China's economy has sustained dire effects from the global economic slowdown, and the spill-over has impacted e-commerce as a trading platform. In July 2008, Alibaba CEO Jack Ma spoke of the coming "winter chill" and told his staff that "We are prepared for the winter, so we have reserved a lot of cash."

Yet in these demanding times there are also new opportunities. According to research conducted by SPG Media for their 2007-2008 report on global e-procurement, the Internet is still a popular platform for global sourcing. After gathering opinions from procurement specialists and c-level personnel from Forbes 2000 organisations, they found that

• 81% of users use Google to search for business information
• 68% use the Internet as their first resource when sourcing new suppliers
• 80% say time-saving is the key benefit when sourcing suppliers online, and
  
• 86% of senior-level personnel believe the online procurement activities of their organisations will increase significantly over the next five years.
  

On 29 December 2008, Alibaba collaborated with the Jiangsu provincial government to establish a branch website called the 'Jiangsu International E-commerce Platform.' On the website's first day of operation, more than 4000 companies registered as new members. Jiangsu, like Zhejiang and Guangdong, is an economic powerhouse in China and ranks as the third-richest province in terms of per capita GDP. SMEs in Jiangsu suffered from the financial crisis, however, as a large part of their exports previously went to the US market. Now, as they struggle to survive and seek new markets such as Australia and the Middle East, they can profit a lot from e-commerce.

Compared with traditional trading methods, online business has many advantages. It has lower distribution and inventory costs, faster reaction times for enquiries, and it integrates information with all parts of the supply chain. It can serve as a one-stop solution for buyers, dealers, wholesalers and suppliers and can cut out many of the hassles, especially during this time when suppliers are trying to expose their products to new parts of the world and buyers around the world are really trying to save money.  

During 2008, e-commerce turnover in China was more than RMB1.5 trillion. And according to national policy guidelines, by the end of 2010, 25% of the procurement of large-size companies should be completed online. So while there may be a chill in the air at the moment, spring is sure to come soon for e-commerce and B2B.

(Image from wellness-network.org)