Zhongwang Market - Yiwu "Vitality Curve": Building A New Era Of World Business District In Transformation

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At Yiwu International Trade City, foreign businessmen negotiate business with merchants. Photo taken by Yang Ye and Zhang Dawei

Reporter Wu Zhengyi and Yang Ye

Every afternoon around 5 o'clock, the roads around Yiwu International Trade City are congested on time - tens of thousands of business owners rush out after closing their stores and drive back.

An ordinary day, an extraordinary year. In 2023, despite the severe foreign trade situation, Yiwu, known as the "world supermarket", has drawn a "vitality curve". Data shows that from January to November 2023, the total import and export value of Yiwu City exceeded the 500 billion yuan mark for the first time, reaching 522.12 billion yuan, a year-on-year increase of 18.1%; Among them, exports amounted to 461.62 billion yuan, a year-on-year increase of 15.7%.

Small commodities, large markets. This vitality, originating from a super strong supply chain, is projected onto 75000 stores, generating orders one by one; Mapping onto Yiwu International Trade City is a continuous iteration and innovation.

There are more orders now

During this period, it is the peak season for the shipment of Dragon Year and Spring Festival supplies. As a major merchant specializing in producing original New Year paintings, Wang Yan, the founder of Xintao New Year decorations, and her husband are busy.

"Factory workers are all working overtime, and there are too many orders to handle," Wang Yan told Shanghai Securities News reporters. Generally, the ordering season for New Year paintings is concentrated from the end of October to early November each year. "The peak season this time is even busier than expected, with not only customers from all over the country, but also many overseas Chinese merchants coming to purchase. Orders have been scheduled for mid January 2024."

"Customers are like a dragon, if they don't come, they will suffer poverty." This is a common saying among business owners of Yiwu International Trade City. The bustling Yiwu International Trade City, with 75000 shops, has been bustling for almost the entire year of 2023.

These busy figures have burned a set of numbers - in December 2023, Yiwu officially became the first county-level city in China with an annual express delivery volume exceeding 10 billion yuan. This means that nearly 30 million parcels are shipped daily from here to over 230 countries and regions around the world.

When conducting research in Yiwu Small Commodity City, the reporter learned that many merchants have seen unexpected growth in orders, and factory production has been scheduled for April and May 2024.

Just after receiving a group of foreign buyers, Tao Juying, the founder of Zhejiang Yilingnuo Technology Co., Ltd., immediately called the factory to inquire about the order situation. "Ensuring delivery" has become her most important task at the moment. Tao Juying and his wife mainly export bathroom products, and the "FIRMER" brand they founded has gained some fame. Their products are exported to Europe, America, Southeast Asia, Africa and other places.

"Since 2023, market sentiment has returned and foreign merchants have significantly increased. Our order volume from January to October increased by 60%," said Tao Juying.

The reporter's visit found that, in addition to the rising popularity, the market is also changing quietly, and orders from countries jointly building the "the Belt and Road" are growing.

"In the past years, there were many customers in Europe and the United States, but since this year, the number of customers who jointly built the" the Belt and Road "countries has increased significantly." In the view of Wu Jianjing, the general manager of Yiwu Meishi Cosmetics Co., Ltd., national policy orientation and multiple facilities in transportation, logistics and financial services are important factors to attract foreign businessmen from the "the Belt and Road" countries to Yiwu.

The reporter learned from Yiwu Mall Group that from January to November 2023, the sampled transaction volume of the entire market exceeded 200 billion yuan, with a daily average passenger flow of over 200000 people and a daily average foreign trade flow of over 3100 people, basically recovering to the level of 2019. From January to November, Yiwu's imports and exports to countries jointly building the "the Belt and Road" totaled 292.47 billion yuan, up 22% year on year.

Transformation and innovation

Since 2023, China's foreign trade has been under pressure due to the impact of the global economic environment. Traditional manufacturing enterprises are feeling the pressure brought by the slowdown in external demand growth.

Why is Yiwu's foreign trade growing against the trend? Several merchants told reporters that from the perspective of the industrial chain, Yiwu's organizational capacity, supply capacity, and market supply chain resilience still have strong competitiveness globally.

In recent years, more and more Yiwu enterprises have chosen to take the initiative and seek development through transformation, upgrading and building their "moat" through innovation and brand building.

"Your products have a variety of styles, good prices, and reliable quality!" A heartfelt remark from Ali, a customer from Iraq, made Tao Juying quite pleased. She told reporters that good products and excellent services are the biggest "magic weapon" to retain customers.

Tao Juying recalled that during her overseas exhibition in 2008, some customers bluntly said "Chinese (Yiwu) products are junk", which deeply hurt her and prompted her to turn towards branding. "A few years ago, we almost invested all of our revenue in brand building. It was difficult at first, but now it has come out!" She said, "Putting customer service first, solving each 'pain point' with innovation, has formed a closed loop of trade services."

Traditional New Year painting products are also being innovated and upgraded by the owner of Yiwu. "On the one hand, our New Year painting products have collaborated deeply with multiple designer teams to create 'bestsellers'; on the other hand, we have introduced more scientific production and management processes in our own and cooperative factories to ensure product quality." said Wang Yan.

Merchants are undergoing transformation, and shopping malls are also undergoing transformation. As the world's largest wholesale market for small commodities, Yiwu China Small Commodity City is also undergoing an innovative transformation, completing the transformation from a traditional commercial enterprise to an international trade comprehensive service provider.

The acceleration of Yiwu's small commodities going global relies on increasingly convenient infrastructure. In recent years, the Small Commodity City has laid out overseas warehouses, built overseas markets and opened up cross-border payments around the joint construction of the "the Belt and Road" countries. As of December 2023, 50 new overseas warehouses have been added, totaling 210, covering an area of over 1.9 million square meters and covering 54 countries. The business scope of the joint venture company Zhijie Yuangang has expanded to 129 countries, 60 shipping companies, 33 routes, and 453 destination ports worldwide.

Wang Dong, General Manager of Small Commodity City, introduced to reporters that 2023 is the first year of YiwuPay's "Yipay" business expansion. As of December 22 of that year, more than 20000 merchants have opened cross-border RMB accounts, and cross-border settlement funds have exceeded 7 billion yuan. The "Small Business AI" big model launched by the mall empowers market operators and has currently served over 2000 market operators. "On the one hand, the small commodity city continuously promotes prosperity around the traditional offline market, while stabilizing the basic market, driving growth and market expansion; on the other hand, it focuses on the fulfillment end, guided by digitization, connects the overseas supply chain, and constructs a full chain trade ecological closed loop." said Wang Dong.

The World Business District in the New Era

"If the market prospers, Yiwu prospers; if the market declines, Yiwu declines." This is a consensus in Yiwu.

At the recently held "The Third China (Yiwu) the Belt and Road Cities International Forum 2023", the former President of Slovenia Danilo Turk sighed that Yiwu, a city that does not rely on the sea and has no mineral resources, is famous for its trade and has become the world's small commodity capital, which is a miracle. "The development of commodity trade in Yiwu also reflects the miracle of China's transformation and reform," he said.

Pushing open the window of Yiwu, the world not only sees the hard power of China's manufacturing industry, which has steadily ranked first in the world, but also feels the huge potential of the huge consumer market with over 1.4 billion people.

The current Yiwu market gathers 26 categories of 2.1 million types of goods, covering more than 230 countries and regions in trade. On average, 30 million parcels are sent out from here every day, and more than 560000 overseas merchants purchase from Yiwu every year. More than 15000 merchants from over 100 countries and regions often reside in Yiwu, and it is also related to 2.1 million small and medium-sized enterprises and 32 million industrial workers nationwide. It is truly a "small commodity, big market".

"Through the efforts of generations of Yiwu people, Yiwu has formed a new era of world business district." Chen Wenling, Chief Economist of the China International Economic Exchange Center, said that the next step is for Yiwu to continuously expand its market level, international trade level, industrial level, urban level, open level, reform level, and cultural level, in order to enhance the level of the business district. And relying on the advantage of foreign investment gathering, integrating China and the world, making Yiwu an important window for "China to see the world, and the world to see China.".

Looking towards the future, entrepreneurs in Yiwu are constantly innovating——

Tao Juying has just formed a new overseas marketing expansion team and will expand one-on-one support for overseas customers next year. At the same time, on the basis of expanding traditional overseas markets, she will also enhance her development efforts in new markets such as Mexico.

Sun Lingjuan, founder of Fodora Jewellery, told the reporter that, in addition to continuously increasing the proportion of jewelry R&D personnel and accelerating the update of new products, he also recently launched relevant advertising in Little Red Book and Tiktok. She checks data every day and receives new customers who are "attracted" to her. "Many of our clients are young entrepreneurs, and our marketing activities need to keep up with the times. We hope to attract and cultivate new customers through these younger platforms for advertising display."

The export channel of Yiwu small commodities continues to expand globally. Fan Xiaohong, the person in charge of East China International Intermodal Port, told reporters that it is expected that the number of trains sent will continue to increase in 2024. "To meet the growing demand, we are planning to increase the number of China Europe trains to Central Asia."

Not far from the east side of the fifth district of Yiwu International Trade City, the construction of the Global Data Trade Center project with a total investment of over 8.3 billion yuan is in full swing, which is a sign of Yiwu's iteration and leap towards the sixth generation market.

"Unlike the previous five markets, the sixth generation market is an open market with the goal of turning Yiwu into a free trade zone!" Wang Dong told reporters that the sixth generation market, with the new import market as its core symbol, online and offline digital linkage, global layout, and goods to the world, allows global merchants to rely on the Yiwu Free Trade Zone platform to facilitate free global trade.

Source: Shanghai Securities Journal