E—commerce Drives China—Vietnam Border Trade

Technology provides new ways for entrepreneurs to attract customers in thriving border region

“I came to Dongxing to do e-commerce in 2010. At first I was mainly engaged in online sales of Vietnamese food and rosewood handicrafts， and then in 2014 I started to sell agarwood and related products. Vietnam is the main source of goods， because the cost of border trade is lower than that through other channels，” explained Lu Zengchen from Binyang in China’s Guangxi Zhuang Autonomous Region. The ideal location and favorable business environment are what attracted him to Dongxing， a county-level city of Guangxi on the China-Vietnam border.

Thanks to the city’s geographic location in the frontier region and favorable policies related to its role as a national key pilot zone for development and opening-up， cross-border e-commerce is thriving here. Dongxing e-commerce sales exceeded 1.7 billion yuan （US$260 million） from January to July this year， a year-on-year growth of 20.53 percent. In the e-commerce development index of Chinese counties issued by Ali Research， Dongxing topped the list of 30 counties for three consecutive years， ranking first in Guangxi.

Small-scale E-commerce Booms

Entering Lu’s home， rows of shelves came into sight， displaying a variety of agarwood and its accessory products， such as incense sticks， sliced agarwood， powdered agarwood and incense holders. There were also stacks of cartons for packaging on the floor. “After purchasing raw materials from Vietnam， simple processing will be done on the first floor or commissioned to other companies，” Lu said. This 600-square-meter building is both Lu’s home and his office. The second floor is for online shop operations， and the third floor and above is for residential use. On the second floor， two customer service representatives were concentrating on their work. Next to them was a studio for photographing their goods.

“I had an offline shop before， but the market was very limited. Now I have opened shops on online platforms like Taobao and WeChat and monthly sales total about 100，000 yuan （US$15，000），” Lu said. Apart from Lu and his wife， his small business has four employees responsible for customer service， graphic design and overall operations.

In 2015， Lu met his Vietnamese wife Nguyen Thi Thu Thao through a friend. “I studied Chinese at the Xiamen campus of Huaqiao University， and this experience helped me become better accustomed to life in China，” Nguyen said. She assists her husband in managing their online shops. She is also responsible for communication with Vietnamese clients.

Now， Dongxing is home to more than 2，000 online shops like Lu’s， up from only around 100 in 2008. Rapid development of e-commerce has also given rise to some problems for entrepreneurs here. According to Lu， a lack of talent is the biggest challenge at present. “We urgently need talented people who can work on cross-border e-commerce in Dongxing. People from other places are reluctant to work here， so it’s difficult for us to recruit，” Lu explained.

To improve talent attraction and personnel training， a five-year development plan on e-commerce in Dongxing has been formulated， the Dongxing e-commerce public service center has been established， and cooperation with higher-education institutions has been launched. “To meet the great demand of technical personnel for cross-border e-commerce， we are now making active efforts to carry out related training programs，” said Chen Xiwen， secretary-general of the Dongxing E-commerce Association.

“Dongxing e-commerce features a large number of small and medium sellers， and they are the key drivers of the market，” Chen added. So far， a total of 2，306 e-commerce businesses are based in Dongxing， with more than 20，000 people employed. Eighty-three logistics and courier companies deliver over 65，000 items across the border every day.

Evolving Frontier Trade

As the trade between Dongxing and Mong Cai across the China-Vietnam border becomes increasingly frequent， traditional forms of frontier trade have proven insufficient. As a result， a number of cross-border e-commerce platforms have been set up， including 89bay.com， baiannet.com and 1eby.cn.

Different from many other small e-commerce players， 89bay.com was established on the foundation of the Dongxing border trade zone. The platform creates new methods of cross-border settlement and provides one-stop service for clients. Buyers and sellers are able to conduct online transactions on the website.

“In 2015， we kicked off a project for upgrading the online cross-border trade and streamlining the transaction process，” said 89bay.com General Manager Qi Yousheng. The platform offers transaction information and plays a role in customs supervision. Its average daily trade volume is about 10 million yuan （US$1.5 million）.

89bay.com is also an incubator for China-Vietnam border trade. Many businesspeople and citizens take training courses on cross-border e-commerce. The real-time transaction information is displayed on a large screen. Some people stare at the screen while trading on the platform.

In addition to 89bay.com， baiannet.com and 1eby.cn are also important platforms specializing in cross-border online trade. Baiannet.com is a third party trading platform for online commodity trading. 1eby.cn features Dongxing products， Vietnamese products and a trading platform for quality goods， exploring the sharing economy in the border region.

With the participation of the Alibaba global supply procurement platform and the JD.com China Pavilion in the Dongxing market， e-commerce in the city is constantly being enriched. Now， Dongxing is home to 2，162 e-commerce businesses， three e-commerce platforms and a financial settlement platform. These companies are trading more than 400 types of products from all industries， ranging from rosewood furniture， rosewood handicrafts and agarwood products to fresh produce and packaged food. Well-known brands include Dongqi Agarwood， Wancheng Produce and the Zhongyi Company.

In addition to its geographic location， favorable policies of the national key pilot zone for development and opening-up also play an important role in promoting cross-border e-commerce in Dongxing. “Our next step is to strengthen cooperation with the Vietnamese side to foster the model of frontier trade plus e-commerce. We will launch matchmaking services for enterprises of the two countries and e-commerce will play a bigger role in raising citizens’ income，” Chen said.