China’s Latest Lockdown Set to Delay eCommerce Orders
Digital commerce has gone through a hell of a ride over these last two years.
For many of us, it fueled most of our lives for long stretches of 2020 before we began to gradually emerge from the front door and get back out into the physical world.
But in doing so, stronger demand for goods tied with logistical shortcomings provoked international supply chain pains, driving inflation to record levels and leaving us short of change.
In the latest episode of the Covid chronicles, a recent outbreak in China looks set to delay further ecommerce orders.
That’s because the region that is under lockdown is Shenzhen, essentially the world’s largest manufacturer.
This means that online orders placed with ecommerce platforms – whether they are global or regional – are likely to be delayed by lockdown and restrictions.
Shenzhen is home to about half of all online retail exporters in China and was locked down for at least one week last Sunday. Its residents, approximately 17.5 million, were ordered to work from home and with all nonessential businesses shut down.
Significant disruption to the production and delivery of goods has been the result of the lockdown.
“Shenzhen now has pressed the pause key,” said Wang Xin head of the Shenzhen Cross-Border eCommerce Association, “with operations halted for almost all sectors, and we are no exception.” The association represents 3,000 exporters.
There are also knock-on effects. Deliveries are halted due to logistics firms as well as warehouses pausing operations or are running at limited capacity.
Global shopping platforms are populated more and more with Chinese sellers. That’s because they typically sell or specialize in low-cost everyday goods, from sneakers to chargers.
China’s cross-border ecommerce industry surged by 25% in 2021 to reach $220 billion, which built on a huge spike of 40% during 2020.
Some of these companies, such as Shein and Anker Innovations, have risen to the top globally due to the Middle Kingdom’s integrated supply chain systems.
When should we expect the resumption of manufacturing and parcel deliveries?
According to Wang, the Shenzhen Cross-Border eCommerce Association is “actively negotiating” with authorities to resume the local economy that has global reach.
The current caveat is that authorities are allowing some factories to remain open and allowed to operate so long as they test workers on a daily basis and operate in bubbles.
“Even if you’re not in the areas with serious [Covid-19] cases, you’re not allowed to do anything,” said Wang.
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