Turbocharging digital business
 
Mar 14, 2021
Category:

Developing markets are taking to online sourcing as COVID-19 pandemic restricts travel.

Fast-developing markets in the Middle East and Africa (MEA) are renowned for leap-frog technological progress. Kenya was a pioneer of online banking, bypassing the slow and expensive process of setting up peripheral branch networks amid a dearth of physical banking infrastructure.

In the same way, MEA businesses and consumers have been quick to adopt online commerce as COVID-19 pandemic restrictions curb conventional trade and shopping.

New order

Visitors from MEA economies have for many years been fixtures at Hong Kong Trade Development Council (HKTDC) events, sourcing products and meeting new clients and partners. These businesses have swiftly adapted to the online event model the HKTDC began adopting last year amid tight restrictions on international travel and physical events.

The HKTDC’s MEA regional office in Dubai held a webinar earlier this month to highlight trends in online sourcing and introduce the hybrid HKTDC International Sourcing Show, which runs online from 17 March to 29 July and as a physical event in Hong Kong from 26 to 29 July.

Daniel Lam, the HKTDC Regional Director for Middle East and Africa, told the webinar that the World Trade Organization now forecasts that world merchandise trade for 2020 will have declined 9.2% in volume for 2020 and will rise 7.2% in 2021. But the course of the pandemic and related government policies make this forecast tentative.

Mainland China had been the first major economy to recover from the pandemic, Mr Lam said, and has become the most promising driver of world trade in this year. The latest forecasts indicated the mainland’s gross domestic product (GDP) expanded by 2.3% last year and will then rise by more than 8% in 2021. In a bid to help facilitate this, the 14th Five-Year Plan, which covers 2021 to 2025, advocates a new “dual circulation” development model aimed at reinforcing domestic demand as the main growth driver. Inevitably, this is expected to create increased opportunities for world trade, especially in the Guangdong-Hong Kong-Macao Greater Bay Area and within the Belt and Road economies.

“As with other industries, COVID-19 has accelerated technological trends,” Mr Lam said. “We are seeing transformational changes in the marketplace, driven by meaningful technological advancements.”

He said virtual tours, e-commerce platforms, video conferencing and other similar innovations had been around for some years but had accelerated greatly amid the pandemic. Enterprises could deploy new technology solutions to explore business opportunities and continue to excel.

Virtual fairground and e-commerce
To help enterprises tide over the COVID-19 outbreak, the HKTDC has launched a series of digital initiatives, including webinars, an upgraded online marketplace and virtual exhibitions.

All these digital initiatives give businesses in Hong Kong and companies in the Middle East and Africa new channels to maintain and establish contact with global buyers and capture orders during the traditional peak sourcing season.

Emerging strength

Michelle Leung, CEO of China-based e-commerce service provider Fung Omni Services, told the webinar that global e-commerce sales had grown from US$2.796 trillion, which comprised 11.9% of retail sales, in 2018 to 16.5% in 2020. Projected online sales would reach 21.4% by 2024, when digital sales would be worth US$6.297 trillion.

Of last year’s sales, 63% were in the Asia-Pacific, 19% in North America and 13% in Western Europe. The MEA region as well as Central and Western Europe accounted for a small slice of overall online sales but the regions were catching up quickly, growing 19.8% and 21.5% respectively against a global average of 16.5%.

In terms of the number of online shoppers, emerging markets are growing strongly with the Asia-Pacific headcount rising 8.6% while MEA markets grew 5.9% and the mature North American market expanded 3.7%.

Ms Leung said for many years business-to-business (B2B) and business to consumer (B2C) operators had worked independently, but recently these had started to converge, as the mainland’s Taobao and AliExpress, or Amazon and Amazon Business, moved closer together. This allows operators to have a single inventory and order system for both. She said the online B2B market was growing faster than B2C, reaching US$6.6 trillion in 2020.

Livestreaming

Ms Leung pointed out that conducting sales through livestreaming was very popular in Asia as consumers feel as if they were inside a shop. Giving an example of taking the concept to overseas markets, she described Fung’s Manchester City Tmall Global store, which virtually takes consumers to the England football club’s shop.

Dawn Chan, Manager of HKTDC Visitor Promotion, pointed out that four out of five leading companies worldwide relied on the mainland for suppliers. The HKTDC last year launched summer and autumn sourcing weeks online.

She said the HKTDC International Sourcing Show would feature four product zones – Smart Home, Smart Play, Smart Style and Smart Tech – as well as the Intelligence Hub, which would host numerous seminars keeping attendees up to date on developments in their industries.

Suppliers could find the most appropriate buyers and vice-versa through the Click2Match business matching platform, which uses artificial intelligence (AI) to automatically match exhibitors with prospective buyers.

Lenny Lee, HKTDC Digital Business Senior Marketing Manager, said online global sourcing responds to global opportunities brought by the crisis.

He said the hktdc.com Sourcing online marketplace, which has been upgraded to meet pandemic-era needs, offered buyers personalised product recommendations, trustworthy and authenticated suppliers (of gold, silver and bronze reliability categories), enhanced connections with suppliers, and succinct features for product sourcing, such as a buyer dashboard and personalised product alerts.

Companies could easily create sourcing pages and develop search tags for their products, he said. Artificial intelligence features ensure buyers can easily find what they need.

The platform also offers all-round promotion features including social media, news bites, newsletters and search-engine marketing.

Muhammad Noufel, General Manager of Dubai firm Specialised Lighting Trading, has been travelling to HKTDC events for more than 20 years and welcomed the online platforms the HKTDC set up when the pandemic prevented travel.

“My experience with all these platforms has been very encouraging and if I am to say I have at least sustained operations over the pandemic period and it was because of these online platforms where I managed to continue to establish relationships with existing and new suppliers,” he said.