Alibaba Group has entered into a strategic collaboration with the municipal government of Yiwu in Zhejiang Province to launch an eWTP hub in Yiwu to digitize trade infrastructure and empower new trade flows for the city, which is the world’s largest wholesale market.

Yiwu, in central Zhejiang Province, is the world’s largest wholesale market for daily commodities, attracting more than 500,000 buyers from around the world every year. Yiwu exports goods to more than 200 countries and regions and a majority of the 450,000 merchants in Yiwu are micro-, small- or medium-sized enterprises, a group Alibaba serves through its e-commerce platforms and other digital services.

This collaboration between Alibaba Group and Yiwu will make cross-border e-commerce more accessible to small players in global trade.

The eWTP hub, called the Yiwu eWTP Pilot Area, will build on the success of the eWTP hub established in October 2017 in Hangzhou, the capital of China’s Zhejiang Province.

With the support of the Zhejiang Provincial Government and experience from the Hangzhou eWTP hub, the Yiwu eWTP hub will use technology to promote innovation in trade and trade finance, establish a smart logistics hub and create greater inclusivity for businesses in Yiwu.

“Alibaba Group and Yiwu both have a long history of enabling small businesses to participate in global trade. While Yiwu brings together buyers from around the world, Alibaba’s platforms also bring together millions of merchants and hundreds of millions of consumers. The synergy of the two ecosystems will create value for our communities of users,” said Daniel Zhang, CEO of Alibaba Group, at the launch ceremony of the Yiwu eWTP Pilot Area.

The Yiwu eWTP Pilot Area is the fifth eWTP hub under the global eWTP initiative following eWTP’s launch in Malaysia in March 2017. Since then, the eWTP project has launched hubs in Hangzhou (China), Belgium and Rwanda, respectively.

Initiated in 2016 by Jack Ma, founder and executive chairman of Alibaba Group, the eWTP is a private sector-led, multi-stakeholder initiative that facilitates public-private dialogue to share best practices, incubate new trade rules and foster a more-integrated and inclusive policy and business environment to promote the development of e-commerce, trade and the digital economy.

The concept of eWTP was accepted as a major policy recommendation of the Business 20 (B20) and officially included in the 2016 G20 Leaders’ Communique.

Introduction to Xiaomi’s e-commerce platform Youpin

Beijing’s online retail market began relatively early, and in recent years has experienced rapid growth, such that it is now the primary driver behind consumption in Beijing. In 2016, sales from wholesale and retail enterprises above reporting size exceeded 200 billion yuan (US$29.76 billion), with an average yearly growth rate of 48.9% over the last five years.

In that timeframe, online retail went from accounting for 4% of social consumer goods sales in 2011 to 18.6% in 2016. In the first half of 2017, online retail sales made up 24.4% of all social consumer goods sales, a further increase of 8.3 percentage points over the first half of 2016.

On August 1^st, Beijing’s Municipal Bureau of Statistics announced that, as part of the ongoing effort to ease the situation faced by the non-government functions of the city, Beijing would be introducing a series of policies to deepen business transitions, advance consumer regulation, and make structural improvements to consumption. 

From this year on, growth in Beijing’s consumption is to shift from relying solely on growth in consumption of goods towards relying on both goods and services, while shifting consumption patterns towards high-end goods and emergent services.

In the first half of 2017, total consumption in Beijing reached 1.12 trillion yuan (US$ 166.4 billion), an increase of 9.3%.  Of this figure, commercial consumption (total sales of retail goods) accounted for 525.7 billion yuan (US$78.2 billion), an increase of 5.6%, and consumption of services stood at 592.6 billion yuan (US$88.2 billion), an increase of 12.7%. Services thus contributed 70.7% of total consumer market growth, making it the primary moving force in increasing consumption.

Innovation in e-commerce alters consumption patterns

Beijing’s online and offline consumption are interfacing in an increasingly seamless fashion, driving innovation and altering consumption patterns, with e-commerce at the forefront of the changes. Beijing Municipal Bureau of Statistics has said that Beijing’s online retail market began relatively early, and in recent years has experienced rapid growth, promoting change in consumption patterns and becoming a major driving force in Beijing’s economy, and has gradually entered a more mature phase of stable growth.

Data shows that in 2016, sales in Beijing from wholesale and retail enterprises above reporting size exceeded 200 billion yuan (US$29.76 billion), with an average yearly growth rate of 48.9% over the last five years. In that timeframe, online retail went from accounting for 4% of social consumer goods sales in 2011 to 18.6% in 2016, six percentage points higher than the national average and ranking first in the nation.

In the first half of 2017, online retail and wholesale sales increased by 15.4% over the first half of 2016, to 94.9 billion yuan, growing at a rate 6 percentage points higher than last year, and making up 24.4% of all social consumer goods sales, a further increase of 8.3 percentage points over the first half of 2016.

As new business models emerge, food and hotel industries usher in new opportunities

With the entry of “Internet+” models into the market, the food and beverage industry is changing the way in which it delivers services; group buying, delivery, mobile kitchens, and similar new models are increasingly popular.

In 2016, food and hotel industries above reporting size earned 5.83 billion yuan (US$867.5 million) through online channels, 1.8 times what had been earned the year prior. In the first half of this year, online platforms for food services have contributed 45.5% to the expansion in this market.

Old brands come back to life through e-commerce

In addition, with the help of the internet, many older brands have been able to achieve a new life. In 2016, of 77 brands with revenues above reporting level, 14 have launched e-commerce businesses, selling products from foodstuffs and medicines through shoes and books and earning 470 million yuan (US$69.9 million) in revenue from online sources, an increase of 43.7% over 2015. In the first half of the year, another brand has joined those 14, and they have collectively earned 320 million yuan (US$ 47.6 million) through e-commerce.

The gross domestic product (GDP) of China was 18,068.3 billion yuan (US$2,626.81 billion) in the first quarter of 2017, a year-on-year increase of 6.9% at comparable prices according to the preliminary estimates of National Bureau of Statistics of China.

The planting intention survey on 110,000 rural households showed that the planting area intended for rice went down by 0.3%; wheat down by 0.8%; corn down by 4.0%; soya up by 8.1%; and cotton down by 0.7%.

The output of pork, beef, mutton and poultry was 22.49 million tons, a year-on-year growth of 0.2 percent, among which the output of pork was 14.68 million tons, up by 0.2 percent. The number of pigs registered was 410.95 million, a year-on-year growth of 0.1 percent and 191.49 million pigs slaughtered, a year-on-year growth of 0.2 percent.

In Q1 2017, the year-on-year real growth rate of total value added of the industrial enterprises above designated size was 6.8%, 1.0 percentage point faster than Q1 2016; 0.8 percentage point faster than 2016.

An analysis by types of ownership showed that the value added of the state holding enterprises went up by 6.2% year on year; collective enterprises up by 0.5%; share-holding enterprises up by 6.9%; and enterprises funded by foreign investors or investors from Hong Kong, Macao and Taiwan up by 6.9%.

In terms of sectors, the value added of the mining dropped by 2.4 percent on a year-on-year basis, the manufacturing grew by 7.4 percent and the production and supply of electricity, thermal power, gas, and water grew by 8.9 percent.

The industrial structure continued to improve. The value added of high-tech industry and equipment manufacturing industry grew by 13.4% and 12.0% year on year respectively, 6.6 percentage points and 5.2 percentage points faster than that of the industrial enterprises above designated size as a whole, 2.6 percentage points and 2.5 percentage points higher than the whole of last year.

The sales-output ratio of the industrial enterprises above designated size reached 97.2%. In March 2017, the total value added of the industrial enterprises above designated size went up by 7.6% year on year, 1.3 percentage points faster than that in the first two months of 2017, or up by 0.83 percentage point month on month.

The index of national services production increased by 8.3% year on year, 0.1 percentage point higher than Q1 2016. Information transmission, software and information technology services, and transport, storage and postal services maintained high growth rates.

The growth rates of wholesale, retail trade, accommodation, and catering trade picked up considerably. In March 2017, the business activity index for sectors like retail trade, air transport, postal services, internet and software information technology services, monetary and financial services, capital market services, and insurance all kept within the expansion range of over 55%.

The investment in fixed assets (excluding rural households) was 9,377.7 billion yuan (US$1,361.35 bn) in Q1 2017, a year-on-year growth of 9.2%, 1.1 percentage points faster than the whole year of 2016, 0.3 percentage point faster that than in the first two months of 2017.

The investment by the state holding enterprises reached 3,308.7 billion yuan (US$480.32 bn), up 13.6%; private investment reached 5,731.3 billion yuan, up by 7.7%.

The investment in infrastructure was 1,899.7 billion yuan, an increase of 23.5%. The investment in high-tech industry increased by 22.6%, 13.4 percentage points faster than the total investment. The funds in place for investment in fixed assets in the first quarter were 10,608.1 billion yuan, down by 2.9 percent. The total investment in newly-started projects was 6,201.5 billion yuan, a drop of 6.5% year on year. .

The total investment in real estate development in the first quarter was 1,929.2 billion yuan, a year-on-year growth of 9.1 percent, 2.2 percentage points faster than last year, and 0.2 percentage point faster than the first two months. The investment in residential buildings went up by 11.2%. The floor space started was 315.60 million square meters, up by 11.6% year on year. Specifically, the floor space of residential buildings newly started went up by 18.1%.

The floor space of commercial buildings sold was 290.35 million square meters, up by 19.5%. The floor space of residential buildings sold was up by 16.9%. The total sales of commercial buildings were 2,318.2 billion yuan, a growth of 25.1 percent. The sales of residential buildings were up by 20.2 percent. The land space purchased for real estate development was 37.82 million square meters, up by 5.7 percent year on year.

The total retail sales of consumer goods in China reached 8,582.3 billion yuan (US$1,245.89 bn) in Q1 2017, a year-on-year rise of 10.0%, 0.4 percentage point less than the whole of last year.

The total value of imports and exports in Q1 2017 was 6,198.6 billion yuan (US$899.85 bn), an increase of 21.8% year on year. The total value of exports was 3,326.8 billion yuan, up by 14.8%; the total value of imports was 2,871.8 billion yuan, an increase of 31.1%. The trade balance was 454.9 billion yuan in surplus.

The export of mechanical and electronic products increased by 15.1%, accounting for 58.1% of the total value of exports. The imports from and exports to some countries along One Belt, One Road went up. The exports to Russia, Pakistan, Poland, Kazakhstan and India increased by 37.0%, 18.7%, 19%, 69.3%, and 27.7%.

The consumer price in China went up by 1.4% year on year in Q1 2017, 0.7 percentage point less than the same period of last year.

The national per capita disposable income was 7,184 yuan (US$1,042.9), a nominal growth of 8.5% year on year or a real growth of 7.0% after deducting price factors. The growth rate of income was 0.1 percentage point higher than that of GDP.

The per capita disposable income of the urban residents was 9,986 yuan (US$1,449.66), a real growth of 6.3 percent after deducting price factors. The per capita disposable income of the rural residents was 3,880 yuan, up by 7.2 percent in real terms.

The per capita income of the urban residents was 2.57 times of that of the rural residents, 0.02 less than the same period last year. The median of the national per capita disposable income was 6,067 yuan, a nominal increase of 6.7 percent.

The per capita expenditure nationwide was 4,796 yuan, a nominal increase of 7.7%, or 6.2% after deducting price factors.

By the end of February, the number of rural migrant workers was 172.53 million, which was 4.54 million more than the same period last year, or up by 2.7 percent. The monthly income of migrant workers was 3,482 yuan, a year-on-year increase of 6.4 percent.

Some economists think official Chinese economic data understates performance using data on satellite-recorded nighttime lights as an independent benchmark for comparing various published indicators of the state of the Chinese economy.

“Alibaba economy” to generate about 30% of all jobs in 2035

1688.com, the largest online B2B website under Alibaba Group and sourcing destinations of many Taobao sellers, is opening up to foreign suppliers with the addition of twenty four South Korean brands through Alibaba’s Direct From Overseas Markets program.

1688 started accepting suppliers from outside mainland China since August 2014 when some wholesalers from Taiwan were accepted into the online B2B platform.

The acceptance of Korean suppliers on 1688.com were supported by South Korea’s Ministry of Agriculture and Food and Rural Affairs. Some of the well known brands are Woongjin Foods, brewer HITE-Jinro, and Daesang Corp.

1688.com is a Chinese online B2B website while its sister website Alibaba.com is an English one for global sourcing. According to 1688, a mini-site will be set up for Korean products by the end of this year. And, the next country under Direct From Overseas Markets program is Southeast Asian countries.

China B2B e-commerce market revenue exceeded RMB4.53 billion (US$740 million), an increase of 6.1% from the prior quarter in the same year and by 57.29% from prior year period according to the latest data from Enfodesk.

Check out China online B2B market share in Q2 2014 here.

Also read: China B2B Market Overview in 2013

Costco Wholesale, the American membership-only warehouse club that provides a wide selection of merchandise, launched Tmall flagship store on Tmall Global reaching Chinese consumers directly with competitively priced food and healthcare products ranging from clothing to groceries to laundry detergent to health and beauty aids.

Tmall Global offers retailers the ability to sell to Chinese shoppers via bonded warehouses in Chinese free trade zones, which reduces logistics costs and shortens delivery times.

Tmall, Alibaba Group’s subsidiary having reached GMV of RMB 159 billion in Q2 2014, has become a very attractive B2C online shopping platform for international brands such as Estee Lauder and Burberry. In the past week, Zara and Massimo Dutti apparel brands launched their Tmall flagship stores.

Find out How Much Top Brands on Taobao/Tmall Can Sell