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For many SMEs in China, 2008 has proven a disastrous year. Thousands upon thousands closed for soaring costs of production, mainly in materials and labor. The declining needs of overseas market are accompanied by the continuous rise in RMB. All signs seem to tell one fact - winter is coming.

What to do to help the remaining SMEs survive the winter becomes high on the agendas of many local governments, especially in Guangdong, Zhejiang and Fujian, three southern coastal provinces now contributing the largest share of export volume. On the table, e–commerce is recognized as an effective vehicle for SMEs to migrate competitiveness to the Internet.

While e-commerce as a way to help explore overseas market is yet to be used by a fare portion of SMEs, domestic renowned business-to-business (B2B) companies Alibaba, GlobalSources and ECVV all say they will go through the winter with stuck SMEs.

On July 23, Jack Ma, CEO of Alibaba Group, composed an internal e-mail titled The Mission of Winter, calling up all his staff to get prepared for the winter. He opined that it was merely the start of an extremely long hard time.

Being cautious can’t be mistaken, but seeing a chance encourages more. ECVV,an innovative B2B company prominent in the South China market, eyes opportunities. “ECVV is not alone out there. Like Alibaba, its future hinges on that of SMEs. The problem most SMEs are facing, that is, how to fit into the new demands of global market, is also our main concern when we’re building marketing strategy. We will guide enterprises via our e-commerce platform and bring them more value with innovation, which is also our corporate culture.” Steven Chen, CEO of ECVV, said.

According to a government report, during the first half year of 2008, 67,000 SMEs collapsed, most of which are export-oriented enterprises in Zhujiang and Yangtze River Delta areas. The growing costs of production (materials and labor), the declining needs of overseas market and the fast appreciation of RMB are the main causes. As these factors are escalating, local governments have to consider post-Olympic development and many choose e-commerce as a breakthrough.

Compared to traditional channels to promote products in overseas markets, e-commerce features lower costs, easier application and quicker return. Plugged to Internet, SMEs become unlimited to geography or demography. Recently, coordinated by Zhejiang government, its enterprises have been promised to gain full promotion across the Alibaba website, considered the global leader in e-commerce.

Four years younger than Alibaba, by the end of 2007, ECVV had already garnered one million registered companies and two million products. This June, the mayor of Shenzhen found ECVV and decided to offer operation guidance and special funds, hoping local enterprises could benefit form it eventually.

For ECVV, there is more than one way to do e-commerce. It has launched three other websites: jobs, trade shows, and industry news. The job website will fuel SMEs with trade professionals. Trade shows combine online and offline marketing into one. And industry news reflects the latest markets. Besides, ECVV’s retailing B2C website ecvvshopping.com has gone to market successfully, backed up by its main B2B site. Its aim is clear: the whole chain.

“I disagree it’s a winter for ECVV. Though our growth slows down, compared to the rate of 300% two years ago, now 70%-100% for this half year, the market is still large. Only a fraction of SMEs are using e-commerce to explore overseas market. So challenges and opportunities coexist. Now we’re ready.” Steven said confidently.

Posted under Inside B2B

Shenzhen, a booming city on the south coast of China, near Hong Kong, wishes to add to its high-tech export with the aid of e-commerce.

Affected by the recent global slump, Shenzhen’s local businesses, mostly SMEs heavily relying on export, are in a hard time to boost revenues as usual, meanwhile with keeping costs down becoming a prominent issue. In this situation, Shenzhen Government sees a chance to upgrade these enterprises with the aid of e-commerce, deemed a highly cost-effective channel to reach buyers. ECVV.com, an innovative business-to-business website that provides online presentation for suppliers and products, is among the e-commerce companies selected to back up by the government.

proportion of sems in shenzhen 2008

Nowadays, Shenzhen’s economics much incline to export-oriented manufacturers, 99% of which are SMEs. For the past years, these enterprises have made the city’s miracle of fast development. Situation, however, is not always good. They are also the ones that weather the austere climate of global economics. To help smaller businesses get through the difficulty, Shenzhen has put the support to e-commerce on the agenda, in the hope of recharging high-tech production with high-end Internet services.

The government has promised to prop Internet service providers that are able to bring more value to SMEs. Support policies involve introduction of talents, establishment of Internet industrial parks, tax reduction or exemption, and subsidies for overseas marketing.

According to Mr. Feng Dechong, vice director of Shenzhen Small and Medium-Sized Enterprises Center, e-commerce has great potential. Only 11% of the SMEs are using Internet for transaction and business development. And in Japan and South Korea, companies who use e-commerce more usually have higher transaction amount by 1 to 2 percentage points. 

SEMs Trade Volume Statistics from 2002 to 2012

Most SMEs in Shenzhen are victims of the global wide recession caused by soaring oil price as well as domestic deflation policy, A latest report shows that in the first half year of 2008 67,000 SMEs in the country went bankrupt and more than 20,000,000 workers lost their jobs. Even in Zhejiang, the province with the most SMEs, 20% closed as a result of insufficient fund and reduced production.

What should the surviving SMEs do? “With the progress of e-commerce, SMEs are more likely to get rid of the tough situation. But B2B isn’t the cure-all. SMEs should always be concerned about how to put costs down to improve competition, under any circumstances. Putting money on affordable and effective channels, especially when the market is tight, is the ultimate way to make a success. In that sense, B2B is a solution.”  Mr. Chen, CEO of ECVV, pointed out.

Posted under Inside B2B

After several weeks’ prep, we are happy to announce that the official blog for ecvv.com, a booming business-to-business (b2b) platform in China, has started. 

We will cover as many topics from the big environment upon which the b2b mode in China survives, the status quo of the majority of its users, i.e. small- and medium-sized enterprises (SME), how to build  trustworthiness for China-based suppliers and manufacturers, how to purchase safely for global sourcers, up to innovations to e-business promising to bring more value to the two parties. In a word, everything interesting to global eyes on e-commerce, especially those on China.

Posted under ecvv News