6]. - A Russian-speaking graduate reported earning 40,000 yuan in six months by working as a part-time tour guide, reflecting the growing market for foreign tourists in cities like Chengdu [5][10]. - Another individual transitioned from banking to full-time guiding in Shanghai, capitalizing on the rising number of foreign visitors and earning between 800 to 1,000 yuan per day [12][16]. Group 2: Social Media Influence - The article discusses the rapid growth of social media accounts targeting foreign audiences, with one individual gaining 300,000 followers in three days by creating engaging content for "TikTok refugees" [17][19]. - The influx of foreign users on platforms like Xiaohongshu (Little Red Book) has created a demand for content that explains Chinese culture and products, leading to opportunities for monetization [20][22]. Group 3: E-commerce Ventures - A young entrepreneur has successfully launched a cross-border e-commerce business selling crystals on TikTok, achieving profitability within three months by focusing on storytelling and unique product offerings [31][33]. - The strategy involves targeting a specific demographic (American women aged 25-40) and leveraging social media for marketing, which has proven effective in generating sales [33][35]. Group 4: Market Dynamics - The article notes the competitive landscape in the inbound tourism sector, with many new entrants leading to price wars and the need for innovative marketing strategies to attract customers [24][25]. - A travel entrepreneur emphasized the importance of understanding customer needs and creating tailored experiences, such as food tours and family visits, to stand out in a crowded market [26][27].