- The e-commerce giant’s latest effort in Yiwu marks another push to help revive global trade, as Covid-19 continues to threaten various parts of the world
- Yiwu recorded more than US$41 billion in total international trade last year
Alibaba Group Holding is ramping up efforts to make cross-border e-commerce more accessible to small and medium-sized enterprises (SMEs), with a series of initiatives in the eastern city of Yiwu home to the world’s largest wholesale market for daily commodities.
The e-commerce giant on Monday announced plans to develop a digitised comprehensive bonded zone in Yiwu, located in Zhejiang province, that is expected to launch an offline exhibition area this September, according to the company’s statement. Ratified by China’s State Council in April this year, comprehensive bonded zones are specially designated commercial areas that implement favourable taxation and other policies under the supervision of customs officials.
A joint venture between Alibaba and Zhejiang China Commodities City Group, the Shanghai-listed operator of Yiwu China Commodities City, will develop that bonded zone as well as a cross-border trade service operation under the electronic World Trade Platform (eWTP) framework.
“Alibaba will work together with Yiwu to further facilitate the city’s transformation into a digitised small commodities trading hub and digitised port,” said Daniel Zhang Yong, the company’s chairman and chief executive, in a statement. Alibaba is the parent company of the South China Morning Post.
The eWTP operation in Yiwu will provide SMEs with a one-stop platform for digitised trade services including customs clearance, foreign exchange settlement and tax procedures. It will be the third eWTP trade service platform, following the launch of similar operations in Hangzhou and in Liege, Belgium.
The eWTP was conceived by Alibaba founder Jack Ma in 2016 as an electronic Silk Road to connect every country and give SMEs the ability to sell anywhere in the world. The benefits of using eWTP hubs include speedy customs clearance, logistics support and minimal tariffs. To date, Alibaba has joined forces with the governments of Belgium, Malaysia, Rwanda and Ethiopia as well as Hangzhou and Yiwu in China to establish eWTP hubs.
“The cooperation [with China Commodities City Group] helps the globalisation of Alibaba’s platform, as it will serve more offline merchants and suppliers,” said Li Chengdong, an independent e-commerce analyst. “For China Commodities City Group, which was forced to pursue digital transformation during the [coronavirus] pandemic, it benefits from Alibaba’s experience and more mature technologies.”
Their joint venture in Yiwu marks another push to help revive global trade, as the Covid-19 pandemic continues to threaten various parts of the world. Zhang, however, said in May that the timing and pace of global recovery remains uncertain.
Yiwu’s total value of imports and exports reached 296.7 billion yuan (US$41.9 billion) last year, around double its gross domestic product, with Africa and the Middle East as the city’s two largest trading markets by value, according to official data. Yiwu sells commodities to more than 210 countries and territories, according to State Council data.
Alibaba and the municipal government of Yiwu also announced on Monday the establishment of the city’s eWTP digital customs clearance port. This system will enable overseas merchants to export products to China in smaller quantities via international parcel delivery by completing and clearing customs processes online, which enables faster delivery of goods to customers in the world’s second-largest economy.
Other initiatives by Alibaba in Yiwu include a system to facilitate cross-border and foreign exchange transactions for SMEs in partnership with the Zhejiang Chouzhou Commercial Bank. A small commodities online trade show, part of the Alibaba.com business-to-business platform’s series of exhibitions, will also be held in the city.