E-commerce pilot zones, diversified global channels key to the sector's growth, say experts

The novel coronavirus outbreak will speed up the reshuffle in cross-border e-commerce in the medium to long term, as the sector faces some difficulties such as a decline in orders, insufficient sources of goods and rising logistics costs, industry insiders said.

They indicated cross-border e-commerce enterprises with limited capital and low operating efficiency are likely to be knocked out. Risk prevention and control capabilities in the supply chain have become increasingly important as companies seek to extend their global reach.

"Some countries have taken restrictive measures such as canceling flights and increased inspection and quarantine requirements for imported goods, which have had an impact on China's cross-border e-commerce, especially in the export trade," China International Electronic Commerce Center analyst Li Mingtao said.

Li suggested more diversified and convenient commodity circulation channels should be created for those e-commerce enterprises to deepen international cooperation in e-trade under the auspices of the Belt and Road Initiative.

The nation's comprehensive cross-border e-commerce pilot zones should play a role in boosting imports and exports. Overseas warehouses are encouraged to offer resources for small and medium-sized enterprises, Li added.

DHgate.com, a Chinese cross-border business-to-business e-commerce platform, said the epidemic caused insufficient stocks for most sellers, and over half have run out of stock.

Last month, logistics services faced the challenge of workforce shortages. This caused a backlog in goods, followed by a decline in the average transaction value of commodities and higher refunds.

"China and other countries should cooperate to solve the supply-demand gap and improve the business environment of SMEs through e-commerce," said Diane Wang, founder and CEO of DHgate.com.

Wang added they have encouraged traditional offline merchants in key provinces across the nation to go online and help companies put offline inventory online. They also supported domestic sellers by helping them retain overseas buyers.

The company launched a customer retention program, actively contacted buyers through various means such as in-site messages to explain the epidemic situation, and issued coupons to compensate customers.

DHgate.com vowed to provide a faster delivery service. They guaranteed customers in the United States and Europe will get their goods within six working days. Customers in France, Australia, Spain, Brazil, and Russia can receive orders in under 12 working days.

It also called for the establishment of an online Silk Road, empowering SMEs in China and bringing China's digital experience to help SMEs in other countries.

Jiang Yanzhao, deputy manager of the international network division of China Post's international business department, said they drafted plans to boost international transport capacity by operating overtime cargo aircraft and overseas transshipments.

"The sales revenues of cross-border e-commerce platforms are expected to decline in the first half of this year due to the outbreak," said Zhang Zhouping, a senior analyst at domestic research house the Internet Economy Institute.

Zhang added smaller companies engaged in the cross-border e-commerce business face insufficient stocks and delayed logistics services.

China's cross-border e-commerce sector has grown exponentially as the country's middle and high-income shoppers demand increasingly diversified and personalized products and services. Market consultancy iiMedia Research said market size of the country's cross-border online shopping has been expected to rise to 10.8 trillion yuan ($1.5 trillion) in 2019.

Ymatou, a Shanghai-based crossborder e-commerce site, said its users tend to buy jewelry, cosmetics and bags from overseas buyers through livestreaming amid the COVID-19 epidemic.

Zeng Bibo, chief executive officer of Ymatou, said international logistics efficiency has been influenced by the outbreak.

Zeng added the consumption of high-priced goods worth from 2,000 to 5,000 yuan might be affected, but ordinary commodities priced between 300 to 800 yuan were acceptable for buyers.