Electronic Trade Boom

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Electronic Trade Boom

China-ASEAN e-commerce collaboration expands By Yu Lintao

China’s huge market and strong consumption power are “very attractive”to traders from the Association of Southeast Asian Nations （ASEAN）， said Selina Eu， co-founder of e-commerce platform Monzter from Malaysia.

Monzter participated in the China-ASEAN Expo （CAEXPO） from September 11 to 14 in Nanning， capital city of south China’s Guangxi Zhuang Autonomous Region， for the first time in an attempt to enhance its visibility in the Chinese market. The company had announced its leap into the Chinese market at the 2016 Global Internet Economy Conference held in Beijing in late August.

Eu said during the CAEXPO that her company is already operating in countries such as Indonesia and Viet Nam， and China is its next priority.

She added that China’s favorable environment for e-commerce development and its mature technical services can help out ASEAN countries’ e-commerce sector. Monzter plans to locate its south China operation center in Nanning to boost cross-border e-commerce between China and ASEAN countries.

Cross-border e-commerce was a focus of this year’s CAEXPO. On the sidelines of the four-day event， the China-ASEAN E-commerce Summit 2016 and the Second China-ASEAN Information Harbor Forum were held.

While addressing the summit， Huang Shiyong， Vice Governor of Guangxi， said that e-commerce has redefined trade by opening up a new era for free trade. Along with the advancement of China-ASEAN cooperation， the development of cross-border ecommerce has become a top priority for all parties.

While some ASEAN e-commerce platforms such as Monzter are exploring the Chinese market， Chinese e-commerce giants such as the Alibaba Group and JD.com are also actively reaching out to the ASEAN market. As a result of huge market demand and policy support from both sides， cross-border e-commerce is expected to become a potential source of growth for China-ASEAN economic cooperation.

Huge potential

Yu Yong， Vice President of the Alibaba Group，told Beijing Review that there were more than 1 million registered business users from ASEAN countries trading with Chinese clients on Alibaba’s online marketplaces in 2015. “In the future， e-commerce will account for 30 percent of trade between China and ASEAN countries. The new business model does not aim to seize traditional trade turf， but to help expand trade between China and ASEAN—to make the cake bigger，” Yu said.

Yu added that ASEAN is one of the most promising regions for economic growth around the world， and Alibaba intends to expand its investment and operations in the region.

In April， Alibaba spent $1 billion to acquire online retailer Lazada Group with business operations in Singapore， Indonesia，Malaysia， the Philippines， Thailand and Viet Nam. The company has also invested in Singapore’s logistic enterprise Quantium Solutions International under SingPost and Thai e-payment company Ascend Money.

Many other Chinese e-commerce enterprises have also set their sights on the ASEAN market. Joining hands with the China Chamber of International Commerce，Suning.cn established the China-ASEAN E-Commerce Platform in September. Crossborder business-to-business e-commerce platform Osell has started operations in Laos，Viet Nam， Myanmar and Indonesia. China’s leading express company S.F. Express has also set up an overseas department and has begun to do business in Singapore， Malaysia，Thailand and Viet Nam.

Despite the fact that China’s foreign trade declined in 2015， its cross-border ecommerce grew at a remarkable pace. According to a report released by the China E-commerce Research Center， the country’s cross-border e-commerce volume amounted to 5.4 trillion yuan （$818 billion） in 2015， rising 28.6 percent from a year earlier. ASEAN was China’s third largest market for cross-border e-commerce， taking up 11.4percent of the total value of transactions，behind only the United States and the EU.

At the e-commerce summit during the CAEXPO， Buhn Bhuchongchroen， General Manager of the Overseas Department of the Thailand E-commerce Association for Tourism Business， said that e-commerce is one of the most important aspects of the economic blueprint proposed by Thai Prime Minister Prayuth Chan-ocha. He added that the Thai Government attaches great importance to cooperation with China in the field of e-commerce.

The Indonesian Pavilion at this year’s China-ASEAN Expo in Nanning， south China’s Guangxi Zhuang Autonomous Region

Chinese e-commerce enterprises hold promotional activities during the 2015 China-ASEAN Expo in Nanning， Guangxi Zhuang Autonomous Region

“In the past， a product sent from Thailand to China needed about one month to be delivered， but that can now be done in three days. Convenient logistic services will further enhance e-commerce cooperation between China and Thailand，” Buhn said.

In an interview with Beijing Review，Toe Aung Myint， Permanent Secretary of Myanmar’s Ministry of Commerce， said that since younger generations have become used to online consumption， e-commerce has great potential in his country. Chinese smartphone brands Huawei， Xiaomi and Lenovo are popular in Myanmar， while jade and jewelry are among the most soughtafter commodities Chinese consumers buy from Myanmar， according to him.

“E-commerce is one of the priorities of the Government of Myanmar. We hope China and Myanmar can strengthen cooperation in this field，” said the Myanmarese official. “China is an important trading partner of Myanmar. I believe cross-border e-commerce will enhance bilateral economic and trade relations.”

A recent report released by global growth consulting firm Frost & Sullivan， Analysis of Southeast Asian E-Commerce Market， shows the great potential of ASEAN’s e-commerce market. It said that Southeast Asia is poised to become one of the world’s fastestgrowing regions for e-commerce revenue，exceeding $25 billion by 2020.

The report attributed the growing ecommerce market in Southeast Asia to the rapid rate of Internet penetration in the region. The fast expansion of China’s e-commerce market is providing further impetus for online retail growth in Southeast Asia， it asserted.

In 2015， e-commerce revenue in China represented 12.1 percent of total retail sales，surpassing the United States， the EU and Japan. Given the prevalence of e-commerce in China，Southeast Asia is likely to follow a similar upward trajectory， according to the report. This is despite the fact that at present， e-commerce represents less than 2.5 percent of all retail sales in Southeast Asia. According to the White Paper on China and ASEAN Information Technology Development and Cooperation released on September 11， China’s rising cross-border ecommerce will seek to tap into an estimated 400 million potential users under the ASEAN umbrella.

Supporting measures

While opportunities for China-ASEAN ecommerce cooperation are immense， the lack of Internet and logistics infrastructure in Southeast Asia poses an obstacle for future growth.

The China-ASEAN Information Harbor，headquartered in Nanning， was set up in 2014 to tackle this issue under the framework of the Silk Road Economic Belt and 21st-Century Maritime Silk Road （Belt and Road） Initiative proposed by China as well as through the joint efforts of both China and ASEAN countries. The institution is tasked with boosting cooperation between China and ASEAN countries via Internet connectivity and information sharing.

Ma Jixian， Deputy Director of the Guangxi Regional Department of Commerce， said during the CAEXPO that the establishment of the information hub will build a solid road for cross-border e-commerce between China and ASEAN countries.

The information harbor plans to accelerate the construction of Internet and telecommunications facilities in countries along the 21st-Century Maritime Silk Road，lengthen the reach of fiber-optic cables and upgrade broadband connections in poverty-stricken regions. These measures seek to enable more people living in the region to access the benefits of the Internet.

According to Wen Ku， an official with China’s Ministry of Industry and Information Technology， since the establishment of the information hub， 16 cross-border land cables and several submarine cables have been laid between China and ASEAN countries to promote interconnectivity.

In addition， through the advancement of the Belt and Road Initiative， infrastructure construction in ASEAN countries is expected to improve gradually and interconnectivity enhanced， which will accelerate the growth of cross-border ecommerce between all countries involved in the project.

Besides improving basic infrastructure for China-ASEAN cross-border e-commerce， participants are also strengthening collaboration on the construction of supporting systems. On the sidelines of the CAEXPO， officials and experts from China and ASEAN countries also discussed cooperation in terms of intellectual property protection as well as the establishment of online payment and comprehensive service platforms. ■

Copyedited by Bryan Michael Galvan

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