China Daily Global Edition (USA)
OSell rides e-payments to robust growth
Group sales revenue rose 30 percent y-o-y to 40b yuan in first nine months of year
While the COVID-19 pandemic has made many manufacturers uneasy about staying afloat since last year, the dark cloud has a silver lining in that riding the wave of new formats in foreign trade through big data and tools such as online exhibitions and digital payments have empowered export-oriented companies to survive and even post robust growth.
With China and its partners pushing for implementation of the Regional Comprehensive Economic Partnership agreement next year, OSell Group, a business-to-business, cross-border site that brings Chinese merchandise overseas, said it plans to build more warehouses and service centers to expand into markets of the Association of Southeast Asian Nations, while consolidating its presence in key markets in the Middle East and Europe.
Backed by sales and service networks and a large number of employees in Indonesia, Vietnam and Malaysia, Feng Jianfeng, chairman of the Chongqing-based company, said the RCEP will support the growth of regional and global trade, cross-border e-commerce and related industries, creating a stable and open investment environment for global companies investing in the region.
Although the pandemic has affected the expansion of OSell’s network channels and cross-border logistics operations, the company has been relying on innovative business models such as building overseas warehouses, cross-border business-to-business franchising service centers, branding and trading centers as well as industrial parks to ensure its operations and support foreign trade activities for companies both in China and abroad.
For instance, the company conducted more than two months of market research to sell Chinese bags and suitcases before building a sales network in Indonesia. It chose to work with local businesses to sell these bags and suitcases directly and began building a warehouse in Jakarta to ensure supplies and coordinate logistics services.
After gaining recognition of local
distributors with the overseas warehouse operation mode, OSell not only developed a local languagesoftware to facilitate local consumers to place orders directly, but also expanded online sales channels, including exploring business opportunities in various social apps and launching a number of promotional events.
Thanks to such a localized strategy, OSell to date has more than 50,000 franchise partners across Indonesia, with nearly 10 categories of goods, including toys, garments, baby and maternal products, cosmetics, bags and suitcases.
Feng said building overseas warehouses and supporting growth of cross-border e-commerce businesses
can stimulate consumption of quality products. They are also practical solutions to strengthen China’s dual-circulation development paradigm of both exports and imports.
Under the dual-circulation model, the domestic market is the mainstay while the domestic and foreign markets reinforce each other.
Even though many Chinese exporters hope overseas consumers see the merit in buying their goods, small and medium-sized enterprises, or SMEs, typically lack the digital means to combine what is trending in the market and what their production capabilities manage to achieve, he said.
Agricultural products are
among the many categories where Chinese producers earn diminished profits due to a lack of wellknown indigenous brands. Feng’s target is to help farmers and agricultural SMEs elevate their bargaining power.
“Based on customer insights and our extensive resources and networks in foreign markets, we suggest brands make adjustments in flavors, packaging and portions to better resonate with overseas customers,” he said.
Mushrooms from Hubei province and preserved pickles from Chongqing have all rolled out overseas versions to cater to the palates of foreigners, Feng added.
The executive reiterated that leading scientific research results are only the first step in technological innovation. To truly transform these breakthroughs into production tools and solutions, the interaction of overseas warehouses, exhibitions, logistics, sufficient cash flow and other services will be needed because they are key to support cross-border e-commerce activities.
Supported by more than 1,000 employees, OSell has established service branches and China-oriented brand centers in Moscow, Warsaw, Ho Chi Minh City, Dubai, New Delhi, Toronto, Duisburg, Jakarta and Sao Paulo, as well as many cities in Saudi Arabia, Bahrain and other countries and regions, to introduce their quality products to China and set up localized overseas teams to integrate all local resources from abroad.
Founded in 2010, the Chinese company’s sales revenue soared 30 percent on a yearly basis to reach 40 billion yuan ($6.25 billion) in the first nine months of this year.
Data from the General Administration of Customs showed that China’s foreign trade in goods totaled 28.33 trillion yuan in the first three quarters, up 22.7 percent year-on-year.
With several policies to promote the development of a new mode of foreign trade and facilitate crossborder trade transactions, China’s cross-border e-commerce trade rose 20.1 percent between January and September, and exports through market procurement trade posted an increase of 37.7 percent over the period.
China’s cross-border e-commerce has grown nearly tenfold over the past five years. Domestic firms currently run more than 1,900 overseas warehouses and about 130 bonded maintenance projects of processing trade across the world, said Li Xingqian, director-general of the foreign trade department at the Ministry of Commerce.
Foreign trade via cross-border e-commerce climbed 31.1 percent to 1.69 trillion yuan in 2020, with over 10,000 traditional trade firms going online for the first time in 2020. Many adopted digital solutions, including big data, business-tobusiness or B2B platforms and online exhibition activities, to attract overseas customers and boost sales.
Apart from planning to increase its foreign trade volume from $4.65 trillion in 2020 to $5.1 trillion by 2025, China will expand the proportion of new forms of foreign trade from 7 percent of the total last year to 10 percent in 2025 to foster new competitive strengths, the ministry said in a 14th Five-Year (2021-25) commercial development plan it published in July.
To spur new forms and models of foreign trade, China will encourage its pilot free trade zones and comprehensive bonded areas to build global supply warehouses and transportation hubs during the 14th Five-Year Plan period, said Li Kuiwen, director-general of the General Administration of Customs’ statistics and analysis department.
Under the administration’s fiveyear plan, the government will support companies to conduct bonded research and development and support the expansion of the range of bonded maintenance and remanufacturing businesses, while introducing new forms of Customs clearance facilitation measures for companies engaged in certain businesses like cross-border e-commerce, procurement trade and overseas warehouses.