BEIJING, July 9 (Xinhua) -- At the recently-concluded 5th China-South Asia Expo, participants contracted a total of 456 projects worth 807.937 billion yuan.
China and South Asia has kept significant momentum in the economic and trade cooperation over the past years. Gao Yan, deputy director of the Ministry of Commerce, stated recently that in 2017 the trade volume between China and South Asian countries had reached 126.77 billion U.S. dollars, up 14.6 percent year on year, together with 1.7 billion U.S. dollars directly invested to these countries.
As the Belt and Road construction continuously promotes upgrading of infrastructure and logistics systems in South Asia, new opportunities have been created for cross-border e-commerce development.
Analysts believe China has secured a leading position in the e-commerce field. With their considerable size and strength, Chinese e-commerce giants like Alibaba and JD.com can bring more capital to South Asian countries while providing more business model options together with more operational assistance.
In its e-commerce infancy, South Asia is seen as one of the most promising markets with regards to that industry.
On May 8, Pakistani e-commerce company Daraz announced that it had been wholly acquired by Alibaba Group. Daraz operates in South Asian countries such as Bangladesh, Myanmar, Sri Lanka and Nepal. The total population of its five markets exceeds 460 million, of which 60 percent are under 35 years of age.
“South Asia has a huge consumer market. There are 1.3 billion people in India 200 million in Pakistan. With a relatively large proportion of young population, these countries are witnessing large amounts of active consumption. In addition, young people are more ready to accept new consumption styles. Therefore, South Asia is a promising e-commerce market with great potential,” pointed out by Liu Xiaoxue, associate research fellow at the National Institute of International Strategy of Chinese Academy of Social Sciences.
E-commerce is developing at a noticeably rapid pace in Pakistan, with a reported annual growth rate of 72 percent. The country’s e-commerce sales in 2017 reached 622 million U.S. dollars, and the figure is expected to exceed 1 billion dollars by 2020.
Jawad Farid, an executive at an innovative technology company based in Pakistan named ExD, said that of Pakistan’s 70,000 individual items sold on e-commerce platforms each month, about 35 percent are delivered outside of Karachi, Lahore and Islamabad. This indicates that though most online shoppers live in urban areas, rural consumers are also willing to buy locally unavailable products online.
The development of e-commerce is related to the level of infrastructure and the industrial chain, which is comprised of logistics, payment, marketing, financing environment, personnel and other associated conditions.
It’s reported that in South Asia, despite the rapidly growing consumption of smart phones in countries such as Sri Lanka and Pakistan, payment system is an area growing relatively slowly. Farid disclosed that the mainstream means of payment in Pakistan is cash on delivery, which accounts for 90 percent of all transactions. To capture market opportunities ahead of others, Chinese FinTech giants have sped up their deployment in South Asia.
In March this year, Alibaba’s Ant Financial announced an intended 184.5 million dollar investment to Pakistan’s number one mobile payment platform, Easypaisa, which has over 20 million users. In April, Ant Financial entered into strategic cooperation with bKash, the largest mobile payment company in Bangladesh, to create a local version of Alipay. Prior to those moves, Ant Financial had also invested in India's largest mobile payment and business platform Paytm.
“These versions of ‘Alipay’ for use by locals, although under different names, have received technological empowerment from Alipay and the locals can also enjoy the benefits brought along by technologies in the era of digital financial inclusion. The number of Paytm users has gone up from the 23 million three years ago to 250 million today, making it the world’s third largest e-wallet and enabling the commonly seen QR code in China available on the streets of India. In Bangladesh, Alipay has upgraded bKash from the era of simple handsets to that of smart phones," said one executive from Ant Financial.
(Edited by Yang Qi, kateqiyang@xinhua.org; source: 21st Century Business Herald)
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