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Ecommerce giants Alibaba, JD.com and Pinduoduo are leading the Chinese internet group launching a multi-billion dollar initiative to help traditional exporters switch to domestic sales as part of a national campaign to ease the country’s economy from an escalating trade war with the United States.
Alibaba has established a task force to sourise goods from exporters in more than 10 states in China. Taobao and Tmall, the e-commerce market, have committed to offering higher commissions and better exposure on the platform to encourage at least 10,000 exporters to sell 100,000 items. Alibaba supermarket chain Freshippo said that export suppliers have created a special “green channel” for selling products on the shelves.
Pinduoduo had previously responded to sellers with international arm Temu, which was hit by the end of the exemption from the “de Minimis” obligation in a package to the US on May 2nd. The merchant has pledged to invest RMB100 million ($13.7 billion) to help “pivot and upgrade.”
“We are determined to carry costs and risks and navigate the uncertainty of the external market environment,” said Zhao Jiazhen, Co-Chief Executive Officer of Pindudou. “We prioritize ensuring stable development and sound profits for small and medium-sized manufacturers.”
In addition to cancelling the “minimum” obligation exemption for small packages under $800, Chinese sellers face 125% tariffs on many items shipping to the US, making such sales uneconomical.
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Elsewhere, online retail platform JD.com has announced the RMB200BN fund for sourcing products from local exporters over the next year. WeChat owners Tencent, Delivery Service Meituan and Bytedance, Tiktok and Douyin Short Video Apps owners have also launched similar programs.
Search engine group Baidu said one million companies will be able to promote their products in live streams with the help of “virtual humans” generated by AI. Ridehailing app Didi said it had planned to invest RMB2BN to “stabilize employment and promote consumption” and support domestic manufacturers with “Go Global.”
Li Cheng Dong, founder of Beijing-based e-commerce consulting firm Haitong, said the “political” considerations have led to the Chinese tech giant “voluntarily assuming social responsibility.”
“The anti-Us unification has encouraged each Chinese company to do whatever it can,” Li said. “Steaming into this critical time will bring them the benefits of reputation.”
Li pointed out that formal intervention is not necessary because the “political sensibility” of companies is strong enough to guide such decisions.
“Consumers are also focusing on these (tech giants),” he added. “They must pay attention to public opinion and make wise commercial choices.”
China’s high-tech groups have reminded and reminded of the social responsibility of Beijing since the government’s crackdown in 2020. President Xi Jinping met major entrepreneurs in February, including Jack Ma of Alibaba, Pony Ma of Tencent, and Wang Singh of Mate Anne.
Amidst slowing the economy and Trump’s punitive tariffs, Beijing has stepped up its own efforts to counter the looming turmoil. The Commerce Department recently held discussions with industry groups, supermarket chains and distributors on how to help exporters explore domestic sales channels. At a meeting in Beijing attended by Deputy Minister Shen Qi-Ping on Friday, the ministry promised to help domestic businesses deal with “outside shocks.”
There was also evidence of patriotic purchases by Chinese consumers and evidence of systematic support for the country’s stock market from the “bar team” of state-owned investments and companies buying back shares.
