eBay Packages From Mainland China/Hong Kong

People have wondered how some sellers on eBay can sell items (e.g. handphone cases) including postage, for less than the cost of local mail in their countries. e.g. I just bought 50 tiny magnets for USD$0.99 at Buy It Now price, and if you buy from auctions you can probably get a phone case for less than USD$1, all including postage.

My theories are:

1. They have an "unlimited" plan, that lets them send an unlimited amount of overseas mail for a fixed price.
2. They're selling things at a loss to build reputation.

There's been a new development. Recently, 3 of my packages from eBay arrived with LOCAL return addresses and postage stamps. The local address is:
4PX Worldwide Express
Co Ltd C/O Airpak
Express Pte Ltd 30 Kaki
Bukit Road 3. #06-03/04
Empire Techno Centre
In addition, they are arriving MUCH faster - as little as 7 days from purchase date, compared to 3 weeks in the past. I wonder what they're doing, maybe sending a big package together and distributing it locally? But the much faster shipping rate makes me very happy.

Update 26 Aug 2015
I found another reason for the slow shipping. If you have a package with tracking, you can see this:

They actually open the package for inspection before it leaves the country
.