Chinese exporters stay resilient amid increased competition from Vietnam, other emerging markets, Alibaba executive says

The bullish outlook for China’s small and medium-sized exporters comes as the country’s export growth rebounded in May
Alibaba has been ramping up efforts to make cross-border e-commerce more accessible to small enterprises, as domestic consumption has slowed

Alibaba

Tracy Quin Shanghai

Published: 10:30pm, 13 Jun 2022

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China’s small exporters, whose operations have been disrupted by the government’s zero-Covid-19 policy, will continue to be competitive amid the growing challenge from their counterparts in Vietnam and other emerging markets, according to a senior executive at e-commerce giant Alibaba Group Holding.

The country’s small and medium-sized exporters are still doing fine, despite increased manufacturing activity in emerging markets like Vietnam, Alibaba.com general manager Zhang Kuo said in a live-streaming session on June 9, according to a report on Sunday by Chinese digital media outlet Jiemian.com.

That assessment by Zhang comes as China’s export growth rebounded in May, following the gradual return to normal of manufacturing activity in Shanghai towards the end of the city’s two-month Covid-19 lockdown.

Alibaba, owner of the South China Morning Post, on Monday confirmed that Zhang gave a speech that was live-streamed on June 9, but did not elaborate on his remarks. Alibaba.com, the company’s first business, operates an integrated international online wholesale marketplace that connects Chinese and overseas suppliers to overseas wholesale buyers.

China’s export growth rebounded in May, as manufacturing activity in Shanghai gradually returned to normal. Photo: Shutterstock

The bullish outlook by Alibaba.com’s Zhang reflects China’s broader effort to turn around its faltering economy, following relief packages introduced by the government in May.

The country’s exports totalled US$308.25 billion in May, up 16.9 per cent from a year earlier, according to data released by China Customs last Thursday.

That marked a significant improvement from April, when China’s overall exports increased 3.9 per cent from a year ago to US$273.62 billion – its lowest growth rate since June 2020.

China’s export momentum at the time was weakened by strict Covid-19 control measures, which disrupted manufacturing supply chains across the country.

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Alibaba has already been ramping up efforts to make cross-border e-commerce more accessible to small and medium-sized enterprises (SMEs), as domestic consumption has slowed.

Over the past three years, high value-added industries such as machinery, new energy systems, cars and consumer electronics have become the main growth drivers for exports, according to Alibaba.com.

New energy-related transaction volume from January to April this year, for example, increased by more than 130 per cent from the same period in 2021, according to data provided by Alibaba.com.

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SME foreign trade merchants are expected to benefit from the accelerated digitalisation of their operations and processes over the next two decades, according to Alibaba.com.

That shift in focus for the e-commerce giant has become more urgent because of the impact of Beijing’s zero-Covid-19 policy on domestic consumer spending. At the national level, total retail sales – seen as a barometer of consumer spending – plunged 11.1 per cent in April from a year ago.

The gross merchandise value (GMV), or sales turnover, for Japanese clothing brand Uniqlo on Alibaba’s Tmall, for example, fell 33 per cent in April from a year ago, according to data provided by YipitData, a firm tracking online sales.

Its data also showed Spanish apparel retailer Zara’s GMV dropping 56 per cent in the same month.