Cross-border E-commerce Boosts China-ASEAN Agricultural Cooperation

Guo Xixian

“Sawatdee ka， Dajia hao （Hello， everyone），” greets NisacholThaithong， a Thai live-streamer facing a mobile phone， preparedto sell. In traditional Thai clothes， Nisachol greets viewers in both Thai and Chinese.

Nisachol hails from Ko Samui， anisland of Thailand， and has been livingand studying in China for 12 years. Sheholds a PhD in Economics and performsacademic studies on the Chinese andASEAN economies， teaches the Thailanguage， and hosts livestreams. Nisacholsells Thai durians on multiple mainstream Chinese social media platforms including Douyin and Toutiao and promotes otheragricultural products such as jasmine teaon Facebook and Lazada， the largest onlineshopping platform in Southeast Asia. Sheattended the China-ASEAN Expo twice and won the New Star Prize at the 2021 LazadaSoutheast Asia Cross-border LivestreamTalents Competition.

“I became a livestreamer quite byaccident，”revealedNisachol. She arrivedat Guangxi University in 2010 seeking amasters degree in International Trade. Shewas soon fascinated by Chinese cultureand decided to stay in China for furtherstudy. After the COVID-19 outbreak in 2020， Nisachol began teaching classes onlineand became familiar with livestreaming. Gradually she developed an interest inlivestream marketing and decided to give it a try.

Nisachol cooperated with friendsto build her own brand of durians. Herpartners were engaged in tourism inThailand， but the pandemic pummeledthe industry， pushing them to seek forother sources of income. Half of Nisacholsteam works in Thailand to communicatewith fruit growers， find suppliers， andbuild logistics chains， while the other halfengages in marketing in China.“We plan tosell tangerines from the Wuming District of Guangxis Nanning City，”saidNisachol.“Our business has been improving， giving us theconfidence to sell Thai durians in China and introduce Guangxis produce to Thailand.”

Livestream Booms

Pressured by the COVID-19 pandemicand the conflict between Russia andUkraine， agricultural production capacity has been shrinking in the last two years.China-ASEAN agricultural trade has beenimpacted， but containment measures such as lockdown inspired greater usage of theinternet in ASEAN countries. Businessopportunities for cross-border e-commerce were generated during the crisis， and sales of agricultural products received a boostthrough livestream selling.

Nisachol is one of many to sell products on livestream platforms. The 3rd LazadaSoutheast Asia Cross-border LivestreamTalent Competition took place on June 24， 2022. Altogether， nearly 200 livestreamershad participated in the annual event in the last two years， garnering millions of views and over 100 million likes.

The“Premium Goods from ASEANFriends”livestream marketing campaignheld on March 28 featured consul-generals of Malaysia， Thailand， and Vietnam inNanning. They promoted high-qualityASEAN goods to Chineseconsumers and also introducedGuangxi produce and specialties to Southeast Asian viewers. Theevent was tremendously popular throughout the region.

The 2020 China-ASEANLivestream Shopping Festival，another livestream marketingprogram to facilitate trade ofagricultural products betweenChina and ASEAN， lasted aslong as five months and heldover 300，000 livestream events，achieving sales of nearly 10 billion yuan （US$1.48 billion）.

At a press conference onChina-ASEAN Economic andTrade Cooperation at the 18thChina-ASEAN Expo on July 29，2021， Ren Hongbin， AssistantMinister of Commerce， notedthat cross-border e-commerce inChina had been undergoing rapid development in recent years andbecome a new highlight of foreign trade development. Since theCOVID-19 outbreak， in particular，cross-border e-commerce hasbucked the trend and maintained rapid growth. The scale of thesector has increased almost tenfold infive years. According to data released by the General Administration of Customs on April 24， 2022， Chinas cross-bordere-commerce market volume reached1.92 trillion yuan （US$283.97 million）in 2021， year-on-year growth of 18.6percent.

Nisachol can seamlessly shiftbetween Chinese and Thai languageswhile livestreaming. She likes to teach Chinese viewers simple Thai wordsand expressions such as“delicious” and“thankyou.”When introducingproducts， she shows viewers ways toopen a durian and pick a ripe one.

Nisachol likes to interact withviewers during her livestreams. Shesings Thai songs with her colleagues and performs Thai dance. Nisachol knowsChinese livestreaming jargon as welland often shouts“send the number‘one， Laotie”to stimulate viewers.“Laotie”is a popular Chinese online phrase referring to big fans or dear friends， and viewersusually post No.1 in the commentsto simply acknowledge the streamer.Many Chinese viewers are surprised tosee a Thai girl speak fluent Chinese andsell products on livestream platforms.They interact with her and even sendher bonus“gifts”（varied amounts ofmoney）.

Nisachol recognizes the potentialof livestream selling. She noted thatlivestreaming has fewer limitations onthe diversity of sales， which makes theendeavor more interesting. It cuts thedistance between sellers and customers， and empowers buyers to learn about the products directly and vividly. Productsare purchased by viewers withoutapplying any pressure.

Livestream selling has even evolvedinto a new social form. Many Southeast Asian celebrities with many fans havejoined the industry.“It gives themopportunities to communicate withfans，”saidNisachol.“Livestream selling helps celebrities maintain their fan bases and increase income to offset decreased revenues from public performances due to COVID-19 protocols.”

Yuan Bo， a researcher and deputy director of Asian Institute of ChineseAcademy of International Trade andEconomic Cooperation （CAITEC） underthe Ministry of Commerce， noted thatwhile China-ASEAN e-commerce hasbeen developing fast， the outbreak ofthe COVID-19 pandemic prompted theemergence of new forms of cross-border e-commerce and helped influencerlivestream selling achieve explosivegrowth. Products sold by internetinfluencers are generally affordablebut with high quality， which suits theeconomic development level of bothChina and ASEAN. Internet celebrities livestream promotion has won culturalrecognition as well. Many e-commercecompanies have been scrambling toinvest in ASEAN to create an evenmore favorable environment forfurther development of cross-bordere-commerce.

More than 100 cross-bordere-commerce companies includingAlibaba and Ant Group have established offices in the Guangxi Pilot Free TradeZone. Lazada has built a cross-bordere-commerce and innovation servicecenter in Nanning to create servicesystems for livestreamer incubation，cross-border livestream selling， andforeign language training for cross-border e-commerce practitioners. Over 200 livestreamers have worked at thecenter.

Difficulties and Challenges

Alongside the many opportunities，the pandemic and Russia-Ukraineconflict have brought challenges tocross-border e-commerce. Agricultural products have a shorter shelf life andgreater transportation requirementsthan most commodities. Seasonalproduce surges at harvest time， causing even bigger pressure on logistics.

Nisachol stressed that durianstransported by air are picked whenthey are at“80 percent ripeness”toguarantee the quality of the fruit. Land transportation costs less but takeslonger， so durians delivered by land are usually picked when they are at “60 percent ripeness.”

The COVID-19 pandemic added uncertainties to the transportation， with customs clearance time increasing by three to five days on average， and a sudden outbreak may further prolong the waiting. The costs of Nisachols durians rose two to three times after the pandemic.

Late last year， one of Nisachols refrigerated trucks waited for 15 days at Guangxis Youyiguan Port， during which time many durians nearly spoiled. The fruits， which were expected to sell for 900 yuan （US$133.29） per crate， were finally unloaded in Jinhua， Zhejiang Province， and for only 400 yuan （US$59.24） per crate， causing nearly 400，000 yuan （US$59，240） of losses. Now， most durians she sells are transported by air. Although this squeezes her profit margin， Nisachol wants to guarantee consumers fresh products.

The sustained development of crossborder e-commerce of agricultural products faces many challenges. In terms of transportation， logistics infrastructure needs improvement， and the situations of countries railways and highways vary. Institutionally， a lack of standards for inspection and quarantine as well as certification of agricultural products also causes problems. Meanwhile， laws and regulations on cross-border e-commerce are not improved enough to effectively restrain false advertising and regulatory violations arising in livestream selling. In terms of markets， cross-border e-commerce in many ASEAN countries started late， so the ASEAN market is not open enough because of the lack of both information and related marketing experience.

Nisachol believes that the sector is seizing progress despite the many lingering difficulties. Varying languages， cultural differences， the lack of information transparency， distrust of payment credibility， and incomplete supply chains are all hampering the development of cross-border e-commerce.

Yuan Bo added that more efforts are needed to facilitate China-ASEAN e-commerce of agricultural products. Although the sector boasts great potential and advantages， both sides should focus on coordinating the online economy and the real economy to ensure long-term development. Nontariff barriers will be eliminated， which will require greater efforts in inspection and quarantine as well as reciprocal recognition of standards of agricultural products.

At a high-level April 26 conference to discuss Chinas e-commerce of agricultural products， Zhang Tianyi， director of Department of Market and Informatization of the Ministry of Agriculture and Rural Affairs， outlined how the sector enjoyed rapid development in the past but is now at a key stage of overcoming difficulties. The strategies and policies related to the sector should pivot to high-level development， which requires a shift in focus from sales to upgrading industrial and supply chains and building brands. All these efforts are fundamental to the sustained and sound development of the sector

RCEP Booster

The entry into force of the Regional Comprehensive Economic Partnership （RCEP） agreement on January 1， 2022 marked the creation of the free trade area with the largest population and biggest economic aggregate. The RCEP will become a development booster for China-ASEAN cross-border e-commerce of agricultural products.

Chapter 12 of the RCEP agreement elaborates on electronic commerce because developing the sector has become a consensus of signatories. As part of the agreement， customs clearance procedures are simplified for more efficient release of goods. It stipulates that the importing Party shall adopt or maintain procedures that allow goods to be cleared from customs within 48 hours of the arrival of goods and provide for the release of perishable goods from customs control in less than six hours.

The agreement also promotes paperless trading by clarifying that aParty shall not deny the legal validity of electronic authentication and electronic signature. It also requires each Party to endeavor to avoid unnecessary regulatory burden on electronic transactions and build mechanisms of dialogue and dispute settlement on e-commerce. RCEP encourages establishment of new cross-border e-commerce service platforms and construction of supportive logistics systems and overseas warehouses to accelerate sound development and upgrading of cross-border e-commerce.

Yuan Bo added that RCEP further lowers tariffs on some agricultural products such as peppers and coconut water ASEAN exports to China， based on the China-ASEAN Free Trade Area （CAFTA） agreement. And the principles of trade facilitation provide a favorable environment for the import and export of produce， especially fresh products. Harvest time of agricultural products varies between China and ASEAN countries， which is also a factor conducive to bilateral e-commerce trade. The RCEP enhances trade facilitation throughout the region， further motivating regional cooperation on agricultural trade.

Thanks to livestream selling， the trend-bucking growth of cross-border e-commerce is injecting new impetus to China-ASEAN agricultural cooperation. Nisachol believes that Chinese and ASEAN preferential policies in the sector will help industrial development and trade facilitation and that competition will encourage market opening and force e-commerce companies to improve the quality of products. Nisachol is confident in the prospects of livestream selling. “Cross-border e-commerce is new to Thailand， so the country only has a handful of well-known livestreamers，” she said. “So I believe Thailand boasts great potential in this sector.”

“Thank you， komkun ka，” she says while placing her palms together and doing a wai， the traditional greeting of Thailand. Nisachol bids farewell to her viewers when the days sales near their end. The future will bring more livestream events， and Nisachol is ready for it.