APILOT cross-border e-commerce program in Hangzhou has been hailed a success with progress being made on several fronts as it continues to move forward.
The second Global Cross-border E-commerce Summit, which kicked off on October 26 at Hangzhou International Expo Center, saw a review of the achievements and practices of China’s first Cross-border E-commerce Comprehensive Pilot Area, since its induction in Hangzhou in 2015.
Shanchen Home is a Hangzhou-based manufacturing company, which exports products of home textiles and housewares to the US. The business was previously based on an OEM/ODM model, where retail products went directly into a foreign market with another merchant’s brand name.
Back in the 1990s and early 2000s this was the common practice among manufacturing companies in foreign trade. With rising costs in human resources and raw materials, the prices the OEM factories offered were no longer appealing compared to their Southeast and Central Asian competitors. Not only that but profits dropped greatly.
Last year, Shanchen was enrolled in the “Top 100” program, a collaboration between Amazon Global Selling and the e-commerce pilot area, that helps 100 companies in Hangzhou to sell their branded products to global customers on Amazon.
Amazon offers a one-stop service and guidance to those in need from products listing, online promotion, to warehouse storage and shipping solutions, which could have been unaffordable for small and medium sized enterprises in a traditional approach of foreign trade.
“With products reaching the end customers, cross-border e-commerce companies are able to price their products and establish a brand for their businesses,” said Cindy Tai, vice president of Amazon China and head of Amazon Global Selling Asia.
At the two-day summit, Amazon also announced together with the pilot area, the inauguration of Global Selling’s first offline outlet in China – Hangzhou Cross-border E-commerce Park. The park is set to draw in relevant service providers to cover every step in e-commerce export, including translation, logistics, custom clearance, taxing, e-store operation and etc.
Amazon is only one of the many partners that the pilot area works with. In May, Google AdWords, an online advertising tool, opened an experience center in Hangzhou. In June, Wish — a mobile e-commerce platform targeted at a younger generation — signed an agreement with the government in Xiaoshan District. In July, India’s biggest online payment company Paytm headquartered its e-commerce division Paytm Mall in Hangzhou.
“From day one, we have been making great efforts to boost the export trade. The main goal is to facilitate the upgrade of our manufacturing industry from ‘Made in China’ to ‘Created in China’,” Wu Changhong, chief of publicity department at the Cross-border E-commerce Comprehensive Pilot Area Committee, told Shanghai Daily.
Up to the end of September this year, the turnover in citywide cross-border e-commerce had reached US$7.26 billion, a rise of 27.88 percent from a year earlier. And export accounts for 70 percent of the trade, with a total value of US$5.07 billion.
For the past two years, the pilot area has established a “single window” online service portal to streamline the procedures on imports and exports. Presently 8,050 companies have registered online, with 2,768 focusing on B2B businesses.
It has also built 13 industry parks in 10 districts, counties and county-level cities. The impetus to supporting services such as finance, logistics and law is taking effects.
PingPong Global Solutions Inc, for example, is a company in the pilot area that deals specifically with international payments for Chinese e-commerce sellers. Within two years, it has served 100,000 customers nationwide with a peak transaction value of over 300 million yuan (US$45 million) on a daily basis.
“About half of the cross-border e-commerce businesses in south China is using our service,” Lu Shuai, CMO of PingPong revealed during a roundtable talk at the summit.
Before PingPong entered the market, there were only three companies globally offering similar services with a much higher expense. With the help of big data and other technologies, PingPong has cut the former commission fee by two thirds.
Last October, it opened a branch office in Luxembourg to serve a wider customer group in Europe.
At the summit, the government also launched the Hangzhou eWTP Pilot Area together with the Alibaba Group.
The eWTP or Electronic World Trade Platform was an initiative first proposed by Jack Ma, founder and executive chairman of the Alibaba Group and gained further support from the government.
It is a multilateral international collaboration platform that aims to set up new rules for international e-commerce, to benefit developing countries and SMEs, and to make easy “global sell” and “global buy” with the platform.
In March this year, eWTP’s first overseas digital free trade zone was officially launched in Malaysia. The cooperation between Alibaba and Malaysian government built an international logistics hub at Kuala Lumpur International Airport, providing service to facilitate cross-border e-commerce for businesses in Malaysia.
Apart from that, eWTP is also trying to promote best practices of the Hangzhou Pilot Area to other parts of the world, especially in Belt and Road countries, in the hope of re-connecting the ancient Silk Road with electronic businesses.
“If Hangzhou makes progress in setting up rules for cross-border e-commerce, it will be a great step for China in participating global governance,” Long Yongtu, former vice minister of the Ministry of Foreign Trade and Economic Cooperation and now the member of Council of Advisors, Bo’ao Forum for Asia, said at the summit. “I have great hopes in the pilot area.”