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Event Review: Ecommerce & trade in a covid Age

Ecommerce & Trade in a covid age

To kick off the year of the tiger, the New Zealand Chinese Trade Association Young Associates held their first event of the year virtually. In this Covid-Era, businesses are having to adapt to new ecommerce trends to drive sales and maintain growth. In this webinar an audience of students and young professionals had the opportunity to chime into two experts in the field, Olivia Shen from OS consulting and Pier Smulders from Alibaba.

Olivia Shen started off with introducing to us the concept of social commerce. This is the convergence of e-commerce and social media where brands engaging in social commerce use social media platforms as vehicles to sell products and services. Where it used to be the case that brands would raise awareness of products on social media and use another ecommerce platform for payment, we are now seeing social media platforms integrating shopping functions.

Olivia then goes on to discuss the different digital platforms in the China market, and touches upon some of the main players including Litttle Red Book (LBR) and WeChat.. These platforms are increasingly investing in more research and development to capture the full length of the customers' buyers journey and strategically keeping customers on the platform for as long as they can. Olivia then goes over the overall digital landscape in China, and how it has developed over the past two decades from web 1.0 to web 3.0, blogging - images - video. Now with the post covid pandemic we are seeing a new wave of e-commerce trends in web 4.0, not just with key opinion leaders but now key opinion customers. Wechat in China, allows consumers to livestream and drive opinions. Social media is rapidly expanding and she notes the uncertain and opportunistic opportunities with the implementation of VR and AR technologies in the next few years.

Next we had Pier Smulders, where he discusses how overseas brands can tap into the Chinese consumer market through ecommerce. Firstly, he notes the perspective of not looking just west but east in analysing consumer trends. He believes one reason western companies have failed recently is that they look for inspiration from the US and Europe for innovation and technology, but that is only half of the story. The point is looking at China and Asia not as just a potential market to sell in but what the consumer drivers are in increasing trends coming out of the region.

Secondly, he briefly discusses Alibaba’s history and its significance in China’s ecommerce space. Some interesting statistics he notes are that Alibaba generated 1.2 trillion USD in gross merchandise volume in 2021, with 90% in the local Chinese economy and 10% globally.

Everyone knows Shanghai's lockdown and overall climate has slowed down e-commerce growth. With lockdown restrictions there has been an emergence of cross border e-commerce. In a Chinese perspective this is where foreign products (outside of China) can enter via bonded warehouses, pay cross border tax and are not subject to China domestic product regulation, and only applies to several categories. This is seen as one the fastest growing section of imports into China and is important for overseas brands getting into the market. China is biggest in luxury goods purchase and with travel restrictions, global brands are benefitting from cross border ecommerce, with higher domestic spend.

Pier then looks at Chinese consumers not being able to travel and an increase in domestic consumption. This has generated ideas normally seen in the west where social activities, such as sports and outdoor activities are becoming more popular in China. In turn this has grown certain niches of more adventurous consumers, individualism and greater want in expressing their personalities. In effect this has seen new products introduced through cross border ecommerce. He notes with the rapidly changing market that it is key for businesses to keep up to date with the latest trends and platforms to stay ahead as a business in engaging with new opportunities.

It used to be quite a high upfront cost to enter the market, as you needed a flagship storefront on Tmall/Alibaba to sell goods. However this has changed recently, as Pier discussed two new business models on the platform, Mini store and Import Overseas Fulfilment, which has allowed brands to sell on Alibaba’s platforms at a much lower upfront cost.

To round off the webinar was a Q&A where there was a wide array of questions regarding the pandemic’s and its drivers on Chinese consumer consumption, luxury brands and supply chain contrastiants and its effects on ecommerce.

Event review written by Allan Chan 12th April 2022.

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