E-commerce provides boost for China-ASEAN trade

NANNING - Yang Hong, vice-president of Vietnamese footwear company Binh Tien Imex (Biti's) has not missed a single China-ASEAN Expo in 14 years.

During the period, Biti's has become an increasingly popular brand in China, with supply often falling short of demand. But at the ongoing 14th China-ASEAN Expo, Yang admits he has worries.

"To expand our businesses in China, we have to find bigger, influential partners instead of continuing to rely on small distributors, who often do not enjoy tax advantages and have limited channels to sell," Yang says.

One of the solutions is to expand the business online. Yang says the company is already in talks with Chinese e-commerce giants such as Alibaba for potential cooperation. E-commerce could add 1-2 million yuan (about $152,750 to 305,500) to the company's sales every month, Yang says.

An increasing number of companies in ASEAN are seeing e-commerce as a new growth engine for China-ASEAN trade. E-commerce giants are also trying to tap into a market with a population of about 2 billion and growing purchasing power.

"China and ASEAN has great potential for cooperation in e-commerce," says Qian Keming, China's vice minister of commerce, on the sidelines of the expo, which runs from Tuesday to Friday in Nanning, capital of south China's Guangxi Zhuang autonomous region.

Many Chinese e-commerce companies have already launched campaigns in ASEAN, improving bilateral trade. JD.com, for example, sold more than 115,000 Thai durians to Chinese customers in a single day in May, a record on its fresh food e-commerce platform.

Suning.com, another e-commerce platform in China, operates a China-ASEAN e-commerce platform, which was established in late 2016. It has had well over 1.2 million orders and sales over 26 million yuan.

"For Suning's overseas operation, the Southeast Asia market is of significant strategic value," said Fan Chunyan, vice president of Suning.com.

On the sidelines of the expo, the Guangxi branch of China Post signed a memorandum of understanding with the Malaysia External Trade Development Corporation, promising to sell Malaysian products, including coffee and beauty products, on its e-commerce portal ule.com.

Ong Ka Chuan, second minister of the Malaysian International Trade and Industry Ministry, says he believes China's success in e-commerce could assist ASEAN to build a platform for businesses to grow and integrate into the global eco-system.

China and ASEAN will have more cooperation opportunities in e-commerce with the help of the Belt and Road Initiative, he says.

For e-commerce to further gain steam in ASEAN, many challenges remain, such as in logistics. Tao Yu, vice president of DHGate.com, a cross-border e-commerce site, says customs clearance in some ASEAN countries can still be relatively complicated, requiring local as well as cross-border e-commerce companies to better cope with the issue.

Another challenge comes from cross-border payment methods. While third-party mobile and online payment platforms such as Alipay and WeChat Pay have gained increasing popularity in China, their presence in ASEAN is still very limited.

Pornchai Tarkulwaranont, vice minister of Thailand's Ministry of Science and Technology, says the use of digital currency and online payments is the most important factor to speed up the growth of e-commerce in ASEAN.

Advanced technologies such as blockchain are considered as solutions to cross-border payment, and many ASEAN countries, including Thailand, are already experimenting with them, he says.