For Chinese sellers, Russia is undoubtedly a market full of potential. Regardless of geography or policy, Russia has advantages no less than other regions. According to data from the General Administration of Customs, in the first four months of this year, China exported goods to Russia worth 232.3 billion yuan, a year-on-year increase of 81%. Russia may very well be the 'Maximum' of emerging markets.
However, entering the Russian market is not easy, and there are few detailed discussions on the Russian market in the industry. At Pinwan’s Russia special offline closed-door exchange meeting, we saw the following points of view:
'Starting at sea, ending at home', Russia will become a new point of opportunity
Liu Fangwei, a senior overseas investor, believes that the overseas brand 'starts from overseas' means that letting enterprises go global and tell Chinese stories well will become the best solution to seize and even create certainty,'' ;Finally local' allows the brand to embrace the different possibilities of globalization in a better posture.
First of all, enterprises going overseas must choose an appropriate business model and attach great importance to localization. The successful models of European, American and domestic markets cannot be fully reused in emerging markets. Compared with China's 'three modernizations' process, most emerging market countries are now experiencing the industrial level of the 1990s, around 2005 The level of consumption, the level of Internet development around 2015, and due to their respective development needs, they have different degrees of acceptance of capital and enterprises. To operate in these countries and regions, it is particularly important to identify market conditions and choose a business model. Secondly, enterprises must also pay attention to different policy conditions and changes, and flexibly adjust business models and monetization methods.
Now Is a Golden Opportunity Period for 'Looking to the Future' Between China and Russia
Liang Chengfa, a guest from the Guangdong Commonwealth of Independent States International Science and Technology Cooperation Alliance, believes that, first of all, economic sanctions and the sharp drop in EU exports to Russia have affected the supply of the Russian consumer market, and filling the market gap is the biggest opportunity for Chinese companies to go overseas. In addition, the Russian Federation government has listed RMB as a reserve currency, and plans to further use RMB as a strategic reserve currency. From a more macro perspective, this year's export data will definitely have room for growth.
However, on the basis of the growth of foreign trade scale and the increase of local currency settlement, the trade surplus and deficit need to be further balanced to control risks. At present, in Russia, only some regions and banks support local currency settlement, and even so, it does not mean that the seamless connection between finance and payment has been completed. Most locals still prefer to choose local payment methods when paying.
At the same time, for cross-border trade, low customs clearance efficiency and weak local logistics foundation are also major challenges for the Russian market. Although the current disruption of logistics and the predicament of sanctions are forcing Russia to optimize and update cross-border transportation and infrastructure, its infrastructure construction capacity is limited in the short term, and railway transportation capacity and customs clearance efficiency still restrict bulk trade and customs clearance for a period of time. Fulfillment speed for small commodity shipments.
In addition, as far as the employer is concerned, the legal protection for investment in Russia is not perfect. The most recent agreement on investment protection was signed in 2006, and the official has not yet updated the protection measures for investment entities at the legal level.
Liang Chengfa suggested to the sea-going companies present that it takes enthusiasm to do well in the Russian market, but at the same time, we must also pay attention to risk prevention and control. It is necessary to use reason to cool down and make the right choices in order to better look forward to the future.
Going to Russia, you can use e-commerce as an entry point
As Russia's largest e-commerce platform and a representative of China-Russia digital economic and trade enterprises, Ozon has helped batches of overseas companies successfully land in Russia in the past 25 years, and has accumulated a lot of experience.
Huang Xiao, president of Ozon Greater China, said that Russia has a population of 145 million, and e-commerce, which is directly linked to consumption, shows a growth momentum when offline retail sales decline. Due to the withdrawal of some European and American brands, there is a gap in the supply of automobiles, consumer electronics, and clothing in the Russian market, which provides a huge opportunity for Chinese companies to fill the gap.
Image source: shared by Ozon, the data source is Statista
On the other hand, China has a large number of cross-border e-commerce talents, a complete operation and marketing system, and very sound infrastructure and services. Among the enterprises going overseas, there are not a few with excellent market adaptability. These enterprises are very good at insight into market trends, recognize opportunities for participation and act quickly. For example, in the Russian market, some companies have made good use of the parallel import policy, and some brands have cut into e-commerce, through brand building and marketing innovation, and finally expanded online to offline omni-channel sales.
The key planning of China-Russia economic cooperation in 2030 covers the development of e-commerce and digital trade, the construction of logistics interconnection system and the improvement of financial cooperation level. As the largest e-commerce platform in Russia, Ozon will continue to support companies interested in doing business in Russia under the new plan.
How can logistics difficulties be resolved?
Zhang Ronghua, a guest from China Post, mentioned in his sharing that Russia has a vast area and its population is relatively scattered. The biggest challenge for Russian e-commerce lies in logistics performance capabilities such as transportation, terminal and warehouse infrastructure.
In the past ten years, China Post has assumed the main responsibility for my country's import and export cross-border e-commerce logistics services. China Post provides a variety of products and services to customers on the China-Russia line, and has done a lot of work in terms of collection capacity, storage capacity, port and trunk line capacity, etc., to ensure product timeliness and service quality.
Relying on the location advantages of the Guangdong-Hong Kong-Macao Greater Bay Area, combined with the resources of the aviation network and port channels, Guangdong Post can provide a full range of logistics channels and provide comprehensive logistics solutions for Russian companies going overseas.
How to roll out localized marketing in the Russian market?
Yandex is the largest Internet company in Russia. Ma Jing, general manager of Yandex Greater China, shared that the number of Internet users in Russia has reached 116 million, and the Internet access rate is as high as 81%. It is the country with the largest number of Internet users in Europe. The online time is nearly 8 hours. After statistics on covered users, Yandex found that 92% of online shopping users in Russia use EMS services, and users' interest in online shopping increased by 25% last year.
Taking mobile phone brands as an example, in 2021-2022, Samsung's share in the Russian mobile phone market will drop from 34% to 10%, while Chinese mobile phone brands have experienced a more obvious growth, further verifying that there is an unfilled market in Russia. There is a gap in the market, and Chinese brands that are good at marketing will have the opportunity to fill this gap.
Source: Yandex share
Ma Jing also added that under the influence of the overall environment, Yandex has insight into that Russian users are more sensitive to commodity prices, and some users will compare prices on three or four websites within 2-5 days before finally placing an order. In the localized marketing layout for Russia, it is necessary to use a variety of advertisements to enhance the interactive experience and guide purchases. For consumer electronics products such as mobile phones and home appliances that Russian users prefer, Yandex also recommends that brands describe product features through review articles and advantages, increase exposure, spread brand awareness, and give users more decision-making
two cities.
A reporter from the Securities Times learned that while doing a good job in the export business of commercial vehicles and passenger vehicles, Hunchun City will make full use of the favorable opportunity of the 'used car' export pilot project granted by the state to carry out the export business of used cars. At present, Hunchun City has completed the preliminary work, and the second-hand car export business can be officially launched after confirmation by relevant departments. This will play an important supporting role in cultivating and developing new forms of foreign trade in Hunchun, radiating surrounding areas to optimize and strengthen the used car export business, and promoting the high-quality development of an export-oriented economy.
According to Wang Yubao, in addition to the export business of complete vehicles and second-hand cars, the Hunchun Comprehensive Bonded Zone is also striving to make breakthroughs in the export business of auto parts this year and improve the industrial chain of automobile export. export intention.
First-mover advantage in trade with Russia
As the only port to Russia in Jilin Province, Hunchun Port is an important land channel for my country's trade with Russia. According to data from the Jilin Provincial Department of Commerce, in 2022, Jilin Province's import and export trade with Russia will reach 17.33 billion yuan, a year-on-year increase of 65%, 35.7 percentage points higher than the national level, and the trade scale will hit a record high. In 2022, Jilin Province's exports to Russia will be 6.56 billion yuan, a year-on-year increase of 123%, and its imports to Russia will be 10.77 billion yuan, a year-on-year increase of 43%.
Entering 2023, Jilin Province's trade with Russia will continue to grow. According to statistics released by Changchun Customs, from January to February 2023, the total value of Jilin Province's imports and exports to Russia increased by 54.1% year-on-year.
A large part of Jilin Province's trade with Russia is carried out through Hunchun Port. During the three-year epidemic period, Hunchun Port was the only port between China and Russia that maintained uninterrupted customs clearance of goods, which had a positive impact on Sino-Russian trade exchanges.
Fang Minghao, deputy director of the Hunchun Municipal Bureau of Commerce, told the Securities Times reporter that the development of Hunchun City has a very obvious first-mover advantage in Russian trade. There are more than 10 Russian and North Korean ports around the four state-level railway and highway ports in Hunchun City. Hunchun City has become the most critical 'chess piece' for Jilin to implement the strategy of 'borrowing ports to go to sea' and has a unique location advantage.
In addition, as one of the first batch of opening-up cities along the country's borders, Hunchun enjoys a series of national support policies and has the advantage of first-mover in many fields.
It is understood that on October 26, 2022, the General Administration of Customs issued an announcement on the expansion of the pilot market procurement trade mode, adding 8 domestic markets to the pilot market procurement trade mode, and Hunchun Northeast Asia International Commodity City was among them, becoming the only one in Jilin Province Selected units. Since being approved as a pilot program of national-level market procurement and trade, Hunchun has attracted many trading companies to settle in the market by building a comprehensive service management platform, building a market procurement and trade service center, and carrying out market procurement and trade policy presentations, opening up exports for Hunchun's local traditional specialty products The new channels provide new favorable opportunities for further expansion of foreign trade exports.
The mutual market trade policy is a unique preferential policy granted by the state to border areas. Hunchun City is one of the first batch of pilot counties and cities approved by the Ministry of Commerce for the on-site processing of imported goods traded by border residents, becoming the only pilot city in Jilin Province for on-site processing of inter-trade goods. The development of mutual market trade has played an important role in promoting Hunchun's trade with Russia.
Hunchun Jidian Digital Frontier Trade Technology Service Co., Ltd. ('Jidian Digital Trade'), as the operator of the Railway Mutual Market Trade Zone and Mutual Trade Commodity Landing Processing Park Area A, can provide customers with cross-border trade services across the entire industry chain.
'Area A of the landing processing park is currently in the preparatory stage and will be officially put into operation soon. The main work at present is to assist border residents in identity verification registration and registration.' According to the person in charge of the marketing department of Jidian Data Trade, the park has obvious advantages and can be Border residents sell raw materials to processing factories through customs clearance through the mutual market. The introduction of processing enterprises can increase taxation and drive employment. At the same time, enterprises can indirectly enjoy tax benefits and reduce production costs when purchasing commodities from the mutual market.
The person in charge said, 'Mutual trade among border residents + on-site processing' is the crystallization of exploration and innovation by the front-line regional governments of mutual trade among border residents, and it is also an inevitable path for industrial upgrading of border residents' mutual trade. At the same time, the landing in Zone A of the processing park empowers the settled enterprises, and serves the enterprises in the park through supply chain finance and financial leasing. The development of mutual market trade can not only help to rejuvenate the border and enrich the people, and stimulate local economic development, but also will become an important channel for Hunchun to develop trade with Russia and a new growth point for economic and trade cooperation.
Opportunities facing Hunchun
This year, Hunchun has ushered in an important opportunity for development.
In March 2023, the heads of state of China and Russia jointly signed the 'Joint Statement of the President of the People's Republic of China and the President of the Russian Federation on the Development Plan of the Key Directions of Sino-Russian Economic Cooperation by 2030', specifying that the two sides will carry out bilateral economic cooperation in 8 key directions , and emphasized its commitment to significantly increase the trade volume between the two countries by 2030.
On March 31, Jing Junhai, secretary of the Jilin Provincial Party Committee, presided over a meeting of the Standing Committee of the Provincial Party Committee, emphasizing that party committees and governments at all levels should firmly grasp the signing of the joint statement by the heads of state of China and Russia and the development of the 'Northeast-Far East' region between China and Russia. A major opportunity for mutually beneficial cooperation, and actively promote the high-quality development of economic and trade cooperation with Russia. It is necessary to continue to optimize the market-oriented, rule-of-law, internationalized business environment, and strive to build Jilin into a bridgehead for Chinese companies to cooperate with Russia.
At the recently held press conference on the interpretation of Jilin Province's high-level open development policy, the person in charge of the relevant departments of Jilin Province made it clear that 'the implementation of 7 x 24-hour appointment clearance at the Hunchun port to Russia. Compressed 5 working days to on-the-spot completion' 'Steady promotion of 'borrowing ports to sea', strengthening cooperation with Russia in the development and utilization of Zarubino, Slavyanka, Vladivostok and other ports, and promoting the development of Hunchun via Russian ports Resume the operation of international routes', 'promote the construction of Yanbian (Hunchun) land border port-type national logistics hub', etc.
Song Donglin, a professor and doctoral supervisor at Jilin University, believes that the economic ups and downs of Northeast China are closely related to geopolitics. Under the background of the great changes in geopolitics caused by the conflict between Russia and Ukraine in a century, the Northeast needs further development to achieve a new round of revitalization. With the reform and opening up, Hunchun should give full play to its role as a bridgehead because of its special geographical advantages.
The heads of state of China and Russia signed a joint statement on the development plan for the key directions of China-Russia economic cooperation before 2030, providing a major opportunity for Jilin Province and Hunchun City to promote the high-quality development of cooperation with Russia. For Hunchun City, it is even more necessary to seize the important opportunity of mutually beneficial cooperation between China and Russia in the 'Northeast-Far East' region, further deepen cooperation with Russia, strengthen connectivity, and expand economic and trade exchanges with Russia.
'Most cold-water seafood such as king crabs imported from China are imported through the Hunchun Port. Although Hunchun City has a large scale in this field, it has not really formed a central effect.' Song Donglin said that Hunchun City should learn from Yunnan flowers and plants. The development experience of the market, making full use of the advantages of the Internet and digitalization, has built Hunchun into a national distribution center integrating the import, wholesale and processing of cold-water seafood. Commodity added value.
While building a commercial distribution center, Hunchun City should further promote the currency exchange between RMB and Russian ruble, and promote the Yanbian area including Hunchun City to become a regional RMB international settlement center.
At the same time, relevant government departments should give greater power to the Changjitu Development and Opening Pilot Zone, and use Hunchun City as a bridgehead to form an operation mode of government promotion, enterprise participation, and market-oriented operation to further promote the opening up of Hunchun and related areas and help Promote the revitalization of Northeast China to achieve new breakthroughs.
The content is quoted from: Securities Times.