Online firms wary about economic outlook

Sellers to combat global slowdown by expanding product portfolios

More than 40 percent of Chinese small and medium-sized enterprises that export via e-commerce remained neutral about the future of the export business amid uncertainties about the global economic outlook, according to a recent survey.

About 42 percent of the Chinese large sellers on eBay Inc, a global online marketplace, said they were neither optimistic nor pessimistic about the economic outlook, compared with 39 percent that were optimistic.

The survey, conducted from July to August, was based on 809 eBay sellers whose sales exceed $100,000 in the mainland, Hong Kong and Taiwan.

Total annual sales of 3,835 eBay large sellers as of June 30 grew by 93 percent in the mainland from a year ago, said John Lin, eBay vice-president.

He attributed the growth to increasingly large demand from emerging markets, especially Latin America, Eastern Europe and the Asia-Pacific. Chinese companies' e-commerce exports to Argentina increased by 96 percent, to Israel by 72 percent, and to Ukraine by 71 percent from July 2011 to June this year, according to figures of eBay's online payment arm, PayPal Inc.

"While consumer electronics, clothing and jewelry remained the strongest category that companies export via e-commerce, household products, auto parts and sporting goods are increasingly popular," Lin said.

Among the surveyed large sellers, 71 percent said they will expand their product portfolios to meet the economic challenges.

The robust growth of export business via e-commerce, however, sharply contrasts with China's overall export outlook.

The country's exports in October increased by 11.6 percent from a year earlier, the strongest growth since May, according to figures released earlier this month by the General Administration of Customs.

China has seen its exports decline since late last year, and it is only in the past few months that the figure has accelerated.

Wang Haifeng, director of international economics at the Institute for International Economic Research, which is affiliated with the National Development and Reform Commission, said that the low price of online products is one of the main reasons for online sellers' growth overseas, especially in emerging markets where the residents, who have lower incomes, are more sensitive to prices.

There are around 40 million SMEs in China, and only 5 million are export-focused, according to the National Bureau of Statistics. SMEs that use e-commerce websites to export remain a fraction of the total.

Despite the growth, the surveyed sellers cited intensifying global competition, high logistics expenses, and large retailers turning to online sales as their main concerns.

China has become one of the top five countries on eBay in terms of revenue, Lin said. The company generates its revenues from commission from its sellers.

chenlimin@chinadaily.com.cn