Diane Wang of DHgate.com says that this revolution is helping to level the playing field between large enterprises and SMEs, while also pushing more female entrepreneurs to the fore.
Slowly but surely, large-scale enterprises are becoming increasingly prepared for digital globalisation and are embracing new types of digital businesses, like cross-border e-commerce platforms. Traditional manufacturing enterprises and traditional foreign trade enterprises, as well as marketing, payments, logistics, distribution warehouses, financial services and other business processes, are all undergoing significant changes as a result. The deep integration between traditional business and the Internet, including the adoption of both an online and an offline presence by businesses of all kinds, is already highly visible.
According to conservative estimates, only half of traditional enterprises are likely to be experience this ‘rebirth’ in the future, though; the remaining fifty per cent will have to contend with them. The result will be that, by 2030, approximately two billion jobs will have vanished, accounting for roughly half of existing job opportunities worldwide. However, after 15 years, many new types of global companies are predicted to emerge.
Closer ties between traditional industry and the Internet
We are already in the midst of this evolution. For example, in China, street vendors must now support mobile phone payment methods, or risk being abandoned by customers. This is also true for big chain stores like WalMart, as well as ‘mom-and-pop’ shops selling baked goods. These may be examples of the shallow integration of traditional industries and the Internet, but this is just the beginning. In the future, businesses’ more prominent use of the Internet will create inestimable opportunities.
Traditional enterprises will only have access to these opportunities if they leverage the Internet to enhance their core abilities. We are still in the early stages of companies with an online presence alone gaining an offline presence, and traditional enterprises gaining an online presence. Deep integration like this will allow new companies to rise in every industry; in addition, such integration will remould industries’ ecosystems. In time, offline-only enterprises and online-only enterprises will become fewer and fewer.
Not long ago, I was chatting with the owner of the biggest foreign trade group in China. They offer services to thousands of local SMEs that engage in foreign trade, helping them with customs clearance and tax return settlements. However, they were surpassed by a small company that leverages the Internet and foreign trade services more effectively than they do. This is an example of how digital globalisation helps level the playing field; it also helps worthy enterprises achieve the success they deserve.
With the merging of traditional industries and the Internet, the strategies that enabled past successes, like possessing multiple warehouses, are no longer relevant today. Thus, all resources must be re-examined with digital globalisation in mind. That being said, the nature and goals of the business have not changed, providing quality products and services to customers is still essential.
Taking the aforementioned foreign trade group as an example, the thirty years of experience in foreign trade that the owner has accumulated remains the organisation’s most valuable asset. But while historically he was rightly focused on customer service, there was also a need to build a comprehensive foreign trade service platform capable of attracting more customers from other provinces, while developing innovative services. It was the Internet that provided the opportunities for this kind of deep integration.
First, the Internet provided the opportunity to scale up his business. Many companies like his are scattered across various heavily-populated places, such as Zhuhai, Qingdao and Hangzhou, but only serve customers within their respective regions. After he achieved deeper integration with the Internet, he broke free of such regional confines. Now, he not only serves local customers, but also those across the country.
Second, through online service platforms, the cost of services that they provide has been reduced, while efficiency has actually improved.
Third, digital integration has provided the opportunity for them to develop more innovative services, such as supply chain finance and assisting customers to handle their tax returns. Before, it took six months for customers to receive their returns, now the time is much shorter. The tax return can be given immediately to the customer, because banks can utilise online data to determine the customer’s credit before offering a direct return.
In China, TaoBao, China’s leading domestic e-commerce platform, has been revolutionary in multiple areas, particularly with gathering goods from across the country and redistributing them. However, digital globalisation has brought another change – cross-border e-commerce platforms have been breaking down the boundaries between countries. The future holds the promise of people being able to buy and sell globally much more easily.
Over the past 10 years, the Chinese Yiwu Commodity City, the Guangzhou wholesale market, the Russian market and the Spanish wholesale clothing market, have all been receiving less and less attention. According to the the head of the Yiwu Commodity City, the flow of people is only a quarter of what it used to be; nowadays, everyone is sourcing their products online.
In actuality, digital globalisation has not abandoned these major markets. Through cross border e-commerce platforms they can transform their businesses, acquiring business from beyond the confines of their locality, accepting orders from across the globe. Therefore, businesses are not limited to selling their goods to Chinese customers alone; they can also sell to Chilean, Brazilian and Singaporean customers. Companies can function both online and offline. They can also choose to use a combination of the two, using online payment for in-store purchases.
Digital globalisation means more equality
When it comes to digital globalisation, there is no rich or poor, big or small, male or female. In other words, due to the nature of international business, people cannot and will not discriminate against sellers based on such criteria. More companies can thus enjoy the prospect of increased sales.
First, during the era of traditional trade, it took some developing countries several decades or even centuries to catch up to developed countries. But today, the forces of digital globalisation have allowed developing countries to develop far more quickly. China is by far the most successful case, but Brazil’s progress is quite impressive as well: digital globalisation has resulted in its GDP being two to three times higher than some developed countries.
Second, even if a company does not have the same name recognition that companies like Lenovo or Huawei have, SMEs can still become multinational enterprises and compete with much larger companies in the global market. Even the smallest company can gain an international following.
Third, digital globalisation helps women have the same equal entrepreneurial opportunities as men. According to a 2015 survey conducted by Alibaba, only 3.6 per cent of female entrepreneurs work in traditional industries; however, I am proud to say that roughly half of the entrepreneurs on DHgate.com are women.
A woman named Jolie Shen is one such entrepreneur. In 2011, after she graduated with her associate’s degree, she resigned from a foreign headhunting company based in Beijing and moved to Suzhou to be with her family. As a stay-at-home mother, she decided to start her own business on DHgate.com, selling wedding dresses to buyers in Europe and the United States. Her one-woman operation evolved into a company with over seventy people in four years. Just last month, the company attracted the attention of a new investor. She intends to use this funding to realise her dream of attaining international brand recognition, through cross border e-commerce.
Embracing both the Internet and globalisation clearly increases the number of opportunities available to female entrepreneurs, helping them to succeed in their chosen industries.
It is evident that digital globalisation is reaching every corner of the world, offering everyone the opportunity to realise their dreams. With the help of digital integration, we can achieve more equitable capital allocation across the globe, making the act of embracing digital globalisation a worthy pursuit.
DHgate.com is the first to market and the biggest transactional cross-border B2B e-commerce marketplace in China, providing global buyers with quality products at competitive prices. Founded in 2004, DHgate.com has approximately 10 million global buyers from 230 countries and regions, with 1.4 million global sellers offering 40 million products. DHgate.com‘s business enables buyers to directly access global manufacturers of the world’s top brands with rich product selections. DHgate.com is an all-in-one platform with integrated services for international logistics, cross-border payments, internet financing.