Public, private sectors rev up support for cross-border e-commerce

In 2004, the second year after SARS raged across China, Diane Wang founded DHgate.com. Over the years of ups and downs, the B2B e-commerce trading and service platform has helped many small- and micro-sized enterprises to conduct business across the border. This year, when COVID-19 broke out, she felt that the website's mission became even more important.

An employee loads packages for cross-border shipment onto a truck at a warehouse in Hekou, Yunnan province, on March 20, 2020. [Photo/China News Service]

Wang said she has seen China's trading companies going through much hardship since the outbreak. At the beginning of the year when the epidemic began to plague the country, businesses faced difficulties in maintaining operations and filling orders from abroad. Now, the spread of COVID-19 has eased in the country but swept across the globe, hitting the companies a second time and bringing along serious new challenges — decreased demands, plunging logistics capacity, and notable pressure on cash flow.

"The year 2020 can be a year of life and death for many small- and micro-sized enterprises in the foreign trade sector," Wang said during a live TED-style webcast by business magazine China Entrepreneur. "So it is urgent to make routine-breaking moves." Fortunately, both the government and e-commerce platforms in China have mounted up their support for such companies.

Non-guarantee concessional loans

Leading the DHgate.com team, Wang made her moves to offer help.

On Feb. 5, the third day after the Chinese New Year holiday, DHgate.com updated the agreement with the state-owned China Construction Bank (CCB) on an e-commerce loan product that they launched together last December, lowering the interest rate for cross-border sellers on the platform from 5% to 4.5%.

Beyond the financial aspect, the platform also offers support on logistics. It invited China Post—one of the major logistics providers for exporting e-commerce goods from China—to brief companies on logistics services during the outbreak and answer their questions in a live webcast. It drew more than 12,000 views and prompted nearly 1,000 online interactions.

Charter cargo flights

Wang was never fighting against the setbacks during the trying time alone, as the country witnessed rapidly developing cross-border e-commerce businesses.

Xu Ping, head of the Henan Bonded Group, has been doing her part to cope with challenges in the field, one of them being international shipping.

While participating in an online cross-border e-commerce development forum on March 22, Xu said the cargo-carrying capacity of international passenger flights is down over 80%, and charter flights came to be the only solution for transporting cargo over trunk international air routes.

On April 8, the first charter plane of China Gate Logistics (CGL)—a subsidiary of the Henan Bonded Group—took off with cross-border e-commerce cargo as well as donated COVID-19 prevention supplies, and headed for Europe.

With a price 20% lower than the market price offered to the companies in the Henan Bonded Logistics Center, the cargo spaces had been booked up within three days after being opened up for application.After the cargo plane landed in Belgium, the cargo went through customs clearance and went on expedited routes to other European countries.

Now, the Zhengzhou-Liege European charter flights operate twice a week regularly. CGL is also planning to offer charter flights to North America soon, with a frequency of three times a week. The first flight to New York has been scheduled for May 1.

China-Europe freight trains

As air cargo companies finds solutions for cross-border e-commerce, so does shipping businesses on the ground, especially China's enormous rail freight sector.

China-Europe Railway Express. [Photo/Xinhua]

On April 7, China's State Council put forward a string of measures to boost cross-border e-commerce and foreign trade. It plans to establish 46 new cross-border e-commerce pilot zones in addition to the existing 59 ones, and make further efforts to smooth international freight channels such as China-Europe freight trains and improve cargo connections.

Even before this call for action, those cargo transport trains had already been on the move. On April 6, the first China-Europe freight trains specifically for postal parcels left Chongqing with 42 containers of international parcels and two containers of relief supplies, scheduled to arrive in Lithuania on April 13.

A new line of freight trains was also opened from Xi'an to Barcelona on April 8, and trains from Wuhan have also begun to resume normal operations.

According to data from China Railway, in the first three months of this year, the China-Europe freight trains fulfilled 1,941 runs and sent 174,000 standard containers, up 15% and 18% year on year, respectively. The number of runs and containers sent in March both registered record highs.

Suggestions and more calls for action

"What we should think amid the outbreak is how to be worthy of the chances brought by the crisis, and make progress and get stronger," DHgate.com's Diane Wang said.

Recalling that many companies managed to rapidly adapt and go online in order to survive the 2003 SARS outbreak and thrive, Wang said the digital transformation amid the COVID-19 outbreak will again be very important.

She also called for coordination among cross-border e-commerce companies as well as for more efforts from the Chinese side to help other countries build their e-commerce ecosystem.

Henan Bonded Group's Xu said she noticed that cross-border e-commerce already gained more traction among people and small- and micro-sized enterprises around the world amid the outbreak.

She said the outbreak can be an opportunity to promote cross-border e-commerce—a new growth engine for foreign trade—as the habits of people across the world come to change and the sector come to realize what it falls short of, such as the last-kilometer delivery in overseas countries.

Speaking at the same forum as Xu, State Council Counsellor Tang Min said that, despite non-contact sectors seeing an overall rapid growth in the past two months, individual companies did not necessarily see such a trend in their businesses.

However, “confidence is more important than gold during the unprecedented hard time,” Tang said. Addressing companies coping with impacts of the outbreak, he said, "You are not fighting alone. The country, the government, the industrial associations, the customers, and many others are with you."

Editor: John Li