Alibaba’s Electronic World Trade Platform and its Influence in eCommerce
The Belgian government has become the first European countryto join the Electronic World Trade Platform, an initiative launched by the Chinese eCommerce giant Alibaba.
But, what can this mean for eCommerce in in the upcoming years? Let’s take this by steps.
What is the Electronic World Trade Platform?
The Electronic World Trade Platform, or eWTP, is an initiative created by Alibaba aimed at removing or reducing barriers that currently make it difficult for Small and Medium Enterprises (SMEs) to sell and buy globally online.
Jack Ma, Alibaba’s founder and the visionary of the eWTP, sees this program as “an international organization with the overall goal of making it easier for SMEs to take part in global trade via eCommerce by simplifying regulations, lowering barriers to entry to new markets and providing small businesses with easier access to financing. “
To be more specific, the eWTP main functions are:
- To establish rules for the development of electronic trade in terms industry standards;
- To simplify regulations and customs processes;
- To lower tariffs;
- To harmonize taxation;
- To help in the evolution of consumer protection;
- To facilitate the flow of goods, finance and data;
- And to develop internet and logistics’ infrastructure.
This program will be driven by businesses, with support from governments – businesses create hubs for eCommerce, whilst governments can create virtual free trade zones for small companies.
These eHubs would allow SMEs in one country to sell to consumers in another, with a speedy customs clearance, low or no import duties and better access to logistics. But in order for that to happen, it is required that governments agree on a number of subjects, such as universal market regulations and customs-clearance procedures, the reduction in tariffs, among others.
So, how will SMEs benefit from the eWTP?
According to a survey by the World’s Trade Organization and the OECD, the major challenges that SMEs face to enter international markets include the access to information about export opportunities, access to trade finance and logistics costs.
On the short term, this program will open up the conversation around cross-border eCommerce to small and medium sized businesses, providing them useful and valuable data to further develop their businesses.
However, it’s in the long run that SMEs will reap the most profits. As mentioned before, this program aims at creating a free market for online stores all around the world, which will increase eCommerce’s potential in an amazing, hard to imagine, way.
And we aren’t talking about SMEs in developed countries. No, no, no. This program will also be an incredible push forward for companies in developing countries, since it aims at improving logistics and internet infrastructure – which, as we saw in our previous article, as a huge impact for the growth of the eCommerce market.
But it not all clear skies.
One of the biggest barriers to develop cross-border eCommerce, and, consequently, to implement this program, is the wide variety of specific regulations that each country has.
To create unique regulations in several areas concerning cross-border trade, like customs processes, and to make these regulations acceptable to several governments is an arduous task, one which will take several years to develop. Which, in our opinion, only adds to the appeal of this proposal, since it will be very interesting to see how the Electronic World Trade Platform will handle these issues.
So, when will we see some changes happening?
This program was first proposed by Jack Ma in the March 2016, in the Boao Asian Forum, being later endorsed by world leaders in the same year G20 summit. And ever since then, China, Malaysia, Rwanda and Belgium have joined the program.
The project is moving, at a great speed we would say. But when it comes to physical, tangible results, we can safely say it is too early in the game to have anything to show for, other than alliances. But we truly believe that we will see improvements in the eCommerce game, sooner rather than later.
If you want to have more information about the Electronic World Trade Platform directly from the source, we recommend you to check their official website, the eWTP fact sheetand great videofrom Alibaba’s own news platform.