Improving BRICS E—commerce Cooperation

Cross-border e-commerce is expected to be a priority of BRICS cooperation in the next 10 years

The 9th BRICS Summit， a meeting of the leaders of Brazil， Russia， India， China and South Africa， is set to take place Sept. 3-5 in Xiamen in southeast China's Fujian Province. This meeting is widely expected to usher in the next \"Golden Decade\" of BRICS cooperation. Economic and trade cooperation has been a priority of BRICS cooperation for many years. The 7th Meeting of BRICS Trade Ministers in Shanghai on Aug. 1-2 marked a good start for BRICS economic and trade cooperation in the upcoming “Golden Decade”.

At a press conference held after the Shanghai meeting， Chinese Minister of Commerce Zhong Shan told reporters that trade ministers reached consensus on a number of important issues including trade facilitation， economic and technological cooperation， capacity building and the multilateral trade system， and approved the Joint Declaration of the 7th Meeting of the BRICS Trade Ministers. The ministers also agreed that “in the foreseeable future， e-commerce will be a new driver of BRICS economic and trade cooperation” and approved the BRICS E-commerce Cooperation Initiative.

Why then do BRICS countries focus their attention on e-commerce？ What is the initiative about？ What impact will the initiative have on BRICS e-commerce cooperation？

Timely and Realistic

In an interview with China Report ASEAN， Zhang Li， deputy director of the E-commerce Institute of the Chinese Academy of International Trade and Economic Cooperation （CAITEC， under the Chinese Ministry of Commerce）， said that based on the current status of the global economy， e-commerce is an important driver of economic growth around the world. It is only natural that BRICS countries focus on e-commerce cooperation as a way to integrate into global economic development and the global value chain.

BRICS countries have good reasons to focus more on e-commerce， thanks to the rapid development BRICS countries have achieved in the e-commerce field， the growth rate of which is highest in China and India.

“We have laid a solid foundation for BRICS cooperation in this area，” Zhang said.

According to the E-commerce in China 2016 report released by the Chinese Ministry of Commerce in April， China’s e-commerce transactions in 2016 were worth 26.1 trillion yuan （US$4 trillion）， a year-on-year increase of 20 percent， accounting for nearly 40 percent of the global retail e-commerce market. According to Statista， a German market research firm， India is the fastest-growing e-commerce market in the Asia Pacific region， with its sales volume in 2016 reaching US$16 billion. These sales figures are expected to reach US$45 billion by 2021. American financial services firm Morgan Stanley forecasts that India’s e-commerce industry will reach US$119 billion in value by 2020.

Bai Ming， a researcher at CAITEC， said that the large number of small and medium enterprises （SMEs） in BRICS countries is another factor that will contribute to the success of e-commerce. It has been a priority of the Chinese government， as well as other BRICS governments， to promote the development of SMEs. Unfortunately， due to the high cost of traditional offline transactions， successful transnational cooperation between SMEs is often difficult to achieve. E-commerce， with its low costs and high efficiency， will provide SMEs with new options for trade.

BRICS E-commerce Working Group

BRICS e-commerce cooperation started in 2014， with private businesses and academic institutions as major players. The agreement on the BRICS E-commerce Cooperation Initiative marks the start of cooperation at the national level. Bai believes that the establishment of the BRICS working group on e-commerce is the highlight of the initiative， and BRICS pragmatic cooperation in e-commerce will be institutionalized with rules and regulations.

Bai further noted that cross-border e-commerce will enable the two-way flow of commodities between China and other BRICS countries. In order to succeed， some businesses may apply the B2C model to deliver their commodities to consumers in destination countries directly. How can the relevant authorities exercise effective supervision of cross-border e-commerce activities？ With a BRICS working group on e-commerce， BRICS countries can work on standards， rules and regulations for the relevant authorities to exercise real-time supervision of cross-border e-commerce activities and share information with others， creating an environment for the healthy development of BRICS e-commerce cooperation.

Zhang believes that the establishment of the working group is significant in promoting common e-commerce development among BRICS countries. In 2016， China’s e-commerce transactions accounted for 40 percent of the global retail e-commerce market. Compared with other BRICS countries， China is in a leading position in e-commerce in terms of both market size and growth rate. In addition， in recent years， Chinese e-commerce giants such as Alibaba， as well as research and higher education institutions， have accumulated significant practical and theoretical experience in e-commerce platform construction， logistics and e-payments， the knowledge of which can be replicated and shared. Therefore， it’s essential for China to play a leading role and share its experience with others for common development.

According to the Ministry of Commerce， the BRICS e-commerce cooperation initiative was first proposed by China at the BRICS expert dialogue on e-commerce in May this year. Zhang said that reflects China’s sincerity for the development of BRICS e-commerce cooperation. The establishment of the BRICS working group on e-commerce provides a platform for further cooperation.