Wu Bingjian, a Chinese merchant known as Haukua or Hauka among foreign traders, was said to be the richest man in the world in the early 19th century. He accumulated great wealth through trade between the Qing Dynasty and the rest of the world.
As a senior Cantonese merchant, Mr. Wu was one of the few authorized dealers allowed to export Chinese silk and porcelain, popular products produced in China at the time. He was so wealthy that, according to one story, during a fire that gutted one of his treasure rooms, his silver was melted into a two-mile river.
In the long history following the Wu dynasty, China’s role in world trade diminished, although the power to trade with foreigners was still considered a privilege.
At the height of China’s command economy era in the 1950s and 1960s, the country’s foreign trade was tightly controlled by 12 state-run trading companies. However, market reforms from the late 1970s turned the country into the world’s factory floor and once again an important sourcing source for foreign traders.
This time it’s not just about vases and silk. China is now the world’s largest producer of products ranging from microwave ovens to massage chairs. China’s share of global exports rose from 0.8% in 1978 to about 15% in 2020, according to United Nations data.
Today, all companies have the right to trade with foreigners. However, in reality, there are many barriers to Chinese companies’ ability to do business overseas. These include basic hurdles like translation (one of Alibaba co-founder Jack Ma’s first ventures was called Hope Translation), and facilitating trade with China. This also includes customs clearance issues through the many agencies established for the purpose.
And now, digitalization is progressing. The Silk Road e-commerce exhibition at the 2nd World Digital Trade Expo to be held in Hangzhou this month will demonstrate the Chinese government’s desire to showcase China’s trade power and ability to maximize the benefits of digitalizing commerce. have come together to create a cross-border trade app.
Alibaba Group Holding’s AliExpress and Lazada, as well as similar services from fast-fashion retailers Shein and PDD Holdings, say their services will help Chinese manufacturers cost-effectively access consumers around the world. It advertises how it can help. Foreign giants like Amazon are also expanding their reach into local businesses. Alibaba owns the South China Morning Post.
Breaking away from the traditional cross-border e-commerce model where sellers open online shops on the platform, an increasingly popular approach is for manufacturers to ship their products to designated warehouses operated by apps, where the remaining products are It is “complete storage” shipped by the manufacturer. An overview of the work performed by the platform.
In other words, apps have become “super agents” like Mr. Wu during the Qing Dynasty. This process eliminates direct contact with the outside world for small businesses, which many appreciate as it saves them time and effort.
This approach gives apps full control over data and logistics flows, allowing you to manage prices more efficiently. PDD-backed app Temu claims to help consumers “shop like millionaires” by offering great deals like $2.88 winter gloves and $11.99 smartwatches. . Meanwhile, Mr. Shein is said to be preparing a major initial public offering (IPO) in the United States.
However, there are limits. Apps may appeal to consumers by increasing their relative purchasing power, but with China’s labor and production costs gradually rising, it is questionable whether ultra-low-cost strategies are sustainable. . Ultimately, the app should help China speed up development cycles instead of being locked into low-cost production.
Finally, when China opened more widely to foreign trade, Wu and his allies lost their advantage. Chinese shopping apps are currently facing regulatory headwinds in destination countries such as Indonesia, with the city of Jakarta’s recent decision to ban live-streaming e-commerce on TikTok being the first warning.