Alibaba has reportedly struck a deal with Zhejiang Province's Yiwu City to develop a platform under the Electronic World Trade Platform (eWTP) project that aims to provide an e-commerce trading platform for small and medium enterprises (SMEs).
Yiwu City is the world's largest market for wholesalers of commodities that people use on a daily basis. Alibaba's collaboration with Yiwu will reportedly allow small sellers to have a trading platform where they can have access to buyers from around the world.
Yiwu is expected to gain a lot from the deal as it exports goods to over 200 countries outside China. The deal is expected to improve exporting figures and revenue for the wholesale market that attracts over 500,000 buyers yearly.
Furthermore, the platform is expected to encourage small business owners to tap into global buyer circles that they haven't been introduced to in the past. If the trading platform is a success, Chinese sellers can gain popularity in the e-commerce and export sectors.
Alibaba has been working to boost its cross-border e-commerce activities over the last few months as online retail was predicted to show signs of slowing down this year and the next. The Chinese e-commerce giant is expecting to gain improved logistics through the Yiwu deal.
Under the eWTP system first introduced by Alibaba Founder and Chairman Jack Ma, the Yiwu deal is expected to reduce costs and potential barriers that could be keeping SMEs from trading with global buyers.
While Alibaba is basically unrivaled in China, the deal with Yiwu City is expected to further increase the company's foundations in its home turf. The firm already has eWTP hubs in Rwanda and Belgium.
Global Times noted that many traders in China have transitioned digitally. Sports products exporter Zhang Xingang told the outlet that his business expanded at a faster rate after he moved the focus from brick-and-mortar selling to e-commerce.
The interest in online retail has gone widespread in China, opening many doors for the Alibaba-Yiwu deal to explore and tap into. There are also various sectors in the Chinese market that still need a trading platform to improve their global reach.
Yiwu City is already a massive market for wholesaling as it recorded export figures of 81.92 billion yuan in Q1 2019. With the digital economy booming and Alibaba coming around to offer a digitized platform for sellers in the city, it is expected that China's exports will build up despite the trade war.
"The synergy of the two ecosystems will create value for our communities of users," CEO of Alibaba Group, Daniel Zhang, said of the collaboration.