Taking China’s eCommerce Lessons On The Road

China has been the belle of the ball when it comes to the global potential of eCommerce — for both consumers and businesses — for the better part of the last decade. And while enthusiasm for expanding opportunities to access the Chinese market and its billion-plus consumers is as avid as it’s ever been — as evidenced by last week’s announcement of PayPal and UnionPay’s global payments partnership — the bigger commerce story has expanded beyond China in the last few years.

But as of late, there have been some rumblings in the Chinese market. For the last year, trade disputes have rumbled around China, creating uncertainty in that market.

While China will weather these storms, their emergence on the horizon has created an opportunity for more powerful eCommerce ecosystems to develop in emerging markets like Vietnam and India. And not just in terms of new sellers, as Karen Webster discussed with PingPong Head of Global Partnerships Ning Ye, but in terms of the creation of entirely new networks for both merchants and consumers.

“We see a lot of opportunities in those new regions. Vietnam and India were the first markets we entered, and we have seen faster than expected growth in those regions, which gives us a lot of faith in the future growth yet to come,” Ning noted.

But keeping that growth on track will take support, she said — because not every market is as mature as China when it comes to digital commerce, nor does every market have the same needs to meet.

No ‘One-Size-Fits-All’ Solutions

As PingPong has expanded its footprint to enable cross-border commerce for merchants outside of China, Ning said, the first and most important lesson is that every market is different. Offering real value-added services is all about pinpointing and effectively addressing those specifics.

In Vietnam, that means looking at an exploding eCommerce opportunity. For merchants, that largely means either selling on common marketplaces or on more specialized eCommerce marketplaces, such as those that provide print-on-demand services.

“If you’ve bought a custom T-shirt online, there is a high chance it came from Vietnam,” Ning said.

T-shirts are simple, she noted, but the logistics behind them are precise, particularly when they are created on demand and the inventory offered to consumers is entirely virtual.

“Many of the supplies, for example, are purchased from other countries which requires mature payments functions to make sure they can be paid — and increasingly, real-time payments are in demand,” Ning pointed out. “There also needs to be a properly managed infrastructure for shipping and handling, for social media marketing. All of this needs to be activated and supported.”

Flip over to India, where the needs are more diverse and PingPong’s focus in on the service market.

That is particularly apparent in the market for freelance technical services. According to Oxford University data, as of 2017, the largest overall supplier of online labor is India, with 24 percent of that global digital workforce.

The experience and tools necessary in this type of market aren’t centered on logistically supporting items moving around the planet, said Ning, but on the best ways to manage transactional relationships with global customers.

There are two common ways for Indian freelancers to receive work. One is through online platforms such as Fiverr, Freelancer, Guru and PeoplePerHour, and the other is through offline individuals or organizations. The former makes the payments process relatively straightforward, particularly with the aid of third parties to move funds, but it can be costly and complex to make all of that work. Working outside of a platform can make the collections process more difficult, more closely scrutinized and ultimately more risky.

Smoothing that array of issues for both types of transactions requires merchants to work with payment services providers who assist with invoices, payments collection, cash flow management and currency exchange to make the process both less expensive and more secure.

India and Vietnam are emerging markets, and it is expected that merchants from those markets will face challenges associated with the early days of entering the digital commerce fold. However, as a relatively mature eCommerce market, Chinese merchants also face with a lot of challenges as they expand into more markets, Ning noted, which leaves PingPong a lot of new ground on which to innovate.

The Next Evolution of Chinese eCommerce

Despite the maturity of the Chinese market, there are baked-in challenges for firms looking to expand their reach worldwide.

“Traditionally, a lot of Chinese merchants entering global markets start in the EU and the U.S., and the complexity in those markets is predictable, they know what to expect,” said Ning.

But as they expand farther into regions like the Middle East, and nations like Mexico and Brazil, the challenges become less transparent from the outside, she noted. That means a new paradigm must be developed for the specifics of these new markets and what it will take to successfully transact there. That includes securing tax services, managing suppliers, navigating FX exchanges to minimize charges and working through VAT systems with different rules governing them.

“Even if they are quite mature and experienced, when they are entering global markets, they need effective help and ongoing education from their service providers like us,” said Ning.