E-commerce to focus on retail, cross-border trade, service sector, commerce bureau says

Chengdu plans to create more e-commerce businesses within a decade, in a bid to give the city an edge over competitors in the fields of heavy industry, low-profit export manufacturing and estate development.

Eager to diversify its economy, Chengdu's government implemented a number of policies, such as Chengdu's E-commerce Development Plan (2012-2015) and Promoting the Quick and Healthy Development of Chengdu's E-commerce Industry (2013-2015), to assist in such things as online payment services and cross-border logistics, as well as offering favorable policies to attract e-commerce enterprises from other parts of the country to settle in the city.

Peng Jun, director of the commercial service department at the Chengdu commerce bureau, said that as e-commerce has grown, the city's private companies have benefited from the low-cost means of reaching more customers. "Chengdu is considered a model e-commerce city for several reasons: It has a rapidly growing economy that influences neighboring areas, a strong industrial base, a sound environment for e-commerce development, a complete e-commerce support system, an improved logistics distribution system, and technology and talent support services," Peng said.

With large companies such as JD.com, China's second-biggest business-to-customer e-commerce company, moving divisions into Chengdu, and the city's e-commerce foundation projects concentrating in six industrial parks, Chengdu aims to generate up to 600 billion yuan ($96 billion) worth of business transactions on its e-commerce platforms by 2015, taking more than 10 percent of the city's total retail sales of consumer goods.

As e-commerce has proven itself to be a new powerhouse for the nation's economic growth, Xu Zhen, secretary-general of Chengdu's E-commerce Association, said it will continue to expand online commerce over the coming years with a focus on such key areas as cross-border trade, retail, online sales of Sichuan agricultural products and the service sector.

Milanoo.com, a Chengdu-based fashion website selling dresses, shoes, handbags and jewelry in 170 countries and regions, is one of many companies that reflect this trend. It plans to expand its multilingual customer service center overseas as international orders pour in, a company official said.

The company will enlarge its current customer service center in India and establish a new one in Moscow for the Russian market. It also will open its first overseas showroom this year in Paris.

Milanoo initially focused on selling wedding gowns to developed markets, but it now offers a wide range of affordable garments, including children's wear, costumes and business-casual attire.

Nine languages, including German, Japanese, Italian and Portuguese, are available on its online trading platform, and its average daily visitor number averages about 100,000, the company said. As most of the website's customers are from France, Spain, Italy, Bulgaria and the United States, the company plans to open more showrooms in those countries over the next three years.

"Making a big overseas move is a logical next step for us," said Xu Yuan, vice-president of Milanoo. "Many European and US garment brands are having problems, as many of their expansion plans both at home and in international markets have been limited by the slow economic recovery, as well as by changing shopping habits in those markets.

"This is an opportunity for e-commerce companies like ours to grab more market share," Xu said. The company's sales revenue rose 80 percent in 2013 from a year earlier. The company's headquarters in Chengdu is responsible for making the decisions to develop and diversify business categories, as well as providing technical support, while other functions, including the product supply chain, express distribution network, and online customer and payment services, are distributed around the world.

"An increasing number of e-commerce companies in Chengdu started providing English websites targeting US and European customers when they decided to go global," said Liu Shiqing, a researcher at Sichuan Academy of Social Sciences in Chengdu.

Liu said some of the e-commerce companies' efforts to expand came after domestic market conditions became tougher. Many players have been competing head-to-head, with cutthroat price wars, which lure users but have cut into profit margins, in the past two years.

"Under such circumstances, taking the business on a global level will help Chengdu's e-commerce players gain higher profits and seek more share from international markets."

Contact the writer at zhongnan@chinadaily.com.cn

Visitors try two-dimensional code services at an international e-commerce expo in Guangzhou. A number of Chinese cities, including Chengdu, capital of Sichuan province, are promoting e-commerce as a new and vital means to enhance their local economy. Zou Zhongpin / China Daily

(China Daily 05/23/2014 page15)