Exporters with digital channels find it easier to survive COVID-19
By Global Business and Chen Tong
Global foreign trade has slowed remarkably in recent months as the coronavirus pandemic spread internationally. But export-oriented companies who have online channels will likely find it easier to survive than those who don't.
Cross border e-commerce business is hardly new here in China. While many Chinese shoppers can now buy foreign products via e-commerce sites, domestic companies have also been using them as a route for exports. That preparation paid off for Chinese firms during the pandemic, enabling them to continue to serve foreign customers.
"Companies have developed digital channels have been more resilient and easier to survive," said Diane Wang, CEO of DHgate.com, a business-to-business (B2B) online wholesale platform.
Hangzhou Seaknight is a cross-border fishing gear company. As with most exporters, it has seen its business hit hard by the pandemic in February and March when cross-border shipping came to a virtual halt. But starting from May, sales had actually risen by more than 20 percent from a year ago.
That surge was mainly because of strategy shift that focused on developing online channels, such as Amazon and AliExpress, and using foreign KOLs to market products online, according to Shi Hongxiang, the company's partner.
Official data indicated that foreign trade on cross-border shopping platforms surged by almost 35 percent in the first quarter of 2020, despite an overall slowdown in the country's exports and imports during the same period.
To take Alibaba's cross border e-commerce platform AliExpress as an example, data shows that its website clicks in Spain and Italy jumped by double digits during the pandemic, while in Russia, sales during June's special promotions hit more than 100 million U.S. dollars.
"In China, selling is no longer just about sales, but has to do with broadcasting, KOLs, and social media interactions. We've brought that mature business model to oversea markets. We expect to hire one million foreign KOLs in the next three years to help our sellers reach foreign buyers," said Zhang Qi, director of Aliexpress Global Consumer and Market Operation.
Wang advised companies without digital solutions should prepare to go online as fast as they need to. And that comment resembled a recent study from the World Trade Organization.
The study highlighted that the pandemic has made it clear that "e-commerce can support small businesses and be an economic driver for both domestic growth and international trade.”
"E-commerce could benefit from looking at greater international cooperation to facilitate the cross-border movement of goods and services, narrow the digital divide, and level the playing field for micro, small and medium-sized enterprises (MSMEs)," the study cited.
To better use e-commerce tools, companies could diversify product sourcing and supplying, expand market access, as well as integrate digital solutions such as digital payments and smart financing solutions, said Wang.